Company: IPST
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001788230-25-000062
Chunk: 252

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 2
Chunk 252
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 to approximately $79,000 in product inventory write downs and adjustments in the three months ended March 31, 2024. As we work to shed some of our excess capacity and overhead, and as we increase our sales of higher margin items, we expect this Products gross margin to increase significantly (See also below our comments related to this in more detail in Non-GAAP Financial Measures).

Sales and Marketing Expenses

Sales and marketing expenses were approximately $1,315,000 for the three months ended March 31, 2025 compared to approximately $1,190,000 for the three months ended March 31, 2024. This approximately $125,000 increase included:

Sales and Marketing ExpenseThree Months Ended March 31, (rounded to $000’s)Change20252024Personnel - Cash Wages and Related Expense$729,000 $645,000 $84,000 Tasting Room22,000 34,000 (12,000)Leases and Rentals190,000 166,000 24,000 Sales and Marketing Expenses206,000 96,000 110,000 Other168,000 249,000 (81,000)$1,315,000 $1,190,000 $125,000 

•The approximately $84,000 increase in personnel expense was primarily a result of moving a full time employee into the Salute Series sales pipeline to drive more adoption and to grow the brand. 

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•The approximately $110,000 increase in sales and marketing expenses included: an increase in digital advertising production expense to drive DtC sales of our highest margin spirits brands, offset by decreases in sponsorships and print advertising as we shifted to a new third-party e-commerce platform.  

•The approximately $81,000 decrease in other sales and marketing expenses stems from decreased deals, discounts, rebates and incentives offered to wholesale distributors for low margin products and the ending of a contract for an outside sales consultant as of December 31, 2024.

•General and Administrative Expenses

General and administrative expenses were approximately $1,308,000 for the three months ended March 31, 2025, compared to approximately $1,447,000 for the three months ended March 31, 2024. This approximately $139,000 decrease included:

General and Administrative ExpenseThree Months Ended March 31, (rounded to $000’s)Change20252024Personnel - Cash Wages and Related Non-Cash Expense