Temporary Equity and Stockholders' Deficiency
|3 Months Ended|
Mar. 31, 2020
|Temporary Equity and Stockholders' Deficiency||
12. TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIENCY
Series B Preferred Stock
On March 29, 2020, the Company’s Board of Directors as well as the holders of the Series B Convertible Preferred Stock approved an Amendment to the Certificate of Designation of the Series B Convertible Preferred Stock (the “Third Amendment”) which extends the period in which holders of the Series B Shares may voluntarily elect to convert such shares into shares of common stock of the Company to December 31, 2020. In addition, the Series B Amendment extends the date upon which the Company shall redeem all then-outstanding Series B Shares and all unpaid accrued and accumulated dividends to December 31, 2020.
The Series B stockholders are entitled to cumulative cash dividends at an annual rate of 8% of the Series B liquidation value (equal to face value of $10 per share), as defined, payable when, as and if declared by the Board of Directors. Cumulative dividends earned by the Series B stockholders were $179,770 and $177,795 for the three months ended March 31, 2020 and 2019, respectively. Dividends payable of $85,223 are included in the current portion of other liabilities at March 31, 2020. Cumulative unpaid and undeclared dividends in arrears related to the Series B totaled $1,444,131 and $1,264,361 as of March 31, 2020 and December 31, 2019, respectively.
Accumulated Other Comprehensive Income
For three months ended March 31, 2020 and 2019, the Company recorded $128,051 and $8,339, respectively, of foreign currency translation adjustments as accumulated other comprehensive income, primarily related to fluctuations in the Argentine peso to United States dollar exchange rates (see Note 3 – Summary of Significant Accounting Policies, Highly Inflationary Status in Argentina).
A summary of warrants activity during the three months ended March 31, 2020 is presented below:
A summary of outstanding and exercisable warrants as of March 31, 2020 is presented below:
On January 31, 2019, the Company granted five-year options for the purchase of 1,350,000 shares of the Company’s common stock under the 2018 Plan, of which options for the purchase of 1,100,000 shares of the Company’s common stock were granted to certain employees of the Company, options for the purchase of 100,000 shares of the Company’s common stock were granted to certain members of the Board of Directors and options for the purchase of 150,000 shares of the Company’s common stock were granted to consultants. The options had an exercise price of $0.385 per share and vest 25% at the first anniversary of date of grant, with the remaining shares vesting ratably on a quarterly basis over the following three years. The options had an aggregate grant date fair value of $200,092, which will be recognized ratably over the vesting period. No options were granted during the three months ended March 31, 2020.
The Company has computed the fair value of options granted during the three months ended March 31, 2019 using the Black-Scholes option pricing model, with the following assumptions used:
During the three months ended March 31, 2020 and 2019, the Company recorded stock-based compensation expense of $103,581 and $157,994, respectively, related to the amortization of stock option grants, which is reflected in general and administrative expenses in the accompanying condensed consolidated statements of operations. As of March 31, 2020, there was $964,345 of unrecognized stock-based compensation expense related to stock option grants that will be amortized over a weighted average period of 2.50 years.
A summary of GGH stock options activity during the three months ended March 31, 2020 is presented below:
The following table presents information related to GGH stock options at March 31, 2020:
Gaucho Group, Inc. Stock Options
As of December 31, 2019, options to purchase 6,595,000 shares of GGI common stock have been issued and are outstanding under the 2018 Gaucho Plan, with a weighted average estimated fair value of approximately $0.14 per share.
The entire disclosure for shareholders' equity and share-based payment arrangement. Includes, but is not limited to, disclosure of policy and terms of share-based payment arrangement, deferred compensation arrangement, and employee stock purchase plan (ESPP).
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef