Company: IPST
Filing Date: 2025-10-16
Form Type: S-1/A
Source: 0001213900-25-099309
Chunk: 346

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-10-16
Form: S-1/A
Chunk 346
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 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 -basedfactors such as the nature and terms of the renewal or termination, asset -basedfactors such as the physical location of the asset and entity -basedfactors 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 -cancelablelease 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. In January 2025, the Company terminated onewarehouse lease in Eugene, Oregon, moving from a 33,000square feet to an approximately 8,000square feet lease. The monthly expenses associated with the new lease were reduced from approximately $ 18,000per month down to $ 7,700per month. The new lease expires in January 2028, with an option for a three year extension. The change in ROU assets and related liabilities both for the terminated lease and the new warehouse lease were captured on the March 31, 2025 balance sheet. The Company also negotiated the reduction of warehouse space of its largest warehouse effective September 15, 2025, reducing annualized expenses for that space by approximately two -thirds. F-36

Heritage Distilling Holding Company, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited) NOTE 9 — LEASES (cont.)

The following table presents the consolidated lease cost for amounts included in the measurement of lease liabilities for operating leases for the three and six months ended June 30, 2025 and 2024, respectively:

| Lease Cost:                         |     | Three Months Ended 
 June 30,           
 2025               |         |     | 2024 |         |     | Six Months Ended 
 June 30,         
 2025             |         |     | 2024 |         |
|:------------------------------------|:----|:-------------------|--------:|:----|:-----|--------:|:----|:-----------------|--------:|:----|:-----|--------:|
| Amortization of Right-of-Use Assets |     | $                  | 105,070 |     | $