Madison Technologies Inc 10-Q for FY2021 Q3

Madison Technologies Inc. (MDEX)

10-Q 2021-12-21 For: 2021-09-30

Added on April 06, 2026

About this 10-Q

Madison Technologies Inc filed this 10-Q on December 21, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $463.82K; up 220764.3% from $210 a year earlier
Net loss: $2.41M; compared with a net loss of $165.71K a year earlier

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450 Park Avenue, 30^thFloor, New York, NY		10022
(Address of principal executive offices)		(Zip Code)

Title of each class		Trading Symbol		Name of each exchange on which registered
Common		MDEX		OTCQB

Larger accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)

Class		Outstanding at December 17, 2021
Common Stock - $0.001 par value		1,599,095,027

INTERIM FINANCIAL STATEMENTS

Interim Balance Sheets	3

Interim Statements of Operations	4

Interim Statements of Stockholders’ Equity (Deficit)	5 - 6

Interim Statements of Cash Flows	7

Notes to the Interim Financial Statements	8 - 29

	September 30, 2021			December 31, 2020
ASSETS

CURRENT ASSETS
Cash	$	2,194,562		$	9,491
Accounts receivables		136,500			-
Note receivables – Note 3		138,964			-
Prepaid expenses and Deposits		76,836			67,718
Due from related party – Note 18		321,139			-
Total Current Assets		2,868,001			77,209
Intangible Assets – Note 4		9,339,048			433,407
Equipment, net – Note 6		1,183,766			-
Inventory – Note 7		146,323			-
Investments – Note 8, Note 13		2,339,921			-
Operating lease right-of-use assets, net – Note 9		1,145,152			-
Goodwill – Note 5		5,815,118			-
Total Assets	$	22,837,329		$	510,616

LIABILITIES AND STOCKHOLDERS’ DEFICIT

CURRENT LIABILITIES
Accounts payable and accrued charges – Note 10	$	587,220		$	61,779
Customer Deposits		78,813			-
Due to related party – Note 18		44,169			-
License fee payable – Note 11		33,500			33,500
Current portion of lease liabilities – Note 9		6,293			-
Demand notes and accrued interest payable – Note 14		-			20,486
Subordinate note payable and interest payable – Note 17		365,000
Convertible notes payable – Note 15		28,878			494,992
Interest payable on convertible notes – Note 15		2,283			-
Total current liabilities		1,146,156			610,757
Long term portion of lease liability obligations – Note 9		1,179,590			-
Long term convertible notes – Note 16		15,258,098			57,759

Total liabilities		17,583,844			668,516

STOCKHOLDERS’ EQUITY (DEFICIIT)
Capital Stock: (Note 19 and 20)
Preferred Shares – 50,000,000 shares authorized, $0.001 par value
Preferred Shares - Series A, $0.001 par value; 3%, stated value $100 per share 100,000 shares designated, Nil shares issued and outstanding	$	-		$	93
Preferred Shares - Series B, $0.001 par value; Super Voting 100 shares designated, 100 shares issued and outstanding		-			-
Preferred Shares - Series C, $0.001 par value; 2%, stated value $100 per share 10,000 shares designated, none issued		-			-
Preferred Shares - Series D, $0.001 par value; convertible, stated value $3.32 per share, 230,000 shares designated, 230,000 shares issued and outstanding		230			-
Preferred Shares - Series E, $0.001 par value; convertible, stated value $1,000 per share, 1,000 shares designated, 1,000 shares issued and outstanding		1			-
Preferred Shares - Series E-1, $0.001 par value; convertible, stated value $0.87 per share, 1,152,500 shares designated, none issued		-			-
Preferred Shares - Series F, $0.001 par value; convertible, stated value $1 per share, 1,000 shares designated, 1,000 shares issued		1			-
Preferred Shares - Series G, $0.001 par value; convertible, stated value $1,000 per share, 4,600 shares designated, none issued		-			-

