SecProbe.io

CORRESP
1
filename1.htm

ERIC M. HELLIGE

Partner

Direct Tel: 212-326-0846

Fax: 212-326-0806

ehellige@pryorcashman.com

October 25, 2024

Via Edgar

Ms. Eiko Yaoita Pyles

Ms. Jean Yu

Mr. Thomas Jones

Mr. Geoffrey Kruczek

Securities and Exchange Commission

Division of Corporate Finance

100 F Street, N.E.

Washington, D.C. 20549

    Re:
    Heritage Distilling Holding Company, Inc.

    Amendment No. 3 to Draft Registration Statement on Form S-1

    Filed October 3, 2024

    File No. 333-279382

Ladies and Gentlemen:

On behalf of our client, Heritage Distilling Holding
Company, Inc., a Delaware corporation (the “Company”), and pursuant to the applicable provisions of the Securities Act
of 1933, as amended (the “Securities Act”), and the rules promulgated thereunder, we hereby file in electronic form the accompanying
Amendment No. 4 to Registration Statement on Form S-1 of the Company (“Amendment No. 4”), marked to indicate changes to Amendment
No. 3 to the Registration Statement on Form S-1 that was filed with the Securities and Exchange Commission (the “Commission”)
on October 3, 2024.

Amendment No. 4 reflects the responses of the Company
to comments received from the Staff of the Commission (the “Staff”) in a letter dated October 21, 2024 (the “Comment
Letter”). The discussion below is presented in the order of the numbered comments in the Comment Letter. Certain capitalized terms
set forth in this letter are used as defined in Amendment No. 4. For your convenience, references in the responses to page numbers are
to the marked version of Amendment No. 4 and to the prospectus included therein.

The Company has asked us to convey the following
responses to the Staff:

Amendment No. 3 to Registration Statement on Form S-1 filed October
3, 2024

Dilution; page 58

 1. Please provide us with your calculation for arriving at
the numbers disclosed in the dilution calculation table on page 59 similar to those you provided in Annex A of your correspondence letter
dated July 5, 2024.

 Response: As requested by the Staff, Annex A to this letter sets out
the Company’s calculations of its historical net tangible book value per share as of June 30, 2024 and the per share increases
and decreases in net tangible book value and pro forma net tangible book value attributable to the Pre-Closing Adjustments and Post Closing
Adjustments made in calculating the dilution in pro forma net tangible book value per share to new investors participating in this offering,
as illustrated in the table on page 59 of Amendment No. 4.

Securities and Exchange Commission

October 25, 2024

Page 2

Consolidated Financial Statements; page F-1

 2. Your revised disclosure on page 126 states that in the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the holders of shares of Series A Preferred Stock will be entitled to be paid out before any payments to the common
shareholders, an amount equal to the greater of (i) 110% of the sum of (a) the Stated Value, plus (b) the amount of the aggregate dividends
then accrued on such share of Series A Preferred Stock and not previously paid, or (ii) such amount per share as would have been payable
had all shares of Series A Preferred Stock been converted into common stock immediately prior to such liquidation, dissolution or winding
up. As this payment appears to be considerably in excess of the par value of the preferred shares disclosed on the face of your balance
sheet, please revise to disclose in the equity section of the balance sheets the aggregate amount of liquidation preference of these Preferred
Shares. Refer to ASC 505-10-50-4. Also, revise to disclose the terms of the liquidation preference in the notes to the financial statements.

 Response: As requested by the Staff, the Company has amended the description
of the Company’s preferred stock on its balance sheet at June 30, 2024 and December 31, 2024 on page F-2 of Amendment No. 4 to
disclose the aggregate amount of the liquidation preference of the Company’s outstanding preferred stock. In addition, the Company
has revised the description of its preferred stock in Footnote 9 to its unaudited interim condensed consolidated financial statements
for the six month periods ended June 30, 2024 and 2023 on page F- 31 of Amendment No. 4 to disclose the terms of the liquidation preference
of the Company’s outstanding preferred stock.

