Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 60

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 60
---
 Tree Spirits on the terms set forth in our
acquisition agreement for that company. In July 2024, such former shareholders notified Thinking Tree Spirits and us of their intention
to commence litigation to seek damages against Thinking Tree Spirits and us if we do not pay such former shareholders an amount in cash
that they allege is the fair value of the shares of capital stock they held in Thinking Tree Spirits as required by Oregon law. The amount
the dissenting shareholders alleged was the fair value of their shares exceeded the amount we believed was the actual fair value of such
shares. The statutory time period has passed for any other party to assert dissenters’ rights.

We have subsequently settled with one of the three
TTS dissenters and we have sent the remaining two dissenters the statutorily required payment offers and documentation in an attempt to
wind down the dissenters process. The statutorily-required 30-day review period for those offers passed on January 6, 2025, after which
time we received one response objecting to the offer. Nevertheless, we believe the matter to be concluded.

In the event a remaining dissenter elects to challenge
the offer, our position is the matter is now concluded, we intend to deny any allegations and to vigorously defend any litigation that
is commenced. However, the outcome of litigation is inherently uncertain and it is possible that the plaintiffs in any such litigation
will prevail no matter how vigorously we defend ourselves or the fact that we provided them with a funded offer and they chose not to
reply within the 30 days required by law. In such case, the judicially-determined value of the shares of the dissenting shareholders could
exceed the per share value of the consideration we paid for Thinking Tree Spirits, which could result in the payment of significant compensatory
damages by our company. Any such adverse decision in such actions could have a material adverse effect on our financial position and liquidity
and on our business and results of operations. In addition, regardless of the outcome, litigation can have an adverse impact on us because
of defense costs, diversion of management resources and other factors. Further, in the event there is litigation that becomes public,
such litigation could cause harm to our brand and our reputation, thereby impacting the value of our shares of common stock held by our
stockholders.

<div align='center'>34</div>

We may enter partnerships, co-branding arrangements, licensing agreements, co-location, joint branding or other collaborative arrangements with other brands, producers,