Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 02, 2017 | May 22, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Giggles N' Hugs, Inc. | |
Entity Central Index Key | 1,381,435 | |
Document Type | 10-Q | |
Document Period End Date | Apr. 2, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-01 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 134,622,251 | |
Trading Symbol | GIGL | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Apr. 02, 2017 | Jan. 01, 2017 |
Current assets: | ||
Cash and equivalents | $ 8,843 | $ 144,520 |
Inventory | 25,325 | 20,331 |
Prepaid expenses, other | 7,803 | 13,806 |
Total current assets | 41,971 | 178,657 |
Fixed assets, net of accumulated depreciation and amortization of $1,284,168 and $1,220,099 | 930,059 | 994,128 |
Other assets | 2,620 | 2,620 |
Total assets | 974,650 | 1,175,405 |
Current liabilities: | ||
Accounts payable | 596,287 | 610,925 |
Incentive from lessor - current portion | 91,071 | 87,420 |
Note Payable - lessor, current portion net of discount of $0 and $35,094, respectively | 21,544 | 21,544 |
Accrued expenses | 271,577 | 328,952 |
Advances from officer | 25,000 | |
Deferred revenue | 21,218 | 24,159 |
Promissory note payable and accrued interest | 32,928 | 193,340 |
Convertible note payable and accrued interest | 50,000 | 151,383 |
Derivative liability | 222,436 | 357,411 |
Total current liabilities | 1,332,061 | 1,775,134 |
Long-term liabilities: | ||
Incentive from lessor - long-term | 628,494 | 653,008 |
Note payable - lessor | 411,173 | 411,173 |
Deferred gain | 413,416 | 429,115 |
Total long-term liabilities | 1,453,083 | 1,493,296 |
Total liabilities | 2,785,144 | 3,268,430 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock, $0.001 par value, 1,125,000,000 shares authorized, 134,222,251 and 67,934,205 shares issued and outstanding, as of April 2, 2017 and January 1, 2017, respectively | 134,222 | 67,933 |
Common stock issuable (683,333 and 405,556 shares as of April 2, 2017 and January 1, 2017, respectively) | 243,535 | 218,535 |
Additional paid-in capital | 9,177,175 | 8,229,747 |
Accumulated deficit | (11,365,426) | (10,609,240) |
Total stockholders' deficit | (1,810,494) | (2,093,025) |
Total liabilities and stockholders' deficit | $ 974,650 | $ 1,175,405 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Apr. 02, 2017 | Jan. 01, 2017 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization | $ 1,284,168 | $ 1,220,099 |
Note payable, discount current | $ 0 | $ 35,094 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,125,000,000 | 1,125,000,000 |
Common stock, shares issued | 134,222,251 | 67,934,205 |
Common stock, shares outstanding | 134,222,251 | 67,934,205 |
Common stock issuable, shares | 683,333 | 405,556 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 02, 2017 | Mar. 27, 2016 | |
Revenue | ||
Net sales | $ 661,703 | $ 878,932 |
Costs and operating expenses | ||
Cost of operations | 503,791 | 770,518 |
General and administrative expenses | 935,734 | 324,192 |
Depreciation and amortization | 64,069 | 89,141 |
Total operating expenses | 1,503,594 | 1,183,851 |
Loss from Operations | (841,891) | (304,919) |
Finance and interest expense | (49,270) | (88,953) |
Change in fair value of derivatives | (50,629) | |
Gain on extinguishment of derivatives | 185,604 | |
Loss before provision for income taxes | (756,186) | (393,872) |
Provision for income taxes | (800) | |
Net loss | $ (756,186) | $ (394,672) |
Net loss per share - basic and diluted | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding - basic and diluted | 96,515,942 | 42,140,868 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - 3 months ended Apr. 02, 2017 - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Stock Issuable [Member] | Accumulated Deficit [Member] | Total |
Balance at Jan. 01, 2017 | $ 67,933 | $ 8,229,747 | $ 218,535 | $ (10,609,240) | $ (2,093,025) |
Balance, shares at Jan. 01, 2017 | 67,934,205 | ||||
Shares issued for employees compensation | $ 10,170 | 18,300 | 28,470 | ||
Shares issued for employees compensation, shares | 10,170,000 | ||||
Shares issued to settle accounts payable | $ 1,500 | 178,500 | 180,000 | ||
Shares issued to settle accounts payable, shares | 1,500,000 | ||||
Shares issued for convertible notes | $ 54,119 | 218,728 | $ 272,847 | ||
Shares issued for convertible notes, shares | 54,118,046 | 54,118,046 | |||
Cash received for stock issuable | 25,000 | $ 25,000 | |||
Shares issued for professional services | $ 500 | 900 | 1,400 | ||
Shares issued for professional services, shares | 500,000 | ||||
Warrants granted for service | 531,000 | 531,000 | |||
Net loss | (756,186) | (756,186) | |||
Balance at Apr. 02, 2017 | $ 134,222 | $ 9,177,175 | $ 243,535 | $ (11,365,426) | $ (1,810,494) |
Balance, shares at Apr. 02, 2017 | 134,222,251 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Apr. 02, 2017 | Mar. 27, 2016 | |
Cash flows from operating activities | ||
Net loss | $ (756,186) | $ (394,672) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 64,069 | 89,141 |
Amortization of debt discount | 79,209 | |
Stock-based compensation | 28,470 | |
Loss on stock issuance for payable settlement | 108,000 | |
Warrants granted for services | 531,000 | |
Shares issued for services | 1,400 | 28,396 |
Interest and fees included in note payable | 34,784 | |
Amortization of deferred gain | (15,699) | |
Gain on extinguishment of derivative liability | (185,604) | |
Change in fair value of derivative liability | 50,629 | |
Changes in operating assets and liabilities: | ||
Decrease in prepaid expenses and deposits | 6,003 | 4,931 |
(Increase) decrease in inventory | (4,994) | 4,673 |
Increase in accounts payable | 57,362 | 53,854 |
Decrease in lease incentive liability | (20,863) | (28,175) |
