What changed in this filing

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Item 1A. Risk Factors

2024-01-25 compared with 2022-08-26 · 913 added, 675 removed, 52 unchanged (97% of the section changed)

Risk Factors.

business involves significant risks, some of which are described below.

You should carefully consider the risks and uncertainties described

below, together with all of the other information in this Annual Report on Form 10-K.

The risks and uncertainties described below are

not the only ones we face.

Additional risk and uncertainties that we are unaware of or that we deem immaterial may also become important

factors that adversely affect our business.

The realization of any of these risks and uncertainties could have a material adverse effect

on our reputation, business, financial condition, results of operations, growth and future prospects as well as our ability to accomplish

our strategic objectives.

Our business involves significant risks,

some of which are described below.

You should carefully consider the risks and uncertainties described below, together with all

of the other information in this Annual Report.

The risks and uncertainties described below are not the only ones we face.

risk and uncertainties of which we are unaware or that we deem immaterial may also become important factors that adversely affect

our business.

The realization of any of these risks and uncertainties could have a material adverse effect on our reputation, business,

financial condition, results of operations, growth and future prospects as well as our ability to accomplish our strategic objectives.

In that event, the market price of our Common Stock could decline and you could lose part or all of your investment.

Related to Our Business

have a history of losses.

We have not been profitable historically and may not achieve or maintain profitability in the future.

We have a history of losses, have

not been profitable historically and may not achieve or maintain profitability in the future.

have a history of losses.

Our ability to forecast our future operating results is subject to a number of uncertainties, including our

ability to plan for and model future growth.

We have encountered and will continue to encounter risks and uncertainties frequently experienced

by growing companies in rapidly evolving industries.

If our assumptions regarding these uncertainties, which we use to plan our business,

are incorrect or change in reaction to changes in our markets, or if we do not address these risks successfully, our operating and financial

results could differ materially from expectations, our business could suffer and the trading price of our stock may decline.

have incurred net losses of $14.3 million and $0.9 million for the years ended December 31, 2021 and 2020, respectively.

As of December

31, 2021, we had accumulated deficit of $15.7 million.

are not certain whether or when we will obtain a high enough volume of sales of our products and services to sustain or increase our

growth or achieve or maintain profitability in the future.

We expect our costs to increase in future periods, which could negatively

affect our future operating results if our revenue does not increase.

In particular, we expect to continue to expend substantial financial

and other resources on:

production related to our network operations, including investments in expanding our content and production teams;

Madison Technologies Inc.

Form 10-K - 2021 Page 11

and marketing, including a significant expansion of our sales organization;

expansion of our business into adjacent geographic markets;

administration expenses, including legal and accounting expenses related to being a public company.

investments may not result in increased revenue or growth in our business.

If we are unable to increase our revenue at a rate sufficient

to offset the expected increase in our costs, our business, financial position and results of operations will be harmed, and we may not

be able to achieve or maintain profitability over the long term.

Additionally, we may encounter unforeseen operating expenses, difficulties,

complications, delays and other unknown factors that may result in losses in future periods.

If our revenue growth does not meet our

expectations in future periods, our financial performance may be harmed, and we may not be able to achieve or maintain profitability

Our ability to forecast our future operating results is subject to a number of uncertainties, including

our ability to plan for and model future growth.

We have encountered and will continue to encounter risks and uncertainties frequently

experienced by growing companies in rapidly evolving industries.

If our assumptions regarding these uncertainties, which we use

to plan our business, are incorrect or change in reaction to changes in our markets, or if we do not address these risks successfully,

our operating and financial results could differ materially from expectations, our business could suffer and the trading price

of our stock may decline.

We have incurred net losses of $13.1 million

and $14.3 million for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, we had accumulated deficit

of $28.9 million.

We are not certain whether or when we will

obtain a high enough volume of sales of our products and services to sustain or increase our growth or achieve or maintain profitability

in the future.

incurred debt in connection with our acquisitions of television station assets which could adversely affect our financial condition and

restrict our operating flexibility.

connection with our acquisitions of the Los Angeles Stations, the Houston Station and the Seattle Station completed in 2021, we issued

$16.5 million in convertible notes to Arena Investors LP.

The convertible notes require us to make quarterly interest payments, based

on a fixed 11.0% interest rate interest, of approximately $0.4 million that commenced March 31, 2021 with a pro-rated payment of $0.2

The notes are convertible at any time, at the option of Arena Investors LP, into shares of our Common Stock at a price of $0.02,

subject to adjustment (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 our issuance 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 volume weighted average price of our 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.

We man not redeem the Notes.

The convertible

notes are secured by substantially all of our assets.

convertible notes include negative covenants that restrict our ability to, among other things:

We expect our costs to increase in future periods, which could negatively affect our future operating results if

our revenue does not increase.

In particular, we may, among other things, expend substantial financial and other resources on:

content production

related to BCTV, including investments in expanding our content and production teams;

sales and marketing, including a significant

expansion of our sales organization;

continued expansion of our business into adjacent geographic markets;

re-establishing our business operations after the Change of Control;

general administration expenses, including legal

and accounting expenses related to being a public company.

investments may not result in increased revenue or growth in our business.

If we are unable to increase our revenue at a rate

sufficient to offset the expected increase in our costs, our business, financial position and results of operations will be harmed,

and we may not be able to achieve or maintain profitability over the long term.

Additionally, we may encounter unforeseen operating

expenses, difficulties, complications, delays and other unknown factors that may result in losses in future periods.

If our revenue

growth does not meet our expectations in future periods, our financial performance may be harmed, and we may not be able to achieve

or maintain profitability in the future.

We have incurred debt in connection

with our acquisitions of television station assets, some of which is currently in default, and this has and may continue to materially

and adversely affected our financial condition and could restrict our operating flexibility.

connection with our planned launch of BCTV, we issued promissory and convertible notes that include negative covenants that restrict

our ability to, among other things:

incur additional indebtedness;

liens or other encumbrances on assets;

make loans, guarantees, investments and acquisitions;

create liens or other encumbrances on assets;

make loans, guarantees,

investments and acquisitions;

sell or otherwise dispose of assets;

or permit a change of control;

merge or consolidate with another entity;

make negative pledges;

enter into affiliate transactions;

cash distributions to our stockholders;

and change the nature of our business materially.

amounts under the convertible notes may be accelerated by Arena Investors LP upon the occurrence and continuance of certain events of

default, including without limitation:

payment defaults;

breach of covenants beyond applicable grace periods;

breach of representations

and warranties;

bankruptcy and insolvency defaults;

and the occurrence of a material adverse effect (as defined).

Acceleration is automatic

upon the occurrence of certain bankruptcy and insolvency defaults.

convertible notes and related obligations, including interest payments, covenants and restrictions, could have important consequences,

make cash distributions to our stockholders.

January 2023, outstanding principal amounts under the Notes of not less than $16.5 million were accelerated by Arena in its capacity

as Agent due to the occurrence of certain events of default under the Notes, which ultimately resulted in the Change of Control.

On November 10, 2023, Philip Falcone, individually

and on behalf of Madison and other named defendants, filed a Confession of Judgment affirming that a promissory note (the “Z4

Note”) had been issued by the Company, dated December 28, 2021, by Z4 Mgmt.

LLC (“Z4”), which was guaranteed

by each of FFO1 and FFO2.

The Z4 Note was initially payable on February 15, 2022, and had an original principal balance of $500,000

with an interest rate of 12% per annum.

The Z4 Note’s expiration date was extended to July 5, 2022, then further extended

to March 31, 2023, and as of October 1, 2023, the revised principal balance, along with interest accrued, totaled $581,304.

such date, Z4 filed an Affidavit of Default affirming that the Z4 Note was in default and requesting a judgment in the amount of

$581,304 against the Company, FFO1, FFO2, and Mr.

Falcone personally, in favor of Z4.

On December 5, 2023, a judgement in favor

Z4 in the sum of $581,304 was rendered against us, Mr.

Falcone, FFO1 and FFO2.

addition to the defaults described above, as of the date of this Annual Report, and since the last day of the year ended December

31, 2022, we are in default under a certain loans payable for failure to pay principal and accrued interest on such loans, with

an aggregate of approximately $3.5 million and $3.0 million of principal, accrued interest and late fees, as of such date and

as of December 31, 2022, respectively.

We have not yet made principal and interest payments on such notes when due and as a result,

under terms of the notes, the interest rate is as much as 22% per annum.

As a result of the Change of Control, we intend to strategize

with the holders of such notes to extend, modify or otherwise revisit the terms of such indebtedness in order to resolve such

outstanding defaults.

Such convertible notes

and related obligations, including interest payments, covenants and restrictions, had and could have in the future important consequences,

including the following:

cash in order to satisfy the obligations relating to the convertible notes could adversely

affect the amount or timing of investments to grow our business, impairing our ability to

invest in and successfully grow our business;

convertible notes could limit our ability to obtain additional financing on satisfactory

terms to fund our working capital requirements, capital expenditures, acquisitions, debt

obligations and other general corporate requirements;

Madison Technologies Inc.

Form 10-K - 2021 Page 12

convertible notes may increase our vulnerability to general economic downturns, competition

and industry conditions and we may be unable to take advantage of opportunities that our

leverage prevents us from exploiting, placing us at a disadvantage to our competitors that

are less leveraged;

convertible notes impose restrictions on the manner in which we conduct our business, including

restrictions on our ability to pay dividends, incur additional debt and sell assets.

obligations under the convertible notes could have an adverse effect on our business, financial condition, operating results or cash

In addition, our failure to comply with the covenants under the convertible notes could result in an event of default and acceleration

of the outstanding balance, which could significantly harm our business and cause our stock price to decline.

We have not yet made the

$0.4 million interest payments that were due on April 1, 2022 and July 1, 2022, and as a result, under terms of the convertible notes,

the interest rate is 20.0% per annum.

We are currently in discussions with our lender, Arena Capital LP, on a plan of forbearance;

there is no assurance that we will be successful in completion of a plan, which may disrupt our operations and result in a restructuring

of obligations.

broadcast facilities are vulnerable to disruption due to natural or other disasters, strikes and other events beyond our control.

major earthquake, fire, tsunami, hurricane, cyclone, or other disaster, such as a major flood, seasonal storms, nuclear event, or terrorist

attack affecting our facilities or the areas in which we are located, or affecting those of our customers or third-party manufacturers

or suppliers, could significantly disrupt our or their operations and delay or prevent product shipment or installation during the time

required to repair, rebuild or replace our or their damaged manufacturing facilities.

These delays could be lengthy and costly.

third-party contract manufacturer’s, suppliers’ or customers’ facilities are negatively impacted by such a disaster,

production, shipment, and installation of our products could be delayed, which can impact the period in which it recognizes the revenue

related to that product sale.

Additionally, customers may delay purchases of our products until operations return to normal.

we can respond quickly to a disaster, the continued effects of the disaster could create uncertainty in our business operations.

concerns about terrorism, the effects of a terrorist attack, political turmoil, labor strikes, war, including the developing conflict

between Russia and Ukraine, or the outbreak of epidemic diseases (including the on-going COVID-19 pandemic) could have a negative effect

on our operations and sales.

we are unable to acquire new customers, our future revenues and operating results will be harmed.

Likewise, potential customer turnover

in the future, or costs we incur to retain our existing customers, could materially and adversely affect our financial performance.

success depends on our ability to acquire new customers in new and existing vertical markets, and in new and existing geographic markets.

