UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-Q/A

———————

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

 

For the quarterly period ended: September 30, 2013

or

 

o	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: 333-165406

———————

Frozen Food Gift Group, Inc.

(Exact name of registrant as specified in its charter)

———————

Delaware	27-1668227
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification No.)

 

8895 Towne Centre Dr., Suite 105, San Diego, CA 92122

(Address of Principal Executive Office) (Zip Code)

 

888-530-3738

 

(Registrant’s telephone number, including area code)

 

With Copies to:

Gary L. Blum

Law Offices of Gary L. Blum

3278 Wilshire Boulevard, Suite 603

Los Angeles, CA 90010

(213) 381-7450

 

N/A

(Former name, former address and former fiscal year, if changed since last report)

———————

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.
					þ	Yes	o	No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
					þ	Yes	o	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.
Large accelerated filer	o			Accelerated filer			o
Non-accelerated filer	o	(Do not check if a smaller reporting company)		Smaller reporting company			þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
					o	Yes	þ	No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

As September 30 2013, the Company had 229,057,603 shares of common stock issued and outstanding.

PART I – FINANCIAL INFORMATION

 

Item 1. Financial Statements.

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Condensed Balance Sheets

September 30, 2013 and December 31, 2012

(Unaudited) 

 

		September 30, 2013				December 31, 2012
ASSETS
Current Assets:
Cash		$	71			$	24,851
Prepaid expenses			–				750
Inventory			–				–
Loan receivable - other			96,549				96,549
Total current assets			96,620				122,150
Furniture and equipment, net			1,025				1,513
Security deposits			750				750
		$	98,395			$	124,413
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses		$	745,764			$	782,708
Customer deposits			45,000				45,000
Loans payable - stockholders			15,288				15,538
Convertible notes payable - stockholder - net of unamortized discount			181,826				165,916
Loans payable - other			112,209				106,000
Total current liabilities			1,100,087				1,115,162
Non-current Liabilities
Derivative liability			303,476				322,167
Total non-current liabilities			303,476				322,167
Stockholders' Equity:
Series A Convertible Preferred Stock, no par value; 9,118,108 shares authorized, -0- Shares issued and outstanding, respectively			–				–
Series B Convertible Preferred Stock, no par value; 20,500,000 shares authorized, -0- Shares issued and outstanding, respectively			205				–
Common stock, $0.00001 par value; 20,000,000,000 shares authorized, 229,173,063 and 129,017,612 shares issued and outstanding, respectively			2,291				1,290
Additional paid in capital			579,507				287,694
Deficit accumulated during development stage			(1,887,171	)			(1,601,900	)
			(1,305,168	)			(1,312,916	)
		$	98,395			$	124,413

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Condensed Statements of Operations

For the Nine Months Ended September 30, 2013 and 2012, and for the Period

From January 2, 2009 (Inception) to September 30, 2013

(Unaudited)

 

		From January 2, 2009 (Inception) to September 30,				For the Three Months Ended September 30,								For the Nine Months Ended September 30,
		2012				2013				2012				2013				2012
Revenue		$	156,028			$	–			$	2,302			$	–			$	3,406
Cost of goods sold			88,421				–				375				–				775
Gross income			67,607				–				1,927				–				2,631
Expenses:
General and administrative expenses			789,222				1,944				4,833				9,147				9,386
Officer's compensation			330,000				30,000				30,000				90,000				90,000
Advertising and promotion			59,582				2				4,628				3,753				6,345
Director's fees			247,500				22,500				22,500				67,500				67,500
Professional fees			166,209				14,273				20,280				41,595				71,526
Rent			20,102				1,288				2,849				5,788				3,524
Selling expenses			316				30				2,517				316				3,367
Telephone			10,731				577				844				2,116				2,355
			1,623,662				70,614				88,451				220,215				254,003
Net (loss) before other income and expenses			(1,556,055	)			(70,614	)			(86,524	)			(220,215	)			(251,372	)
Other income and expenses
Derivative income/(expense)			114,585				(4,888	)			(158	)			116,172				224
Interest expense			(445,701	)			(68,866	)			(30,310	)			(181,227	)			(191,999	)
Provision for income taxes			–				–				–				–				–
			(331,116	)			(73,754	)			(30,468	)			(65,055	)			(191,775	)
Net (loss)		$	(1,887,171	)		$	(144,368	)		$	(116,992	)		$	(285,270	)		$	(443,147	)
(Loss) per common share - Basic and fully diluted		$	(0.02	)		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted average number of shares outstanding - Basic and fully diluted			119,449,455				132,103,311				128,946,193				150,078,796				124,438,050

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Statement of Stockholders' Equity

For the Period from January 2, 2009 (Inception) to September 30, 2013

(Unaudited)

 

Convertible Preferred Stock

Additional

Accumulated Deficit During

Common Stock

Series A

Series B

Paid in

Subscription

Development

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Receivable

Stage

Total

January 2, 2009 - Issuance of common stock for services at $.00001 per share

99,184,000

$

992

–

$

–

–

$

–

Shares issued for services at $0.05 per share

2,000,000

20

–

–

–

–

Net loss

–

–

–

–

–

–

–

–

(336,111

)

(336,111

)

Balance - December 31, 2009

101,184,000

1,012

–

–

–

–

99,980

–

(336,111

)

(235,119

)

Shares issued for services at $0.00001 per share

11,242,666

112

–

–

–

–

–

–

–

112

Net loss

–

–

–

–

–

–

–

–

(357,090

)

(357,090

)

Balance - December 30, 2010

112,426,666

1,124

–

–

–

–

99,980

–

(693,201

)

(592,097

)

Shares issued for services at $0.05 per share

30,000

–

–

–

–

–

1,500

–

–

1,500

Net loss

–

–

–

–

–

–

–

–

(328,841

)

(328,841

)

Balance - December 31, 2011

112,456,666

1,124

–

–

–

–

101,480

–

(1,022,042

)

(919,438

)

Shares issued for cash at $0.0055 per share per share

9,118,108

91

–

–

–

–

49,909

–

–

50,000

Shares issued for services at $0.0055 per share

2,022,014

20

–

–

–

–

11,101

–

–

11,121

Shares issued for services at $0.0055 per share

1,268,544

13

–

–

–

–

6,964

–

–

6,977

Shares issued for services at $0.0055 per share

266,252

3

–

–

–

–

1,461

–

–

1,464

Shares issued for cash at $0.02924 per share

2,564,822

26

–

–

–

–

74,974

(25,000

)

