Company: IPST
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-006695
Chunk: 16

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 16
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 of 494,840 shares of our Series A Convertible Preferred Stock (“Series A Preferred Stock”) and warrants to purchase an aggregate of 246,261 shares of common stock for an aggregate purchase price of $4,948,478, of which $2,025,000 was paid in cash, $1,155,000 was paid by the sale and transfer to us of an aggregate of 525 barrels of premium aged whiskey with an average value of $2,200 per barrel, $110,600 was paid by the sale and transfer to us of an aggregate of 50 barrels of premium aged whiskey with an average value of $2,212 per barrel, and $719,919 was paid to us by the cancellation of outstanding indebtedness. Each share of Series A Preferred Stock has a stated value of $12.00 per share, pays dividends at the rate of 15% per annum of the stated value (or $1.80 per share), and is convertible by the holder at any time into a number of shares of common stock determined by dividing (a) an amount equal to 110% of the sum of (i) the stated value plus (ii) the amount of all accrued and unpaid dividends, by (b) the then-applicable conversion price. The Series A Preferred Stock is also mandatorily convertible on such basis on June 15, 2027, or at our option at any time on or after June 15, 2025. The conversion price of the Series A Preferred Stock is initially $4.00 per share. The warrants issued in our November 2024 initial public offering had an exercise price equal to $4.00 per share and will expire on June 15, 2029; however, at any time after June 15, 2027, the warrants will automatically exercise on a cashless basis if our common stock has traded for five consecutive trading days at or above an amount equal to 125% of the exercise price of the warrants.

6 In September 2024, we completed a private placement to two accredited investors of 93,789 shares of our Series A Preferred Stock that did not include any related warrants in exchange for the cancellation of warrants to purchase 510,315 shares of common stock at $6.00 per share. The value assigned to the cancelled warrants was determined to be $937,959, or $1.838 per warrant, using a Black-Scholes Valuation model with an estimated stock price of $5.00 and an