What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2021-04-15 compared with 2020-04-14 · 506 added, 282 removed, 197 unchanged (80% of the section changed)

2 unchanged sentences

31, 2020 AND 2019

Balance Sheets

Statements of Operations

Statements of Stockholders’

Statements of Cash Flows

Notes to the Financial Statements

Madison Technologies Inc.

Form 10-K - 2019 Page 16

Auditor’s Report

of Operations

of Stockholders’

of Cash Flows

to the Financial Statements

MARGETSON LTD.

Professional Accountant

905 West Pender Street

East 5 th Street

Vancouver BC, V7L 1M1

1.855.603.3228

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have audited the accompanying balance sheets of Madison Technologies Inc.

as of December 31, 2019 and 2018 and the related statements

of operations, stockholders’

deficit and cash flows for each of the two years then ended and the related notes (collectively

referred to as the “financial statements’).

In my opinion, the financial statements present fairly, in all material

respects, the financial position of the Company as at December 31, 2019 and 2018 and the results of its operations and its cash

flows for each of the two years in the period ended December 31, 2019 in conformity with accounting principles generally accepted

in the United States of America.

as of December 31, 2020 and 2019 and the related

statements of operations, stockholders’

deficit and cash flows for each of the two years in the period ended December 31,

2020 and the related notes (collectively referred to as the “financial statements’).

In my opinion, the financial

statements present fairly, in all material respects, the financial position of the Company as at December 31, 2020 and 2019 and

the results of its operations and its cash flows for each of the two years in the period ended December 31, 2020 in conformity

with accounting principles generally accepted in the United States of America.

Doubt about the Company’s Ability to Continue as a Going Concern

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

assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has

incurred operating losses since inception, and has a working capital deficiency which raises substantial doubt about its

ability to continue as a going concern.

Management’s plans in regard to their planned financing and other matters are also

described in Note 1.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

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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.

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

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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

assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial statements, the Company has

incurred operating losses since inception, which raises substantial doubt about its ability to continue as a going concern.

Management’s

plans in regard to their planned financing and other matters are also described in Note 1.

The financial statements do not include

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

Critical Audit Matter

Critical audit matters are matters

arising from the current period audit of the financial statements that were communicated or required to be communicated to the

audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

I determined that there are no critical audit matters.

have served as the Company’s auditor since 2009.

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Vancouver, BC

Madison Technologies Inc.

Form 10-K - 2019 Page 17

April 15, 2021

TECHNOLOGIES INC.

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

expenses (Note 6)

Assets –

AND STOCKHOLDERS’

payable and accrued charges

fee payable (Note 4)

notes and accrued interest payable (Note 7)

notes payable (Note 8)

term portion of convertible notes and interest payable (Note 8)

STOCKHOLDERS’

Common Stock (Note 7)

Authorized 500,000,000 shares

Issued and outstanding:

18,057,565 shares (Dec 31, 2018 –

16,757,565 shares)

Additional Paid in Capital

Shares subscribed

Accumulated deficit

Total stockholders’

Total liabilities and stockholders’

(Note 10 and 11)

Shares –

50,000,000 shares authorized, $0.001 par value

Shares - Series A, $0.001 par value;

3%, stated value $100 per share 100,000 shares designated, 92,999 shares issued and outstanding

Shares - Series B, $0.001 par value;

Super Voting 100 shares designated, 100 shares issued and outstanding

Shares - Series C, $0.001 par value;

2%, stated value $100 per share 10,000 shares designated, none issued

Common Shares

- $0.001 par value;

500,000,000 shares authorized 23,472,565 shares issued and outstanding (Dec 31, 2019 - 18,057,565 shares)

Paid in Capital:

shares Series A

stockholders’

liabilities and stockholders’

1 Going concern

14 Subsequent events

Accompanying Notes to the Financial Statements.

Madison Technologies Inc.

Form 10-K - 2019 Page 18

TECHNOLOGIES INC.

of Operations

For the twelve

Cost of sales

Operating expenses

Amortization expense

General and administrative

Consulting fees

Management fees

Marketing and product development

Professional fees

Total operating

Loss before other expense

Net loss and comprehensive loss

Net loss per share-Basic and diluted

Average number of shares of common stock outstanding

Amortized interest

Write down of

investment (Note 5)

Net loss and comprehensive

Net loss per share-Basic

Average number

of shares of common stock outstanding

Accompanying Notes to the Financial Statements.