–

50,000

Shares issued for services at $0.0292 per share

311,316

3

–

–

–

–

9,087

–

–

9,090

Shares issued for partial conversion of loan at $0.01 per share

625,000

6

–

–

–

–

6,244

–

–

6,250

Conversion feature liability being reclassified to equity upon partial conversion of note payable

–

–

–

–

–

–

15,238

–

–

15,238

Subtotals

128,632,722

$

1,286

–

$

–

–

$

–

$

276,458

$

(25,000

)

$

(1,022,042

)

$

(769,298

)

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Statement of Stockholders' Equity

For the Period from January 2, 2009 (Inception) to September 30, 2012

(Unaudited)

 

Accumulated Deficit

Convertible Preferred Stock

Additional

During

Common Stock

Series A

Series B

Paid in

Subscription

Development

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Receivable

Stage

Total

Subtotals

128,632,722

$

1,286

–

$

–

–

$

–

$

276,458

$

(25,000

)

$

(1,022,042

)

$

(769,298

)

Shares issued for services at $0.0292 per share

233,721

2

–

–

–

–

6,823

–

–

6,825

Shares issued for services at $0.0292 per share

58,172

1

–

–

–

–

1,698

–

–

1,699

Shares issued for services at $0.0292 per share

15,512

–

–

–

–

–

453

–

–

453

Shares issued for services at $0.0292 per share

77,485

1

–

–

–

–

2,262

–

–

2,263

Payment of subscription receivable

–

–

–

–

–

–

–

25,000

–

25,000

Net loss

–

–

–

–

–

–

–

–

(579,859

)

(579,859

)

Balance - December 31, 2012

129,017,612

1,290

–

–

–

–

287,694

–

(1,601,901

)

(1,312,917

)

Issuance of common shares upon partial conversion of note at $0.01 per share

300,000

3

–

–

–

–

2,997

–

–

3,000

Shares issued for services at $0.01 per share

31,584

–

–

–

–

–

316

–

–

316

Issuance of common shares upon partial conversion of note at $0.005 per share

1,200,000

12

–

–

–

–

5,988

–

–

6,000

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Statement of Stockholders' Equity

For the Period from January 2, 2009 (Inception) to September 30, 2012

(Unaudited) (continued)

 

Accumulated Deficit

Convertible Preferred Stock

Additional

During

Common Stock

Series A

Series B

Paid in

Subscription

Development

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Receivable

Stage

Total

Shares issued for services at $0.005 per share

125,956

1

–

–

–

–

629

–

–

630

Issuance of common shares upon partial conversion of note at $0.0007 per share

4,000,000

40

–

–

–

–

2,760

–

–

2,800

Shares issued for services at $0.0007 per share

419,866

4

–

–

–

–

290

–

–

294

Issuance of common shares upon partial conversion of note at $0.00097 per share

12,000,000

120

–

–

–

–

11,520

–

–

11,640

Shares issued for services at $0.00097 per share

1,259,600

13

–

–

–

–

1,209

–

–

1,222

Issuance of common shares upon partial conversion of note at $0.0017 per share

8,089,324

81

–

–

–

–

13,671

–

–

13,752

Shares issued for services at $0.0017 per share

849,190

9

–

–

–

–

1,435

–

–

1,444

  

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Statement of Stockholders' Equity

For the Period from January 2, 2009 (Inception) to September 30, 2012

(Unaudited) (continued)

 

Accumulated Deficit

Convertible Preferred Stock

Additional

During

Common Stock

Series A

Series B

Paid in

Subscription

Development

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Receivable

Stage

Total

Conversion feature liability being reclassified to equity upon partial conversion of note payable

–

–

–

–

–

–

29,241

–

–

29,241

Issuance of preferred series B shares as partial payment of accrued expenses at $0.00878 per share

–

–

–

–

20,500,000

205

179,795

–

–

180,000

Issuance of common shares upon partial conversion of note at $0.001 per share

6,000,000

60

–

–

–

–

5,940

–

–

6,000

Shares issued for services at $0.001 per share

629,851

6

–

–

–

–

624

–

–

630

Issuance of common shares upon partial conversion of note at $0.00063 per share

6,229,587

62

–

–

–

–

3,617

–

–

3,679

Shares issued for services at $0.00063 per share

1,283,733

13

–

–

–

–

796

–

–

809

Issuance of common shares upon partial conversion of note at $0.00035 per share

16,398,371

164

–

–

–

–

5,575

–

–

5,739

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Statement of Stockholders' Equity

For the Period from January 2, 2009 (Inception) to September 30, 2012

(Unaudited) (continued)

 

Accumulated Deficit

Convertible Preferred Stock

Additional

During

Common Stock

Series A

Series B

Paid in

Subscription

Development

Shares

Amount

Shares

Amount

Shares

Amount

Capital

Receivable

Stage

Total

Shares issued for services at $0.00035 per share

3,004,968

30

–

–

–

–

1,022

–

–

1,052

Issuance of common shares upon partial conversion of note at $0.00023 per share

7,700,000

77

–

–

–

–

1,694

–

–

1,771

Shares issued for services at $0.00023 per share

3,813,190

38

–

–

–

–

839

–

–

877

Issuance of common shares upon partial conversion of note at $0.0003 per share

20,821,533

208

–

–

–

–

6,038

–

–

6,246

Shares issued for services at $0.0003 per share

5,998,698

60

–

–

–

–

1,740

–

–

1,800

Conversion feature liability being reclassified to equity upon partial conversion of note payable

–

–

–

–

–

–

14,077

–

–

14,077

Net loss

–

–

–

–

–

–

–

–

(285,270

)

(285,270

)

Balance - September 30, 2013

229,173,063

$

2,291

–

$

–

20,500,000

$

205

$

579,507

$

–

$

(1,887,171

)

$

(1,305,168

)

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Condensed Statement of Cash Flows

September 30, 2013 and December 31, 2012

(Unaudited)

 

