Company: IPST
Filing Date: 2025-01-24
Form Type: 8-K
Source: 0001788230-25-000012
Chunk: 3

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-01-24
Form: 8-K
Item: Item 1.01
Chunk 3
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ation”), provided, however, the Investor may increase the Beneficial Ownership Limitation up to 9.99% at its sole discretion upon sixty-one days’ prior written notice to the Company. For the avoidance of doubt, the Beneficial Ownership Limitation in no event will exceed 19.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock pursuant to the Purchase Agreement.

The net proceeds to the Company under the Purchase Agreement will depend on the frequency and prices at which the Company sells shares of its Common Stock to the Investor. The Company expects that any proceeds received by the Company from such sales to the Investor will be used for the purchase of raw goods to produce more products for sale, additional digital marketing to drive more e-commerce sales, additional marketing and sales support to grow the Company’s wholesale efforts, additional marketing efforts to expand the Company’s TBN growth, the addition of key finance staff to ameliorate deficiencies identified by the Company’s auditors, the repayment of debt and other obligations, and general working capital.

Following the Commencement Date, the Company has the right to terminate the Purchase Agreement at any time, upon one business day’s notice, at no cost or penalty. During any “suspension event” under the Purchase Agreement, the Investor does not have the right to terminate the Purchase Agreement; however, the Company may not initiate any regular or other purchase of shares by the Investor, until such event of default is cured. In addition, in the event of bankruptcy proceedings by or against the Company, the Purchase Agreement will automatically terminate in accordance with the terms of the Purchase Agreement.

Registration Rights Agreement

Concurrent with the execution of the Purchase Agreement, the Company entered into a registration rights agreement with the Investor (the “ Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company agreed to file a registration statement on Form S-1 with the SEC covering the resale of the Securities, on or before the 30th calendar day following the date of the Registration Rights Agreement and to use its commercially reasonable efforts to cause such registration statement to be declared effective by the SEC at the earliest practicable date, subject to limited exceptions described therein. The registration rights granted under the Registration Rights Agreement are subject to certain conditions and limitations and are subject to customary indemnification and contribution provisions.

Purchase and Sale of Series B Preferred Stock

Pursuant to the Purchase Agreement, the Company has agreed to sell and the Investor has agreed to purchase up to $1,000