Madison Technologies Inc. 10-K

Item 8. Financial Statements and Supplementary Data. MADISON TECHNOLOGIES INC. DECEMBER 31, 2022 AND 2021 TABLE OF Contents Independent Auditor’s Report (PCAOB ID#: 5041 ) F-1 CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets F-2 Consolidated Statements of Operations F-3 Consolidated Statements of Stockholders’ Deficit F-4 Consolidated Statements of Cash Flows F-5 Notes to the Consolidated Financial Statements F-6 Report of Independent Registered Public Accounting Firm To the shareholders and the board of directors of Madison Technologies Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Madison Technologies Inc. (the “Company”) as of December 31, 2022 and 2021, the related statement of operations, stockholders’ equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States. Substantial Doubt about the Company’s Ability to Continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s significant operating losses raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or are required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ BF Borgers CPA PC BF Borgers CPA PC We have served as the Company’s auditor since March 28, 2022 PCAOB ID 5041 Lakewood, CO January 24, 2024 F- 1 MADISON TECHNOLOGIES INC. CONSOLIDATED Balance Sheets For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 ASSETS CURRENT ASSETS Cash $ — $ 729 Prepaid expenses 12,722 — Note receivables — 738,878 Assets from discontinued operations 11,726,332 15,859,685 Total Current Assets 11,739,054 16,599,292 Intangible assets, net — 167,000 Investments 100 100 Total Assets $ 11,739,154 $ 16,766,392 LIABILITIES AND STOCKHOLDERS’ DEFICIT CURRENT LIABILITIES Accounts payable and accrued expenses $ 741,399 $ 283,024 Derivative liability 4,429,329 3,464,529 Promissory notes 936,112 491,741 Convertible notes 1,883,295 850,000 Interest payable on senior secured notes 3,300,000 453,750 Senior secured notes, net of discount 14,599,240 12,919,392 Liabilities from discontinued operations 2,582,902 1,977,273 Total liabilities 28,472,277 20,439,709 Preferred Shares - Series C, $ 0.001 par value; 2 %, stated value $ 100 per share 10,000 shares designated, 0 issued and outstanding, December 31, 2022 and 2021, respectively; — — Preferred Shares - Series D, $ 0.001 par value; convertible, stated value $ 3.32 per share, 230,000 shares designated, 155,000 shares issued and outstanding, December 31, 2022 and 2021, respectively; 75,000 converted 155 155 Preferred Shares - Series E, $ 0.001 par value; convertible, stated value $ 1,000 per share, 1,000 shares designated, 0 issued and outstanding, December 31, 2022 and 2021, respectively; 1,000 shares exchanged for Series E-1 — — Preferred Shares - Series E-1, $ 0.001 par value; convertible, stated value $ 0.87 per share, 1,152,500 shares designated, 1,152,500 and 0 shares issued and outstanding, December 31, 2022 and 2021, respectively; 1,153 1,153 Preferred Shares - Series F, $ 0.001 par value; convertible, stated value $ 1 per share, 1,000 shares designated, 0 issued and outstanding, December 31, 2022 and 2021, respectively; 1,000 shares converted — — Preferred Shares - Series G, $ 0.001 par value; convertible, stated value $ 1,000 per share, 4,600 shares designated, 0 issued and outstanding, December 31, 2022 and 2021, respectively; 4,600 shares converted — — Preferred Shares – Series H, $ 0.001 par value; convertible, stated value $ 1 per share, 39,895 shares designated, 39,895 issued and outstanding, December 31, 2022 and 2021, respectively 40 40 STOCKHOLDERS’ DEFICIT Preferred Shares – 50,000,000 shares authorized, $ 0.001 par value Preferred Shares - Series A, $ 0.001 par value; 3 %, stated value $ 100 per share, 100,000 shares designated, 0 shares issued and outstanding, December 31, 2022 and 2021, respectively — — Preferred Shares - Series B, $ 0.001 par value; 100 shares designated, 100 shares issued and outstanding, December 31, 2022 and 2021, respectively — — Common Shares - $ 0.001 par value; 6,000,000,000 shares authorized, 1,603,095,243 shares issued and outstanding, December 31, 2022 and 2021, respectively 1,603,095 1,599,095 Additional Paid in Capital 10,549,265 10,473,261 Accumulated deficit ( 28,886,831 ) ( 15,747,021 ) Total stockholders’ deficit ( 16,734,471 ) ( 3,674,665 ) Total liabilities and stockholders’ deficit $ 11,739,154 $ 16,766,392 See the accompanying Notes to the Consolidated Financial Statements. F- 2 MADISON TECHNOLOGIES INC. CONSOLIDATED STATEMENTS of Operations For the Year For the Year Ended Ended December 31, 2022 December 31, 2021 Revenues $ — $ — Operating Expenses General and administrative 629,619 8,478 Professional fees 1,910,039 411,447 Bad debt expense 818,279 — Long-lived assets impairment loss 197,427 — Goodwill impairment loss — 4,224,962 Total operating expenses 3,555,364 4,644,887 Loss before other expense ( 3,555,364 ) ( 4,644,887 ) Other income (expense) Interest expense ( 5,952,153 ) ( 5,260,417 ) Gain on debt extinguishment — 9,126,294 Loss from debt derivative — ( 10,065,713 ) Loss from change in value of warrants — ( 6,008 ) Other income 39,114 6,445 Total non-operating expense ( 5,913,039 ) ( 6,199,399 ) Loss from continuing operations ( 9,468,403 ) ( 10,844,286 ) Loss from discontinued operations ( 3,671,407 ) ( 3,418,293 ) Net loss and comprehensive loss $ ( 13,139,810 ) $ ( 14,262,579 ) Net loss per share-Basic and diluted $ ( 0.008 ) $ ( 0.040 ) Average number of shares of common stock outstanding 1,599,829,313 352,843,639 See the accompanying Notes to the Consolidated Financial Statements. F- 3 MADISON TECHNOLOGIES INC. CONSOLIDATED Statements of stockholders’ DEFICIT For the Year Ended December 31, 2022 Additional Common Preferred Paid In Accumulated Shares Amount Stock Capital Deficit Total Balance, December 31, 2021 1,599,095,027 $ 1,599,095 $ 1,348 $ 10,473,261 $ ( 15,747,021 ) $ ( 3,674,665 ) Conversion of convertible note into Common Stock 4,000,216 4,000 — 76,004 — 80,004 Net loss for the period — — — — ( 13,139,810 ) ( 13,139,810 ) Balance, December 31, 2022 1,599,095,027 $ 1,603,095 $ 1,348 $ 10,549,265 $ ( 28,886,831 ) $ ( 16,734,471 ) For the Year Ended December 31, 2021 Additional Common Preferred Paid In Accumulated Shares Amount Stock Capital Deficit Total Balance, December 31, 2020 23,472,565 $ 23,472 $ 93 $ 1,302,977 $ ( 1,484,442 ) $ ( 157,900 ) Cancellation of Series A Preferred — — ( 93 ) 93 — — Conversion of debt to Series D Preferred — — 230 667,984 — 668,214 Series E Preferred issued for acquisition of assets — — 1 4,225,061 — 4,225,062 Series F Preferred issued for convertible note — — 1 230,030 — 230,031 Equity portion of debts issued and extinguished — — — 1,023,855 — 1,023,855 Common issued for Series B Preferred transfer 1,500,000 1,500 — ( 1,500 ) — — Series E Preferred exchanged for Series E-1 Preferred 1,091,388,889 1,091,389 1,152 ( 1,092,541 ) — — Conversion of Series F Preferred into Common Stock 192,073,017 192,073 ( 1 ) ( 192,072 ) — — Sale of Series G Preferred and conversion into Common Stock 255,555,556 255,556 — 4,344,444 — 4,600,000 Common Stock exchanged for Series H Preferred ( 39,895,000 ) ( 39,895 ) 40 39,855 — — Conversion of Series D 75,000,000 75,000 ( 75 ) ( 74,925 ) — — Net loss for the period — — — — ( 14,262,579 ) ( 14,262,579 ) Balance, December 31, 2021 1,599,095,027 $ 1,599,095 $ 1,348 $ 10,473,261 $ ( 15,747,021 ) $ ( 3,674,665 ) See the accompanying Notes to the Consolidated Financial Statements. F- 4 MADISON TECHNOLOGIES INC. consolidated Statements of cash flows For the For the Year Ended Year Ended December 31, 2022 December 31, 2021 Cash flows from operating activities: Net loss from continuing operations for the period $ ( 9,468,403 ) $ ( 10,844,286 ) Adjustments to reconcile net loss to cash used in operating activities: Amortized interest 2,428,313 2,694,914 Bad debt expense 725,561 — Fair value of Warrant issued for services 9,000 — Loss on disposal of CZJ License — 437,125 Losses from impairment of long-lived assets and goodwill 167,000 4,224,962 Changes in non-cash working capital items: Prepaid expenses 595 17,183 Accounts payable and accruals 471,380 220,754 Interest payable 2,846,250 453,750 Interest receivable — ( 6,812 ) Net cash used in operating activities ( 2,820,304 ) ( 2,802,410 ) Cash flows from investing activities: Purchases of intangible assets — ( 167,000 ) Funds advanced for note receivable — ( 718,750 ) Net cash used in investing activities — ( 885,750 ) Cash flows from financing activities: Proceeds from convertible and promissory notes sold 1,752,000 16,730,000 Proceeds from sales of Series G Preferred Stock — 4,600,000 Repayment of convertible note — ( 350,000 ) Net cash provided by financing activities 1,752,000 20,980,000 Cash flows from continuing operations ( 1,068,304 ) 17,291,840 Cash flows from discontinued operations: Net cash provided by (used in) operating activities 1,082,088 ( 2,204,652 ) Net cash used in investing activities ( 14,513 ) ( 15,095,950 ) Cash flows from discontinued operations 1,067,575 ( 17,300,602 ) Net decrease in cash ( 729 ) ( 8,762 ) Cash, beginning of year 729 9,491 Cash, end of year $ — $ 729 SUPPLEMENTAL DISCLOSURE Interest paid $ 453,750 $ 1,139,292 Taxes paid $ — $ — During the year ended December 31, 2021 and 2022, the following transactions did not involve cash: (a) Demand notes, convertible notes and interest with a carrying value of $ 668,214 were exchanged for 230,000 preferred shares of Series D. (b) $ 1,463,936 in operating leases for equipment were capitalized and leases payable of the same amount were recorded. (c) 1,000 shares of Series E Preferred Stock were issued by the Company in exchange for 100 % of the common shares of Sovryn Holdings Inc. The shares were valued at $ 4,225,062 and goodwill of $ 4,224,962 was recorded and subsequently impaired. $ 100 of common shares were eliminated upon consolidation. (d) 1,000 shares of Series E Preferred Stock were exchanged for 1,152,500 shares of Series E-1 Preferred Stock and 1,091,388,889 shares of Common Stock. (e) Convertible notes and interest with a carrying value of $ 80,004 were converted into 4,000,216 shares of Common Stock. See the accompanying Notes to the Consolidated Financial Statements F- 5 MADISON TECHNOLOGIES INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS December 31, 2022 and 2021 Note 1 Nature of Operations Madison Technologies Inc. (the “Company”) was incorporated on June 15, 1998 in the State of Nevada, and our shares of Common Stock are quoted on the Experts Market tier of the over-the-counter market operated by OTC Markets, Inc. Madison Technologies Inc. is seeking to create, develop and launch BlockchainTV (“BCTV”), the first-to-market 24/7 television broadcast and streaming communications network designed to bring the most up-to-date Crypto information and entertainment to the masses in the U.S. and around the world. During August 2021, our shareholders approved to amend our Articles of Incorporation to increase our authorized common stock from 500,000,000 shares to 6,000,000,000 shares. Note 2 Going Concern The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. For the year ended December 31, 2022, we generated no revenues from continuing operations, incurred a net loss of $ 13,139,810 and had a working capital deficit and an accumulated deficit of $ 13,860,314 and $ 28,886,831 , respectively, at December 31, 2022. It is management’s opinion that these matters raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the issuance date of this report. Our ability to continue as a going concern is dependent upon management’s ability to raise additional capital as needed from the sales of stock or debt and further implement our business plan. The accompanying consolidated financial statements do not include any adjustments that might be required should we be unable to continue as a going concern. Note 3 Summary of Significant Accounting Policies Use of estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates. Consolidation The accompanying consolidated financial statements include the accounts of our current and former wholly owned subsidiaries, Blockchain.tv, Inc., SovRryn Holdings Inc (“Sovryn”) and CZJ License Inc. Sovryn is consolidated up until December 31, 2022 and recognized as a discontinued operation. CZJ License Inc. was consolidated up until it was sold on November 15, 2021. All the intercompany balances and transactions have been eliminated in the consolidation. During the year ended December 31, 2021, the operations of Sovryn and CZJ License Inc. were consolidated into our operations and were designated as discontinued. F- 6 Segment reporting Our chief operating decision maker is our chief executive officer, who reviews information on an aggregated basis. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. Revenue recognition We adopted the ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). We recognize revenue when we transfer promised services to the customer. The performance obligation is the monthly services rendered. We have one main revenue source which is leasing of television station channels. Accordingly, we recognize revenue when services are provided as time passes the customers have access to utilize the channel. These revenues are billed in advance, arrears and/or are prepaid. The performance obligation is the monthly services rendered. At December 31, 2022, we have one main revenue source, which is leasing of television channels. Where there is a leasing contract for channels, we bill monthly for our services as rendered. Where there is no contract, the revenue is recognized as provided. We recognize revenue in accordance with ASC 606 using the following 5 steps to identify revenues: ● identify the contract with a customer; ● identify the performance obligations in the contract; ● determine the transaction price; ● allocate the transaction price to performance obligations in the contract; and ● recognize revenue as the performance obligation is satisfied. Advances from client deposits are contract liabilities with customers that represent our obligation to either transfer goods or services in the future, or refund the amount received. Where possible, we obtain retainers to lessen our risk of non-payment by our customers. Advances from client deposits are recognized as revenue as we meet specified performance obligations as detailed in the contract. Operating leases In February 2016, the FASB issued ASU 2016-02, Leases (“Topic 842”). The new standard establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. For leases with an initial term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the term of the lease. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition. Similarly, lessors will be required to classify leases as sales-type, finance or operating, with classification affecting the pattern of income recognition. Classification for both lessees and lessors will be based on an assessment of whether risks and rewards as well as substantive control have been transferred through a lease contract. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We adopted the new standard April 19, 2021. We have elected not to recognize lease assets and lease liabilities for leases with an initial term of 12 months or less. Intangible assets Intangible assets are non-monetary identifiable assets, controlled by us that will produce future economic benefits, based on reasonable and supportable assumptions about conditions that will exist over the life of the asset. An intangible asset that does not meet these attributes will be recognized as an expense when it is incurred. Intangible assets that do, are capitalized and initially measured at cost. Those with a determinable life will be amortized on a systematic basis over their future economic life. Those with an indefinite useful life shall not be amortized until its useful life is determined to be longer indefinite. An intangible asset subject to amortization shall be periodically reviewed for impairment. A recoverability test will be performed and, if applicable, unscheduled amortization is considered. F- 7 License agreements have been capitalized, recorded at cost and amortized over the life of the contracts. They will be amortized over the life of the license to which it supports. Equipment Equipment represents purchases made for assets, whose useful life was determined to be greater than one year. The assets are initially recorded at cost and depreciated over their estimated useful lives. Website development costs We recognized the costs associated with developing a website in accordance with ASC 350-50 “Website Development Cost”. The website development costs are divided into three stages, planning, development and production. The development stage can further be classified as application and infrastructure development, graphics development and content development. In short, website development cost for internal use should be capitalized except content input and data conversion costs in content development stage. Costs associated with the website consist primarily of website development costs paid to third party. These capitalized costs will be amortized based on their estimated useful life over three years upon the website becoming operational. Internal costs related to the development of website content will be charged to operations as incurred. Website development costs related to the customers are charged to cost of sales. Impairment of Long-Lived Assets In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets ” , all long-lived assets such as plant and equipment and intangible assets we hold and use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. Concentration of credit risk We place our cash and cash equivalents with a high credit quality financial institution. We maintain United States Dollars. We minimize its credit risks associated with cash by periodically evaluating the credit quality of its primary financial institution. Financial instruments Our financial instruments consist principally of cash, accounts payable, accrued liabilities and notes payable. The carrying amounts of such financial instruments in the accompanying financial statements approximate their fair values due to their relatively short-term nature or the underlying terms are consistent with market terms. It is the management’s opinion that we are not exposed to any significant currency or credit risks arising from these financial instruments. Fair value measurements We follow the guidelines in ASC Topic 820 “Fair Value Measurements and Disclosures”. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. F- 8 We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. All financial instruments approximate their fair value. Level 1 — Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. Convertible Notes with Fixed Rate Conversion Options We may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. We record the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the note date with a charge to interest expense in accordance with ASC 480 - “Distinguishing Liabilities from Equity”. Advertising and promotion costs We follow ASC 720 “Advertising Costs” and expenses costs as incurred. Stock-based compensation We follow the guideline under ASC 718, “Stock Compensation”. The standard provides that for all stock-based compensation plans, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights, which requires that all share-based payments to both employees and directors be recognized in the income statement based on their fair values. For non-employees stock-based compensation, We apply ASC 505 Equity-Based Payments to Non-employees. This standard provides that all stock-based compensation related to non-employees be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever can be most reliably be measured or determinable. Comprehensive income ASC Topic 220, “ Comprehensive Income ”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit. F- 9 Loss per share Net Loss Per Share Basic loss per share is calculated by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in our earnings (loss). Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless such dilutive potential shares would result in anti-dilution. As of December 31, 2022 and 2021, no options were outstanding and 246,173,016 and 192,573,017 warrants were outstanding and exercisable, respectively. Additionally, as of December 31, 2022 and 2021, the outstanding principal balance, including accrued interest of the third-party convertible debt, totaled $ 22,154,828 and $ 17,365,033 , respectively, and was convertible into 1,148,500,170 and 866,192,064 shares of Common Stock, respectively. We issued shares of Preferred Stock that may be converted into our Common Stock. Of the outstanding shares of Preferred Stock as of December 31, 2022 and 2021, as applicable, Series A Preferred Stock was convertible into 318,056,580 shares of Common Stock. Series D Preferred Stock was convertible into 155,000,000 shares of Common Stock, Series E-1 Preferred Stock was convertible into 1,152,500,000 shares of Common Stock and Series H Preferred Stock was convertible into 39,895,000 shares of Common Stock. The total potentially dilutive shares calculated are 3,060,124,766 and 2,724,216,661 as of December 31, 2022 and 2021, respectively. It should be noted that contractually the limitations on the third-party notes (and the related warrants) limit the number of shares converted into either 4.99% or 9.99% of the then outstanding shares. As of December 31, 2022, and 2021, potentially dilutive securities consisted of the following: Schedule of Potentially Dilutive Securities December 31, 2022 December 30, 2021 Warrants 246,173,016 192,573,017 Convertible Preferred Stock 1,665,451,580 1,665,451,580 Convertible debt 1,148,500,170 866,192,064 Total 3,060,124,766 2,724,216,661 Business Combinations In accordance with ASC 805-10, “Business Combinations”, we account for all business combinations using the acquisition method of accounting. Under this method, assets and liabilities, including any remaining non-controlling interests, are recognized at fair value at the date of acquisition. The excess of the purchase price over the fair value of assets acquired, net of liabilities assumed, and non-controlling interests is recognized as goodwill. Certain adjustments to the assessed fair values of the assets, liabilities, or non-controlling interests made subsequent to the acquisition date, but within the measurement period, which is up to one year, are recorded as adjustments to goodwill. Any adjustments subsequent to the measurement period are recorded in income. Any cost or equity method interest that we hold in the acquired company prior to the acquisition is re-measured to fair value at acquisition with a resulting gain or loss recognized in income for the difference between fair value and the existing book value. Results of operations of the acquired entity are included in our results from the date of the acquisition onward and include amortization expense arising from acquired tangible and intangible assets. Credit losses In June 2016, the FASB issued ASU 326, “Financial Instruments – Credit Losses”. The ASU sets forth a “current expected credit loss” (CECL) model which requires us to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost and applies to some off-balance sheet credit exposures. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years, with early adoption permitted. Recently, the FASB issued the final ASU to delay adoption for smaller reporting companies to calendar year 2023. We are currently assessing the impact of the adoption of this ASU on its financial statements. Related Party Transactions We follow FASB ASC subtopic 850-10, “Related Party Transactions”, for the identification of related parties and disclosure of related party transactions. Pursuant to ASC 850-10-20, related parties include: a) our affiliates; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of management; d) our principal owners; e) our management; f) other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests. F- 10 Material related party transactions are required to be disclosed in the consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. Discontinued operations Discontinued operations are components of an entity that either have been disposed or abandoned or is classified as held for sale. Additionally, in order to qualify as a discontinued operation, the disposal or abandonment must represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. Income taxes We follow the guideline under ASC Topic 740 Income Taxes. “Accounting for Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Due to the uncertainty regarding our future profitability, the future tax benefits of its losses have been fully reserved. Recently Issued Accounting Pronouncements We adopt new pronouncements relating to generally accepted accounting principles applicable to us as they are issued, which may be in advance of their effective date. In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU addresses issuer’s accounting for certain modifications or exchanges of freestanding equity-classified written call options. This amendment is effective for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact this new guidance will have on its financial statements We do not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements. Note 4 Notes Receivable Schedule of Notes Receivable December 31, 2022 December 31, 2021 Secured note – Top Dog Productions Inc. $ — $ 468,750 Convertible note – ZA Group Inc. — 250,000 Advances in escrow and prepaid expenses — 24,042 Accrued interest — 6,811 $ — $ 749,603 F- 11 On September 9, 2021, we received a secured promissory note with Top Dog Productions Inc. We agreed to lend an aggregate principal sum of up to $ 2,000,000 that accrues 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 31, 2022. On November 15, 2021, we received a $ 250,000 convertible promissory note with ZA Group Inc. for the sale of our wholly owned subsidiary, CZJ License Inc. The note accrues at a rate of 5 % per annum. The principal and accrued interest of the note receivable will be due and payable on November 5, 2023. At any time after 180 days following the date of the note receivable, we may convert all or any part of the outstanding and unpaid amount of the note into fully paid and non-assessable shares of common stock of ZA Group Inc. at a fixed conversion price of $ 0.005 per share. As of December 31, 2022, based on management’s assessments of the collectability of the principal and $ 14,145 in accrued interest receivable and the value of ZA Group, Inc. common stock, we recognized an allowance for the $ 64,145 principal and interest and included the charge in bad debt expense for the year ended December 31, 2022. Note 5 Intangible Assets 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. Note 6 Goodwill 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. Note 7 Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities as of December 31, 2022 and December 31, 2021 are summarized below: Schedule of Accounts Payable and Accrued Liabilities 2022 2021 Accounts payable $ 371,987 $ 232,491 Accrued expenses 174,078 35,000 Accrued interest 195,334 15,033 Total $ 741,399 $ 283,024 F- 12 Note 8 Derivative Liability We incur a derivative liability when we issue warrants in connection with the sale of notes payable. Management has determined that the daily closing price of our Common Stock is not a reliable factor for determining the value of the warrants and corresponding derivative liability on the basis that (i) the average daily volume of our Common Stock traded is approximately $1,000, (ii) for approximately two months during 2022 and as of the date of this Annual Report on form 10-K, our Common Stock is listed on the OTC Expert Market that limits visibility of our Common Stock to investors, and (iii) the share price is exceptionally volatile in its thinly traded status. Valuation methods such at Black-Scholes rely on daily closing prices and their volatility. As a better representation of value, management is using a share price of $0.018 per share to determine the derivative liability from the issuance of such warrants, which was the per share price used in connection with the issuance of 255,555,556 