		From January 2, 2009 (Inception) to September 30,				For the Nine Months Ended September 30,
		2013				2013				2012
Cash flows from operating activities:
Net (loss)		$	(1,887,170	)		$	(285,270	)		$	(443,147	)
Adjustments to reconcile net (loss) to net cash (used by) operating activities:
Derivative expense			(126,984	)			(45,348	)			(69,887	)
Depreciation			2,225				488				488
Prepaid expenses			–				750				3,770
Security deposits			(750	)			–				(750	)
Accounts payable and accrued expenses			745,764				36,944				110,600
Customer deposits			45,000				–				–
Derivative liability			303,476				(18,691	)			253,571
Stock issued for services			151,570				9,074				39,892
Stock Issued for accrued expense			180,000				180,000
Net cash used in operating activities			(586,869	)			(195,941	)			(105,463	)
Cash flows from investing  activities:
Loan receivable - other			(96,549	)			–				–
Purchase of equipment			(3,250	)			–				–
Net cash provided by (used in) investing activities			(99,799	)			–				–
Cash flows from financing activities:
Proceeds from sale of common stock			191,877				60,627				131,250
Proceeds from issuance of convertible notes payable			379,365				104,075				119,040
Repayments of convertible notes payable			(6,250	)
Stockholders' loans - proceeds			79,435				600				750
Stockholders' loans - repayments			(65,897	)			(350	)			(31,000	)
Loans payable - other - proceeds			140,800				25,800
Loans payable - other - repayments			(32,591	)			(19,591	)			(108,290	)
Net cash provided by financing activities			686,739				171,161				111,750
Net increase in cash			71				(24,780	)			6,287
Cash - January 1			–				24,851				540
Cash - September 30		$	71			$	71			$	6,827
Supplemental cash flow information:
Cash paid during the period for:
Interest		$	21,352			$	–			$	–
Income taxes		$	–			$	–			$	–

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Notes to Financial Statements

September 30, 2013

 

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization

The Company was created on January 2, 2009 and was incorporated in the state of Delaware later that year. The Company is in the development stage. The Company intends to sell ice cream and related frozen products on the internet. The Company has chosen December 31 as a year-end and has had limited activity from inception through September 30, 2013.

 

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such principles and regulations of the Securities and Exchange Commission for Form 10-Q. All adjustments, consisting of normal recurring adjustments, have been made which, in the opinion of management, are necessary for a fair presentation of the results of interim periods. The results of operations for such interim periods are not necessarily indicative of the results that may be expected for a full year because of, among other things, seasonality factors in the retail business. The unaudited financial statements contained herein should be read in conjunction with the audited financial statements and notes thereto for the fiscal year ended December 31, 2012.

 

The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and notes required by U.S. generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and notes thereto for the fiscal year ended December 31, 2012.

 

Revenue Recognition

In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:

 

Revenue is recognized at the time the product is delivered. Provision for sales returns will be estimated based on the Company's historical return experience. Revenue is presented net of returns.

 

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

 

Net Income (Loss) Per Common Share

The Company calculates net income (loss) per share based on the authoritative guidance. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses common stock equivalents, if any, are not considered, as their effect would be anti-dilutive.

 

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Notes to Financial Statements

September 30, 2013

 

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Segment Information

The Company follows Accounting Standards Codification ("ASC") 280, "Segment Reporting". The Company currently operates in a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

 

Income Taxes

Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.

 

ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.

 

Stock-Based Compensation

The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.

 

Derivative Liability

We account for conversion features on our convertible notes payable as derivative liabilities in accordance with ASC 815-40, "Contracts in Entity's Own Equity." This is because the conversion rates are not fixed at a stated rate. Instead, the conversion rates are typically stated as a stated discount to the then-current market price of our common stock. Derivative liabilities are valued when the financial instruments are initially issued or the derivative first requires recognition and are also revalued at each reporting date, with the change in their respective fair values being recorded as a gain or loss on revaluation within other income and expenses in the statements of operations. During the quarter ended September 30, 2013, we recognized a net increase in our derivative liability of $10,183, which is after a reclassification of $17,978 to additional paid-in capital recognized in connection with certain notes being converted into shares of stock. Taking into account amounts reclassified to equity, our gross increase in derivative liability was $28,161. Of this increase, $23,273 was related to the recognition of a debt discount for two additional notes payable entered into in July and August 2013. The remaining balance of the increase was recognized as additional other expense for the quarter.

 

Recently Adopted Accounting Pronouncements

There are no recent accounting pronouncements that apply to the Company.

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Notes to Financial Statements

September 30, 2013

 

Note 2. LOANS PAYBLE – STOCKHOLDERS

 

At September 30, 2013 the Company was indebted to two stockholders in the amount of $15,288. The loans bear no interest and are due on demand

 

Note 3. CONVERTIBLE NOTES PAYABLE – STOCKHOLDER

 

On February 25, 2013, the Company issued a convertible note to a stockholder of the Company in the principal amount of $25,000. Terms of the note are as follows: principal balance of $25,000, maturity date of August 25, 2013, interest accrues at the rate of 10% per anum, principal is convertible into shares of common stock at a conversion rate equal to 50% of the lowest trading price during the 20 consecutive trading days prior to conversion, as defined in the agreement. Principal amounts may be repaid prior to maturity subject to a 25% prepayment penalty.

 

The conversion feature was fair valued at $25,000 at February 25, 2013 and $26,507 at September 30, 2013. The change in fair value of the conversion feature is being recorded through operating results as a component of other expense.

 

On February 28, 2013, the Company issued a convertible note to a stockholder of the Company in the principal amount of $100,800. Terms of the note are as follows: principal balance of $100,800, maturity date of February 28, 2015, interest accrues at the rate of 12% per anum, principal is convertible into shares of common stock at a conversion rate equal to 50% of the average lowest intraday trading price during the 20 consecutive trading days prior to conversion, as defined in the agreement or $0.01, whichever is lower. During 2013, $19,591 of this note has been converted into common stock.

 

The conversion feature was fair valued at $100,800 at February 28, 2013 and $87,618 at September 30, 2013. The decrease in fair value of $19,591 is due to amounts being reclassified to additional paid-in capital recognized when the underlying notes were converted into common stock. The remaining change in fair value of the conversion feature is being recorded through operating results as a component of other expense.

 

On May 1, 2013, the Company issued a convertible note to a stockholder of the Company in the principal amount of $15,000. Terms of the note are as follows: principal balance of $15,000, maturity date of May 1, 2014, interest accrues at the rate of 10% per anum, principal is convertible into shares of common stock at a conversion rate equal to 50% of the lowest trading price during the 20 consecutive trading days prior to conversion, as defined in the agreement.

