10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2023

☐     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.)
360 E 1st Street, #450 Tustin, California	92780
(Address of principal executive offices)	(Zip Code)

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

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☒
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 ☒

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 August 14, 2023, there were 75,056,123 shares of common stock, $0.00001 par value, issued and outstanding.

FREEZE TAG, INC. 

TABLE OF CONTENTS

QUARTER ENDED JUNE 30, 2023

PART I – FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4.	Controls and Procedures	19
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 3.	Defaults Upon Senior Securities	20
Item 4.	Mine Safety Disclosures	20
Item 5.	Other Information	20
Item 6.	Exhibits	21

2

PART I – FINANCIAL INFORMATION

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

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

The results for the period ended June 30, 2023 are not necessarily indicative of the results of operations for the full year. These condensed, consolidated 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, 2022 filed with the Securities and Exchange Commission on March 31, 2023.

3

FREEZE TAG, INC.

(A DELAWARE CORPORATION)

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30, 2023			December 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash	$	600,461		$	741,163
Accounts receivable		25,606			16,875
Prepaid expenses and other current assets		11,994			13,462
Total current assets		638,061			771,500
Property and equipment, net		15,536			20,197
Intangible assets, net		-			-
Capitalized software		501,236			370,639
Other assets		853			853
Total assets	$	1,155,686		$	1,163,189
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	162,422		$	164,541
Accrued expenses		500,669			493,962
Unearned royalties		7,543			7,543
Notes payable – related party, current portion		379,825			379,825
Notes payable, current portion		9,760			10,268
Total current liabilities		1,060,219			1,056,139
Notes payable, net of current portion		158,666			163,255
Other long-term liabilities		5,726			8,917
Total liabilities		1,224,611			1,228,311
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		9,309,665			9,290,829
Common stock payable		16,800			16,800
Accumulated deficit		(9,396,210	)		(9,373,571	)
Total stockholders’ deficit		(68,925	)		(65,122	)
Total liabilities and stockholders’ deficit	$	1,155,686		$	1,163,189

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

4

FREEZE TAG, INC. 

(A DELAWARE CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues	$	579,542		$	492,739		$	1,090,914		$	1,008,655
Operating costs and expenses:
Cost of sales		88,573			84,179			193,361			174,416
Selling, general and administrative expenses		454,124			428,792			896,993			865,070
Total operating costs and expenses		542,697			512,971			1,090,354			1,039,486
Income (loss) from operations		36,845			(20,232	)		560			(30,831	)
Other income (expense):
Gain on debt extinguishment		-			176,441			-			176,441
Interest expense, net		(11,643	)		(11,712	)		(23,199	)		(23,760	)
Total other income (expense)		(11,643	)		164,729			(23,199	)		152,681
Net income (loss)		25,202		$	144,497			(22,639	)	$	121,850
Weighted average number of common shares outstanding - basic		75,056,123			75,056,123			75,056,123			75,056,123
Weighted average number of common shares outstanding - diluted		306,109,123			306,109,123			75,056,123			325,655,929
Income per common share – basic and diluted	$	0.00		$	0.00		$	0.00		$	0.00

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

5

FREEZE TAG, INC. 

(A DELAWARE CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

	Series B Preferred Stock				Series C Preferred Stock				Common Stock				Additional Paid-in		Common Stock		Retained Earnings
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Payable		(Deficit)			Total
Balance, December 31, 2022		2,480,482	$	25		4,355,000	$	44		75,056,123	$	751	$	9,290,829	$	16,800	$	(9,373,571	)	$	(65,122	)
Imputed interest on related party debt		-		-		-		-		-		-		9,367		-		-			9,367
Net loss		-		-		-		-		-		-		-		-		(47,841	)		(47,841	)
Balance, March 31, 2023		2,480,482	$	25		4,355,000	$	44		75,056,123	$	751	$	9,300,196	$	16,800	$	(9,421,412	)	$	(103,596	)
Imputed interest on related party debt		-		-		-		-		-		-		9,469		-		-			9,469
Net income		-		-		-		-		-		-		-		-		25,202			25,202
Balance, June 30, 2023		2,480,482	$	25		4,355,000	$	44		75,056,123	$	751	$	9,309,665	$	16,800	$	(9,396,210	)	$	(68,925	)
Balance, December 31, 2021		2,480,482	$	25		4,355,000	$	44		75,056,123	$	751	$	9,252,845	$	16,800	$	(9,574,272	)	$	(303,807	)
Imputed interest on related party debt		-		-		-		-		-		-		9,366		-		-			9,366
Net loss		-		-		-		-		-		-		-		-		(22,647	)		(22,647	)
Balance, March 31, 2022		2,480,482	$	25		4,355,000	$	44		75,056,123	$	751	$	9,262,211	$	16,800	$	(9,596,919	)	$	(317,088	)
Imputed interest on related party debt		-		-		-		-		-		-		9,470		-		-			9,470
Net income		-		-		-		-		-		-		-		-		144,497			144,497
Balance, June 30, 2022		2,480,482	$	25		4,355,000	$	44		75,056,123	$	751	$	9,271,681	$	16,800	$	(9,452,422	)	$	(163,121	)

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

6

FREEZE TAG, INC. 

(A DELAWARE CORPORATION)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities:
Net income (loss)	$	(22,639	)	$	121,850
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation and amortization		4,661			51,977
Imputed interest expense		18,836			18,836
Forgiveness of debt		-			(176,441	)
Changes in operating assets and liabilities:
Accounts receivable		(8,731	)		(722	)
Prepaid expenses and other current assets		1,468			1,929
Accounts payable		(2,119	)		18,171
Accrued expenses		1,395			5,438
Other		2,121			(2,799	)
Net cash provided (used) by operating activities		(5,008	)		38,239
Cash flows from investing activities:
Capitalized software costs		(130,597	)		(62,952	)
Net cash used by investing activities		(130,597	)		(62,952	)
Cash flows from financing activities:
Payments on notes payable		(5,097	)		(4,958	)
Net cash used by financing activities		(5,097	)		(4,958	)
Net decrease in cash		(140,702	)		(29,671	)
Cash at the beginning of the period		741,163			752,826
Cash at the end of the period	$	600,461		$	723,155
Supplemental disclosure:
Cash paid for income taxes	$	1,500		$	3,800
Cash paid for interest expense	$	147		$	455

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

7

FREEZE TAG, INC.

(A DELAWARE CORPORATION)

Notes to Condensed Consolidated Financial Statements

Six Months Ended June 30, 2023

(Unaudited)

NOTE 1 – THE COMPANY AND NATURE OF BUSINESS

Nature of Operations

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

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

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

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

Revenue Recognition

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

We determine revenue recognition through the following steps:

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

· identification of the performance obligations in the contract;

· determination of the transaction price;

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

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

8

Property and Equipment

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

Vehicle	5 years
Computer equipment	5 years
Office furniture and equipment	7 years

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

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

Intangible Assets

Intangible assets consist primarily of intellectual property, customer base and non-compete agreements acquired in 2017, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.

Income Taxes

We account for income taxes using ASC Topic 740, Income Taxes (“ASC Topic 740”). 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. 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.

9

The Company had no stock-based compensation expense recognized in its statements of operations for the six months ended June 30, 2023 and 2022.

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 June 30, 2023 and 2022, the diluted weighted average number of shares includes 13,303,000 common shares issuable upon conversion of Series B preferred stock and 217,750,000 common shares issuable upon conversion of Series C preferred stock and for the six months ended June 30, 2022, also includes 18,991,250 related party convertible debt and 555,556 common shares issuable from outstanding stock options using the treasury stock method. For the six months ended June 30, 2023, 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 June 30, 2023 and December 31, 2022.

