Gaucho Group Holdings, Inc. (VINO)·Q1 2016 Earnings Summary

Executive Summary

• Q1 2016 revenue declined 23% year over year to $0.44M, primarily driven by Argentine peso devaluation; private placement fees and hotel revenues partially offset the decline .
• Gross profit improved to $0.11M as cost of sales fell; net loss narrowed to $2.00M and diluted EPS improved to $(0.05) from $(0.06) a year ago .
• Liquidity remains the central risk: cash runway extends only through August 2016 absent additional financing; management reiterated substantial doubt about going concern and ongoing capital-raising needs .
• Corporate actions/catalysts: common stock became DTC-eligible in April, and the company applied to list on NYSE MKT in May; 651k shares held by a subsidiary were retired shortly thereafter .
• No Wall Street consensus from S&P Global was available for Q1 2016; thus, no beat/miss comparison is possible (S&P Global mapping for VINO unavailable).

What Went Well and What Went Wrong

• What Went Well

  • Gross profit rose year over year (to $108.7k vs $87.9k) on lower cost of sales and higher private placement fees; hotel revenues also increased in the quarter .
  • DTC eligibility improves trading mechanics and potential liquidity: “This represents yet another step forward...we anticipate that the DTC eligibility will make our shares more attractive to current and potential investors” — Scott Mathis, Chairman & Founder .
  • Management is executing revenue and cost initiatives (marketing expansion, winery capacity, new real estate revenue sources; equipment to reduce subcontracting; outsourcing/restructuring) to become more self-sufficient and less dependent on external financing .

• What Went Wrong

  • Top-line pressure from FX: revenues fell ~23% YoY as the Argentine peso weakened significantly vs USD; FX also reduced cost bases but remains a headwind to reported sales .
  • Continued operating losses and going concern risk: cash on hand funds operations only through August 2016 without new capital; management cites “substantial doubt” about the company’s ability to continue as a going concern .
  • Elevated G&A mix included non-cash items (e.g., $291.7k related to vesting of restricted stock issued to a consultant under an advisory agreement; severance of ~$230k), which constrained operating leverage .

Financial Results

Income statement (last three reported quarters; oldest → newest):

Additional context and YoY comparisons:

• Revenue declined ~23% YoY given peso devaluation; private placement fees and hotel revenues increased .
• G&A was approximately flat YoY at ~$2.0M, but included $291.7k vesting of restricted shares tied to the Maxim advisory agreement and ~$230k severance; FX reduced some local costs .
• Interest expense decreased YoY to ~$27k from ~$46k due to lower debt .

Balance sheet and liquidity KPIs (quarter-end):

• Cash: $1,329,736 (Mar 31, 2016) vs $110,645 (Dec 31, 2015) — improved primarily from equity issuance .
• Working capital: $222,077 at Mar 31, 2016 (vs $(1,477,183) at Dec 31, 2015) .
• Going concern/liquidity: cash runway through August 2016 without new financing; substantial doubt raised .

Segment disclosure:

• The company operates as a single segment (real estate development in Argentina; U.S. broker-dealer is a support function) — no segment revenue table provided .

Guidance Changes

• No formal quantitative guidance was provided in the Q1 2016 10-Q or related filings – –.
• An April investor presentation with 2016 projections was referenced, but detailed figures were not filed in-text (EX-99.1 cited); thus, no guided ranges are available for comparison .

Earnings Call Themes & Trends

(No earnings call transcript identified for Q1 2016; themes drawn from MD&A and filings.)

Management Commentary

• Strategy and initiatives: “Revenue enhancement initiatives include expanding marketing, investment in additional winery capacity and developing new real estate development revenue sources. Cost reduction initiatives include investment in equipment that will decrease our reliance on subcontractors, plus outsourcing and restructuring of certain functions. Our goal is to become more self-sufficient and less dependent on outside financing.”
• FX impact and mix: Revenues decreased ~$129k YoY due largely to peso devaluation; increases in private placement fees and hotel revenues partially offset; cost of sales decreased, supporting higher gross profit .
• Liquidity: “The Company presently has only enough cash on hand to sustain its operations through August 2016.”
• Market structure/listing: “We anticipate that the DTC eligibility will make our shares more attractive to current and potential investors.” — Scott Mathis . The company also applied to list on NYSE MKT and retired ~651k shares held by a subsidiary .

Q&A Highlights

• No Q1 2016 earnings call transcript or Q&A was identified in company filings or transcripts databases for the period [ListDocuments/Search returned none for VINO Q1 2016 earnings-call-transcript].

Estimates Context

• S&P Global consensus estimates for Q1 2016 were unavailable due to missing mapping for VINO in SPGI systems (tool returned no data). As a result, we cannot benchmark reported results to Wall Street estimates this quarter.

Key Takeaways for Investors

• Liquidity is the gating factor: with cash funding operations only through August 2016 absent new financing, equity or debt raises remain the central near‑term catalyst and risk .
• FX headwinds depress reported USD revenues; however, local-cost deflation in USD terms aided gross profit YoY, and private placement fees/hotel revenues provided partial offsets .
• Sequentially, revenue fell from Q4 2015 ($0.57M) to Q1 2016 ($0.44M), and operating loss widened vs Q4; watch for seasonality and monetization of real estate lots to drive step-ups .
• Corporate infrastructure improvements (DTC eligibility, NYSE MKT application) may enhance trading liquidity and broaden the investor base if successful; the retirement of ~651k shares is marginally accretive .
• Execution priorities: accelerate revenue initiatives (marketing, winery capacity, lot sales closings) and continue cost controls to narrow operating losses in 2016 .
• Absence of Street estimates and lack of formal guidance increases uncertainty; focus on cash flow runway updates, capital raise terms, and operational KPIs (hotel occupancy, wine volumes, lot deed transfers) in upcoming disclosures .

Supporting tables reference specific filings and page sections as cited.