Asfiled with the Securities and Exchange Commission on August 30, 2019

RegistrationNo. 333-_______

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

FORMS-1

Registrationstatement under the Securities Act of 1933

GauchoGroup Holdings, Inc.

135Fifth Avenue, Floor 10, New York, New York 10010; telephone 212-739-7700

(Address,including zip code, and telephone number, including area code,

ofregistrant’s principal executive offices)

ScottL. Mathis

President& Chief Executive Officer

GauchoGroup Holdings, Inc.

135Fifth Avenue, Floor 10

NewYork, NY 10010

T.212-739-7700

(Name,address, including zip code, and telephone number, including area code, of agent service)

Copiesto:

ApproximateDate of Commencement of Proposed Sale to the Public: As soon as possible after this Registration Statement becomes effective.

Ifany of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 underthe Securities Act of 1933, as amended (the “Securities Act”), check the following box. [  ]

Ifthis Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, pleasecheck the following box and list the Securities Act registration statement number of the earlier effective registration statementfor the same offering. [  ]

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smallerreporting company. See the definitions of “large accelerated filer,” “accelerated filer” “smallerreporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.[X]

CALCULATIONOF REGISTRATION FEE

Wehereby amend this registration statement on such date or dates as may be necessary to delay our effective date until we will filea further amendment which specifically states that this Registration Statement shall thereafter become effective in accordancewith Section 8(a) of the Securities Act of 1933, as amended or until this Registration Statement will become effective on suchdate as the Securities and Exchange Commission, in accordance with Section 8(a) may determine.

Theinformation in this prospectus is not complete and may be changed. We may not sell these securities until the registration statementfiled with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and itis not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECTTO COMPLETION, DATED ______________, ____, 2019

PRELIMINARYPROSPECTUS

GauchoGroup Holdings, Inc.

_______________Shares of Common Stock

Thisis a firm commitment public offering of Gaucho Group Holdings, Inc. (the “Company”). We are offering _____________shares of our common stock (the “Shares”). The public offering price will be $_______ per Share (the “Offering”).

Ourcommon stock is presently quoted on the OTCQB under the symbol “VINO.” On ________ ___, 2019, the last reported closingbid price of our common stock was $___________ per share. We have applied to have our common stock listed on the Nasdaq CapitalMarket under the symbol “VINO” which listing is a condition to this Offering. No assurance can be given that our applicationwill be approved.

Investingin the securities involves a high degree of risk. See “Risk Factors” beginning on page 7 of this prospectus

ThisOffering is being conducted on a firm commitment basis. The underwriters are obligated to take and pay for all the shares offeredby the Prospectus if any such shares are taken. The underwriters are not required to take or pay for the shares covered by theunderwriters’ over-allotment option to purchase additional shares of common stock.

Wehave granted the underwriters an option, exercisable, for 45 days from the date of this prospectus, to purchase up to an additional15% of the Shares at the public offering price, less the underwriting discounts and commissions to cover over-allotment, if any.

Theunderwriters expect to deliver the Shares to purchasers in the Offering on or before ______________, 2019.

Neitherthe Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapprovedof the securities offered hereby or passed upon the adequacy or accuracy of this prospectus. Any representation. to the contraryis a criminal offense.

Book-RunningManager

NewbridgeSecurities Corp.
5200 Town Center Circle, Tower One
Suite 306
Boca Raton, FL 33486

Thedate of this prospectus is _______________, 2019

INDEX

ABOUTTHIS PROSPECTUS

Theregistration statement as of which this prospectus forms a part that we have filed with the Securities and Exchange Commission,or SEC, includes exhibits that provide more detail of the matters discussed in this prospectus. You should read this prospectusand the related exhibits filed with the SEC, together with the additional information described under the heading “WhereYou Can Find More Information.”

Throughand including ________________, 2019 _____________ (the 25th day after the date of this Prospectus) all dealers effecting transactionsin the securities, whether or not participating in this Offering, may be required to deliver a prospectus). This is inaddition to the dealer’s obligations to deliver this prospectus when acting as an underwriter with the respect to the unsoldallotment or subscriptions.

Youshould rely only on the information contained in this prospectus and in any free writing prospectus prepared by or on behalf ofus. We have not, and the underwriters have not, authorized anyone to provide you with information different from, or in additionto, that contained in this prospectus or any related free writing prospectus. This prospectus is an offer to sell only the securitiesoffered hereby but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in thisprospectus is current only as of its date. Our business, financial condition, results of operations and prospects may have changedsince that date.

Weare not offering to sell or seeking offers to purchase these securities in any jurisdiction where the offer or sale is not permitted.We have not done anything that would permit this Offering or possession or distribution of this prospectus in any jurisdictionwhere action for that purpose is required, other than in the United States. Persons outside the jurisdiction of the United Stateswho come into possession of this prospectus and any free writing prospectus related to this Offering are required to inform themselvesabout and to observe any restrictions relating to this Offering and the distribution of this prospectus and any such free writingprospectus applicable to that jurisdiction.

Unlessthe context otherwise requires, the terms “Gaucho Group Holdings,” “GGH,” the “Company,” “we,”“us” and “our” refer to Gaucho Group Holdings, Inc. and our subsidiaries. We have registered our name,logo and the trademarks “ALGODON®,” and “Gaucho – Buenos Aires™” in the United States.Other service marks, trademarks and trade names referred to in this prospectus are the property of their respective owners. Exceptas set forth above and solely for convenience, the trademarks and trade names in this prospectus are referred to without the ^®, ^© and ™ symbols, but such references should not be construed as any indicator that their respectiveowners will not assert, to the fullest extent under applicable law, their rights thereto.

Thisprospectus includes industry and market data and other information, which we have obtained from, or is based upon, market research,independent industry publications or other publicly available information. Although we believe each such source to have been reliableas of its respective date, we have not independently verified the information contained in such sources. Any such data and otherinformation is subject to change based on various factors, including those described below under the heading “Risk Factors”and elsewhere in this prospectus.

CAUTIONARYSTATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certainstatements included or incorporated by reference in this prospectus constitute forward-looking statements within the meaning ofapplicable securities laws. All statements contained in this registration statement that are not clearly historical in natureare forward-looking, and the words “anticipate”, “believe”, “continue”, “expect”,“estimate”, “intend”, “may”, “plan”, “will”, “shall” andother similar expressions are generally intended to identify forward-looking statements within the meaning of Section 27A of theSecurities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of1934 (the “Exchange Act”). All forward-looking statements are based on our beliefs and assumptions based oninformation available at the time the assumption was made. These forward-looking statements are not based on historical factsbut on management’s expectations regarding future growth, results of operations, performance, future capital and other expenditures(including the amount, nature and sources of funding thereof), competitive advantages, business prospects and opportunities. Forward-lookingstatements involve significant known and unknown risks, uncertainties, assumptions and other factors that may cause our actualresults, levels of activity, performance or achievements to differ materially from those implied by forward-looking statements.These factors should be considered carefully and prospective investors should not place undue reliance on the forward-lookingstatements. Although the forward-looking statements contained in this registration statement or incorporated by reference hereinare based upon what management believes to be reasonable assumptions, there is no assurance that actual results will be consistentwith these forward-looking statements. These forward-looking statements are made as of the date of this registration statementor as of the date specified in the documents incorporated by reference herein, as the case may be. Important factors that couldcause such differences include, but are not limited to:

Althoughwe believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results,levels of activity or performance. You should not place undue reliance on forward-looking statements contained in this prospectus.

Weundertake no obligation to update any forward-looking statements to reflect events or circumstances after the date on which suchstatements were made or to reflect the occurrence of unanticipated events, except as may be required by applicable securitieslaws.

ProspectusSummary

Thissummary highlights information contained elsewhere in this prospectus. It may not contain all of the information that you shouldconsider before investing in our common stock. You should read this entire prospectus carefully, including the “Risk Factors”,Management’s Discussion and Analysis of Financial Condition and Results of Operations”, and the financial statementsand related notes included herein. This prospectus includes forward-looking statements that involve risks and uncertainties. See“Cautionary Note Regarding Forward-Looking Statements.”

A1:[__] reverse stock split of our common stock will be effected in connection with the closing of this Offering and a listingwith Nasdaq Capital Markets. In addition, all Series B Preferred Stock converted into common stock at the closing of this Offering.

CompanyStructure and History

GauchoGroup Holdings, Inc. (“GGH” or the “Company”) positions its e-commerce fashion, leather goods and accessoriesbrand, Gaucho – Buenos Aires™, as one of luxury, creating a platform for the global consumer to accesstheir piece of Argentine style and high-end products. With ambitious couture, a concentration on leather goods, ready-to-wearand high-street fashion and accessories, this is the luxury brand in which Argentina finds its contemporary expression. GGH seeksto grow its direct-to-consumer online products to global markets in the United States, Asia, the United Kingdom, Europe, and Argentina.

GGH’sgoal is to become recognized as the LVMH (“Louis Vuitton Moët Hennessy”) of South America’s leading luxurybrands. Through its wholly owned subsidiary ALGODON, GGH also owns and operates legacy investments in the boutique hotel, hospitalityand luxury vineyard property markets. This includes a golf, tennis and wellness resort, as well as an award winning, wine productioncompany concentrating on Malbecs and Malbec blends. Utilizing these wines as its ambassador, GGH seeks to further develop itslegacy real estate, which includes developing residential vineyard lots located within its resort.

TheCompany’s senior management is based at its corporate offices in New York City, and its local operations are managed inBuenos Aires and San Rafael, Argentina by professional staff with considerable e-commerce, wine, hotel, hospitality and resortexperience.

TheCompany was incorporated on April 5, 1999 in the State of Delaware as Investprivate.com, Inc. and subsequently changed its nameseveral times. Effective March 11, 2019, the Company changed its name to Gaucho Group Holdings, Inc. to reflect its expanded growthstrategy, progress, and transition to a diversified luxury goods company.

Ourwebsite is http://www.gauchoholdings.com. Information contained on our website does not constitute part of and is not incorporatedinto this prospectus.

Thecurrent corporate organizational structure of GGH and how we have operated substantially for the past year appears below.

Theremaining 21% of Gaucho Group, Inc. (“GGI”) is held by certain affiliates and outside investors whoprovided the startup capital for GGI, a majority of which are stockholders of GGH. See “Certain Relationships andRelated Transactions” on page 81.

Fora more thorough discussion of the Company’s business, see “Business” on page 46.

THEOFFERING

Unlessotherwise indicated, all information in this prospectus assumes no exercise of the outstanding options or outstanding warrants.

SUMMARYCONSOLIDATED FINANCIAL INFORMATION

Thefollowing tables present our summary consolidated financial and other data as of and for the periods indicated. The summary consolidatedstatements of operations data for the fiscal years ended December 31, 2018 and December 31, 2017, and the summary consolidatedbalance sheet data as of December 31, 2018, are derived from our audited financial statements included elsewhere in this prospectus.The consolidated statement of operations data for the six months ended June 30, 2019 and 2018 and the summary consolidatedbalance sheet data as of June 30, 2019, are derived from our unaudited condensed consolidated financial statements includedelsewhere in this prospectus and have been prepared on the same basis as the audited consolidated financial statements.

Thesummarized financial information presented below is derived from and should be read in conjunction with our audited consolidatedfinancial statements including the notes to those financial statements, and our unaudited condensed consolidated financial statementsincluding the notes to those financial statements, both of which are included elsewhere in this prospectus along with the sectionentitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Our historicalresults are not necessarily indicative of our future results.

RiskFactors

Aninvestment in our securities involves certain risks relating to our structure and investment objective. The risks set forth beloware the risks we have identified and which we currently deem material or predictable. We also may face additional risks and uncertaintiesnot currently known to us, or which as of the date of this registration statement we might not consider significant, which mayadversely affect our business. In general, you take more risk when you invest in the securities of issuers in emerging marketssuch as Argentina than when you invest in the securities of issuers in the United States. If any of the following risks occur,our business, financial condition and results of operations could be materially adversely affected. In such case, our net assetvalue and the price of our common stock could decline, and you may lose all or part of your investment.

Inevaluating the Company, its business and any investment in the Company, readers should carefully consider the following factors:

RisksRelating to Argentina

Asof the date of this registration statement, the majority of our operations, property and sales are located in Argentina. As aresult, the quality of our assets, our financial condition and the results of our operations are dependent upon the macroeconomic,regulatory, social and political conditions prevailing in Argentina from time to time. These conditions include growth rates,inflation rates, exchange rates, taxes, foreign exchange controls, changes to interest rates, changes to government policies,social instability, and other political, economic or international developments either taking place in, or otherwise affecting,Argentina.

Economicand political instability in Argentina may adversely and materially affect our business, results of operations and financial condition.

TheArgentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative GDP growth,high and variable levels of inflation and currency depreciation and devaluation. The economy has experienced high inflation andGDP growth has been sluggish in the last few years. On October 8, 2018, the International Monetary Fund (IMF) published the “WorldEconomic Outlook” report. The IMF noted that after growing by 2.9 percent in 2017, Argentina was expected to contract by2.6 percent in 2018. The actual contraction in 2018 was 2.5 percent. Further, the IMF forecasted that the Argentinian economyis expected to contract by a further 1.6 percent in 2019 with growth of 3.2 percent expected over the medium term under the steadyimplementation of reforms and returning confidence.

TheIMF noted that in Argentina, tighter global financial conditions, together with a domestic corruption scandal and persistent uncertaintyover the success of the stabilization plan underlying the program with the IMF, have contributed to financial market volatility.The IMF estimated that inflation in Argentina was expected to reach 31.8 percent in 2018, driven by the significant currency depreciation.The actual 2018 inflation rate was 34.3%. The IMF projected the 2019 inflation rate to be approximately 40%.

Theoperating environment in Argentina continues to be a challenging business environment, including the continuing significant devaluationof Argentina’s currency, high inflation and economic recession. Volatility and declines in the exchange rate are expectedin the future, which could have an adverse impact on our Argentine revenues, net earnings, cash flows and net monetary asset position.

On December 10, 2015, Mauricio Macri tookoffice as the new president of Argentina, along with his former finance minister Alfonso Prat-Gay and Luis Caputo, who replacedPrat-Gay in late 2016. President Macri has made a number of decisions in pursuit of economic reform, including removing currencycontrols, which resulted in a 30% devaluation of the peso in 2015. By August 2019, inflation has risen to more than 50% thisyear. Mr. Macri’s approach to the economy has been one of gradualism, but the economy has suffered and his structural economicreforms have hurt poor and middle-class families in Argentina.

Giventhe political climate, it is not certain what other changesmay take place or what the impact of the changes may be on the economy of Argentina. Our discussion below is based on recent history.

Economicand Political Risks Specific to Argentina

TheArgentinian economy has been characterized by frequent and occasionally extensive intervention by the Argentinian government andby unstable economic cycles. The Argentinian government has often changed monetary, taxation, credit, tariff and other policiesto influence the course of Argentina’s economy, and taken other actions which do, or are perceived to weaken the nation’seconomy especially as it relates to foreign investors and other overall investment climate. For example, in 2008, the Argentinegovernment assumed control over approximately $30 billion held in private pension funds, which caused a significant temporarydecline in the Argentine stock market, a decline in the Argentine peso and prompted Standard & Poor’s to downgrade Argentina’scredit rating. The Argentine peso has devalued significantly against the U.S. dollar, from about 6.1 Argentine pesos per dollarin December 2013 to an average of 42.4 pesos per dollar in July 2019.

Theoverall state of Argentinian politics and the Argentina economy have resulted in numerous investment reports that warn about foreigninvestment in Argentina. In February 2019, the Morgan Stanley Capital International (MSCI) index allowed Argentina to remain inthe frontier emerging market despite the country technically being ineligible based on available 2017 Gross National Income data.In May 2019, MSCI classified Argentina as an emerging market rather than a pure frontier market. Nonetheless, investors consideringan investment in GGH should be mindful of these potential political and financial risks.

Argentina’seconomy may not support foreign investment or our business.

TheArgentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth,high inflation and currency deflation. Currently there is significant inflation, labor unrest, and currency deflation. There hasalso been significant governmental intervention into the Argentine economy, including price controls and foreign currency restrictions.As a result, uncertainty remains as to whether economic growth in Argentina is sustainable and whether foreign investment willbe successful.

Asof July 1, 2018, Argentina has a highly inflationary economy which may continue to increase our accounting and legal costs.

TheInternational Practices Task Force (“IPTF”) of the Center for Audit Quality discussed the inflationary status of Argentinaat its meeting on May 16, 2018 and categorized Argentina as a country with a projected three-year cumulative inflation rate greaterthan 100%. Therefore, the Company has transitioned its Argentine operations to highly inflationary status as of July 1, 2018.As a result, the Company is required to change the functional currency of its Argentine operations to the U.S. dollar, effectiveas of July 1, 2018. For operations in highly inflationary economies, monetary asset and liabilities are translated at exchangerates in effect at the balance sheet date, and non-monetary assets and liabilities are translated at historical exchange rates.Income and expense accounts are translated at the weighted average exchange rate in effect during the period. Translation adjustmentsare reflected in loss on foreign currency translation on the accompanying statements of operations. The Company was delayed infiling its Quarterly Report on Form 10-Q for the period ended September 30, 2018 as a result of this change and the Company hasincurred from July 1, 2018 through June 30, 2019 approximately $50,000 in additional expense to adjust to this new methodin the form of increased accounting and legal fees.

Pastefforts by Argentina to nationalize businesses.

InApril 2012, then Argentine President Cristina Fernández de Kirchner announced her decision to nationalize YPF, thecountry’s largest oil company, from its majority stakeholder, thus contributing to declining faith from foreign investorsin the country and again resulting in a downgrade by Standard and Poor’s of Argentina’s economic and financial outlookto “negative”. There were other discussions in Argentina about the possibility of nationalizing other businesses andindustries under former President Kirchner, and even though she is no longer President, she was elected a Senator in late2017. She has made several public statements about her intent to debate everything and take firm positions on her political ideals.In May 2019 Ms. Kirchner announced plans to run for Vice President alongside Alberto Fernández (no relation) againstcurrent President Macri in the October 2019. Although Mr. Macri has chosen moderate Argentine Senator Miguel Pichetto as the vice-presidentialcandidate, Mr. Fernández has also struck an alliance with Sergio Massa, a key centrist political figure, which could widenthe appeal of the Fernández/ Kirchner ticket in Argentina.

InAugust 2019, Mr. Macri earned only 32% of the vote in primary elections due to voters’ anger over austerity measures, thedeep recession and soaring inflation, with the opposition ticket of Fernández/ Kirchner winning approximately 48%. Thisindicates that Mr. Fernández and Ms. Kirchner could win the election in October in a first round win provided they haveover 45% of the vote. After the results, the peso fell about 17% against the dollar and Argentina’s bonds and stocks plunged.

Ifthe Fernández/ Kirchner ticket wins in October, we areunable to predict the impact and influence she will have on Argentine policies going forward and the ultimate impact on the economyand the effect on our company. Likewise, if President Macri wins, there is no assurance that his programs will bode well orill for the Company. There is no assurance that any investment in GGH will be safe from government control or nationalizationif policies are reversed or if Mr. Macri fails to win the election.

Currentcorruption investigations in Argentina could have an adverse impact on the development of the economy and investor confidence.

TheArgentine Government has announced a large-scale corruption investigation in Argentina. The investigation relates to paymentsover the past decade to government officials from businessmen and companies who had been awarded large government contracts. Asof the date of this registration statement, several Argentine businessmen, mainly related to public works, and over a dozen formergovernment officials of the Fernández de Kirchner administration are being investigated for bribery to the State. As aresult, on September 17, 2018, the former president of Argentina, Cristina Fernandez de Kirchner, and several businessmen wereprosecuted for illegal association, and goods for 4 billion pesos were seized. Depending on the results of such investigationsand the time it takes to conclude them, the companies involved could face, among other consequences, a decrease in their creditrating, be subject to claims by their investors, as well as experiencing restrictions on financing through the capital markets.These adverse effects could hamper the ability of these companies to meet their financial obligations on time. In connection withthe aforementioned, the lack of future financing for these companies could affect the realization of the projects or works thatare currently in execution.

Inaddition, the effects of these investigations could affect the investment levels in infrastructure in Argentina, as well as thecontinuation, development and completion of public works, which could ultimately lead to lower growth in the Argentine economy.

Asof the date of this registration statement, we have not estimated the impact that this investigation could have on the Argentineeconomy. Likewise, we cannot predict for how long corruption investigations could continue, what other companies might be involved,or how important the effects of these investigations might be. In turn, the decrease in investors’ confidence, among otherfactors, could have a significant adverse impact on the development of the Argentine economy, which could adversely affect ourbusiness, financial condition and the results of our operations.

Dueto the Company’s operations in Argentina, the Company is exposed to the risk of changes in foreign exchange rates.

Dueto the international nature of Gaucho Group Holdings’ business, movements in foreign exchange rates may impact the consolidatedstatements of operations, consolidated balance sheets and cash flows of the Company. Since almost all of the Company’s salesare located in Argentina, the Company’s consolidated net sales are impacted negatively by the strengthening or positivelyby the weakening of the U.S. dollar as compared to Argentina’s currencies. Additionally, movements in the foreign exchangerates may unfavorably or favorably impact the Company’s results of operations, financial condition and liquidity. On April29, 2019, Argentina’s central bank said it would step up intervention in the currency market by starting to sell dollarsto stabilize the peso.

Argentina’sability to obtain financing from international markets is limited, which may impair its ability to implement reforms and fostereconomic growth.

Afterthe economic crisis in 2002, the Argentine government has maintained a policy of fiscal surplus. To be able to repay its debt,the Argentine government may be required to continue adopting austere fiscal measures that could adversely affect economic growth.

In2005 and 2010, Argentina restructured over 91% of its sovereign debt that had been in default since the end of 2001. Some of thecreditors who did not participate in the 2005 or 2010 exchange offers continued their pursuit of a legal action against Argentinafor the recovery of debt.

InApril 2010, a New York court granted an attachment over reserves of the Argentine Central Bank in the United States requestedby creditors of Argentina on the basis that the Central Bank was its alter ego. In subsequent court rulings, Argentina was orderedto pay $1.33 billion to hedge fund creditors who refused to participate in the debt restructuring along with those who did. InFebruary 2014, Argentina filed an appeal to the U.S. Supreme Court seeking to reverse these lower court decisions, but the U.S.Supreme Court declined to consider Argentina’s appeal.

AU.S. Court of Appeals blocked the most recent debt payment made by Argentina in June 2014 because it was improperly structured,giving Argentina through the end of July 2014 to find a way to pay to fulfill its obligations. On or about July 30, 2014, creditrating agencies Fitch and S&P declared Argentina to be in “selective default” after a U.S. judge blocked trusteeBank of New York Mellon from making payments to Argentine bond holders, after Argentina deposited the $539 million in funds dueto bond holders with the trustee. The court’s reason for blocking the payments was due to Argentina failing to reach anagreement with a group of hedge funds that are holding out for better terms on old Argentine defaulted debt. In March 2015, morethan 500 creditors, separate from the hedge fund creditors, filed suit against Argentina for payment on the debt of $5.4 billion.Argentina filed a motion opposing those claims noting that there were now $10 billion in judgments and claims before the court.In February 2016, Argentina and four of its major bond creditors entered into a settlement agreement whereby Argentina agreedto pay roughly $4.65 billion to those creditors to resolve the fifteen-year litigation. Subsequently, Argentina has also enteredinto settlement agreements with other bond default creditors who were not party to the original settlement which, in the aggregate,could have an estimated dollar value upwards of $10 billion.