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.

Software Development Costs

Software development costs include direct costs incurred for internally developed products and payments made to independent software developers and/or contract engineers and artists. The Company accounts for software development costs in accordance with the FASB guidance for the costs of computer software to be sold, leased, or otherwise marketed as found in ASC Subtopic 985-20. On a case-by-case basis, certain software development costs are capitalized once the technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product encompasses both technical design documentation and game design documentation, or the completed and tested product design and working model. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable against future revenues. For products where proven game engine technology exists, this may occur early in the development cycle.

Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established. For most products, technological feasibility is established when a detailed game design document containing sufficient technical specifications written for a proven game engine or framework technology had been created and approved by management. However, technological feasibility is evaluated on a product-by-product basis. Amounts related to software development that are not capitalized are charged immediately to the appropriate expense account. Amounts that were considered ‘research and development’ that are not capitalized are immediately charged to general and administrative expense.

Prior to a product’s release, the Company expenses, as part of “Cost of Sales—Product Development,” capitalized costs when the Company believes such amounts are not recoverable. Capitalized costs for those products that are cancelled or abandoned are charged to product development expense in the period of cancellation. Commencing upon product release, capitalized software development costs are amortized to “Cost of Sales—Product Development” based on the straight-line method.

 The Company evaluates the future recoverability of capitalized software development costs and intellectual property licenses on an annual basis. For products that have been released in prior years, the primary evaluation criterion is actual title performance. For products that are scheduled to be released in future years, recoverability is evaluated based on the expected performance of the specific products to which the costs relate or in which the licensed trademark or copyright is to be used. Criteria used to evaluate expected product performance include: historical performance of comparable products developed with comparable technology; orders for the product prior to its release; and, for any sequel product, estimated performance based on the performance of the product on which the sequel was based.

The Company had no impairment expense, related to capitalized software development costs, recognized in the Company’s statements of operations for the six months ended June 30, 2023 or 2022.

Based on the previous trends in the Company’s business, management has determined the expected shelf life of the majority of a game’s revenue will be realized over a three to five-year period and will expense capitalized production costs from the date of the initial release, or first sale of the product for a specific technology platform. It is possible that the same game developed on different technology platforms (such as PC and Mac, or iOS and Android) would be launched on different release dates because product development cycles may differ and distribution partner release policies may differ.

10

At June 30, 2023 and December 31, 2022, the Company had $501,236 and $370,639 respectively, of capitalized software development costs in other assets on the balance sheet. The Company did not recognize amortization expense in the six months ended June 30, 2023 and 2022.

Recent Accounting Pronouncements

Although there were new accounting pronouncements issued or proposed by the FASB during the six months ended June 30, 2023 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no material impact on net earnings, financial position or cash flows.

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 condensed consolidated financial statements, the Company had a net loss of $22,639 and used net cash of $140,702 for the six months ended June 30, 2023. As of June 30, 2023, the Company had a working capital deficit of $422,158 and a total stockholders’ deficit of $68,925. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

Management believes that by continuing to implement cost reductions, and by increasing revenue from updated product lines, operating cash flows will be sufficient to support the Company’s business plan. 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:

	June 30, 2023			December 31, 2022
Vehicle	$	46,609		$	46,609
Computer equipment		7,170			7,170
Office furniture and equipment		8,613			8,613
Total		62,392			62,392
Less accumulated depreciation		(46,856	)		(42,195	)
Net	$	15,536		$	20,197

Depreciation expense was $4,661 and $6,237 for the six months ended June 30, 2023 and 2022, respectively.

11

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consisted of the following at:

	June 30, 2023			December 31, 2022
Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(457,400	)		(457,400	)
Net	$	-		$	-

Amortization expense was $0 and $45,740 for the six months ended June 30, 2023 and 2022, respectively.

NOTE 6 – NOTES PAYABLE

Notes payable consisted of the following:

	June 30, 2023		December 31, 2022
Related Party:
Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2023	$	6,925	$	6,925
Convertible note payable to Craig Holland, non- interest bearing, maturing on December 31, 2023		186,450		186,450
Convertible note payable to Mick Donahoo, non- Interest bearing, maturing on December 31, 2023		186,450		186,450
Other:
Note payable to financial institution, secured by vehicle, interest at 2.9%, due in 2025		18,425		23,523
Small Business Loan, payable to financial institution, 3.75% interest, payments starting in June 2021, due in 2050		150,000		150,000
Total notes payable	$	548,251	$	553,348
Less current portion		389,585		390,093
Notes payable, net of current portion	$	158,666	$	163,255

On April 30, 2020, the Company received a U.S. Small Business Administration Loan under the Paycheck Protection Program (PPP Loan) primarily for payroll costs related to the COVID-19 crisis in the amount of $174,420. Under the Paycheck Protection Program, the PPP Loan has a fixed interest rate of 1%, a maturity date two years from the date of the funding of the loan and no payments are due for six months. Pursuant to the terms of the PPP Loan, the Company may apply for forgiveness of the amount due on the PPP Loan in an amount equal to the sum of the following costs incurred by the Company during the 8-week period (or any other period that may be authorized by the U.S. Small Business Association) beginning on the date of first disbursement of the loan: payroll costs, any payment of interest on a covered mortgage obligation, payment on a covered rent obligation, and any covered utility payment. The amount of PPP Loan forgiveness shall be calculated in accordance with the requirements of the Paycheck Protection Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), although no more than 25% of the amount forgiven can be attributable to non-payroll costs. The Company applied for and received loan forgiveness in 2021.

12

On January 25, 2021, the Company received an additional PPP Loan in the amount of $174,421. Under the Paycheck Protection Program, the PPP Loan has a fixed interest rate of 1%, a maturity date five years from the date of the funding of the loan and no payments are due for six months. Other terms are consistent with the first PPP loan. The Company applied for and received forgiveness of the full loan amount and accrued interest in 2022.

On May 18, 2020, the Company received an additional U.S. Small Business Administration Loan (SBA Loan) in the amount of $150,000 to alleviate continued economic injury caused the COVID-19 crisis. The SBA Loan has a fixed interest rate of 3.75% and matures in thirty years from the date of the loan. Payments were scheduled to begin twelve months from the effective date in a fixed amount of $731 per month. All payments will be applied to interest first. This loan is secured by the general assets of the Company. The SBA Loan has since indicated that the first payments are not required to begin until 30 months from the date of the note.

The Company had a note payable to Craig Holland, its Chief Executive Officer, with a balance of $6,925 at June 30, 2023 and 2022. 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 June 30, 2023 and 2022. 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 six months ended June 30, 2023 and 2022, total imputed interest expense was $18,836 and $18,835; respectively, which was recorded to additional paid-in capital.

Future maturities of notes payable as of June 30, 2023 are as follows:

December 31,	Amount
2023	$	384,996
2024		10,569
2025		2,686
2026		-
2027		2,704
Thereafter		147,296
Notes Payable	$	548,251

NOTE 7 – STOCKHOLDERS’ DEFICIT

Common Stock

The Company is authorized to issue up to 800,000,000 shares of its $0.00001 par value common stock and had 75,056,123 common shares issued and outstanding as of June 30, 2023.

There was no common stock activity during the six months ended June 30, 2023 and 2022.

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 June 30, 2023 and 2022, 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 the Company’s then-outstanding common stock.

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There was no Series B preferred stock activity during the six months ended June 30, 2023 and 2022.

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 six months ended June 30, 2023 and 2022.