Madison Technologies Inc.

Form 10-K - 2019 Page 19

TECHNOLOGIES INC.

of stockholders’

Balance, December 31, 2018

shares issued for cash

Shares issued at

$0.05 per share

Shares issued at

$0.10 per share

December 31, 2019

of debt at $0.01 per share

of shares for services

issued for license

of debt at $0.005 per share

portion on convertible debt issued

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

December 31, 2020

Accompanying Notes to the Financial Statements

TECHNOLOGIES INC.

of stockholders’

December 31, 2018

shares issued for cash

issued at $0.05 per share

issued at $0.10 per share

loss for the year

Balance, December

December 31, 2019

Accompanying Notes to the Financial Statements.

Madison Technologies Inc.

Form 10-K - 2019 Page 20

TECHNOLOGIES INC.

1 unchanged sentence

Cash flows from operating activities:

for the period

Adjustments to reconcile

net loss to cash used in operating activities:

Amortization of license

Net loss for the year

Adjustments to reconcile net loss to cash used

in operating activities:

Amortization of intangible

Amortized interest

Accrued interest

2 unchanged sentences

on notes payable

Changes in assets

and liabilities:

Accounts payable

Demand note issued

Convertible notes

issued for services

Changes in current assets and liabilities:

Prepaid expenses

payable and accrued charges

Net cash used

in operating activities

Cash flows from investing activities:

Net cash used

in investing activities

Cash flows from financing activities:

Proceeds from convertible

Advances from related

Cash received from

share issuance

subscribed but not issued

Proceeds from convertible notes issued

Fees incurred in debt conversion

Cash received

from share issuance

Net cash provided

by financing activities

Net increase (decrease) in cash

Net increase in cash

Cash, beginning

Cash, end of year

SUPPLEMENTAL DISCLOSURE

Interest paid

Convertible note issued for related party advance

following is information pertaining to the year ended December 31, 2020:

the transaction wherein the Company was assigned the Casa Zeta- Jones License, $45,000 of debt assumed and $100,000 of costs

incurred were secured with convertible notes.

of prepaid royalty fees were secured with convertible notes.

retainer for legal fees for $12,500 was secured with a convertible note.

During the year, legal fees of $5,000 were incurred

and paid for in cash, which reduced both amount of the retainer and the balance owing on the convertible note.

debt of $44,650 was converted into 5,415,000 shares of common stock.

Accompanying Notes to the Financial Statements

Madison Technologies Inc.

Form 10-K - 2019 Page 21

TECHNOLOGIES INC.

2 unchanged sentences

Company was incorporated on June 15, 1998 in the State of Nevada, USA and the Company’s common shares are publicly traded

on the OTC Bulletin Board.

on the OTC Markets OTCQB.

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

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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 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

plan of operations and sales strategy include online and social media marketing, as well as attending various tradeshows and conferences.

The Company Soled ballistic panels which are personal

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

The Company’s plan

of operations and sales strategy included online and social media marketing, as well as attending various tradeshows and conferences.

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

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

(“Scout”) and assumed all

the debt that Scout owed.

July 17, 2020, the Company entered into an acquisition agreement to acquire the Casa Zeta-Jones Brand License Agreement from Luxurie

Legs, LLC of Delaware (“Luxurie”).

Luxurie transferred all its rights, title and interest in the License Agreement

to the Company in exchange for the Company’s newly issued preferred convertible Series A stock.

Upon conversion, the stock

could control up to 95% of the outstanding common shares.

The agreement also required voting control, represented by newly issued

shares of super voting preferred Series B stock.

September 28, 2020, the Company entered into a share exchange agreement to acquire 51% interest of Posto Del Sole Inc., a jewelry

designer company to further develop the Company’s existing brands and create new designer labels.

The title and rights will

be transferred when all the terms and conditions in the Securities Exchange Agreement are met.

