What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2020-04-14 compared with 2019-04-01 · 251 added, 200 removed, 228 unchanged (66% of the section changed)

1 unchanged sentence

TECHNOLOGIES INC.

Madison Technologies Inc.

Form 10-K - 2018

TECHNOLOGIES INC.

Report of Independent Registered Public Accounting Firm

of Operations

of Stockholders’

of Cash Flows

to the Financial Statements

31, 2019 AND 2018

Balance Sheets

Statements of Operations

Statements of Stockholders’

Statements of Cash Flows

Notes to the Financial Statements

Madison Technologies Inc.

Form 10-K - 2018

Form 10-K - 2019 Page 16

MARGETSON LTD.

24 unchanged sentences

obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or

My audits included performing procedures to assess the risks of material misstatement of the financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining on a test basis,

evidence regarding the amounts and disclosures in the financial statements.

My audits also included evaluating the accounting

principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

I believe that my audits provide a reasonable basis for my opinion.

The Company is not required to have, nor was I engaged to perform, an audit of its internal control over financial reporting.

As part of my audits, I am required to obtain an understanding of internal control over financial reporting, but not for the purpose

of expressing an opinion on the effectiveness of the Company’s internal control

over financial reporting.

Accordingly, I express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

My audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

that my audits provide a reasonable basis for my opinion.

accompanying financial statements have been prepared using accounting principles generally accepted in the United States of America

6 unchanged sentences

any adjustments that might result from the outcome of this uncertainty.

have served as the Company’s auditor since 2009

MARGETSON LTD

Professional Accountant

have served as the Company’s auditor since 2009

Vancouver, BC

Madison Technologies Inc.

1 unchanged sentence

TECHNOLOGIES INC.

asset, at amortized cost License agreement (Note 5)

AND STOCKHOLDERS’

payable and accrued liabilities

fee payable (Note 3)

notes and accrued interest payable (Note 4)

notes payable (Note 5)

party convertible note payable (Notes 5 & 6)

party advance (Note 6)

December 31, 2019

December 31, 2018

CURRENT ASSETS

Prepaid expenses

LIABILITIES AND STOCKHOLDERS’

CURRENT LIABILITIES

Accounts payable and accrued liabilities

License fee payable (Note 3)

Demand notes and accrued interest payable (Note 4)

Convertible notes payable (Note 5)

Related party convertible loan (Note 6)

TOTAL LIABILITIES

STOCKHOLDERS’

Stock (Note 7) Par Value:

$0.001 Authorized 500,000,000 shares Issued and outstanding:

Common Stock (Note 7)

Authorized 500,000,000 shares

Issued and outstanding:

18,057,565 shares (Dec 31, 2018 –

16,757,565 shares)

Paid in Capital

subscribed (Note 7)

stockholders’

liabilities and stockholders’

Additional Paid in Capital

Shares subscribed

Accumulated deficit

Total stockholders’

Total liabilities and stockholders’

1 Going concern

9 Subsequent events

Accompanying Notes to the Financial Statements.

3 unchanged sentences

of Operations

and administrative

before other item

item - interest

loss and comprehensive loss

loss per share -Basic and diluted

number of shares of common stock outstanding

For the twelve

Cost of sales

Operating expenses

Amortization expense

General and administrative

Loss before other expense

Net loss and comprehensive loss

Net loss per share-Basic and diluted

Average number of shares of common stock outstanding

Accompanying Notes to the Financial Statements.

2 unchanged sentences

TECHNOLOGIES INC.

of stockholders’DEFICIT

December 31, 2016

converted to shares

at $0.05 per share

at $0.045 per share

loss, December 31, 2017

of stockholders’

Balance, December 31, 2018

converted to shares

at $0.01 per share

at $0.005 per share

shares issued for cash

Shares issued at

$0.05 per share

Shares issued at

$0.10 per share

loss for the year

Balance, December

Balance, December 31, 2017

converted to common shares

Converted at $0.01

Converted at $0.005

subscribed at $0.10 per share

loss, December 31, 2018

December 31, 2018

loss for the year

Balance, December

Accompanying Notes to the Financial Statements.

