Company: IPST
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001788230-25-000175
Chunk: 139

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part I, Item 1
Chunk 139
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 included:

Total Gross Profit - Crypto and RelatedThree Months Ended September 30,(rounded to $000’s)Change20252024Crypto and Related1,855,000 $— 1,855,000  $1,855,000 $— $1,855,000 

Total Gross Margin - Crypto and RelatedThree Months Ended September 30,Change20252024Crypto and Related 97.2 %— %97.2 % 97.2 %— %97.2 %

It is important to note that there were no comparable cost of sales in 2024 as we began recognizing staking and validator revenues and costs once the validator service was fully operational on September 18, 2025.

Gross Profit Analysis — Crypto and Related Business

Gross Margin numbers above are based on the total revenues for the three months ended September 30, 2025 and 2024 as follows:

Total Revenues - Crypto and RelatedThree Months Ended September 30,(rounded to $000’s)Change20252024Blockchain rewards / Validator business$1,909,000 $— $1,909,000  $1,909,000 $— $1,909,000 

•Gross margin was approximately 97.2% and 0% for the three months ended September 30, 2025 and 2024, respectively, based upon total net revenues of approximately $1,855,000 and $0, respectively.

65

Sales and Marketing Expenses

Sales and marketing expenses were approximately $1,023,000 for the three months ended September 30, 2025 compared to approximately $1,270,000 for the three months ended September 30, 2024. This approximately $247,000 decrease included:

Sales and Marketing ExpenseThree Months Ended September 30, (rounded to $000’s)Change20252024Personnel - Cash Wages and Related Expense$604,000 $764,000 $(160,000)Personnel - Share-Based Compensation— — — Tasting Room19,000 39,000 (20,000)Leases and Rentals275,000 189,000 86,000 Sales and Marketing Expenses(45,000)79,000 (124,000)Other170,000 199,000 (29,000)$1,023,000 $1,270,000 $(