Company: IPST
Filing Date: 2025-04-28
Form Type: 10-K
Source: 0001788230-25-000048
Chunk: 150

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-04-28
Form: 10-K
Item: Item 7
Chunk 150
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 parties, barreled whiskey sold to third parties, and royalties from spirits sales under the new TBN model.

The approximately $1,048,000 decrease in net sales of services period over period included:

Services SalesYears Ended December 31, (rounded to $000’s)20242023ChangeThird Party Production$99,000 $1,094,000 $(995,000)Retail Services1,442,000 1,387,000 55,000 Consulting and Other246,000 354,000 (108,000) $1,787,000 $2,835,000 $(1,048,000)

•The approximately $995,000 decrease in third-party production resulted from the ending of a low-margin third-party bottling contract as of January 31, 2024. The bulk of our revenue in this category included production services revenue related to a contract we had to produce a gin for a large international spirit brand owner as we made the choice to focus our time, energy and resources on higher margin activities. Lesser amounts of revenue in this category in 2024 came from contract bottling services; and third-party barrel sales and storage revenues.

•The approximately $55,000 increase in retail services included Cask Club sales increasing $29,000 and Cocktail/Tasting orders in the tasting rooms increasing $30,000.

•The approximately $108,000 decrease in consulting fees is related to TBN projects as we saw the successful completion and opening of the Stillaguamish project in October 2024 and we moved the announced Coquille and Tonto Apache projects that were in planning phase into construction phase in preparation for openings in late 2025. 

Cost of Sales

Cost of sales were approximately $6,276,000 and $5,820,000 for the years ended December 31, 2024 and 2023, respectively, an increase of approximately $456,000, or 7.8%, period over period. 

Total Cost of SalesYears Ended December 31, (rounded to $000’s) 20242023ChangeProducts$6,173,000 $4,963,000 $1,210,000 Services103,000 857,000 (754,000) $6,276,000 $5,820,000 $456,000 

The approximately $1,210,000 increase in net products cost of sales period over period included: an