 

The conversion feature was fair valued at $15,000 at May 1, 2013 and $15,633 at September 30, 2013. The change in fair value of the conversion feature is being recorded through operating results.

 

On June 1, 2013, the Company issued a convertible note to a stockholder of the Company in the principal amount of $12,000. Terms of the note are as follows: principal balance of $12,000, maturity date of June 1, 2014, interest accrues at the rate of 10% per anum, principal is convertible into shares of common stock at a conversion rate equal to 50% of the lowest trading price during the 20 consecutive trading days prior to conversion, as defined in the agreement.

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Notes to Financial Statements

September 30, 2013

 

Note 3. CONVERTIBLE NOTES PAYABLE - STOCKHOLDER (continued)

 

The conversion feature was fair valued at $12,000 at June 1, 2013 and $12,403 at September 30, 2013. The change in fair value of the conversion feature is being recorded through operating results.

 

On August 8, 2013, the Company issued a convertible note to a stockholder of the Company in the principal amount of $11,273. Terms of the note are as follows: principal balance of $11,273, maturity date of August 8, 2014, interest accrues at the rate of 10% per anum, principal is convertible into shares of common stock at a conversion rate equal to 50% of the lowest trading price during the 20 consecutive trading days prior to conversion, as defined in the agreement.

 

The conversion feature was fair valued at $11,273 at August 8, 2013 and $11,439 at September 30, 2013. The change in fair value of the conversion feature is being recorded through operating results.

 

During 2012, the Company issued convertible notes aggregating to $275,920 in principal. Of these notes, $6,250 were converted into shares of common stock during 2012 and $41,668 was converted into shares of common stock during the nine months ended September 2013. When issued in 2012, the notes generally became due after one year or less, accrued interest at 7% to 10%, and were generally convertible into shares of common stock at a conversion rate equal to 50% to 70% of the lowest trading price during the 20 consecutive trading days prior to conversion, as defined in the agreement.

 

The notes' conversion features are being accounted for as a derivative liability and are being carried at fair value on the accompanying balance sheet. As of December 31, 2012, the derivative liability for these notes was stated at approximately $319,000. During the nine months ended September 2013, derivative liability of approximately $24,000 was reclassified to additional paid-in capital in connection with the conversion of the underlying notes into shares of common stock. As of September 30, 2013, the derivative liability associated with the 2012 notes was approximately $116,000. The decrease in fair value has been recorded through operating results.

 

Note 4. LOANS PAYBLE – OTHER

 

At September 30, 2013 the Company was indebted to an unrelated third party in the amount of $81,209. The loan has a stated interest rate of 12.00% for the entire term of the loan. Principal and all accrued interest are due in December 2013. Interest expense for the nine months ended September 30, 2013 was approximately $7,900.

 

At September 30, 2013 the Company was indebted to an unrelated third party in the amount of $27,000. The loan bears interest at 17% for its six month term. Principal and all accrued interest are payable when the note comes due in February 2014. Interest expense for the nine months ended September 2012 was approximately $7,000.

 

At September 30, 2012 the Company was indebted to an unrelated third party in the amount of $4,000. The loan bears no interest and is due on demand.

 

Note 5. STOCKHOLDERS' EQUITY

 

The Company has authorized 20,000,000,000 shares of common stock with a par value of $0.00001 per share. At September 30, 2013 and December 31, 2012, 229,173,063 and 129,017,612 shares of common stock were issued and outstanding, respectively.

 

In July 2013, The Company authorized 9,118,108 shares of Series A convertible preferred stock with a par value of $0.00001 per share. Series A preferred shares have anti-dilution protection with respect to conversion and voting rights. At September 30, 2013 and December 31, 2012, there were no shares of Series A convertible preferred stock issued and outstanding, respectively.

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Notes to Financial Statements

September 30, 2013

 

Note 5. STOCKHOLDERS' EQUITY (continued)

 

In July 2013, The Company authorized 20,500,000 shares of Series B convertible preferred stock with a par value of $0.00001 per share. Series B preferred shares are convertible into the Company's common stock on a 500 to 1 basis and vote on all matters on a 500 votes per one share basis. Series B has anti-dilution protection with respect to conversion and voting rights.

 

At inception, the Company issued 99,184,000 shares of its common stock for costs and services related to its organization aggregating $992, which approximated the fair market value of the costs and services provided. Accordingly, the Company recorded a charge to operations of $992 during the year ended December 31, 2009.

 

During August 2009 the Company entered into an agreement with two individuals for consulting services in exchange for the issuance of 2,000,000 shares of common stock. The shares were valued at their fair market value of $100,000 and the value was charged to operations as general and administrative expenses.

 

In July 2010 the Company issued 11,242,666 shares of its common stock for consulting services at par value $0.00001 (or $112). The shares were valued at their fair market value of $112 and the value was charged to operations as general and administrative expenses.

 

In September 2011 the Company issued 30,000 shares of its common stock for consulting services at $0.05 (or $1,500). The shares were valued at their fair market value of $1,500 and the value was charged to operations as general and administrative expenses.

 

In February 2012, the Company issued 9,118,108 shares of its common stock for cash at $0.0055 per share (or $50,000).

 

In March 2012, the Company issued 2,022,014 shares of its common stock for consulting services at $0.0055 per share (or $11,121). The shares were valued at their fair market value of $11,121 and the value was charged to operations as professional fees.

 

In May 2012, the Company issued 3,050,000 shares of its common stock for cash at $0.0246 per share (or $75,000).

 

In May 2012, the Company issued 1,447,000 shares of its common stock for consulting services at $0.0245 per share (or $35,452). The shares were valued at their fair market value of $35,452 and the value was charged to operations as professional fees.

 

In June 2012, as per the terms of an antidilutive clause in a private placement, the Company issued 2,564,822 shares of its common stock for consulting services at $0.0292 per share. The shares were valued at their fair market value of $50,000 and the value was charged to operations as professional fees.

 

In June 2012, as per the terms of an antidilutive clause in a consulting agreement, the Company issued 311,316 shares of its common stock for consulting services at $0.0292 per share. The shares were valued at their fair market value of $9,090 and the value was charged to operations as professional fees.

