frzt_10q.htm

0001477932-19-002819.txt : 20190515 0001477932-19-002819.hdr.sgml : 20190515 20190515170113 ACCESSION NUMBER: 0001477932-19-002819 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 54 CONFORMED PERIOD OF REPORT: 20190331 FILED AS OF DATE: 20190515 DATE AS OF CHANGE: 20190515 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: 19829401 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, 2019

¨ 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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes 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

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 10, 2019, there were 75,056,123 shares of common stock, $0.00001 par value, issued and outstanding.

FREEZE TAG, INC.

TABLE OF CONTENTS

QUARTER ENDED MARCH 31, 2019


PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
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

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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, 2019 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, 2018 filed with the Securities and Exchange Commission on April 1, 2019.

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FREEZE TAG, INC.

(A DELAWARE CORPORATION)

CONDENSED BALANCE SHEETS

	March 31, 2019			December 31, 2018
ASSETS	(Unaudited)

Current assets:
Cash	$	277,920		$	309,216
Accounts receivable		2,864			5,079
Prepaid expenses and other current assets		9,792			27,001
Total current assets		290,576			341,296

Property and equipment, net		12,179			13,051
Intangible assets, net		318,290			341,160
Other assets		86,877			2,850

Total assets	$	707,922		$	698,357

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable	$	192,459		$	176,020
Accrued expenses		455,665			452,655
Unearned royalties		7,543			127,182
Notes payable–related party		379,825			379,825
Other current liabilities		27,233			-
Total current liabilities		1,062,725			1,135,682

Other long-term liabilities		54,697			-

Total liabilities		1,117,422			1,135,682

Commitments and contingencies

Stockholders’ deficit:
Preferred stock, $0.00001 par value, 25,000,000 shares authorized:
Series B; 2,480,482 shares issued and outstanding		25			25
Series C; 4,355,000 shares issued and outstanding		44			44
Common stock; $0.00001 par value, 800,000,000 shares authorized, 75,056,123 shares issued and outstanding		751			751
Additional paid-in capital		9,010,906			8,997,457
Common stock payable		16,800			16,800
Accumulated deficit		(9,438,026	)		(9,452,402	)
Total stockholders’ deficit		(409,500	)		(437,325	)

Total liabilities and stockholders’ deficit	$	707,922		$	698,357

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,
	2019			2018

Revenues	$	560,203		$	495,854

Operating costs and expenses:
Cost of sales		71,923			55,695
Selling, general and administrative expenses		463,918			496,882

Total operating costs and expenses		535,841			552,577

Income (loss) from operations		24,362			(56,723	)

Other income (expense):
Interest expense, net		(9,986	)		(25,913	)

Total other income (expense)		(9,986	)		(25,913	)

Net income (loss)	$	14,376		$	(82,636	)

Weighted average number of common shares outstanding - basic		75,056,123			70,626,123
Weighted average number of common shares outstanding - diluted		94,073,373			70,626,123

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

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 STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

Series A

Preferred Stock

Series B

Preferred Stock

Series C

Preferred Stock

Common Stock

Additional Paid-in

Common
Stock

Common

Stock
Subscription

Retained Earnings

Shares

Amount

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Payable

Receivable

(Deficit)

Total

Balance, January 1, 2018

-

$ -

2,585,882

$ 26

4,355,000

$ 44

69,786,123

$ 698

$ 8,919,980

$ 16,800

$ (5,000 )

$ (9,392,240 )

$ (459,692 )

Collection of stock subscription    receivable

-

-

-

-

-

-

-

-

-

-

5,000

-

5,000

Issuance of common stock for conversion of Series B preferred stock

-

-

(50,400 )

(1 )

-

-

2,520,000

25

(25 )

-

-

-

-

Imputed interest on related party debt

-

-

-

-

-

-

-

-

25,911

-

-

-

25,911

Net loss

-

-

-

-

-

-

-

-

-

-

-

(82,636 )

(82,636 )

Balance, March 31, 2018

-

$ -

2,535,482

$ 25

4,355,000

$ 44

72,306,123

$ 723

$ 8,945,867

$ 16,800

$ -

$ (9,474,876 )

$ (511,417 )

Balance, January 1, 2019

-

$ -

2,480,482

$ 25

4,355,000

$ 44

75,056,123

$ 751

$ 8,997,457

$ 16,800

$ -

$ (9,452,402 )

$ (437,325 )

Imputed interest on related party    debt

-

-

-



            -

-

-

-

-

9,366

-

-

-

54,529

Stock-based compensation

-

-

-

-

-

-

-

-

4,083

-

-

-

23,000

Net income

-

-

-

-

-

-

-

-

-

-

-

14,376

14,376

Balance, March 31, 2019

-

$ -

2,480,482

$ 25

4,355,000

$ 44

75,056,123

$ 751

$ 9,010,906

$ 16,800

$ -

$ (9,438,026 )

$ (409,500 )

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,
	2019			2018
Cash flows from operating activities:
Net income (loss)	$	14,376		$	(82,636	)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization		23,742			23,584
Imputed interest expense		9,366			25,911
Stock-based compensation		4,083			-
Changes in operating assets and liabilities:
Accounts receivable		2,215			(540	)
Prepaid expenses and other current assets		17,209			(8,232	)
Other assets		(2,097	)		-
Accounts payable		16,439			11,676
Accrued expenses		3,010			8,232
Unearned royalties		(119,639	)		(5	)

Net cash used by operating activities		(31,296	)		(22,010	)

Cash flows from investing activities:
Purchase of property and equipment		-			(3,106	)

Net cash used by investing activities		-			(3,106	)

Cash flows from financing activities:
Proceeds stock subscription receivable		-			5,000

Net cash provided by financing activities		-			5,000

Net decrease in cash		(31,296	)		(20,116	)
Cash at the beginning of the period		309,216			167,492

Cash at the end of the period	$	277,920		$	147,376

Supplemental disclosure:

Cash paid for income taxes	$	-		$	-
Cash paid for interest expense		-			1

Non-cash transactions:

Issuance of common shares in conversion of Series B preferred stock	$	-		$	25
Right-of-use asset obtained in exchange for lease obligation		88,325			-

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, 2019

(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.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

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

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

Revenue Recognition

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

We determine revenue recognition through the following steps:

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

· identification of the performance obligations in the contract;

· determination of the transaction price;

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

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

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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.

Income Taxes

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

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

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

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Stock-Based Compensation

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

The Company had stock-based compensation expense recognized in its statements of operations of $4,083 for the three months ended March 31, 2019 and $0 for the three months ended March 31, 2018.

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.

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, 2019 and December 31, 2018.

