Company: IPST
Filing Date: 2025-02-04
Form Type: 424B3
Source: 0001213900-25-010139
Chunk: 357

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-02-04
Form: 424B3
Chunk 357
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      |  (0.07 | )% |

The benefit from and provision for income taxes
differs from the amount computed by applying the statutory federal income tax rate of 21% to earnings before taxes, primarily because
of the valuation allowance, nondeductible items, state taxes, fair value adjustments, true-up adjustments.

<div align='center'>F-71

Heritage Distilling Holding Company, Inc.
Notes to Consolidated Financial Statements</div>

NOTE 11 — LEASES

The Company adopted ASC Topic 842 on January 1,
2022 using the modified retrospective approach. Comparative information has not been restated and continues to be reported under ASC Topic 840,
Leases, which was the accounting standard in effect for those periods. The Company has operating leases for corporate offices,
warehouses, distilleries, tasting rooms and certain equipment which have been accounted for using the adopted standard. 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.

The following table presents the consolidated lease
cost for amounts included in the measurement of lease liabilities for operating leases for the years ended December 31, 2023, and 2022,
respectively:

| Lease Cost:                         |     | Years Ended  
 December 31, 
 2023         |           |     | 2022 |           |
|:------------------------------------|:----|:-------------|----------:|:----|:-----|----------:|
| Amortization of Right-of-Use Assets |     | $            |    29,299 |     | $    |    49,395 |
| Interest on Lease Liabilities       |     |              |       275 |     |      |     2,177 |
| Operating lease cost