Preferred Shares – Series H, $0.001 par value; convertible, stated value $1 per share, 39,385 shares designated, none issued		-			-
Preferred stock value		-			-
Common Shares - $0.001 par value; 500,000,000 shares authorized 24,972,565 shares issued and outstanding (Dec 31, 2020 - 23,472,565 shares)		24,972			23,472
Additional Paid in Capital:
Preferred shares Series A		-			343,001
Preferred shares Series D		667,984			-
Preferred shares Series E		4,225,061			-
Common Shares		2,181,570			959,976
Shares subscribed		4,600,000			-
Accumulated deficit		(6,446,334	)		(1,484,442	)
Total stockholders’ equity (deficit)		5,253,485			(157,900	)
Total liabilities and stockholders’ equity (deficit)	$	22,837,329		$	510,616

	For the three			For the three			For the nine			For the nine
	Months Ended			Months Ended			Months Ended			Months Ended
	Sep 30, 2021			Sep 30, 2020			Sep 30, 2021			Sep 30, 2020

Revenues
Sales	$	463,815		$	210		$	759,840		$	1,164
Miscellaneous income		213			-			213			—
Cost of sales		-			(31	)		-			(763	)

Net Revenues		464,028			179			760,053			401

Operating Expenses
Amortization		(74,247	)		20,884			140,826			20,884
Amortized right of use assets		16,810			-			36,180			-
Accretion of lease liability		58,841			-			75,795			-
Broadcasting/station expenses		74,889			-			178,869			-
Consulting fees		69,000			40,000			348,500			40,000
General and administrative		110,936			6,320			149,905			18,009
Financing fees		1,320,692			-			1,606,275			-
Management fees		154,385			10,000			360,462			10,000
Marketing and product development		28,790			-			207,325			-
Professional fees		517,911			27,870			1,041,630			31,519
Royalties		(32,722	)		41,667			35,323			41,667

Total operating expenses		2,245,285			146,741			4,181,090			162,079

Loss before other expense		(1,781,257	)		(146,562	)		(3,421,037	)		(161,578	)

Loss on disposal of assets		(17,147	)		-			(17,147	)		-
Amortized interest		(135,855	)		(14,633	)		(372,177	)		(14,633	)
Interest		(471,033	)		(4,519	)		(1,151,531	)		(7,592	)

Net loss and comprehensive loss	$	(2,405,292	)	$	(165,714	)	$	(4,961,892	)	$	(183,903	)

Net loss per share-Basic and diluted	$	(0.096	)	$	(0.009	)	$	(0.203	)	$	(0.010	)

Average number of shares of common stock outstanding		24,972,565			19,396,315			24,439,598			18,507,072

	Preferred Series A			Preferred Series B		Preferred Series D		Preferred Series E		Series E-1		Preferred Series F		Series G		Series H		Common
	Number of Shares
										Preferred		Preferred		Pref		Pref
	Preferred Series A			Preferred Series B		Preferred Series D		Preferred Series E		Series E-1		Preferred Series F		Series G		Series H		Common
Balance, December 31, 2020	$	93		$	-		-		-		-		-		-		-	$	23,472
Balance, December 31, 2020		92,999			100		-		-		-		-		-		-		23,472,565
Cancellation of Preferred Series A		(93)			-		-		-		-		-		-		-		-
Cancellation of Preferred Series A		(92,999	)		-		-		-		-		-		-		-		-
Conversion of debt to Preferred Series D		-			-		230		-		-		-		-		-		-
Conversion of debt to Preferred Series D		-			-		230,000		-		-		-		-		-		-
Shares issued for acquisition of assets		-			-		-		1		-		-		-		-		-
Shares issued for acquisition of assets		-			-		-		1,000		-		-		-		-		-
Shares issued for convertible note		-			-		-		-		-		1		-		-		-
Shares issued for convertible note		-			-		-		-		-		1,000		-		-		-
Conversion of debt at $0.01 per share							230
Conversion of debt at $0.01 per share, shares							230,000
Issuance of shares for services
Issuance of shares for services, shares
Shares issued for license
Shares issued for license, shares

Equity portion on convertible debt issued		-			-		-		-		-		-		-		-		-
Equity portion on convertible debt issued		-			-		-		-		-		-		-		-		-
Shares subscriptions received		-			-		-		-		-		-		-		-		-
Shares subscriptions received		-			-		-		-		-		-		-		-		-
Shares issued for voting control Series B		-			-		-		-		-		-		-		-	$	1,500
Shares issued for voting control Series B		-			-		-		-		-		-		-		-		1,500,000
Equity portion on convertible subordinated notes		-			-		-		-		-		-		-		-		-
Equity portion on convertible subordinated notes		-			-		-		-		-		-		-		-		-
Net loss for the period		-			-		-		-		-		-		-		-		-
Balance, September 30, 2021		-			100		230,000		1,000		-		1,000		-		-		24,972,565

