Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 283

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 283
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 to whiskey inventory); and, $719,919 was
paid by the cancellation of outstanding indebtedness (factoring agreements) during the three months ended September 30, 2024 (of which
$296,619 was from a related party). In addition, the Series A Preferred Stockholders who were issued Series A Preferred Stock during the
three months ended September 30, 2024 received an additional 510,315 warrants with an exercise price of $6.00 per share as part of the
Series A Preferred Stock subscriptions (the “$6.00 Warrants”) (of which 321,026 of the $6.00 Warrants were issued to a related
party). In September 2024, the 510,315 $6.00 Warrants (including 321,026 $6.00 Warrants from a related party) were exchanged for 93,789
shares of Series A Preferred Stock that did not include any related warrants (including 59,001 shares of Series A Preferred Stock that
did not include any related warrants for a related party). The value assigned to the $6.00 Warrants exchanged for Series A preferred Stock
that did not include any warrants was negotiated to be $937,959 (including $590,045 from a related party), or $1.838 per $6.00 Warrant
using a Black-Scholes Valuation model with a then estimated IPO stock price of $5.00 per share and exercise price of $6.00 per share (See
Note 16.), The Company allocated the net proceeds between the warrants and the Series A Preferred Stock using the relative fair value
method.

In connection with the $4,948,478 of Series A
Preferred Stock, the Company also issued 197,013 warrants to purchase common stock at the lesser of $5.00 per share or the price per share
at which the common stock is sold in the Company’s initial public offering (of which 60,563 of the $5.00 Warrants were issued to
a related party). (See Note 16.) Subsequent to September 30, 2024, upon the November 25, 2024 initial public offering at $4.00 per share,
the 197,013 warrants at $5.00 per share were recalculated and reissued as 246,267 warrants at $4.00 per share (and the 60,563 related
party warrants at $5.00 per share were