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, the 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 June 30, 2023 and 2022, there were zero 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 $0 of stock-based compensation during the six months ended June 30, 2023 and 2022. As of June 30, 2023, there is no future compensation cost related to non-vested stock options not yet recognized in the statements of operations.

A summary of the status of the stock options issued by the Company under both plans as of June 30, 2023, and changes during six months then ended is presented below:

	Shares		Weighted Average Exercise Price
Outstanding, December 31, 2022		7,762,821	$	0.024
Granted		-		-
Canceled / Expired		-		-
Exercised		-		-
Outstanding, June 30, 2023		7,762,821	$	0.024

The outstanding options expire on various dates beginning in 2027 through 2029.

NOTE 8 – 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 six months ended June 30, 2023 contains forward-looking statements, principally in this Section and “Business.” Generally, you can identify these statements because they use words like “anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” and similar terms. These statements reflect only our current expectations. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy and actual results may differ materially from those we anticipated due to a number of uncertainties, many of which are unforeseen, including, among others, the risks we face as described in this filing. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. To the extent that such statements are not recitations of historical fact, such statements constitute forward-looking statements that, by definition, involve risks and uncertainties. In any forward-looking statement where we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation of belief will be accomplished.

We believe it is important to communicate our expectations to our investors. There may be events in the future; however, that we are unable to predict accurately or over which we have no control. The risk factors listed in our Annual Report on Form 10-K for the year ended December 31, 2022, as well as any cautionary language in this Quarterly Report on Form 10-Q and our last Annual Report on Form 10-K, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Factors that could cause actual results or events to differ materially from those anticipated include but are not limited to: distributors not accepting our games; price reductions; unforeseen delays in game production; changes in product strategies; general economic, financial and business conditions; changes in and compliance with governmental regulations; changes in various tax laws; and the availability of key management and other personnel. As noted in our risk factors in our Annual Report on Form 10-K for year ended December 31, 2022, we are also closely monitoring the ongoing COVID-19 pandemic and its effects on our business, as well as its effects on general market and economic conditions.

Summary Overview

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

In October 2017, Rob Vardeman, former President of Munzee Inc. joined gaming industry veterans, Craig Holland and Mick Donahoo, to form a stronger and well-rounded Freeze Tag team through a merger. In addition to successful games Freeze Tag has launched previously, the current portfolio of games includes hits such as Munzee, a real-world gaming adventure and social platform with over 8 million locations worldwide and hundreds of thousands of players, WallaBee, an addictive collecting game with over 2,000 beautifully drawn digital cards, and Eventzee, an app that allows individuals, businesses, and other community organizations to build custom scavenger hunts.

 We also offer our technology and services to businesses that want to leverage our expertise in location-based 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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  We are closely monitoring the coronavirus pandemic and the directives from federal and local authorities regarding not only our workforce, but how it impacts both the companies we work with for the development of our games and apps, and our users. We believe these social distancing and “stay-at-home” regulations may negatively impact our users and their ability to play our geolocation games for the foreseeable future. The extent and duration of this impact is difficult to predict at this time.

 Central to Freeze Tag’s core strategy is capitalizing on fast-growing trends in the mobile applications world, including geofencing and location-based advertising. We plan to leverage the combined company’s proprietary technology and expertise to create more exciting location-based experiences in our games and apps. Throughout 2023, we plan to continue to explore opportunities to incorporate geofencing into our applications, and then, when the time is right, we will examine opportunities to introduce advertising opportunities to Freeze Tag clients and customers.

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 condensed consolidated financial statements, the Company recognized a net loss of $22,639 and used net cash of $140,702 for the six months ended June 30, 2023. As of June 30, 2023, the Company had a working capital deficit of $422,158 and a total stockholders’ deficit of $68,925. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

Management believes that by continuing to implement cost reductions, and by increasing revenue from updated product lines, operating cash flows will be sufficient to support the Company’s business plan. However, management is currently evaluating alternative financing sources to fund the Company’s current business plan should cash provided by operations be insufficient.

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

Critical Accounting Policies

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

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

Revenue Recognition

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

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We determine revenue recognition through the following steps:

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

· identification of the performance obligations in the contract;

· determination of the transaction price;

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

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

Intangible Assets

Intangible assets consist primarily of intellectual property, customer base and non-compete agreements acquired in 2017, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable.

Accounting for Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC Topic 718-10, Compensation-Stock Compensation and ASC Subtopic 505-50, Equity-Based Payments to Non-Employees. 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.

Software Development Costs

Software development costs include direct costs incurred for internally developed products and payments made to independent software developers and/or contract engineers and artists. The Company accounts for software development costs in accordance with the FASB guidance for the costs of computer software to be sold, leased, or otherwise marketed as found in ASC Subtopic 985-20. On a case-by-case basis, certain software development costs are capitalized once the technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product encompasses both technical design documentation and game design documentation, or the completed and tested product design and working model. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable against future revenues. For products where proven game engine technology exists, this may occur early in the development cycle.

Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established. For most products, technological feasibility is established when a detailed game design document containing sufficient technical specifications written for a proven game engine or framework technology had been created and approved by management. However, technological feasibility is evaluated on a product-by-product basis. Amounts related to software development that are not capitalized are charged immediately to the appropriate expense account. Amounts that were considered ‘research and development’ that are not capitalized are immediately charged to general and administrative expense.

Prior to a product’s release, the Company expenses, as part of “Cost of Sales—Product Development,” capitalized costs when the Company believes such amounts are not recoverable. Capitalized costs for those products that are cancelled or abandoned are charged to product development expense in the period of cancellation. Commencing upon product release, capitalized software development costs are amortized to “Cost of Sales—Product Development” based on the straight-line method.

 The Company evaluates the future recoverability of capitalized software development costs and intellectual property licenses on an annual basis. For products that have been released in prior years, the primary evaluation criterion is actual title performance. For products that are scheduled to be released in future years, recoverability is evaluated based on the expected performance of the specific products to which the costs relate or in which the licensed trademark or copyright is to be used. Criteria used to evaluate expected product performance include: historical performance of comparable products developed with comparable technology; orders for the product prior to its release; and, for any sequel product, estimated performance based on the performance of the product on which the sequel was based.

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Recent Accounting Pronouncements

Although there were new accounting pronouncements issued or proposed by the FASB during the six months ended June 30, 2023 and through the date of filing of this report, we do not believe any of these accounting pronouncements has had or will have a material impact on our financial position or results of operations.

Results of Operations

Revenues

Our revenues for the three months ended June 30, 2023 of $579,542 were up $86,803 from revenues of $492,739 for the three months ended June 30, 2022. Revenues for the six months ended June 30, 2023 of $1,090,914 were up $82,259 from revenues of $1,008,655 for the six months ended June 30, 2022.  The primary reason for the increase in revenues year over year was due to an increase in sales of our Munzee and Eventzee product lines.  We are continuing to make improvements in our products and have expectations for continued growth in our Munzee and Eventzee apps, and we expect to see increased demand going forward.

Cost of Sales

Cost of sales increased $4,394 to $88,573 for the three months ended June 30, 2023 from $84,179 for the three months ended June 30, 2022. Cost of sales for the six months ended June 30, 2023 of $193,361 were up $18,945 from cost of sales of $174,416 for the six months ended June 30, 2022. The increase was a mainly a result of increased server and supporting software product costs offset by a decrease in physical product costs (inventory of physical products).

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $25,332 to $454,124 for the three months ended June 30, 2023 from $428,792 for the three months ended June 30, 2022. Selling, general and administrative expenses for the six months ended June 30, 2023 of $896,993 were up $31,923 from $865,070 for the six months ended June 30, 2022. The increase is primarily due to an increase in accounting, salary, external software developers, insurance, and travel expenses, offset by a decrease in rent, and slight decrease in marketing, general office, and postage expenses.