shares of Common Stock issued upon conversion of the Series G Preferred Stock on November 2, 2021. For the years ended December 31, 2022 and 2021, our derivative liability was as follows: Schedule of Derivative Liability 2022 2021 Balance at January 1 $ 3,464,529 $ — Liability for Warrants issued 964,800 3,464,529 Balance at December 31 $ 4,429,329 $ 3,464,529 In the years ended December 31, 2022 and 2021, we issued warrants to purchase up to 53,600,000 and 192,573,016 shares of Common Stock, respectively. Note 9 Securities Exchange Agreements SovRyn Holdings, Inc We entered into a securities exchange agreement on February 16, 2021 with Sovryn to acquire 100 % of the shares of Sovryn in exchange for (i) Jeffrey Canouse, our CEO at the time, transferring 100 shares of our Series B Preferred Stock to a designee of Sovryn and (ii) 1,000 shares of Series E Preferred Stock. Upon the effectiveness of an amendment to our Articles of Incorporation to increase our authorized common stock from 500,000,000 shares to 6,000,000,000 shares, all shares of Series E Preferred Stock issued to the shareholders were exchanged for 1,152,500 shares of our Series E-1 Preferred Stock and 1,091,388,889 shares of our Common Stock. The Series E Preferred Stock votes on an as-converted basis with our Common Stock prior to their conversion. The Series E Preferred Stock represented approximately 59 % of the fully diluted shares of our Common Stock immediately after such shares were issued. The valuation for the Preferred Series E shares was determined to be $ 4,225,062 based on the market value of our shares we exchanged at the date the transaction. The transaction was recorded as an asset purchase and we recorded goodwill of $ 4,224,962 , which was based on the market value of such shares exchanged at the date of the transaction. Note 10 Promissory Notes On December 28, 2021, we issued a $ 500,000 promissory note that bears interest at 12 % per annum and matures on March 31, 2023 . In connection with such issuance, we issued 500,000 warrants that expire on December 31, 2023 and may be converted in shares of our Common Stock on or after June 26, 2022 at a price of $ 0.025 per share. We estimate the value such warrant to be approximately $ 9,000 , based on a value of $ 0.018 per share of our Common Stock as of December 28, 2021.The promissory note is subordinate to the Notes we issued to the Investors. As of December 31, 2022 and 2021, $ 500,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default. On January 14, 2022, we issued an unsecured $ 150,000 note payable with $ 15,000 in fees payable upon its April 5, 2022 maturity date, which we treated as deferred financing fees and amortize over the term of the note. The obligation is subordinate to the Notes we issued to the Investors. As of December 31, 2022, $ 120,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default. F- 13 On January 14, 2022, we issued an unsecured $ 150,000 note payable with $ 15,000 in fees payable upon its April 5, 2022 maturity date, which we treated as deferred financing fees and amortized over the term of the note. The obligation is subordinate to the Notes we issued to the Investors. As of December 31, 2022, $ 135,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default. On April 27, 2022, we issued a $ 125,000 unsecured note payable that has a $ 12,500 original issue discount and matures on December 31, 2022 . In connection with such issuance, we issued the noteholder a warrant to purchase up to 2,500,000 shares of our Common Stock at $ 0.025 per share that is exercisable starting September 15, 2022 and until April 15, 2024. We estimate the total value of such warrants to be $ 45,000 , based on a $ 0.018 price per share of our Common Stock that we treat as a debt discount and amortize over the term of the note. As of December 31, 2022, $ 125,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default. Note 11 Convertible Notes Payable Our convertible notes payable, all of which are liabilities as of the years ended December 31, 2022 and 2021, are as follows: Schedule of Convertible Notes Payable December 31, 2022 December 31, 2021 Series 1 (a) $ 1,050,000 $ 850,000 Series 2 (b) 250,000 — Series 3 (c) 208,000 — Series 4 (d) 550,000 — Series 5 (e) 192,500 — Series 6 (f) 55,000 — Principal outstanding total 2,305,500 850,000 Less discount 426,094 — Principal outstanding, net $ 1,879,406 $ 850,000 (a) Series 1: We issued a total of $ 1,050,000 in subordinated convertible notes that bear interest at 6 % per annum, mature on December 31, 2022 and may be converted at the noteholder’s option at any time into shares of our Common Stock at a fixed price of $ 0.021 per share. We have not yet repaid the noteholders and are in default. (b) Series 2: On January 6, 2022, we issued to one of our shareholders a $ 250,000 unsecured note payable that bears interest at 12 % per annum and matures on April 6, 2022 . In connection with such issuance, we issued the noteholder a warrant to purchase up to 6,250,000 shares of our Common Stock at $ 0.021 per share at any time starting July 1, 2022 and ending July 1, 2024. We estimate the value of the warrant to be $ 112,500 , based on a $ 0.018 price per share of our Common Stock that is treated as a debt discount to be amortized over the term of the note. We have not yet repaid the noteholder and are in default. F- 14 On January 14, 2022, we issued to one of our shareholders a $ 25,000 unsecured note payable that bears interest at 12 % per annum and matures on April 6, 2022 . In connection with such issuance, we issued the noteholder a warrant to purchase up to 600,000 shares of our Common Stock at $ 0.021 per share at any time starting July 1, 2022 and ending July 1, 2024. We estimate the value of the warrant to be $ 10,800 , based on a $ 0.018 price per share of our Common Stock that we treated as a debt discount to be amortized over the term of the note. In May 2022, we repaid the note. On February 17, 2022, we issued a $ 50,000 unsecured note payable that bears interest at 12 % per annum and matures on April 6, 2022 . In connection with such issuance, we issued the noteholder a warrant to purchase up to 1,250,000 shares of our Common Stock at $ 0.02 1 per share at any time starting July 1, 2022, and ending July 1, 2024. We estimate the value of the warrant to be $ 22,500 , based on a $ 0.018 price per share of our Common Stock that we treat as a debt discount that we amortized over the term of the note. In April 2022, we repaid the note. (c) Series 3: On February 15, 2022, we issued two $ 137,500 unsecured convertible notes payable bearing an 11.25 % interest rate per annum that mature on February 23, 2023 and have a $ 15,000 original issue discount. In connection with such issuances, we issued the noteholders warrants to purchase up to 2,500,000 shares of our Common Stock at $ 0.10 per share that are exercisable at any time until February 11, 2027. We estimate the total value of the warrants to be $ 90,000 , based on a $ 0.018 price per share of our Common Stock that we treat as a debt discount and amortize over the terms of the notes along with the deferred financing fees. The notes’ principal and interest may be converted into our Common Stock at $ 0.02 per share. On October 25, 2022, the noteholder converted $ 67,000 and $ 13,004 of note principal and interest, respectively. We have not yet repaid the noteholders their outstanding principal and interest and are in default. (d) Series 4: On May 5, 2022, we issued a shareholder a convertible subordinate note totaling $ 110,000 that accrues interest at 12 % per annum and matures on May 5, 2023 . The note may be converted into shares of our Common Stock at $ 0.02 per share. In connection with such issuance, we issued the noteholder a warrant to purchase up to 5,000,000 shares of our Common Stock at $ 0.02 per share. We have not yet repaid the noteholders and are in default. On June 24, 2022, we issued a convertible subordinate note totaling $ 110,000 that accrues interest at 12 % per annum and matures on May 5, 2023 . The note may be converted into shares of our Common Stock at $ 0.02 per share. In connection with such issuance, we issued the noteholder a warrant to purchase up to 5,000,000 shares of our Common Stock at $ 0.02 per share. We have not yet repaid the noteholders and are in default. (e) Series 5: On May 5, 2022, we issued an $ 82,500 note payable that has a $ 7,500 original issue discount, matures on May 5, 2023 and bears interest at 12 % per annum. In connection with such issuance, we issued the noteholder a warrant to purchase up to 3,750,000 shares of our Common Stock at $ 0.02 per share that is exercisable upon issuance until May 5, 2029. We estimate the total value of the warrants to be $ 67,500 , based on a $ 0.018 price per share of our Common Stock that we treat as a debt discount and amortize over the term of the note. As of December 31, 2022, $ 82,500 in note principal is outstanding. We have not yet repaid the noteholders and are in default. On May 5, 2022, we issued a $ 110,000 note payable that has a $ 10,000 original issue discount and matures on May 5, 2023 and bears interest at 12 % per annum. In connection with such issuance, we issued the noteholder a warrant to purchase up to 5,000,000 shares of our Common Stock at $ 0.02 per share that is exercisable upon issuance until May 5, 2029. We estimate the total value of the warrants to be $ 90,000 , based on a $ 0.018 