What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-01-25 compared with 2022-08-26 · 286 added, 167 removed, 18 unchanged (96% of the section changed)

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

FOLLOWING PRESENTATION OF OUR PLAN OF OPERATION OF SHOULD BE READ IN CONJUNCTION WITH THE AUDITED FINANCIAL STATEMENTS AND OTHER FINANCIAL

INFORMATION INCLUDED HEREIN.

THE FOLLOWING PRESENTATION OF OUR PLAN

OF OPERATION OF SHOULD BE READ IN CONJUNCTION WITH THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION

INCLUDED HEREIN.

On January 28, 2023, the Agent for the

Investors delivered a notice to us (the “Acceleration Notice”) stating that the Agent and Investors (a) elected to

hereby cause the outstanding principal amount of the Investor Notes, plus accrued but unpaid interest, liquidated damages and other

amounts owing in respect thereof, to become immediately due and payable in cash, (b) intended to commence legal action to collect

any or all of the amounts due under the Investor Notes, and (c) sought the appointment of a receiver or trustee as a means of realizing

proceeds on their collateral.

On February 1, 2023, we entered into the

Partial Foreclosure Agreement with the Investors pursuant to which we transferred ownership of our FCC licenses and other broadcast

television assets to a third-party entity controlled by the Investors.

In consideration therefor, the Investors agreed to reduce

the indebtedness under the Notes by a $11,600,000.

On September 21, 2023, the Agent delivered

a notice to us that the Agent exercised the Investors’ rights to vote the Pledged Interests and to exercise the Pledgees’

rights, powers and privileges, to pass certain resolutions and to amend our bylaws then in effect to, among other things, (i) remove

the Board of Directors and all Company officers, and (ii) reduce the number of the Board of Directors from three directors to one

As a result of the Agent sending such notice and exercising its rights to vote the Pledged Interests, a Change of Control

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.

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.

On November 6, 2023, the shareholders

of the Company removed Philip Falcone and Warren Zenna as our directors and appointed Thomas Amon as the sole member of our board

of directors.

Amon removed all our officers and was appointed as the Company’s President, Secretary, Treasurer, Chief

Executive Officer, Chief Financial Officer and Principal Accounting Officer.

OF OPERATIONS

financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments

relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable

to continue in operation.

Our consolidated financial statements included

herein have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating

to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to

continue in operation.

We expect we will require additional capital to meet our long-term operating requirements.

We expect to raise

additional capital through, among other things, the sale of equity or debt securities.

Madison Technologies Inc.

Form 10-K - 2021 Page 26

ended December 31, 2021 and December 31, 2020

Revenues increased to $1,243,655 for the year ended December 31, 2021 from $1,374 for the year ended December 31, 2020.

resulted from the acquisitions of television stations in 2021 and the $1,243,655 revenues generated by the lease agreements held by those

We anticipate 2022 Net Revenues will increase compared to 2021 Net Revenues as a result a full year of operating the television

stations acquired during 2021 and the launch of BLOCKCHAIN.TV in 2022.

increased to $105,450 for the year ended December 31, 2021 from $0 for the year ended December 31, 2020.

The increase resulted from the

Sovryn acquisitions in 2021 of television stations that have amortizable tangible and intangible assets.

general and administrative fees

general and administrative fees increased to $350,770 for the year ended December 31, 2021 from $29,600 for the year ended December 31,

The increase was primarily the result of selling and overhead expenses for our television stations that we started operating in

2021 following their acquisitions.

operation expenses are $266,644 and $0 for the years ended December 31, 2021 and 2020.

The expenses are direct costs of operating the

television stations we acquired in 2021.

Fees increased to $1,850,041 for the year ended December 31, 2021 from $89,144 for the year ended December 31, 2020.

The increase was

primarily the result of an increase in the legal and accounting expense associated with the acquisitions of television stations, the

financing associated with those acquisitions and, the expense associated with regulatory filings for the SEC, including the Form S1 Registration.

impairment loss

goodwill impairment loss was $4,224,962 and $0 for the years ended December 31, 2021 and 2020.

