July 23, 2019
Scott L. Mathis
President & Chief Executive Officer
Gaucho Group Holdings, Inc.
135 Fifth Avenue, Floor 10
New York, NY 10010
Re: Gaucho Group Holdings, Inc.
Draft Registration Statement on Form S-1
Submitted June 26, 2019
CIK 0001559998
Dear Mr. Mathis:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so we may
better
understand your disclosure.
Please respond to this letter by providing the requested information and
either submitting
an amended draft registration statement or publicly filing your registration
statement on
EDGAR. If you do not believe our comments apply to your facts and circumstances
or do not
believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments
and your
amended draft registration statement or filed registration statement, we may
have additional
comments.
Draft Registration Statement on Form S-1, Filed June 26, 2019
General
1. It appears that you qualify as an "emerging growth company" as defined
in the Jumpstart
Our Business Startups Act. If so, please disclose that fact in your
filing.
2. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
3. Please provide us with copies of any graphics, maps, photographs, and
related captions or
other artwork including logos that you intend to use in the prospectus.
Such graphics and
Scott L. Mathis
FirstName LastNameScott L. Mathis
Gaucho Group Holdings, Inc.
Comapany NameGaucho Group Holdings, Inc.
July 23, 2019
July 23, 2019 Page 2
Page 2
FirstName LastName
pictorial representations should not be included in any preliminary
prospectus distributed
to prospective investors prior to our review.
Prospectus Summary, page 3
4. We note your disclosure in this section and on page 62 regarding a
reverse stock split you
plan to effect in connection with your listing on a national exchange.
We further note
your disclosure on page F-61, stating "On December 12, 2017, the
Company's Board of
Directors approved a five-for-one reverse stock split, to be effective
upon the Company's
uplisting to a national stock exchange." Please revise to clarify the
actual reverse stock
split ratio approved by your stockholders and board, when available.
5. We note your focus in this section and in the "Business" section on
your e-commerce
brand. We further note, from your disclosure on pages F-13 and F-38,
that you do not
appear to have recognized any revenue from this business line as of
December 31, 2018 or
March 31, 2019. Please balance your disclosure in these sections with
disclosure
regarding the material risks and barriers to entry associated with
this business line and
ensure that you do not place undue prominence on your plans to expand
this aspect of
your business without fully addressing all material aspects of your
other lines business and
their respective impacts on your results of operations and growth
strategy.
Dilution, page 29
6. We note your disclosure, including on page 3, stating that all Series
B Preferred Stock
converted into common stock at the closing of this offering. Please
revise your disclosure
in this section to include the effect of such conversion in your
calculations. Please refer to
Item 506 of Regulation S-K.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Consolidated Results of Operations, page 33
7. Please revise your disclosure in this section to clarify the relative
contributions to your
operating results from your hotel and resort operations, real estate
operations, and
agricultural operations, respectively. Additionally, please revise
your disclosure under
"Recent Developments and Trends" to clarify the relative extent to
which you expect each
of your existing businesses as well as GG's fashion business to
contribute to your financial
condition and results of operations in the future. Refer to Item
303(a) of Regulation S-K.
Business, page 43
8. To the extent that management tracks such information, please include
occupancy data,
average daily rate and RevPAR for each of your material hotel
properties.
Sales and Marketing Strategy / Competitive Edge, page 46
9. Please revise to clarify the nature of the relationship, contractual
or otherwise, that you
Scott L. Mathis
FirstName LastNameScott L. Mathis
Gaucho Group Holdings, Inc.
Comapany NameGaucho Group Holdings, Inc.
July 23, 2019
July 23, 2019 Page 3
Page 3
FirstName LastName
have with each of the business advisors identified in this section.
Currency Devaluation, page 50
10. We note your disclosure in this section. We further note your
disclosure on page 35
regarding the negative effect on your revenues as a result of the
"impact of the decline in
the value of the Argentine peso . . . vis- -vis the U.S. dollar during
2018." Please balance
your disclosure in this section with a discussion of future potential
negative impacts on
your business or results of operations as a result of currency
devaluation.
Wine Distribution Partnership with sbe Entertainment Group, page 54
11. Please revise to clarify the nature of your relationship with sbe
Entertainment Group. To
the extent applicable, please file any material agreements you have
entered into with sbe
Entertainment Group as exhibits or advise. Refer to Item 601(b)(10) of
Regulation S-K.
Directors, Executive Officers and Corporate Governance
Term of Office, page 66
12. Please revise to disclose the length of each director's term of
office.
Certain Relationships and Related Transactions and Director Independence, page
77
13. We note your disclosure in this section regarding your expense sharing
agreements. We
further note your disclosure on pages F-19 and F-52 regarding expense
sharing
agreements. Please revise your disclosure in this section to include
all of the disclosures
required by Item 404(a) of Regulation S-K, including identifying both
of the related
parties with which you have expense sharing agreements, the
approximate value of the
transactions, and the approximate value of the related person's
interests therein.
Indemnification Agreements, page 77
14. We note your statement that you "have not entered into indemnification
agreements with
each of [your] directors and executive officers." This is inconsistent
with the remaining
disclosure in this section and in the risk factor on page 24 under the
heading "The
Company's officers and directors are indemnified against certain
conduct that may prove
costly to defend." Please revise for consistency.
Exhibits
15. We note that your bylaws provide that a state or federal court located
within the state of
Delaware will be the exclusive forum for certain types of claims,
including derivative
claims. Please revise your registration statement to clearly and
prominently disclose this
provision, including whether it applies to claims made under the
federal securities laws.
Additionally, please describe any risks to investors associated with
this provision and any
uncertainty as to such provision's enforceability.
Scott L. Mathis
Gaucho Group Holdings, Inc.
July 23, 2019
Page 4
You may contact Peter McPhun, Staff Accountant, at (202) 551-3581 or
Kristi Marrone,
Staff Accountant, at (202) 551-3429 if you have questions regarding comments on
the financial
statements and related matters. Please contact Sara von Althann, Staff
Attorney, at (202) 551-
3207 or Erin E. Martin, Legal Branch Chief, at (202) 551-3391 with any other
questions.
Sincerely,
FirstName LastNameScott L. Mathis
Division of
Corporation Finance
Comapany NameGaucho Group Holdings, Inc.
Office of Real
Estate and
July 23, 2019 Page 4 Commodities
FirstName LastName