Company: IPST
Filing Date: 2025-12-19
Form Type: S-1/A
Source: 0001213900-25-123872
Chunk: 33

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-19
Form: S-1/A
Chunk 33
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 from a low of $1.246 to a high of $14.933. In addition, digital assets do not pay interest or returns other than staking rewards and so the ability to generate a return on investment from the net proceeds of any financings will depend on whether there is appreciation in the value of digital assets following our purchases of digital assets with the net proceeds from such financings. We plan to treat the unlocking of tokens via staking on our validator as a form of yield for revenue purposes, consistent with GAAP. Future fluctuations in digital asset trading prices may result in our converting digital assets into cash with a value substantially below what we paid for such digital assets. If investors perceive our share price as a proxy for $IP Tokens, the lack of a continuous redemption/creation arbitrage can cause persistent, material premiums or discounts to intrinsic value. While staking of $IP Token held by us can generate a return, there is no guarantee a market for staking of $IP Tokens will continue or expand or that the yield on such staking will remain at current levels. We plan to engage in derivatives transactions, including for the purpose of generating yield by the sale of covered call options on our $IP Tokens, and such transactions may expose us to material risks that could adversely impact our business, operating results and financial condition. Derivatives transactions are financial contracts whose value depends on, or is derived from, the price or level of some other underlying product, asset, rate, or index, such as the value of a particular commodity. Derivatives transactions include, but are not limited to, swaps, options and futures. Derivatives transactions may be employed for different purposes, including hedging or mitigating exposure to a particular asset or risk; obtaining or creating investment exposure; and monetizing and generating yield on an existing asset or position. As discussed above, in September 2025, the Digital Assets Committee of our Board approved our sale of covered call options using less than 2% of the total amount of $IP Tokens we own. By selling such covered call options, we will be paid option premia in exchange for which the option counterparty will obtain the right, but not the obligation, to purchase a specified amount of our $IP Tokens at a designated option strike price. We expect to sell call options that can be exercised if the price of the $IP Token in the market reaches a price that is 25% above the $IP Token price at the time the option is sold. In this way, we expect