frzt_10q.htm

0001477932-18-002504.txt : 20180515 0001477932-18-002504.hdr.sgml : 20180515 20180515170113 ACCESSION NUMBER: 0001477932-18-002504 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 48 CONFORMED PERIOD OF REPORT: 20180331 FILED AS OF DATE: 20180515 DATE AS OF CHANGE: 20180515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Freeze Tag, Inc. CENTRAL INDEX KEY: 0001485074 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-54267 FILM NUMBER: 18837547 BUSINESS ADDRESS: STREET 1: 18062 IRVINE BLVD, SUITE 103 CITY: TUSTIN STATE: CA ZIP: 92780 BUSINESS PHONE: 714-210-3850 MAIL ADDRESS: STREET 1: 18062 IRVINE BLVD, SUITE 103 CITY: TUSTIN STATE: CA ZIP: 92780 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, 2018

¨ 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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes x No ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(Do not check if a 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 x

Applicable only to issuers involved in bankruptcy proceedings during the preceding five years:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No ¨

Applicable only to corporate issuers:

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 11, 2018, there were 72,306,123 shares of common stock, $0.00001 par value, issued and outstanding.

FREEZE TAG, INC.

TABLE OF CONTENTS

QUARTER ENDED MARCH 31, 2018

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
Item 4.	Controls and Procedures	21

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22
Item 3.	Defaults Upon Senior Securities	22
Item 4.	Mine Safety Disclosures	22
Item 5.	Other Information	22
Item 6.	Exhibits	23

PART I – FINANCIAL INFORMATION

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

The results for the period ended March 31, 2018 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, 2017 filed with the Securities and Exchange Commission on April 2, 2018.

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FREEZE TAG, INC.

(A DELAWARE CORPORATION)

CONDENSED BALANCE SHEETS

	March 31, 2018			December 31, 2017
	(Unaudited)
ASSETS

Current assets:
Cash	$	147,376		$	167,492
Accounts receivable		7,935			7,395
Prepaid expenses and other current assets		47,589			39,357
Total current assets		202,900			214,244

Property and equipment, net		15,132			12,740
Intangible assets, net		409,770			432,640
Other assets		15,000			15,000

Total assets	$	642,802		$	674,624

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable	$	167,170		$	155,494
Accrued expenses		453,792			451,247
Unearned royalties		127,182			127,187
Total current liabilities		748,144			733,928

Long-term liabilities:
Accrued expenses		26,250			20,563
Notes payable – related party		379,825			379,825
		406,075			400,388

Total liabilities		1,154,219			1,134,316

Commitments and contingencies

Stockholders’ deficit:
Preferred stock, $0.00001 par value, 25,000,000 shares authorized:
Series B; 2,535,482 and 2,585,882 shares issued and outstanding, respectively		25			26
Series C; 4,355,000 shares issued and outstanding		44			44
Common stock; $0.00001 par value, 800,000,000 shares authorized, 72,306,123 and 69,786,123 shares issued and outstanding, respectively		723			698
Additional paid-in capital		8,945,867			8,919,980
Common stock payable		16,800			16,800
Common stock subscription receivable		-			(5,000	)
Accumulated deficit		(9,474,876	)		(9,392,240	)
Total stockholders’ deficit		(511,417	)		(459,692	)

Total liabilities and stockholders’ deficit	$	642,802		$	674,624

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

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FREEZE TAG, INC.

(A DELAWARE CORPORATION)

CONDENSED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
	2018			2017

Revenues	$	495,854		$	570,477

Operating costs and expenses:
Cost of sales		55,695			91,850
Selling, general and administrative expenses		496,882			424,066

Total operating costs and expenses		552,577			515,916

Income (loss) from operations		(56,723	)		54,561

Other income (expense):
Interest expense, net		(25,913	)		(1,564	)
Gain on disposition of property and equipment		-			2,028

Total other income (expense)		(25,913	)		464

Income (loss) before income taxes		(82,636	)		55,025
Provision for income taxes		-			(8,946	)

Net income (loss)	$	(82,636	)	$	46,079

Weighted average number of common shares outstanding - basic and diluted		70,626,123			6,720,000

Income (loss) per common share – basic and diluted	$	(0.00	)	$	0.01

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

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FREEZE TAG, INC.

(A DELAWARE CORPORATION)

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2018			2017
Cash flows from operating activities:
Net income (loss)	$	(82,636	)	$	46,079
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization		23,584			5,354
Imputed interest expense		25,911			-
Gain on disposition of property and equipment		-			(2,028	)
Changes in operating assets and liabilities:
Accounts receivable		(540	)		-
Prepaid expenses and other current assets		(8,232	)		8,946
Accounts payable		11,676			3,638
Accrued expenses		8,232			(17,805	)
Unearned royalties		(5	)		-

Net cash provided by (used by) operating activities		(22,010	)		44,184

Cash flows from investing activities:
Proceeds from disposition of property and equipment		-			16,251
Purchase of property and equipment		(3,106	)		(6,280	)

Net cash provided by (used by) investing activities		(3,106	)		9,971

Cash flows from financing activities:
Proceeds stock subscription receivable		5,000			-
Proceeds from notes payable		-			643
Repayment of notes payable		-			(30,771	)

Net cash provided by (used by) financing activities		5,000			(30,128	)

Net increase (decrease) in cash		(20,116	)		24,027
Cash at the beginning of the period		167,492			193,892

Cash at the end of the period	$	147,376		$	217,919

Supplemental disclosure:
Cash paid for income taxes	$	-	$	-
Cash paid for interest expense		1		1,564

Non-cash transactions:
Issuance of common shares in conversion of Series B preferred stock	$	25	$	-
Cancellation of common shares		-		(8	)

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

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FREEZE TAG, INC.

(A DELAWARE CORPORATION)

Notes to Condensed Financial Statements

Three Months Ended March 31, 2018

(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. We also offer our gaming technology and services to businesses that want to leverage mobile gaming in their marketing and branding programs.

Merger Transaction

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. The Company recognizes revenue from the sale of its products in accordance with current accounting standards upon the transfer of title and risk of loss to its customers, and once any performance obligations have been completed. Revenue from product sales is recorded net of processing costs.

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Allowances for Sales Returns and Doubtful Accounts

The allowance for sales returns is based on the Company’s estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of the Company’s products. The allowance for doubtful accounts is based on the Company’s assessment of the collectability of customer accounts and the aging of the related invoices, and represents the Company’s best estimate of probable credit losses in its existing trade accounts receivable. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. We determined that no allowances for sales returns and doubtful accounts were required at March 31, 2018 and December 31, 2017.

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:

Computer equipment		5 years
Office furniture and equipment		7 years
Automobiles		5 years
Leasehold improvements		15 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.

Impairment of Long-Lived Assets

Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset 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.

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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.

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 no stock-based compensation expense recognized in its statements of operations for the three months ended March 31, 2018 and 2017.

