Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 325

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 325
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 impairment losses on long-lived assets for the years ended December 31, 2023 and 2022.

<div align='center'>F-53

Heritage Distilling Holding Company, Inc.
Notes to Consolidated Financial Statements</div>

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Investments/Investment in Flavored Bourbon LLC — Non-marketable
equity investments of privately held companies are accounted for as equity securities without readily determinable fair value at cost
minus impairment, as adjusted for observable price changes in orderly transactions for identical or similar investment of the same issue
pursuant to Accounting Standards Codification (“ASC”) Topic 321 Investments — Equity Securities (“ASC
321”) as the Company does not exert any significant influence over the operations of the investee company.

The Company performs a qualitative assessment at
each reporting period considering impairment indicators to evaluate whether the investment is impaired. Impairment indicators that the
Company considers include but are not limited to; i) a significant deterioration in the earnings performance, credit rating, asset quality,
or business prospects of the investee, ii) a significant adverse change in the regulatory, economic, or technological environment of the
investee, iii) a significant adverse change in the general market condition of either the geographical area or the industry in which the
investee operates, iv) a bona fide offer to purchase, an offer by the investee to sell, or a completed auction process for the same or
similar investment for an amount less than the carrying amount of that investment; v) factors that raise significant concerns about the
investee’s ability to continue as a going concern, such as negative cash flows from operations, working capital deficiencies, or
noncompliance with statutory capital requirements or debt covenants. If the qualitative assessment indicates that the investment is impaired,
a loss is recorded equal to the difference between the fair value and carrying value of the investment.

As of December 31, 2023 and 2022, the Company
had a 15.1% ownership interest in Flavored Bourbon, LLC. and did not record any impairment charges related to its investments. See also
Note 5 — Payment Upon Sale of Flavored Bourbon, LLC. In January 2024, Flavored Bourbon LLC conducted a capital call, successfully
raising $12 million from current and new investors at the same valuation as the last raise. The Company chose not to participate in the
raise, but still retained its rights to full