Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 361

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 361
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 the Company issued multiple additional
unsecured convertible promissory notes under the terms of the 2023 Notes to the same related party for a principal sum of $3,982,500 with
a cash proceed of $2,950,000 (See Note 5).

As of December 31, 2022, the fair value of
the related party convertible notes and warrant liabilities was $3,476,057 and $187,181, respectively. As of December 31, 2023, the fair
value of the related party convertible notes and warrant liabilities was $17,220,203 and $340,918, respectively.

2023 Series — Convertible Whiskey Special Ops 2023 Notes

As of December 31, 2023, $800,000 in principal of
the Whiskey Special Ops 2023 Notes were held by the related party, plus 106,667 warrants to purchase common stock, calculated using an
estimated IPO price of $7.50 per share. Subsequent to December 31, 2023, the Company issued an additional $1,433,000 of Whiskey Special
Ops 2023 Notes with a similarly calculated 191,067 warrants to the same related party.

On February 29, 2024, the related party agreed to
exchange its then held Whiskey Notes and related warrants for equity under the terms of the most recent round of 2023 Convertible Notes
and the aforementioned warrants were terminated. (See Note 16.)

2023 Barrel Production Contract

During 2023, the Company entered into a distilled
spirits barreling production agreement with Tiburon Opportunity Fund, L.P. This agreement is for production of 1,200 barrels of distilled
spirits over time. There was a prepayment of $1,000,000 made in January 2023. Subsequent to December 31, 2023, this agreement was amended
in March 2024 to a reduced number of 600 barrels for $500,000. The then $500,000 excess prepayment was then used to purchase a Whiskey
Note in the principal amount of $672,500 and subsequently exchanged (contingent upon the consummation of this offering) under the terms
of a Subscription Exchange Agreement for common stock in conjunction with the February 29, 2024 exchange of Whiskey Notes for common stock.
(See Note 16.).

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Heritage Distilling