price per share of our Common Stock that we treat as a debt discount and amortize over the term of the note. As of December 31, 2022, $ 110,000 in note principal is outstanding. We have not yet repaid the noteholders and are in default. On October 14, 2022, we issued a $ 110,000 note payable that has a $ 10,0000 original issue discount and matures on October 14, 2023 and bears interest at 12 % per annum. In connection with such issuance, we issued the noteholder a warrant to purchase up to 5,000,000 shares of our Common Stock at $ 0.02 per share that is exercisable upon issuance until May 5, 2029. We estimate the total value of the warrants to be $ 90,000 , based on a $ 0.018 price per share of our Common Stock that we treat as a debt discount and amortize over the term of the note. As of December 31, 2022, $ 110,000 in note principal is outstanding. We have not yet repaid the noteholders and are in default. F- 15 On December 2, 2022, we issued a $ 220,000 note payable that has a $ 20,000 original issue discount and matures on October 14, 2023 and bears interest at 12 % per annum. In connection with such issuance, we issued the noteholder a warrant to purchase up to 10,000,000 shares of our Common Stock at $ 0.02 per share that is exercisable upon issuance until May 5, 2029. We estimate the total value of the warrants to be $ 180,000 , based on a $ 0.018 price per share of our Common Stock that we treat as a debt discount and amortize over the term of the note. As of December 31, 2022, $ 220,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default. (f) Series 6: On September 16, 2022, we issued a $ 55,000 note payable that has a $ 5,000 original issue discount and matures on September 16, 2023 and bears interest at 12 % per annum. The note may be converted into shares of our Common Stock at the lesser of $ 0.001 per share or at a 50% discount to the lowest closing price of our Common Stock within the past twenty days prior to a conversion. As of December 31, 2022, $ 55,000 in note principal is outstanding. We have not yet repaid the noteholders and are in default. On February 17, 2022, we issued a $ 50,000 unsecured note payable that bears interest at 12 % per annum and matures on April 6, 2022 . In connection with the note sale, we issued the noteholder a Warrant to purchase 1,250,000 shares of our Common Stock at $ 0.021 per share at any time starting July 1, 2022 and ending July 1, 2024. We estimate the value of the Warrant to be $ 22,500 , based on a $ 0.018 price per share of our Common Stock that we treat as a debt discount that we amortized over the term of the note. In April 2022, we repaid the note. Note 12 Senior Secured Notes On February 17, 2021, we entered into a securities purchase agreement with funds affiliated with Arena Investors, LP (the “Investors”) pursuant to which it issued two convertible notes having an aggregate principal amount of $ 16,500,000 for an aggregate purchase price of $ 15,000,000 (collectively, the “Notes”). The Notes are secured by a blanket lien on all of the Company’s assets and the shares of our Common Stock and Preferred Stock (the “Pledged Assets”) held by Philip Falcone, FFO1 2021 Irrevocable Trust, FFO2 2021 Irrevocable Trust and Korr Value LP (the “Pledgers”), which shares may be voted by the Investors in the event of default. In connection with the issuance of the Notes, we issued to the Investors warrants to purchase an aggregate of 192,073,017 shares of our Common Stock (collectively, the “Warrants”) and 1,000 shares of Series F Preferred Stock that convert into 192,073,017 shares of our Common Stock (the “Series F Preferred Stock”). Such warrants and Series F Preferred Stock were each valued at $ 864,000 based on a $ 0.0045 price per share of our Common Stock and treated as a debt discount this is amortized over the term of the Notes. The Notes have a term of thirty-six months and mature on February 17, 2024, unless earlier converted. The Notes accrue interest at a rate of 11 % per annum, subject to increase to 20% per annum upon default. Interest is payable in cash on a quarterly basis beginning on March 31, 2021. Notwithstanding the above, at our election, any interest payable on an applicable payment date may be paid in registered shares of our Common Stock in an amount equal (A) the amount of the interest payment due on such date, divided by (B) an amount equal to 80% of the average volume-weighted average price of our Common Stock for the five (5) days immediately preceding the date of conversion. At December 31, 2022 and December 31, 2021 accrued and unpaid interest was $ 3,300,000 and $ 453,750 , respectively. F- 16 On September 24, 2021, the Company and the Investors amended the Notes and related closing documents, by executing the Limited Waiver and First Amendment the closing documents. Such amendment also waived specified events of default. The Notes were henceforth convertible at any time, at the holder’s option, into shares of our Common Stock at a price of $ 0.02 per share, subject to an event of default adjustment. Notwithstanding the foregoing, at any time during the continuance of any event of default, the conversion price in effect equals the alternate conversion price provided in the Notes. If at any time the conversion price as determined for any conversion would be less than the par share value of the Common Stock, then at the sole discretion of the Holder, such conversion price equals such par value for such conversion and the conversion amount for such conversion may be increased to include Additional Principal (defined as such additional amount to be added to the principal amount of the Note to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the conversion price not been adjusted by the holder thereof to the par value price, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The conversion price was also subject to adjustment due to certain events, including stock dividends, stock splits and in connection with our issuance of our Common Stock or common stock equivalents at an effective price per share lower than the conversion price then in effect. We did not have a right to redeem the Notes. As part of such purchase agreement with the Investors, we issued warrants to purchase up to 192,073,017 shares of Common Stock. On September 24, 2021, we and the Investors amended the warrants such that each warrant became exercisable for a period of five (5) years from the date of issuance at an initial exercise price equal to $ 0.025 per share, adjusted to $ 0.020 per share when interest is paid late, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. The Investors could exercise the warrants on a cashless exercise basis. The Series F Preferred Stock has no voting rights and converts into 4.9% of our issued and outstanding shares of our Common Stock on a fully diluted basis upon the date on which stockholder approval for such issuance is obtained. The Series F Preferred Stock was subsequently converted and 192,073,017 shares of Common Stock, which were issued on October 11, 2021. On October 27, 2022, the Agent for the Investors notified us that certain events of default have occurred and were continuing under the Investor Notes. On November 21, 2022, we, the Investors and the Agent entered into a Forbearance Agreement, pursuant to which, among other things, we acknowledged the outstanding principal balances of the Investor Notes, that we have an obligation for interest, including default interest, fees and expenses in connection with the Investor Notes, that we have no rights of offset, defenses, claims or counterclaims with respect to our obligations and pursuant to a side letter, dated as of November 21, 2022, we agreed to achieve certain milestones by the dates as set forth therein. The Forbearance Agreement expired on December 30, 2022. As of December 31, 2022 and 2021, the outstanding liability for our Senior Secured Notes is as follows: Schedule of senior secured Notes 2022 2021 Principal $ 16,500,000 $ 16,500,000 Less discount 1,900,760 3,580,608 Principal, net of discount $ 14,599,240 $ 12,919,392 As of December 31, 2022 and 2021, accrued interest payable on such senior secured Notes is $ 3,300,000 and $ 453,750 , respectively, with interest accruing at a default rate of 20 % per annum in 2022 and at 11 % per annum in 2021. F- 17 Note 13 Related Party 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. The agreement commenced March 1, 2021 and ended on July 31, 2021. We paid Zenna Consulting $ 0 and $ 57,000 fees in the years ended December 31, 2022 and 2021, respectively. On March 1, 2022, we issued 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 to Mr. Canouse in exchange for transferring 100 shares of our Series B Preferred Stock to the FFO1 2021 Irrevocable Trust, an entity controlled by Mr. Falcone, then our CEO and Chairman of our Board of Directors. The shares were valued at $ 1,500 . Such shares of Series B Preferred Stock provide the holder thereof with voting power equivalent to the number of votes equal to 51% of the total voting power of each class of stock outstanding. FFO1 2021 Irrevocable Trust also holds 461,000 Preferred Series E-1 shares and FFO2 2021 Irrevocable Trust holds 461,000 Preferred Series E-1 shares. Lisa Falcone, the wife of Mr. Falcone, is the trustee of the FFO2 2021 Irrevocable Trust and Ms. Falcone has shared voting and dispositive power. The shares of our Preferred Stock held by the FFO1 2021 Irrevocable Trust and the FFO2 2021 Irrevocable Trust are included in the Pledged Assets. Effective January 1, 2022, we entered into a management consulting agreement with GreenRock LLC, a company controlled by Philip Falcone, for a period of one year ending December 31, 2022, under which we provided monthly remuneration of $ 35,000 , plus expenses in connection with his duties, responsibilities and performance as chief executive officer. In February 2021, our subsidiary, Sovryn Holdings Inc., entered into 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. Mr. 