16. 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 June 30, 2023, the lease had a remaining term of approximately 4.8 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 June 30, 2023, the Company had no leases that were classified as a financing lease.

Total operating lease expense was $82,965 and $165,931 during the three and six months ended June 30, 2023, respectively, and $82,965 and $165,931 during the three and six months ended June 30, 2022, respectively. Lease expenses are recorded in general and administrative expenses on the accompanying condensed consolidated statements of operations.

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Supplemental cash flow information related to leases was as follows:

SCHEDULE OF SUPPLEMENTAL CASH FLOWS INFORMATION RELATED TO LEASES 

Future minimum lease commitments are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE COMMITMENT 

The Company is the lessor of a building and land that it purchased in connection with 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 $10,937 and $21,565 during the three and six months ended June 30, 2023, respectively, related to this lease agreement. The Company recorded lease revenue of $10,594 and $14,339 during the three and six months ended June 30, 2022, respectively, related to this lease agreement.