Bahrain - In May, the Company signed a non-binding

Bahrain - In May, the Company signed a non-binding Letter of Intent (LOI) with City Scape Trading (franchisee), a Bahrain-based hospitality company, to open up to two (2) Giggles N’ Hugs franchise locations in Bahrain with additional locations to follow if successful.

The Company began making progress on finalizing the LOI once Ramadan concluded in late June. We have been working with the franchisee on technical questions related to utility needs, floor plans and build-out specifications. Under the terms of the agreement, the franchisee has 12 months from the closing of the Area Development Agreement ( ADA ) to open its first location. As such, they had been waiting to get all technical questions answered prior to finalizing. Notwithstanding any other issues, we currently anticipate the LOI closing in late September.

Under the terms of the master license agreement, Giggles N’ Hugs will receive up-front development fees for each location, as well as ongoing royalties based on a percentage of monthly gross sales. The company is engaged in similar discussions with other parties internationally as well as here in the US on additional potential franchising opportunities. We will update shareholders as these discussions progress.