Asa result of Argentina’s default and its aftermath of litigation, the government may not have the financial resources necessaryto implement reforms and foster economic growth, which, in turn, could have a material adverse effect on the country’s economyand, consequently, our businesses and results of operations. Furthermore, Argentina’s inability to obtain credit in internationalmarkets could have a direct impact on our own ability to access international credit markets to finance our operations and growth.

InApril of 2016, after settling the litigation, Argentina was able to return to the international debt markets with a $16.5 billioncentury bond. The attractiveness of a century bond is debatable amongst investment advisers and its impact over the long-termin is this case unknown. In 2017, Argentina engaged in additional sales of bonds on international markets for around $13.4 billion.There can be no assurance that the Argentine government will not default on its obligations under these or any of its bonds ifit experiences another economic crisis or has a change in political control. A new default by the Argentine government could leadto a new recession, even higher inflation, restrictions on Argentine companies access to financing and funds, limit the operationsof Argentine companies in the international markets, higher unemployment and social unrest, which would negatively affect ourfinancial condition, results of operations and cash flows.

InJune 2018, the Argentine Government entered into a US$50 billion, 36-month stand-by arrangement with the IMF. This measure wasintended to halt the significant depreciation of the peso during the first half of 2018. In December 2018, the IMF completed asecond review under the stand-by arrangement and although there were indications that the financial markets in Argentina havestabilized since the end of September 2018 following the adoption of the new monetary policy framework, the IMF noted that externalrisks are centered around an unanticipated tightening of global financial conditions, which could resurface concerns about Argentina’sability to meet its large gross financing needs. The IMF also warned that greater than expected inertia in the inflation processmay delay the expected easing of monetary policy and generate a greater economic loss during the needed disinflation and thata deeper recession or more persistent inflation could generate a more forceful opposition to the policies underpinning the programand hinder their implementation. Finally, the IMF noted that uncertainty associated with the 2019 electoral cycle may triggernew rounds of financial market turbulence and capital account pressures.

TheArgentine government may again place currency limitations on withdrawals of funds.

Through2015, the Argentine government, led by then president Cristina Fernández, instituted economic controls that included limitingthe ability of individuals and companies to exchange local currency (Argentine peso) into U.S. dollars and to transfer funds outof the country. At the time, public reports stated that government officials were micromanaging money flows by limiting dollarpurchases and discouraging dividend payments and international wire transfers. As a result of these controls, Argentine companieshad limited access to U.S. dollars through regular channels (e.g., banks) and consumers faced difficulty withdrawing and exchanginginvested funds. Given the Company’s investment in Argentine projects and developments, its ability to mobilize and accessfunds may be adversely affected by the above-mentioned political actions, despite the efforts to repeal economic controls in therecent past.

InDecember 2015, newly elected President Mauricio Macri ended the central bank’s support of the peso and removed the currencycontrols that limited the ability of Argentines to buy dollars, resulting in a 30% devaluation of the Argentine peso. In January2017, the country lifted the 120-day holding period for incoming funds hoping to increase the flow of money into the country andease access for tourists, citizens and businesses. However, Argentina is still feeling the impact of removing currency controlsand has continued experiencing a decrease in the value of the Argentine peso throughout 2019.

TheArgentine government may, in the future, impose additional controls on the foreign exchange market and on capital flows from andinto Argentina, in response to capital flight or depreciation of the peso. These restrictions may have a negative effect on theeconomy and on our business if imposed in an economic environment where access to local capital is constrained.

Thestability of the Argentine banking system is uncertain.

Adverseeconomic developments, even if not related to or attributable to the financial system, could result in deposits flowing out ofthe banks and into the foreign exchange market, as depositors seek to shield their financial assets from a new crisis. Any runon deposits could create liquidity or even solvency problems for financial institutions, resulting in a contraction of availablecredit.

Additionally,unrest among the employment sector of the banking industry has led to strikes led by strong labor unions. This makes it difficultfor citizens and businesses to conduct banking activities and decreases the level of trust people put into the Argentine bankingsystem.

Inthe event of a future shock, such as the failure of one or more banks or a crisis in depositor confidence, the Argentine governmentcould impose further exchange controls or transfer restrictions and take other measures that could lead to renewed political andsocial tensions and undermine the Argentine government’s public finances, which could adversely affect Argentina’seconomy and prospects for economic growth which could adversely affect our business.

Governmentmeasures to preempt or respond to social unrest may adversely affect the Argentine economy and our business.

TheArgentine government has historically exercised significant influence over the country’s economy. Additionally, the country’slegal and regulatory frameworks have at times suffered radical changes, due to political influence and significant political uncertainties.In April 2014, there were nationwide strikes that paralyzed the Argentine economy, shutting down air, train and bus traffic, closingbusinesses and ports, emptying classrooms, shutting down non-emergency hospital attention and leaving trash uncollected. Thisis consistent with past periods of significant economic unrest and social and political turmoil.

Futuregovernment policies to preempt, or in response to, social unrest may include expropriation, nationalization, forced renegotiationor modification of existing contracts, suspension of the enforcement of creditors’ rights, new taxation policies, includingroyalty and tax increases and retroactive tax claims, and changes in laws and policies affecting foreign trade and investment.Such policies could destabilize the country and adversely and materially affect the economy, and thereby our business.

TheArgentine economy could be adversely affected by economic developments in other global markets.

Financialand securities markets in Argentina are influenced, to varying degrees, by economic and market conditions in other global markets.Although economic conditions vary from country to country, investors’ perception of the events occurring in one countrymay substantially affect capital flows into other countries. Lower capital inflows and declining securities prices negativelyaffect the real economy of a country through higher interest rates or currency volatility.

Inaddition, Argentina is also affected by the economic conditions of major trade partners, such as Brazil and/or countries thathave influence over world economic cycles, such as the United States. If interest rates rise significantly in developed economies,including the United States, Argentina and other emerging market economies could find it more difficult and expensive to borrowcapital and refinance existing debt, which would negatively affect their economic growth. In addition, if these developing countries,which are also Argentina’s trade partners, fall into a recession the Argentine economy would be affected by a decrease inexports. All of these factors would have a negative impact on us, our business, operations, financial condition and prospects.

TheArgentine government may order salary increases to be paid to employees in the private sector, which would increase our operatingcosts.

Therehave been nationwide strikes in Argentina over wages and benefits paid to workers which workers believe to be inadequate in lightof the high rate of inflation and rising utility rates. In the past, the Argentine government has passed laws, regulations anddecrees requiring companies in the private sector to maintain minimum wage levels and provide specified benefits to employeesand may do so again in the future. In the aftermath of the Argentine economic crisis, employers both in the public and privatesectors have experienced significant pressure from their employees and labor organizations to increase wages and to provide additionalemployee benefits. Due to the high levels of inflation, the employees and labor organizations have begun again demanding significantwage increases. It is possible that the Argentine government could adopt measures mandating salary increases and/or the provisionof additional employee benefits in the future. Any such measures could have a material and adverse effect on our business, resultsof operations and financial condition. To management’s knowledge, currently there are no pending measures.

Restrictionson the supply of energy could negatively affect Argentina’s economy.

Asa result of a prolonged recession, and the forced conversion into pesos and subsequent freeze of gas and electricity tariffs inArgentina, there has been a lack of investment in gas and electricity supply and transport capacity in Argentina in recent years.At the same time, demand for natural gas and electricity has increased substantially, driven by a recovery in economic conditionsand price constraints, which has prompted the government to adopt a series of measures that have resulted in industry shortagesand/or cost increases. In 2017, the government increased the tariffs on electricity and gas hoping to spur an increase in domesticenergy production which increased the cost for these utilities for citizens. Scheduled increases in electricity tariffs inMay and August 2019 were canceled and the government committed to no further gas tariff increases in 2019.

Thefederal government has been taking a number of measures, including the tariff increase, to alleviate the short-term impact ofenergy shortages on residential and industrial users. If these measures prove to be insufficient, or if the investment that isrequired to increase natural gas production and transportation capacity and energy generation and transportation capacity overthe medium-and long-term fails to materialize on a timely basis, economic activity in Argentina could be limited, which couldhave a significant adverse effect on our business.

Weare exposed to risks in relation to compliance with anti-corruption and anti-bribery laws and regulations.

Ouroperations are subject to various anti-corruption and anti-bribery laws and regulations, including the Corporate Criminal LiabilityLaw 27,401 effective March 1, 2018 and the U.S. Foreign Corrupt Practices Act of 1977 (the “FCPA”). Both the CorporateCriminal Liability Law and the FCPA impose liability against companies who engage in bribery of government officials, either directlyor through intermediaries. The Corporate Criminal Liability Law establishes a system of criminal liability of private legal personswhich include companies created under any legal form (LLCs, PLCs, partnerships, etc.) whether of national or foreign capital forcriminal offenses against public administration and national and cross-border bribery committed by, among others, its shareholders,attorneys-in-fact, directors, managers, employees, or representatives. The anti-corruption laws generally prohibit providing anythingof value to government officials for the purposes of obtaining or retaining business or securing any improper business advantage.By late September 2019, it is expected that legislation will be introduced to strengthen the anti-money laundering law to freezefunds and other assets when there are suspicions of money laundering, terrorism financing, or evidence of funds or assets linkedto corruption. As part of our business, we may deal with entities in which the employees are considered government officials.We have a compliance program that is designed to manage the risks of doing business in light of these new and existing legal andregulatory requirements.

Althoughwe have internal policies and procedures designed to ensure compliance with applicable anti-corruption and anti-bribery laws andregulations, there can be no assurance that such policies and procedures will be sufficient. Violations of anti-corruption lawsand sanctions regulations could lead to financial penalties being imposed on us, limits being placed on our activities, our authorizationsand licenses being revoked, damage to our reputation and other consequences that could have a material adverse effect on our business,results of operations and financial condition. Further, litigations or investigations relating to alleged or suspected violationsof anti-corruption laws and sanctions regulations could be costly.

RealEstate Considerations and Risks Associated with the International Projects that GGH Operates

TheReal Estate Industry and International Investing

Investmentsin real estate are subject to numerous risks, including the following:

Investmentin Argentine real property is subject to economic and political risks.

Investmentin foreign real estate requires consideration of certain risks typically not associated with investing in the United States. Suchrisks include, among other things, trade balances and imbalances and related economic policies, unfavorable currency exchangerate fluctuations, imposition of exchange control regulation by the United States or foreign governments, United States and foreignwithholding taxes, limitations on the removal of funds or other assets, policies of governments with respect to possible nationalizationof their industries, political difficulties, including expropriation of assets, confiscatory taxation and economic or politicalinstability in foreign nations or changes in laws which affect foreign investors. Any one of these risks has the potential toreduce the value of our real estate holdings in Argentina and have a material adverse effect on the Company’s financialcondition.

Thereal estate market is uncertain in Argentina.

PresidentMacri has attempted to boost the real estate market in Argentina by lifting various currency restrictions. However, the real estatemarket has not rebounded from the crippling effect of past currency controls. As a result, the real estate market in Argentinais uncertain. It is possible that with time the efforts of President Macri will be fruitful, but it is too soon to evaluate whatthe impact will be as the economy continues to change. Continued investment in real estate in Argentina is very risky and couldnever materialize in the way our business model plans. However, waiting to act on certain real estate endeavors will have negativeconsequences if the market sees an increase in competitiveness. The main competitive factors in the real estate development businessinclude availability and location of land, price, funding, design, quality, reputation and partnerships with developers. Althoughthere is little to no leverage used to acquire real estate in Argentina, thereby greatly lessening the impact of foreclosuresin the market, the practice of cash acquisitions can be a barrier to entry in the real estate market. A number of residentialand commercial developers and real estate services companies may desire to enter the market and compete with the Company in seekingland for acquisition, financial resources for development and prospective purchasers. To the extent that one or more of the Company’scompetitors are able to acquire and develop desirable properties, as a result of greater financial resources or otherwise, theCompany’s business could be materially and adversely affected. If the Company is not able to acquire and develop sought-afterproperty as promptly as its competitors, or should the level of competition increase, its financial position and results of operationscould be adversely affected.

Anadverse economic environment for real estate companies such as a credit crisis may adversely impact our results of operationsand business prospects significantly.

Thesuccess of our business and profitability of our operations depend on continued investment in real estate and access to capitaland debt financing. A prolonged crisis of confidence in real estate investments and lack of credit for acquisitions may constrainour growth. In order to pursue acquisitions, we may need access to equity capital and/or debt financing. Any disruptions in thefinancial markets may adversely impact our ability to refinance existing debt and the availability and cost of credit in the nearfuture. Any consideration of sales of existing properties or portfolio interests may be offset by lower property values. Our abilityto make scheduled payments or to refinance our existing debt obligations depends on our operating and financial performance, whichin turn is subject to prevailing economic conditions. If a recurrence of the disruptions in financial markets remains or arisesin the future, there can be no assurances that government responses to such disruptions will restore investor confidence, stabilizethe markets or increase liquidity and the availability of credit.

Thereare limitations on the ability of foreign persons to own Argentinian real property.

InDecember 2011, the Argentine Congress passed Law 26.737 (Regime for Protection of National Domain over Ownership, Possession orTenure of Rural Land) limiting foreign ownership of rural land, even when not in border areas, to a maximum of 15 percent of allnational, provincial or departmental productive land. Ownership by the same foreign owner (i.e., foreign individuals, foreignentities or local entities controlled by a foreign person) may not exceed 1,000 hectares (2,470 acres) of the ‘core area’or the ‘equivalent surface’ determined according to the location of the lands. The Interministerial Council of RuralLands, the enforcement agency, defines the ‘equivalent surface’ taking into consideration: (1) the proportion of the‘rural lands’ in relation to the municipality, department and province; and (2) the potential and quality of the rurallands for their use and exploitation. Every non-Argentine national must request permission from the National Land Registry ofArgentina in order to acquire non-urban real property.

Asapproved, the law has been in effect since February 28, 2012 but is not retroactive. Furthermore, the general limit of 15 percentownership by non-nationals must be reached before the law is applicable and each provincial government may establish its own maximumarea of ownership per non-national.

Inthe Mendoza province, the maximum area allowed per type of production and activity per non-national is as follows: Mining—25,000hectares (61,776 acres), cattle ranching—18,000 hectares (44,479 acres), cultivation of fruit or vines—15,000 hectares(37,066 acres), horticulture—7,000 hectares (17,297 acres), private lot—200 hectares (494 acres), and other—1,000hectares (2,471 acres). A hectare is a unit of area in the metric system equal to approximately 2.471 acres. However, these maximumswill only be considered if the total 15 percent is reached. Currently, the Company owns approximately 4,138 acres of Argentinerural land through AWE, 2,050 acres are considered land held for cultivation of fruit or vines and 2,088 was purchased during2017 to provide additional access to AWE. Because the maximum area for this type of land allowed per non-national is 25,000 hectares,the Company is compliant with the law’s limit, were it to apply today. Costs of compliance with the law may be significantin the future. Although currently, the area under foreign ownership in Mendoza is approximately 8.6 percent, this law may applyto the Company in the future and could affect the Company’s ability to acquire additional real property in Argentina. Theinability to acquire additional land could curtail the Company’s growth strategy. Management is not currently aware of anychange that would require the Company to divest itself of its properties.

Ourbusiness is subject to extensive regulation and additional regulations may be imposed in the future.

Ouractivities are subject to Argentine federal, state and municipal laws, and to regulations, authorizations and licenses requiredwith respect to construction, zoning, use of the soil, environmental protection and historical patrimony, consumer protection,antitrust and other requirements, all of which affect our ability to acquire land, buildings and shopping malls, develop and buildprojects and negotiate with customers.

Inaddition, companies in this industry are subject to increasing tax rates, the creation of new taxes and changes in the taxationregime. We are required to obtain licenses and authorizations with different governmental authorities in order to carry out ourprojects. Maintaining our licenses and authorizations can be a costly provision. In the case of non-compliance with such laws,regulations, licenses and authorizations, we may face fines, project shutdowns, and cancellation of licenses and revocation ofauthorizations.

Inaddition, public authorities may issue new and stricter standards, or enforce or construe existing laws and regulations in a morerestrictive manner, which may force us to make expenditures to comply with such new rules. Development activities are also subjectto risks relating to potential delays in obtaining or an inability to obtain all necessary zoning, environmental, land-use, development,building, occupancy and other required governmental permits and authorizations. Any such delays or failures to obtain such governmentapprovals may have an adverse effect on our business.

Theremay be a lack of liquidity in the underlying real estate.

Becausea substantial part of the assets managed by the Company will be invested in illiquid real estate, there is a risk that the Companywill be unable to realize its investment objectives through the sale or other disposition of properties at attractive prices orto do so at a desirable time. This could hamper the Company’s ability to complete any exit strategy with regard to investmentsit has structured or participated in.

Thereis limited public information about real estate in Argentina.

Thereis generally limited publicly available information about real estate in Argentina, and the Company will be conducting its owndue diligence on future transactions. Moreover, it is common in Argentinian real estate transactions that the purchaser bearsthe burden of any undiscovered conditions or defects and has limited recourse against the seller of the property. Should the pre-acquisitionevaluation of the physical condition of any future investments have failed to detect certain defects or necessary repairs, thetotal investment cost could be significantly higher than expected. Furthermore, should estimates of the costs of developing, improving,repositioning or redeveloping an acquired property prove too low or estimates of the market demand or the time required to achieveoccupancy prove too optimistic, the profitability of the investment may be adversely affected.

Ourconstruction projects may be subject to delays in completion.

AlgodonWine Estates has required significant redevelopment construction (including potentially building residential units for AlgodonWine Estates). The quality of the construction and the timely completion of these projects are factors affecting operations andsignificant delays or cost overruns could materially adversely affect the Company’s operations. Delays in construction ordefects in materials and/or workmanship have occurred and may continue to occur. Defects could delay completion of one or allof the projects or, if such defects are discovered after completion, expose the Company to liability. In addition, constructionprojects may also encounter delays due to adverse weather conditions, natural disasters, fires, delays in the provision of materialsor labor, accidents, labor disputes, unforeseen engineering, environmental or geological problems, disputes with contractors andsubcontractors, or other events. If any of these materialize, there may be a delay in the commencement of cash flow and/or anincrease in costs that may adversely affect the Company.

TheCompany may be subject to certain losses that are not covered by insurance.

GGH,its affiliates and/or subsidiaries currently maintain insurance coverage against liability to third parties and property damageas is customary for similarly situated businesses, however the Company does not hold any country-risk insurance. There can beno assurance, however, that insurance will continue to be available or sufficient to cover any such risks. Insurance against certainrisks, such as earthquakes, floods or terrorism may be unavailable, available in amounts that are less than the full market valueor replacement cost of the properties or subject to a large deductible. In addition, there can be no assurance the particularrisks which are currently insurable will continue to be insurable on an economic basis.

BoutiqueHotel

Inaddition to the risks that apply to all real estate investments, hotel and hospitality investments are subject to additional riskswhich include:

Theboutique hotel market is highly competitive.

TheCompany competes in the boutique hotel segment, which is highly competitive, is closely linked to economic conditions and maybe more susceptible to changes in economic conditions than other segments of the hospitality industry. Competition within theboutique hotel segment is also likely to continue to increase in the future. Competitive factors include name recognition, qualityof service, convenience of location, quality of the property, pricing, and range and quality of dining, services and amenitiesoffered. Additionally, success in the boutique hotel market depends, largely, on an ability to shape and stimulate consumer tastesand demands by producing and maintaining innovative, attractive, and exciting properties and services. The Company competes inthis segment against many well-known companies that have established brand recognition and significantly greater financial resources.If it is unable to achieve and maintain consumer recognition for its brand and otherwise compete with well-established competitors,the Company’s business and operations will be negatively impacted. There can be no assurance that the Company will be ableto compete successfully in this market or that the Company will be able to anticipate and react to changing consumer tastes anddemands in a timely manner.

Historically,the Company’s hotel incurs overhead costs higher than the total gross margin.

Currently,the overhead costs for the Algodon Mansion hotel do not exceed its total gross margin, however historically the Algodon Mansionhotel has operated at a loss. There can be no assurance that the Algodon Mansion hotel will continue to operate at a profit orthat the Company will be able to continue increasing revenues and lowering the hotel’s overhead cost in the future.

Theprofitability of the Company’s hotels will depend on the performance of hotel management.

Theprofitability of the Company’s hotel and hospitality investment will depend largely upon the ability of management thatit employs to generate revenues that exceed operating expenses. The failure of hotel management to manage the hotels effectivelywould adversely affect the cash flow received from hotel and hospitality operations.

Weare subject to risks affecting the hotel industry.

Inaddition, the profitability of our hotels depends on:

AlgodonWine Estates and Land Development

Thetourism industry is highly competitive and may affect the success of the Company’s projects.

Thesuccess of the tourism and real estate development projects underway at Algodon Wine Estates depends primarily on recreationaland secondarily on business tourists and the extent to which the Company can attract tourists to the region and to its properties.The Company is in competition with other hotels and developers based upon brand affiliations, room rates, customer service, location,facilities, and the condition and upkeep of the lodging in general, and in relation to other lodges/hotels/investment opportunitiesin the local market. Algodon Wine Estates operates as a multi-functional resort and winery and serves a niche market, which maybe difficult to target. Algodon Wine Estates may also be disadvantaged because of its geographical location in the greater Mendozaregion. While the San Rafael area continues to increase in popularity as a tourist destination, it is currently less traveledthan other regions of Mendoza, where tourism is more established.

Theprofitability of Algodon Wine Estates will depend on consumer demand for leisure and entertainment.

AlgodonWine Estates is dependent on demand from leisure and business travelers, which may be seasonal and fluctuate based on numerousfactors. Demand may decrease with increases in energy costs, airline fares and other expenses related to travel, which may detertravel. Business and leisure travel patterns may be disrupted due to perceived fears of local unrest or terrorism both abroadand in Argentina. General and local economic conditions and their effects on travel may adversely affect Algodon Wine Estates.

Developmentof the Company’s projects will proceed in phases and is subject to unpredictability in costs and expenses.

Itis contemplated that the expansion and development plans of Algodon Wine Estates will be completed in phases and each phase willpresent different types and degrees of risk. Algodon Wine Estates may be unable to acquire the property it needs for further expansionor be unable to raise the property to the standards anticipated for the ALGODON® brand. This may be due to difficulties associatedwith obtaining required future financing, purchasing additional parcels of land, or receiving the requisite zoning approvals.Algodon Wine Estates may have problems with local laws and customs that cannot be predicted or controlled. Development costs mayalso increase due to inflation or other economic factors.