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.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02 “Leases (Topic 842),” which amends existing accounting standards for leases. The ASU requires lessees to recognize most leases on their balance sheet as a lease liability with a corresponding right-of-use asset. Right-of-use assets and lease liabilities are recorded at the present value of minimum lease payments. For our operating lease, the asset is included in Other long-term assets on the consolidated balance sheet at March 31, 2019 and is amortized within operating income over the lease term. The long-term component of the lease liability is included in Other long-term liabilities, net, and the current component is included in Other current liabilities. The Company adopted the ASU effective January 1, 2019. We recognized an $88,325 right-of-use asset and $88,325 related lease liability as of January 1, 2019 for our operating lease. The adoption of ASC 842 did not have a material impact on the Company’s consolidated results of operations, equity or cash flows as of the adoption date. Under the alternative method of adoption, comparative information was not restated, but will continue to be reported under the standards in effect for those periods.

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The Company considers the applicability and impact of all ASUs. Recently issued ASUs not listed above were assessed and determined to be either not applicable or are expected to have minimal impact on our condensed financial statements.

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 net income of $14,376 and used net cash of $31,296 in operations for the three months ended March 31, 2019. As of March 31, 2019, the Company had a working capital deficit of $772,149 and a total stockholders’ deficit of $409,500. 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, 2019			December 31, 2018

Computer equipment	$	7,971		$	7,971
Office furniture and equipment		10,055			10,055
Total		18,026			18,026
Less accumulated depreciation		(5,847	)		(4,975	)

Net	$	12,179		$	13,051

Depreciation expense was $872 and $714 for the three months ended March 31, 2019 and 2018, respectively.

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NOTE 5 – INTANGIBLE ASSETS

Intangible assets consisted of the following at:

	March 31, 2019			December 31, 2018

Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(139,110	)		(116,240	)

Net	$	318,290		$	341,160

Amortization expense was $22,870 for the three months ended March 31, 2019 and 2018.

NOTE 6 – LEASES

Our adoption of ASU 2016-02, Leases (Topic 842), and subsequent ASUs related to Topic 842, requires us to recognize substantially all leases on the balance sheet as an ROU asset and a corresponding lease liability. The new guidance also requires additional disclosures as detailed below. We adopted this standard on the effective date of January 1, 2019 and used this effective date as the date of initial application. Under this application method, we were not required to restate prior period financial information or provide Topic 842 disclosures for prior periods. We elected the ‘package of practical expedients,’ which permitted us to not reassess our prior conclusions related to lease identification, lease classification, and initial direct costs, and we did not elect the use of hindsight.

We determine if a contract is a lease at the inception of the arrangement. We review all options to extend, terminate, or purchase the ROU assets, and when reasonably certain to exercise, we include the option in the determination of the lease term and lease liability. We have one operating lease related to our office space in Texas with a remaining lease terms of 3 years. We recognized $8,550 in operating lease costs for the three months ended March 31, 2019.

Lease ROU assets and liabilities are recognized at commencement date of the lease, based on the present value of lease payments over the lease term. The lease ROU asset also includes any lease payments made and excludes any lease incentives. When readily determinable, we use the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date, including the lease term.

Short-term leases with an initial term of 12 months or less are not recorded on the Balance Sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. As of March 31, 2019, we did not have any short-term leases.

The tables below present financial information associated with our lease. This information is only presented as of, and for the three months ended, March 31, 2019. As noted above, we adopted Topic 842 using a transition method that does not require application to periods prior to adoption.

	Balance Sheet Classification	March 31, 2019

Right-of-use assets	Right-of-use assets	$	81,930
Current lease liabilities	Other current liabilities		27,233
Non-current lease liabilities	Other long-term liabilities		54,697

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As of March 31, 2019, our maturities of our lease liability is as follows:

2019	$	25,650
2020		34,200
2021		34,200
Total	$	94,050
Less: Imputed interest		(12,120	)
Present value of lease liabilities	$	81,930

NOTE 7 – NOTES PAYABLE – RELATED PARTY

Long-term notes payable - related party consisted of the following at March 31, 2019 and December 31, 2018:

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

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, 2019 and 2018, total imputed interest expense was $9,366 and $25,911, respectively, which was recorded to additional paid-in capital.

NOTE 8 – STOCKHOLDERS’ DEFICIT

Common Stock

The Company is authorized to issue up to 800,000,000 shares of its $0.00001 par value common stock and had 75,056,123 common shares issued and outstanding as of March 31, 2019.

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

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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, 2019, there were 2,480,482 shares of Series B preferred stock and 4,355,000 shares of Series C preferred stock issued and outstanding.

Series B Preferred Stock

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

There was no Series B preferred stock activity during the three months ended March 31, 2019. 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

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

There was no Series C preferred stock activity during the three months ended March 31, 2019 and March 31, 2018.

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, 2019, there were 5,600 stock options outstanding under the 2006 Stock Option Plan.

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

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The Company recognized $4,083 of stock-based compensation during the three months ended March 31, 2019 and none during the three months ended March 31, 2018. As of March 31, 2019, future compensation cost related to non-vested stock options not yet recognized in the statements of operations totaled $12,250.

A summary of the status of the stock options issued by the Company under both plans as of March 31, 2019, and changes during three months then ended is presented below:

			Weighted Average
	Shares		Exercise Price

Outstanding, December 31, 2018		1,518,423	$	0.076

Granted		-		-
Canceled / Expired		-		-
Exercised		-		-

Outstanding, March 31, 2019		1,518,423	$	0.076

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

NOTE 9 – 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, 2019 and 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, 2019 and 2018. See Note 6 for detailed disclosure of this related party debt, including interest rates, terms of conversion and other repayment terms.

NOTE 10 – 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, 2019 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.

Summary Overview

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

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

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

In 2018, our main focus as a company was centered on our flagship product, Munzee. We dedicated virtually all of our product strategy, design, engineering, creative, and testing resources to bring the “next generation” version (called Munzee 4.0) to market. We successfully introduced the new version to the market in January 31, 2019.

During the first quarter of 2019, we began implementing growth marketing programs to capitalize on the launch of our Munzee 4.0 app. To date, those efforts have been very successful, resulting in thousands of new users signing up to become Munzee players. The economic impact of these new players is already rippling through the company, although it will take time for new users to begin spending at the level of players who have been active Munzee players for years. In July of 2019, Munzee, as a game, will be 8 years old. Many players are still active who began playing back in 2011.

During the remaining months in 2019, we will also focus development and marketing resources to growing other Freeze Tag games to strengthen our product portfolio.

Going Concern Uncertainty

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.

