ITEM
8.01 OTHER EVENTS.
Due
to the outbreak of coronavirus disease 2019 (COVID-19), Giggles N’ Hugs, Inc. ("the "Company") is filing
this current report on Form 8-K to avail itself of an extension to file its Annual Report on Form 10-K for the period ended December
31, 2019 (the “Annual Report”), which is originally due on March 30, 2020, relying on an order issued by the Securities
and Exchange Commission (the “SEC”) on March 4, 2020 (Release No. 34-88318) pursuant to Section 36 of the Securities
Exchange Act of 1934, as amended, regarding exemptions granted to certain public companies, as such order was amended by the SEC
on March 25, 2020 (Release 34-88465) (together, the “Orders”).
The
rapidly evolving COVID-19 outbreak has disrupted operations at our Company-owned Giggles N’ Hugs restaurant in the Glendale
Galleria located in Glendale, California. On March 16, 2020, the Governor of California, Gavin Newsom, directed all restaurants
in California to close their dining room seating areas and to limit their services to take-out, drive-thru and delivery operations.
Additionally, as a result of California’s state-wide “shelter in place” policy announced by Governor Newsom
on March 19, 2020, the Glendale Galleria Mall where our Giggles N’ Hugs restaurant is located closed to the public and we
were forced to close our restaurant completely, with no access to our facilities in the mall and no ability to generate revenue.
Additionally, we submitted a business disruption claim to our insurance company but we were denied relief as we were informed
that our insurance policy does not cover losses due to epidemics or pandemics.
In
light of the ongoing hardships caused by the onset and continuation of the coronavirus and its impact on the restaurant business
in California and on our business in particular, and in accordance with the Orders, we hereby state the following:
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The
delay in the filing of our Annual Report is due to staffing difficulties by the Company
as a result of the COVID-19 pandemic, materially impairing the Company’s income
stream and its ability to timely prepare and file its Annual Report by March 30, 2020.
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The
Company currently expects to file the Annual Report on or before the 45th
day after the original due date for the Annual Report.
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Risk
Factor
The
continuation of the COVAD-19 coronavirus and its ongoing impact on our business is likely to negatively affect your investment
in our Company.
As
a result of the ongoing coronavirus pandemic and its impact in California, we have been forced to temporarily close our Giggles
N’ Hugs restaurant in the Glendale Galleria mall in Glendale California. As a result, our revenue stream has completely
halted and we do not know when we will be able to resume operations and return to revenue generation. Additionally, we do not
know whether we will be able to take advantage of disaster relief options that may become available to businesses affected by
the coronavirus or whether we will be able to recover from this crisis of the coronavirus continues for an indefinite period of
time. As a result of these factors, our business prospects have been, and will continue to be, negatively impacted for the foreseeable
future and the value of our securities in the public market may be damaged.
Forward-Looking
Statements
Forward
looking statements in this document are made under the safe harbor provisions of the Private Securities Litigation Reform Act
of 1995.
Except
for historical information contained in this current report on Form 8-K, the matters discussed are forward-looking statements
that involve risks and uncertainties, including but not limited to the spread of COVID-19 and governmental and industry response
thereto. When used in this report, words such as “anticipates”, “believes”, “could”, “estimates”,
“expects”, “may”, “plans”, “potential” and “intends” and similar expressions,
as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based
on the beliefs of the Company’s management, as well as assumptions made by and information currently available to the Company’s
management. Among the factors that could cause actual results to differ materially are the following: the continuing effect of
the coronavirus pandemic on the restaurant business in California and on the restaurant franchising business nationwide; the imposition
of additional state or federal government edicts negatively impacting our ability to continue to operate our Giggles N’
Hugs Glendale Galleria restaurant; general economic conditions affected by the continuing impact of the coronavirus pandemic;
and the risk factors reported from time to time in the Company’s SEC reports. The Company undertakes no obligation to update
forward-looking statements as a result of future events or developments.