Theability of the Company to operate its businesses may be adversely affected by U.S. and Argentine government regulations.

Manyaspects of the Company’s businesses face substantial government regulation and oversight. For example, hotel propertiesare subject to numerous laws, including those relating to the preparation and sale of food and beverages, including alcohol andthose governing relationships with employees such as minimum wage and maximum working hours, overtime, working conditions, hiringand firing employees and work permits. Additionally, hotel properties may be subject to various laws relating to the environmentand fire and safety. Compliance with these laws may be time consuming and costly and may adversely affect hotel operations inArgentina.

Anotherexample is the wine industry which is subject to extensive regulation by local and foreign governmental agencies concerning suchmatters as licensing, trade and pricing practices, permitted and required labeling, advertising and relations with wholesalersand retailers. New or revised regulations in Argentina, or other foreign countries and U.S. import laws could have a materialadverse effect on Algodon Wine Estates’ financial condition or operations.

Finally,because many of the Company’s properties are located in Argentina, they are subject to its laws and to the laws of variouslocal districts that affect ownership and operational matters. Compliance with applicable rules and regulations requires significantmanagement attention and any failure to comply could jeopardize the Company’s ability to operate or sell a particular propertyand could subject the Company to monetary penalties, additional costs required to achieve compliance, and potential liabilityto third parties. Regulations governing the Argentinian real estate industry as well as environmental laws have tended to becomemore restrictive over time. The Company cannot assure that new and stricter standards will not be adopted or become applicableto the Company, or that stricter interpretations of existing laws and regulations will not be implemented.

AlgodonWine Estates—Vineyard and Wine Production

Competitionwithin the wine industry could have a material adverse effect on the profitability of wine sales.

Theoperation of a winery is a highly competitive business and the dollar amount and unit volume of wine sales through the ALGODON®label could be negatively affected by a variety of competitive factors. Many other local and foreign producers of wine have significantlygreater financial, technical, marketing and public relations resources and wine producing expertise than the Company, and manyhave more refined, developed and established brands. The wine industry is characterized by fickle demand and success in this industryrelies heavily on successful branding. Thus, the ALGODON® brand concept may not appeal to a large segment of the market, preventingthe Company from successfully competing against other Argentinian and foreign brands. Wholesaler, retailer and consumer purchasingdecisions are also influenced by the quality, pricing and branding of the product, as compared to competitive products. Unit volumeand dollar sales could be adversely affected by pricing, purchasing, financing, operational, advertising or promotional decisionsmade by competitors, which could affect the supply of, or consumer demand for, product produced under the ALGODON® brand.

AlgodonWine Estates is subject to import and export rules and taxes which may change.

AlgodonWine Estates primarily exports its products to the United States and Europe. In countries to which Algodon Wine Estates intendsto export its products, Algodon Wine Estates will be subject to excise and other taxes on wine products in varying amounts, whichare subject to change. Significant increases in excise or other taxes could have a material adverse effect on Algodon Wine Estates’financial condition or operations. Political and economic instabilities of foreign countries may also disrupt or adversely affectAlgodon Wine Estates’ ability to export or make profitable sales in that country. Moreover, exporting costs are subjectto macro-economic forces that affect the price of transporting goods (e.g., the cost of oil and its impact on transportation systems),and this could have an adverse impact on operations.

TheCompany’s business would be adversely affected by natural disasters.

Naturaldisasters, floods, hurricanes, fires, earthquakes, hailstorms or other environmental disasters could damage the vineyard, itsinventory, or other physical assets of the Algodon Wine Estates’ resort, including the golf course. If all or a portionof the vineyard or inventory were to be lost prior to sale or distribution as a result of any adverse environmental activity,or if the golf course and facilities were damaged, Algodon Wine Estates would become significantly less attractive as a destinationresort and therefore lose a substantial portion of its anticipated profit and cash flow. Such a loss would seriously harm thebusiness and reduce overall sales and profits. The Company is not insured against crop losses as a result of weather conditionsor natural disasters. Moderate, but irregular weather conditions may adversely affect the grapes, making any one season less profitablethan expected. In addition to weather conditions, many other factors, such as pruning methods, plant diseases, pests, the numberof vines producing grapes, and machine failure could also affect the quantity and quality of grapes. Any of these conditions couldcause an increase in the price of production or a reduction in the amount of wine Algodon Wine Estates is able to produce anda resulting reduction in business sales and profits.

Climatechange, or legal, regulatory or market measures to address climate change, may negatively affect our business, operations or financialperformance, and water scarcity or poor water quality could negatively impact our production costs and capacity.

Ourwine business depends upon agricultural activity and natural resources. There has been much public discussion related to concernsthat carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patternsand the frequency and severity of extreme weather and natural disasters. Severe weather events and climate change may negativelyaffect agricultural productivity in the regions from which we presently source our agricultural raw materials such as grapes.Decreased availability of our raw materials may increase the cost of goods for our products. Severe weather events or changesin the frequency or intensity of weather events can also disrupt our supply chain, which may affect production operations, insurancecost and coverage, as well as delivery of our products to wholesalers, retailers and consumers.

Wateris essential in the production of our products. The quality and quantity of water available for use is important to the supplyof grapes and our ability to operate our business. Water is a limited resource in many parts of the world and if climate patternschange and droughts become more severe, there may be a scarcity of water or poor water quality that may affect our productioncosts or impose capacity constraints. Management is unaware of any current water issues in Argentina.

Variousdiseases, pests and certain weather conditions may negatively affect our business, operations or financial performance.

Variousdiseases, pests, fungi, viruses, drought, frosts and certain other weather conditions could affect the quality and quantity ofgrapes other agricultural raw materials available, decreasing the supply of our products and negatively impacting profitability.We cannot guarantee that our grape suppliers or our suppliers of other agricultural raw materials will succeed in preventing contaminationin existing vineyards or fields or that we will succeed in preventing contamination in our existing vineyards or future vineyardswe may acquire. Future government restrictions regarding the use of certain materials used in growing grapes or other agriculturalraw materials may increase vineyard costs and/or reduce production of grapes or other crops. Growing agricultural raw materialsalso requires adequate water supplies. A substantial reduction in water supplies could result in material losses of grape cropsand vines or other crops, which could lead to a shortage of our product supply.

Contaminationcould adversely affect our sales.

Thesuccess of our brands depends upon the positive image that consumers have of those brands. Contamination, whether arising accidentallyor through deliberate third-party action, or other events that harm the integrity or consumer support for our brands, could adverselyaffect their sales. Contaminants in raw materials, packaging materials or product components purchased from third parties andused in the production of our wine or defects in the fermentation or distillation process could lead to low beverage quality as(i) a perceived failure to maintain high ethical, social and environmental standards for all of our operations and activities;(ii) a perceived failure to address concerns relating to the quality, safety or integrity of our products; our environmental impact,including use of agricultural materials, packaging, water and energy use, and waste management; or (iii) effects that are perceivedas insufficient to promote the responsible use of alcohol.

GauchoGroup—Buenos Aires

(e-commerce,fashion & leather accessories brand)

GauchoGroup, Inc. has no significant operating history.

Thougha majority-owned subsidiary of Gaucho Holdings, Gaucho Group (“GGI”) operates as a standalone business, responsiblefor its own financing and operations and therefore subject to all the risks inherent in a newly established business venture.GGI has few assets and little operating history. It has not yet had any significant sales or been able to confirm thatits business model can or will be successful. As such, given its start-up status with an unproven business model, there is a substantialrisk regarding GGI’s ability to succeed. The risk of a total loss exists when dealing with start-up companies.

Themarkets in which we plan to operate are highly competitive, and such competition could cause our business to be unsuccessful.

Weexpect to face intense competition for our Argentine-sourced and designed products. There are many companies around the worldthat produce similar high-end products, though not necessarily with the Gaucho style that we plan to incorporate into our products.However, whether or not consumers find our products superior or more desirable than other high-end producers, including many brandedproducts with established worldwide reputations and brands, such as Coach, Ralph Lauren, Hermès, Louis Vuitton, Gucci,Prada, Kate Spade and Calvin Klein, cannot yet be determined. In addition, we face competition through third party distributionchannels, such as e-commerce, department stores and specialty stores.

Competitionis based on a number of factors, including, without limitation, the following:

Inaddition, many of our anticipated competitors will be significantly larger and more diversified than us and will likely have significantlygreater financial, technological, manufacturing, sales, marketing and distribution resources than we do. Their greater capabilitiesin these areas may enable them to better withstand periodic downturns in the high-end product sector in which we plan to compete.They may also be able to compete more effectively on the basis of price and production, and to develop new products more quickly.The general availability of manufacturing contractors and agents also allows new entrants easy access to the markets in whichwe compete, which may increase the number of our competitors and adversely affect our competitive position and our business. Anyincreased competition, or our failure to adequately address any of these competitive factors, could result in the ability to generatesignificant revenues, which could adversely affect our business, results of operations and financial condition.

Ifwe are unable to continue to compete effectively on any of the factors mentioned above, we may never be able to generate operatingprofits and our business, financial condition and results of operations would be adversely affected.

Ourbusiness is subject to risks associated with importing products, and the imposition of additional duties and any changes to internationaltrade agreements could have a material adverse effect on our business, results of operations and financial condition.

Thereare risks inherent to importing our products. We anticipate that virtually all of our products will be manufactured in Argentinaand thus could be subject to duties when imported into the United States, Canada, Europe and Asia, as applicable. Furthermore,if the United States imposes import duties or other protective import measures, other countries could retaliate in ways that couldharm the international distribution of our products.

Wemay not be able to protect our intellectual property rights, which may cause us to incur significant costs.

Thesuccess of our future business will in part be dependent on intellectual property rights. We rely primarily on copyright, tradesecret and trademark law to protect our intellectual property. The process for obtaining federal trademark registration of ourservice mark “Gaucho—Buenos Aires™” is underway, but there can be no guarantee that we will successfullyobtain trademark status and protection for our primary brand terms. Similarly, a third party may copy or otherwise obtain anduse our proprietary information without our authorization. Policing unauthorized use of our intellectual property is difficult,particularly in light of the global nature of the Internet and because the laws of other countries may afford us little or noeffective protection of our intellectual property. Potentially expensive litigation may be necessary in the future to enforceour intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rightsof others or to defend against claims of infringement or invalidity.

Privacybreaches and other cyber security risks related to our business could negatively affect our reputation, credibility and business.

Weare likely to be dependent on information technology systems and networks for a significant portion of our direct-to-consumersales, including our e-commerce sites and retail business credit card transaction authorization and processing. We are responsiblefor storing data relating to our customers and employees and also rely on third party vendors for the storage, processing andtransmission of personal and Company information. In addition to taking the necessary precautions ourselves, we require that third-partyservice providers implement reasonable security measures to protect our employees’ and customers’ identity and privacy.We do not, however, control these third-party service providers and cannot guarantee that no electronic or physical computer break-insor security breaches will occur in the future. Our systems and technology are vulnerable from time-to-time to damage, disruptionor interruption from, among other things, physical damage, natural disasters, inadequate system capacity, system issues, securitybreaches, “hackers,” email blocking lists, computer viruses, power outages and other failures or disruptions outsideof our control. A significant breach of customer, employee or Company data could damage our reputation, our relationship withcustomers and our brands, and could result in lost sales, sizable fines, significant breach-notification costs and lawsuits, aswell as adversely affect our results of operations. We may also incur additional costs in the future related to the implementationof additional security measures to protect against new or enhanced data security and privacy threats, or to comply with state,federal and international laws that may be enacted to address those threats.

Wemay not be able to accurately predict consumer trends and preferences.

Successin creating demand is dependent on GGI’s ability to continue to accurately predict consumer trends and preferences.If consumer tastes do not coincide with GGI’s product offerings, it could materially affect demand, having an adverseimpact on our operations.

Additionally,we hope to enter new markets in which we may have limited or no operating experience. There can be no assurance that we will beable to achieve success and/or profitability in our new markets. The success of these new markets will be affected by the differentcompetitive conditions, consumer tastes, and discretionary spending patterns within the new markets, as well as by our abilityto generate market awareness of the Gaucho Group brand. When we enter highly competitive new markets or territories in which wehave not yet established a market presence, the realization of our revenue targets and desired profit margins may be more susceptibleto volatility and/or more prolonged than anticipated.

GauchoGroup is only in the beginning stages of its advertising campaign.

GGIhas been relying thus far on word-of-mouth and social mediato generate attention to its new brand and to attract customers. However, in the future, it is likely that management will concludethat additional paid advertising and marketing is necessary to attract and retain customers, in which case operating expensescould increase and financial results could be adversely affected.

Laborlaws and regulations may adversely affect the Company.

Variouslabor laws and regulations govern operations and relationships with employees, including minimum wages, breaks, overtime, fringebenefits, safety, working conditions and citizenship requirements. Changes in, or any failure to comply with, these laws and regulationscould subject the Company to fines or legal actions. Settlements or judgments that are not insured or in excess of coverage limitationscould also have a material adverse effect on the Company’s business. This could result in a disruption in the work force,sanctions and adverse publicity. Significant government-imposed increases in minimum wages, paid or unpaid leaves of absence andmandated health benefits could be detrimental to the Company’s profitability.

Theemployees of GGI may in the future become members of a union. The terms of any collective bargaining agreement(s) couldresult in increased labor costs. In addition, any failure to negotiate an agreement in a timely manner could result in an interruptionof operations, which would materially and adversely affect the business, results of operations and its financial condition.

GauchoGroup relies on its suppliers to maintain consistent quality.

Theability of GGI to maintain consistent quality depends in part upon its ability to acquire quality materials neededfor its products from reliable sources in accordance with certain specifications, at certain prices, and in sufficient quantities.As such, GGI is and will likely continue to be dependent on its suppliers. This presents possible risks of shortages, interruptionsand price fluctuations. If any suppliers do not perform adequately or otherwise fail to distribute products or supplies requiredfor our business, management may not be able to replace the suppliers in a short period of time on acceptable terms. The inabilityto replace suppliers in a short period of time on acceptable terms could increase costs and could cause shortages of product thatmay force management to remove certain items from GGI’s product offerings.

GeneralCorporate Business Considerations

Insiderscontinue to have substantial control over the Company.

Asof August 30, 2019, the Company’s directors and executive officers hold the current right to vote approximately 16.5%of the Company’s outstanding voting stock, including the Series B Preferred on an as-converted basis. Of this total,7.5% is owned or controlled, directly or indirectly by Company CEO Scott Mathis. Assuming the sale of all the Shares, theCompany’s directors and executive officers hold the right to vote _____% of the Company shares, with ______% owned or controlled,directly by Mr. Mathis. In addition, the Company’s directors and executive officers have the right to acquire additionalshares which could increase their voting percentage significantly. As a result, Mr. Mathis acting alone, and/or many of theseindividuals acting together, may have the ability to exert significant control over the Company’s decisions and controlthe management and affairs of the Company, and also to determine the outcome of matters submitted to stockholders for approval,including the election and removal of a director, the removal of any officer and any merger, consolidation or sale of all or substantiallyall of the Company’s assets. Accordingly, this concentration of ownership may harm a future market price of the shares by:

Lossof one or more of the Company’s key employees could adversely affect the Company’s businesses.

Wedepend on the continued performance of the members of our management team, such as Scott Mathis, our Chairman, President and ChiefExecutive Officer who has contributed significantly to the expertise of our team and the position of our business. If we losethe services of Mr. Mathis, and are unable to locate a suitable replacement in a timely manner, it could have a material adverseeffect on our business. We do not currently hold key man life insurance for Mr. Mathis but we expect to obtain key man insuranceon Mr. Mathis for the benefit of the Company.

TheCompany has incurred recurring losses from operations and our independent registered public accounting firm issued a report whichincludes a going concern.

TheCompany has incurred recurring losses from operations (continuing) of $5,254,781 and $7,685,390 and has reported negative netoperating cash flows of $4,345,933 and $8,075,299 for the years ended December 31, 2018 and 2017, respectively. For thesix months ended June 30, 2019, the Company has a net loss from operations of $3,199,280 and negative netoperating cash flows of $3,419,542. We have suffered recurring losses from operations and our independent registeredpublic accounting firm issued a report which includes an explanatory paragraph relating to our ability to continue as agoing concern.

Revenuesare currently insufficient to pay operating expenses and costs which may result in the inability to execute the Company’sbusiness concept.

TheCompany’s operations have to date generated significant operating losses, as reflected in the financial information includedin this registration statement. Management’s expectations in the past regarding when operations would become profitablehave been not been realized, and this has continued to put a strain on working capital. Business and prospects must be consideredin light of the risks, expenses, and difficulties frequently encountered by companies in the early stages of operations. If theCompany is not successful in addressing these risks, its business and financial condition will be adversely affected. In lightof the uncertain nature of the markets in which the Company operates, it is impossible to predict future results of operations.

Wemay incur losses and liabilities in the course of business which could prove costly to defend or resolve.

Companiesthat operate in one or more of the businesses that we operate face significant legal risks. There is a risk that we could becomeinvolved in litigation wherein an adverse result could have a material adverse effect on our business and our financial condition.There is a risk of litigation generally in conducting a commercial business. These risks often may be difficult to assess or quantifyand their existence and magnitude often remain unknown for substantial periods of time. We may incur significant legal expensesin defending against litigation.

TheCompany is dependent upon additional financing which it may not be able to secure in the future.

Asit has in the past, the Company will likely continue to require financing to address its working capital needs, continue its developmentefforts, support business operations, fund possible continuing operating losses, and respond to unanticipated capital requirements.For example, the continuing development of the Algodon Wine Estates project requires significant ongoing capital expendituresas well as the investment in GGI’s line of luxury goods. There can be no assurance that additional financing or capitalwill be available and, if available, upon acceptable terms and conditions. To the extent that any required additional financingis not available on acceptable terms, the Company’s ability to continue in business may be jeopardized and the Company mayneed to curtail its operations and implement a plan to extend payables and reduce overhead until sufficient additional capitalis raised to support further operations. There can be no assurance that such a plan will be successful. Such a plan could havea material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Companycould be forced to discontinue its operations, liquidate and/or seek reorganization in bankruptcy. As to the effect this Offeringwill have on the Company’s financial needs, see “Risks Related to this Offering” below.

Ourlevel of debt may adversely affect our operations and our ability to pay our debt as it becomes due.

Thefact that we are leveraged may affect our ability to refinance existing debt or borrow additional funds to finance working capitalrequirements, acquisitions and capital expenditures. In addition, the recent disruptions in the global financial markets, includingthe bankruptcy and restructuring of major financial institutions, may adversely impact our ability to refinance existing debtand the availability and cost of credit in the future. In such conditions, access to equity and debt financing options may berestricted and it may be uncertain how long these economic circumstances may last. This would require us to allocate a substantialportion of cash flow to repay principal and interest, thereby reducing the amount of money available to invest in operations,including acquisitions and capital expenditures. Our leverage could also affect our competitiveness and limit our ability to changesin market conditions, changes in the real estate industry and economic downturns.

Wemay not be able to generate sufficient cash flows from operations to satisfy our debt service requirements or to obtain futurefinancing. If we cannot satisfy our debt service requirements or if we default on any financial or other covenants in our debtarrangements, the lenders and/or holders of our debt will be able to accelerate the maturity of such debt or cause defaults underthe other debt arrangements. Our ability to service debt obligations or to refinance them will depend upon our future financialand operating performance, which will, in part, be subject to factors beyond our control such as macroeconomic conditions andregulatory changes in Argentina. If we cannot obtain future financing, we may have to delay or abandon some or all of our plannedcapital expenditures, which could adversely affect our ability to generate cash flows and repay our obligations as they becomedue.

TheCompany may not pay dividends on its common stock.

TheCompany has not paid dividends to date on its common stock. The Company does not contemplate or anticipate declaring or payingany dividends with respect to its common stock. In May 2018, Argentina’s currency began a steep slide in its value, so thatthe exchange rate of the Argentine peso dropped from 15 pesos to the U.S. dollar, to 41 pesos to the U.S. dollar. At the same,the local inflation rate reached upwards of 40% annually. Not surprisingly, these macro-economic developments have been havinga negative impact on the Company. At the end of 2018, the Company concluded in that it must still tread cautiously and manageits available cash resources prudently and the decisions were made to not declare any additional cash dividends. The Company reservesthe right to declare a dividend when operations merit. However, payments of any cash dividends in the future will depend on ourfinancial condition, results of operations, and capital requirements as well as other factors deemed relevant by our board ofdirectors. It is anticipated that earnings, if any, will be used to finance the development and expansion of the Company’sbusiness.

TheChief Executive Officer and the Chief Financial Officer of GGH are also involved in outside businesses which may affect theirability to fully devote their time to the Company.

ScottMathis, Chairman of the Board of Directors of GGH, Chief Executive Officer, President and Treasurer of GGH is also the Chairmanand Chief Executive Officer of Hollywood Burger Holdings, Inc., a private company he founded which is developing Hollywood-themedfast food restaurants in the United States. His duties as CEO of Hollywood Burger Holdings, Inc. consume less than 10% of histime, but which may interfere with Mr. Mathis’s duties as the CEO of GGH.

Inaddition, Maria Echevarria, Chief Financial Officer and Chief Operating Officer of GGH also serves as the Chief Financial Officerof Hollywood Burger Holdings, Inc. Ms. Echevarria’s duties as CFO of Hollywood Burger Holdings Inc. consume approximately10% of her time, which may interfere with her duties as the CFO of GGH.

TheCompany’s officers and directors are indemnified against certain conduct that may prove costly to defend.

TheCompany may have to spend significant resources indemnifying its officers and directors or paying for damages caused by theirconduct. The Company’s Amended and Restated Certificate of Incorporation exculpates the Board of Directors and its affiliatesfrom certain liability, and the Company has procured directors’ and officers’ liability insurance to reduce the potentialexposure to the Company in the event damages result from certain types of potential misconduct. Furthermore, the General CorporationLaw of Delaware provides for broad indemnification by corporations of their officers and directors, and the Company’s bylawsimplement this indemnification to the fullest extent permitted under applicable law as it currently exists or as it may be amendedin the future. Consequently, subject to the applicable provisions of the General Corporation Law of Delaware and to certain limitedexceptions in the Company’s Amended and Restated Certificate of Incorporation, the Company’s officers and directorswill not be liable to the Company or to its stockholders for monetary damages resulting from their conduct as an officer or director.

Ourbylaws designate the federal and state courts of the State of Delaware as the sole and exclusive forum for certain types of actionsand proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorablejudicial forum for disputes with us or our directors, officers or employees.

Ourbylaws provide that, unless we consent in writing to the selection of an alternative forum, the federal and state courts of theState of Delaware are the exclusive forum for certain types of actions and proceedings, not including claims under the federalsecurities laws such as the Securities Act or the Exchange Act, that may be initiated by our stockholders with respect to ourcompany and our directors. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicialforum that the stockholder believes is favorable for disputes with us or our directors, which may discourage meritorious claimsfrom being asserted against us and our directors. Alternatively, if a court were to find this provision of our charter inapplicableto, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costsassociated with resolving such matters in other jurisdictions, which could adversely affect our business, financial conditionor results of operations.

