Company: IPST
Filing Date: 2025-05-21
Form Type: 424B3
Source: 0001641172-25-011934
Chunk: 48

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-21
Form: 424B3
Chunk 48
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Notes to Condensed Consolidated Financial Statements
(unaudited)</div>

NOTE 7 — STOCKHOLDERS’ EQUITY / (DEFICIT) (cont.)

• Tranche 2 - for up to 1,524,976 shares of common stock (of which up to 256,716 were to a related party) when the 10-Trading-Day VWAP of the common stock reaches 300% of the $4.00 per share initial public offering price (or $12 per share), and that will expire on the 42-month anniversary of the Company’s initial public offering (the “$12 Contingent Legacy Shareholder Warrants”); and,

• Tranche 3 - for up to 1,906,220 shares of common stock (of which up to 320,895 were to a related party) when the 10-Trading-Day VWAP of the common stock reaches 500% of the $4.00 per share initial public offering price (or $20 per share), and that will expire on the 60-month anniversary of the Company’s initial public offering (the “$20 Contingent Legacy Shareholder Warrants”).

The Company recorded a value of $8,828 for the Contingent Legacy Shareholder Warrants as of the October 30, 2024 grant date based on a Black Scholes option pricing model. The assumptions used in the Black-Scholes option pricing model for the Contingent Legacy Shareholder Warrants were as follows:

| Weighted                                                            
 Average Expected Volatility                                         |     |          |   70 | % |
| Expected                                                            
 Dividends                                                           |     |          |    — | % |
| Weighted                                                            
 Average Expected Term (in years)                                    |     |          |      | 5 |
| Risk-Free                                                           
 Interest Rate                                                       |     |          | 4.22 | % |
| Probability                                                         
 Scenarios of meeting contingencies                                  |     |          |      |   |
| Shareholder                                                         
 holds shares owned on May 31, 2023 through warrant exercise date    |     | 95%      
 to 75%   |      |   |
| Common                                                              
 stock attains a specified 10-Trading-Day VWAP price before expiring |     | 0.025%   
 to 2.25% |      |   |

As of March 31, 2025, there were outstanding and exercisable: 625,446 $