Item
3.02 Unregistered Sale of Equity Securities
Conversion
of Promissory Notes Issued in Private Placement
From
July 13, 2022 through August 30, 2022, the Company issued convertible promissory notes to certain investors (the “Investor
Notes”) in the aggregate amount of $1,531,500. Pursuant to the terms of the Investor Notes, if the stockholders approve
for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of shares of up to 15,000,000 of the Company’s common
stock upon the conversion of the Investor Notes, without giving effect to Nasdaq’s 20% Rule, the Investor Notes are to be automatically
converted into units consisting of one share of common stock and one warrant to purchase one share of common stock at a price equal to
the lesser of (a) $0.55 per unit or (b) the three-day volume weighted average closing price (“VWAP”) of the Company’s
common stock beginning on the date that is two days prior to stockholder approval of such conversion at the 2022 annual stockholder meeting.
At
the annual stockholder meeting held on August 30, 2022, the Company obtained the requisite stockholder approval, and the Investor Notes
comprised of $1,531,500 and $8,099 in interest, were automatically converted into an aggregate of 4,920,172 units based
on a conversion price of $0.3182 – the three-day VWAP of the Company’s common stock beginning on the date that is
two days prior to stockholder approval of such conversion at the 2022 annual stockholder meeting. Each warrant issued upon the conversion
of the Investor Notes is exercisable at a price of $0.3182. For this sale of securities, no general solicitation was used, no
commissions were paid, all persons were accredited investors, and the Company relied on the exemption from registration available under
Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated under the Securities Act with respect to transactions by an issuer not
involving any public offering. A Form D will be filed with the SEC within 15 days of the conversion
of the Investor Notes.
See
Item 5.07 for further information regarding the stockholder approval of the issuance of shares upon conversion of the Investor Notes
at the annual stockholders’ meeting of Gaucho Group Holdings, Inc. (the “Company”) held on August 30, 2022.
Non-Executive
Director Compensation
On
August 30, 2022, Gaucho Group Holdings, Inc. (the “Company”), issued a total of 30,810 shares at $0.807 per share
to Dr. Steven Moel and Mrs. Edie Rodriguez as compensation for service as members of the Board of Directors of the Company (the “Board”)
for the second half of 2022. On August 11, 2022, the Company issued restricted stock units (“RSUs”) to all non-executive
directors as compensation for service as members of the Board for the second half of 2022. The RSUs vested on the earlier of December
31, 2022 or pro rata to termination of service as a director. At the Company’s annual stockholder meeting held on August 30, 2022,
Dr. Moel’s and Mrs. Rodriguez’s terms expired, and neither was re-elected. As a result, Dr. Moel’s and Mrs. Rodriguez’s
service as directors terminated effective as of August 30, 2022, and their RSUs vested pro rata as of such date.
For
this sale of securities, no general solicitation was used, no commissions were paid, all persons were accredited investors, and the Company
relied on the exemption from registration available under Section 4(a)(2) and/or Rule 506(b) of Regulation D promulgated under the Securities
Act with respect to transactions by an issuer not involving any public offering.
See
Item 5.02 for further information regarding the departure of certain directors.