Company: IPST
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001788230-25-000175
Chunk: 146

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part I, Item 1
Chunk 146
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 $307,000 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 reopened those locations on Mondays and Tuesdays as we approached the Memorial Day holiday to take advantage of higher summer foot traffic.

•The approximately $68,000 decrease in consulting fees was 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 the planning phase into the construction phase in preparation for openings in late 2025 and early 2026. 

Net Revenues - Crypto and Related Business

Nine Months Ended September 30,(rounded to $000’s)Total Revenues - Crypto and Related20252024ChangeBlockchain rewards / Validator business $1,909,000 $— $1,909,000 $1,909,000 $— $1,909,000 

(See description of Self Staking and Third-Party Validator Commissions in the three month period discussion above). Net revenues were approximately $1,909,000 and $0 for the nine months ended September 30, 2025 and 2024, respectively, an increase of approximately $1,909,000, or 100%, period over period. There were no comparable revenues in 2024 as we began recognizing staking and validator revenues on September 18, 2025. For the nine months ended September 30,2025, substantially all Crypto and Related Revenue related to Self-Staking 

Cost of Sales — Spirits Business

Cost of sales were approximately $3,018,000 and $3,524,000 for the nine months ended September 30, 2025 and 2024, respectively, a decrease of approximately $506,000, or 14.4%, period over period. Cost of Sales for the nine months ended September 30, 2025 included approximately $121,000 of non-cash share-based compensation expenses related to RSU grant awards recognized in the nine months ended September 30, 2025 for production employees compared to no such award recognition in 2024. Removing the $121,000 in non-cash share-based compensation from the cost of the