Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS??? EQUITY

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STOCKHOLDERS’ EQUITY
 3 Months Ended
Mar. 31, 2022
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

15. STOCKHOLDERS’ EQUITY

 

Common Stock

 

On February 3, 2022, the Company issued 15,000 shares of common stock and paid $34,999 cash as consideration for the purchase of the domain name Gaucho.com. The seller is entitled to additional shares if the closing price per share is less than $2.64 on August 14, 2022, such that the collective value of the total shares issued to the seller has a fair market value of $36,900.

 

On February 3, 2022, the Company issued 1,283,423 shares of its common stock, valued at $2,194,653, to Hollywood Burger Holdings, Inc, a company with whom GGH shares common management, in exchange for a 100% ownership interest in Hollywood Burger Argentina S.R.L., now Gaucho Development S.R.L., The purpose of the acquisition was to acquire certain real property held by Gaucho Development S.R.L. (see Note 3 – Acquisition of Hollywood Burger Argentina, S.R.L.)

 

On March 28, 2022, the Company issued 1,042,788 shares of its common stock, valued at $2,419,268, to the minority holders of GGI, in exchange for the remaining 21% non-controlling interest in GGI. The acquisition of the remaining shares of GGI resulted in a decrease of non-controlling interest to zero, and an adjustment to additional paid-in capital to reflect the Company’s increased ownership in GGI.

 

Accumulated Other Comprehensive Loss

 

For three months ended March 31, 2022 and 2021, the Company recorded a gain of $263,406 and $98,980, 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 2 – Summary of Significant Accounting Policies, Highly Inflationary Status in Argentina).

 

Warrants

 

A summary of warrant activity during the three months ended March 31, 2022 is presented below:

 

    Number of Warrants     Weighted Average Exercise Price    

Weighted Average Remaining Life in

Years

     Intrinsic Value  
                         
Outstanding, January 1, 2022     1,584,345     $ 6.01                  
Issued     750,000       1.75                  
Exercised     -       -                  
Expired     (310,179 )     6.00                  
Canceled     -       -                  
Outstanding, March 31, 2022     2,024,166     $ 4.44       1.3     $ 622,500  
                                 
Exercisable, March 31, 2022     2,024,166     $ 4.44       1.3     $ 622,500  

 

See Note 11 – Convertible Debt Obligations for details regarding warrants issued during the three months ended March 31, 2022.

 

 

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

A summary of outstanding and exercisable warrants as of March 31, 2022 is presented below:

 

Warrants Outstanding     Warrants Exercisable  
Exercise Price     Exercisable Into   Outstanding Number of Warrants     Weighted Average Remaining Life in Years     Exercisable Number of Warrants  
                         
$ 1.75     Common Stock     750,000       2.9       750,000  
$ 6.00     Common Stock     1,258,833       0.4       1,258,833  
$ 7.50     Common Stock     15,333       3.9       15,333  
        Total     2,024,166       1.3       2,024,166  

 

Stock Options

 

No stock options were granted during the three months ended March 31, 2022 or the three months ended March 31, 2021. The following table presents information related to GGH stock options outstanding as of March 31, 2022:

 

Options Outstanding     Options Exercisable  
            Weighted        
      Outstanding     Average     Exercisable  
Exercise     Number of     Remaining Life     Number of  
Price     Options     In Years     Options  
                     
$ 0.59       3,334       3.7       1,043  
$ 0.60       10,001       3.6       3,128  
$ 5.78       235,998       2.1       155,050  
$ 8.09       85,338       1.5       74,738  
$ 9.08       102,346       3.5       38,428  
$ 11.55       69,668       0.9       69,668  
$ 16.50       54,342       0.7       54,436  
          561,027       1.7       396,491  

 

During the three months ended March 31, 2022 and 2021, the Company recorded stock-based compensation expense of $72,700 and $101,453, respectively, related to stock options for the purchase of GGH common stock, which is reflected as general and administrative expenses (classified in the same manner as the grantees’ wage compensation) in the accompanying condensed consolidated statements of operations. As of March 31, 2022, there was $347,647 of unrecognized stock-based compensation expense related to stock option grants that will be amortized over a weighted average period of 1.9 years.

 

 

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

 

Gaucho Group, Inc. Stock Options

 

As of March 31, 2022, options to purchase 5,502,500 shares of GGI common stock are outstanding under the 2018 Gaucho Plan (the “GGI Stock Options”). The options are exercisable at $0.14 per share of GGI common stock and expire on December 18, 2023. During the three months ended March 31, 2022 and 2021, the Company recorded stock-based compensation expense of $10,354 and $67,196, respectively, related to stock options for the purchase of GGI common stock As of March 31, 2022, there is $40,017 unrecognized stock-based compensation expense related to the GGI Stock Options that will be recognized through December 31, 2022.