	Amount
	Pref			Pref		Pref		Pref		Pref		Pref		Pref		Pref
	Series A			Series B		Series D		Series E		Series E-1		Series F		Series G		Series H		Common
Balance, December 31, 2020	$	93			-		-		-		-		-		-		-	$	23,472
Cancellation of Preferred Series A		(93	)		-		-		-		-		-		-		-		-
Conversion of debt to Preferred Series D		-			-	$	230		-		-		-		-		-		-
Shares issued for acquisition of assets		-			-		-	$	1		-		-		-		-		-
Shares issued for convertible note		-			-		-		-		-	$	1		-		-		-
Equity portion on convertible debt issued		-			-		-		-		-		-		-		-		-
Shares subscriptions received		-			-		-		-		-		-		-		-		-
Shares issued for voting control Series B		-			-		-		-		-		-		-		-	$	1,500
Equity portion on convertible subordinated notes		-			-		-		-		-		-		-		-		-
Net loss for the period		-			-		-		-		-		-		-		-		-
Balance, September 30, 2021	$	-		$	-	$	230	$	1	$	-	$	1	$	-	$	-	$	24,972

	Pref Series A			Series B		Pref Series D		Pref Series E		Series E-1		Series F		Series G		Series H		Common			Shares Subscribed		Accumulated Deficit			Total
	Additional Paid In Capital
										Pref		Pref		Pref		Pref
	Pref Series A			Series B		Pref Series D		Pref Series E		Series E-1		Series F		Series G		Series H		Common			Shares Subscribed		Accumulated Deficit			Total
Balance, December 31, 2020	$	343,001			-		-		-		-		-		-		-	$	959,976		$	-	$	(1,484,442	)	$	(157,900	)
Cancellation of Preferred Series A		(343,001	)		-		-		-		-		-		-		-		343,094			-		-			-
Conversion of debt to Preferred Series D		-			-	$	667,984		-		-		-		-		-		-			-		-			668,214
Shares issued for acquisition of assets		-			-		-	$	4,225,061		-		-		-		-		-			-		-			4,225,062
Shares issued for convertible note		-			-		-		-		-		-		-		-		-			-		-			1
Equity portion on convertible debt issued		-			-		-		-		-		-		-		-		30,000			-		-			30,000
Shares subscriptions received		-			-		-		-		-		-		-		-		-			4,600,000		-			4,600,000
Shares issued for voting control Series B		-			-		-		-		-		-		-		-		(1,500	)		-		-			-
Equity portion on convertible subordinated notes		-			-		-		-		-		-		-		-		850,000			-		-			850,000
Net loss for the period		-			-		-		-		-		-		-		-		-			-		(4,961,892	)		(4,961,892	)
Balance, September 30, 2021	$	-		$	-	$	667,984	$	4,225,061	$	-	$	-	$	-	$	-	$	2,181,570		$	4,600,000	$	(6,446,334	)	$	5,253,485

	June 30, 2021						December 31, 2020
	Cost		Depreciation		Net		Cost		Depreciation		Net
Tuffy Packs, LLC License	$	50,000	$	50,000	$	-	$	50,000	$	50,000	$	-
Website for Casa-Zeta Jones Brand		10,000		-		10,000		10,000		-		10,000
Domain Name – Go.TV		100,000		-		100,000		-		-		-
Market Advantage		58,843		2,504		56,339		-		-		-
Casa Zeta-Jones Brand License		488,094		139,448		348,646		488,094		64,687		423,407
Licenses		8,824,063		-		8,824,063		-		-		-

	$	9,531,000	$	191,952	$	9,339,048	$	548,094	$	114,687	$	433,407

Total	$	5,815,118
Purchase of 100% of the common shares of Sovryn Holdings, Inc.	$	4,224,962
KNLA- KNET acquisition		977,059
KVVV acquisition		613,097
Total	$	5,815,118