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Revenue Recognition

We determine revenue recognition through the following steps:

Intangible Assets

Impairment of Long-Lived Assets

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.

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Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02 “Leases (Topic 842),” which amends existing accounting standards for leases. The ASU requires lessees to recognize most leases on their balance sheet as a lease liability with a corresponding right-of-use asset. Right-of-use assets and lease liabilities are recorded at the present value of minimum lease payments. For our operating lease, the asset is included in Other long-term assets on the consolidated balance sheet at March 31, 2019 and is amortized within operating income over the lease term. The long-term component of the lease liability is included in Other long-term liabilities, net, and the current component is included in Other current liabilities. The Company adopted the ASU effective January 1, 2019. We recognized an $88,235 right-of-use asset and a $88,325 related lease liability as of January 1, 2019 for our operating lease. The adoption of ASC 842 did not have a material impact on the Company’s consolidated results of operations, equity or cash flows as of the adoption date. Under the alternative method of adoption, comparative information was not restated, but will continue to be reported under the standards in effect for those periods.

Results of Operations for the Three Months Ended March 31, 2019 Compared to the Three Months Ended March 31, 2018.

Revenues

Revenues increased $64,349 to $560,203 for the three months ended March 31, 2019 from $495,854 for the three months ended March 31, 2018. The primary reason for the increase in revenues in the current year was due to the close-out of a significant mobile distribution contract in the period allowing us to recognize deferred revenue.

Cost of Sales

Cost of sales increased $16,228 to $71,923 for the three months ended March 31, 2019 from $55,695 for the three months ended March 31, 2018. The increase was a result of increased server and server usage fees, as well as increased physical product costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses decreased $32,964 to $463,918 for the three months ended March 31, 2019 from $496,882 for the three months ended March 31, 2018. The decrease is primarily due to the cost savings related to our Texas office relocation, partially offset by expenses related to additional development resources added during the first quarter of the current fiscal year.

Other Income (Expense)

Interest expense decreased to $9,986 for the three months ended March 31, 2019 from $25,913 for the three months ended March 31, 2018. These amounts relate primarily to the imputed interest on related party debt.

Net Income (Loss)

As a result of the above, we reported net income of $14,376 for the three months ended March 31, 2019 and a net loss of $82,636 for the three months ended March 31, 2018.

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Liquidity and Capital Resources

Introduction

As of March 31, 2019, we had current assets of $290,576, including cash of $277,920, and current liabilities of $1,062,725, resulting in a working capital deficit of $772,149. In addition, we had a total stockholders’ deficit of $409,500 at March 31, 2019.

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

By comparison, 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.

For the three months ended March 31, 2019, we did not have any cash provided by or used in investing activities. For the three months ended March 31, 2018, we used net cash in investing activities of $3,106 for the purchase of property and equipment.

For the three months ended March 31, 2019, we did not have any cash provided by or used in financing activities. 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.

Notes Payable – Related Party

As of March 31, 2019, 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%.

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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, 2019, our disclosure controls and procedures were effective (1) to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (2) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to us, including our chief executive and chief financial officers, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in Internal Control over Financial Reporting

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

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PART II – OTHER INFORMATION

ITEM 1 Legal Proceedings

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

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

ITEM 1A Risk Factors

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

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

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

ITEM 3 Defaults Upon Senior Securities

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

ITEM 4 Mine Safety Disclosures

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

ITEM 5 Other Information

Munzee Tax Audit

As noted in our previous filings, the Internal Revenue Service is currently conducting a tax audit of Munzee’s tax returns for 2015 and 2016. We are working diligently to resolve and outstanding issues. At this time, we do not know if Munzee will owe any additional amounts.

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ITEM 6 Exhibits

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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

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

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

32.1*

Section 1350 Certification of Chief Executive Officer

32.2*

Section 1350 Certification of Chief Financial Officer.

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101.INS**

XBRL Instance Document

101.SCH**

XBRL Taxonomy Extension Schema Document

101.CAL**

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB**

XBRL Taxonomy Extension Label Linkbase Document

101.PRE**

XBRL Taxonomy Extension Presentation Linkbase Document
_______

*	Filed herewith.

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

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

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

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

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

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

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

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

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

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

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

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

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

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SIGNATURES

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

	Freeze Tag, Inc.

Dated: May 15, 2019	By:	/s/ Craig Holland
		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, 2019	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, 2019	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, 2019, 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, 2019	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, 2019, 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, 2019	By:	/s/ Mick Donahoo
		Mick Donahoo
		Chief Financial Officer (Chief Accounting Officer)

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(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.

(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.

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Use of Estimates   The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“U.S. GAAP”) requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates and these differences may be material.   The following accounting policies involve significant judgments, assumptions and estimates by management.   Revenue Recognition   The Company’s revenues are derived primarily by licensing software products in the form of mobile games for smartphone and tablet platforms. Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.   We determine revenue recognition through the following steps:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr> <td style="width: 4%; text-align: justify"> </td> <td style="vertical-align: top; width: 4%; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">identification of the contract, or contracts, with a customer;</td></tr> <tr> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">identification of the performance obligations in the contract;</td></tr> <tr> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">determination of the transaction price;</td></tr> <tr> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">allocation of the transaction price to the performance obligations in the contract; and</td></tr> <tr> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">recognition of revenue when, or as, we satisfy a performance obligation.</td></tr> </table>      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> <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> <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> <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> <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 stock-based compensation expense recognized in its statements of operations of $4,083 for the three months ended March 31, 2019 and $0 for the three months ended March 31, 2018.   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.   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, 2019 and December 31, 2018.   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.   Recent Accounting Pronouncements   In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02 “Leases (Topic 842),” which amends existing accounting standards for leases. The ASU requires lessees to recognize most leases on their balance sheet as a lease liability with a corresponding right-of-use asset. Right-of-use assets and lease liabilities are recorded at the present value of minimum lease payments. For our operating lease, the asset is included in Other long-term assets on the consolidated balance sheet at March 31, 2019 and is amortized within operating income over the lease term. The long-term component of the lease liability is included in Other long-term liabilities, net, and the current component is included in Other current liabilities. The Company adopted the ASU effective January 1, 2019. We recognized an $88,325 right-of-use asset and $88,325 related lease liability as of January 1, 2019 for our operating lease. The adoption of ASC 842 did not have a material impact on the Company’s consolidated results of operations, equity or cash flows as of the adoption date. Under the alternative method of adoption, comparative information was not restated, but will continue to be reported under the standards in effect for those periods.   The Company considers the applicability and impact of all ASUs. Recently issued ASUs not listed above were assessed and determined to be either not applicable or are expected to have minimal impact on our condensed financial statements.

