Company: IPST
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001788230-25-000126
Chunk: 301

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 301
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 96,000      Products Gross Profit Excluding Unabsorbed Overhead583,000 854,000 (271,000)Services249,000 402,000 (153,000)     Total Gross Profit Excluding Unabsorbed Overhead$832,000 $1,256,000 $(424,000)

Three Months Ended June 30,(rounded to $000’s)Total Gross Margin - Excluding Unabsorbed Overhead20252024ChangeProducts(2.3)%23.7 %(26.0)%Add Back: Unabsorbed Overhead57.3 %35.4 %21.9 %     Products Gross Margin Excluding Unabsorbed Overhead55.0 %59.1 %(4.1)%Services95.4 %100.8 %(5.3)%     Total Gross Margin Excluding Unabsorbed Overhead63.0 %68.1 %(5.1)%

Gross Margin excluding unabsorbed overhead of 63.0% for the three months ended June 30, 2025 compared to 68.1% for the same period in 2024 is a significant increase, as is the 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

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

Total SalesThree Months Ended June 30,(rounded to $000’s)Change20252024Products$1,060,000 $1,445,000 $(385,000)Services261,000 399,000 (138,000) $1,321,000 $1,844,000 $(523,000)

•Gross margin was approximately 17.0% and 40.4% (63.0% and 68.1%, excluding unabsorbed overhead) for the three months ended June 30, 2025 and 2024, respectively, based upon total net sales of approximately $1,321,000 and $1,844,000, respectively. As we add more Special Operations Salute sales via online channels, 

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we expect to see our overall gross margin increase