Company Quick10K Filing
Freeze Tag
Price-0.00 EPS-0
Shares75 P/E0
MCap-0 P/FCF0
Net Debt-0 EBIT-0
TEV-0 TEV/EBIT2
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-03-31 Filed 2020-05-15
10-K 2019-12-31 Filed 2020-03-30
10-Q 2019-09-30 Filed 2019-11-14
10-Q 2019-06-30 Filed 2019-08-14
10-Q 2019-03-31 Filed 2019-05-15
10-K 2018-12-31 Filed 2019-04-01
10-Q 2018-09-30 Filed 2018-11-14
10-Q 2018-06-30 Filed 2018-08-14
10-Q 2018-03-31 Filed 2018-05-15
10-K 2017-12-31 Filed 2018-04-02
10-Q 2017-09-30 Filed 2017-11-14
10-Q 2017-06-30 Filed 2017-08-14
10-Q 2017-03-31 Filed 2017-05-15
10-K 2016-12-31 Filed 2017-03-31
10-Q 2016-09-30 Filed 2016-11-14
10-Q 2016-06-30 Filed 2016-08-15
10-Q 2016-03-31 Filed 2016-05-16
10-K 2015-12-31 Filed 2016-03-30
10-Q 2015-09-30 Filed 2015-11-16
10-Q 2015-06-30 Filed 2015-08-14
10-Q 2015-03-31 Filed 2015-05-15
10-K 2014-12-31 Filed 2015-03-31
10-Q 2014-09-30 Filed 2014-11-14
10-Q 2014-06-30 Filed 2014-08-14
10-Q 2014-03-31 Filed 2014-05-15
10-K 2013-12-31 Filed 2014-03-31
10-Q 2013-09-30 Filed 2013-11-14
10-Q 2013-06-30 Filed 2013-08-14
10-Q 2013-03-31 Filed 2013-05-15
10-K 2012-12-31 Filed 2013-04-01
10-Q 2012-09-30 Filed 2012-11-14
10-Q 2012-06-30 Filed 2012-08-14
10-Q 2012-03-31 Filed 2012-05-15
10-K 2011-12-31 Filed 2012-03-30
10-Q 2011-09-30 Filed 2011-11-14
10-Q 2011-06-30 Filed 2011-08-15
10-Q 2011-03-31 Filed 2011-05-16
10-K 2010-12-31 Filed 2011-03-31
8-K 2018-08-31
8-K 2018-04-02
8-K 2018-03-15

FRZT 10Q Quarterly Report

Part I - Financial Information
Note 1 - The Company and Nature of Business
Note 2 - Summary of Significant Accounting Policies
Note 3 - Going Concern Uncertainty
Note 4 - Property and Equipment
Note 5 - Intangible Assets
Note 6 - Notes Payables
Note 7 - Stockholders' Deficit
Note 8 - Related Party Transactions
Note 9 - Subsequent Events
Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3 Quantitative and Qualitative Disclosures About Market Risk
Item 4 Controls and Procedures
Part II - Other Information
Item 1 Legal Proceedings
Item 1A Risk Factors
Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
Item 3 Defaults Upon Senior Securities
Item 4 Mine Safety Disclosures
Item 5 Other Information
Item 6 Exhibits
EX-21.1 frzt_ex211.htm
EX-31.1 frzt_ex311.htm
EX-31.2 frzt_ex312.htm
EX-32.1 frzt_ex321.htm
EX-32.2 frzt_ex322.htm

Freeze Tag Earnings 2020-03-31

Balance SheetIncome StatementCash Flow
1.0-2.2-5.4-8.6-11.8-15.02012201420172020
Assets, Equity
2.3-0.2-2.6-5.1-7.5-10.02012201420172020
Rev, G Profit, Net Income
0.60.30.1-0.2-0.4-0.72012201420172020
Ops, Inv, Fin

10-Q 1 frzt_10q.htm FORM 10-Q frzt_10q.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10‑Q

 

(Mark One)

 

x           QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2020

 

¨            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _______________ to _______________

 

Commission file number: 000-54267

 

FREEZE TAG, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

20-4532392

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

18062 Irvine Blvd, Suite 103

Tustin, California

 

 

92780

(Address of principal executive offices)

 

(Zip Code)

 

Registrant’s telephone number, including area code (714) 210-3850

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒     No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒     No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of May 15, 2020, there were 75,056,123 shares of common stock, $0.00001 par value, issued and outstanding.

 

 

 

 

FREEZE TAG, INC.

 

TABLE OF CONTENTS

QUARTER ENDED MARCH 31, 2020

 

 

 
2

Table of Contents

 

PART I – FINANCIAL INFORMATION

 

The accompanying condensed, consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions for Form 10-Q. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements.

 

In the opinion of management, the condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments necessary to present fairly the consolidated financial condition, results of operations, and cash flows of the Company for the interim periods presented.

 

The results for the period ended March 31, 2020 are not necessarily indicative of the results of operations for the full year. These condensed financial statements and related notes should be read in conjunction with the financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on March 30, 2020.

 

 
3

Table of Contents

 

FREEZE TAG, INC. 

