Company: IPST
Filing Date: 2025-08-26
Form Type: S-1
Source: 0001213900-25-080839
Chunk: 137

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-26
Form: S-1
Chunk 137
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% for the three months ended June 30, 2025 compared to 68.1% for the same period in 2024 is a significant increase, as is the improvement compared to the 55.6% we reported for the full year 2024, indicating our efforts aimed at reducing overhead expenses and focusing on high margin items are starting to bear fruit. Gross Profit Analysis Gross Margin numbers above are based on the total sales for the three months ended June 30, 2025 and 2024 as follows:

| Total Sales 
 2025        |     | Three Months Ended June 30, 
 (rounded to $000’s)         |      2024 |     |   |    Change |     |   |          |   |
|:------------|:----|:----------------------------|----------:|:----|:--|----------:|:----|:--|:---------|:--|
| Products    |     | $                           | 1,060,000 |     | $ | 1,445,000 |     | $ | (385,000 | ) |
| Services    |     |                             |   261,000 |     |   |   399,000 |     |   | (138,000 | ) |
|             |     | $                           | 1,321,000 |     | $ | 1,844,000 |     | $ | (523,000 | ) |

•Gross margin was approximately 17.0% and 40.4% (63.0% and 68.1%, excluding unabsorbed overhead) for the three months ended June30, 2025 and 2024, respectively, based upon total net sales of approximately $1,321,000 and $1,844,000, respectively. As we add more Special Operations Salutesales via online channels, we expect to see our overall gross margin increase. Likewise, as we add more states into our wholesale distribution channel focused solely on high -marginitems, rather than any low -marginwell vodka in those states, we expect to see additional margin increases. Also, as we add more cases of production through our system, we expect the unabsorbed overhead costs will be reduced as each additive case of new sales volume begins to carry incremental overhead costs as part of the normal manufacturing cost accounting, which should increase our overall margins. Finally, our third -partyproduction contracts were very low margin for us, which is why management