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GIG HARBOR, Wash. - Heritage Distilling Holding Company, Inc. (Nasdaq:CASK) has completed a $223.8 million private placement offering, consisting of $95 million in cash and $128.8 million in $IP tokens, the company announced Monday. The deal comes as the company, currently valued at $12.7 million in market capitalization, faces significant financial challenges according to InvestingPro data, with negative EBITDA of $18.29 million in the last twelve months.
The transaction, which closed on August 15, has enabled Heritage to eliminate $19.3 million in debt and future liabilities, including the complete payoff of its senior secured facility held by Silverview Credit Partners. This debt reduction is expected to decrease annual interest expenses by more than $2 million. InvestingPro analysis indicates this debt reduction was crucial, as the company’s current ratio of 0.19 suggests significant liquidity challenges, with short-term obligations exceeding liquid assets.
As part of the deal, Heritage now holds more than 53.2 million $IP tokens on its balance sheet, valued at approximately $320 million based on the August 22 closing price of $6.0668 per token. This includes the acquisition of 23.5 million $IP tokens at $3.40 per token using $80 million from the transaction proceeds.
The company has also renegotiated its two largest leases, reducing related annual expenses by over $550,000, which is expected to lower unabsorbed overhead and improve gross profit margins.
The company’s stock has faced significant pressure, declining 86% over the past year, with InvestingPro reporting a weak overall Financial Health Score of 1.12. "Heritage has successfully closed on our $IP token treasury strategy while simultaneously eliminating more than $19 million in debt and future obligations, including all senior secured debt," said Justin Stiefel, Chief Executive Officer and Co-Founder of Heritage. InvestingPro subscribers have access to over 10 additional key insights about Heritage’s financial position and future prospects.
The $IP token is the native token of Story, a blockchain platform that enables users to register intellectual property on-chain and add usage terms via smart contracts. Story launched its mainnet in February 2025.
Heritage, which describes itself as one of the largest craft spirits producers on the West Coast by revenue, has been recognized as North America’s most awarded craft distillery by the American Distilling Institute for ten consecutive years. Recent financial data shows annual revenue of $7.06 million, though the company faces profitability challenges with negative returns on assets of -63.9%.
The private placement was supported by Story Foundation and other investors including a16z crypto, Amber Group, Arrington Capital, and Polychain Capital, according to the company’s press release statement.
In other recent news, Heritage Distilling Holding Company, Inc. announced a significant $220 million private placement offering to establish a digital asset treasury strategy focused on the $IP token, the native cryptocurrency of the Story blockchain network. This transaction is structured as a Private Investment in Public Equity (PIPE) and includes $100 million in cash and $120 million in $IP tokens. Additionally, Heritage Distilling reported the sale of 11.96 million shares of its common stock to C/M Capital Master Fund, LP, generating approximately $4.8 million in gross proceeds. These sales were part of a broader agreement allowing the company to sell up to $15 million in newly-issued common stock.
In a move to integrate cryptocurrency into its business model, Heritage Distilling has adopted a Cryptocurrency Treasury Reserve Policy. As part of this initiative, the company plans to launch Bitcoin Bourbon™, a product allowing purchases with Bitcoin, making it the first craft spirits company to accept cryptocurrency as payment. The company is also exploring the use of crypto payments within its supply chain. Heritage Distilling’s CEO, Justin Stiefel, highlighted the blend of traditional whiskey-making and modern digital commerce with the upcoming Bitcoin Bourbon, which is set at 106.15 proof, a nod to Bitcoin culture.
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