Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 340

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 340
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month anniversary of the closing date, the Silverview Loan accrues interest at a fixed rate of 15.0% through maturity. Interest payable
in cash is required to be repaid on the fifteenth day of each calendar month. The Company had an option to prepay the Silverview
Loan with a prepayment premium up to 30.0% of the obligations during the first twenty-four months of the loan, after which time the
Company can prepay the loan with no premium due.

The Company is now past that initial twenty-four-month
window and can prepay all or some of the outstanding balance without penalty. The Silverview Loan also contained certain financial and
other debt covenants that, among other things, impose certain restrictions on indebtedness, liens, investments and capital expenditures.
The financial covenants required that, at the end of each applicable fiscal period as defined pursuant to the Silverview Loan agreement,
the Company either had (i) an EBITDA interest coverage ratio up to 2.00 to 1.00, or (ii) a cash interest coverage ratio of not
less than 1.25 to 1.00. Commencing with the fiscal quarter ending June 30, 2021, the Company was to maintain liquidity of not less
than $500,000. The Silverview Loan may be used for general corporate purposes, including working capital needs and capital expenditures.

The Company violated various financial and other
debt covenants regarding its failure to comply with the financial covenants and to timely furnish its consolidated financial statements
for the year ended December 31, 2023. As the chance of meeting the same or more restrictive covenants at subsequent compliance measurement
dates within the following year is remote, the Company determined that the Silverview Loan should be classified as a current liability
as of December 31, 2023. As of both December 31, 2023 and 2022, the outstanding balance of the Silverview Loan was $12,250,000. The lender
had previously agreed to waive any existing covenant compliance matters as of December 31, 2022 and to forbear exercising its rights and
remedies under the loan agreement through December 31, 2023.

In April 2020, the Company was granted a loan
under the Paycheck Protection Program (“PPP”) offered by the Small Business Administration (the “SBA”) under the
Coronavirus Aid, Relief and Economic