Decrease in accrued expenses | (69,610) | (114,009) |
(Decrease) Increase in deferred revenue | (2,941) | 19,691 |
Net cash used in operating activities | (174,180) | (256,961) |
Cash flows from financing activities | ||
Payments on promissory note payable | (11,497) | |
Proceeds from related party | 25,000 | |
Proceeds from common stock issuable | 25,000 | |
Net cash provided by financing activities | 38,503 | |
NET DECREASE IN CASH | (135,677) | (256,961) |
CASH AT BEGINNING OF PERIOD | 144,520 | 334,191 |
CASH AT END OF PERIOD | 8,843 | 77,230 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Interest paid | 4,359 | |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Shares issued to settle convertible notes payable | 272,847 | |
Reclass of notes payable to accrued interest | 12,235 | |
Shares issued to settle payable | $ 72,000 | $ 31,500 |
History and Organization
History and Organization | 3 Months Ended |
Apr. 02, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
History and Organization | NOTE 1 – HISTORY AND ORGANIZATION Giggles N’ Hugs, Inc. (“GIGL Inc.” or the “Company”) was originally organized on September 17, 2004 under the laws of the State of Nevada, as Teacher’s 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. On December 30, 2011, GIGL Inc. completed the acquisition of all the issued and outstanding shares of GNH, Inc. (“GNH”), a Nevada corporation, pursuant to a Stock Exchange Agreement. For accounting purposes, the acquisition of GNH by GIGL Inc. has been recorded as a reverse merger. The Company adopted a 52/53 week fiscal year ending on the Sunday closest to December 31 st |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 02, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | NOTE 2 – BASIS OF PRESENTATION The interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US Dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with US generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these interim financial statements be read in conjunction with the financial statements of the Company for the year ended January 1, 2017 and notes thereto included in the Company’s annual report on Form 10-K. The Company follows the same accounting policies in the preparation of interim reports. The condensed consolidated balance sheet as of January 1, 2017 included herein was derived from the audited consolidated financial statements as of that date, but does not included all disclosures, including notes, required by GAAP. Results of operations for the interim periods may not be indicative of annual results. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Apr. 02, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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 thirteen weeks ended April 2, 2017, the Company incurred a net loss of $756,186, used cash in operations of $174,180, and had a stockholders’ deficit of $1,810,494 as of that date. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. In addition, the Company’s independent registered public accounting firm in its report on the January 1, 2017 financial statements has raised substantial doubt about the Company’s ability to continue as a going concern. 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 had cash on hand in the amount of $8,843 as of April 2, 2017. Management estimates that the current funds on hand will be sufficient to continue operations through May 2017. 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 stockholders, in case or equity financing. Principles of consolidation 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 (which was closed June 30, 2016 due to a complete remodel of the Mall), 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 including assumptions made in impairment analysis of fixed assets, accruals of potential liabilities, valuation of equity securities issued for services and realization of deferred tax assets. Actual results could differ from those estimates. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the warrant derivative liabilities as their fair values were determined by using a probability weighted average Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. 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 period ended April 2, 2017 and March 27, 2016, the assumed conversion of convertible note payable and the exercise of stock warrants are anti-dilutive due to the Company’s net losses and are excluded in determining diluted loss per share. 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 Company’s financial statements and disclosures. 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 Company’s 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 Company’s present or future consolidated financial statements. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Apr. 02, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following at: April 2, 2017 January 1, 2017 Leasehold improvements $ 1,889,027 $ 1,889,027 Fixtures and equipment 60,310 60,310 Computer software and equipment 264,890 264,890 Property and equipment, total 2,214,227 2,214,227 Less: accumulated depreciation (1,284,168 ) (1,220,099 ) Property and equipment, net $ 930,059 $ 994,128 Depreciation and amortization expenses for the thirteen weeks ended April 2, 2017 and March 27, 2016 were $64,069 and $89,141, respectively, Repair and maintenance expenses for the thirteen weeks ended April 2, 2017 and March 27, 2016 were $15,542 and $28,992, respectively. |
Advance From Officer
Advance From Officer | 3 Months Ended |
Apr. 02, 2017 | |
Advance From Officer | |
Advance From Officer | NOTE 5 – ADVANCE FROM OFFICER During the period ended April 2, 2017, an officer made an unsecured non-interest bearing advance of $25,000 to the Company with no formal terms of repayment. The $25,000 advance remains outstanding as of April 2, 2017. |
