Exhibit 10.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report:
November 16, 2021
Gaucho Group Holdings, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-40075 | 52-2158952 | ||
| State of | Commission | IRS Employer | ||
| Incorporation | File Number | Identification No. |
112 NE 41st Street, Suite 106
Miami, FL 33137
Address of principal executive offices
212-739-7700
Telephone number, including
Area code
Former name or former address if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| ☐ | Pre-commencement communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| ☐ | Pre-commencement communication pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common Stock | VINO | The Nasdaq Stock Market LLC |
Item 1.01 Entry into a Material Definitive Agreement
On November 16, 2021, Gaucho Group Holdings, Inc. (the “Company”), through its wholly owned subsidiary, Gaucho Ventures I – Las Vegas, LLC (“GVI”), executed a First Amendment to the Amended and Restated Limited Liability Company Agreement of LVH Holdings LLC (“LVH”) to modify the number, amount, and timing of the Company’s additional capital contributions to LVH. A copy of the First Amendment to the Amended and Restated Limited Liability Company Agreement is furnished as Exhibit 10.1 to this report.
As previously disclosed in a current report on Form 8-K filed June 17, 2017, on June 16, 2021, the Company, through GVI, entered into the Amended and Restated Limited Liability Company Agreement of LVH. As of the date of the First Amendment to the Amended and Restated Limited Liability Company Agreement, GVI and SLVH LLC comprise all of the members of LVH.
Item 2.02 Results of Operation and Financial Condition
On November 16, 2021, the Company issued a press release announcing its financial results for the third quarter ended September 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information contained in this Item 2.02 and Exhibit 99.1, attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended and shall not be deemed incorporated by reference in any filing with the Securities Exchange Commission under the Securities Exchange Act of 1934, as amended or the Securities Act of 1933, as amended whether made before or after the date hereof and irrespective of any general incorporation language in any filings.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| 10.1 | First Amendment to Amended and Restated Limited Liability Company Agreement dated November 16, 2021 |
| 99.1 | Press release, dated November 16, 2021 |
| 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 17th day of November, 2021.
| Gaucho Group Holdings, Inc. | ||
| By: | /s/ Scott L. Mathis | |
| Scott L. Mathis, President & CEO | ||
Exhibit 10.1
Exhibit 99.1
GAUCHO GROUP HOLDINGS, INC. ANNOUNCES THIRD QUARTER FINANCIAL RESULTS
Revenues Soar to $2.6 Million as Company Posts First Quarterly Profit
New York, NY / November 16, 2021 Gaucho Group Holdings, Inc. (NASDAQ:VINO), a company that includes a growing collection of e-commerce platforms with a concentration on fine wines, luxury real estate, and leather goods and accessories, today announced financial results for the third quarter period ending September 30, 2021. Investors are encouraged to read the Company’s quarterly report on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”) and posted at www.gauchoholdings.com.
Financial Highlights
| ● | Revenues for the third quarter were $2.6 million compared to $60,228 in the prior year period, a 4,242% increase | |
| ● | Gross profit for the third quarter was $2.4 million, compared to $21,000 in the prior year period, a 11,505% increase. | |
| ● | Net income for the third quarter was $931,000 or $0.11 basic earnings per share compared to loss of $0.18 per share in prior year period | |
| ● | Working capital of $6.2 million | |
| ● | Stockholder equity rises to $17.6 million |
Commenting on the results, Scott Mathis, Chief Executive Officer of Gaucho Holdings, stated, “We are absolutely thrilled to report our first quarterly profit as a public company. Earlier this year we completed an $8 million public offering and achieved our long-desired goal to uplist our shares to Nasdaq. Since then, we have taken significant strides to complete our vision of becoming recognized as the LVMH of South America. These strides include operating in the boutique hotel, hospitality and luxury vineyard property markets, featuring our 4,138-acre Algodon Wine Estates in Mendoza, Argentina. We have created an e-commerce platform, Gaucho – Buenos Aires™, for consumers to access Argentine style and high-end products with a concentration on leather-goods and ready-to-wear accessories. By the end of the year, we expect to launch a line of luxury textiles and home accessories. We are making progress towards the opening of our flagship retail location in Miami’s Design District and have recently completed another installment investment in our Las Vegas project to further expand opportunities in lodging, hospitality, retail and gaming.
“Our third quarter financial results reflect early sales of real estate lots at our Algodon Wine Estates as well as a small increase in hotel, restaurant and wine sales after Argentine hotels reopened with COVID-19 measures in place. We are encouraged by the pace of lot sales occurring at Algodon Wine Estates. Recognition of revenue from these sales is contingent on deeding requirements, a process that has been made a bit more time consuming given the pandemic environment. This pushed some revenues into the fourth quarter, but we are pursuing this process as quickly as possible, and we are encouraged by the pace of lot sales that we see in the fourth quarter and the environment for ongoing sales throughout next year. Argentina officially “reopened” from Covid related shutdowns, and as the world continues to reopen, we believe we will benefit from a surge in pent up consumer demand for travel and luxury experiences. Over the years we have been opportunistic about acquiring new acreage, and our earlier engagement of architectural design firm EDSA has resulted in substantial improvements to the infrastructure and amenities of Algodon Wine Estates. Recently drilled water wells should further enhance the appeal and market value of these properties. And, lastly, as we have previously announced, we are actively seeking to partner with a 5-star hotel chain to potentially bring in an 80-120 room hotel with branded residences. If we are successful with finding a partner, we believe it can add immeasurable value and result in even stronger revenue growth at Algodon Wine Estates. We look forward to finishing the year strongly and growing even stronger in 2022.”
