Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 324

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 324
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 determinable. The incremental borrowing rate is estimated to approximate the interest rate on a collateralized
basis with similar terms and payments, and in the economic environments where the leased asset is located. The incremental borrowing rate
is calculated by modeling the Company’s credit rating on its history arm’s-length secured borrowing facility and estimating
an appropriate credit rating for similar secured debt instruments. The Company’s calculated credit rating on secured debt instruments
determines the yield curve used. In addition, an incremental credit spread is estimated and applied to reflect the Company’s ability
to continue as a going concern. Using the spread adjusted yield curve with a maturity equal to the remaining lease term, the Company determines
the borrowing rates for all operating leases.

The Company’s operating lease terms include
periods under options to extend or terminate the operating lease when it is reasonably certain that the Company will exercise that option
in the measurement of its operating lease ROU assets and liabilities. The Company considers contractual-based factors such as the nature
and terms of the renewal or termination, asset-based factors such as the physical location of the asset and entity-based factors such
as the importance of the leased asset to the Company’s operations to determine the operating lease term. The Company generally uses
the base, non- cancelable lease term when determining the operating lease ROU assets and lease liabilities. The ROU asset is tested for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable in accordance with
Accounting Standards Codification Topic 360, Property, Plant, and Equipment.

Operating lease transactions are included in operating
lease ROU assets, current operating lease liabilities and operating lease liabilities, net of current portion on the consolidated balance
sheets.

Impairment of long-lived assets— All
of the Company’s long-lived assets held and used are evaluated for impairment whenever events or changes in circumstances indicate
that the carrying amounts may not be recoverable. Factors that the Company considers in deciding when to perform an impairment review
include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and
significant changes or planned changes in the use of the assets. When such an event occurs, future cash flows expected to result from
the use of the asset and its eventual disposition is estimated. If the undiscounted expected future cash flows are less than the carrying
amount of the asset, an impairment loss is recognized for the difference between the asset’s fair value and its carrying value.
The Company did not record any