Company: IPST
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001788230-25-000175
Chunk: 153

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part I, Item 1
Chunk 153
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 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 nine months ended September 30, 2025 and 2024, respectively, based upon total net revenues of approximately $1,855,000 and $0, respectively.

Sales and Marketing Expenses

Sales and marketing expenses were approximately $4,310,000 for the nine months ended September 30, 2025 compared to approximately $3,760,000 for the nine months ended September 30, 2024. This approximately $550,000 increase included:

Sales and Marketing ExpenseNine Months Ended September 30, (rounded to $000’s)Change20252024Personnel - Cash Wages and Related Expense$2,159,000 $2,074,000 $85,000 Personnel - Share-Based Compensation647,000 — 647,000 Tasting Room63,000 109,000 (46,000)Leases and Rentals653,000 542,000 111,000 Sales and Marketing Expenses243,000 356,000 (113,000)Other545,000 679,000 (134,000)$4,310,000 $3,760,000 $550,000 

74

•The approximately $647,000 of personnel - share-based compensation in the nine months ended September 30, 2025, for which there was no such expense in the comparable nine months ended September 30, 2024 included; $511,000 grant of matching non-cash RSU compensation related to deferred compensation. (See Notes 2 and 7 of our condensed consolidated financial statements for the Three and Nine Month Periods ended September 30, 2025 and 2024), plus additional RSU grants recognitions of $136,000.

•The approximately $46,000 decrease in tasting room expenses was the result of decrease in spending.

•The approximately $134,000 decrease in other sales and marketing expenses stems from decreased deals, discounts, rebates and incentives offered to wholesale distributors for low margin products and the ending of a contract for an outside sales consultant as of December 31, 2024.

General and Administrative Expenses

General and