If we are unable to attract a sufficient number of new customers, we may be unable to generate revenue growth at desired rates.

solutions market is competitive and many of our competitors have substantial financial, personnel and other resources that they utilize

to develop solutions and attract customers.

As a result, it may be difficult for us to add new customers to our customer base.

in the marketplace may also lead us to win fewer new customers or result in us providing discounts and other commercial incentives.

factors that impact our ability to acquire new customers include the perceived need for AI-based weapons detection for security solutions,

the size of our prospective customers’ security budgets, the utility and efficacy of our existing and new products, whether proven

or perceived, and general economic conditions.

reserving cash in order to satisfy the obligations relating to such notes could adversely affect the amount or timing of investments to grow our business, impairing our ability to invest in and successfully grow our business;

limit our ability to obtain additional financing on satisfactory terms to fund our working capital requirements, capital expenditures, acquisitions, debt obligations and other general corporate requirements;

result in foreclosure of certain pledged assets pursuant to such notes;

increase our vulnerability to general economic downturns, competition and industry conditions and we may be unable to take advantage of opportunities that our leverage prevents us from exploiting, placing us at a disadvantage to our competitors that are less leveraged;

impose restrictions on the manner in which we conduct our business, including restrictions on our ability to pay dividends, incur additional debt and sell assets.

The obligations under

such promissory and convertible notes could have a material adverse effect on our business, financial condition, operating results

or cash flows.

In addition, our failure to comply with the covenants under such convertible notes could result in an event of default

and acceleration of the outstanding balance, which could significantly harm our business and cause our stock price to decline.

Our products may never achieve market

Our ability to generate revenues from sales

of our products and services and to achieve profitability will depend upon our ability to successfully commercialize such products

and services.

Because we have not yet begun to offer any of our products or services for sale, we have no basis to predict whether

any of our products or services will achieve market acceptance.

A number of factors may limit the market acceptance of any of our

products or services, including:

the competitive features of our products and services, including price, as compared to other similar products and services;

the extent and success of our marketing efforts and those of our collaborators;

unfavorable publicity concerning our products or similar products;

the timing of regulatory approvals of our products or services and market entry compared to competitive products.

If we are unable

to attract viewers or acquire customers, our future revenues and operating results will be harmed.

Likewise, potential customer

turnover in the future, or costs we incur to retain our existing customers, could materially and adversely affect our financial

Our success depends

on our ability to acquire new customers in new and existing vertical markets, and in new and existing geographic markets.

are unable to attract a sufficient number of new customers, we may be unable to generate revenue growth at desired rates.

in which we now and may in the future operate are competitive and many of our competitors have substantial financial, personnel

and other resources that they utilize to develop solutions and attract viewers and customers.

As a result, it may be difficult

for us to add new viewers and customers to our base.

Competition in the marketplace may also lead us to attract fewer new viewers

and customers or result in us providing discounts and other commercial incentives.

Additional factors that impact our ability to

acquire new viewers or customers include keeping pace with technological developments, including with respect to production and

programming capabilities, network and information systems and the utility of our OTA Platform, as well as general economic conditions.

These factors may have a meaningful negative impact on future revenues and operating results.

we are unable to sell additional services to our customers and maintain and grow our customer retention rates, our future revenue and

operating results will be harmed.

future success depends, in part, on our ability to expand the deployment of our services with existing customers by selling them additional

This may require increasingly sophisticated and costly sales efforts and may not result in additional sales.

In addition, the

rate at which our customers purchase additional services depends on a number of factors, including the perceived need for additional

TV entertainment, information and other content as well as general economic conditions.

If our efforts to sell additional services to

our customers are not successful, our business may suffer.

Madison Technologies Inc.

Form 10-K - 2021 Page 13

business model is predicated, in part, on building a customer base that will generate a recurring stream of revenues.

If that recurring

stream of revenues does not develop as expected, or if our business model changes as the industry evolves, our operating results may

be adversely affected.

business model is dependent, in part, on our ability to maintain and increase distribution to generate recurring revenues.

future customers may not utilize our television broadcast assets at the same rate at which customers currently do.

If our current and

future customers reduce their utilization, our recurring revenue stream relative to our total revenues would be reduced and our operating

results would be adversely affected.

economic conditions make it difficult to predict revenue for a particular period, and a shortfall in revenue may harm our operating results.

If we are unable

to sell services to our customers and grow our customer retention rates, our future revenue and operating results may be harmed.

Our future success depends,

in part, on our ability to deploy our services to viewers and other customers.

This may require increasingly sophisticated and

costly sales efforts and may not result in any sales.

In addition, the rate at which our customers purchase our services may depends

on a number of factors, including the perceived need for additional TV entertainment, information and other content as well as

general economic conditions.

If our efforts to sell our services to such viewers and customers are not successful, our business

Our business model

is predicated, in part, on building a customer base that will generate a recurring stream of revenue.

If such revenue stream does

not develop as expected, or if our business model changes as the broadcasting industry evolves, our operating results may be adversely

Our business model

is dependent, in part, on our ability to maintain and increase distribution to generate recurring revenues.

Our customers may

not utilize our television broadcast assets at the same rate at which we intend them to do currently.

If our customers are to

reduce their utilization, our recurring revenue stream relative to our total revenues would be reduced and our operating results

would be adversely affected.

economic conditions make it difficult to predict revenue for a particular period, and a shortfall in revenue may harm our operating

revenue depends significantly on general economic conditions.

Economic weakness and customer financial difficulties may result in decreased

revenue and earnings.

Such factors could make it difficult to accurately forecast our sales and operating results and could negatively

affect our ability to provide accurate forecasts of our costs and expenses.

General economic weakness may also lead to longer collection

cycles for payments due from our customers, an increase in customer bad debt, restructuring initiatives and associated expenses and impairment

of investments.

Economic weakness and customer financial difficulties may result

in decreased revenue and earnings.

Such factors could make it difficult to accurately forecast our sales and operating results

and could negatively affect our ability to provide accurate forecasts of our costs and expenses.

General economic weakness may

also lead to longer collection cycles for payments due from our customers, an increase in customer bad debt, restructuring initiatives

and associated expenses and impairment of investments.

about future economic conditions also makes it difficult to forecast operating results and to make decisions about future investments.

Future or continued economic weakness for us or our customers, failure of our customers and markets to recover from such weakness and

customer financial difficulties could have a material adverse effect on demand, and consequently on our business, financial condition

and results of operations.

brand, reputation and ability to attract, retain, and serve our customers are dependent in part upon the reliable performance of our

products and infrastructure.

brand, reputation and ability to attract, retain, and serve our customers are dependent in part upon the reliable performance of, and

the ability of our existing customers and new customers to access and use our television broadcast assets.

We have experienced, and may

in the future experience, disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes,

equipment failure, human or software errors, capacity constraints, and fraud or cybersecurity attacks.

In some instances, we may not

be able to identify the cause or causes of these performance problems within an acceptable period of time.

Future or continued economic weakness for us or our customers, failure of our customers and markets to recover from such weakness

and customer financial difficulties could have a material adverse effect on demand, and consequently on our business, financial

condition and results of operations.

Our brand, reputation

and ability to attract, retain, and serve our customers will be dependent in part upon the reliable performance of our products

and infrastructure.

Our brand, reputation

and ability to attract, retain, and serve our customers will be dependent in part upon the reliable performance of, and the ability

of our customers to access and use our television broadcast assets.

We may in the future experience disruptions, outages and other

performance problems due to a variety of factors, including infrastructure changes, equipment failure, human or software errors,

capacity constraints, and fraud or cybersecurity attacks.

In some instances, we may not be able to identify the cause or causes

of these performance problems within an acceptable period of time.

Interruptions

in our systems or the third-party systems on which we rely, whether due to system failures, computer viruses, physical or electronic

break-ins, or other factors, could affect the security or availability of our television broadcast assets, network infrastructure, cloud

infrastructure and website.

break-ins, or other factors, could affect the security or availability of our television broadcast assets, network infrastructure,

cloud infrastructure and website.

with the reliability or security of our systems could harm our reputation.

Damage to our reputation and the cost of remedying these problems

could negatively affect our business, financial condition and operating results.

disruptions or other performance problems with our television broadcast assets could harm our reputation and business and may damage

our customers’ businesses.

Interruptions in our service delivery might reduce our revenue, cause us to issue credits to customers,

subject us to potential liability and cause customers not to renew their subscription purchases of our products.

we are not able to maintain and enhance our brand or reputation as an industry leader, our business and operating results may be adversely

believe that maintaining and enhancing our reputation as the leader in next-generation television is critical to our relationship with

our existing end-user customers and our ability to attract new customers and reseller partners.

The successful promotion of our brand

will depend on multiple factors, including our marketing efforts, our ability to continue to deliver a superior customer experience and

develop high-quality features and our ability to successfully differentiate our broadcast services from those of our competitors.

brand promotion activities may not be successful or yield increased revenue.

The promotion of our brand requires us to make substantial

expenditures, and we anticipate that the expenditures will increase as our market becomes more competitive, as we expand into new geographies

Damage to our reputation and the cost of remedying

these problems could negatively affect our business, financial condition and operating results.

Any disruptions or other

performance problems with our television broadcast assets could harm our reputation and business and may damage our customers’

Interruptions in our service delivery might reduce our revenue, cause us to issue credits to customers, subject us

to potential liability and cause customers not to renew any subscriptions that we may offer.

If we are not

able to position our brand or reputation as an industry leader, our business and operating results may be adversely affected.

We believe that if we

position ourselves as the leader in next-generation television, it will help build relationships with our end-user customers and

our ability to attract customers and reseller partners.

The successful promotion of our brand will depend on multiple factors,

including our marketing efforts, our ability to continue to deliver a superior customer experience and develop high-quality features

and our ability to successfully differentiate our broadcast services from those of our competitors.

Our brand promotion activities

may not be successful or yield increased revenue.

The promotion of our brand requires us to make substantial expenditures, and

we anticipate that the expenditures will increase as our market becomes more competitive, and as we expand into new geographies

and vertical markets.

1 unchanged sentence

this revenue may not offset the increased expenses

If we do not successfully maintain and enhance our brand and reputation, our business and operating results may be adversely

Madison Technologies Inc.

Form 10-K - 2021 Page 14

are dependent on the continued services and performance of our senior management and other key employees, as well as on our ability to

successfully hire, train, manage and retain qualified personnel, especially those in sales and marketing and research and development.

future performance depends on the continued services and contributions of our senior management, particularly Philip Falcone, our President

and Chief Executive Officer, and other key employees to execute on our business plan and to identify and pursue new opportunities and

product innovations.

We do not maintain key man insurance for any of our executive officers or key employees.

From time to time, there

may be changes in our senior management team resulting from the termination or departure of our executive officers and key employees.

Our senior management and key employees are generally employed on an at-will basis, which means that they could terminate their employment

with us at any time.

The loss of the services of our senior management, particularly Mr.

other key employees for any reason could significantly delay or prevent our development or the achievement of our strategic objectives

and harm our business, financial condition and results of operations.

ability to successfully pursue our growth strategy will also depend on our ability to attract, motivate and retain our personnel, especially

those in sales and marketing and research and development.

We face escalating compensation demands from new and prospective employees,

as well as intense competition for these employees from numerous technology, software and other companies, especially in certain geographic

areas in which we operate, and we cannot ensure that we will be able to attract, motivate and/or retain additional qualified employees

in the future.