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 net income of $14,376 and used net cash of $31,296 in operations for the three months ended March 31, 2019. As of March 31, 2019, the Company had a working capital deficit of $772,149 and a total stockholders’ deficit of $409,500. 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.

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">March 31, 2019</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid">December 31, 2018</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">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">7,971</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">7,971</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">10,055</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">18,026</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">18,026</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">(5,847</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">(4,975</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">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">12,179</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">13,051</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   Depreciation expense was $872 and $714 for the three months ended March 31, 2019 and 2018, 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">March 31, 2019</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid">December 31, 2018</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">(139,110</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">(116,240</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">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">318,290</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">341,160</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>   Amortization expense was $22,870 for the three months ended March 31, 2019 and 2018.

Long-term notes payable - related party consisted of the following at March 31, 2019 and December 31, 2018:   <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>   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, 2019 and 2018, total imputed interest expense was $9,366 and $25,911, respectively, 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 75,056,123 common shares issued and outstanding as of March 31, 2019.   There was no common stock activity during the three months ended March 31, 2019. 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.     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, 2019, there were 2,480,482 shares of Series B preferred stock and 4,355,000 shares of Series C preferred stock issued and outstanding.    Series B Preferred Stock   The Company’s Series B preferred stock has 2,700,000 shares authorized and the following rights: (i) dividend rights equal to the Company’s common stock; (ii) no liquidation preference over the Company’s common stock; (iii) each share is convertible into 50 shares of the Company’s common stock; (iv) no redemption rights; (v) no call rights by the Company; and (vi) no voting rights. The holders of the Series B preferred stock cannot convert their shares of Series B preferred stock if such conversion would cause the holder to beneficially own more than 4.99% of our then-outstanding common stock.   There was no Series B preferred stock activity during the three months ended March 31, 2019. 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   The Company’s Series C Preferred Stock has 4,500,000 shares authorized and the following rights: (i) dividend rights equal to the Company’s common stock; (ii) no liquidation preference over the Company’s common stock; (iii) each share is convertible into 50 shares of the Company’s common stock; (iv) no redemption rights; (v) no call rights by the Company; and (vi) each shares votes on an “as converted” basis, such that each share currently has 50 votes on all matters brought before the Company’s common stockholders for a vote.   There was no Series C preferred stock activity during the three months ended March 31, 2019 and March 31, 2018.   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, 2019, there were 5,600 stock options outstanding under the 2006 Stock Option Plan.   We account for stock-based compensation in accordance with ASC Topic 718, Compensation – Stock Compensation. Under the fair value recognition provisions of this standard, stock-based compensation cost is measured at the grant date based on the estimated value of the award granted, using the Black-Scholes option pricing model, and recognized over the period in which the award vests in general and administrative expenses.    The Company recognized $4,083 of stock-based compensation during the three months ended March 31, 2019 and none during the three months ended March 31, 2018. As of March 31, 2019, future compensation cost related to non-vested stock options not yet recognized in the statements of operations totaled $12,250.   A summary of the status of the stock options issued by the Company under both plans as of March 31, 2019, 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, 2018</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">1,518,423</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, 2019</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">1,518,423</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, 2019 and 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, 2019 and 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, 2019 and 2018, total imputed interest expense was $9,366 and $25,911, respectively, 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.

<table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%"> <tr> <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> <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> <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> <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>

<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"> March 31, 2019</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid"> December 31, 2018</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">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">7,971</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">7,971</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">10,055</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">18,026</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">18,026</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">(5,847</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">(4,975</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">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">12,179</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">13,051</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"> March 31, 2019</td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td colspan="2" style="border-bottom: black 1pt solid"> December 31, 2018</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">(139,110</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">(116,240</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">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">318,290</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom: black 2.25pt double; text-align: justify">$</td> <td style="border-bottom: black 2.25pt double; vertical-align: bottom; text-align: right">341,160</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, 2018</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">1,518,423</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, 2019</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">1,518,423</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>

698357

707922

2850

86877

341160

318290

13051

12179

341296

290576

27001

9792

5079

2864

1135682

1117422

54697

1135682

1062725

27233

379825

127182 7543

452655

455665

176020

192459

16800 16800

8997457

9010906

751

-9452402

-9438026

-437325

-511417

-409500

698

723

751

8919980

8945867

8997457

9010906

16800

-5000

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-9452402

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698357

707922

0.00

-0.00

75056123

70626123

14376

-82636

14376

-9986

-25913

9986

25913

24362

-56723

535841

552577

463918

496882

71923

55695

560203

495854

5000 5000 25 -1 -25 54529 25911 25911 9366

2585882

2535482

2480482

4355000

69786123

72306123

75056123

23000

4083

-31296

-22010

-119639 -5

3010

8232

16439

11676

-2097

-17209

8232

-2215

540

4083

9366 25911

23742

23584

-3106

3106

5000

5000 88325 25

309216

147376

277920

167492

-31296

-20116

Our adoption of ASU 2016-02, Leases (Topic 842), and subsequent ASUs related to Topic 842, requires us to recognize substantially all leases on the balance sheet as an ROU asset and a corresponding lease liability. The new guidance also requires additional disclosures as detailed below. We adopted this standard on the effective date of January 1, 2019 and used this effective date as the date of initial application. Under this application method, we were not required to restate prior period financial information or provide Topic 842 disclosures for prior periods. We elected the ‘package of practical expedients,’ which permitted us to not reassess our prior conclusions related to lease identification, lease classification, and initial direct costs, and we did not elect the use of hindsight.   We determine if a contract is a lease at the inception of the arrangement. We review all options to extend, terminate, or purchase the ROU assets, and when reasonably certain to exercise, we include the option in the determination of the lease term and lease liability. We have one operating lease related to our office space in Texas with a remaining lease terms of 3 years. We recognized $8,550 in operating lease costs for the three months ended March 31, 2019.   Lease ROU assets and liabilities are recognized at commencement date of the lease, based on the present value of lease payments over the lease term. The lease ROU asset also includes any lease payments made and excludes any lease incentives. When readily determinable, we use the implicit rate in determining the present value of lease payments. When leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the lease commencement date, including the lease term.   Short-term leases with an initial term of 12 months or less are not recorded on the Balance Sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. As of March 31, 2019, we did not have any short-term leases.   The tables below present financial information associated with our lease. This information is only presented as of, and for the three months ended, March 31, 2019. As noted above, we adopted Topic 842 using a transition method that does not require application to periods prior to adoption.   <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 id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">Balance Sheet Classification</td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">March 31, 2019</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 id="ffcell" style="vertical-align: bottom; text-align: right"> </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">Right-of-use assets</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="width: 25%; text-align: right">Right-of-use assets</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">81,930</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">Current lease liabilities</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="text-align: right">Other current liabilities</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">27,233</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-current lease liabilities</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="text-align: right">Other long-term liabilities </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">54,697</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>    As of March 31, 2019, our maturities of our lease liability is 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; text-align: justify">2019</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td style="vertical-align: bottom; width: 9%; text-align: right">25,650</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">2020</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">34,200</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">2021</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">34,200</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">94,050</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Less: Imputed interest</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(12,120</td> <td style="vertical-align: bottom; padding-bottom: 0.75pt; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Present value of lease liabilities</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">81,930</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

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.