(A DELAWARE CORPORATION)

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

March 31,
 2020

 

 

December 31,

2019

 

 

 

 (unaudited)

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash

 

$ 176,484

 

 

$ 254,776

 

Accounts receivable

 

 

10,343

 

 

 

9,772

 

Prepaid expenses and other current assets

 

 

10,595

 

 

 

17,628

 

Total current assets

 

 

197,422

 

 

 

282,176

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

54,498

 

 

 

9,563

 

Intangible assets, net

 

 

226,810

 

 

 

249,680

 

Other assets

 

 

57,547

 

 

 

64,612

 

 

 

 

 

 

 

 

 

 

Total assets

 

$ 536,277

 

 

$ 606,031

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$ 138,765

 

 

$ 162,476

 

Accrued expenses

 

 

483,352

 

 

 

458,025

 

Unearned royalties

 

 

7,543

 

 

 

7,543

 

Notes payable – current portion

 

 

7,032

 

 

 

-

 

Other current liabilities

 

 

30,084

 

 

 

49,715

 

Total current liabilities

 

 

666,776

 

 

 

677,759

 

 

 

 

 

 

 

 

 

 

Notes payable, net of current portion

 

 

379,825

 

 

 

379,825

 

Notes payable – related party

 

 

 43,193

 

 

 

 -

 

Other long-term liabilities

 

 

24,613

 

 

 

32,417

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

1,114,407

 

 

 

1,090,001

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ deficit:

 

 

 

 

 

 

 

 

Preferred stock, $0.00001 par value, 25,000,000 shares authorized:

 

 

 

 

 

 

 

 

 Series B; 2,480,482 shares issued and outstanding

 

 

25

 

 

 

25

 

 Series C; 4,355,000 shares issued and outstanding

 

 

44

 

 

 

44

 

Common stock; $0.00001 par value, 800,000,000 shares authorized, 75,056,123 shares issued and outstanding

 

 

751

 

 

 

751

 

Additional paid-in capital

 

 

9,113,326

 

 

 

9,093,439

 

Common stock payable

 

 

16,800

 

 

 

16,800

 

Accumulated deficit

 

 

(9,709,076 )

 

 

(9,595,029 )

Total stockholders’ deficit

 

 

(578,130 )

 

 

(483,970 )

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ deficit

 

$ 536,277

 

 

$ 606,031

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements

 

 
4

Table of Contents

 

FREEZE TAG, INC. 

(A DELAWARE CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

  2020

 

 

  2019

 

 

 

 

 

 

 

 

Revenues

 

$ 403,490

 

 

$ 560,203

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

Cost of sales

 

 

63,914

 

 

 

71,923

 

Selling, general and administrative expenses

 

 

443,533

 

 

 

463,918

 

 

 

 

 

 

 

 

 

 

Total operating costs and expenses

 

 

507,447

 

 

 

535,841

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

(103,957 )

 

 

24,362

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(10,090 )

 

 

(9,986 )

 

 

 

 

 

 

 

 

 

Total other income (expense)

 

 

(10,090 )

 

 

(9,986 )

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$ (114,047 )

 

$ 14,376

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

 

75,056,123

 

 

 

75,056,123

 

Weighted average number of common shares outstanding - diluted

 

 

75,056,123

 

 

 

94,073,373

 

 

 

 

 

 

 

 

 

 

Income (loss) per common share – basic and diluted

 

$ 0.00

 

 

$ 0.00

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements

 

 
5

Table of Contents

 

FREEZE TAG, INC.

(A DELAWARE CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

 

 

 

Series A
Preferred Stock

 

 

Series B
Preferred Stock

 

 

Series C
Preferred Stock

 

 


Common Stock

 

 

Additional
Paid-in

 

 


Common
Stock

 

 


Common
Stock
 Subscription

 

 

Retained
Earnings

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Payable

 

 

Receivable

 

 

(Deficit)

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2019

 

 

-

 

 

$ -

 

 

 

2,480,482

 

 

$ 25

 

 

 

4,355,000

 

 

$ 44

 

 

 

75,056,123

 

 

$ 751

 

 

$ 8,997,457

 

 

$ 16,800

 

 

$ -

 

 

$ (9,452,402 )

 

$ (437,325 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed interest on related party debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,366

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

54,529

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4,083

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

23,000

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

14,376

 

 

 

14,376

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2019

 

 

-

 

 

$ -

 

 

 

2,480,482

 

 

$ 25

 

 

 

4,355,000

 

 

$ 44

 

 

 

75,056,123

 

 

$ 751

 

 

$ 9,010,906

 

 

$ 16,800

 

 

$ -

 

 

$ (9,438,026 )

 

$ (409,500 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2020

 

 

-

 

 

$ -

 

 

 

2,480,482

 

 

$ 25

 

 

 

4,355,000

 

 

$ 44

 

 

 

75,056,123

 

 

$ 751

 

 

$

9,093,439

 

 

$ 16,800

 

 

$ -

 

 

$

(9,595,029

)

 

$

(483,970

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Imputed interest on related party debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,470

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

9,470

 

Stock-based compensation

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10,417

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

10,417

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(114,047 )

 

 

(114,047 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, March 31, 2020

 

 

-

 

 

$ -

 

 

 

2,480,482

 

 

$ 25

 

 

 

4,355,000

 

 

$ 44

 

 

 

75,056,123

 

 

$ 751

 

 

$ 9,113,326

 

 

$ 16,800

 

 

$ -

 

 

$ (9,709,076 )

 

$ (578,130 )

 

The accompanying notes are an integral part of the condensed consolidated financial statements

 

 
6

Table of Contents

 

FREEZE TAG, INC. 

