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

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-12
Form: S-1/A
Chunk 25
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 the expectations of public market analysts and investors. In that event, the market price of our common stock may fall. Risks associated with our net operating loss (“NOL”) carryforwards, tax liabilities and fluctuations between reporting periods could adversely affect our results of operations and financing costs and the market price of our common stock. As of September30, 2025, we recorded a provision for income taxes of 21% and a deferred income tax liability of $49.4million based on our 2025 year -to-datenet income before income taxes. In recording the deferred tax liability, we fully reserved against our net operating loss carryforwards without assuming the use of any of our accrued loss carryforwards at this time. We are awaiting the completion of a Section 382 NOL review to determine to what extent past NOLs can be used in the future, and if so, how much and over what period of time they can be used. As of December31, 2024, we had $61.2million of federal NOL carryforwards, some or all of which could be used to offset the currently -bookednet income to reduce any possible tax liability. The need for the Section 382 review was triggered by the size of our August15, 2025 private placement of Pre -FundedWarrants, the total number of new shares of common stock that are issuable as a result of such offering relative to our previously outstanding shares of common stock and the potential ownership changes that would result from the issuance of such shares. We anticipate the Section 382 report will be finalized prior to December31, 2025, which would allow for a full -yeartax and NOL reconciliation taking into account the value of our $IP Tokens as of December31, 2025 and any resulting gain or loss to be recognized based on that final value. While we believe some amount of our NOLs will be available to use in the future, since the amount cannot yet be quantified, we have elected to fully reserve against the use of any such tax benefits in our financial statements for the nine months ended September30, 2025. Further, the net income and the resulting tax for the nine -monthperiod ended September30, 2025 was based on the fair value of $8.54 per $IP Token as of September30, 2025. Given the lowest closing price of the $IP Token of $2.0786 subsequent to September30, 2025 (