Company: IPST
Filing Date: 2025-05-12
Form Type: 424B3
Source: 0001641172-25-009684
Chunk: 106

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-12
Form: 424B3
Chunk 106
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 into higher margin products. We expect that our unabsorbed overhead           
 will decrease over time as our production volumes increase with increased sales, as our overhead   
 expenses will be more fully allocated to increased levels of production. (See below our discussion 
 on Gross Margins related to unabsorbed overhead in Non-GAAP Financial Measures).                   |
| ● | Cost                                                                                               
 of Products Sales includes approximately $211,000 in product inventory write downs and adjustments 
 in 2024 compared to a positive inventory adjustment of approximately $21,000 in 2023.              |

Gross Profit

Gross profit was approximately $2,126,000 and $2,151,000 for the years ended December 31, 2024 and 2023, respectively, a decrease of approximately $25,000, or 1.2%, period over period, and included:

|          | Total Gross 
 Profit      | Years              
 Ended December 31, 
 (rounded           
 to $000’s)         |      2024 |     |   |      2023 |     |   |   Change |   |
|:---------|:------------|:-------------------|----------:|:----|:--|----------:|:----|:--|---------:|:--|
| Products |             | $                  |   442,000 |     | $ |   173,000 |     | $ |  269,000 |   |
| Services |             |                    | 1,684,000 |     |   | 1,978,000 |     |   | (294,000 | ) |
|          |             | $                  | 2,126,000 |     | $ | 2,151,000 |     | $ |  (25,000 | ) |

|             |     |    Years 
    Ended 
 December 
      31, |      |   |     |      |      |   |     |        |      |    |
| Total Gross 
 Margin      |     |     2024 |      |   |     | 2023 |      |   |     | Change |      |    |
| Products    |     |          |  6.7 | % |     |      |  3.4 | % |     |        |  3.3 | %  |
| Services    |     |          | 94.2 | % |     |      | 69.8 |