Company: IPST
Filing Date: 2025-05-07
Form Type: POS AM
Source: 0001641172-25-009076
Chunk: 217

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-07
Form: POS AM
Chunk 217
---
PM Backsolve Valuation Method analysis to derive a value of the Company’s Class A Units. The OPM Backsolve Valuation Method analysis applies the Black-Scholes-Merton option pricing model, which is impacted by the following assumptions:

| ● | Expected                                                                                                                      
 Term. The probability weighted expected term incorporates the Company’s assumptions about the time necessary for the business 
 to develop and position itself for a potential liquidity event.                                                               |

| ● | Expected                                                                                                                            
 Volatility. As Flavored Bourbon, LLC shares are privately held, the volatility used is based on a benchmark of comparable companies 
 within the distilled spirits industry.                                                                                              |

| ● | Expected                                                                                                                            
 Dividend Yield. The dividend rate used is zero as Flavored Bourbon, LLC has never paid any cash dividends, and the Company does not 
 anticipate any in the foreseeable future.                                                                                           |

| ● | Risk-Free                                                                                                                              
 Interest Rate. The interest rates used are based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent 
 remaining term equal to the expected term.                                                                                             |

The assumptions the Company used in calculating the fair value as of June 30, 2024 included: expected term of 5years; expected volatility of 70%; expected dividends of $ 0; and, risk-free interest rate of 4.08% (based on the 5-year T-Bill rate).

| F-14 |

Heritage Distilling Holding Company, Inc.

Notes to Consolidated Financial Statements

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

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 value 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, 2024 and 2023, the Company repurchased 21and 72shares of common stock