Ourfinancial controls and procedures may not be sufficient to accurately or timely report our financial condition or results of operations,which may adversely affect investor confidence in us and, as a result, the value of our common stock.

Asa public company, we are required to maintain internal control over financial reporting and to report any material weaknessesin such internal controls. Section 404 of the Sarbanes-Oxley Act requires that we evaluate and determine the effectiveness ofour internal control over financial reporting and provide a management report on internal control over financial reporting.

Theeffectiveness of our controls and procedures may in the future be limited by a variety of factors, including:

Ifwe identify material weaknesses in our internal control over financial reporting in the future, if we are unable to comply withthe requirements of Section 404 in a timely manner, and if we are unable to assert that our internal control over financial reportingis effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price ofour common stock could be adversely affected, and we could become subject to investigations by the stock exchange on which oursecurities are listed, the SEC, or other regulatory authorities, which could require additional financial and management resources.

Althoughwe qualify as an emerging growth company, we also qualify asa smaller reporting company and under the smaller reporting company rules we are subject to scaled disclosure requirementsthat may make it more challenging for investors to analyze our results of operations and financial prospects.

Currently,we qualify as both a “smaller reporting company” and an “emerging growth company” as definedby Rule 12b-2 of the Exchange Act. However we have elected to provide disclosure under the smaller reporting company rulesand therefore we are able to provide simplified executive compensation disclosures in our filings and have certain other decreaseddisclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statementsin annual reports. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects.

Furthermore,we are a non-accelerated filer as defined by Rule 12b-2 of the Exchange Act, and, as such, are not required to provide an auditorattestation of management’s assessment of internal control over financial reporting, which is generally required for SECreporting companies under Section 404(b) of the Sarbanes-Oxley Act. Because we are not required to, and have not, had our auditorsprovide an attestation of our management’s assessment of internal control over financial reporting, a material weaknessin internal controls may remain undetected for a longer period.

RisksRelated to This Offering

Theremay be future sales or other dilution of our equity, which may adversely affect the market price of our common stock.

Asof August 30, 2019, we had 60,271,082 shares of common stock outstanding. Approximately 32,285,000 of suchshares may be sold in the public market. If a substantial number of shares are sold, or if it is perceived that they willbe sold, in the public market, the trading price of our common stock, and consequently our warrants, could decline.

Youmay experience future dilution as a result of future debt or equity offerings.

Inorder to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertibleinto or exchangeable for our common stock that could result in further dilution to investors purchasing our common stock in thisOffering or result in downward pressure on the price of our common stock. Debt financing, if available, may involve agreementsthat include covenants limiting or restricting our ability to take certain actions, such as incurring debt, making capital expendituresor declaring dividends. We may sell shares of our common stock or other securities in other offerings at prices that are higheror lower than the prices paid by investors in this Offering, and investors purchasing shares or other securities in the futurecould have rights superior to existing stockholders.

Ourmanagement will have broad discretion over the use of the net proceeds from this Offering, you may not agree with how we use theproceeds and the proceeds may not be invested successfully.

Wehave estimated the use of the net proceeds from this Offering as set forth on page 27, “Use of Proceeds”, however,there is a large amount designated to be used for general working capital and not for any particular purpose. Accordingly, ourmanagement will have broad discretion as to the use of the net proceeds from this Offering and could use them for purposes otherthan those contemplated at the time of commencement of this Offering. Accordingly, you will be relying on the judgment of ourmanagement with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision,to assess whether the proceeds are being used appropriately. It is possible that, pending their use, we may invest the net proceedsin a way that does not yield a favorable, or any, return for our company.

Raisingadditional funds through debt or equity financing could be dilutive and may cause the market price of our common stock to decline.We still may need to raise additional funding which may not be available on acceptable terms, or at all. Failure to obtain additionalcapital may force us to delay, limit, or terminate our product development efforts or other operations.

Tothe extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interestmay be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rightsas a stockholder. Furthermore, any additional fundraising efforts may divert our management from their day-to-day activities,which may adversely affect our ability to develop and commercialize our therapeutic candidates.

Weestimate that our current cash and cash equivalents, along with the net proceeds from this Offering, will be sufficient for usto fund our operating expenses and capital expenditure requirements through the first half of 2021. Without giving effect to theanticipated net proceeds from this Offering, our existing capital resources are not sufficient to meet our projected operatingrequirements beyond the fourth quarter of 2019. This raises substantial doubt about our ability to continue as a goingconcern one year from the date of our audited consolidated financial statements for the year ended December 31, 2018 are issued.The net proceeds from this Offering may remove such doubt regarding our ability to continue as a going concern. We have basedthis estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currentlyexpect. In addition, the expected net proceeds of this Offering may not be sufficient for us to fund any of our product candidatesthrough regulatory approval, and we may need to raise substantial additional capital to complete the development and commercializationof our product candidates. We may continue to seek funds through equity or debt financings, collaborative or other arrangementswith corporate sources, or through other sources of financing. Additional funding may not be available to us on acceptable terms,or at all. Any failure to raise capital as and when needed, as a result of insufficient authorized shares or otherwise, couldhave a negative impact on our financial condition and on our ability to pursue our business plans and strategies.

Youmay experience immediate and substantial dilution in the book value per share of the Shares you purchase.

Thepublic offering price per Share is substantially higher than the net tangible book value per share of our common stock. Therefore,if you purchase securities in this Offering, you will pay an effective price per share of common stock you acquire that substantiallyexceeds our net tangible book value per share after this Offering. You will experience immediate dilution of $__________ . pershare, representing the difference between our as adjusted net tangible book value per share after giving effect to this Offeringand the public offering price per Share. In addition, if previously issued options to acquire common stock are exercised at pricesbelow the offering price or the accompanying warrants being offered in the Offering are accounted for as liabilities, you willexperience further dilution. See “Dilution” for a more detailed discussion of the dilution you may incur in connectionwith this Offering.

USEOF PROCEEDS

Weestimate that our net proceeds from this Offering will be approximately $7.165 million after deducting theunderwriting discounts and commissions and estimated offering expenses payable by us. If the underwriter’sover-allotment option is exercised in full the net proceeds will be approximately $ _______.

Thebelow chart describes the use of net proceeds from this Offering. This is an estimated use of proceeds and amounts may be re-allocatedby the Board in its sole discretion.

GauchoGroup Holdings, Inc.

Useof Proceeds (Estimated as of August 30, 2019)

2019Common Stock Subscriptions

TheCompany owes GGI approximately $900,000 as repayment of an intercompany loan made between January 2019 and June2019 to the Company for operational expenses.

Ifthe over-allotment of options is exercised by the underwriter, the use of proceeds will be increased proportionately. Managementbelieves that the proceeds from this Offering will be sufficient to satisfy the Company’s cash needs for the next 24 months.

DIVIDENDPOLICY

Wehave never declared or paid cash dividends on our common stock. We currently intend to retain all available funds and any futureearnings for use in the operation of our business and do not anticipate paying any dividends on our common stock in the foreseeablefuture. Any future determination to declare dividends will be made at the discretion of our board of directors and will dependon our financial condition, operating results, capital requirements, general business conditions and other factors that our boardof directors may deem relevant.

CAPITALIZATION

Thefollowing table sets forth our cash and capitalization as of June 30, 2019:

Youshould read the information in this table together with our financial statements and accompanying notes and “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this prospectus.

(1)Assumes conversion of all Series B Preferred Stock into Common Stock at closing of the Offering.

DILUTION

Ifyou invest in the securities being offered by this prospectus, your interest will be diluted immediately to the extent of thedifference between the public offering price per Share and the adjusted net tangible book value per share of our common stockafter this Offering.

Thenet tangible book value of our common stock (including the Series B Preferred on an as-converted basis to common stock)for the six months ending June 30, 2019, was approximately $1.4 million, or approximately $0.02 per share. Nettangible book value per share represents the amount of our total tangible assets, excluding goodwill and intangible assets, lesstotal liabilities, divided by the total number of shares of our common stock outstanding, which includes Series B Preferredon an as-converted basis to common stock. Dilution per share to new investors represents the difference between the effectiveamount per share paid by purchasers for each share of common stock in this Offering and the net tangible book value per shareof our common stock immediately following the completion of this Offering.

Dilutionin net tangible book value per share represents the difference between the amount per share paid by purchasers in this Offeringand the net tangible book value per share of our common stock immediately after this Offering. After giving effect to the saleof            Shares in this Offering at a public offering price of $            per Share, and after deducting the underwriting discounts and commissionsand the estimated offering expenses payable by us, our as adjusted net tangible book value as of June 30, 2019 would havebeen approximately $            per share of common stock. This represents an immediate increase in pro forma net tangible book value of$            per share to our existing stockholders and an immediate dilution of $ per share to investors purchasing Shares.

Thefollowing table illustrates this dilution on a per share basis:

Ifthe underwriters exercise their option in full to purchase            additional shares of common stock in this Offering at the assumed offeringprice of $            per share of common stock, the pro forma net tangible book value per share after this Offering would be $            per share,the increase in the pro forma net tangible book value per share to existing stockholders would be $            per share and the dilutionto new investors purchasing securities in this Offering would be $            per share.

Thenumber of shares of common stock to be outstanding after this Offering is based on 55,602,590 shares of common stock issuedand 55,552,057 outstanding as of June 30, 2019, which does not include:

Tothe extent that outstanding exercisable options or warrants are exercised, you may experience further dilution. If all outstandingexercisable options and warrants with exercise prices below $           per share (the last reported sale price for our common stock as reported on the OTCQB on            ,2019) were exercised, our pro forma as adjusted net tangible book value as of June 30, 2019 (calculated on the basis ofthe assumptions set forth above) would have been approximately $           million, or approximately $            per share, causing immediate dilutionof $            per share to new investors purchasing shares in this Offering.

Inaddition, we may choose to raise additional capital due to market conditions or strategic considerations, even if we believe wehave sufficient funds for our current or future operating plans. To the extent that we raise additional capital by issuing equitysecurities or convertible debt, your ownership will be further diluted.

MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Thefollowing discussion and analysis of financial condition and results of operations should be read in conjunction with our auditedconsolidated financial statements and the accompanying notes included elsewhere in this prospectus. References in this Management’sDiscussion and Analysis of Financial Condition and Results of Operations to “us,” “we,” “our,”and similar terms refer to Gaucho Group Holdings, Inc., a Delaware corporation, and its subsidiaries. This discussion includesforward-looking statements, as that term is defined in the federal securities laws, based upon current expectations that involverisks and uncertainties, such as plans, objectives, expectations and intentions. Actual results and the timing of events coulddiffer materially from those anticipated in these forward-looking statements as a result of a number of factors. Words such as“anticipate,” “estimate,” “plan,” “continuing,” “ongoing,” “expect,”“believe,” “intend,” “may,” “will,” “should,” “could,”and similar expressions are used to identify forward-looking statements.

Wecaution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties,risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projectionsupon which the statements are based. See “Special Note - Forward-Looking Statements.” Our actual results could differmaterially from those anticipated in the forward-looking statements as a result of certain factors discussed in “Risk Factors”and elsewhere in this prospectus. Any one or more of these uncertainties, risks and other influences could materially affect ourresults of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performanceand achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake noobligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

SpecialNote Regarding Emerging Growth Company Status and Smaller Reporting Company Status

Currentlywe qualify as both an “emerging growth company” and asa “smaller reporting company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended). Weare allowed and have elected to comply with the smaller reporting company rules which allows us to omit certain information,including three years of year-to-year comparisons and tabular disclosure of contractual obligations, from this Management’sDiscussion and Analysis of Financial Condition and Results of Operations. However, we have provided all information forthe periods presented that we believe to be appropriate and necessary.

Overview

GauchoGroup Holdings, Inc. (“GGH” or the “Company”) positions its e-commerce fashion, leather goods and accessoriesbrand, Gaucho – Buenos Aires™, as one of luxury, creating a platform for the global consumer to accesstheir piece of Argentine style and high-end products. With ambitious couture, a concentration on leather goods, ready-to-wearand high-street fashion and accessories, this is the luxury brand in which Argentina finds its contemporary expression. GGH seeksto grow its direct-to-consumer online products to global markets in the United States, Asia, the United Kingdom, Europe, and Argentina.We intend to focus on e-commerce and scalability of the Gaucho – Buenos Aires brand, as real estate in Argentina is politicallysensitive.

GGH’sgoal is to become recognized as the LVMH (“Louis Vuitton Moët Hennessy”) of South America’s leading luxurybrands. Through one of its wholly owned subsidiaries, GGH also owns and operates legacy investments in the boutiquehotel, hospitality and luxury vineyard property markets. This includes a golf, tennis and wellness resort, as well as an awardwinning, wine production company concentrating on Malbecs and Malbec blends. Utilizing these wines as its ambassador, GGH seeksto further develop its legacy real estate, which includes developing residential vineyard lots located within its resort.

TheCompany’s senior management is based at its corporate offices in New York City, and its local operations are managed inBuenos Aires and San Rafael, Argentina by professional staff with considerable e-commerce, wine, hotel, hospitality and resortexperience.

RecentDevelopments and Trends

Overthe past six months, GGH has been the process of pivoting operations to focus primarily on e-commerce sales of our Gaucho—BuenosAires brand, in addition to our wines which also serve as ambassador to our 4,138 acre wine and real estate development. We believethat the change in focus and ongoing restructuring of our Argentine operations can have a positive impact and overall improvementon our business.

Ourgoal for 2019 and 2020 is to focus on actions that can result in immediate revenues, such as e-commerce sales, continued deedingof lots and real estate sales and greater distribution of our wines by supporting our importer and their network partners. Webegin our big push of e-commerce sales through our planned launch of the Gaucho—Buenos Aires brand at New York Fashion Weekon September 12, 2019 to create momentum through the holiday season and bring in revenue.

InQ3 2019 we anticipate our marketing strategy for Gaucho—Buenos Aires will include a popup shop in New York City, assumingour production schedule is on track to receive our products here in the U.S. With popup shops, we can for example, work with localPR companies to get the word out, as these opportunities are typically promoted via direct mail, PR and digital marketing efforts,as well as word of mouth and strategic geographic positioning.

Forour digital marketing campaign, in Q3 we are currently micro testing U.S. markets and focus groups to gauge demand and iron outearly details of our marketing strategy.

InQ4 2019, we anticipate opening a clothing shop in Buenos Aires on the ground floor of Algodon Mansion and we hope to have compiledenough data to roll out a more largely funded campaign based on the target marketing testing results.

In 2020, we expect that our Gaucho brandsales will continue to grow to represent a majority of our revenue, with our wine and real estate business making up the remainder.By 2021/2022, we expect that our revenues from the Gaucho line will represent a vast majority of our income, surpassing our wineand real estate sales.

Market Size & Segments

Our market research shows that the totalmarket for online products such as Gaucho’s is $6.57 billion in the U.S. in 2019 (throughout all online channels). In theonline personal luxury goods market, brand websites selling accessories and apparel in North America are among the largest segmentsof sales, however, e-tailers such as Amazon capture the most sales.

According to data from Bain & Company,revenue from brand websites in the apparel & accessories segment sold in the Americas was expected to be $2.54 billion in2018.

Growth Outlook - United States

The market for online products suchas Gaucho’s is expected to grow at a 4% Compound Annual Growth Rate (CAGR) over the years of 2019-2024. Although thisis a slowdown from the 11% CAGR over the previous five years, it is mainly due to slowing economic growth projections and theindustry becoming more saturated as it matures.

As online shopping continuesto increase (especially for online luxury goods), we believe that Gaucho is in a favorable position to capture online growthin the luxury fashion industry. By 2025, it is forecasted that online channels will represent 25% of the luxurymarket’s value.

Although the number of households over $100,000 (a key driver of luxury fashionsales) is expected to plateau over the coming years, it is still expected to grow at a 0.1% CAGR until 2024, driving growthfor the luxury market.

Growth Outlook–Global

Global growth for e-commerce fashion is expected to grow at an 8.19% CAGR until 2022, led by four notablefactors:

Bags and accessories currently make up14% of e-commerce fashion revenue and are expected to grow to 14.4% in 2022.

Revenue

While U.S. firms create the mostluxury fashion revenue, other countries (like China) are outpacing them in the overall personal luxury goods market, and itis likely that Chinese consumers represent the most opportunity for sales.

Revenue –Segments

The accessories market was expected tobe 10% larger in 2018 than apparel and has a much higher expected growth rate moving forward. While apparel is still expectedto grow over the next 4 years, growth is declining. Premium/bridge and mid-market players are most likely to struggle, in theface of strong competition from value/discount players and increasing market saturation. Thus, we believe that theluxury segments are expected to be the most attractive, especially for new entrants.

Customer Segmentation

Consumers who earn $75,000 to 250,000 peryear make up $4.77 billion of online designer clothing sales, or $3.44 billion of the market for Gaucho’s products. Thisincome level also supports our (price) positioning of Gaucho’s products in the ready-to-wear/contemporary segment.

Currently, older generations are morerelevant to spending compared to Gen Y/Z. However, since they represent a larger portion of consumers, and the trend isincreasing, the share of spending of these consumers is expected to rise significantly. Gen Y is also twice as likely as BabyBoomers to prefer up-and-coming brands. The target customer is likely to be Gen Y (currently) and is more likely to be awoman, as these groups are most likely to buy luxury fashion goods online. Therefore, a reasonable target market Gauchoshould focus on is women aged 25-34 that make between $75,000-$250,000 per year. However, this is not meant to suggestthat this would be our only target market.

Key Trends

End of ownership – rental marketis becoming increasingly popular among younger generations, leading the market to have an expected $1.85 billion value by 2023,up 85% from 2017. This could negatively affect sales of luxury fashion goods.

Personalization is a leading factor in ecommerce at large:

Channels & Strategies

As Gen Z spending increases, it will be more important to tailor marketing strategiestowards them: Gen Z consumers are more “individualist” (looking for products that convey their unique personality);more willing to shop in physical stores (but expecting a digitally enhanced experience); and more logo-driven, though they exhibitlittle brand loyalty.

The above information is based on marketresearch conducted on GGH’s behalf and the following sources:

https://www.kasasa.com/articles/generations/gen-x-gen-y-gen-z

https://www2.deloitte.com/content/dam/Deloitte/at/Documents/consumer-business/deloitte-global-powers-of-luxury-goods-2018.pdf

IBISworld report on Online Designer ClothingSales in the U.S.

https://stylesage.co/blog/future-of-luxury-brands/

https://www.bain.com/insights/luxury-goods-worldwide-market-study-fall-winter-2018/

https://www.npd.com/wps/portal/npd/us/news/press-releases/2019/younger-consumers-are-redefining-luxury-fashion-shopping--reports-npd/

https://www.shopify.com/enterprise/ecommerce-fashion-industry

https://www.mckinsey.com/industries/retail/our-insights/ten-trends-for-the-fashion-industry-to-watch-in-2019

https://www.statista.com/outlook/21030000/100/luxury-fashion/worldwide

Wecontinue to expand our wine distribution through the efforts of our US wine importer, Seaview Imports, as well as our relationshipwith Back Bar USA as our wines become available in more retail channels across the US. Please see “Algodon Fine Wines”under our “Business” section for more information on wine distribution.

Werecognize that investment in foreign real estate requires considerationof certain risks typically not associated with investing in the United States. Such risks include, trade balances and imbalancesand related economic policies, unfavorable currency exchange rate fluctuations, imposition of exchange control regulation by theUnited States or foreign governments, United States and foreign withholding taxes, limitations on the removal of funds or otherassets, policies of governments with respect to possible nationalization of their industries, political difficulties, includingexpropriation of assets, confiscatory taxation and economic or political instability in foreign nations or changes in laws whichaffect foreign investors. See also “Risk Factors” on page 7 for more information.

InDecember 2011, the Argentine Congress passed Law 26.737 (Regime for Protection of National Domain over Ownership, Possession orTenure of Rural Land) limiting foreign ownership of rural land, even when not in border areas, to a maximum of 15 percent of allnational, provincial or departmental productive land. Every non-Argentine national must request permission from the National LandRegistry of Argentina in order to acquire non-urban real property. Additionally, no foreign individual or entity can acquire morethan 30 percent within the allowed 15 percent of the total land of the department.

Asapproved, the law has been in effect since February 28, 2012 but is not retroactive. Furthermore, the general limit of 15 percentownership by non-nationals must be reached before the law is applicable and each provincial government may establish its own maximumarea of ownership per non-national.

Inthe Mendoza province, the maximum area allowed per type of production and activity per non-national is as follows: Mining—25,000hectares (61,776 acres), cattle ranching—18,000 hectares (44,479 acres), cultivation of fruit or vines—15,000 hectares(37,066 acres), horticulture—7,000 hectares (17,297 acres), private lot—200 hectares (494 acres), and other—1,000hectares (2,471 acres). A hectare is a unit of area in the metric system equal to approximately 2.471 acres. However, these maximumswill only be considered if the total 15 percent is reached. Although currently, the area under foreign ownership in Mendoza isapproximately 8.6 percent, this law may apply to the Company in the future and could affect the Company’s ability to acquireadditional real property in Argentina. Currently, the Company owns approximately 4,138 acres of Argentine rural land through AWE,2,050 acres are considered land held for cultivation of fruit or vines and 2,088 was purchased during 2017 to provide additionalaccess to AWE. Because the maximum area for this type of land allowed per non-national is 25,000 hectares, the Company is compliantwith the law’s limit, were it to apply today. Costs of compliance with the law may be significant in the future.

Currently,GGH is developing lots for sale to third party builders and is not engaged in any construction activity. To date, twenty-eightlots have been sold. The Company has closed on the sale of all 25 lots and recorded revenue of $1,468,000. Revenue is recordedwhen the deeds are issued. As of December 31, 2018, the Company has $995,327 of deposits for pending sales.

Aspreviously reported, we have completed infrastructure on many lots that allow us to recognize revenues, and we anticipate theinfrastructure will be complete on 97 lots by end of Q2 2020.

Asreflected in our consolidated financial statements we have generated significant losses from operations of $5,254,781 and $7,685,390for the years ended December 31, 2018 and 2017, respectively, consisting primarily of general and administrative expenses, raisingsubstantial doubt that we will be able to continue operations as a going concern. We have suffered recurring losses from operationsand our independent registered public accounting firm issued a report which includes an explanatory paragraph relating to ourability to continue as a going concern. Our ability to execute our business plan is dependent upon our generating cash flow andobtaining additional debt or equity capital sufficient to fund operations. Our business strategy may not be successful in addressingthese issues and there can be no assurance that we will be able to obtain any additional capital. If we cannot execute our businessplan (including acquiring additional capital), our stockholders may lose their entire investment in us. If we are able to obtainadditional debt or equity capital (of which there can be no assurance), we hope to acquire additional management as well as increasemarketing our products and continue the development of our real estate holdings.

Financings

In2018 and 2017, we raised, net of repayments, approximately $5,084,000 and $9,271,000, respectively of new capital through theissuance of debt and equity. We used the net proceeds from the closings of these private placement offerings for general workingcapital and capital expenditures.

