Company: IPST
Filing Date: 2025-11-18
Form Type: 10-Q
Source: 0001788230-25-000175
Chunk: 137

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-11-18
Form: 10-Q
Item: Part I, Item 1
Chunk 137
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 ended September 30, 2025 and 2024, respectively, a decrease of approximately $270,000, or 36.5%, period over period, and included:

Three Months Ended September 30,(rounded to $000’s)Total Gross Profit - Excluding Unabsorbed Overhead - Spirits Business20252024ChangeProducts$(259,000)$257,000 $(516,000)Add Back: Unabsorbed Overhead728,000 482,000 246,000      Products Gross Profit Excluding Unabsorbed Overhead469,000 739,000 (270,000)Services236,000 385,000 (149,000)     Total Gross Profit Excluding Unabsorbed Overhead$705,000 $1,124,000 $(419,000)

Three Months Ended September 30,Total Gross Margin - Excluding Unabsorbed Overhead - Spirits Business20252024ChangeProducts(31.7)%18.7 %(50.4)%Add Back: Unabsorbed Overhead89.2 %35.1 %54.2 %     Products Gross Margin Excluding Unabsorbed Overhead57.5 %53.7 %3.7 %Services89.1 %96.5 %(7.4)%     Total Gross Margin Excluding Unabsorbed Overhead65.2 %63.4 %1.9 %

Gross Margin excluding unabsorbed overhead of 65.2% for the three months ended September 30, 2025 compared to 63.4% 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 — Spirits Business

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

Total Sales - Spirits BusinessThree Months Ended September 30,(rounded to $000’s)Change20252024Products$816,000 $1,375,000 $(559,000)Services265,000 399,000 (134,000) $1,081,000 $1,774,000 $(693,000)