Company: IPST
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001788230-25-000126
Chunk: 226

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part II, Item 8
Chunk 226
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 a Black Scholes valuation (the “Settlement Equity”). The result of the Negotiated Settlements with the secured and unsecured creditors was: a) $8,989,438 of the Company’s secured notes payable as of June 30, 2025 plus $995,474 of payoff related fees and expenses negotiated to be settled for $7,000,000 in cash, $2,848,000 of Settlement Equity (in the form of 4,000,000 warrants) with the remaining $2,635,507 to be recognized as a gain on settlement in the statement of operations; and, b) an aggregate of $3,792,767 of the Company’s unsecured accounts payable as of June 30, 2025 was negotiated to be settled for $1,816,250 in cash, $605,795 in Settlement Equity (in the form of an aggregate of 1,527,820 warrants) with the remaining $1,138,541 to be recognized in the then current period (third quarter) statement of operations in the respective expense accounts to which the expenses were originally recorded. ELOC Agreement — Subsequent to June 30, 2025, an aggregate of 10,525,357 shares of common stock had been sold to the investor under the ELOC Purchase Agreement for aggregate gross proceeds to the Company of $4,087,161. Exercise of Common Warrants and Prepaid Warrants — Subsequent to June 30, 2025, 100,000 prepaid warrants and 18,796 common warrants were exercised for $1,188, leaving 0 prepaid warrants outstanding and 0 common warrants outstanding (including 0 common warrants outstanding of the related party). Litigation — CFGI — On January 31, 2025, CFGI, LLC (“CFGI”) commenced a litigation against the Company in the Superior Court, Suffolk County, Massachusetts asserting claims arising under a November 1, 2022 written engagement letter agreement whereby CFGI agreed to provide financial, accounting and tax consulting services to the Company. CFGI contends that it fully performed its obligations under such agreement, but that the parties amended the agreement on or about May 22, 2023 when the Company fell behind in its payments. CFGI alleges further that, while the Company made some payments under the amended agreement, CFGI was then owed approximately $730,000, plus interest. On July 30, 2025, the parties entered into a settlement agreement whereby the Company paid $