Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 27, 2015 | Apr. 12, 2016 | Jun. 28, 2015 | |
Document And Entity Information | |||
Entity Registrant Name | Giggles N' Hugs, Inc. | ||
Entity Central Index Key | 1,381,435 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 27, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-27 | ||
Entity Well-Known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 3,387,415 | ||
Entity Common Stock, Shares Outstanding | 42,636,033 | ||
Trading Symbol | GIGL | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,015 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 27, 2015 | Dec. 28, 2014 |
Current assets: | ||
Cash and equivalents | $ 334,191 | $ 108,236 |
Inventory | 37,660 | 37,397 |
Prepaid expenses and other | 26,919 | 23,032 |
Total current assets | 398,770 | 168,665 |
Fixed assets, net of accumulated depreciation and amortization of $1,485,997 and $765,563 | 1,729,836 | 2,437,730 |
Other assets | 32,620 | 65,861 |
Total assets | 2,161,226 | 2,672,256 |
Current liabilities: | ||
Accounts payable | 554,229 | 432,508 |
Incentive from lessor — current portion | 134,645 | 111,644 |
Note payable - lessor, net of discount of $35,094 | 648,222 | 91,500 |
Accrued expenses | 396,568 | 330,498 |
Deferred revenue | 52,334 | $ 43,437 |
Promissory note payable, net of discount of $60,306 | 204,694 | |
Convertible note payable accrued interest, net of debt discount of $139,471 | 71,779 | |
Total current liabilities | 2,062,471 | $ 1,009,587 |
Long-term liabilities: | ||
Incentive from lessor — long-term | $ 1,063,453 | 1,204,199 |
Note payable - lessor | 609,150 | |
Total long-term liabilities | $ 1,063,453 | 1,813,349 |
Total liabilities | 3,125,925 | 2,822,936 |
Stockholders’ deficit: | ||
Common stock, $0.001 par value, 1,125,000,000 shares authorized, 41,821,033 and 33,563,830 shares issued and outstanding as of December 27, 2015 and December 28, 2014, respectively | 41,820 | 33,563 |
Common stock payable (555,556 and 1,887,148 shares as of December 27, 2015 and December 28, 2014, respectively) | 245,498 | 668,114 |
Additional paid-in capital | 7,970,268 | 6,301,241 |
Accumulated deficit | (9,222,285) | (7,153,598) |
Total stockholders’ deficit | (964,699) | (150,680) |
Total liabilities and stockholders’ deficit | $ 2,161,226 | $ 2,672,256 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 27, 2015 | Dec. 28, 2014 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 1,485,997 | $ 765,563 |
Note payable, discount | 35,094 | |
Promissory note payable, discount | 60,306 | |
Convertible note payable and accrued interest, discount | $ 139,471 | |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,125,000,000 | 1,125,000,000 |
Common stock, shares issued | 41,821,033 | 33,563,830 |
Common stock, shares outstanding | 41,821,033 | 33,563,830 |
Common stock payable, shares | 555,556 | 1,887,148 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Revenue | ||
Net sales | $ 3,451,772 | $ 3,340,941 |
Costs and operating expenses | ||
Cost of operations | 3,082,428 | 2,978,869 |
General and administrative expenses | 1,380,390 | 1,389,569 |
Other operating expenses | 276,745 | 259,525 |
Depreciation and amortization | 387,330 | $ 350,115 |
Loss on impairment | 353,414 | |
Total costs and operating expenses | 5,480,307 | $ 4,978,078 |
Loss from Operations | (2,028,535) | (1,637,137) |
Finance and interest expense | 113,439 | 558,636 |
Loss (Gain) on debt | (74,669) | 159,137 |
Loss before provision for income taxes | (2,067,305) | (2,354,910) |
Provision for income taxes | 1,382 | 2,400 |
Net loss | $ (2,068,687) | $ (2,357,310) |
Net loss per share - basic and diluted | $ (0.06) | $ (0.08) |
Weighted average number of common shares outstanding - basic and diluted | 35,745,779 | 28,676,829 |
Consolidated Statements of Shar
Consolidated Statements of Shareholder's Deficit - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Stock Payable [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 28, 2013 | $ 24,159 | $ 3,654,207 | $ 480,500 | $ (4,796,288) | $ (637,422) |
Balance, shares at Dec. 28, 2013 | 24,159,145 | ||||
Shares issued for professional services | $ 1,646 | 709,203 | (201,327) | 509,522 | |
Shares issued for professional services, Shares | 1,646,388 | ||||
Shares issued for settle the accounts payable | $ 722 | 213,479 | 278,941 | 493,142 | |
Shares issued for settle the accounts payable, Shares | 722,337 | ||||
Shares issued for cash proceeds | $ 3,712 | 922,288 | $ 110,000 | 1,036,000 | |
Shares issued for cash proceeds, Shares | 3,711,667 | ||||
Shares issued upon conversion of Notes Payable | $ 2,096 | 471,708 | 473,804 | ||
Shares issued upon conversion of Notes Payable, Shares | 2,096,118 | ||||
Shares issued for exercise warrant conversion feature | $ 1,228 | 168,867 | 170,095 | ||
Shares issued for exercise warrant conversion feature, Shares | 1,228,175 | ||||
Warrant conversion feature for convertible note | 161,489 | 161,489 | |||
Net loss | $ (2,357,310) | (2,357,310) | |||
Balance at Dec. 28, 2014 | $ 33,563 | 6,301,241 | $ 668,114 | $ (7,153,598) | (150,680) |
Balance, shares at Dec. 28, 2014 | 33,563,830 | ||||
Shares issued for professional services | $ 1,293 | 299,792 | $ 40,462 | 341,547 | |
Shares issued for professional services, Shares | 1,293,333 | ||||
Shares issued for settle the accounts payable | $ 422 | 67,860 | 68,282 | ||
Shares issued for settle the accounts payable, Shares | 423,268 | ||||
Shares issued for cash proceeds | $ 3,071 | 421,414 | $ 25,000 | 449,485 | |
Shares issued for cash proceeds, Shares | 3,070,776 | ||||
Shares issued upon conversion of Notes Payable | $ 556 | 49,444 | 50,000 | ||
Shares issued upon conversion of Notes Payable, Shares | 555,223 | ||||
Bonus shares issued to investors | $ 910 | 199,290 | $ 200,200 | ||
Bonus shares issued to investors, Shares | 910,000 | ||||
Shares issued previously reflected as stock payable | $ 1,598 | 486,480 | $ (488,078) | ||
Shares issued previously reflected as stock payable, Shares | 1,597,982 | ||||
Fair value of conversion features | 145,154 | $ 145,154 | |||
Shares issued upon exercise of warrants | $ 407 | (407) | |||
Shares issued upon exercise of warrants, Shares | 406,621 | ||||
Net loss | $ (2,068,687) | $ (2,068,687) | |||
Balance at Dec. 27, 2015 | $ 41,820 | $ 7,970,268 | $ 245,498 | $ (9,222,285) | $ (964,699) |
Balance, shares at Dec. 27, 2015 | 41,821,033 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (2,068,687) | $ (2,357,310) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 367,549 | $ 350,115 |
Write off of intangibles | 23,881 | |
Amortization of debt discount | 67,261 | $ 55,072 |
Shares issued for services | $ 341,547 | 390,550 |
Loss on stock issuance for payable settlement | $ 117,413 | |
Gain on note payable modification | $ (69,228) | |
Loss on impairment | 353,414 | |
Accrued interest on note | (16,135) | $ 161,489 |
Bonus shares issued to investors | $ 200,200 | |
Shares issued for legal settlement | $ 105,750 | |
Changes in operating assets and liabilities: | ||
Increase in prepaid expenses and deposits | $ (3,887) | (3,563) |
Increase in security deposits, other | 9,360 | (3,250) |
Decrease (increase) in inventory | $ (263) | 4,347 |
Decrease (increase) in unamortized fees | 68,390 | |
(Decrease) increase in accounts payable | $ 190,003 | (41,889) |
(Decrease) increase in lease incentive liability | (117,744) | (12,366) |
Increase in accrued expenses | $ 66,070 | 28,654 |
(Decrease) increase in accrued interest | (464) | |
(Decrease) increase in deferred revenue | $ 8,897 | $ 2,910 |
Loss on impairment | 353,414 | |
Net cash used in operating activities | (647,762) | $ (1,134,152) |
Cash flows from investing activities | ||
Purchase of fixed assets | (13,069) | (116,510) |
Net cash used in investing activities | (13,069) | (116,510) |
Cash flows from financing activities | ||
Proceeds from convertible note payable | $ 238,500 | 50,000 |
Proceeds from lessor note payable | 105,000 | |
Proceeds from note payable | $ 200,000 | (33,416) |
Proceeds from shares issued | $ 449,485 | 1,206,094 |
Proceeds (payment) from related party | $ (40,000) | |
Payments to notes payable | $ (1,199) | |
Net cash provided by financing activities | 886,786 | $ 1,287,678 |
NET INCREASE IN CASH | 225,955 | 37,016 |
CASH AT BEGINNING OF THE YEAR | 108,236 | 71,220 |
CASH AT END OF PERIOD | 334,191 | 108,236 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | $ 26,834 | 52,373 |
Income taxes paid | 2,400 | |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued to settle convertible notes payable | $ 50,000 | 473,804 |
Accounts payable settled by share issuance | 68,282 | $ 375,729 |
