Company: IPST
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001788230-25-000062
Chunk: 204

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part II, Item 8
Chunk 204
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C Spirits317 225 92 40.9 %4,570 2,272 2,298 101.1 %

•The difference in Salute Series and Military DtC Spirits growth of 107.8% for units sold of 107.8% year over year versus the 76.8% increase in revenue for those same products is the result of us release more bottle only products at $95 per unit during the three months ended March 31, 2025 versus 2024. In the first quarter 2024 we were primarily selling the Army SOF in tube for $125 at retail, whereas during the same time period in 2025 we had a broader selection of spirits under the Salute Series banner, with more units selling for $95.

•Since the launch of the Army SOF version in late October 2023, sales of our of Salute Series products directly to consumers in our tasting rooms and online, has increased approximately $185,000 to approximately $426,000 for the three months ended March 31, 2025 compared to approximately $241,000 for the three months ended March 31, 2024.

The approximately $220,000 decrease in net sales of services period over period included:

Services SalesThree Months Ended March 31, (rounded to $000’s)20252024ChangeThird Party Production$6,000 $111,000 $(105,000)Retail Services239,000 300,000 (61,000)Consulting and Other9,000 63,000 (54,000) $254,000 $474,000 $(220,000)

•The approximately $105,000 decrease in third-party production resulted from the ending of a low-margin third-party bottling contract as of January 31, 2024. The bulk of our revenue in this category included production services revenue related to a contract we had to produce a gin for a large international spirit brand owner as we made the choice to focus our time, energy and resources on higher margin activities. Lesser amounts of revenue in this category in 2024 came from contract bottling services; and third-party barrel sales and storage revenues.

•The approximately $61,000 decrease in retail services was the result of the reduction of hours in some of our brick and mortar retail locations as we made the decision to close some locations on Mondays and Tuesday to reduce labor expenses on our slowest retail sales days during the quarter. During the