At December 31, 2020, the share

exchange had not closed and advances made to Posto Del Sole Inc.

were expensed.

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, 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.

Management has no formal plan in place to

address this concern but considers that the Company will be able to obtain additional funds by equity financing and/or related

party advances.

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

At December 31, 2020, the Company had not yet achieved profitable operations, had a working capital deficit

$533,548, had accumulated losses of $1,484,442 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

Subsequent to the year-end, the Company entered into a number of agreements that provide financing in amounts greater than

$16.5 million.

That said, there is no assurance that the businesses being funded by this additional debt will ultimately be successful.

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

Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

As at December 31, 2019, the Company did not have any cash equivalents in 2019.

As at December 31, 2020, the Company did not have any cash equivalents.

(2019 –

23 unchanged sentences

reasonably assured.

Madison Technologies Inc.

Form 10-K - 2019 Page 23

Basic and Diluted Net Income (Loss) per Share

Basic and Diluted Net Loss per Share

Company reports basic loss per share in accordance FASB ASC Topic 260, “

19 unchanged sentences

source of information used in fair value measurement and expands disclosures about fair value measurements required under other

accounting pronouncements.

It does not change existing guidance as to whether or not an instrument is carried at fair value.

Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

When determining the fair value measurements for assets and liabilities,

which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the

Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the

asset or liability, such as inherent risk, transfer restrictions and credit risk.

The Company has adopted FASB ASC 825, “

Instruments”, which allows companies to choose to measure eligible financial instruments and certain other items at

fair value that are not required to be measured at fair value.

The Company has not elected the fair value option for any eligible

financial instruments.

Madison Technologies Inc.

Form 10-K - 2019 Page 24

accounting pronouncements The Company defines fair value as the price that would be received from selling an asset or paid to

transfer a liability in an orderly transaction between market participants at the measurement date.

When determining the fair

value measurements for assets and liabilities, which are required to be recorded at fair value, the Company considers the principal

or most advantageous market in which the Company would transact and the market-based risk measurements or assumptions that market

participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

has adopted FASB ASC 825, “

Financial Instruments”, which allows companies to choose to measure eligible financial

instruments and certain other items at fair value that are not required to be measured at fair value.

The Company has not elected

the fair value option for any eligible financial instruments.

carrying value of the Company’s financial instruments including cash, accounts payable and accrued liabilities, license

fee payable, demand notes and interest payable and convertible notes payable approximate their fair value due to the short maturities

of these financial instruments.

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.

Impairment of Long-Lived Assets

losses on long-lived assets, such as mining claims, are recognized when events or changes in circumstances indicate that the undiscounted

cash flows estimated to be generated by such assets are less than their carrying value and, accordingly, all or a portion of such

carrying value may not be recoverable.

Impairment losses are then measured by comparing the fair value of assets to their carrying

Foreign Currency Translation and Transactions

Company’s functional currency is US dollars.

Foreign currency balances are translated into US dollars as follows:

assets and liabilities are translated at the period-end exchange rate.

Non-monetary assets are translated at the rate of exchange

in effect at their acquisition, unless such assets are carried at market or nominal value, in which case they are translated at

the period-end exchange rate.

Revenue and expense items are translated at the average exchange rate for the period.

Foreign exchange

gains and losses in the period are included in operations.

Intangible Assets

9 unchanged sentences

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

Recent Accounting Pronouncements

In December 2019, the FASB

issued ASU No.

A recoverability test will be performed and, if applicable,

unscheduled amortization is considered.

agreements have been capitalized, recorded at cost and amortized over the life of the contracts.

Website costs have been capitalized

and will be subject to amortization once the website is operational.

They will be amortized over the life of the license

to which it supports.

Recent Accounting Standards

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

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 statements.

August 2018, the FASB issued ASU No.

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.

Also, 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.

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

those fiscal years.

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

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

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the adoption of this ASU on its financial statements.

In February 2016, the FASB issued

ASU 2016-02, “Leases (Topic 842)”

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.

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,

2 unchanged sentences

issued would, if adopted, have a material effect on the accompanying financial statements.

3 License Agreement

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:

3 Intangible assets

assets are amortized on a straight-line basis over the terms of the license agreements.

