Giggles N' Hugs (GIGL) 10-Q 14 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 01, 2018	Aug. 15, 2018
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	Jul. 1, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-30
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		167,624,080
Trading Symbol	GIGL
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jul. 01, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 164,525	$ 131,336
Inventory	22,416	24,710
Prepaid expenses, other	24,703	21,196
Total current assets	211,644	177,242
Fixed assets:
Total fixed assets, net	620,039	740,189
Other assets	2,620	2,620
Total assets	834,303	920,051
Current liabilities:
Accounts payable	578,360	677,692
Incentive from lessor - current portion	109,774	102,168
Note payable from lessor, in default	422,361	422,361
Accrued expenses	140,112	250,876
Accrued officers salary	425,900	375,900
Deferred revenue	20,854	6,530
Convertible note payable	50,000	50,000
Total current liabilities	1,747,361	1,885,527
Long-term liabilities:
Incentive from lessor - long-term	493,356	550,839
Deferred gain	366,870	401,262
Total long-term liabilities	860,226	952,101
Total liabilities	2,607,587	2,837,628
Stockholders' deficit:
Common stock, $0.001 par value, 1,125,000,000 shares authorized, 167,184,080 and 145,602,251 shares issued and outstanding as of July 1, 2018 and December 31, 2017, respectively	167,184	145,602
Common stock issuable (1,397,619 shares as of July 1, 2018 and December 31, 2017, respectively)	293,535	293,535
Additional paid-in capital	10,499,839	9,874,936
Accumulated deficit	(12,733,842)	(12,231,650)
Total stockholders' deficit	(1,773,284)	(1,917,577)
Total liabilities and stockholders' deficit	$ 834,303	$ 920,051

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jul. 01, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	1,125,000,000	1,125,000,000
Common stock, shares issued	167,184,080	145,602,251
Common stock, shares outstanding	167,184,080	145,602,251
Common stock issuable, shares	1,397,619	1,397,619

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Revenue
Net sales	$ 579,937	$ 575,824	$ 1,193,300	$ 1,237,527
Costs and operating expenses
Cost of operations	466,786	429,164	966,463	932,955
General and administrative expenses	303,515	249,822	581,742	1,185,556
Depreciation and amortization	58,516	64,068	120,150	128,137
Total operating expenses	828,817	743,054	1,668,355	2,246,648
Loss from Operations	(248,880)	(167,230)	(475,055)	(1,009,121)
Other expenses:
Finance and interest expense	(11,747)	(14,772)	(26,137)	(64,042)
Change in fair value of derivatives				(50,629)
Gain on extinguishment of derivatives				185,604
Loss on extinguishment of debt		(186,818)		(186,818)
Loss on settlement			(1,000)
Loss before provision for income taxes	(260,627)	(368,820)	(502,192)	(1,125,006)
(Provision) benefit from income taxes		(2,650)		(2,650)
Net loss	$ (260,627)	$ (371,470)	$ (502,192)	$ (1,127,656)
Net loss per share - basic and diluted			$ (0.01)	$ (0.01)
Weighted average number of common shares outstanding - basic and diluted	165,407,413	134,355,584	157,076,499	120,473,746

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - 6 months ended Jul. 01, 2018 - USD ($)	Common Stock [Member]	Additional Paid in Capital [Member]	Stoc Issuable [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2017	$ 145,602	$ 9,874,936	$ 293,535	$ (12,231,650)	$ (1,917,577)
Balance, shares at Dec. 31, 2017	145,602,251
Shares issued for cash	$ 19,792	573,963			$ 593,755
Shares issued for cash, shares	19,791,829				19,791,829
Shares issued for employees compensation	$ 200	4,400			$ 4,600
Shares issued for employees compensation, shares	200,000
Shares issued to settle accounts payable	$ 1,000	35,000			36,000
Shares issued to settle accounts payable, shares	1,000,000
Shares issued for professional services	$ 590	11,540			$ 12,130
Shares issued for professional services, shares	590,000				590,000
Net loss				(502,192)	$ (502,192)
Balance at Jul. 01, 2018	$ 167,184	$ 10,499,839	$ 293,535	$ (12,733,842)	$ (1,773,284)
Balance, shares at Jul. 01, 2018	167,184,080

