Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 298

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 298
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. The principals and sole
owners of Summit Distillery, Inc., are also shareholders of HDHC. For each of the nine months ended September 30, 2024
and 2023, the Company expensed a management fee of $135,000 and $135,000, respectively, to Summit Distilling, Inc. The fee is based upon
a percentage of the Company’s trailing twelve months, earnings before interest, taxes and depreciation expense, as defined
in the management agreement.

2022 and 2023 Convertible Notes

During 2022, the Company issued multiple unsecured
convertible promissory notes under the terms of the 2022 Notes to a related party who is a current shareholder of the Company and owns
more than 10% of the Company’s outstanding common stock as of September 30, 2024 and December 31, 2023 and 2022. The aggregate
principal sum of the related party convertible 2022 Notes was $6,311,250 with an aggregate cash proceed of $4,675,000 (see Note 5).
Concurrent with the execution of the 2022 Notes, the Company issued warrants to the related party in an amount equal to 50% of the cash
proceeds from the convertible notes (see Note 7). The Company initially allocated the $4,675,000 aggregate cash proceeds from the
related party to the convertible 2022 Notes and the associated warrants on their respective issuance dates in the aggregate amounts of
$4,422,379 and $252,621, respectively.

<div align='center'>F-36

Heritage Distilling Holding Company, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)</div>

NOTE 14 — RELATED-PARTY TRANSACTIONS (cont.)

During 2023, the Company issued multiple additional
unsecured convertible promissory notes under the terms of the 2023 Notes to the same related party for a principal sum of $3,982,500 with
a cash proceed of $2,950,000 (see Note 5).

As of September 30, 2024, the fair value
of the related party convertible notes and warrant liabilities was $8,783,749 and $367,401, respectively. As of December 31, 2023,
the fair value of the related party convertible notes and warrant liabilities was $17,220,203 and $340,918, respectively.

In October