Company: IPST
Filing Date: 2025-12-23
Form Type: 424B3
Source: 0001213900-25-125341
Chunk: 156

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-23
Form: 424B3
Chunk 156
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 in the business, as we work to grow our Salute Seriesvolume sales, which is our highest margin item, we will begin to see reductions in our unabsorbed overhead overall and per case, leading to higher gross margins. This is purely a function of how much excess capacity we have in our production system at the time while we transition from low margin, but high volume production to higher margin products.

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Services cost of sales decreased by approximately $754,000 from 2023 to 2024 primarily resulting from us ending a low -marginthird party production contract for another brand and the wind down of barrel production for third parties.

| Components of Products Cost of Sales 
 2024                                 |     | Years Ended December 31, 
 (rounded to $000’s)      |      2023 |     |   |    Change |     |   |           |
|:-------------------------------------|:----|:-------------------------|----------:|:----|:--|----------:|:----|:--|----------:|
| Product Cost (from inventory)        |     | $                        | 3,623,000 |     | $ | 2,748,000 |     | $ |   875,000 |
| Overhead – Unabsorbed                |     |                          | 2,550,000 |     |   | 2,215,000 |     |   |   335,000 |
|                                      |     | $                        | 6,173,000 |     | $ | 4,963,000 |     | $ | 1,210,000 |

| Components of Products Cost of Sales |     |  Years Ended 
 December 31, |      |     |       |        |     |      |    |
| 2024                                 |     |              | 2023 |     |       | Change |     |      |    |
| Product Cost (from inventory)        |     |         58.7 |    % |     |  55.4 | %      |     |  3.3 | %  |
| Overhead – Unabsorbed                |     |         41.3 |    % |     |  44.6 | %      |     | (3.3 | )% |
|                                      |     |        100.0 |    % |     | 100.0 | %      |     |    — | %  |

•Unabsor