Due to a sustained decline in the market

capitalization of our Common Stock during the fourth quarter of 2021, we performed an interim goodwill impairment test.

raise additional capital through, among other things, the sale of equity or debt securities.

Years Ended December 31, 2022 and December

and administrative expenses

General and administrative expenses increased

to $629,619 for the year ended December 31, 2022, from $8,478 for the year ended December 31, 2021.

The increase was primarily

the result of recruiting and hiring employees and outside talent to develop BCTV content and distribution arrangements.

Professional Fees

Professional fees increased to $1,910,039

for the year ended December 31, 2022, from $411,447 for the year ended December 31, 2021.

The increase was primarily the result

of an increase in the consulting, legal and accounting expense associated with regulatory filings for the SEC, developing the business

and fundraising efforts.

Goodwill Impairment Loss

Our goodwill impairment loss was $0 and

$4,224,962 for the years ended December 31, 2022 and 2021, respectively.

Due to a sustained decline in the market capitalization

of our Common Stock during the fourth quarter of 2021, we performed an interim goodwill impairment test.

Management considered

that, along with other possible factors affecting the assessment of our operations for the purposes of performing a goodwill impairment

assessment, including management assumptions about expected future revenue forecasts and discount rates, changes in the overall economy,

trends in the stock price, estimated control premium, other operating conditions, and the effect of changes in estimates and assumptions

that could materially affect the determination of fair value and goodwill.

As a result of the significant decline in the current market

capitalization despite any of the other positive factors contemplated and relatively little change in our ongoing business operations,

the outcome of this goodwill impairment test resulted in a charge for the impairment of goodwill of $4,224,962 recorded in the consolidated

financial statements for the year ended December 31, 2021.

Madison Technologies Inc.

Form 10-K - 2021 Page 27

on asset disposals

loss on asset disposals was $1,737,147 and $0 for the years ended December 31, 2021 and 2020.

Our initial objective was to create one

the largest, most comprehensive, state of the art OTA content distribution platforms to capitalize on the changing media and distribution

landscape and on the growing OTA viewership in the U.S.

We are exploring more capital efficient and technology centric alternatives to

its planned station acquisition distribution platform.

While there is no guarantee that it will be successful with this alternative approach,

we have determined that it will postpone further capital expenditures on acquisitions and as a result, the planned acquisitions of W27EB-Chicago,

KPHE-Phoenix, KVSD-San Diego, WANN-Atlanta and KDTL-St.

Louis stations have been terminated and future acquisition plans have been put

on hold while we evaluate this alternative approach.

As a result, we recognized $1,737,147 of losses from disposition of OTA assets.

expense increased to $5,553,121 for the year ended December 31, 2021 from $237,417 for the year ended December 31, 2020.

resulted from financing associated with the acquisition of television stations.

on Debt Extinguishment

loss on debt extinguishment was $5,553,121 for the year ended December 31, 2021 as compared to $0 for the year ended December 31, 2020.

The increase was the result of non-cash charges we recognized when we amended the stock price conversion terms of our Notes held the

Investors and by extinguishing notes payable by issuing shares of our Series D Preferred Stock.

from derivative that is not designated in a hedging relationship

gain from derivative that is note designated in a hedging relationship was $10,065,713 and $0 for the years ended December 31, 2021 and

loss from discontinued operations was $479,117 and $390,376 for the years ended December 31, 2021 and 2020, respectively.

15, 2021, we sold our subsidiary, CZJ License Inc., for $250,000 and designated its operations as discontinued.

The previous year’s

assets, liabilities and expenses have been similarly classified for comparative purposes.

Loss increased to $14,262,579 for the year ended December 31, 2021 from $910,163 for the year ended December 31, 2020.