 

In June 2012, the Company issued 625,000 shares of its common stock for consulting services at $0.0245 per share (or $15,313). The shares were valued at their fair market value of $15,313 and the value was charged to operations as professional fees.

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Notes to Financial Statements

September 30, 2013

 

Note 5. STOCKHOLDERS' EQUITY (continued)

 

In June 2012, as per the terms of an antidilutive clause in a private placement, the Company issued 233,721 shares of its common stock for consulting services at $0.0292 per share. The shares were valued at their fair market value of $6,825 and the value was charged to operations as professional fees.

 

In June 2012, as per the terms of an antidilutive clause in a private placement, the Company issued 58,172 shares of its common stock for consulting services at $0.0292 per share. The shares were valued at their fair market value of $1,699 and the value was charged to operations as professional fees.

 

In June 2012, as per the terms of an antidilutive clause in a private placement, the Company issued 15,512 shares of its common stock for consulting services at $0.0292 per share. The shares were valued at their fair market value of $453 and the value was charged to operations as professional fees.

 

In June 2012, as per the terms of an antidilutive clause in a consulting agreement, the Company issued 77,485 shares of its common stock for consulting services at $0.0292 per share. The shares were valued at their fair market value of $2,263 and the value was charged to operations as professional fees.

 

In March 2013, the Company issued 300,000 shares of common stock at $0.01 per share as partial conversion of a note.

 

In March 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 31,584 shares of its common stock for consulting services at $0.01 per share. The shares were valued at their fair market value of $316 and the value was charged to operations as professional fees.

 

In April 2013, the Company issued 1,200,000 shares of common stock at $0.005 per share as partial conversion of two notes.

 

In April 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 136,789 shares of its common stock for consulting services at $0.005 per share. The shares were valued at their fair market value of $684 and the value was charged to operations as professional fees.

 

In May 2013, the Company issued 4,000,000 shares of common stock at $0.0007 per share as partial conversion of a note.

 

In May 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 419,866 shares of its common stock for consulting services at $0.0007 per share. The shares were valued at their fair market value of $294 and the value was charged to operations as professional fees.

 

In May 2013, the Company issued 12,000,000 shares of common stock at $0.00097 per share as partial conversion of a note.

 

In May 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 1,259,600 shares of its common stock for consulting services at $0.00097 per share. The shares were valued at their fair market value of $1,222 and the value was charged to operations as professional fees.

 

In June 2013, the Company issued 8,089,324 shares of common stock at $0.0017 per share as partial conversion of a note.

 

In June 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 849,189 shares of its common stock for consulting services at $0.0017 per share. The shares were valued at their fair market value of $1,444 and the value was charged to operations as professional fees.

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Notes to Financial Statements

September 30, 2013

 

Note 5. STOCKHOLDERS' EQUITY (continued)

 

In July 2013, the Company issued 20,500,000 shares of preferred series B stock at $0.00878 per share as partial payment of certain accrued expenses.

 

In July 2013, the Company issued 6,000,000 shares of common stock at $0.001 per share as partial conversion of a note.

 

In July 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 629,851 shares of its common stock for consulting services at $0.001 per share. The shares were valued at their fair market value of $630 and the value was charged to operations as professional fees.

 

In July 2013, the Company issued 6,229,587 shares of common stock at $0.00063 per share as partial conversion of a note.

 

In July 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 1,283,732 shares of its common stock for consulting services at $0.00063 per share. The shares were valued at their fair market value of $809 and the value was charged to operations as professional fees.

 

In August 2013, the Company issued 16,398,371 shares of common stock at $0.00035 per share as partial conversion of a note.

 

In July 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 1,283,732 shares of its common stock for consulting services at $0.00035 per share. The shares were valued at their fair market value of $1,052 and the value was charged to operations as professional fees.

 

In August 2013, the Company issued 7,700,000 shares of common stock at $0.00023 per share as partial conversion of a note.

 

In August 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 3,813,190 shares of its common stock for consulting services at $0.00023 per share. The shares were valued at their fair market value of $877 and the value was charged to operations as professional fees.

 

In September 2013, the Company issued 20,821,533 shares of common stock at $0.0003 per share as partial conversion of a note.

 

In September 2013, as per the terms of an antidilutive clause in a private placement, the Company issued 5,998,697 shares of its common stock for consulting services at $0.0003 per share. The shares were valued at their fair market value of $1,800 and the value was charged to operations as professional fees.

 

Note 6. INCOME TAXES

 

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows:

 

As of September 30, 2013, the Company has a net operating loss carryforward of approximately $1,839,000. This loss will be available to offset future taxable income. If not used, this carryforward loss will begin to expire in 2029. The deferred tax asset relating to the operating loss carryforward has been fully reserved at September 30, 2013. The principal difference between the operating loss for income tax purposes and reporting purposes results from the issuance of common shares for services.

 

Income tax provision at the federal statutory rate			39%
Effect of operating losses			(39%	)
			0%

 

 

Frozen Food Gift Group, Inc.

d/b/a Sendascoop.com

(A Development Stage Company)

Notes to Financial Statements

September 30, 2013

 

Note 7. BASIS OF REPORTING

 

The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

 

The Company has experienced a loss from operations during its development stage as a result of its investment necessary to achieve its operating plan, which is long-range in nature. For the period from inception to September 30, 2013, the Company incurred a net loss of approximately $1,887,000. In addition, the Company has no significant assets or revenue generating operations.

 

The Company's ability to continue as a going concern is contingent upon its ability to attain profitable operations by securing financing and implementing its business plan. In addition, the Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which the Company operates.

 

The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets

 

Note 8. SUBSEQUENT EVENT

 

On February 22, 2013, the Company entered into an agreement to purchase all of the outstanding shares of Miami Ice Machine Company as reported on Form 8-K filed with the Securities and Exchange Commission on February 28, 2013. The Company has not closed on this acquisition.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

The following information should be read in conjunction with our consolidated financial statements and related notes thereto included elsewhere in our financial statements and notes thereto and the related "Management's Discussion and Analysis of Financial Condition and Results of Operations".

 

Summary and Outlook of the Business

 

The Company was started in January 2009. For the nine months ended September 30, 2013 and 2012, and for the period from inception to September 30, 2013, the Company had net losses of $285,270, $443,147and $1,887,171 respectively. The losses primarily result from accrued salary of officers and directors and from professional fees. To date management has been able to finance the business via private placements of its common stock and the issuance of debt.