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, 2018, 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. For the three months ended March 31, 2017, the diluted weighted average number of shares is the same as the basic weighted average number of shares as the Company did not have any common stock equivalents.

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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, 2018 and December 31, 2017.

The current assets, and current liabilities reported on the Company’s balance sheets are estimated by management to approximate fair market value due to their short-term nature. The long-term notes payable – related party are considered to approximate fair value since their terms (including imputed interest expense) are considered to approximate terms for similar debt instruments.

Recent Accounting Pronouncements

Although there were new accounting pronouncements issued or proposed by the FASB during the three months ended March 31, 2018 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements 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 $82,636 and used net cash of $22,010 in operations for the three months ended March 31, 2018. As of March 31, 2018, the Company had a working capital deficit of $545,244 and a total stockholders’ deficit of $511,417. 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, 2018			December 31, 2017

Computer equipment	$	7,435		$	7,170
Office furniture and equipment		10,055			7,214
Total		17,490			14,384
Less accumulated depreciation		(2,358	)		(1,644	)

Net	$	15,132		$	12,740

Depreciation expense was $714 and $5,344 for the three months ended March 31, 2018 and 2017, respectively.

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NOTE 5 – INTANGIBLE ASSETS

Intangible assets consisted of the following at:

	March 31, 2018			December 31, 2017

Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(47,630	)		(24,760	)

Net	$	409,770		$	432,640

Amortization expense was $22,870 and $0 for the three months ended March 31, 2018 and 2017, respectively.

NOTE 6 – NOTES PAYABLE – RELATED PARTY

Long-term notes payable - related party consisted of the following at March 31, 2018 and December 31, 2017:

Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019	$	6,925
Convertible note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019		186,450
Convertible note payable to Mick Donahoo, non-interest bearing, maturing on December 31, 2019		186,450

Total	$	379,825

The note payable to Craig Holland, our Chief Executive Officer, was amended on July 25, 2017 to eliminate the option to convert the note to common stock of the Company and to make the note non-interest bearing.

The convertible notes payable to Craig Holland and Mick Donahoo, our Chief Financial Officer, were amended on July 25, 2017 to change the conversion terms of the notes and to make the notes non-interest bearing. 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, 2018, total imputed interest expense was $25,911, which was recorded to additional paid-in capital.

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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 72,306,123 common shares issued and outstanding as of March 31, 2018.

On August 21, 2017, the Board of Directors of the Company adopted resolutions authorizing an amendment to the Company’s Articles of Incorporation to approve a reverse stock split of the Company’s outstanding common stock at a ratio of 1-for-100 and to decrease the number of the Company’s authorized common shares from 2,000,000,000 shares to 800,000,000 shares. The par value of the Company’s common stock of $0.00001 per share was not adjusted in connection with the reverse stock split. The reverse stock split was approved by FINRA and went effective on October 5, 2017. The Company has given retroactive effect to the reverse stock split in the accompanying financial statements for all periods presented.

During the three months ended March 31, 2018, the Company issued 2,520,000 shares of its common stock recorded at par value of $25 to an accredited investor in conversion of 50,400 shares of its Series B preferred stock. As the conversion was within the terms of the preferred stock, no gain or loss was recognized.

During the three months ended March 31, 2017, Munzee cancelled 800,000 outstanding common shares at par value of $8.

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, 2018, there were 2,535,482 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.

On July 25, 2017, we entered into Securities Exchange and Preferred Stock Agreements (the “PS Exchange Agreements”) with certain accredited investors and lenders (together, the “PS Exchangers”). Under the PS Exchange Agreements, as amended, the PS Exchangers agreed to exchange certain promissory notes issued us to them into shares of our Series B preferred stock automatically upon us completing a reverse stock split of our common stock with FINRA. On October 5, 2017, FINRA took our reverse stock split effective at the open of market. As a result, on October 5, 2017, we issued the PS Exchangers a total of 2,663,182 shares of our Series B preferred stock.

In two transactions in November 2017, we issued a total of 3,865,000 common shares recorded at par value to an accredited investor in conversion of 77,300 shares of our Series B preferred stock.

During the three months ended March 31, 2018, an accredited investor converted 50,400 shares of Series B preferred stock into 2,520,000 shares of the Company’s common stock.

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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.

At the closing of the Merger, we issued the owners of all of Munzee’s outstanding common stock 4,355,000 shares of our Series C preferred stock.

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.

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, 2018, 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 did not recognize any stock-based compensation during the three months ended March 31, 2018 and 2017. As of March 31, 2018, future compensation cost related to non-vested stock options not yet recognized in the statements of operations totaled $39,333.

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A summary of the status of the stock options issued by the Company under both plans as of March 31, 2018, and changes during three months then ended is presented below:

			Weighted Average
	Shares		Exercise Price

Outstanding, December 31, 2017		1,518,421	$	0.076

Granted		-		-
Canceled / Expired		-		-
Exercised		-		-

Outstanding, March 31, 2018		1,518,421	$	0.076

The outstanding options expire on various dates beginning August 2020 through December 2027.

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, 2018. 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, 2018. See Note 6 for detailed disclosure of this related party debt, including interest rates, terms of conversion and other repayment terms.

NOTE 9 – SUBSEQUENT EVENTS

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

No subsequent events to report.

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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, 2018 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 this filing, as well as any cautionary language in this annual report, 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.

Merger Transaction

On October 18, 2017, we closed the merger transaction (the “Merger”) that was the subject of that certain Agreement and Plan of Merger (the “Merger Agreement”) with Munzee, Inc., a Delaware corporation (“Munzee”) dated July 26, 2017. At closing, in accordance with the Merger Agreement, Munzee merged with and into our corporation, Freeze Tag, Inc., a Delaware corporation (the “Merger”), with Freeze Tag, Inc. being the surviving corporation. At the closing, we issued the current owners of all of Munzee’s outstanding common stock 4,355,000 shares of our Series C Convertible Preferred Stock. Under U.S. generally accepted accounting principles, the merger is treated as a “reverse merger” under the purchase method of accounting, with Munzee as the accounting acquirer. Accordingly, Munzee’s historical financial results of operations replace Freeze Tag’s historical financial results of operations for all periods prior to the Merger and, for all periods following the Merger, the financial results of operations of the combined company will be included in the Company’s financial statements. Accordingly, the results of operations and cash flows for the three months ended March 31, 2018 and March 31, 2017 presented herein are those of Munzee and are not comparable to the results of operations and cash flows for the three months ended March 31, 2017 contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2017 filed with the Commission on May 15, 2017.

15

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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 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.

Our newest location based product, ZeeTours, was launched in December 2017 through a marketing contract with Groupon. ZeeTours is a location-based smartphone game that combines fitness, learning and fun into a zany walking tour.

Central to Freeze Tag’s core strategy is capitalizing on two fast-growing trends in the mobile applications world: augmented reality gaming and location-based advertising. We plan to leverage the combined company’s proprietary technology and expertise to create more exciting augmented reality location-based games that can serve as a location-based advertising network.

