Company: IPST
Filing Date: 2025-10-16
Form Type: S-1/A
Source: 0001213900-25-099309
Chunk: 406

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-10-16
Form: S-1/A
Chunk 406
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 to the lesser of: (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) $ 10.00per share. The warrants will automatically be exercised on a cashless basis after the three -yearanniversary of the issuance date if the stock price hits 125% of the warrant exercise 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 Whiskey Notes using a probability weighted expected return method and the Monte Carlo Simulation. The fair value of the warrant liabilities at the issuance dates in the years ended December 31, 2024 and December 31, 2023 was approximately $ 302,020and $ 1,621,527, respectively, of which $ 111,112and $ 436,041, respectively, was associated with the related party warrant liabilities. The fair value of the warrant liabilities at the issuance dates in April 2024 was approximately $ 48,889, of which $ 26,706was associated with the related party warrant liabilities. 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 gain of $ 1,814,712(of which $ 406,774was to a related party) resulting from the change in fair value of the warrant liabilities to $ 0(of which $ 0was to a related party) for the year ended December 31, 2024. The Company recorded a net gain of $ 108,835(of which $ 29,267was to a related party) resulting from the change in fair value of the warrant liabilities to $ 1,512,692(of which $ 406,774was to a related party) for the year ended December 31, 2023. In April 2024, the Whiskey Notes (including 755,919related warrants) were exchanged (contingent upon the