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017
Cash flows from operating activities
Net loss	$ (502,192)	$ (1,127,656)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	120,150	128,137
Stock-based compensation	4,600	28,470
Loss on stock issuance for payable settlement	1,000	109,096
Warrants vested for services		531,000
Interest and fees included in note payable		21,449
Shares issued for services	12,130	10,290
Gain on extinguishment of derivative liability		(185,604)
Change in fair value of derivative liability		50,629
Promissory note settlement		186,818
Changes in operating assets and liabilities:
Increase in prepaid expenses and deposits	(3,507)	(2,711)
Decrease (increase) in inventory	2,294	(5,286)
(Decrease) increase in accounts payable	(64,332)	69,589
Decrease in lease incentive liability	(49,877)	(42,543)
(Decrease) increase in accrued expenses	(60,764)	180,623
Increase (decrease) in deferred revenue	14,324	(12,529)
(Decrease) increase amortization of deferred gain	(34,392)	6,539
Net cash used in operating activities	(560,566)	(53,689)
Cash flows from financing activities
Payments on promissory note payable		(11,543)
Proceeds from common stock issuable		75,000
Proceeds from sale of common shares	593,755
Net cash provided by financing activities	593,755	63,457
NET INCREASE IN CASH	33,189	9,768
CASH AT BEGINNING OF PERIOD	131,336	144,520
CASH AT END OF PERIOD	164,525	154,288
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Shares issued to settle convertible notes payable		272,847
Reclass of notes payable to accrued interest		3,125
Shares issued to settle payable	$ 36,000	$ 136,904

History and Organization

History and Organization	6 Months Ended
	Jul. 01, 2018
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. Giggles N Hugs restaurant concept brings together high-end, organic food with the play elements and entertainment for children. Giggles N Hugs offers an upscale, family-friendly atmosphere with a play area dedicated to children ages 10 and younger with nightly entertainment, such as magic shows, concerts, puppet shows, as well as activities and games which include face painting, dance parties, karaoke, and arts and crafts, The Company adopted a 52/53 week fiscal year ending on the Sunday closest to December 31 st

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jul. 01, 2018
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 December 31, 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 December 31, 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	6 Months Ended
	Jul. 01, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Going concern The accompanying condensed 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 condensed consolidated financial statements, during the twenty-six weeks ended July 1, 2018, the Company incurred a net loss of $502,192, used cash in operations of $560,566, and had a stockholders’ deficit of $1,773,284 as of that date. In addition, the note payable to the Company’s landlord was in default. 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 December 31, 2017 financial statements has raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the financial statements are issued. 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 $164,525 as of July 1, 2018. Management estimates that the current funds on hand will be sufficient to continue operations through December 2018. 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 can 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 The condensed 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 derivative liabilities and equity securities issued for services and realization of deferred tax assets. Actual results could differ from those estimates. Revenue In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (ASC 606). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Under ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The Company adopted the guidance of ASC 606 on January 1, 2018. The implementation of ASC 606 had no impact on the condensed consolidated financial statements and no cumulative effect adjustment was recognized. 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 July 1, 2018, the assumed conversion of convertible notes payable and the exercise of 19,967,917 stock warrants, and 115,000 options to acquire shares of common stock are anti-dilutive due to the Company’s net losses and are excluded in determining diluted loss per share. 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 Company’s 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 the 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. Recent Accounting Standards 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 Company’s 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 Company’s financial statements and disclosures, and believes the adoption of the pronouncement will result in the recording of lease assets and lease liabilities of approximately $1,500,000 to our balance sheet upon adoption. 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	6 Months Ended
	Jul. 01, 2018
Property, Plant and Equipment [Abstract]
Property and Equipment	NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consisted of the following at: July 1, 2018 December 31, 2017 Leasehold improvements $ 1,889,027 $ 1,889,027 Fixtures and equipment 60,310 60,310 Computer software and equipment 267,372 267,372 Property and equipment, total 2,216,709 2,216,709 Less: accumulated depreciation (1,596,670 ) (1,476,520 ) Property and equipment, net $ 620,039 $ 740,189 Depreciation and amortization expense for the thirteen weeks and twenty-six weeks ended July 1, 2018 were $58,516 and $120,150, respectively, and for the thirteen weeks and twenty-six weeks ended July 2, 2017 were $64,068 and $128,137, respectively. Repair and maintenance expense for the thirteen weeks and twenty-six weeks ended July 1, 2018 were $14,959 and $30,518, respectively, and for thirteen weeks and twenty-six weeks ended July 2, 2017 were $18,238 and $33,780, respectively, 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. For the periods ended July 1, 2018 and December 31, 2017, there were no indications of further impairment based on management’s assessment of these assets.

