Company: IPST
Filing Date: 2025-08-29
Form Type: DEF 14A
Source: 0001788230-25-000148
Chunk: 22

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-29
Form: DEF 14A
Chunk 22
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 Pre-Funded Warrant Shares is required under Nasdaq Listing Rule 5635(a) because it considers the $IP Tokens to be assets for purposes of Nasdaq Listing Rule 5635(a).

Nasdaq Listing Rule 5635(d) requires stockholder approval prior to a transaction, other than a public offering, involving the sale, issuance or potential issuance of common stock (or securities convertible into or exercisable for common stock) which alone or together with sales by our officers, directors or substantial stockholders, equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance, at a price that is the lower of: (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) immediately preceding the signing of the binding agreement; or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five trading days immediately preceding the signing of the binding agreement.

As of August 8, 2025, immediately prior to the signing of the Subscription Agreements, there were 25,345,027 shares of our common stock outstanding. The aggregate number of shares of common stock underlying the Pre-Funded Warrants, equals 370,378,890 shares, representing 1,461.3% of the total number of outstanding shares of common stock immediately prior to the Offering. If the Agent Warrants and Pre-Funded Warrants were exercised on the closing date of the Offering, the aggregate number of shares issued on such date would also have represented in excess of 20% of the total number of outstanding shares of common stock immediately prior to the Offering. While the price per share of common stock in the Offering was higher than the average Nasdaq Official Closing Price of the common stock for the five trading days immediately preceding the signing of the Subscription Agreements, which was $0.60422 per share, it is possible that Nasdaq may deem the actual value of the USDC and the $IP Tokens that were delivered to us as consideration for the Pre-Funded Warrants in lieu of the cash purchase price to be less than the value ascribed by us and the Investors to such consideration.

In addition, Nasdaq Listing Rule 5635(c) generally requires us to obtain stockholder approval prior to issuance of securities when a stock option or purchase plan is established or materially amended or other equity compensation arrangement made or materially amended, pursuant to which shares of common stock may be acquired by our officers, directors