 

Revenues

 

For the nine months ended September 30, 2013 and 2012, and for the period from inception to September 30, 2013, the Company recorded revenue of $0, $3,406 and $156,028 respectively. The decline in revenue occurred because the Company needed to restrict the full execution of its business plan due to a lack of appropriate funding.

 

Going Concern

 

Our financial statements have been prepared assuming we will continue as a going concern. The Company has experienced a loss from operations during its development stage as a result of its investment necessary to achieve its operating plan, which is long-range in nature. For the period from inception to September 30, 2013, the Company incurred a net loss of approximately $1,887,171. Management has been able, thus far, to finance the losses of the business through private placements of its common stock and the issuance of debt. The Company's ability to continue as a going concern is contingent upon its ability to attain profitable operations by securing financing and implementing its business plan. The Company’s financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. Assurances cannot be given that adequate financing can be obtained to meet our capital needs. If we are unable to generate profits and to continue to obtain financing to meet our working capital requirements, we may have to curtail our business sharply or cease operations altogether. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis to retain our current financing, to obtain additional financing, and, ultimately, to attain profitability. Should any of these events not occur, we will be adversely affected and we may have to cease normal operations.

 

Recent Developments during the Quarter:

 

Miami Ice Machine Company – On February 22, 2013, Frozen Food Gift Group entered into a Definitive Purchase Agreement with Miami Ice Machine Company for $880,000 in restricted common stock.  The initial payment of 21,600,000 shares of restricted common stock was issued shortly afterwards.   On August 30, 2013, the Company received notice from one of the two prior owners, Mr. Jeffrey Saltzman, via his attorney, that states he believes the Purchase Agreement is in dispute, and would like to enter into mediation to rescind the Agreement and negotiate a settlement.  On September 6, 2013, the Company responded that it disagrees with Mr. Saltzman’s assertion, and did not agree to the mediation or settlement.  Because the Company has not been able to fully audit Miami Ice Machine, the Company has not recorded or recognized any financial data such as revenues, gross profits or expenses directly relating to the operations of Miami Ice Machine Company. The company has recorded the shares as issued thus far, and will seek return of these shares if agreement cannot be reached. As of September 30, 2013, the Purchase Agreement is still in dispute and ongoing efforts are being made to resolve the issue.

 

Critical Accounting Policies 

 

Revenue Recognition

 

In general, the Company records revenue when persuasive evidence of an arrangement exists, services have been rendered or product delivery has occurred, the sales price to the customer is fixed or determinable, and collectability is reasonably assured. The following policies reflect specific criteria for the various revenues streams of the Company:

 

Revenue is recognized at the time the product is delivered. Provision for sales returns will be estimated based on the Company's historical return experience. Revenue is presented net of returns.

 

 

Financial Instruments

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2013. The respective carrying value of certain on-balance sheet financial instruments approximated their fair values. These financial instruments include cash and accounts payable and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments because they are short term in nature and their carrying amounts approximate fair values.

 

Net Income (Loss) Per Common Share

 

The Company calculates net income (loss) per share based on the authoritative guidance. Basic earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is calculated by dividing net income (loss) by the weighted average number of common shares and dilutive common stock equivalents outstanding. During periods in which the Company incurs losses, common stock equivalents, if any, are not considered, as their effect would be anti-dilutive.

 

Income Taxes

 

Deferred income taxes are recognized for the tax consequences related to temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for tax purposes at each year end, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recognized when, based on the weight of all available evidence, it is considered more likely than not that all, or some portion, of the deferred tax assets will not be realized. Income tax expense is the sum of current income tax plus the change in deferred tax assets and liabilities.

 

ASC 740, Income Taxes, requires a company to first determine whether it is more likely than not (which is defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more likely than not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.

 

Stock-Based Compensation

 

The Company accounts for equity instruments issued to employees in accordance with ASC 718, Compensation - Stock Compensation. ASC 718 requires all share-based compensation payments to be recognized in the financial statements based on the fair value using an option pricing model. ASC 718 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from initial estimates.

 

Results of Operations for the nine months ended September 30, 2013 and 2012, and for the period from inception to September 30, 2013

 

Revenue. For the nine months ended September 30, 2013 and 2012, and for the period from inception to September 30, 2013, the Company recorded revenue of $0, $3,406 and $156,028 respectively. The decline in revenue occurred because the Company needed to restrict the full execution of its business plan due to a lack of appropriate funding.

 

Gross Income. For the nine months ended September 30, 2013 and 2012, and for the period from inception to September 30, 2013, the Company’s gross income was $0, $2,631 and $67,607 respectively. The decline in gross income occurred because the Company needed to restrict the full execution of its business plan due to a lack of funding, which decreased the Company’s revenue and gross income.

 

 

Expenses. For the nine months ended September 30, 2013 and 2012, and for the period from inception to September 30, 2013, the Company’s total expenses were $220,215, $254,003 and $1,623,662 respectively.

 

Other Income and Expenses. For the nine months ended September 30, 2013 and 2012, and for the period from inception to September 30, 2013, other income and expenses were $65,055, $191,775 and $331,116 respectively. The figure of $331,116 from inception to September 30, 2013 consisted of $114,585 in derivative income and ($445,701) in interest expense.

 

Net Loss. For the nine months ended September 30, 2013 and 2012, and for the period from inception to September 30, 2013, the Company had net losses of $285,270, $443,147 and $1,887,171 respectively. The losses primarily result from accrued salary of officers and directors and from professional fees. This is illustrated in the Company’s net loss from inception to September 30, 2013 of $1,887,171, of which $743,709 came from these three categories (consisting of accrued officer’s compensation of $330,000, accrued director’s fees of $247,500 and professional fees of $166,209).

 

As of September 30, 2013, the Company had an accumulated deficit of $1,887,171, and as of December 31, 2012, the Company’s accumulated deficit was $1,601,900.

 

Financial Condition, Liquidity and Capital Resources

 

The Company is currently illiquid. There is substantial doubt about our ability to continue as a going concern, which is dependent on the Company’s ability to raise additional capital, as well as successful implementation of its business plan which contemplates increasing revenues significantly.

