Company: IPST
Filing Date: 2025-12-19
Form Type: S-1/A
Source: 0001213900-25-123872
Chunk: 186

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-19
Form: S-1/A
Chunk 186
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 progresses. The Story Network penalizes bad behaviors by validators (specifically, double -signingblocks and downtime) by slashing out a fraction of their staked tokens. If a validator double signs for a block, the validator will get slashed 5% of its tokens and get permanently jailed, which is also referred to as “tombstoned.” If a validator is offline for too long and misses 95% of the last 28,800 blocks, the validator will get slashed 0.02% of its tokens and get jailed. A validator will also get jailed after self -undelegationif the validator’s remaining self -delegationamount is smaller than the minimum self -delegation. A jailed validator cannot participate in the consensus and earn any rewards; however, a jailed validator can unjail itself after a cooldown time, which is currently set at ten minutes. After ten minutes, the validator can call Story’s staking contract to unjail itself if its stake is more than the minimum stake amount (1,024 $IP Tokens), after which it can participate in the consensus again if it is still within the top 64 validators. One of our validator nodes incurred a slashing event during an early testing phase of our validator and prior to our validator being fully funded. That event did not have a material impact on the number of $IP Tokens or other assets we hold, and no additional slashing event or penalty has occurred with respect to our validator since that time. The Story Network currently offers incremental staking rewards for $IP Tokens staked in a longer -termsmart contract. To increase the yield on our $IP Tokens, our current staking strategy is to maintain a portion of our $IP Token holdings in a flexible staking arrangement, which carries a 14 -daydeactivation period (unbonding period), regardless of which validator node we use, and allocate some of our $IP Token holdings in long -termstaking with up to an 18 -monthdeactivation period (which provides rewards that are greater than the rewards associated with $IP Tokens in the flexible staking arrangement). As a result, as part of the “activating” and “exiting” processes of $IP Token staking, any staked $IP Tokens will be inaccessible for a period of time determined by a range of factors, resulting in certain liquidity risks that we manage. Process of Staking and Liquidity Management.Our Chief Investment Officer and the members of the Digital Assets Committee of our Board have periodic meetings to evaluate treasury operations, including