Packs, LLC License

for Casa-Zeta Jones Brand

Zeta-Jones Brand License

4 License Agreements

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 and may be

renewed for successive terms of two years each.

The payment terms for the license was as follows:

payable within seven days after the effective date;

1 unchanged sentence

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

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.

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, which fully amortizes the license.

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

Company has three notes payable.

Each note is unsecured and payable on demand.

Note payable bearing interest at 8%

Accrued interest there on

Note payable bearing interest at 5%

(Debt is Canadian $30,000)

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.

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 share;

and $0.04 to 1 common share.

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,

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.

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.

July 17, 2020, the Company entered into an acquisition

agreement with Luxurie Legs, LLC, a Delaware corporation, to acquire the Casa Zeta-Jones Brand license agreement.

agreement, as amended, grants the Company the worldwide rights to promote and sell certain products, and license the rights

to manufacture, promote and sell such products under the brand Casa Zeta-Jones and more.

The license agreement purchase

included the issuance of 92,999 Series A 3% Convertible Preferred Series A shares valued at $343,094, 10,000 Preferred

Series B voting shares valued at $nil, the assumption of $45,000 in debt and costs incurred of $100,000.

values were based on the licensor obtaining 95% of the Company’s common shares, whose value was discounted by a 50% factor,

given the lightly traded history in its shares.

Company is subject to the following terms:

3.5 year term as follows:

execution –

December 31, 2021

January 1, 2022 –

December 31, 2022

January 1, 2023 –

December 31, 2023

date November 2020, On Shelf Date February 15, 2021.

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

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

upon signing (paid)

on July 20, 2020 (paid)

on September 1, 2020 (paid)

minimum sales and guaranteed minimum royalties:

Minimum Royalties

Minimum Sales

1/1/22 –

1/1/23 –

Company to provide the Licensor with 50 gift sets of Licensed Products annually.

5 Securities Exchange Agreement

Company entered into a Securities Exchange Agreement on September 25, 2020 with Posto Del Sole Inc.

(“PDS”) a New

York corporation, to acquire 51% of the shares of PDS and in return, the Company will issue 10,000 Preferred Series C shares.

(See Note 11).

As part of the agreement, the Company is to provide monthly investments to a total aggregate of $1,000,000 during

the twelve-month period following the closing.

PDS has 60 days from closing to provide the necessary financial statements and

notes in order to satisfy regulatory requirements and disclosures.

As at December 31, 2020 PDS had not provided any such information,

the Securities Exchange Agreement had not closed and as a result, the Company wrote off advances of $165,000 that were made to

PDS in anticipation of closing.

6 Prepaid Expenses

Company has the following in prepaid expenses:

for service fees

for legal fees

for management fees

for royalties

7 Note Payable

Company has one note payable that is accruing interest at 5% per annum.

The note is unsecured and matures on June 30, 2021.

payable bearing interest at 5%

interest thereon

8 Convertible Notes and Accrued Interest Payable

summary of the convertible notes and accrued interest payable is as follow:

long-term portion

notes are unsecured and, except where specifically noted, are due on demand.

Except for notes denoted below under (e), all accrued

interest occurred in the twelve months ended December 31, 2020.

No conversion shall result in the Holder holding in excess of

9.99% of the total issued and outstanding common stock of the Company at any time.

October 28, 2020, $9,500 was converted into 1,900,000 common shares.

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

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.

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

in this debt is $490 due to the former CEO.

April 2, 2020, these notes terms were changed from non-convertible to convertible at $0.05 debt to 1 common share.

also amended to include the above noted clause with respect to holding less than 9.99% of the issued and outstanding common

During the year ended December 31, 2020, interest accrued on this debt was $6,164 (2019 - $6,146).

For comparative

purposes, these amounts previously shown as debt payable as at December 31, 2019, have been reclassified as convertible debt.

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 issued during the year ended December 31, 2020

should be allocated to equity and amortized to interest, based on the due date of the debt.

A summary of the balances is as

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 a portion of the value of the following notes issued during the year ended December 31,

2020 should be allocated to equity and amortized to interest, based on the due date of the debt.

