Heritage Distilling to implement 1-for-20 reverse stock split

GIG HARBOR, Wash. - Heritage Distilling Holding Company Inc., operating as IP Strategy (NASDAQ:IPST), announced Friday that its Board of Directors has approved a 1-for-20 reverse stock split of the company’s common stock. The move comes as the stock has fallen 83% over the past year, currently trading at just $0.58 with a market capitalization of approximately $13.6 million, according to InvestingPro data.

The reverse split is set to take effect at 12:01 a.m. on November 5, 2025, with the stock expected to begin trading on a split-adjusted basis when markets open that day under the same ticker symbol. The company will receive a new CUSIP number: 42727R 203.

Under the terms of the split, every 20 shares of issued and outstanding common stock will automatically combine into one share. The split will not affect the number of authorized shares, par value, or stockholder rights, except for adjustments related to fractional shares.

Stockholders who would otherwise receive fractional shares will instead receive cash payments based on the closing price on November 4. The split will also apply to shares issuable upon exercise of outstanding warrants and stock options, with proportionate adjustments to exercise prices.

According to the company’s press release statement, the reverse split aims to bring IP Strategy into compliance with Nasdaq’s minimum bid price requirement and improve the marketability and liquidity of its common stock. InvestingPro data shows the company faces significant financial challenges, with a weak financial health score of 1.15, negative EBITDA of $18.29 million, and a concerning current ratio of 0.19, indicating potential liquidity issues.

The action follows stockholder authorization at a Special Meeting on September 18, 2025, where the board received approval to implement a reverse split with a ratio ranging from 1-for-5 up to 1-for-20.

Stockholders holding shares through brokers or banks will have their positions automatically adjusted, as will registered stockholders holding shares in book-entry form. Investors should note that IP Strategy is scheduled to report earnings on November 14, just days after the reverse split takes effect.

IP Strategy describes itself as the first Nasdaq-listed company to hold $IP tokens as a primary reserve asset and operate a validator for the Story Protocol, providing exposure to the programmable intellectual property economy. Despite its innovative business model, InvestingPro identifies multiple warning signs, including rapid cash burn and a significant debt burden of $16.89 million, with the company not profitable over the last twelve months.

In other recent news, Heritage Distilling Holding Company, Inc. has announced a 1-for-20 reverse stock split, set to take effect on November 5, 2025. The company will maintain its existing ticker symbol once the split-adjusted trading begins. Additionally, Heritage Distilling plans to close all five of its retail tasting rooms in Washington and Oregon by December 31, 2025, as it transitions spirits production to third-party partners. This decision follows a strategic review prompted by challenging market conditions, including rising state taxes and regulatory hurdles.

Heritage Distilling has also received an additional 180-day compliance period from Nasdaq to meet the minimum bid price requirement for continued listing on the Nasdaq Capital Market. The company had initially been notified in April 2025 about its non-compliance with the $1.00 minimum bid price rule. In executive news, Heritage Distilling has entered into 18-month employment agreements with its CEO, President, and CFO, featuring equity awards and specific salary terms.

Furthermore, IP Strategy, a subsidiary of Heritage Distilling, has launched its validator business on the Story Network, earning approximately $1.5 million in $IP token rewards within the first two weeks of operation. The company has self-staked 43.5 million unlocked $IP tokens since September, resulting in nearly 165,000 $IP tokens in rewards. These developments reflect the company’s ongoing efforts to navigate market challenges and explore new business opportunities.

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