Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 335

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 335
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 effective as of, June 30, 2023. In October 2023, in accordance with the
Subscription Exchange Agreement, and upon approval of an increase in authorized capital to accommodate such exchange, an aggregate fair
value of $33,849,109 in convertible notes was exchanged (contingent upon the consummation of this offering) for an aggregate of 3,312,148
shares of common stock (with a previous fair value of $30,344,094 as of September 30, 2023 and a principal amount of $24,795,755, including
accrued interest) and 507,394 prepaid warrants to purchase common stock (with a previous fair value of $3,505,015 as of September 30,
2023 and a principal amount of $1,714,574, including accrued interest). The aggregate fair value of the exchanged notes will be reclassified
from Convertible Notes to equity under the terms of the Subscription Exchange Agreement upon the effectiveness of the Company’s
anticipated IPO — which is the remaining prerequisite for the unconditional exchange of the 2022 and 2023 Convertible Notes for
equity. As of December 31, 2023, the aggregate fair value of the convertible notes had increased to $36,283,891 (with $31,665,014 attributable
to the 3,312,148 shares of common stock, and $4,618,876 attributable to the 507,394 prepaid warrants to purchase common stock.) The agreement
had a true up provision in the event the eventual IPO price is higher or lower than the conversion rate of $13.16 per share stated in
the document. Under the terms of the Subscription Exchange Agreement, the true up provision was eliminated and the strike price of the
warrants related to the 2022 Notes was fixed at a negotiated fixed, non-adjustable rate of $6.00 per share. If the Company has not
listed the Common Stock on a national or international securities exchange by October 31, 2024, the Holder will have the right to exchange
the Common Stock issued under the Subscription Exchange Agreement for promissory notes (the “New Notes”) on terms substantially
similar to the Notes exchanged (contingent upon the consummation of this offering) in October 2023. When the Subscription Exchange Agreement
was executed, the company did not have enough shares of common stock in the authorized capital account to accommodate all shares due.
The Note Hold