Conversion feature and discounts on notes payable credit to additional paid in capital | $ 145,151 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 27, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Giggles N Hugs, Inc. (GIGL Inc.) was originally organized September 17, 2004 (Date of Inception) under the laws of the State of Nevada, as Teachers Pet, Inc. GIGL Inc. was organized to sell teaching supplies and learning tools. On August 20, 2010, GIGL Inc. filed an amendment to its articles of incorporation to change its name to Giggles N Hugs, Inc. The Company is authorized to issue 1,125,000,000 shares of its $0.001 par value common stock. The Company adopted a 52/53 week fiscal year ending on the Sunday closest to December 31st for financial reporting purposes. Fiscal year 2015 consists of a year ending December 27, 2015. Fiscal year 2014 consists of a year ending December 28, 2014. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the year ended December 27, 2015, the Company incurred a net loss of $2,068,687 used cash in operations of $647,762 and had a stockholders deficit of $964,699 as of that date. In addition, the Company was behind in certain lease payments of one of its restaurant locations and was in default on a note payable of $683,316. These factors raise substantial doubt about the Companys ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Companys ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company has and will continue to use significant capital to grow and acquire market share At December 27, 2015, the Company had cash on hand in the amount of $334,191. Management estimates that the current funds on hand will be sufficient to continue operations through June 2016. Management is currently seeking additional funds, primarily through the issuance of debt and equity securities for cash to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stock holders, in case or equity financing. Principles of consolidation For the years ended December 27, 2015 and December 28, 2014, the consolidated financial statements include the accounts of Giggles N Hugs, Inc., GNH, Inc., GNH CC, Inc. for restaurant operations in Westfield Mall in Century City, California, GNH Topanga, Inc. for restaurant operations in Westfield Topanga Shopping Center in Woodland Hills, California, and Glendale Giggles N Hugs, Inc. for restaurant operations in Glendale Galleria in Glendale, California. Intercompany balances and transactions have been eliminated. Giggles N Hugs, Inc., GNH, Inc., GNH CC, Inc., GNH Topanga, Inc., and Glendale Giggles N Hugs, Inc. will be collectively referred herein to as the Company. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Estimates and assumptions used by management affected impairment analysis for fixed assets, intangible assets, amounts of potential liabilities and valuation of issuance of equity securities issued for services. Actual results could differ from those estimates. Concentration of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with financial institutions, in the form of demand deposits. At December 27, 2015 and December 28, 2014, the Company had cash deposits in two financial institutions that were above FDIC limits of $250,000. The Company believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of these two financial institutions. Fair value of financial instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (Paragraph 820-10-35-37) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Companys financial assets and liabilities, such as cash and cash equivalents, inventory, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. Income taxes The Company accounts for income taxes under the provisions of ASC 740 Accounting for Income Taxes, which requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and cause a change in managements judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities. Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. Inventories Inventories are stated at the lower of cost or market on a first-in, first-out basis and consist of restaurant food and other supplies. Property and equipment The Company records all property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of the Companys internal development and construction department. Depreciation periods are as follows: Leasehold improvements 10 years Restaurant fixtures and equipment 10 years Computer software and equipment 3 to 5 years Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. Based on managements assessment, as of December 27, 2015, the Company incurred a loss on impairment of $353,414, relating to the leasehold improvements at its Glendale store location. For the year ended December 28, 2014, there are no indications of impairment based on managements assessment of these assets. Leases The Company currently leases its restaurant locations. The Company evaluates the lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. The Company currently has three leases, which are classified as operating leases. Minimum base rent for the Companys operating leases, which generally have escalating rentals over the term of the lease, is recorded on a straight-line basis over the lease term. The initial rent term includes the build-out, or rent holiday period, for the Companys leases, where no rent payments are typically due under the terms of the lease. Deferred rent expense, which is based on a percentage of revenue, is also recorded to the extent it exceeds minimum base rent per the lease agreement. The Company disburses cash for leasehold improvements and furniture, fixtures and equipment to build out and equip its leased premises. The Company also expends cash for structural additions that it makes to leased premises of which $700,000, $506,271, and $475,000 were reimbursed to Century City, Topanga, and Glendale by its landlords, respectively, as construction contributions pursuant to agreed-upon terms in the lease agreements. Landlord construction contributions usually take the form of up-front cash. Depending on the specifics of the leased space and the lease agreement, amounts paid for structural components are recorded during the construction period as leasehold improvements or the landlord construction contributions are recorded as an incentive from lessor. Stock-based compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board (FASB) whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. The fair value of the Companys stock option and warrant grants is estimated using the Black-Scholes Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes Option Pricing model, and based on actual experience. The assumptions used in the Black-Scholes Option Pricing model could materially affect compensation expense recorded in future periods. The Company also issues restricted shares of its common stock for share-based compensation programs to employees and non-employees. The Company measures the compensation cost with respect to restricted shares to employees based upon the estimated fair value at the date of the grant, and is recognized as expense over the period, which an employee is required to provide services in exchange for the award. For non-employees, the Company measures the compensation cost with respect to restricted shares based upon the estimated fair value at measurement date which is either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Loss per common share Net loss per share is provided in accordance with ASC Subtopic 260-10. We present basic loss per share (EPS) and diluted EPS on the face of statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Except where the result would be anti-dilutive to income from continuing operations, diluted earnings per share has been computed assuming the conversion of the convertible long-term debt and the elimination of the related interest expense, and the exercise of stock options and warrants. Loss per common share has been computed using the weighted average number of common shares outstanding during the year. For the years ended December 27, 2015 and December 28, 2014, the assumed conversion of convertible note payable and the exercise of stock warrants are anti-dilutive due to the Companys net losses and are excluded in determining diluted loss per share. Revenue recognition Our revenues consist of sales from our restaurant operations and sales of memberships entitling members unlimited access to our play areas for the duration of their membership. As a general principle, revenue is recognized when the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred and services have been rendered, (iii) the price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. With respect to memberships, access to our play area extends throughout the term of membership. The vast majority of memberships sold are for one month terms. Revenue is recognized on a straight line basis over the membership period. The company receives payment from its customers at the start of the subscription period and the company records deferred revenue for the unearned portion of the subscription period. Revenues from restaurant sales are recognized when payment is tendered at the point of sale. Revenues are presented net of sales taxes. The obligation is included in other accrued expenses until the taxes are remitted to the appropriate taxing authorities. We recognize a liability upon the sale of our gift cards and recognize revenue when these gift cards are redeemed in our restaurants. As of December 27, 2015 and December 28, 2014, the amount of gift cards sales were $4,448 and $4,212, respectively, and were recorded as deferred revenue. For party rental agreements, we rely upon a signed contract between us and the customer as the persuasive evidence of a sales arrangement. Party rental deposits are recorded as deferred revenue upon receipt and recognized as revenue when the service has been rendered. Additionally, revenues are recognized net of any discounts, returns, allowances and sales incentives, including coupon redemptions and complimentary meals. Advertising costs Advertising costs are expensed as incurred. During the fiscal years ended December 27, 2015 and December 28, 2014, there were $29,946 and $57,317, respectively in advertising costs included in general and administrative expenses. Convertible Debentures Beneficial Conversion Feature Recent Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Companys financial statements and disclosures. In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation Stock Compensation (Topic 718). The pronouncement was issued to clarify the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The pronouncement is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2014-12 is not expected to have a significant impact on the Companys consolidated financial position or results of operations. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Companys financial statements and disclosures. The Company anticipates that this will add significant liabilities to the balance sheet. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Companys present or future consolidated financial statements. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 27, 2015 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | NOTE 2 FIXED ASSETS Fixed assets consisted of the following at: December 27, 2015 December 28, 2014 Leasehold improvements $ 2,494,151 $ 2,847,565 Fixtures and equipment 85,267 85,267 Computer software and equipment 283,001 269,932 Property and equipment, total 2,862,419 3,202,764 Less: accumulated depreciation and amortization (1,132,583 ) (765,034 ) Property and equipment, net $ 1,729,836 $ 2,437,730 Depreciation expense was $367,549 and $350,115 for the fiscal years ended December 27, 2015 and December 28, 2014, respectively. As of December 27, 2015, leasehold improvements was reduced by an impairment charge of $353,414 recorded in 2015 related to Glendale store location due to a default on a note payable to an affiliated of the landlord (see Note 4). Repair and maintenance expenses for the years ended December 27, 2015 and December 28, 2014 were $111,977 and $81,548, respectively. |