Additionally, the combined company intends to offer services to help advertisers explore new possibilities in location-based advertising where captive users are roaming around in the real world. For example, AR games can help drive foot traffic to malls and movie theatres, or create memorable real world interactions that help connect users to brands with deeply emotional experiences. This kind of experience based location-specific advertising can have consumer impacts far beyond that of Google AdWords or Facebook news feed videos.

Going Concern Uncertainty

16

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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.

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

Revenue Recognition

Our revenues are derived primarily by licensing software products in the form of mobile games for smartphone and tablet platforms. We recognize revenue from the sale of our products in accordance with current accounting standards upon the transfer of title and risk of loss to its customers, and once any performance obligations have been completed. Revenue from product sales is recorded net of processing costs.

Allowances for Sales Returns and Doubtful Accounts

The allowance for sales returns is based on our estimates of potential future product returns and other allowances related to current period product revenue. We analyze historical returns, current economic trends and changes in customer demand and acceptance of our products. The allowance for doubtful accounts is based on our assessment of the collectability of customer accounts and the aging of the related invoices, and represents our best estimate of probable credit losses in its existing trade accounts receivable. We regularly review the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. We determined that no allowances for sales returns and doubtful accounts were required at March 31, 2018 and December 31, 2017.

Intangible Assets

Impairment of Long-Lived Assets

17

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Accounting for Stock-Based Compensation

We account 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.

Fair Value of Financial Instruments

Recent Accounting Pronouncements

Results of Operations for the Three Months Ended March 31, 2018 Compared to the Three Months Ended March 31, 2017.

Revenues

As discussed above, revenues for the three months ended March 31, 2017 are Munzee revenues only, while revenues for the three months ended March 31, 2018 are the combined entities, post-merger revenues. Revenue from product sales is recorded net of processing costs. Revenues decreased $74,623 to $495,854 for the three months ended March 31, 2018 from $570,477 for the three months ended March 31, 2017. The primary reason for the decrease in revenues in the current year was due to the closing down of the Munzee Marketplace store, which was shut down prior to the merger and which also resulted in a decrease in cost of sales and other expenses, partially offset by the contribution of Freeze Tag revenues during the period. The Munzee Marketplace store was shut down to focus on our core business of location-based games.

18

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Cost of Sales

Cost of sales decreased $36,155 to $55,695 for the three months ended March 31, 2018 from $91,850 for the three months ended March 31, 2017. The decrease was a result of lower revenues and shutting down operations of the Munzee Marketplace store prior to the merger.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $72,816 to $496,882 for the three months ended March 31, 2018 from $424,066 for the three months ended March 31, 2017. The increase is primarily due to the inclusion of Freeze Tag expenses during the first quarter of the current fiscal year.

Other Income (Expense)

Interest expense increased to $25,913 for the three months ended March 31, 2018 from $1,564 for the three months ended March 31, 2017. The increase in the current year is due primarily to the imputed interest on related party debt.

We received proceeds of $16,251 from the sale of an automobile and recognized a gain on disposition of property and equipment of $2,028 during the three months ended March 31, 2017. We had no gain or loss from disposition of property and equipment for the three months ended March 31, 2018.

Provision for Income Taxes

The provision for income taxes was $0 and $8,946 for the three months ended March 31, 2018 and 2017, respectively. The $8,946 provision for the three months ended March 31, 2017 consists of a provision for income taxes on the pre-merger income of Munzee.

Net Income (Loss)

As a result of the above, we reported a net loss of $82,636 for the three months ended March 31, 2018 and net income of $46,079 for the three months ended March 31, 2017.

19

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Liquidity and Capital Resources

Introduction

As of March 31, 2018, we had current assets of $202,900, including cash of $147,376, and current liabilities of $748,144, resulting in a working capital deficit of $600,768. In addition, we had a total stockholders’ deficit of $511,417 at March 31, 2018.

During the three months ended March 31, 2018, we used net cash of $22,010 from operating activities. 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 $22,010 in operating activities for the three months ended March 31, 2018 as a result of our net loss of $82,636, increases in accounts receivable of $540 and prepaid and other expenses of $8,232 and decrease in unearned royalties of $5, partially offset by non-cash expenses totaling $49,495 and increases in accounts payable of $11,676 and accrued expenses of $8,232.

By comparison, net cash provided by operating activities for the three months ended March 31, 2017 was $44,184 as a result of our net income of $46,079, non-cash expense of $5,354, decrease in prepaid expenses and other current assets of $8,946 and increase in accounts payable of $3,638, partially offset by non-cash gain of $2,028 and decrease in accrued expenses of $17,805.

For the three months ended March 31, 2018, we used net cash in investing activities of $3,106, comprised of the purchase of property and equipment. For the three months ended March 31, 2017, we had net cash provided by investing activities of $9,971, comprised of proceeds from the sale of property and equipment of $16,251, partially offset by the purchase of property and equipment of $6,280.

For the three months ended March 31, 2018, we had net cash provided by financing activities of $5,000, comprised of proceeds from stock subscription receivable. For the three months ended March 31, 2017, we used cash of $30,128 in financing activities, comprised of repayment of notes payable of $30,771, partially offset by proceeds from notes payable of $643.

20

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Notes Payable – Related Party

As of March 31, 2018, our 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, 2019. 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, 2018, 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.

21

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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

During the quarter ended March 31, 2018, we issued a total of 2,520,000 common shares recorded at par value to an accredited investor in conversion of 50,400 shares of our Series B Preferred Stock. The shares of our common stock were issued without restrictive legend in accordance with Rule 144 due to the time the holder held the shares of our Series B Preferred Stock and the prior securities of the company. Based on the representations of the holder in the Securities Exchange and Series B Preferred Stock Purchase Agreement dated July 25, 2017 and in the Notice of Conversion, the issuance of the shares was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933. The investor was accredited and sophisticated, familiar with our operations, and there was no solicitation.

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

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

22

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ITEM 6 Exhibits

23

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10.17 (6)		Amendment to Convertible Promissory Note dated December 31, 2013 – Mick Donahoo

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

Table of Contents

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.

