Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 326

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 326
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 recovery of is capital account of $25.3 million, with the Company being guaranteed a pay
out of this $25.3 million in the event the brand is sold to a third party, or the Company can block such sale. The Company retains 11.2071%
ownership interest in this entity plus a 2.5% override in the waterfall of distributions. The valuation and accounting for this event
will be recorded in the Company’s financial statements for the quarter ended March 31, 2024. See Note 16.

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 years ended December 31, 2023 and 2022, the Company repurchased 71 and
82 shares of common stock at a price of $157.89 per share, respectively.

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.

<div align='center'>F-54

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

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

Revenue recognition— The
Company’s revenue consists primarily of the sale of spirits domestically in the United States. Customers consist primarily
of direct consumers. The Company’s revenue generating activities have a single performance obligation and are recognized at the
point in time when control transfers and the obligation has been fulfilled, which is when the related goods are shipped or delivered to
the customer, depending upon the method of distribution and shipping terms. Revenue is measured as the amount of consideration the Company