Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 337

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 337
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ated the IPO, $10.00 dollars per share. Total
warrants outstanding if calculated using an assumed IPO price of $5.00 per share as of December 31, 2023 would be 595,000 (of which 160,000
would be to a related party). The warrants include a mandatory cashless exercise provision whereby any warrants not previously exercised,
will be automatically cashlessly exercised, beginning on the third anniversary of their issuance date, on any trading day that the 20-day
VWAP of the common stock equals or exceeds a price per share equal to or greater than 125% of the exercise price of the warrant.

<div align='center'>F-60

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

NOTE 5 — CONVERTIBLE NOTES (cont.)

The Company agreed to make royalty payments on the
Whiskey Special Ops 2023 Notes at the rate of $10 per bottle of a new product offering of Special Forces labelled spirits. As of December
31, 2023, the Company had sold 4,680 bottles of the new product offering of Special Forces labelled spirits, representing more than $465,274
in retail shelf value, and recorded $46,800 of royalties due to the Whiskey Special Ops Noteholders. These royalties were eliminated in
conjunction with the exchange of the Whiskey Notes and related Warrants into common stock subsequent to December 31, 2023.

The outstanding balance of the Whiskey Special Ops
2023 Notes and accrued interest may, in whole or part, be converted into common stock prior to maturity at the option of the holder so
long as the price per share is equal to or greater than the original IPO price. Any principal and accrued interest remaining outstanding
upon maturity will be mandatorily converted into common stock of the Company at the rate of $1.25 per $1.00 of outstanding principal and
accrued interest at a price per share equal to the then market price per share, but in no case less than 80% of the Company’s original
IPO price. The aggregate Fair Value of $1,452,562 in Whiskey Notes (separately) and the related Fair Value of the Warrant Liability of
$1,512,692 will be reclassified from being a liability to equity under the terms of the Subscription Exchange Agreement upon the effectiveness
of the Company’s anticipated IPO — which is the remaining prerequisite for the unconditional conversion of