		Cost		Additions		Total		Depreciation		Net
Transmitter	10 years	$	684,085	$	-	$	684,085	$	30,015	$	654,070
Antenna	10 years		240,773		-		240,773		9,633		231,140
Tech Equipment	5 years		237,059		54,922		291,981		20,364		271,617
Office Equipment	5 years		7,389		-		7,389		492		6,897
Microwave	5 years		22,065		-		22,065		2,023		20,042

		$	1,191,371	$	54,922	$	1,246,293	$	62,527	$	1,183,766

					Loss/Gain
	Cost		Depreciation		Disposition
Tech Equipment	$	18,181	$	1,034	$	17,147

Closed for KYMU	$	1,864,920
Closed for K05NH		1
Escrowed for W27EB		300,000
Escrowed for KPHE		100,000
Escrowed for KVSD		75,000

	$	2,339,921

				Accumulated
		Amount		Amortization		Net
Tower lease - 1	174.5 mths	$	547,663	$	17,262	$	530,401
Tower lease - 2	94 mths		244,079		10,386		233,693
Generator lease	174.5 mths		109,507		3,452		106,055
Studio lease	220.5 mths		280,084		5,081		275,003
		$	1,181,333	$	36,181	$	1,145,152


2022	$	183,807
2023		189,546
2024		195,543
2025		207,903
2026		214,960
Remaining		2,040,880
Lease obligations, net		3,032,639
Amt representing interest		1,846,756
Remaining lease liability		1,185,883
Less current portion		6,293
Non-current lease obligation	$	1,179,590

	Sep 30, 2021		Dec 31, 2020
Audit fees	$	12,500	$	25,800
Accounting fees		10,000		8,100
Legal fees		459,382		25,118
General Admin expenses		32,588		335
Consulting fees		72,750		-
Management fees		-		3,000

Total	$	587,220	$	62,353

	1.	$10,000 payable within seven days after the effective date;
	2.	An additional $15,000 payable within 30 days after the effective date; and
	3.	A final payment of $25,000 payable within 90 days of the effective date.

	i.	Year 1: execution – December 31, 2022
	ii.	Year 2: January 1, 2022 – December 31, 2023
	iii.	Year 3: January 1, 2023 – December 31, 2024

	b.	Marketing date Jan 2022, On Shelf Date April 30, 2022

	c.	Royalty payments with a rate of 8%, net of sales, subject to guaranteed minimums noted below.

	d.	Advance prepayment of $150,000 to be applied against royalties, paid as follows:

	i.	$50,000 upon signing (paid)
	ii.	$50,000 on July 20, 2020 (paid)
	iii.	$50,000 on September 1, 2020 (paid)

Year		Guaranteed Minimum Royalties		Guaranteed Minimum Sales

i.	7/17/20 – 12/31/22	$	250,000	$	3,200,000
ii.	1/1/22 – 12/31/23	$	250,000	$	3,200,000
iii.	1/1/23 – 12/31/24	$	250,000	$	3,200,000

	February 16, 2021		December 31, 2020

	$	20,000	$	20,000
Note payable bearing interest at 5%	$	20,000	$	20,000
Accrued interest thereon		616		486
	$	20,616	$	20,486

Face Value		Conversion Rate		Interest rate			Due Date		Accrued Interest		Carrying Value		Feb 15 2021 Total		Dec 31 2020 Total
$	10,000	$	0.005		-			-	$	-	$	500	$	500	$	500	(a)
$	85,000	$	0.01		-			-		-		50,800		50,800		50,800	(b)
$	50,000	$	0.01		10	%		05/01/2022		2,500		50,000		52,500		52,500	(c)
$	5,000	$	0.01		10	%		05/01/2022		259		5,000		5,259		5,259	(d)
$	12,500	$	0.01		10	%		6/23/2021		457		7,500		7,957		7,957	(d)
$	20,000	$	0.04		-			-		-		20,000		20,000		20,000
$	68,490	$	0.05		-			-		-		68,490		68,490		68,490	(e)
$	25,000	$	0.05		12	%		-		20,056		25,000		45,056		44,682	(f)
$	25,000	$	0.05		8	%		-		32,047		25,000		57,047		56,797	(f)
$	23,622	$	0.05		5	%		-		16,388		23,622		40,010		39,551	(f)
$	684,000	$	0.05		10	%		Various		22,066		220,799		242,865		154,444	(g)
$	75,000				10	%		Various		1,788		55,331		57,119		51,771	(h)
									$	95,561	$	552,042		647,603	$	552,751
		Less long-term portion														57,759
		Current portion											$	647,603	$	494,992

