Company: IPST
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-006695
Chunk: 132

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 132
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 As discussed above, in the past, we have violated various financial and other debt covenants regarding our failure to comply with the financial covenants and to timely furnish our 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 was remote, we determined that the Silverview Loan should be classified as a current liability as of September 30, 2024. As of September 30, 2024 and 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 from exercising its rights and remedies under the loan agreement through December 31, 2023. In June 2024, we reached an agreement in principal to modify the Silverview Loan in the following ways. The modification, which was executed by the parties on October 1, 2024, and was further modified on November 19, 2024, and went into effect upon the closing of our initial public offering in November 2024:

| 2) | recast the amortization schedule                                                                                                       
 to reduce the amount paid each quarter to allow us to preserve cash, as follows: $974,729 due December 25, 2024, $700,000 due June 30, 
 2025 and then $500,000 due every six months thereafter;                                                                                |

| 3) | increased the per annum interest                                                                                                       
 rate from 15% to 16.5% commencing in December 2024, with monthly interest payments remaining in effect but allowing us at our election 
 to pay 100% of each interest payment in cash or to pay approximately 73.7% of such interest payment in cash and to add the balance of  
 such interest payment to the principal amount of the loan through the end of December 2025;                                            |

| 4) | waived any breach relating                        
 to past missed amortization or interest payments; |

| 5) | waived any breach relating     
 to any past covenant defaults; |

| 6) | added a 1% additional exit 
 fee due at loan payoff;    |

| 8) | eliminated the EBITDA coverage         
 and interest coverage ratio tests; and |

| 9) | reduced and simplified the