(A DELAWARE CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Three Months Ended
March 31,

 

 

 

  2020

 

 

  2019

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$ (114,047 )

 

$ 14,376

 

Adjustments to reconcile net income (loss) to net cash used by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

23,743

 

 

 

23,742

 

Imputed interest expense

 

 

9,470

 

 

 

9,366

 

Stock-based compensation

 

 

10,417

 

 

 

4,083

 

Loss on disposal of assets

 

 

801

 

 

 

-

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(571 )

 

 

2,215

 

Prepaid expenses and other current assets

 

 

7,033

 

 

 

17,209

 

Other assets

 

 

 

 

 

 

(2,097 )

Accounts payable

 

 

(23,711 )

 

 

16,439

 

Accrued expenses

 

 

25,327

 

 

 

3,010

 

Unearned royalties

 

 

-

 

 

 

(119,639 )

Other current liabilities

 

 

(20,370 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash used by operating activities

 

 

(81,908 )

 

 

(31,296 )

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of property and equipment

 

 

(46,609 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash used by investing activities

 

 

(46,609 )

 

 

-

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from loan financing

 

 

50,225

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

 

50,225

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Net decrease in cash

 

 

(78,292 )

 

 

(31,296 )

Cash at the beginning of the period

 

 

254,776

 

 

 

309,216

 

 

 

 

 

 

 

 

 

 

Cash at the end of the period

 

$ 176,484

 

 

$ 277,920

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$ -

 

 

$ -

 

Cash paid for interest expense

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Non-cash transactions:

 

 

 

 

 

 

 

 

Issuance of common shares in conversion of Series B preferred stock

 

$ -

 

 

$ -

 

Right-of-use asset obtained in exchange for lease obligation

 

 

-

 

 

 

88,325

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements

 

 
7

Table of Contents

 

FREEZE TAG, INC.

(A DELAWARE CORPORATION)

Notes to Condensed Consolidated Financial Statements

Three Months Ended March 31, 2020

(Unaudited)

 

NOTE 1 – THE COMPANY AND NATURE OF BUSINESS

 

Nature of Operations

 

Freeze Tag, Inc. (“Freeze Tag” or the “Company”) is a leading creator of mobile location-based games for consumers and businesses. The Company also offers gaming technology and services to businesses that want to leverage mobile gaming in their marketing and branding programs.

 

Beginning in the quarter ended March 31, 2020, our wholly-owned subsidiary, Space Coast Geo Store, LLC, a Florida limited liability company, sells merchandise to the geocaching industry. The LLC was filed with the State of Florida on September 3, 2019 and there was no activity in the entity from the time of filing until it began operations in the quarter ended March 31, 2020.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Use of Estimates

 

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and these differences may be material.

 

The following accounting policies involve significant judgments, assumptions and estimates by management.

 

Revenue Recognition

 

The Company’s revenues are derived primarily by licensing software products in the form of mobile games for smartphone and tablet platforms. Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

 

·

identification of the contract, or contracts, with a customer;

 

 

 

 

·

identification of the performance obligations in the contract;

 

 

 

 

·

determination of the transaction price;

 

 

 

 

·

allocation of the transaction price to the performance obligations in the contract; and

 

 

 

 

·

recognition of revenue when, or as, we satisfy a performance obligation.

 

 
8

Table of Contents

 

Property and Equipment

 

Property and equipment is stated at cost and is depreciated or amortized using the straight-line method over the estimated useful life of the related asset as follows:

 

Vehicle

 

7 years

Computer equipment

 

5 years

Office furniture and equipment

 

7 years

 

Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments will be capitalized. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

 

The Company will assess the recoverability of property and equipment by determining whether the depreciation and amortization of these assets over their remaining life can be recovered through projected undiscounted future cash flows. The amount of equipment impairment, if any, will be measured based on fair value and is charged to operations in the period in which such impairment is determined by management.

 

Intangible Assets

 

Intangible assets consist primarily of intellectual property, customer base and non-compete agreements acquired in the Merger, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.

 

Income Taxes

 

We account for income taxes using ASC Topic 740, Income Taxes. Under ASC Topic 740, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC Topic 740 includes accounting guidance which clarifies the accounting for the uncertainty in recognizing income taxes in an organization by providing detailed guidance for financial statement recognition, measurement and disclosure involving uncertain tax positions. This guidance requires an uncertain tax position to meet a more-likely-than-not recognition threshold at the effective date to be recognized both upon the adoption of the related guidance and in subsequent periods.

 

The Company has no uncertain tax positions at any of the dates presented.

 

 
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Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation and ASC Subtopic 505-50, Equity-Based Payments to Non-Employees (“ASC stock-based compensation guidance”). Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

 

The Company had stock-based compensation expense recognized in its statements of operations of $10,417 for the three months ended March 31, 2020 and $4,083 for the three months ended March 31, 2019.

 

Earnings per Share

 

The computation of basic earnings per common share is based on the weighted average number of shares outstanding during the period. The computation of diluted earnings per common share is based on the weighted average number of shares outstanding during the period plus the weighted average common stock equivalents which would arise from the exercise of stock options, warrants, convertible preferred stock and other rights during the period.

 

For the three months ended March 31, 2020 and 2019, the diluted weighted average number of shares is the same as the basic weighted average number of shares as the inclusion of any common stock equivalents would be anti-dilutive.

 

Fair Value of Financial Instruments

 

In accordance with current accounting standards, certain assets and liabilities must be measured at fair value. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. ASC 820 requires that certain assets and liabilities must be measured at fair value, and the standard details the disclosures that are required for items measured at fair value. The Company had no assets and liabilities required to be measured on a recurring basis at March 31, 2020 and December 31, 2019.

 

The current assets and current liabilities reported on the Company’s consolidated balance sheets are estimated by management to approximate fair market value due to their short-term nature.