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 Februay 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 15, 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, 2018	By:	/s/ Craig Holland
	Name:	Craig Holland
	Its:	Chief Executive Officer (Principal Executive Officer)

EX-31.1 2 frzt_ex311.htm CERTIFICATION frzt_ex311.htm

EXHIBIT 31.1

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

I, Craig Holland, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Freeze Tag, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: May 15, 2018	By:	/s/ Craig Holland
		Craig Holland
		Chief Executive Officer (Principal Executive Officer)

EX-31.2 3 frzt_ex312.htm CERTIFICATION frzt_ex312.htm

EXHIBIT 31.2

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

I, Mick Donahoo, certify that:


Dated: May 15, 2018	By:	/s/ Mick Donahoo
		Mick Donahoo
		Chief Financial Officer (Chief Accounting Officer)

EX-32.1 4 frzt_ex321.htm CERTIFICATION frzt_ex321.htm

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Freeze Tag, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2018, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Craig Holland, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


Dated: May 15, 2018	By:	/s/ Craig Holland
		Craig Holland
		Chief Executive Officer (Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Freeze Tag, Inc. and will be retained by Freeze Tag, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2 5 frzt_ex322.htm CERTIFICATION frzt_ex322.htm

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 USC, SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Freeze Tag, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2018, as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), I, Mick Donahoo, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:


Dated: May 15, 2018	By:	/s/ Mick Donahoo
		Mick Donahoo
		Chief Financial Officer (Chief Accounting Officer)

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Nature of Operations   Freeze Tag, Inc. (Freeze Tag or the Company) is a leading creator of mobile location-based games for consumers and businesses. We also offer our gaming technology and services to businesses that want to leverage mobile gaming in their marketing and branding programs.   Merger Transaction   On October 18, 2017, we closed the merger transaction (the Merger) that was the subject of that certain Agreement and Plan of Merger (the Merger Agreement) with Munzee, Inc., a Delaware corporation (Munzee) dated July 26, 2017. At closing, in accordance with the Merger Agreement, Munzee merged with and into our corporation, Freeze Tag, Inc., a Delaware corporation (the Merger), with Freeze Tag, Inc. being the surviving corporation. Under U.S. generally accepted accounting principles, the merger is treated as a reverse merger under the purchase method of accounting, with Munzee as the accounting acquirer. Accordingly, Munzees historical results of operations replace Freeze Tags historical results of operations for all periods prior to the Merger and, for all periods following the Merger, the results of operations of the combined company will be included in the Companys financial statements.

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 Companys 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 Companys revenues are derived primarily by licensing software products in the form of mobile games for smartphone and tablet platforms. The Company recognizes revenue from the sale of its products in accordance with current accounting standards upon the transfer of title and risk of loss to its customers, and once any performance obligations have been completed. Revenue from product sales is recorded net of processing costs.   Allowances for Sales Returns and Doubtful Accounts   The allowance for sales returns is based on the Companys estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of the Companys products. The allowance for doubtful accounts is based on the Companys assessment of the collectability of customer accounts and the aging of the related invoices, and represents the Companys best estimate of probable credit losses in its existing trade accounts receivable. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customers ability to pay. We determined that no allowances for sales returns and doubtful accounts were required at March 31, 2018 and December 31, 2017.   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:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; width: 40%; text-align: justify">Computer equipment</td> <td style="width: 2%; text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">5 years</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Office furniture and equipment</td> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">7 years</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Automobiles</td> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">5 years</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Leasehold improvements</td> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">15 years</td></tr> </table>   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.   Impairment of Long-Lived Assets   Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset 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.   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 no stock-based compensation expense recognized in its statements of operations for the three months ended March 31, 2018 and 2017.   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, 2018, 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. For the three months ended March 31, 2017, the diluted weighted average number of shares is the same as the basic weighted average number of shares as the Company did not have any common stock equivalents.    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, 2018 and December 31, 2017.   The current assets, and current liabilities reported on the Companys balance sheets are estimated by management to approximate fair market value due to their short-term nature. The long-term notes payable related party are considered to approximate fair value since their terms (including imputed interest expense) are considered to approximate terms for similar debt instruments.   Recent Accounting Pronouncements   Although there were new accounting pronouncements issued or proposed by the FASB during the three months ended March 31, 2018 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

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 $82,636 and used net cash of $22,010 in operations for the three months ended March 31, 2018. As of March 31, 2018, the Company had a working capital deficit of $545,244 and a total stockholders deficit of $511,417. These factors, among others, raise substantial doubt about the Companys 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 Companys 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 Companys current business plan should cash provided by operations be insufficient.   The Companys ability to continue as a going concern is dependent upon successfully executing its plans to attain a successful level of operations. The Companys financial statements do not include any adjustments that might be necessary if it were unable to continue as a going concern.

Property and equipment consisted of the following at:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom: black 1pt solid; text-align: center">March 31, 2018</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 31, 2017</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Computer equipment</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">7,435</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">7,170</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Office furniture and equipment</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">10,055</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">7,214</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">17,490</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">14,384</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less accumulated depreciation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(2,358</td> <td style="vertical-align: bottom; padding-bottom: 0.75pt; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(1,644</td> <td style="vertical-align: bottom; padding-bottom: 0.75pt; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Net</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">15,132</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">12,740</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   Depreciation expense was $714 and $5,344 for the three months ended March 31, 2018 and 2017, respectively.

Intangible assets consisted of the following at:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom: black 1pt solid; text-align: center">March 31, 2018</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 31, 2017</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Intellectual property</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">307,100</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">307,100</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Customer base</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">142,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">142,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Non-compete agreements</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">8,300</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">8,300</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less accumulated depreciation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(47,630</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(24,760</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Net</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">409,770</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">432,640</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   Amortization expense was $22,870 and $0 for the three months ended March 31, 2018 and 2017, respectively.

Long-term notes payable - related party consisted of the following at March 31, 2018 and December 31, 2017:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td id="ffcell" style="vertical-align: bottom; width: 9%; text-align: right">6,925</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Convertible note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">186,450</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Convertible note payable to Mick Donahoo, non-interest bearing, maturing on December 31, 2019</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">186,450</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">379,825</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   The note payable to Craig Holland, our Chief Executive Officer, was amended on July 25, 2017 to eliminate the option to convert the note to common stock of the Company and to make the note non-interest bearing.   The convertible notes payable to Craig Holland and Mick Donahoo, our Chief Financial Officer, were amended on July 25, 2017 to change the conversion terms of the notes and to make the notes non-interest bearing. 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, 2018, total imputed interest expense was $25,911, which was recorded to additional paid-in capital.