Note Payable Lessor
Note Payable Lessor | 3 Months Ended |
Apr. 02, 2017 | |
Note Payable Lessor | |
Note Payable Lessor | NOTE 6 – 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 accrued 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. 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. On August 12, 2016 the Company entered into a third amendment on its lease at The Glendale Galleria. The amendment covered several areas, including adjustment to percentage rent payable, reduced the minimum rent payable, along with the payment and principal of Promissory Note. The Promissory Note was adjusted to a balance due of $763,261 from $683,316, with no interest, payable in equal monthly instalments of $5,300 through maturity of Note on May 31, 2028. The Company imputed interest using a discount rate of 10% to determine a fair value of the note of $443,521, resulting in a valuation discount of $319,740. As of April 2, 2017 and December 31, 2016, the balance of note payable was $726,869, and unamortized note discount was $294,153, with a net balance due of $432,717. The exchange of the notes in fiscal 2016 was treated as a debt extinguishment as the change in terms constituted more than a 10% change in the fair value of the original note, and the difference between the fair value of the new note and the old note (including eliminating all remaining unamortized discount) of $220,668 was treated as a gain on debt extinguishment. The Company determined that since the GGP Promissory Note and the related revision of the lease were agreed to at the same time, that the change in the lease payment terms and the reduced rent, and the issuance of the new note are directly related. As such the gain on the termination of the note of $220,668 was deferred, and is being amortized over the remaining life of the lease as an adjustment to rent expense. The lender under the Note is GGP Limited Partnership (GGP). GGP is an affiliate of Glendale II Mall Associates, the lessor of the Company’s 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 April 2, 2016, the Company was delinquent in its payments to GGP under the note, but has subsequently brought the note current. |
Convertible Note Payable
Convertible Note Payable | 3 Months Ended |
Apr. 02, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Note Payable | NOTE 7 – CONVERTIBLE NOTE PAYABLE A summary of convertible debentures payable as of April 2, 2017 and January 1, 2017 is as follows: April 2, 2017 January 1, 2017 Iconic Holdings, LLC $ - $ 84,191 J&N Invest LLC 50,000 50,000 Accrued interest - 17,192 Total Convertible Notes 50,000 151,383 Net Convertible Notes $ 50,000 $ 151,383 Iconic Holdings, LLC On July 11, 2016, the company modified the conversion feature of the Iconic note eliminating the conversion floor. The company determined that since the conversion floor had been eliminated, that the company could no longer determine if it had enough authorized shares to fulfil the conversion obligation. As such, the Company determined that the conversion feature created a derivative (see Note 10). During the period ended April 2, 2017, the Company converted the remaining balance of the principal into 38,457,435 shares of common stock at average conversion price $0.00259 per share. Upon extinguishment of note, the derivative was eliminated (see Note 10). J&N Invest LLC - On August 24, 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 accrues interest at a rate of 5% per annum and matured on August 31, 2016. The Lender may also convert all or a portion of the Note Payable at any time into shares of common stock at a price of $0.10 per share. As of the date of this report, the note matured and past due. As the market price of the stock on the date of issuance was $0.23, the Company recognized a debt discount at the date of issuance in the amount of $50,000 related to the fair value of the beneficial conversion feature. The discount was fully amortized as of January 1, 2017. |
Promissory Note
Promissory Note | 3 Months Ended |
Apr. 02, 2017 | |
Debt Disclosure [Abstract] | |
Promissory Note | NOTE 8 – PROMISSORY NOTE On December 18, 2015, the Company issued a six-month 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 went into default when the Company failed to make payment on the due date. Consequently, on July 8, 2016, the Company entered into an Exchange Agreement with St. George Investments, LLC, to replace the original Promissory Note with a new Convertible Promissory Note (“Note”) carrying the following terms and conditions: 1. The new Note will add 10% ($26,500) to the original principal as an Exchange Fee, making the new principal amount $291,500, and the Note shall carry an interest rate of 8% per annum. The amount of the exchange fee was recognized as a finance cost. 2. The Note carries a Conversion clause that allows the Holder to have a cashless conversion into shares of Common Stock for all or part of the principal, at a price equal to the average market price for 20 days prior to the conversion. 3. In conjunction with the conversion provision, the Company agreed to an Irrevocable Letter of Instructions to Transfer Agent, along with a Secretary’s Certificate and Board Resolution, which allows a Share Reserve equal to three times the number of shares of Common Stock divided by outstanding debt by the defined conversion price, but not less than 18,000,000 shares. 4. In addition, the Company executed a Share Issuance Resolution Authorizing the Issuance of New Shares of Common Stock. This document, in effect, allows the Holder to provide, at their discretion, a Conversion Notice directly to the Transfer Agent to receive unrestricted shares under the terms of this Exchange Agreement. 