15. STOCKHOLDERS’ EQUITY

Common Stock

On February 3, 2022, the Company issued 15,000 shares of common stock and paid $34,999 cash as consideration for the purchase of the domain name Gaucho.com. The seller is entitled to additional shares if the closing price per share is less than $2.64 on August 14, 2022, such that the collective value of the total shares issued to the seller has a fair market value of $39,600. (See Note 6, Intangible Assets).

On February 3, 2022, the Company issued 1,283,423 shares of its common stock, valued at $2,194,653, to Hollywood Burger Holdings, Inc, a company with whom GGH shares common management, in exchange for a 100% ownership interest in Hollywood Burger Argentina S.R.L., now Gaucho Development S.R.L., The purpose of the acquisition was to acquire certain real property held by Gaucho Development S.R.L. (see Note 3 – Acquisition of Hollywood Burger Argentina, S.R.L.)

On March 28, 2022, the Company issued 1,042,788 shares of its common stock, valued at $2,419,268, to the minority holders of GGI, in exchange for the remaining 21% non-controlling interest in GGI. The acquisition of the remaining shares of GGI resulted in a decrease of non-controlling interest to zero, and an adjustment to additional paid-in capital to reflect the Company’s increased ownership in GGI.

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

From April 19, 2022 through June 6, 2022, the Company sold 600,592 shares of the Company’s common stock for aggregate gross proceeds of $555,811 less cash offering costs of $44,465, in connection with a Common Stock Purchase Agreement (the “Purchase Agreement”) with an underwriter (the “Underwriter”). Pursuant to the Purchase Agreement, the Company has the right to sell to the Underwriter up to $50,000,000 (the “Total Commitment”) in shares of the Company’s common stock, subject to certain limitations and conditions set forth in the Purchase Agreement. The Company has the right, but not the obligation, to direct the Underwriter to purchase up to a fixed maximum amount of shares of Common Stock as set forth in the Purchase Agreement, from time to time over a 36 month period beginning May 6, 2021. At any time when the Company’s common stock is trading below $1.00 on the Nasdaq, the Company is unable to direct the Underwriter to purchase any number of shares.

On June 7, 2022, the Company issued an aggregate of 650,562 immediately-vested shares of its common stock, with a grant date value of $525,000, as compensation to the non-executive members of its board of directors.

On June 22, 2022, the Company issued (i) 2,207,309 shares of its common stock valued at $1,379,568 and (ii) 315,330 shares of restricted stock valued at $197,081, in exchange for, and upon the cancellation of, options for the purchase of 5,502,500 shares of GGI common stock (the “GGI Stock Options”). The Company recognized stock-based compensation of $20,597 in connection with the cancellation of the GGI Stock Options. (See Note 1. Business Organization, Nature of Operations and Risks and Uncertainties, Non-Controlling Interest). The restricted stock units vest quarterly, with 157,665 shares vesting on September 18, 2022, and 157,665 shares vesting on December 18, 2022.

Accumulated Other Comprehensive Loss

For three and six months ended June 30, 2022, the Company recorded a gain of $358,056 and $621,462, respectively, and for the three and six three months ended June 30, 2021, the Company recorded a gain of $136,660 and $235,640, 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).

Warrants

A summary of warrant activity during the six months ended June 30, 2022 is presented below:

 SUMMARY OF WARRANTS ACTIVITY

See Note 11 – Convertible Debt Obligations for details regarding warrants issued during the six months ended June 30, 2022.

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

A summary of outstanding and exercisable warrants as of June 30, 2022 is presented below:

 SCHEDULE OF WARRANTS OUTSTANDING AND EXERCISABLE

Stock Options

Gaucho Group Holdings, Inc. Stock Options

During the three and six months ended June 30, 2022, the Company recorded stock-based compensation expense of $57,403 and $130,103, respectively, and during the three and six months ended June 30, 2021, the Company recorded stock-based compensation expense of $101,453 and $202,906, respectively, related to the amortization of options granted for the purchase of GGH common stock, which is reflected as general and administrative expenses (classified in the same manner as the grantees’ wage compensation) in the accompanying condensed consolidated statements of operations. As of June 30, 2022, there was $290,242 of unrecognized stock-based compensation expense related to stock option grants that will be amortized over a weighted average period of 1.8 years.

Gaucho Group, Inc. Stock Options

During the three and six months ended June 30, 2022, the Company recorded stock-based compensation expense of $29,731 and $40,085, respectively, of which $20,597 represented stock-based compensation expense that was recognized upon the cancellation and exchange of the GGI Stock Options on June 22, 2022 (see Common Stock, above). During the three and six months ended June 30, 2021, the Company recorded stock-based compensation expense of $44,610 and $111,806, respectively, related to the GGI Stock Options. Stock-based compensation in connection with the GGI Stock Options is reflected as general and administrative expenses (classified in the same manner as the grantees’ wage compensation) in the accompanying condensed consolidated statements of operations.

There were no stock options granted during the six months ended June 30, 2022 or during the six months ended June 30, 2021.