 

Lease Accounting

 

We determine if a contract is a lease at the inception of the arrangement. We review all options to extend, terminate, or purchase the Right-of-use (“ROU”) assets, and when reasonably certain to exercise, we include the option in the determination of the lease term and lease liability. Lease ROU assets and liabilities are recognized at commencement date of the lease, based on the present value of lease payments over the lease term. The lease ROU asset also includes any lease payments made and excludes any lease incentives. When readily determinable, we use the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date, including the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the Balance Sheet.

 

 
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Recent Accounting Pronouncements

 

Although there were new accounting pronouncements issued or proposed by the FASB during the three months ended March 31, 2020 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements, other than the item listed above, has had or will have a material impact on its financial position or results of operations.

 

NOTE 3 – GOING CONCERN UNCERTAINTY

 

The accompanying financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. As shown in the accompanying financial statements, the Company incurred a net loss of $114,047 and used total net cash of $78,292 for the three months ended March 31, 2020.  As of March 31, 2020, the Company had a working capital deficit of $469,354 and a total stockholders’ deficit of $578,130. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

 

Management believes that by implementing cost reductions and realizing cost efficiencies from the Merger, operating cash flows will be sufficient to support the Company’s business plan. The Company will also continue to develop and launch new games to maximize revenues. However, management is currently evaluating alternative financing sources to fund the Company’s current business plan should cash provided by operations be insufficient.

 

The Company’s ability to continue as a going concern is dependent upon successfully executing its plans to attain a successful level of operations. The Company’s financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern.

 

NOTE 4 – PROPERTY AND EQUIPMENT

 

Property and equipment consisted of the following at:

 

 

 

March 31,
2020

 

 

December 31,
2019

 

 

 

 

 

 

 

 

Vehicle

 

$ 46,609

 

 

$ -

 

Computer equipment

 

 

7,170

 

 

 

7,971

 

Office furniture and equipment

 

 

10,055

 

 

 

10,055

 

Total

 

 

63,834

 

 

 

18,026

 

Less accumulated depreciation

 

 

(9,336 )

 

 

(8,463 )

 

 

 

 

 

 

 

 

 

Net

 

$ 54,498

 

 

$ 9,563

 

 

Depreciation expense was $873 and $872 for the three months ended March 31, 2020 and 2019, respectively.

 

 
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NOTE 5 – INTANGIBLE ASSETS

 

Intangible assets consisted of the following at:

 

 

 

March 31,
2020

 

 

December 31,
2019

 

 

 

 

 

 

 

 

Intellectual property

 

$ 307,100

 

 

$ 307,100

 

Customer base

 

 

142,000

 

 

 

142,000

 

Non-compete agreements

 

 

8,300

 

 

 

8,300

 

Less accumulated depreciation

 

 

(230,590 )

 

 

(207,720 )

 

 

 

 

 

 

 

 

 

Net

 

$ 226,810

 

 

$ 249,680

 

 

Amortization expense was $22,870 for the three months ended March 31, 2020 and 2019.

 

NOTE 6 – NOTES PAYABLES

 

Notes payable consisted of the following at March 31, 2020 and December 31, 2019:

 

 

 

March 31,
2020

 

 

 

December 31,
2019

 

Related party:

 

 

 

 

 

 

Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2021

 

$ 6,925

 

 

$ 6,925

 

Convertible note payable to Craig Holland, non-interest bearing, maturing on December 31, 2021

 

 

186,450

 

 

 

186,450

 

Convertible note payable to Mick Donahoo, non-Interest bearing, maturing on December 31, 2021

 

 

186,450

 

 

 

186,450

 

Other:

 

 

 

 

 

 

 

 

Note payable to financial institution, secured by vehicle, interest at 2.9%, due in 2025

 

 

50,225

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Total

 

$ 430,050

 

 

$ 379,825

 

 

Messrs. Holland and Donahoo have the right, at any time, at their election, to convert all or part of the amount due into shares of fully paid and non-assessable shares of common stock of the Company. The fixed conversion price is $0.02 per share.

 

The Company has imputed interest expense on the notes payable – related party using an annual rate of 10%. During the three months ended March 31, 2020 and 2019, total imputed interest expense was $9,470 and $9,366, respectively, which was recorded to additional paid-in capital.

 

Future maturities of notes payable as of March 31, 2020 are as follows:

 

December 31,

 

Amount

 

2020

 

$ 7,032

 

2021

 

 

389,515

 

2022

 

 

9,975

 

2023

 

 

10,268

 

2024

 

 

10,569

 

Thereafter

 

2,691

 

Notes Payable

 

$ 430,050

 

 

 
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NOTE 7 – STOCKHOLDERS’ DEFICIT

 

Common Stock

 

The Company is authorized to issue up to 800,000,000 shares of its $0.00001 par value common stock and had 75,056,123 common shares issued and outstanding as of March 31, 2020.

 

There was no common stock activity during the three months ended March 31, 2020 and March 31, 2019.

 

Preferred Stock

 

The Company is authorized to issue up to 25,000,000 shares of its $0.00001 par value preferred stock. The shares of preferred stock may be issued from time to time in one or more series. As of March 31, 2020 and 2019, there were 2,480,482 shares of Series B preferred stock and 4,355,000 shares of Series C preferred stock issued and outstanding.

 

Series B Preferred Stock

 

The Company’s Series B Preferred Stock has 2,700,000 shares authorized and the following rights: (i) dividend rights equal to the Company’s common stock; (ii) no liquidation preference over the Company’s common stock; (iii) each share is convertible into 50 shares of the Company’s common stock; (iv) no redemption rights; (v) no call rights by the Company; and (vi) no voting rights. The holders of the Series B preferred stock cannot convert their shares of Series B preferred stock if such conversion would cause the holder to beneficially own more than 4.99% of our then-outstanding common stock.