Incentive From Lessor
Incentive From Lessor | 12 Months Ended |
Dec. 27, 2015 | |
Leases [Abstract] | |
Incentive From Lessor | NOTE 3 INCENTIVE FROM LESSOR The Company received $700,000 for Century City, $506,271 for Topanga and $475,000 for Glendale from the Companys landlords as construction contributions pursuant to agreed-upon terms in the lease agreements as of December 27, 2015. Landlord construction contributions usually take the form of up-front cash. Depending on the specifics of the leased space and the lease agreement, amounts paid for structural components are recorded during the construction period as leasehold improvements or the landlord construction contributions are recorded as an incentive from lessor. The incentive from lessor is amortized over the life of the lease which is 10 years and netted against occupancy cost. The balance of the incentive from lessor as of December 27, 2015 and December 28, 2014 was $1,198,098 and $1,315,843, and included deferred rent of $218,874 and $175,535, respectively. As of December 27, 2015, $134,644 of the incentive from lessor was current and $1,063,453 was long term. Amortization of the incentive from lessor was $117,745 and $83,617 for the fiscal years ended December 27, 2015 and December 28, 2014, respectively. |
Note Payable Lessor
Note Payable Lessor | 12 Months Ended |
Dec. 27, 2015 | |
Note Payable Lessor | |
Note Payable Lessor | NOTE 4 NOTE PAYABLE LESSOR On February 12, 2013, the Company entered into a $700,000 Promissory Note Payable Agreement with GGP Limited Partnership (Lender) to be used by the Company for a portion of the construction work to be performed by the Company under the lease by and between the Company and Glendale II Mall Associates, LLC. The Note Payable accrues interest at a rate of 10% through October 15, 2015, 12% through October 31, 2017, and 15% through October 31, 2023 and matures on October 31, 2023. As of December 28, 2014 the principal balance due under the note was $666,584, with accrued interest due of $34,066, for an aggregate amount due of $700,650. On March 1, 2015, the Company and the lender renegotiated the terms of the Promissory Note and agreed to a new note with a principal balance due of $683,316. As part of the new agreement, the Lender waived principal and interest payments for two years beginning March 1, 2015. Thereafter, principal and interest will be paid in equal monthly installments of $12,707, within increasing interest rates. As of December 27, 2015 the principal balance due under the note was $683,316. Due to the two year interest free period, the Company recalculated the fair value of the note taking into account the payment stream and the incremental changes in the interest rate and determined the fair value of the new note on the date of modification to be $619,377, net of a discount of $63,939. The Company analyzed whether the change in terms should be treated as a modification of debt or an extinguishment of debt. Based upon the Companys analysis, they determined that the change in terms resulted in more than a 10% change in fair value, and thus treated the change in terms as a debt extinguishment. As such, the Company recognized a gain of $69,228 on the debt extinguishment. The Company determined that the discount should be amortized over the two year period where no interest was due or payable. As such, the Company amortized $28,845 of the discount during the year ended December 27, 2015. The unamortized discount at December 27, 2015 was $35,094, and the net balance due was $648,222. The lender under the Note is GGP Limited Partnership (GGP). GGP is an affiliate of Glendale II Mall Associates, the lessor of the Companys Glendale Mall restaurant location. In accordance with the note agreement, an event of default would occur if the Borrower defaults under the lease between the Company and Glendale II Mall Associates. Upon the occurrence of an event of default, the entire balance of the Note payable and accrued interest would become due and payable, and the balance due becomes subject to a default interest rate (which is 5% higher than the defined interest rate). As of December 27, 2015, the Company was past due in its rental obligation and the Note is in default. As of December 27, 2015, the entire principal and accrued interest is due and payable and is classified as current liability due to the default under the note payable. |
Convertible Note Payable
Convertible Note Payable | 12 Months Ended |
Dec. 27, 2015 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | NOTE 5 CONVERTIBLE NOTE PAYABLE A summary of convertible debentures payable as of December 27, 2015 and December 28, 2014 is as follows: December 27, 2015 December 28, 2014 Iconic Holdings, LLC $ 161,250 $ - J&N Invest LLC 50,000 - Total Convertible Notes 211,250 - Less: Discount (139,471 ) - Net Convertible Notes $ 71,779 - Iconic Holdings, LLC The Company determined that the ability of the holder to convert the note to common shares at 65% of the market created a beneficial conversion feature upon issuance. The Company also considered if the conversion feature required liability accounting under current accounting guidelines but determined that the conversion of the shares were indexed to the Companys stock, and that the floor of .$0.08 would not allow the conversion to exceed the Companys authorized share limit. Based on the current market price on the date of issuance of the note of $0.13 and the discount of 65%, the Company calculated an initial beneficial conversion feature of $86,827. The total note discount was $109,327 including the $22,500 discussed above. Such amount will be recognized as a note discount and amortized over the life of the note. The Company amortized $1,822 of the discount during the year ended December 27, 2015. The unamortized discount at December 27, 2015 was $107,505. J&N Invest LLC |
Promissory Note
Promissory Note | 12 Months Ended |
Dec. 27, 2015 | |
Debt Disclosure [Abstract] | |
Promissory Note | NOTE 6 PROMISSORY NOTE On December 18, 2015, the Company issued an unsecured promissory note in the principal sum of $265,000 in favor of St. George Investments, LLC, pursuant to the terms of a securities purchase agreement of the same date. The note was subject to an original issue discount of $60,000 and a $5,000 fee to cover certain expenses of lender. The note matures in six months and carries no interest unless there is an event of default. GNH may prepay the note in full within 90 days of the issuance date for $235,000. The Company has accounted for the discount as a contra account to the note and will be amortized to interest expense over the life of the note. As such, the Company amortized $4,694 of the discount during the year ended December 27, 2015. The unamortized discount at December 27, 2015 was $60,306, and the net balance due was $204,694. The terms of the note transaction are subject to adjustment on a retroactive basis should the Registrant enter into a financing transaction with terms that would have been more favorable to the lender at any time any portion of the note remains outstanding. The Company considered whether this potential adjustment had any effect on the accounting of the note at issuance. The Company believes this is a contingent transaction, not subject to estimation at this point, and any adjustment related to this conversion feature, if any, will be accounted for at the date it occurs. |
Business Loan and Security Agre
Business Loan and Security Agreement | 12 Months Ended |
Dec. 27, 2015 | |
Business Loan And Security Agreement | |
Business Loan and Security Agreement | NOTE 7 BUSINESS LOAN AND SECURITY AGREEMENT In August 2015, the Company entered into a Business Loan and Security Agreement with American Express Bank, which allows the Company to borrow up to $174,000. The loan matures in August 2016 and will remain in effect for successive one year periods unless terminated by either party. The loan is secured by credit card collections from the Companys store operations. The agreement provides that the Company will receive an advance of up to $174,000 at the beginning of each fiscal month, and requires the Company to repay the loan from the credit card deposits it receives from its customers. Assuming the balance has been paid off by the end of the month, the Company will receive another advance up to the face amount of the note at the beginning of the next fiscal month. The loan requires a loan fee of .5% of the outstanding balance as of each disbursement date. At December 27, 2015, the advance for the month of December 2015 had been entirely paid off and there was no amount due as of that date. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 27, 2015 | |
Equity [Abstract] | |