The Company’s revenues are derived primarily by licensing software products in the form of mobile games for smartphone and tablet platforms. Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.   We determine revenue recognition through the following steps:   <table cellspacing="0" cellpadding="0" style="font: 12pt Times New Roman, Times, Serif; width: 100%; font-size-adjust: none; font-stretch: normal"> <tr> <td style="width: 4%; text-align: justify"> </td> <td style="vertical-align: top; width: 4%; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">identification of the contract, or contracts, with a customer;</td></tr> <tr> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">identification of the performance obligations in the contract;</td></tr> <tr> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">determination of the transaction price;</td></tr> <tr> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">allocation of the transaction price to the performance obligations in the contract; and</td></tr> <tr> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td> <td style="text-align: justify"> </td></tr> <tr> <td style="text-align: justify"> </td> <td style="vertical-align: top; text-align: justify">•</td> <td style="vertical-align: top; text-align: justify">recognition of revenue when, or as, we satisfy a performance obligation.</td></tr> </table>

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> <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> <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> <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> <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 stock-based compensation expense recognized in its statements of operations of $4,083 for the three months ended March 31, 2019 and $0 for the three months ended March 31, 2018.

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.

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, 2019 and December 31, 2018.   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.

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02 “Leases (Topic 842),” which amends existing accounting standards for leases. The ASU requires lessees to recognize most leases on their balance sheet as a lease liability with a corresponding right-of-use asset. Right-of-use assets and lease liabilities are recorded at the present value of minimum lease payments. For our operating lease, the asset is included in Other long-term assets on the consolidated balance sheet at March 31, 2019 and is amortized within operating income over the lease term. The long-term component of the lease liability is included in Other long-term liabilities, net, and the current component is included in Other current liabilities. The Company adopted the ASU effective January 1, 2019. We recognized an $88,325 right-of-use asset and $88,325 related lease liability as of January 1, 2019 for our operating lease. The adoption of ASC 842 did not have a material impact on the Company’s consolidated results of operations, equity or cash flows as of the adoption date. Under the alternative method of adoption, comparative information was not restated, but will continue to be reported under the standards in effect for those periods.    The Company considers the applicability and impact of all ASUs. Recently issued ASUs not listed above were assessed and determined to be either not applicable or are expected to have minimal impact on our condensed financial statements.

94073373

70626123

81930

25650

34200

94050

-12120

8550

We have one operating lease related to our office space in Texas with a remaining lease terms of 3 years.

0.076

2520000

0.10

<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">2019</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="vertical-align: bottom; width: 1%; text-align: justify">$</td> <td id="ffcell" style="vertical-align: bottom; width: 9%; text-align: right">25,650</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">2020</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: right">34,200</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">2021</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">34,200</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Total</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; text-align: justify">$</td> <td style="vertical-align: bottom; text-align: right">94,050</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> <tr style="background-color: #CCEEFF"> <td style="vertical-align: top; text-align: justify">Less: Imputed interest</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: solid; border-bottom-width: 1pt; text-align: right">(12,120</td> <td style="vertical-align: bottom; padding-bottom: 0.75pt; text-align: justify">)</td></tr> <tr style="background-color: white"> <td style="vertical-align: top; text-align: justify">Present value of lease liabilities</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: justify">$</td> <td style="vertical-align: bottom; border-bottom-style: double; border-bottom-width: 2.25pt; text-align: right">81,930</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 id="hdcell" style="border-bottom-style: solid; border-bottom-width: 1pt">Balance Sheet Classification</td> <td style="text-align: center"> </td> <td colspan="2" style="border-bottom-style: solid; border-bottom-width: 1pt">March 31, 2019</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 id="ffcell" style="vertical-align: bottom; text-align: right"> </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">Right-of-use assets</td> <td style="vertical-align: bottom; width: 1%; text-align: justify"> </td> <td style="width: 25%; text-align: right">Right-of-use assets</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">81,930</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">Current lease liabilities</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="text-align: right">Other current liabilities</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">27,233</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-current lease liabilities</td> <td style="vertical-align: bottom; text-align: justify"> </td> <td style="text-align: right">Other long-term liabilities </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">54,697</td> <td style="vertical-align: bottom; text-align: justify"> </td></tr> </table>

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Entity Filer Category Entity Emerging Growth Company Entity Small Business 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' DEFICIT Current liabilities: Accounts payable Accrued expenses Unearned royalties Notes payable - –related party Other current liabilities Total current liabilities Other long-term liabilities Total liabilities Commitments and contingencies Stockholders deficit: Preferred stock, $0.00001 par value, 25,000,000 shares authorized: Common stock; $0.00001 par value, 800,000,000 shares authorized, 75,056,123 shares issued and outstanding Additional paid-in capital Common stock payable Accumulated deficit Total stockholders deficit Total liabilities and stockholders 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 Total other income (expense) Net income (loss) Weighted average number of common shares outstanding - basic Weighted average number of common shares outstanding - diluted Income (loss) per common share - basic and diluted Beginning Balance, Shares Beginning Balance, Amount Collection of stock subscription receivable Issuance of common stock for conversion of Series B preferred stock, Shares Issuance of common stock for conversion of Series B preferred stock, Amount Imputed interest on related party debt Stock-based compensation Net income (loss) Ending Balance, Shares Ending Balance, Amount Condensed Statements Of Cash Flows Cash flows from operating activities: Adjustments to reconcile net income (loss) to net cash used by operating activities: Depreciation and amortization Imputed interest expense Stock-based compensation Changes in operating assets and liabilities: Accounts receivable Prepaid expenses and other current assets Other assets Accounts payable Accrued expenses Unearned royalties Net cash used by operating activities Cash flows from investing activities: Purchase of property and equipment Net cash used by investing activities Cash flows from financing activities: Proceeds stock subscription receivable Net cash provided by financing activities Net 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 Right-of-use asset obtained in exchange for lease obligation 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 - LEASES NOTE 7 - NOTES PAYABLE RELATED PARTY NOTE 8 - STOCKHOLDERS' DEFICIT NOTE 9 - RELATED PARTY TRANSACTIONS NOTE 10 - SUBSEQUENT EVENTS Summary Of Significant Accounting Policies Use of Estimates Revenue Recognition 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 Estimated useful life of asset Property And Equipment Property and equipment Intangible Assets Schedule of Intangible assets Leases Summary of financial information associated with lease Operating lease liability, maturity Notes Payable Related Party Convertible notes payable related party Stockholders Deficit Schedule of status of warrants and options issued Property, plant and equipment, estimated useful lives Summary Of Significant Accounting Policies Intangible assets estimated useful lives Going Concern Uncertainty Stockholders' deficit Working capital deficit Net cash used by operating activities Property and equipment, gross Less accumulated depreciation Property And Equipment Depreciation expense Intangible assets, gross Less accumulated amortization Intangible Assets EX-101.PRE 11 frzt-20190331_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, 2019	May 10, 2019
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, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Non-accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Common Stock, Shares Outstanding		75,056,123
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2019