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. Note 14 Mezzanine Equity We account for certain of our Preferred Stock in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity . Based on this guidance, preferred stock that is conditionally redeemable is classified as temporary or “mezzanine” equity. Accordingly, the various Series of our Preferred Stock, which is subject to conditional redemption, is presented at redemption value as mezzanine equity outside of the stockholders’ equity section of the consolidated balance sheets. Preferred Shares Series A Preferred Stock There are 100,000 designated and authorized shares of Series A Preferred Stock, subject to a 9.99 % conversion limitation and anti-dilution rights for 24 months from time of issuance. Holders of Series A Preferred Stock are entitled to receive, when and as declared, dividends equal to 3% per annum on the stated value, payable in additional shares of Series A Preferred Stock. Holders of Series A Preferred Stock have the right to vote on any matter submitted to our shareholders for vote, on an as-converted basis. Each share of Series A Preferred Stock may be convertible into 3,420 shares of Common Stock, or as adjusted to equal the conversion ratio multiplied by a fraction, the numerator of which is the number of shares outstanding on a fully diluted basis after the issuance of the dilution shares, and the denominator is 360,000,000 . On July 17, 2020, we issued 92,999 Series A Preferred Stock at a value of $ 343,094 , with the acquisition cost derived using the $0.04 market price on that date of $0.04 multiplied by 95% of the number of our issued and outstanding shares at the time (18,057,565) and multiplied by 50% of that value. F- 18 On February 16, 2021, we cancelled all of the outstanding shares of Series A Preferred Stock shares. In exchange, the holders of such shares received one-year option agreements to purchase shares of our wholly owned subsidiary at the time, CZJ License, Inc. at $ 10 per share for up to 300,000 shares. The option agreement expired without being exercised. Series C Preferred Stock There are 10,000 designated and authorized shares of Series C Preferred Stock, containing a 9.99 % conversion limitation. Holders of Series C Preferred Stock are entitled to receive, when and as declared, dividends equal to 2% per annum on the stated value, payable in additional shares of Series C Preferred Stock. So long as any shares of Series C Preferred Stock remain outstanding, without the consent of the holders of 80% of the shares of Series C Preferred Stock then outstanding, we may not redeem, repurchase or otherwise acquire directly or indirectly any securities deemed junior to such Series C Preferred Stock (“Junior Securities”) nor may we directly or indirectly pay or declare or make any distribution upon, nor may any distribution be made in respect of, any Junior Securities , nor may any monies be set aside for or applied to the purchase or redemption of any Junior Securities. Each holder of the Series C Preferred Stock has the right to vote on any matter submitted to our shareholders for a vote, on an as converted basis. Each share of Series C Preferred Stock may be convertible into 100 shares of our Common Stock. As at December 31, 2022, no shares of Series C Preferred Stock are outstanding. Series D Preferred Stock There are 230,000 designated and authorized shares of Series D Preferred Stock, subject to a 4.99 % conversion limitation, which may be increased to a maximum of 9.99 % by a holder by written notice to us. There is a stated value of $ 3.32 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series D are issued. Series D are ranked as pari passu with the Series E Preferred Stock and the Series F Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock and have no voting rights. Each share of Series D Preferred Stock may be converted into 1,000 common shares. On February 16, 2021, we settled $ 1,028,000 in note payables, convertible notes payable and accrued interest for 230,000 shares of our Series D Preferred Stock, of which 75,000 shares of Series D Preferred Stock were converted into 75,000,000 shares of our Common Stock and 155,000 Series D Preferred shares remain unconverted and outstanding. Series E Preferred Stock There are 1,000 designated and authorized shares of Series E Preferred Stock having a stated value of $ 1,000 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series E are issued. Series E are ranked pari passu with the Series D Preferred Stock and Series F Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock. It has voting rights equal to the number of shares of Common Stock into which the Series E Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. To the extent that holders of shares Series E Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series E Preferred Stock, constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of shares of Series E Preferred Stock are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series E Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series E Preferred Stock are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series E Preferred Stock are outstanding, we may not, without the affirmative vote of the holders of all the then outstanding shares of Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock or alter or amend the Series E certificate of designations (the “Series E Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing. On September 16, 2021, the conversion rate for each share of Series E Preferred Stock was amended to equal (i)(a) 56.60% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series E Certificate), divided by (ii) the total number of shares of Series E Preferred Stock, (iii) rounded to the nearest thousandth. The total number of Fully-Diluted Shares is set as of, and cannot change after the Approval Date. Based on the current fully-diluted shares outstanding, this equated to 2,243,888,889 shares of Common Stock. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.4340. F- 19 On February 16, 2021, we issued 1,000 shares of Series E Preferred Stock to acquire Sovryn that we valued at $ 4,225,062 based on a value of 100% of the per share price of Common Stock at the time. On September 16, 2021, the holders of our Series E Preferred Stock entered into an exchange agreement with us whereby on October 11, 2021, the 1,000 Series E Preferred shares were exchanged for 1,152,500 Series E-1 Preferred shares and 1,091,388,889 shares of Common Stock. We valued the exchange at the same $ 4,225,062 value as was assigned to the 1,000 shares of Series E Preferred Stock. As at December 31, 2021, no shares of Series E Preferred Stock are outstanding. Series E-1 Preferred Stock There are 1,152,500 designated and authorized shares of Series E-1 Preferred Stock, which have a stated value of $ 0.87 per share. Shares of Series E-1 Preferred Stock are pari passu with the Series D Preferred Stock and Series F Preferred Stock and are senior in dividend rights and liquidation preference to our Common Stock and all other Common Stock Equivalents. It has votes equal to the number of shares of common stock into which the Series E-1 Preferred Stock would be convertible on the record date for the vote or consent of stockholders, and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. It has votes equal to the number of shares of common stock into which the Series E-1 Preferred Stock would be convertible on the record date for the vote or consent of stockholders, and shall otherwise have voting rights and powers equal to the voting rights and powers of Common Stock. To the extent that holders of shares of Series E-1 Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series E-1 Preferred Stock constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of Series E-1 Preferred Stock are entitled to vote on matters with holders of shares of Common Stock and vote together as one class, each share of Series E-1 Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series E-1 Preferred Stock are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series E-1 Preferred Stock are outstanding, we cannot, without the affirmative vote of the Holders of all the then outstanding shares of Series E-1 Preferred Stock, (a) alter or change adversely, the powers, preferences or rights given to the Series E-1 Preferred Stock or alter or amend the Series E-1 certificate of designations (the “Series E-1 Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing. On October 11, 2021, the Series E-1 shares were issued. At December 31, 2022, 1,152,500 shares of Series E-1 Preferred Stock remain outstanding. Each share of Series E-1 Preferred Stock may be converted into 1,000 shares of Common Stock. Series F Preferred Stock There are 1,000 designated and authorized shares of Series F Preferred Stock, which have a stated value of $ 1.00 