Common Stock | NOTE 8 COMMON STOCK Issuance of Common Stock December 27, 2015 During the year ended December 27, 2015, the Company issued 1,293,333 shares of its common stock valued at $341,547 for services. The shares were valued based on the closing price of the stock on the date of agreement. During the year ended December 27, 2015, the Company issued 423,268 shares of its common stock valued at $68,282 in settlement of accounts payable balances. During the year ended December 27, 2015, the Company issued 3,070,776 shares of its common stock for cash of $449,485 net of closing costs. In conjunction with the sale of these shares, the company issued to the underwriter warrants to acquire 152,885 shares of our common stock at an exercise price of $0.01 per share. As of December 27, 2015, 555,556 of these shares valued at $25,000 have not yet been issued. During the year ended December 27, 2015, the Company issued 910,000 shares of its common stock valued at $200,200 to investors as bonus. The shares were valued based on the closing price of the stock on the date of issuance and reflected the fair value of these shares as a financing cost. During the year ended December 27, 2015, the Company issued 1,597,982 shares of its common stock valued at $488,078 previously accounted for as common stock payable. On July 1, 2015, the Company entered into an unsecured Note Payable Agreement with an investor for which the Company issued a $50,000 Convertible Note Payable, which accrued interest at a rate of 15% per annum and matured July 31, 2016. The note was convertible at a conversion price of $0.15 per share. The Note Payable had warrants attached, with an exercise term of 3 years and convertible into 66,667 shares of common stock at an exercise price of $0.15 per share. The Company recognized a debt discount at the date of issuance in the amount of $9,647 related to the fair value of the warrants. During 2015 the Company offered the note holder an inducement to convert the note at a conversion price of $0.09 per share. As such, the note was converted into 555,223 shares of the Companys common stock and the note was retired. The Company calculated the difference between the initial conversion price and the modified conversion price to be $20,000 and recorded such amount as an inducement to convert. December 28, 2014 During the year ended December 28, 2014, the Company issued 1,646,388 shares of its common stock valued at $509,522 for services. The shares were valued based on the closing price of the stock on the date of agreement. During the year ended December 28, 2014, the Company issued 722,337 shares of its common stock valued at $493,142 in settlement of accounts payable balances. During the year ended December 28, 2014, the Company issued 3,711,667 shares of its common stock for cash of $1,036,000 net of closing costs. In conjunction with the sale of these shares, the company issued to the underwriter warrants to acquire 363,615 shares of our common stock at an exercise price of $0.01 per share. During the year ended December 28, 2014 the Company issued 2,096,118 shares of its common stock valued at $473,804 for the conversion of a Note payable. During the year ended December 28, 2014 the Company issued 1,228,175 shares of its common stock valued at $170,095 for the exercise of warrants conversion feature. |
Stock Options and Warrants
Stock Options and Warrants | 12 Months Ended |
Dec. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Options and Warrants | NOTE 9 STOCK OPTIONS AND WARRANTS Employee Stock Options The following table summarizes the changes in the options outstanding at December 27, 2015, and at December 28, 2014, and the related prices for the shares of the Companys common stock issued to employees of the Company under a non-qualified employee stock option plan. Weighted Average Stock Exercise Options Price Outstanding, December 29, 2013 175,000 $ 4.50 Granted - - Exercised - - Expired/Cancelled (40,000 ) - Outstanding, December 28, 2014 135,000 $ 4.50 Granted - - Exercised - - Expired/Cancelled (20,000 ) - Outstanding, December 27, 2015 115,000 $ 4.50 Exercisable, December 27, 2015 115,000 $ 4.50 As of December 27, 2015, the stock options had no intrinsic value due to the low stock price of the Companys stock. There were no options granted during the fiscal years ended December 27, 2015, and December 28, 2014. There was no stock-based compensation expense in connection with options granted to employees recognized in the consolidated statement of operations for the fiscal years ended December 27, 2015 and December 28, 2014. Warrants The following table summarizes the changes in the warrants outstanding at December 27, 2015, and December 28, 2014, and the related prices. Weighted Average Exercise Warrants Price Outstanding, December 29, 2013 575,675 $ 0.37 Granted 547,400 0.06 Exercised (744,565 ) 0.12 Outstanding, December 28, 2014 378,510 $ 0.16 Granted 386,219 0.05 Exercised (406,621 ) 0.01 Expired/Cancelled (191,608 ) - Outstanding, December 27, 2015 166,500 $ 0.13 Exercisable, December 27, 2015 166,500 $ 0.13 Weighted Weighted Average Weighted Range of Average Remaining Average Exercise Number Exercise Contractual Number Exercise Prices Outstanding Price Life Exercisable Price $0.01 ~ $0.37 166,500 $ 0.13 6.14 166,500 $ 0.13 166,500 6.14 166,500 As of December 27, 2015, the stock warrants had no intrinsic value due to the low stock price of the Companys stock. During the year ended December 27, 2015, the Company granted warrants to an underwriter to purchase 152,885 shares of common stock in conjunction with our private offering. In addition, the Company also granted warrants to purchase 233,334 shares of common stock in conjunction with the issuance of our notes payable. The warrants are exercisable at a price range of $0.01 per share through $0.25 per shares and will expire in three years and seven years. See Note 8 for further discussion. During the year ended December 27, 2015, a total of 406,621 warrants were exercised on cashless basis in exchange for 406,621 shares of our common stock. During the year ended December 28, 2014, the Company granted warrants to an underwriter to purchase 363,615 shares of common stock in conjunction with our private offering. In addition, the Company also granted warrants to purchase 183,785 shares of common stock in conjunction with the issuance of our note payable. The warrants are exercisable at $0.01 per shares and $0.15 per share, and will expire in three years. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 COMMITMENTS AND CONTINGENCIES The Company leases its restaurant locations under an operating lease, with the remaining term being 10 years. Restaurant leases typically include land and building shells, require contingent rent above the minimum base rent payments based on a percentage of sales ranging from 7% to 10%, have escalating minimum rent requirements over the term of the lease and require various expenses incidental to the use of the property. The lease also has a renewal option, which Century City may exercise in the future. The Companys current lease at Century City provides early termination rights, permitting the Company and its landlord to mutually terminate the lease prior to expiration if the Company does not achieve specified sales levels in certain years. In October 2015, Westfield group, the landlord of our Century City location embarked on a massive $700 million renovation of the mall. In March 2016 (Westfield) approached the Company about recapturing its Century City space due to the remodeling. Currently, approximately 90% of the mall is closed or being remodeled with the completion expected sometime during 2017. Negotiations are ongoing, and the Company expects to receive compensation that will exceed the net book value of its assets. Based on our discussions, the store is expected to close late in the third quarter, and the Company will be relived of its remaining lease obligation. During the year ended December 31, 2012, GNH Topanga entered into a Lease Agreement with Westfield Topanga Owner, LP, a Delaware limited partnership, to lease approximately 5,900 square feet in the Westfield Topanga Shopping Center. The lease includes land and building shells, provides a construction reimbursement allowance of up to $475,000, requires contingent rent above the minimum base rent payments based on a percentage of sales ranging from 7% to 10% and require other expenses incidental to the use of the property. The lease also has a renewal option, which GNH Topanga may exercise in the future. The Companys current lease provides early termination rights, permitting the Company and its landlord to mutually terminate the lease prior to expiration if the Company does not achieve specified sales levels in certain years. The lease commenced on March 23, 2013 and expires on April 30, 2022. On April 1, 2013, the Company entered into a Lease Agreement with GLENDALE II MALL ASSOCIATES, LLC, a Delaware limited liability company, to lease approximately 6,000 square feet in the Glendale Galleria in the City of Glendale, County of Los Angeles, and State of California. The lease includes land and building shells, provides a construction reimbursement allowance of up to $475,000, requires contingent rent above the minimum base rent payments based on a percentage of sales ranging from 4% to 7% and require other expenses incidental to the use of the property. The lease commenced on November 21, 2013 and expires on October 31, 2023. As of December 27, 2015, the Company was in default of certain of the payments due under this lease, which caused a default under a note payment due to affiliate of lessor (see Note 4). As a result of this default, the Company incurred an impairment charge of $353,414 relating to the leasehold improvements at this location. Rent expense for the Companys restaurant operating leases was $627,668 and $606,714 for the fiscal years ended December 27, 2015 and December 28, 2014, respectively, and is included as part of the cost of operations. As of December 27, 2015, the aggregate minimum annual lease payments under operating leases, including amounts characterized as deemed landlord financing payments are as follows: 2016 $ 654,007 2017 678,102 2018 703,100 2019 729,033 2020 561,787 Thereafter 1,124,448 Total $ 4,450,477 Litigation As of December 27, 2015, due to the nonpayment of our lease obligations to Glendale II Mall Associates, we are in default under our promissory note Dated March 1, 2015 in favor of GGP Limited Partnership (GGP). The entire principal and accrued interest of $683,316, is due and payable, and is classified as current liability. We do not currently have any other material pending legal proceedings outside ordinary routine litigations incidental to our business. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 27, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 INCOME TAXES The net income generated from the Century City restaurant operations from Giggles N Hugs, LLC is treated as partnership income for federal and state income tax purposes and does not incur income tax expense for Giggles N Hugs, Inc. because the reverse merger was effectuated on December 30, 2011. Instead, its earnings and losses are allocated to and reported on the individual returns of the members tax returns. Accordingly, no provision for income tax is included in the consolidated financial statements. For the fiscal years ended December 27, 2015 and December 28, 2014, GNH, Inc. incurred net operating losses and, accordingly, no provision for income taxes has been recorded. In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 27, 2015 and December 28, 2014, the Company had $6,472,000 and $5,389,000, respectively of federal and state net operating loss carryforwards. The net operating loss carryforwards, if not utilized, will begin to expire in 2022. Deferred tax liabilities and assets are recognized for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. A reconciliation of tax expense computed at the statutory federal tax rate income (loss) from operations before income taxes to the actual income tax expense is as follows: December 27, 2015 December 28, 2014 Tax provision (benefits) computed at the statutory rate (39.83%) $ (431,000 ) $ (939,020 ) Valuation allowance for deferred tax assets 429,618 936,620 Income tax expense $ 1,382 $ 2,400 Deferred income taxes include the net tax effects of net operating loss (NOL) carryforwards and the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Companys deferred tax assets are as follows: December 27, 2015 December 28, 2014 Net operating loss carryover $ 2,578,000 $ 2,146,000 Other (624,000 ) (231,000 ) Total defered tax assets 1,954,000 1,915,000 Valuation allowance (1,954,000 ) (1,915,000 ) Net deferred tax asset $ - $ - The Company has provided a valuation reserve against the full amount of the net deferred tax assets, because in the opinion of management, it is more likely than not that these tax assets will not be realized. The Companys NOL and tax credit carryovers may be significantly limited under the Internal Revenue Code (IRC). NOL and tax credit carryovers are limited under Section 382 when there is a significant ownership change as defined in the IRC. During the fiscal year December 27, 2015 and in prior years, the Company may have experienced such ownership changes, which could impose such limitations. The limitation imposed by the IRC would place an annual limitation on the amount of NOL and tax credit carryovers that can be utilized. When the Company completes the necessary studies, the amount of NOL carryovers available may be reduced significantly. However, since the valuation allowance fully reserves for all available carryovers, the effect of the reduction would be offset by a reduction in the valuation allowance. The company files income tax returns in the U.S. federal jurisdiction, and the State of Nevada. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 27, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 12 SUBSEQUENT EVENTS During the First Quarter ended March 27, 2016, the Company issued 815,000 shares of common stock for services rendered with a value of $68,020. In October 2015, Westfield group, the landlord of our Century City location embarked on a massive $700 million renovation of the mall. In March 2016 (Westfield) approached the Company about recapturing its Century City space due to the remodeling. Currently, approximately 90% of the mall is closed or being remodeled with the completion expected sometime in mid 2017. Negotiations are ongoing, and the Company expects to receive compensation that will exceed the net book value of its assets. Based on our discussions, the store is expected to close late in the third quarter. The Company is in active discussions with Westfield and other national mall groups on potential new locations. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 27, 2015 | |
Accounting Policies [Abstract] | |
Organization | Organization Giggles N Hugs, Inc. (GIGL Inc.) was originally organized September 17, 2004 (Date of Inception) under the laws of the State of Nevada, as Teachers Pet, Inc. GIGL Inc. was organized to sell teaching supplies and learning tools. On August 20, 2010, GIGL Inc. filed an amendment to its articles of incorporation to change its name to Giggles N Hugs, Inc. The Company is authorized to issue 1,125,000,000 shares of its $0.001 par value common stock. The Company adopted a 52/53 week fiscal year ending on the Sunday closest to December 31st for financial reporting purposes. Fiscal year 2015 consists of a year ending December 27, 2015. Fiscal year 2014 consists of a year ending December 28, 2014. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, during the year ended December 27, 2015, the Company incurred a net loss of $2,068,687 used cash in operations of $647,762 and had a stockholders deficit of $964,699 as of that date. In addition, the Company was behind in certain lease payments of one of its restaurant locations and was in default on a note payable of $683,316. These factors raise substantial doubt about the Companys ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Companys ability to raise additional funds and implement its business plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company has and will continue to use significant capital to grow and acquire market share At December 27, 2015, the Company had cash on hand in the amount of $334,191. Management estimates that the current funds on hand will be sufficient to continue operations through June 2016. Management is currently seeking additional funds, primarily through the issuance of debt and equity securities for cash to operate our business. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stock holders, in case or equity financing. |
Principles of Consolidation | Principles of consolidation For the years ended December 27, 2015 and December 28, 2014, the consolidated financial statements include the accounts of Giggles N Hugs, Inc., GNH, Inc., GNH CC, Inc. for restaurant operations in Westfield Mall in Century City, California, GNH Topanga, Inc. for restaurant operations in Westfield Topanga Shopping Center in Woodland Hills, California, and Glendale Giggles N Hugs, Inc. for restaurant operations in Glendale Galleria in Glendale, California. Intercompany balances and transactions have been eliminated. Giggles N Hugs, Inc., GNH, Inc., GNH CC, Inc., GNH Topanga, Inc., and Glendale Giggles N Hugs, Inc. will be collectively referred herein to as the Company. |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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. Estimates and assumptions used by management affected impairment analysis for fixed assets, intangible assets, amounts of potential liabilities and valuation of issuance of equity securities issued for services. Actual results could differ from those estimates. |
Concentration of Credit Risk | Concentration of Credit Risk The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company maintains the majority of its cash balances with financial institutions, in the form of demand deposits. At December 27, 2015 and December 28, 2014, the Company had cash deposits in two financial institutions that were above FDIC limits of $250,000. The Company believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of these two financial institutions. |
Fair Value of Financial Instruments | Fair value of financial instruments The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and paragraph 820-10-35-37 of the FASB Accounting Standards Codification (Paragraph 820-10-35-37) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 establishes a framework for measuring fair value in accounting principles generally accepted in the United States of America (U.S. GAAP), and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, Paragraph 820-10-35-37 establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by Paragraph 820-10-35-37 are described below: Level 1: Quoted market prices available in active markets for identical assets or liabilities as of the reporting date. Level 2: Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 3: Pricing inputs that are generally observable inputs and not corroborated by market data. The carrying amount of the Companys financial assets and liabilities, such as cash and cash equivalents, inventory, prepaid expenses, and accounts payable and accrued expenses approximate their fair value due to their short term nature. The carrying values financing obligations approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. |
Income Taxes | Income taxes The Company accounts for income taxes under the provisions of ASC 740 Accounting for Income Taxes, which requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority. Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and cause a change in managements judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities. |
Cash and Cash Equivalents | Cash and cash equivalents For the purpose of the statements of cash flows, all highly liquid investments with an original maturity of three months or less are considered to be cash equivalents. The carrying value of these investments approximates fair value. |
Inventories | Inventories Inventories are stated at the lower of cost or market on a first-in, first-out basis and consist of restaurant food and other supplies. |
