Company: IPST
Filing Date: 2025-06-13
Form Type: S-1
Source: 0001641172-25-015121
Chunk: 102

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-06-13
Form: S-1
Chunk 102
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2025 that occurred 
 in first quarter 2024 and the reduction of sales of low margin spirits as we continue to    
 move our emphasis to higher margin items.                                                   |

| ● | Retail                                                                                          
 products sales included the impact of sales from the launch of our Special Operations           
 Salute product line in November 2023, with sales associated with that new product line          
 of approximately $227,000 and $280,000 for the three months ended March 31, 2025 and            
 2024,and which is an important part of our strategy as our margins on sales direct to consumers 
 are highest for us. The year over year approximately $173,000 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 the movement of reorders into second    
 quarter 2025 that occurred in first quarter 2024 for DtC items. A portion of the reduction      
 in retail revenue in three months ended March 31, 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 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 $171,000 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.                                    |

Online DtC Product Sales from our online distributor’s inventory sold retailers for resale to retail customers for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 reflected the Company’s increased focus on high-margin direct to consumer (“DtC”) and online sales period over period. The tables below report the substantial increase in the retail value of DtC products sold to consumers during the three months ended March 31, 2025 versus 2024 (sales from our online distributor’s inventory) as follows (in dollars and units sold):

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