Company: IPST
Filing Date: 2025-12-12
Form Type: S-1/A
Source: 0001213900-25-121277
Chunk: 406

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-12
Form: S-1/A
Chunk 406
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, 2027. The warrant exercise price is equal to: (i) if the Company consummates an IPO, 100% of the price per share at which the Company’s common stock is sold in the IPO; or (ii) if the Company consummates a deSPAC merger, 100% of the redemption price related to such deSPAC merger. The warrants will automatically be exercised cashlessly if the stock price hits 125% of the IPO price. The warrants are free -standinginstruments and determined to be liability -classifiedin accordance with ASC 480. More specifically, ASC 480 requires a financial instrument to be classified as a liability if such financial instrument contains a conditional obligation that the issuer must or may settle by issuing a variable number of its equity securities if, at inception, the monetary value of the obligation is predominantly based on a known fixed monetary amount. The Company measured the warrant liabilities at fair value at the respective issuance dates of the 2022 Notes, including the note issued in February 2023, and March 31, 2023 using a probability weighted expected return method and the Monte Carlo Simulation. The fair value of the warrant liabilities at the issuance dates of the 2022 Notes issued in 2022 was approximately $ 581,364, of which $ 300,059was associated with the related party warrant liabilities. The fair value of the warrant liabilities at the issuance dates of the 2022 Notes issued in February 2023 was approximately $ 12,874. The warrant liabilities are subsequently remeasured to fair value at each reporting date with changes in fair value recognized as a component of total other income (expense) in the consolidated statements of operations. The Company recorded a net loss of $ 1,078,132and a net loss of $ 348,994resulting from the change in fair value of the warrant liabilities for the years ended December 31, 2024 and 2023, respectively, of which $ 462,410and $ 149,710, respectively, was related to the change in value of the related party warrant liabilities. As of December 31, 2024 and 2023, the fair value of the warrant liabilities was $0and $ 794,868, respectively of which $ 0and $ 340,918were associated with the related party warrant liabilities.

F-81 Heritage Distilling Holding Company, Inc.
Notes to Consolidated Financial Statements NOTE 7 — WARRANT LIABILITIES (cont.) In April