10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to ___________________.

Commission file number: 000-55209

Algodon Wines & Luxury Development Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	52-2158952
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

135 Fifth Avenue, 10th Floor

New York, NY 10010

(Address of principal executive offices)

212-739-7700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [  ]

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

Large accelerated filer	[  ]		Accelerated filer	[  ]
Non-accelerated filer	[  ]	(Do not check if a smaller reporting company)	Smaller reporting company	[X]
Emerging growth company	[  ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ] No [X]

As of August 14, 2018, there were 45,973,292 shares of common stock outstanding.

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2018 (unaudited) and December 31, 2017	1
Unaudited Condensed Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2018 and 2017	2
Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three Months and Six Months Ended June 30, 2018 and 2017	3
Unaudited Condensed Consolidated Statement of Changes in Temporary Equity and Stockholders’ Deficiency for the Six Months Ended June 30, 2018	4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2018 and 2017	5
Notes to Unaudited Condensed Consolidated Financial Statements	7
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	33
ITEM 4. Controls and Procedures	33
PART II
OTHER INFORMATION
ITEM 1. Legal Proceedings	34
ITEM 1A. Risk Factors	34
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
ITEM 3. Defaults Upon Senior Securities	35
ITEM 4. Mine Safety Disclosures	35
ITEM 5. Other Information	35
ITEM 6. Exhibits	35
Signatures	36

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2018			December 31, 2017
	(unaudited)
Assets
Current Assets
Cash	$	147,134		$	358,303
Accounts receivable, net of allowance of $2,202 and $3,421 at June 30, 2018 and December 31, 2017, respectively		168,775			188,067
Accounts receivable - related parties, net of allowance of $514,087 at each of June 30, 2018 and December 31, 2017		199,169			851,016
Advances and loans to employees		278,784			284,496
Inventory		1,095,238			1,388,666
Real estate lots held for sale		31,830			151,906
Prepaid expenses and other current assets		115,166			159,465
Total Current Assets		2,036,096			3,381,919
Property and equipment, net		3,096,302			4,532,890
Prepaid foreign taxes, net of deferred tax reserve of $364,719 and $392,593 at June 30, 2018 and December 31, 2017, respectively		191,538			342,312
Investment - related parties		9,950			26,401
Deposits		61,284			61,284
Total Assets	$	5,395,170		$	8,344,806
Liabilities, Temporary Equity and Stockholders’ Deficiency
Current Liabilities
Accounts payable	$	465,603		$	415,318
Accrued expenses, current portion		811,294			1,000,521
Deferred revenue		651,616			1,732,664
Loans payable, current portion, net of debt discount		359,387			256,724
Convertible debt obligations, net of debt discount		1,244,033			20,000
Current portion of other liabilities		100,735			19,156
Total Current Liabilities		3,632,668			3,444,383
Accrued expenses, non-current portion		156,476			247,515
Other liabilities, non-current portion		-			11,474
Loans payable, non-current portion, net of debt discount		886,890			634,930
Total Liabilities		4,676,034			4,338,302
Commitments and Contingencies
Series B convertible redeemable preferred stock, par value $0.01 per share, 902,670 shares authorized, 902,670 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively. Liquidation preference of $9,267,090 at June 30, 2018.		9,026,824			9,026,824
Stockholders’ Deficiency
Preferred stock, 11,000,000 shares authorized; Series A convertible preferred stock, par value $0.01 per share; 10,097,330 shares authorized; no shares are available for issuance.		-			-
Common stock, par value $0.01 per share; 80,000,000 shares authorized; 45,669,539 and 43,067,546 shares issued and 45,619,006 and 43,063,135 shares outstanding as of June 30, 2018 and December 31, 2017, respectively.		456,693			430,674
Additional paid-in capital		82,748,920			80,902,967
Accumulated other comprehensive loss		(11,990,976	)		(10,795,810	)
Accumulated deficit		(79,475,970	)		(75,544,081	)
Treasury stock, at cost, 50,533 and 4,411 shares at June 30, 2018 and December 31, 2017, respectively.		(46,355	)		(14,070	)
Total Stockholders’ Deficiency		(8,307,688	)		(5,020,320	)
Total Liabilities, Temporary Equity and Stockholders’ Deficiency	$	5,395,170		$	8,344,806

See Notes to the Condensed Consolidated Financial Statements

1

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	For the three months ended						For the six months ended
	June 30,						June 30,
	2018			2017			2018			2017
Sales	$	396,392		$	413,295		$	1,674,315		$	1,031,832
Cost of sales		(385,883	)		(553,917	)		(961,845	)		(1,038,600	)
Gross profit (loss)		10,509			(140,622	)		712,470			(6,768	)
Operating Expenses
Selling and marketing		59,901			56,710			157,803			207,750
General and administrative		2,038,116			1,634,532			3,990,391			3,417,417
Depreciation and amortization		82,679			43,357			89,418			64,972
Total operating expenses		2,180,696			1,734,599			4,237,612			3,690,139
Loss from Operations		(2,170,187	)		(1,875,221	)		(3,525,142	)		(3,696,907	)
Other (Expense) Income
Interest expense, net		(336,588	)		(53,477	)		(406,747	)		(135,333	)
Gain on sale of investment in subsidiary		-			-			-			199,200
Total other (expense) income		(336,588	)		(53,477	)		(406,747	)		63,867
Loss from Continuing Operations		(2,506,775	)		(1,928,698	)		(3,931,889	)		(3,633,040	)
Loss from Discontinued Operations		-			-			-			(106,543	)
Net Loss		(2,506,775	)		(1,928,698	)		(3,931,889	)		(3,739,583	)
Deemed dividend to Series B preferred stockholders		(157,522	)		(48,283	)		(313,313	)		(51,336	)
Net Loss Attributable to Common Stockholders	$	(2,664,297	)	$	(1,976,981	)	$	(4,245,202	)	$	(3,790,919	)
Net Loss per Basic and Diluted Common Share:
Loss from continuing operations	$	(0.06	)	$	(0.04	)	$	(0.10	)	$	(0.08	)
Loss from discontinued operations		-			-			-			-
Net Loss per Common Share	$	(0.06	)	$	(0.04	)	$	(0.10	)	$	(0.08	)
Weighted Average Number of Common Shares Outstanding:
Basic and Diluted		43,601,253			42,974,812			43,345,510			42,954,832

See Notes to the Condensed Consolidated Financial Statements

2

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(unaudited)

	For the three months ended						For the six months ended
	June 30,						June 30,
	2018			2017			2018			2017
Net Loss	$	(2,506,775	)	$	(1,928,698	)	$	(3,931,889	)	$	(3,739,583	)
Other Comprehensive Loss:
Foreign currency translation adjustments		(909,557	)		(196,492	)		(1,195,166	)		3,768
Total Comprehensive Loss	$	(3,416,332	)	$	(2,125,190	)	$	(5,127,055	)	$	(3,735,815	)

See Notes to the Condensed Consolidated Financial Statements

3

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIENCY

FOR THE SIX MONTHS ENDED JUNE 30, 2018

(unaudited)

	Series B
	Convertible Redeemable Preferred Stock				Common Stock				Treasury Stock					Additional Paid-In			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount			Capital			Loss			Deficit			Deficiency
Balance - December 31, 2017		902,670	$	9,026,824		43,067,546	$	430,674		4,411	$	(14,070	)	$	80,902,967		$	(10,795,810	)	$	(75,544,081	)	$	(5,020,320	)
Stock-based compensation:
Common stock issued under 401(k) profit sharing plan		-		-		116,284		1,163		-		-			80,236			-			-			81,399
Options and warrants		-		-		-		-		-		-			388,331			-			-			388,331
Common stock issued for cash		-		-		822,000		8,220		-		-			567,180			-			-			575,400
Beneficial conversion feature on convertible debt issued		-		-		-		-		-		-			227,414			-			-			227,414
Common stock issued upon conversion of convertible debt and interest		-		-		1,285,516		12,855		-		-			797,020			-			-			809,875
Dividends declared on Series B Convertible Redeemable Preferred Stock		-		-		-		-		-		-			(474,719	)		-			-			(474,719	)
Common stock issued in satisifaction of dividends payable		-		-		378,193		3,781		-		-			260,491			-			-			264,272
Common stock returned to the company to satisfy receivable		-		-		-		-		46,122		(32,285	)		-			-			-			(32,285	)
Comprehensive loss:
Net loss		-		-		-		-		-		-			-			-			(3,931,889	)		(3,931,889	)
Other comprehensive loss		-		-		-		-		-		-			-			(1,195,166	)		-			(1,195,166	)
Balance - June 30, 2018		902,670	$	9,026,824		45,669,539	$	456,693		50,533	$	(46,355	)	$	82,748,920		$	(11,990,976	)	$	(79,475,970	)	$	(8,307,688	)

See Notes to the Condensed Consolidated Financial Statements

4

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	For the six months ended
	June 30,
	2018			2017
Cash Flows from Operating Activities
Net loss	$	(3,931,889	)	$	(3,739,583	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation:
401(k) stock		34,571			43,814
Options and warrants		388,331			314,127
Net realized and unrealized investment losses		16,451			8,168
Depreciation and amortization		89,418			64,972
Amortization of debt discount		234,550			-
Provision for uncollectible assets		(27,874	)		6,000
Gain on sale of investment in subsidiary		-			(199,200	)
Decrease (increase) in assets:
Accounts receivable		525,421			(103,662	)
Inventory		(145,837	)		(38,255	)
Prepaid expenses and other current assets		(132,079	)		128,154
Increase (decrease) in liabilities:
Accounts payable and accrued expenses		179,010			(472,794	)
Deferred revenue		(572,023	)		(87,962	)
Other liabilities		81,579			(2,115	)
Total Adjustments		671,518			(338,753	)
Net Cash Used in Operating Activities		(3,260,371	)		(4,078,336	)
Cash Flows from Investing Activities
Purchase of property and equipment		(326,799	)		(283,279	)
Proceeds from sale of investment in subsidiary		-			199,200
Net Cash Used in Investing Activities		(326,799	)		(84,079	)
Cash Flows from Financing Activities
Proceeds from loans payable		580,386			517,243
Repayments of loans payable		(51,961	)		(31,312	)
Proceeds from convertible debt obligations		2,026,730			1,260,000
Repayments of debt obligations		-			(115,000	)
Dividends paid in cash		(127,913	)		-
Proceeds from sale of Series B preferred stock		-			3,539,214
Proceeds from common stock offering, net of issuance costs		575,400			40,500
Net Cash Provided by Financing Activities		3,002,642			5,210,645
Effect of Exchange Rate Changes on Cash		373,359			85,045
Net (Decrease) Increase in Cash		(211,169	)		1,133,275
Cash - Beginning of Period		358,303			131,190
Cash - End of Period	$	147,134		$	1,264,465

See Notes to the Condensed Consolidated Financial Statements

5

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS, continued

(unaudited)

	For the six months ended
	June 30,
	2018		2017
Supplemental Disclosures of Cash Flow Information:
Interest paid	$	181,439	$	112,855
Income taxes paid	$	-	$	15,643
Non-Cash Investing and Financing Activity
Accrued stock-based compensation converted to equity	$	81,399	$	73,868
Debt and interest converted to equity	$	809,875	$	1,267,324
Common stock returned to Company to satisfy receivable	$	32,285	$	-
Beneficial conversion feature	$	227,424	$	-
Dividends declared on Series B Convertible Redeemable Preferred Stock	$	474,719	$	-
Common stock issued to satisfy dividends payable	$	264,272	$	-

See Notes to the Condensed Consolidated Financial Statements

6

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. ORGANIZATION

Through its wholly-owned subsidiaries, Algodon Wines & Luxury Development Group, Inc. (the “Company”, “Algodon Partners”, “AWLD”), a Delaware corporation that was incorporated on April 5, 1999, currently invests in, develops and operates international real estate projects. The Company’s wholly-owned subsidiaries are InvestProperty Group, LLC, Algodon Global Properties, LLC, and Algodon Europe, Ltd. Through its subsidiaries, the Company currently operates Algodon Mansion (“TAR”), a Buenos Aires-based luxury boutique hotel property and has redeveloped, expanded and repositioned an Argentine winery and golf resort property called Algodon Wine Estates (“AWE”) for subdivision of a portion of this property for residential development.

2. GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company incurred losses from continuing operations of $3,931,889 during the six months ended June 30, 2018 and has an accumulated deficit of $79,475,970 at June 30, 2018. Cash used in operating activities was $3,260,371 for the six months ended June 30, 2018. Based upon projected revenues and expenses, the Company believes that it may not have sufficient funds to operate for the next twelve months. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company needs to raise additional capital in order to continue to pursue its business objectives. The Company funded its operations during the six months ended June 30, 2018 through the proceeds from convertible debt obligations of $2,026,730, proceeds from loans payable of $580,386, and net proceeds from the sale of common stock of $575,400. The Company repaid debt of $51,961 during the six months ended June 30, 2018 and paid cash dividends of $127,913 during the six months ended June 30, 2018.

If the Company is not able to obtain additional sources of capital, it may not have sufficient funds to continue to operate the business for twelve months from the date these financial statements are issued. Historically, the Company has been successful in raising funds to support its capital needs. Management believes that it will be successful in obtaining additional financing; however, no assurance can be provided that the Company will be able to do so. Further, there is no assurance that these funds will be sufficient to enable the Company to attain profitable operations or continue as a going concern. To the extent that the Company is unsuccessful, the Company may need to curtail its operations and implement a plan to extend payables and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. Such a plan could have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Company could be forced to discontinue its operations, liquidate and/or seek reorganization in bankruptcy. These condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

7

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, 2018, and for the three and six months ended June 30, 2018 and 2017. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the operating results for the full year. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on March 30, 2018. The condensed consolidated balance sheet as of December 31, 2017 has been derived from the Company’s audited consolidated financial statements.

Use of Estimates

To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, the Company must make estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates and assumptions of the Company include the valuation of equity instruments, the useful lives of property and equipment and reserves associated with the realizability of certain assets.

Discontinued Operations

The Company accounted for its decision to close down its broker-dealer subsidiary as discontinued operations in accordance with the guidance provided in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, “Accounting for Impairment or Disposal of Long-Lived Assets,” and ASC Topic 205, “Presentation of Financial Statements,” which require that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results shall be reported in the financial statements as discontinued operations. Accordingly, the results of operations for the broker dealer subsidiary during the periods presented are reclassified into a separate line item in the statements of operations. There were no assets or liabilities of discontinued operations as of June 30, 2018 or December 31, 2017.

Segment Information

The FASB has established standards for reporting information on operating segments of an enterprise in interim and annual financial statements. The Company operates in one segment which is the business of real estate development in Argentina. The Company’s chief operating decision-maker reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating segment.

8

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. The functional currencies of the Company’s operating subsidiaries are their local currencies (United States dollar, Argentine peso and British pound). Argentine assets and liabilities are translated into U.S. dollars using the exchange rate at the balance sheet date (28.880 and 18.593 for the Argentine peso and 0.7572 and 0.7400 for the British pound at June 30, 2018 and December 31, 2017, respectively), and revenue and expense accounts are translated using a weighted average exchange rate for the period then ended (23.4199 and 15.6863 for the Argentine peso and 0.7352 and 0.8589 for the British pound for the three and six months ended June 30, 2018 and 2017, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies.

The Company continued to monitor the inflation trends in Argentina during the second quarter of 2018 to assess whether the Argentine economy should be considered highly inflationary, which is defined in U.S. GAAP as the period in which the three-year cumulative inflation rate in the country exceeds 100%. The determination that Argentina has a highly inflationary economy requires a change in the functional currency of the Company’s Argentine operations to the U.S. dollar in the quarterly period following when the economy was deemed to be highly inflationary.

While there has been uncertainty in recent periods about the three-year cumulative inflation rate given the unavailability and inconsistency of certain historical inflation data in Argentina, as of June 30, 2018, all available inflation statistics published by the Argentine Central Bank had exceeded a three-year cumulative rate of 100%. The Argentine economy was deemed to be highly inflationary as of the second quarter of 2018 and, as a result, the Company is required to change the functional currency of its Argentine operations to the U.S. dollar, effective as of July 1, 2018.

Property and Equipment

Investments in property and equipment are recorded at cost. These assets are depreciated using the straight-line method over their estimated useful lives. Most of the Company’s assets are located in Argentina and are subject to variation as a result of foreign currency translation.

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

9

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Stock-Based Compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on financial reporting dates and vesting dates until the service period is complete. The fair value amount of the shares expected to ultimately vest is then recognized over the period for which services are required to be provided in exchange for the award, usually the vesting period. The Company accounts for forfeitures as they occur.

Concentrations

The Company maintains cash with major financial institutions. Cash held in US bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. No similar insurance or guarantee exists for cash held in Argentina bank accounts. There were aggregate uninsured cash balances of $92,977 and $146,952 at June 30, 2018 and December 31, 2017, respectively, of which $92,977 and $92,168, respectively, represents cash held in Argentine bank accounts.

Comprehensive Income (Loss)

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

Revenue Recognition

On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers. ASC Topic 606 provides a single comprehensive model to use in accounting for revenue arising from contracts with customers, and gains and losses arising from transfers of non-financial assets including sales of property and equipment, real estate, and intangible assets. The Company adopted ASC Topic 606 for all applicable contracts using the modified retrospective method, requires a cumulative-effect adjustment, if any, as of the date of adoption. The adoption of ASC Topic 606 did not have a material impact on the Company’s consolidated financial statements as of the date of adoption, and therefore a cumulative-effect adjustment was not required.