5. Further to this Exchange Agreement, the Company executed an Authorization to Initiate ACH Debit Entries that allowed the Holder to receive a daily payment of $312.50 ($7,500 per month). The Company can cancel such authorization with five days’ written notice. The company determined that since the conversion floor had no limit to the conversion price, that the company could no longer determine if it had enough authorized shares to fulfil the conversion obligation. As such, the Company determined that the conversion feature created a derivative at the date of the modification During the period ended April 2, 2017, the Company paid $7,517 of the principal balance. In addition, the Holder converted $48,914 of debt into 15,660,611 shares of Common Stock based on instructions the Holder sent to the transfer agent. However, the parties disagree as to the conversion price set in the note agreement due to execution by the parties of different versions of the document, and the Company believes that the balance converted was in excess of at least $100,000 more than that claimed by the holder. The amount reflected herein due the Holder as April 2, 2017 was $32,928, but the company believes that amount is in dispute and not due. Accordingly, the company has filed a lawsuit to protect its rights, which is described in this report. On March 23, 2017, St. George served an arbitration demand and summons claiming that the Company had breached its obligations under the convertible note by preventing St. George from converting the remaining balance of the note to common stock. The parties disagree as to the conversion price set in the note agreement due to execution by the parties of different versions of the document. On May 3, 2017, the Company counter-sued for full damages for breaching the contract, claiming mistakes, rescission, breach of the covenant of good faith and fair dealing and unjust enrichment. |
Business Loan and Security Agre
Business Loan and Security Agreement | 3 Months Ended |
Apr. 02, 2017 | |
Business Loan And Security Agreement | |
Business Loan and Security Agreement | NOTE 9 – 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 Company’s store operations. The agreement provides that the Company will receive an advance of up to $180,000 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 0.5% of the outstanding balance as of each disbursement date. At April 2, 2017 and January 1, 2017, $4,741 and $136,629 was outstanding and is included in accrued expenses. |
Derivative Liability
Derivative Liability | 3 Months Ended |
Apr. 02, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liability | NOTE 10 - DERIVATIVE LIABILITY Under authoritative guidance used by the FASB on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The Company has issued certain convertible notes whose conversion price is based on a future market price. However, since the number of shares to be issued is not explicitly limited, the Company is unable to conclude that enough authorized and unissued shares are available to share settle the conversion option. The result is that the conversion option is classified as a liability and bifurcated from the debt host and accounted for as a derivative liability in accordance with ASC 815 and will be re-measured at the end of every reporting period with the change in value reported in the statement of operations. The derivative liabilities were valued using a probability weighted average Black-Scholes-Merton pricing model with the following assumptions: January 1, 2017 April 2, 2017 Exercise Price $ 0.07-0.01 $ 0.07-0.01 Risk-free interest rate 0.57 % 0.57 Expected volatility 216 % 216 % Expected life (in years) 1 1 % Expected dividend yield 0 0 Fair Value: $ 357,411 $ 222,436 The risk-free interest rate was based on rates established by the Federal Reserve Bank. The Company uses the historical volatility of its common stock to estimate the future volatility for its common stock. The expected life of the conversion feature of the notes was based on the remaining term of the notes, or an estimate of until such notes would be converted. The expected dividend yield was based on the fact that the Company has not customarily paid dividends in the past and does not expect to pay dividends in the future. During the period ended April 2, 2017, the Company converted $172,847 of convertible notes payable resulting in a gain on the extinguishment of derivative liabilities of $185,604. In addition, the Company recognized a cost of $50,629 during the period ended April 2, 2017 relating to the change in the fair value of the derivative liabilities. |
Common Stock
Common Stock | 3 Months Ended |
Apr. 02, 2017 | |
Equity [Abstract] | |
Common Stock | NOTE 11 – COMMON STOCK Issuance of Common Stock During the thirteen weeks ended April 2, 2017, the Company granted and issued to officers and employees 10,170,000 shares of restricted common stock with a fair value of $28,470, and a non-employee 500,000 shares with a fair value of $1,400 based on the fair value of the shares on the date of grant. During the thirteen weeks ended April 2, 2017, the Company issued 1,500,000 shares of common stock in settlement of an accounts payment of $72,000. The fair value of the shares issued was $180,000 based on the fair value of the shares on the date of grant resulting in an additional cost to the Company of $108,000. During the thirteen weeks ended April 2, 2017, the Company received $25,000 from the sales of 277,777 shares of stock. Such shares have not yet been issued. During the thirteen weeks ended April 2, 2017, the Company issued total of 54,118,046 shares of its common stock for conversion of convertible notes in the amount of $272,847. Employee Stock Options