3 unchanged sentences

of cash flows

Flows from operating activities:

loss for the year –

as restated (Note 10)

to reconcile net loss to cash used in operating activities:

interest on notes payable

exchange on notes payable

in assets and liabilities:

payable and accruals

cash used in operating activities

Flows from financing activities:

from convertible notes issued

from related party

Cash Flows from operating activities:

for the period

Adjustments to reconcile

net loss to cash used in operating activities:

Amortization of license

Accrued interest

on notes payable

Foreign exchange

on notes payable

Changes in assets

and liabilities:

Accounts payable

Net cash used

in operating activities

Cash Flows from financing activities:

Proceeds from convertible

Advances from related

Cash received from

share issuance

subscribed but not issued

cash provided by financing activities

decrease in cash

beginning of year

note issued for related party advance

Net cash provided

by financing activities

Net increase (decrease) in cash

Cash, beginning

SUPPLEMENTAL DISCLOSURE

Interest paid

Convertible note issued for related party advance

Accompanying Notes to the Financial Statements

2 unchanged sentences

TECHNOLOGIES INC.

TO THE INTERIM FINANCIAL STATEMENTS

TO THE FINANCIAL STATEMENTS

1 Nature and Continuance of Operations

1 unchanged sentence

on the OTC Bulletin Board.

January 21, 2015, a majority of the Company’s stockholders approved a consolidation of the issued and outstanding shares

of common stock, on a 10 for 1 basis, thereby decreasing the issued and outstanding share capital from 113,020,000 to 11,302,000.

These financial statements give retroactive effect to this change.

December 31, 2016, the Company dissolved its wholly owned subsidiary, Scout Resources Inc.

(“Scout”) and assumed all

the debt that Scout owed.

until fiscal 2014, the Company was in the business of mineral exploration.

3 unchanged sentences

commercial purposes.

On December 14, 2014, the smokeless cannabis delivery agreement was terminated.

On December 14, 2014, this asset purchase agreement was terminated.

January 21, 2015, a majority of the Company’s stockholders approved a consolidation of the issued and outstanding shares

of common stock, on a 10 for 1 basis, thereby decreasing the issued and outstanding share capital from 113,020,000 to 11,302,000.

On March 11, 2015, the Company changed its name from Madison Explorations, Inc.

to Madison Technologies Inc.

and effected the

stock consolidation.

September 16, 2016, the Company entered into an exclusive distribution product license agreement with Tuffy Packs, LLC to distribute

products into the United Kingdom and 43 other essentially European countries.

The Company is selling ballistic panels which are

personal body armors, that conforms to the National Institute of Justice (NIJ) Level IIIA threat requirements.

The Company will be selling ballistic panels which

are personal body armors, that conforms to the National Institute of Justice (NIJ) Level IIIA threat requirements.

The Company’s

1 unchanged sentence

As the Company failed to make specified payments as required, the agreement was amended to a non-exclusive basis.

March 11, 2015, the Company changed its name from Madison Explorations, Inc.

to Madison Technologies Inc.

and effected the stock

consolidation.

December 31, 2016, the Company dissolved its wholly owned subsidiary, Scout Resources Inc.

(“Scout”) and assumed all

the debt that Scout owed.

financial statements have been prepared in accordance with generally accepted accounting principles applicable to a going concern,

3 unchanged sentences

as a going concern.

At December 31, 2018, the Company had not yet achieved profitable operations, has accumulated losses of $532,016

since its inception and expects to incur further losses in the development of its business, all of which casts substantial doubt

about the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern is

dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations

At December 31, 2019, the Company had not yet achieved profitable operations, had accumulated losses of $574,279

since its inception and expects to incur further losses in the development of its business, all of which casts substantial

doubt about the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern

is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations

and repay its liabilities arising from normal business operations when they come due.

3 unchanged sentences

That said, there is no assurance of additional funding being available.

Madison Technologies Inc.

Form 10-K - 2018 Page 23

2 Summary of Significant Accounting Policies

Company has elected a December 31st fiscal year end.

Madison Technologies Inc.

Form 10-K - 2019 Page 22

Cash and cash equivalents

3 unchanged sentences

Revenue Recognition

May 2014, the FASB issued guidance on the recognition of Revenue from Contracts with Customers.

The core principle of the guidance

is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that

reflects the consideration which the company expects to receive in exchange for those goods or services.

To achieve this core

principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized.

addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and

fulfill contracts.

The guidance also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue

and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized

from costs incurred to obtain or fulfill a contract.

Company adopted the ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), using the modified retrospective

Revenues for the year ended December 31, 2019 were not adjusted.

The adoption of Topic 606 did not have a material impact

to the Company’s financial statements.

Revenue from contracts with customers is generated primarily from selling products

The customer orders and pays for the products through an online portal.

Once the payment goes through, a purchase order

is generated and submitted to the supplier.