Property and Equipment | Property and equipment The Company records all property and equipment at cost less accumulated depreciation. Improvements are capitalized while repairs and maintenance costs are expensed as incurred. Depreciation is calculated using the straight-line method over the estimated useful life of the assets or the lease term, whichever is shorter. Leasehold improvements include the cost of the Companys internal development and construction department. Depreciation periods are as follows: Leasehold improvements 10 years Restaurant fixtures and equipment 10 years Computer software and equipment 3 to 5 years Management assesses the carrying value of property and equipment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If there is indication of impairment, management prepares an estimate of future cash flows expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. Based on managements assessment, as of December 27, 2015, the Company incurred a loss on impairment of $353,414, relating to the leasehold improvements at its Glendale store location. For the year ended December 28, 2014, there are no indications of impairment based on managements assessment of these assets. |
Leases | Leases The Company currently leases its restaurant locations. The Company evaluates the lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. The Company currently has three leases, which are classified as operating leases. Minimum base rent for the Companys operating leases, which generally have escalating rentals over the term of the lease, is recorded on a straight-line basis over the lease term. The initial rent term includes the build-out, or rent holiday period, for the Companys leases, where no rent payments are typically due under the terms of the lease. Deferred rent expense, which is based on a percentage of revenue, is also recorded to the extent it exceeds minimum base rent per the lease agreement. The Company disburses cash for leasehold improvements and furniture, fixtures and equipment to build out and equip its leased premises. The Company also expends cash for structural additions that it makes to leased premises of which $700,000, $506,271, and $475,000 were reimbursed to Century City, Topanga, and Glendale by its landlords, respectively, as construction contributions pursuant to agreed-upon terms in the lease agreements. Landlord construction contributions usually take the form of up-front cash. Depending on the specifics of the leased space and the lease agreement, amounts paid for structural components are recorded during the construction period as leasehold improvements or the landlord construction contributions are recorded as an incentive from lessor. |
Stock-based Compensation | Stock-based compensation The Company periodically issues stock options and warrants to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for stock option and warrant grants issued and vesting to employees based on the authoritative guidance provided by the Financial Accounting Standards Board whereas the value of the award is measured on the date of grant and recognized over the vesting period. The Company accounts for stock option and warrant grants issued and vesting to non-employees in accordance with the authoritative guidance of the Financial Accounting Standards Board (FASB) whereas the value of the stock compensation is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Non-employee stock-based compensation charges generally are amortized over the vesting period on a straight-line basis. In certain circumstances where there are no future performance requirements by the non-employee, option grants are immediately vested and the total stock-based compensation charge is recorded in the period of the measurement date. The fair value of the Companys stock option and warrant grants is estimated using the Black-Scholes Option Pricing model, which uses certain assumptions related to risk-free interest rates, expected volatility, expected life of the stock options or warrants, and future dividends. Compensation expense is recorded based upon the value derived from the Black-Scholes Option Pricing model, and based on actual experience. The assumptions used in the Black-Scholes Option Pricing model could materially affect compensation expense recorded in future periods. The Company also issues restricted shares of its common stock for share-based compensation programs to employees and non-employees. The Company measures the compensation cost with respect to restricted shares to employees based upon the estimated fair value at the date of the grant, and is recognized as expense over the period, which an employee is required to provide services in exchange for the award. For non-employees, the Company measures the compensation cost with respect to restricted shares based upon the estimated fair value at measurement date which is either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. |
Loss Per Common Share | Loss per common share Net loss per share is provided in accordance with ASC Subtopic 260-10. We present basic loss per share (EPS) and diluted EPS on the face of statements of operations. Basic EPS is computed by dividing reported losses by the weighted average shares outstanding. Except where the result would be anti-dilutive to income from continuing operations, diluted earnings per share has been computed assuming the conversion of the convertible long-term debt and the elimination of the related interest expense, and the exercise of stock options and warrants. Loss per common share has been computed using the weighted average number of common shares outstanding during the year. For the years ended December 27, 2015 and December 28, 2014, the assumed conversion of convertible note payable and the exercise of stock warrants are anti-dilutive due to the Companys net losses and are excluded in determining diluted loss per share. |
Revenue Recognition | Revenue recognition Our revenues consist of sales from our restaurant operations and sales of memberships entitling members unlimited access to our play areas for the duration of their membership. As a general principle, revenue is recognized when the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred and services have been rendered, (iii) the price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. With respect to memberships, access to our play area extends throughout the term of membership. The vast majority of memberships sold are for one month terms. Revenue is recognized on a straight line basis over the membership period. The company receives payment from its customers at the start of the subscription period and the company records deferred revenue for the unearned portion of the subscription period. Revenues from restaurant sales are recognized when payment is tendered at the point of sale. Revenues are presented net of sales taxes. The obligation is included in other accrued expenses until the taxes are remitted to the appropriate taxing authorities. We recognize a liability upon the sale of our gift cards and recognize revenue when these gift cards are redeemed in our restaurants. As of December 27, 2015 and December 28, 2014, the amount of gift cards sales were $4,448 and $4,212, respectively, and were recorded as deferred revenue. For party rental agreements, we rely upon a signed contract between us and the customer as the persuasive evidence of a sales arrangement. Party rental deposits are recorded as deferred revenue upon receipt and recognized as revenue when the service has been rendered. Additionally, revenues are recognized net of any discounts, returns, allowances and sales incentives, including coupon redemptions and complimentary meals. |
Advertising Costs | Advertising costs Advertising costs are expensed as incurred. During the fiscal years ended December 27, 2015 and December 28, 2014, there were $29,946 and $57,317, respectively in advertising costs included in general and administrative expenses. |
Convertible Debentures | Convertible Debentures Beneficial Conversion Feature |
Recent Accounting Standards | Recent Accounting Standards In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. Entities will be able to transition to the standard either retrospectively or as a cumulative-effect adjustment as of the date of adoption. The Company is in the process of evaluating the impact of ASU 2014-09 on the Companys financial statements and disclosures. In June 2014, the FASB issued Accounting Standards Update No. 2014-12, Compensation Stock Compensation (Topic 718). The pronouncement was issued to clarify the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The pronouncement is effective for reporting periods beginning after December 15, 2015. The adoption of ASU 2014-12 is not expected to have a significant impact on the Companys consolidated financial position or results of operations. In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is in the process of evaluating the impact of ASU 2016-02 on the Companys financial statements and disclosures. The Company anticipates that this will add significant liabilities to the balance sheet. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Companys present or future consolidated financial statements. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Property and Equipment Estimated Useful Lives | Depreciation periods are as follows: Leasehold improvements 10 years Restaurant fixtures and equipment 10 years Computer software and equipment 3 to 5 years |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Fixed Assets | Fixed assets consisted of the following at: December 27, 2015 December 28, 2014 Leasehold improvements $ 2,494,151 $ 2,847,565 Fixtures and equipment 85,267 85,267 Computer software and equipment 283,001 269,932 Property and equipment, total 2,862,419 3,202,764 Less: accumulated depreciation and amortization (1,132,583 ) (765,034 ) Property and equipment, net $ 1,729,836 $ 2,437,730 |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Debt Disclosure [Abstract] | |