The following table summarizes the changes in the options outstanding at April 2, 2017, and the related prices for the shares of the Company’s common stock issued to employees of the Company under a non-qualified employee stock option plan. Weighted Average Stock Exercise Options Price Outstanding, January 1, 2017 115,000 $ 4.50 Granted - - Exercised - - Outstanding, April 2, 2017 115,000 $ 4.50 Exercisable, April 2, 2017 115,000 $ 4.50 As of April 2, 2017, the stock options had no intrinsic value. There were no options granted during the fiscal quarter ended April 2, 2017, and there was no stock-based compensation expense in connection with options granted to employees recognized in the consolidated statement of operations for the thirteen weeks ended April 2, 2017. Warrants The following table summarizes the changes in the warrants outstanding at April 2, 2017, and the related prices. A summary of the Company’s warrants as of April 2, 2017 is presented below: Weighted Average Exercise Warrants Price Outstanding, January 1, 2017 606,500 $ 0.13 Granted 5,150,000 0.15 Exercised - - Outstanding, April 2, 2017 5,756,500 $ 0.15 Exercisable, April 2, 2017 5,756,500 $ 0.15 Weighted Weighted Average Weighted Range of Average Remaining Average Exercise Number Exercise Contractual Number Exercise Prices Outstanding Price Life Exercisable Price $0.01 ~ $0.15 5,756,500 $ 0.15 4.20 5,756,000 $ 0.15 5,756,500 4.20 5,756,000 On May 17, 2016, GIGL entered into a Strategic Alliance Agreement with Kiddo, Inc., a Florida corporation (“consultant”) whereby consultant will provide marketing and branding services as well as introductions to potential strategic partners and investors. As consideration for consultant’s services pursuant to the Strategic Alliance Agreement, GIGL agreed to issue to consultant a warrant to purchase up to 4,400,000 shares of GIGL’s common stock at an exercise price of $0.075 per share, which warrant vests in increments based upon the achievement of certain milestones. As of September 25, 2016, 440,000 of these warrants with a fair value of $31,000 were deemed have been achieved and are included in the table of outstanding warrants above. At April 2, 2017, the achievement of the corresponding milestones for the remaining warrants to acquire 3,960,000 has been determined to be remote or undeterminable due to the early stages of the agreement, as such, the warrants have not been included as outstanding in the table above. During the period ended April 2, 2017, the Company entered into agreements to issue warrants to acquire 5,150,000 shares of common stock for celebrities services to promote the Company’s business. The warrants were fully vested upon issuance, expire 5 years from the date of issuance, and 5,000,000 of the warrants are exercisable at $.10 per share and 150,000 of the warrants are exercisable at $.20 per share. The total fair value of these options at grant date was $531,000 using the Black-Scholes Option Pricing model with the following assumptions: life of 5 years; risk free interest rate of 1.73%; volatility of 350% and dividend yield of 0%. |
Leases
Leases | 3 Months Ended |
Apr. 02, 2017 | |
Leases [Abstract] | |
Leases | NOTE 12- LEASES The Company currently leases its restaurant locations. The Company evaluates teach lease to determine its appropriate classification as an operating or capital lease for financial reporting purposes. Minimum base rent for the Company’s 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 Company’s leases, where no rent payments are typically due under the terms of the lease. Deferred rent liabilities are recorded to the extent it exceeds minimum base rent per the lease agreement. Rent expense for the Company’s restaurant operating leases was $100,773 and $148,500 for the thirteen weeks ended April 2, 2017 and March 27, 2016, respectively. 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 $506,271 and $475,000 were initially reimbursed 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. On August 12, 2016, the Company entered into a third amendment on its lease at The Glendale Galleria. The amendment covered several areas, including adjustment to percentage rent payable, reduced the minimum rent payable and payment and principal of the Promissory Note payable to GGP which resulted in an aggregate gain of $455,287 which has been deferred, and will amortized on the straight-line basis over the remaining life of the lease as an adjustment to rent expense. During the year ended January 1, 2017, $26,172 of the deferred gain was amortized and offset to rent expense, resulting in a remaining deferred gain balance of $429,115 as of January 1, 2017. During the period ended April 2, 2017, $15,699 of the deferred gain was amortized and offset to rent expense, resulting in a remaining deferred gain balance of $413,416 as of April 2, 2017. The balance of the incentive from lessor as of April 2, 2017 and January 1, 2017, were $719,565 and $740,428, and included deferred rent of $121,988 and $117,056, respectively. As of April 2, 2017, $91,071 of the incentive from lessor was current and $628,494 was long term. Amortization of the incentive from lessor was $20,863 and $28,175 for the thirteen weeks ended April 2, 2017 and March 27, 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Apr. 02, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 13 – COMMITMENTS AND CONTINGENCIES Litigation On March 23, 2017, St. George Investments, LLC ("St. George") served an arbitration demand and summons claiming that the Company had breached its obligations under a convertible note by preventing St. George from converting the remaining balance of the note to common stock. The parties disagree as to the conversion price set in the note agreement due to execution by the parties of different versions of the document. St. George has claimed for additional damages. We believe these claims lack merit and the Company has retained counsel to vigorously defend this action. Effective May 3, 2017, the Company has counter-sued for full damages for breaching the contract, claiming mistakes, rescission, breach of the covenant of good faith and fair dealing and unjust enrichment. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 02, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 14 – SUBSEQUENT EVENTS On May 2, 2017, the Company issued to a consultant 300,000 unrestricted shares of common stock at fair value of $24,000 for services. On May 15, 2017, the Company issued 100,000 restricted shares of common stock at a fair value of $8,000 for services. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Apr. 02, 2017 | |
Accounting Policies [Abstract] | |
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 thirteen weeks ended April 2, 2017, the Company incurred a net loss of $756,186, used cash in operations of $174,180, and had a stockholders’ deficit of $1,910,494 as of that date. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent upon the Company’s ability to raise additional funds and implement its business plan. In addition, the Company’s independent registered public accounting firm in its report on the January 1, 2017 financial statements has raised substantial doubt about the Company’s ability to continue as a going concern. 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 had cash on hand in the amount of $8,843 as of April 2, 2017. Management estimates that the current funds on hand will be sufficient to continue operations through May 2017. 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 stockholders, in case or equity financing. |
Principles of Consolidation | Principles of consolidation 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 (which was closed June 30, 2016 due to a complete remodel of the Mall), 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 including assumptions made in impairment analysis of fixed assets, accruals of potential liabilities, valuation of equity securities issued for services and realization of deferred tax assets. Actual results could differ from those estimates. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the condensed consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The Company uses Level 2 inputs for its valuation methodology for the warrant derivative liabilities as their fair values were determined by using a probability weighted average Black-Scholes-Merton pricing model based on various assumptions. The Company’s derivative liabilities are adjusted to reflect fair value at each period end, with any increase or decrease in the fair value being recorded in results of operations as adjustments to fair value of derivatives. |
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 period ended April 2, 2017 and March 27, 2016, the assumed conversion of convertible note payable and the exercise of stock warrants are anti-dilutive due to the Company’s net losses and are excluded in determining diluted loss per share. |
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 Company’s financial statements and disclosures. 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 Company’s 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 Company’s present or future consolidated financial statements. |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Apr. 02, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following at: April 2, 2017 January 1, 2017 Leasehold improvements $ 1,889,027 $ 1,889,027 Fixtures and equipment 60,310 60,310 Computer software and equipment 264,890 264,890 Property and equipment, total 2,214,227 2,214,227 Less: accumulated depreciation (1,284,168 ) (1,220,099 ) Property and equipment, net $ 930,059 $ 994,128 |
Convertible Note Payable (Table
Convertible Note Payable (Tables) | 3 Months Ended |
Apr. 02, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Convertible Debentures Payable | A summary of convertible debentures payable as of April 2, 2017 and January 1, 2017 is as follows: April 2, 2017 January 1, 2017 Iconic Holdings, LLC $ - $ 84,191 J&N Invest LLC 50,000 50,000 Accrued interest - 17,192 Total Convertible Notes 50,000 151,383 Net Convertible Notes $ 50,000 $ 151,383 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 3 Months Ended |
Apr. 02, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Assumptions Used | The derivative liabilities were valued using a probability weighted average Black-Scholes-Merton pricing model with the following assumptions: January 1, 2017 April 2, 2017 Exercise Price $ 0.07-0.01 $ 0.07-0.01 Risk-free interest rate 0.57 % 0.57 Expected volatility 216 % 216 % Expected life (in years) 1 1 % Expected dividend yield 0 0 Fair Value: $ 357,411 $ 222,436 |
Common Stock (Tables)
Common Stock (Tables) | 3 Months Ended |
Apr. 02, 2017 | |
Equity [Abstract] | |
Summary of Stock Awards for Options | The following table summarizes the changes in the options outstanding at April 2, 2017, and the related prices for the shares of the Company’s common stock issued to employees of the Company under a non-qualified employee stock option plan. Weighted Average Stock Exercise Options Price Outstanding, January 1, 2017 115,000 $ 4.50 Granted - - Exercised - - Outstanding, April 2, 2017 115,000 $ 4.50 Exercisable, April 2, 2017 115,000 $ 4.50 |
Schedule of Stock Warrants Activity | A summary of the Company’s warrants as of April 2, 2017 is presented below: Weighted Average Exercise Warrants Price Outstanding, January 1, 2017 606,500 $ 0.13 Granted 5,150,000 0.15 Exercised - - Outstanding, April 2, 2017 5,756,500 $ 0.15 Exercisable, April 2, 2017 5,756,500 $ 0.15 |