Common Stock   The Company is authorized to issue up to 800,000,000 shares of its $0.00001 par value common stock and had 72,306,123 common shares issued and outstanding as of March 31, 2018.   On August 21, 2017, the Board of Directors of the Company adopted resolutions authorizing an amendment to the Companys Articles of Incorporation to approve a reverse stock split of the Companys outstanding common stock at a ratio of 1-for-100 and to decrease the number of the Companys authorized common shares from 2,000,000,000 shares to 800,000,000 shares. The par value of the Companys common stock of $0.00001 per share was not adjusted in connection with the reverse stock split. The reverse stock split was approved by FINRA and went effective on October 5, 2017. The Company has given retroactive effect to the reverse stock split in the accompanying financial statements for all periods presented.   During the three months ended March 31, 2018, the Company issued 2,520,000 shares of its common stock recorded at par value of $25 to an accredited investor in conversion of 50,400 shares of its Series B preferred stock. As the conversion was within the terms of the preferred stock, no gain or loss was recognized.   During the three months ended March 31, 2017, Munzee cancelled 800,000 outstanding common shares at par value of $8.    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, 2018, there were 2,535,482 shares of Series B preferred stock and 4,355,000 shares of Series C preferred stock issued and outstanding.   Series B Preferred Stock   The Companys Series B preferred stock has 2,700,000 shares authorized and the following rights: (i) dividend rights equal to the Companys common stock; (ii) no liquidation preference over the Companys common stock; (iii) each share is convertible into 50 shares of the Companys 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.   On July 25, 2017, we entered into Securities Exchange and Preferred Stock Agreements (the PS Exchange Agreements) with certain accredited investors and lenders (together, the PS Exchangers). Under the PS Exchange Agreements, as amended, the PS Exchangers agreed to exchange certain promissory notes issued us to them into shares of our Series B preferred stock automatically upon us completing a reverse stock split of our common stock with FINRA. On October 5, 2017, FINRA took our reverse stock split effective at the open of market. As a result, on October 5, 2017, we issued the PS Exchangers a total of 2,663,182 shares of our Series B preferred stock.   In two transactions in November 2017, we issued a total of 3,865,000 common shares recorded at par value to an accredited investor in conversion of 77,300 shares of our Series B preferred stock.   During the three months ended March 31, 2018, an accredited investor converted 50,400 shares of Series B preferred stock into 2,520,000 shares of the Companys common stock.   Series C Preferred Stock   The Companys Series C Preferred Stock has 4,500,000 shares authorized and the following rights: (i) dividend rights equal to the Companys common stock; (ii) no liquidation preference over the Companys common stock; (iii) each share is convertible into 50 shares of the Companys 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 Companys common stockholders for a vote.   At the closing of the Merger, we issued the owners of all of Munzees outstanding common stock 4,355,000 shares of our Series C preferred stock.   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.   2006 Stock Option Plan   The Companys 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, 2018, 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 did not recognize any stock-based compensation during the three months ended March 31, 2018 and 2017. As of March 31, 2018, future compensation cost related to non-vested stock options not yet recognized in the statements of operations totaled $39,333.   A summary of the status of the stock options issued by the Company under both plans as of March 31, 2018, and changes during three months then ended is presented below:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="text-align: center">Weighted Average</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Shares</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Exercise Price</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Outstanding, December 31, 2017</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,518,421</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">0.076</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Granted</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Canceled / Expired</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Exercised</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Outstanding, March 31, 2018</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">1,518,421</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">0.076</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   The outstanding options expire on various dates beginning August 2020 through December 2027.

The Company had a note payable to Craig Holland, its Chief Executive Officer, with a balance of $6,925 at March 31, 2018. 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, 2018. See Note 6 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, 2018, total imputed interest expense was $25,911, which was recorded to additional paid-in capital.

Management has evaluated subsequent events according to the requirements of ASC TOPIC 855, and has reported the following:   No subsequent events to report.

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires the Companys 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.

The Companys revenues are derived primarily by licensing software products in the form of mobile games for smartphone and tablet platforms. The Company recognizes revenue from the sale of its products in accordance with current accounting standards upon the transfer of title and risk of loss to its customers, and once any performance obligations have been completed. Revenue from product sales is recorded net of processing costs.

The allowance for sales returns is based on the Companys estimates of potential future product returns and other allowances related to current period product revenue. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of the Companys products. The allowance for doubtful accounts is based on the Companys assessment of the collectability of customer accounts and the aging of the related invoices, and represents the Companys best estimate of probable credit losses in its existing trade accounts receivable. The Company regularly reviews the allowance by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customers ability to pay. We determined that no allowances for sales returns and doubtful accounts were required at March 31, 2018 and December 31, 2017.

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:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; width: 40%; text-align: justify">Computer equipment</td> <td style="width: 2%; text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">5 years</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Office furniture and equipment</td> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">7 years</td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Automobiles</td> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">5 years</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Leasehold improvements</td> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">15 years</td></tr> </table>   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 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.

Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset 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.

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.

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 no stock-based compensation expense recognized in its statements of operations for the three months ended March 31, 2018 and 2017.

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, 2018, 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. For the three months ended March 31, 2017, the diluted weighted average number of shares is the same as the basic weighted average number of shares as the Company did not have any common stock equivalents.

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, 2018 and December 31, 2017.   The current assets, and current liabilities reported on the Companys balance sheets are estimated by management to approximate fair market value due to their short-term nature. The long-term notes payable related party are considered to approximate fair value since their terms (including imputed interest expense) are considered to approximate terms for similar debt instruments.

Although there were new accounting pronouncements issued or proposed by the FASB during the three months ended March 31, 2018 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom: black 1pt solid; text-align: center">March 31, 2018</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 31, 2017</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Computer equipment</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">7,435</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">7,170</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Office furniture and equipment</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">10,055</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">7,214</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">17,490</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">14,384</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less accumulated depreciation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(2,358</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(1,644</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Net</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">15,132</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">12,740</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell" style="border-bottom: black 1pt solid; text-align: center">March 31, 2018</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">December 31, 2017</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Intellectual property</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">307,100</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">307,100</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Customer base</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">142,000</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">142,000</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Non-compete agreements</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">8,300</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">8,300</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Less accumulated depreciation</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(47,630</td> <td style="vertical-align: bottom; text-align: justify">)</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">(24,760</td> <td style="vertical-align: bottom; text-align: justify">)</td></tr> <tr style="background-color: #CCEEFF"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Net</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">409,770</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">432,640</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td id="ffcell" style="vertical-align: bottom; width: 9%; text-align: right">6,925</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Convertible note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">186,450</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Convertible note payable to Mick Donahoo, non-interest bearing, maturing on December 31, 2019</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">186,450</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Total</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">379,825</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" id="hdcell"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="text-align: center">Weighted Average</td> <td style="text-align: justify"> </td></tr> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Shares</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid; text-align: center">Exercise Price</td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" id="ffcell" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td colspan="2" style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Outstanding, December 31, 2017</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 9%; text-align: right">1,518,421</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">0.076</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Granted</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Canceled / Expired</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Exercised</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 1pt solid; text-align: justify"> </td> <td style="border-bottom: black 1pt solid; vertical-align: bottom; text-align: right">-</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right"> </td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Outstanding, March 31, 2018</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify"> </td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">1,518,421</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">0.076</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

P5Y

P7Y

P5Y

P15Y

714

5344

22870

5600

1518421

0.076

1-for-100

(i) dividend rights equal to the Companys common stock; (ii) no liquidation preference over the Companys common stock; (iii) each share is convertible into 50 shares of the Companys 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 Companys common stockholders for a vote.

(i) dividend rights equal to the Companys common stock; (ii) no liquidation preference over the Companys common stock; (iii) each share is convertible into 50 shares of the Companys 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.

10000000 3865000 77300 50400 2520000

39333

25 8 800000 1512821

0.10

5000

the Company's outstanding common stock at a ratio of 1-for-100 and to decrease the number of the Company's authorized common shares from 2,000,000,000 shares to 800,000,000 shares.

