Company: IPST
Filing Date: 2025-05-07
Form Type: POS AM
Source: 0001641172-25-009076
Chunk: 47

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-07
Form: POS AM
Chunk 47
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 ● | we                                                                                            
 may not have been given all relevant information during our due diligence process, which      
 could have affected our decision to proceed with the acquisition or could have allowed us     
 to renegotiate the purchase price or other terms;                                             |
| ● | we                                                                                            
 are obligated by certain earn-out provisions of our purchase contract to issue to the sellers 
 of Thinking Tree Spirits additional shares of our common stock over the next three years      
 if the Thinking Tree Spirits brands grow in revenue over that period, which could lead to     
 dilution for all other shareholders; and                                                      |
| ● | as                                                                                            
 the purchaser in the acquisition, we may be subject to litigation related to certain acts     
 of Thinking Tree Spirits or its management that occurred prior to the acquisition, including  
 wrongful termination or age discrimination claims, securities fraud, whistleblower issues     
 or other matters, known or unknown to us at the time.                                         |

Certain former Thinking Tree Spirits shareholders opposed our acquisition of that company and filed a notice exercising dissenters’ rights. Two of the dissenters claims have been resolved and we are awaiting final resolution of the third.

In July 2024, three Thinking Tree Spirits shareholders provided Thinking Tree Spirits a notice of dissent to our proposed acquisition of Thinking Tree Spirits on the terms set forth in our acquisition agreement for that company. We have subsequently settled with two of the three TTS dissenters and are awaiting final resolution with the third. The third dissenter initiated litigation on April 16, 2025 seeking payment under the Oregon dissenters rights statute.

The outcome of any litigation related to the remaining open dissenter is inherently uncertain and it is possible that the plaintiffs in any such litigation will prevail no matter how vigorously we defend ourselves or the fact that we provided them with a fair and reasonable offer. In such case, the judicially-determined value of the shares of the dissenting shareholders could exceed the per share value of the consideration we paid for Thinking Tree Spirits, which could result in the payment of significant compensatory damages by our company. Any such adverse decision in such actions could have a material adverse effect on our financial position and liquidity and on our business and results of operations. In addition, regardless of the outcome, litigation can have an adverse impact on us because of defense costs, diversion of management resources and other factors. Further, in the event there is litigation that becomes public, such litigation could cause harm to our brand and our reputation, thereby impacting the value of our shares of common stock held by our stockholders.

We may enter partnerships, co-brand