Company: IPST
Filing Date: 2025-05-21
Form Type: 424B3
Source: 0001641172-25-011934
Chunk: 84

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-05-21
Form: 424B3
Chunk 84
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|:----|:--|---------:|
| Spirits                 
 – Wholesale             |     | $            | 174,000 |     | $      |   267,000 |     | $ |  -93,000 |
| Spirits                 
 – Retail                |     |              | 146,000 |     |        |   129,000 |     |   |   17,000 |
| Spirits                 
 – Third Party           |     |              |       — |     |        |    99,000 |     |   |  -99,000 |
| Merchandise             
 and Prepared Food       |     |              |  33,000 |     |        |    57,000 |     |   |  -24,000 |
| Unabsorbed              
 Overhead                |     |              | 461,000 |     |        |   662,000 |     |   | -201,000 |
|                         |     | $            | 814,000 |     | $      | 1,214,000 |     | $ | -400,000 |

• The approximately $93,000 decrease in wholesale product cost of sales to approximately $174,000 for the three months ended March 31, 2025 compared to approximately $267,000 for the three months ended March 31, 2024 was primarily the result of the shifting of some wholesale orders from the first quarter to the second quarter based on timing of reorders in the wholesale channel and the continued reduction of focus on our part on low margin items as we shift focus to higher margin items.

• The decrease to $0 in third-party production costs is due to no such activity in the three months ended March 31, 2025.

• Our unabsorbed overhead, which is a measure of our capacity relative to our current utilization, decreased by approximately $201,000 to approximately $461,000 for the three months ended March 31, 2025 compared to approximately $662,000 for the three months ended March 31, 2024. The unabsorbed overhead expense indicates our underutilization of current production capacity as we move away from low-margin, high volume products into higher margin products. Our goal continues to be the reduction of unabsorbed overhead over time as our production volumes increase with increased sales and as we reduce overhead costs associated with excess production capacity, warehouse space and other real estate. The combined efforts of increasing high margin product sales and