Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 342

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 342
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 In April 2023, the Company entered into a new secured business loan and security agreement with Channel
Partners Capital, LLC (the “2023 Channel Partners Loan”) for an aggregate borrowing capacity of $250,000, of which. $47,104
of proceeds were used to pay off the 2022 Channel Partners Loan. The 2023 Channel Partners Loan will mature on October 5, 2024 and
accrues interest at a fixed rate of 13.34%. Payment of $16,944, principal plus interest is payable monthly. The Company has an option
to prepay the 2023 Channel Partners Loan with a prepayment discount of 5.0%. As of December 31, 2023 and 2022, the outstanding balance
of the 2023 Channel Partners Loan was $149,824 and $0, respectively.

As of December 31, 2023, the principal repayments
of the Company’s debt measured on an amortized basis of $14,669,280 are expected to be due within one year from the issuance of
these consolidated financial statements. The outstanding principal of $14,270,956, net of debt issuance costs of $398,324, was classified
as a current liability on the Company’s consolidated balance sheets as of December 31, 2023.

NOTE 7 — WARRANT LIABILITIES

2022 and 2023 Convertible Promissory Notes Warrants

During 2022 and 2023, the Company issued warrants
to purchase the Company’s common stock to the 2022 Notes holders, including a related party, in an amount equal to 50% of the cash
proceeds (see Note 5 and Note 14). These warrants are exercisable on or after the occurrence of an IPO or a deSPAC merger and
expire on July 31, 2027. The warrant exercise price is equal to: (i) if the Company consummates an IPO, 100% of the price per
share at which the Company’s common stock is sold in the IPO, or (ii) if the Company consummates a deSPAC merger, 100% of the
redemption price related to such deSPAC merger. The warrants will automatically be exercised cashlessly if the stock price hits 125% of
the IPO price. The warrants are free-standing instruments and determined to be liability-classified in accordance with ASC 480. More
specifically, ASC