Company: IPST
Filing Date: 2025-12-19
Form Type: S-1/A
Source: 0001213900-25-123872
Chunk: 165

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-12-19
Form: S-1/A
Chunk 165
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) to compare operating performance on a consistent basis for the raw inputs, direct labor and direct overhead to a produce a product removing unused production capacity or overhead, (ii) for planning purposes, including the preparation of our internal annual operating budget, and (iii) to evaluate the performance and effectiveness of operational strategies as we work to reduce overhead. Adjusted Gross Profit and Adjusted Gross Margin:Adjusted gross profit represents GAAP gross profit adjusted for any nonrecurring gains and losses. Adjusted Gross Margin represents Adjusted Gross Profit as a percentage of total net sales. We use these measures (i) to compare operating performance on a consistent basis, (ii) for planning purposes, including the preparation of our internal annual operating budget, and (iii) to evaluate the performance and effectiveness of operational strategies. EBITDA and Adjusted EBITDA:EBITDA represents GAAP net income/(loss) adjusted for (i) depreciation of property and equipment; (ii) interest expense; (iii) share -basedcompensation; and (iv) provision for income taxes. Adjusted EBITDA represents EBITDA adjusted for the recognition of share -basedcompensation, non -recurringgains and losses; and other one -timeitems. We believe that EBITDA and adjusted EBITDA help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we include in GAAP operating 98

loss. These non -GAAPfinancial measures should not be considered in isolation from, or as substitutes for, financial information prepared in accordance with GAAP. There are several limitations related to the use of this non -GAAPfinancial measure compared to the closest comparable GAAP measure. Some of these limitations are that: •Adjusted Gross Profit, EBITDA and adjusted EBITDA do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; •Adjusted Gross Profit, EBITDA and adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; •Adjusted Gross Profit, EBITDA and adjusted EBITDA exclude certain recurring, non -cashcharges such as depreciation of property and equipment and, although this is a non -cashcharge, the assets being depreciated may have to be replaced in the future; •Adjusted Gross Profit, EBITDA and adjusted EBITDA exclude income tax benefit (expense); and •Other companies in our industry may calculate non -GAAPfinancial measures differently than we do, limiting their usefulness as comparative measures