Company: IPST
Filing Date: 2025-12-19
Form Type: S-1/A
Source: 0001213900-25-123872
Chunk: 133

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-19
Form: S-1/A
Chunk 133
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 and personnel -relatedexpenses associated with supply chain logistics. We recognize the staking and validator business cost of sales in the same manner that the related revenue is recognized. Our cost of sales consists of AWS data center incidences that run the validator protocol and software, financial software to track each token earned and their value, consulting agreements related to managing the validator work and contracted computer programmers to insure validator uptime. Gross Profit and Gross Margin Our gross profit is the difference between our revenues and cost of sales. Gross margin percentage is obtained by dividing gross profit by our revenue. Our gross profit and gross margin are, or may be, influenced by several factors, including: •Market conditions that may impact our pricing; •Our cost structure for manufacturing operations, including contract manufacturers, relative to volume, and our product support obligations; •Our capacity utilization and overhead cost absorption rates; •Our ability to maintain our costs on the components that go into the manufacture of our products; and •Seasonal sales offerings or product promotions in conjunction with plans created with our distributors or retail channels. We expect our gross margins to fluctuate over time, depending on the factors described above. Sales and Marketing Sales and marketing expenses consist primarily of employee -relatedcosts for individuals working in our sales and marketing departments, our tasting room general managers and Cask Club directors, our hourly tasting room sales associates, the executives to whom all general managers report, and the executives whose primary function is sales or marketing, and rent and associated costs for running each tasting room. The expenses include our employee -relatedcosts for our personnel responsible for managing our e -commerceplatform, wages, commissions and bonuses for our outside sales team members who market and sell our products to distributors and retail end users and the associated costs of such sales. Sales and marketing expenses also include the costs of sports and venue sponsorships, radio, television, social media, influencers, direct mail and other traditional marketing costs, costs related to trade shows and events and an allocated portion of overhead costs. We expect our sales and marketing costs will increase as we expand our wholesale distribution footprint, initiate new marketing campaigns for our DtC sales and enter new locations in partnership with tribes that are opening facilities under the TBN. General and Administrative General and administrative expenses consist primarily of personnel -relatedexpenses associated with our executive, finance, legal, insurance, information technology and human resources functions, as well as professional fees for legal, audit, accounting and other consulting services, and an allocated portion of overhead costs. We expect our general and administrative expenses will increase on