Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 360

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 360
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is required to pay a monthly management fee to Summit Distillery, Inc (see Note 14).

NOTE 13 — RETIREMENT PLAN

The Company sponsors a Roth 401(k) and profit-sharing
plan (the “Plan”), in which all eligible employees may participate after completing 3 months of employment. No contributions
have been made by the Company during the years ended of December 31, 2023 and 2022.

<div align='center'>F-73

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

NOTE 14 — RELATED-PARTY TRANSACTIONS

Management Agreement

On October 6, 2014, the Company entered into
a management agreement with Summit Distillery, Inc., an Oregon corporation, to open a new Heritage Distilling Company location in Eugene,
Oregon. The Company engaged Summit Distillery, Inc., to manage the Eugene location for an annual management fee. The principals and sole
owners of Summit Distillery, Inc., are also shareholders of HDHC. For each of the years ended December 31, 2023 and 2022, the Company
expensed a management fee of $180,000 and $180,000 respectively, to Summit Distilling, Inc. The fee is based upon a percentage of the
Company’s trailing twelve months, earnings before interest, taxes and depreciation expense, as defined in the management agreement.

2022 and 2023 Convertible Notes

During 2022, the Company issued multiple unsecured
convertible promissory notes under the terms of the 2022 Notes to a related party who is a current shareholder of the Company and owns
more than 10% of the Company’s outstanding common stock as of December 31, 2022 and 2023. The aggregate principal sum of the
related party convertible 2022 Notes was $6,311,250 with an aggregate cash proceed of $4,675,000 (See Note 5). Concurrent with the
execution of the 2022 Notes, the Company issued warrants to the related party in an amount equal to 50% of the cash proceeds from the
convertible notes (see Note 7). The Company initially allocated the $4,675,000 aggregate cash proceeds from the related party to
the convertible 2022 Notes and the associated warrants on their respective issuance dates in the aggregate amounts of $4,422,379 and $252,621,
respectively.

During 2023,