Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 365

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 365
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 Company entered into contracts with
wholesale distributors for distribution of its products into Kansas, Kentucky, Colorado and portion of Texas with a goal of completing
those negotiations by the end of the second quarter of 2024.

In May 2024, 105,360 RSUs were voluntarily terminated
and 80 RSUs were forfeited, leaving 11,064 issued RSUs to settle at a grant value of $157.89 per share. The Company had previously anticipated
recognizing $18,394,817 of previously unrecognized compensation expense for those RSU awards upon the expiration of lock up agreements
entered into in connection with this offering. As a result of the termination of the aforementioned RSUs, the Company now expects to recognize
an expense of $1,746,895 upon the expiration of any lock ups for the remaining. In April 2024, certain holders of common stock and prepaid
warrants received from the 2023 October Subscription Exchange Agreements agreed to amend those agreements as they relate to the exercise
price for warrants offered as part of the 2022 Convertible Notes. Under the terms of a Subscription Exchange Agreement, the strike price
of the warrants related to the 2022 Notes was fixed at a negotiated fixed, non-adjustable $6.00 per share and include a cashless exercise
provision. Accordingly, these 908,334 warrants will no longer qualify to be classified as liabilities in accordance with ASC 480, and
their fair value that has previously been recorded as warrant liabilities will be reclassified to equity.

In April 2024 all holders of Whiskey Notes agreed
to exchange their notes and warrants for common stock under a Subscription Exchange Agreement. Under the terms of a Subscription Exchange
Agreements, the Whiskey Notes and related 755,919 warrants were exchanged (contingent upon the consummation of this offering) for 2,399,090
shares of common stock and 546,927 prepaid warrants. Accordingly, those warrants will no longer qualify to be classified as liabilities
in accordance with ASC 480, and their fair value that has previously been recorded as warrant liabilities will be reclassified to
equity. (See Note 7.) The Whiskey Notes and related warrants were exchanged (contingent upon the consummation of this offering) for common
stock; however, the Whiskey Notes and related Warrant Liabilities remain on our balance sheet until the effectiveness of the Company’s
anticipated IPO — which is the remaining prerequisite for the