Replies to post #12600 on Giggles N'''''''''''''''' Hugs Inc. (fka GIGL)

[WeWillSee44]

Thats a lot of money. I really hope you do all your DD before investing that. I like this company but nothing is a sure thing. This company unlike other OTC has a legitimate business and some celebrity backing...however its still a stock and worse yet one on the otc.

I wouldnt let the opinion of anyone here be part of that decision. Just my two cents.

[BB Player]

Look at the stickies above or go to OTC Markets for info.

[randy218]

3 month .45 to.50
6 month .85 to 91
1 year 2.00 to 3.00

[Jspila]

I'll do my best to give you the facts so you can make a decision and then I'll put my opinion at the end.

1) The company has an exceptional management team. The fact that John Kaufman and Philip Gay both grew California Pizza Kitchen from 2 locations to over 100 when it was sold to Pepsi. They understand how to grow a company and manage expansion. Many small companies fail when they try to expand.

Management Team:

Joey Parsi, Founder, President, & Director

Joey Parsi had a long and successful career as an investment manager and entrepreneur. He had a 20+ year career working on Wall Street for Lehman Brothers, Sutro and Company, and Prudential Securities. Parsi previously served as an investment advisor for Lehman Brothers; senior vice president at Sutro and Company, where he managed and oversaw millions of dollars for individual and institutional investors specializing in IPOs and technology equities; and worked at Prudential Securities where he oversaw client assets in a number of investments.

In 1998, Parsi opened Barron Chase and was able to expand the company to more than 30 employees. In total, Parsi and his team raised more than $30 million in funding for nine separate companies, many of which are now publicly traded on the NASDAQ markets. After liquidating the business in 2001 he joined TD Waterhouse, where he personally managed more than $350 million in assets for clients, and oversaw more than $1 billion in assets in his region. Parsi then went on to found Giggles in 2008.



John Kaufman, President

John Kaufman was the COO at California Pizza Kitchen when the founders had just two locations and grew the company along with Philip Gay as CFO to over 100 locations. Pepsi Co. bought the pizza chain at this point, and Kaufman was recruited to become president of Koo Koo Roo Chicken, one of the fastest growing fast casual concepts on the west coast.



Philip Gay, CFO

Philip Gay was previously the CEO at the Daily Grill restaurant group, a publicly traded Restaurant concept with 50 locations throughout the country. Prior to that, Gay was CFO at California Pizza Kitchen, growing the concept along with John Kaufman as COO from two stores when he started to over 100 when he left after the company was sold to Pepsi Co. He joined Wolfgang Puck Restaurants group as CFO eventually becoming the CEO.



Sean Richards, COO

Sean Richards joined Giggles in 2010, bringing with him more than 20 years of operations management experience. He previously managed and ran operations for Pink Taco restaurants, Hard Rock, House of Blues and Hooters casino among other national brands.



Joan Barnes, Advisory Board Member

Joan Barnes is the founder and former CEO of Gymboree, which is the largest clothing retailer in the nation for kids. She has been instrumental in helping us with Giggles' merchandising and licensing which she in essence pioneered some 30 years ago when she licensed the Gymboree brand. With Barnes' help, Giggles is rolling out a variety of products for kids including, branded clothing, branded toys, frozen foods, and other merchandising products.



Todd Star, head of real estate expansion

Todd Star was senior executive VP for Westfield USA, overseeing its west coast leasing operations for 14 years. He is a strong asset to Giggles as he leads expansion negotiations with several of the largest mall owners in the U.S., including General Growth Properties, Simon Property Group, and Westfield Group, who collectively own more than 500 properties worldwide.

2) The share structure here is one of the best for a company that is trading on the OTC, and has traded as low as it did. From 2011 - late 2016, the share structure grew from 23 million shares to 55 million shares - So roughly 6 million shares per year. I think that is a great job of managing expenses. They are trading on the OTC.. They could have run a pump and dumped 200 million shares easily. They haven't done that tho.. they have tried to manage the business the right way. Now obviously the Iconic note hurt the SS and brought the outstanding shares up to 122 million. The CEO has said this was a mistake and that they would not be taking convertible debt again after seeing what it did to the company. They did give 10 Million restricted shares to Jillian Michaels. They have not announced all of the information on her deal yet. I think it is possible she invested in the company as part of the partnership. She has invested in several other companies in the past few years and the way the PR is worded.. I think she invested.

3) The concept is solid. Organic, Gluten Free foods are a big deal for a lot of parents. They still serve pizza for those who don't want the healthier choices. Serving alcohol is a great way to drive profitable sales. They play area is nice, but I think what really sets it apart from other places is the cookie decorating, live band playing kids music, face painting, scavenger hunt, science activities, movies night, and more. This is the kind of stuff parents want to bring their kids to. Ask the parents of 2-8 year olds... They are begging for a way to get the kids out of the house and let them burn off some energy. With Giggles N Hugs, they can buy a monthly pass.. have a healthy lunch.. and a lot more than videogames at chuck-e-cheese.

4) The company wants to brand a variety of products ranging from apparel to toys to Organic foods. I think Giggles N Hugs would be a phenomenal brand name for kids stuff. I also think that they can be very successful marketing branded food products in the Gluten Free / Organic area. They have the former CEO and founder from Gymboree helping with this, as well as the experience of John Kaufman & Phillip Gay where they marketed frozen pizzas branded California Pizza Kitchen to help grow that business. Michelle Steinberg has launched products for a variety of A list celebs and major companies (Volkswagen, Kohls, Da Beers, Crocs, LA Lakers) and she is working with GIGL as well.