 

Management has been able, thus far, to finance the losses of the business through private placements of its common stock and the issuance of debt. Assurances cannot be given that adequate financing can be obtained to meet our capital needs. If we are unable to generate profits and to continue to obtain financing to meet our working capital requirements, we may have to curtail our business sharply or cease operations altogether. Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow to meet our obligations on a timely basis to retain our current financing, to obtain additional financing, and, ultimately, to attain profitability. Should any of these events not occur, we will be adversely affected and we may have to cease normal operations.

 

Since its inception, the Company has been funded by its Chairman and Chief Executive Officer, and persons related to or acquainted with these. We currently have no internal sources of liquidity. To remedy the current deficiency in our liquidity position, we continue to seek external sources of capital through additional private equity offerings, strategic agreements with partner companies, and private debt placement. To date, the majority of our funding has been derived from private debt placement from a small number of accredited investors, and it is possible that we will obtain future funding from these investors. Whether we will be successful in obtaining additional capital, or obtaining such capital on commercially reasonable terms, and whether we can significantly increase revenues, is uncertain. We are not aware of any known trends, favorable or unfavorable, in our capital resources nor aware of any material changes in the mix and relative cost of such resources. We are unable to predict whether any known demands, commitments, events or uncertainties will result in or are reasonably likely to result in the Company’s cash liquidity increasing or decreasing in any material way, which creates uncertainty in the Company’s ability to continue to operate.

 

The Company currently has no material commitments for capital expenditures.

 

As of September 30, 2013, current assets were $96,620, which consisted of $71 of cash and $96,549 in loan receivables. As of December 31, 2012, current assets were $122,150, which consisted of $24,851 of cash, $750 of prepaid expenses and $96,549 in loan receivables.

 

As of September 30, 2013, total current liabilities were $1,100,087 which consisted of $745,764 of accounts payable and accrued expenses, $45,000 in customer deposits and $309,323 of loan payable obligations. As of December 31, 2012, total current liabilities were $1,115,162, which consisted of $782,708 of accounts payable expenses, $45,000 in customer deposits and $287,454 of loan payable obligations.

 

 

As of September 30, 2013, non-current liabilities were $303,476 consisting solely of derivative liabilities, and as of December 31, 2012, non-current liabilities were $322,167, also consisting solely of derivative liabilities.

 

For the nine months ended September 30, 2013 and 2012, and for the period from inception to September  30, 2013, net cash used by operating activities was ($195,941), ($105,463) and ($586,869) respectively.

 

Cash flows from financing activities represented the Company’s principal source of cash for the period from inception through September 30, 2013. Cash flows from financing activities for the period from January 1 to September 30, 2013 were $171,161 including $60,627 in proceeds from the sale of common stock and $104,075 in proceeds from the issuance of convertible notes.

 

For period of January 1 to September 30, 2012, cash flows from financing activities were $111,750 including $131,250 in proceeds from the sale of common stock, $119,040 in proceeds from the issuance of convertible notes, ($31,000) in repayments of stockholders’ loans and ($108,290) in repayments of other loans payable.

 

For the period from inception through September 30, 2013, cash flows from financing activities totaled $686,739, including $191,877 in common stock issuances, $379,365 in issuances of convertible notes payable, ($6,250) in repayments of convertible loans payable, $79,435 in proceeds from stockholders’ loans, ($65,897) in repayments of stockholders’ loans, $140,800 in proceeds from other loans payable and ($32,591) in repayments of other loans payable.

 

Off-Balance Sheet Arrangements

 

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

 

Recent Accounting Pronouncements

 

There are no recent accounting pronouncements that apply to the Company.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

 

Not required for smaller reporting company.

 

Item 4. Controls and Procedures.

 

Evaluation of Disclosure Controls and Procedures

 

It is management's responsibility to establish and maintain adequate internal control over all financial reporting pursuant to Rule 13a-15 under the Securities Exchange Act of 1934 (the "Exchange Act"). Our management has reviewed and evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2013. Following this review and evaluation, management determined that our disclosure controls and procedures are not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.

 

The deficiency in our disclosure controls and procedures is related to a lack of segregation of duties due to the lack of an accounting department and the fact that we only have one employee at present due to the limited financial resources of the Company. We continue to actively search for additional capital in order to be in position to remediate this lack of segregation of duties.

 

 

Changes in Internal Control over Financial Reporting

 

There were no changes in the Company's internal controls over financial reporting or in other factors that could affect these internal controls subsequent to the date of their most recent evaluation, including any corrective actions with regard to deficiencies and material weaknesses.

 

Management’s Report on Internal Control over Financial Reporting

 

Our management is responsible for establishing and maintaining adequate internal control over our financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

 

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

We assessed the effectiveness of our internal control over financial reporting as of September 30, 2013. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework.

 

Based upon management’s assessment using the criteria contained in COSO, and for the reasons discussed below, our management has concluded that, as of September 30, 2013, our internal control over financial reporting was not effective.

 

Based on its evaluation, the Company's Chief Executive Officer identified a major deficiency that existed in the design or operation of our internal control over financial reporting that it considers to be a “material weakness”. The Public Company Accounting Oversight Board has defined a material weakness as a “significant deficiency or combination of significant deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.”

 

The deficiency in our internal control is related to a lack of segregation of duties due to our lack of an accounting department and the lack of experienced in-house accountants due to the limited financial resources of the Company. We continue to actively search for additional capital in order to be in position to add the necessary staff to address this material weakness.

 

 

 

 

 

 

 

PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

The Company is not a party to any legal proceedings.

 

Item 1A. Risk Factors.

