RELATED PARTY TRANSACTIONS |
6 Months Ended |
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Jun. 30, 2023 | |
| Related Party Transactions [Abstract] | |
| RELATED PARTY TRANSACTIONS |
12. RELATED PARTY TRANSACTIONS
Accounts Receivable – Related Parties
As of June 30, 2023 and December 31, 2022 the Company had accounts receivable – related parties of $1,075,102 and $1,115,816 net of allowances for expected credit losses of $470,516 and $339,503, respectively, representing the net realizable value of advances made to, and expense sharing obligations receivable from, separate entities under common management. During the three and six months ended June 30, 2023, the Company made advances in the amount of $0 and $85,644, respectively, to the related entities. During the three and six months ended June 30, 2022, the Company made advances in the amount of $0 and $36,000, respectively to the related entities. During the three and six months ended June 30, 2023, the Company received repayments in the amount of $237,813 and $367,813, respectively, from the related entities. During the three and six months ended June 30, 2022, the Company received repayments in the amount of $583,000 and $703,000, respectively, from the related entities. Receivables recorded in the amount of $383,529 and $417,413 in connection with an expense sharing agreement during the six months ended June 30, 2023 and 2022 are discussed below.
The Company recorded credit losses related to accounts receivable, related parties of $0 and $19,431 during the three and six months ended June 30, 2023, respectively. The Company recorded credit losses of $0 during the three and six months ended June 30, 2022. Credit losses are recorded as bad debt expense which is reflected in the general and administrative expenses on the on the accompanying unaudited consolidated statements of operations.
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 six months ended June 30, 2023 and 2022, the Company recorded a contra-expense of $383,529 and $417,413, respectively, related to the reimbursement of general and administrative expenses as a result of the agreement. During the three months ended June 30, 2023 and 2022, the Company recorded a contra-expense of $208,103 and $189,188, respectively, related to the reimbursement of general and administrative expenses as a result of the agreement.
GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Management Fee Income
The Company earns management fees of $75,000 per quarter from LVH. A member of the Company’s board of directors is the managing member of SLVH, LLC, and holds a 20% membership interest in SLVH. SLVH owns 88% of the limited liability interest of LVH.
Amendment to LVH Limited Liability Company Agreement
On June 30, 2023, the Company through its wholly owned subsidiary, GVI, executed a Fourth Amendment to the Amended and Restated Limited Liability Company Agreement of LVH to extend the outside date for execution of the ground lease from June 30, 2023 to December 29, 2023.
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