About Gaucho Group Holdings, Inc.
For more than ten years, Gaucho Group Holdings, Inc.’s (gauchoholdings.com) mission has been to source and develop opportunities in Argentina’s undervalued luxury real estate and consumer marketplace. Our company has positioned itself to take advantage of the continued and fast growth of global e-commerce across multiple market sectors, with the goal of becoming a leader in diversified luxury goods and experiences in sought after lifestyle industries and retail landscapes. With a concentration on fine wines (algodonfinewines.com & algodonwines.com.ar), hospitality (algodonhotels.com), and luxury real estate (algodonwineestates.com) associated with our proprietary Algodon brand, as well as the leather goods, ready-to-wear and accessories of the fashion brand Gaucho – Buenos Aires™ (gauchobuenosaires.com), these are the luxury brands in which Argentina finds its contemporary expression.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Statements other than statements of historical facts included in this press release may constitute forward-looking statements and are not guarantees of future performance, condition or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in our filings with the Securities and Exchange Commission and elsewhere. The Company undertakes no duty to update any forward-looking statement made herein. All forward-looking statements speak only as of the date of this press release.
Media Relations:
Gaucho Group Holdings, Inc.
Rick Stear
Director of Marketing
212.739.7669
rstear@gauchoholdings.com
Investor Relations:
John McNamara
917-658-2602
john@tradigitalir.com
GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (unaudited) | ||||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash | $ | 2,836,500 | $ | 134,536 | ||||
| Accounts receivable, net of allowance of $215,026 and $180,941 as of September 30, 2021 and December 31, 2020, respectively | 2,353,476 | 255,720 | ||||||
| Accounts receivable - related parties, net of allowance of $339,503 and $332,130 as of September 30, 2021 and December 31, 2020, respectively | 741,495 | 252,852 | ||||||
| Advances to employees | 282,204 | 282,508 | ||||||
| Inventory | 1,327,572 | 1,172,775 | ||||||
| Real estate lots held for sale | 59,790 | 139,492 | ||||||
| Operating lease right-of-use asset, current portion | 311,925 | - | ||||||
| Investment | 45,182 | 53,066 | ||||||
| Deposits, current | 15,269 | 35,854 | ||||||
| Prepaid expenses and other current assets | 602,415 | 196,539 | ||||||
| Total Current Assets | 8,575,828 | 2,523,342 | ||||||
| Long Term Assets | ||||||||
| Property and equipment, net | 3,396,950 | 2,860,222 | ||||||
| Operating lease right-of-use asset, non-current portion | 1,396,857 | - | ||||||
| Prepaid foreign taxes, net | 664,128 | 519,499 | ||||||
| Investment - related parties | 3,500,000 | 457 | ||||||
| Deferred offering costs | 24,000 | 67,016 | ||||||
| Deposits, non-current | 56,130 | - | ||||||
| Total Assets | $ | 17,613,893 | $ | 5,970,536 | ||||
GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| (unaudited) | ||||||||
| Liabilities, Temporary Equity and Stockholders’ Equity (Deficiency) | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 457,129 | $ | 891,168 | ||||
| Accrued expenses, current portion | 451,278 | 1,401,402 | ||||||
| Deferred revenue | 753,302 | 933,941 | ||||||
| Operating lease liabilities, current portion | 263,292 | - | ||||||
| Loans payable, current portion | 249,000 | 437,731 | ||||||
| Debt obligations | 7,000 | 1,270,354 | ||||||
| Investor deposits | 29,950 | 29,950 | ||||||
| Other current liabilities | 130,628 | 131,895 | ||||||
| Total Current Liabilities | 2,341,579 | 5,096,441 | ||||||
| Long Term Liabilities | ||||||||
| Accrued expenses, non-current portion | 126,103 | 169,678 | ||||||
| Operating lease liabilities, non-current portion | 1,470,046 | - | ||||||
| Loans payable, non-current portion | 94,000 | 310,591 | ||||||
| Total Liabilities | 4,031,728 | 5,576,710 | ||||||
| Commitments and Contingencies (Note 13) | ||||||||
| Series B convertible redeemable preferred stock, par value $0.01 per share; 902,670 shares authorized; 0 and 901,070 issued and outstanding at September 30, 2021 and December 31, 2020, respectively | - | 9,010,824 | ||||||
| Stockholders’ Equity (Deficiency) | ||||||||
| Preferred stock, 11,000,000 shares authorized: | ||||||||
| Series A convertible preferred stock, par value $0.01 per share; 10,097,330 shares authorized; no shares are available for issuance | - | - | ||||||
| Common stock, par value $0.01 per share; 150,000,000 shares authorized; 8,784,618 and 5,234,406 shares issued and 8,781,249 and 5,231,037 shares outstanding as of September 30, 2021 and December 31, 2020, respectively | 87,845 | 52,344 | ||||||
| Additional paid-in capital | 120,184,675 | 96,951,440 | ||||||
| Accumulated other comprehensive loss | (11,598,452 | ) | (11,932,801 | ) | ||||
| Accumulated deficit | (94,919,120 | ) | (93,534,828 | ) | ||||
| Treasury stock, at cost, 3,369 shares at September 30, 2021 and December 31, 2020 | (46,355 | ) | (46,355 | ) | ||||
| Total Gaucho Group Holdings, Inc. Stockholders’ Equity (Deficiency) | 13,708,593 | (8,510,200 | ) | |||||
| Non-controlling interest | (126,428 | ) | (106,798 | ) | ||||
| Total Stockholders’ Equity (Deficiency) | 13,582,165 | (8,616,998 | ) | |||||
| Total Liabilities, Temporary Equity and Stockholders’ Equity (Deficiency) | $ | 17,613,893 | $ | 5,970,536 | ||||
GAUCHO
GROUP HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Sales | $ | 2,605,158 | $ | 60,228 | $ | 3,220,557 | $ | 474,546 | ||||||||
| Cost of sales | (210,437 | ) | (80,995 | ) | (650,003 | ) | (571,621 | ) | ||||||||
| Gross profit (loss) | 2,394,721 | (20,767 | ) | 2,570,554 | (97,075 | ) | ||||||||||
| Operating Expenses | ||||||||||||||||
| Selling and marketing | 100,870 | 110,687 | 336,081 | 160,686 | ||||||||||||
| General and administrative | 1,370,870 | 859,967 | 3,934,500 | 3,342,240 | ||||||||||||
| Depreciation and amortization | 35,758 | 45,906 | 103,680 | 138,409 | ||||||||||||
| Gain from insurance settlement | - | (30,240 | ) | - | (30,240 | ) | ||||||||||
| Total operating expenses | 1,507,498 | 986,320 | 4,374,261 | 3,611,095 | ||||||||||||
| Income (Loss) From Operations | 887,223 | (1,007,087 | ) | (1,803,707 | ) | (3,708,170 | ) | |||||||||
| Other Expense (Income) | ||||||||||||||||
| Interest expense, net | 49,646 | 72,459 | 88,209 | 193,595 | ||||||||||||
| Forgiveness of PPP Loan | - | - | (242,486 | ) | - | |||||||||||
| Gain on debt restructuring | - | (130,421 | ) | - | (130,421 | ) | ||||||||||
| Other income | (87,500 | ) | - | (87,500 | ) | - | ||||||||||
| Gains from foreign currency translation | (6,130 | ) | (14,826 | ) | (34,991 | ) | (35,316 | ) | ||||||||
| Total other (income) expense | (43,984 | ) | (72,788 | ) | (276,768 | ) | 27,858 | |||||||||
| Net Income (Loss) | 931,207 | (934,299 | ) | (1,526,939 | ) | (3,736,028 | ) | |||||||||
| Net loss attributable to non-controlling interest | 45,086 | 32,838 | 142,647 | 128,355 | ||||||||||||
| Series B preferred stock dividends | - | (178,094 | ) | - | (540,217 | ) | ||||||||||
| Net Income (Loss) Attributable to Common Stockholders | $ | 976,293 | $ | (1,079,555 | ) | $ | (1,384,292 | ) | $ | (4,147,890 | ) | |||||
| Earnings (Loss) Per Common Share - Basic and Diluted | ||||||||||||||||
| Basic | $ | 0.11 | $ | (0.26 | ) | $ | (0.18 | ) | $ | (1.02 | ) | |||||
| Diluted | $ | 0.11 | $ | (0.26 | ) | $ | (0.18 | ) | $ | (1.02 | ) | |||||
| Shares used in computing earnings per share: | ||||||||||||||||
| Basic | 8,658,395 | 4,110,303 | 7,530,833 | 4,049,059 | ||||||||||||
| Diluted | 8,658,395 | 4,110,303 | 7,530,833 | 4,049,059 | ||||||||||||
| Net income (loss) | $ | 931,207 | $ | (934,299 | ) | $ | (1,526,939 | ) | $ | (3,736,028 | ) | |||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign currency translation adjustments | 98,709 | (17,837 | ) | 334,349 | 400,686 | |||||||||||
| Comprehensive income (loss) | 1,029,916 | (952,136 | ) | (1,192,590 | ) | (3,335,342 | ) | |||||||||
| Comprehensive loss attributable to non-controlling interests | 45,086 | 32,838 | 142,647 | 128,355 | ||||||||||||
| Comprehensive income (loss) attributable to controlling interests | $ | 1,075,002 | $ | (919,298 | ) | $ | (1,049,943 | ) | $ | (3,206,987 | ) | |||||