Company: IPST
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-006695
Chunk: 119

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 119
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000 |     |   |   991,000 |     |   |   53,000 |   |
| Consulting and Other   |                |                     |    91,000 |     |   |   348,000 |     |   | (257,000 | ) |
|                        |                | $                   | 1,259,000 |     | $ | 2,153,000 |     | $ | (894,000 | ) |

| ● | The approximately $690,000 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; contract bottling services; and third-party barrel storage revenues. We expect our barrel storage revenue to continue 
 to increase as more third-party barrels are put into our warehouse. We terminated our gin production contract in early January 2024 as    
 we shifted our focus toward applying our resources in higher-margin activities under our own core brands and programs and reducing risks  
 associated with hourly labor in certain markets.                                                                                          |

| ● | The approximately $53,000 increase                                                                                                        
 in retail services sales included Cask Club sales increasing by approximately $27,000 and Cocktail orders in the tasting rooms increasing 
 by approximately $49,000, offset by sales of Tastings decreasing by approximately $18,000.                                                |

74 Cost of Sales Cost of sales were approximately $3,524,000 and $4,135,000 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of approximately $611,000, or 14.8%, period over period. The reduction in cost of sales resulted primarily from an approximately $580,000 decrease in services cost of sales, to approximately $95,000 for the nine months ended September 30, 2024 compared approximately $675,000 for the nine months ended September 30, 2023.

|          | Total Cost of Sales | Nine Months Ended   
 September 30,       
 (rounded to $000’s) |      2024 |     |   |      2023 |     |   | Change   |   |
|:---------|:--------------------|:--------------------|----------:|:----|:--|----------:|:----|:--|:---------|: