MORTGAGES RECEIVABLE

6 Months Ended

Jun. 30, 2024

Mortgages Receivable

MORTGAGES RECEIVABLE

3. MORTGAGES RECEIVABLE

The Company offers loans to purchasers in connection with the sale of real estate lots. The loans bear interest at 7.2% per annum and terms generally range from eight to ten years. Principal and interest for each loan is billed and receivable on a monthly basis. The loans are secured by a first mortgage lien on the property purchased by the borrower. The Company records a credit loss reserve for unsecured amounts of past due mortgages receivable. Mortgages receivable include the related interest receivable and are presented at amortized cost, less the reserve for expected credit losses, in the accompanying condensed consolidated financial statements.

Management evaluates each loan individually on a quarterly basis, to assess collectability and estimate a reserve for past due amounts. Past due principal and interest in the aggregate amounts of $1,140,466 and $815,674 are included in mortgages receivable, current as of June 30, 2024 and December 31, 2023, respectively. The total allowance for uncollectable mortgages is $1,673,366 and $1,436,981 as of June 30, 2024 and December 31, 2023, respectively.

The following represents the maturities of mortgages receivable as of June 30, 2024:

For the period from July 1, 2024 through December 31, 2024	$	1,066,152
For the year ended December 31,
2025		409,927
2026		440,436
2027		473,215
2028		480,227
2029		495,135
Thereafter		598,150
Gross Receivable		3,963,242
Less: Allowance		(1,673,366	)
Net receivable		2,289,876
Less: current portion		(712,124	)
Mortgages receivable, non-current portion	$	1,577,752

GAUCHO GROUP HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As of each of June 30, 2024 and December 31, 2023, two borrowers had past-due loans outstanding representing 11% and 10% of the total balance of mortgages receivable. A reserve is established for the unsecured portion of these receivables.

The Company recorded interest income from its mortgages receivable of $9,562 and $109,816 for the six months ended June 30, 2024 and 2023, respectively. As of June 30, 2024 and December 31, 2023, there is $203,710 and $190,967, respectively, of interest receivable included in mortgages receivable on the accompanying condensed consolidated balance sheets.