If we are unable to attract new employees and retain our current employees, we may not be able to adequately develop and

maintain new products, or market our existing products at the same levels as our competitors and it may, therefore, lose customers and

market share.

Our failure to attract and retain personnel, especially those in sales and marketing and engineering positions could have

an adverse effect on our ability to execute our business objectives and, as a result, our ability to compete could decrease, our operating

If we do not successfully position our brand and reputation as an industry leader, our business and operating results

may be adversely affected.

We are dependent

on the continued services and performance of Thomas Amon and other key employees we intend to hire in the future, as well as on

our ability to successfully hire, train, manage and retain qualified personnel.

Our future performance

depends on the continued services and contributions of Thomas Amon, our President, Chief Executive Officer and Chief Financial

Officer, to execute on our business plan and to identify and pursue new opportunities and product innovations.

We do not maintain

key man insurance for Mr.

From time to time, there may be changes in our senior management team resulting from the termination

or departure of executive officers and key employees.

We currently intend for our senior management and key employees to be generally

employed on an at-will basis, which means that they could terminate their employment with us at any time.

The loss of the services

Amon, or any other future key employees, for any reason could significantly delay or prevent our development or the achievement

of our strategic objectives and harm our business, financial condition and results of operations.

Our ability to successfully

pursue our growth strategy will also depend on our ability to attract, motivate and retain personnel.

We expect to face escalating

compensation demands from new and prospective employees, as well as intense competition for these employees from numerous technology,

software and other companies, especially in certain geographic areas in which we intend to operate, and we cannot ensure that we

will be able to attract, motivate and/or retain additional qualified employees in the future.

If we are unable to attract new employees

or retain Mr.

Amon, we may not be able to adequately develop, market and maintain new products or services at the same levels as

our competitors and may, therefore, lose customers and market share.

Our failure to attract and retain personnel could have an

adverse effect on our ability to execute our business objectives and, as a result, our ability to compete could decrease, our operating

results could suffer and our revenue could decrease.

Even if we are able to identify and recruit a sufficient number of new hires, these

new hires will require significant training before they achieve full productivity and they may not become productive as quickly as we

would like, or at all.

we cannot maintain our company culture as it grows, we could lose the innovation, teamwork, passion and focus on execution that we believe

contributes to our success and as a result, our business may be harmed.

believe that a critical component to our success has been our mission-driven company culture based on our shared commitment to make television

accessible to younger consumers, which we believe fosters innovation, teamwork, passion for customers and focus on execution, and facilitates

Even if we are able to identify and recruit a sufficient number of new hires,

these new hires will require significant training before they achieve full productivity and they may not become productive as quickly

as we would like, or at all.

If we cannot maintain

our Company’s culture as it grows, we could lose the innovation, teamwork, passion and focus on execution that we believe

contributes to a successful business and as a result, our business may be harmed.

We believe that a critical

component to a successful business is mission-driven company culture based on a shared commitment to make television accessible

to younger consumers, which we believe fosters innovation, teamwork, passion for customers, a focus on execution, and facilitates

critical knowledge transfer, knowledge sharing and professional growth.

We have invested substantial time and resources in building our

team within this company culture.

Any failure to preserve our culture could negatively affect our ability to retain and recruit personnel

and to effectively focus on and pursue our corporate objectives.

As we grow and develop the infrastructure of a public company, we may

find it difficult to maintain these important aspects of our company culture.

If we fail to maintain our company culture, our business

may be adversely impacted.

may acquire or invest in other companies or technologies in the future, which could divert management’s attention, fail to meet

our expectations, result in additional dilution to our stockholders, increase expenses, disrupt our operations or otherwise harm our

operating results.

may in the future acquire or invest in, businesses, television broadcast assets or technologies that we believe could complement or expand

our platform, enhance our technical capabilities or otherwise offer growth opportunities.

We may not be able to fully realize the anticipated

benefits of any future acquisitions or anticipated benefits may not transpire.

The pursuit of potential acquisitions may divert the attention

of management and cause us to incur various expenses related to identifying, investigating and pursuing suitable acquisitions, whether

or not they are consummated.

Madison Technologies Inc.

Form 10-K - 2021 Page 15

Any failure to preserve such culture could negatively affect

our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives.

As we grow and develop

the Company’s infrastructure, we may find it increasingly difficult to maintain these important aspects.

If we fail to do

so, our business may be adversely impacted.

we are unable to compete effectively with new entrants and other potential competitors, our sales and profitability could be adversely

The sales prices for

our products and services may decline for a variety of reasons, including competitive pricing pressures, discounts, a change in

our mix of products and services, anticipation of the introduction of new products or promotional programs.

Competition continues

to increase in the market segments in which we may participate, and we expect competition to further increase in the future, thereby

leading to increased pricing pressures.

Larger competitors with more diverse product and service offerings may reduce the price

of products that compete with theirs or may bundle them with other products and services.

Additionally, currency fluctuations in

certain countries and regions may negatively impact prices that partners and customers are willing to pay in those countries and

We cannot be certain that we will be successful in developing and introducing products with enhanced functionality on

a timely basis, or that our product offerings, if introduced, will enable us to maintain our prices and gross profits at levels

that will allow us to maintain positive gross margins and achieve profitability.

may acquire or invest in other companies or technologies in the future, which could divert management’s attention, fail

to meet our expectations, result in additional dilution to our stockholders, increase expenses, disrupt our operations or otherwise

harm our operating results.

We may in the future

acquire or invest in, businesses, television broadcast assets or other assets or technologies that we believe could complement

or expand our business, enhance our capabilities or otherwise offer growth opportunities.

We may not be able to fully realize the

anticipated benefits of any future acquisitions or anticipated benefits may not transpire.

The pursuit of potential acquisitions

may divert the attention of management and cause us to incur various expenses related to identifying, investigating and pursuing

suitable acquisitions, whether or not they are consummated.

are inherent risks in integrating and managing acquisitions.

If we acquire additional businesses, we may not be able to assimilate or

integrate the acquired personnel, operations, products, services and technologies successfully or effectively manage the combined business

following the acquisition and our management may be distracted from operating our business.

We also may not achieve the anticipated benefits

from the acquired business due to a number of factors, including, without limitation:

unanticipated

costs or liabilities associated with the acquisition;

of acquisition-related costs, which would be recognized as a current period expense;

to generate sufficient revenue to offset acquisition or investment costs;

to maintain relationships with customers and partners of the acquired business;

of incorporating acquired technology and rights into our platform and of maintaining quality and security standards consistent with

in customer purchases due to uncertainty related to any acquisition;

potential loss of key employees;

of resources that are needed in other parts of our business and diversion of management and employee resources;

to recognize acquired deferred revenue in accordance with our revenue recognition policies;

of substantial portions of our available cash and equity or the incurrence of debt to consummate the acquisition.

If we acquire additional businesses, we may not be able to assimilate

or integrate the acquired personnel, operations, products, services and technologies successfully or effectively manage the combined

business following the acquisition and our management may be distracted from operating our business.

We also may not achieve the

anticipated benefits from the acquired business due to a number of factors, including, without limitation:

unanticipated costs or liabilities associated

with the acquisition;

incurrence of acquisition-related costs, which

would be recognized as a current period expense;

inability to generate sufficient revenue to

offset acquisition or investment costs;

inability to maintain relationships with customers

and partners of the acquired business;

difficulty of incorporating acquired technology and rights into our operations and of maintaining quality

and security standards consistent with our intended brands;

delays in customer purchases due to uncertainty

related to any acquisition;

the potential loss of key employees;

use of resources

that are needed in other parts of our business and diversion of management and employee resources;

inability to recognize acquired deferred revenue

in accordance with our revenue recognition policies;

use of substantial portions of our available

cash and equity or the incurrence of debt to consummate the acquisition.

also increase the risk of unforeseen legal liability, including for potential shareholder suits or potential violations of applicable

law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered

by due diligence during the acquisition process or new regulatory restrictions at the federal, state, or local levels.

Generally, if

an acquired business fails to meet our expectations, our operating results, business and financial condition may suffer.

could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect our business, results

of operations and financial condition.

addition, a significant portion of the purchase price of companies it acquires may be allocated to goodwill and other intangible assets,

which must be assessed for impairment at least annually.

law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not

discovered by due diligence during the acquisition process or new regulatory restrictions at the federal, state, or local levels.

Generally, if an acquired business fails to meet our expectations, our operating results, business and financial condition may

Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely

affect our business, results of operations and financial condition.

In addition, a significant

portion of the purchase price of companies we may acquire may be allocated to goodwill and other intangible assets, which must

be assessed for impairment at least annually.

If our acquisitions do not ultimately yield expected returns, we may be required

to take charges to our operating results based on our impairment assessment process, which could harm our results of operations.

we are unable to compete effectively with new entrants and other potential competitors, our sales and profitability could be adversely

sales prices for our products and services may decline for a variety of reasons, including competitive pricing pressures, discounts,

a change in our mix of products and services, anticipation of the introduction of new products or promotional programs.

Competition continues

to increase in the market segments in which we participate, and we expect competition to further increase in the future, thereby leading

to increased pricing pressures.

Larger competitors with more diverse product and service offerings may reduce the price of products that

compete with theirs or may bundle them with other products and services.

Additionally, currency fluctuations in certain countries and

regions may negatively impact prices that partners and customers are willing to pay in those countries and regions.

We cannot be certain

that we will be successful in developing and introducing new products with enhanced functionality on a timely basis, or that our new

product offerings, if introduced, will enable it to maintain our prices and gross profits at levels that will allow us to maintain positive

gross margins and achieve profitability.

Madison Technologies Inc.

Form 10-K - 2021 Page 16

our services may collect and store viewer and related information, domestic and international privacy and cyber security concerns, and

other laws and regulations, could result in additional costs and liabilities to us or inhibit sales of our products.

may be affected by cyber-attacks and other means of gaining unauthorized access to our products, systems, and data.

Because our services

may collect and store viewer and related information, domestic and international privacy and cyber security concerns, and other

laws and regulations, could result in additional costs and liabilities to us or inhibit sales of our products or services.

We may be affected by

cyber-attacks and other means of gaining unauthorized access to our products, services, systems, and data.

For instance, cyber

criminals or insiders may target us or third parties with which we have business relationships to obtain data, or in a manner that disrupts

our operations or compromises our products or the systems into which our products are integrated.

The evolution of technology systems

introduces ever more complex security risks that are difficult to predict and defend against.

An increasing number of companies, including

those with significant online operations, have recently disclosed breaches of their security, some of which involved sophisticated tactics

and techniques allegedly attributable to criminal enterprises or nation-state actors.

While we take measures to protect the security

of personal information, it is possible that our security controls over personal information and other practices we follow may not prevent

the unauthorized access to, or the unintended release of, personal information.

In addition, we do not know whether our current practices

will be deemed sufficient under applicable laws or whether new regulatory requirements might make our current practices insufficient.

If there is a breach of our computer systems and we know or suspect that certain personal information has been accessed, or used inappropriately,

we may need to inform the affected individual and may be subject to significant fines and penalties.

In the event of a breach we could

face government scrutiny or consumer class actions.

criminals or insiders may target us or third parties with which we have business relationships to obtain data, or in a manner that

disrupts our operations or compromises our products or the systems into which our products are integrated.

