Company: IPST
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001788230-25-000175
Chunk: 300

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part II, Item 8
Chunk 300
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 $61,234,307 in federal net operating loss carryforwards, some or all of which could be used to offset the currently booked net income to reduce any possible tax liability. The need for the Section 382 review was triggered by the August 15, 2025 PIPE’s size and total number of new shares issued relative to our previously outstanding shares of common stock and the ownership changes thereof. We anticipates the Section 382 report will be finalized prior to year end, which would allow for a full year tax and NOL reconciliation taking into account the $IP Token’s value as of December 31, 2025 and any resulting gain or loss to be recognized based on that final price.

While we believe some amount of the NOLs will be available to use in the future, since the amount cannot yet be quantified, we have elected to fully reserve against the use of any such tax benefits at this time. Further, the net income and the resulting tax for the three and nine months ended September 30, 2025 is based on the fair value of $8.54 per $IP Token as of September 30, 2025. Given the closing price of the $IP token of $3.32 subsequent to September 30, 2025 (at the close of November 13, 2025), the currently reported gain on change in fair value of intangible digital assets reported for the nine months ended September 30, 2025 would necessarily assumed to be offset by losses on change in fair value of intangible digital assets in the quarter ended December 31, 2025. We would then anticipate reducing or eliminating any tax liability in the aggregate for the full year ending December 31, 2025.

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SELECTED FINANCIAL INFORMATION

The following table sets forth a summary of our historical financial data as of the dates indicated. The balance sheet data as of December 31, 2024 and 2023 has been derived from our audited consolidated financial statements. The balance sheet data as of September 30, 2025 has been derived from our unaudited interim condensed consolidated financial statements included elsewhere in this filing. The unaudited interim condensed consolidated financial statements were prepared on the same basis as our audited consolidated financial statements. In our opinion, such financial statements include all adjustments, consisting of normal recurring adjustments, that we consider necessary for a fair presentation of the financial information for those periods. The summary financial data should be read with the financial statements and the accompanying