Note Payable From Lessor - In D

Note Payable From Lessor - In Default	6 Months Ended
	Jul. 01, 2018
Note Payable From Lessor - In Default
Note Payable From Lessor - In Default	NOTE 5 – NOTE PAYABLE FROM LESSOR – In Default 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. 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. As of December 31, 2017 and July 1, 2018 the balance of note payable net of unamortized note discount approximated $422,000 as no payments were made during the period. 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 July 1, 2018, the Company was delinquent in its payments to GGP under the note, and as such, the Note has been reflected as currently due and disclosed as in default.

Convertible Note Payable

Convertible Note Payable	6 Months Ended
	Jul. 01, 2018
Debt Disclosure [Abstract]
Convertible Note Payable	NOTE 6 – CONVERTIBLE NOTE PAYABLE 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. The balance of the Note was $50,000 as of July 1, 2018 and December 31, 2017 and was past due.

Business Loan and Security Agre

Business Loan and Security Agreement	6 Months Ended
	Jul. 01, 2018
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 originally matured in August 2016 but 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. The Company received the last loan from American Express Bank in May of 2018. At July 1, 2018, $6,601 was outstanding and recorded as part of Accrued Expenses in the accompanying balance sheet. The outstanding balance was paid off on July 6, 2018 and the loan was terminated.

Common Stock

Common Stock	6 Months Ended
	Jul. 01, 2018
Equity [Abstract]
Common Stock	NOTE 8 – COMMON STOCK Issuance of Common Stock On April 19, 2018, Giggles N’ Hugs Inc. closed a public rights offering. The Company sold 19,791,829 units at a price of $.03 per unit. Each unit consists of one share of common stock and 0.70 of a warrant. Each whole warrant will be exercisable for one share of common stock at a price of $.06. per share. In the aggregate 19,791,829 shares of common stock and 13,854,274 warrants were issued for gross proceeds, before expenses and dealer-manager fees, of $593,755. During the twenty-six weeks ended July 1, 2018, the Company granted and issued 200,000 shares of restricted common stock with a fair value of $4,600 for services. During the twenty-six weeks ended July 1, 2018, the Company issued 1,000,000 shares of common stock in settlement of an accounts payable amounting to $35,000. The fair value of the shares issued was $36,000 based on the fair value of the shares on the date of settlement resulting in an additional cost to the Company of $1,000. During the weeks ended July 1, 2018, the Company issued 590,000 shares of common stock at fair value of $12,130 for services. Employee Stock Options The following table summarizes the changes in the options outstanding at July l, 2018, 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. Options Exercise Price Outstanding, December 31, 2017 115,000 $ 4.50 Granted - - Exercised - - Outstanding, July 1, 2018 115,000 $ 4.50 Exercisable, July 1, 2018 115,000 $ 4.50 As of July 1, 2018, the stock options had no intrinsic value. There were no options granted during the fiscal quarter ended July 1, 2018, and there was no stock-based compensation expense in connection with options granted to employees. Warrants The following table summarizes the changes in the warrants outstanding at July 1, 2018, and the related prices. A summary of the Company’s warrants as of July 1, 2018 is presented below: Warrants Weighted Average Exercise Price Outstanding, December 31, 2017 6,113,643 $ 0.11 Granted 13,854,274 - Exercised - - Outstanding, July 1, 2018 19,967,917 $ 0.03 Exercisable, July 1, 2018 19,967,917 $ 0.03 Range of Exercise Prices Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life Number Exercisable Weighted Average Exercise Price $ 0.01 ~ $0.37 6,113,643 $ 0.07 2.56 6,113,643 $ 0.05 13,854,274 0.06 4.75 13,854,274 0.06 19,967,917 7.31 19,967,917

