Company: IPST
Filing Date: 2025-10-16
Form Type: S-1/A
Source: 0001213900-25-099309
Chunk: 6

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-10-16
Form: S-1/A
Chunk 6
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 validator chosen to propose a block will (when that block is successfully confirmed by the other validator nodes) receive the gas fees for all transactions in the block (known as “execution layer rewards”). In addition, the Story Network automatically issues $IP tokens as rewards to validators who successfully propose a block. We have elected to operate our own validator services rather than to “delegate” our $IP tokens to third-party validation service providers. As a result of the recent expansion of our cryptocurrency treasury reserve policy and our decision to establish a new validator business, we now report our business in two segments: •IP Management Infrastructure: this segment executes and manages our treasury policy, operates our validators and operates infrastructure to allow IP owners to manage, track and monetize their IP through the $IP token and the Story ecosystem; and •Craft Spirits: this segment executes and manages our craft distillery business, including producing, marketing and selling our lines of award -winningcraft spirits and the development of our Tribal Beverage Network. 1 Our Cryptocurrency Business As discussed above, in August 2025, we modified and updated our cryptocurrency treasury reserve policy to focus our growing cryptocurrency efforts on the Story Network, a decentralized layer 1 blockchain that allows network participants to register, license and enforce IP assets, using the native utility token of the Story Network, the $IP token. This was a shift from our prior treasury reserve policy when we held excess cash primarily in FDIC-insured interest-bearing accounts. The impetus to adopt this strategy resulted from our desire to obtain the highest yield on excess cash. Under this approach, our digital asset treasury policy now focuses primarily on holding $IP tokens. Our approach involves applying a public-market treasury model to an asset that we believe is earlier in its lifecycle with respect to both development and usage, as well as institutional adoption, compared to other, more established cryptocurrencies, such as Bitcoin or Solana. The Digital Assets Committee of our Board, which manages our treasury reserve policy, will focus efforts and attention on this digital asset strategy and a significant portion of our balance sheet will be allocated to holding $IP tokens in our digital asset treasury. At October 13, 2025, approximately 99% of our digital asset reserves consisted of $IP tokens, with the remainder of such assets held in USDC. We do not intend to dedicate any of our treasury-allocated capital to other digital assets outside of those in the Story ecosystem. Our treasury strategy is intended to bring value to our stockholders in the following ways: •We currently operate a validator