The evolution of technology

systems introduces ever more complex security risks that are difficult to predict and defend against.

An increasing number of companies,

including those with significant online operations, have recently disclosed breaches of their security, some of which involved

sophisticated tactics and techniques allegedly attributable to criminal enterprises or nation-state actors.

While we take measures

to protect the security of personal information, it is possible that our security controls over personal information and other

practices we follow may not prevent the unauthorized access to, or the unintended release of, personal information.

we do not know whether our current practices will be deemed sufficient under applicable laws or whether new regulatory requirements

might make our current practices insufficient.

If there is a breach of our computer systems and we know or suspect that certain

personal information has been accessed, or used inappropriately, we may need to inform the affected individual and may be subject

to significant fines and penalties.

In the event of a breach, we could face government scrutiny or consumer class actions.

Cybersecurity incidents

directed at us or third-parties with whom we have relationships can range from uncoordinated individual attempts to gain unauthorized

access to information technology systems to sophisticated and targeted measures known as advanced persistent threats.

Cybersecurity

incidents directed at us or our third-party vendors can range from uncoordinated individual attempts to gain unauthorized access to information

technology systems to sophisticated and targeted measures known as advanced persistent threats.

Cybersecurity incidents are also constantly

evolving, increasing the difficulty of detecting and successfully defending against them.

In the ordinary course of our business, we

and our third-party vendors collect and store personal information, as well as our proprietary business information and intellectual

property and that of our customers and employees.

Additionally, we rely on third-parties and their security procedures for the secure

storage, processing, maintenance, and transmission of information that is critical to our operations.

Despite measures designed to prevent,

detect, address, and mitigate cybersecurity incidents, such incidents may occur to us or our third-party providers and, depending on

their nature and scope, could potentially result in the misappropriation, destruction, corruption or unavailability of critical data

and confidential or proprietary information (our own or that of third parties, including personal information of our customers and employees)

and the disruption of business operations.

We have experienced and expect to continue to experience attempted routine cyber-attacks of

our information technology networks, such as through phishing scams and ransomware.

Although none of these actual or attempted cyber-attacks

has had a material adverse impact on our operations or financial condition, we cannot guarantee that any such incidents will not have

such an impact in the future.

For example, we are at risk for interruptions, outages and breaches of:

operational systems, including

business, financial, accounting, product development, data processing or production processes, owned by us or our third-party vendors

or suppliers;

facility security systems, owned by us or our third-party vendors or suppliers;

in-product technology owned by us or our

third-party vendors or suppliers;

the integrated software in our solutions;

or customer or other data that we process or our third-party

vendors or suppliers process on our behalf.

Such cyber incidents could materially disrupt operational systems;

result in loss of intellectual

property, trade secrets or other proprietary or competitively sensitive information;

compromise certain information of customers, employees,

suppliers, or others;

jeopardize the security of our facilities;

or affect the performance of in-product technology and the integrated

software in our solutions.

cyber incident could be caused by disasters, insiders (through inadvertence or with malicious intent) or malicious third parties (including

nation-states or nation-state supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption and other security

defenses, including hacking, fraud, trickery or other forms of deception.

The techniques used by cyber attackers change frequently and

may be difficult to detect for long periods of time.

Although we maintain information technology measures designed to protect us against

intellectual property theft, data breaches and other cyber incidents, such measures will require updates and improvements, and we cannot

guarantee that such measures will be adequate to detect, prevent or mitigate cyber incidents.

actual or alleged security breaches or alleged violations of federal or state laws or regulations relating to privacy and data security

could result in mandated user notifications, litigation, government investigations, significant fines, and expenditures;

incidents are also constantly evolving, increasing the difficulty of detecting and successfully defending against them.

ordinary course of our business, we and such third-parties expect to collect and store personal information, as well as our proprietary

business information and intellectual property and that of our customers and employees.

Additionally, we expect to rely on third

parties and their security procedures for the secure storage, processing, maintenance, and transmission of information that is

critical to our operations.

Despite measures designed to prevent, detect, address, and mitigate cybersecurity incidents, such incidents

may occur to us or our third-party providers and, depending on their nature and scope, could potentially result in the misappropriation,

destruction, corruption or unavailability of critical data and confidential or proprietary information (our own or that of third

parties, including personal information of our customers and employees) and the disruption of business operations.

experience attempted routine cyber-attacks of our information technology networks, such as through phishing scams and ransomware.

Although we do not except any of these actual or attempted cyber-attacks to have a material adverse impact on our operations or

financial condition, we cannot guarantee that any such incidents will not have such an impact in the future.

For example, we may

be at higher risk for interruptions, outages and breaches of:

operational systems, including business, financial, accounting, product

development, data processing or production processes owned by us or such third-parties;

facility security systems, owned by us

or such third-parties;

in-product technology owned by us or such third-parties;

any integrated software in our solutions;

or other data that we process or such third-parties process on our behalf.

Such cyber incidents could materially disrupt operational

result in loss of intellectual property, trade secrets or other proprietary or competitively sensitive information;

certain information of customers, employees, suppliers, or others;

jeopardize the security of any of our facilities or equipment;

or affect the performance of in-product technology and any integrated software in our solutions.

cyber incident could be caused by disasters, insiders (through inadvertence or with malicious intent) or malicious third parties

(including nation-states or nation-state supported actors) using sophisticated, targeted methods to circumvent firewalls, encryption

and other security defenses, including hacking, fraud, trickery or other forms of deception.

The techniques used by cyber attackers

change frequently and may be difficult to detect for long periods of time.

Although we maintain information technology measures

designed to protect us against intellectual property theft, data breaches and other cyber incidents, such measures will require

updates and improvements, and we cannot guarantee that such measures will be adequate to detect, prevent or mitigate cyber incidents.

Any actual or alleged

security breaches or alleged violations of federal or state laws or regulations relating to privacy and data security could result

in mandated user notifications, litigation, government investigations, significant fines, and expenditures;

divert management’s

attention from operations;

deterring people from using our platform;

deterring people from using our products or services;

damage our brand and reputation;

and a materially adversely affect

our business, results of operations, and financial condition.

Defending against claims or litigation based on any security breach or

incident, regardless of their merit, will be costly and may cause reputation harm.

In addition, we may incur significant costs for remediation

that may include liability for stolen assets or information, repair of system damage, and compensation to customers, employees, and business

The successful assertion of one or more large claims against us that exceed available insurance coverage, denial of coverage

as to any specific claim, or any change or cessation in our insurance policies and coverages, including premium increases or the imposition

of large deductible requirements, could have a material adverse effect on our business, results of operations, and financial condition.

Madison Technologies Inc.

Form 10-K - 2021 Page 17

are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information

security, and our actual or perceived failure to comply with such obligations could harm our business.

and our customers are subject to a number of domestic and international laws and regulations that apply to cloud services and the internet

These laws, rules and regulations address a range of issues including data privacy and cyber security, breach notification

and restrictions or technological requirements regarding the collection, processing, use, storage, protection, disclosure, retention

or transfer of data.

and materially

adversely affect our business, results of operations, and financial condition.

Defending against claims or litigation based on

any security breach or incident, regardless of their merit, will be costly and may cause reputation harm.

In addition, we may incur

significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation

to customers, employees, and business partners.

The successful assertion of one or more large claims against us that exceed available

insurance coverage, denial of coverage as to any specific claim, or any change or cessation in our insurance policies and coverages,

including premium increases or the imposition of large deductible requirements, could have a material adverse effect on our business,

results of operations, and financial condition.

We may be subject

to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security,

and our actual or perceived failure to comply with such obligations could harm our business.

We may be subject to

a number of domestic and international laws and regulations that apply to cloud services and the internet generally.

rules and regulations address a range of issues, including data privacy and cyber security, breach notification and restrictions

or technological requirements regarding the collection, processing, use, storage, protection, disclosure, retention or transfer

The regulatory framework for online services, data privacy and cyber security issues worldwide can vary substantially

from jurisdiction to jurisdiction, is rapidly evolving and is likely to remain uncertain for the foreseeable future.

Many federal, state,

local and foreign government bodies and agencies have adopted or are considering adopting laws, rules and regulations regarding the collection,

processing, use, storage and disclosure of information, web browsing and geolocation data collection, data analytics, facial recognition,

cyber security and breach response and notification procedures.

Furthermore, existing laws and regulations are constantly evolving, and

new laws and regulations that apply to our business are being introduced at every level of government in the United States, as well as

internationally.

As we seek to expand our business, we are, and may increasingly become subject to various laws, regulations, and standards,

and may be subject to contractual obligations relating to data privacy and security in the jurisdictions in which we operate.

Any significant

change to applicable laws, regulations or industry practices regarding the use or disclosure of personal information, or regarding the

manner in which the express or implied consent of customers for the use and disclosure of personal information is obtained, could require

us to modify our products and features, possibly in a material manner and subject to increased compliance costs, which may limit our

ability to develop new products and features that make use of the personal information that our customers voluntarily share.

or perceived failure, by us to comply with any federal or state privacy or security laws, regulations, industry self-regulatory principles,

or codes of conduct, regulatory guidance, orders to which we may be subject, or other legal obligations relating to data privacy or security

could adversely affect our reputation, brand and business, and may result in claims, liabilities, proceedings or actions against us by

governmental entities, customers or others.

Any such claims, proceedings or actions could hurt our reputation, brand and business, force

us to incur significant expenses in defense of such proceedings or actions, distract our management, increase our costs of doing business,

result in a loss of customers and result in the imposition of monetary penalties.

the United States, there are numerous federal and state data privacy and security laws, rules, and regulations governing the collection,

use, disclosure, retention, security, transfer, storage, and other processing of personal data, including federal and state data privacy

laws, data breach notification laws, and consumer protection laws.

For example, the FTC and many state attorneys general are interpreting

federal and state consumer protection laws to impose standards for the online collection, use, dissemination, and security of data.

standards require us to publish statements that describe how we handle personal data and choices individuals may have about the way we

handle their personal data.

If such information that we publish is considered untrue or inaccurate, we may be subject to government claims

of unfair or deceptive trade practices, which could lead to significant liabilities and consequences.

Moreover, according to the FTC,

violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal data secure may constitute

unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

State consumer protection

laws provide similar causes of action for unfair or deceptive practices.

addition, many state legislatures have adopted legislation that regulates how businesses operate online, including measures relating

to privacy, data security, and data breaches.

Such legislation includes the California Consumer Privacy Act (“CCPA”), which

came into effect in 2020, increases privacy rights for California consumers and imposes obligations on companies that process their personal

Among other things, the CCPA gives California consumers expanded rights related to their personal information, including

the right to access and delete their personal information and receive detailed information about how their personal information is used

The CCPA also provides California consumers the right to opt-out of certain sales of personal information and may restrict

the use of cookies and similar technologies for advertising purposes.

The CCPA prohibits discrimination against individuals who exercise

their privacy rights, and provides for civil penalties for violations enforceable by the California Attorney General as well as a private

right of action for certain data breaches that result in the loss of personal information.

This private right of action is expected to

increase the likelihood of, and risks associated with, data breach litigation.

Many of the CCPA’s requirements as applied to personal

information of a business’s personnel and related individuals are subject to a moratorium set to expire on January 1, 2023.

expiration of the moratorium may increase our compliance costs and our exposure to public and regulatory scrutiny, costly litigation,

fines and penalties.

Additionally, in November 2020, California passed the California Privacy Rights Act (the “CPRA”), which

expands the CCPA significantly, including by expanding California consumers’ rights with respect to certain personal information

and creating a new state agency to oversee implementation and enforcement efforts, potentially resulting in further uncertainty and requiring

us to incur additional costs and expenses in an effort to comply.

Many of the CPRA’s provisions will become effective on January

The costs of compliance with, and the other burdens imposed by, these and other laws or regulatory actions may increase our

operational costs, and/or result in interruptions or delays in the availability of systems.

Madison Technologies Inc.

Form 10-K - 2021 Page 18

Many federal,

state, local and foreign government bodies and agencies have adopted or are considering adopting laws, rules and regulations regarding

the collection, processing, use, storage and disclosure of information, web browsing and geolocation data collection, data analytics,

facial recognition, cyber security and breach response and notification procedures.

Furthermore, existing laws and regulations

are constantly evolving, and new laws and regulations that apply to our business are being introduced at every level of government

in the United States, as well as internationally.

As we seek to develop our business, we are, and may increasingly become subject

to various laws, regulations, and standards, and may be subject to contractual obligations relating to data privacy and security

in the jurisdictions in which we operate.

Any significant change to applicable laws, regulations or industry practices regarding

the use or disclosure of personal information, or regarding the manner in which the express or implied consent of customers for

the use and disclosure of personal information is obtained, could require us to modify our products and features, possibly in a

material manner and subject to increased compliance costs, which may limit our ability to develop new products and features that

make use of the personal information that our customers may voluntarily share.

Any failure, or perceived failure, by us to comply

with any federal or state privacy or security laws, regulations, industry self-regulatory principles, or codes of conduct, regulatory

guidance, orders to which we may be subject, or other legal obligations relating to data privacy or security could adversely affect

our reputation, brand and business, and may result in claims, liabilities, proceedings or actions against us by governmental entities,

customers or others.

Any such claims, proceedings or actions could hurt our reputation, brand and business, force us to incur significant

expenses in defense of such proceedings or actions, distract our management, increase our costs of doing business, result in a

loss of customers and result in the imposition of monetary penalties.

In the United States,

there are numerous federal and state data privacy and security laws, rules, and regulations governing the collection, use, disclosure,

retention, security, transfer, storage, and other processing of personal data, including federal and state data privacy laws, data

breach notification laws, and consumer protection laws.

For example, the Federal Trade Commission (“FTC”) and many

state attorneys general are interpreting federal and state consumer protection laws to impose standards for the online collection,

use, dissemination, and security of data.

Such standards require us to publish statements that describe how we handle personal

data and choices individuals may have about the way we handle their personal data.

If such information that we publish is considered

untrue or inaccurate, we may be subject to government claims of unfair or deceptive trade practices, which could lead to significant

liabilities and consequences.

Moreover, according to the FTC, violating consumers’ privacy rights or failing to take appropriate

steps to keep consumers’ personal data secure may constitute unfair acts or practices in or affecting commerce in violation

of Section 5(a) of the Federal Trade Commission Act.

State consumer protection laws provide similar causes of action for unfair

or deceptive practices.

March 2021, the Governor of Virginia signed into law the Virginia Consumer Data Protection Act (the “VCDPA”).

The VCDPA creates

consumer rights, similar to the CCPA, but also imposes security and assessment requirements for businesses.

In addition, in July 2021,

Colorado enacted the Colorado Privacy Act (“COCPA”), becoming the third comprehensive consumer privacy law to be passed in

the United States (after the CCPA and VCDPA).

The COCPA closely resembles the VCDPA, and both will be enforced by the respective states’

Attorney General and district attorneys, although the two differ in many ways.

Once they become enforceable in 2023, we must comply with

each if our operations fall within the scope of these newly enacted comprehensive mandates, which may increase our compliance costs and

potential liability.

Similar laws have been proposed in other states and at the federal level, reflecting a trend toward more stringent

privacy legislation in the United States.

This legislation may add additional complexity, variation in requirements, restrictions and

potential legal risk, require additional investment in resources to compliance programs, could impact strategies and availability of

previously useful data, and could result in increased compliance costs and/or changes in business practices and policies.

VCDPA creates consumer rights, similar to the CCPA, but also imposes security and assessment requirements for businesses.

in July 2021, Colorado enacted the Colorado Privacy Act (“COCPA”), becoming the third comprehensive consumer privacy

law to be passed in the United States (after the CCPA and VCDPA).

The COCPA closely resembles the VCDPA, and both will be enforced

by the respective states’ Attorney General and district attorneys, although the two differ in many ways.

We must comply

with each if our operations fall within the scope of these newly enacted comprehensive mandates, which may increase our compliance

costs and potential liability.

Similar laws have been proposed in other states and at the federal level, reflecting a trend toward

more stringent privacy legislation in the United States.

This legislation may add additional complexity, variation in requirements,

restrictions and potential legal risk, require additional investment in resources to compliance programs, could impact strategies

and availability of previously useful data, and could result in increased compliance costs and/or changes in business practices

and policies.

addition, some laws may require us to notify governmental authorities and/or affected individuals of data breaches involving certain

3 unchanged sentences

For example, laws in all 50 U.S.

states may require businesses to

provide notice to consumers whose personal information has been disclosed as a result of a data breach.

These laws are not consistent,

and compliance in the event of a widespread data breach may be difficult and costly.

We also may be contractually required to notify

consumers or other counterparties of a security breach.

Regardless of our contractual protections, any actual or perceived security breach

or breach of our contractual obligations could harm our reputation and brand, expose us to potential liability or require us to expend

significant resources on data security and in responding to any such actual or perceived breach.

strive to comply with all applicable laws, policies, legal obligations and industry codes of conduct relating to privacy and data protection

to the extent possible.

Because the interpretation and application of privacy and data protection laws are still uncertain, it is possible

that these laws may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another or with our existing

practices or the features of our products and may conflict with other rules or regulations, making enforcement, and thus compliance requirements,

ambiguous, uncertain, and potentially inconsistent.

Any failure or perceived failure by us to comply with our privacy policies, privacy-related

obligations to customers or other third parties, or our privacy-related legal obligations, or any compromise of security that results

in the unauthorized access to or unintended release of personally identifiable information or other customer data, may result in governmental

enforcement actions, litigation, or public statements against us by consumer advocacy groups or others.

Any of these events could cause

us to incur significant costs in investigating and defending such claims and, if found liable, pay significant damages.

Further, these

proceedings and any subsequent adverse outcomes may cause our customers to lose trust in us, which could have an adverse effect on our

reputation and business.

may also be subject to claims of liability or responsibility for the actions of third parties with whom we interact or upon whom it relies

in relation to various products, including but not limited to vendors and business partners.

If so, in addition to the possibility of

fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify our products,

which could have an adverse effect on our business.

Any inability to adequately address privacy and/or data concerns, even if unfounded,

or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability to

us, damage our reputation, inhibit sales and adversely affect our business.

Madison Technologies Inc.

Form 10-K - 2021 Page 19

costs of compliance with, and other burdens imposed by, the laws, rules, regulations and policies that are applicable to the businesses

of our customers may limit the use and adoption of, and reduce the overall demand for, our software.

Even the perception of privacy concerns,

whether or not valid, may harm our reputation, inhibit adoption of our products by current and future customers, or adversely impact

our ability to attract and retain workforce talent.

Our failure to comply with applicable laws and regulations, or to protect such data,

could result in enforcement action against us, including fines, imprisonment of our officials and public censure, claims for damages

by customers and other affected individuals, damage to our reputation and loss of goodwill (both in relation to existing customers and

prospective customers), any of which could have a material adverse effect on our operations, financial performance and business.

operating results may be harmed if we are required to collect taxes on our billings in jurisdictions where it has not historically done

jurisdictions, including state, local and federal taxing authorities, have differing rules and regulations governing taxes, and these

rules and regulations are subject to varying interpretations that may change over time.

In particular, significant judgment is required

in evaluating our tax positions and our provision for taxes.

While we believe that we are in material compliance with our obligations

under applicable taxing regimes, one or more states, localities or the federal government may seek to impose tax collection obligations

It is possible that we could face tax audits and that such audits could result in tax-related liabilities for which we have not

A successful assertion that we should be collecting taxes in jurisdictions where it has not historically done so and do not

accrue for taxes could result in substantial tax liabilities for past sales, discourage customers from purchasing from us or otherwise

states may require businesses

to provide notice to consumers whose personal information has been disclosed as a result of a data breach.

These laws are not

consistent, and compliance in the event of a widespread data breach may be difficult and costly.

We also may be contractually

required to notify consumers or other counterparties of a security breach.

Regardless of our contractual protections, any actual

or perceived security breach or breach of our contractual obligations could harm our reputation and brand, expose us to potential

liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach.

strive to comply with all applicable laws, policies, legal obligations and industry codes of conduct relating to privacy and data

protection to the extent possible.

Because the interpretation and application of privacy and data protection laws are still uncertain,

it is possible that these laws may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another

or with our existing practices or the features of our products and may conflict with other rules or regulations, making enforcement,

and thus compliance requirements, ambiguous, uncertain, and potentially inconsistent.

Any failure or perceived failure by us to

comply with our privacy policies, privacy-related obligations to customers or other third parties, or our privacy-related legal

obligations, or any compromise of security that results in the unauthorized access to or unintended release of personally identifiable

information or other customer data, may result in governmental enforcement actions, litigation, or public statements against us

by consumer advocacy groups or others.

Any of these events could cause us to incur significant costs in investigating and defending

such claims and, if found liable, pay significant damages.

Further, these proceedings and any subsequent adverse outcomes may

cause our customers to lose trust in us, which could have an adverse effect on our reputation and business.

We may also be subject

to claims of liability or responsibility for the actions of third parties with whom we interact or upon whom it relies in relation

to various products or services, including but not limited to vendors and business partners.

If so, in addition to the possibility

of fines, lawsuits and other claims, we could be required to fundamentally change our business activities and practices or modify

our products, which could have an adverse effect on our business.

Any inability to adequately address privacy and/or data concerns,

even if unfounded, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional

cost and liability to us, damage our reputation, inhibit sales and adversely affect our business.

The costs of compliance

with, and other burdens imposed by, the laws, rules, regulations and policies that are applicable to the businesses of our customers

may limit the use and adoption of, and reduce the overall demand for, our products or services.

Even the perception of privacy

concerns, whether or not valid, may harm our reputation, inhibit adoption of our products or services by current and future customers,

or adversely impact our ability to attract and retain workforce talent.

Our failure to comply with applicable laws and regulations,

or to protect such data, could result in enforcement action against us, including fines, imprisonment of our employees or directors

and public censure, claims for damages by customers and other affected individuals, damage to our reputation and loss of goodwill

(both in relation to existing customers and prospective customers), any of which could have a material adverse effect on our operations,

financial performance and business.

Periods of rapid growth and expansion

could place a significant strain on our resources, including our future employees, which could negatively impact our operating

We may experience periods of rapid growth

and expansion, which may place a significant strain and demands on our management, our operational and financial resources, customer

operations, research and development, sales and marketing, administrative, and other resources.

To manage our possible future growth

effectively, we will be required to continue to improve our management, operational and financial systems.

Future growth would

also require us to successfully hire, train, motivate and manage employees.

In addition, our continued growth and the evolution

of our business plan will require significant additional management, technical and administrative resources.