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Is Entity a Voluntary Filer? Is Entity's Reporting Status Current? Entity Filer Category Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Statement [Table] Statement [Line Items] ASSETS Current assets: Cash Accounts receivable Prepaid expenses and other current assets Total current assets Property and equipment, net Intangible assets, net Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable Accrued expenses Unearned royalties Total current liabilities Long-term liabilities: Accrued expenses Notes payable - related party Total long-term liabilities Total liabilities Commitments and contingencies Stockholders deficit: Preferred stock Common stock; $0.00001 par value, 800,000,000 shares authorized, 72,306,123 and 69,786,123 shares issued and outstanding, respectively Additional paid-in capital Common stock payable Common stock subscription receivable Accumulated deficit Total stockholders deficit Total liabilities and stockholders deficit Stockholders' equity (deficit): Preferred stock, par value Preferred stock, authorized shares Preferred stock, issued shares Preferred stock, outstanding shares Common stock, par value Common stock, authorized shares Common stock, issued shares Common stock, outstanding shares Condensed Statements Of Operations Revenues Operating costs and expenses: Cost of sales Selling, general and administrative expenses Total operating costs and expenses Income (loss) from operations Other income (expense): Interest expense, net Gain on disposition of property and equipment Total other income (expense) Income (loss) before income taxes Provision for income taxes Net income (loss) Weighted average number of common shares outstanding - basic and diluted Income (loss) per common share - basic and diluted Condensed Statements Of Cash Flows Cash flows from operating activities: Net income (loss) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization Imputed interest expense Gain on disposition of property and equipment Changes in operating assets and liabilities: Accounts receivable Prepaid expenses and other current assets Accounts payable Accrued expenses Unearned royalties Net cash provided by (used by) operating activities Cash flows from investing activities: Proceeds from disposition of property and equipment Purchase of property and equipment Net cash provided by (used by) investing activities Cash flows from financing activities: Proceeds stock subscription receivable Proceeds from notes payable Repayment of notes payable Net cash provided by (used by) financing activities Net increase (decrease) in cash Cash at the beginning of the period Cash at the end of the period 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 Cancellation of common shares Notes to Financial Statements 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 PAYABLE RELATED PARTY NOTE 7 - STOCKHOLDERS' DEFICIT NOTE 8 - RELATED PARTY TRANSACTIONS NOTE 9 - SUBSEQUENT EVENTS Summary Of Significant Accounting Policies Policies Use of Estimates Revenue Recognition Allowances for Sales Returns and Doubtful Accounts Property and Equipment Intangible Assets Impairment of Long-Lived Assets Income Taxes Stock-Based Compensation Earnings per Share Fair Value of Financial Instruments Recent Accounting Pronouncements Summary Of Significant Accounting Policies Tables Estimated useful life of asset Property And Equipment Tables Property and equipment Intangible Assets Tables Schedule of Intangible assets Notes Payable Related Party Tables Convertible notes payable related party Stockholders Deficit Tables Schedule of status of warrants and options issued Property, plant and equipment, estimated useful lives Summary Of Significant Accounting Policies Details Narative Intangible assets estimated useful lives Going Concern Uncertainty Details Narrative Net loss Total stockholders' equity (deficit) Working capital deficit Net cash provided by operating activities Property and equipment, gross Less accumulated depreciation and amortization Property And Equipment Details Narrative Depreciation expense Intangible assets, gross Less accumulated amortization Intangible Assets Details Narrative Amortization expense Note payable Convertible Notes Payable, related party Underlying Asset Class [Axis] Interest rate Debt instrument, convertible, conversion price Debt instrument maturity date Number of Shares Beginning Balance Granted EX-101.PRE 11 frzt-20180331_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE XML 12 R1.htm IDEA: XBRL DOCUMENT

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2018	May 11, 2018
Document And Entity Information
Entity Registrant Name	FREEZE TAG, INC.
Entity Central Index Key	0001485074
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		72,306,123
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2018

XML 13 R2.htm IDEA: XBRL DOCUMENT

CONDENSED BALANCE SHEETS - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash	$ 147,376	$ 167,492
Accounts receivable	7,935	7,395
Prepaid expenses and other current assets	47,589	39,357
Total current assets	202,900	214,244
Property and equipment, net	15,132	12,740
Intangible assets, net	409,770	432,640
Other assets	15,000	15,000
Total assets	642,802	674,624
Current liabilities:
Accounts payable	167,170	155,494
Accrued expenses	453,792	451,247
Unearned royalties	127,182	127,187
Total current liabilities	748,144	733,928
Long-term liabilities:
Accrued expenses	26,250	20,563
Notes payable - related party	379,825	379,825
Total long-term liabilities	406,075	400,388
Total liabilities	1,154,219	1,134,316
Commitments and contingencies
Stockholders deficit:
Common stock; $0.00001 par value, 800,000,000 shares authorized, 72,306,123 and 69,786,123 shares issued and outstanding, respectively	723	698
Additional paid-in capital	8,945,867	8,919,980
Common stock payable	16,800	16,800
Common stock subscription receivable		(5,000)
Accumulated deficit	(9,474,876)	(9,392,240)
Total stockholders deficit	(511,417)	(459,692)
Total liabilities and stockholders deficit	642,802	674,624
Series B Preferred Stock [Member]
Stockholders deficit:
Preferred stock	25	25
Series C Preferred Stock [Member]
Stockholders deficit:
Preferred stock	$ 44	$ 44

XML 14 R3.htm IDEA: XBRL DOCUMENT

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
Stockholders' equity (deficit):
Preferred stock, par value	$ 0.00001	$ 0.00001
Preferred stock, authorized shares	25,000,000	25,000,000
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, authorized shares	800,000,000	800,000,000
Common stock, issued shares	72,306,123	69,786,123
Common stock, outstanding shares	72,306,123	69,786,123
Series B Preferred Stock [Member]
Stockholders' equity (deficit):
Preferred stock, authorized shares	2,700,000	2,700,000
Preferred stock, issued shares	2,535,482	2,585,882
Preferred stock, outstanding shares	2,535,482	2,585,882
Series C Preferred Stock [Member]
Stockholders' equity (deficit):
Preferred stock, authorized shares	4,500,000	4,500,000
Preferred stock, issued shares	4,355,000	4,355,000
Preferred stock, outstanding shares	4,355,000	4,355,000

XML 15 R4.htm IDEA: XBRL DOCUMENT

CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Condensed Statements Of Operations
Revenues	$ 495,854	$ 570,477
Operating costs and expenses:
Cost of sales	55,695	91,850
Selling, general and administrative expenses	496,882	424,066
Total operating costs and expenses	552,577	515,916
Income (loss) from operations	(56,723)	54,561
Other income (expense):
Interest expense, net	(25,913)	(1,564)
Gain on disposition of property and equipment		2,028
Total other income (expense)	(25,913)	464
Income (loss) before income taxes	(82,636)	55,025
Provision for income taxes		(8,946)
Net income (loss)	$ (82,636)	$ 46,079
Weighted average number of common shares outstanding - basic and diluted	70,626,123	6,720,000
Income (loss) per common share - basic and diluted	$ (0.00)	$ 0.01