Initiatives

Wehave implemented a number of initiatives designed to expand revenues and control costs. Revenue enhancement initiatives includeexpanding marketing, investment in additional winery capacity and developing new real estate development revenue sources. In August2017, the Company completed a strategic acquisition of land directly adjacent to its existing property at AWE for $700,000, whichmore than doubles the size of AWE and provides room for continued expansion and growth. Cost reduction initiatives include investmentin equipment that will decrease our reliance on subcontractors, plus outsourcing and restructuring of certain functions. Our goalis to become more self-sufficient and less dependent on outside financing.

Liquidity

Asreflected in our accompanying consolidated financial statements, we have generated significant losses which have resulted in atotal accumulated deficit of approximately $81.2 million as of December 31, 2018, raising substantial doubt that we willbe able to continue operations as a going concern. Our independent registered public accounting firm included an explanatory paragraphin their report for the years ended December 31, 2018 and 2017, stating that we have incurred significant losses and need to raiseadditional funds to meet our obligations and sustain our operations. Our ability to execute our business plan is dependent uponour generating cash flow and obtaining additional debt or equity capital sufficient to fund operations. If we are able to obtainadditional debt or equity capital (of which there can be no assurance), we hope to acquire additional management as well as increasethe marketing of our products and continue the development of our real estate holdings.

Ourbusiness strategy may not be successful in addressing these issues and there can be no assurance that we will be able to obtainany additional capital. If we cannot execute our business plan on a timely basis (including acquiring additional capital), ourstockholders may lose their entire investment in us, because we may have to delay vendor payments and/or initiate cost reductions,which would have a material adverse effect on our business, financial condition and results of operations, and we could ultimatelybe forced to discontinue our operations, liquidate and/or seek reorganization under the U.S. bankruptcy code.

ConsolidatedResults of Operations

Thefollowing table summarizes the revenue recognized in the Company’s condensed consolidated statements of operations:

[1]During the six months ended June 30, 2019, the Company recognized $94,207 of agricultural revenues resulting from the sale ofgrapes.

Wedo not currently have any revenue from our Gaucho—Buenos Aires brand as GGI is not yet fully operational.

Threemonths ended June 30, 2019 compared to three months ended June 30, 2018

Overview

Wereported net losses of approximately $2.0 million and $2.5 million for the three months ended June 30, 2019 and 2018, respectively.

Revenues

Revenueswere approximately $269,000 and $396,000 during the three months ended June 30, 2019 and 2018, respectively, representing a decreaseof $127,000 or 32%. Decreases in real estate lot revenue of approximately $77,000 and decreases of approximately $202,000 resultingfrom the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar for the three months endedJune 30, 2019 compared to the three months ended June 30, 2018, were partially offset by and approximately $159,000 increase inagricultural revenues resulting from the sale of grapes during the second quarter of 2019.

Gross(loss) profit

Wegenerated a gross loss of approximately $133,000 for the three months ended June 30, 2019 as compared to a gross profit of approximately$11,000 for the three months ended June 30, 2018, representing a decline in gross profit of $144,000. Cost of sales, which consistsof real estate lots, raw materials, direct labor and indirect labor associated with our business activities, increased by approximately$15,000 from approximately $386,000 for the three months ended June 30, 2018 to approximately $401,000 for the three months endedJune 30, 2019. The increase in cost of sales results primarily from the cost of grapes sold during the second quarter of 2019(approximately $306,000), offset by the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar.

Thedecline in gross profit results primarily from gross losses recognized on agricultural sales resulting from the sale of grapesat a loss during the three months ended June 30, 2019.

Sellingand marketing expenses

Sellingand marketing expenses were approximately $125,000 and $60,000 for the three months ended June 30, 2019 and 2018, respectively,representing an increase of $65,000 or 108% in 2019, primarily resulting from marketing events for GGI.

Generaland administrative expenses

Generaland administrative expenses were approximately $1,552,000 and $2,038,000 for the three months ended June 30, 2019 and 2018, respectively,representing a decrease of $486,000 or 24%. The decrease resulted primarily from decreases of approximately $164,000 in stock-basedcompensation, approximately $100,000 in travel expenses, and approximately $184,000 resulting from the decline in the value ofthe Argentine peso vis-à-vis the U.S. dollar for the three months ended June 30, 2019 compared to the three months endedJune 30, 2018.

Depreciationand amortization expense

Depreciationand amortization expense were approximately $63,000 and $83,000 during the three months ended June 30, 2019 and 2018, respectively,representing a decrease of $20,000 or 24%.

Interestexpense, net

Interestexpense, net, was approximately $105,000 and $337,000 during the three months ended June 30, 2019 and 2018, respectively, representinga decrease of $232,000 or 69%. The decrease is primarily related to the amortization of debt discount on convertible debt duringthe three months ended June 30, 2018.

Sixmonths ended June 30, 2019 compared to sixmonths ended June 30, 2018

Overview

Wereported net losses of approximately $3.4 million and $3.9 million for the six months ended June 30, 2019and 2018, respectively.

Revenues

Revenuesfrom continuing operations were approximately $709,000 and $1,674,000 during the six months endedJune 30, 2019 and 2018, respectively, representing a decrease of $965,000 or 58%. The decrease in revenuesresults primarily from the decreases in real estate lot revenues of approximately $877,000 and decreases ofapproximately $532,000 resulting from the impact of the decline in the value of the Argentine peso vis-à-vis theU.S. dollar, partially offset by the increases in hotel and agricultural revenues of approximately $424,000.

Grossprofit

Wegenerated a gross profit of approximately $79,000 for the six months ended June 30, 2019, as compared toa gross profit of approximately $712,000 for the six months ended June 30, 2018, representing a decreaseof $633,000. Cost of sales, which consists of raw materials, direct labor and indirect labor associated with our businessactivities, decreased by approximately $332,000 from $962,000 for the six months ended June 30, 2018to $630,000 for the six months ended June 30, 2019. The decrease in cost of sales results are principallyrelated to the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar of approximately$477,000 as well as the decrease in real estate lot costs of approximately $123,000, partially offset by an increasein cost of agricultural revenues of approximately $306,000 resulting from the sale of grapes during the quarter.

Sellingand marketing expenses

Sellingand marketing expenses were approximately $237,000 and $158,000 for the six months ended June 30,2019 and 2018, respectively, representing an increase of $79,000 or 50%, primarily resulting from market eventsfor our new subsidiary, GGI.

Generaland administrative expenses

Generaland administrative expenses were approximately $2,929,000 and $3,990,000 for the six months ended June30, 2019 and 2018, respectively, representing a decrease of $1,061,000 or 27%. The decrease resulted primarilyfrom approximately $333,000 in exchange rate gains recognized during the six months ended June 30, 2018 as well asdecreases of approximately $213,000 decrease in stock-based compensation and bonuses, approximately $179,000 decreasein travel expenses, and approximately $316,000 decreases resulting from the decline in the value of the Argentine pesovis-à-vis the U.S. dollar for the six months ended June 30, 2019 compared to the six months endedJune 30, 2018.

Depreciationand amortization expense

Depreciationand amortization expense were approximately $112,000 and $89,000 during the six months ended June30, 2019 and 2018, respectively, representing an increase of $23,000.

Interestexpense, net

Interestexpense was approximately $227,000 and $407,000 during the six months ended June 30, 2019 and 2018,respectively, representing a decrease of $180,000 or 44%. The decrease is primarily relatedto the amortization of debt discount on convertible debt during the six months ended June 30, 2018.

Yearended December 31, 2018 compared to year ended December 31, 2017

Overview

Wereported net losses from continuing operations of approximately $5.7 million and $7.8 million for the years ended December 31,2018 and 2017, respectively. The improvement in net loss from continuing operations is primarily the results of a decrease inoperating expenses, partially offset by an increase in interest expense as described below.

Revenues

Revenuesfrom continuing operations were approximately $3.1 million and $1.8 million during the years ended December 31, 2018 and 2017,respectively, reflecting an increase of approximately $1.3 million or 71%. Increases in hotel and restaurant revenues of $0.9million, real estate sale revenue of $2.6 million and agricultural revenues of approximately $0.1 were partially offset by a decreaseof approximately $2.3 million resulting from the impact of the decline in the value of the Argentine peso (“ARS”)vis-à-vis the U.S. dollar during 2018. The average exchange rate of the Argentina peso increased from 16.55 for the yearended December 31, 2017 to 28.88 for the year ended December 31, 2018, which represents a decrease in the average worth of theArgentine peso from US $0.06 to $0.03.

Totalsales from Argentina were ARS $83.9 million during the year ended December 31, 2018 as compared to ARS $26.9 million during theyear ended December 31, 2017, reflecting a net increase of approximately ARS $57.0 million or 212%. Hotel room and event revenueswere approximately ARS $25.6 million and ARS $14.1 million during years ended December 31, 2018 and 2017, respectively, representingan increase of approximately ARS $11.5 million, or 82% due to higher occupancy and higher room rates. Real estate sale revenueswere approximately ARS $39.4 million and ARS $0 million during the years ended December 31, 2018 and 2017, respectively, as aresult of lot sales during 2018. Restaurant revenues were approximately ARS $7.5 million and ARS $5.2 million during the yearsended December 31, 2018 and 2017, respectively, representing an increase of approximately ARS $2.3 million or 44%. Argentine winemakingrevenues were approximately ARS $6.2 million and ARS $4.4 million during the years ended December 31, 2018 and 2017, respectively,representing an increase of approximately ARS $1.9 million or 43%. Other revenues, including golf, tennis and agricultural revenues,were ARS $5.1 million and ARS $3.3 million during the years ended December 31, 2018 and 2017, respectively, representing an increaseof approximately ARS $1.8 million or 56%, of which ARS $1.4 million represents an increase in agricultural revenues.

Grossloss

Wegenerated a gross profit of approximately $1,658,000 from continuing operations for the year ended December 31, 2018 as comparedto a gross loss of approximately $130,000 from continuing operations for the year ended December 31, 2017, representing an increaseof $1,788,000. The improvement results primarily from the increase in real estate sale revenues of approximately $2,561,000 andthe increase in hotel and restaurant sales of approximately $859,000. The improvement in gross profit was partially offset by$1,276,000 impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar for the year ended December31, 2018 compared to the year ended December 31, 2017, and by the increase in the cost of goods sold as described below.

Costof sales, which consists of raw materials, direct labor and indirect labor associated with our business activities, decreasedby approximately $505,000, from approximately $1,947,000 for the year ended December 31, 2017, to approximately $1,442,000 forthe year ended December 31, 2018. A decrease of approximately $1,009,000 resulting from the decline in the value of the Argentinepeso vis-à-vis the U.S. dollar for the year ended December 31, 2018 compared to the year ended December 31, 2017 was partiallyoffset by approximately $181,000 increase in hotel and restaurant costs, approximately $110,000 increase in real estate costsand $165,000 increase in agricultural costs.

Therestaurant and golf and tennis business units at AWE realized negative margins in 2018 and 2017, due to significant fixed costs(i.e. depreciation on golf courses and tennis courts) related to these business units. The restaurant and golf and tennis arekept open every day at a loss, in order to support the image of the winery. During the year ended December 31, 2017, we recordedapproximately $61,000 of inventory write downs as the result of significant hailstorms which damaged the vineyard in process duringthe year.

Sellingand marketing expenses

Sellingand marketing expenses were approximately $317,000 and $348,000 from continuing operations, for the years ended December 31, 2018and 2017, respectively, representing a decrease of approximately $31,000 or 9%. Decreases of approximately $84,000 resulting fromthe decline in the value of the Argentine peso vis-à-vis the U.S. dollar for the year ended December 31, 2018 comparedto the year ended December 31, 2017 were partially offset by an increase of approximately $53,000 in advertising costs and marketingefforts to promote the Algodon brand.

Generaland administrative expenses

Generaland administrative expenses were approximately $6,424,000 and $7,015,000 from continuing operations for the years ended December31, 2018 and 2017, respectively, representing a decrease of approximately $401,000 or 6%, resulting primarily from the impactof the decline in the value of the Argentine peso vis-à-vis the U.S. dollar for the year ended December 31, 2018 comparedto the year ended December 31, 2017.

Depreciationand amortization expense

Depreciationand amortization expense was approximately $172,000 and $193,000 during the years ended December 31, 2018 and 2017, respectively,representing a decrease of approximately $21,000 or 11%. It should be noted that approximately an additional $26,000 and $94,000of depreciation and amortization expense was capitalized to inventory during the years ended December 31, 2018 and 2017, respectively.The decrease in depreciation expense results from the impact of the decline in the value of the Argentine peso relative to theU.S. dollar during the period, partially offset by increases resulting from the purchases of property and equipment during theperiod. Most of our property and equipment is located in Argentina and the gross cost being depreciated is impacted by the devaluationof the Argentine peso relative to the U.S. dollar.

Interestexpense, net

Interestexpense was approximately $611,000 and $321,000 during the years ended December 31, 2018 and 2017, respectively, representingan increase of approximately $291,000 or 91%. The increase is primarily due to the increase in debt principal outstanding duringthe period.

Lossfrom Discontinued Operations

OnNovember 29, 2016, our Board of Directors determined that it was in the Company’s best interest to close down DPEC Capitaland we ceased our broker-dealer operations December 31, 2016. On February 21, 2017, our request to FINRA for Broker-Dealer Withdrawal(“BDW”) became effective. The loss from discontinued operations, incurred by the broker dealer operations, was approximately$106,000 for the year ended December 31, 2017.

GGHalso owned approximately 96.5% of Mercari Communications Group, Ltd. (“Mercari”), a public shell corporation currentin its SEC reporting obligations. On December 20, 2016, we entered into a Stock Purchase Agreement with a Purchaser, whereby thePurchaser agreed to purchase all of our shares or Mercari for $260,000. The sale of Mercari stock was completed on January 20,2017 and we received net proceeds after expenses of $199,200.

Liquidityand Capital Resources

Wemeasure our liquidity in variety of ways, including the following:

Basedupon our working capital deficiency as of June 30, 2019, we require additional equity and/or debt financing in orderto sustain operations. These conditions raise substantial doubt about our ability to continue as a going concern.

Wehave relied primarily on debt and equity private placement offerings to third party independent, accredited investors to sustainoperations. During the six months ended June 30, 2019, we received proceeds of approximately $786,000 fromthe issuance of convertible debt. During the year ended December 31, 2018, we received proceeds of approximately $3,508,000 fromthe issuance of convertible debt, approximately $580,000 of proceeds from loans payable. We also received approximately $3,010,000and $1,324,000 of proceeds from the sale of common stock during the six months ended June 30, 2019 and the yearended December 31, 2018, respectively.

Theproceeds from these financing activities were used to fund our existing operating deficits, legal and accounting expenses associatedwith being a public company, capital expenditures associated with our real estate development projects, enhanced marketing effortsto increase revenues and the general working capital needs of the business.

Availabilityof Additional Funds

Asa result of the above developments, we have been able to sustain operations. However, we will need to raise additional capitalin order to meet our future liquidity needs for operating expenses, capital expenditures for the winery expansion and to furtherinvest in our real estate development. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantlycurtail or discontinue operations.

Sourcesand Uses of Cash for the Six Months Ended June 30, 2019 and 2018

NetCash Used in Operating Activities

Netcash used in operating activities for the six months ended June 30, 2019 and 2018 amounted to approximately $3,554,000and $3,260,000, respectively. During the six months ended June 30, 2019, the net cash used in operatingactivities was primarily attributable to the net loss of approximately $3,394,000, adjusted for approximately $596,000of net non-cash expenses, and approximately $756,000 of cash used by changes in the levels of operating assetsand liabilities. During the six months ended June 30, 2018, the net cash used in operating activities was primarilyattributable to the net loss of approximately $3,932,000 adjusted for approximately $736,000 of net non-cash expenses,and approximately $64,000 of cash used by changes in the levels of operating assets and liabilities.

NetCash Used in Investing Activities

Netcash used in investing activities for the six months ended June 30, 2019 and 2018 amounted to approximately$121,000 and $327,000, respectively. Cash used in investing activities during the six months ended June30, 2019 and 2018, respectively, resulted entirely from the purchase of property and equipment.

NetCash Provided by Financing Activities

Netcash provided by financing activities for the six months ended June 30, 2019 and 2018 amounted to approximately$3,620,000 and $3,003,000, respectively. For the six months ended June 30, 2019, the net cash providedby financing activities resulted primarily from approximately $786,000 of proceeds from convertible debt obligations and approximately$3,010,000 of proceeds from common stock offerings, partially offset by debt and loan repayments of approximately $176,000.For the six months ended June 30, 2018, the net cash provided by financing activities resulted from approximately$2,027,000 of proceeds from convertible debt obligations, approximately $580,000 of proceeds from the issuance ofloans payable, and approximately $575,000 from cash proceeds from the issuance of common stock, partially offset by debtand loan repayments of approximately $52,000 and dividends paid in cash of approximately $128,000.

Sourcesand Uses of Cash for the Years Ended December 31, 2018 and 2017

NetCash Used in Operating Activities

Netcash used in operating activities for the years ended December 31, 2018 and 2017, amounted to approximately $4,346,000 and $8,075,000,respectively. During the year ended December 31, 2018 the net cash used in operating activities was primarily attributable tothe net loss of approximately $5,678,000, adjusted for approximately $878,000 of non-cash expenses and $454,000 of cash providedby changes in the levels of operating assets and liabilities. During the year ended December 31, 2017 the net cash used in operatingactivities was primarily attributable to the net loss of approximately $7,913,000, adjusted for approximately $865,000 of non-cashexpenses and $1,028,000 cash used by changes in the levels of operating assets and liabilities.

NetCash Used in Investing Activities

Netcash used in investing activities for the years ended December 31, 2018 and 2017 amounted to approximately $292,000 and $849,000,respectively. During the year ended December 31, 2018 the net cash used in investing activities was primarily attributable tothe purchase of property and equipment of approximately $292,000. During the year ended December 31, 2017 the net cash used ininvesting activities was primarily attributable to the purchase of property and equipment of approximately $930,000, partiallyoffset by the proceeds from sale of investment in subsidiary of approximately $81,000.

NetCash Provided by Financing Activities

Netcash provided by financing activities for the years ended December 31, 2018 and 2017 amounted to approximately $5,084,000 and$9,271,000, respectively. For the year ended December 31, 2018, the net cash provided by financing activities resulted primarilyfrom the proceeds from convertible debt obligations of approximately $3,508,000, net proceeds from the issuance of equity securitiesof approximately $1,324,000, proceeds from loans payable of approximately $580,000 partially offset by net repayments of debtof approximately $200,000, and dividends paid of approximately $128,000. For the year ended December 31, 2017, the net cash providedby financing activities resulted primarily from the net proceeds from a preferred stock offering of approximately $7,760,000,proceeds from convertible debt obligations of approximately $1,280,000, net proceeds from the issuance of common stock of approximately$41,000 and proceeds from loans payable of approximately $519,000, partially offset by net repayments of debt of approximately$267,000, and dividends paid of approximately $61,000.

GoingConcern and Management’s Liquidity Plans

Theaccompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern,which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business.As discussed in Note 2 to the accompanying condensed consolidated financial statements, we have not achieved a sufficientlevel of revenues to support our business and development activities and have suffered substantial recurring losses from operationssince our inception, which conditions raise substantial doubt that we will be able to continue operations as a going concern.The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary ifwe were unable to continue as a going concern.

Basedon current cash on hand and subsequent activity as described herein, we may not have sufficient funds to operate our businessoperations for the next twelve months. While we are exploring opportunities with third parties and related parties to providesome or all of the capital we need over the short and long terms, we have not entered into any external agreementto provide us with the necessary capital. Historically, the Company has been successful in raising funds to support ourcapital needs. If we are unable to obtain additional financing on a timely basis, we may have to delay vendor payments and/orinitiate cost reductions, which would have a material adverse effect on our business, financial condition and results of operations,and ultimately, we could be forced to discontinue our operations, liquidate and/or seek reorganization under the U.S. bankruptcycode. As a result, our auditors have issued a report which includes an explanatory paragraph relating to our ability to continueas a going concern in conjunction with their audit of our December 31, 2018 and 2017 consolidated financial statements.

Off-BalanceSheet Arrangements

None.

ContractualObligations

Asa smaller reporting company, we are not required to provide the information required by paragraph (a)(5) of this Item.

CriticalAccounting Policies and Estimates

Useof Estimates

Toprepare financial statements in conformity with accounting principles generally accepted in the United States of America, we mustmake estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements, and thedisclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Actual results could differ from those estimates. Our significant estimates and assumptionsare the valuation of equity instruments, the useful lives of property and equipment and reserves associated with the realizabilityof certain assets.

HighlyInflationary Status in Argentina

TheInternational Practices Task Force (“IPTF”) of the Center for Audit Quality discussed the inflationary status of Argentinaat its meeting on May 16, 2018 and categorized Argentina as a country with a projected three-year cumulative inflation rate greaterthan 100%. Therefore, the Company has transitioned its Argentine operations to highly inflationary status as of July 1, 2018.

Foroperations in highly inflationary economies, monetary asset and liabilities are translated at exchange rates in effect at thebalance sheet date, and non-monetary assets and liabilities are translated at historical exchange rates. Income and expense accountsare translated at the weighted average exchange rate in effect during the period. Translation adjustments are reflected in losson foreign currency translation on the accompanying statements of operations.

ForeignCurrency Translation

TheCompany’s functional and reporting currency is the United States dollar. The functional currencies of the Company’soperating subsidiaries are their local currencies (United States dollar, Argentine peso and British pound) except for the Company’sArgentine subsidiaries for the six-month period from July 31, 2018 through December 31, 2018, as described above. Prior to thetransition of Argentine operations to highly inflationary status on July 1, 2018, these foreign subsidiaries translated assetsand liabilities from their local currencies to U.S. dollars using period end exchange rates while income and expense accountswere translated at the average rates in effect during the during the period. The resulting translation adjustment is recordedas part of other comprehensive income (loss), a component of shareholders’ deficit. The Company engages in foreign currencydenominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies. Gainsand losses resulting from transactions denominated in non-functional currencies are recognized in earnings.

Inventory

Inventoriesare comprised primarily of “vineyard in process,” “wine in process,” “finished wine,” plusfood and beverage items and are stated at the lower of cost or market, with cost being determined on the first-in, first-out method.Costs associated with winemaking, and other costs associated with the creation of products for resale, are recorded as inventory.“Vineyard in process” represents the monthly capitalization of farming expenses (including farming labor costs, usageof farming supplies and depreciation of the vineyard and farming equipment) associated with the growing of grape, olive and otherfruits during the farming year which culminates with the February/March harvest. “Wine in process” represents thecapitalization of costs during the winemaking process (including the transfer of grape costs from vineyard in process, winemakinglabor costs and depreciation of winemaking fixed assets, including tanks, barrels, equipment, tools and the winemaking building).“Finished wines” represents wine available for sale and includes the transfer of costs from wine in process once thewine is bottled and labeled. Other inventory represents olives, other fruits, golf equipment and restaurant food.