When the supplier ships the products to the customer, revenue is then recognized when

the performance obligation is completed.

Company recognizes revenue when a contract is in place, goods or services are delivered to the purchaser and collectability is

reasonably assured.

Stock-Based Compensation

Company follows the guideline under FASB ASC Topic 718 “

Compensation-Stock Compensation ”

for all stock-based compensation plans, including employee stock options, restricted stock, employee stock purchase plans

and stock appreciation rights.

Stock compensation expenses are to be recorded using the fair value method.

No stock options have

Madison Technologies Inc.

Form 10-K - 2019 Page 23

Basic and Diluted Net Income (Loss) per Share

6 unchanged sentences

financial instruments is not presented where anti-dilutive.

Comprehensive Income

accordance with FASB ASC Topic 220 “

Comprehensive Income ,”

comprehensive income consists of net income and

other gains and losses affecting stockholder’s equity that are excluded from net income, such as unrealized gains and losses

on investments available for sale, foreign currency translation gains and losses and minimum pension liability.

Use of Estimates

27 unchanged sentences

Form 10-K - 2019 Page 24

Financial Instruments and correction of error in previously issued financial statements

Company’s financial instruments consisting of cash, account payable and accrued liabilities, notes payable and accrued interest

and related party advances are carried at face which approximates fair value because of their short-term nature.

the year ended 2017, the Company changed the accounting policy by which it accounts for its convertible debt.

Previously, the

Company based its policy on the fact that the promissory notes have been issued without an interest component and, assuming the

reason for investing is the pursuit of profit, the total value of these instruments had been allocated to the equity component

as this is the only logical reason for investment.

Promissory note issuances were included in additional paid-in capital and were

amortized and charged to interest on an effective interest rate basis.

the year, the Company corrected this policy and adopted FASB ASC Topic 470, “

Debt with Conversions and Other Options, ”

which requires that convertible debt with no beneficial conversion feature be allocated in totality to debt and that no amount

be allocated to equity.

This change has been applied retroactively to the financial statements and the effect on the financial

statements is described in Note 8.

None of the Company’s convertible notes had a beneficial conversion feature.

instruments that potentially subject the Company to credit risk consist principally of cash.

Management does not believe the Company

is exposed to significant credit risk.

as well, does not believe the Company is exposed to significant interest rate risks during the period resented in these financial

accompanying financial statements do not include any adjustments that might result from the eventual outcome of the risks and

uncertainties described above.

Company accounts for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and

4 unchanged sentences

to the uncertainty regarding the Company’s future profitability, the future tax benefits of its losses have been fully reserved.

Madison Technologies Inc.

Form 10-K - 2018 Page 25

Impairment of Long-Lived Assets

13 unchanged sentences

gains and losses in the period are included in operations.

functional currency of the now dissolved wholly owned subsidiary was Canadian dollars.

The assets and liabilities arising from

these operations were translated at current exchange rates and related revenues and expenses at the exchange rates in effect at

the time the revenue or expense was incurred.

Resulting translation adjustments, if material, were accumulated as a separate component

of accumulated other comprehensive income in the statement of stockholders’

Intangible Assets

6 unchanged sentences

Those with a determinable life will be amortized on a systematic basis over their future economic life.

with an indefinite useful life shall not be amortized until its useful life is determined to be longer indefinite.

with a indefinite useful life shall not be amortized until its useful life is determined to be longer indefinite.

An intangible

assets subject to amortization shall be periodically reviewed for impairment.

asset subject to amortization shall be periodically reviewed for impairment.

A recoverability test will be performed and, if

applicable, unscheduled amortization is considered.

Madison Technologies Inc.

Form 10-K - 2019 Page 25

license agreement has been capitalized and recorded at cost.

It has been amortized over the life of the contract, which is two

It will be amortized over the life of the contract, which is two

Recent Accounting Pronouncements

In December 2019, the FASB

issued ASU No.

2019-12, “Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes”.

This new guidance

includes several provisions to simplify the accounting for income taxes.

The standard removes certain exceptions for recognizing

deferred taxes for investments, performing intraperiod allocation, and calculating income taxes in interim periods.

This standard

is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years.

Early adoption

of this standard is permitted.

The adoption of this guidance is not expected to have a material impact on the Company’s financial

In August 2018, the FASB issued

2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), Customer’s Accounting

for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract”.

This new guidance requires

a customer in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal-use

software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred.

capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of

the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use.

standard is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years.

adoption of this standard is permitted.

