Company: IPST
Filing Date: 2025-06-04
Form Type: POS AM
Source: 0001641172-25-013501
Chunk: 131

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-06-04
Form: POS AM
Chunk 131
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 awards generally vest on time-based vesting schedules. Stock-based compensation expense is recognized based on the value of the portion of stock-based payment awards that is ultimately expected to vest and become exercisable during the period. We recognize compensation expense for all stock-based payment awards made to employees, directors, and non-employees using a straight-line method, generally over a service period of four years.

We grant stock options to purchase common stock with exercise prices equal to the value of the underlying stock, as determined by the Board of Directors on the date the equity award was granted. The fair value of the common stock underlying our stock-based awards has historically been determined by our board of directors, with input from management and corroboration from contemporaneous third-party valuations. We believe that our board of directors has the relevant experience and expertise to determine the fair value of our common stock. Given the absence of a public trading market of our common stock, and in accordance with the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately Held Company Equity Securities Issued as Compensation, our board of directors exercised reasonable judgment and considered numerous objective and subjective factors to determine the best estimate of the fair value of our common stock at each grant date. These factors include:

| ● | contemporaneous                                                                  
 valuations of our common stock performed by independent third-party specialists; |

| ● | the                                                 
 lack of marketability inherent in our common stock; |

| ● | our                                         
 actual operating and financial performance; |

| ● | our                                          
 current business conditions and projections; |

| ● | the                                                           
 hiring of key personnel and the experience of our management; |

| ● | our                                           
 history and the introduction of new products; |

| ● | our                   
 stage of development; |

| 86 |

| ● | the                                                                                            
 likelihood of achieving a liquidity event, such as an initial public offering (IPO), a merger, 
 or acquisition of our company given prevailing market conditions;                              |

| ● | the                                                                                
 operational and financial performance of comparable publicly traded companies; and |

| ● | the                                                                        
 U.S. and global capital market conditions and overall economic conditions. |

In valuing our common stock, the fair value of our business was determined using various valuation methods, including combinations of income and market approaches with input from management. The income approach estimates value based on the expectation of future cash flows that a company will generate. These future cash flows are discounted to their present values using a discount rate that is derived from an analysis of