The Company earns revenues from the sale of real estate lots and sales of food and wine as well as hospitality, food & beverage, and other related services. The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

10

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Revenue Recognition, continued

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

	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Real estate sales	$	77,182	$	-	$	877,036	$	-
Hotel room and events		164,011		160,550		387,579		424,499
Restaurants		66,173		77,881		156,270		168,150
Winemaking		87,775		76,922		227,171		299,750
Golf, tennis and other		1,251		97,942		26,259		139,433
	$	396,392	$	413,295	$	1,674,315	$	1,031,832

Revenue from real estate lot sales is recorded when the lot is deeded and legal ownership of the lot is transferred to the customer. Revenue from the sale of food, wine and agricultural products is recorded when the customer obtains control of the goods purchased. Revenues from hospitality and other services are recognized as earned at the point in time that the related service is rendered and the performance obligation has been satisfied.

The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Deferred revenues associated with real estate lot sale deposits are recognized as revenues (along with any outstanding balance) when the lot sale closes and the deed is provided to the purchaser. Other deferred revenues primarily consist of deposits accepted by the Company in connection with agreements to sell barrels of wine, advance deposits received for grapes and other agricultural products, and hotel deposits. Wine barrel and agricultural product advance deposits are recognized as revenues (along with any outstanding balance) when the product is shipped to the purchaser. Hotel deposits are recognized as revenue upon occupancy of rooms, or the provision of services.

During the three and six months ended June 30, 2018 the Company recognized approximately $28,000 and $828,000, respectively, of revenues related to the sale of real estate lots which was included in deferred revenues as of December 31, 2017. For the three and six months ended June 30, 2018, the Company did not recognize any revenue related to performance obligations satisfied in previous periods. Contracts related to the sale of wine, agricultural products and hotel services have an original expected length of less than one year. The Company has elected not to disclose information about remaining performance obligations pertaining to contracts with an original expected length of one year or less, as permitted under the guidance.

11

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

Revenue Recognition, continued

As of June 30, 2018 and December 31, 2017, the Company had deferred revenue of $608,700 and $1,690,224, respectively, associated with real estate lot sale deposits, $9,301 and $0, respectively, related to advance deposits for wine barrel and agricultural products and had $33,615 and $42,440, respectively, of deferred revenue related to hotel deposits. Sales taxes and value added (“VAT”) taxes collected from customers and remitted to governmental authorities are presented on a net basis within revenues in the condensed consolidated statements of operations.

Net Loss per Common Share

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments.

The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:

	June 30,
	2018		2017
Options		7,973,593		7,839,265
Warrants		1,376,875		1,903,730
Series B convertible preferred stock		9,026,700		4,806,210
Convertible debt		1,987,070		-
Total potentially dilutive shares		20,364,238		14,549,205

New Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”, which increases the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 will require lessees to recognize a right-of-use (ROU) asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation for leases with terms of more than twelve months. Both the ROU asset and lease liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Accounting by lessors will remain largely unchanged from current U.S. GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted, and is to be applied as of the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact that the provisions of ASU 2016-02 will have on the Company’s consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, which allows entities the option to adopt this standard prospectively with a cumulative-effect adjustment to opening equity and include required disclosures for prior periods.

12

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, continued

New Accounting Pronouncements, continued

In August 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 in the statement of cash flows in order to reduce diversity in practice. The ASU is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The adoption of ASU 2016-15 did not have a material effect on the Company’s condensed consolidated financial statements and related disclosures.

On February 22, 2017, the FASB issued ASU 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20)”, which requires that all entities account for the derecognition of a business in accordance with ASC 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 material impact on the Company’s condensed consolidated financial statements and related disclosures.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718); Scope of Modification Accounting”. The amendments in this ASU provide guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. If the value, vesting conditions or classification of the award changes, modification accounting will apply. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU 2017-09 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

On June 20, 2018, the FASB issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting”, which simplifies the accounting for share-based payment transactions resulting for acquiring goods and services from nonemployees. ASU 2018-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

The Company has implemented all new accounting standards that are in effect and may impact its condensed consolidated financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position or results of operations.

13

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

4. DISCONTINUED OPERATIONS

On November 29, 2016, the Company’s Board of Directors determined that it was in the Company’s best interest to close down its broker-dealer operations on December 31, 2016. On February 21, 2017, the Company’s request to FINRA for Broker-Dealer Withdrawal became effective.

Results of Discontinued Operations

There were no results of discontinued operations during the three and six months ended June 30, 2018, or for the three months ended June 30, 2017. Results of discontinued operations for the six months ended June 30, 2017 were as follows:

	For Six Months Ended
	June 30, 2017
Revenues	$	-
Gross profit	$	-
Operating expenses	$	(106,564	)
Interest income (expense)	$	21
Loss from discontinued operations	$	(106,543	)

5. INVENTORY

Inventory is comprised of the following:

	June 30, 2018		December 31, 2017
Vineyard in process	$	85,272	$	349,458
Wine in process		722,858		865,762
Finished wine		35,680		63,964
Other		251,428		109,482
	$	1,095,238	$	1,388,666

14

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

6. INVESTMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company holds certain affiliate warrants earned by the broker-dealer subsidiary prior to its discontinuation of operations, which are marked to market at each reporting date using the Black-Scholes option pricing model. The Company recorded unrealized losses on the affiliate warrants of $14,824 and $16,451 during the three and six months ended June 30, 2018, respectively, and $5,137 and $8,168 recorded during the three and six months ended June 30, 2017, respectively, which are included in revenue on the accompanying condensed consolidated statements of operations.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or developed by the Company. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1 - Valued based on quoted prices at the measurement date for identical assets or liabilities trading in active markets. Financial instruments in this category generally include actively traded equity securities.

Level 2 - Valued based on (a) quoted prices for similar assets or liabilities in active markets; (b) quoted prices for identical or similar assets or liabilities in markets that are not active; (c) inputs other than quoted prices that are observable for the asset or liability; or (d) from market corroborated inputs. Financial instruments in this category include certain corporate equities that are not actively traded or are otherwise restricted.

Level 3 - Valued based on valuation techniques in which one or more significant inputs is not readily observable. Included in this category are certain corporate debt instruments, certain private equity investments, and certain commitments and guarantees

Investments – Related Parties at Fair Value

As of June 30, 2018	Level 1		Level 2		Level 3		Total
Warrants- Affiliates	$	-	$	-	$	9,950	$	9,950

As of December 31, 2017		Level 1		Level 2		Level 3		Total
Warrants- Affiliates	$	-	$	-	$	26,401	$	26,401

15

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

6. INVESTMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

A reconciliation of Level 3 assets is as follows:

	Warrants
Balance - December 31, 2017	$	26,401
Unrealized loss		(16,451	)
Balance - June 30, 2018	$	9,950

	June 30, 2018			December 31, 2017
Accumulated unrealized (losses) gains related to investments at fair value	$	(56,898	)	$	(40,447	)

7. ACCRUED EXPENSES

Accrued expenses are comprised of the following:

	June 30, 2018		December 31,2017
Accrued compensation and payroll taxes	$	330,574	$	463,604
Accrued taxes payable		29,068		63,550
Accrued interest		299,522		255,481
Other accrued expenses		152,130		217,886
Accrued expenses, current		811,294		1,000,521
Accrued payroll tax obligations, non-current		156,476		247,515
Total accrued expenses	$	967,770	$	1,248,036

Accrued taxes payable consist primarily of Argentine taxes payable.

16

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

8. LOANS PAYABLE

On March 31, 2017, the Company received a bank loan in the amount of $519,156 (ARS $8,000,000) (the “2017 Loan”). The 2017 Loan bears interest at 24.18% per annum and is due on March 1, 2021. Principal and interest will be paid in forty-two monthly installments beginning on October 1, 2017 and ending on March 1, 2021. The Company incurred interest expense on this loan of $16,280 and $42,788 during the three and six months ended June 30, 2018 and incurred interest of expense on this loan of $28,455 during the three and six months ended June 30, 2017.

On August 19, 2017, the Company purchased 845 hectares of land adjacent to its existing property at AWE. The Company paid $100,000 at the date of purchase and executed a note payable in the amount of $600,000 (the “Land Loan”) with a stated interest rate of 0% and with quarterly payments of $50,000 beginning on December 18, 2017 and ending August 18, 2021. At the date of purchase, the Company took possession of the property, with full use and access, but will not receive the deed to the property until after $400,000 of the purchase price has been paid. The Company imputed interest on the note at 7% per annum and recorded a discounted note balance of $517,390 on August 19, 2017. Amortization of the note discount in the amount of $5,321 and $14,957 for the three and six months ended June 30, 2018, respectively is recorded as interest expense on the accompanying condensed consolidated statements of operations. The balance on the note was $444,563, net of debt discount of $55,437 on June 30, 2018, of which $122,697 (net of discount of $27,303) is included in loans payable, net, current and $321,866 (net of discount of $28,134) is included in loans payable, net, non-current in the accompanying condensed consolidated balance sheets.

On January 25, 2018 the Company received a bank loan in the amount of $525,000 (the “2018 Loan”), denominated in U.S. dollars. The 2018 Loan bears interest at 6.75% per annum and is due on January 25, 2023. Principal and interest will be paid in 60 equal monthly installments of $10,311, beginning on February 23, 2018. The Company incurred interest expense of $8,285 and $14,054 on this loan during the three and six months ended June 30, 2018, respectively.

On June 4, 2018 the Company received a loan in the amount of $55,386 which bears interest at 10% per month and is due upon demand of the lender (the “Demand Loan”). Interest is paid monthly. The Company incurred interest expense on this loan of $6,832 during the three months ended June 30, 2018.

The Company’s loans payable are summarized below:

	June 30, 2018							December 31, 2017
	Gross Principal Amount		Debt Discount			Loans Payable, Net of Debt Discount		Gross Principal Amount		Debt Discount			Loans Payable, Net of Debt Discount
Demand Loan	$	55,386	$	-		$	55,386	$	-	$	-		$	-
2018 Loan		502,682		-			502,682		-		-			-
2017 Loan		243,646		-			243,646		412,047		-			412,047
Land Loan		500,000		(55,437	)		444,563		550,000		(70,393	)		479,607
Total Loans Payable		1,301,714		(55,437	)		1,246,277		962,047		(70,393	)		891,654
Less: current portion		386,690		(27,303	)		359,387		287,838		(31,114	)		256,724
Loans Payable, non-current	$	915,024	$	(28,134	)	$	886,890	$	674,209	$	(39,279	)	$	634,930

17

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

9. CONVERTIBLE DEBT OBLIGATIONS

During an offering that ended on September 30, 2010, the Company issued convertible notes with an interest rate of 8% and an amended maturity date of March 31, 2011 (the “2010 Debt Obligations”). The Company incurred interest expense of $9,247 and $18,400 during the three and six months ended June 30, 2018, respectively, and $8,849 and $18,400 during the three and six months ended June 30, 2017, respectively, on the 2010 Debt Obligations. As of December 31, 2017, the entire principal balance owed on the 2010 Debt Obligations has been repaid, however, accrued interest of $273,881 and $255,481 remained outstanding as of June 30, 2018, and December 31, 2017, respectively. Accrued interest on the 2010 Debt Obligations is not convertible.

On December 31, 2017, the Company sold a convertible promissory note in the amount of $20,000 to an accredited investor. From February 2, 2018 through April 26, 2018, the Company sold additional convertible promissory notes in the aggregate principal amount of $2,026,730 (together, the “Convertible Notes”). The Convertible Notes mature 90 days from the date of issuance, bear interest at 8% per annum and are convertible into the Company’s common stock at a $0.63 per share, which represented a 10% discount to the price used for the sale of the Company’s common stock at the commitment date. The conversion option represented a beneficial conversion feature which was recorded as a debt discount with a corresponding credit to additional paid-in capital. The Company incurred total interest expense of $256,008, related to this debt during the three and six months ended June 30, 2018, of which $219,593 represented amortization of debt discount.

On June 30, 2018, principal and interest of $794,875 and $15,000, respectively, were converted into 1,285,516 shares of common stock at a conversion price of $0.63 per share.

The Company’s debt obligations as of June 30, 2018 and December 31, 2017 are summarized below:

	June 30, 2018								December 31, 2017
	Principal			Interest [1]		Total			Principal		Interest [1]		Total
Debt Obligations	$	-		$	273,881	$	273,881		$	-	$	255,481	$	255,481
Convertible Debt		1,251,854			25,641		1,277,495			20,000		-		20,000
Convertible Debt Obligations, Gross		1,251,854			299,522		1,551,376			20,000		255,481		275,481
Debt Discount		(7,821	)		-		(7,821	)		-		-		-
Convertible Debt Obligations, net of debt discount	$	1,244,033		$	299,522	$	1,543,555		$	20,000	$	255,481	$	275,481

[1] Accrued interest is included as a component of accrued expenses on the accompanying condensed consolidated balance sheets (see Note 7 – Accrued Expenses).

18

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

10. RELATED PARTY TRANSACTIONS

Assets

Accounts receivable – related parties of $199,169 and $851,016 at June 30, 2018 and December 31, 2017, respectively, represents the net realizable value of advances made to related, but independent, entities under common management, of which $155,420 and $724,591 respectively, represents amounts owed to the Company in connection with expense sharing agreements as described below.

Investments

See Note 6 – Investments and Fair Value of Financial Instruments, for information related to investments in related parties.

Expense Sharing

On April 1, 2010, the Company entered into an agreement with a related entity, of which AWLD’s CEO is Chairman and Chief Executive Officer and AWLD’s CFO is an executive officer, to share expenses such as office space, support staff and other operating expenses. The Company is entitled to receive reimbursement of $69,829 and $139,659 for expenses incurred during the three and six months ended June 30, 2018, respectively and $73,672 and $132,355 for expenses incurred during the three and six months ended June 30, 2017, respectively, pursuant to this agreement. The entity owed $155,420 and $724,591, respectively, as of June 30, 2018 and December 31, 2017, under this agreement. The amount owed to the Company is being repaid in installments through October 1, 2018, pursuant to a repayment schedule agreed upon by the Company and the related entity on March 24, 2017.

The Company also had an expense sharing agreement with a different related entity to share expenses such as office space and other clerical services, which was terminated on August 2017. The owners of more than 5% of that entity include (i) AWLD’s Chairman, and (ii) a more than 5% owner of AWLD. The Company was entitled to receive reimbursement of $3,990 and $7,980 for expenses during the three and six months ended June 30, 2017, pursuant to this agreement. The entity owed $396,116 to the Company under the expense sharing agreement as of June 30, 2018 and December 31, 2017, of which the entire balance is deemed unrecoverable and reserved.

11. BENEFIT CONTRIBUTION PLAN

The Company sponsors a 401(k) profit-sharing plan (“401(k) Plan”) that covers substantially all of its employees in the United States. The 401(k) Plan provides for a discretionary annual contribution, which is allocated in proportion to compensation. In addition, each participant may elect to contribute to the 401(k) Plan by way of a salary deduction. A participant is always fully vested in their account, including the Company’s contribution. For the three and six months ended June 30, 2018, the Company recorded a charge associated with its contribution of $15,027 and $34,571, respectively, and for the three and six months ended June 30, 2017, the Company recorded a charge associated with its contribution of $25,797 and $43,814, respectively. This charge has been included as a component of general and administrative expenses in the accompanying condensed consolidated statements of operations. The Company issues shares of its common stock to settle prior year’s obligations based on the fair market value of its common stock on the date the shares are issued (shares were issued at $0.70 and $2.00 per share for the six months ended June 30, 2018 and 2017, respectively).

19

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

12. TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIENCY

Series B Preferred Stock

The Series B stockholders are entitled to cumulative cash dividends at an annual rate of 8% of the Series B liquidation value (equal to face value of $10 per share), as defined, payable when, as and if declared by the Board of Directors. Cumulative dividends earned by the Series B stockholders were $157,522 and $313,312 for the three and six months ended June 30, 2018, respectively and $48,286 and $51,336 for the three and six months ended June 30, 2017, respectively. During 2018, Company’s Board of Directors declared dividends in the amount of $474,719. During June 2018, the Company issued 378,193 shares of common stock valued at $0.70 per share, or $264,273, in satisfaction of certain dividends payable and paid cash dividends of $127,818. Dividends payable of $82,628 are included in current portion of other liabilities at June 30, 2018. Cumulative unpaid dividends in arrears related to the Series B totaled $157,522 and $284,564 as of June 30, 2018 and December 31, 2017, respectively.

Common Stock

During March 2018, the Company issued 116,284 shares of common stock at $0.70 per share to settle its 2017 obligation, (an aggregate of $81,399) representing the Company’s 401(k) matching contributions to the Company’s 401(k) profit-sharing plan.

During the three months ended June 30, 2018, the Company issued an aggregate of 822,000 shares of common stock at $0.70 per share for cash proceeds of $575,400.

Treasury Stock

On May 19, 2018, a former employee transferred 46,122 shares of the Company’s common stock to the Company, as payment of a $32,285 receivable from the former employee.

Accumulated Other Comprehensive Income (Loss)

For three and six months ended June 30, 2018, the Company recorded $(909,557) and $(1,195,166), respectively, of foreign currency translation adjustments as accumulated other comprehensive income (loss) and for the three and six months ended June 30, 2017, the Company recorded $(196,492) and $3,768, respectively, of foreign currency translation adjustments as accumulated other comprehensive income (loss), primarily related to fluctuations in the Argentine peso to United States dollar exchange rates.

20

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Warrants

A summary of warrants activity during the six months ended June 30, 2018 is presented below:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life in Years		Intrinsic Value
Outstanding, December 31, 2017		1,465,296			2.17
Issued		-			-
Exercised		-			-
Expired		(88,421	)		2.30
Outstanding, June 30, 2018		1,376,875		$	2.17		2.0	$	-
Exercisable, June 30, 2018		1,376,875		$	2.17		2.0	$	-

A summary of outstanding and exercisable warrants as of June 30, 2018 is presented below:

Warrants Outstanding					Warrants Exercisable
Exercise Price		Exercisable Into	Outstanding Number of Warrants		Weighted Average Remaining Life in Years		Exercisable Number of Warrants
$	2.00	Common Stock		741,879		2.5		741,879
$	2.30	Common Stock		446,689		0.8		446,689
$	2.50	Common Stock		188,307		2.7		188,307
		Total		1,376,875				1,376,875

Stock Options

On February 12, 2018, the Company granted five-year options for the purchase of 1,304,328 shares of the Company’s common stock under the 2016 Plan, which options for the purchase of common stock were granted to certain employees of the Company. The options had an exercise price of $0.77 per share and vest 25% at the first anniversary of date of grant, with the remaining shares vesting ratably on a quarterly basis over the following three years. The options had an aggregate grant date fair value of $610,985, which will be recognized ratably over the vesting period. The Company has computed the fair value of options granted using the Black-Scholes option pricing model. Assumptions used in applying the Black-Scholes option pricing model are as follows: risk free interest rate of 2.56%, expected term of 5 years, expected volatility of 43.5%, and expected dividends of 0.00%. There were no stock options granted during the three months ended June 30, 2018, or during the three or six months ended June 30, 2017.

21

ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

12. TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIENCY, continued

Stock Options, continued

During the three and six months ended June 30, 2018, respectively, the Company recorded stock-based compensation expense of $205,111 and $388,331, respectively, and during the three and six months ended June 30, 2017, the Company recorded stock-based compensation expense of $149,597 and $314,127, respectively, related to stock option grants, which is reflected as general and administrative expenses in the accompanying condensed consolidated statements of operations. As of June 30, 2018, there was $1,227,770 of unrecognized stock-based compensation expense related to stock option grants that will be amortized over a weighted average period of 2.8 years, of which $58,416 of unrecognized expense is subject to non-employee mark-to-market adjustments.

A summary of options activity during the six months ended June 30, 2018 is presented below:

				Weighted		Weighted
				Average		Average
	Number of			Exercise		Remaining		Intrinsic
	Options			Price		Term (Yrs)		Value
Outstanding, December 31, 2017		9,234,265			2.18
Granted		1,304,328			0.77
Exercised		-			-
Expired		(2,505,000	)		2.49
Forfeited		(60,000	)		1.62
Outstanding, June 30, 2018		7,973,593		$	1.71		2.6	$	-
Exercisable, June 30, 2018		4,196,572		$	2.34		1.6	$	-

The following table presents information related to stock options at June 30, 2018:

Options Outstanding				Options Exercisable
Exercise Price		Outstanding Number of Options		Weighted Average Remaining Life in Years		Exercisable Number of Options
$	0.77		1,294,328		-		-
$	1.10		1,370,000		-		-
$	2.20		3,071,890		2.0		2,153,096
$	2.48		2,237,375		1.2		2,043,476
			7,973,593		1.6		4,196,572

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ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

13. COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is involved in litigation and arbitrations from time to time in the ordinary course of business. The Company does not believe that the outcome of any such pending or threatened litigation will have a material adverse effect on its financial condition or results of operations. However, as is inherent in legal proceedings, there is a risk that an unpredictable decision adverse to the Company could be reached. The Company records legal costs associated with loss contingencies as incurred. Settlements are accrued when, and if, they become probable and estimable.

Commitments

The Company leases office space in New York City under an operating lease which expires on August 31, 2020. Rent expense for this property was $77,548 and $133,386 for the three months and six months ended June 30, 2018, respectively, and $69,694 and $121,474 for the three months and six months ended June 30, 2017, respectively, net of expense allocation to affiliates.

14. SUBSEQUENT EVENTS

Management has evaluated all subsequent events to determine if events or transactions occurring through the date the condensed consolidated financial statements were issued, require adjustment to or disclosure in the accompanying condensed consolidated financial statements.

Common Stock

From July 2 through August 2, 2018, the Company sold 354,286 shares of common stock at $0.70 per share for aggregate proceeds of $248,000.

Foreign Currency Exchange Rates

The Argentine peso to United States dollar exchange rate was [  ], 20.109 and 18.593 at August [  ], June 30, 2018 and December 31, 2017, respectively.

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Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included herein. In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by, or on our behalf, whether or not in future filings with the Securities and Exchange Commission. Forward-looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments. Forward looking statements are necessarily based upon estimates and assumptions that are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control and many of which, with respect to future business decisions, are subject to change. These uncertainties and contingencies can affect actual results and could cause actual results to differ materially from those expressed in any forward looking statements made by, or on our behalf. 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. We disclaim any obligation to update forward-looking statements.

The independent registered public accounting firm’s report on the Company’s consolidated financial statements as of December 31, 2017, and for each of the years in the two-year period then ended, includes a “going concern” explanatory paragraph, that describes substantial doubt about the Company’s ability to continue as a going concern.

Unless the context requires otherwise, references in this document to “AWLD”, “we”, “our”, “us” or the “Company” are to Algodon Wines & Luxury Development Group, Inc. and its subsidiaries.

Overview

We are an integrated, lifestyle related real estate development company, capitalizing on our unique brand of affordable luxury, branded as “Algodon”, to create a diverse set of interrelated products and services. Our wines, hotels and real estate ventures, currently concentrated in Argentina, offer a blend of high-end, luxury and adventures products. We hope to further broaden the reach and depth of our services to strengthen and cement the reach of our brand. Ultimately, we intend to further expand and grow our business by combining unique and promising opportunities with our brand and clientele.

Through our subsidiaries, we currently operate Algodon Mansion, a Buenos Aires-based luxury boutique hotel property and we have redeveloped, expanded and repositioned a winery and golf resort property called Algodon Wine Estates for subdivision of a portion of this property for residential development.

Investment in foreign real estate requires consideration of certain risks typically not associated with investing in the United States. Such risks include, trade balances and imbalances and related economic policies, unfavorable currency exchange rate fluctuations, imposition of exchange control regulation by the United States or foreign governments, United States and foreign withholding taxes, limitations on the removal of funds or other assets, policies of governments with respect to possible nationalization of their industries, political difficulties, including expropriation of assets, confiscatory taxation and economic or political instability in foreign nations or changes in laws which affect foreign investors.

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Recent Developments and Trends

Financings

During the three months ended June 30, 2018, we raised, net of repayments, approximately $3.0 million of new capital through the issuance of debt, consisting primarily of proceeds from the issuance of convertible debt and loans payable. We used the net proceeds from these debt issuances for general working capital and capital expenditures.

Initiatives

We have implemented a number of initiatives designed to expand revenues and control costs. 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, as well as outsourcing and restructuring of certain functions. Our goal is to become more self-sufficient and less dependent on outside financing.

Liquidity

As reflected in our accompanying condensed consolidated financial statements, we have generated significant losses which have resulted in a total accumulated deficit of approximately $79.5 million, raising substantial doubt that we will be able to continue operations as a going concern. Our independent registered public accounting firm included an explanatory paragraph in their report for the years ended December 31, 2017 and 2016, stating that we have incurred significant losses and need to raise additional funds to meet our obligations and sustain our operations. Our ability to execute our business plan is dependent upon our generating cash flow and obtaining additional debt or equity capital sufficient to fund operations. If we are able to obtain additional debt or equity capital (of which there can be no assurance), we hope to acquire additional management as well as increase the marketing of our products and continue the development of our real estate holdings.

Our business strategy may not be successful in addressing these issues and there can be no assurance that we will be able to obtain any additional capital. If we cannot execute our business plan on a timely basis (including acquiring additional capital), our stockholders 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 ultimately be forced to discontinue our operations, liquidate and/or seek reorganization under the U.S. bankruptcy code.

Consolidated Results of Operations

Three months June 30, 2018 compared to three months ended June 30, 2017

Overview

We reported net losses of approximately $2.5 million and $1.9 million for the three months ended June 30, 2018 and 2017, respectively.

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Revenues

Revenues from continuing operations were approximately $396,000 and $413,000 during the three months ended June 30, 2018 and 2017, respectively, representing a decrease of $17,000 or 4%. Decreases of approximately $205,000 resulting from the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar were partially offset by the increases of approximately $198,000 in real estate lot revenues, hotel revenues and wine sales during the three months ended June 30, 2018 as compared to the three months ended June 30, 2017.

Gross profit (loss)

We generated a gross profit of approximately $11,000 for the three months ended June 30, 2018 as compared to a gross loss of approximately $141,000 for the three months ended June 30, 2017, representing an improvement in gross profit of $151,000. Cost of sales, which consists of real estate lots, raw materials, direct labor and indirect labor associated with our business activities, decreased by approximately $168,000 from $554,000 for the three months ended June 30, 2017 to $386,000 for the three months ended June 30, 2018. The decrease in cost of sales results primarily from the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar as well as a decrease in indirect hotel costs as the result of the reduction in hotel staff.

The improvement in gross profit results primarily from the decrease in indirect hotel costs as described above.

Selling and marketing expenses

Selling and marketing expenses were approximately $60,000 and $57,000 for the three months ended June 30, 2018 and 2017, respectively, representing an increase of $3,000.

General and administrative expenses

General and administrative expenses were approximately $2,038,000 and $1,635,000 for the three months ended June 30, 2018 and 2017, respectively, representing an increase of $403,000 or 25%. Increased losses of approximately $583,000 were recognized on transactions denominated in foreign currencies as well as increased travel expenses of approximately $109,000 were related to shareholder meetings held during the quarter, which were partially offset by approximately $274,000 due to the decline in the value of the Argentine peso vis-à-vis the U.S. dollar for the three months ended June 30, 2018 compared to the three months ended June 30, 2017.

Depreciation and amortization expense

Depreciation and amortization expense was approximately $83,000 and $43,000 during the three months ended June 30, 2018 and 2017, respectively, representing an increase of $40,000 or 93%, primarily as the result of investments in property and equipment during the quarter as well as $25,000 expense related to the reversal of amounts previously charged to inventory.

Interest expense, net

Interest expense, net, was approximately $332,000 and $53,000 during the three months ended June 30, 2018 and 2017, respectively, representing an increase of $279,000 or 526%. This increase of approximately $309,000 was a result of an increase in the average outstanding principal balance of convertible debt and other loans payable outstanding during the period, and the amortization of the debt discount recorded related to the beneficial conversion feature on the convertible debt. These increases were partially offset by decreases of approximately $31,000 in interest expense recognized related to Argentine debt that resulted from the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar for the three months ended June 30, 2018 compared to the three months ended June 30, 2017.

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Six months ended June 30, 2018 compared to six months ended June 30, 2017

Overview

We reported net losses of approximately $3.9 million and $3.7 million for the six months ended June 30, 2018 and 2017, respectively.

Revenues

Revenues from continuing operations were approximately $1,674,000 and $1,032,000 during the six months ended June 30, 2018 and 2017, respectively, representing an increase of $642,000 or 62%. Increases in real estate lot revenues of approximately $1,309,000 and hotel revenues of approximately $158,000 were partially offset by a decrease of approximately $823,000 from the impact of the fluctuations in exchange rate of the Argentine peso to the United States dollar during the period.

Gross profit (loss)

We generated a gross profit of approximately $712,000 for the six months ended June 30, 2018, as compared to a gross loss of approximately $7,000 for the six months ended June 30, 2017, representing an improvement in gross profit of $719,000. Cost of sales, which consists of raw materials, direct labor and indirect labor associated with our business activities, decreased by approximately $77,000 from $1,039,000 for the six months ended June 30, 2017 to $962,000 for the six months ended June 30, 2018. The decrease in cost of sales results are principally related to the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar as well as the decrease in indirect hotel costs as the result of the reduction in hotel staff, partially offset by an increase in cost of wine sales which corresponds to the increase in wine sale revenues as discussed above.

Selling and marketing expenses

Selling and marketing expenses were approximately $158,000 and $208,000 for the six months ended June 30, 2018 and 2017, respectively, representing an decrease of $50,000 or 24%, which is primarily the result of stockholders’ events held during the first quarter of 2017 and decreases resulting from the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar in the during the six months ended June 30, 2018 as compared to the same period in 2017.

General and administrative expenses

General and administrative expenses were approximately $3,990,000 and $3,417,000 for the six months ended June 30, 2018 and 2017, respectively, representing an increase of $573,000 or 17%. Increased losses recognized on transactions denominated in foreign currencies and increases resulting from increased corporate headcount, as well as increased travel expenses related to shareholder meetings were partially offset by the decline in the value of the Argentine peso vis-à-vis the U.S. dollar for the six months ended June 30, 2018 compared to the six months ended June 30, 2017.

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Depreciation and amortization expense

Depreciation and amortization expense was approximately $89,000 and $65,000 during the six months ended June 30, 2018 and 2017, respectively, representing an increase of $24,000 or 37%. It should be noted that an additional $17,000 and $54,000 of depreciation and amortization expense was included in cost of sales during the six months ended June 30, 2018 and 2017, respectively. Increases in depreciation resulting from investments in property and equipment during the period were partially offset by the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar for the six months ended June 30, 2018 compared to the six months ended June 30, 2017.

Interest expense, net

Interest expense was approximately $402,000 and $135,000 during the six months ended June 30, 2018 and 2017, respectively, representing an increase of $267,000 or 198%. This increase was a result of an increase in the average outstanding principal balance of convertible debt and other loans payable outstanding during the period, and the amortization of the debt discount recorded related to the beneficial conversion feature on the convertible debt. These increases were partially offset decreases in interest expense recognized related to Argentine debt, due to the impact of the decline in the value of the Argentine peso vis-à-vis the U.S. dollar in the six months ended June 30, 2018 compared to the six months ended June 30, 2017.

Gain on sale of investment in subsidiary

AWLD owned approximately 96.5% of Mercari Communications Group, Ltd. (“Mercari”), a public shell corporation current in its SEC reporting obligations. On December 20, 2016, we entered into a Stock Purchase Agreement with a purchaser, whereby the purchaser agreed to purchase all of our shares of 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.

Loss from discontinued operations

On November 29, 2016, our Board of Directors determined that it was in the Company’s best interest to close down DPEC Capital and we ceased our broker-dealer operations December 31, 2016. On February 21, 2017, our request to FINRA for Broker-Dealer Withdrawal (“BDW”) became effective. Loss from discontinued operations during the six months ended June 30, 2017 consist primarily of expenses incurred to wind down the broker-dealer operations.

Liquidity and Capital Resources

We measure our liquidity a variety of ways, including the following:

	June 30, 2018			December 31, 2017
Cash	$	147,134		$	358,303
Working Deficiency	$	(1,596,572	)	$	(62,464	)

Based upon our working capital deficiency as of June 30, 2018, we require additional equity and/or debt financing in order to sustain operations. These conditions raise substantial doubt about our ability to continue as a going concern.

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We have relied primarily on debt and equity private placement offerings to third party independent, accredited investors to sustain operations. During the six months ended June 30, 2018, we received proceeds of approximately $2,027,000 from the issuance of convertible debt, approximately $580,000 of proceeds from a bank loan, and issued 822,000 shares of common stock at $0.70 per share for cash proceeds of approximately $575,000.

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

Availability of Additional Funds

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

Sources and Uses of Cash for the Six months ended June 30, 2018 and 2017

Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended June 30, 2018 and 2017 amounted to approximately $3,236,000 and $4,078,000, respectively. During the six months ended June 30, 2018, the net cash used in operating activities was primarily attributable to the net loss of approximately $3,932,000, adjusted for approximately $735,000 of net non-cash expenses, and approximately $64,000 of cash used by changes in the levels of operating assets and liabilities. During the six months ended June 30, 2017, the net cash used in operating activities was primarily attributable to the net loss of approximately $3,740,000 adjusted for approximately $437,000 of net non-cash expenses, partially offset by the gain on the sale of investment in a subsidiary of $(199,200) and approximately $577,000 of cash used by changes in the levels of operating assets and liabilities.

Net Cash Used in Investing Activities

Net cash used in investing activities for the six months ended June 30, 2018 and 2017 amounted to approximately $327,000 and $84,000, respectively. Cash used in investing activities during the six months ended June 30, 2018 was entirely from the purchase of property and equipment. Cash used in investing activities during the six months ended June 30, 2017 consisted of approximately $283,000 cash used for the purchase of property and equipment, partially offset by $199,200 proceeds from the sale of our investment in a subsidiary.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2018 and 2017 amounted to approximately $3,003,000 and $5,211,000, respectively. 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 of loans payable, and approximately $575,000 from cash proceeds from the issuance of common stock, partially offset by the repayments of approximately $52,000 and dividends paid in cash of approximately $128,000. For the six months ended June 30, 2017, the net cash provided by financing activities resulted primarily from the offering of equity securities for net proceeds of approximately $3,580,000 and new borrowings of approximately $1,777,000, less repayments of approximately $146,000.

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Going Concern and Management’s Liquidity Plans

The accompanying 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 sufficient level of revenues to support our business and development activities and have suffered substantial recurring losses from operations since 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 if we were unable to continue as a going concern.

Based on current cash on hand and subsequent activity as described herein, we may not have sufficient funds to operate our business operations for the next twelve months. While we are exploring opportunities with third parties and related parties to provide some or all of the capital we need over the short and long terms, we have not entered into any external agreement to provide us with the necessary capital. Historically, the Company has been successful in raising funds to support our capital needs. If we are unable to obtain additional financing on a timely basis, 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 ultimately, we could be forced to discontinue our operations, liquidate and/or seek reorganization under the U.S. bankruptcy code. As a result, our auditors have issued a going concern opinion in conjunction with their audits of our December 31, 2017 and 2016 consolidated financial statements.

Off-Balance Sheet Arrangements

None.

Contractual Obligations

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

Critical Accounting Policies and Estimates

Revenue Recognition

On January 1, 2018, we adopted ASC Topic 606, Revenue from Contracts with Customers. ASC Topic 606 provides a single comprehensive model to use in accounting for revenue arising from contracts with customers, and gains and losses arising from transfers of non-financial assets including sales of property and equipment, real estate, and intangible assets. We adopted ASC Topic 606 for all applicable contracts using the modified retrospective method, which requires a cumulative-effect adjustment, if any, as of the date of adoption. The adoption of ASC Topic 606 did not have a material impact on our consolidated financial statements as of the date of adoption, and therefore a cumulative-effect adjustment was not required.

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We earn revenues from the real estate lot sales and sale of food and wine as well as hospitality, food & beverage, and other related services. We recognize revenue when goods or services are transferred to customers in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, we perform the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) we satisfy each performance obligation.

The following table summarizes the revenue recognized in our condensed consolidated statements of operations:

	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Real estate sales	$	77,182	$	-	$	877,036	$	-
Hotel room and events		164,011		160,550		387,579		424,499
Restaurants		66,173		77,881		156,270		168,150
Winemaking		87,775		76,922		227,171		299,750
Golf, tennis and other		1,251		97,942		26,259		139,433
	$	396,392	$	413,295	$	1,674,315	$	1,031,832

Revenue from real estate lot sales is recorded when the lot is deeded and legal ownership of the lot is transferred to the customer. Revenue from the sale of food, wine and agricultural products is recorded when the customer obtains control of the goods purchased. Revenues from hospitality and other services are recognized as earned at the point in time that the related service is rendered and the performance obligation has been satisfied.

The timing of our revenue recognition may differ from the timing of payment by our customers. A receivable is recorded when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied. Deferred revenues associated with real estate lot sale deposits are recognized as revenues (along with any outstanding balance) when the lot sale closes and the deed is provided to the purchaser. Other deferred revenues primarily consist of deposits accepted by us in connection with agreements to sell barrels of wine, and advance deposits received for grapes and other agricultural products, and hotel deposits. Wine barrel and agricultural product advance deposits are recognized as revenues (along with any outstanding balance) when the product is shipped to the purchaser. Hotel deposits are recognized as revenue upon occupancy of rooms, or the provision of services.

During the three and six months ended June 30, 2018 we recognized approximately $28,000 and $828,000 of revenues related to the sale of real estate lots which were included in deferred revenues as of December 31, 2017. For the three and six months ended June 30, 2018, we did not recognize any revenue related to performance obligations satisfied in previous periods. Contracts related to the sale of wine, agricultural products and hotel services have an original expected length of less than one year. We have elected not to disclose information about remaining performance obligations pertaining to contracts with an original expected length of one year or less, as permitted under the guidance.

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As of June 30, 2018 and December 31, 2017, we had deferred revenue of $608,700 and $1,690,224, respectively, associated with real estate lot sale deposits, and $9,301 and $0, respectively, related to advance deposits for wine barrel and agricultural products, and we had $33,615 and $42,440, respectively, of deferred revenue related to hotel deposits. Sales taxes and value added (“VAT”) taxes collected from customers and remitted to governmental authorities are presented on a net basis within revenues in the condensed consolidated statements of operations.

There are no other material changes from the critical accounting policies, estimates and new accounting pronouncements set forth in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” set forth in our Annual Report on Form 10-K filed with the SEC on March 30, 2018. Please refer to that document for disclosures regarding the critical accounting policies related to our business.

New Accounting Pronouncements

We have implemented all new accounting standards that are in effect and may impact our condensed consolidated financial statements and we do not believe that there are any other new accounting standards that have been issued that might have a material impact on our financial position or results of operations.

In May 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 recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The guidance in ASU 2014-09 was revised in July 2015 to be effective for interim periods beginning on or after December 15, 2017 and should be applied on a transitional basis either retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application. In 2016, FASB issued additional ASUs that clarify the implementation guidance on principal versus agent considerations (ASU 2016-08), on identifying performance obligations and licensing (ASU 2016-10), and on narrow-scope improvements 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 on January 1, 2018 and were adopted using the modified retrospective method. The adoption of ASC Topic 606 did not have a material impact on our condensed consolidated financial statements as of the date of adoption, and therefore a cumulative-effect adjustment was not required.

In August 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 in the statement of cash flows in order to reduce diversity in practice. The ASU is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The adoption of ASU 2016-15 did not have a material effect on our condensed consolidated financial statements and related disclosures.

On February 22, 2017, the FASB issued ASU 2017-05, ‘Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20)”, which requires that all entities account for the derecognition of a business in accordance with ASC 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 material impact on our condensed consolidated financial statements and related disclosures.

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

On June 20, 2018, the FASB issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting”, which simplifies the accounting for share-based payment transactions resulting for acquiring goods and services from nonemployees. ASU 2018-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We are currently evaluating the impact that the adoption of this standard will have on our financial statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

Item 4: Controls and Procedures

Disclosure Controls and Procedures

Our management carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (who is our Principal Executive Officer) and our Chief Financial Officer (who is our Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of our disclosure controls and procedures (as defined by Exchange Act Rules 13a-15(e) or 15d-15(e)) as of June 30, 2018, pursuant to Exchange Act Rule 13a-15(b). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2018.

Changes in Internal Control over Financial Reporting

During the three months ended June 30, 2018, there were no changes in our internal controls over financial reporting, or in other factors that could significantly affect these controls, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Controls

Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. Controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or deterioration in the degree of compliance with the policies or procedures. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time AWLD 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 AWLD and its subsidiaries are successful, they may exceed the limits of applicable insurance coverage

Item 1A. Risk Factors

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item. However, our current risk factors are set forth in our Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 30, 2018.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuances of Shares, Convertible Securities, Options and Warrants

Between February 2, 2018 and April 26, 2018, the Company sold convertible promissory notes (the “Convertible Notes”) in the amount of $2,026,730 to accredited investors. The Convertible Notes have a 90-day maturity, bear interest at 8% per annum and are convertible into the Company’s common stock at a at a 10% discount to the price used for the sale of the Company’s common stock in the Company’s next private placement offering. On June 30, 2018, a total of 1,285,517 shares of common stock were issued to certain holders of Convertible Notes who were accredited investors upon conversion of certain of the Convertible Notes representing $809,875 of principal and accrued interest. For these sales of securities, no general solicitation was used, 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 was filed with the SEC on May 23, 2018.

On June 30, 2018, the Company issued 822,000 shares of common stock at $0.70 per share for aggregate cash proceeds of $575,400. For this sale of securities, no general solicitation was used, no commissions were paid, and the Company relied on the exemption from registration available under Section 4(a)(2) and Rule 506(b) of Regulation D of the Securities Act of 1933, as amended. A Form D was filed for these transactions on July 17, 2018.

Between July 2, 2018 and August 2, 2018, the Company sold 354,286 shares of common stock to accredited investors for total gross proceeds of $248,000 pursuant to a private placement. No general solicitation was used, no commissions were paid, and the Company relied on the exemption from registration available under Section 4(a)(2) and Rule 506(b) of Regulation D of the Securities Act of 1933, as amended, in connection with the sales. A Form D was filed with the Securities and Exchange Commission on July 17, 2018, and an amended Form D was filed with the SEC on August 1, 2018.

Other than as set forth herein or in the Company’s current reports on Form 8-K, there have not been any sales of unregistered securities.

34

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine and Safety Disclosure

Not applicable.

Item 5. Other Information

The Company’s management is presently establishing and managing a new, wholly-owned subsidiary of the Company, Gaucho Group, Inc., a Delaware corporation (“Gaucho Group”). The Company’s Chairman, President and Chief Executive Officer, Scott L. Mathis, serves as Gaucho Group’s President and Chief Executive Officer, and the Company’s Chief Financial Officer, Maria I. Echevarria, serves as the Gaucho Group’s Treasurer and Secretary. Currently, Gaucho Group has one director, Scott L. Mathis, with plans to add two additional directors before or during the fourth quarter.

Gaucho Group is creating a platform and the infrastructure to manufacture, distribute and sell high end products created in Argentina under the brand name Gaucho – Buenos Aires. Gaucho – Buenos Aires is in the process of developing both its initial products for manufacture and sale and its e-commerce platform. With Gaucho – Buenos Aires, Algodon intends to add a high-end fashion and accessories e-commerce sector to its collection of luxury assets, connecting buyers with some of Argentina’s best creative talents that harness the country’s unique heritage and artisanship of products such as woven fabrics, leather goods and precious metal jewelry.

Item 6. Exhibits

The following is a complete list of exhibits filed as part of this Form 10-Q. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.

Exhibit	Description
2.1	Stock Purchase Agreement between the Company and China Concentric Capital Group, Inc., dated December 20, 2016(2)
2.2	First Amendment to the Stock Purchase Agreement between the Company and China Concentric Capital Group, Inc., dated January 17, 2016(2)
2.3	Escrow Agreement between the Company, China Concentric Capital Group, Inc., and J.M. Walker & Associates, dated December 16, 2016(2)
2.4	First Amendment to the Escrow Agreement between the Company, China Concentric Capital Group, Inc., and J.M. Walker & Associates, dated January 17, 2017(2)
3.1	Amended and Restated Certificate of Incorporation filed September 30, 2013(1)
3.2	Amended and Restated Bylaws(1)
4.1	Amended and Restated Certificate of Designation of the Series A Preferred filed September 30, 2013(1)
4.2	Amendment No. 1 to the Amended and Restated Certificate of Designation of Series A Convertible Preferred Stock, dated February 28, 2017(3)
4.3	Certificate of Designation of Series B Convertible Preferred Stock, dated February 28, 2017(3)
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.*
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.*
32	Certification of Chief Financial Officer pursuant to 18 U.S. C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act**
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*

(1)	Incorporated by reference from the Company’s Registration of Securities Pursuant to Section 12(g) on Form 10 dated May 14, 2014.
(2)	Incorporated by reference to the Company’s Annual Report on Form 10-K filed on March 31, 2017.
(3)	Incorporated by reference from the Company’s Current Report on Form 8-K, filed on March 2, 2017.
*	Filed herewith.
**	Furnished and not filed herewith.

35

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 14, 2018	ALGODON WINES & LUXURY DEVELOPMENT GROUP, INC.
	By:	/s/ Scott L. Mathis
		Scott L. Mathis
		Chief Executive Officer
	By:	/s/ Maria Echevarria
		Maria Echevarria
		Chief Financial Officer and Chief Operating Officer

36

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

I, Scott L. Mathis, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Algodon Wines & Luxury Development Group, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 14, 2018		/s/ Scott L. Mathis
	Name:	Scott L. Mathis
	Title:	Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934

I, Maria Echevarria, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Algodon Wines & Luxury Development Group, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 14, 2018		/s/ Maria Echevarria
	Name:	Maria I. Echevarria
	Title:	Chief Financial Officer
		(Principal Financial Officer)

EX-32

Exhibit 32

CERTIFICATION PURSUANT TO

18 U.S.C. §1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Algodon Wines & Luxury Development Group, Inc. (the “Company’s Quarterly Report”) on Form 10-Q for the period ended June 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Scott L. Mathis, as Chief Executive Officer and principal executive officer and Maria I. Echevarria, as Chief Financial Officer and principal financial officer of the Company hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of the undersigned’s knowledge and belief, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

/s/ Scott L. Mathis

Scott L. Mathis

Chief Executive Officer and Principal Executive Officer

Dated: August 14, 2018

/s/ Maria I. Echevarria

Maria I. Echevarria

Chief Financial Officer and Principal Financial Officer

Dated: August 14, 2018

This certification accompanies this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 14, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	Algodon Wines & Luxury Development Group, Inc.
Entity Central Index Key	0001559998
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		45,973,292
Trading Symbol	VINO
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2018

XML

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash	$ 147,134	$ 358,303
Accounts receivable, net of allowance of $2,202 and $3,421 at June 30, 2018 and December 31, 2017, respectively	168,775	188,067
Accounts receivable - related parties, net of allowance of $514,087 at each of June 30, 2018 and December 31, 2017	199,169	851,016
Advances and loans to employees	278,784	284,496
Inventory	1,095,238	1,388,666
Real estate lots held for sale	31,830	151,906
Prepaid expenses and other current assets	115,166	159,465
Total Current Assets	2,036,096	3,381,919
Property and equipment, net	3,096,302	4,532,890
Prepaid foreign taxes, net of deferred tax reserve of $364,719 and $392,593 at June 30, 2018 and December 31, 2017, respectively	191,538	342,312
Investment - related parties	9,950	26,401
Deposits	61,284	61,284
Total Assets	5,395,170	8,344,806
Current Liabilities
Accounts payable	465,603	415,318
Accrued expenses, current portion	811,294	1,000,521
Deferred revenue	651,616	1,732,664
Loans payable, current portion, net of debt discount	359,387	256,724
Convertible debt obligations, net of debt discount	1,244,033	20,000
Current portion of other liabilities	100,735	19,156
Total Current Liabilities	3,632,668	3,444,383
Accrued expenses, non-current portion	156,476	247,515
Other liabilities, non-current portion		11,474
Loans payable, non-current portion, net of debt discount	886,890	634,930
Total Liabilities	4,676,034	4,338,302
Commitments and Contingencies
Series B convertible redeemable preferred stock, par value $0.01 per share, 902,670 shares authorized, 902,670 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively. Liquidation preference of $9,267,090 at June 30, 2018.	9,026,824	9,026,824
Stockholders' Deficiency
Common stock, par value $0.01 per share; 80,000,000 shares authorized; 45,669,539 and 43,067,546 shares issued and 45,619,006 and 43,063,135 shares outstanding as of June 30, 2018 and December 31, 2017, respectively.	456,693	430,674
Additional paid-in capital	82,748,920	80,902,967
Accumulated other comprehensive loss	(11,990,976)	(10,795,810)
Accumulated deficit	(79,475,970)	(75,544,081)
Treasury stock, at cost, 50,533 and 4,411 shares at June 30, 2018 and December 31, 2017, respectively.	(46,355)	(14,070)
Total Stockholders' Deficiency	(8,307,688)	(5,020,320)
Total Liabilities, Temporary Equity and Stockholders' Deficiency	5,395,170	8,344,806
Series A Convertible Preferred Stock [Member]
Stockholders' Deficiency
Preferred stock, 11,000,000 shares authorized; Series A convertible preferred stock, par value $0.01 per share; 10,097,330 shares authorized; no shares are available for issuance.

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Allowance for doubtful accounts	$ 2,202	$ 3,421
Income tax reserve	$ 364,719	$ 392,593
Series B convertible redeemable preferred stock, par value	$ 0.01	$ 0.01
Series B convertible redeemable preferred stock, shares authorized	902,670	902,670
Series B convertible redeemable preferred stock, shares issued	902,670	902,670
Series B convertible redeemable preferred stock, shares outstanding	902,670	902,670
Liquidation preference	$ 9,267,090
Preferred stock, shares authorized	11,000,000	11,000,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	45,669,539	43,067,546
Common stock, shares outstanding	45,619,006	43,063,135
Treasury stock, shares	50,533	4,411
Series A Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,097,330	10,097,330
Preferred stock, shares issued
Related Party [Member]
Allowance for doubtful accounts	$ 514,087	$ 514,087

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Sales	$ 396,392	$ 413,295	$ 1,674,315	$ 1,031,832
Cost of sales	(385,883)	(553,917)	(961,845)	(1,038,600)
Gross profit (loss)	10,509	(140,622)	712,470	(6,768)
Operating Expenses
Selling and marketing	59,901	56,710	157,803	207,750
General and administrative	2,038,116	1,634,532	3,990,391	3,417,417
Depreciation and amortization	82,679	43,357	89,418	64,972
Total operating expenses	2,180,696	1,734,599	4,237,612	3,690,139
Loss from Operations	(2,170,187)	(1,875,221)	(3,525,142)	(3,696,907)
Other (Expense) Income
Interest expense, net	(336,588)	(53,477)	(406,747)	(135,333)
Gain on sale of investment in subsidiary				199,200
Total other (expense) income	(336,588)	(53,477)	(406,747)	63,867
Loss from Continuing Operations	(2,506,775)	(1,928,698)	(3,931,889)	(3,633,040)
Loss from Discontinued Operations				(106,543)
Net Loss	(2,506,775)	(1,928,698)	(3,931,889)	(3,739,583)
Deemed dividend to Series B preferred stockholders	(157,522)	(48,283)	(313,313)	(51,336)
Net Loss Attributable to Common Stockholders	$ (2,664,297)	$ (1,976,981)	$ (4,245,202)	$ (3,790,919)
Net Loss per Basic and Diluted Common Share:
Loss from continuing operations	$ (0.06)	$ (0.04)	$ (0.10)	$ (0.08)
Loss from discontinued operations
Net Loss per Common Share	$ (0.06)	$ (0.04)	$ (0.10)	$ (0.08)
Weighted Average Number of Common Shares Outstanding:
Basic and Diluted	43,601,253	42,974,812	43,345,510	42,954,832

XML

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement of Comprehensive Income [Abstract]
Net Loss	$ (2,506,775)	$ (1,928,698)	$ (3,931,889)	$ (3,739,583)
Other Comprehensive Loss:
Foreign currency translation adjustments	(909,557)	(196,492)	(1,195,166)	3,768
Total Comprehensive Loss	$ (3,416,332)	$ (2,125,190)	$ (5,127,055)	$ (3,735,815)

XML

Condensed Consolidated Statement of Changes in Temporary Equity and Stockholders' Deficiency (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($)	Series B Convertible Redeemable Preferred Stock [Member]	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Total
Balance beginning at Dec. 31, 2017	$ 9,026,824	$ 430,674	$ (14,070)	$ 80,902,967	$ (10,795,810)	$ (75,544,081)	$ (5,020,320)
Balance beginning, shares at Dec. 31, 2017	902,670	43,067,546	4,411
Stock-based compensation: Common stock issued under 401(k) profit sharing plan		$ 1,163		80,236			81,399
Stock-based compensation: Common stock issued under 401(k) profit sharing plan, shares		116,284
Stock-based compensation: Options and warrants				388,331			388,331
Common stock issued for cash		$ 8,220		567,180			575,400
Common stock issued for cash, shares		822,000
Beneficial conversion feature on convertible debt issued				227,414			227,414
Common stock issued upon conversion of convertible debt and interest		$ 12,855		797,020			809,875
Common stock issued upon conversion of convertible debt and interest, shares		1,285,516
Dividends declared on Series B Convertible Redeemable Preferred Stock				(474,719)			(474,719)
Common stock issued in satisfaction of dividends payable		$ 3,781		260,491			264,272
Common stock issued in satisfaction of dividends payable, shares		378,193
Common stock returned to the company to satisfy receivable			$ (32,285)				(32,285)
Common stock returned to the company to satisfy receivable, shares			46,122
Net loss						(3,931,889)	(3,931,889)
Other comprehensive loss					(1,195,166)		(1,195,166)
Balance ending at Jun. 30, 2018	$ 9,026,824	$ 456,693	$ (46,355)	$ 82,748,920	$ (11,990,976)	$ (79,475,970)	$ (8,307,688)
Balance ending, shares at Jun. 30, 2018	902,670	45,669,539	50,533

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash Flows from Operating Activities
Net loss	$ (3,931,889)	$ (3,739,583)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation: 401(k) stock	34,571	43,814
Stock-based compensation: Options and warrants	388,331	314,127
Net realized and unrealized investment losses	16,451	8,168
Depreciation and amortization	89,418	64,972
Amortization of debt discount	234,550
Provision for uncollectible assets	(27,874)	6,000
Gain on sale of investment in subsidiary		(199,200)
Decrease (increase) in assets:
Accounts receivable	525,421	(103,662)
Inventory	(145,837)	(38,255)
Prepaid expenses and other current assets	(132,079)	128,154
Increase (decrease) in liabilities:
Accounts payable and accrued expenses	179,010	(472,794)
Deferred revenue	(572,023)	(87,962)
Other liabilities	81,579	(2,115)
Total Adjustments	671,518	(338,753)
Net Cash Used in Operating Activities	(3,260,371)	(4,078,336)
Cash Flows from Investing Activities
Purchase of property and equipment	(326,799)	(283,279)
Proceeds from sale of investment in subsidiary		199,200
Net Cash Used in Investing Activities	(326,799)	(84,079)
Cash Flows from Financing Activities
Proceeds from loans payable	580,386	517,243
Repayments of loans payable	(51,961)	(31,312)
Proceeds from convertible debt obligations	2,026,730	1,260,000
Repayments of debt obligations		(115,000)
Dividends paid in cash	(127,913)
Proceeds from sale of Series B preferred stock		3,539,214
Proceeds from common stock offering, net of issuance costs	575,400	40,500
Net Cash Provided by Financing Activities	3,002,642	5,210,645
Effect of Exchange Rate Changes on Cash	373,359	85,045
Net (Decrease) Increase in Cash	(211,169)	1,133,275
Cash - Beginning of Period	358,303	131,190
Cash - End of Period	147,134	1,264,465
Supplemental Disclosures of Cash Flow Information:
Interest paid	181,439	112,855
Income taxes paid		15,643
Non-Cash Investing and Financing Activity
Accrued stock-based compensation converted to equity	81,399	73,868
Debt and interest converted to equity	809,875	1,267,324
Common stock returned to Company to satisfy receivable	32,285
Beneficial conversion feature	227,424
Dividends declared on Series B Convertible Redeemable Preferred Stock	474,719
Common stock issued to satisfy dividends payable	$ 264,272

XML

Organization

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

1. ORGANIZATION

Through its wholly-owned subsidiaries, Algodon Wines & Luxury Development Group, Inc. (the “Company”, “Algodon Partners”, “AWLD”), a Delaware corporation that was incorporated on April 5, 1999, currently invests in, develops and operates international real estate projects. The Company’s wholly-owned subsidiaries are InvestProperty Group, LLC, Algodon Global Properties, LLC, and Algodon Europe, Ltd. Through its subsidiaries, the Company currently operates Algodon Mansion (“TAR”), a Buenos Aires-based luxury boutique hotel property and has redeveloped, expanded and repositioned an Argentine winery and golf resort property called Algodon Wine Estates (“AWE”) for subdivision of a portion of this property for residential development.

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Going Concern and Management's Liquidity Plans

6 Months Ended

Jun. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern and Management's Liquidity Plans

2. GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company incurred losses from continuing operations of $3,931,889 during the six months ended June 30, 2018 and has an accumulated deficit of $79,475,970 at June 30, 2018. Cash used in operating activities was $3,260,371 for the six months ended June 30, 2018. Based upon projected revenues and expenses, the Company believes that it may not have sufficient funds to operate for the next twelve months. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company needs to raise additional capital in order to continue to pursue its business objectives. The Company funded its operations during the six months ended June 30, 2018 through the proceeds from convertible debt obligations of $2,026,730, proceeds from loans payable of $580,386, and net proceeds from the sale of common stock of $575,400. The Company repaid debt of $51,961 during the six months ended June 30, 2018 and paid cash dividends of $127,913 during the six months ended June 30, 2018.

If the Company is not able to obtain additional sources of capital, it may not have sufficient funds to continue to operate the business for twelve months from the date these financial statements are issued. Historically, the Company has been successful in raising funds to support its capital needs. Management believes that it will be successful in obtaining additional financing; however, no assurance can be provided that the Company will be able to do so. Further, there is no assurance that these funds will be sufficient to enable the Company to attain profitable operations or continue as a going concern. To the extent that the Company is unsuccessful, the Company may need to curtail its operations and implement a plan to extend payables and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful. Such a plan could have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Company could be forced to discontinue its operations, liquidate and/or seek reorganization in bankruptcy. These condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, 2018, and for the three and six months ended June 30, 2018 and 2017. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the operating results for the full year. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on March 30, 2018. The condensed consolidated balance sheet as of December 31, 2017 has been derived from the Company’s audited consolidated financial statements.

Use of Estimates

To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, the Company must make estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates and assumptions of the Company include the valuation of equity instruments, the useful lives of property and equipment and reserves associated with the realizability of certain assets.

Discontinued Operations

The Company accounted for its decision to close down its broker-dealer subsidiary as discontinued operations in accordance with the guidance provided in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, “Accounting for Impairment or Disposal of Long-Lived Assets,” and ASC Topic 205, “Presentation of Financial Statements,” which require that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results shall be reported in the financial statements as discontinued operations. Accordingly, the results of operations for the broker dealer subsidiary during the periods presented are reclassified into a separate line item in the statements of operations. There were no assets or liabilities of discontinued operations as of June 30, 2018 or December 31, 2017.

Segment Information

The FASB has established standards for reporting information on operating segments of an enterprise in interim and annual financial statements. The Company operates in one segment which is the business of real estate development in Argentina. The Company’s chief operating decision-maker reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating segment.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. The functional currencies of the Company’s operating subsidiaries are their local currencies (United States dollar, Argentine peso and British pound). Argentine assets and liabilities are translated into U.S. dollars using the exchange rate at the balance sheet date (28.880 and 18.593 for the Argentine peso and 0.7572 and 0.7400 for the British pound at June 30, 2018 and December 31, 2017, respectively), and revenue and expense accounts are translated using a weighted average exchange rate for the period then ended (23.4199 and 15.6863 for the Argentine peso and 0.7352 and 0.8589 for the British pound for the three and six months ended June 30, 2018 and 2017, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies.

The Company continued to monitor the inflation trends in Argentina during the second quarter of 2018 to assess whether the Argentine economy should be considered highly inflationary, which is defined in U.S. GAAP as the period in which the three-year cumulative inflation rate in the country exceeds 100%. The determination that Argentina has a highly inflationary economy requires a change in the functional currency of the Company’s Argentine operations to the U.S. dollar in the quarterly period following when the economy was deemed to be highly inflationary.

While there has been uncertainty in recent periods about the three-year cumulative inflation rate given the unavailability and inconsistency of certain historical inflation data in Argentina, as of June 30, 2018, all available inflation statistics published by the Argentine Central Bank had exceeded a three-year cumulative rate of 100%. The Argentine economy was deemed to be highly inflationary as of the second quarter of 2018 and, as a result, the Company is required to change the functional currency of its Argentine operations to the U.S. dollar, effective as of July 1, 2018.

Property and Equipment

Investments in property and equipment are recorded at cost. These assets are depreciated using the straight-line method over their estimated useful lives. Most of the Company’s assets are located in Argentina and are subject to variation as a result of foreign currency translation.

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

Stock-Based Compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on financial reporting dates and vesting dates until the service period is complete. The fair value amount of the shares expected to ultimately vest is then recognized over the period for which services are required to be provided in exchange for the award, usually the vesting period. The Company accounts for forfeitures as they occur.

Concentrations

The Company maintains cash with major financial institutions. Cash held in US bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. No similar insurance or guarantee exists for cash held in Argentina bank accounts. There were aggregate uninsured cash balances of $92,977 and $146,952 at June 30, 2018 and December 31, 2017, respectively, of which $92,977 and $92,168, respectively, represents cash held in Argentine bank accounts.

Comprehensive Income (Loss)

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

Revenue Recognition

On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers. ASC Topic 606 provides a single comprehensive model to use in accounting for revenue arising from contracts with customers, and gains and losses arising from transfers of non-financial assets including sales of property and equipment, real estate, and intangible assets. The Company adopted ASC Topic 606 for all applicable contracts using the modified retrospective method, requires a cumulative-effect adjustment, if any, as of the date of adoption. The adoption of ASC Topic 606 did not have a material impact on the Company’s consolidated financial statements as of the date of adoption, and therefore a cumulative-effect adjustment was not required.

The Company earns revenues from the sale of real estate lots and sales of food and wine as well as hospitality, food & beverage, and other related services. The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

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

	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Real estate sales	$	77,182	$	-	$	877,036	$	-
Hotel room and events		164,011		160,550		387,579		424,499
Restaurants		66,173		77,881		156,270		168,150
Winemaking		87,775		76,922		227,171		299,750
Golf, tennis and other		1,251		97,942		26,259		139,433
	$	396,392	$	413,295	$	1,674,315	$	1,031,832

Revenue from real estate lot sales is recorded when the lot is deeded and legal ownership of the lot is transferred to the customer. Revenue from the sale of food, wine and agricultural products is recorded when the customer obtains control of the goods purchased. Revenues from hospitality and other services are recognized as earned at the point in time that the related service is rendered and the performance obligation has been satisfied.

The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Deferred revenues associated with real estate lot sale deposits are recognized as revenues (along with any outstanding balance) when the lot sale closes and the deed is provided to the purchaser. Other deferred revenues primarily consist of deposits accepted by the Company in connection with agreements to sell barrels of wine, advance deposits received for grapes and other agricultural products, and hotel deposits. Wine barrel and agricultural product advance deposits are recognized as revenues (along with any outstanding balance) when the product is shipped to the purchaser. Hotel deposits are recognized as revenue upon occupancy of rooms, or the provision of services.

During the three and six months ended June 30, 2018 the Company recognized approximately $28,000 and $828,000, respectively, of revenues related to the sale of real estate lots which was included in deferred revenues as of December 31, 2017. For the three and six months ended June 30, 2018, the Company did not recognize any revenue related to performance obligations satisfied in previous periods. Contracts related to the sale of wine, agricultural products and hotel services have an original expected length of less than one year. The Company has elected not to disclose information about remaining performance obligations pertaining to contracts with an original expected length of one year or less, as permitted under the guidance.

As of June 30, 2018 and December 31, 2017, the Company had deferred revenue of $608,700 and $1,690,224, respectively, associated with real estate lot sale deposits, $9,301 and $0, respectively, related to advance deposits for wine barrel and agricultural products and had $33,615 and $42,440, respectively, of deferred revenue related to hotel deposits. Sales taxes and value added (“VAT”) taxes collected from customers and remitted to governmental authorities are presented on a net basis within revenues in the condensed consolidated statements of operations.

Net Loss per Common Share

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments.

The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:

	June 30,
	2018		2017
Options		7,973,593		7,839,265
Warrants		1,376,875		1,903,730
Series B convertible preferred stock		9,026,700		4,806,210
Convertible debt		1,987,070		-
Total potentially dilutive shares		20,364,238		14,549,205

New Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”, which increases the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 will require lessees to recognize a right-of-use (ROU) asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation for leases with terms of more than twelve months. Both the ROU asset and lease liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Accounting by lessors will remain largely unchanged from current U.S. GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted, and is to be applied as of the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact that the provisions of ASU 2016-02 will have on the Company’s consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, which allows entities the option to adopt this standard prospectively with a cumulative-effect adjustment to opening equity and include required disclosures for prior periods.

In August 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 in the statement of cash flows in order to reduce diversity in practice. The ASU is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The adoption of ASU 2016-15 did not have a material effect on the Company’s condensed consolidated financial statements and related disclosures.

On February 22, 2017, the FASB issued ASU 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20)”, which requires that all entities account for the derecognition of a business in accordance with ASC 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 material impact on the Company’s condensed consolidated financial statements and related disclosures.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718); Scope of Modification Accounting”. The amendments in this ASU provide guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. If the value, vesting conditions or classification of the award changes, modification accounting will apply. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU 2017-09 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

On June 20, 2018, the FASB issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting”, which simplifies the accounting for share-based payment transactions resulting for acquiring goods and services from nonemployees. ASU 2018-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

The Company has implemented all new accounting standards that are in effect and may impact its condensed consolidated financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position or results of operations.

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Discontinued Operations

6 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

4. DISCONTINUED OPERATIONS

On November 29, 2016, the Company’s Board of Directors determined that it was in the Company’s best interest to close down its broker-dealer operations on December 31, 2016. On February 21, 2017, the Company’s request to FINRA for Broker-Dealer Withdrawal became effective.

Results of Discontinued Operations

There were no results of discontinued operations during the three and six months ended June 30, 2018, or for the three months ended June 30, 2017. Results of discontinued operations for the six months ended June 30, 2017 were as follows:

	For Six Months Ended
	June 30, 2017
Revenues	$	-
Gross profit	$	-
Operating expenses	$	(106,564	)
Interest income (expense)	$	21
Loss from discontinued operations	$	(106,543	)

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Inventory

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Inventory

5. INVENTORY

Inventory is comprised of the following:

	June 30, 2018		December 31, 2017
Vineyard in process	$	85,272	$	349,458
Wine in process		722,858		865,762
Finished wine		35,680		63,964
Other		251,428		109,482
	$	1,095,238	$	1,388,666

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Investments and Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Investments and Fair Value of Financial Instruments

6. INVESTMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company holds certain affiliate warrants earned by the broker-dealer subsidiary prior to its discontinuation of operations, which are marked to market at each reporting date using the Black-Scholes option pricing model. The Company recorded unrealized losses on the affiliate warrants of $14,824 and $16,451 during the three and six months ended June 30, 2018, respectively, and $5,137 and $8,168 recorded during the three and six months ended June 30, 2017, respectively, which are included in revenue on the accompanying condensed consolidated statements of operations.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or developed by the Company. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1 - Valued based on quoted prices at the measurement date for identical assets or liabilities trading in active markets. Financial instruments in this category generally include actively traded equity securities.

Level 2 - Valued based on (a) quoted prices for similar assets or liabilities in active markets; (b) quoted prices for identical or similar assets or liabilities in markets that are not active; (c) inputs other than quoted prices that are observable for the asset or liability; or (d) from market corroborated inputs. Financial instruments in this category include certain corporate equities that are not actively traded or are otherwise restricted.

Level 3 - Valued based on valuation techniques in which one or more significant inputs is not readily observable. Included in this category are certain corporate debt instruments, certain private equity investments, and certain commitments and guarantees

Investments – Related Parties at Fair Value

As of June 30, 2018	Level 1		Level 2		Level 3		Total
Warrants- Affiliates	$	-	$	-	$	9,950	$	9,950

As of December 31, 2017		Level 1		Level 2		Level 3		Total
Warrants- Affiliates	$	-	$	-	$	26,401	$	26,401

A reconciliation of Level 3 assets is as follows:

	Warrants
Balance - December 31, 2017	$	26,401
Unrealized loss		(16,451	)
Balance - June 30, 2018	$	9,950

	June 30, 2018			December 31, 2017
Accumulated unrealized (losses) gains related to investments at fair value	$	(56,898	)	$	(40,447	)

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Accrued Expenses

6 Months Ended

Jun. 30, 2018

Accrued Liabilities [Abstract]

Accrued Expenses

7. ACCRUED EXPENSES

Accrued expenses are comprised of the following:

	June 30, 2018		December 31,2017
Accrued compensation and payroll taxes	$	330,574	$	463,604
Accrued taxes payable		29,068		63,550
Accrued interest		299,522		255,481
Other accrued expenses		152,130		217,886
Accrued expenses, current		811,294		1,000,521
Accrued payroll tax obligations, non-current		156,476		247,515
Total accrued expenses	$	967,770	$	1,248,036

Accrued taxes payable consist primarily of Argentine taxes payable.

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Loans Payable

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Loans Payable

8. LOANS PAYABLE

On March 31, 2017, the Company received a bank loan in the amount of $519,156 (ARS $8,000,000) (the “2017 Loan”). The 2017 Loan bears interest at 24.18% per annum and is due on March 1, 2021. Principal and interest will be paid in forty-two monthly installments beginning on October 1, 2017 and ending on March 1, 2021. The Company incurred interest expense on this loan of $16,280 and $42,788 during the three and six months ended June 30, 2018 and incurred interest of expense on this loan of $28,455 during the three and six months ended June 30, 2017.

On August 19, 2017, the Company purchased 845 hectares of land adjacent to its existing property at AWE. The Company paid $100,000 at the date of purchase and executed a note payable in the amount of $600,000 (the “Land Loan”) with a stated interest rate of 0% and with quarterly payments of $50,000 beginning on December 18, 2017 and ending August 18, 2021. At the date of purchase, the Company took possession of the property, with full use and access, but will not receive the deed to the property until after $400,000 of the purchase price has been paid. The Company imputed interest on the note at 7% per annum and recorded a discounted note balance of $517,390 on August 19, 2017. Amortization of the note discount in the amount of $5,321 and $14,957 for the three and six months ended June 30, 2018, respectively is recorded as interest expense on the accompanying condensed consolidated statements of operations. The balance on the note was $444,563, net of debt discount of $55,437 on June 30, 2018, of which $122,697 (net of discount of $27,303) is included in loans payable, net, current and $321,866 (net of discount of $28,134) is included in loans payable, net, non-current in the accompanying condensed consolidated balance sheets.

On January 25, 2018 the Company received a bank loan in the amount of $525,000 (the “2018 Loan”), denominated in U.S. dollars. The 2018 Loan bears interest at 6.75% per annum and is due on January 25, 2023. Principal and interest will be paid in 60 equal monthly installments of $10,311, beginning on February 23, 2018. The Company incurred interest expense of $8,285 and $14,054 on this loan during the three and six months ended June 30, 2018, respectively.

On June 4, 2018 the Company received a loan in the amount of $55,386 which bears interest at 10% per month and is due upon demand of the lender (the “Demand Loan”). Interest is paid monthly. The Company incurred interest expense on this loan of $6,832 during the three months ended June 30, 2018.

The Company’s loans payable are summarized below:

	June 30, 2018							December 31, 2017
	Gross Principal Amount		Debt Discount			Loans Payable, Net of Debt Discount		Gross Principal Amount		Debt Discount			Loans Payable, Net of Debt Discount
Demand Loan	$	55,386	$	-		$	55,386	$	-	$	-		$	-
2018 Loan		502,682		-			502,682		-		-			-
2017 Loan		243,646		-			243,646		412,047		-			412,047
Land Loan		500,000		(55,437	)		444,563		550,000		(70,393	)		479,607
Total Loans Payable		1,301,714		(55,437	)		1,246,277		962,047		(70,393	)		891,654
Less: current portion		386,690		(27,303	)		359,387		287,838		(31,114	)		256,724
Loans Payable, non-current	$	915,024	$	(28,134	)	$	886,890	$	674,209	$	(39,279	)	$	634,930

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Convertible Debt Obligations

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Convertible Debt Obligations

9. CONVERTIBLE DEBT OBLIGATIONS

During an offering that ended on September 30, 2010, the Company issued convertible notes with an interest rate of 8% and an amended maturity date of March 31, 2011 (the “2010 Debt Obligations”). The Company incurred interest expense of $9,247 and $18,400 during the three and six months ended June 30, 2018, respectively, and $8,849 and $18,400 during the three and six months ended June 30, 2017, respectively, on the 2010 Debt Obligations. As of December 31, 2017, the entire principal balance owed on the 2010 Debt Obligations has been repaid, however, accrued interest of $273,881 and $255,481 remained outstanding as of June 30, 2018, and December 31, 2017, respectively. Accrued interest on the 2010 Debt Obligations is not convertible.

On December 31, 2017, the Company sold a convertible promissory note in the amount of $20,000 to an accredited investor. From February 2, 2018 through April 26, 2018, the Company sold additional convertible promissory notes in the aggregate principal amount of $2,026,730 (together, the “Convertible Notes”). The Convertible Notes mature 90 days from the date of issuance, bear interest at 8% per annum and are convertible into the Company’s common stock at a $0.63 per share, which represented a 10% discount to the price used for the sale of the Company’s common stock at the commitment date. The conversion option represented a beneficial conversion feature which was recorded as a debt discount with a corresponding credit to additional paid-in capital. The Company incurred total interest expense of $256,008, related to this debt during the three and six months ended June 30, 2018, of which $219,593 represented amortization of debt discount.

On June 30, 2018, principal and interest of $794,875 and $15,000, respectively, were converted into 1,285,516 shares of common stock at a conversion price of $0.63 per share.

The Company’s debt obligations as of June 30, 2018 and December 31, 2017 are summarized below:

	June 30, 2018								December 31, 2017
	Principal			Interest [1]		Total			Principal		Interest [1]		Total
Debt Obligations	$	-		$	273,881	$	273,881		$	-	$	255,481	$	255,481
Convertible Debt		1,251,854			25,641		1,277,495			20,000		-		20,000
Convertible Debt Obligations, Gross		1,251,854			299,522		1,551,376			20,000		255,481		275,481
Debt Discount		(7,821	)		-		(7,821	)		-		-		-
Convertible Debt Obligations, net of debt discount	$	1,244,033		$	299,522	$	1,543,555		$	20,000	$	255,481	$	275,481

[1] Accrued interest is included as a component of accrued expenses on the accompanying condensed consolidated balance sheets (see Note 7 – Accrued Expenses).

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Related Party Transactions

6 Months Ended

Jun. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

10. RELATED PARTY TRANSACTIONS

Assets

Accounts receivable – related parties of $199,169 and $851,016 at June 30, 2018 and December 31, 2017, respectively, represents the net realizable value of advances made to related, but independent, entities under common management, of which $155,420 and $724,591 respectively, represents amounts owed to the Company in connection with expense sharing agreements as described below.

Investments

See Note 6 – Investments and Fair Value of Financial Instruments, for information related to investments in related parties.

Expense Sharing

On April 1, 2010, the Company entered into an agreement with a related entity, of which AWLD’s CEO is Chairman and Chief Executive Officer and AWLD’s CFO is an executive officer, to share expenses such as office space, support staff and other operating expenses. The Company is entitled to receive reimbursement of $69,829 and $139,659 for expenses incurred during the three and six months ended June 30, 2018, respectively and $73,672 and $132,355 for expenses incurred during the three and six months ended June 30, 2017, respectively, pursuant to this agreement. The entity owed $155,420 and $724,591, respectively, as of June 30, 2018 and December 31, 2017, under this agreement. The amount owed to the Company is being repaid in installments through October 1, 2018, pursuant to a repayment schedule agreed upon by the Company and the related entity on March 24, 2017.

The Company also had an expense sharing agreement with a different related entity to share expenses such as office space and other clerical services, which was terminated on August 2017. The owners of more than 5% of that entity include (i) AWLD’s Chairman, and (ii) a more than 5% owner of AWLD. The Company was entitled to receive reimbursement of $3,990 and $7,980 for expenses during the three and six months ended June 30, 2017, pursuant to this agreement. The entity owed $396,116 to the Company under the expense sharing agreement as of June 30, 2018 and December 31, 2017, of which the entire balance is deemed unrecoverable and reserved.

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Benefit Contribution Plan

6 Months Ended

Jun. 30, 2018

Retirement Benefits [Abstract]

Benefit Contribution Plan

11. BENEFIT CONTRIBUTION PLAN

The Company sponsors a 401(k) profit-sharing plan (“401(k) Plan”) that covers substantially all of its employees in the United States. The 401(k) Plan provides for a discretionary annual contribution, which is allocated in proportion to compensation. In addition, each participant may elect to contribute to the 401(k) Plan by way of a salary deduction. A participant is always fully vested in their account, including the Company’s contribution. For the three and six months ended June 30, 2018, the Company recorded a charge associated with its contribution of $15,027 and $34,571, respectively, and for the three and six months ended June 30, 2017, the Company recorded a charge associated with its contribution of $25,797 and $43,814, respectively. This charge has been included as a component of general and administrative expenses in the accompanying condensed consolidated statements of operations. The Company issues shares of its common stock to settle prior year’s obligations based on the fair market value of its common stock on the date the shares are issued (shares were issued at $0.70 and $2.00 per share for the six months ended June 30, 2018 and 2017, respectively).

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Temporary Equity and Stockholders' Deficiency

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Temporary Equity and Stockholders' Deficiency

12. TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIENCY

Series B Preferred Stock

The Series B stockholders are entitled to cumulative cash dividends at an annual rate of 8% of the Series B liquidation value (equal to face value of $10 per share), as defined, payable when, as and if declared by the Board of Directors. Cumulative dividends earned by the Series B stockholders were $157,522 and $313,312 for the three and six months ended June 30, 2018, respectively and $48,286 and $51,336 for the three and six months ended June 30, 2017, respectively. During 2018, Company’s Board of Directors declared dividends in the amount of $474,719. During June 2018, the Company issued 378,193 shares of common stock valued at $0.70 per share, or $264,273, in satisfaction of certain dividends payable and paid cash dividends of $127,818. Dividends payable of $82,628 are included in current portion of other liabilities at June 30, 2018. Cumulative unpaid dividends in arrears related to the Series B totaled $157,522 and $284,564 as of June 30, 2018 and December 31, 2017, respectively.

Common Stock

During March 2018, the Company issued 116,284 shares of common stock at $0.70 per share to settle its 2017 obligation, (an aggregate of $81,399) representing the Company’s 401(k) matching contributions to the Company’s 401(k) profit-sharing plan.

During the three months ended June 30, 2018, the Company issued an aggregate of 822,000 shares of common stock at $0.70 per share for cash proceeds of $575,400.

Treasury Stock

On May 19, 2018, a former employee transferred 46,122 shares of the Company’s common stock to the Company, as payment of a $32,285 receivable from the former employee.

Accumulated Other Comprehensive Income (Loss)

For three and six months ended June 30, 2018, the Company recorded $(909,557) and $(1,195,166), respectively, of foreign currency translation adjustments as accumulated other comprehensive income (loss) and for the three and six months ended June 30, 2017, the Company recorded $(196,492) and $3,768, respectively, of foreign currency translation adjustments as accumulated other comprehensive income (loss), primarily related to fluctuations in the Argentine peso to United States dollar exchange rates.

Warrants

A summary of warrants activity during the six months ended June 30, 2018 is presented below:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life in Years		Intrinsic Value
Outstanding, December 31, 2017		1,465,296			2.17
Issued		-			-
Exercised		-			-
Expired		(88,421	)		2.30
Outstanding, June 30, 2018		1,376,875		$	2.17		2.0	$	-
Exercisable, June 30, 2018		1,376,875		$	2.17		2.0	$	-

A summary of outstanding and exercisable warrants as of June 30, 2018 is presented below:

Warrants Outstanding					Warrants Exercisable
Exercise Price		Exercisable Into	Outstanding Number of Warrants		Weighted Average Remaining Life in Years		Exercisable Number of Warrants
$	2.00	Common Stock		741,879		2.5		741,879
$	2.30	Common Stock		446,689		0.8		446,689
$	2.50	Common Stock		188,307		2.7		188,307
		Total		1,376,875				1,376,875

Stock Options

On February 12, 2018, the Company granted five-year options for the purchase of 1,304,328 shares of the Company’s common stock under the 2016 Plan, which options for the purchase of common stock were granted to certain employees of the Company. The options had an exercise price of $0.77 per share and vest 25% at the first anniversary of date of grant, with the remaining shares vesting ratably on a quarterly basis over the following three years. The options had an aggregate grant date fair value of $610,985, which will be recognized ratably over the vesting period. The Company has computed the fair value of options granted using the Black-Scholes option pricing model. Assumptions used in applying the Black-Scholes option pricing model are as follows: risk free interest rate of 2.56%, expected term of 5 years, expected volatility of 43.5%, and expected dividends of 0.00%. There were no stock options granted during the three months ended June 30, 2018, or during the three or six months ended June 30, 2017.

During the three and six months ended June 30, 2018, respectively, the Company recorded stock-based compensation expense of $205,111 and $388,331, respectively, and during the three and six months ended June 30, 2017, the Company recorded stock-based compensation expense of $149,597 and $314,127, respectively, related to stock option grants, which is reflected as general and administrative expenses in the accompanying condensed consolidated statements of operations. As of June 30, 2018, there was $1,227,770 of unrecognized stock-based compensation expense related to stock option grants that will be amortized over a weighted average period of 2.8 years, of which $58,416 of unrecognized expense is subject to non-employee mark-to-market adjustments.

A summary of options activity during the six months ended June 30, 2018 is presented below:

				Weighted		Weighted
				Average		Average
	Number of			Exercise		Remaining		Intrinsic
	Options			Price		Term (Yrs)		Value
Outstanding, December 31, 2017		9,234,265			2.18
Granted		1,304,328			0.77
Exercised		-			-
Expired		(2,505,000	)		2.49
Forfeited		(60,000	)		1.62
Outstanding, June 30, 2018		7,973,593		$	1.71		2.6	$	-
Exercisable, June 30, 2018		4,196,572		$	2.34		1.6	$	-

The following table presents information related to stock options at June 30, 2018:

Options Outstanding				Options Exercisable
Exercise Price		Outstanding Number of Options		Weighted Average Remaining Life in Years		Exercisable Number of Options
$	0.77		1,294,328		-		-
$	1.10		1,370,000		-		-
$	2.20		3,071,890		2.0		2,153,096
$	2.48		2,237,375		1.2		2,043,476
			7,973,593		1.6		4,196,572

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. COMMITMENTS AND CONTINGENCIES

Legal Matters

The Company is involved in litigation and arbitrations from time to time in the ordinary course of business. The Company does not believe that the outcome of any such pending or threatened litigation will have a material adverse effect on its financial condition or results of operations. However, as is inherent in legal proceedings, there is a risk that an unpredictable decision adverse to the Company could be reached. The Company records legal costs associated with loss contingencies as incurred. Settlements are accrued when, and if, they become probable and estimable.

Commitments

The Company leases office space in New York City under an operating lease which expires on August 31, 2020. Rent expense for this property was $77,548 and $133,386 for the three months and six months ended June 30, 2018, respectively, and $69,694 and $121,474 for the three months and six months ended June 30, 2017, respectively, net of expense allocation to affiliates.

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Subsequent Events

6 Months Ended

Jun. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

14. SUBSEQUENT EVENTS

Management has evaluated all subsequent events to determine if events or transactions occurring through the date the condensed consolidated financial statements were issued, require adjustment to or disclosure in the accompanying condensed consolidated financial statements.

Common Stock

From July 2 through August 2, 2018, the Company sold 354,286 shares of common stock at $0.70 per share for aggregate proceeds of $248,000.

Foreign Currency Exchange Rates

The Argentine peso to United States dollar exchange rate was [  ], 20.109 and 18.593 at August [  ], June 30, 2018 and December 31, 2017, respectively.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for annual financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the unaudited condensed consolidated financial statements of the Company as of June 30, 2018, and for the three and six months ended June 30, 2018 and 2017. The results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the operating results for the full year. It is suggested that these unaudited condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on March 30, 2018. The condensed consolidated balance sheet as of December 31, 2017 has been derived from the Company’s audited consolidated financial statements.

Use of Estimates

Use of Estimates

To prepare financial statements in conformity with accounting principles generally accepted in the United States of America, the Company must make estimates and assumptions. These estimates and assumptions affect the reported amounts in the financial statements, and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The significant estimates and assumptions of the Company include the valuation of equity instruments, the useful lives of property and equipment and reserves associated with the realizability of certain assets.

Discontinued Operations

Discontinued Operations

The Company accounted for its decision to close down its broker-dealer subsidiary as discontinued operations in accordance with the guidance provided in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 360, “Accounting for Impairment or Disposal of Long-Lived Assets,” and ASC Topic 205, “Presentation of Financial Statements,” which require that only a disposal of a component of an entity, or a group of components of an entity, that represents a strategic shift that has, or will have, a major effect on the reporting entity’s operations and financial results shall be reported in the financial statements as discontinued operations. Accordingly, the results of operations for the broker dealer subsidiary during the periods presented are reclassified into a separate line item in the statements of operations. There were no assets or liabilities of discontinued operations as of June 30, 2018 or December 31, 2017.

Segment Information

Segment Information

The FASB has established standards for reporting information on operating segments of an enterprise in interim and annual financial statements. The Company operates in one segment which is the business of real estate development in Argentina. The Company’s chief operating decision-maker reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating segment.

Foreign Currency Translation

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. The functional currencies of the Company’s operating subsidiaries are their local currencies (United States dollar, Argentine peso and British pound). Argentine assets and liabilities are translated into U.S. dollars using the exchange rate at the balance sheet date (28.880 and 18.593 for the Argentine peso and 0.7572 and 0.7400 for the British pound at June 30, 2018 and December 31, 2017, respectively), and revenue and expense accounts are translated using a weighted average exchange rate for the period then ended (23.4199 and 15.6863 for the Argentine peso and 0.7352 and 0.8589 for the British pound for the three and six months ended June 30, 2018 and 2017, respectively). Resulting translation adjustments are made directly to accumulated other comprehensive income. The Company engages in foreign currency denominated transactions with customers and suppliers, as well as between subsidiaries with different functional currencies.