The increase was

primarily the result of $5,553,141 of interest expense for debt instruments we issued in 2021, a $4,224,962 goodwill impairment loss,

and $1,737,147 in losses from asset disposals, Net Loss on a basic and diluted basis of $.040 per share for the year ended December 31,

2021, based on 352,843,639 weighted average shares outstanding, as compared to a Net Loss of $0.047 per share for the year ended December

31, 2020, based on 19,453,890 weighted average shares outstanding.

The increase in weighted average shares outstanding relates primarily

to issuances of 192,073,017 shares to the Investors on October 11, 2021 in connection with the $16,500,000 Notes we sold, the 1,091,388,889

shares we issued on October 11, 2021 to Preferred Series E-1 holders in pursuant to an Exchange Agreement and the into 255,555,556 shares

we issued on November 2, 2021 in exchange for shares of our Preferred Series Stock.

Madison Technologies Inc.

Form 10-K - 2021 Page 28

assessment, including management’s assumptions about expected future revenue forecasts and discount rates, changes in the

overall economy, trends in the stock price, estimated control premiums, other operating conditions, and the effect of changes in

estimates and assumptions that could materially affect the determination of fair value and goodwill.

As a result of the significant

decline in our market capitalization despite any of the other positive factors contemplated and relatively little change in our

ongoing business operations, the outcome of this goodwill impairment test resulted in a charge for the impairment of goodwill of

$4,224,962 recorded in the consolidated financial statements for the year ended December 31, 2021.

Loss from Impairment of Long-Lived Assets

Our loss from impairment of long-lived

assets was $197,427 and $0 for the years ended December 31, 2022 and 2021, respectively.

Our intangible assets primarily consist

of our domain names and access to a third-party streaming platform for our BCTV business, which are considered indefinite-lived

intangible assets that are not amortized, but instead are tested at least annually for impairment.

Based on management’s

assessment of the lack of revenue to date and the prospects for future revenues using the intangible assets, we fully impaired

the assets and recognized an impairment charge of $197,427 in the year ended December 31, 2022.

Interest Expense

Interest expense increased to $5,952,153

for the year ended December 31, 2022, from $5,260,417 for the year ended December 31, 2021.

The increase resulted primarily from

accruing default interest on the $16,500,000 of principal amount of Notes issued to the Investors starting on January 1, 2022.

Gain on Debt Extinguishment

Our gain on debt extinguishment was $0

for the year ended December 31, 2022, as compared to $9,126,294 for the year ended December 31, 2021.

In 2021, we recognized a

non-cash net gain when we amended the conversion price of the Notes held by the Investors and when we extinguished outstanding

notes payable by issuing shares of our Series D Preferred Stock.

Gain from Derivative That is not Designated

in a Hedging Relationship

Our gain from derivative that is not designated

in a hedging relationship was $0 and $10,065,713 for the years ended December 31, 2022 and 2021, respectively.

Discontinued Operations

Our loss from discontinued operations was

$3,671,407 and $3,418,293 for the years ended December 31, 2022 and 2021, respectively.

Effective February 1, 2023, we entered

into the Partial Foreclosure Agreement with the Investors, pursuant to which we transferred our ownership of the assets associated

with the broadcast television business of Sovryn, then our subsidiary, in consideration for a $11,600,000 reduction in the indebtedness

due under the Investor Notes.

As a result, the revenues, expenses, assets and liabilities of Sovryn are included as discontinued

operations for the years ended December 31, 2022.

Included in the loss from discontinued operations for the year ended December

31, 2022 is a $1,144,491 loss from impairment of our long-lived assets.

On November 15, 2021, we sold our subsidiary, CZJ License

and designated its operations as discontinued.

Net loss decreased to $13,139,810 for

the year ended December 31, 2022, from $14,262,579 for the year ended December 31, 2021.

The decrease was primarily the result

of a one-time $4,224,962 goodwill impairment loss in 2021 that was partial offset by a $1,144,941 loss from impairment of long-lived

assets from discontinued operations and a $197,427 loss from impairment of long-lived assets from continuing operations.

on a basic and diluted basis of $0.008 per share for the year ended December 31, 2022, based on 1,599,829,313 weighted average

shares outstanding, as compared to a net loss of $0.04 per share for the year ended December 31, 2021, based on 352,843,639 weighted

average shares outstanding.

