Company: IPST
Filing Date: 2025-04-28
Form Type: 10-K
Source: 0001788230-25-000048
Chunk: 157

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-04-28
Form: 10-K
Item: Item 7
Chunk 157
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 as we completed a successful public offering of our common stock (which occurred on November 25, 2024), when the employees would then be paid their respective deferral, plus RSUs or stock options (under the existing 2019 Plan and the new 2024 Plan discussed in Notes 2 and 9 of our consolidated financial statements for the years ended December 31, 2024 and 2023).   

•The approximately $143,000 decrease in recruiting and retention expenses included recruiting expenses related to hiring of key personnel in 2024 and 2023.

•The approximately $65,000 decrease in leases and rentals was primarily the result of our closed Capitol Hill tasting room lease terminating May 2023, and our Ballard tasting room lease terminating April 2024.

•The approximately $138,000 decrease in depreciation expense was primarily the result of accelerating depreciation in 2023 to write off the remaining assets of our Ballard tasting room, which was closed in March 2023.

•The approximately $180,000 decrease in other general and administrative expenses included accumulative smaller changes in utilities, travel, insurance and other expenses.

65

•The approximately $1,546,000 increase in professional fees expense included:

Professional FeesYears Ended December 31, (rounded to $000’s)Change20242023Accounting and Valuation Services$559,000 $1,318,000 $(759,000)Legal997,000 657,000 340,000 Consulting133,000 170,000 (37,000)Consulting - Share-Based Compensation1,571,000 — 1,571,000 Other506,000 75,000 431,000 $3,766,000 $2,220,000 $1,546,000 

A majority of our professional fees expense in the years ended December 31, 2024 and 2023 were incurred as a result of general preparedness of our financial reporting and capital structure for our initial public offering, and previously, for the proposed SPAC transaction discussed below (which was terminated in May 2023). Accordingly, within that context, most of our professional fees expense and changes in expense levels between the respective year-over-year periods were as follows:

•The approximately $1,571,000 of non-cash share-based compensation expense recognized in 2024 for RSU awards granted to consultants. 41.7% of our Professional Fees in 2024 were non