Company: IPST
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001788230-25-000175
Chunk: 357

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part I, Item 2
Chunk 357
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,000 1,654,000 142,000      Products Gross Profit Excluding Unabsorbed Overhead1,539,000 2,276,000 (737,000)Services733,000 1,164,000 (431,000)     Total Gross Profit Excluding Unabsorbed Overhead$2,272,000 $3,440,000 $(1,168,000)

Nine Months Ended September 30,Total Gross Margin - Excluding Unabsorbed Overhead - Spirits Business20252024ChangeProducts(9.5)%15.4 %(24.8)%Add Back: Unabsorbed Overhead66.2 %40.8 %25.3 %     Products Gross Margin Excluding Unabsorbed Overhead56.7 %56.2 %0.5 %Services94.0 %92.5 %1.5 %     Total Gross Margin Excluding Unabsorbed Overhead65.0 %64.8 %0.2 %

Gross Margin excluding unabsorbed overhead of 65.0% for the nine months ended September 30, 2025 compared to 64.8% for the same period in 2024 shows consistent performance, and remains a solid improvement compared to the 55.6% we reported for the full year 2024, indicating our efforts aimed at reducing overhead expenses and focusing on high margin items are starting to bear fruit.

Gross Profit Analysis - Spirits Business

Gross Margin numbers above are based on the total sales for the nine months ended September 30, 2025 and 2024 as follows:

Total Sales - Spirits BusinessNine Months Ended September 30,(rounded to $000’s)Change20252024Products$2,714,000 $4,051,000 $(1,337,000)Services780,000 1,259,000 (479,000) $3,494,000 $5,310,000 $(1,816,000)

•Gross margin was approximately 13.6% and 33.6% (65.0% and 64.8%, excluding unabsorbed overhead) for the nine months ended September 30, 2025 and 2024, respectively, based upon total net sales of approximately $3,494,000 and $5,310,