Other Income (Expense)

Total other income (expense) for the three months ended June 30, 2023 of ($11,643) was $176,372 lower than other income (expense) of $164,729 for the three months ended June 30, 2022. Total other income (expense) for the six months ended June 30, 2023 of $($23,199) was down $175,880 from $152,681 for the six months ended June 30, 2022. The change is primarily driven by the forgiveness of accrued interest related to our second Paycheck Protection Program (PPP) loan which was forgiven in 2022. Interest expense and other income (expense) remained relatively stable.

Net Income

As a result of the above, we reported net income (loss) of $25,202 and ($22,639) for the three and six months ended June 30, 2023 compared to net income of $144,497 and $121,850 for the three and six months ended June 30, 2022. 

Liquidity and Capital Resources

Introduction

As of June 30, 2023, we had current assets of $638,061, including cash of $600,461, and current liabilities of $1,060,219, resulting in a working capital deficit of $422,158. In addition, we had a total stockholders’ deficit of $68,925 at June 30, 2023.

During the six months ended June 30, 2023, we used net cash of $140,702. Management believes that by continuing to implement cost reductions, and by increasing revenue from updated product lines, operating cash flows will be sufficient to support our business plan. However, 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 $5,008 from operating activities for the six months ended June 30, 2023. A net loss of $22,639 and increases in accounts receivable of $8,731 and decreases in accounts payable of $2,119 were partially offset by $23,497 of non-cash expenses, a decrease of $1,468 of prepaid expenses and increases in liabilities of $3,516.

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By comparison, we provided net cash of $38,239 from operating activities for the six months ended June 30, 2022. Net income of $121,850, non-cash expenses of $70,813, a decrease in prepaid and other assets of $1,929 and increases of our accounts payable of $18,171 and accrued expenses of $5,438 were partially offset by loan forgiveness of $176,441 and increases in accounts receivable of $722.

                We used $130,597 and $62,952 for capitalized software development costs the six months ended June 30, 2023 and 2022; respectively.

Financing activities used $5,097 and $4,958 for auto loan payments for the six months ended June 30, 2023 and 2022, respectively.

Notes Payable – Related Party

As of June 30, 2023, our related party debt was comprised of notes payable totaling $379,825 to Craig Holland, our Chief Executive Officer, and Mick Donahoo, our Chief Financial Officer. These notes are non-interest bearing and mature on December 31, 2023. Of this related party indebtedness, there are two convertible notes payable of $186,450 to each of Messrs. Holland and Donahoo, who have the right, at any time, at their election, to convert all or part of the amount due into shares of fully paid and non-assessable shares of our common stock. The fixed conversion price is $0.02 per share. We have imputed interest on these notes payable using an annual rate of 10%.

ITEM 3 Quantitative and Qualitative Disclosures About Market Risk

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

ITEM 4 Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined) in Exchange Act Rules 13a – 15(c) and 15d – 15(e). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer, who are our principal executive officer and principal financial officers, respectively, concluded that, as of the end of the six month period ended June 30, 2023, our disclosure controls and procedures were not 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

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

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ITEM 6 Exhibits

3.1 (1)	Articles of Incorporation of Freeze Tag, Inc.
3.2 (1)	Articles of Amendment to Articles of Incorporation
3.3 (1)	Bylaws of Freeze Tag, Inc.
3.4 (3)	Articles of Amendment to Certificate of Incorporation February 4, 2014
3.5 (7)	Articles of Amendment to Certificate of Incorporation filed on February 18, 2016
10.1 (1)	10% Convertible Promissory Note dated July 1, 2010 with The Holland Family Trust
10.2 (2)	Convertible Promissory Note (10%) dated December 20, 2013 – Accredited Investor
10.3 (2)	Convertible Promissory Note (10%) dated December 31, 2013 – Holland Family Trust
10.4 (2)	Convertible Promissory Note (10%) dated December 31, 2013 – Craig Holland Debt
10.5 (2)	Convertible Promissory Note (10%) dated December 31, 2013 – Craig Holland Salary
10.6 (2)	Convertible Promissory Note (10%) dated December 31, 2013 – Mick Donahoo Salary
10.7 (2)	Convertible Promissory Note (10%) dated December 31, 2013 – Mick Donahoo Debt
10.8 (2)	Convertible Promissory Note (10%) dated December 31, 2013 – Robert Cowdell
10.9 (8)	Convertible Promissory Note with an Accredited Investor dated June 25, 2014
10.10 (4)	Convertible Promissory Note (10%) dated September 30, 2014 – Holland Family Trust
10.11 (4)	Convertible Promissory Note (10%) dated September 30, 2014 – Craig Holland
10.12 (5)	Consulting and Co-Development Agreement with Gogii Games Corp. dated November 17, 2014 (Redacted Version)
10.13 (5)	Convertible Promissory Note with an accredited investor dated February 11, 2015
10.14 (5)	Master Development Agreement with TIC TOC STUDIOS, LLC dated February 18, 2015 (Redacted Version)
10.15 (6)	Convertible Promissory Note with an accredited investor dated July 28, 2015
10.16 (6)	Amendment to Convertible Promissory Note dated December 31, 2013 – Craig Holland
10.17 (6)	Amendment to Convertible Promissory Note dated December 31, 2013 – Mick Donahoo

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10.18 (6)	Amendment to Convertible Promissory Note with an accredited investor dated December 30, 2013
10.19 (8)	Convertible Promissory Note with an accredited investor dated April 7, 2016
10.20 (9)	License Agreement with Munzee, Inc. dated October 19, 2016
10.21 (9)	License Agreement with Paws, Incorporation dated November 1, 2016 (Redacted Version)
10.22 (10)	Amendment #1 to Convertible Promissory Note with an accredited investor dated April 7, 2016
10.23 (10)	Convertible Promissory Note with an accredited investor dated February 8, 2017
10.24 (11)	Merger Agreement with Munzee, Inc. dated July 26, 2017
10.25 (11)	Form of Securities Exchange and Common Stock Purchase Agreement with Related Parties dated July 25, 2017
10.26 (11)	Form of Securities Exchange and Common Stock Purchase Agreement with Accredited Investor #1 and Accredited Investor #2 dated July 26, 2017
10.27 (11)	Form of Second Securities Exchange and Common Stock Purchase Agreement with Accredited Investor #2 dated July 26, 2017
10.28 (11)	Form of Securities Exchange and Common Stock Purchase Agreement with Accredited Investor #3 dated July 26, 2017
10.29 (11)	Form of Amendment No. 1 to Promissory Note with Craig Holland and Mick Donahoo dated July 25, 2017
10.30 (11)	Amendment No. 1 to Promissory Note with Craig Holland dated July 25, 2017
10.31 (12)	Corporate Sponsorship Agreement with American Diabetes Association dated March 22, 2018
21.1(13)	Subsidiaries of Freeze Tag Inc.
31.1*	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2*	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.1*	Section 1350 Certification of Chief Executive Officer
32.2*	Section 1350 Certification of Chief Financial Officer.
101.INS**	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH**	Inline XBRL Taxonomy Extension Schema Document
101.CAL**	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF**	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB**	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE**	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL 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.

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(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
(13)	Incorporated by reference from our Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020.

