Company: IPST
Filing Date: 2025-06-13
Form Type: S-1
Source: 0001641172-25-015121
Chunk: 116

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-06-13
Form: S-1
Chunk 116
---
ed                                                                           
 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 three months ended March 31, 2025 and 2024, and the years ended December 31, 2024 and 2023. Adjusted Gross Margin excluding unabsorbed overhead is the percentage obtained by dividing Adjusted Gross Profit after removing unabsorbed overhead by our GAAP total net sales. It is an analysis that assumes all excess production capacity and space has been used in production and generating revenue, assigning all such overhead costs across all production and revenue. It is especially important in forecasting to larger entities that may be looking to acquire brands or entities about the amount of inefficiencies they can wring out of a products or production if such products or ventures were acquired and absorbed into their larger and more efficient systems.

| 78 |

| Gross Profit Analysis Excluding Unabsorbed Overhead |     | 2025 |               Three 
 Months Ended  March 
       31,  (rounded 
          to $000’s) |   |     | 2024 |           |   |     | 2024 |           Years 
 Ended  December 
   31,  (rounded 
      to $000’s) |   |     | 2023 |           |   |
|:----------------------------------------------------|:----|:-----|--------------------:|:--|:----|:-----|----------:|:--|:----|:-----|----------------:|:--|:----|:-----|----------:|:--|
| GAAP Total Net Sales                                |     | $    |           1,092,000 |   |     | $    | 1,706,000 |   |     | $    |       8,403,000 |   |     | $    | 7,972,000 |   |
| GAAP Gross Profit                                   |     | $    |             272,000 |   |     | $    |   409,000 |   |     |      |       2,126,000 |   |     |      | 2,151,000 |   |
| GAAP Gross Profit Add