The adoption of this guidance will not have a material impact on the Company’s financial

June 2016, the FASB issued ASU 2016-13, “Financial Instruments –

Credit Losses”.

The ASU sets forth a “current

expected credit loss”

(CECL) model which requires the Company to measure all expected credit losses for financial instruments

held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts.

This replaces

the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized

cost and applies to some off-balance sheet credit exposures.

This ASU is effective for fiscal years beginning after December 15,

2019, including interim periods within those fiscal years, with early adoption permitted.

Recently, the FASB issued the final

ASU to delay adoption for smaller reporting companies to calendar year 2023.

The Company is currently assessing the impact of

the adoption of this ASU on its financial statements.

In February 2016, the FASB issued

ASU 2016-02, “Leases (Topic 842)”

and subsequent amendments to the initial guidance:

ASU 2018-10, ASU 2018-11, ASU

2018-20 and ASU 2019-01 (collectively, Topic 842).

As the Company has no leases, this pronouncement did not affect the Company’s

financial statements.

Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued,

3 unchanged sentences

3 License Agreement

Company entered into an exclusive product license agreement on September 16, 2016 with Tuffy Packs, LLC, a Texas corporation,

to sell Ballistic Panels in certain countries, essentially in Europe.

The license is for a period of two years unless terminated

and may be renewed for successive terms of two years each.

The Company entered into an exclusive

product license agreement on September 16, 2016 with Tuffy Packs, LLC, a Texas corporation, to sell Ballistic Panels in certain

countries, essentially in Europe.

The license was for a period of two years unless terminated and may be renewed for successive

terms of two years each.

The payment terms for the license is as follows:

2 unchanged sentences

final payment of $25,000 payable within 90 days of the effective date.

Madison Technologies Inc.

Form 10-K - 2018 Page 26

December 31, 2018, the Company had paid $16,500 to the Licensor, leaving an unpaid balance of $33,500.

To date, the Company has

recorded a total license amortization of $50,000.

The Company initially recorded

an intangible asset and a license fee payable of $50,000.

As at December 31, 2019, the

Company had paid $16,500 to the Licensor, leaving an unpaid balance of $33,500.

The Company has fully amortized the intangible

asset of $50,000.

a result of the failure to make payments as required under the agreement, the Company was informed on March 20, 2017, that going

forward, the agreement would be on a non-exclusive basis.

Madison Technologies Inc.

Form 10-K - 2019 Page 26

4 Demand Notes and Accrued Interest Payable

1 unchanged sentence

Each note is unsecured and payable on demand.

payable bearing interest at 8%

interest there on

payable bearing interest at 5%

Note payable bearing interest at 8%

Accrued interest there on

Note payable bearing interest at 5%

(Debt is Canadian $30,000)

interest there on

payable bearing at 12%

interest there on

debt and interest payable

accrued for the year ended December 31, 2018 were as follows:

accrued on the note bearing 8% interest was $2,000 (2017 - $2,00).

accrued on the note bearing 5% interest was $1,143 (2017 - $1,190).

accrued on the note bearing 12% interest was $2,992 (2017 - $2,992).

Madison Technologies Inc.

Form 10-K - 2018 Page 27

Accrued interest there on

Note payable bearing interest at 12%

Accrued interest there on

Total debt and interest payable

accrued on the note bearing 8% interest was $2,000 for the twelve months ended December 31, 2019 (2018 - $2,000).

accrued on the note bearing 5% interest was $1,141 for the twelve months ended December 31, 2019 (2018 - $1,143).

accrued on the note bearing 12% interest was $3,000 for the twelve months ended December 31, 2019 (2018 - $2,992).

5 Convertible Notes Payable

at December 31, 2019, there are nine convertible notes payable.

Two notes were converted into shares during the year ended December

31, 2017 and two notes were converted into shares during the period ended March 31, 2018.

All notes are non-interest bearing,

unsecured and payable on demand.

The remaining notes are convertible into common stock at the discretion of the holder at five

different conversion rates:

$0.01 debt to 1 common share, $0.005 to 1 common share;

All notes are non-interest bearing, unsecured and payable on demand.

The notes are convertible into common stock at the discretion of the holder at five different conversion rates:

$0.01 debt to

1 common share, $0.005 to 1 common share;

$0.15 to 1 common share;

$0.05 to 1 common

$0.05 to 1 common share;

and $0.04 to 1 common share.

The effect that conversion would have on earnings per share has not been disclosed due to

the anti-dilutive effect.

