Company: IPST
Filing Date: 2025-12-19
Form Type: S-1/A
Source: 0001213900-25-123872
Chunk: 313

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-19
Form: S-1/A
Chunk 313
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Heritage Distilling Holding Company, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited) NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

The Company earns commission income in the form of $IP Tokens from validator operations and staking rewards in the form of $IP Tokens from self-staking. A contract with enforceable rights and obligations exists when the Company stakes its tokens to the validator and starts solving blocks on the Story blockchain, which is the customer by analogy. Each block creation or validation is a performance obligation. Revenue is recognized at the point when the block creation or validation is complete and the rewards are transferred into a digital wallet that the Company controls. Revenue is measured based on the number of tokens received and the fair value of the token at contract inception. Because the Company does not unilaterally control the validator, the Company is not the principal to the validation service. As such, the Company presents staking rewards and commission income as revenue on a net basis, reflecting only the portion of protocol rewards and commission to which it is entitled.

The following table presents revenue disaggregated by sales channel:

|                                             |     | For the Nine Months Ended 
 September 30,             |      2025 |     |   |      2024 |
|:--------------------------------------------|:----|:--------------------------|----------:|:----|:--|----------:|
| Direct to Consumer                          |     | $                         | 1,757,198 |     | $ | 2,526,302 |
| Wholesale                                   |     |                           |   956,814 |     |   | 1,299,067 |
| Third Party                                 |     |                           |         — |     |   |   225,718 |
| Total Products Revenue                      |     |                           | 2,714,012 |     |   | 4,051,087 |
| Distillery Services                         |     |                           |   780,250 |     |   | 1,258,820 |
| Total Revenue from Contracts with Customers |     |                           | 3,494,262 |     |   | 5,309,907 |
| Crypto and Related Revenue                  |     |                           | 1,908,544 |     |   |         — |
| Total Revenue                               |     | $                         | 5,402,806 |     | $ | 5,309,907 |

Excise taxes — Excise taxes are levied on