Giggles N Hugs Inc (OTCMKTS:GIGL) Continues To Gain Strength On The OTC
By Chris Sandburg / in Momentum & Growth, Momentum Stocks, Stocks / on Tuesday, 21 Feb 2017 01:20 AM / 0 Comment / 140 views
https://www.insiderfinancial.com/giggles-n-hu...tc/119679/
Mid January, we highlighted Giggles N Hugs Inc (OTCMKTS:GIGL) as being a company to watch. We noted that the company is one of those very rare OTC opportunities whereby the company that underpins the ticker is quantifiable, fully operational and growing at a fast rate. It’s one of those times when a company is OTC simply because it’s young, as opposed to another less savory factor.
Since our previous coverage, Giggles N Hugs has gained some strength from a PPS perspective, but just as importantly from our point of view, has brought home a couple of key developments that serve to underpin the market cap strength, and further reinforce a bullish bias on the stock.
Here’s what happened recently, and what we’re looking for next.
By way of a quick introduction, this one is a restaurant stock, currently based out of California. We say currently, because there are some plans in place for an East Coast expansion (and we’ll get to why shortly) that might warrant a rehoming of the HQ. Anyway, the company opens restaurant locations that serve as a sort of intersection between healthy (but fast) food and playtime/exercise. Think Chuck E. Cheese, but healthy and brought up to date.
A play/food crossover isn’t anything revolutionary, but the health food spin is something new (we were surprised at this too, but it seems to be the case) and the novelty of it is drawing a considerable amount of consumer interest. Much of this interest is from celebrities, which in California is a sure-fire marketing freebie, and this buzz is filtering through to the numbers. The company grew revenues from $1.3 million in 2012 to $3.5 million during 2015 – a 25.3% compound annual growth rate.
The most interesting thing for us right now, however, is the way Giggles N Hugs is able to expand at very low initial outlay. The locations have proven to bring heavy foot traffic into the real estate within which they operate (read: malls) and as such, the RE owners are basically paying the company to open fresh locations on their property.
Which brings us nicely to on of the most recent updates – a fresh location funding for the company’s first Northern California operation. It’s an LOI signed with a $78 billion alternative investment fund called QIC to open the next Giggles N’ Hugs location at The Shops at Tanforan (Tanforan) mall in San Bruno, California.
QIC is paying the company up to $1.4 million in tenant allowances, which covers the entire build-out cost of the new location. It’s very rare a company with a few locations like this one gets a multi million-dollar outlay cost covered in an unproven location, and for us, that’s a sign that there’s some smart money behind this one.
Adding to the attraction is the most recent announcement, detailing the full conversion of an outstanding debt by the company. The debt, which was related to a transaction between the company and an entity called Iconic Holdings, LLC, saw the latter convert $191,000 into shares of common stock. There’s been a bit of selling pressure on the company over the last few months based on this conversion, and the completion should serve to remove this pressure and clear the way for some operationally driven gains.
As CEO Parsi says:
“With most if not all of the shares converted and sold over the past six months, we anticipate that this will result in a decrease of continued selling pressure on the Company’s securities”
So, what’s next?
Well as mentioned earlier, Giggles N Hugs is looking to expand into the East Coast, and wants to do so by way of a combination of franchises and company owned locations. The best revenue days for the company come when the weather is cold and wet, and it goes without saying that (with this being the case) the east coast should be a strong market.
Management is looking to raise capital to fund this expansion, so there’s a chance we might see some dilution, but in the most recent communication, the CEO suggested he is heading to the banks for this capital first.
By Chris Sandburg / in Momentum & Growth, Momentum Stocks, Stocks / on Tuesday, 21 Feb 2017 01:20 AM / 0 Comment / 140 views
https://www.insiderfinancial.com/giggles-n-hu...tc/119679/
Mid January, we highlighted Giggles N Hugs Inc (OTCMKTS:GIGL) as being a company to watch. We noted that the company is one of those very rare OTC opportunities whereby the company that underpins the ticker is quantifiable, fully operational and growing at a fast rate. It’s one of those times when a company is OTC simply because it’s young, as opposed to another less savory factor.
Since our previous coverage, Giggles N Hugs has gained some strength from a PPS perspective, but just as importantly from our point of view, has brought home a couple of key developments that serve to underpin the market cap strength, and further reinforce a bullish bias on the stock.
Here’s what happened recently, and what we’re looking for next.
By way of a quick introduction, this one is a restaurant stock, currently based out of California. We say currently, because there are some plans in place for an East Coast expansion (and we’ll get to why shortly) that might warrant a rehoming of the HQ. Anyway, the company opens restaurant locations that serve as a sort of intersection between healthy (but fast) food and playtime/exercise. Think Chuck E. Cheese, but healthy and brought up to date.
A play/food crossover isn’t anything revolutionary, but the health food spin is something new (we were surprised at this too, but it seems to be the case) and the novelty of it is drawing a considerable amount of consumer interest. Much of this interest is from celebrities, which in California is a sure-fire marketing freebie, and this buzz is filtering through to the numbers. The company grew revenues from $1.3 million in 2012 to $3.5 million during 2015 – a 25.3% compound annual growth rate.
The most interesting thing for us right now, however, is the way Giggles N Hugs is able to expand at very low initial outlay. The locations have proven to bring heavy foot traffic into the real estate within which they operate (read: malls) and as such, the RE owners are basically paying the company to open fresh locations on their property.
Which brings us nicely to on of the most recent updates – a fresh location funding for the company’s first Northern California operation. It’s an LOI signed with a $78 billion alternative investment fund called QIC to open the next Giggles N’ Hugs location at The Shops at Tanforan (Tanforan) mall in San Bruno, California.
QIC is paying the company up to $1.4 million in tenant allowances, which covers the entire build-out cost of the new location. It’s very rare a company with a few locations like this one gets a multi million-dollar outlay cost covered in an unproven location, and for us, that’s a sign that there’s some smart money behind this one.
Adding to the attraction is the most recent announcement, detailing the full conversion of an outstanding debt by the company. The debt, which was related to a transaction between the company and an entity called Iconic Holdings, LLC, saw the latter convert $191,000 into shares of common stock. There’s been a bit of selling pressure on the company over the last few months based on this conversion, and the completion should serve to remove this pressure and clear the way for some operationally driven gains.
As CEO Parsi says:
“With most if not all of the shares converted and sold over the past six months, we anticipate that this will result in a decrease of continued selling pressure on the Company’s securities”
So, what’s next?
Well as mentioned earlier, Giggles N Hugs is looking to expand into the East Coast, and wants to do so by way of a combination of franchises and company owned locations. The best revenue days for the company come when the weather is cold and wet, and it goes without saying that (with this being the case) the east coast should be a strong market.
Management is looking to raise capital to fund this expansion, so there’s a chance we might see some dilution, but in the most recent communication, the CEO suggested he is heading to the banks for this capital first.
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