These notes are convertible

into common stock at the discretion of the Holder at 70% of the lowest closing bid price for the Company’s common stock

during the 20 trading days immediately preceding the date of delivery by Holder to the Company of the Conversion Notice.

face value of each note is $25,000 and a summary of the balances is as follows:

9 Related Party

September 28, 2020, the Company entered into a renewable employment agreement with the President and CEO of the Company as described

in Note 12 , Commitments .

President and CEO of the Company currently holds 100 Series B Preferred Super Voting shares which he is entitled to 51% voting

rights no matter how many shares of common stock or other voting stock of the Company are issued or outstanding in the future,

such that he shall always have majority voting control of the Company.

10 Common Stock

following common stock transactions occurred during the year ended December 31, 2020:

July 23, 2020, the Company issued 1,785,000 shares of common stock pursuant to the conversion of a note payable of $16,900 at

$0.01 per share plus legal fees of $950, totaling $17,850.

October 28, 2020, the Company issued 1,900,000 shares of common stock pursuant to the conversion of a note payable of $9,500 at

$0.005 per share.

November 2, 2020, the Company issued 1,730,000 shares of common stock pursuant the conversion of a note payable of $17,300 at

$0.01 per share.

following common stock transactions occurred in the year ended December 31, 2019:

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

4 unchanged sentences

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.

One note for $25,000 was converted into 2,500,000 shares at

$0.01 per share and the other note for $10,000 was converted into 2,000,000 shares at $0.005 per share.

July 14, 2017, two convertible notes were converted into shares.

One note for $25,000 was converted into 555,556 shares at $0.045

per share and the other note for $20,000 was converted to 400,000 shares at $0.05 per share.

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 11,302,009.

This was effected on March 11, 2015.

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

exchange for $50,000.

($2.50 per share).

June 7, 2004, the Company issued 5,907,000 in consideration of $472 in cash.

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

are no shares subject to warrants or options as of December 31, 2020.

11 Preferred Shares

A 3% Convertible Preferred Stock, par value $0.001 with a stated valued of $100 per share

are 100,000 designated and authorized Series A 3% convertible preferred stock with a 9.99% conversion cap and anti-dilution rights

for 24 months from time of issuance.

Holders of Series A 3% Preferred Stock shall be entitled to receive, when and as declared,

dividends equal to 3% per annum on the stated value, payable in additional shares of Series A Preferred Stock.

Holders of Series

A 3% Convertible Preferred Stock have the right to vote on any matter that may be submitted to the Company’s shareholders

for vote, on an as converted basis, either by written consent or by proxy.

Each share of Series A 3% Convertible Preferred Stock

may be convertible into 3420 shares of Common Stock, or as adjusted to equal the conversion ratio multiplied by a fraction, the

numerator of which shall be the number of shares outstanding on a fully diluted basis after the issuance of the dilution shares,

and the denominator shall be 360,000,000.

(See Form 8K filing on August 6, 2020, Exhibit 10.3)

July 17, 2020, 92,999 Series A 3% Convertible Preferred Stock were issued pursuant to the License Agreement at a value of $343,094

The acquisition cost was derived using the current market price of $0.04 x 95% of the number of the issued and outstanding shares

of the Company at the time (18,057,565) x 50% of the value.

(See Note 4).

at December 31, 2020, there were unpaid and accrued dividends of $703.

B Super Voting Preferred Stock, par value $0.001

are 100 designated and authorized Series B Super Voting Preferred Stock.

Holders with Series B Super Voting Preferred Stock have

the right to vote on all shareholder matters equal to 51% of the total vote of common stockholders.

The Series B Super Voting

Preferred Stockholder is entitled to 51% voting rights no matter how many shares of common stock or other voting stock of the

Company are issued or outstanding in the future, such that the holder of Series B Super Voting Preferred Stock shall always have

majority control of the Company.

July 17, 2020, 100 Series B Super Voting Preferred Stock were issued pursuant to the License Agreement.

The Series B Super Voting

Preferred Stock was valued at par at $Nil.

Although the Series B Super Voting Preferred Stock is entitled to 51% voting rights

as described above, the stock has no dividend rate nor a conversion feature.

Furthermore, the shares were not issued to the investors

but rather were granted to new unrelated management.

