St George Facts.
Lets see if we can't use a little common sense and logic and analyze this St George thing. IMO - I can't see how they are owed more than maybe 5 million shares MAX. More than likely, they should be owed about a million. We don't know the conversion date, so it's hard to say for sure.
Fact 1 - Currently owed is $132,000
Fact 2 - On July 8th, the conversion clause was implemented with the note exchange. At this time, GIGL sent an "Irrevocable Letter of Instructions" to the transfer agent which allows a SHARE RESERVE equal to an amount calculated but not less than 18 million shares. They set aside a set number of shares which would be issued to St. George, with a minimum number of shares being set aside of 18 million.
Fact 3 - The conversion clause calculation is - "At a price equal to the average market price for 20 days prior to the conversion". There is no percentage discount applied. Average price over the last 20 days. If they wanted to convert today, it would be at .1746. That would be 756k shares.
Fact 4 - They converted $81,300 into 9.26 million and $48,914 into 15.7 million shares. All said and done, the minimum number of shares has already been issued and all that is owed to St. George is the remaining $132,000.
Fact 5 - The conversions which happened previously, happened at the stocks lows. Jan 6th, is when the stock broke over a penny and it has run since then. We don't know the exact date of conversion and the price which is being contested, but we know that if they attempted to convert at any time after Jan 26th, the conversion price would be substantially higher than what they received previously.
Fact 6 - We know that St George served an arbitration demand and summons on March 23rd. The question is what the conversion price should be. GIGL claims the parties disagree on the conversion price set in the note agreement due to execution by the parties of different versions of the document. GIGL claims mistake, rescission, breach of the covenant of good faith and fair dealing, and unjust enrichment.
Take that for what you will.. It sounds to me like St George tried to convert at a lower price than GIGL thought they should. Feb 16th is the date that the run to 18 cents started. My guess is they tried to convert at the end of Feb when they realized the price was going up. Even if they are given a conversion price of .05, we are looking at 2.6 million shares. This is a drop in the bucket based on the volume we have seen since Jan.
Lets see if we can't use a little common sense and logic and analyze this St George thing. IMO - I can't see how they are owed more than maybe 5 million shares MAX. More than likely, they should be owed about a million. We don't know the conversion date, so it's hard to say for sure.
Fact 1 - Currently owed is $132,000
Fact 2 - On July 8th, the conversion clause was implemented with the note exchange. At this time, GIGL sent an "Irrevocable Letter of Instructions" to the transfer agent which allows a SHARE RESERVE equal to an amount calculated but not less than 18 million shares. They set aside a set number of shares which would be issued to St. George, with a minimum number of shares being set aside of 18 million.
Fact 3 - The conversion clause calculation is - "At a price equal to the average market price for 20 days prior to the conversion". There is no percentage discount applied. Average price over the last 20 days. If they wanted to convert today, it would be at .1746. That would be 756k shares.
Fact 4 - They converted $81,300 into 9.26 million and $48,914 into 15.7 million shares. All said and done, the minimum number of shares has already been issued and all that is owed to St. George is the remaining $132,000.
Fact 5 - The conversions which happened previously, happened at the stocks lows. Jan 6th, is when the stock broke over a penny and it has run since then. We don't know the exact date of conversion and the price which is being contested, but we know that if they attempted to convert at any time after Jan 26th, the conversion price would be substantially higher than what they received previously.
Fact 6 - We know that St George served an arbitration demand and summons on March 23rd. The question is what the conversion price should be. GIGL claims the parties disagree on the conversion price set in the note agreement due to execution by the parties of different versions of the document. GIGL claims mistake, rescission, breach of the covenant of good faith and fair dealing, and unjust enrichment.
Take that for what you will.. It sounds to me like St George tried to convert at a lower price than GIGL thought they should. Feb 16th is the date that the run to 18 cents started. My guess is they tried to convert at the end of Feb when they realized the price was going up. Even if they are given a conversion price of .05, we are looking at 2.6 million shares. This is a drop in the bucket based on the volume we have seen since Jan.
Quote:St. George Investments, LLC - The Company executed into a Promissory Note Agreement with St. George Investments, LLC, (“Holder”) dated December 18, 2015, with a principal amount of $265,000 due in full on June 18, 2016. 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.
2. The Note shall carry an interest rate of 8% per annum
3. 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,
4. 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.
5. 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.
6. 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.
During the fiscal year ended January 1, 2017, the Holder converted $81,300 of debt into 9,261,973 shares of Common Stock. In addition, the Company paid $20,841 of the principal balance. The balance outstanding as of January 1, 2017 was $183,359 plus $3,981 of accrued interest, and is past its maturity date of September 15, 2016.
Subsequent to January 1, 2017, additional balance of $48,914 was converted to approximately 15.7 million shares of common stock pursuant to the terms of the note (See Note 10 and 12). The Balance as of this filling was $132,000 and is being disputed (See Legal Proceedings).
Quote:St. George Investments, LLC v Giggles N’ Hugs
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 have retained counsel to vigorously defend this action and present cross claims for mistake, rescission, breach of the covenant of good faith and fair dealing and unjust enrichment (See Note 6).
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