The increase in weighted average shares outstanding relates primarily to issuances of 192,073,017

shares to the Investors on October 11, 2021 in connection with the Notes we issued, the 1,091,388,889 shares we issued on October

11, 2021 to holders of shares of Series E-1 Preferred Stock pursuant to an exchange agreement and the 255,555,556 shares we issued

on November 2, 2021 in exchange for shares of our Preferred Series Stock, which were outstanding for all of 2022.

and Capital Resources

and Working Capital

at December 31, 2021, we had $55,656 in cash and a $4,373,271 working capital deficit, compared to cash of $9,491 and working capital

deficit of $533,548 as at December 31, 2020.

will require additional capital to meet our long-term operating requirements.

We have not yet made the $0.4 million interest payments

on the Notes held by Arena Partners LC that were due on April 1, 2022 and July 1, 2022, and as a result, under the Note terms, the interest

rate is 20.0% per annum.

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

however, 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.

expect to raise additional capital through the sale of equity and/or debt securities;

however, there is no assurance that we will be

successful at raising additional capital in the future.

If our plans are not achieved and/or if significant unanticipated events occur,

we may have to further modify our business plan, which may require us to raise additional capital.

As of December 31, 2021, our principal

source of liquidity was our cash, which totaled $55,656.

Historically, our principal sources of cash have included proceeds from the

sale of common stock and preferred stock and related party loans.

Our principal uses of cash have included cash used in operations, to

make acquisitions and to pay interest on our Notes.

We expect that the principal uses of cash in the future will be for continuing operations

associated with rolling out the business plan and for interest payments.

As at December 31, 2022, we had $0

in cash and a $13,860,314 working capital deficit, compared to cash of $729 and working capital deficit of $3,673,317 as at December

The increase in the working capital deficit primarily resulted from classifying our obligations under the Investor’s

Notes as a current liability as a result of us being in default under the Notes during the year ended December 31, 2022.

We will require additional capital to

meet our long- and short-term operating requirements.

For the year ended December 31, 2022, our principal source of liquidity

was our cash that we obtained from borrowings.

Our principal use of cash was to fund operations.

We expect that the principal

uses of cash in the future will be for continuing operations associated with rolling out our business plan and repayment of notes

payable that are not converted into our Common Stock or renegotiated.

Cash Used in Operating Activities

used cash of $6,203,200 in operating activities during fiscal 2021 compared to cash used of $489,325 in operating activities during the

previous fiscal year.

The increase was primarily the result of increase in expenses associated with the build out and roll out of our

business plan.

We used cash of $2,820,304 in operating

activities for the year ended December 31 2022, compared to cash used of $2,802,410 in operating activities during the year ended

December 31, 2021.

Cash Used in Investing Activities

used cash of $14,715,635 in investing activities during fiscal 2021 compared to cash used of $10,000 in investing activities during the

previous fiscal year.

The increase was the result of acquisitions and expenses associated with KNLA/KNET, KVVV, KYMU television stations,

deposits associated with signed purchase agreements and loans made to Top Dog Productions Inc.

Cash Provided (Used in) by Financing Activities

cash flows provided by financing activities of $20,965,000 for fiscal 2021, were from the proceeds of the Arena financing in February

2021 and Share subscriptions received but not issued for our Series G preferred stock and proceeds from subordinated loans, compared

to $507,450 of cash provided by financing activities during the previous fiscal year.

Madison Technologies Inc.

Form 10-K - 2021 Page 29

We used cash of $0 in investing activities

during the year ended December 31,2022, compared to cash used of $855,750 in investing activities during the year ended December

In the year ended December 31,2021, we used cash to make loans to Top Dog Productions Inc.

to build out our website.

Top Dog Productions, Inc.

is a Los Angeles based TV production company that assisted us with developing BCTV content and production

of short segments as prototypes.

