Company: IPST
Filing Date: 2025-08-26
Form Type: S-1
Source: 0001213900-25-080839
Chunk: 147

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-26
Form: S-1
Chunk 147
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     | Six Months Ended June 30, 
       (rounded to $000’s) |      |     |      |        |     |       |    |
| 2025               |     |                           | 2024 |     |      | Change |     |       |    |
| Products           |     |                       0.1 |    % |     | 13.6 | %      |     | (13.5 | )% |
| Services           |     |                      96.5 |    % |     | 90.7 | %      |     |   5.8 | %  |
|                    |     |                      20.7 |    % |     | 32.6 | %      |     | (11.9 | )% |

It is important to note that the approximately $2,000 in Products Gross Profits, and the resulting low Gross Margin of 0.1%, is after layering in the approximately $1,043,000 in unabsorbed overhead costs.

87

Gross Profit — Analysis of Exclusion of Unabsorbed Overhead To provide a more detailed view to our performance for products and services based purely on the direct input costs we remove unabsorbed overhead expenses for the following analysis. Gross profit excluding unabsorbed overhead was approximately $1,045,000 and $1,537,000 for the six months ended June 30, 2025 and 2024, respectively, a decrease of approximately $492,000, or 32.0%, period over period, and included:

|                                                     | Total Gross Profit – Excluding Unabsorbed Overhead | Six Months Ended June 30, 
 (rounded to $000’s)       |      2025 |     |   |      2024 |     |   | Change   |   |
|:----------------------------------------------------|:---------------------------------------------------|:--------------------------|----------:|:----|:--|----------:|:----|:--|:---------|:--|
| Products                                            |                                                    | $                         |     2,000 |     | $ |   365,000 |     | $ | (363,000 | ) |
| Add Back: Unabsorbed Overhead                       |                                                    |                           | 1,043,000 |     |   | 1,172,000 |     |   | (129,000 | ) |
| Products Gross Profit Excluding Unabsor