 

There was no Series B Preferred Stock activity during the three months ended March 31, 2020 and March 31, 2019.

 

Series C Preferred Stock

 

The Company’s Series C Preferred Stock has 4,500,000 shares authorized and the following rights: (i) dividend rights equal to the Company’s common stock; (ii) no liquidation preference over the Company’s common stock; (iii) each share is convertible into 50 shares of the Company’s common stock; (iv) no redemption rights; (v) no call rights by the Company; and (vi) each shares votes on an “as converted” basis, such that each share currently has 50 votes on all matters brought before the Company’s common stockholders for a vote.

 

There was no Series C Preferred Stock activity during the three months ended March 31, 2020 and March 31, 2019.

 

Stock Options

 

2017 Non-Qualified Stock Option Plan

 

On December 4, 2017, our Board of Directors approved the Freeze Tag, Inc. 2017 Non-Qualified Stock Option Plan (the “Plan”). Under the Plan, our Board of Directors may issue options to purchase up to an aggregate of 10,000,000 shares of common stock to individuals, including, but not limited to, our Board of Directors and/or our executive management. On December 5, 2017, our Board of Directors granted options to purchase a total of 1,512,821 shares of our common stock.

 

 
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2006 Stock Option Plan

 

The Company’s 2006 Stock Option Plan adopted by our Board of Directors in March of 2006 terminated in the year ended December 31, 2016. As of March 31, 2020 and 2019, there were 5,600 stock options outstanding under the 2006 Stock Option Plan.

 

We account for stock-based compensation in accordance with ASC Topic 718, Compensation – Stock Compensation. Under the fair value recognition provisions of this standard, stock-based compensation cost is measured at the grant date based on the estimated value of the award granted, using the Black-Scholes option pricing model, and recognized over the period in which the award vests in general and administrative expenses.

 

The Company recognized $10,417 of stock-based compensation during the three months ended March 31, 2020 and $4,083 during the three months ended March 31, 2019. As of March 31, 2020, future compensation cost related to non-vested stock options not yet recognized in the statements of operations totaled $72,917.

 

A summary of the status of the stock options issued by the Company under both plans as of March 31, 2020, and changes during three months then ended is presented below:

 

 

 

 

 

 

Weighted Average

 

 

 

Shares

 

 

Exercise Price

 

 

 

 

 

 

 

 

Outstanding, December 31, 2019

 

 

7,768,421

 

 

$ 0.031

 

 

 

 

 

 

 

 

 

 

Granted

 

 

-

 

 

 

-

 

Canceled / Expired

 

 

-

 

 

 

-

 

Exercised

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

Outstanding, March 31, 2020

 

 

7,768,421

 

 

$ 0.031

 

 

The outstanding options expire on various dates beginning in 2020 through 2029.

 

NOTE 8 – RELATED PARTY TRANSACTIONS

 

The Company had a note payable to Craig Holland, its Chief Executive Officer, with a balance of $6,925 at March 31, 2020 and 2019. The Company also had convertible notes payable to Mr. Holland and Mick Donahoo, its Chief Financial Officer, with a total balance of $372,900 as of March 31, 2020 and 2019. See Note 7 for detailed disclosure of this related party debt, including interest rates, terms of conversion and other repayment terms.

 

The Company has imputed interest expense on the notes payable – related party using an annual rate of 10%. During the three months ended March 31, 2019 and 2018, total imputed interest expense was $9,470 and $9,366, respectively, which was recorded to additional paid-in capital.

 

NOTE 9 – SUBSEQUENT EVENTS

 

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has reported the following:

 

CARES Act Paycheck Protection Program Loan - On May 7, 2020, the Company received a U.S. Small Business Administration Loan (“SBA Loan”) from Cross River Bank related to the COVID-19 crisis in the amount of $174,420 primarily for payroll costs. Under the Paycheck Protection Program (PPP) Loan Note (the “Promissory Note”), the SBA Loan has a fixed interest rate of 1%, a maturity date two years from the date of the funding of the loan and no payments are due on the SBA Loan for six months. Pursuant to the terms of the SBA Loan and Promissory Note, the Company may apply for forgiveness of the amount due on the SBA Loan in an amount equal to the sum of the following costs incurred by the Company during the 8-week period (or any other period that may be authorized by the U.S. Small Business Association) beginning on the date of first disbursement of the loan: payroll costs, any payment of interest on a covered mortgage obligation, payment on a covered rent obligation, and any covered utility payment. The amount of SBA Loan forgiveness shall be calculated in accordance with the requirements of the Paycheck Protection Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), although no more than 25% of the amount forgiven can be attributable to non-payroll costs.

  

 
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ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-Looking Statements

 

This Quarterly Report on Form 10-Q of Freeze Tag, Inc. (“Freeze Tag” or the “Company”) for the three months ended March 31, 2020 contains forward-looking statements, principally in this Section and “Business.” Generally, you can identify these statements because they use words like “anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” and similar terms. These statements reflect only our current expectations. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy and actual results may differ materially from those we anticipated due to a number of uncertainties, many of which are unforeseen, including, among others, the risks we face as described in this filing. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements that, by definition, involve risks and uncertainties. In any forward-looking statement where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation of belief will be accomplished.

 

We believe it is important to communicate our expectations to our investors. There may be events in the future; however, that we are unable to predict accurately or over which we have no control. The risk factors listed in our Annual Report on Form 10-K for the year ended December 31, 2019, as well as any cautionary language in this Quarterly Report on Form 10-Q and our last Annual Report on Form 10-K, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Factors that could cause actual results or events to differ materially from those anticipated include but are not limited to: distributors not accepting our games; price reductions; unforeseen delays in game production; changes in product strategies; general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in various tax laws; and the availability of key management and other personnel. As noted in our risk factors in our Annual Report on Form 10-K for year ended December 31, 2019, we are also closely monitoring the ongoing COVID-19 pandemic and its effects on our business, as well as its effects on general market and economic conditions.

 

Summary Overview

 

Freeze Tag, Inc. is a creator of location-based, mobile social games that are fun and engaging for consumers and businesses. Based on a free-to-play business model that has propelled games built and marketed by some of our competitors to worldwide success, we employ state-of-the-art data analytics and proprietary technology to dynamically optimize the gaming experience for revenue generation. Players can download and enjoy our games for free, and, if they so choose, they can purchase virtual items and additional features within the game to increase the fun factor.

 

Founded by gaming industry veterans, Freeze Tag has launched several successful games over the course of its history. Our current portfolio includes hits such as Munzee®, a social platform with over 7 million locations worldwide and hundreds of thousands of players that blends gamification and geolocation into an experience that rewards players for going places in the physical world; Garfield Go, a Pokemon Go style augmented reality game based on the iconic cat Garfield; WallaBee®, an addictive collecting game with over 2,000 beautifully drawn digital cards; as well as many social mobile games that provide endless hours of family-friendly fun. We also offer our technology and services to third party businesses that want to leverage mobile gaming in their marketing and branding programs. For example, our Eventzee® solution allows businesses to create private scavenger hunts in physical places such as malls, tradeshows, company events or campuses to create immersive brand experiences.

 

 
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Our mission is to design, develop and deliver innovative digital entertainment that surprises and delights. Our products bring families together by providing fun to kids of all ages. We also strive to create a workplace environment where creativity and fun can thrive in a demanding industry.

 

In 2019, after successfully launching a new version of our flagship product, Munzee, we continued to develop and enhance the mobile application by adding more features and functionality, such as incorporating the ability for players to join teams (called “clans”) from anywhere in the world and play together, competing against other worldwide teams. Adding these features increased the usage of existing players and increased the retention of new players such that by the end of 2019, we achieved a marked increase in user retention.

 

In Q4 of 2019, we embarked upon another major development project involving our Eventzee app. We have completely re-designed the Eventzee app, adding many features requested by our customers over the years. Our current plan is to launch the revised Eventzee app in Q2 of 2020, barring any unforeseen events or obstacles.

 

Beginning in the quarter ended March 31, 2020, our wholly-owned subsidiary, Space Coast Geo Store, LLC, a Florida limited liability company, sells merchandise to the geocaching industry.

 

Going Concern Uncertainty

 

The accompanying financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. As shown in the accompanying financial statements, the Company incurred a net loss of $114,047 and used total net cash of $78,292 for the three months ended March 31, 2020.  As of March 31, 2020, the Company had a working capital deficit of $469,354 and a total stockholders’ deficit of $578,130. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

 

Management believes that by implementing cost reductions and realizing cost efficiencies from the Merger, operating cash flows will be sufficient to support the Company’s business plan. The Company will also continue to develop and launch new games to maximize revenues. However, management is currently evaluating alternative financing sources to fund the Company’s current business plan should cash provided by operations be insufficient.

 

The Company’s ability to continue as a going concern is dependent upon successfully executing its plans to attain a successful level of operations. The Company’s financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern.

 

Critical Accounting Policies

 

The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, costs, expenses and related disclosures. These estimates and assumptions are often based on historical experience and judgments that we believe to be reasonable under the circumstances at the time made. However, all such estimates and assumptions are inherently uncertain and unpredictable and actual results may differ. For further information on our significant accounting policies, see Note 2 to our financial statements included in this filing. 

 

 
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The following is a summary of our critical accounting policies that involve estimates and management’s judgment.

 

Revenue Recognition

 

The Company’s revenues are derived primarily by licensing software products in the form of mobile games for smartphone and tablet platforms. Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

 

We determine revenue recognition through the following steps:

 

 

·

identification of the contract, or contracts, with a customer;

 

 

 

 

·

identification of the performance obligations in the contract;

 

 

 

 

·

determination of the transaction price;

 

 

 

 

·

allocation of the transaction price to the performance obligations in the contract; and

 

 

 

 

·

recognition of revenue when, or as, we satisfy a performance obligation.

  

Intangible Assets

 

Intangible assets consist primarily of intellectual property, customer base and non-compete agreements acquired in the Merger, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.

 

Accounting for Stock-Based Compensation

 

The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation and ASC Subtopic 505-50, Equity-Based Payments to Non-Employees (“ASC stock-based compensation guidance”). Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

 

Recent Accounting Pronouncements

 

Although there were new accounting pronouncements issued or proposed by the FASB during the three months ended March 31, 2020 and through the date of filing of this report, we do not believe any of these accounting pronouncements has had or will have a material impact on our financial position or results of operations.

 

Results of Operations for the Three Months Ended March 31, 2020 Compared to the Three Months Ended March 31, 2019.

 

Revenues

 

Revenues decreased $156,713 to $403,490 for the three months ended March 31, 2020 from $560,203 for the three months ended March 31, 2019. The primary reason for the decrease in revenues in the current year was due to the close-out in the first quarter of 2019 of a significant mobile distribution contract in that period allowing us to recognize deferred revenue of $119,639.

 

 
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Cost of Sales

 

Cost of sales decreased $8,009 to $63,914 for the three months ended March 31, 2020 from $71,923 for the three months ended March 31, 2019. The decrease was a result of decreases in server and server usage fees.