A recap of convertible debt outstanding based on conversion rates is as follow:

at $0.01 debt to 1 common share

at $0.005 debt to 1 common share

at $0.015 debt to 1 common share

at $0.05 debt to 1 common share

at $0.04 debt to 1 common share

related party convertible debt at $0.05 debt to 1 common share (Note 6)

convertible debt to third parties

6 Related Party Advance

2008, the President advanced the Company $561 repayable without interest or any other terms.

The unpaid balance as at October

23, 2018 was $261.

that conversion would have on earnings per share has not been disclosed due to the anti-dilutive effect.

A recap of convertible

debt outstanding based on conversion rates is as follow:

Convertible at $0.01 debt to 1 common share

Convertible at $0.005 debt to 1 common share

Convertible at $0.015 debt to 1 common share

Convertible at $0.05 debt to 1 common share

Convertible at $0.04 debt to 1 common share

Madison Technologies Inc.

Form 10-K - 2019 Page 27

6 Related Party Convertible Loan

2008, the current President advanced the Company $561 repayable without interest or any other terms.

The unpaid balance as at

October 23, 2018 was $261.

The President advanced a further $229 (CAD $300) to cover out of pocket expenditures.

On October 23,

the Company entered into a convertible note payable with the President by combining the two advances to the aggregate amount of

2018, the Company entered into a convertible note payable with the President by combining the two advances to the aggregate amount

The note payable is due on demand and may be convertible to common stock of the Company at $0.05 per share.

There were no

other related party transactions during the period ended December 31, 2018 or the year ended December 31, 2017.

no other related party transactions during the period ended December 31, 2019 or the year ended December 31, 2018.

been included in Note 5 above.

7 Common Stock

March 2, 2018, the Company completed a private placement of 150,000 shares of common stock at a per share price of $0.10 for gross

proceeds of $15,000.

As of the date of this report, the shares have not been issued.

March 25, 2019, the Company completed a private placement of 600,000 shares of common stock at a per share price of $0.05 for

gross proceeds of $30,000.

This was issued during the period ended December 31, 2019.

February 14, 2019, the Company completed a private placement of 400,000 shares of common stock at a per share price of $0.05 for

gross proceeds of $20,000.

As of the date of this report, the shares have not been issued.

This was issued during the period ended December 31, 2019.

On March 2, 2018, the Company

completed a private placement of 150,000 shares of common stock at a per share price of $0.10 for gross proceeds of $15,000.

shares were issued on June 16, 2019.

On February 16, 2018, the Company

completed a private placement of 150,000 shares of common stock at a per share price of $0.10 for gross proceeds of $15,000.

shares were issued on June 16, 2019.

January 25, 2018, two convertible notes were converted into shares.

7 unchanged sentences

This was effected on March 11, 2015.

This consolidation has been applied retroactively and all references to the number of shares

issued reflect this consolidation.

March 30, 2006, the Company entered into a private placement agreement whereby the Company issued 20,000 Regulation-S shares in

3 unchanged sentences

($.00008 per share.)

June 14, 2001, the Company approved a forward stock split of 5,000:1.

Madison Technologies Inc.

Form 10-K - 2019 Page 28

June 14, 2001, the Company approved a forward stock split of 5,000:1.

June 15, 1998, the Company authorized and issued 5,375,000 shares of its common stock in consideration of $430 in cash.

2 unchanged sentences

tax recovery differs from that which would be expected from applying the effective tax rates to the net income (loss) as follows:

income (loss) for the year –

and effective tax rates

taxes expenses (recovery) at the effective rate

of change in tax rates

benefit not recognized

tax expense (recovery) and income tax liability (asset)

Net loss for the year

Statutory and effective tax rates

Income taxes expenses (recovery) at the effective rate

Effect of change in tax rates

Tax benefit not recognized

Income tax expense (recovery) and income tax liability (asset)

at December 31, 2019 the tax effect of the temporary timing differences that give rise to significant components of deferred income

2 unchanged sentences

deferred income tax asset will not be realized.

loss carried forward

taxes recognized

Tax loss carried forward

Deferred tax assets

Valuation allowance

Deferred taxes recognized

tax losses will expire between 2028 and 2039.

9 Subsequent events

February 26, 2019 the Company completed a private placement of 400,000 at $0.05 per share for gross proceeds of $20,000.

date of this report, the shares have not been issued.

March 13, 2019, the Company completed a private placement of 600,000 at $0.05 per share for gross proceeds of $30,000.

date of this report, the shares have not been issued.

Madison Technologies Inc.

7 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data