Leases

Leases	6 Months Ended
	Jul. 01, 2018
Leases [Abstract]
Leases	NOTE 9 – LEASES The Company currently leases its restaurant locations. The Company evaluates each 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 $88,057 and $100,773 for the thirteen weeks ended July 1, 2018 and July 2, 2017, respectively, and $175,306 and $202,363 for the twenty-six weeks ended July 1, 2018 and July 2, 2017. 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. The Promissory Note was adjusted to a balance due of $763,262 from $683,316, with zero percent interest, payable in equal monthly instalments of $5,300 through maturity of Note on May 31, 2028, creating a gain on extinguishment of the old note of $220,686. (see Note 5). The change in the payment terms of the lease caused a change in the previously calculated deferred rent of $69,614. For reporting purposes, 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. In addition, past due rent of $164,987 was forgiven. As such the gain on the termination of the note of $220,686, the adjustment to the deferred rent in the aggregate amount of $69,614, and the forgiveness of past due rent of $164,987, resulting in an aggregate gain of $455,287 had been deferred, and is being amortized on the straight-line basis over the remaining life of the lease as an adjustment to rent expense. The balance of the deferred gain was $401,260 as of December 31, 2017. During the period ended July 1, 2018, $34,392 of deferred gain was amortized and offset to rent expense, resulting in a remaining deferred gain balance of $366,870 as of July 1, 2018 which will be amortized as an offset to rent expense over the remainder of the lease. The balance of the incentive from lessor as of July 1, 2018 and December 31, 2017, were $603,130 and $653,007, and included deferred rent of $134,531 and $132,818, respectively. As of July 1, 2018, $109,774 of the incentive from lessor was current and $493,356 was long term. Amortization of the incentive from lessor was $25,362 and $21,679 for the thirteen weeks ended July 1, 2018 and July 2, 2017, respectively, and $49,877 and $42,543 for twenty-six weeks ended July 1, 2018 and July 2, 2017, respectively.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jul. 01, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	NOTE 10 – COMMITMENTS AND CONTINGENCIES Litigation As of July 1, 2018, there was no material outstanding litigation.

Subsequent Events

Subsequent Events	6 Months Ended
	Jul. 01, 2018
Subsequent Events [Abstract]
Subsequent Events	NOTE 11 – SUBSEQUENT EVENTS In August 6, 2018, the Company issued total of 440,000 shares of common stock at fair value of $4,708 to two consultants for service rendered.

Summary of Significant Accoun18

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 01, 2018
Accounting Policies [Abstract]
Going Concern	Going concern The accompanying condensed 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 condensed consolidated financial statements, during the twenty-six weeks ended July 1, 2018, the Company incurred a net loss of $502,192, used cash in operations of $560,566, and had a stockholders’ deficit of $1,773,284 as of that date. In addition, the note payable to the Company’s landlord was in default. 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 December 31, 2017 financial statements has raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the financial statements are issued. 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 $164,525 as of July 1, 2018. Management estimates that the current funds on hand will be sufficient to continue operations through December 2018. 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 can 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 The condensed 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 derivative liabilities and equity securities issued for services and realization of deferred tax assets. Actual results could differ from those estimates.
Revenue	Revenue In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), (ASC 606). The underlying principle of ASC 606 is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contract(s), which includes (1) identifying the contract(s) or agreement(s) with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. Under ASC 606, revenue is recognized when performance obligations under the terms of a contract are satisfied, which occurs for the Company upon shipment or delivery of products or services to our customers based on written sales terms, which is also when control is transferred. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring the products or services to a customer. The Company adopted the guidance of ASC 606 on January 1, 2018. The implementation of ASC 606 had no impact on the condensed consolidated financial statements and no cumulative effect adjustment was recognized.
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 July 1, 2018, the assumed conversion of convertible notes payable and the exercise of 19,967,917 stock warrants, and 115,000 options to acquire shares of common stock are anti-dilutive due to the Company’s net losses and are excluded in determining diluted loss per share.
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 Company’s 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 the 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.
Recent Accounting Standards	Recent Accounting Standards 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 Company’s 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 Company’s financial statements and disclosures, and believes the adoption of the pronouncement will result in the recording of lease assets and lease liabilities of approximately $1,500,000 to our balance sheet upon adoption. 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)	6 Months Ended
	Jul. 01, 2018
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment	Property and equipment consisted of the following at: July 1, 2018 December 31, 2017 Leasehold improvements $ 1,889,027 $ 1,889,027 Fixtures and equipment 60,310 60,310 Computer software and equipment 267,372 267,372 Property and equipment, total 2,216,709 2,216,709 Less: accumulated depreciation (1,596,670 ) (1,476,520 ) Property and equipment, net $ 620,039 $ 740,189

Common Stock (Tables)