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CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net income (loss)	$ (82,636)	$ 46,079
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	23,584	5,354
Imputed interest expense	25,911
Gain on disposition of property and equipment		(2,028)
Changes in operating assets and liabilities:
Accounts receivable	(540)
Prepaid expenses and other current assets	(8,232)	8,946
Accounts payable	11,676	3,638
Accrued expenses	8,232	(17,805)
Unearned royalties	(5)
Net cash provided by (used by) operating activities	(22,010)	44,184
Cash flows from investing activities:
Proceeds from disposition of property and equipment		16,251
Purchase of property and equipment	(3,106)	(6,280)
Net cash provided by (used by) investing activities	(3,106)	9,971
Cash flows from financing activities:
Proceeds stock subscription receivable	5,000
Proceeds from notes payable		643
Repayment of notes payable		(30,771)
Net cash provided by (used by) financing activities	5,000	(30,128)
Net increase (decrease) in cash	(20,116)	24,027
Cash at the beginning of the period	167,492	193,892
Cash at the end of the period	147,376	217,919
Supplemental disclosure:
Cash paid for income taxes
Cash paid for interest expense	1	1,564
Non-cash transactions:
Issuance of common shares in conversion of Series B preferred stock	25
Cancellation of common shares		$ (8)

XML 17 R6.htm IDEA: XBRL DOCUMENT

THE COMPANY AND NATURE OF BUSINESS

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 1 - THE COMPANY AND NATURE OF BUSINESS

Nature of Operations

Merger Transaction

XML 18 R7.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

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

Revenue Recognition

Allowances for Sales Returns and Doubtful Accounts

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:

Computer equipment		5 years
Office furniture and equipment		7 years
Automobiles		5 years
Leasehold improvements		15 years

Intangible Assets

Impairment of Long-Lived Assets

Income Taxes

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

Stock-Based Compensation

The Company had no stock-based compensation expense recognized in its statements of operations for the three months ended March 31, 2018 and 2017.

Earnings per Share

Fair Value of Financial Instruments

Recent Accounting Pronouncements

XML 19 R8.htm IDEA: XBRL DOCUMENT

GOING CONCERN UNCERTAINTY

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 3 - GOING CONCERN UNCERTAINTY

XML 20 R9.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at:

	March 31, 2018			December 31, 2017

Computer equipment	$	7,435		$	7,170
Office furniture and equipment		10,055			7,214
Total		17,490			14,384
Less accumulated depreciation		(2,358	)		(1,644	)

Net	$	15,132		$	12,740

Depreciation expense was $714 and $5,344 for the three months ended March 31, 2018 and 2017, respectively.

XML 21 R10.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 5 - INTANGIBLE ASSETS

Intangible assets consisted of the following at:

	March 31, 2018			December 31, 2017

Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(47,630	)		(24,760	)

Net	$	409,770		$	432,640

Amortization expense was $22,870 and $0 for the three months ended March 31, 2018 and 2017, respectively.

XML 22 R11.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE RELATED PARTY

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 6 - NOTES PAYABLE RELATED PARTY

Long-term notes payable - related party consisted of the following at March 31, 2018 and December 31, 2017:

Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019	$	6,925
Convertible note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019		186,450
Convertible note payable to Mick Donahoo, non-interest bearing, maturing on December 31, 2019		186,450

Total	$	379,825

XML 23 R12.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' DEFICIT

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

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 72,306,123 common shares issued and outstanding as of March 31, 2018.

During the three months ended March 31, 2017, Munzee cancelled 800,000 outstanding common shares at par value of $8.

Preferred Stock

Series B Preferred Stock

In two transactions in November 2017, we issued a total of 3,865,000 common shares recorded at par value to an accredited investor in conversion of 77,300 shares of our Series B preferred stock.

During the three months ended March 31, 2018, an accredited investor converted 50,400 shares of Series B preferred stock into 2,520,000 shares of the Company’s common stock.

Series C Preferred Stock

At the closing of the Merger, we issued the owners of all of Munzee’s outstanding common stock 4,355,000 shares of our Series C preferred stock.

Stock Options

2017 Non-Qualified Stock Option Plan

2006 Stock Option Plan

A summary of the status of the stock options issued by the Company under both plans as of March 31, 2018, and changes during three months then ended is presented below:

			Weighted Average
	Shares		Exercise Price

Outstanding, December 31, 2017		1,518,421	$	0.076

Granted		-		-
Canceled / Expired		-		-
Exercised		-		-

Outstanding, March 31, 2018		1,518,421	$	0.076

The outstanding options expire on various dates beginning August 2020 through December 2027.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB Topic 4.E)
-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74567-122707

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(e))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
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-Paragraph 1
-Subparagraph (SX 210.5-02(31))
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB Topic 4.C)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(30))
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(d))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

+ Details

XML 24 R13.htm IDEA: XBRL DOCUMENT

RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 8 - RELATED PARTY TRANSACTIONS

XML 25 R14.htm IDEA: XBRL DOCUMENT

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 9 - SUBSEQUENT EVENTS

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

No subsequent events to report.

XML 26 R15.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2018

Summary Of Significant Accounting Policies Policies

Use of Estimates

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

Revenue Recognition

Allowances for Sales Returns and Doubtful Accounts

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:

Computer equipment		5 years
Office furniture and equipment		7 years
Automobiles		5 years
Leasehold improvements		15 years

Intangible Assets

Impairment of Long-Lived Assets

Income Taxes

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

Stock-Based Compensation

The Company had no stock-based compensation expense recognized in its statements of operations for the three months ended March 31, 2018 and 2017.