Inaccordance with general practice within the wine industry, wine inventories are included in current assets, although a portionof such inventories may be aged for periods longer than one year. As required, we reduce the carrying value of inventories thatare obsolete or in excess of estimated usage to estimated net realizable value. Our estimates of net realizable value are basedon analyses and assumptions including, but not limited to, historical usage, future demand and market requirements. Reductionsto the carrying value of inventories are recorded in cost of sales. If future demand and/or pricing for our products are lessthan previously estimated, then the carrying value of the inventories may be required to be reduced, resulting in additional expenseand reduced profitability. During the year ended December 31, 2017, we recorded approximately $61,000 of inventory write downsas a result of hailstorms that occurred during the year.

ConvertibleDebt

TheCompany records a beneficial conversion feature (“BCF”) related to the issuance of notes which are convertible ata price that is below the market value of the Company’s stock when the note is issued. The intrinsic value of the BCF isrecorded as debt discount which is amortized to interest expense over the life of the respective note using the effective interestmethod. Beneficial conversion features that are contingent upon the occurrence of a future event are recorded when the contingencyis resolved.

Propertyand Equipment

Propertyand equipment are stated at cost, net of accumulated depreciation using the straight-line method over their estimated useful lives.Leasehold improvements are amortized over the lesser of (a) the useful life of the asset; or (b) the remaining lease term.

Theestimated useful lives of property and equipment are as follows:

Wecapitalize internal vineyard improvement costs when developing new vineyards or replacing or improving existing vineyards. Thesecosts consist primarily of the costs of the vines and expenditures related to labor and materials to prepare the land and constructvine trellises. Expenditures for repairs and maintenance are charged to operating expense as incurred. The cost of propertiessold or otherwise disposed of and the related accumulated depreciation are eliminated from the accounts at the time of disposaland the resulting gains and losses are included as a component of operating income. Real estate development consists of costsincurred to ready the land for sale, including primarily costs of infrastructure as well as master plan development and associatedprofessional fees. Such costs will be allocated to individual lots proportionately based on square meters and those allocatedcosts will be derecognized upon the sale of individual lots. Given that they are not currently in service, capitalized real estatedevelopment costs are currently not being depreciated. Land is an inexhaustible asset and is not depreciated.

Stock-BasedCompensation

Wemeasure the cost of services received in exchange for an award of equity instruments based on the fair value of the award. Foremployees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of theaward is generally re-measured on financial reporting dates and vesting dates until the service period is complete. The fair valueamount of the shares expected to ultimately vest is then recognized over the period services are required to be provided in exchangefor the award, usually the vesting period. The estimation of stock-based awards that will ultimately vest requires judgment, andto the extent actual results or updated estimates differ from original estimates, such amounts are recorded as a cumulative adjustmentin the period estimates are revised. We consider many factors when estimating expected forfeitures, including types of awards,employee class, and historical experience.

ComprehensiveIncome (Loss)

Comprehensiveincome is defined as the change in equity of a business during a period from transactions and other events and circumstances fromnon-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributionsto owners. The guidance requires other comprehensive income (loss) to include foreign currency translation adjustments.

RealEstate Lots Held for Sale

Asthe development of a real estate lot is completed and the lot becomes available for immediate sale in its present condition, thelot is marketed for sale and is included in real estate lots held for sale on the Company’s balance sheet. Real estate lotsheld for sale are reported at the lower of carrying value or fair value less cost to sell. If the carrying value of a real estatelot held for sale exceeds its fair value less estimated selling costs, an impairment charge is recorded. The Company did not recordany impairment charge in connection with real estate lots held for sale during the year ended December 31, 2018.

Impairmentof Long-Lived Assets

Whencircumstances, such as adverse market conditions, indicate that the carrying value of a long-lived asset may be impaired, we performan analysis to review the recoverability of the asset’s carrying value, which includes estimating the undiscounted cashflows (excluding interest charges) from the expected future operations of the asset. These estimates consider factors such asexpected future operating income, operating trends and prospects, as well as the effects of demand, competition and other factors.If the analysis indicates that the carrying value is not recoverable from future cash flows, an impairment loss is recognizedto the extent that the carrying value exceeds the estimated fair value. Any impairment losses are recorded as operating expenses,which reduce net income. There were no impairments of long-lived assets for the years ended December 31, 2018 and 2017, respectively.

SegmentInformation

TheFASB has established standards for reporting information on operating segments of an enterprise in interim and annual financialstatements. Since GGI is not yet fully operational, we currently operate as one segment which is the business ofreal estate development in Argentina. Our chief operating decision-maker reviews our operating results on an aggregate basis andmanages our operations as a single operating segment.

RevenueRecognition

Weearn revenues from our real estate, hospitality, food & beverage, broker-dealer and other related services. Revenue from rooms,food and beverage, and other operating departments are recognized as earned at the time of sale or rendering of service. Cashreceived in advance of the sale or rendering of services is recorded as advance deposits or deferred revenue on the consolidatedbalance sheets. Deferred revenues associated with real estate lot sale deposits are recognized as revenues (along with any outstandingbalance) when the lot sale closes and the deed is provided to the purchaser. Other deferred revenues primarily consist of depositsaccepted by us in connection with agreements to sell barrels of wine. These wine barrel deposits are recognized as revenues (alongwith any outstanding balance) when the barrel of wine is shipped to the purchaser. Sales taxes and value added (“VAT”)taxes collected from customers and remitted to governmental authorities are presented on a net basis with revenues in the consolidatedstatements of operations.

IncomeTaxes

Weaccount for income taxes under the liability method, which requires the recognition of deferred tax assets and liabilities forboth the expected impact of differences between the financial statements and tax basis of assets and liabilities and for the expectedfuture tax benefit to be derived from tax loss and tax credit carry forwards. Additionally, we establish a valuation allowanceto reflect the likelihood of realization of deferred tax assets.

NewAccounting Pronouncements

InMay 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers,”(“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in ASC 605 — Revenue Recognition(“ASC 605”) and most industry-specific guidance throughout ASC 605. The standard requires that an entity recognizerevenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to whichwe expect to be entitled in exchange for those goods or services. The guidance in ASU 2014-09 was revised in July 2015 to be effectivefor interim periods beginning on or after December 15, 2017 and should be applied on a transitional basis either retrospectivelyto each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognizedat the date of initial application. In 2016, FASB issued additional ASUs that clarify the implementation guidance on principalversus agent considerations (ASU 2016-08), on identifying performance obligations and licensing (ASU 2016-10), and on narrow-scopeimprovements and practical expedients (ASU 2016-12) as well as on the revenue recognition criteria and other technical corrections(ASU 2016-20). These new standards became effective for us on January 1, 2018 and were adopted using the modified retrospectivemethod. The adoption of ASC Topic 606 did not have a material impact on our consolidated financial statements as of the date ofadoption, and therefore a cumulative-effect adjustment was not required.

InFebruary 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842).” ASU2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognizein the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representingits right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted tomake an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition,lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modifiedretrospective approach. This amendment will be effective for fiscal years beginning after December 15, 2018, including interimperiods within those fiscal years. The FASB issued ASU No. 2018-10 “Codification Improvements to Topic 842, Leases”and ASU No. 2018-11 “Leases (Topic 842) Targeted Improvements” in July 2018, and ASU No. 2018-20 “Leases (Topic842) - Narrow Scope Improvements for Lessors” in December 2018. ASU 2018-10 and ASU 2018-20 provide certain amendments thataffect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows all entities adopting ASU 2016-02 to choose anadditional (and optional) transition method of adoption, under which an entity initially applies the new leases standard at theadoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption.We adopted ASU 2016-02 effective January 1, 2019 and if adopted the impact is known to have a material impact on our consolidatedfinancial statements, primarily related to recording right-of-use assets and obligations for current operating leases on our balancesheets.

InAugust 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments(Topic 230)” which provides guidance on the presentation and classification of certain cash receipts and cash payments inthe statement of cash flows in order to reduce diversity in practice. The ASU is effective for interim and annual periods beginningafter December 15, 2017 with early adoption permitted. The adoption of ASU 2016-15 did not have a material effect on our consolidatedfinancial statements and related disclosures.

OnFebruary 22, 2017, the FASB issued ASU 2017-05, ‘Other Income – Gains and Losses from the Derecognition of NonfinancialAssets (Topic 610-20)”, which requires that all entities account for the derecognition of a business in accordance withASC 810, including instances in which the business is considered in substance real estate. The ASU is effective for annual periods,and interim periods therein, beginning after December 15, 2017. The adoption of the provisions of ASU 2017-05 did not have a materialimpact on our consolidated financial statements and related disclosures.

InMay 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718); Scope of Modification Accounting. Theamendments in this ASU provide guidance that clarifies when changes to the terms or conditions of a share-based payment awardmust be accounted for as modifications. If the value, vesting conditions or classification of the award changes, modificationaccounting will apply. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods withinthose fiscal years. The adoption of ASU 2017-09 did not have a material impact on our consolidated financial statements and relateddisclosures.

OnJune 20, 2018, the FASB issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718) - Improvements to NonemployeeShare-Based Payment Accounting”, which expands the scope of ASC 718, Compensation—Stock Compensation to include share-basedpayment transactions for acquiring goods and services from nonemployees. ASU 2018-07 is effective for fiscal years, and interimperiods within those fiscal years, beginning after December 15, 2018. We have elected to early adopt ASU 2018-07 on July 1, 2018.The results of applying ASU 2018-07 did not have a material impact on our consolidated financial statements and related disclosures.

InJuly 2018, the FASB issued ASU No. 2018-09, “Codification Improvements” (“ASU 2018-09”). ASU 2018-09 providesamendments to a wide variety of topics in the FASB’s Accounting Standards Codification, which applies to all reporting entitieswithin the scope of the affected accounting guidance. The transition and effective date guidance is based on the facts and circumstancesof each amendment. Some of the amendments in ASU 2018-09 do not require transition guidance and were effective upon issuance ofASU 2018-09. However, many of the amendments do have transition guidance with effective dates for annual periods beginning afterDecember 15, 2018. The adoption of ASU 2018-09 is not expected to have a material impact on our consolidated financial statementsand related disclosures.

InAugust 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance improvesthe disclosure requirements on fair value measurements. The updated guidance if effective for fiscal years, and interim periodswithin those fiscal years, beginning after December 15, 2019. Early adoption is permitted for any removed or modified disclosures.We are currently assessing the timing and impact of adopting the updated provisions.

Wehave implemented all new accounting standards that are in effect and may impact our consolidated financial statements and we donot believe that there are any other new accounting standards that have been issued that might have a material impact on our financialposition or results of operations.

BUSINESS

CompanyOverview

GauchoGroup Holdings, Inc. (the “Company”) was incorporated on April 5, 1999. Effective October 1, 2018, the Company changedits name from Algodon Wines & Luxury Development, Inc. to Algodon Group, Inc., and effective March 11, 2019, the Company changedits name from Algodon Group, Inc. to Gaucho Group Holdings, Inc. (“GGH”). Through its wholly-owned subsidiaries, GGHinvests in, develops and operates real estate projects in Argentina. GGH operates a hotel, golf and tennis resort, vineyard andproducing winery in addition to developing residential lots located near the resort. In 2016, GGH formed a new subsidiary andin 2018, established an e-commerce platform for the manufacture and sale of high-end fashion and accessories. The activities inArgentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon– Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its wines in Europethrough its United Kingdom entity, Algodon Europe, LTD.

GGH’smission is to increase our scalability, diversify the Company’s assets, and minimize our political risk. We believe ourgoal of becoming the LVMH of South America (Moët Hennessy Louis Vuitton) can help us to achieve that. While we continue makingexcellent wine, upgrading our rooms at the Algodon Mansion, and completing the infrastructure at the vineyard, our growth areais in e-commerce through Gaucho – Buenos Aires™ because of the potential for immediate revenues and growth/scale ona global basis. The Gaucho brand also diversifies our business outside of Argentina and helps insulate us from political risk.Together with our wines, these aspects of our business have the potential to insulate us from both the economic and politicalfluctuations in Argentina.

Thebelow table provides an overview of GGH’s operating entities.

Gaucho– Buenos Aires™

Gaucho– Buenos Aires™ is a new luxury fashion and accessories brand that is the result of more than a decade’s investmentin Argentina’s heart and soul, featuring luxury products that merge the traditional Gaucho style with a modern twist, infusedwith uniqueness and modern Buenos Aires glamour. With Gaucho – Buenos Aires, GGH adds a high-end fashion and accessoriese-commerce sector to its collection of luxury assets. Our e-commerce platform is able to process and fulfill orders inthe United States and internationally, and we believe this asset has the potential to achieve significant scale and add valueto our company. Gaucho – Buenos Aires connects buyers with some of Argentina’s best creative talents that harnessthe country’s unique heritage and artisanship of products such as woven fabrics, leather goods and precious metal jewelry.

WithArgentina’s recent re-engagement with importing and exporting, it is beginning to regain its status as a global culturalenclave. Once dubbed the “Paris of South America” for its exquisite Belle Époque style and entering what webelieve will be a new golden age. Evolving politics and tastes suggest the time is now for Buenos Aires to once again align itselfwith Milan, New York, Paris and London as a global fashion capital – and for Gaucho – Buenos Aires to become its ambassador.We believe there may be a sizeable appetite in the USA and beyond for its luxury products, such as fine leather goods, accessoriesand apparel, that deliver and reflect a unique and unmistakable Argentine point of view.

Seenin the intricate stitching of handmade leather, or the exquisite workmanship of an embossed belt buckle, “Gaucho”style is a world-renowned symbol of Argentine craftsmanship. Though rooted in the traditions of Argentine culture, Gaucho –Buenos Aires intends to become a brand in which Argentine luxury finds its contemporary expression: merging the traditional Gauchostyle with a modern twist, infused with uniqueness and modern Buenos Aires glamour.

Gaucho– Buenos Aires reflects the very spirit of Argentina – its grand history and its revival as a global center of luxury.Our goal is to reintroduce the world to the grandeurs of the city’s elegant past, intertwined with an altogether deepercultural connection: the strength, honor and integrity of the Gaucho.

OurU.S. debut and press launch of Gaucho – Buenos Aires is scheduled for Thursday, September 12, 2019 during New York FashionWeek. Prior to this marketing push, our sales and creative teams have enabled pre-sale access to the website to purchase goodsand enact a marketing plan that we hope will raise global awareness of our brand.

OurProducts

Theinaugural Capsule Collection of Gaucho – Buenos Aires™ includes ready-to-wear, and what Argentina is well known for:leather goods and accessories, all defining the style, quality, and uniqueness of Argentina. The Capsule Collection is comprisedof 22 looks, 12 women’s and 10 men’s, with design inspired by the contrast between the cosmopolitan, eclectic BuenosAires vibe and the rural Argentine landscape.

TheCapsule Collection launched in Q4 2018, and was soon followed by the debut of its Fall/Winter Collection which was showcased tofashion industry media at Argentine fashion week’s Designers Buenos Aires on March 18, 2019. As one of Buenos Aires’most exclusive fashion events, Designers Buenos Aires showcases Argentina’s finest talents, attracting internationalpress, as well as high profile fashionistas and the royalty of the Argentine fashion and television world.

Gaucho– Buenos Aires’s fully optimized e-commerce platform (www.gauchobuenosaires.com) offers a commercialline of designer clothing, with an emphasis on leather goods accessories, including leather jackets, branded hoodies, t-shirts,polo shirts and ponchos. We anticipate these products will be available to ship on or after September 2019, coinciding with NewYork Fashion Week, where we hope to debut our 2020 fall/winter collection, which will include U.S. press and social media marketingcampaign initiatives. In the following 18 months, we also anticipate a strategic roll-out introducing other new products suchas fragrances, a Gaucho Kids clothing line, Gaucho Casa (home goods), and Gaucho Residences as the natural evolution of the brand’sgrowth.

Blendingthe quality of a bygone era with a sophisticated, modern, global outlook, the brand’s beautifully handcrafted clothing andaccessories herald the birth of what we hope will become Argentina’s finest designer label.

Fragrances:Homme (Men), Femme (Women), Vamos Sport (Unisex)

Thefragrance collection of Gaucho – Buenos Aires™ has been created by Firmenich, the world’s largest privately-ownedcompany in the fragrance and flavor business. Founded in Geneva, Switzerland in 1895, it has created many of the world’sbest-known perfumes that consumers the world over enjoy each day, including Giorgio Armani, Hugo Boss, Ralph Lauren, Lolita Lempicka,Kenzo, and Dolce & Gabbana. Its passion for smell and taste is at the heart of its success. It is renowned for its world-classresearch and creativity, as well as its thought leadership in sustainability and exceptional understanding of consumer trends.Each year, it invests 10% of its revenues in research and innovation, reflecting its continuous desire to understand, developand distill the best that nature has to offer.

Gaucho– Buenos Aires has three fragrances ready for packaging, including a men’s fragrance Homme, a women’sfragrance Femme, and a unisex fragrance Vamos Sport.

Salesand Marketing Strategy / Competitive Edge

Duringthe economic crisis in Argentina, iconic international fashion chains left the country. As scarcity is the mother of invention,this gave rise to local brands that made up for that absence. Despite the fact that Argentina’s fashion scene is today thriving,the country lacks any international mainstream exposure. Argentina’s continuing challenges with inflation and unemploymenthave made it difficult for local labels to break into the global fashion landscape, and today there is not a single Argentinefashion brand that is a household name. We believe Gaucho – Buenos Aires has the ability to fill that void. Our intentionis to become the leading fashion and leather accessories brand out of South America.

Wehave assembled a talented team who speak in the unique voice most representative of Argentina’s local fashion scene, andwe believe we have the opportunity, the aptitude and the vision not only to successfully introduce this voice to the world’sfashion scene, but to become a major player in that landscape.

OurU.S.-based e-commerce website has been designed to deliver Argentine luxury goods to the U.S. marketplace and elsewhere aroundthe globe. We believe the potential for scale here is particularly significant as Argentina is now making noteworthy re-entryto international trade. Currently, one of the few ways to buy Argentina goods is to travel there and buy local. We want to changethat, and in a favorable economic and political climate, we seek to be in the forefront of opening Argentina’s luxury marketto the millions of potential customers around the globe interested in luxury items from Argentina.

Ourtarget market is upper and upper-middle class female and male millennials in urban areas of the United States and Europe. Millennialshave the potential to become the largest spending generation in history, and with the popularity of midrange to high end fashionbrands such as Gucci, Armani, Lululemon, and many others, we believe our millennial target market appreciates high quality clothingand accessories, and is willing to spend above the average market price for such quality items in the “affordable luxury”category.

BusinessAdvisors

MonicaPhromsavanh, Director of Business Development. Monica’s role at Gaucho – Buenos Aires is to define our brand vision,goals and strategy, and assist in creating an operational playbook by which to launch and grow our brand. She is integral togetting the Gaucho brand off the ground. We entered into a consulting contract (oral) with Monica on an independent contractorbasis in April 2019 and she is paid $10,000 per month. On August 5, 2019 she was also granted an option under GGI’s 2018Equity Incentive Plan to purchase 100,000 shares of common stock of GGI at a strike price of $0.55 per share, with 25,000 sharesvesting on August 5, 2020 and 6,250 shares vesting each quarter thereafter. The option expires on August 5, 2024.

Monicais the Founder and CEO of ModaBox, and a passionate serial entrepreneur known for creating business solutions in the industryshe knows best: fashion. She is an innovative brand builder with multi-faceted expertise in retail, marketing, strategy, businessdevelopment, and consumer behavior. Prior to launching ModaBox, Monica served as Founder and Creative Director of women’sapparel and accessories retailer ModaListas. During this time, she worked alongside talented fashion industry professionals whilegrowing a 100 sq. ft. shop nestled in New York’s iconic Limelight Shops into a 4000 sq. ft. modern woman’s shoppinghaven. In her four years at the Limelight, she also served as Managing Director and Head Buyer for men’s clothing and apparelretailer W Shops. Prior to ModaListas, she spent three years at luxury fashion house Burberry as a Men’s RTW Specialistand worked in general management at Limited Brands’ Express stores. Monica has a total of 17 years’ experience inretail and business management.

Julianode Rossi, Creative Solutions Consultant. Juliano serves as a consultant providing valuable guidance to the Gaucho Group team,having significant experience in the high-end fashion world. We entered into a consulting contract (oral) with Juliano on anindependent contractor basis in July 2017 for project-based work. The amount paid to Juliano is not considered material becauseof the project-by-project basis. He currently serves as Creative Solutions Consultant to the Net-a-Porter Group. DeRossi has 15 years’ experience in marketing and advertising for global brands and luxury retailers. He has resided in Londonfor the past five years, working in marketing, content production and brand partnership campaigns for MatchesFashion.com and atthe YOOX Net-a-Porter Group where he was responsible for leading the in-house creative solutions (design and productionteams) managing multiple content productions served across all YOOX Net-a-Porter Group digital platforms, print publicationsand social channels. At MR PORTER, NET-A-PORTER, PORTER MAGAZINE and MATCHESFASHION.COM, he oversaw the production of top-ratecampaigns, driving the content vision for the management of branded content productions including fashion shoots and video seriesproductions for brands such as BMW, Johnnie Walker Blue Label, American Express, Piaget, Cartier, IWC, Marc Jacobs, Burberry Prorsum,Fendi, Lanvin, Crème De La Mer, Chloe, Stella McCartney, Michael Kors, and Helmut Lang.

NeelsVisser, Brand Ambassador and Social Media Marketing Advisor. Neels is an American social media star and influencer, model, DJ,actor, and businessman. He began his career at a young age modeling for high-end brands such as American Eagle, Dolce & Gabbana,Vanity Teen magazine and Maybelline. Neels currently consults for a number of young fashion brands, and has amassed a followingof over 4 million across his social media platforms. Vogue magazine recently named him as one of five social media stars thatcan “give Kendall (Jenner) and Gigi (Hadid) a run for their money.” We anticipate that Neels’ broad networkof social influencers and micro influencers can lay the groundwork for potential partnerships and brand affiliates/ambassadorsfor the Gaucho – Buenos Aires brand in the U.S. market. We entered into a written consulting contract with Neels on anindependent contractor basis in October 2018 and pay him $2,500 per month.

SocialMedia Strategy

Ourdigital marketing efforts will include ongoing search engine optimization (SEO) campaigns and initiatives to increase websiteconversions and brand awareness, social media marketing via Instagram, Facebook and Pinterest using micro and macro/celebrityinfluencers, and public relations firms specializing in the international fashion scene. Social media star, and Gaucho –Buenos Aires™ advisor, Neels Visser, also has a broad network of social influencers and micro influencers that can lay thegroundwork for potential partnerships and brand affiliates/ambassadors.

Ourpublic relations teams, led by notable Buenos Aires firms Grupo MASS and Marisa Koifman, are diligently working to generate anearly buzz about our brand, our designers, and our e-commerce platform. Social media star, and Gaucho – Buenos Aires advisor,Neels Visser, is also contacting his broad network of social influencers and micro influencers to lay the groundwork for potentialpartnerships and brand affiliates/ambassadors.