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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: August 14, 2023	By:	/s/ Craig Holland
		Craig Holland
	Its:	Chief Executive Officer (Principal Executive Officer)

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EX-31.1

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: August 14, 2023	By:	/s/ Craig Holland
		Craig Holland
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

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

I, Mick Donahoo, 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: August 14, 2023	By:	/s/ Mick Donahoo
		Mick Donahoo
		Chief Financial Officer (Chief Accounting Officer)

EX-32.1

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 June 30, 2023, 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: August 14, 2023	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

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 June 30, 2023, 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:

(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: August 14, 2023	By:	/s/ Mick Donahoo
		Mick Donahoo
		Chief Financial Officer (Chief Accounting 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.

XML

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 14, 2023
Cover [Abstract]
Entity Registrant Name	FREEZE TAG, Inc.
Entity Central Index Key	0001485074
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Jun. 30, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		75,056,123
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	000-54267
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	20-4532392
Entity Address City Or Town	Tustin
Entity Address State Or Province	CA
Entity Address Postal Zip Code	92780
City Area Code	714
Local Phone Number	210-3850
Entity Address Address Line 1	360 E 1st Street
Entity Interactive Data Current	Yes
Entity Address Address Line 2	#450

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash	$ 600,461	$ 741,163
Accounts receivable	25,606	16,875
Prepaid expenses and other current assets	11,994	13,462
Total current assets	638,061	771,500
Property and equipment, net	15,536	20,197
Intangible assets, net	0	0
Capitalized software	501,236	370,639
Other assets	853	853
Total assets	1,155,686	1,163,189
Current liabilities:
Accounts payable	162,422	164,541
Accrued expenses	500,669	493,962
Unearned royalties	7,543	7,543
Notes payable - related party, current portion	379,825	379,825
Notes payable, current portion	9,760	10,268
Total current liabilities	1,060,219	1,056,139
Notes payable, net of current portion	158,666	163,255
Other long-term liabilities	5,726	8,917
Total liabilities	1,224,611	1,228,311
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	9,309,665	9,290,829
Common stock payable	16,800	16,800
Accumulated deficit	(9,396,210)	(9,373,571)
Total stockholders' deficit	(68,925)	(65,122)
Total liabilities and stockholders' deficit	1,155,686	1,163,189
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

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Common stock, par value per share	$ 0.00001	$ 0.00001
Common stock, shares authorized	800,000,000	800,000,000
Common stock, shares issued	75,056,123	75,056,123
Common stock, shares outstanding	75,056,123	75,056,123
Preferred stock, par value per share	$ 0.00001	$ 0.00001
Preferred stock, shares authorized	25,000,000	25,000,000
Series B Preferred Stock [Member]
Preferred stock, shares authorized	2,700,000	2,700,000
Preferred stock, shares issued	2,480,482	2,480,482
Preferred stock, shares outstanding	2,480,482	2,480,482
Series C Preferred Stock [Member]
Preferred stock, shares authorized	4,500,000	4,500,000
Preferred stock, shares issued	4,355,000	4,355,000
Preferred stock, shares outstanding	4,355,000	4,355,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Revenues	$ 579,542	$ 492,739	$ 1,090,914	$ 1,008,655
Operating costs and expenses:
Cost of sales	88,573	84,179	193,361	174,416
Selling, general and administrative expenses	454,124	428,792	896,993	865,070
Total operating costs and expenses	542,697	512,971	1,090,354	1,039,486
Income (loss) from operations	36,845	(20,232)	560	(30,831)
Other income (expense):
Gain on debt extinguishment	0	176,441	0	176,441
Interest expense, net	(11,643)	(11,712)	(23,199)	(23,760)
Total other income (expense)	(11,643)	164,729	(23,199)	152,681
Net income (loss)	$ 25,202	$ 144,497	$ (22,639)	$ 121,850
Weighted average number of common shares outstanding - basic	75,056,123	75,056,123	75,056,123	75,056,123
Weighted average number of common shares outstanding - diluted	306,109,123	306,109,123	75,056,123	325,655,929
Income per common share - basic and diluted	$ 0.00	$ 0.00	$ 0.00	$ 0.00

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Unaudited) - USD ($)	Total	Series C, Preferred Stock [Member]	Series B, Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Common Stock Payable [Member]	Retained Earnings (Deficit) [Member]
Balance, shares at Dec. 31, 2021		4,355,000	2,480,482	75,056,123
Balance, amount at Dec. 31, 2021	$ (303,807)	$ 44	$ 25	$ 751	$ 9,252,845	$ 16,800	$ (9,574,272)
Imputed interest on related party debt	9,366	0	0	0	9,366	0	0
Net loss	(22,647)	$ 0	$ 0	$ 0	0	0	(22,647)
Balance, shares at Mar. 31, 2022		4,355,000	2,480,482	75,056,123
Balance, amount at Mar. 31, 2022	(317,088)	$ 44	$ 25	$ 751	9,262,211	16,800	(9,596,919)
Balance, shares at Dec. 31, 2021		4,355,000	2,480,482	75,056,123
Balance, amount at Dec. 31, 2021	(303,807)	$ 44	$ 25	$ 751	9,252,845	16,800	(9,574,272)
Imputed interest on related party debt	(18,836)
Net loss	121,850
Balance, shares at Jun. 30, 2022		4,355,000	2,480,482	75,056,123
Balance, amount at Jun. 30, 2022	(163,121)	$ 44	$ 25	$ 751	9,271,681	16,800	(9,452,422)
Balance, shares at Mar. 31, 2022		4,355,000	2,480,482	75,056,123
Balance, amount at Mar. 31, 2022	(317,088)	$ 44	$ 25	$ 751	9,262,211	16,800	(9,596,919)
Imputed interest on related party debt	9,470	0	0	0	9,470	0	0
Net loss	144,497	$ 0	$ 0	$ 0	0	0	144,497
Balance, shares at Jun. 30, 2022		4,355,000	2,480,482	75,056,123
Balance, amount at Jun. 30, 2022	(163,121)	$ 44	$ 25	$ 751	9,271,681	16,800	(9,452,422)
Balance, shares at Dec. 31, 2022		4,355,000	2,480,482	75,056,123
Balance, amount at Dec. 31, 2022	(65,122)	$ 44	$ 25	$ 751	9,290,829	16,800	(9,373,571)
Imputed interest on related party debt	9,367	0	0	0	9,367	0	0
Net loss	(47,841)	$ 0	$ 0	$ 0	0	0	(47,841)
Balance, shares at Mar. 31, 2023		4,355,000	2,480,482	75,056,123
Balance, amount at Mar. 31, 2023	(103,596)	$ 44	$ 25	$ 751	9,300,196	16,800	(9,421,412)
Balance, shares at Dec. 31, 2022		4,355,000	2,480,482	75,056,123
Balance, amount at Dec. 31, 2022	(65,122)	$ 44	$ 25	$ 751	9,290,829	16,800	(9,373,571)
Imputed interest on related party debt	(18,836)
Net loss	(22,639)
Balance, shares at Jun. 30, 2023		4,355,000	2,480,482	75,056,123
Balance, amount at Jun. 30, 2023	(68,925)	$ 44	$ 25	$ 751	9,309,665	16,800	(9,396,210)
Balance, shares at Mar. 31, 2023		4,355,000	2,480,482	75,056,123
Balance, amount at Mar. 31, 2023	(103,596)	$ 44	$ 25	$ 751	9,300,196	16,800	(9,421,412)
Imputed interest on related party debt	9,469	0	0	0	9,469	0	0
Net loss	25,202	$ 0	$ 0	$ 0	0	0	25,202
Balance, shares at Jun. 30, 2023		4,355,000	2,480,482	75,056,123
Balance, amount at Jun. 30, 2023	$ (68,925)	$ 44	$ 25	$ 751	$ 9,309,665	$ 16,800	$ (9,396,210)

