Company: IPST
Filing Date: 2025-06-13
Form Type: S-1
Source: 0001641172-25-015121
Chunk: 354

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-06-13
Form: S-1
Chunk 354
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 arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. The change in the valuation allowance for the period ended December 31, 2024 was an increase of $ 3,135,451and change in the valuation allowance for the period ended December 31, 2023 was an increase of $ 2,879,551.

At December 31, 2024 and 2023, the Company has federal net operating loss carryforwards of $ 61,234,307and $ 49,287,572, respectively, which have an indefinite carryforward period. Under Sections 382 and 383 of the Code, substantial changes in the Company’s ownership may limit the amount of net operating loss and research that could be used annually in the future to offset taxable income. The tax benefits related to future utilization of federal net operating loss carryforwards, credit carryovers, tax credits, and other deferred tax assets may be limited or lost if the cumulative changes in ownership exceeds 50% within any three-year period. The Company has not completed a formal Section 382/383 analysis under the Code regarding the limitation of net operating loss and tax credit carryforwards. If a change in ownership were to have occurred, the annual limitation may result in a reduction of available tax attributes in a given tax year.

The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Due to its operating loss carryforward, the U.S. federal statute of limitations remains open for 2019 and onward. The Company has no ongoing or recently closed income tax examinations. The Company recognizes tax benefits from an uncertain position only if it is more likely than not that the position is sustainable, based on its technical merits. Interest and penalties related to uncertain tax positions are classified as income tax expense.

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Heritage Distilling Holding Company, Inc.

Notes to Consolidated Financial Statements

NOTE 11 — INCOME TAXES(cont.)

For the years ended December 31, 2024 and 2023, the Company’s income tax provision consisted of current state taxes of $ 9,150and $ 472, respectively. and federal and other $0 for both years.

The effective tax rate of the Company’s provision (benefit) for income taxes differs from the federal statutory rate as follows:

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

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