Gaucho– Buenos Aires will primarily be an e-commercestore targeting U.S. customers. However we do plan on pursuing reselling retail venues both online and brick and mortar.For example, in the wake of our press launch, we received unsolicited inquiries from several high-end boutiques in Brazil interestedin carrying the Gaucho line. There are of course numerous avenues for us to explore involving brick and mortar opportunitiesalone, via agencies or direct solicitation.

Onlinereselling avenues we expect to pursue include Net-a-Porter, MatchesFashion and at least six other high-end, reputable venueswith whom we already have an established foot in the door via our networking channels.

Weanticipate our marketing strategy will include popup shops in cities such as Austin, Dallas, Houston, Miami, Los Angeles, NewYork City and Aspen. With popup shops, we can for example, work with local PR companies to get the word out, as these opportunitiesare typically promoted via direct mail, PR and digital marketing efforts, as well as word of mouth and strategic geographic positioning.

Ouronline marketing efforts will also include SEO initiatives, social media marketing via Instagram, Facebook and Pinterest, andretargeting ads.

Afterour U.S. debut, we also anticipate presenting at fashion showsin 2020 in New York City, London, Paris, Milan and several other targeted cities. Gaucho – Buenos Aires presents an opportunityfor global press to talk about Argentina finding its foothold once again on the global fashion scene, spotlighting our designers,our designs, and our concentration on leather goods. As there are few brands launching out of Argentina, and certainly fewer withglobal intentions, the press reaction to Gaucho – Buenos Aires has been extremely positive and encouraging.

Press

Inearly 2019 Gaucho – Buenos Aires has garnered the front cover pages of Marie Claire Argentina and Vogue Italia,one of the most iconic fashion magazines on the globe, who states that Gaucho – Buenos Aires is currently “among themost interesting brands on the Argentinian scene.” Our recent press clippings since our Argentina debut in October 2018include appearances in some of the most widely read fashion magazines in Latin American fashion, including Forbes Argentina,Revista L’Officiel, Revista Luz, Numeral, Polo Mundial, and others.

Gaucho– Buenos Aires Trademarks 

Wefiled a U.S. Trademark Application (Serial No. 87743647) for the GAUCHO – BUENOS AIRES in January 2018, and in February2019, the U.S. Patent and Trademark Office issued a Notice of Allowance for this mark. This application covers goods and servicessuch as apparel, leather accessories and other products, jewelry, cosmetic fragrances and home goods.

TheCompany intends to promote Gaucho – Buenos Aires™ so that its name and logo collectively become a recognizabletrademark with international appeal. We anticipate seeking trademark protection for other marks as we develop our business andproduct lines.

Withinsix months of the Notice of Allowance date, or August 12, 2019, we were required to file a satisfactory Statement of Useif use has occurred, or file for an extension of time. The mark was then in use with some of the goods, but not others.As a result, on August 6, 2019, we filed to divide the application for the goods that were in use for whicha Statement of Use was filed, and filed an Extension Request in the existing application for the remaining goods. Following thefiling the details of the now two applications are:

Application Serial No. 87981741

Application Date: January 4, 2018

Classes: 9, 18, 25 and 33

Goods:

Class9 - Protective cases and covers for cell phones and mobile phones,

Class18 - Handbags; purses; clutch wallets and handbags; wallets; belt bags; necessaire, namely, cosmetic bags sold empty; travel bags,

Class 25 - T-shirts; tops; shirts;sweaters; hoodies; ponchos; pants; bottoms; shorts; skirts; dresses; jackets; coats; scarves; pocket squares; ties; belts; hosiery;underwear; gloves; footwear; shoes; headwear; hats; caps being headwear

Class 33 – Wines

Status: Statement of use filed, but notyet processed (no pending deadlines)

Application Serial No. 87743647

Application Date: January 4, 2018

Classes: 3, 14, 21 and 24

Goods:

Class 3 – Fragrances; perfumes

Class 14 - Jewelry;watches; necklaces; bracelets; earrings; keychains; lapel pins; rings for scarves being jewelry

Class 21 - Beverageware; cups; coffeeservices in the nature of tableware; tea services in the nature of tableware; dishware; plates; bowls; saucers; napkin rings;serving forks; serving spoons; serving platters; serving trays; servingware for serving food and drinks; sugar bowls; salt andpepper shakers; vases

Class 24 - Bed and table linen; bed blankets; bed sheets; pillowcases; comforters; duvets; bath linen

Status:Deadline to file Statement of Use is February 12, 2020; up to four more 6-month extensions of time, with the final deadline forfiling the Statement of Use being February 12, 2022

ArgentinaActivities

GGH,through its wholly-owned subsidiary and holding company, InvestProperty Group (“IPG”), identifies and develops specificinvestments in the boutique hotel, hospitality and luxury property markets and in other lifestyle businesses such as wine productionand distribution, golf, tennis and real estate development. GGH also operates hotel, hospitality and related properties and isactively seeking to expand its real estate investment portfolio by acquiring additional properties and businesses in Argentina,or by entering into strategic joint ventures. Using GGH’s icon wines as its ambassador, GGH’s mission is to developa group of real estate projects under its ALGODON® brand with the goal of developing synergies among its luxury properties.

In2016, GGH formed a new wholly-owned subsidiary, Gaucho Group, Inc. (“GGI”), and in 2019, the entity began developinga platform and infrastructure to manufacture, distribute and sell high end products created in Argentina under the brand nameGaucho – Buenos Aires™. See Gaucho – Buenos Aires™ on page 47 above.

GGH’ssenior management is based in its corporate offices in New York City. GGH’s local operations are managed by professionalstaff with substantial hotel, hospitality and resort experience in Buenos Aires and San Rafael, Argentina.

GGH’sConcept and Business: Repositioning of Hotel Properties, Luxury Destinations and Residential Properties

GGH,through IPG, focuses on opportunities that create value through repositioning of underperforming hotel and commercial assets suchas hotel/residential/retail destinations. Repositioning means we are working to gradually increment our average fares to solidifyour position as a luxury option. This trend has been well received in large metropolitan areas which have become quite competitive.We believe that the trend is now trickling down to secondary metropolitan, resort and foreign markets where there is significantlyless competition from the established major operators. We continue to seek opportunities where value can be added through re-capitalization,repositioning, expansion, improved marketing and/or professional management. We believe that GGH can increase demand for all ofa property’s various offerings, from its rooms, to its dining, meeting and entertainment facilities, to its retail establishmentsthrough careful branding and positioning of properties. While the maxim remains true that the three most important factors inreal estate are “location, location, location,” management believes that “style and superior service”have grown in importance and can lead to increased operating revenues and capital appreciation.

Weare currently increasing our activity, occupancy and presence in the market by using direct marketing actions (Facebook and GoogleAds, Trip Advisor, Online Travel Agencies, internet presence), and expanding our net of travel agencies and operators, introducingeffective changes in our direct sales capacity (new sales-oriented webpages, joint ventures with other hotel organizations, trainingof our reservations employees, implementing new reservation software). We have also reached out to travel industry media operatorsto develop new strategic relationships and we are implementing a new commercial management operation for a more aggressive approachwith a sales-oriented objective. GGH has built a team of industry professionals to assist in implementing its vision toward repositioningreal estate assets. See “Directors, Executive Officers and Corporate Governance” on page 67.

Planof Operations

GGHcontinues to implement its growth and development strategy that includes a luxury boutique hotel, a resort estate, vineyard andwinery, the sale of high-end fashion, leather goods and accessories, and a large land development project including residentialhouses within the vineyard. See “Algodon Wine Estates” below.

LongTerm Growth Strategy

Ourdesire is to follow in the footsteps of global leading luxury brands such as Chanel from Paris, Burberry from London, Tom Fordfrom New York, and Gucci from Milan, and to establish Gaucho as “the Spirit of Argentina” representing Buenos Aires.In doing so, our mission is also to work with the intention of building a multi-billion dollar brand. We believe that throughour e-commerce website, we have the potential to achieve significant scale, and add value to our company.

Roll-upStrategy

Upona successful listing on Nasdaq, we believe we will be positioned to utilize the Company’s stock as “currency”in a sort of “roll-up strategy” to acquire other companies that fall squarely within or complement the Company’sexisting and planned lines of business. For example, we might seek to acquire businesses that offer high-end fashion and accessories,or other luxury products and/or experiential hospitality experiences, the quality of which is consistent with the GGH brand. Weseek to become the LVMH (“Louis Vuitton Moet Hennessy”) of South America, with the goal of becoming its most well-knownluxury brand.

TheCompany hopes to continue to self-finance future acquisition and development projects because in countries like Argentina, havingcash available to purchase land and other assets provides an advantage to buyers. Bank financing in such countries is often difficultor impossible to obtain. To be able to grow our business and expand into new projects, the Company would first want to deployexcess cash generated by operations, but significant amounts of excess cash flow is not anticipated for at least a number of years.Another option would be obtaining new investment funds from investors, including public offerings, and/or borrowing from institutionallenders. GGH may also be able to acquire property for stock instead of cash.

Cobrandingand Strategic Alliances

Oneof GGH’s goals includes positioning its brand ALGODON® as one of luxury. In the past we have formed strategic allianceswith well-established luxury brands that have strong followings to create awareness of the GGH brand and help build customer loyalty.Since its inception, GGH has been associated or co-branded with several world-class luxury brands including Relais & Châteaux,Veuve Clicquot Champagne (owned by Louis Vuitton Moët Hennessy), Nespresso, Porsche, Chanel, Hermès, Carolina Herrera,Stendhal Paris, Davidoff Cigars, and L’Occitane, Art Basel, Andrew Harper Travel, and Designers Buenos – Aires.

Catalystsfor Growth

GauchoCasa Residences

AsGaucho – Buenos Aires™ continues to expand its recognition on a domestic and international basis, another area thatwe can potentially create value and scale is by licensing our brand to commercial, and residential real estate developments. Currentexamples of such co-branded developments include: Aston Martin Residences in Miami, Bulgari Resort and Residences Dubai, FendiChateau Residences in Bal Harbour, Residences by Armani Casa in Miami, Mercedes House in New York, as well Porsche Design Towerin Sunny Isles Beach.

Thesefashion houses and automobile manufactures license their brand’s unique styles and unmistakable names to real estate developers,in an effort to create business opportunity. The mutually beneficial model could be a medium through which Gaucho – BuenosAires™ makes its imprint on the global market. By using our distinct style – employing fine leathers, metals, andnatural stones – in the design and construction of such a project, Gaucho – Buenos Aires could add intrinsic valueto the parties involved. This creates potential for licensing fees, as well a portion of proceeds from property sales.

GauchoHome Collection

Inrecent years there has been a rise of boutique hotel home goods collections such as by Marriott, who led the way with its debutof Autograph Collection. Others that have followed include Curio by Hilton (Starwood’s Tribute Portfolio), and The UnboundCollection (part of the Hyatt Hotels group). We envision the possibility of Gaucho – Buenos Aires utilizing Algodon Mansionas a launch point for a collection of hotel bedding, pillows, linens and robes. Likewise, Argentina’s “La Belle Époque”could serve as a reliable source of inspiration for a multitude of luxury consumer goods, including home soft-furnishings. Argentina’srich Polo heritage might also serve as a reliable foundation for a collection of high-end, contemporary leather home furnishingsfor anything from armchairs and sofas to lamps and photo frames.

Gaucho– Kids Collection

Weenvision the possibility of a designer baby and kids’ clothes collection at Gaucho – Buenos Aires, so that parentswho love our brand can treat their children to a luxury line of fun, Gaucho-inspired clothing for kids. We envision building thisline around the idea of creating comfy, well-made garments that allow kids to be creative in the way they dress. Gaucho Kids mayinclude, for example, branded onesies and toddler t-shirts, whimsical prints that foster imagination and individuality, and otherunique printed separates for kids who don’t mind standing out in a crowd.

Gaucho– Buenos Aires Boutique at Algodon Mansion

Locatedin the ground floor lobby of Algodon Mansion, the future location (anticipated opening in Q4 of 2019) of our boutique store isjust a stroll away from the city’s main shopping boulevards on Alvear. The Gaucho – Buenos Aires boutique will beopen to receive direct foot traffic from shoppers along Montevideo. Emulating the great boutiques and ateliers of Europe’sfashion capitals, Algodon Mansion is an inspiring space in which to shop our collection. Built in 1912, the building connectsus to the bygone glamor of the city’s golden age – and plays an important role in defining Gaucho Buenos Aires’ethos and aesthetic.

PopupShops

Popupshops are a popular trend that can be a low cost means of creating a temporary store front focusing on spreading brand awareness,communicating brand values, collecting customer data, and providing personalized experiences. This can also provide a way forGaucho – Buenos Aires build a relationship with customers in person, while driving conversion on more cost-effective digitalchannels. We envision popup shops in U.S. cities such as Aspen, Austin, Dallas and Houston, Miami, Los Angeles, New York City,Berlin and Barcelona. With popup shops, we can for example work with local PR companies to get the word out, as these opportunitiesare typically promoted via direct mail, PR and digital marketing efforts, as well as word of mouth and strategic geographic positioning.We also anticipate a summer high season popup location in Punta Del Este, Uruguay, which is a popular vacation spot for wealthyArgentines and other Latin Americans.

CurrencyDevaluation

Acurrency devaluation certainly helps Argentina tourism, enticing foreign holidaymakers seeking to make their vacation money stretchfurther. Vacationers looking for the most representative souvenirs of Argentina and its culture may well know the country is bestknown for its leather. With hundreds of domestic tanneries, Argentina’s has high quality production of cow, sheep and goatleather goods such as jackets, shoes and handbags.

Adevalued peso may also aid Argentina’s wine exporters by improving market competitiveness and leading to better revenues.Additionally, non-leveraged real estate can be a hedge against inflation, and we believe that over time the land values may performwell.

Whileour contracts and vendors are largely payable in pesos, which is favorable to us given the current exchange rate of the peso againstthe U.S. dollar, the downside is that the Argentine market is somewhat closed off for our Gaucho brand goods and our wines. Eventhough we produce some Gaucho goods in Argentina and we are able to realize a higher margin by selling outside of Argentina, wealso do have some goods produced in the U.S. at a higher cost and our margins are therefore much lower.

Further,our real estate and hotel operations are stated in U.S. dollars which can be seen as less desirable than stating in pesos andcould have a negative effect on demand for those parts of our business.

TheALGODON® Brand

Webelieve that the force and power of brand is of paramount importance in the luxury real estate/hotel market. GGH has developedthe ALGODON® brand, one of distinction, refinement and elegance. Inspired by both the Cotton Club days of the Roaring 20’sand the distinctive style and glamour of the 50’s Rat Pack when travel and leisure was synonymous with cultural sophistication,this brand concept was taken from the Spanish word for “cotton.” ALGODON® connotes a clean and pure appreciationfor the good life, a sense of refined culture, and ultimately a destination where the best elements of the illustrious past meetthe affluent present. GGH is looking to attract attention and upscale demographic visitors to the ALGODON® properties andto round out the brand experience in various other forms including music, dining, wine, sports and apparel, by marketing themesthat highlight active lifestyles and the pleasures of life. Management believes that these types of brand extensions will serveto reinforce the overall brand recognition and further build upon GGH’s core presence in the luxury hotel segment.

Descriptionof Specific Investment Projects

GGHhas invested in two ALGODON® brand properties located in Argentina. The first property is Algodon Mansion, a Buenos Aires-basedluxury boutique hotel that opened in 2010 and is held in IPG’s subsidiary, The Algodon – Recoleta S.R.L. (“TAR”).The second property, held by Algodon Wine Estates S.R.L., is a Mendoza-based winery and golf resort called Algodon Wine Estatesconsisting of 4,138 acres, which was subdivided for residential development, and expanded by acquiring adjoining wine producingproperties.

AlgodonMansion

TheCompany, through TAR, has renovated a hotel in the Recoleta section of Buenos Aires called Algodon Mansion, a stately six-storymansion (including roof-top facilities and basement) located at 1647 Montevideo Street, a tree-lined street in Recoleta, one ofthe most desirable neighborhoods in Buenos Aires. The property is approximately 20,000 square feet and is a ten-suite premium-luxuryhotel with a lounge/living room area, a patio area featuring a glass ceiling and fireplace, and a private wine tasting room. Theproperty also includes a rooftop that houses a luxury spa and terrace pool. Each guest room is an ultra-luxury two-to-three roomsuite, each approximately 510-1,200 square feet. Recoleta is Buenos Aires’ embassy and luxury hotel district and has fashionableboutiques, high-end restaurants, cafés, art galleries, and opulent belle époque architecture.

Belowis a table showing occupancy data, average daily rate and revenue per available room (RevPAR) for Algodon Mansion:

Pastguests of Algodon Mansion include President Maurico Macri of Argentina, Roger Federer, Bobby Flay, Jim Courier, Andre Agassi,Pete Sampras, Mardy Fish, Salvatore Ferragamo, and Maguy Maccario Doyle, the Principality of Monaco’s Ambassador to theUnited States. Algodon Mansion was featured in an article by Huffington Post in January 2018, which praised the luxurious accommodations,impressive suites, and fine amenities of the hotel. In 2016, the Algodon Mansion hotel received an international award of excellencefrom TripExpert and was awarded 8th place in the ‘Top 20 International Hideaway’ category for Andrew Harper’s2016 Readers’ Choice Awards.

Inboth 2019 and 2018, Algodon Mansion was inducted to TripAdvisor’s Hall of Fame, a distinction given to recognize hotelsthat have won its Certificate of Excellence award for five consecutive years. Algodon Mansion won the Certificate of Excellenceaward for the years 2014 through 2019. The Certificate of Excellence award celebrates businesses that have continually delivereda quality customer experience, taking into account the quality, quantity and recency of reviews submitted by travelers on TripAdvisorover a 12-month period. To qualify, a business must maintain an overall TripAdvisor bubble rating of at least four out of five,have a minimum number of reviews and must have been listed on TripAdvisor for at least 12 months.

AlgodonWine Estates

AlgodonWine Estates S.R.L. (“AWE”) is 4,138-acre area located in the Cuadro Benegas district of San Rafael, Mendoza, nowknown as Algodon Wine Estates. The resort property is part of the Mendoza wine region nestled in the foothills of the Andes mountainrange. This property includes a winery (whose vines date back to the mid-1940’s), a 9-hole golf course, tennis, restaurantand hotel. The estate is situated on Mendoza’s Ruta del Vino (Wine Trail). The 4,138-acre property has an impressive lineage,both in terms of wine production and golf, and features structures on the property that date back to 1921.

AlgodonWine Estates features Algodon Villa, a private lodge originally built in 1921 that has been fully restored and refurbished toits original farmhouse design of adobe walls and cane roof. The lodge offers three suites, a gallery for private gatherings, aliving area that may also serve as a dining and conference room, swimming pool, and adjacent vine-covered picnic area. The AlgodonVilla offers five-star service and is situated for vacationing families, business conferences, retreat travelers, golfing companions,or wine route globe trekkers. Algodon Wine Estates has also recently completed the construction of a new lodge which lies adjacentto the original one. The new lodge features six additional suites and a gallery with two fireplaces and a bar.

Belowis a table showing occupancy data, average daily rate and revenue per available room (RevPAR) for Algodon Wine Estates:

AlgodonWine Estates completed the expansion of its nine-hole golf course to 18 holes during 2013, including irrigation canals and ponds.Adjacent to the course is a clubhouse, pro shop, driving range, and award-winning restaurant and the Tennis Center.

Inboth 2019 and 2018, Algodon Wine Estates was inducted to TripAdvisor’s Hall of Fame, a distinction given to recognize hotelsthat have won its Certificate of Excellence award for five consecutive years. Algodon Wine Estates won the Certificate of Excellenceaward for the years 2014 through 2019. The Certificate of Excellence award celebrates businesses that have continually delivereda quality customer experience, taking into account the quality, quantity and recency of reviews submitted by travelers on TripAdvisorover a 12-month period. To qualify, a business must maintain an overall TripAdvisor bubble rating of at least four out of five,have a minimum number of reviews and must have been listed on TripAdvisor for at least 12 months.

AlgodonFine Wines

AlgodonWine Estates contains a vineyard with 290 acres of vines. Over 60 acres have been cultivated since the 1940’s, and approximately20 acres since the 1960’s. The property produces eight varieties of grapes, including Argentina’s signature varietal,Malbec, as well as Bonarda, Cabernet Sauvingnon, Merlot, Syrah, Pinot Noir, Chardonnay and Semillon. The primary difference betweenthe old and new vines is the style of pruning. Algodon Wine Estates utilizes a boutique wine making process, typified by productionof a low volume of premium wines sold at a higher than average price in the market.

InMarch 2014, Algodon Wine Estates acquired its own bottling machine in order to improve the winery’s production capacity.This bottling machine allows our winemakers to bottle when desired and when necessary, rather than depending on the availabilityof external bottling facilities. In April 2014, new stainless-steel wine tanks were added to the winery, increasing storage capacityby 55,000 liters. This includes five 5,000-liter tanks and three 10,000-liter tanks. These upgrades have significantly increasedour production capacity. During the production year of 2017 we produced 74,710 liters, which translates to about 99,613 bottlesor 8,300 cases of wine. During the production year of 2018 we produced 57,775 liters of wine, which translates to about 77,000bottles or 6,500 cases of wine, representing a reduction in production of 23% from 2017 due to changes in the wine market.

Inan effort to increase distribution of its wines, Algodon Wine Estates is working with a number of importers operating in someof the world’s chief markets for premium wines. In Europe, Algodon Wine Estates warehouses its wines in Amsterdam for centraldistribution to clients in Germany and in the U.K. through Condor Wines (www.condorwines.co.uk), which works with regional distributionpartners throughout the U.K. such as hotel and restaurant chains, regional and national brewers, pub companies, wholesalers andwine merchants. In the United States, Algodon Fine Wines is available for sale online at Sherry-Lehmann.com (which ships to 39states), at Sherry-Lehmann’s iconic retail store in New York City, at Spec’s Wines, Spirits and Finer Foods retailstores in Texas, and Wally’s Wine & Spirits retail store located in Los Angeles. GGH’s Fine Wine’s Malbechas been featured on the esteemed wine lists of West London’s The Fat Duck, a Michelin 3-Star Restaurant, and arguably theU.K.’s most famous eatery, as well as London’s Restaurant Gordon Ramsay, A Michelin 3-Star Restaurant, also the exclusiveLondon wine club, 67 Pall Mall, and the exclusive wine list of Buenos Aires’ fine dining restaurant, Parrilla Don Julio,one of Argentina’s most high-profile eateries.

OnJune 1, 2016, the Company executed an import and distribution agreement with Seaview Imports, whose principal location is 48 HarborPark Drive, Suite D, Port Washington, NY 10150.

Foundedin 2013, Seaview Imports is a national importer of fine wines from France, Spain, Italy, Australia, New Zealand, Argentina andChile. Headquartered in Port Washington, NY, the company distributes its products in twenty-five select states through wholesalersand state boards. Their producers are leaders in their regions and their portfolios are all exceptional in quality and value.For further information, please visit www.seaviewimports.com.