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net income (loss)	$ (22,639)	$ 121,850
Adjustments to reconcile net income to net cash (used) provided by operating activities:
Depreciation and amortization	4,661	51,977
Imputed interest expense	18,836	18,836
Forgiveness of debt	0	(176,441)
Changes in operating assets and liabilities:
Accounts receivable	(8,731)	(722)
Prepaid expenses and other current assets	1,468	1,929
Accounts payable	(2,119)	18,171
Accrued expenses	1,395	5,438
Other	2,121	(2,799)
Net cash provided (used) by operating activities	(5,008)	38,239
Cash flows from investing activities:
Capitalized software costs	(130,597)	(62,952)
Net cash used by investing activities	(130,597)	(62,952)
Cash flows from financing activities:
Payments on notes payable	(5,097)	(4,958)
Net cash used by financing activities	(5,097)	(4,958)
Net decrease in cash	(140,702)	(29,671)
Cash at the beginning of the period	741,163	752,826
Cash at the end of the period	600,461	723,155
Supplemental disclosure:
Cash paid for income taxes	1,500	3,800
Cash paid for interest expense	$ 147	$ 455

XML

THE COMPANY AND NATURE OF BUSINESS

6 Months Ended

Jun. 30, 2023

THE COMPANY AND NATURE OF BUSINESS

THE COMPANY AND NATURE OF BUSINESS

NOTE 1 – THE COMPANY AND NATURE OF BUSINESS

Nature of Operations

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

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

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

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.

Property and Equipment

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

Vehicle	5 years
Computer equipment	5 years
Office furniture and equipment	7 years

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

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

Intangible Assets

Intangible assets consist primarily of intellectual property, customer base and non-compete agreements acquired in 2017, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.

Income Taxes

We account for income taxes using ASC Topic 740, Income Taxes (“ASC Topic 740”). 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. Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company had no stock-based compensation expense recognized in its statements of operations for the six months ended June 30, 2023 and 2022.

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 June 30, 2023 and 2022, the diluted weighted average number of shares includes 13,303,000 common shares issuable upon conversion of Series B preferred stock and 217,750,000 common shares issuable upon conversion of Series C preferred stock and for the six months ended June 30, 2022, also includes 18,991,250 related party convertible debt and 555,556 common shares issuable from outstanding stock options using the treasury stock method. For the six months ended June 30, 2023, 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 June 30, 2023 and December 31, 2022.

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.

Software Development Costs

Software development costs include direct costs incurred for internally developed products and payments made to independent software developers and/or contract engineers and artists. The Company accounts for software development costs in accordance with the FASB guidance for the costs of computer software to be sold, leased, or otherwise marketed as found in ASC Subtopic 985-20. On a case-by-case basis, certain software development costs are capitalized once the technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product encompasses both technical design documentation and game design documentation, or the completed and tested product design and working model. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable against future revenues. For products where proven game engine technology exists, this may occur early in the development cycle.

Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established. For most products, technological feasibility is established when a detailed game design document containing sufficient technical specifications written for a proven game engine or framework technology had been created and approved by management. However, technological feasibility is evaluated on a product-by-product basis. Amounts related to software development that are not capitalized are charged immediately to the appropriate expense account. Amounts that were considered ‘research and development’ that are not capitalized are immediately charged to general and administrative expense.

Prior to a product’s release, the Company expenses, as part of “Cost of Sales—Product Development,” capitalized costs when the Company believes such amounts are not recoverable. Capitalized costs for those products that are cancelled or abandoned are charged to product development expense in the period of cancellation. Commencing upon product release, capitalized software development costs are amortized to “Cost of Sales—Product Development” based on the straight-line method.

 The Company evaluates the future recoverability of capitalized software development costs and intellectual property licenses on an annual basis. For products that have been released in prior years, the primary evaluation criterion is actual title performance. For products that are scheduled to be released in future years, recoverability is evaluated based on the expected performance of the specific products to which the costs relate or in which the licensed trademark or copyright is to be used. Criteria used to evaluate expected product performance include: historical performance of comparable products developed with comparable technology; orders for the product prior to its release; and, for any sequel product, estimated performance based on the performance of the product on which the sequel was based.

The Company had no impairment expense, related to capitalized software development costs, recognized in the Company’s statements of operations for the six months ended June 30, 2023 or 2022.

Based on the previous trends in the Company’s business, management has determined the expected shelf life of the majority of a game’s revenue will be realized over a three to five-year period and will expense capitalized production costs from the date of the initial release, or first sale of the product for a specific technology platform. It is possible that the same game developed on different technology platforms (such as PC and Mac, or iOS and Android) would be launched on different release dates because product development cycles may differ and distribution partner release policies may differ.

At June 30, 2023 and December 31, 2022, the Company had $501,236 and $370,639 respectively, of capitalized software development costs in other assets on the balance sheet. The Company did not recognize amortization expense in the six months ended June 30, 2023 and 2022.

Recent Accounting Pronouncements

Although there were new accounting pronouncements issued or proposed by the FASB during the six months ended June 30, 2023 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no material impact on net earnings, financial position or cash flows.

XML

GOING CONCERN UNCERTAINITY

6 Months Ended

Jun. 30, 2023

GOING CONCERN UNCERTAINITY

GOING CONCERN UNCERTAINITY

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 condensed consolidated financial statements, the Company had a net loss of $22,639 and used net cash of $140,702 for the six months ended June 30, 2023. As of June 30, 2023, the Company had a working capital deficit of $422,158 and a total stockholders’ deficit of $68,925. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

Management believes that by continuing to implement cost reductions, and by increasing revenue from updated product lines, operating cash flows will be sufficient to support the Company’s business plan. 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.

XML

PROPERTY AND EQUIPMENT

6 Months Ended

Jun. 30, 2023

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 4 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at:

	June 30, 2023			December 31, 2022
Vehicle	$	46,609		$	46,609
Computer equipment		7,170			7,170
Office furniture and equipment		8,613			8,613
Total		62,392			62,392
Less accumulated depreciation		(46,856	)		(42,195	)
Net	$	15,536		$	20,197

Depreciation expense was $4,661 and $6,237 for the six months ended June 30, 2023 and 2022, respectively.

XML

INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2023

INTANGIBLE ASSETS

INTANGIBLE ASSETS

NOTE 5 – INTANGIBLE ASSETS

Intangible assets consisted of the following at:

	June 30, 2023			December 31, 2022
Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(457,400	)		(457,400	)
Net	$	-		$	-

Amortization expense was $0 and $45,740 for the six months ended June 30, 2023 and 2022, respectively.

XML

NOTES PAYABLE

6 Months Ended

Jun. 30, 2023

NOTES PAYABLE

NOTES PAYABLE

NOTE 6 – NOTES PAYABLE

Notes payable consisted of the following:

	June 30, 2023		December 31, 2022
Related Party:
Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2023	$	6,925	$	6,925
Convertible note payable to Craig Holland, non- interest bearing, maturing on December 31, 2023		186,450		186,450
Convertible note payable to Mick Donahoo, non- Interest bearing, maturing on December 31, 2023		186,450		186,450
Other:
Note payable to financial institution, secured by vehicle, interest at 2.9%, due in 2025		18,425		23,523
Small Business Loan, payable to financial institution, 3.75% interest, payments starting in June 2021, due in 2050		150,000		150,000
Total notes payable	$	548,251	$	553,348
Less current portion		389,585		390,093
Notes payable, net of current portion	$	158,666	$	163,255

On April 30, 2020, the Company received a U.S. Small Business Administration Loan under the Paycheck Protection Program (PPP Loan) primarily for payroll costs related to the COVID-19 crisis in the amount of $174,420. Under the Paycheck Protection Program, the PPP Loan has a fixed interest rate of 1%, a maturity date two years from the date of the funding of the loan and no payments are due for six months. Pursuant to the terms of the PPP Loan, the Company may apply for forgiveness of the amount due on the PPP Loan in an amount equal to the sum of the following costs incurred by the Company during the 8-week period (or any other period that may be authorized by the U.S. Small Business Association) beginning on the date of first disbursement of the loan: payroll costs, any payment of interest on a covered mortgage obligation, payment on a covered rent obligation, and any covered utility payment. The amount of PPP Loan forgiveness shall be calculated in accordance with the requirements of the Paycheck Protection Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), although no more than 25% of the amount forgiven can be attributable to non-payroll costs. The Company applied for and received loan forgiveness in 2021.