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series F are issued. Shares of Series F Preferred Stock are pari passu with the Series D Preferred Stock and Series F Preferred Stock and senior in dividend rights and liquidation preference to our Common Stock and all other Common Stock Equivalents. It has voting rights equal to the number of shares of common stock into which the Series F Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. It has votes equal to the number of shares of common stock into which the Series F Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. To the extent that holders of shares of Series F Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series F Preferred Stock constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of shares of Series F Preferred Stock are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series F Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series F Preferred Stock are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series F Preferred Stock are outstanding, we cannot, without the affirmative vote of the holders of all the then outstanding shares of Series F Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series F Preferred Stock or alter or amend the Series F certificate of designations (the “Series F Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing. F- 20 On February 17, 2021, we issued to the Investors 1,000 shares of Series F Preferred Stock that convert into 192,073,017 shares of Common Stock, which we valued at $ 864,000 , based on the underlying value of shares our Common Stock that were $ 0.0045 per share at the time. On September 16, 2021, the conversion rate for each share of Series F Preferred Stock was amended to equal (i)(a) 4.84% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series F Certificate), divided by (ii) the total number of shares of Series F Preferred Stock, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares is set as of, and can not change after the Approval Date. Based on the full-diluted shares outstanding, this equated to 192,073,017 shares of Common Stock on the Approval Date. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.9516. On October 11, 2021, the 1,000 shares of Series F Preferred Stock were converted into 192,073,017 shares of Common Stock. As at December 31, 2022, no shares of Series F Preferred Stock are outstanding. Series G Preferred Stock On August 20, 2021, the certificate of designation for the Series G Preferred Stock was amended. There are now 4,600 designated and authorized Series G Preferred Stock, subject to a 4.99 % conversion limitation, which may be increased to a maximum of 9.9 % by a holder by written notice to us. The Series G Preferred Stock has a stated value of $ 1,000 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series G Preferred Stock are issued. The Series G Preferred Stock is ranked as a as a series of junior Preferred Stock. It has voting rights equal to the number of shares of common stock into which the Series G Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. To the extent that holders of shares of Series G Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series G Preferred Stock constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of shares of Series G Preferred Stock are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series G Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series G are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series G Preferred Stock are outstanding, we cannot, without the affirmative vote of the holders of all the then outstanding shares of Series G Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series G Preferred Stock or alter or amend the Series G certificate of designations (the “Series G Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing. On September 16, 2021, the conversion rate for each share of Series G Preferred Stock was amended to equal (i)(a) 6.45% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series G Certificate, divided by (ii) the total number of shares of Series G Preferred Stock, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares is set as of, and does not change after the Approval Date. Based on the current fully-diluted shares outstanding, this equated to 255,555,556 shares of common stock on the Approval Date. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.9355. F- 21 We received $ 4,600,000 in subscriptions for 4,600 of shares Series G Preferred Stock that we valued at $ 1,000 per share based on the cash price. On November 2, 2021, all the 4,600 shares of Series G Preferred Stock were converted into 255,555,556 shares of our Common Stock. At December 31, 2022, no shares of Series G Preferred Stock are outstanding. Series H Preferred Stock On November 5, 2021, we designated 39,895 shares of Series H Preferred Stock, which have a stated value of $ 1.00 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series H are issued. Shares of Series H Preferred Stock have no voting rights and are senior in dividend rights and liquidation preference to our Common Stock and all other Common Stock Equivalents. Each share of Series H Preferred Stock may be converted into 1,000 shares of Common Stock, subject to a maximum ownership limit of 9.99%. On November 11, 2021, pursuant to an exchange agreement that we entered into with the Investors, 39,895,000 of our shares of Common Stock held by the Investors were exchanged for 39,895 shares of our Series H Preferred Stock and we cancelled the 39,895,000 shares. We valued the 39,895,000 shares and 39,895 shares of Series H Preferred Stock at $ 3,989,500 . At December 31, 2022, 39,895 shares of Series H Preferred Stock remain outstanding. Note 15 Shareholders’ Equity Preferred Stock As of December 31, 2022 and 2021, we are authorized to issue 50,000,000 shares of preferred stock, with designations, voting, and other rights and preferences to be determined by our Board of Directors, of which 48,617,400 remain available for designation and issuance. Series B Preferred Stock There are 100 designated and authorized shares of Series B Preferred Stock. Holders of Series B Preferred Stock have the right to vote on all shareholder matters equal to 51% of the total voting power of each class of stock outstanding. Holders of shares of Series B Preferred are entitled to such 51% voting rights regardless of the number of voting shares issued by the company at any time. On July 17, 2020, 100 Series B Preferred Stock were issued to acquire the Casa Zeta-Jones Brand License Agreement (the “License Agreement”) from Luxurie Legs, LLC, a limited liability company organized pursuant to the laws of the State of Delaware (“LUXURIE”), pursuant to which, at the effective time, LUXURIE transferred all of its right, title and interest in the License Agreement to Madison in exchange for a controlling interest in Madison represented by newly issued preferred stock. Although the Series B Preferred Stock is entitled to 51% voting rights as described above, the stock has no dividend rate nor conversion feature. On February 17, 2021, the 100 shares Series B Preferred Stock were transferred from Mr. Canouse (our former director and CEO), to the FFO1 2021 Irrevocable Trust, a company Mr. Falcone (our director and CEO) is the trustee and has the voting and dispositive power. The 100 shares of Series B Preferred are included in the Pledged Assets. At December 31, 2022 and 2021, there were 100 and 100 Series B Preferred shares outstanding, respectively. Common Stock On October 25, 2022, we issued 4,000,216 shares of Common Stock to a Series 3 note holder in conversion of $ 80,004 of note principal and interest. On August 14, 2021, our shareholders approved an increase in the authorized number of Common Stock to 6,000,000,000 , from 500,000,000 , which became effective the same day. As of December 31, 2022 and 2021, there were 1,603,095,243 shares outstanding, respectively. F- 22 The following Common Stock transactions occurred during the year ended December 31, 2021. No issuances of Common Stock occurred in 2022: On April 7, 2021, we issued 1,500,000 shares of our Common Stock to Mr. Canouse in exchange for transferring his 100 shares of our Series B Preferred Stock to the FFO1 2021 Irrevocable Trust, which Mr. Falcone is the trustee and has the voting and dispositive power. The shares were valued at $ 1,500 . On October 11, 2021, we issued 1,091,388,889 shares of our Common Stock to holders of Series E-1 Preferred Stock in accordance with the Exchange Agreement. On October 11, 2021, holders of Series F Preferred Stock converted their 1,000 shares into 192,073,017 shares of our Common Stock. On November 2, 2021, holders of Series G Preferred Stock converted their 4,600 shares into 255,555,556 shares of Common Stock. On November 11, 2021, 39,895,000 shares of Common Stock were cancelled and returned to treasury in exchange for 39,895 shares of Series H Preferred Stock. On November 24, 2021, a holder with 75,000 shares of Series D Preferred Stock converted such shares into 75,000,000 shares of Common Stock. Warrants On February 17, 2021, we issued warrants to purchase up to 192,073,017 shares of Common Stock to Arena that are exercisable for a five-year period from the date of issuance and, based on an amendment made on September 24, 2021, such warrants may be converted into Common Stock at $0.02 per share, subject to a maximum ownership limit of 9.99%. The