Common Stock (Tables)	6 Months Ended
	Jul. 01, 2018
Equity [Abstract]
Summary of Stock Awards for Options	The following table summarizes the changes in the options outstanding at July l, 2018, 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. Options Exercise Price Outstanding, December 31, 2017 115,000 $ 4.50 Granted - - Exercised - - Outstanding, July 1, 2018 115,000 $ 4.50 Exercisable, July 1, 2018 115,000 $ 4.50
Schedule of Stock Warrants Activity	A summary of the Company’s warrants as of July 1, 2018 is presented below: Warrants Weighted Average Exercise Price Outstanding, December 31, 2017 6,113,643 $ 0.11 Granted 13,854,274 - Exercised - - Outstanding, July 1, 2018 19,967,917 $ 0.03 Exercisable, July 1, 2018 19,967,917 $ 0.03
Schedule of Changes in Warrants Outstanding	Range of Exercise Prices Number Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life Number Exercisable Weighted Average Exercise Price $ 0.01 ~ $0.37 6,113,643 $ 0.07 2.56 6,113,643 $ 0.05 13,854,274 0.06 4.75 13,854,274 0.06 19,967,917 7.31 19,967,917

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017	Dec. 31, 2017	Jan. 01, 2017
Net loss	$ 260,627	$ 371,470	$ 502,192	$ 1,127,656
Net cash used in operating activities			560,566	53,689
Stockholders' deficit	1,773,284		1,773,284		$ 1,917,577
Cash and equivalents	$ 164,525	$ 154,288	164,525	$ 154,288	$ 131,336	$ 144,520
ASU 2016-02 [Member]
Lease assets and lease liabilities			$ 1,500,000
Stock Warrants [Member]
Anti-dilutive securities			19,967,917
Options to Acquire Shares of Common Stock [Member]
Anti-dilutive securities			115,000

Property and Equipment (Details

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017
Property, Plant and Equipment [Abstract]
Depreciation and amortization	$ 58,516	$ 64,068	$ 120,150	$ 128,137
Repair and maintenance expenses	$ 14,959	$ 18,238	$ 30,518	$ 33,780

Property and Equipment - Schedu

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Jul. 01, 2018	Dec. 31, 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	267,372	267,372
Property and equipment, total	2,216,709	2,216,709
Less: accumulated depreciation	(1,596,670)	(1,476,520)
Property and equipment, net	$ 620,039	$ 740,189

Note Payable From Lessor - In24

Note Payable From Lessor - In Default (Details Narrative) - USD ($)	Aug. 12, 2016	Jul. 01, 2018	Dec. 31, 2017	Mar. 01, 2015	Feb. 12, 2013
Promissory notes payable face value	$ 683,316
Promissory note principal balance		$ 422,361	$ 422,361
Notes payable accrued interest rate	0.00%
Debt maturity date	May 31, 2028
Repayment of debt, periodic payment	$ 5,300
Imputed interest discount rate	10.00%
Fair value of note payable	$ 443,521
Maximum percentage of defined interest rate	5.00%
Adjusted Balance [Member]
Promissory notes payable face value	$ 763,262
Promissory Note Payable Agreement [Member] | GGP Limited Partnership [Member]
Promissory notes payable face value					$ 700,000
Promissory note principal balance				$ 683,316

Convertible Note Payable (Detai

Convertible Note Payable (Details Narrative) - USD ($)	Aug. 12, 2016	Aug. 24, 2015	Jul. 01, 2018	Dec. 31, 2017
Convertible note payable face amount	$ 683,316
Convertible note payable interest rate	0.00%
Debt maturity date	May 31, 2028
Convertible note payable			$ 50,000	$ 50,000
Unsecured Note Payable Agreement [Member]
Convertible note payable face amount		$ 50,000
Convertible note payable interest rate		5.00%
Convertible note payable conversion price per share		$ 0.10
Debt maturity date		Aug. 31, 2016

Business Loan and Security Ag26

Business Loan and Security Agreement (Details Narrative) - USD ($)	1 Months Ended
	Aug. 31, 2015	Jul. 01, 2018
Loan Payable		$ 6,601
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%