C 2% Convertible Preferred Stock, par value $0.001 with a stated value of $100 per share

are 10,000 designated and authorized Series C 2% convertible preferred stock with a 9.99% conversion cap.

Holders of Series C

2% Preferred Stock shall be entitled to receive, when and as declared, dividends equal to 2% per annum on the stated value, payable

in additional shares of Series C Preferred Stock.

So long as any shares of Series C Preferred Stock remain outstanding, neither

the Company nor any subsidiary thereof shall, without the consent of the Holders of 80% of the shares of Series C Preferred Stock

then outstanding, redeem, repurchase or otherwise acquire directly or indirectly any Junior Securities nor shall the Company directly

or indirectly pay or declare or make any distribution upon, nor shall any distribution be made in respect of, any Junior Securities,

nor shall any monies be set aside for or applied to the purchase or redemption of any Junior Securities.

Each holder of the Series

C Preferred Stock shall have the right to vote on any matter that may from time to time be submitted to the Company’s shareholders

for a vote, on an as converted basis, either by written consent or by proxy.

Each share of Series C 2% Convertible Preferred Stock

may be convertible into 100 shares of Common Stock.

at December 31, 2020, no Series C Convertible Preferred shares were issued.

12 Commitments

Company entered into a one-year employment agreement with Jeffrey Canouse on September 28, 2020 as President and Chief Executive

The term may be renewed or non-renewed with not less than thirty days’

notice prior to the expiration of the initial

employment term.

The employment may be terminated by death or disability, terminated with or without cause or terminated by the

If the employee is terminated by the Company without cause or by the employee for good reason, then the Company will

continue to pay his base salary of $8,000 for the remainder of the employment term or renewal term.

Beginning on the first anniversary

date of the initial salary increase and continue on each anniversary of the increase date, the base salary shall be increased

by an amount not less than 5% times the base salary in effect, plus any additional amount as determined by the Company’s

Board of Directors.

As of December 31, 2020, Canouse had received $34,000 in management fees, $24,000 of which was pursuant to

the employment agreement.

Company entered into a one-year employment agreement with Walter Hoelzel on September 29, 2020 as Chief Marketing Officer.

term may be renewed or non-renewed with not less than thirty days’

notice prior to the expiration of the initial employment

The employment may be terminated by death or disability, terminated with or without cause or terminated by the employee.

If the employee is terminated by the Company without cause or by the employee for good reason, then the Company will continue

to pay his base salary of $5,000 for the remainder of the employment term or renewal term.

As of December 31, 2020, Hoelzel had

received $25,000 in consulting fees, $15,000 of which were pursuant to the employment agreement.

Company entered into a one-year employment agreement with Stuart Sher on September 29, 2020 as Chief Creative Officer.

may be renewed or non-renewed with not less than thirty days’

notice prior to the expiration of the initial employment term.

The employment may be terminated by death or disability, terminated with or without cause or terminated by the employee.

employee is terminated by the Company without cause or by the employee for good reason, then the Company shall continue to pay

his base salary for the remainder of the employment term or renewal term.

As of December 31, 2020, Sher had received $25,000 in

consulting fees, $15,000 of which were pursuant to the employment agreement.

Company entered into a consulting agreement with Virtue Development Company on September 29, 2020 for project consultancy.

consulting agreement is for 6 months with 6 months renewal options at the beginning of the 5 th month.

The monthly compensation

is $4,250 and as at December 31, 2020, the Company had paid $12,750 in fees pursuant to this agreement.

Company entered into a consulting agreement with Oscaleta Partners LLC on November 1, 2020 as project manager.

The consulting

agreement may be terminated by either party at the end of the initial 6 months term by giving 30 days written notice to the other

party or at any time with cause.

The monthly compensation is $25,000 and as of December 31, 2020, the Company incurred $75,000

in consulting fees.

Company entered into a one-year consulting agreement with Bernt Ullmann on November 23, 2020 to provide market exposure services.

The monthly compensation is $5,000 per month and as of December 31, 2020, the Company incurred $5,000 fees.

13 Income Taxes

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

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)

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)

at December 31, 2020 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.