On January 25, 2021, the Company received an additional PPP Loan in the amount of $174,421. Under the Paycheck Protection Program, the PPP Loan has a fixed interest rate of 1%, a maturity date five years from the date of the funding of the loan and no payments are due for six months. Other terms are consistent with the first PPP loan. The Company applied for and received forgiveness of the full loan amount and accrued interest in 2022.

On May 18, 2020, the Company received an additional U.S. Small Business Administration Loan (SBA Loan) in the amount of $150,000 to alleviate continued economic injury caused the COVID-19 crisis. The SBA Loan has a fixed interest rate of 3.75% and matures in thirty years from the date of the loan. Payments were scheduled to begin twelve months from the effective date in a fixed amount of $731 per month. All payments will be applied to interest first. This loan is secured by the general assets of the Company. The SBA Loan has since indicated that the first payments are not required to begin until 30 months from the date of the note.

The Company had a note payable to Craig Holland, its Chief Executive Officer, with a balance of $6,925 at June 30, 2023 and 2022. 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 June 30, 2023 and 2022. 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 six months ended June 30, 2023 and 2022, total imputed interest expense was $18,836 and $18,835; respectively, which was recorded to additional paid-in capital.

Future maturities of notes payable as of June 30, 2023 are as follows:

December 31,	Amount
2023	$	384,996
2024		10,569
2025		2,686
2026		-
2027		2,704
Thereafter		147,296
Notes Payable	$	548,251

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STOCKHOLDERS DEFICIT

6 Months Ended

Jun. 30, 2023

STOCKHOLDERS DEFICIT

STOCKHOLDERS' DEFICIT

NOTE 7 – STOCKHOLDERS’ DEFICIT

Common Stock

The Company is authorized to issue up to 800,000,000 shares of its $0.00001 par value common stock and had 75,056,123 common shares issued and outstanding as of June 30, 2023.

There was no common stock activity during the six months ended June 30, 2023 and 2022.

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 June 30, 2023 and 2022, 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 the Company’s then-outstanding common stock.

There was no Series B preferred stock activity during the six months ended June 30, 2023 and 2022.

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 six months ended June 30, 2023 and 2022.

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, the 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 June 30, 2023 and 2022, there were zero 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 $0 of stock-based compensation during the six months ended June 30, 2023 and 2022. As of June 30, 2023, there is no future compensation cost related to non-vested stock options not yet recognized in the statements of operations.

A summary of the status of the stock options issued by the Company under both plans as of June 30, 2023, and changes during six months then ended is presented below:

	Shares		Weighted Average Exercise Price
Outstanding, December 31, 2022		7,762,821	$	0.024
Granted		-		-
Canceled / Expired		-		-
Exercised		-		-
Outstanding, June 30, 2023		7,762,821	$	0.024

The outstanding options expire on various dates beginning in 2027 through 2029.

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2023

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 8 – 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

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2023

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.

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.

Property and Equipment

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

Vehicle	5 years
Computer equipment	5 years
Office furniture and equipment	7 years

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

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

Intangible Assets

Intangible assets consist primarily of intellectual property, customer base and non-compete agreements acquired in 2017, which are amortized on a straight-line basis over their estimated useful lives of 5 years. Intangible assets are reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.

Income Taxes

We account for income taxes using ASC Topic 740, Income Taxes (“ASC Topic 740”). 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. Stock-based compensation expense recognized during the requisite services period is based on the value of share-based payment awards after reduction for estimated forfeitures. Forfeitures are estimated at the time of grant and are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company had no stock-based compensation expense recognized in its statements of operations for the six months ended June 30, 2023 and 2022.

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 June 30, 2023 and 2022, the diluted weighted average number of shares includes 13,303,000 common shares issuable upon conversion of Series B preferred stock and 217,750,000 common shares issuable upon conversion of Series C preferred stock and for the six months ended June 30, 2022, also includes 18,991,250 related party convertible debt and 555,556 common shares issuable from outstanding stock options using the treasury stock method. For the six months ended June 30, 2023, 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 June 30, 2023 and December 31, 2022.

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.

Software Development Costs

Software development costs include direct costs incurred for internally developed products and payments made to independent software developers and/or contract engineers and artists. The Company accounts for software development costs in accordance with the FASB guidance for the costs of computer software to be sold, leased, or otherwise marketed as found in ASC Subtopic 985-20. On a case-by-case basis, certain software development costs are capitalized once the technological feasibility of a product is established and such costs are determined to be recoverable. Technological feasibility of a product encompasses both technical design documentation and game design documentation, or the completed and tested product design and working model. Software development costs are capitalized once technological feasibility of a product is established and such costs are determined to be recoverable against future revenues. For products where proven game engine technology exists, this may occur early in the development cycle.

Significant management judgments and estimates are utilized in the assessment of when technological feasibility is established. For most products, technological feasibility is established when a detailed game design document containing sufficient technical specifications written for a proven game engine or framework technology had been created and approved by management. However, technological feasibility is evaluated on a product-by-product basis. Amounts related to software development that are not capitalized are charged immediately to the appropriate expense account. Amounts that were considered ‘research and development’ that are not capitalized are immediately charged to general and administrative expense.

Prior to a product’s release, the Company expenses, as part of “Cost of Sales—Product Development,” capitalized costs when the Company believes such amounts are not recoverable. Capitalized costs for those products that are cancelled or abandoned are charged to product development expense in the period of cancellation. Commencing upon product release, capitalized software development costs are amortized to “Cost of Sales—Product Development” based on the straight-line method.

 The Company evaluates the future recoverability of capitalized software development costs and intellectual property licenses on an annual basis. For products that have been released in prior years, the primary evaluation criterion is actual title performance. For products that are scheduled to be released in future years, recoverability is evaluated based on the expected performance of the specific products to which the costs relate or in which the licensed trademark or copyright is to be used. Criteria used to evaluate expected product performance include: historical performance of comparable products developed with comparable technology; orders for the product prior to its release; and, for any sequel product, estimated performance based on the performance of the product on which the sequel was based.

The Company had no impairment expense, related to capitalized software development costs, recognized in the Company’s statements of operations for the six months ended June 30, 2023 or 2022.

Based on the previous trends in the Company’s business, management has determined the expected shelf life of the majority of a game’s revenue will be realized over a three to five-year period and will expense capitalized production costs from the date of the initial release, or first sale of the product for a specific technology platform. It is possible that the same game developed on different technology platforms (such as PC and Mac, or iOS and Android) would be launched on different release dates because product development cycles may differ and distribution partner release policies may differ.

At June 30, 2023 and December 31, 2022, the Company had $501,236 and $370,639 respectively, of capitalized software development costs in other assets on the balance sheet. The Company did not recognize amortization expense in the six months ended June 30, 2023 and 2022.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no material impact on net earnings, financial position or cash flows.

