Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 322

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 322
---
 as incurred, and were $1,397,964 and
$493,630 as of December 31, 2023 and 2022, respectively. The deferred offering costs relating to the Company’s contemplated
IPO will be offset against IPO proceeds upon the consummation of the offering. In the event the IPO is terminated, abandoned or significantly
delayed, any deferred transaction costs will be immediately recognized in operating expenses.

Liabilities for Deferred Revenue— During
2023, the Company entered into a distilled spirits barreling production agreement with Tiburon Opportunity Fund, L.P. This agreement is
for production of 1,200 barrels of distilled spirits over time. There was a prepayment of $1,000,000 made in January 2023. Subsequent
to December 31, 2023, this agreement was amended in March 2024 to a reduced number of 600 barrels for $500,000. The then $500,000 excess
prepayment was then used to purchase a Whiskey Note in the principal amount of $672,500 and subsequently exchanged (contingent upon the
consummation of this offering) under the terms of a Subscription Exchange Agreement for common stock in conjunction with the February
29, 2024 exchange of Whiskey Notes for common stock. (See Note 16.).

Property and equipment, net of accumulated depreciation— Property
and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets — generally
three to twenty years. Leasehold improvements are amortized on a straight-line basis over the shorter of the asset’s estimated
useful life or the term of the lease. Construction in progress is related to the construction or development of property and equipment
that have not yet been placed in service for their intended use. When the asset is available for use, it is transferred from construction
in progress to the appropriate category of property and equipment and depreciation on the item commences.

Upon retirement or sale, the related cost and accumulated
depreciation are removed from the accounts and any resulting gain or loss is included in the consolidated statements of operations. Costs
of maintenance and repairs are charged to expense as incurred; significant renewals and betterments are capitalized.

<div align='center'>F-52

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

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

Leases— The Company adopted