Company: IPST
Filing Date: 2025-04-28
Form Type: 10-K
Source: 0001788230-25-000048
Chunk: 155

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-04-28
Form: 10-K
Item: Item 7
Chunk 155
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 Tasting Room144,000 119,000 25,000 Leases and Rentals740,000 712,000 28,000 Sales and Marketing Expenses503,000 1,006,000 (503,000)Other1,019,000 842,000 177,000 $6,039,000 $5,938,000 $101,000 

•The approximately $356,000 decrease in personnel expense was primarily a result of a decrease of five full-time marketing and retail administration staff in May 2023.

•The approximately $730,000 of non-cash share-based compensation expense recognized in 2024 for sales and marketing personnel included deferred compensation matching RSUs to certain personnel of approximately $511,000, and historical RSU recognition at IPO $219,000.

•The approximately $25,000 increase in leases and rentals expenses was primarily due to the additional cost associated with our new tasting room location in Eugene, Oregon from the Thinking Tree Spirits acquisition offset by a decrease in rent expenses from closure of our Ballard, Washington retail location in March 2023.

•The approximately $503,000 decrease in sales and marketing expenses included: an increase in digital advertising production expense to drive DtC sales of our highest margin spirits brands, offset by decreases in sponsorships and print advertising as we shifted to a new third-party e-commerce platform and the ending of two large sports sponsorships that were put under contract before COVID-19 shutdowns went into effect (and could not be cancelled), which contracts were extended through negotiations in 2022 and 2023, and that were not renewed nor expensed in 2024 or beyond.

•The approximately $177,000 increase in other sales and marketing expenses included increases in: professional fees for contracted Chief Revenue Officer services and e-commerce distribution services and travel; software for an improved point-of-sale software upgrade; retail tasting room location utilities and insurance; and a net increase in other sales and marketing expenses.

•Removing the approximately $730,000 in non-cash share-based compensation expense recognized in 2024 for RSU grant awards for members of the Sales and Marketing team from the expenses for 2024 would result in a total cash expense under Sales and Marketing Expense of $5,309,000 for 2024, $629,000 less that the cash expenditures for 2023. 

64

General and Administrative Expenses

General and administrative expenses were approximately $11,006,000 for the year ended December