Company: IPST
Filing Date: 2025-05-07
Form Type: POS AM
Source: 0001641172-25-009076
Chunk: 242

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-07
Form: POS AM
Chunk 242
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 issuer must or may settle by issuing a variable number of its equity securities if, at inception, the monetary value of the obligation is predominantly based on a known fixed monetary amount.

The Company measured the warrant liabilities at fair value at the respective issuance dates of the Whiskey Notes using a probability weighted expected return method and the Monte Carlo Simulation. The fair value of the warrant liabilities at the issuance dates in the years ended December 31, 2024 and December 31, 2023 was approximately $ 302,020and $ 1,621,527, respectively, of which $ 111,112and $ 436,041, respectively, was associated with the related party warrant liabilities. The fair value of the warrant liabilities at the issuance dates in April 2024 was approximately $ 48,889, of which $ 26,706was associated with the related party warrant liabilities. The warrant liabilities are subsequently remeasured to fair value at each reporting date with changes in fair value recognized as a component of total other income (expense) in the consolidated statements of operations. The Company recorded a net gain of $ 1,814,712(of which $ 406,774was to a related party) resulting from the change in fair value of the warrant liabilities to $ 0(of which $ 0was to a related party) for the year ended December 31, 2024. The Company recorded a net gain of $ 108,835(of which $ 29,267was to a related party) resulting from the change in fair value of the warrant liabilities to $ 1,512,692(of which $ 406,774was to a related party) for the year ended December 31, 2023.

In April 2024, the Whiskey Notes (including 755,919related warrants) were exchanged (contingent upon the consummation of the Company’s initial public offering) for common stock. The then outstanding $ 23,311,063in aggregate fair value ($ 8,678,433of principal amount, including accrued interest; $ 6,630,870of proceeds) of the Whiskey Notes and related Warrants (Warrant Liability) in accordance with a Subscription Exchange Agreement, exchanged for a total of 2,399,090shares of common stock and 546,927prepaid warrants to purchase common stock. The Whiskey Notes and related warrants were exchanged (contingent upon the consummation of the Company’s initial public offering) for common stock