If we are unable to

manage our growth successfully, we may not be able to effectively manage the growth and evolution of our current business and our

operating results could suffer.

Our future performance may depend

on the success of products and services we have not yet developed or acquired.

Our success depends on the development,

implementation and acceptance of our products and services.

Commitments to develop new products and services must be made well

in advance of any resulting sales, and technologies and standards may change during development, potentially rendering our products

and services outdated or uncompetitive before their introduction.

Our ability to develop products and services to meet evolving

industry requirements and at prices acceptable to our customers will be significant factors in determining our competitiveness.

We may expend considerable funds and other resources on the development of our products and services without any guarantee that

these products will be successful.

If we are not successful in bringing one or more products or types of services to market, whether

because we fail to address marketplace demand, fail to develop viable technologies or otherwise, our revenues may decline and our

results of operations could be seriously harmed.

operating results may be harmed if we are required to collect taxes on our billings in jurisdictions where it has not historically

jurisdictions, including state, local and federal taxing authorities, have differing rules and regulations governing taxes, and

these rules and regulations are subject to varying interpretations that may change over time.

In particular, significant judgment

is required in evaluating our tax positions and our provision for taxes.

While we believe that we are in material compliance with

our obligations under applicable taxing regimes, one or more states, localities or the federal government may seek to impose tax

collection obligations on us.

It is possible that we could face tax audits and that such audits could result in tax-related liabilities

for which we have not accrued.

A successful assertion that we should be collecting taxes in jurisdictions where it has not historically

done so and do not accrue for taxes could result in substantial tax liabilities for past sales, discourage customers from purchasing

from us or otherwise harm our business and operating results.

addition, our tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and

other laws, regulations, principles and interpretations, including those relating to income tax nexus, jurisdictional mix of profits

at varying statutory tax rates, by changes in foreign currency exchange rates, or by changes in the valuation of our deferred

tax assets and liabilities.

Although we believe our tax estimates are reasonable, the final determination of any tax audits or

litigation could be materially different from our historical tax provisions and accruals, which could have a material adverse

effect on our operating results or cash flows in the period or periods for which a determination is made.

We expect to require

additional capital to support the growth of our business, and this capital might not be available on acceptable terms, if at all.

We intend to continue

to make investments to support our business growth and expect to require additional funds to respond to business challenges, including

the potential need to develop new business segments, services, features or enhance our products, improve our operating infrastructure

or acquire complementary businesses and technologies.

Accordingly, we expect to need to engage in equity or debt financings to

secure additional funds.

If we raise additional funds through future issuances of equity or convertible debt securities, our existing

stockholders could suffer significant dilution, and any new equity securities that we issue could have rights, preferences and

privileges superior to those of holders of our Common Stock.

Any debt financing that we may secure in the future could involve

restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it

more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

not be able to obtain additional financing on terms favorable to it, if at all.

If we are unable to obtain adequate financing or

financing on terms satisfactory to it when we require it, our ability to continue to support our business growth and to respond

to business challenges could be significantly impaired, and our business may be adversely affected.

Without obtaining adequate capital

funding or improving our financial performance, we may not be able to continue as a going concern.

Our recurring losses from operations and

negative cash flows raise substantial doubt about our ability to continue as a going concern without additional capital-raising

As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern.

to secure additional funding may require us to modify, delay, or abandon some of our planned future expansion or development, or

to otherwise enact operating cost reductions available to management, which could have a material adverse effect on our business,

operating results, financial condition, and ability to achieve our intended business objectives.

The requirements of being a public

company may strain our resources and divert management’s attention.

As a public company, we are subject to

the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank

Wall Street Reform and Consumer Protection Act and other applicable securities rules and regulations.

The Exchange Act requires,

among other things, that we file annual and current reports with the SEC with respect to our business and operating results.

with these rules and regulations increases our legal and financial compliance costs, makes some activities more difficult, time-consuming,

or costly, and increases demand on our systems and resources.

As a result of disclosure of information

in this Annual Report and in filings required of a public company, our business and financial condition is more visible, which

we believe may result in threatened or actual litigation, including by competitors and other third parties.

If such claims are

successful, our business and operating results could be harmed, and even if the claims do not result in litigation or are resolved

in our favor, these claims, and the time and resources necessary to resolve them, could divert resources of our management and

harm our business and operating results.

addition, our tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other

laws, regulations, principles and interpretations, including those relating to income tax nexus, jurisdictional mix of profits at varying

statutory tax rates, by changes in foreign currency exchange rates, or by changes in the valuation of our deferred tax assets and liabilities.

Although we believe our tax estimates are reasonable, the final determination of any tax audits or litigation could be materially different

from our historical tax provisions and accruals, which could have a material adverse effect on our operating results or cash flows in

the period or periods for which a determination is made.

may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges,

including the need to develop new features or enhance our products, improve our operating infrastructure or acquire complementary businesses

and technologies.

Accordingly, we may need to engage in equity or debt financings to secure additional funds.

If we raise additional

funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution,

and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and

other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business

opportunities, including potential acquisitions.

We may not be able to obtain additional financing on terms favorable to it, if at all.

If we are unable to obtain adequate financing or financing on terms satisfactory to it when we require it, our ability to continue to

support our business growth and to respond to business challenges could be significantly impaired, and our business may be adversely

a result of being a public company, we are responsible for establishing and maintaining adequate internal control over financial reporting.

We have identified material weaknesses in our internal control over financial reporting, and if we are unable to remediate the material

weaknesses, or if we fail to develop and maintain effective disclosure controls and procedures and internal control over financial reporting,

our ability to produce timely and accurate consolidated financial statements or comply with applicable laws and regulations could be

impaired, which may adversely affect our business and stock price.

a public company, we are required to furnish a report by management on the effectiveness of our internal control over financial reporting

for each future Annual Report on Form 10-K to be filed with the SEC.

This assessment will need to include disclosure of any material

weaknesses identified by our management in internal control over financial reporting.

As a smaller reporting company, we

are subject to scaled disclosure requirements that may make it more challenging for investors to analyze our results of operations

and financial prospects.

As a “smaller reporting company,”

we (i) are able to provide simplified executive compensation disclosures in our filings, (ii) are exempt from the provisions of

Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report

on the effectiveness of internal control over financial reporting and (iii) have certain other decreased disclosure obligations

in our filings with the SEC, including being required to provide only two years of audited financial statements in annual reports.

Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects.

We will remain a smaller reporting company

until the beginning of a fiscal year in which we had a public float of $250 million held by non-affiliates as of the last business

day of the second quarter of the prior fiscal year, assuming our Common Stock is registered under Section 12 of the Exchange Act

on the applicable evaluation date.

Even if we remain a smaller reporting company, if our public float exceeds $250 million and

our annual revenues are greater than $100 million, we will become subject to the provisions of Section 404(b) of the Sarbanes-Oxley

As a result of

being a public company, we are responsible for establishing and maintaining adequate internal control over financial reporting.

We have identified material weaknesses in our internal control over financial reporting, and if we are unable to remediate the

material weaknesses, or if we fail to develop and maintain effective disclosure controls and procedures and internal control over

financial reporting, our ability to produce timely and accurate consolidated financial statements or comply with applicable laws

and regulations could be impaired, which may adversely affect our business and the price of our Common Stock.

As a public company,

we are required to furnish a report by our management on the effectiveness of our internal control over financial reporting for

each Annual Report on Form 10-K that we file with the SEC.

This assessment will need to include disclosure of any material weaknesses

identified by our management in internal control over financial reporting.

Effective internal control over financial reporting

1 unchanged sentence

to prevent fraud.

Any failure to implement new or improved controls, or difficulties encountered in their implementation, could cause

us to fail to meet our reporting obligations.

Ineffective internal control over financial reporting could also cause investors to lose

confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

Madison Technologies Inc.

Form 10-K - 2021 Page 20

we are unable to assert that our internal control over financial reporting is effective, we could lose investor confidence in the accuracy

and completeness of our financial reports, which could cause the trading price of our common stock to decline, and we may be subject

to investigation and/or sanctions by the SEC.

have identified material weaknesses in our internal control over financial reporting.

If we are unable to remediate these material weaknesses,

these material weaknesses could result in a material misstatement of our consolidated financial statements.

Any failure to implement new or improved controls, or difficulties encountered in their implementation, could

cause us to fail to meet our reporting obligations.

Ineffective internal control over financial reporting could also cause investors

to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Common

have identified material weaknesses in our internal control over financial reporting.

A material weakness is a deficiency, or combination

of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement

of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

A material weakness is a deficiency, or

combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material

misstatement of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis.

did not design and maintain an effective control environment commensurate with our financial reporting requirements.

Specifically, we

lacked a sufficient complement of personnel with an appropriate level of internal controls and accounting knowledge, training and experience

commensurate with our financial reporting requirements.

Additionally, the limited personnel resulted in our inability to consistently

establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated by, among other

things, insufficient segregation of duties in our finance and accounting functions.

This material weakness contributed to the following

additional material weaknesses:

lack of a functioning audit committee and lack of a majority of outside directors on our board of directors, resulting in ineffective

oversight in the establishment and monitoring of required internal controls and procedures;

inadequate segregation of duties consistent with control objectives;

insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application

of US GAAP and SEC disclosure requirements;

Specifically,

we lacked a sufficient complement of personnel with an appropriate level of internal controls and accounting knowledge, training

and experience commensurate with our financial reporting requirements.

Additionally, the limited personnel resulted in our inability

to consistently establish appropriate authorities and responsibilities in pursuit of our financial reporting objectives, as demonstrated

by, among other things, insufficient segregation of duties in our finance and accounting functions.

This material weakness contributed

to the following additional material weaknesses:

(1) lack of a functioning audit

committee and no outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring

of required internal controls and procedures;

(2) inadequate segregation

of duties consistent with control objectives;

(3) insufficient written policies

and procedures for accounting and financial reporting with respect to the requirements and application of U.S.

generally accepted

accounting principles (“GAAP”) and SEC disclosure requirements;

ineffective controls over period end financial disclosure and reporting processes.

The aforementioned material weaknesses were identified

and communicated to management in connection with the preparation and audit of our financial statements as of December 31, 2020 and the

preparation of our 2021 quarterly financial statements.

we are undertaking efforts to remediate these material weaknesses, the material weaknesses will not be considered remediated until our

remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have concluded,

through testing, that the newly implemented and enhanced controls are operating effectively.

At this time, we cannot predict the success

of such efforts or the outcome of our assessment of the remediation efforts.

We can give no assurance that our efforts will remediate

these material weaknesses in our internal control over financial reporting, or that additional material weaknesses will not be identified

in the future.

effectiveness of our internal control over financial reporting is subject to various inherent limitations, including cost limitations,

judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of

The aforementioned material weaknesses were

identified and communicated to management in connection with the preparation and audit of our financial statements as of December

31, 2022 and the preparation of our 2023 quarterly financial statements.

we are undertaking efforts to remediate these material weaknesses, the material weaknesses will not be considered remediated until

our remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have

concluded, through testing, that the newly implemented and enhanced controls are operating effectively.

At this time, we cannot

predict the success of such efforts or the outcome of our assessment of the remediation efforts.

We can give no assurance that

our efforts will remediate these material weaknesses in our internal control over financial reporting, or that additional material

weaknesses will not be identified in the future.

The effectiveness of

our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments

used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud.