On September 9, 2021, we issued a secured promissory note with Top Dog Productions, Inc.

aggregate principal sum of up to $2,000,000.

accruing interest at a rate of 5% per annum.

As of December 31, 2022, we advanced

$527,624 and accrued $26,510 in interest receivable.

Based on management’s assessment of the collectability of the principal

and interest, we recognized an allowance for the entire amount and included the charge in bad debt expense for the year ended December

Net Cash Provided by Financing Activities

Net cash provided by financing activities

of $1,752,000 came primarily from proceeds from subordinated loans entered into during the year ended December 31, 2022, compared

to $20,982,000 of cash provided by financing activities during the year ended December 31, 2021, which consisted primarily of the

proceeds from the Arena financing in February 2021, share subscriptions received, but not issued, for our Series G convertible

Preferred Stock, par value $0.001 per share (the “Series G Preferred Stock”), and proceeds from subordinated loans.

Discontinued Operations

In the fourth quarter of 2022, management at that time determined

that Sovryn’s television broadcast business was not an efficient use of our resources to develop and launch BCTV, our core

business, and sought to exit Sovryn’s business and reduce Madison’s senior debt it incurred in connection with acquiring

Sovryn’s assets and creating its business.

As a result, Sovryn is recognized as a discontinued operation in the accompanying

consolidated financial statements.

The previous year’s assets, liabilities and expenses have been similarly classified for

comparative purposes.

The following is a summary of Sovryn for the years ended December 31, 2022 and 2021:

Current assets

Property, equipment and right-of-use assets

Intangible assets

Accounts payable and accrued liabilities

Lease liability obligations

Selling, general and administrative

Television operation

Professional fees

Interest expense

Loss on asset disposals

Impairment loss

Loss from discontinued operations

of Significant Equipment

do not intend to purchase any significant equipment during the next twelve months.

As of December 31, 2022, we had no intention

to purchase any significant equipment during the next twelve months.

Sheet Arrangements

have no off-balance sheet arrangements including arrangements that would affect its liquidity, capital resources, market risk support

and credit risk support or other benefits.

have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk

support and credit risk support or other benefits.

Commitments for Capital Expenditures

had no contingencies or long-term commitments at December 31, 2022.

independent auditors’ reports accompanying our December 31, 2021 and 2020 financial statements contain an explanatory paragraph

The independent auditors’ reports

accompanying our December 31, 2022 and 2021 consolidated financial statements in this Annual Report contain an explanatory paragraph

expressing substantial doubt about our ability to continue as a going concern.

The financial statements have been prepared assuming that

we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in

the ordinary course of business.

Disclosure of Contractual Obligations

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.

Madison Technologies Inc.

Form 10-K - 2021 Page 30

Accounting Policies

follow certain significant accounting policies when preparing our consolidated financial statements.

A complete summary of these policies

is included in Note 1 of Notes to Consolidated Financial Statements.

Certain of the policies require management to make significant and

subjective estimates or assumptions that may deviate from actual results.

In particular, management makes estimates regarding the useful

life of long-lived assets related to depreciation and amortization expense, estimates regarding fair value of our reporting units and

future cash flows with respect to assessing potential impairment of both long-lived assets and goodwill and estimates of expense related

to our debt and equity instruments.

Each of these estimates is discussed in greater detail in the following discussion.

Such consolidated financial statements have been

prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our

liabilities and commitments in the ordinary course of business.

Transactions with Related Parties

In March 2021, we entered into a consulting

agreement with Zenna Consulting Group, Inc.

(“Zenna Consulting”), a corporation affiliated with Warren Zenna, who served

as a Board member at such time, to provide oversight of marketing and communications services, which ended on July 31, 2021.

paid Zenna Consulting $0 and $57,000 fees in the years ended December 31, 2022 and 2021, respectively.

Zenna was a member of

our Board of Directors until November 6, 2023.

On March 1, 2022, we granted a warrant to Mr.

