Company: IPST
Filing Date: 2025-08-29
Form Type: DEF 14A
Source: 0001788230-25-000148
Chunk: 23

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-29
Form: DEF 14A
Chunk 23
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, employees or consultants. We believe the issuance or delivery of Pre-Funded Warrants and Pre-Funded Warrant Shares to Mr. Stiefel and Mr. Varga in the Offering should not be treated as equity compensation within the meaning of Rule 5635(c). However, it is possible Nasdaq may deem all or a portion of any arrangement as compensatory in nature, particularly in circumstances where the value deemed received by a listed company is less than the fair value of the securities issued. Accordingly, we are seeking the approval of our stockholders for the issuance of shares of the Common Stock to Mr. Stiefel and Mr. Varga in the Offering pursuant to Nasdaq Listing Rule 5635(c).

Finally, under the Nasdaq Listing Rule 5635(b), we are not permitted (without risk of delisting) to undertake a transaction that could result in a change in control of our company without seeking and obtaining separate stockholder approval. Nasdaq guidance indicates that a change of control would occur, subject to certain limited exceptions, if after a transaction an investor (or a group of investors) would hold 20% or more of a company’s then-outstanding shares of common stock or voting power, and such ownership or voting power would represent the company’s largest concentration of ownership or voting power. We are not required to obtain stockholder approval for the Offering under Nasdaq Listing Rule 5635(b) because no stockholder held more than 19.99% of the total outstanding shares of our common stock immediately after the Offering, and the Pre-Funded Warrants include the Beneficial Ownership Limitation. However, given the number of shares of common stock issuable upon the exercise of the Pre-Funded Warrants, and the Agent Warrants, and that, if our stockholders approve this proposal, Story Foundation will have the right to nominate at least three and up to five of our directors, it is possible that Nasdaq may deem the Offering in its entirety to effect a change of control of our company.

Accordingly, as a result of the foregoing, the Subscription Agreements require us to use our commercially reasonable efforts to hold the Special Meeting, at which we would solicit our stockholders’ affirmative vote for approval of the issuance of the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Advisory Warrants, and the Advisory Common Stock in accordance with the applicable law and rules and regulations of Nasdaq, no later than September 30, 2025 (or October 18, 202