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CONDENSED BALANCE SHEETS - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Current assets:
Cash	$ 277,920	$ 309,216
Accounts receivable	2,864	5,079
Prepaid expenses and other current assets	9,792	27,001
Total current assets	290,576	341,296
Property and equipment, net	12,179	13,051
Intangible assets, net	318,290	341,160
Other assets	86,877	2,850
Total assets	707,922	698,357
Current liabilities:
Accounts payable	192,459	176,020
Accrued expenses	455,665	452,655
Unearned royalties	7,543	127,182
Notes payable - –related party	379,825	379,825
Other current liabilities	27,233
Total current liabilities	1,062,725	1,135,682
Other long-term liabilities	54,697
Total liabilities	1,117,422	1,135,682
Commitments and contingencies
Stockholders deficit:
Common stock; $0.00001 par value, 800,000,000 shares authorized, 75,056,123 shares issued and outstanding	751	751
Additional paid-in capital	9,010,906	8,997,457
Common stock payable	16,800	16,800
Accumulated deficit	(9,438,026)	(9,452,402)
Total stockholders deficit	(409,500)	(437,325)
Total liabilities and stockholders deficit	707,922	698,357
Series B Preferred Stock [Member]
Stockholders deficit:
Preferred stock, $0.00001 par value, 25,000,000 shares authorized:	25	25
Series C Preferred Stock [Member]
Stockholders deficit:
Preferred stock, $0.00001 par value, 25,000,000 shares authorized:	$ 44	$ 44

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CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Stockholders 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	75,056,123	75,056,123
Common stock, outstanding shares	75,056,123	75,056,123
Series B Preferred Stock [Member]
Stockholders deficit:
Preferred stock, authorized shares	2,700,000	2,700,000
Preferred stock, issued shares	2,480,482	2,480,482
Preferred stock, outstanding shares	2,480,482	2,480,482
Series C Preferred Stock [Member]
Stockholders 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

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CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Condensed Statements Of Operations
Revenues	$ 560,203	$ 495,854
Operating costs and expenses:
Cost of sales	71,923	55,695
Selling, general and administrative expenses	463,918	496,882
Total operating costs and expenses	535,841	552,577
Income (loss) from operations	24,362	(56,723)
Other income (expense):
Interest expense, net	(9,986)	(25,913)
Total other income (expense)	(9,986)	(25,913)
Net income (loss)	$ 14,376	$ (82,636)
Weighted average number of common shares outstanding - basic	75,056,123	70,626,123
Weighted average number of common shares outstanding - diluted	94,073,373	70,626,123
Income (loss) per common share - basic and diluted	$ 0.00	$ (0.00)

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CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)	Series B Preferred Stock	Series C Preferred Stock	Common Stock	Additional Paid-In Capital	Common Stock Payable	Common Stock Subscription Receivable	Retained Earnings (Deficit)	Total
Beginning Balance, Shares at Dec. 31, 2017	2,585,882	4,355,000	69,786,123
Beginning Balance, Amount at Dec. 31, 2017	$ 26	$ 44	$ 698	$ 8,919,980	$ 16,800	$ (5,000)	$ (9,392,240)	$ (459,692)
Collection of stock subscription receivable						5,000		5,000
Issuance of common stock for conversion of Series B preferred stock, Shares	(50,400)		2,520,000
Issuance of common stock for conversion of Series B preferred stock, Amount	$ (1)		$ 25	(25)
Imputed interest on related party debt				25,911				25,911
Net income (loss)							(82,636)	(82,636)
Ending Balance, Shares at Mar. 31, 2018	2,535,482	4,355,000	72,306,123
Ending Balance, Amount at Mar. 31, 2018	$ 25	$ 44	$ 723	8,945,867	16,800		(9,474,876)	(511,417)
Beginning Balance, Shares at Dec. 31, 2018	2,480,482	4,355,000	75,056,123
Beginning Balance, Amount at Dec. 31, 2018	$ 25	$ 44	$ 751	8,997,457	16,800		(9,452,402)	(437,325)
Imputed interest on related party debt				9,366				54,529
Stock-based compensation				4,083				23,000
Net income (loss)							14,376	14,376
Ending Balance, Shares at Mar. 31, 2019	2,480,482	4,355,000	75,056,123
Ending Balance, Amount at Mar. 31, 2019	$ 25	$ 44	$ 751	$ 9,010,906	$ 16,800		$ (9,438,026)	$ (409,500)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

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CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities:
Net income (loss)	$ 14,376	$ (82,636)
Adjustments to reconcile net income (loss) to net cash used by operating activities:
Depreciation and amortization	23,742	23,584
Imputed interest expense	9,366	25,911
Stock-based compensation	4,083
Changes in operating assets and liabilities:
Accounts receivable	2,215	(540)
Prepaid expenses and other current assets	17,209	(8,232)
Other assets	(2,097)
Accounts payable	16,439	11,676
Accrued expenses	3,010	8,232
Unearned royalties	(119,639)	(5)
Net cash used by operating activities	(31,296)	(22,010)
Cash flows from investing activities:
Purchase of property and equipment		(3,106)
Net cash used by investing activities		(3,106)
Cash flows from financing activities:
Proceeds stock subscription receivable		5,000
Net cash provided by financing activities		5,000
Net decrease in cash	(31,296)	(20,116)
Cash at the beginning of the period	309,216	167,492
Cash at the end of the period	277,920	147,376
Supplemental disclosure:
Cash paid for income taxes
Cash paid for interest expense		1
Non-cash transactions:
Issuance of common shares in conversion of Series B preferred stock		25
Right-of-use asset obtained in exchange for lease obligation	$ 88,325

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THE COMPANY AND NATURE OF BUSINESS

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 1 - THE COMPANY AND NATURE OF BUSINESS

Nature of Operations

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2019

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

We determine revenue recognition through the following steps:

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

	•	identification of the performance obligations in the contract;

	•	determination of the transaction price;

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

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

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 stock-based compensation expense recognized in its statements of operations of $4,083 for the three months ended March 31, 2019 and $0 for the three months ended March 31, 2018.

