Giggles N Hugs Inc (OTCMKTS:GIGL) Smiling Their Way To A Comeback

The most recent bear run that has hit Giggle N Hugs Inc (OTCMKTS:GIGL) can be attributed to many reasons, however, deteriorating performance is not one of them.The run, which is shown in the chart below, has led to a share price decline by ten times from $0.25 in April 2017 to $0.025 by the end of October has sent shareholders in panic mode. GIGL Daily ChartThis, as we will later see, has a lot more to do with a current arbitration than it has to do with the company’s operational facets.With the above being said, what does this mean for the company and how is its outlook?That’s what were here to answer.Over the course of this piece, we will seek to answer the questions: who is GIGL, in what space does it operate, how have they been performing and what are its future prospects like? Let’s dive right in.GIGL: Their BusinessBased in California, Giggles N’ Hugs is the first and only restaurant that brings together high-end, organic food with active, cutting-edge play and entertainment for children. Their locations offer an upscale, family-friendly atmosphere with a unique, custom-made 2000 square-foot play area that children 10 and younger absolutely love.Their main clients, as alluded from the above, are parents wishing to ensure their children are in a safe and fun-filled environment within set confines while allowing for their own fun.So far, this seems to be working out quite well given that they have been generating significant revenues over the past. Moreover, according to management, they seem to have ‘no real competition’within this space. As such, their market share seems to be ever-increasing with each day that passes. With this backdrop, the question on people’s minds would be, what has GIGL being doing about this situation?Well, they have been taking advantage of the situation.New DevelopmentsIt all started in March this year when the company partnered with Jillian Michaels.The multi-faceted partnership is a major play was to create an international brand as they ventured into the global space while making Juliana one of the company’s major shareholders in the process. Her presence was and is still meant to boost brand image and entice people to the firm while leveraging on her image in the process.In the words of Jillian:

"As a businesswoman, I'm committed to aligning with brands that further health and wellness for people of all ages. Giggles N' Hugs is the most fun space for families of all ages and I hope to help them expand globally so that countless other families can enjoy the same experience that mine does when visiting their restaurants and play spaces."

Source:The move spoke to their approach to venture out to new locations with a global approach being taken in their bid to implement this strategy. With this has come a new play.They have further issued new shares in a bid to implement this strategy.While speaking at the announcement of the common stocks rights offering, the company’s founder and CEO, Joey Parsy, said that the rights issue was a way of rewarding their loyal shareholders while ensuring there is no further dilution of their position in the company. They intend to raise $5 million from this issue which will be used in the expansion of its product base and mainly in ensuring that they are able to venture to the world over.Such an issue only goes to exemplify their firm belief in their futuristic growth. As such, the question on what caused their share price to plummet should be lingering in readers’ minds.Share Price: The Fall and CauseAccording to their CEO, Joey Parsi, the fall is attributable to a mediation they settled with St. George Investments, LLC back in 2016. The mediation led to the issuance of 7.9 million free trading shares with St. George Investments being required to purchase 1.1 million shares at $0.1 per share.At present, however, the shares issued to St. George Investment are expected to have hit the market which is contrary to the management’s expectations. As such, based on demand and supply, the price has thus taken a dip, a significant one at that.However, given that this dip has less to do with the company’s fundamentals and more to with the mediation, we do not expect that this will have a long-lasting effect on the company. In actual sense, it presents an even better chance for investors to get onboard while the share price is still low and reap the benefits of a bounce back upon share price stabilization.Financial PositionTheir financial performance, though not impeccable, has been improving since inception. However, the past quarter presented significant problems for them in terms of revenue generation with their revenues standing at $575,824 which is lower than the previous quarter by $85,879.The news is not gloomy all through.Their gross profit margin was improved over the past quarter standing at 14.3%, a rise from 14% in the previous quarter. Moreover, their net loss was at $371,470 from $756,186 in 2Q2017, more than halved. This was attributable to a reduction in their operating expenses per unit sales.The good news didn’t end there. Their cash position improved to $154,288 from $8,843 and so did their working capital position which went down from a negative position of over $1.2 million to close the quarter at just shy of $1 million. Their negative operating cash flows also reduced to $120,491 from $174,180.Given the above, their financial performance cannot be the reason for such a drastic drop in share price. On the contrary, they have been working at bettering their position and this seems to be bearing fruit for them.Our position on GIGL holds, they are due for a comeback and this will be as significant as the downturn they have been experiencing. Investors would be wise to put their money here.ConclusionGIGL is due for a comeback in no time. The fall in prices will soon be a thing of the past and any investor who will have their money with them will benefit greatly from the monetary compensation the upturn will offer.We will be updating our subscribers as soon as we know more. For the latest updates on GIGL, sign up below!Disclosure: We have no position in GIGL and have not been compensated for this article.