Company: IPST
Filing Date: 2025-08-15
Form Type: 424B3
Source: 0001641172-25-024441
Chunk: 23

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-15
Form: 424B3
Chunk 23
---
 expense in the period in which they occur. Stock-based compensation from vested stock options, whether forfeited or not, is not reversed.

During the six months ended June 30, 2025 and 2024, the Company did not grant any stock option awards. The Company has not granted any stock options since 2019, when the Company’s 2018 Plan was terminated in favor of the 2019 Plan, under which, the Company has granted RSUs. See Note 7. Upon the closing of the Company’s initial public offering (which occurred on November 25, 2024), the 2024 Equity Incentive Plan (the “2024 Plan”) became effective, authorizing the issuance of up to 2,500,000 shares of common stock. On June 24, 2025, the shareholders approved an increase in the number of shares authorized for issuance under the 2024 Plan to up to 5,000,000 shares of common stock. As of June 30, 2025, the Company had made grants of 2,527,500 shares of common stock under the 2024 Plan, and 2,472,500 shares remained authorized for grant.

| 17 |

<div align='center'>Heritage Distilling Holding Company, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)</div>

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

Stock option awards generally vest on time-based vesting schedules. Stock-based compensation expense is recognized based on the value of the portion of stock-based payment awards that is ultimately expected to vest and become exercisable during the period. The Company recognizes compensation expense for all stock-based payment awards made to employees, directors, and non-employees using a straight-line method, generally over a service period of four years.

Advertising— The Company expenses costs relating to advertising either as costs are incurred or the first time the advertising takes place. Advertising expenses totaled $46,539 and $159,910 for the three months ended June 30, 2025 and 2024, respectively; and $235,834 and $245,187 for the six months ended June 30, 2025 and 2024, respectively, and were included in “Sales and marketing” in the condensed consolidated statements of operations.

Income taxes— The Company follows the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 740, “ Income Taxes” for establishing and classifying any tax provisions