Earnings per Share

Fair Value of Financial Instruments

Recent Accounting Pronouncements

XML 27 R16.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2018

Summary Of Significant Accounting Policies Tables

Estimated useful life of asset

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:

Computer equipment		5 years
Office furniture and equipment		7 years
Automobiles		5 years
Leasehold improvements		15 years

XML 28 R17.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2018

Property And Equipment Tables

Property and equipment

	March 31, 2018			December 31, 2017

Computer equipment	$	7,435		$	7,170
Office furniture and equipment		10,055			7,214
Total		17,490			14,384
Less accumulated depreciation		(2,358	)		(1,644	)

Net	$	15,132		$	12,740

XML 29 R18.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2018

Intangible Assets Tables

Schedule of Intangible assets

	March 31, 2018			December 31, 2017

Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(47,630	)		(24,760	)

Net	$	409,770		$	432,640

XML 30 R19.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE RELATED PARTY (Tables)

3 Months Ended

Mar. 31, 2018

Notes Payable Related Party Tables

Convertible notes payable related party

Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019	$	6,925
Convertible note payable to Craig Holland, non-interest bearing, maturing on December 31, 2019		186,450
Convertible note payable to Mick Donahoo, non-interest bearing, maturing on December 31, 2019		186,450

Total	$	379,825

XML 31 R20.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' DEFICIT (Tables)

3 Months Ended

Mar. 31, 2018

Stockholders Deficit Tables

Schedule of status of warrants and options issued

			Weighted Average
	Shares		Exercise Price

Outstanding, December 31, 2017		1,518,421	$	0.076

Granted		-		-
Canceled / Expired		-		-
Exercised		-		-

Outstanding, March 31, 2018		1,518,421	$	0.076

XML 32 R21.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Mar. 31, 2018
Computer equipment [Member]
Property, plant and equipment, estimated useful lives	5 years
Office furniture and equipment [Member]
Property, plant and equipment, estimated useful lives	7 years
Automobiles [Member]
Property, plant and equipment, estimated useful lives	5 years
Leaseholds improvements [Member]
Property, plant and equipment, estimated useful lives	15 years

XML 33 R22.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narative)	3 Months Ended
	Mar. 31, 2018
Summary Of Significant Accounting Policies Details Narative
Intangible assets estimated useful lives	5 years

XML 34 R23.htm IDEA: XBRL DOCUMENT

GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($)	3 Months Ended
GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($)	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Going Concern Uncertainty Details Narrative
Net loss	$ (82,636)	$ 46,079
Total stockholders' equity (deficit)	(511,417)		$ (459,692)
Working capital deficit	(545,244)
Net cash provided by operating activities	$ (22,010)	$ 44,184

XML 35 R24.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Property and equipment, gross	$ 17,490	$ 14,384
Less accumulated depreciation and amortization	(2,358)	(1,644)
Property and equipment, net	15,132	12,740
Computer equipment [Member]
Property and equipment, gross	7,435	7,170
Office furniture and equipment [Member]
Property and equipment, gross	$ 10,055	$ 7,214

XML 36 R25.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	Mar. 31, 2018	Mar. 31, 2017
Property And Equipment Details Narrative
Depreciation expense	$ 714	$ 5,344

XML 37 R26.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Less accumulated amortization	$ (47,630)	$ (24,760)
Intangible assets, net	409,770	432,640
Intellectual property [Member]
Intangible assets, gross	307,100	307,100
Customer base [Member]
Intangible assets, gross	142,000	142,000
Non-compete agreements [Member]
Intangible assets, gross	$ 8,300	$ 8,300

XML 38 R27.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended
INTANGIBLE ASSETS (Details Narrative) - USD ($)	Mar. 31, 2018	Mar. 31, 2017
Intangible Assets Details Narrative
Amortization expense	$ 22,870	$ 0

XML 39 R28.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE RELATED PARTY (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Note payable	$ 6,925
Notes payable - related party	379,825	$ 379,825
Craig Holland Maturing On December 31, 2019 [Member]
Note payable	6,925	6,925
Convertible Notes Payable, related party	186,450	186,450
Mick Donahoo, maturing on December 31, 2019
Convertible Notes Payable, related party	$ 186,450	$ 186,450

XML 40 R29.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE RELATED PARTY (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt instrument, convertible, conversion price	$ 0.02
Imputed interest expense	$ 25,911
Craig Holland [Member]
Interest rate	10.00%
Debt instrument maturity date	December 31, 2019
Craig Holland One [Member]
Interest rate	10.00%
Debt instrument maturity date	December 31, 2019
Mick Donahoo [Member]
Interest rate	10.00%
Debt instrument maturity date	December 31, 2019

XML 41 R30.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' DEFICIT (Details) - Stock Options [Member]	3 Months Ended
	Mar. 31, 2018 $ / shares shares
Number of Shares
Beginning Balance \| shares	1,518,421
Granted \| shares
Canceled / Expired \| shares
Exercised \| shares
Weighted Average Exercise Price
Beginning Balance	$ 0.076
Grant
Canceled / Expired
Exercised
Ending Balance	$ 0.076

XML 42 R31.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($)		1 Months Ended		3 Months Ended
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($)	Dec. 05, 2017	Nov. 30, 2017	Aug. 21, 2017	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 04, 2017	Oct. 05, 2017
Common stock, par value				$ 0.00001		$ 0.00001
Common stock, authorized shares				800,000,000		800,000,000
Common stock, issued shares				72,306,123		69,786,123
Common stock, outstanding shares				72,306,123		69,786,123
Preferred stock, par value				$ 0.00001		$ 0.00001
Preferred stock, authorized shares				25,000,000		25,000,000
Compensation cost				$ 39,333
Investor [Member]
Issuance of common stock for conversion of Series B preferred stock, Shares		77,300		50,400
Issuance of common stock for conversion of debt, Shares				2,520,000
Outstanding common stock shares at par value				$ 25
Series C Preferred Stock [Member]
Preferred stock, authorized shares				4,500,000		4,500,000
Preferred stock, issued shares				4,355,000		4,355,000
Preferred stock, outstanding shares				4,355,000		4,355,000
Preferred Stock voting rights description				(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.
Series B Preferred Stock [Member]
Preferred stock, authorized shares				2,700,000		2,700,000
Preferred stock, issued shares				2,535,482		2,585,882
Preferred stock, outstanding shares				2,535,482		2,585,882
Preferred Stock voting rights description				(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.
Series B Preferred Stock [Member] \| Preferred Stock Exchange Agreements [Member]
Preferred stock, issued shares								2,663,182
Munzee [Member]
Outstanding common stock shares at par value					$ 8
Outstanding common stock shares cancelled					800,000
Munzee [Member] \| Series C Preferred Stock [Member]
Common stock, outstanding shares				4,355,000
Board of Directors [Member]
Common stock shares options purchase	1,512,821
Common Stock [Member]
Reverse stock split			1-for-100
Common stock, par value			$ 0.00001
Amendment in articles of incorporation description			the Company's outstanding common stock at a ratio of 1-for-100 and to decrease the number of the Company's authorized common shares from 2,000,000,000 shares to 800,000,000 shares.
Issuance of common stock for conversion of Series B preferred stock, Shares		3,865,000
2006 Stock Option Plan [Member]
Stock options outstanding				5,600
2017 Non-Qualified Stock Option Plan [Member] \| Maximum [Member]
Option granted to purchase common shares							10,000,000

XML 43 R32.htm IDEA: XBRL DOCUMENT

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Notes payable	$ 6,925
Imputed interest expense	$ 25,911
Related party annual interest rate	10.00%
Chief Financial Officer [Member]
Convertible notes payable - related party	$ 372,900

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

(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 Februay 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 15, 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

1.	I have reviewed this Quarterly Report on Form 10-Q of Freeze Tag, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exhibit Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	(1)	The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and

	(2)	Information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.