RELATED PARTY TRANSACTIONS |
9 Months Ended |
|---|---|
Sep. 30, 2024 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS |
12. RELATED PARTY TRANSACTIONS
Accounts Receivable – Related Parties
The Company had accounts receivable – related parties of $0 as of September 30, 2024 and December 31, 2023, net of allowances for expected credit losses of $1,769,082 and $1,517,836, respectively, representing the net realizable value of advances made to, and expense sharing obligations receivable from, separate entities under common management.
The Company recorded credit loss expense (net of recoveries) related to accounts receivable, related parties of $262,431 and $251,246 and during the three and nine months ended September 30, 2024, respectively. The Company recorded credit losses related to accounts receivable, related parties of $0 and $19,431 during the three and nine months ended September 30,2023, respectively. Credit losses are recorded as bad debt expense which is reflected within general and administrative expenses on the accompanying condensed consolidated statements of operations.
Expense Sharing
The Company is a party to expense sharing agreements with two related entities to share expenses such as support staff, professional services, and other operating expenses (the “Related Party ESAs”). During the three months ended September 30, 2024 and 2023, the Company made advances in the amount of $165,800 and $12,500, respectively, to the related entities, and paid salaries on behalf of the related entities (pursuant to the expense sharing agreements discussed below) in the amount of $97,098 and $108,994, respectively. The Company received repayments from the related parties in the amount of $0 and $217,414 during the three months ended September 30, 2024 and 2023, respectively.
During the nine months ended September 30, 2024 and 2023, the Company made advances in the amount of $338,340 and $98,144, respectively, to the related entities, and paid expenses on behalf of the related entities (pursuant to the expense sharing agreements discussed below) in the amount of $282,098 and $492,523, respectively. The Company received repayments from the related parties in the amount of $369,168 and $585,228 during the nine months ended September 30, 2024 and 2023, respectively.
Management Fee Income
During the nine months ended September 30, 2024 and 2023, the Company recorded income of $0 and $225,000 respectively, representing management fees received from LVH pursuant to a June 2021 agreement with LVH.
Other Related Party Transactions
See Note 9 – Loans Payable related to promissory notes issued and Note 10 – Convertible Debt related to Preferred Share Convertible Notes issued to a holder greater than 10% of the Company’s common stock.
GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
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