If we are unable to remediate the material weaknesses, our ability to record, process and report financial information accurately,

and to prepare the consolidated financial statements within the time periods specified by the rules and regulations of the SEC, could

be adversely affected which, in turn, may adversely affect our reputation and business and the trading price of our common stock.

failure to design and maintain effective internal control over financial reporting could result in errors in our consolidated financial

statements that could result in a restatement of our financial statements, and could cause us to fail to meet our reporting obligations,

any of which could diminish investor confidence in us and cause a decline in the price of our common stock.

In addition, any such failures

could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of

our securities and harm to our reputation and financial condition, or diversion of financial and management resources from the operation

of our business.

Madison Technologies Inc.

Form 10-K - 2021 Page 21

and to prepare the consolidated financial statements within the time periods specified by the rules and regulations of the SEC,

could be adversely affected which, in turn, may adversely affect our reputation and business and the trading price of our Common

Our failure to design and maintain effective internal control over financial reporting could also result in errors in our

consolidated financial statements that could result in a restatement of such financial statements, and could cause us to fail to

meet such time periods, any of which could diminish investor confidence in us and cause a decline in the price of our Common Stock.

In addition, any such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss

of investor confidence, our Common Stock no longer being quoted on the over-the-counter market, harm to our reputation and financial

condition, or diversion of financial and management resources from the operation of our business.

reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

generally accepted accounting principles (GAAP) are subject to interpretation by the Financial Accounting Standards Board (FASB), the

SEC, and various bodies formed to promulgate and interpret appropriate accounting principles.

A change in these principles or interpretations

could have a significant effect on our reported results of operations and could affect the reporting of transactions already completed

before the announcement of such change.

continuation or worsening of the COVID-19 pandemic, or other similar public health developments, could have an adverse effect on business,

results of operations, and financial condition.

face various risks and uncertainties related to the global outbreak of COVID-19 and the new coronavirus strains or variants that have

The continued COVID-19 pandemic has led to disruption and volatility in the global economy and capital markets, which increases

the cost of capital and adversely impacts access to capital.

Government-enforced travel bans and business closures around the world have

significantly impacted our ability to sell, install and service our products especially given the nature of the markets we serve.

has, and may continue to, disrupt third-party contract manufacturer and supply chain.

We may also experience customer payment delays

for our products which could negatively impact our results of operations.

We may also experience some delays in installation of our products

at customers’ facilities, which could lead to postponed revenue recognition for those transactions.

Furthermore, if significant

portions of the workforce are unable to work effectively, including because of illness, quarantines, government actions, facility closures,

remote working or other restrictions in connection with the COVID-19 pandemic, operations will likely be adversely impacted.

have been experiencing supply chain challenges due to the COVID-19 pandemic.

There is no guarantee that our operations will not be materially

adversely affected in the future in the supply chain interruptions intensify.

Furthermore, although in the long-term, we believe that

the COVID 19 pandemic may encourage organizations to reassess their security screening processes and may continue to accelerate their

adoption of solutions such as touchless security screening, which could create additional demand for our products, there is no guarantee

that such organizations will choose to implement our solutions.

the COVID-19 pandemic continues for a prolonged duration, we or our customers may be unable to perform fully on our contracts, which

will likely result in increases in costs and reduction in revenue.

These cost increases may not be fully recoverable or adequately covered

by insurance.

The long-term effects of COVID-19 to the global economy and to us are difficult to assess or predict and may include a

further decline in the market prices of our products, risks to employee health and safety, risks for the deployment of our products and

services and reduced sales in geographic locations impacted.

Any prolonged restrictive measures put in place to control COVID-19 or other

adverse public health developments in any of our targeted markets may have a material and adverse effect on our business operations and

results of operations.

GAAP is subject to interpretation

by the Financial Accounting Standards Board (“FASB”), the SEC, and various bodies formed to promulgate and interpret

appropriate accounting principles.

A change in these principles or interpretations could have a significant effect on our reported

results of operations and could affect the reporting of transactions already completed before the announcement of such change.

We may be vulnerable to continued

global economic uncertainty causing volatility in financial markets.

Our business may be sensitive to changes

in general economic conditions and the financial markets inside the United States and internationally, which have experienced extreme

disruption in recent times, including, among other things, extreme volatility in security prices, severely diminished liquidity

and credit availability, and declining valuations of investments.

We believe these disruptions are likely to have an ongoing adverse

effect on the world economy.

A continued economic downturn and financial market disruptions could have a material adverse effect

on our business, financial condition and results of operations.

Any uncertainties relating to COVID-19 or other adverse public

health developments, inflation, the foreign and domestic government sanctions imposed on Russia as a result of its invasion of

Ukraine, or global supply chain disruptions may cause consumers, businesses, and governments to defer purchases in response to

tighter credit, decreased cash availability and declining consumer confidence.

Accordingly, demand for our products or services

could decrease and differ materially from current expectations.

Further, some of our customers may require substantial financing

in order to fund their operations and subscribe or purchase products or services from us.

The inability of these customers to obtain

sufficient credit to finance purchases of our products or services and meet their payment obligations to us or possible insolvencies

of our customers could result in decreased customer demand and could adversely impact our financial results.

Related to Our Common Stock

market price of our Common Stock is likely to be highly volatile, and you may lose some or all of your investment.

trading price of our common stock is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of

factors, including the following:

impact of COVID-19 pandemic on our business;

inability to re-list our shares of Common Stock on the OTC Markets;

in applicable laws or regulations;

Madison Technologies Inc.

Form 10-K - 2021 Page 22

relating to the uncertainty of our projected financial information;

related to the organic and inorganic growth of our business and the timing of expected business milestones.

addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market

prices of equity securities of many companies.

These fluctuations have often been unrelated or disproportionate to the operating performance

of those companies.

The market price

of our Common Stock is likely to be highly volatile given our status as a relatively unknown company with a small and thinly traded

public float, and lack of profits, and you may lose some or all of your investment.

The market for our Common

Stock is characterized by significant price volatility when compared to the securities of larger, more established companies that

have large public floats, and we expect that the price of our Common Stock will continue to be more volatile than the securities

of such larger, more established companies for the indefinite future.

The volatility in the price of our Common Stock is attributable

to a number of factors.

First, as noted above, our Common Stock is, compared to the securities of such larger, more established

companies, sporadically and thinly traded.

The price of our Common Stock could, for example, decline precipitously in the

event that a large number of shares of our Common Stock is sold on the market without commensurate demand.

Secondly, we are a speculative

or “risky” investment due to our lack of profits to date.

As a consequence of this enhanced risk, more risk-adverse

investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more

inclined to sell their shares of Common Stock on the market more quickly and at greater discounts than would be the case with the

securities of a larger, more established company that has a large public float.

Such volatility can also occur due to a variety

of other factors, including the following:

the inability to maintain the quotation of the

Common Stock on the over-the-counter market;

changes in applicable laws or regulations;

risks relating to the uncertainty of our projected

financial information;

risks related to the organic and inorganic growth

of our business and the timing of expected business milestones.

In addition, the stock

markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity

securities of many companies.

These fluctuations have often been unrelated or disproportionate to the operating performance of

those companies.

Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may

negatively affect the market price of our Common Stock, regardless of our actual operating performance.

in our share price could subject us to securities class action litigation.

the past, securities class action litigation has often been brought against a company following a decline in the market price of its

securities or the completion of a merger.

If we face such litigation, it could result in substantial costs and a diversion of management’s

attention and resources, which could harm our business.

securities or industry analysts do not publish research or reports about us, or publish negative reports, our stock price and trading

volume could decline.

trading market for our common stock will depend, in part, on the research and reports that securities or industry analysts publish about

Many of these factors are

beyond our control and may decrease the market price of our Common Stock regardless of our operating performance.

Volatility in

the prices of our Common Stock could subject us to securities class action litigation.

the past, securities class action litigation has often been brought against a company following a decline in the market price

of its securities or the completion of a merger.

If we face such litigation, it could result in substantial costs and a diversion

of management’s attention and resources, which could harm our business.

Our Common Stock is quoted on the

Experts Market tier of the OTC Markets Group Inc., which may have an unfavorable impact on the price of our Common Stock and liquidity.

Our Common Stock may not be eligible for listing on a national securities exchange.

Our Common Stock is quoted on the Experts

Market tier of OTC Markets Group, Inc.

This tier is a significantly more limited market than other national securities exchanges,

such as those operated by The Nasdaq Stock Market LLC.

The quotation of our Common Stock on the over-the-counter market may result

in a less liquid market available for existing and potential stockholders to trade shares of our Common Stock, could depress the

trading price of our Common Stock and could have a long-term adverse impact on our ability to raise capital in the future.

is no guarantee that any such national securities exchange or other quotation system will permit our Common Stock to be listed

As a result, investors may find it difficult to buy or sell or obtain accurate quotations for our Common Stock, and

the liquidity of our Common Stock remain limited.

These factors may have an adverse impact on the trading and price of our Common

We cannot predict the extent to which

an active public trading market for our Common Stock will develop or be sustained.

If an active public trading market for our Common

Stock does not develop or cannot be sustained, you may be unable to liquidate your investment in our securities.

At present, there is minimal public trading

in our Common Stock.

We cannot predict the extent to which an active public market for our Common Stock will develop or be sustained

due to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock

brokers, institutional investors, and others in the investment community that generate or influence sales volume, and that even

if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such

as ours or purchase or recommend the purchase of our securities until such time as we became more seasoned and viable.

As a consequence,

there may be periods of several days or more when trading activity in our Common Stock is minimal or non-existent, as compared

to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without

an adverse effect on market price.

We cannot give you any assurance that an active public trading market for our securities will

develop or be sustained.

If such a market cannot be sustained, you may be unable to liquidate your investment in our securities.

broker-dealers may be discouraged

from effecting transactions in shares of our Common Stock because they may be considered penny stocks and thus be subject to the

penny stock rules.

The SEC has adopted a number of rules to

regulate “penny stock” that restricts transactions involving stock which is deemed to be penny stock.

Such rules include

Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Exchange Act.

These rules may have the effect

of reducing the liquidity of penny stocks.

“Penny stocks” generally are equity securities with a price of less than

$5.00 per share (other than securities registered on certain national securities exchanges if current price and volume information

with respect to transactions in such securities is provided by the exchange or system).

Our shares of Common Stock have in the

past constituted, and may again in the future constitute, “penny stock” within the meaning of the rules.

The additional

sales practice and disclosure requirements imposed upon U.S.

broker-dealers may discourage such broker-dealers from effecting transactions

in shares of our Common Stock, which could severely limit the market liquidity of such shares of Common Stock and impede their

sale in the secondary market.

broker-dealer selling a penny stock

to anyone other than an established customer or “accredited investor” (generally, an individual with a net worth in

excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability

determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless

the broker-dealer or the transaction is otherwise exempt.

In addition, the “penny stock” regulations require the U.S.

broker-dealer to deliver, prior to any transaction involving a “penny stock”, a disclosure schedule prepared in accordance

with SEC standards relating to the “penny stock” market, unless the broker-dealer or the transaction is otherwise exempt.

broker-dealer is also required to disclose commissions payable to the U.S.

broker-dealer and the registered representative

and current quotations for the securities.

Finally, a U.S.

broker-dealer is required to submit monthly statements disclosing recent

price information with respect to the “penny stock” held in a customer’s account and information with respect

to the limited market in “penny stocks”.

