Gaucho Group Holdings, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

LEASES

LEASES

3 Months Ended

Mar. 31, 2024

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 March 31, 2024, the lease had a remaining term of approximately 4.1 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 March 31, 2024, the Company had no leases that were classified as a financing lease.

Total operating lease expense was $82,965 for each of the three months ended March 31, 2024 and 2023. Lease expenses are recorded in general and administrative expenses on the accompanying consolidated statements of operations.

Supplemental cash flow information related to the lease is as follows:

	For the Three Months Ended March 31,
	2024			2023

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	53,710		$	56,449

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	-		$	-

Weighted Average Remaining Lease Term:
Operating leases		4.1			5.1

Weighted Average Discount Rate:
Operating leases		7.0	%		7.0	%

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Future minimum lease commitments are as follows:


For the period April 1 through December 31, 2024	$	259,457
For the years ended December 31,
2025		357,881
2026		368,617
2027		365,004
2028		120,463
Total future minimum lease payments		1,471,422
Less: imputed interest		(196,724	)
Net future minimum lease payments		1,274,698
Less: operating lease liabilities, current portion		266,260
Operating lease liabilities, non-current portion	$	1,008,438

The Company is the lessor of a building and land that it purchased in connection with the acquisition of GDS, pursuant to an operating lease which expires on August 31, 2031. At the end of the lease, the lessee may enter into a new lease or return the asset, which would be available to the Company for re-leasing. The Company recorded lease revenue of $10,674 and $10,628 during the three months ended March 31, 2024 and 2023, respectively, related to this lease agreement.