Schedule of Changes in Warrants Outstanding | Weighted Weighted Average Weighted Range of Average Remaining Average Exercise Number Exercise Contractual Number Exercise Prices Outstanding Price Life Exercisable Price $0.01 ~ $0.15 5,756,500 $ 0.15 4.20 5,756,000 $ 0.15 5,756,500 4.20 5,756,000 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |||
Apr. 02, 2017 | Mar. 27, 2016 | Jan. 01, 2017 | Dec. 27, 2015 | |
Accounting Policies [Abstract] | ||||
Net loss | $ 756,186 | $ 394,672 | ||
Net cash used in operating activities | 174,180 | 256,961 | ||
Stockholders' deficit | 1,810,494 | $ 2,093,025 | ||
Cash and equivalents | $ 8,843 | $ 77,230 | $ 144,520 | $ 334,191 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Apr. 02, 2017 | Mar. 27, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization | $ 64,069 | $ 89,141 |
Repair and maintenance expenses | $ 15,542 | $ 28,992 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Apr. 02, 2017 | Jan. 01, 2017 |
Property, Plant and Equipment [Abstract] | ||
Leasehold improvements | $ 1,889,027 | $ 1,889,027 |
Fixtures and equipment | 60,310 | 60,310 |
Computer software and equipment | 264,890 | 264,890 |
Property and equipment, total | 2,214,227 | 2,214,227 |
Less: accumulated depreciation | (1,284,168) | (1,220,099) |
Property and equipment, net | $ 930,059 | $ 994,128 |
Advance From Officer (Details N
Advance From Officer (Details Narrative) | Apr. 02, 2017USD ($) |
Advance From Officer | |
Unsecured non-interest bearing advance | $ 25,000 |
Advances from officer | $ 25,000 |
Note Payable Lessor (Details Na
Note Payable Lessor (Details Narrative) - USD ($) | Aug. 12, 2016 | Feb. 12, 2013 | Apr. 02, 2017 | Mar. 27, 2016 | Jan. 01, 2017 | Mar. 01, 2015 |
Promissory notes payable face value | $ 683,316 | $ 700,000 | $ 100,000 | |||
Notes payable accrued interest rate | ||||||
Debt maturity date | May 31, 2028 | Oct. 31, 2023 | ||||
Promissory note principal balance | $ 443,521 | 726,869 | $ 726,869 | $ 683,316 | ||
Repayment of debt, periodic payment | $ 5,300 | |||||
Fair value of discount rate | 10.00% | |||||
Unamortization of debt discount | $ 319,740 | 294,153 | 294,153 | |||
Net balance due | 432,717 | $ 432,717 | ||||
Maximum percentage of defined interest rate | 10.00% | |||||
Gain on debt extinguishment | $ 220,668 | 185,604 | ||||
Gain on termination of of note | $ 220,668 | |||||
Minimum default interest rate | 5.00% | |||||
Adjusted Balance [Member] | ||||||
Promissory notes payable face value | $ 763,261 | |||||
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 ($) | Aug. 12, 2016 | Dec. 21, 2015 | Aug. 24, 2015 | Feb. 12, 2013 | Apr. 02, 2017 | Jan. 01, 2017 |
Convertible note payable interest rate | ||||||
Convertible note payable face amount | $ 683,316 | $ 700,000 | $ 100,000 | |||
Discount on convertible note payable | $ 319,740 | $ 294,153 | $ 294,153 | |||
Debt maturity date | May 31, 2028 | Oct. 31, 2023 | ||||
Debt conversion shares issued | 15,660,611 | |||||
Iconic Holdings LLC [Member] | ||||||
Debt conversion shares issued | 38,457,435 | |||||
Trading price per share | $ 0.00259 | |||||
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 | 11,250 | |||||
Debt fee and costs | 11,250 | |||||
Net proceeds form debt issuance | $ 138,500 | |||||
Convertible note payable guaranteed interest rate | 10.00% | |||||
Debt maturity date | Dec. 21, 2016 | |||||
Convertible note payable redemption price percentage | 65.00% | |||||
Convertible note payable conversion price per share | $ 0.08 | |||||
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 | $ 50,000 | |||||
Debt maturity date | Aug. 31, 2016 | |||||
Convertible note payable conversion price per share | $ 0.10 | |||||
Trading price per share | $ 0.23 |
Convertible Note Payable - Summ
Convertible Note Payable - Summary of Convertible Debentures Payable (Details) - USD ($) | Apr. 02, 2017 | Jan. 01, 2017 |
Total Convertible Notes | $ 50,000 | $ 151,383 |
Accrued interest | 17,192 | |
Net Convertible Notes | 50,000 | 151,383 |
Iconic Holdings LLC [Member] | ||
Total Convertible Notes | 84,191 | |
J&N Invest LLC [Member] | ||
Total Convertible Notes | $ 50,000 | $ 50,000 |
Promissory Note (Details Narrat
Promissory Note (Details Narrative) - USD ($) | 3 Months Ended | |||
Apr. 02, 2017 | Aug. 12, 2016 | Dec. 18, 2015 | Feb. 12, 2013 | |
Unsecured promissory note principal | $ 25,000 | |||
Convertible note payable face amount | $ 100,000 | $ 683,316 | $ 700,000 | |
Convertible note payable interest rate | ||||
Debt conversion shares issued | 15,660,611 | |||
Debt instrument periodic payment, per month | $ 32,928 | |||
Debt conversion, converted amount | 48,914 | |||
St. George Investments, LLC [Member] | ||||
Unsecured promissory note principal | $ 265,000 | |||
Debt original principal | $ 26,500 | |||
Debt original principal, rate | 10.00% | |||
Convertible note payable face amount | $ 291,500 | |||
Convertible note payable interest rate | 8.00% | |||
Debt instrument daily payment | $ 313 | |||
Debt instrument periodic payment, per month | $ 7,500 | |||
St. George Investments, LLC [Member] | Minimum [Member] | ||||
Debt conversion shares issued | 18,000,000 |
Business Loan and Security Ag34
Business Loan and Security Agreement (Details Narrative) - USD ($) | 1 Months Ended | ||
Aug. 31, 2015 | Apr. 02, 2017 | Jan. 01, 2017 | |
Accrued expenses | $ 4,741 | $ 136,629 | |
American Express Bank [Member] | |||
Line of credit facility maximum borrowing capacity | $ 174,000 | ||
Loan maturities date | August 2,016 | ||
Proceeds from advances | $ 180,000 | ||
Percentage of loan fee | 0.50% |
Derivative Liability (Details N
Derivative Liability (Details Narrative) - USD ($) | Aug. 12, 2016 | Apr. 02, 2017 | Mar. 27, 2016 |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||
