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, 2023

15. 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, 2023, the lease had a remaining term of approximately 5.1 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, 2023, the Company had no leases that were classified as a financing lease.

Total operating lease expenses was $82,965 during the three months ended March 31, 2023 and 2022. Lease expenses are recorded in general and administrative expenses on the accompanying condensed consolidated statements of operations.

Supplemental cash flow information related to leases was as follows:

	For the Three Months Ended March 31,
	2023			2022

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	56,449		$	53,325

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

Weighted Average Remaining Lease Term:
Operating leases		5.1			6.1

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, 2023	$	229,191
For the years ended December 31,
2024		336,102
2025		357,881
2026		368,617
2027		365,004
2028		120,463
Total future minimum lease payments		1,777,258
Less: imputed interest		(293,970	)
Net future minimum lease payments		1,483,288
Less: operating lease liabilities, current portion		(208,590	)
Operating lease liabilities, non-current portion	$	1,274,698

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 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 $10,628 and $3,745 during the three months ended March 31, 2023 and 2022, respectively, related to this lease agreement.