 

Not required for smaller reporting company.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

The following documents are filed as a part of this report or incorporated herein by reference:

 

Exhibit No.		Description
2.0		Form of Common Stock Share Certificate of Frozen Food Gift Group, Inc. (1)
3.0		Articles of Incorporation of Frozen Food Gift Group, Inc. (2)
3.1		Amendment to Articles of Incorporation (2)
3.2		Bylaws of Frozen Food Gift Group, Inc. (2)
3.3		Amendment to Articles of Incorporation filed with the Delaware Secretary of State on May 22, 2013*
4.1		Certificate of Designation of Series A Convertible Preferred Stock filed with the Delaware Secretary of State on July 10, 2013 (15)
4.2		Certificate of Designation of Series B Convertible Preferred Stock filed with the Delaware Secretary of State on July 10, 2013 (15)
10.1		Independent Contractor Agreement with Phillip Nagele and Joseph Masters dated July 31, 2009 (2)
10.2		Commercial Lease Agreement by and between Winaway International, Inc. and Frozen Food Gift Group, Inc., dated October 26, 2009 (3)
10.3		Commercial Lease Agreement between McCleary Maritime Properties, LLC and Frozen Food Gift Group, Inc., dated September 23, 2010 (9)
10.4		Pre-Incorporation Agreement between the Founders of Frozen Food Gift Group, Inc. dated January 2, 2009 (3)
10.5		Independent Contractor Agreement with Judd Handler dated January 8, 2010 (3)
10.6		Addendum to NEWCO Ice Cream Independent Contractor Agreement, dated July 31, 2009 (4)
10.7		Letter Agreement with ANP Industries, Inc. dated July 7, 2010 (4)
10.8		Independent Contractor Agreement with Joseph Schmedding dated April 1, 2011 (7)
10.9		Resignation of Director from Company’s Board (5)
10.10		Private Issuance of Common Shares (6)
10.11		Promissory Note issued to Tangiers Investors, LP, dated July 1, 2011 (7)
10.12		Securities Purchase Agreement with Tangiers Investors, LP, dated September 15, 2011 (11)
10.13		Registration Rights Agreement with Tangiers Investors, LP, dated September 15, 2011 (11)
10.14		Addendum to Securities Purchase Agreement with Tangiers Investors, LP, dated September 15, 2011 (11)
10.15		Stock Purchase and Non Dilution of Stock Interest Agreement with Tangiers Investors, LP, dated February 16, 2012 (6, 11)

 

 

10.16		Option to Convert Common Stock into Preferred Stock at Future Date with Tangiers Investors, LP, dated February 16, 2012 (6, 11)
10.17		Stock Purchase and Non Dilution of Stock Interest Agreement with Tangiers Investors, LP, dated April 30, 2012 (11)
10.18		Independent Contractor Agreement with Tangiers Investors, LP, dated April 30, 2012 (11)
10.19		Exchange Agreement with Tangiers Investors, LP, dated June 5, 2012 (11)
10.20		7% Convertible Note issued to Tangiers Investors, LP, dated June 5, 2012 (11)
10.21		Notice of Conversion, Tangiers Investors, LP, dated June 8, 2012 (11)
10.22		10% Convertible Note issued to Brent Coetzee, dated November 7, 2012 (10, 11)
10.23		10% Convertible Note issued to Jeffrey Saltzman, dated November 21, 2012 (10, 11)
10.24		10% Convertible Note issued to Daniel Kaplan, dated November 21, 2012 (10, 11)
10.25		Stock Purchase Agreement with Miami Ice Machine Company, Inc., dated February 22, 2013 (11)
10.26		10% Convertible Note issued to Tangiers Investors, LP, dated February 25, 2013 (11)
10.27		Note Purchase Agreement with Tangiers Investors, LP, dated February 25, 2013 (11)
10.28		Assignment Agreement with JMJ Financial and Long Side Ventures, LLC, dated February 28, 2013 (11)
10.29		12% Convertible Note issued to Long Side Ventures, LLC, dated February 28, 2013 (11)
10.30		Assignment Agreement with Tangiers Investors, LP, and Taconic Group, LLC, dated March 6, 2013 (11)
10.31		12% Convertible Note issued to Taconic Group, LLC, dated March 6, 2013 (11)
10.32		Assignment Agreement with Tangiers Investors, LP, and Taconic Group, LLC, dated March 6, 2013 (11)
10.33		12% Convertible Note issued to Taconic Group, LLC, dated March 6, 2013 (11)
10.34		10% Convertible Note issued to Tangiers Investors, LP, dated May 1, 2013 (12)
10.35		Note Purchase Agreement with Tangiers Investors, LP, dated May 1, 2013 (12)
10.36		10% Convertible Note issued to Tangiers Investors, LP, dated June 1, 2013 (*, 13)
10.37		Note Purchase Agreement with Tangiers Investors, LP, dated June 1, 2013 (*, 13)
10.38		10% Convertible Note issued to Tangiers Investors, LP, dated July 1, 2013 (*, 14)
10.39		Note Purchase Agreement with Tangiers Investors, LP, dated July 1, 2013 (*, 14)
10.40		10% Convertible Note issued to Tangiers Investors, LP, dated August 8, 2013 (*, 16)
10.41		Note Purchase Agreement with Tangiers Investors, LP, dated August 8, 2013 (*, 16)
10.42		10% Convertible Note issued to Tangiers Investors, LP, dated October 9, 2013 (*, 17)
10.43		Note Purchase Agreement with Tangiers Investors, LP, dated October 9, 2013 (*, 17)
14.0		Code of Ethics (2)
31.1		Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1		Certification of the Company’s Principal Executive Officer and Principal Financial Officer pursuant to pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
99.4		Temporary Hardship Exemption*

 

* Filed herewith

 

(1)	Previously filed on Form 10-K on March 30, 2012.
(2)	Previously filed on Form S-1 on March 11, 2010.
(3)	Previously filed on Form S-1 on May 14, 2010.
(4)	Previously filed on Form S-1 on June 3, 2011.
(5)	Previously filed on Form 8-K on January 31, 2012.
(6)	Previously filed on Form 8-K on February 20, 2012.
(7)	Previously filed on Form 10-Q on November 18, 2011.
(8)	Previously filed on Form 10-Q on May 14, 2012.
(9)	Previously filed on Form S-1 on January 21, 2011.
(10)	Previously filed on Form 8-K on November 29, 2012.
(11)	Previously filed on Form 10-K on April 15, 2013.
(12)	Previously filed on Form 10-Q on May 20, 2013.
(13)	Previously filed on Form 8-K on June 3, 2013.
(14)	Previously filed on Form 8-K on July 8, 2013.
(15)	Previously filed on Form 8-K on July 15, 2013.
(16)	Previously filed on Form 8-K on August 12, 2013.
(17)	Previously filed on Form 8-K on October 16, 2013.

 

 

SIGNATURES

 

Pursuant to the requirements of Section 13 or 15(d) 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.

 

	FROZEN FOOD GIFT GROUP, INC.
Date: February 13, 2014	By:	/s/ JONATHAN IRWIN
		JONATHAN IRWIN
		Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer