Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 332

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 332
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iation expense related to property and equipment
for the years ended December 31, 2023 and 2022 was $1,430,240 and $1,512,661 respectively.

NOTE 5 — CONVERTIBLE NOTES

Increased Authorized Capital for Convertible Notes

On October 30, 2023, the Company’s Board of
Directors and shareholders took certain actions and approved Amendments to the Company’s certificate of incorporation and bylaws
in preparation for a planned initial public offering (the “Actions and Amendments”). These Actions and Amendments, among other
things: increased the Company’s authorized capital from 3,000,000 shares to 10,000,000 shares, including 9,500,000 shares of common
stock and 500,000 shares of Founders Common Stock (which Founders Common Stock has four votes per share). Subsequent to December 31, 2023,
the Company is in process filing a Second Amendment to its Amended and Restated Certificate of Incorporation to increase authorized capital
to 70,000,000 shares. (See Note 16.). Upon approval of the October 30, 2023 increase in authorized shares, the 2022 and 2023 Convertible
Notes were exchanged (contingent upon the consummation of this offering) for 3,312,148 additional shares of common stock and 507,394 prepaid
warrants; The actual unconditional exchange of the Convertible Notes and reclassification of the aggregate fair value of $36,283,890 in
Convertible Notes to equity (of Common Stock Par Value and Paid-in-capital of $387 and $36,283,504, respectively) under the terms of the
Subscription Exchange Agreement will occur upon the effectiveness of the Company’s anticipated IPO — which is the remaining
prerequisite for the unconditional exchange of the 2022 and 2023 Convertible Notes for equity. Until such time, the Convertible Notes
will remain on our balance sheet and the change in their fair value will also continue to be recognized as Other Income/(Expense) in our
Statement of Operations.

<div align='center'>F-58

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

NOTE 5 — CONVERTIBLE NOTES (cont.)

2020 Convertible Promissory Note

In March and August 2020, the Company issued
multiple unsecured convertible promissory notes (the “March 2020 Notes” and “August 2020