16. LEASES

On April 8, 2021, GGI entered into a lease agreement to lease a retail space in Miami, Florida for 7 years, which expires May 1, 2028. As of September 30, 2023, the lease had a remaining term of approximately 4.6 years. Lease payments begin at $26,758 per month and escalate 3% every year over the duration of the lease. The Company was granted rent abatements of 15% for the first year of the lease term, and 10% for the second and third year of the lease term. The Company was required to pay a $56,130 security deposit.

As of September 30, 2023, the Company had no leases that were classified as a financing lease.

Total operating lease expense was $82,965 and $248,896 during the three and nine months ended September 30, 2023, respectively, and approximately $83,000 and $249,000 during the three and nine months ended September 30, 2022, respectively. Lease expenses are recorded in general and administrative expenses on the accompanying condensed consolidated statements of operations.

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to leases was as follows:

 SCHEDULE OF SUPPLEMENTAL CASH FLOWS INFORMATION RELATED TO LEASES

Future minimum lease commitments are as follows:

 SCHEDULE OF FUTURE MINIMUM LEASE COMMITMENT

The Company is the lessor of a building and land that it purchased in connection with acquisition of GDS, pursuant to an operating lease which expires on August 31, 2031. At the end of the leases, the lessee may enter into a new lease or return the asset, which would be available to the Company for releasing. The Company recorded lease revenue of $9,717 and $31,282 during the three and nine months ended September 30, 2023, respectively, related to this lease agreement. The Company recorded lease revenue of approximately $24,000 and $39,000 during the three and nine months ended September 30, 2022, respectively, related to this lease agreement.