Satomi, one thing that has to be considered is the thrust of the problem here is determining the difference between incompetence and criminal intent/behavior. (Sorry for the long post, I thought I'd do a deeper dive on this topic than my prior efforts).
For example, making expansion projections that don't materialize because they weren't able to find investors, despite their efforts to do so, on the surface, is not criminal behavior. It's just part of doing business. Or if they changed their projections or for a number of other normal business reasons that prior decisions are changed. That's not criminal.
Doing legitimate marketing to try and improve the stock price is not manipulation, it's trying to improve shareholder value. Marketing is not criminal manipulation (It's legal manipulation, sure. That's what marketing is. LOL).
I've seen straight up penny stock scams and $GIGL really has little in common with them. The areas I think to focus on for potential criminal behavior are (and I'm stretching with these):
1) The conflict of interest arrangement $GIGL has with Gay's company to do the accounting and how his own compensation is wrapped up in the monthly $5,000 package. I would look at how the contract was awarded to his company (did they put it out for bid or did he just award it to his company?), and if the payment is in line with other companies that do the same service. I posted about this before that I used a very respectable (but expensive) tax firm down the street from the Glendale Galleria to do the accounting/tax work for a couple companies of mine and it was no where near $5,000 a month.
2) Look at what all these "consultants" or whatever their titles, actually did for their compensation or did Parsi just rent their names to prop up the company legitimacy? That's why I focus on Gay not doing the one thing he was paid to do since Feb., 2015. What efforts did he do to expand $GIGL since then? How about the others? Did he have any communications with investors at all? Meetings? Phone calls? Isn't that what his business does? How is it he could accomplish anything in three years with the stacked deck of connections?
3) Of course the celebrity ambassadors can be looked at to determine if they fulfilled their contracts. In the scheme of things, this is really a minor, civil issue (not criminal or SEC related). Sarah Jessica Parker is being sued regarding a promotional contract deal she allegedly didn't fulfill (not an SEC issue): http://www.foxnews.com/entertainment/2018/04/25/sex-and-city-star-sarah-jessica-parker-sued-by-jewelry-company.html 4) Okay....Parsi time. Once again, doing things to improve the value of the company but not successfully accomplishing them is not the definition of criminal behavior. That's really just marketing by an incompetent CEO. Plus, many, many things that companies try to execute fail to materialize. That's just how business goes. I don't think Parsi started out with any intent other than build a restaurant company. I don't think the company is in the position now that Parsi ever imagined. But through a series of bad decisions, he's backed himself into a corner. Criminal? Most of it, no. Incompetent? Yes.
The Bahrain deal? If he never had any interactions with anyone and just fabricated the entire thing, that's different than actually signing an LOI and the other party exercises their right to withdraw their offer. From what we know, the latter happened. Not criminal and the statements made about it don't appear to be criminal either. Even if he was outright lying, that doesn't mean a law was broken. The entire planet would be in jail if every lie told was a crime.
To date, what the evidence points to is Parsi reached his level of incompetence. He's just not a good businessman. There are glaringly large mistakes he made but again, from what we know, these aren't criminal acts.
What one person calls "misleading" the law might say is the cost of doing business. Failure is not a crime.
5) I would also look at how this offering money is spent. But Parsi even stated in the filings that money raised will go to operations of $GIGL. So, even if he and Gay pay some bills and pay themselves with the remaining funds, they have zero left for expansion. But they put this in the filings that they would do exactly that. They fully disclosed it.
If they don't pay the bills and pocket the entire amount, that's something to look at, but salary can fall into this catch all clause of operations, so they are covered even if they don't pay the bills and just pocket this cash as "salary and/or compensation." It's not a smart move, but it appears to be covered in the filings.
The key thing is if they put effort into something but failed at achieving it, that's not criminal in and of itself. Or, if they planned something, did nothing towards it because they changed their minds later on isn't a crime either. They failed to raise enough money to keep the existing stores open AND expand. They have to choose one but can't do both. That's not a crime. Changing plans of the direction of a company isn't a crime. How many times have we heard a business is "pivoting?"
So, no expansion right now...with what we know right now. I don't see where the "Let's give Gay a chance" comes from. We already gave him a chance for three years! He had one job and he accomplished nothing.
6) The catering. My prior posts about this point out there were at least two legal entities formed for the catering: GNH Catering and GNH Cc. Inc. One of them is still active, the other dissolved. What I mentioned before is to follow the flow of money for this. If Parsi is the legal owner of the catering, and not $GIGL, and the money flows to him as a private company, not $GIGL, but he's using $GIGL resources to promote the catering, then that's a problem. That can account for the name change but this remains to be resolved. There should be a separate line item in the $GIGL financials for income from the catering because it is a separate legal entity. But the shares should be owned by the parent company $GIGL, not Parsi. We'd have to see the start up docs for the catering company to see if it states that $GIGL owns the shares of the private catering company. That leads to how the taxes are reported and paid. A private, sole member business entity cash will flow through to Parsi's federal tax returns if he doesn't state that $GIGL owns it.
There's tons of evidence with $GIGL for the incompetence and self-serving actions by Parsi and Gay. Again, criminal intent vs. being a bad decision maker is the issue. All the rest is just a company run by shady characters. I don't have the answers to the legal issues here.
Make no mistake, Gay is not blameless here. So many of you want to give him a pass and think changing his job title actually means something here. It doesn't. But I get why people hope it does.
By the very nature of penny stocks, they attract founders who couldn't break into the mainstream business landscape to start up their venture. I would say there are more shady and incompetent CEO/founders in penny stocks. Not that they don't exist with the big board stocks, I'm not saying that at all. Enron, Madoff, Milken...you name it.
But, do you think Parsi could be the CEO of Apple, Amazon, or Facebook? Of course not.
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