Tax loss carried forward

Deferred tax assets

Valuation allowance

Deferred taxes recognized

tax losses will expire between 2028 and 2039.

loss carried forward

taxes recognized

losses of $438,000 will expire between 2028 and 2039.

Tax losses of $697,000 have no expiry date.

14 Subsequent Events

to December 31, 2020, the Company issued convertible notes payable totaling $35,000, convertible at $0.05 with a rate of 10% per

annum that matures on January 31, 2022.

February 16, 2021, the Company entered into a Share Exchange Agreement with Sovryn Holdings, Inc.

to exchange 100% of the outstanding

common shares of Sovryn Holdings, Inc.

for i) 100 shares of Series B Preferred Stock of the Company to be transferred by Jeffrey

Canouse, the Company’s CEO to a designee of Sovryn and ii) 1,000 shares of Series E Convertible Preferred Stock.

effectiveness of an amendment to the Company’s Articles of Incorporation to increase the Company’s authorized common

stock, from par value $0.001 to par value $0.0001 per share, from 500,000,000 shares to 7,000,000,000 shares, all shares of Series

E Convertible Preferred Stock issued to the shareholders shall automatically convert into approximately 2,305,000,000 shares of

common stock of the Company.

The Series E Convertible Preferred Stock votes on an as-converted basis with the common stock prior

to their conversion.

The Series E Preferred Stock shall represent approximately 59% of the fully diluted shares of common stock

of the Company after the closing of the transactions contemplated by the Securities Purchase Agreement.

to the closing of the Share Exchange Agreement with Sovryn Holdings, Inc., the Holders of the outstanding convertible notes payable

of $764,000 will exchange their convertible notes payable to 230,000 shares of Series D Convertible Preferred Stock.

Series D Convertible Preferred Stock shall be convertible into common stock of the Company at a ratio of 1,000 shares of common

stock for each share of Series D Convertible Preferred Stock held.

At the same time, Series A Convertible Preferred Stock that

were previously issued, can be exchanged for common stock as well.

February 17, 2021, the Company entered into a securities purchase agreement with funds affiliated with Arena Investors LP (the

“Investors”) pursuant to which we pursuant to which it issued convertible notes in an aggregate principal amount of

$16.5 million for an aggregate purchase price of $15 million (collectively, the “Notes”).

In connection with the issuance

of the Notes, the Company issued to the Investors warrants to purchase an aggregate of 192,073,017 shares of Common Stock (collectively,

the “Warrants”) and 1,000 shares of series F convertible preferred stock (the “Series F Preferred Stock”).

Notes each have a term of thirty-six months and mature on February 17, 2023, unless earlier converted.

The Notes accrue interest

at a rate of 11% per annum, subject to increase to 20% per annum upon and during the occurrence of an event of default.

is payable in cash on a quarterly basis beginning on March 31, 2021.

Notwithstanding the above, at the Company’s election,

any interest payable on an applicable payment date may be paid in registered Common Stock of the Company (rather than cash) in

an amount equal (A) the amount of the interest payment due on such date, divided by (B) an amount equal to 80% of the average

VWAP of the Common Stock for the five (5) days immediately preceding the date of conversion.

Notes are convertible at any time, at the holder’s option, into shares of our common stock equal to the lesser of:

amount determined by dividing (A) $50,000,000, by (B) the total number of shares of preferred stock, Common Stock and Common Stock

Equivalents outstanding on such Conversion Date (assuming full conversion or exercise of all then issued and outstanding securities

of the Company that are exercisable for or convertible into such equity securities of the Company) and (ii) $1.00, subject to

adjustment herein (the “Conversion Price”) , subject to certain beneficial ownership

limitations (with a maximum ownership limit of 9.99%) .

The conversion price is also

subject to adjustment due to certain events, including stock dividends, stock splits and in connection with the issuance by the

Company of common stock or common stock equivalents at an effective price per share lower than the conversion price then in effect .

Notwithstanding the foregoing, at any time during the continuance of any Event of Default, the Conversion Price in effect shall

be equal to 75% of the average VWAP of the Common Stock for the five (5) Trading Days on the Trading Market immediately preceding

the date of conversion (the Alternative Conversion Price”);

provided, however, that the Alternate Conversion Price may not

exceed $0.015 per share, as adjusted pursuant to the terms of the Notes.

