Company: IPST
Filing Date: 2025-08-26
Form Type: S-1
Source: 0001213900-25-080839
Chunk: 146

Company: Heritage Distilling Holding Company, Inc.
Filing Date: 2025-08-26
Form: S-1
Chunk 146
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absorbed overhead, which is a measure of our capacity relative to our current utilization, decreased by approximately $129,000 to approximately $1,043,000 for the six months ended June30, 2025 compared to approximately $1,172,000 for the six months ended June30, 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 reducing general overhead costs are geared toward reducing our overhead expenses to have our remaining overhead right -sizedto our strategy of focusing on producing and selling high margin super premium items. (See below for our discussion on Gross Margins related to unabsorbed overhead in Non -GAAP Financial Measures). Unabsorbed overhead includes approximately $2,000 in product inventory write downs and adjustments in the six months ended June30, 2025 compared to approximately $79,000 in the six months ended ended June30, 2024. Gross Profit Gross profit was approximately $499,000 and $1,157,000 for the six months ended June 30, 2025 and 2024, respectively, a decrease of approximately $658,000, or 56.9%, period over period, and included:

| Total Gross Profit 
 2025               |     | Six Months Ended June 30, 
 (rounded to $000’s)       |    2024 |     |   |    Change |     |   |          |   |
|:-------------------|:----|:--------------------------|--------:|:----|:--|----------:|:----|:--|:---------|:--|
| Products           |     | $                         |   2,000 |     | $ |   365,000 |     | $ | (363,000 | ) |
| Services           |     |                           | 497,000 |     |   |   792,000 |     |   | (295,000 | ) |
|                    |     | $                         | 499,000 |     | $ | 1,157,000 |     | $ | (658,000 | ) |

| Total Gross Margin |