Company: IPST
Filing Date: 2025-05-12
Form Type: 424B3
Source: 0001641172-25-009684
Chunk: 216

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-12
Form: 424B3
Chunk 216
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 of $3,421,000 recorded as gain on increase in value of Flavored Bourbon, LLC on the condensed consolidated statement of operations for the year ended December 31, 2024.

The OPM Backsolve Valuation Method derives the implied equity value for one type of equity security from a contemporaneous transaction involving another type of security. The recent transaction involving Class E Units was utilized as the reference transaction in the OPM 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 5 years; 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 |

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

Notes to Consolidated Financial Statements</div>

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