	(a)	On October 28, 2020, $9,500 was converted into 1,900,000 common shares.
	(b)	On July 23, 2020, $16,900 in debt and $950 in costs were converted into 1,785,000 common shares and on November 2, 2020, $17,300 was converted into 1,730,000 common shares.
	(c)	The notes are convertible into common stock at the discretion of the Holder at the lesser of $0.01 or 50% of the lowest closing bid price for the Company’s stock during the 20 immediately preceding the date of delivery by Holder to the Company of the Conversion Notice.
	(d)	The notes are convertible into common stock at the discretion of the Holder at 50% of the lowest closing bid price for the Company’s common stock during the 30 trading days immediately preceding the date of delivery by Holder to the Company of the Conversion Notice.
	(e)	Included in this debt is $490 due to the former CEO. The debt was repaid via check.
	(f)	On April 2, 2020, these notes terms were changed from non-convertible to convertible at $0.05 debt to 1 common share. They were also amended to include the above noted clause with respect to holding less than 9.99% of the issued and outstanding common stock. During the year ended December 31, 2020, interest accrued on this debt was $6,164 (2019 - $6,146).
	(g)	Based on the intrinsic value of the beneficial conversion feature, as per FASB topic ASC 470-20 Debt with Conversion and other Options, it was determined that all of the value of the following notes that were issued should be allocated to equity and amortized to interest, based on the due date of the debt. A summary of the balances is as follows as at February 15, 2021:

Allocated to			Amortized		Accrued
Equity		Due Date	as interest		at 10%		Total
$	30,000	03-31-2021	$	24,293	$	1,627	$	25,920
	100,000	07-20-2021		56,051		5,726		61,777
	60,000	08-31-2021		27,406		2,860		30,266
	20,000	09-30-2021		7,688		816		8,504
	60,000	10-31-2021		18,715		2,022		20,737
	50,000	10-31-2021		14,504		1,507		16,011
	50,000	10-31-2021		14,504		1,507		16,011
	10,000	11-04-2021		2,671		277		2,948
	110,000	11-18-2021		25,476		2,622		28,098
	55,000	11-19-2021		12,262		1,310		13,572
	27,000	12-31-2021		4,292		481		4,773
	27,000	12-31-2021		4,292		481		4,773
	20,000	12-31-2021		2,976		318		3,294
	30,000	12-31-2021		3,747		382		4,129
	17,500	01-31-2022		961		65		1,026
	17,500	01-31-2022		961		65		1,026
$	684,000		$	220,799	$	22,067	$	242,865

Allocated to equity		Due date	Amortized as Interest		Accrued Interest at 10%		Total
$	10,714	07-31-2021	$	4,397	$	822	$	19,505
	10,714	08-31-2021		3,279		610		18,175
	7,468	09-30-2021		1,501		404		19,438
$	28,896		$	9,177	$	1,836	$	57,118

Face		Loan		Amortized		Carrying		Accrued
Value		Proceeds		Interest		Value		Interest 11%		Total
$	16,500,000	$	15,00,0000	$	258,098	$	15,258,098	$	-	$	15,258,098

	(a)	Demand notes, convertible notes and interest with a carrying value of $668,214 were exchanged for 230,000 preference shares of Series D.

	(b)	$715,228 in operating leases for equipment were capitalized and leases payable of the same amount were recorded.

	(c)	1,000 Series E preference shares were issued for 100% of the common shares of Sovryn Holdings Inc. The shares were valued at $4,225,062 and goodwill of $4,224,962 was recorded. Common shares of $100 were eliminated on consolidation.

	●	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of Madison’s assets;

	●	provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and

	●	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Madison’s assets that could have a material effect on the financial statements.

Exhibit Number		Description

31.1*		Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS*		Inline XBRL Instance 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)

	Madison Technologies, Inc.

Dated: December 21, 2021	By:	/s/ Philip A. Falcone
	Name:	Philip A. Falcone
	Title:	CEO
		(Principal Executive Officer and Principal Financial and Accounting Officer)