The Company continued to monitor the inflation trends in Argentina during the second quarter of 2018 to assess whether the Argentine economy should be considered highly inflationary, which is defined in U.S. GAAP as the period in which the three-year cumulative inflation rate in the country exceeds 100%. The determination that Argentina has a highly inflationary economy requires a change in the functional currency of the Company’s Argentine operations to the U.S. dollar in the quarterly period following when the economy was deemed to be highly inflationary.

While there has been uncertainty in recent periods about the three-year cumulative inflation rate given the unavailability and inconsistency of certain historical inflation data in Argentina, as of June 30, 2018, all available inflation statistics published by the Argentine Central Bank had exceeded a three-year cumulative rate of 100%. The Argentine economy was deemed to be highly inflationary as of the second quarter of 2018 and, as a result, the Company is required to change the functional currency of its Argentine operations to the U.S. dollar, effective as of July 1, 2018.

Property and Equipment

Property and Equipment

Investments in property and equipment are recorded at cost. These assets are depreciated using the straight-line method over their estimated useful lives. Most of the Company’s assets are located in Argentina and are subject to variation as a result of foreign currency translation.

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

Stock-Based Compensation

Stock-Based Compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on financial reporting dates and vesting dates until the service period is complete. The fair value amount of the shares expected to ultimately vest is then recognized over the period for which services are required to be provided in exchange for the award, usually the vesting period. The Company accounts for forfeitures as they occur.

Concentrations

Concentrations

The Company maintains cash with major financial institutions. Cash held in US bank institutions is currently insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 at each institution. No similar insurance or guarantee exists for cash held in Argentina bank accounts. There were aggregate uninsured cash balances of $92,977 and $146,952 at June 30, 2018 and December 31, 2017, respectively, of which $92,977 and $92,168, respectively, represents cash held in Argentine bank accounts.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

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

Revenue Recognition

Revenue Recognition

On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers. ASC Topic 606 provides a single comprehensive model to use in accounting for revenue arising from contracts with customers, and gains and losses arising from transfers of non-financial assets including sales of property and equipment, real estate, and intangible assets. The Company adopted ASC Topic 606 for all applicable contracts using the modified retrospective method, requires a cumulative-effect adjustment, if any, as of the date of adoption. The adoption of ASC Topic 606 did not have a material impact on the Company’s consolidated financial statements as of the date of adoption, and therefore a cumulative-effect adjustment was not required.

The Company earns revenues from the sale of real estate lots and sales of food and wine as well as hospitality, food & beverage, and other related services. The Company recognizes revenue when goods or services are transferred to customers in an amount that reflects the consideration which it expects to receive in exchange for those goods or services. In determining when and how revenue is recognized from contracts with customers, the Company performs the following five-step analysis: (i) identification of contract with customer; (ii) determination of performance obligations; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

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

	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Real estate sales	$	77,182	$	-	$	877,036	$	-
Hotel room and events		164,011		160,550		387,579		424,499
Restaurants		66,173		77,881		156,270		168,150
Winemaking		87,775		76,922		227,171		299,750
Golf, tennis and other		1,251		97,942		26,259		139,433
	$	396,392	$	413,295	$	1,674,315	$	1,031,832

Revenue from real estate lot sales is recorded when the lot is deeded and legal ownership of the lot is transferred to the customer. Revenue from the sale of food, wine and agricultural products is recorded when the customer obtains control of the goods purchased. Revenues from hospitality and other services are recognized as earned at the point in time that the related service is rendered and the performance obligation has been satisfied.

The timing of the Company’s revenue recognition may differ from the timing of payment by its customers. A receivable is recorded when revenue is recognized prior to payment and the Company has an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Deferred revenues associated with real estate lot sale deposits are recognized as revenues (along with any outstanding balance) when the lot sale closes and the deed is provided to the purchaser. Other deferred revenues primarily consist of deposits accepted by the Company in connection with agreements to sell barrels of wine, advance deposits received for grapes and other agricultural products, and hotel deposits. Wine barrel and agricultural product advance deposits are recognized as revenues (along with any outstanding balance) when the product is shipped to the purchaser. Hotel deposits are recognized as revenue upon occupancy of rooms, or the provision of services.

During the three and six months ended June 30, 2018 the Company recognized approximately $28,000 and $828,000, respectively, of revenues related to the sale of real estate lots which was included in deferred revenues as of December 31, 2017. For the three and six months ended June 30, 2018, the Company did not recognize any revenue related to performance obligations satisfied in previous periods. Contracts related to the sale of wine, agricultural products and hotel services have an original expected length of less than one year. The Company has elected not to disclose information about remaining performance obligations pertaining to contracts with an original expected length of one year or less, as permitted under the guidance.

As of June 30, 2018 and December 31, 2017, the Company had deferred revenue of $608,700 and $1,690,224, respectively, associated with real estate lot sale deposits, $9,301 and $0, respectively, related to advance deposits for wine barrel and agricultural products and had $33,615 and $42,440, respectively, of deferred revenue related to hotel deposits. Sales taxes and value added (“VAT”) taxes collected from customers and remitted to governmental authorities are presented on a net basis within revenues in the condensed consolidated statements of operations.

Net Loss Per Common Share

Net Loss per Common Share

Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding, plus the impact of common shares, if dilutive, resulting from the exercise of outstanding stock options and warrants and the conversion of convertible instruments.

The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:

	June 30,
	2018		2017
Options		7,973,593		7,839,265
Warrants		1,376,875		1,903,730
Series B convertible preferred stock		9,026,700		4,806,210
Convertible debt		1,987,070		-
Total potentially dilutive shares		20,364,238		14,549,205

New Accounting Pronouncements

New Accounting Pronouncements

In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)”, which increases the transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 will require lessees to recognize a right-of-use (ROU) asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation for leases with terms of more than twelve months. Both the ROU asset and lease liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Accounting by lessors will remain largely unchanged from current U.S. GAAP. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted, and is to be applied as of the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact that the provisions of ASU 2016-02 will have on the Company’s consolidated financial statements and related disclosures. In July 2018, the FASB issued ASU 2018-11, “Leases (Topic 842): Targeted Improvements”, which allows entities the option to adopt this standard prospectively with a cumulative-effect adjustment to opening equity and include required disclosures for prior periods.

In August 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 in the statement of cash flows in order to reduce diversity in practice. The ASU is effective for interim and annual periods beginning after December 15, 2017 with early adoption permitted. The adoption of ASU 2016-15 did not have a material effect on the Company’s condensed consolidated financial statements and related disclosures.

On February 22, 2017, the FASB issued ASU 2017-05, “Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20)”, which requires that all entities account for the derecognition of a business in accordance with ASC 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 material impact on the Company’s condensed consolidated financial statements and related disclosures.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation - Stock Compensation (Topic 718); Scope of Modification Accounting”. The amendments in this ASU provide guidance that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. If the value, vesting conditions or classification of the award changes, modification accounting will apply. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The adoption of ASU 2017-09 did not have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

On June 20, 2018, the FASB issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718) - Improvements to Nonemployee Share-Based Payment Accounting”, which simplifies the accounting for share-based payment transactions resulting for acquiring goods and services from nonemployees. ASU 2018-07 is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

The Company has implemented all new accounting standards that are in effect and may impact its condensed consolidated financial statements and does not believe that there are any other new accounting standards that have been issued that might have a material impact on its financial position or results of operations.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Accounting Policies [Abstract]

Schedule of Revenue Recognized Multiple-Deliverable Arrangements

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

	For The Three Months Ended				For The Six Months Ended
	June 30,				June 30,
	2018		2017		2018		2017
Real estate sales	$	77,182	$	-	$	877,036	$	-
Hotel room and events		164,011		160,550		387,579		424,499
Restaurants		66,173		77,881		156,270		168,150
Winemaking		87,775		76,922		227,171		299,750
Golf, tennis and other		1,251		97,942		26,259		139,433
	$	396,392	$	413,295	$	1,674,315	$	1,031,832

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

The following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive:

	June 30,
	2018		2017
Options		7,973,593		7,839,265
Warrants		1,376,875		1,903,730
Series B convertible preferred stock		9,026,700		4,806,210
Convertible debt		1,987,070		-
Total potentially dilutive shares		20,364,238		14,549,205

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2018

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Operating Results of Discontinued Operations

Results of discontinued operations for the six months ended June 30, 2017 were as follows:

	For Six Months Ended
	June 30, 2017
Revenues	$	-
Gross profit	$	-
Operating expenses	$	(106,564	)
Interest income (expense)	$	21
Loss from discontinued operations	$	(106,543	)

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Inventory (Tables)

6 Months Ended

Jun. 30, 2018

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory is comprised of the following:

	June 30, 2018		December 31, 2017
Vineyard in process	$	85,272	$	349,458
Wine in process		722,858		865,762
Finished wine		35,680		63,964
Other		251,428		109,482
	$	1,095,238	$	1,388,666

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Investments and Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Schedule of Investments in and Advances to Affiliates

Investments – Related Parties at Fair Value

As of June 30, 2018	Level 1		Level 2		Level 3		Total
Warrants- Affiliates	$	-	$	-	$	9,950	$	9,950

As of December 31, 2017		Level 1		Level 2		Level 3		Total
Warrants- Affiliates	$	-	$	-	$	26,401	$	26,401

Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation

A reconciliation of Level 3 assets is as follows:

	Warrants
Balance - December 31, 2017	$	26,401
Unrealized loss		(16,451	)
Balance - June 30, 2018	$	9,950

Schedule of Accumulated Unrealized Loss Related to Investment at Fair Value

	June 30, 2018			December 31, 2017
Accumulated unrealized (losses) gains related to investments at fair value	$	(56,898	)	$	(40,447	)

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2018

Accrued Liabilities [Abstract]

Schedule of Accrued Expenses

Accrued expenses are comprised of the following:

	June 30, 2018		December 31,2017
Accrued compensation and payroll taxes	$	330,574	$	463,604
Accrued taxes payable		29,068		63,550
Accrued interest		299,522		255,481
Other accrued expenses		152,130		217,886
Accrued expenses, current		811,294		1,000,521
Accrued payroll tax obligations, non-current		156,476		247,515
Total accrued expenses	$	967,770	$	1,248,036

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Loans Payable (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Loans Payable

The Company’s loans payable are summarized below:

	June 30, 2018							December 31, 2017
	Gross Principal Amount		Debt Discount			Loans Payable, Net of Debt Discount		Gross Principal Amount		Debt Discount			Loans Payable, Net of Debt Discount
Demand Loan	$	55,386	$	-		$	55,386	$	-	$	-		$	-
2018 Loan		502,682		-			502,682		-		-			-
2017 Loan		243,646		-			243,646		412,047		-			412,047
Land Loan		500,000		(55,437	)		444,563		550,000		(70,393	)		479,607
Total Loans Payable		1,301,714		(55,437	)		1,246,277		962,047		(70,393	)		891,654
Less: current portion		386,690		(27,303	)		359,387		287,838		(31,114	)		256,724
Loans Payable, non-current	$	915,024	$	(28,134	)	$	886,890	$	674,209	$	(39,279	)	$	634,930

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Convertible Debt Obligations (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Debt Obligations

The Company’s debt obligations as of June 30, 2018 and December 31, 2017 are summarized below:

	June 30, 2018								December 31, 2017
	Principal			Interest [1]		Total			Principal		Interest [1]		Total
Debt Obligations	$	-		$	273,881	$	273,881		$	-	$	255,481	$	255,481
Convertible Debt		1,251,854			25,641		1,277,495			20,000		-		20,000
Convertible Debt Obligations, Gross		1,251,854			299,522		1,551,376			20,000		255,481		275,481
Debt Discount		(7,821	)		-		(7,821	)		-		-		-
Convertible Debt Obligations, net of debt discount	$	1,244,033		$	299,522	$	1,543,555		$	20,000	$	255,481	$	275,481

[1] Accrued interest is included as a component of accrued expenses on the accompanying condensed consolidated balance sheets (see Note 7 – Accrued Expenses).

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Temporary Equity and Stockholders' Deficiency (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Summary of Warrants Activity

A summary of warrants activity during the six months ended June 30, 2018 is presented below:

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Life in Years		Intrinsic Value
Outstanding, December 31, 2017		1,465,296			2.17
Issued		-			-
Exercised		-			-
Expired		(88,421	)		2.30
Outstanding, June 30, 2018		1,376,875		$	2.17		2.0	$	-
Exercisable, June 30, 2018		1,376,875		$	2.17		2.0	$	-

Schedule of Share-based Compensation, Equity Instruments Other Than Options, by Exercise Price Range

A summary of outstanding and exercisable warrants as of June 30, 2018 is presented below:

Warrants Outstanding					Warrants Exercisable
Exercise Price		Exercisable Into	Outstanding Number of Warrants		Weighted Average Remaining Life in Years		Exercisable Number of Warrants
$	2.00	Common Stock		741,879		2.5		741,879
$	2.30	Common Stock		446,689		0.8		446,689
$	2.50	Common Stock		188,307		2.7		188,307
		Total		1,376,875				1,376,875

Schedule of Share-based Compensation, Stock Options, Activity

A summary of options activity during the six months ended June 30, 2018 is presented below:

				Weighted		Weighted
				Average		Average
	Number of			Exercise		Remaining		Intrinsic
	Options			Price		Term (Yrs)		Value
Outstanding, December 31, 2017		9,234,265			2.18
Granted		1,304,328			0.77
Exercised		-			-
Expired		(2,505,000	)		2.49
Forfeited		(60,000	)		1.62
Outstanding, June 30, 2018		7,973,593		$	1.71		2.6	$	-
Exercisable, June 30, 2018		4,196,572		$	2.34		1.6	$	-

Schedule of Share-based Compensation, Shares Outstanding Under Stock Option Plans, by Exercise Price Range

The following table presents information related to stock options at June 30, 2018:

Options Outstanding				Options Exercisable
Exercise Price		Outstanding Number of Options		Weighted Average Remaining Life in Years		Exercisable Number of Options
$	0.77		1,294,328		-		-
$	1.10		1,370,000		-		-
$	2.20		3,071,890		2.0		2,153,096
$	2.48		2,237,375		1.2		2,043,476
			7,973,593		1.6		4,196,572

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Going Concern and Management's Liquidity Plans (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Losses from continuing operations	$ 2,506,775	$ 1,928,698	$ 3,931,889	$ 3,633,040
Accumulated deficit	$ 79,475,970		79,475,970		$ 75,544,081
Net cash used in operating activities			3,260,371	4,078,336
Proceeds from convertible debt obligations			2,026,730	1,260,000
Proceeds from loans payable			580,386	517,243
Proceeds from issuance of common stock			575,400	40,500
Repayments of loans payable			51,961	31,312
Paid cash dividends			$ (127,913)

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Summary of Significant Accounting Policies (Details Narrative)	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($)	Jun. 30, 2017	Jun. 30, 2018 USD ($) Segment	Jun. 30, 2017	Dec. 31, 2017 USD ($)
Property, Plant and Equipment [Line Items]
Cumulative inflationary rate			100.00%
Cash, FDIC insured amount	$ 250,000		$ 250,000
Cash, uninsured amount	92,977		$ 92,977		$ 146,952
Number of operating segment | Segment			1
Revenue from sale of real estate	28,000		$ 828,000
Hotel [Member]
Property, Plant and Equipment [Line Items]
Deferred revenue	33,615		33,615		42,440
Wine Barrel and Agriculture Product [Member]
Property, Plant and Equipment [Line Items]
Deferred revenue	9,301		9,301		0
Real Estate Lot Sales Deposit [Member]
Property, Plant and Equipment [Line Items]
Deferred revenue	608,700		608,700		1,690,224
Argentine Bank [Member]
Property, Plant and Equipment [Line Items]
Cash held in bank	$ 92,977		$ 92,977		$ 92,168
Argentine Peso [Member]
Property, Plant and Equipment [Line Items]
Foreign currency exchange rate, translation, assets and liabilities	28.880		28.880		18.593
Foreign currency exchange rate, revenues and expenses	23.4199	15.6863	23.4199	15.6863
British Pound [Member]
Property, Plant and Equipment [Line Items]
Foreign currency exchange rate, translation, assets and liabilities	0.7572		0.7572		0.7400
Foreign currency exchange rate, revenues and expenses	0.7352	0.8589	0.7352	0.8589

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Summary of Significant Accounting Policies - Schedule of Revenue Recognized Multiple-Deliverable Arrangements (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	$ 396,392	$ 413,295	$ 1,674,315	$ 1,031,832
Real Estate Sales [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	77,182		877,036
Hotel Rooms and Events [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	164,011	160,550	387,579	424,499
Restaurants [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	66,173	77,881	156,270	168,150
Winemaking [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	87,775	76,922	227,171	299,750
Golf, Tennis and Other [Member]
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Revenues	$ 1,251	$ 97,942	$ 26,259	$ 139,433

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Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	20,364,238	14,549,205
Series B Convertible Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	9,026,700	4,806,210
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	7,973,593	7,839,265
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	1,376,875	1,903,730
Convertible debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share, amount	1,987,070

XML

Discontinued Operations - Schedule of Operating Results of Discontinued Operations (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Discontinued Operations and Disposal Groups [Abstract]
Revenues
Gross profit
Operating expenses				(106,564)
Interest income (expense)				21
Loss from discontinued operations				$ (106,543)

XML

Inventory - Schedule of Inventory (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Vineyard in Process	$ 85,272	$ 349,458
Wine in Process	722,858	865,762
Finished Wine	35,680	63,964
Other	251,428	109,482
Total	$ 1,095,238	$ 1,388,666

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Investments and Fair Value of Financial Instruments (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Fair Value Disclosures [Abstract]
Unrealized losses on affiliate warrants	$ 14,824	$ 5,137	$ 16,451	$ 8,168

