Exhibit 3.1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Item 3.03 Material Modification to Rights of Security Holders.
On April 19, 2024, the Board of Directors of Gaucho Group Holdings, Inc. (the “Company”), as authorized by the stockholders of the Company, approved a reverse stock split of the Company’s issued and outstanding shares of common stock, par value $0.01 per share (the “Common Stock”), at a ratio of 1-for-10 (the “Reverse Stock Split”). The Board of Directors of the Company also approved an amended and restated Certificate of Incorporation (the “Certificate”) to effect the Reverse Stock Split.
On April 24, 2024, the Company filed the Certificate with the Delaware Secretary of State with an effective date of 12:01 a.m., Eastern Time, on May 1, 2024 (the “Effective Date”).
Reason for the Reverse Stock Split
The Company is effecting the Reverse Stock Split to satisfy the $1.00 minimum bid price requirement, as set forth in Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Requirement”), for continued listing on The Nasdaq Capital Market. As previously disclosed in a Current Report on Form 8-K filed June 6, 2023, on June 1, 2023, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that, for the preceding 30 consecutive business days, the closing bid price for the Common Stock was trading below the minimum $1.00 per share requirement for continued inclusion on The Nasdaq Capital Market pursuant to the Bid Price Requirement. In accordance with Nasdaq Rules, the Company was provided an initial period of 180 calendar days, or until November 28, 2023, to regain compliance with the Bid Price Requirement.
The Company effected a one-for-ten reverse stock split on September 25, 2023, but did not regain compliance with the Bid Price Requirement as of November 28, 2023. The Company then provided the Staff with notice that it intended to effect an additional reverse stock split, if necessary to regain compliance with the Bid Price Requirement, pending stockholder approval.
On November 29, 2023, the Company received a letter from the Staff notifying the Company that it was eligible for an additional 180 calendar day period, or until May 28, 2024 to regain compliance (the “Compliance Date”). Provided that the Company meets the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market with the exception of the Bid Price Requirement, and the Company provides written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary, then if at any time before the Compliance Date the closing bid price for the Company’s Common Stock is at least $1.00 for a minimum of 10 consecutive business days, the Staff will provide the Company written confirmation of compliance with the Bid Price Requirement.
Effects of the Reverse Stock Split
Effective Date; Symbol; CUSIP Number. The Reverse Stock Split becomes effective with Nasdaq and the Common Stock will begin trading on a split-adjusted basis at the open of market on the Effective Date. In connection with the Reverse Stock Split, the CUSIP number for the Common Stock will change to 36809R503.
Split Adjustment; Treatment of Fractional Shares. On the Effective Date, the total number of shares of Common Stock either issued and outstanding or held in treasury will be converted automatically into the number of shares of Common Stock equal to: (i) the number of shares issued and outstanding or held in treasury immediately prior to the Reverse Stock Split divided by (ii) ten (10). Any fractional share of Common Stock that would otherwise result from the Reverse Stock Split will be rounded to a whole share and, as such, any stockholder who otherwise would have held a fractional share after giving effect to the Reverse Stock Split will instead hold one whole share of the post-Reverse Stock Split Common Stock after giving effect to the Reverse Stock Split. As a result, no fractional shares will be issued in connection with the Reverse Stock Split and no cash or other consideration will be paid in connection with any fractional shares that would otherwise have resulted from the Reverse Stock Split. The Company intends to treat stockholders holding shares of Common Stock in “street name” (that is, held through a bank, broker or other nominee) in the same manner as stockholders of record whose shares of Common Stock are registered in their names. Banks, brokers or other nominees will be instructed to effect the Reverse Stock Split for their beneficial holders holding shares of our Common Stock in “street name;” however, these banks, brokers or other nominees may apply their own specific procedures for processing the Reverse Stock Split.
Also on the Effective Date, all options, warrants and other convertible securities of the Company outstanding immediately prior to the Reverse Stock Split will be adjusted by dividing the number of shares of Common Stock into which the options, warrants and other convertible securities are exercisable or convertible by ten (10) and multiplying the exercise or conversion price thereof by ten (10), all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share. Such proportional adjustments will also be made to the number of shares and restricted stock units issued and issuable under the Company’s equity compensation plan.
No Action Required. Stockholders do not need to take any action, as the effect of the Reverse Stock Split will be reflected automatically. Each share of Common Stock immediately prior to the Effective Time (“Old Shares”) shall thereafter represent that number of shares of Common Stock into which the Old Shares shall have been combined, subject to the elimination of fractional share interests as described above.
Amended and Restated Certificate of Incorporation. The Company will effect the Reverse Stock Split pursuant to the Company’s filing of the Certificate with the Delaware Secretary of State effective 12:01 a.m., Eastern Time, on May 1, 2024, in accordance with Delaware law. A copy of the Certificate is attached hereto as Exhibit 3.1 and is incorporated herein by reference.
Stockholder Approval. At the Company’s Special Stockholder Meeting held on February 29, 2024, the stockholders approved a proposal to grant the Board of Directors discretion on or before June 30, 2024, to implement a reverse stock split in a range of one-for-two up to one-for-ten. As such, the Reverse Stock Split was approved in accordance with Delaware law.
Capitalization. As of April 29, 2024, there were 7,963,839 shares of Common Stock issued and 7,963,810 shares of Common Stock outstanding. As a result of the Reverse Stock Split, there will be approximately 796,384 shares of Common Stock issued and 796,381 shares of Common Stock outstanding (subject to adjustment due to the effect of rounding fractional shares into whole shares). The Reverse Stock Split will not have any effect on the stated par value of the Common Stock. The total number of the Corporation’s authorized shares of Common Stock and Preferred Stock shall not be affected by the foregoing.
Immediately after the Reverse Stock Split, each stockholder’s relative ownership interest in the Company and proportional voting power will remain virtually unchanged except for minor changes and adjustments that will result from rounding fractional shares into whole shares.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
The information set forth in Item 3.03 of this Current Report on Form 8-K with respect to the Certificate effecting the Reverse Stock Split is incorporated by reference into Item 5.03 of this Current Report on Form 8-K.
Item 8.01 Other Events
On April 29, 2024, the Company published a press release announcing the Reverse Stock Split. The full text of the press release is furnished hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| 3.1 | Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on April 24, 2024 | |
| 99.1 | Press Release dated April 29, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 29th day of April 2024.
| Gaucho Group Holdings, Inc. | ||
| By: | /s/ Scott L. Mathis | |
| Scott L. Mathis, President & CEO | ||
Exhibit 3.1
Exhibit 99.1
GAUCHO GROUP HOLDINGS, INC. ANNOUNCES REVERSE STOCK SPLIT
VINO common stock expected to begin trading on a split-adjusted basis on May 1, 2024
MIAMI, FL / APRIL 29, 2024 / Gaucho Group Holdings, Inc. (NASDAQ:VINO), a company that includes a growing collection of e-commerce platforms with a concentration on fine wines, luxury real estate, and leather goods and accessories (the “Company” or “Gaucho Holdings”), today announced a 1-for-10 reverse stock split of the Company’s common stock to become effective at 12:01 a.m. (Eastern Time) on May 1, 2024. The Company’s common stock is expected to begin trading on a split-adjusted basis when the markets open on May 1, 2024 under the existing trading symbol “VINO.”
The reverse stock split is primarily intended to bring the Company into compliance with the minimum bid price requirements for maintaining its listing on the Nasdaq Capital Market. The new CUSIP number following the reverse stock split will be 36809R503.
As a result of the reverse stock split, every 10 shares of the Company’s common stock issued and outstanding or held by the Company as treasury stock will be automatically reclassified into one new share of common stock. The reverse stock split will not modify any rights or preferences of the shares of the Company’s common stock. Proportionate adjustments will be made to the exercise prices and the number of shares underlying the Company’s outstanding equity awards, as applicable, and warrants, as well as to the number of shares issued and issuable under the Company’s equity incentive plans. The common stock issued pursuant to the reverse stock split will remain fully paid and non-assessable. The reverse stock split will not affect the number of authorized shares of common stock or the par value of the common stock. The reverse stock split was approved by the Company’s stockholders at the special meeting of stockholders held on February 29, 2024 at a ratio in the range of 1-for-2 and 1-for-10, such ratio to be determined by the Board of Directors and included in a public announcement. On April 19, 2024, the Company’s Board of Directors approved the reverse stock split at the ratio of 1-for-10.
No fractional shares will be issued in connection with the reverse stock split and no cash or other consideration will be paid in connection with any fractional shares. Stockholders who would otherwise would have held a fractional share after giving effect to the reverse stock split will instead own one whole share of the post-reverse stock split common stock.
Continental Stock Transfer and Trust Company (“Continental”), the Company’s transfer agent, will act as the exchange agent for the reverse stock split. Stockholders of record holding certificates representing pre-split shares of the Company’s common stock will receive a letter of transmittal from Continental with instructions on how to surrender certificates representing pre-split shares. Stockholders should not send in their pre-split certificates until they receive a letter of transmittal from Continental. Stockholders with book-entry shares or who hold their shares through a bank, broker or other nominee will not need to take any action. Stockholders of record who held pre-split certificates will receive their post-split shares book-entry and will be receiving a statement from Continental regarding their common stock ownership post-reverse stock split.
Additional information about the reverse stock split can be found in the Company’s revised definitive proxy statement filed with the Securities and Exchange Commission (the “SEC”) on January 22, 2024, which is available free of charge at the SEC’s website, www.sec.gov, and on the Company’s website at www.GauchoHoldings.com.
About Gaucho Group Holdings, Inc.
For more than ten years, Gaucho Group Holdings, Inc.’s (gauchoholdings.com) mission has been to source and develop opportunities in Argentina’s undervalued luxury real estate and consumer marketplace. Our company has positioned itself to take advantage of the continued and fast growth of global e-commerce across multiple market sectors, with the goal of becoming a leader in diversified luxury goods and experiences in sought after lifestyle industries and retail landscapes. With a concentration on fine wines (algodonfinewines.com & algodonwines.com.ar), hospitality (algodonhotels.com), and luxury real estate (algodonwineestates.com) associated with our proprietary Algodon brand, as well as the leather goods, ready-to-wear and accessories of the fashion brand Gaucho – Buenos Aires® (gaucho.com), these are the luxury brands in which Argentina finds its contemporary expression.
Cautionary Note Regarding Forward-Looking Statements
The information discussed in this press release includes “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included herein concerning, among other things, changes to exchange rates and their impact on the Company, planned capital expenditures, future cash flows and borrowings, pursuit of potential acquisition opportunities, our financial position, business strategy and other plans and objectives for future operations, are forward looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, they do involve certain assumptions, risks and uncertainties and are not (and should not be considered to be) guarantees of future performance. Refer to our risk factors set forth in our reports filed on Edgar. The Company disclaims any obligation to update any forward-looking statement made here.
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