Common Stock (Details Narrative

Common Stock (Details Narrative) - USD ($)	6 Months Ended
	Jul. 01, 2018	Jul. 02, 2017
Equity [Abstract]
Number of common stock shares sold	19,791,829
Sale of common stock price per share	$ .03
Number of units consists of share of common stock	1
Warrants price per share	$ 0.70
Warrant exercisable price per share	$ 0.06
Warrants issued during the period	13,854,274
Proceeds from issuance of common stock	$ 593,755
Shares issued during period restricted shares	200,000
Shares issued during period restricted shares, value	$ 4,600
Number of shares issued for settlement accounts payable, shares	1,000,000
Number of shares issued for settlement accounts payable	$ 35,000
Fair value of shares issued	36,000
Fair value of additional cost	$ 1,000
Issuance of common stock for service, shares	590,000
Shares issued for services	$ 12,130
Stock based compensation of intrinsic value

Common Stock - Summary of Stock

Common Stock - Summary of Stock Awards for Options (Details)	6 Months Ended
	Jul. 01, 2018$ / 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)	6 Months Ended
	Jul. 01, 2018$ / sharesshares
Equity [Abstract]
Warrants, Outstanding, Beginning balance | shares	6,113,643
Warrants, Granted | shares	13,854,274
Warrants, Exercised | shares
Warrants, Outstanding, Ending balance | shares	19,967,917
Warrants, Exercisable | shares	19,967,917
Weighted Average Exercise Price, Outstanding, Beginning | $ / shares	$ 0.11
Weighted Average Exercise Price, Granted | $ / shares
Weighted Average Exercise Price, Exercised | $ / shares
Weighted Average Exercise Price, Outstanding, Ending | $ / shares	0.03
Weighted Average Exercise Price, Exercisable | $ / shares	$ 0.03

Common Stock - Schedule of Chan

Common Stock - Schedule of Changes in Warrants Outstanding (Details)	6 Months Ended
	Jul. 01, 2018$ / sharesshares
Number of Options, Outstanding | shares	19,967,917
Weighted Average Remaining Contractual Life	7 years 3 months 22 days
Number of Options, Exercisable | shares	19,967,917
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	6,113,643
Weighted Average Exercise Price | $ / shares	$ 0.07
Weighted Average Remaining Contractual Life	2 years 6 months 21 days
Number of Options, Exercisable | shares	6,113,643
Weighted Average Exercise Price, Exercisable | $ / shares	$ 0.05
Range 2 [Member]
Number of Options, Outstanding | shares	13,854,274
Weighted Average Exercise Price | $ / shares	$ 0.06
Weighted Average Remaining Contractual Life	4 years 9 months
Number of Options, Exercisable | shares	13,854,274
Weighted Average Exercise Price, Exercisable | $ / shares	$ 0.06

Leases (Details Narrative)

Leases (Details Narrative) - USD ($)	Aug. 12, 2016	Jul. 01, 2018	Jul. 02, 2017	Jul. 01, 2018	Jul. 02, 2017	Dec. 31, 2017
Operating lease rent expenses		$ 88,057	$ 100,773	$ 175,306	$ 202,363
Incentive from lessor amount		493,356		493,356		$ 550,839
Promissory notes payable face value	$ 683,316
Notes payable accrued interest rate	0.00%
Debt periodic payment	$ 5,300
Debt maturity date	May 31, 2028
Gain on debt extinguishment	$ 220,668		(186,818)		(186,818)
Deferred rent	69,614	134,531		134,531		132,818
Amount of due rent forgiven	164,987
Gain on termination of note	220,668
Deferred revenue		455,287		455,287		401,260
Deferred gain amortized and offset rent expense		34,392		34,392
Gain on deferred rent remaining balance				366,870
Incentive from lessor remaining balance amount		603,130		603,130		653,007
Incentive from lessor amount current		109,774		109,774
Incentive from lessor - long-term		493,356		493,356		550,839
Amortization of incentives from lessors		25,362	$ 21,679	49,877	$ 42,543
Adjusted Balance [Member]
Promissory notes payable face value	$ 763,262
Topanga [Member]
Incentive from lessor amount		506,271		506,271
Incentive from lessor - long-term		$ 506,271		$ 506,271
Glendale II Mall Associates, LLC [Member]
Incentive from lessor amount						475,000
Incentive from lessor - long-term						$ 475,000

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - USD ($)	Aug. 06, 2018	Jul. 01, 2018
Number of common stock shares services issued during the period		590,000
Number of common stock services issued during the period		$ 12,130
Subsequent Event [Member] | Two Consultants [Member]
Number of common stock shares services issued during the period	440,000
Number of common stock services issued during the period	$ 4,708