Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS??? EQUITY

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STOCKHOLDERS’ EQUITY
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

14. STOCKHOLDERS’ EQUITY

 

Common Stock

 

On February 2, 2023, the Company issued 5,131 shares of common stock upon the cashless exercise of 13,473 warrants at exercise prices ranging from $24 and $38.2.

 

On February 10, 2023, the Company sold 59,100 shares of common stock and warrants to purchase 14,775 shares at an exercise price of $10.00 for aggregate proceeds of $591,000. The warrants are immediately exercisable and expire two years from the date of issuance.

 

During August 2023, the Company sold 90,000 shares of common stock and warrants to purchase 18,000 shares at an exercise price of $4.50 for aggregate proceeds of $405,000. The warrants are immediately exercisable and expire two years from the date of issuance.

 

During the nine months ended September 30, 2023, the Company sold an aggregate of 111,684 shares of the Company’s common stock for gross proceeds of $850,611 less placement agent fees of $74,972 pursuant to a Common Stock Purchase Agreement (the “New ELOC”).

 

See Note 10 – Convertible Debt Obligations for additional details regarding common shares issued during the three and nine months ended September 30, 2023.

 

Accumulated Other Comprehensive Loss

 

For the three and nine months ended September 30, 2023, the Company recorded a gain (loss) of $64,280 and $(13,512), respectively, and for the three and nine months ended September 30, 2022, the Company recorded a gain of approximately $282,337 and $903,799, respectively, related to 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).

 

 

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Warrants

 

A summary of warrant activity during the nine months ended September 30, 2023 is presented below:

 

   

Number of

Warrants

    

Weighted

Average

Exercise

Price

    

Weighted

Average

Remaining

Life in Years

    

Intrinsic

Value

  
                         
Outstanding, January 1, 2023     129,914     $ 57.70                  
Issued     385,485       4.92                  
Exercised     (13,473 )     33.58                  
Expired     (45,459 )     38.20                  
Canceled     -       -                  
Repriced [1]     (337,710 )   $ 13.40                  
Repriced [1]     337,710     $ 4.50                            
Outstanding, September 30, 2023     456,467     $ 12.56       2.0     $ -  
                                 
Exercisable, September 30, 2023     456,467     $ 12.56       2.0     $ -  

 

  [1] On August 11, the Company adjusted the exercise price of the 2023 Note Warrant from $13.40 to $4.50 per share. See Note 10, Convertible Debt Obligations.

 

See Common Stock, above, and Note 10 – Convertible Debt Obligations for additional details regarding warrants issued during the nine months ended September 30, 2023.

 

A summary of outstanding and exercisable warrants as of September 30, 2023 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

  
                                 
$ 4.50     Common Stock     355,710       2.4       355,710  
$ 10.00     Common Stock     40,406       1.3       40,406  
$ 60.00     Common Stock     60,223       0.2       60,223  
$ 900.00     Common Stock     128       2.4       128  
        Total     456,467       2.0       456,467  

 

 

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

Restricted Stock Units

 

A summary of RSU activity during the nine months ended September 30, 2023 is presented below:

 

            Weighted Average  
      Number of     Grant Date Value  
      RSUs     Per Share  
RSUs non-vested January 1, 2023       51,150     $ 11.60  
Granted       1,000       12.40  
Vested       (389 )     12.40  
Forfeited       (133 )     11.60  
RSUs non-vested September 30, 2023       51,628     $ 11.61  

 

On January 23, 2023, the Company granted 1,000 restricted stock units (“RSUs”) to certain employees and advisors for their service, of which 389 RSUs vested on the grant date and 306 RSUs will vest on each of the next two anniversaries of the date of the grant.

 

During the three and nine months ended September 30, 2023, the Company recorded stock-based compensation expense of $74,645 and $230,045 respectively, related to the amortization of RSUs. No expense related to the amortization of RSUs was recorded for the three or nine months ended September 30, 2022.

 

Stock Options

 

No stock options were granted during the nine months ended September 30, 2023 or the nine months ended September 30, 2022. The following table presents information related to GGH stock options outstanding as of September 30, 2023:

 

          Weighted     Weighted        
          Average     Average        
    Number of     Exercise     Remaining     Intrinsic  
    Options     Price     Term (Yrs)     Value  
                         
Outstanding, January 1, 2023     4,084       853.35                  
Granted     -       -                  
Exercised     -       -                  
Expired     (1,271 )     1,098.90                  
Forfeited     (9 )     970.80                  
Outstanding, September 30, 2023     2,804       741.67       1.1     $ -  
                                 
Exercisable, September 30, 2023     2,594     $ 732.20       1.0     $      -  

 

 

During the three and nine months ended September 30, 2023, the Company recorded stock-based compensation expense of $17,910 and $95,578, respectively, and during the three and nine months ended September 30, 2022, the Company recorded stock-based compensation expense of approximately $53,000 and $183,000, respectively, related to the amortization of options for the purchase of GGH common stock.

 

 

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The Company recorded no stock-based compensation expense related to options for the purchase of GGI common stock for the three and nine months ended September 30, 2023 as all of the GGI options were exchanged and cancelled as of June 22, 2022. For the three and nine months ended September 30, 2022, the Company recorded stock-based compensation expense of approximately $30,000 and $40,000, respectively, related to the options for the purchase of GGI common stock.

 

Stock-based compensation expense is reflected in general and administrative expenses (classified in the same manner as the grantees’ wage compensation) in the accompanying condensed consolidated statements of operations. As of September 30, 2023, there was $74,019 of unrecognized stock-based compensation expense related to stock option grants that will be amortized over a weighted average period of 1.02 years.