XML

Investments and Fair Value of Financial Instruments - Schedule of Investments in and Advances to Affiliates (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Investments in and Advances to Affiliates [Line Items]
Warrants - Affiliates	$ 9,950	$ 26,401
Fair Value, Inputs, Level 1 [Member] | Warrants [Member]
Investments in and Advances to Affiliates [Line Items]
Warrants - Affiliates
Fair Value, Inputs, Level 2 [Member] | Warrants [Member]
Investments in and Advances to Affiliates [Line Items]
Warrants - Affiliates
Fair Value, Inputs, Level 3 [Member] | Warrants [Member]
Investments in and Advances to Affiliates [Line Items]
Warrants - Affiliates	$ 9,950	$ 26,401

XML

Investments and Fair Value of Financial Instruments - Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Warrants [Member]	6 Months Ended
	Jun. 30, 2018 USD ($)
Investments in and Advances to Affiliates [Line Items]
Balance beginning	$ 26,401
Unrealized loss	(16,451)
Balance ending	$ 9,950

XML

Investments and Fair Value of Financial Instruments - Schedule of Accumulated Unrealized Loss Related to Investment at Fair Value (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Accumulated unrealized (losses) gains related to investments at fair value	$ (56,898)	$ (40,477)

XML

Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Accrued Liabilities [Abstract]
Accrued compensation and payroll taxes	$ 330,574	$ 463,604
Accrued taxes payable	29,068	63,550
Accrued interest	299,522	255,481
Other accrued expenses	152,130	217,886
Accrued expenses, current	811,294	1,000,521
Accrued expenses, non-current portion	156,476	247,515
Total accrued expenses	$ 967,770	$ 1,248,036

XML

Loans Payable (Details Narrative)							3 Months Ended		6 Months Ended
	Jun. 04, 2018 USD ($)	Feb. 23, 2018 USD ($)	Jan. 25, 2018 USD ($)	Aug. 19, 2017 USD ($)	Mar. 31, 2017 USD ($)	Mar. 31, 2017 ARS ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Proceeds from loans payable					$ 519,156
Debt instrument interest rate				0.00%	24.18%	24.18%
Debt maturity date					Mar. 01, 2021	Mar. 01, 2021
Number of installment desciption					Forty-two monthly installments	Forty-two monthly installments
Interest expense							$ 16,280	$ 28,455	$ 42,788	$ 28,455
Payment to purchase of land				$ 100,000
Notes payable				600,000
Debt instrument periodic payment				50,000
Payment to acquire property				$ 400,000					326,799	283,279
Debt instrument imputed interest				7.00%
Debt instrument unamortized discount				$ 517,390			55,437		55,437
Amortization of debt discount									234,550
Loans payable current							359,387		359,387			$ 256,724
Loans payable non-current							886,890		886,890			634,930
Land Loan [Member]
Debt Instrument [Line Items]
Debt instrument unamortized discount							55,437		55,437			$ 70,393
Loans payable							444,563		444,563
Loans payable current							122,697		122,697
Loans payable non-current							321,866		321,866
Debt discount non-current							28,134		28,134
2018 Loan [Member]
Debt Instrument [Line Items]
Proceeds from loans payable			$ 525,000
Debt instrument interest rate			6.75%
Debt maturity date			Jan. 25, 2023
Number of installment desciption			60 equal monthly installments
Interest expense							8,285		14,054
Debt instrument periodic payment		$ 10,311
Debt instrument unamortized discount
Demand Loan [Member]
Debt Instrument [Line Items]
Proceeds from loans payable	$ 55,386
Debt instrument interest rate	10.00%
Interest expense							6,832
Debt instrument unamortized discount
Algodon Wine Estates [Member]
Debt Instrument [Line Items]
Amortization of debt discount							$ 5,321		$ 14,957
Argentine Peso [Member]
Debt Instrument [Line Items]
Proceeds from loans payable						$ 8,000,000

XML

Loans Payable - Schedule of Loans Payable (Details) - USD ($)	Dec. 31, 2018	Jun. 30, 2018	Dec. 31, 2017	Aug. 19, 2017
Debt Instrument [Line Items]
Debt discount		$ (55,437)		$ (517,390)
Demand Loan [Member]
Debt Instrument [Line Items]
Gross principal amount		55,386
Debt discount
Loans payable, net of debt discount		55,386
2018 Loan [Member]
Debt Instrument [Line Items]
Gross principal amount		502,682
Debt discount
Loans payable, net of debt discount		502,682
2017 Loan [Member]
Debt Instrument [Line Items]
Gross principal amount		243,646	$ 412,047
Debt discount
Loans payable, net of debt discount		243,646	412,047
Land Loan [Member]
Debt Instrument [Line Items]
Gross principal amount		500,000	550,000
Debt discount		(55,437)	(70,393)
Loans payable, net of debt discount		444,563	479,607
Loan Payable [Member]
Debt Instrument [Line Items]
Gross principal amount		1,301,714	962,047
Debt discount		(55,437)	(70,393)
Loans payable, net of debt discount		1,246,277	891,654
Loan Payable Current [Member]
Debt Instrument [Line Items]
Gross principal amount		386,690	287,838
Debt discount		(27,303)	(31,114)
Loans payable, net of debt discount		359,387	256,724
Loan Payable Non Current [Member]
Debt Instrument [Line Items]
Gross principal amount		915,024	674,209
Debt discount		(28,134)	(39,279)
Loans payable, net of debt discount		$ 886,890	$ 634,930

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Convertible Debt Obligations (Details Narrative) - USD ($)				3 Months Ended			6 Months Ended
	Dec. 31, 2017	Mar. 31, 2017	Sep. 30, 2010	Jun. 30, 2018	Apr. 26, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Aug. 19, 2017
Convertible Debt Obligations [Line Items]
Debt instrument interest rate		24.18%							0.00%
Debt instrument maturity date		Mar. 01, 2021
Accrued interest expense				$ 16,280		$ 28,455	$ 42,788	$ 28,455
Accrued interest	$ 255,481			299,522			299,522
Proceeds from issuance of debt		$ 519,156
Amortization of debt discount							234,550
2010 Debt Obligations [Mermber]
Convertible Debt Obligations [Line Items]
Debt instrument interest rate			8.00%
Debt instrument maturity date			Mar. 31, 2011
Accrued interest expense				9,247		$ 8,849	18,400	$ 18,400
Accrued interest	255,481			$ 273,881			$ 273,881
Debt conversion price per share				$ 0.63			$ 0.63
Debt principal				$ 794,875			$ 794,875
Debt instruments interest				$ 15,000
Debt conversion of convertible debt				1,285,516
Convertible Notes [Member]
Convertible Debt Obligations [Line Items]
Debt instrument interest rate				8.00%			8.00%
Accrued interest expense				$ 256,008			$ 256,008
Proceeds from issuance of debt					$ 2,026,730
Debt conversion price per share				$ 0.63			$ 0.63
Common stock, discount percentage				10.00%			10.00%
Amortization of debt discount				$ 219,593			$ 219,593
Accredited Investor [Member] | Convertible Notes [Member]
Convertible Debt Obligations [Line Items]
Proceeds from issuance of debt	$ 20,000

XML

Convertible Debt Obligations - Schedule of Debt Obligations (Details) - USD ($)		Jun. 30, 2018	Dec. 31, 2017
Debt Obligations [Member]
Convertible Debt Obligations [Line Items]
Principal
Interest	[1]	273,881	255,481
Total		273,881	255,481
Convertible Debt [Member]
Convertible Debt Obligations [Line Items]
Principal		1,251,854	20,000
Interest	[1]	25,641
Total		1,277,495	20,000
Convertible Debt Obligations, Gross [Member]
Convertible Debt Obligations [Line Items]
Principal		1,251,854	20,000
Interest	[1]	299,522	255,481
Total		1,551,376	275,481
Debt Discount [Member]
Convertible Debt Obligations [Line Items]
Principal		(7,821)
Interest	[1]
Total		(7,821)
Convertible Debt Obligations, Net of Debt Discount [Member]
Convertible Debt Obligations [Line Items]
Principal		1,244,033	20,000
Interest	[1]	299,522	255,481
Total		$ 1,543,555	$ 275,481

[1] Accrued interest is included as a component of accrued expenses on the accompanying condensed consolidated balance sheets (see Note 7 - Accrued Expenses).

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Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Related Party Transaction [Line Items]
Accounts receivable related parties	$ 199,169		$ 199,169		$ 851,016
Due from related parties	155,420		155,420		724,591
Received reimbursement expenses	69,829	$ 73,672	139,659	$ 132,355
Sharing Agreement [Member]
Related Party Transaction [Line Items]
Due from related parties	$ 396,116		$ 396,116		$ 396,116
AWLD [Member]
Related Party Transaction [Line Items]
Received reimbursement expenses		$ 3,990		$ 7,980
AWLD Chairman [Member]
Related Party Transaction [Line Items]
Equity method investment, ownership percentage	5.00%		5.00%

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Benefit Contribution Plan (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Retirement Benefits [Abstract]
Defined contribution plan cost recognized	$ 15,027	$ 25,797	$ 34,571	$ 43,814
Share price	$ 0.70	$ 2.00	$ 0.70	$ 2.00

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Temporary Equity and Stockholders' Deficiency (Details Narrative) - USD ($)			1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 19, 2018	Feb. 12, 2018	Mar. 31, 2018	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Value of common stock shares issued						$ 575,400
Common stock issued under 401(k) profit sharing plan, value						81,399
Proceeds from issuance of common stock						575,400	$ 40,500
Foreign currency translation adjustments				$ (909,557)	$ (196,492)	(1,195,166)	3,768
Share based compensation				$ 205,111	149,597	388,331	314,127
Board of Directors [Member]
Dividends declared on preferred stock						$ 474,719
Number of common stock shares issued						378,193
Shares issued, price per share				$ 0.70		$ 0.70
Value of common stock shares issued						$ 264,273
Dividends payable and paid cash dividends						127,818
Dividends payable				$ 82,628		82,628
Former Employee [Member]
Number of treasury stock transferred to common stock	$ 46,122
Value of treasury stock transferred to common stock	32,285
Non Employee [Member]
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options				58,416		$ 58,416
Options [Member]
Number of granted options						1,304,328
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options				$ 1,227,770		$ 1,227,770
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition						2 years 29 days
401(k) Profit Sharing Plan [Member]
Shares issued, price per share			$ 0.70
Common stock issued under 401(k) profit sharing plan, value			$ 81,399
2016 Stock Options Plan [Member]
Stock options term		5 years
Number of granted options		1,304,328
Options exercise price		$ 0.77
Fair value of vesting period		$ 610,985
Risk free interest rate		2.56%
Expected terms		5 years
Expected volatility		43.50%
Expected dividends		0.00%
2016 Stock Options Plan [Member] | First Anniversary [Member]
Vesting percentage		25.00%
Vested period		3 years
Common Stock [Member]
Number of common stock shares issued						822,000
Shares issued, price per share				$ 0.70		$ 0.70
Value of common stock shares issued						$ 8,220
Common stock issued under 401(k) profit sharing plan, shares			116,284			116,284
Common stock issued under 401(k) profit sharing plan, value						$ 1,163
Proceeds from issuance of common stock						$ 575,400
Series B Preferred Stock [Member]
Preferred stock dividend rate						8.00%
Liquidation value per share				$ 10		$ 10
8% dividends earned preferred stock				$ 157,522	$ 48,286	$ 313,312	$ 51,336
Preferred stock, amount of cumulative dividends in arrears						$ 157,522		$ 284,564

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Temporary Equity and Stockholders' Deficiency - Summary of Warrants Activity (Details) - Warrants [Member]	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Warrants, Outstanding, Beginning | shares	1,465,296
Number of Warrants, Issued | shares
Number of Warrants, Exercised | shares
Number of Warrants, Expired | shares	(88,421)
Number of Warrants, Outstanding, Ending | shares	1,376,875
Number of Warrants, Exercisable | shares	1,376,875
Weighted Average Exercise Price, Outstanding, Beginning | $ / shares	$ 2.17
Weighted Average Exercise Price, Issued | $ / shares
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price, Expired | $ / shares	2.30
Weighted Average Exercise Price, Outstanding, Ending | $ / shares	2.17
Weighted Average Exercise Price, Exercisable | $ / shares	$ 2.17
Weighted Average Remaining Life In Years, Outstanding	2 years
Weighted Average Remaining Life In Years, Exercisable	2 years
Intrinsic Value, Outstanding, Ending | $
Intrinsic Value, Exercisable, Ending | $

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Temporary Equity and Stockholders' Deficiency - Schedule of Share-based Compensation, Equity Instruments Other Than Options, by Exercise Price Range (Details)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Outstanding, Number of Warrants	1,376,875
Warrants Exercisable, Number of Warrants	1,376,875
Range of Exercise Price 2.00 [Member] | Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Outstanding, Exercise Price | $ / shares	$ 2.00
Warrants Outstanding Exercisable Into, Description	Common Stock
Warrants Outstanding, Number of Warrants	741,879
Warrants Exercisable, Weighted Average Remaining Life in Years	2 years 6 months
Warrants Exercisable, Number of Warrants	741,879
Range of Exercise Price 2.30 [Member] | Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Outstanding, Exercise Price | $ / shares	$ 2.30
Warrants Outstanding Exercisable Into, Description	Common Stock
Warrants Outstanding, Number of Warrants	446,689
Warrants Exercisable, Weighted Average Remaining Life in Years	9 months 18 days
Warrants Exercisable, Number of Warrants	446,689
Range of Exercise Price 2.50 [Member] | Warrants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Warrants Outstanding, Exercise Price | $ / shares	$ 2.50
Warrants Outstanding Exercisable Into, Description	Common Stock
Warrants Outstanding, Number of Warrants	188,307
Warrants Exercisable, Weighted Average Remaining Life in Years	2 years 8 months 12 days
Warrants Exercisable, Number of Warrants	188,307

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Temporary Equity and Stockholders' Deficiency - Schedule of Share-based Compensation, Stock Options, Activity (Details) - Options [Member]	6 Months Ended
	Jun. 30, 2018 USD ($) $ / shares shares
Number of Options, Outstanding, Beginning | shares	9,234,265
Number of Options, Granted | shares	1,304,328
Number of Options, Exercised | shares
Number of Options, Expired | shares	(2,505,000)
Number of Options, Forfeited | shares	(60,000)
Number of Options, Outstanding, Ending | shares	7,973,593
Number of Options, Exercisable, Ending | shares	4,196,572
Weighted Average Exercise Price, Outstanding, Beginning | $ / shares	$ 2.18
Weighted Average Exercise Price, Granted | $ / shares	0.77
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price, Expired | $ / shares	2.49
Weighted Average Exercise Price, Forfeited | $ / shares	1.62
Weighted Average Exercise Price, Outstanding, Ending | $ / shares	1.71
Weighted Average Exercise Price, Exercisable, Ending | $ / shares	$ 2.34
Weighted Average Remaining Term (Years) Outstanding	2 years 7 months 6 days
Weighted Average Remaining Term (Years) Exercisable	1 year 7 months 6 days
Intrinsic Value, Outstanding | $
Intrinsic Value, Exercisable | $

XML

Temporary Equity and Stockholders' Deficiency - Schedule of Share-based Compensation, Shares Outstanding Under Stock Option Plans, by Exercise Price Range (Details)	6 Months Ended
	Jun. 30, 2018 $ / shares shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Outstanding Number of Options	7,973,593
Options Exercisable, Weighted Exercise Average Remaining Life In Years	1 year 7 months 6 days
Options Exercisable, Exercisable Number of Options	4,196,572
Exercise Price Range 0.77 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Weighted Exercise Average Price | $ / shares	$ 0.77
Options Outstanding, Outstanding Number of Options	1,294,328
Options Exercisable, Weighted Exercise Average Remaining Life In Years	0 years
Options Exercisable, Exercisable Number of Options
Exercise Price Range 1.10 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Weighted Exercise Average Price | $ / shares	$ 1.10
Options Outstanding, Outstanding Number of Options	1,370,000
Options Exercisable, Weighted Exercise Average Remaining Life In Years	0 years
Options Exercisable, Exercisable Number of Options
Exercise Price Range 2.20 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Weighted Exercise Average Price | $ / shares	$ 2.20
Options Outstanding, Outstanding Number of Options	3,071,890
Options Exercisable, Weighted Exercise Average Remaining Life In Years	2 years
Options Exercisable, Exercisable Number of Options	2,153,096
Exercise Price Range 2.48 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options Outstanding, Weighted Exercise Average Price | $ / shares	$ 2.48
Options Outstanding, Outstanding Number of Options	2,237,375
Options Exercisable, Weighted Exercise Average Remaining Life In Years	1 year 2 months 12 days
Options Exercisable, Exercisable Number of Options	2,043,476

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Commitments and Contingencies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Commitments and Contingencies Disclosure [Abstract]
Lease expiration date			Aug. 31, 2020
Operating leases, rent expense	$ 77,548	$ 69,694	$ 133,386	$ 121,474

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Subsequent Events (Details Narrative)	1 Months Ended	6 Months Ended
	Aug. 02, 2018 USD ($) $ / shares shares	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2017
Subsequent Event [Line Items]
Proceeds from sale of common stock		$ 575,400	$ 40,500
Foreign currency exchange rate, translation		20.109		18.593
Common Stock [Member]
Subsequent Event [Line Items]
Proceeds from sale of common stock		$ 575,400
Subsequent Event [Member] | Common Stock [Member]
Subsequent Event [Line Items]
Number of common stock shares sold | shares	354,286
Sale of stock price per share | $ / shares	$ 0.70
Proceeds from sale of common stock	$ 248,000
Foreign currency exchange rate, translation