Company: IPST
Filing Date: 2025-01-27
Form Type: S-1
Source: 0001213900-25-006695
Chunk: 118

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-01-27
Form: S-1
Chunk 118
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Net Sales Net sales were approximately $5,310,000 and $5,525,000 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of approximately $215,000, or 3.9%, period over period, the bulk of which decrease was in the quarter period ending September 30. 2024 as we managed through several out of stock issues on key products. The decrease in net sales resulted primarily from:

| ● | an                                                                                          
 increase in product sales of approximately $678,000, or 20.1%, to approximately $4,051,000  
 for the nine months ended September 30, 2024, compared to approximately $3,373,000 for the  
 nine months ended September 30, 2023, due mainly to the launch of the Salute Series product 
 line in November 2023. This increase would have been greater except for the closure of our  
 Ballard, Washington retail location in late March 2023, which generated a full quarter      
 of retail tasting room revenue in 2023, while the nine months ended September 30,           
 2024, included none of that revenue.                                                        |

| ● | a                                                                                            
 decrease of approximately $894,000, or 41.5%, in services sales, to approximately $1,259,000 
 for the nine months ended September 30, 2024 compared to approximately $2,152,000 for        
 the nine months ended September 30, 2023 resulting primarily from the termination of         
 a third-party bottling contract in January 2024, which we strategically terminated so that   
 we could focus on higher margin activities.                                                  |

73 We note that total sales for the nine months ended September 30, 2024 would have been higher than total sales in the nine months ended September 30, 2023 had we not closed our Ballard, Washington tasting room in March of 2023 in connection with our decision not to renew the lease for that facility and if we have chosen to keep the low margin third party production contract in place rather than terminate it in January 2024. We believe this demonstrates that 2023 and 2024 were periods of stabilization in anticipation of new product launches and new markets to begin our growth after the conclusion of our initial public offering. The approximately $678,000 net increase in products sales, period over period, included:

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