Notes to Condensed Consolidated Financial Statements

Note 2. Summary of significant account policies

Investments/Investments in Flavored Bourbon LLC; page F-13

 3. We note your response to prior comment 4. Please tell us how the OPM Backsolve Valuation Model you used to measure the fair value
of your investment in Flavored Bourbon LLC complies with the requirement in ASC 321-10-55-9 which states that the observable price of
a similar security should be adjusted for the different rights and obligations to determine the amount that should be recorded as an upward
or downward adjustment in the carrying value of the security measured in accordance with paragraph 321-10-35-2 to reflect the fair value
of the security as of the date that the observable transaction for the similar security took place. Also, please note that subsequent
to irrevocably electing to measure at fair value, the investment measured in accordance with paragraph 321-10-35-2 must continue to be
measured at fair value at each reporting period end date in accordance with ASC 321-10-35-1. Revise your disclosures accordingly.

    Response:
    In regard to the valuation for the Company’s investment in Flavored Bourbon, LLC (“Flavored Bourbon”), the Company engaged an independent valuation services company that used the OPM Backsolve Valuation Model to derive the fair value of the Company’s investment in Flavored Bourbon. In such valuation, it was determined that the Class E Units being offered by Flavored Bourbon  were similar enough to the Company’s investment in Class A Units of Flavored Bourbon (with differences including the Class A Units’ liquidation preference seniority and preferential voting rights related to sale or liquidation) to trigger a reassessment of the value of the Company’s investment in Flavored Bourbon, which was done using the Option Pricing Model Backsolve Valuation Method (“OPM Backsolve Valuation Method”). As reflected in the table below, the fair value of the Class A Units was derived by adjusting the observable price for the Class E Units for differences in rights and obligations consistent with ASC 321-10-55-9. The measurement of such adjustments was determined using the OPM Backsolve Valuation Model.

A comparison of the rights of the Class E Units and the Class
A Units showed:

    Class E Preferred (Reference)

    Class A Preferred (Subject)

    Rights and Obligations

    Dividends

    Same as Class A, no adjustment required

    Same as Class E, no adjustment required

    Voting

    Same as Class A, no adjustment required

    Same as Class E, no adjustment required

    Special Rights on Sale

    Reflected in OPM liquidation priority

    Class A has preemptive rights to block the sale of Flavored Bourbon if return thresholds are not met. The OPM liquidation preferences were adjusted for this right of the Class A Preferred.

    Distribution (right to receive)

    Same as Class A, no adjustment required

    Same as Class E, no adjustment required

    Distributions (Liquidation Preference)

    Reflected in the OPM

    Reflected in the OPM

As clarification, the Company has not made the irrevocable
election to measure its investment in Flavored Bourbon at fair value. As disclosed in Footnote 2 to the Company’s unaudited interim
condensed consolidated financial statements for the six month periods ended June 30, 2024 and 2023 on pages F- 13 and F-14 of Amendment
No. 4, the Company’s accounting policy states that the Company’s investment in Flavored Bourbon is “… adjusted
for observable price changes in orderly transactions for identical or similar investment of the same issuer pursuant to Accounting Standards
Codification (“ASC”) Topic 321 …” (ASC 321-10-35-2). The Company has not discontinued the use of the measurement
alternative (i.e.: ”If an entity identifies observable price changes in orderly transactions for the identical or a similar investment
of the same issuer, it shall measure the equity security at fair value as of the date that the observable transaction occurred.”)
in favor of a fair value model. The Company’s investment in Flavored Bourbon continues to qualify for measurement in accordance
with ASC 321-10-35-2. As a result, the Company believes that no change in its disclosure regarding the methodology of valuing its investment
in Flavored Bourbon is required.