Earnings per Share

Fair Value of Financial Instruments

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.

Recent Accounting Pronouncements

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GOING CONCERN UNCERTAINTY

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 3 - GOING CONCERN UNCERTAINTY

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PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at:

	March 31, 2019			December 31, 2018

Computer equipment	$	7,971		$	7,971
Office furniture and equipment		10,055			10,055
Total		18,026			18,026
Less accumulated depreciation		(5,847	)		(4,975	)

Net	$	12,179		$	13,051

Depreciation expense was $872 and $714 for the three months ended March 31, 2019 and 2018, respectively.

XML 22 R11.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 5 - INTANGIBLE ASSETS

Intangible assets consisted of the following at:

	March 31, 2019			December 31, 2018

Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(139,110	)		(116,240	)

Net	$	318,290		$	341,160

Amortization expense was $22,870 for the three months ended March 31, 2019 and 2018.

XML 23 R12.htm IDEA: XBRL DOCUMENT

LEASES

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 6 - LEASES

	Balance Sheet Classification	March 31, 2019

Right-of-use assets	Right-of-use assets	$	81,930
Current lease liabilities	Other current liabilities		27,233
Non-current lease liabilities	Other long-term liabilities		54,697

As of March 31, 2019, our maturities of our lease liability is as follows:

2019	$	25,650
2020		34,200
2021		34,200
Total	$	94,050
Less: Imputed interest		(12,120	)
Present value of lease liabilities	$	81,930

XML 24 R13.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE RELATED PARTY

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 7 - NOTES PAYABLE RELATED PARTY

Long-term notes payable - related party consisted of the following at March 31, 2019 and December 31, 2018:

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 25 R14.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' DEFICIT

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 8 - STOCKHOLDERS' DEFICIT

Common Stock

The Company is authorized to issue up to 800,000,000 shares of its $0.00001 par value common stock and had 75,056,123 common shares issued and outstanding as of March 31, 2019.

Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

There was no Series C preferred stock activity during the three months ended March 31, 2019 and March 31, 2018.

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, 2019, and changes during three months then ended is presented below:

			Weighted Average
	Shares		Exercise Price

Outstanding, December 31, 2018		1,518,423	$	0.076

Granted		-		-
Canceled / Expired		-		-
Exercised		-		-

Outstanding, March 31, 2019		1,518,423	$	0.076

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

XML 26 R15.htm IDEA: XBRL DOCUMENT

RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 9 - RELATED PARTY TRANSACTIONS

XML 27 R16.htm IDEA: XBRL DOCUMENT

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

NOTE 10 - 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 28 R17.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2019

Summary Of Significant Accounting Policies

Use of Estimates

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

Revenue Recognition

We determine revenue recognition through the following steps:

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

	•	identification of the performance obligations in the contract;

	•	determination of the transaction price;

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

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

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 stock-based compensation expense recognized in its statements of operations of $4,083 for the three months ended March 31, 2019 and $0 for the three months ended March 31, 2018.

Earnings per Share

Fair Value of Financial Instruments

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.

Recent Accounting Pronouncements

XML 29 R18.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2019

Summary Of Significant Accounting Policies Tables Abstract

Estimated useful life of asset

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

XML 30 R19.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2019

Property And Equipment

Property and equipment

	March 31, 2019			December 31, 2018

Computer equipment	$	7,971		$	7,971
Office furniture and equipment		10,055			10,055
Total		18,026			18,026
Less accumulated depreciation		(5,847	)		(4,975	)

Net	$	12,179		$	13,051

XML 31 R20.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2019

Intangible Assets Tables Abstract

Schedule of Intangible assets

	March 31, 2019			December 31, 2018

Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(139,110	)		(116,240	)

Net	$	318,290		$	341,160

XML 32 R21.htm IDEA: XBRL DOCUMENT

LEASES (Tables)

3 Months Ended

Mar. 31, 2019

Leases

Summary of financial information associated with lease

	Balance Sheet Classification	March 31, 2019

Right-of-use assets	Right-of-use assets	$	81,930
Current lease liabilities	Other current liabilities		27,233
Non-current lease liabilities	Other long-term liabilities		54,697

Operating lease liability, maturity

2019	$	25,650
2020		34,200
2021		34,200
Total	$	94,050
Less: Imputed interest		(12,120	)
Present value of lease liabilities	$	81,930

XML 33 R22.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE RELATED PARTY (Tables)

3 Months Ended

Mar. 31, 2019

Notes Payable Related Party

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 34 R23.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' DEFICIT (Tables)

3 Months Ended

Mar. 31, 2019

Stockholders Deficit

Schedule of status of warrants and options issued

			Weighted Average
	Shares		Exercise Price

Outstanding, December 31, 2018		1,518,423	$	0.076

Granted		-		-
Canceled / Expired		-		-
Exercised		-		-

Outstanding, March 31, 2019		1,518,423	$	0.076

XML 35 R24.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Mar. 31, 2019
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 36 R25.htm IDEA: XBRL DOCUMENT

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narative) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Summary Of Significant Accounting Policies Details Narative Abstract
Intangible assets estimated useful lives	5 years
Stock-based compensation	$ 4,083

XML 37 R26.htm IDEA: XBRL DOCUMENT

GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($)	3 Months Ended
GOING CONCERN UNCERTAINTY (Details Narrative) - USD ($)	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Going Concern Uncertainty
Net income (loss)	$ 14,376	$ (82,636)
Stockholders' deficit	(409,500)	(511,417)	$ (437,325)	$ (459,692)
Working capital deficit	(772,149)
Net cash used by operating activities	$ (31,296)	$ (22,010)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

XML 38 R27.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Property and equipment, gross	$ 18,026	$ 18,026
Less accumulated depreciation	(5,847)	(4,975)
Property and equipment, net	12,179	13,051
Computer equipment [Member]
Property and equipment, gross	7,971	7,971
Office furniture and equipment [Member]
Property and equipment, gross	$ 10,055	$ 10,055

XML 39 R28.htm IDEA: XBRL DOCUMENT

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Property And Equipment Details Narrative Abstract
Depreciation expense	$ 872	$ 714