The conversion price is also subject to adjustment due

to certain events, including stock dividends, stock splits and in connection with the issuance by the Company of common stock

or common stock equivalents at an effective price per share lower than the conversion price then in effect.

The Notes may not

be redeemed by the Company.

Warrant is exercisable for a period of five years from the date of issuance at an initial exercise price to (i) 125%, times (ii)

the amount determined by dividing (A) $50,000,000, by (B) the total number of shares of preferred stock, Common Stock and Common

Stock Equivalents outstanding on such Conversion Date (assuming full conversion or exercise of all then issued and outstanding

securities of the Company that are exercisable for or convertible into such equity securities of the Company), subject to adjustment

herein , subject to certain beneficial ownership limitations (with a maximum ownership

limit of 9.99%) .

The exercise price is also subject to adjustment due to certain events,

including stock dividends, stock splits and recapitalizations .

Series F Preferred Stock have no voting rights and shall convert into 4.9% of our issued and outstanding shares of common stock

on a fully diluted basis upon Shareholder Approval.

of the Investors have contractually agreed to restrict their ability to exercise the Warrants and convert the Notes such that

the number of shares of the Company common stock held by each of them and their affiliates after such conversion or exercise does

not exceed 9.99% of the Company’s then issued and outstanding shares of common stock.

February 17, 2021, Sovryn, entered into an asset purchase agreement (the “Asset Purchase Agreement”) with NRJ TV II

CA OPCO, LLC, a Delaware limited liability company (“OpCo”) and NRJ TV III CA License Co., LLC, a Delaware limited

liability company (together with OpCo, “Sellers”).

Upon the terms and subject to the satisfaction of the conditions

described in the Asset Purchase Agreement, Sovryn will acquire the licenses and Federal Communications Commission (“FCC”)

authorizations to the KNET-CD and KNLA-CD Class A television stations owned by the Sellers (the “Acquired Stations”),

certain tangible personal property, real property, contracts, intangible property, files, claims and prepaid items together with

certain assumed liablities in connection with the Acquired Stations (the “Asset Sale Transaction”).

As consideration

for the Asset Sale Transaction, Sovryn has agreed to pay the Sellers $10,000,000, $2,000,000 of which was paid to Sellers upon

execution of the Asset Purchase Agreement, as follows:

(i) an escrow deposit of $1,000,000 to be held in escrow pursuant to the

terms of an escrow agreement entered into between Sovryn and the Sellers (the “Escrow Fee”) and (ii) a non-refundable

option fee of $1,000,000 (the “Option Fee”).

closing of the Asset Sale Transaction (the “Closing”) is subject to, among other things, consent by the FCC to the

assignment of the FCC authorizations pertaining to the Acquired Stations, from Sellers to Sovryn (the “FCC Consent”).

The Closing shall occur no more than five (5) business days following the later to occur of (i) the date on which the FCC Consent

has been granted and (ii) the other conditions to the Closing set forth in the Asset Purchase Agreement.

with the closing of the Asset Purchase Agreement, the Board of Directors of the Company appointed Phil Falcone to serve as the

Company’s new Chief Executive Officer and member of the Board of Directors;

Henry Turner was appointed as Chief Technology

Officer and Chief Operating Officer;

and Warren Zenna as a member of the Board of Directors.

Jeffrey Canouse resigned his position

as Chief Executive Officer and was appointed as Chief Compliance Officer and Secretary of the Company and will continue to be

a member of the Board of Directors.

Effective 10 days after mailing to shareholders of a Schedule 14F-1 proposing changes in the

Company’s Board of Directors, Jeffrey Canouse will resign as a director of the Company and Warren Zenna will become a director

of the Company.

Madison Technologies Inc.

Form 10-K - 2019 Page 29

Form 10-K - 2020

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

3 unchanged sentences

Margetson Ltd, Chartered Professional Accountant, 331

905 West Pender Street, Vancouver, BC V6C 1L6, Canada.

East 5 th Street, North Vancouver, BC V7L 1M1, Canada.

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