exercise price is subject to adjustment due to stock dividends, stock splits and recapitalizations and other events. We valued such warrants at $ 864,000 based on a value of $ 0.0045 per share for our Common Stock at the time. On December 28, 2021, we issued a promissory note payable and issued warrants to purchase up to 500,000 shares of Common Stock. Each such warrant is exercisable at $ 0.025 per share and expires on December 31, 2023. We valued such warrants at $ 9,000 based on a value of $ 0.018 per share for our Common Stock at the time. Such warrants issued are loan incentives. The value was allocated to the warrants based on fair value on the date of the grant as determined using the Black-Scholes option pricing model. At December 31, 2022 and 2021, the Warrant transactions are summarized below: Number of Warrants Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Weighted- Average Grant-Date Fair Value Aggregate Intrinsic Value Outstanding and exercisable at December 31, 2020 — $ — — — $ — Issued 192,573,017 0.020 4.13 872,588 3,464,529 Exercised — — — — — Outstanding and exercisable at December 31, 2021 192,573,017 $ 0.020 4.13 872,588 $ 3,464,529 F- 23 For the year ended December 31, 2022, a summary of our warrant activity is as follows: Number of Warrants Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Weighted- Average Grant- Date Fair Value Aggregate Intrinsic Value Outstanding and exercisable at January 1, 2022 192,573,017 $ 0.020 4.13 $ 872,588 $ 3,464,529 — Issued 53,600,000 $ 0.024 4.83 102,001 $ 964,800 Exercised — — — — — Expired — — — — — Outstanding and exercisable at December 31, 2022 246,173,016 $ 0.021 3. 69 $ 399,783 $ 4,431,114 Note 16 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 management sought to exit Sovryn’s business and pay down Madison’s senior debt associated with acquiring Sovryn’s assets and creating its business. As a result, Sovryn is recognized as a discontinued operation in the accompanying 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: Schedule of Previous Year Assets Liabilities and Expenses December 31, 2022 December 31, 2021 Assets Current assets $ 126,331 $ 942,713 Property, equipment and right-of-use assets 1,440,937 2,887,328 Intangible assets 10,159,063 12,029,646 Total Assets 11,726,331 15,859,687 Liabilities Accounts payable and accrued liabilities 1,118,174 508,779 Lease liability obligations 1,464,728 1,468,495 Total Liabilities 2,582,902 21,977,274 Revenues 1,920,612 1,243,655 Selling, general and administrative (509,868 ) (531,899 ) Television operation (344,260 ) (267,193 ) Amortization (323,484 ) (180,210 ) Professional fees (1,178,043 ) (1,652,095 ) Interest expense 175,695 (292,704 ) Loss on asset disposals (52,668 ) (1,737,847 ) Impairment loss (3,008,013 ) — Loss from discontinued operations $ (3,671,408 ) $ (3,418,293 ) F- 24 On February 16, 2021, we cancelled all of the outstanding shares of Series A Preferred Stock and offered their holders option agreements to purchase up to 300,000 shares of CZJ License, Inc., our wholly owned subsidiary at the time, at an option price of $ 10 per share. The option agreements are exercisable for a period of one year from the date of issuance and were not exercised. On November 15, 2021, we entered into a purchase and sale agreement with ZA Group Inc. to sell CZJ License Inc. for $250,000. At the closing of such transaction, ZA Group Inc. delivered a convertible promissory note with a principal amount equal to the purchase price. The interest rate on the note was 5% per annum and matures on November 5, 2023. The note may be converted, from time to time, after 180 days from the issuance date of the note into common stock of ZA Group Inc, at a fixed conversion price of $0.005 per share, subject to a beneficiary ownership limitation of not more than 4.99% of the outstanding shares of common stock of ZA Group Inc. At November 15, 2021, CZJ License Inc.’s accounts were eliminated from the consolidated financial statements. All expenses incurred by CZJ License Inc. up to November 15, 2021 have been disclosed as discontinued operations. The previous year’s assets, liabilities and expenses have been similarly classified for comparative purposes. Schedule of Previous Year Assets Liabilities and Expenses December 31, 2022 December 31, 2021 Assets $ — $ — Liabilities $ — $ — Expenses Amortization — 74,760 Selling, general and administrative — 190,857 Professional fees — 213,500 Loss from discontinued operations $ — $ 479,117 Note 18 Income Taxes Income tax recovery differs from that which would be expected from applying the effective tax rates to the net income (loss) as follows: Schedule of Income Tax Expense December 31, December 31, 2022 2021 Net loss for the year $ ( 13,139,810 ) $ ( 14,262,579 ) Statutory and effective tax rates 21.0 % 21.0 % Income taxes expenses (recovery) at the effective rate $ ( 2,759,360 ) $ ( 2,995,142 ) Effect of change in tax rates — — Permanent differences — — Valuation allowance 2,759,360 2,995,142 Income tax expense and income tax liability $ — $ — As at December 31, 2021 the tax effect of the temporary timing differences that give rise to significant components of deferred income tax asset are noted below. A valuation allowance has been recorded as management believes it is more likely than not that the deferred income tax asset will not be realized. Schedule of Deferred Income Tax Asset December 31, December 31, 2022 2021 Tax loss carried forward $ — $ — Deferred tax assets $ 2,759,360 $ 2,995,142 Valuation allowance ( 2,759,360 ) ( 2,995,142 ) Deferred taxes recognized $ — $ — Tax losses of approximately $ 25 million will expire in 2039 and 2040. F- 25 Note 19 Subsequent Events On January 10, 2023, we issued two unsecured convertible subordinate notes totaling $ 220,000 that accrue interest at 12 % per annum and mature in January 10, 2024 and have a $ 20,000 total original issue discount. The notes may be converted into shares of our Common Stock at $ 0.02 per share, subject to a beneficial ownership limitation of 4.99 %. In connection with one of the notes sold, we issued the noteholder a warrant to purchase up to 40,000,000 shares of our Common Stock at $ 0.02 per share starting January 10, 2023 and ending January 10, 2030. On January 28, 2023, the agent (the “Agent”) for the Investors delivered a notice to us (the “Acceleration Notice”) stating that the Agent and the Investors (a) elected to cause the outstanding principal amount of the 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 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 a Partial Strict Foreclosure Agreement with the Investors pursuant to which we transferred ownership of our Federal Communications Commission 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 February 3, 2023, we entered into a securities purchase agreement with a third party lender pursuant to which we borrowed $88,760 and issued a promissory note that accrues interest a 12% per annum and is repayable in 10 monthly installments starting March 15, 2023. On September 21, 2023, the Agent for the Investors delivered a notice to us that the Agent has 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 of the Company (the “Board of Directors”) and all officers of the Company, and (ii) reduce the number of the Board of Directors from three to one director. As a result of the Agent delivering such notice and exercising its rights to vote the Pledged Interests, a change of control of the Company occurred. On the two-year anniversary of the October 11, 2021 issuance of the Series E-1 shares, the shares were to be automatically converted into 1,152,500,000 shares of our Common Stock, however we did not process the conversion and have not to date. 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. Mr. Amon removed all Company officers and appointed himself as the Company’s President, Secretary, Treasurer, Chief Executive Officer, Chief Financial Officer, Principal Executive Officer and Principal Accounting Officer. 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. On 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 Philip Falcone personally, in favor of Z4. On December 5, 2023, a judgement in favor Z4 Management in the sum of $581,304 was rendered against us, Philip Falcone, FFO1 and FFO2. Presently, we are default on all of promissory and convertible notes payable (See Notes 11 and 12), which have $ 3.5 million in aggregate principal outstanding plus accrued interest, penalties and fees. F- 26 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. There are no disagreements with our accountants on accounting and financial disclosure. Our independent registered public accounting firm since March 28, 2022, is BF Borgers CPA PC, 5400 W Cedar Ave, Lakewood, CO 80226. From January 31, 2009 to March 27, 2022, our independent registered public accounting firm was K. R. Margetson Ltd, Chartered Professional Accountant (“KRM”), 331 East 5 th Street, North Vancouver, BC V7L 1M1, Canada. Our Board of Directors dismissed KRM on March 28, 2022. During the fiscal years ended December 31, 2020 and December 31, 2019, respectively, and the subsequent interim period through February 11, 2022, there were no disagreements between KRM and us on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of KRM, would have caused KRM to make reference to the subject matter of the disagreement in their reports on our consolidated financial statements for such years.