Company: IPST
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-006695
Chunk: 227

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 227
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 | Expected                                                                                 
 Term. The probability weighted expected term incorporates the Company’s assumptions      
 about the time necessary for the business to develop and position itself for a potential 
 liquidity event.                                                                         |

| ● | Expected                                                                                     
 Volatility. As Flavored Bourbon, LLC shares are privately held, the volatility used is based 
 on a benchmark of comparable companies within the distilled spirits industry.                |

| ● | Expected Dividend Yield. The dividend rate used is zero as Flavored Bourbon, LLC has never paid any cash dividends, and we do not anticipate any in the foreseeable future. |

| ● | Risk-Free                                                                                        
 Interest Rate. The interest rates used are based on the implied yield available on U.S. Treasury 
 zero-coupon issues with an equivalent remaining term equal to the expected term.                 |

The assumptions the Company used in calculating the fair value as of June 30, 2024 included: expected term of 5years; expected volatility of 70%; expected dividends of $ 0; and, risk-free interest rate of 4.08% (based on the 5-year T-Bill rate).

Treasury stock— Treasury stock is shares of the Company’s own stock that have been issued and subsequently repurchased by the Company. Converting outstanding shares to treasury shares does not reduce the number of shares issued but does reduce the number of shares outstanding. These shares are not eligible to receive dividends.

The Company accounts for treasury stock under the cost method. Upon the retirement of treasury shares, the Company deducts the par value of the retired treasury shares from common stock and allocates the excess of cost over par as a deduction to additional paid-in capital based on the pro-rata portion of additional paid-in-capital, and the remaining excess as an increase to accumulated deficit. Retired treasury shares revert to the status of authorized but unissued shares. All shares repurchased to date have been retired. For the nine months ended September 30, 2024 and 2023, the Company repurchased 21and 64shares, respectively, of common stock.

F-12 Heritage Distilling Holding Company, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Segment reporting— The Company operates in a single segment. The segment reflects how the Company’s operations are evaluated by senior management and the structure of its internal financial reporting. Both financial and certain non-financial data are reported and evaluated to assist senior management with strategic planning.