5) Expansion - The company wants to continue to open stores on their own as well as franchising out additional stores. They have received franchising interest from all over the world. They will receive large up front royalties followed by 3% - 8% of gross sales. They recently received a non binding LOI from QIC (major mall owner) which offered GIGL 1.4 million to pay for the buildout of the new location and a 75% discount on rent. Prior to the LOI from QIC, they were receiving 700k and a substantial discount on rent to open new locations. They should be able open new company owned locations at very little expense in the future. They have also PR'd that Westfield (major mall owner) would like to have GIGL in more locations, including the major airports they own (JFK, LAX, Newark, George Bush Intercontinental, Boston Logan, Orlando, Miami, and Chicago O’Hare airports.) IMO - parents would jump at the opportunity to let their kids run around at a Giggles N Hugs while waiting for a plane.

When the company is ready to launch the franchising initiative, we expect to receive upfront licensing fees from franchisees, in addition to ongoing royalties. Based on discussions with franchise operators and other factors, multi unit licensing fees could range from several hundred thousand dollars to millions of dollars, while ongoing royalties should typically range from 3% to 8% of gross sales.

6) Jillian Michaels - Jillian Michaels would not have signed on and associated herself with this company if they were just some pump and dump OTC garbage. The partnership with Jillian will help GIGL in the future as they negotiate with new franchisees, with malls for new locations, or with banks to raise capital.

So I think I've hit all the main points there. The company has proven that the stores they are operating now are working, generating enough income, and that the concept works and could be franchised. We need to find out the details on the Jillian Michaels deal. We need to find out if and how much money she invested. They have a deal with Chardan Capital to help them raise capital. Michelle Steinberg has helped bring investors to many of her previous clients. I think that GIGL has enough irons in the fire to secure the capital it will need to expand. Jillian Michaels investing, Franchising providing large up front payments, or Michelle Steinberg introducing GIGL to a new investor, I think they will be able to secure the funding they need. One of these options has to happen for the company to take the next step. A deal breaker for me, and something which would make me start to sell my shares, would be if they took additional convertible debt. Another deal breaker for me would be if they didn't raise capital from one of those options above. If they can't do that.. They are going to slowly bleed 6 - 10 million shares per year without expansion. I am pretty confident they will be able to raise capital the right way. I think there are risks here but I think that the potential is off the charts, and the management team has a proven track record.. I'm betting on GIGL. I think the PPS will see .30 - .50 in the near future and depending on execution.. the PPS could see $1 plus within 12 months.

Like many others have said here.. don't take my word on it. Read the filings, read the PR's. Read all of the DD posts. I've emailed the CEO twice and asked him a variety of questions because I have a decent amount of money invested here. Make an educated decision on the investment. Someone else said to scale in.. I did that as well. Don't buy in one big chunk. I'm going to post the emails I sent the CEO below. Give them a read. Best of luck!


Email 1:

Mr Parsi,

I noticed on your website that the Century City location is marked as Closed, but it states that a new West Side location would be Coming Soon. Is that location different than the LOI you received from QIC for a new location at The Shops at Tarforan in San Bruno, CA? When should we expect that new West Side location to be opening?

Sincerely,

The Century City location was closed because we sold the lease back to Westfield. They are spending $800 million on updating and remodeling the mall. The project should be completed by the end of the year at which point we are hoping to be able go back into it. We will negotiate our return back to Century City so long as they dont ask for an arm and a leg in rent. Given the amount of money they have spent we will see what we can work out. See below for redevelopment project.

The LOI for San Bruno is a different location located just outside San Francisco. Assuming we finalize the LOI and sign the lease, this project should open towards the end of the year. We hope that the deal with QIC sets a precidence so that all the other major mall owners pay us to full cost of all new locations.

In addition to San Francisco, we are looking at additional locations on the west coast in markets like Sacramento, Seattle and portland where it rains a lot which is great for our business. See below link to press release on Todd Star

Recently we also announced our expanded partnership with Westfield in which we hope to open up new locations in all the major airports throughout the country. We want to come to the rescue of families traveling with kids. If you can imagine millions of parents travel every day with small children and with all the security and flight delays, it can be a real challenge so our goal is to make travel easier for parents. See below release regarding Westfield and how they now manage and run all the major airports. Lastly, I have included some additional links to recent press and news.

Given all the above, aside from capital needs, we have purposely been very careful not to grow too big too quickly with all the things we are working on as it could damage our brand which we are building for the longterm much after im gone.


Hope this is all helpful.

Email 2:

Mr. Parsi,

The last time I emailed you with a list of question, you were incredibly detailed and helpful in your answers. I can't thank you enough for taking the time to answer shareholders questions so well. I do have another question which I am hoping you can shed some light on.

Recently you announced your partnership with Jillian Michaels. I think this is a great partnership and I can not wait to see how it works out. In your press release, there are not any details about the financials behind this partnership. This past Friday, the company profile was updated on OTCMarkets and I noticed that the restricted shares increased by 10 million.

Jillian Michaels has a history of investing in a variety of companies through Empowered Media and with her business partner. Hopefully you can answer my question. Is the partnership you announced Jillian a Brand Ambassador / Promotional deal or is she an investor in the company?

Thank you for your time,

Unfortunately I can not answer your question as it is NON public info. At some point in the near future, we will come out with a PR that should provide additional clarity on Jillian and her involvement. Im sorry I cant be of any further help.




Best


Joey Parsi