Summary of Convertible Debentures Payable | A summary of convertible debentures payable as of December 27, 2015 and December 28, 2014 is as follows: December 27, 2015 December 28, 2014 Iconic Holdings, LLC $ 161,250 $ - J&N Invest LLC 50,000 - Total Convertible Notes 211,250 - Less: Discount (139,471 ) - Net Convertible Notes $ 71,779 - |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock Awards for Options | The following table summarizes the changes in the options outstanding at December 27, 2015, and at December 28, 2014, and the related prices for the shares of the Companys common stock issued to employees of the Company under a non-qualified employee stock option plan. Weighted Average Stock Exercise Options Price Outstanding, December 29, 2013 175,000 $ 4.50 Granted - - Exercised - - Expired/Cancelled (40,000 ) - Outstanding, December 28, 2014 135,000 $ 4.50 Granted - - Exercised - - Expired/Cancelled (20,000 ) - Outstanding, December 27, 2015 115,000 $ 4.50 Exercisable, December 27, 2015 115,000 $ 4.50 |
Schedule of Stock Warrants Activity | The following table summarizes the changes in the warrants outstanding at December 27, 2015, and December 28, 2014, and the related prices. Weighted Average Exercise Warrants Price Outstanding, December 29, 2013 575,675 $ 0.37 Granted 547,400 0.06 Exercised (744,565 ) 0.12 Outstanding, December 28, 2014 378,510 $ 0.16 Granted 386,219 0.05 Exercised (406,621 ) 0.01 Expired/Cancelled (191,608 ) - Outstanding, December 27, 2015 166,500 $ 0.13 Exercisable, December 27, 2015 166,500 $ 0.13 |
Summary of Changes in Options Outstanding | Weighted Weighted Average Weighted Range of Average Remaining Average Exercise Number Exercise Contractual Number Exercise Prices Outstanding Price Life Exercisable Price $0.01 ~ $0.37 166,500 $ 0.13 6.14 166,500 $ 0.13 166,500 6.14 166,500 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Aggregate Minimum Annual Lease Payments Under Operating Leases | As of December 27, 2015, the aggregate minimum annual lease payments under operating leases, including amounts characterized as deemed landlord financing payments are as follows: 2016 $ 654,007 2017 678,102 2018 703,100 2019 729,033 2020 561,787 Thereafter 1,124,448 Total $ 4,450,477 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 27, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Tax Expense Computed at Statutory Federal Tax Rate | A reconciliation of tax expense computed at the statutory federal tax rate income (loss) from operations before income taxes to the actual income tax expense is as follows: December 27, 2015 December 28, 2014 Tax provision (benefits) computed at the statutory rate (39.83%) $ (431,000 ) $ (939,020 ) Valuation allowance for deferred tax assets 429,618 936,620 Income tax expense $ 1,382 $ 2,400 |
Schedule of Components of Deferred Tax Assets | Significant components of the Companys deferred tax assets are as follows: December 27, 2015 December 28, 2014 Net operating loss carryover $ 2,578,000 $ 2,146,000 Other (624,000 ) (231,000 ) Total defered tax assets 1,954,000 1,915,000 Valuation allowance (1,954,000 ) (1,915,000 ) Net deferred tax asset $ - $ - |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 28, 2013 | |
Common stock, shares authorized | 1,125,000,000 | 1,125,000,000 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Net loss | $ (2,068,687) | $ (2,357,310) | |
Net cash provided by (used in) operating activities | (647,762) | (1,134,152) | |
Total stockholders’ deficit | (964,699) | (150,680) | $ (637,422) |
Note payable | 683,316 | ||
Cash and equivalents | 334,191 | 108,236 | $ 71,220 |
FDIC limit | 250,000 | $ 250,000 | |
Loss on impairment | 353,414 | ||
Incentive from lessor amount | 1,063,453 | $ 1,204,199 | |
Deferred revenue | 4,448 | 4,212 | |
Advertising costs | 29,946 | $ 57,317 | |
Century City [Member] | |||
Incentive from lessor amount | 700,000 | ||
Topanga [Member] | |||
Incentive from lessor amount | 506,271 | ||
Glendale II Mall Associates, LLC [Member] | |||
Incentive from lessor amount | $ 475,000 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Schedule of Property and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 27, 2015 | |
Leasehold Improvements [Member] | |
Estimated useful lives | 10 years |
Restaurant Fixtures And Equipment [Member] | |
Estimated useful lives | 10 years |
Computer Software And Equipment [Member] | Minimum [Member] | |
Estimated useful lives | 3 years |
Computer Software And Equipment [Member] | Maximum [Member] | |
Estimated useful lives | 5 years |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expenses | $ 367,549 | $ 350,115 |
Impairment change to leasehold improvement | 353,414 | |
Repair and maintenance expenses | $ 111,977 | $ 81,548 |
Fixed Assets - Schedule of Fixe
Fixed Assets - Schedule of Fixed Assets (Details) - USD ($) | Dec. 27, 2015 | Dec. 28, 2014 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 2,494,151 | $ 2,847,565 |
Fixtures and equipment | 85,267 | 85,267 |
Computer software and equipment | 283,001 | 269,932 |
Property and equipment, total | 2,862,419 | 3,202,764 |
Less: accumulated depreciation and amortization | (1,132,583) | (765,034) |
Property and equipment, net | $ 1,729,836 | $ 2,437,730 |
Incentive From Lessor (Details
Incentive From Lessor (Details Narrative) - USD ($) | Apr. 02, 2013 | Dec. 27, 2015 | Dec. 28, 2014 | Dec. 31, 2012 |
Incentive from lessor amount | $ 1,063,453 | $ 1,204,199 | ||
Lease agreement term | Dec. 27, 2015 | |||
Lease incentive amortization period | 10 years | |||
Incentive from lessor remaining balance amount | $ 1,198,098 | 1,315,843 | ||
Deferred rent | 218,874 | 175,535 | ||
Incentive from lessor amount current | 134,644 | |||
Amortization of incentives from lessors | 117,745 | $ 83,617 | ||
Century City [Member] | ||||
Incentive from lessor amount | 700,000 | |||
Topanga [Member] | ||||
Incentive from lessor amount | 506,271 | |||
Lease agreement term | Apr. 30, 2022 | |||
Glendale II Mall Associates, LLC [Member] | ||||
Incentive from lessor amount | $ 475,000 | |||
Lease agreement term | Oct. 31, 2023 |
Note Payable Lessor (Details Na
Note Payable Lessor (Details Narrative) - USD ($) | Feb. 12, 2013 | Dec. 27, 2015 | Mar. 01, 2015 | Dec. 28, 2014 |
Promissory notes payable face value | $ 700,000 | |||
Notes payable accrued interest rate | 10.00% | |||
Note maturity date | Oct. 31, 2023 | |||
Promissory note principal balance | $ 683,316 | $ 683,316 | $ 666,584 | |
Accrued interest for debt | 34,066 | |||
Promissory notes aggregate amount | 648,222 | $ 700,650 | ||
Promissory note monthly installments value | 12,707 | |||
Debt amount on the date of modification | 619,377 | |||
Debt discount | 63,939 | |||
Gain on debt extinguishment | 69,228 | |||
Amortization of debt discount | 28,845 | |||
Unamortization of debt discount | $ 35,094 | |||
Through October 15, 2015 [Member] | ||||
Notes payable accrued interest rate | 10.00% | |||
Through October 31, 2017 [Member] | ||||
Notes payable accrued interest rate | 12.00% | |||
Through October 31, 2023 [Member] | ||||
Notes payable accrued interest rate | 15.00% |
Convertible Note Payable (Detai
Convertible Note Payable (Details Narrative) - USD ($) | Dec. 27, 2015 | Dec. 21, 2015 | Aug. 24, 2015 | Feb. 12, 2013 | Dec. 27, 2015 | Dec. 28, 2014 | Dec. 31, 2015 |
Convertible note payable interest rate | 10.00% | 10.00% | |||||
Convertible note payable face amount | $ 700,000 | ||||||
Discount on convertible note payable | $ 35,094 | $ 35,094 | |||||
Convertible note payable maturity date | Oct. 31, 2023 | ||||||
Amortization of debt discount | 67,261 | $ 55,072 | |||||
Unsecured Note Payable Agreement [Member] | |||||||
Discount on convertible note payable | 109,327 | 109,327 | |||||
Unsecured Note Payable Agreement [Member] | Iconic Holdings, LLC [Member] | |||||||
Convertible note payable interest rate | 8.00% | ||||||
Convertible note payable face amount | $ 161,250 | ||||||
Discount on convertible note payable | 107,505 | 11,250 | 107,505 | $ 22,500 | |||
Debt fee and costs | 11,250 | ||||||
Net proceeds form debt issuance | $ 138,500 | ||||||
Convertible note payable guaranteed interest rate | 10.00% | ||||||
Convertible note payable maturity date | Dec. 21, 2016 | ||||||
Convertible note payable redemption price percentage | 65.00% | ||||||
Trading price per share | $ 0.13 | ||||||
Beneficial conversion feature | $ 86,827 | ||||||
Amortization of debt discount | 1,822 | ||||||
Unsecured Note Payable Agreement [Member] | Iconic Holdings, LLC [Member] | Piggyback Registration Rights [Member] | |||||||
Event of failure maximum percentage of damage on notes principal | 30.00% | ||||||
Event of failure minimum value of damage on notes principal | $ 20,000 | ||||||
Unsecured Note Payable Agreement [Member] | Iconic Holdings, LLC [Member] | Minimum [Member] | |||||||
Convertible note payable conversion price per share | $ 0.08 | ||||||
Unsecured Note Payable Agreement [Member] | Iconic Holdings, LLC [Member] | Maximum [Member] | |||||||
Convertible note payable conversion price per share | $ 0.11 | ||||||
Unsecured Note Payable Agreement [Member] | J&N Invest LLC [Member] | |||||||
Convertible note payable interest rate | 5.00% | ||||||
Convertible note payable face amount | $ 50,000 | ||||||
Discount on convertible note payable | $ 33,049 | $ 50,000 | 33,049 | ||||
Convertible note payable maturity date | Aug. 31, 2016 | ||||||
Convertible note payable conversion price per share | $ 0.10 | ||||||
Trading price per share | $ 0.23 | ||||||
Amortization of debt discount | $ 16,951 |
Convertible Note Payable - Summ
Convertible Note Payable - Summary of Convertible Debentures Payable (Details) - USD ($) | Dec. 27, 2015 | Dec. 28, 2014 |
Total Convertible Notes | $ 211,250 | |
Less: Discount | (139,471) | |
Net Convertible Notes | 71,779 | |
Iconic Holdings, LLC [Member] | ||
Total Convertible Notes | 161,250 | |
J&N Invest LLC [Member] | ||
Total Convertible Notes | $ 50,000 |
Promissory Note (Details Narrat
Promissory Note (Details Narrative) - USD ($) | Dec. 18, 2015 | Dec. 27, 2015 | Dec. 28, 2014 |
Note payable, discount | $ 35,094 | ||
Amortization of debt discount | 67,261 | $ 55,072 | |
Debt discount | 63,939 | ||
St. George Investments, LLC [Member] | |||
