Company: IPST
Filing Date: 2025-05-07
Form Type: POS AM
Source: 0001641172-25-009076
Chunk: 228

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-07
Form: POS AM
Chunk 228
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In October 2023 the holders of the 2022 and 2023 Convertible Notes entered into a Subscription Exchange Agreement to exchange into equity the value of their 2022 and 2023 Convertible Notes with all accrued interest and fees through, and effective as of, June 30, 2023. In October 2023, in accordance with the Subscription Exchange Agreement, and upon approval of an increase in authorized capital to accommodate such exchange, a then aggregate fair value of $ 33,849,109in convertible notes was exchanged (contingent upon the consummation of the Company’s initial public offering, which occurred on November 25, 2024) for an aggregate of 3,312,148shares of common stock (with a then aggregate fair value of $ 30,344,094as of September 30, 2023 and a principal amount of $ 24,795,755, including accrued interest) and 507,394prepaid warrants to purchase common stock (with a then fair value of $ 3,505,015as of September 30, 2023 and a principal amount of $ 1,714,574, including accrued interest).

As of November 25, 2024, the fair value of the Convertible Notes that were issued in 2022 and 2023 and were exchanged in October and November 2023 for a fixed number of shares of common stock and prepaid warrants, was revalued and was reclassified from a liability to equity in the amount of $ 15,278,168(including $ 6,870,236of a related party’s holdings) (representing the 3,312,148shares (including 1,717,559of a related party’s holdings) of common stock and 507,394prepaid warrants for which the Convertible Notes were exchanged multiplied by the price per share of common stock of $ 4.00in the Company’s November 25, 2024 initial public offering, with the remaining $ 21,005,723recorded as a gain for the decrease in fair value of those Convertible Notes for the period from December 31, 2023 to the date of the Company’s Initial public offering (November 25, 2024), which is the date on which the contingent treatment of the liability associated with such convertible notes was relieved and they were reclassified to equity.

The aggregate fair value of the exchanged notes was reclassified from Convertible Notes to equity