Company: IPST
Filing Date: 2025-08-26
Form Type: S-1
Source: 0001213900-25-080839
Chunk: 171

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-26
Form: S-1
Chunk 171
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 to evaluate the performance and 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 -basedcompensation; and (iv) provision for income taxes. Adjusted EBITDA represents EBITDA adjusted for the recognition of share -basedcompensation, non -recurringgains and losses; and other one -timeitems. 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 -GAAPfinancial 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 -GAAPfinancial 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 -cashcharges such as depreciation of property and equipment and, although this is a non -cashcharge, 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 -GAAPfinancial 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 six months ended June 30, 2025 and 2024, and the years ended December 31, 2024 and 2023. Adjust