XML 40 R29.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Less accumulated amortization	$ (139,110)	$ (116,240)
Intangible assets, net	318,290	341,160
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 41 R30.htm IDEA: XBRL DOCUMENT

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended
INTANGIBLE ASSETS (Details Narrative) - USD ($)	Mar. 31, 2019	Mar. 31, 2018
Intangible Assets Details Narrative Abstract
Amortization expense	$ 22,870	$ 22,870

XML 42 R31.htm IDEA: XBRL DOCUMENT

LEASES (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Right-of-use assets	$ 81,930
Other current liabilities	27,233
Other long-term liabilities	54,697
Balance Sheet Classification Topic 842 [Member]
Right-of-use assets	81,930
Other current liabilities	27,233
Other long-term liabilities	$ 54,697

XML 43 R32.htm IDEA: XBRL DOCUMENT

LEASES (Details 1)	Mar. 31, 2019 USD ($)
Leases Details 1Abstract
2019	$ 25,650
2020	34,200
2021	34,200
Total	94,050
Less: Imputed interest	(12,120)
Present value of lease liabilities	$ 81,930

XML 44 R33.htm IDEA: XBRL DOCUMENT

LEASES (Details Narrative)	3 Months Ended
LEASES (Details Narrative)	Mar. 31, 2019 USD ($)
Leases Details Narrative Abstract
Operating lease cost	$ 8,550
Operating lease term, description	We have one operating lease related to our office space in Texas with a remaining lease terms of 3 years.

XML 45 R34.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE RELATED PARTY (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
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 46 R35.htm IDEA: XBRL DOCUMENT

NOTES PAYABLE RELATED PARTY (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Interest rate	10.00%
Debt instrument, convertible, conversion price	$ 0.02
Imputed interest expense	$ 9,366	$ 25,911
Craig Holland [Member]
Debt instrument maturity date	December 31, 2019
Craig Holland One [Member]
Debt instrument maturity date	December 31, 2019
Mick Donahoo [Member]
Debt instrument maturity date	December 31, 2019

XML 47 R36.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' DEFICIT (Details) - Stock Options [Member]	3 Months Ended
	Mar. 31, 2019 $ / shares shares
Number of Shares
Beginning Balance \| shares	1,518,423
Granted \| shares
Canceled / Expired \| shares
Exercised \| shares
Ending Balance \| shares	1,518,423
Weighted Average Exercise Price
Beginning Balance \| $ / shares	$ 0.076
Grant \| $ / shares
Canceled / Expired \| $ / shares
Exercised \| $ / shares
Ending Balance \| $ / shares	$ 0.076

XML 48 R37.htm IDEA: XBRL DOCUMENT

STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($)		3 Months Ended
STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($)	Dec. 05, 2017	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018	Dec. 04, 2017
Common stock, par value		$ 0.00001		$ 0.00001
Common stock, authorized shares		800,000,000		800,000,000
Common stock, issued shares		75,056,123		75,056,123
Common stock, outstanding shares		75,056,123		75,056,123
Preferred stock, par value		$ 0.00001		$ 0.00001
Preferred stock, authorized shares		25,000,000		25,000,000
Compensation cost		$ 12,250
Stock based compensation		$ 4,083
Investor [Member]
Issuance of common stock for conversion of Series B preferred stock, Shares			50,400
Issuance of common stock for conversion of debt, Shares			2,520,000
Outstanding common stock shares at par value			$ 25
Series B Preferred Stock [Member]
Preferred stock, authorized shares		2,700,000		2,700,000
Preferred stock, issued shares		2,480,482		2,480,482
Preferred stock, outstanding shares		2,480,482		2,480,482
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 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.
Board of Directors [Member]
Common stock shares options purchase	1,512,821
2017 Non-Qualified Stock Option Plan [Member] \| Maximum [Member]
Option granted to purchase common shares					10,000,000
2006 Stock Option Plan [Member]
Stock options outstanding		5,600

XML 49 R38.htm IDEA: XBRL DOCUMENT

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Related party annual interest rate	10.00%
Imputed interest expense	$ 9,366	$ 25,911
Chief Financial Officer [Member]
Notes payable	6,925		$ 6,925
Mr. Holland and Mr. Donahoo [Member]
Convertible notes payable - related party	$ 372,900		$ 372,900

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
Emerging growth company	¨

	Series A Preferred Stock				Series B Preferred Stock						Series C Preferred Stock				Common Stock				Additional Paid-in			Common Stock		Common Stock Subscription			Retained Earnings
	Shares		Amount		Shares			Amount			Shares		Amount		Shares		Amount		Capital			Payable		Receivable			(Deficit)			Total

Balance, January 1, 2018		-	$	-		2,585,882		$	26			4,355,000	$	44		69,786,123	$	698	$	8,919,980		$	16,800	$	(5,000	)	$	(9,392,240	)	$	(459,692	)

Collection of stock subscription receivable		-		-		-			-			-		-		-		-		-			-		5,000			-			5,000
Issuance of common stock for conversion of Series B preferred stock		-		-		(50,400	)		(1	)		-		-		2,520,000		25		(25	)		-		-			-			-
Imputed interest on related party debt		-		-		-			-			-		-		-		-		25,911			-		-			-			25,911
Net loss		-		-		-			-			-		-		-		-		-			-		-			(82,636	)		(82,636	)

Balance, March 31, 2018		-	$	-		2,535,482		$	25			4,355,000	$	44		72,306,123	$	723	$	8,945,867		$	16,800	$	-		$	(9,474,876	)	$	(511,417	)


Balance, January 1, 2019		-	$	-		2,480,482		$	25			4,355,000	$	44		75,056,123	$	751	$	8,997,457		$	16,800	$	-		$	(9,452,402	)	$	(437,325	)

Imputed interest on related party debt		-		-		-		-				-		-		-		-		9,366			-		-			-			54,529
Stock-based compensation		-		-		-			-			-		-		-		-		4,083			-		-			-			23,000
Net income		-		-		-			-			-		-		-		-		-			-		-			14,376			14,376

Balance, March 31, 2019		-	$	-		2,480,482		$	25			4,355,000	$	44		75,056,123	$	751	$	9,010,906		$	16,800	$	-		$	(9,438,026	)	$	(409,500	)

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

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

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

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

10.13 (5)		Convertible Promissory Note with an accredited investor dated February 11, 2015

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

10.15 (6)		Convertible Promissory Note with an accredited investor dated July 28, 2015

10.16 (6)		Amendment to Convertible Promissory Note dated December 31, 2013 – Craig Holland

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.