Company: IPST
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001788230-25-000175
Chunk: 351

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part I, Item 2
Chunk 351
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$(342,000)Retail1,757,000 2,526,000 (769,000)Third Party— 226,000 (226,000) $2,714,000 $4,051,000 $(1,337,000)

•The approximately $342,000 decrease in wholesale product sales was primarily the result of reducing focus on lower margin items and the timing of orders through the wholesale channel moving between quarters.

•Retail products sales included the impact of sales of our Special Operations Salute product line with sales associated with that product line of approximately $401,000 and $974,000 for the nine months ended September 30, 2025 and 2024. The year over year approximately $769,000 decrease included is the result of the timing of orders fulfilled through the DtC retailer channel, which consisted of large load in by the retailers in the fourth quarter 2024, modest reorders in the first quarter 2025 as the retailers moved through their inventory and our reduced spend on digital advertising in 2025 as we focused on our cryptocurrency transition. A portion of the reduction in retail revenue in nine months ended September 30, 2025 versus 2024 was also from 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 reopened those locations on Mondays and Tuesdays as we approached to the Memorial Day holiday to take advantage of higher summer foot traffic. 

•The approximately $226,000 decrease in third-party products sales was primarily a result of winding down our contracts on producing bulk whiskey for third parties in 2024 as we continue to shift our focus and resources into higher margin activities.

The approximately $479,000 decrease in net sales of services period over period included:

Services Sales - Spirits BusinessNine Months Ended September 30,(rounded to $000’s)20252024ChangeThird Party Production$20,000 $124,000 $(104,000)Retail Services737,000 1,044,000 (307,000)Consulting and Other23,000 91,000 (68,000) $780,000 $1,259,000 $(479,000)

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•The approximately $104,000 decrease in third-party production resulted from the ending