Shares issued to settle convertible notes payable | $ 272,847 | ||
Gain on extinguishment of derivative liability | $ 220,668 | 185,604 | |
Change in fair value of derivative liability | $ 50,629 |
Derivative Liability - Schedule
Derivative Liability - Schedule of Assumptions Used (Details) - USD ($) | Sep. 25, 2016 | Apr. 02, 2017 | Jan. 01, 2017 |
Fair Value | $ 31,000 | ||
Upon Issuance [Member] | |||
Risk-free interest rate | 0.57% | 0.57% | |
Expected volatility | 216.00% | 216.00% | |
Expected life (in years) | 1 year | 1 year | |
Expected dividend yield | $ 0 | $ 0 | |
Fair Value | $ 222,436 | $ 357,411 | |
Upon Issuance [Member] | Minimum [Member] | |||
Exercise Price | $ 0.07 | $ 0.07 | |
Upon Issuance [Member] | Maximum [Member] | |||
Exercise Price | $ 0.01 | $ 0.01 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Sep. 25, 2016 | Apr. 02, 2017 | May 17, 2016 |
Number of shares issued for settlement accounts payable, shares | 1,500,000 | ||
Number of shares issued for settlement accounts payable | $ 72,000 | ||
Fair value of shares issued | 180,000 | ||
Fair value of additional cost | 108,000 | ||
Sale of stock amount received | $ 25,000 | ||
Number of sale of stock shares received | 277,777 | ||
Number of common stock for conversion of convertible notes, shares | 54,118,046 | ||
Number of common stock for conversion of convertible notes | $ 272,847 | ||
Warrant to purchase common stock | 440,000 | 5,150,000 | |
Fair value of warrants | $ 31,000 | ||
Remaining warrants to acquire | 3,960,000 | ||
Warrant term | 5 years | ||
Warrant exercisable | 5,000,000 | ||
Warrant exercisable, per share | $ .10 | ||
Fair value of options grant | $ 531,000 | ||
Warrants [Member] | |||
Warrant exercisable | 150,000 | ||
Warrant exercisable, per share | $ .20 | ||
Fair value of life | 5 years | ||
Risk free interest | 1.73% | ||
Volatility | 350.00% | ||
Dividend yield | 0.00% | ||
Strategic Alliance Agreement [Member] | |||
Warrant to purchase common stock | 4,400,000 | ||
Warrant exercise price | $ 0.075 | ||
Officers And Employees [Member] | |||
Shares issued during period restricted shares | 10,170,000 | ||
Shares issued during period restricted shares, value | $ 28,470 | ||
Non Employees [Member] | |||
Shares issued during period restricted shares | 500,000 | ||
Shares issued during period restricted shares, value | $ 1,400 |
Common Stock - Summary of Stock
Common Stock - Summary of Stock Awards for Options (Details) | 3 Months Ended |
Apr. 02, 2017$ / sharesshares | |
Equity [Abstract] | |
Stock Options, Outstanding, Beginning balance | shares | 115,000 |
Stock Options, Granted | shares | |
Stock Options, Exercised | shares | |
Stock Options, Outstanding, Ending balance | shares | 115,000 |
Stock Options, Exercisable | shares | 115,000 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ / shares | $ 4.50 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Outstanding, Ending balance | $ / shares | 4.50 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 4.50 |
Common Stock - Schedule of Stoc
Common Stock - Schedule of Stock Warrants Activity (Details) - Warrant [Member] | 3 Months Ended |
Apr. 02, 2017$ / sharesshares | |
Warrants, Outstanding, Beginning balance | shares | 606,500 |
Warrants, Granted | shares | 5,150,000 |
Warrants, Exercised | shares | |
Warrants, Outstanding, Ending balance | shares | 5,756,500 |
Warrants, Exercisable | shares | 5,756,500 |
Weighted Average Exercise Price, Outstanding, Beginning | $ / shares | $ 0.13 |
Weighted Average Exercise Price, Granted | $ / shares | 0.15 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Outstanding, Ending | $ / shares | 0.15 |
Warrants Exercisable, price | $ / shares | $ 0.15 |
Common Stock - Schedule of Chan
Common Stock - Schedule of Changes in Warrants Outstanding (Details) | 3 Months Ended |
Apr. 02, 2017$ / sharesshares | |
Number of Options, Outstanding | shares | 5,756,000 |
Weighted Average Remaining Contractual Life | 4 years 9 months |
Number of Options, Exercisable | shares | 5,756,000 |
Range 1 [Member] | |
Range of Exercise Prices, Lower Range Limit | $ / shares | $ 0.01 |
Range of Exercise Prices, Upper Range Limit | $ / shares | $ 0.15 |
Number of Options, Outstanding | shares | 5,756,500 |
Weighted Average Exercise Price | $ / shares | $ 0.15 |
Weighted Average Remaining Contractual Life | 4 years 9 months |
Number of Options, Exercisable | shares | 576,500 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 0.15 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | |||
Apr. 02, 2017 | Mar. 27, 2016 | Jan. 01, 2017 | Aug. 15, 2016 | |
Operating lease rent expenses | $ 100,773 | $ 148,500 | ||
Incentive from lessor amount | 628,494 | $ 653,008 | ||
Deferred revenue | 413,416 | 429,115 | $ 455,287 | |
Deferred gain amortized and offset rent expense | 15,699 | 26,172 | ||
Incentive from lessor remaining balance amount | 719,565 | 740,428 | ||
Deferred rent | 121,988 | 117,056 | ||
Incentive from lessor amount current | 91,071 | |||
Amortization of incentives from lessors | 20,863 | $ 28,175 | ||
Topanga [Member] | ||||
Incentive from lessor amount | $ 506,271 | |||
Glendale II Mall Associates, LLC [Member] | ||||
Incentive from lessor amount | $ 475,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | May 15, 2017 | May 02, 2017 | Apr. 02, 2017 | Mar. 27, 2016 |
Number of common stock shares issued | $ (1,400) | $ (28,396) | ||
Subsequent Event [Member] | Consultants [Member] | ||||
Number of common stock shares issued | $ 300,000 | |||
Number of common stock value issued, value | 24,000 | |||
Subsequent Event [Member] | 3rd Party [Member] | ||||
Number of restricted shares | 100,000 | |||
Number of restricted shares, value | $ 8,000 |