Company: IPST
Filing Date: 2025-12-12
Form Type: S-1/A
Source: 0001213900-25-121277
Chunk: 352

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-12
Form: S-1/A
Chunk 352
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 be reclassified from liabilities to equity in accordance with ASC 480. Thinking Tree Spirits Dissenters’ Rights Process— In July 2024, threeThinking Tree Spirits shareholders served their notice to exercise dissenters’ rights under Oregon law. Dissenters’ rights statutes allow a party opposed to certain transactions to demand payment in cash for the value of their interests held rather than receive shares in the resulting entity. All three dissenters rights claims have been settled. As a result, 3,466shares due to TTS shareholders that were set aside until the dissenters rights claims were finalized, plus 42,350makeup shares due from earn -outprovisions of the TTS acquisition, were distributed to the remaining TTS shareholders as of September 30, 2025. No other shares are due for this transaction.

NOTE 10 — LEASES

The Company has operating leases for corporate offices, warehouses, distilleries, tasting rooms and certain equipment which have been accounted for using ASC Topic 842. 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.

In January 2025, the Company terminated warehouse lease in Eugene, Oregon, moving from a square feet to an approximately square feet lease. The monthly expenses associated with the new lease were reduced from approximately $ per month down to $ per month. The new lease expires in January 2028, with an option for a 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.

The following table presents the consolidated lease cost for amounts included