Note 16. Subsequent Events; page F-40

 4. Your response does not appear to fully address the prior comment 6, as some of the subsequent events disclosed here do not appear
to be reflected in your pro forma financial information and vice versa (e.g., transactions related to the factoring agreements). Your
revised disclosures also do not appear to quantify the total number of shares issued subsequent to June 30, 2024 by type and class of
stock or equity instruments. Please revise accordingly.

    Response:
    In response to this comment, the Company has expanded Annex A to this letter to include details supporting the information included in the capitalization table on pages 55 and 56 of Amendment No. 4. In addition, in Annex B to this letter, the Company has set out the disclosures included in Footnote 16 (Subsequent Events) to its unaudited interim condensed consolidated financial statements for the six month periods ended June 30, 2024 and 2023 on pages F- 41 and F-42 of Amendment No. 4 and indicated by paragraph references the calculations in Annex A that support the calculations in the tables under the captions “Capitalization” and “Dilution” beginning on pages 55 and 58, respectively, of Amendment No. 4.

*    *
 *

    2

Securities and Exchange Commission

October 25, 2024

Page 3

As it is the goal of the Company to have the Registration
Statement on Form S-1 declared effective as soon as possible, the Company would greatly appreciate the Staff’s review of Amendment
No. 4 as promptly as practicable. If the Staff has any questions with respect to the foregoing, please contact the undersigned at (212)
326-0846.

    Very truly yours,

    /s/ Eric M. Hellige

    Eric M. Hellige

    cc:
    Justin Stiefel

    Heritage Distilling Holding Company, Inc.

    3

Annex A

    Capitalization
    Table reference (PF / PFAA)

    (i)

    (i)

    (iii)

    (iii)

    (iii)

    (iv)

    (ii)

    N/A

    (vii)

    (Vii)

    (v),
    (vi)

    (viii)

    (ix)

    (ix)

    PFAA
    (i)

    PFAA
    (ii)

    PFAA
    (iii)

    PFAA
    (ii)

    June 30, 2024 Footnote reference

    Footnote
    5

    Footnote
    5

    Footnote
    5

    Footnote
    5

    Footnote
    5

    Footnote
    7

    N/A

    Footnote
    9

    Footnote
    9

    Footnote 16 Reference

    FN16-H

    FN16-C.1

    FN16-C.2

    FN16-C.2

    FN16-E.1

    FN16-I.1

    FN16-I.1

    FN16-J.1

    FN16-C.4

    FN16-E.2

    FN16-J.2

    Dilution

    Other

    Contingent

Upon IPO

    Contingent

    Upon IPO

    Contingent

Upon IPO

    Contingent

Upon IPO

    Contingent

Upon IPO

    Contingent

Upon IPO

    Contingent

Upon IPO

    Contingent
    /

 Post IPO

    Contingent

Upon IPO

    Contingent

Upon IPO

    Dilution

    Net
    Tangible Book Value

    Historical
    June 30, 2024

    Pro
    Forma Activity

    Exchange
    of Certain Debt into Equity (2022 and 2023 Convertible Notes)

    Change in Fair
    Value of Whiskey Notes through date of Exchange

    Exchange
    of Certain Debt & Warrants (2023 Series Whiskey Notes)

    Warrants Reclassified
    to Equity as Exercise Price now Fixed at $6.00

    Certain Warrants
    Exchanged for Common Stock

    TTS Acquisition
    - Post acquisition Date IPO Share Price true-up

    Exercise
    of Prepaid Warrants

    New Preferred
    Stock Offering - Q3 2024

    Preferred Stock
    Issued to Purchase Whiskey

    Factoring Agreements
    Exchanged for Preferred Stock

    Preferred Stock
    Warrants Exchanged for Preferred Stock

    Conversion
    of Common Stock into Common Warrants

    (C)

    (See
    Note 1)

    Common Stock

    $31,419,590

    $19,097,710

    $14,730,085

    $884,182

     $-

     $-

    Preferred Stock

    $1,830,000

    $1,350,000

    $110,600

    $719,919

    $937,959

    $(937,959)