Unsecured promissory note principal | $ 265,000 | ||
Note payable, discount | 60,000 | 60,306 | |
Debt fee and costs | 5,000 | ||
Notes prepayment | 235,000 | ||
Amortization of debt discount | $ 4,694 | ||
Debt discount | $ 204,694 |
Business Loan and Security Ag35
Business Loan and Security Agreement (Details Narrative) - American Express Bank [Member] | 1 Months Ended |
Aug. 31, 2015USD ($) | |
Line of credit facility maximum borrowing capacity | $ 174,000 |
Loan maturities date | August 2,016 |
Proceeds from advances | $ 174,000 |
Percentage of laon fee require | 0.50% |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Jul. 01, 2015 | Feb. 12, 2013 | Dec. 27, 2015 | Dec. 28, 2014 |
Stock issued during period for services | $ 341,547 | $ 509,522 | ||
Stock issued during period for cash | $ 449,485 | $ 1,036,000 | ||
Warrant exercise price per share | $ .20 | |||
Number of shares not yet been issued | 555,556 | 1,887,148 | ||
Issuance of convertible notes payable | $ 238,500 | $ 50,000 | ||
Convertible notes payable maturity date | Oct. 31, 2023 | |||
Unsecured Note Payable Agreement With An Investor [Member] | ||||
Number of stock issued for previously accounted for as common stock payable, shares | 66,667 | 555,223 | ||
Issuance of convertible notes payable | $ 50,000 | |||
Convertible notes payable interest rate per annum | 15.00% | |||
Convertible notes payable maturity date | Jul. 31, 2016 | |||
Debt instruments conversion price per share | $ 0.15 | $ 0.09 | ||
Debt instruments term | 3 years | |||
Issuance of debt discount | $ 9,647 | |||
Initial conversion price amount | $ 20,000 | |||
Settlement Accounts Payable [Member] | ||||
Number of shares issued for settlement accounts payable, shares | 423,268 | 722,337 | ||
Number of shares issued for settlement accounts payable | $ 68,282 | $ 493,142 | ||
Warrants [Member] | ||||
Numbr of stock issued during period | $ 170,095 | |||
Numbr of stock issued during period, shares | 1,228,175 | |||
Common Stock [Member] | ||||
Stock issued during period for services shares | 1,293,333 | 1,646,388 | ||
Stock issued during period for services | $ 1,293 | $ 1,646 | ||
Stock issued during period for cash | $ 3,071 | $ 3,712 | ||
Stock issued during period for cash, shares | 3,070,776 | 3,711,667 | ||
Issunace of underwriter warrants to acquire common stock | 152,885 | 363,615 | ||
Warrant exercise price per share | $ 0.01 | $ 0.01 | ||
Number of shares not yet been issued | 555,556 | |||
Number of shares not yet been issued, value | $ 25,000 | |||
Number of shares issued for investors as bonus | $ 200,200 | |||
Number of shares issued for investors as bonus, shares | 910,000 | |||
Number of stock issued for previously accounted for as common stock payable | $ 488,078 | $ 473,804 | ||
Number of stock issued for previously accounted for as common stock payable, shares | 1,597,982 | 2,096,118 | ||
Debt instruments term | 3 years |
Stock Options and Warrants (Det
Stock Options and Warrants (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 27, 2015 | Dec. 28, 2014 | Dec. 28, 2015 | |
Warrant exercise price per share | $ .20 | ||
Option granted during period | |||
Stock-based compensation | |||
Warrants expire date | 3 years | ||
Warrants [Member] | |||
Shares issued upon exercise of warrants, Shares | 406,621 | ||
Minimum [Member] | |||
Warrants expire date | 3 years | ||
Maximum [Member] | |||
Warrants expire date | 7 years | ||
Common Stock [Member] | |||
Issunace of underwriter warrants to acquire common stock | 152,885 | 363,615 | |
Warrants issued to purchase number of common stock | 233,334 | 183,785 | |
Warrant exercise price per share | $ 0.01 | $ 0.01 | |
Shares issued upon exercise of warrants, Shares | 406,621 | ||
Common Stock [Member] | Minimum [Member] | |||
Warrant exercise price per share | 0.01 | $ 0.01 | |
Common Stock [Member] | Maximum [Member] | |||
Warrant exercise price per share | $ 0.15 | $ 0.25 |
Stock Options and Warrants - Su
Stock Options and Warrants - Summary of Stock Awards for Options (Details) - $ / shares | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock Options, Outstanding, Beginning balance | 135,000 | 175,000 |
Stock Options, Granted | ||
Stock Options, Exercised | ||
Stock Options, Expired/Cancelled | (20,000) | (40,000) |
Stock Options, Outstanding, Ending balance | 115,000 | 135,000 |
Stock Options, Exercisable | 115,000 | |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 4.50 | $ 4.50 |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Exercised | ||
Weighted Average Exercise Price, Expired/Cancelled | ||
Weighted Average Exercise Price, Outstanding, Ending balance | $ 4.50 | $ 4.50 |
Weighted Average Exercise Price, Exercisable | $ 4.50 |
Stock Option and Warrants - Sch
Stock Option and Warrants - Schedule of Stock Warrants Activity (Details) - Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Warrants, Outstanding, Beginning balance | 378,510 | 575,675 |
Warrants, Granted | 386,219 | 547,400 |
Warrants, Exercised | (406,621) | (744,565) |
Warrants, Expired/Cancelled | (191,608) | |
Warrants, Outstanding, Ending balance | 166,500 | 378,510 |
Warrants, Exercisable | 166,500 | |
Weighted Average Exercise Price, Outstanding, Beginning | $ 0.16 | $ 0.37 |
Weighted Average Exercise Price, Granted | 0.05 | 0.06 |
Weighted Average Exercise Price, Exercised | $ 0.01 | $ 0.12 |
Weighted Average Exercise Price, Expired/Cancelled | ||
Weighted Average Exercise Price, Outstanding, Ending | $ 0.13 | $ 0.16 |
Warrants Exercisable, price | $ 0.13 |
Stock Options and Warrants - 40
Stock Options and Warrants - Summary of Changes in Options Outstanding (Details) | 12 Months Ended |
Dec. 27, 2015$ / sharesshares | |
Number of Options, Outstanding | shares | 166,500 |
Weighted Average Remaining Contractual Life | 6 years 1 month 21 days |
Number of Options, Exercisable | shares | 166,500 |
Range 1 [Member] | |
Range of Exercise Prices, Lower Range Limit | $ / shares | $ 0.01 |
Range of Exercise Prices, Upper Range Limit | $ / shares | $ 0.37 |
Number of Options, Outstanding | shares | 166,500 |
Weighted Average Exercise Price | $ / shares | $ 0.13 |
Weighted Average Remaining Contractual Life | 6 years 1 month 21 days |
Number of Options, Exercisable | shares | 166,500 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.13 |
Commitments and Contingencies41
Commitments and Contingencies (Details Narrative) | Apr. 02, 2013USD ($)ft² | Oct. 31, 2015USD ($) | Dec. 27, 2015USD ($) | Dec. 28, 2014USD ($) | Dec. 31, 2012USD ($)ft² | Mar. 01, 2015USD ($) |
Expiration date of Lease | Dec. 27, 2015 | |||||
Impairment charge related to leasehold improvements | $ 353,414 | |||||
Promissory note principal and accrued interest balance | $ 683,316 | $ 666,584 | $ 683,316 | |||
Century City [Member] | ||||||
Remaining restaurant operating lease, term | 10 years | |||||
Construction reimbursement allowance | $ 700,000,000 | |||||
Century City [Member] | Minimum [Member] | ||||||
Percentage of sales range | 7.00% | |||||
Century City [Member] | Maximum [Member] | ||||||
Percentage of sales range | 10.00% | |||||
Westfield Topanga Owner, LP [Member] | ||||||
Number of square feet for operating lease | ft² | 5,900 | |||||
Topanga [Member] | ||||||
Rent expense | $ 606,714 | |||||
Construction reimbursement allowance | $ 475,000 | |||||
Expiration date of Lease | Apr. 30, 2022 | |||||
Topanga [Member] | Minimum [Member] | ||||||
Percentage of sales range | 7.00% | |||||
Topanga [Member] | Maximum [Member] | ||||||
Percentage of sales range | 10.00% | |||||
Glendale II Mall Associates, LLC [Member] | ||||||
Rent expense | $ 627,668 | |||||
Number of square feet for operating lease | ft² | 6,000 | |||||
Construction reimbursement allowance | $ 475,000 | |||||
Expiration date of Lease | Oct. 31, 2023 | |||||
Impairment charge related to leasehold improvements | $ 353,414 | |||||
Glendale II Mall Associates, LLC [Member] | Minimum [Member] | ||||||
Percentage of sales range | 4.00% | |||||
Glendale II Mall Associates, LLC [Member] | Maximum [Member] | ||||||
Percentage of sales range | 7.00% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Aggregate Minimum Annual Lease Payments Under Operating Leases (Details) - Deemed Landlord [Member] | Dec. 27, 2015USD ($) |
2,016 | $ 654,007 |
2,017 | 678,102 |
2,018 | 703,100 |
2,019 | 729,033 |
2,020 | 561,787 |
Thereafter | 1,124,448 |
Total | $ 4,450,477 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss | $ 6,472,000 | $ 5,389,000 |
Net operating loss carryforwards, expiration date | expire in 2022 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Tax Expense Computed at Statutory Federal Tax Rate (Details) - USD ($) | 12 Months Ended | |
Dec. 27, 2015 | Dec. 28, 2014 | |
Income Tax Disclosure [Abstract] | ||
Tax provision (benefits) computed at tile statutory rate (39.83% ) | $ (431,000) | $ (939,020) |
Valuation allowance for deferred tax assets | 429,618 | 936,620 |
Income tax expense | $ 1,382 | $ 2,400 |
Effective income tax reconciliation of statutory rate, percent | 39.83% | 39.83% |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Tax Assets (Details) - USD ($) | Dec. 27, 2015 | Dec. 28, 2014 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryover | $ 2,578,000 | $ 2,146,000 |
Other | (624,000) | (231,000) |
Total deferred tax assets | 1,954,000 | 1,915,000 |
Valuation allowance | $ (1,954,000) | $ (1,915,000) |
Net deferred tax assets |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Mar. 27, 2016 | Dec. 27, 2015 | Dec. 28, 2014 | |
Stock issued during period for services | $ 341,547 | $ 509,522 | ||
Subsequent Event [Member] | ||||
Stock issued during period for services shares | 815,000 | |||
Stock issued during period for services | $ 68,020 | |||
Subsequent Event [Member] | Westfield Group [Member] | ||||
Massive renovation of the mall | $ 700,000 | |||
Percentage of mall being remodeled | 90.00% | |||
Construction description | Currently, approximately 90% of the mall is closed or being remodeled with the completion expected sometime in mid 2017. |