Company: IPST
Filing Date: 2025-10-16
Form Type: S-1/A
Source: 0001213900-25-099309
Chunk: 411

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-10-16
Form: S-1/A
Chunk 411
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aturity                       |     | 10%               |     |               |

Upon the consummation of the Company’s initial public offering on November 25, 2024, the Whiskey Special Ops 2023 Notes in the following table were exchanged and reclassified into equity (see Note 5), and were $ as of December 31, 2024, The significant unobservable inputs that were included in the valuation of the Whiskey Special Ops 2023 Notes as of December 31, 2023 include:

|                                        |     | December 31, 2023 |     |               |
|:---------------------------------------|:----|:------------------|:----|:--------------|
| Significant Unobservable Input         |     | Input             
 Range             |     | Weighted      
 Average       |
| Discount Rate                          |     | 54%               |     | 91.3%         |
| Expected Term (in years)               |     | 0.125 – 0.667     |     | 0.125 – 0.667 |
| Probability Scenarios                  |     |                   |     |               |
| IPO                                    |     | 70%               |     |               |
| deSPAC                                 |     | 0%                |     |               |
| Default/Dissolution/Forced Liquidation |     | 20%               |     |               |
| Held to Maturity                       |     | 10%               |     |               |

F-78

Heritage Distilling Holding Company, Inc.
Notes to Consolidated Financial Statements NOTE 8 — FAIR VALUE MEASUREMENT (cont.)

Valuation of Warrant Liabilities — The fair value of the warrant liabilities as of November 25, 2024 (the date of the Company’s initial public offering — which was the remaining prerequisite for the unconditional conversion of the warrant liabilities into equity) was based on the Company’s initial public offering price of $ per share. The fair value of the warrant liabilities at issuance and at each reporting period (through November 25, 2024) was estimated based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The warrants are free-standing instruments and determined to be liability-classified in accordance with ASC 480. The Company used the PWERM and the Monte Carlo Simulation (“MCS”) to incorporate estimates and assumptions concerning the Company’s prospects and market indications into the models to estimate the value of the warrants. The most