Company: IPST
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-006695
Chunk: 271

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 271
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 of a private
entity, or a transaction involving private companies with no public clearing price for their stock, certain methods, models and assumptions
are used to attempt to estimate or derive a fair market value. The statutory deadline has passed for any other Thinking Tree Spirits shareholders
to claim dissenter’s rights.

The amount being sought by the dissenters would
consume most, if not all, of the amount in stock paid in the transaction, and management believes the amount of compensation they are
seeking is too high.

Because this process creates uncertainty related
to how many net Heritage shares are owed to the remaining Thinking Tree Spirits shareholders, management has made the decision to place
any Heritage shares of stock that were to go to Thinking Tree Spirits shareholders in escrow until the matter is resolved. Likewise, any
make-up shares that we assumed were to be issued at the close of the Company’s initial public offering will also be held in escrow
until the same final value determination is made. This is to ensure Heritage is not double paying for the company in both shares and cash.

To the extent any amount of cash is due to the
three dissenters from Heritage, management will deduct that from the total amount of consideration that had been agreed upon for the Thinking
Tree Spirits acquisition, and the remaining amount due to the remaining Thinking Tree Spirits shareholders, if any, will be then paid
in Heritage shares at the agreed upon transaction price per share in the original transaction. Any unused Heritage shares will be returned
to the treasury and will not be considered outstanding. So long as these shares are held in escrow they will not be eligible for trading
or voting.

Subsequent to November 25, 2024 we settled with
one of the three TTS dissenters and we sent the remaining two dissenters the statutorily required payment offers and documentation to
attempt to wind down the dissenters process. The statutorily required thirty (30) day review period for those offers passed on January
6, 2025 with one objection from one of the remaining dissenters. Nevertheless, we believe the matter to be concluded, but there is a risk
either or both of the late responding dissenters could attempt to extract more value than the offer that was sent to them. It is unclear
under Oregon law how successful they would be in such attempts since the review period has passed. As a result of netting out the amount
paid to such dissenters from the makeup provisions of our acquisition agreement with the remaining TTS shareholders, we