Company: IPST
Filing Date: 2025-05-12
Form Type: 424B3
Source: 0001641172-25-009684
Chunk: 108

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-12
Form: 424B3
Chunk 108
---
 effectiveness of operational strategies as we work to reduce overhead.

Adjusted Gross Profit and Adjusted Gross Margin:Adjusted gross profit represents GAAP gross profit adjusted for any nonrecurring gains and losses. Adjusted Gross Margin represents Adjusted Gross Profit as a percentage of total net sales. We use these measures (i) to compare operating performance on a consistent basis, (ii) for planning purposes, including the preparation of our internal annual operating budget, and (iii) to evaluate the performance and effectiveness of operational strategies.

EBITDA and Adjusted EBITDA:EBITDA represents GAAP net loss adjusted for (i) depreciation of property and equipment; (ii) interest expense; (iii) share-based compensation; and (iv) provision for income taxes. Adjusted EBITDA represents EBITDA adjusted for the recognition of share-based compensation, non recurring gains and losses; and other one-time items. We believe that EBITDA and adjusted EBITDA help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we include in GAAP operating loss. These non-GAAP financial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are several limitations related to the use of this non-GAAP financial measure compared to the closest comparable GAAP measure. Some of these limitations are that:

| ● | Adjusted                                                                                      
 Gross Profit, EBITDA and adjusted EBITDA do not reflect our cash expenditures, or future      
 requirements for capital expenditures or contractual commitments;                             |
| ● | Adjusted                                                                                      
 Gross Profit, EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements      
 for, our working capital needs;                                                               |
| ● | Adjusted                                                                                      
 Gross Profit, EBITDA and adjusted EBITDA exclude certain recurring, non-cash charges such     
 as depreciation of property and equipment and, although this is a non-cash charge, the assets 
 being depreciated may have to be replaced in the future;                                      |
| ● | Adjusted                                                                                      
 Gross Profit, EBITDA and adjusted EBITDA exclude income tax benefit (expense); and            |
| ● | Other                                                                                         
 companies in our industry may calculate non-GAAP financial measures differently than we do,   
 limiting their usefulness as comparative measures.                                            |

The following table presents a reconciliation of GAAP Gross Profit to Adjusted Gross Profit by removing unabsorbed overhead for the years ended December 31, 2024 and