 

Selling, General and Administrative Expenses

 

Selling, general and administrative expenses decreased $20,385 to $443,533 for the three months ended March 31, 2020 from $463,918 for the three months ended March 31, 2019. The decrease is primarily due to a decrease in employee and contractor expenses during the first quarter of the current fiscal year.

 

Other Income (Expense)

 

Interest expense increased slightly to $10,090 for the three months ended March 31, 2020 from $9,986 for the three months ended March 31, 2019. These amounts relate primarily to the imputed interest on related party debt.

 

Net Income (Loss)

 

As a result of the above, we reported a net loss of $114,047 for the three months ended March 31, 2020 and net income of $14,376 for the three months ended March 31, 2019.

 

Liquidity and Capital Resources

 

Introduction

 

As of March 31, 2020, we had current assets of $197,422, including cash of $176,484, and current liabilities of $666,776, resulting in a working capital deficit of $469,354. In addition, we had a total stockholders’ deficit of $578,130 at March 31, 2020.

 

During the three months ended March 31, 2020, we used net cash of $78,292. Management believes that by implementing cost reductions and realizing cost efficiencies from the Merger, operating cash flows will be sufficient to support our business plan. We will also continue to develop and launch new games to maximize revenues. As a result, we may have short-term cash needs. Therefore, management is currently evaluating alternative financing sources to fund our current business plan should cash provided by operations be insufficient. There can be no assurance that we will be successful in these efforts.

 

Sources and Uses of Cash

 

We used net cash of $81,908 in operating activities for the three months ended March 31, 2020 mainly as a result of a net loss of $114,047 and decreases of our accounts payable of $23,711 and other current liabilities of $23,370. These uses of cash were partially offset by a decrease of our prepaid expenses and other assets of $7,033 and increases in our accrued expenses of $25,327.

 

 
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By comparison, we used net cash of $31,296 in operating activities for the three months ended March 31, 2019 mainly as a result of net income of $14,376, decreases of our prepaid expenses and other assets of $17,209 and increases in our accounts payable and accrued expenses of $16,439 and $3,010 being more than offset by the decrease of unearned royalties of $119,639.

 

We used $46,609 for the purchase of property and equipment for the three months ended March 31, 2020. For the three months ended March 31, 2019, we did not have any cash provided by or used in investing activities. 

 

Financing activities provided cash of $50,225 for the three months ended March 31, 2020, related to auto financing. For the three months ended March 31, 2019, we did not have any cash provided by or used in financing activities. 

 

Notes Payable – Related Party

 

As of March 31, 2020, our related party debt was comprised of notes payable totaling $379,825 to Craig Holland, our Chief Executive Officer and Mick Donahoo, our Chief Financial Officer. These notes are non-interest bearing and mature on December 31, 2021. Of this related party indebtedness, there are two convertible notes payable of $186,450 to each of Messrs. Holland and Donahoo, who have the right, at any time, at their election, to convert all or part of the amount due into shares of fully paid and non-assessable shares of our common stock. The fixed conversion price is $0.02 per share. We have imputed interest on these notes payable using an annual rate of 10%.

 

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

ITEM 4 Controls and Procedures

 

(a) Evaluation of Disclosure Controls and Procedures

 

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined) in Exchange Act Rules 13a – 15(c) and 15d – 15(e). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer, who are our principal executive officer and principal financial officers, respectively, concluded that, as of the end of the three month period ended March 31, 2020, our disclosure controls and procedures were effective (1) to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to us, including our chief executive and chief financial officers, as appropriate to allow timely decisions regarding required disclosure.

 

(b) Changes in Internal Control over Financial Reporting

 

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 
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PART II – OTHER INFORMATION

 

ITEM 1 Legal Proceedings

 

We are not a party to or otherwise involved in any legal proceedings.

 

In the ordinary course of business, we are from time to time involved in various pending or threatened legal actions. The litigation process is inherently uncertain and it is possible that the resolution of such matters might have a material adverse effect upon our financial condition and/or results of operations. However, in the opinion of our management, other than as set forth herein, matters currently pending or threatened against us are not expected to have a material adverse effect on our financial position or results of operations.

 

ITEM 1A Risk Factors

 

As a smaller reporting company, we are not required to provide the information required by this Item.

 

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

 

There is no information required to be disclosed by this Item.

 

ITEM 3 Defaults Upon Senior Securities

 

There is no information required to be disclosed by this Item.

 

ITEM 4 Mine Safety Disclosures

 

There is no information required to be disclosed by this Item.

 

ITEM 5 Other Information

 

As noted in our previous filings, we are also currently under an Internal Revenue Service tax audit for 2015 and 2016. We are undergoing negotiations relating to tax matters with the taxing authorities and believe that we have provided adequate reserves related to all matters contained in tax periods open to examination. The years open to examination by taxing authorities vary by jurisdiction; no years prior to 2016 are open.

 

 
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ITEM 6 Exhibits

 

3.1 (1)

 

Articles of Incorporation of Freeze Tag, Inc.

 

3.2 (1)

 

Articles of Amendment to Articles of Incorporation

 

3.3 (1)

 

Bylaws of Freeze Tag, Inc.

