Company: IPST
Filing Date: 2025-12-19
Form Type: S-1/A
Source: 0001213900-25-123872
Chunk: 145

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-19
Form: S-1/A
Chunk 145
---
% for the nine months ended September30, 2025 and 2024, respectively, are significant contributors to our current overall low products gross margins. Unabsorbed overhead is a function of costs attributable to the excess capacity and associated overhead in our system. As we move to third party production in 2026 and we move into 2026 with a significantly reduced headcount, we expect unabsorbed overhead to be greatly reduced on a full year basis in 2026. (See below for our discussion on Gross Margins related to unabsorbed overhead in Non -GAAP Financial Measures). The approximately $457,000 decrease in net products cost of sales period over period is further detailed as follows:

| Cost of Sales Products Sales – Spirits Business 
 2025                                            |     | Nine Months Ended   
 September 30,       
 (rounded to $000’s) |      2024 |     |   |           |     | Change |          |   |
|:------------------------------------------------|:----|:--------------------|----------:|:----|:--|----------:|:----|:-------|---------:|:--|
| Spirits – Wholesale                             |     | $                   |   651,000 |     | $ |   928,000 |     | $      | (277,000 | ) |
| Spirits – Retail                                |     |                     |   446,000 |     |   |   549,000 |     |        | (103,000 | ) |
| Spirits – Third Party                           |     |                     |         — |     |   |   134,000 |     |        | (134,000 | ) |
| Merchandise and Prepared Food                   |     |                     |    79,000 |     |   |   164,000 |     |        |  (85,000 | ) |
| Unabsorbed Overhead                             |     |                     | 1,796,000 |     |   | 1,654,000 |     |        |  142,000 |   |
|                                                 |     | $                   | 2,972,000 |     | $ | 3,429,000 |     | $      | (457,000 | ) |

•The approximately $277,000 decrease in wholesale product cost of sales to approximately $651,000 for the nine months ended September30, 2025 compared to approximately $928,000 for the nine months ended September30,