Company: IPST
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001788230-25-000062
Chunk: 100

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 100
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2,000 in product inventory write downs and adjustments in the three months ended March 31, 2025 compared to approximately $79,000 in the three months ended March 31, 2024.

Gross Profit

Gross profit was approximately $272,000 and $409,000 for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $137,000, or 33.5%, period over period, and included:

Total Gross ProfitThree Months Ended March 31, (rounded to $000’s)Change20252024Products$24,000 $19,000 $5,000 Services248,000 390,000 (142,000) $272,000 $409,000 $(137,000)

51

Total Gross MarginThree Months Ended March 31, (rounded to $000’s)Change20252024Products2.8 %1.5 %1.3 %Services97.7 %82.3 %15.4 % 24.9 %24.0 %0.9 %

It is important to note the $24,000 in Products Gross Profits, and the resulting low Gross Margin of 2.8%, is after layering in the $461,000 in unabsorbed overhead costs. 

Gross Profit - Analysis of Exclusion of Unabsorbed Overhead

To provide a more detailed view to our performance for products and services based purely on the direct input costs we remove unabsorbed overhead expenses for the following analysis. Gross profit excluding unabsorbed overhead was approximately $485,000 and $681,000 for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $196,000, or 28.8%, period over period, and included:

Three Months Ended March 31, (rounded to $000’s)Total Gross Profit - Excluding Unabsorbed Overhead20252024ChangeProducts$24,000 $19,000 $5,000 Add Back: Unabsorbed Overhead461,000 662,000 (201,000)     Products Gross Profit Excluding Unabsorbed Overhead485,000 681,000 (196,000)Services248,000 390,000 (142,000)     Total Gross Profit Excluding Unabs