 

3.4 (3)

 

Articles of Amendment to Certificate of Incorporation February 4, 2014

 

3.5 (7)

 

Articles of Amendment to Certificate of Incorporation filed on February 18, 2016

 

10.1 (1)

 

10% Convertible Promissory Note dated July 1, 2010 with The Holland Family Trust

 

10.2 (2)

 

Convertible Promissory Note (10%) dated December 20, 2013 – Accredited Investor

 

10.3 (2)

 

Convertible Promissory Note (10%) dated December 31, 2013 – Holland Family Trust

 

10.4 (2)

 

Convertible Promissory Note (10%) dated December 31, 2013 – Craig Holland Debt

 

10.5 (2)

 

Convertible Promissory Note (10%) dated December 31, 2013 – Craig Holland Salary

 

10.6 (2)

 

Convertible Promissory Note (10%) dated December 31, 2013 – Mick Donahoo Salary

 

10.7 (2)

 

Convertible Promissory Note (10%) dated December 31, 2013 – Mick Donahoo Debt

 

10.8 (2)

 

Convertible Promissory Note (10%) dated December 31, 2013 – Robert Cowdell

 

10.9 (8)

 

Convertible Promissory Note with an Accredited Investor dated June 25, 2014

 

10.10 (4)

 

Convertible Promissory Note (10%) dated September 30, 2014 – Holland Family Trust

 

10.11 (4)

 

Convertible Promissory Note (10%) dated September 30, 2014 – Craig Holland

 

10.12 (5)

 

Consulting and Co-Development Agreement with Gogii Games Corp. dated November 17, 2014 (Redacted Version)

 

10.13 (5)

 

Convertible Promissory Note with an accredited investor dated February 11, 2015

 

10.14 (5)

 

Master Development Agreement with TIC TOC STUDIOS, LLC dated February 18, 2015 (Redacted Version)

 

10.15 (6)

 

Convertible Promissory Note with an accredited investor dated July 28, 2015

 

10.16 (6)

 

Amendment to Convertible Promissory Note dated December 31, 2013 – Craig Holland

 

10.17 (6)

 

Amendment to Convertible Promissory Note dated December 31, 2013 – Mick Donahoo

 

 
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10.18 (6)

 

Amendment to Convertible Promissory Note with an accredited investor dated December 30, 2013

 

10.19 (8)

 

Convertible Promissory Note with an accredited investor dated April 7, 2016

 

10.20 (9)

 

License Agreement with Munzee, Inc. dated October 19, 2016

 

10.21 (9)

 

License Agreement with Paws, Incorporation dated November 1, 2016 (Redacted Version)

 

10.22 (10)

 

Amendment #1 to Convertible Promissory Note with an accredited investor dated April 7, 2016

 

10.23 (10)

 

Convertible Promissory Note with an accredited investor dated February 8, 2017

 

10.24 (11)

 

Merger Agreement with Munzee, Inc. dated July 26, 2017

 

10.25 (11)

 

Form of Securities Exchange and Common Stock Purchase Agreement with Related Parties dated July 25, 2017

 

10.26 (11)

 

Form of Securities Exchange and Common Stock Purchase Agreement with Accredited Investor #1 and Accredited Investor #2 dated July 26, 2017

 

10.27 (11)

 

Form of Second Securities Exchange and Common Stock Purchase Agreement with Accredited Investor #2 dated July 26, 2017

 

10.28 (11)

 

Form of Securities Exchange and Common Stock Purchase Agreement with Accredited Investor #3 dated July 26, 2017

 

10.29 (11)

 

Form of Amendment No. 1 to Promissory Note with Craig Holland and Mick Donahoo dated July 25, 2017

 

10.30 (11)

 

Amendment No. 1 to Promissory Note with Craig Holland dated July 25, 2017

 

10.31 (12)

 

Corporate Sponsorship Agreement with American Diabetes Association dated March 22, 2018

 

21.1*

 

Subsidiaries of Freeze Tag, Inc.

 

31.1*

 

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

 

31.2*

 

Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

 

32.1*

 

Section 1350 Certification of Chief Executive Officer

 

32.2*

 

Section 1350 Certification of Chief Financial Officer.

 

 
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101.INS**

 

XBRL Instance Document

 

101.SCH**

 

XBRL Taxonomy Extension Schema Document

 

101.CAL**

 

XBRL Taxonomy Extension Calculation Linkbase Document

 

101.DEF**

 

XBRL Taxonomy Extension Definition Linkbase Document

 

101.LAB**

 

XBRL Taxonomy Extension Label Linkbase Document

 

101.PRE**

 

XBRL Taxonomy Extension Presentation Linkbase Document

________        

*

Filed herewith.

 

**

Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Securities Act of 1934 and otherwise are not subject to liability.

 

(1)

Incorporated by reference from our Registration Statement on Form S-1, filed with the Commission on August 16, 2010.

 

 

(2)

Incorporated by reference from Current Report on Form 8-K filed with the Commission on February 4, 2014.

 

 

(3)

Incorporated by reference from Definitive Information Statement on Schedule 14-C filed with the Commission on December 31, 2013.

 

 

(4)

Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on November 14, 2014.

 

 

(5)

Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on May 15, 2015.

 

 

(6)

Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on November 16, 2015.

 

 

(7)

Incorporated by reference from Annual Report on Form 10-K filed with the Commission on March 30, 2016.

 

 

(8)

Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on August 14, 2016.

 

 

(9)

Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on November 14, 2016.

 

 

(10)

Incorporated by reference from Annual Report on Form 10-K filed with the Commission on March 31, 2017.

 

 

(11)

Incorporated by reference from Current Report on Form 8-K filed with the Commission on July 31, 2017.

 

 

(12)

Incorporated by reference from Current Report on Form 8-K filed with the Commission on April 11, 2018

 

 
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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

Freeze Tag, Inc.

 

 

 

Dated: May 15, 2020

 

/s/ Craig Holland

 

 

By:

Craig Holland

 

 

Its:

Chief Executive Officer (Principal Executive Officer)

 

 

 
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