Company: IPST
Filing Date: 2025-08-15
Form Type: 424B3
Source: 0001641172-25-024441
Chunk: 97

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-15
Form: 424B3
Chunk 97
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 (57.4%          
 excluding unabsorbed overhead) for the six months ended June 30, 2024 are inclusive of low margin production contracts we ended in         
 2024, the significant amount of unabsorbed overhead we booked (which drags down gross margin based on the amount of unused capacity        
 in our system), and approximately $27,000 in product inventory write downs in the six months ended June 30, 2025 compared to approximately 
 $102,000 in product inventory write downs and adjustments in the six months ended June 30, 2024. As we work to shed some of our excess     
 capacity and overhead, and as we increase our sales of higher margin items, we expect this Products gross margin to increase significantly 
 (See also below our comments related to this in more detail in Non-GAAP Financial Measures).                                               |

| 61 |

Sales and Marketing Expenses

Sales and marketing expenses were approximately $3,287,000 for the six months ended June 30, 2025 compared to approximately $2,488,000 for the six months ended June 30, 2024. This approximately $799,000 increase included:

| Sales and Marketing Expense                |     | Six                                       
 Months Ended June 30, (rounded to $000’s) 
 2025                                      |           |     |   |      2024 |     |   |   Change |   |
|:-------------------------------------------|:----|:------------------------------------------|----------:|:----|:--|----------:|:----|:--|---------:|:--|
| Personnel - Cash Wages and Related Expense |     | $                                         | 1,555,000 |     | $ | 1,309,000 |     | $ |  246,000 |   |
| Personnel - Share-Based Compensation       |     |                                           |   647,000 |     |   |         — |     |   |  647,000 |   |
| Tasting Room                               |     |                                           |    44,000 |     |   |    70,000 |     |   |  (26,000 | ) |
| Leases and Rentals                         |     |                                           |   378,000 |     |   |   353,000 |     |   |   25,000 |   |
| Sales and Marketing Expenses               |     |                                           |   288,000 |     |   |   277,