Zenna to purchase up to 500,000 shares

of our Common Stock at $0.025 per share at any time beginning September 1, 2022 and ending September 1, 2026.

We estimate the value

such warrant to be approximately $9,000, based on the $0.018 market price per share of our Common Stock on March 1, 2022.

On April 7, 2021, we issued 1,500,000 shares

of our Common Stock valued at $1,500 to Mr.

Canouse in exchange for transferring his 100 shares of our Series B Preferred Stock

to FFO1, an entity controlled by Mr.

Falcone, then our Chief Executive Officer and Chairman of our Board of Directors.

shares of Series B Preferred Stock provide the holder thereof the right to vote 51% of the voting power of each class of outstanding

voting shares of capital stock.

FFO1 also held 461,000 shares of Series E-1 Preferred Stock and FFO2 held 461,000 shares of Series

E-1 Preferred Stock.

Lisa Falcone, wife of Mr.

Falcone, is the trustee of FFO2 and Ms.

Falcone has shared voting and dispositive

Such shares of preferred stock held by FFO1 and FFO2 are included in the Pledged Assets.

Effective January 1, 2022, we entered into

a management consulting agreement with GreenRock LLC, a company controlled by Mr.

Falcone, for a period of one year ending December

31, 2022, pursuant to which we provided monthly remuneration of $35,000, plus expenses in connection with his duties, responsibilities

and performance as our chief executive officer.

In February 2021, Sovryn entered into a consulting agreement with GreenRock LLC

to provide us with chief executive officer services.

In the years ended December 31, 2022 and 2021, we paid GreenRock LLC $420,000

and $315,000 in fees, respectively.

Falcone is the managing member of GreenRock LLC and is our former Chief Executive Officer.

We paid GreenRock LLC bonuses of $505,972 for the year ended December 31, 2022.

On February 1, 2023, we entered into the

Partial Foreclosure Agreement with the Investors pursuant to which we transferred ownership of our FCC licenses and other broadcast

television assets to a third-party entity controlled by the Investors.

In consideration therefor, the Investors agreed to reduce

the indebtedness under the Notes by $11,600,000.

On September 21, 2023, the Agent for the Investors delivered to us a notice that

the Agent has exercised the Investors’ rights to vote the Pledged Interests, including the 100 shares of our Series B Preferred

Stock, and to exercise the Pledgees’ rights, powers and privileges to pass certain resolutions and to amend our bylaws then

in effect to, among other things, (i) remove the Board of Directors and all Company officers, and (ii) reduce the number of the

Board of Directors from three directors to one director.

As a result of the Agent sending such notice and exercising its rights

to vote the Pledged Interests, a Change of Control occurred.

On November 6, 2023, the shareholders of

the Company removed Philip Falcone and Warren Zenna as our directors and appointed Thomas Amon as the sole member of our board

of directors.

Amon removed all our officers and appointed himself as the Company’s President, Secretary, Treasurer, Chief

Executive Officer, Chief Financial Officer and Principal Accounting Officer.

Recent Accounting Pronouncements

New pronouncements issued for future implementation

are discussed in Note 3, Summary of Significant Accounting Policies – Recently Issued Accounting Pronouncements, in our Notes

to the consolidated financial statements included in this Annual Report.

Critical Accounting Policies

We follow certain significant accounting

policies when preparing our consolidated financial statements.

A complete summary of these policies is included in Note 1 of the

Notes to the consolidated financial statements included in this Annual Report.

Certain of the policies require management to make

significant and subjective estimates or assumptions that may deviate from actual results.

In particular, management makes estimates

regarding the useful life of long-lived assets related to depreciation and amortization expense, estimates regarding fair value

of our reporting units and future cash flows with respect to assessing potential impairment of both long-lived assets and goodwill

and estimates of expense related to our debt and equity instruments.

Each of these estimates is discussed in greater detail in

the following discussion.

Assets, Depreciation and Amortization Expense and Valuation

review the carrying value of long-lived assets for impairment when events or changes in circumstances indicate that the carrying amount

of an asset, or related asset group, may not be recoverable from estimated future undiscounted cash flows.