Recent Accounting Pronouncements

Although there were new accounting pronouncements issued or proposed by the FASB during the six months ended June 30, 2023 and through the date of filing of this report, the Company does not believe any of these accounting pronouncements has had or will have a material impact on its financial position or results of operations.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of Property and Equipment, Estimated Useful Life

Vehicle	5 years
Computer equipment	5 years
Office furniture and equipment	7 years

XML

PROPERTY AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2023

PROPERTY AND EQUIPMENT

Schedule of Property and Equipment

	June 30, 2023			December 31, 2022
Vehicle	$	46,609		$	46,609
Computer equipment		7,170			7,170
Office furniture and equipment		8,613			8,613
Total		62,392			62,392
Less accumulated depreciation		(46,856	)		(42,195	)
Net	$	15,536		$	20,197

XML

INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2023

INTANGIBLE ASSETS

Schedule of Intangible Assets

	June 30, 2023			December 31, 2022
Intellectual property	$	307,100		$	307,100
Customer base		142,000			142,000
Non-compete agreements		8,300			8,300
Less accumulated depreciation		(457,400	)		(457,400	)
Net	$	-		$	-

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NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2023

NOTES PAYABLE

Schedule of Notes Payable

	June 30, 2023		December 31, 2022
Related Party:
Note payable to Craig Holland, non-interest bearing, maturing on December 31, 2023	$	6,925	$	6,925
Convertible note payable to Craig Holland, non- interest bearing, maturing on December 31, 2023		186,450		186,450
Convertible note payable to Mick Donahoo, non- Interest bearing, maturing on December 31, 2023		186,450		186,450
Other:
Note payable to financial institution, secured by vehicle, interest at 2.9%, due in 2025		18,425		23,523
Small Business Loan, payable to financial institution, 3.75% interest, payments starting in June 2021, due in 2050		150,000		150,000
Total notes payable	$	548,251	$	553,348
Less current portion		389,585		390,093
Notes payable, net of current portion	$	158,666	$	163,255

Schedule of Future Maturities of Notes Payable

December 31,	Amount
2023	$	384,996
2024		10,569
2025		2,686
2026		-
2027		2,704
Thereafter		147,296
Notes Payable	$	548,251

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STOCKHOLDERS DEFICIT (Tables)

6 Months Ended

Jun. 30, 2023

STOCKHOLDERS DEFICIT

Schedule of Status of Warrants and Options Issued

	Shares		Weighted Average Exercise Price
Outstanding, December 31, 2022		7,762,821	$	0.024
Granted		-		-
Canceled / Expired		-		-
Exercised		-		-
Outstanding, June 30, 2023		7,762,821	$	0.024

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	6 Months Ended
	Jun. 30, 2023
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
Vehicles [Member]
Property, plant and equipment, estimated useful lives	5 years

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Intangible assets estimated useful lives	5 years
Capitalized software development costs	$ 501,236		$ 370,639
Equity Option [Member]
Common shares issuable upon conversion		555,556
Convertible Debt [Member]
Common shares issuable upon conversion		18,991,250
Series B Preferred Stock [Member]
Common shares issuable upon conversion	13,303,000
Series C Preferred Stock [Member]
Common shares issuable upon conversion	217,750,000

XML

GOING CONCERN UNCERTAINITY (Details Narrative) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
GOING CONCERN UNCERTAINITY
Net income	$ 25,202	$ (47,841)	$ 144,497	$ (22,647)	$ (22,639)	$ 121,850
Net cash used					140,702
Stockholders' deficit	(68,925)	$ (103,596)	$ (163,121)	$ (317,088)	(68,925)	$ (163,121)	$ (65,122)	$ (303,807)
Working capital deficit	$ 422,158				$ 422,158

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PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property and equipment, gross	$ 62,392	$ 62,392
Less accumulated depreciation	(46,856)	(42,195)
Property and equipment, net	15,536	20,197
Computer Equipment [Member]
Property and equipment, gross	7,170	7,170
Office Furniture and Equipment [Member]
Property and equipment, gross	8,613	8,613
Vehicles [Member]
Property and equipment, gross	$ 46,609	$ 46,609

XML

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
PROPERTY AND EQUIPMENT
Depreciation expense	$ 4,661	$ 6,237

XML

INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Less accumulated amortization	$ (457,400)	$ (457,400)
Intangible assets, net	0	0
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

INTANGIBLE ASSETS (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
INTANGIBLE ASSETS
Amortization expense	$ 0	$ 45,740

XML

NOTES PAYABLE (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Total Notes Payable	$ 548,251	$ 553,348
Less Current Portion	389,585	390,093
Notes Payable, Net Of Current Portion	158,666	163,255
Small Business Loan [Member]
Notes Payable	150,000	150,000
Craig Holland [Member] | Convertible Notes Payable [Member]
Notes Payable	186,450	186,450
Mick Donahoo [Member] | Convertible Notes Payable [Member]
Notes Payable	186,450	186,450
Notes Payable [Member] | Craig Holland [Member]
Notes Payable	6,925	6,925	$ 6,925
Note Payable To Financial Institution, Secured By Vehicle [Member]
Notes Payable	$ 18,425	$ 23,523

XML

NOTES PAYABLE (Details 1) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
NOTES PAYABLE
2023	$ 384,996
2024	10,569
2025	2,686
2026	0
2027	2,704
Thereafter	147,296
Total Notes Payable	$ 548,251	$ 553,348

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NOTES PAYABLE (Details Narrative) - USD ($)	1 Months Ended			6 Months Ended
	Jan. 25, 2021	May 18, 2020	Apr. 30, 2020	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	May 18, 2022
Non-payroll costs			25.00%
Total Imputed Interest Expense				$ 18,836	$ 18,835
Imputed Interest Expense, Annual Rate				10.00%
Paycheck Protection Program (PPP Loan) [Member]
Proceeds From Loan	$ 174,421		$ 174,420
Interest Rate	1.00%		1.00%
Maturity Description	a maturity date five years from the date of the funding of the loan and no payments are due for six months		a maturity date two years from the date of the funding of the loan and no payments are due for six months
SBA LOAN [Member] | May 18, 2020 [Member]
Proceeds From Loan		$ 150,000
Interest Rate							3.75%
Maturity Description		The SBA Loan has since indicated that the first payments are not required to begin until 30 months from the date of the note
Payment From Effective Date Per Month		$ 731
Mr. Holland and Mick Donahoo [Member]
Convertible Note Payable				$ 372,900	372,900
Debt Instrument, Convertible, Conversion Price				$ 0.02
Notes Payable [Member] | Craig Holland [Member]
Notes Payable				$ 6,925	$ 6,925	$ 6,925

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STOCKHOLDERS' DEFICIT (Details)	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Shares
Outstanding At Beginning Of Period | shares	7,762,821
Granted | shares	0
Canceled / Expired | shares	0
Exercised | shares	0
Outstanding At Ending Of Period | shares | shares	7,762,821
Weighted Average Exercise Price
Outstanding At Beginning Of Period | $ / shares	$ 0.024
Granted | $ / shares	0
Canceled / Expired | $ / shares	0
Exercised | $ / shares	0
Outstanding At Ending Of Period | $ / shares	$ 0.024

XML

STOCKHOLDERS' DEFICIT (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 05, 2017	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
Stock-based Compensation	$ 0	$ 0
2017 Non-Qualified Stock Option Plan [Member]
Option Granted To Purchase Common Shares				1,512,821	10,000,000
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	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.
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
Description Of Voting Rights	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.