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

Quarterly report pursuant to Section 13 or 15(d)

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2022

13. RELATED PARTY TRANSACTIONS

Assets

Accounts receivable – related parties of $675,366 and $927,874 at June 30, 2022 and December 31, 2021, respectively, represent the net realizable value of advances made to separate entities under common management.

Expense Sharing

On April 1, 2010, the Company entered into an agreement with a Related Party to share expenses such as office space, support staff, professional services, and other operating expenses (the “Related Party ESA”). During the three and six months ended June 30, 2022, the Company recorded a contra-expense of $189,188 and $417,413, respectively, and during the three and six months ended June 30, 2021, the Company recorded a contra-expense of $152,783 and $245,804, respectively, related to the reimbursement of general and administrative expenses as a result of the agreement.

Amended and Restated Limited Liability Company Agreement

On June 7, 2022, the Company, through its wholly owned subsidiary, GVI, entered into the Second Amendment to the Amended and Restated Limited Liability Company Agreement of LVH Holdings, LLC (the “Amended LLC Agreement”). Pursuant to the Amended LLC Agreement, if LVH Holdings, Inc (“LVH”) does not execute a lease in connection with the development of a project in Las Vegas Nevada by December 31, 2022, LVH will be liquidated and dissolved and all distributions upon its dissolution will be made first to the Company, to repay its capital contributions.

Further, the Amended LLC Agreement modifies the number, amount and timing of GVI’s additional capital contributions to LVH, as follows:

	●	On or before thirty (30) days after the execution and delivery of the joint development agreement between the Landlord (as defined) and LVH Property, Inc. (the “Third Outside Date”), GVI shall make an additional capital contribution to LVH, in cash, in the amount of $2.0 million and shall receive an additional 113.1 LVH Units;

	●	On or before the date that is ninety (90) days after the Third Outside Date (the “Fourth Outside Date”), GVI shall make an additional capital contribution to LVH, in cash, in the amount of $2.0 million and shall receive an additional 113.1 LVH Units; and

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

	●	On or before the date that is ninety (90) days after the Fourth Outside Date (the “Fifth Outside Date”), GVI shall make an additional capital contribution to the Company, in cash, in the amount of $1.0 million and shall receive an additional 56.6 LVH Units.

	●	On or before the date that is ninety (90) days after the Fifth Outside Date (the “Sixth Outside Date”), GVI shall make an additional capital contribution to the Company, in cash, in the amount of $5.0 million and shall receive an additional 282.9 LVH Units.

	●	On or before the date that is ninety (90) days after the Sixth Outside Date (the “Seventh Outside Date”), GVI shall make an additional capital contribution to LVH, in cash, in the amount of $10.0 million and shall receive an additional 565.7 LVH Units; and

	●	On or before the date that is ninety (90) days after the Seventh Outside Date (the “Eighth Outside Date”), GVI shall make an additional capital contribution to the Company, in cash, in the amount of $8.0 million and shall receive an additional 452.6 LVH Units.

If each of the contributions described above is made timely, the Company will hold 1,980 LVH Units, representing 40% of the ownership of LVH, immediately after the Eighth Outside Date.