    Retained Earnings

    $(65,985,135)

    $(1,030,622)

    $(9,312,218)

    $8,580,978

     $-

    $(59,252)

    Shareholders Equity:

    $(32,735,545)

    $18,067,088

    $(9,312,218)

    $23,311,063

    $884,182

     $-

     $-

     $-

    $1,350,000

    $110,600

    $660,667

     $-

    Less: Deferred Offering Costs

    $(1,556,598)

    Less: Intangibles and Goodwill

    $(1,467,807)

    Less: Unamort. Debt Issue
    Costs

    $(238,994)

    (A) Net Tangible Book Value

    $(35,998,944)

    $18,067,088

    $(9,312,218)

    $23,311,063

    $884,182

     $-

     $-

     $-

    $1,350,000

    $110,600

    Shares

    Shares

    Prepaid Warrants

    Shares

    Shares

    Prepaid Warrants

    Shares

    Shares

    Shares

    Shares

    Prepaid Warrants

    Shares

    Shares

    Shares

    Shares

    Common Warrants

    December 31, 2024 Shares Outstanding
    - Pre .57 for 1 Split

    Pre- Split - common stock

    669,550

    5,810,830

    890,166

    4,208,960

    959,520

    Post- Split-calculated

    381,644

    3,312,173

    507,395

    2,399,107

    546,926

    Rounding

    (160)

    (25)

    (1)

    (17)

    1

    December 31 Shares Outstanding

    381,484

    3,312,148

    507,394

     -

    2,399,090

    546,927

     -

     -

    2024 Activity

    Q1 Activity Acquisition of
    TTS

    50,972

     -

    Rounding

    (14)

    Q1 Activity Exchange of Certian
    Warrants for Common Stock

    9,493

    250,632

    Q1 Activity Exercise of Prepaid
    Warrants

    -

    65,891

    (65,891)

    Q2 Exchange of Common Stock
    for Common Warrants

    (2,816,291)

    2,816,291

    IPO PPD Warrants

    IPO Shares

    (B) June 30, 2024 Common Stock
    Outstanding

    441,935

    3,312,148

    507,394

     -

    2,399,090

    546,927

     -

    250,632

     -

    65,891

    (65,891)

    -

     -

    (2,816,291)

    2,816,291

    June 30, 2024 Preferred Stock
    Outstanding

    183,000

    135,000

    11,060

    71,991

    93,789

    Calculations NOT INCLUDING
    Prepaid Warrants

    (A) / (B)[Common Stock]

    $(81.46)

    (D) - (C)

    $81.21

    (E) - (D)

    Calculations INCLUDING Prepaid
    Warrants

    (A) / (B) [Common Stock +
    Prepaid Warrants]

    $(81.46)

    (D1) - (C)

    $81.34

    (E) - (D1)

    Calculations including Common
    Warrants Only

    (A) / (B) [Common Stock +
    Common Warrants]

    $(81.46)

    (D1) - (C)

    $81.34

    (E) - (D1)

    Calculations including PPD
    Warrants & Common Warrants

    (A) / (B) [Common Stock +
    Prepaid Warrants + Common Warrants]

    $(81.46)

    (D1) - (C)

    $81.34

    (E) - (D1)

    Capitalization

    Cash

    $151,613

    $1,350,000

    $250,000

    Convertible
    Notes Payable, Current

    $18,067,088

    $(18,067,088)

    Notes
    payable, Current

    $14,783,425

    $(410,667)

    Convertible
    Notes payable, Long-term

    $13,978,467

    $9,312,218

    $(23,290,685)

    Notes
    payable, Long-term

    $389,875

    Warrant
    Liabilities, Long-term

    $904,560

    $(20,378)

    $(884,182)

    Stockholders’
    Deficit

    Preferred
    Stock - Par Value

    $18

    $14

    $1

    $7

    $9

    Common
    Stock - Par Value

    $7