Seaview’sphilosophy in building Algodon as a brand in the United States has been to select high-profile, quality-oriented retailers whomwe believe have high credibility in speaking to their wine constituency. We believe the most influential component to consumerconfidence (within the fine wine industry) is the endorsement of a well-respected wine merchant. These “Algodon Brand Ambassadors”can not only promote Algodon, its history and vision, but can serve as the go-to wine shop for the shareholders, friends and familyof Algodon aficionados. In tandem with building a network of brand ambassador retailers, an additional initiative is to engagea fine wine distributor in select cosmopolitan markets that can provide smaller independent retail and on-premise (restaurant)coverage.

CurrentDistribution Markets (as of Q3 2019)

Markets- scheduled for Q4 2019

Noneof the understandings with wine importers constitute a binding commitment by either party to produce, import or export the Company’swines; performance by any of the parties is dependent upon numerous factors such as economic and political climate, consumer spending,weather, the Company’s ability to continue wine production operations, the market acceptance of the Company’s products,and other matters described in “Risk Factors” on page 7.

AWEuses microvinification (barrel fermentation) for its premium varietals and blends. Microvinification is commonly used in France,but is uncommon in Argentina, and Algodon Wine Estates is one of the few wineries in the country to implement this specializedprocess.

JamesGaltieri holds the title of Senior Wine Advisor on GGH’s Advisory Board. James is a founding partner and former President/CEOof Pasternak Wine Imports, a renowned national wine importer and distributor, founded in 1988 in partnership with Domaines Baronsde Rothschild (Lafite). He currently maintains an advisory role to Domaines Barons de Rothschild (Lafite), and he is the currentPresident/CEO at Seaview Imports LLC., a national wine importer (based in New York) covering the U.S. market with high-quality,exclusive wine brands. James has considerable background and experience in wine knowledge and wine market dynamics, and he isspecialized in corporate management in the wine & spirit industry.

Inthe summer of 2019, we engaged a marketing group called Back Bar USA to help us execute into the sbe properties and others, aswell as showcase our wines (on site tastings, etc) and train local staff in each location. Back Bar USA focuses on conceptualizing,planning, marketing and executing unique experiences that showcase liquor brands from their clients’ portfolio and onlypartners with first-in-class brands and accounts. In its role as a third-party marketing company, Back Bar USA offers graphics,print, educational support and the financial accountability associated with corporate beverage programs. Back Bar USA creates,manages and executes all phases of programming, taking pressure off the operator and supplier by streamlining the planning andexecution processes. Back Bar USA works closely with many international beverage suppliers, distributors, educators and marketingprofessionals as part of their core business to create programs that highlight their brands’ objectives. We have a writtenagreement with Back Bar USA to market our wines and pay them $3,500 per quarter. More information about Back Bar USA can be obtainedat https://backbarusa.com/.

WineDistribution Partnership with sbe Entertainment Group

InJune 2019, sbe Entertainment Group announced privately that it would add Algodon Fine Wines to the wine lists of its managednetwork of over 40 restaurants and hotels. Our President and CEO met the founder of sbe Hotels (Sam Nazarian) at the opening ofhis new SLS LUX hotel/condo in Miami last year and the Company sponsored the inaugural dinner with its wines. We coordinated withsbe’s beverage program manager and although the Company does not have a written contract with sbe, the Company’s winesare now on the wine lists of multiple sbe-owned and managed venues. Established in 2002 by Founder and CEO Sam Nazarian, sbeis a lifestyle hospitality company that develops, manages and operates award-winning hotels, residences, restaurants and nightclubs.AccorHotels, Europe’s biggest hotels group, recently purchased a 50% stake in sbe Entertainment Group. Through exclusivepartnerships with cultural visionaries, sbe is devoted to creating extraordinary experiences with a commitment to authenticity,sophistication, mastery and innovation. sbe’s global portfolio features over 20 world-class lifestyle hotels and 130 world-renownedhotel, entertainment and food & beverage outlets. The company’s proprietary brands include SLS Hotel & Residences,Delano, Mondrian, Redbury, Hyde Hotel & Residences, Katsuya, Cleo, The Bazaar by José Andrés, Fi’lia byMichael Schwartz, Umami Burger, Hyde Lounge and Skybar. More information about sbe can be obtained at https://www.sbe.com/.

Algodon’spremium wines have received a number of top awards and ratings from the world’s foremost tasting competitions includingGold Medals from the prestigious Global Masters Wine Competition, comprised of master sommeliers. Algodon’s Black LabelReserves represent the best selection from Algodon with 100% microvinified blends whose low yield produces full concentrationof fruit and flavor. Algodon’s complete portfolio of fine wines is currently available in distinguished wine bars, wineshops, restaurants and hotels in Buenos Aires, Mendoza, Germany, Switzerland, Guernsey, U.K., the Netherlands and the United States.

AlgodonWine Estates launched its ultra-premium wine under the “PIMA” brand in November 2012. PIMA by GGH is a single vineyardwine that has been crafted from the finest handpicked grapes of GGH’s 1946 Malbec and 1946 Bonarda vineyards utilizing microvinification(barrel fermentation) process from day one of harvest. PIMA wine is a limited collection which currently retails for approximately$100 per bottle. Most recently, Algodon Wine’s 2010 Bonarda ranked among the World Association of Wine & Spirit Writers’and Journalists’ (WAWWJ®) Top 100 Wines of the World 2014, and its 2014 Bonarda was awarded a gold medal at the 2017New York World Wine & Spirits Competition. In 2016, GGH’s Black Label Malbec was awarded a gold medal in the GlobalMalbec Masters 2016 Wine Competition.

AlgodonWine Estates – Real Estate Development

AWEhas acquired a substantial amount of contiguous real estate surrounding its project in Mendoza, Argentina for a total of 4,138acres. This land was purchased with the purpose of developing a vineyard-resort and attracting investment in second or third homesfor the well-to-do from around the world. GGH continues to invest in the ongoing costs of building out infrastructure and anticipatesthat sales of lots will gradually improve and accelerate as worldwide economic conditions improve.

GGHis currently marketing portions of the property to be developed into luxury residential homes and vineyard estates. Managementbelieves that the power of the ALGODON® brand combined with an attractive package of amenities will promote interest in thesurrounding real estate. The estate’s master plan features a luxury golf and vineyard living community, made up of six distinctvillage sectors, with 610 home sites ranging in size from 0.2 to 2.8 hectares (0.5 to 7 acres) for private sale and development.The development’s village sectors have been designed and named in accordance with their characteristic surroundings andlandscape: the Wine & Golf Village, the Polo & Equestrian Village, the Sierra Pintada Village, The North Vineyard &Orchard Village, The South Vineyard & Orchard Village, and the Desert Vista Village. The development is located fifteen minutesfrom both the local airport and city center.

InApril 2019, GGH announced that it reached an agreement with Compass Real Estate to market and sell home sites at Algodon WineEstates. Compass Real Estate (www.compass.com), dubbed “the country’s fastest-growing luxury real estate technologybrokerage company” by Forbes Magazine, is set to revamp Algodon Wine Estates’ marketing and global sales initiativesby utilizing its network of 7,000 agents and over 1,000 employees. Compass’ business model has attracted investment capitalfrom Fidelity, Softbank, Goldman Sachs, and several other corporations and individuals.

GGHis developing lots for sale to third party builders and is not engaged in any construction activity. To date, twenty-five lotshave been sold. Revenue is recorded when the sale closes and the deeds are issued. During 2018, the Company closed on the saleof 12 of its lots and recorded revenue of $1,468,000. As of December 31, 2018, the Company had $995,327 of deferred income forpending sales.

PotentialValue Creation

Afteran official “arm’s length” evaluation of the entire property (including the additional recently acquired 2,000acres), we estimate the discovery and potential development of underground aquifers could help increase the value of the parcel.Due to the prohibition of developing new wells in Mendoza City Metro Area, it may be positive to take advantage of the lack thereofregulations in San Rafael. Additionally, the current administration of Mendoza Province has asked (upon approval of Gaucho Group)to construct a major road through the far reaches of the property in an effort to link the popular tourist destinations of ValleGrande, and Los Reyunos. This development could in effect raise the commercial value of the land significantly, as well as openup potential rental-income opportunities from storefronts, gas stations, and other businesses.

Owningreal estate in Argentina is subject to risk. For more information see “Risk Factors.”

Projectsand Business Initiatives in Development

GGH’sluxury branded assets have come to be associated with the country’s finest experiences through award-winning wines and exceptionalluxury destinations. We have begun developing U.S.-based e-commerce websites designed to deliver Argentine luxury goods to theU.S. marketplace and elsewhere around the globe. We believe the potential for scale here is particularly significant as Argentinais now making noteworthy re-entry to international trade. With Argentina in the process of re-opening its borders, we believeit is poised to regain its status as a cultural and fashion exporter, and that there may be a sizeable appetite in the U.S. andelsewhere for luxury products that feature a distinctly Argentine point of view. We are excited about the potential for scalehere.

MercariCommunications Group, Ltd.

OnDecember 20, 2016, the Company entered into a Stock Purchase Agreement (the “Transaction”) with China Concentric CapitalGroup, Inc. (the “Purchaser”), in which the Purchaser would purchase all 43,822,001 shares of common stock of MercariCommunications Group, Ltd., a Colorado corporation (“Mercari”) held by the Company and any additional shares of Mercaricurrently held by the Company (the “Shares”) for $260,000 (a net after fees and expenses of less than $200,000) (the“Purchase Price”).

OnJanuary 20, 2017, the Transaction was completed, and the Company assigned to the Purchaser all its right, title and interest tothe Shares and to amounts payable to the Company for non-interest-bearing advances to Mercari, which advances, as of January 20,2017, were in the aggregate amount of $150,087.

Inconnection with the Transaction, J.M. Walker & Associates (the “Escrow Agent”) disbursed a total of $199,250 tothe Company, a total of $60,000 in business consulting fees to three consultants, and $750 to the Escrow Agent for services.

Competition

Theonline luxury fashion business is highly competitive. The apparel industry is characterized by rapid shifts in fashion, consumerdemand, and competitive pressures, resulting in both price and demand volatility. We believe that our emphasis on fine leathergoods, accessories and apparel mitigates these factors.

Webelieve that the fit and quality of our garments, as well as the broad variety of colors and styles, our Gaucho and distinctlyArgentine inspiration, as well as the contemporary luxury garments and accessories that we offer helps to differentiate us. Wecompete against a wide variety of smaller, independent specialty stores, as well as department stores and national and internationalspecialty chains. Companies that operate in this space include, but are not limited to, Rag & Bone, Theory, Maison Kitsune,Vince, and All Saints. Many of these companies have substantially greater name recognition than Gaucho – Buenos Aires. Manyof these companies also have greater financial, marketing, and other resources when compared to Gaucho – Buenos Aires.

Alongwith the competitive factors noted above, other key competitive factors for Gaucho – Buenos Aires online e-commerce operationsinclude the success or effectiveness of customer mailing lists, advertising response rates, merchandise delivery, web site designand web site availability. The online e-commerce operations compete against numerous web sites, many of which may have a greatervolume of web traffic, and greater financial, marketing, and other resources.

GovernmentRegulation

Withrespect to the Company’s clothing line, pursuant to the Federal Trade Commission, clothing exported from Argentinato the U.S. must have a label that contains the country of origin and the composition of the item. Additional information canbe found here: https://www.ftc.gov/tips-advice/business-center/guidance/threading-your-way-through-labeling-requirements-under-textile.

Withrespect to the Company’s wine production, please see “Risk Factors” on page 18. Additional information may befound here: https://www.ttb.gov/itd/argentina.shtml and https://www.ttb.gov/itd/importing_alcohol.shtml.

Employees

Includingthe operating subsidiaries in Argentina, the Company has approximately 58 full-time employees. In Argentina, GGH also employstemporary, seasonal employees during the busy harvest season. In the United States, GGH currently employs approximately 7 full-timeemployees. None of the employees in the United States are covered by a collective bargaining agreement and management believesit has good relations with its employees.

Ourprincipal executive offices are located at 135 Fifth Avenue, Floor 10, New York, NY 10010. Our telephone number is 212-739-7700.

DESCRIPTIONOF OUR CAPITAL STOCK

Thefollowing description summarizes important terms of our capital stock. For a complete description, you should refer to our certificateof incorporation and bylaws, forms of which are incorporated by reference to the exhibits to the registration statement of whichthis prospectus is a part, as well as the relevant portions of the Delaware law.

CapitalStock

TheCompany has two classes of stock: common and preferred. The Company’s amended and restated certificate of incorporationprovides for 80,000,000 shares of common stock, par value $0.01 and 11,000,000 shares of preferred stock par value $0.01.

Inthe discussion that follows, we have summarized selected provisions of our amended and restated certificate of incorporation,amended and restated bylaws, and certificates of designation, and the Delaware General Corporation Law relating to our capitalstock. This summary is not complete. This discussion is subject to the relevant provisions of Delaware law and is qualified inits entirety by reference to our certificate of incorporation and our bylaws. You should read the provisions of our amended andrestated certificate of incorporation, our amended and restated bylaws, and our certificates of designation as currently in effectfor provisions that may be important to you. Please also see “Effect of Certain Provisions of our Amended and RestatedBylaws” below.

CommonStock

Eachshare of common stock has equal and identical rights to every other share for purposes of dividends, liquidation preferences,voting rights and any other attributes of the Company’s common stock. No voting trusts or any other arrangement for preferentialvoting exist among any of the stockholders, and there are no restrictions in the articles of incorporation, or bylaws precludingissuance of further common stock or requiring any liquidation preferences, voting rights or dividend priorities with respect tothis class of stock.

Asof June 30, 2019, there were 55,602,590 shares of common stock issued and 55,552,057 shares of common stockoutstanding. Shares in treasury are the result of the redemption of WOW Group membership interests and indirectly, GGH’sshares. Each share of common stock entitles the holder thereof to one vote, either in person or by proxy, at a meeting of stockholders.The holders are not entitled to vote their shares cumulatively. Accordingly, the holders of more than 50% of the issued and outstandingshares of common stock can elect all of the directors of the Company.

Allshares of common stock are entitled to participate ratably in dividends when and as declared by the Company’s board of directorsout of the funds legally available. Any such dividends may be paid in cash, property or additional shares of common stock. TheCompany has not paid any dividends since its inception and presently anticipates that no dividends will be declared in the foreseeablefuture. Any future dividends will be subject to the discretion of the Company’s board of directors and will depend upon,among other things, future earnings, the operating and financial condition of the Company, its capital requirements, general businessconditions and other pertinent facts. Therefore, there can be no assurance that any dividends on the common stock will be paidin the future.

Holdersof common stock have no preemptive rights or other subscription rights, conversion rights, redemption or sinking fund provisions.In the event of the dissolution, whether voluntary or involuntary of the Company, each share of common stock is entitled to shareratably in any assets available for distribution to holders of the equity securities of the Company after satisfaction of allliabilities.

PreferredStock

Asof June 30, 2019, there were 11,000,000 shares of authorized preferred stock, with 10,097,330 shares designated as SeriesA Convertible Preferred Stock (“Series A Preferred”) and 902,670 designated as Series B Convertible Preferred Stock(“Series B Preferred”). As of June 30, 2019, there were no shares issued and outstanding of Series A Preferredand 902,670 shares issued and outstanding of Series B Preferred.

Asof the date of this Offering, all outstanding Series B Preferred shares will have converted into ______________ shares of commonstock. The Board of Directors has the ability to issue blank check preferred stock under the Company’s Amended and RestatedCertificate of Incorporation.

StockOptions and Warrants

Asof June 30, 2019, there were options to acquire a total of 7,409,375 shares of common stock granted pursuant toour 2008, 2016 and 2018 equity incentive plans at a weighted-average exercise price of $1.16, of which 2,849,136 sharesof our common stock are currently issuable upon exercise of outstanding stock options at a weighted-average exerciseprice of $1.93 per share, and there were warrants to acquire a total of 992,166 shares of our common stock all of whichare currently exercisable, at a weighted-average exercise price of $2.11.

Effectof Certain Provisions of our Amended and Restated Bylaws

Ourbylaws contain provisions that could have the effect of delaying, deferring, or discouraging another party from acquiring controlof us. These provisions and certain provisions of Delaware law, which are summarized below, could discourage takeovers, coerciveor otherwise.

Ourbylaws provide for our Board of Directors to be divided into three classes serving staggered terms. Approximately one-third ofthe Board of Directors will be elected each year. This method of electing directors makes changes in the composition of the Boardof Directors more difficult, and thus a potential change in control of a corporation a lengthier and more difficult process. Aclassified board of directors is designed to assure continuity and stability in a board of directors’ leadership and policiesby ensuring that at any given time a majority of the directors will have prior experience with our Company and be familiar withour business and operations.

Theclassified board structure may increase the amount of time required for a takeover bidder to obtain control of the Company withoutthe cooperation of our Board of Directors, even if the takeover bidder were to acquire a majority of the voting power of our outstandingcommon stock. Without the ability to obtain immediate control of our Board of Directors, a takeover bidder will not be able totake action to remove other impediments to its acquisition of our Company. Thus, a classified Board of Directors could discouragecertain takeover attempts, perhaps including some takeovers that stockholders may feel would be in their best interests. Further,a classified Board of Directors will make it more difficult for stockholders to change the majority composition of our Board ofDirectors, even if our stockholders believe such a change would be beneficial. Because the a classified Board of Directors willmake the removal or replacement of directors more difficult, it will increase the directors’ security in their positions,and could be viewed as tending to perpetuate incumbent management.

Sincethe creation of a classified Board of Directors will increase the amount of time required for a hostile bidder to acquire controlof our Company, the existence of a classified board of directors could tend to discourage certain tender offers which stockholdersmight feel would be in their best interest. However, our Board of Directors believes that forcing potential bidders to negotiatewith our Board of Directors for a change of control transaction will allow our Board of Directors to better maximize stockholdervalue in any change of control transaction.

Ourbylaws also provide that, unless we consent in writing to an alternative forum, the federal and state courts of the State of Delawarewill be the sole and exclusive forum for: (i) any derivative action or proceeding brought on our behalf; (ii) any action assertinga claim of breach of a fiduciary duty owed by any of our directors, officers, or employees to us or our stockholders; (iii) anyaction asserting a claim arising pursuant to any provision of the Delaware General Corporation Law; or (iv) any action assertinga claim that is governed by the internal affairs doctrine, in each case subject the court having personal jurisdiction over theindispensable parties named as defendants therein. This exclusive forum provision wouldnot apply to suits brought to enforce any liability or duty created by the Securities Act or the Exchange Act or any other claimfor which the federal courts have exclusive jurisdiction. This forum selection provision may limit our stockholders’ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, employeesor agents, which may discourage such lawsuits against us and our directors, officers, employees and agents even though an action,if successful, might benefit our stockholders.

Ourbylaws establish an advance notice procedure for stockholder proposals to be brought before any meeting of our stockholders, includingproposed nominations of persons for election to our board of directors. At an annual or special meeting, stockholders may onlyconsider proposals or nominations (i) specified in the notice of meeting; (ii) brought before the meeting by or at the directionof our board of directors or (iii) otherwise properly brought before the meeting by any stockholder who is a stockholder of recordon the date of the giving of the notice and on the record date of the meeting and who complies with the notice procedures setforth in our bylaws. The bylaws do not give our board of directors the power to approve or disapprove stockholder nominationsof candidates or proposals regarding other business to be conducted at a special or annual meeting of our stockholders. However,our bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed.These provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’sown slate of directors or otherwise attempting to obtain control of the Company.

DelawareAnti-Takeover Statute

Weare subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. These provisionscan discourage certain coercive and inadequate takeover bids of the Company by requiring those seeking control of the Companyto negotiate with the Board of Directors first. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging,under certain circumstances, in a business combination with an interested stockholder (one who owns 15% or more of the Company’soutstanding voting stock) for a period of three years following the date the person became an interested stockholder unless:

Generally,a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interestedstockholder. We expect the existence of this provision to have an anti-takeover effect with respect to transactions that our Boardof Directors does not approve in advance and could result in making it more difficult to accomplish transactions that our stockholdersmay see as beneficial such as (i) discouraging business combinations that might result in a premium over the market price forthe shares of our common stock; (ii) discouraging hostile takeovers which could inhibit temporary fluctuations in the market priceof our common stock that often result from actual or rumored hostile takeover attempts; and (iii) preventing changes in our management.

TransferAgent and Registrar

Thetransfer agent and registrar for our common stock is Continental Stock Transfer & Trust. The transfer agent’s addressis: 1 State Street, 30th Floor, New York, New York 10004-1561. Shares of our common stock will be issued in uncertificated formonly, subject to limited circumstances.

MarketListing

Ourcommon stock is currently listed on the OTC Market’s OTCQB tier under the symbol “VINO” and we intend to listour common stock on the Capital Markets tier of the Nasdaq under the same symbol.

Disclosureof Commission Position on Indemnification for Securities Act Liabilities

Insofaras indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controllingpersons pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is againstpublic policy as expressed in the Securities Act and is, therefore, unenforceable.

PROPERTIES

GGHand its operating subsidiaries maintain their corporate headquarters at 135 Fifth Avenue, 10th Floor, New York, NY under a leasecovering approximately 3,300 square feet, which expires in August 2020 at a monthly rental of $19,000. The Company expectsto remain in these offices for the immediate future, unless its growth, or the growth of its affiliates, necessitates a move intolarger or separate offices.

TheAlgodon – Recoleta, SRL (“TAR”) owns a hotel in the Recoleta section of Buenos Aires called Algodon Mansion,located at 1647 Montevideo Street. The hotel is approximately 20,000 square feet and has ten suites, a restaurant, a dining room,and a luxury spa and pool.

AlgodonWine Estates owns and operates a resort property located Ruta Nacional 144 Km 674, Cuadro Benegas, San Rafael (5603) in Argentinaand consisting of 4,138 acres. The property has a winery, 18-hole golf course, tennis courts, dining and a hotel.

TARhas guaranteed a loan of $600,000 for the Algodon Mansion and the resort property and the properties are subject to encumbrances.

LegalProceedings

Fromtime to time GGH and its subsidiaries and affiliates are subject to litigation and arbitration claims incidental to its business.Such claims may not be covered by its insurance coverage, and even if they are, if claims against GGH and its subsidiaries aresuccessful, they may exceed the limits of applicable insurance coverage. We are not involved in any litigation that we believeis likely, individually or in the aggregate, to have a material adverse effect on our consolidated financial condition, resultsof operations or cash flows.

MarketInformation

Atthe close of the Offering our common stock will trade under the symbol “VINO” on the Nasdaq Capital Markets. The followingtable sets forth the range of high and low bids reported in the over-the-counter market for our common stock, which was our primarytrading market prior to the Offering. The prices reflect inter-dealer prices, do not include retail mark-ups, markdowns or commissions,and may not necessary reflect actual transactions.