Company: IPST
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001788230-25-000126
Chunk: 129

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 129
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 below for our discussion on Gross Margins related to unabsorbed overhead in Non-GAAP Financial Measures). Unabsorbed overhead includes approximately $2,000 in product inventory write downs and adjustments in the six months ended June 30, 2025 compared to approximately $79,000 in the six months ended ended June 30, 2024.

Gross Profit

Gross profit was approximately $499,000 and $1,157,000 for the six months ended June 30, 2025 and 2024, respectively, a decrease of approximately $658,000, or 56.9%, period over period, and included:

Total Gross ProfitSix Months Ended June 30,(rounded to $000’s)Change20252024Products$2,000 $365,000 $(363,000)Services497,000 792,000 (295,000) $499,000 $1,157,000 $(658,000)

Total Gross MarginSix Months Ended June 30,(rounded to $000’s)Change20252024Products0.1 %13.6 %(13.5)%Services96.5 %90.7 %5.8 % 20.7 %32.6 %(11.9)%

It is important to note that the approximately $2,000 in Products Gross Profits, and the resulting low Gross Margin of 0.1%, is after layering in the approximately $1,043,000 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 

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approximately $1,045,000 and $1,537,000 for the six months ended June 30, 2025 and 2024, respectively, a decrease of approximately $492,000, or 32.0%, period over period, and included:

Six Months Ended June 30,(rounded to $000’s)Total Gross Profit - Excluding Unabsorbed Overhead20252024ChangeProducts$2,000 $365,000 $(363,000)Add Back: Unabsorbed Overhead1,043,000 1,172,000 (129,000)     Products Gross