Stockholders should be aware that, according

to the SEC, the market for “penny stocks” has suffered in recent years from patterns of fraud and abuse.

Such patterns

(i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;

(ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases;

“boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons;

(iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers;

and (v) the wholesale dumping of the

same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses.

Our management is aware of the abuses that have occurred historically in the penny stock market.

Although we do not expect to be

in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive

within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.

Because certain of our stockholders

control a significant number of shares of our Common Stock, they may have effective control over actions requiring stockholder

As of the date of the filing of this Annual

Report and in part due to the Change of Control, Arena, together with its affiliates, beneficially owns an aggregate of 2,347,661,906

shares of Common Stock as well as all shares of outstanding Series B Preferred Stock, par value $0.001 per share (the “Series

B Preferred Stock”), providing such holder the ability to vote approximately 90.2% of the total voting power of our capital

One of the entities affiliated with Arena, Portents Holdings LLC, beneficially owns all of our outstanding Series B Preferred

Stock, which shares alone entitles it to voting power equivalent to the number of votes equal to 51% of the total voting power

of each class of stock outstanding.

Due to such disproportionate voting power, new investors will not be able to effect a change

in our business or management, and therefore, stockholders would have limited recourse as a result of decisions made by management.

As a result, Arena has the ability to control the outcome of matters submitted to our stockholders for approval, including the

election of directors and any merger, consolidation or sale of all or substantially all of our assets.

In addition, Arena has the

ability to control the management and affairs of our Company.

Accordingly, this concentration of ownership might harm the market

price of our Common Stock by:

delaying, deferring or preventing a change in corporate control;

impeding a merger, consolidation, takeover or other business combination involving us;

discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.

If securities

or industry analysts do not publish research or reports about us, or publish negative reports, the price of our Common Stock and

trading volume could decline.

The trading market

for our Common Stock will depend, in part, on the research and reports that securities or industry analysts publish about us.

We do not have any control over these analysts.

If our financial performance fails to meet analyst estimates or one or more of the

analysts who cover us downgrade our common stock, change their opinion, or reduce their target stock price on us, our stock price would

likely decline.

If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility

in the financial markets, which could cause our stock price or trading volume to decline.

we do not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of

currently anticipate that it will retain future earnings for the development, operation and expansion of our business and we do not anticipate

declaring or paying any cash dividends for the foreseeable future.

As a result, capital appreciation, if any, of our common stock would

be your sole source of gain on an investment in such shares for the foreseeable future.

material portion of the outstanding shares of our common stock is currently restricted from resale but may be sold on a stock exchange

in the near future.

The number of shares eligible for public sale upon the lapse of such restrictions could depress the market price

of our common stock.

connection with the issuance of convertible notes to Arena Investors LP, we issued to them Warrants to purchase an aggregate of 192,073,017

shares of Common Stock.

connection with the issuance of a promissory note to Z4 Management LLC, we issued to them Warrants to purchase 500,000 shares of our

Common Stock.

have 230,000 shares of Series D Preferred Stock that may be converted to 230,000,000 shares of Common Stock.

have 1,152,500 shares of Series E-1 Preferred Stock that may be converted to 1,152,500,000 shares of Common Stock.

Madison Technologies Inc.

Form 10-K - 2021 Page 23

have 39,895 shares of Series H Preferred Stock that may be converted to 39,895,000 shares of Common Stock.

of December 31, 2021, the outstanding principal balance, including accrued interest of the third-party convertible debt was convertible

into 866,192,064 shares of Common Stock.

of our Common Stock as restrictions end may make it more difficult for us to sell equity securities in the future at a time and at a

price that we deem appropriate.

These sales could also cause the trading price of our common stock to fall and make it more difficult

for us to sell shares of our Common Stock.

addition, FFO 1 Trust delivered 48,405,000 shares of Restricted Common Stock the New York State as partial payment for outstanding personal

Any sale of this Common Stock could also cause the trading price our shares to fall.

If our financial performance fails to meet analyst estimates or one or more of

the analysts who cover us downgrade our Common Stock, change their opinion, or reduce the target stock price for our Common Stock,

our Common Stock price would likely decline.

If one or more of these analysts do not publish reports on us regularly or at all,

we will not likely have visibility in the financial markets, which could cause our Common Stock price or trading volume to decline.

Because we do

not anticipate paying any cash dividends on our shares of Common Stock in the foreseeable future, capital appreciation, if any,

would be your sole source of gain if you hold such shares.

We currently anticipate

that we will retain future earnings for the development, operation and expansion of our business and we do not anticipate declaring

or paying any cash dividends on our Common Stock for the foreseeable future.

As a result, capital appreciation, if any, of our

Common Stock would be your sole source of gain on an investment in such shares for the foreseeable future.

A large number

of outstanding shares of our Common Stock is currently restricted from resale.

The number of shares eligible for public sale upon

the lapse of such restrictions and conversions of outstanding convertible notes and preferred stock could depress the market price

of our Common Stock dilute the ownership interests of existing stockholders.

The following summarizes

certain transactions in which a large number of shares of Common Stock were issued, which shares are currently restricted from

resale but may in the future be sold upon the lapse of such restrictions:

● In connection with the issuance of convertible notes to the Investors, we issued to them shares

of our Series F convertible preferred stock, par value $0.001 per share (“Series F Preferred Stock”), which was subsequently

converted into 192,073,017 shares of Common Stock.

● In connection with the issuance of a promissory note to Z4 in December 2021, we issued it warrants

to purchase up to 500,000 shares of our Common Stock.

● 155,000 issued and outstanding shares of our Series D convertible preferred stock, par value $0.001

per share (the “Series D Preferred Stock”), may be converted into 155,000,000 shares of Common Stock.

● We have issued 1,152,500 shares of the Series E-1 convertible preferred stock, par value $0.001

per share (the “Series E-1 Preferred Stock”), which were issued in September 2021 and automatically convert into 1,152,500,000

shares of Common Stock two years from the date of issuance.

The Company has not processed such conversions as of the date of this

Annual Report.

● We have issued 39,895 shares of Series H convertible preferred stock, par value $0.001 per share

(the “Series H Preferred Stock”), which may be converted into 39,895,000 shares of Common Stock.

● As of the date of this Annual

Report, the outstanding aggregate principal balance, including accrued interest, of outstanding

convertible notes, excluding the Investors’ Notes all of which are currently in

default is convertible into approximately 163,000,000 shares of Common Stock.

Sales of our Common

Stock as such restrictions are lifted and such conversions occur (or in connection with any anticipated conversions) may make it

more difficult for us to sell our Common Stock and other equity securities in the future at a time and at a price that we deem

Such conversions and sales could also cause the trading price of our Common Stock to fall and dilute the ownership

of our existing stockholders.

We could issue “blank check”

preferred stock without stockholder approval with the effect of diluting then current stockholder interests and impairing their

voting rights;

and provisions in our organizational documents could discourage a takeover that stockholders may consider favorable.

Our articles of incorporation, as amended

(“Articles of Incorporation”), authorizes the issuance of up to 50,000,000 shares of “blank check” preferred

stock with designations, rights and preferences as may be determined from time to time by our Board.

Our Board is empowered, without

stockholder approval, to issue a series of preferred stock with dividend, liquidation, conversion, voting or other rights which

could dilute the interest of, or impair the voting power of, our common stockholders.

The issuance of a series of preferred stock

could be used as a method of discouraging, delaying, or preventing a change in control of the Company.

For example, it would be

possible for our Board of Directors to issue preferred stock with voting or other rights or preferences that could impede the success

of any attempt to change control of the Company.

Currently, shares of our Series B Preferred Stock, Series D Preferred Stock, Series

E-1 Preferred Stock and Series H Preferred Stock are currently outstanding, each with preferential rights over the Common Stock.

Our Articles of Incorporation, amended

and restated bylaws (“Bylaws”) and Nevada law have anti-takeover provisions that could discourage, delay or prevent

a change in control, which may cause the prices of our securities to decline.

Our Articles of Incorporation, Bylaws and

Nevada law contain provisions which could make it more difficult for a third party to acquire us, even if closing such a transaction

would be beneficial to our stockholders.

We are currently authorized to issue up to 50,000,000 shares of “blank check”

preferred stock.

This preferred stock may be issued in one or more series, the terms of which may be determined at the time of

issuance by our board of directors without further action by stockholders.

Currently, shares of our Series B Preferred Stock, Series

D Preferred Stock, Series E-1 Preferred Stock and Series H Preferred Stock are currently outstanding, each with preferential rights

over the Common Stock.

The terms of such series of preferred stock any other series of preferred stock may include voting rights

(including the right to vote as a series on particular matters), preferences as to dividend, liquidation, conversion and redemption

rights and sinking fund provisions.

Such classes of preferred stock now and hereinafter issued could materially adversely affect

the rights of the holders of our securities, and therefore, reduce the value of our securities.

In particular, specific rights

granted to future holders of preferred stock could be used to restrict our ability to merge with, or sell our assets to, a third

party and thereby preserve control by current management.

Our Articles of Incorporation, Bylaws or

Nevada law contain provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such

practices or bids unacceptably expensive to the raider and to encourage prospective acquirers to negotiate with our board of directors

rather than to attempt a hostile takeover.

These provisions include, among others:

the inability of our stockholders to call a special meeting;

the right of our Board of Directors to issue preferred stock without stockholder approval;

the ability of our directors to fill vacancies on our Board of Directors.

● Provisions of our Articles of Incorporation, Bylaws or

Nevada law also could have the effect of discouraging potential acquisition proposals or making a tender offer or delaying or

preventing a change in control, including changes a stockholder might consider favorable.

Such provisions may also prevent or

frustrate attempts by our stockholders to replace or remove our management.

In particular, our Articles of Incorporation, our

Bylaws or Nevada law, as applicable, among other things, may provide our Board of Directors with the ability to alter our Bylaws

without stockholder approval, and provide that vacancies on our Board of Directors may be filled by a majority of directors in

office, although less than a quorum.

In addition, we are subject to Nevada’s

Combination with Interested Stockholders Statute (Nevada Revised Statutes 78.411 – 78.444), which prohibits an interested

stockholder from entering into a “combination” with the corporation, unless certain conditions are met.

These provisions

are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking

to acquire control of our company to first negotiate with our Board of Directors.

These provisions may delay or prevent someone

from acquiring or merging with us, which may cause the market price of our Common Stock to decline.

We are also subject to Nevada’s Acquisition

of Controlling Interest Statute (Nevada Revised Statutes 78.378 – 78.3793), which prohibits an acquirer, under certain circumstances,

from voting shares of a corporation’s stock after crossing specific threshold ownership percentages.

These provisions have

the effect of discouraging or delaying from acquiring or merging with us.

Unresolved Staff Comments.

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required

under this item.

are a remote-only company.

Accordingly, we do not maintain a headquarters.

Through four leases with remaining terms ranging from approximately

7 to 18 years, we lease TV production and broadcast transmission facilities in Los Angeles County, California, King County, Washington

and Harris County, Texas.

Legal Proceedings.

are not a party to any pending legal proceedings and, to the best of our knowledge, none of our property or assets are the subject of

any pending legal proceedings.

Mine Safety Disclosures.

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

Cybersecurity.

Not applicable.

We are a remote-only company.

we maintain basic headquarters at 2500 Westchester Avenue, Suite 401, Purchase, New York, for which there is no lease.

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 1A. Risk Factors