Recoverability of assets to

be held and used is measured by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash

flows expected to be generated by the asset or asset group.

If the carrying amount of the asset exceeds its estimated future cash flows,

an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

we recognized that we would not complete the acquisition of the TV station assets of W27EB and KPHE TV and we wrote off $1,150,000 in

deposits paid to sellers of those assets.

performed the annual goodwill and indefinite-lived intangible assets impairment assessments as of December 31, 2021 and concluded that

our goodwill for the Sovryn acquisition was impaired as of that date.

Goodwill and indefinite lived assets are tested annually or more

frequently if events or changes in circumstances indicate that the asset might be impaired.

We follow a two-step process for testing

First, the fair value of each reporting unit is compared to its carrying value to determine whether an indication of impairment

If impairment is indicated, then the fair value of the reporting unit’s goodwill is determined by allocating the unit’s

fair value of its assets and liabilities (including any unrecognized intangible assets) as if the reporting unit had been acquired in

a business combination.

The amount of impairment for goodwill is measured as the excess of its carrying value over its implied fair value.

We review the carrying value of long-lived

assets for impairment when events or changes in circumstances indicate that the carrying amount of an asset, or related asset group,

may not be recoverable from estimated future undiscounted cash flows.

Recoverability of assets to be held and used is measured

by a comparison of the carrying amount of an asset or asset group to estimated undiscounted future cash flows expected to be generated

by the asset or asset group.

If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge

is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset.

For the year ended December

31, 2022, we recognized that we would not complete the acquisition of the TV station assets of W27EB and KPHE TV and we wrote off

$1,150,000 in deposits paid to sellers of those assets.

For the year ended December 31, 2022,

our intangible assets primarily consisted of our domain names and access to a third party streaming platform for our BCTV business,

which are considered indefinite-lived intangible assets that are not amortized, but instead are tested at least annually for impairment.

Based on management’s assessment of the lack of revenue to date and the prospects for future revenues using the intangible

assets, we fully impaired the assets and recognized an impairment charge of $197,427 in the year ended December 31, 2022.

performed the annual goodwill impairment assessment as of December 31, 2021 and concluded that our goodwill for the Sovryn acquisition

was impaired as of that date.

Goodwill is tested annually or more frequently if events or changes in circumstances indicate that

the asset might be impaired.

We follow a two-step process for testing impairment.

First, the fair value of each reporting unit

is compared to its carrying value to determine whether an indication of impairment exists.

If impairment is indicated, then the

fair value of the reporting unit’s goodwill is determined by allocating the unit’s fair value of its assets and liabilities

(including any unrecognized intangible assets) as if the reporting unit had been acquired in a business combination.

of impairment for goodwill is measured as the excess of its carrying value over its implied fair value.

For the year ended December

31, 2022, we had no goodwill.

have certain financial instruments that are derivatives or contain embedded derivatives.

We evaluate all of our financial instruments

to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted

for in accordance with ASC 810-10-05-4 and 815-40.

This accounting treatment requires that the carrying amount of any derivatives be

recorded at fair value at issuance and marked-to-market at each balance sheet date.

In the event that the fair value is recorded as a

liability, as is the case with us, the change in the fair value during the period is recorded as either other income or expense.

conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise

date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on extinguishment.

to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately

accounted for in accordance with ASC 810-10-05-4 and 815-40.

This accounting treatment requires that the carrying amount of any

derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date.

In the event that the fair

value is recorded as a liability, as is the case with us, the change in the fair value during the period is recorded as either

other income or expense.

Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at

the conversion, repayment or exercise date and then the related fair value amount is reclassified to other income or expense as

part of gain or loss on extinguishment.

Quantitative and Qualitative Disclosures About Market Risk.

is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under

Madison Technologies Inc.

Form 10-K - 2021 Page 31

We are a smaller reporting company as

defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

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 7. Management’s Discussion and Analysis