Company: IPST
Filing Date: 2025-10-16
Form Type: S-1/A
Source: 0001213900-25-099309
Chunk: 144

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-10-16
Form: S-1/A
Chunk 144
---
 which we expect will increase our overall margins.

81

•Gross margin for Products of (2.3)% (55.0% excluding unabsorbed overhead) for the three months ended June30, 2025 compared to 23.7% (59.1% excluding unabsorbed overhead) for the three months ended June30, 2024 are inclusive of low margin production contracts we ended in 2024, the significant amount of unabsorbed overhead we booked (which drags down gross margin based on the amount of unused capacity in our system). As we work to shed some of our excess capacity and overhead, and as we increase our sales of higher margin items, we expect this Products gross margin to increase significantly ( See also below our comments related to this in more detail in Non -GAAP Financial Measures). Sales and Marketing Expenses Sales and marketing expenses were approximately $1,973,000 for the three months ended June 30, 2025 compared to approximately $1,298,000 for the three months ended June 30, 2024. This approximately $675,000 increase included:

| Sales and Marketing Expense                
 2025                                       |     | Three Months Ended June 30, 
 (rounded to $000’s)         |      2024 |     |   |           |     | Change |         |   |
|:-------------------------------------------|:----|:----------------------------|----------:|:----|:--|----------:|:----|:-------|--------:|:--|
| Personnel – Cash Wages and Related Expense |     | $                           |   826,000 |     | $ |   664,000 |     | $      | 162,000 |   |
| Personnel – Share-Based Compensation       |     |                             |   647,000 |     |   |         — |     |        | 647,000 |   |
| Tasting Room                               |     |                             |    22,000 |     |   |    35,000 |     |        | (13,000 | ) |
| Leases and Rentals                         |     |                             |   188,000 |     |   |   187,000 |     |        |   1,000 |   |
| Sales and Marketing Expenses               |     |                             |    82,000 |     |   |   181,000 |     |        | (99,000 | ) |
| Other                                      |