Company: IPST
Filing Date: 2025-05-21
Form Type: 424B3
Source: 0001641172-25-011934
Chunk: 81

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-21
Form: 424B3
Chunk 81
---
61,000 decrease in retail services was the result of the reduction of hours in some of our brick and mortar retail locations as we made the decision to close some locations on Mondays and Tuesday to reduce labor expenses on our slowest retail sales days during the quarter. During the same period in 2024 our retail locations were open seven days per week. We plan to reopen those locations on Mondays and Tuesdays as we get closer to the Memorial Day holiday to take advantage of higher summer foot traffic.

• The approximately $54,000 decrease in consulting fees is related to TBN projects as we saw the successful completion and opening of the Stillaguamish project in October 2024 and we moved the announced Coquille and Tonto Apache projects that were in planning phase into construction phase in preparation for openings in late 2025.

<div align='center'>49</div>

Table of Contents

Cost of Sales

Cost of sales were approximately $820,000 and $1,298,000 for the three months ended March 31, 2025 and 2024, respectively, a decrease of approximately $478,000, or 36.8%, period over period.

|          | Cost     
 of Sales | Three        
 Months Ended 
 March        
 31,          
 (rounded     
 to $000’s)   |    2025 |     |   |      2024 |     |   |   Change |
|:---------|:---------|:-------------|--------:|:----|:--|----------:|:----|:--|---------:|
| Products |          |              | 814,000 |     |   | 1,214,000 |     | $ | -400,000 |
| Services |          |              |   6,000 |     |   |    84,000 |     |   |  -78,000 |
|          |          | $            | 820,000 |     | $ | 1,298,000 |     | $ | -478,000 |

The approximately $400,000 decrease in net products cost of sales period over period included: a decrease in product cost of approximately $199,000 to approximately $353,000 for the three months ended March 31, 2025, from approximately $552,000 for the three months ended March 31, 2024, and a decrease in unabsorbed overhead of approximately $201,000 to approximately $461,000 as of March 31,