United states

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ quarterly report under section 13 Or 15(d) of the securities exchange act of 1934

For the quarterly period ended September 30, 2021

☐ transition report under section 13 Or 15(d) of the securities exchange act of 1934

For the transition period from ________________________to _______________________

Commission file number 000-51302

MADISON TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

Nevada	85-2151785
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

450 Park Avenue, 30th Floor, New York, NY	10022
(Address of principal executive offices)	(Zip Code)

(212) 339-5888

(Registrant’s telephone number, including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common	MDEX	OTCQB

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (s. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company in Rule 12b-2 of the Exchange Act.

Larger accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

Class	Outstanding at December 17, 2021
Common Stock - $0.001 par value	1,599,095,027

MADISON TECHNOLOGIES INC.

(UNAUDITED)

TABLE OF Contents

INTERIM FINANCIAL STATEMENTS
Interim Balance Sheets	3
Interim Statements of Operations	4
Interim Statements of Stockholders’ Equity (Deficit)	5 - 6
Interim Statements of Cash Flows	7
Notes to the Interim Financial Statements	8 - 29

-2-

MADISON TECHNOLOGIES INC.

INTERIM CONSOLIDATED Balance Sheets

(UNAUDITED)

	September 30, 2021			December 31, 2020
ASSETS
CURRENT ASSETS
Cash	$	2,194,562		$	9,491
Accounts receivables		136,500			-
Note receivables – Note 3		138,964			-
Prepaid expenses and Deposits		76,836			67,718
Due from related party – Note 18		321,139			-
		2,868,001			77,209
Intangible Assets – Note 4		9,339,048			433,407
Equipment, net – Note 6		1,183,766			-
Inventory – Note 7		146,323			-
Investments – Note 8, Note 13		2,339,921			-
Operating lease right-of-use assets, net – Note 9		1,145,152			-
Goodwill – Note 5		5,815,118			-
Total Assets	$	22,837,329		$	510,616
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued charges – Note 10	$	587,220		$	61,779
Customer Deposits		78,813			-
Due to related party – Note 18		44,169			-
License fee payable – Note 11		33,500			33,500
Current portion of lease liabilities – Note 9		6,293			-
Demand notes and accrued interest payable – Note 14		-			20,486
Subordinate note payable and interest payable – Note 17		365,000
Convertible notes payable – Note 15		28,878			494,992
Interest payable on convertible notes – Note 15		2,283			-
		1,146,156			610,757
Long term portion of lease liability obligations – Note 9		1,179,590			-
Long term convertible notes – Note 16		15,258,098			57,759
Total liabilities		17,583,844			668,516
STOCKHOLDERS’ EQUITY (DEFICIIT)
Capital Stock: (Note 19 and 20)
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, Nil shares issued and outstanding	$	-		$	93
Preferred Shares - Series B, $0.001 par value; Super Voting 100 shares designated, 100 shares issued and outstanding		-			-
Preferred Shares - Series C, $0.001 par value; 2%, stated value $100 per share 10,000 shares designated, none issued		-			-
Preferred Shares - Series D, $0.001 par value; convertible, stated value $3.32 per share, 230,000 shares designated, 230,000 shares issued and outstanding		230			-
Preferred Shares - Series E, $0.001 par value; convertible, stated value $1,000 per share, 1,000 shares designated, 1,000 shares issued and outstanding		1			-
Preferred Shares - Series E-1, $0.001 par value; convertible, stated value $0.87 per share, 1,152,500 shares designated, none issued		-			-
Preferred Shares - Series F, $0.001 par value; convertible, stated value $1 per share, 1,000 shares designated, 1,000 shares issued		1			-
Preferred Shares - Series G, $0.001 par value; convertible, stated value $1,000 per share, 4,600 shares designated, none issued		-			-
Preferred Shares – Series H, $0.001 par value; convertible, stated value $1 per share, 39,385 shares designated, none issued		-			-
Common Shares - $0.001 par value; 500,000,000 shares authorized 24,972,565 shares issued and outstanding (Dec 31, 2020 - 23,472,565 shares)		24,972			23,472
Additional Paid in Capital:
Preferred shares Series A		-			343,001
Preferred shares Series D		667,984			-
Preferred shares Series E		4,225,061			-
Common Shares		2,181,570			959,976
Shares subscribed		4,600,000			-
Accumulated deficit		(6,446,334	)		(1,484,442	)
Total stockholders’ equity (deficit)		5,253,485			(157,900	)
Total liabilities and stockholders’ equity (deficit)	$	22,837,329		$	510,616

See Accompanying Notes to the Financial Statements.

-3-

MADISON TECHNOLOGIES INC.

INTERIM CONSOLIDATED STATEMENTS of Operations

(UNAUDITED)

	For the three			For the three			For the nine			For the nine
	Months Ended			Months Ended			Months Ended			Months Ended
	Sep 30, 2021			Sep 30, 2020			Sep 30, 2021			Sep 30, 2020
Revenues
Sales	$	463,815		$	210		$	759,840		$	1,164
Miscellaneous income		213			-			213			—
Cost of sales		-			(31	)		-			(763	)
Net Revenues		464,028			179			760,053			401
Operating Expenses
Amortization		(74,247	)		20,884			140,826			20,884
Amortized right of use assets		16,810			-			36,180			-
Accretion of lease liability		58,841			-			75,795			-
Broadcasting/station expenses		74,889			-			178,869			-
Consulting fees		69,000			40,000			348,500			40,000
General and administrative		110,936			6,320			149,905			18,009
Financing fees		1,320,692			-			1,606,275			-
Management fees		154,385			10,000			360,462			10,000
Marketing and product development		28,790			-			207,325			-
Professional fees		517,911			27,870			1,041,630			31,519
Royalties		(32,722	)		41,667			35,323			41,667
Total operating expenses		2,245,285			146,741			4,181,090			162,079
Loss before other expense		(1,781,257	)		(146,562	)		(3,421,037	)		(161,578	)
Loss on disposal of assets		(17,147	)		-			(17,147	)		-
Amortized interest		(135,855	)		(14,633	)		(372,177	)		(14,633	)
Interest		(471,033	)		(4,519	)		(1,151,531	)		(7,592	)
Net loss and comprehensive loss	$	(2,405,292	)	$	(165,714	)	$	(4,961,892	)	$	(183,903	)
Net loss per share-Basic and diluted	$	(0.096	)	$	(0.009	)	$	(0.203	)	$	(0.010	)
Average number of shares of common stock outstanding		24,972,565			19,396,315			24,439,598			18,507,072

See Accompanying Notes to the Financial Statements.

-4-

MADISON TECHNOLOGIES INC.

INTERIM CONSOLIDATED Statements of stockholders’ EQUITY (DEFICIT)

(UNAUDITED)

For September 30, 2021

	Number of Shares
										Preferred		Preferred		Pref		Pref
	Preferred Series A			Preferred Series B		Preferred Series D		Preferred Series E		Series E-1		Preferred Series F		Series G		Series H		Common
Balance, December 31, 2020		92,999			100		-		-		-		-		-		-		23,472,565
Cancellation of Preferred Series A		(92,999	)		-		-		-		-		-		-		-		-
Conversion of debt to Preferred Series D		-			-		230,000		-		-		-		-		-		-
Shares issued for acquisition of assets		-			-		-		1,000		-		-		-		-		-
Shares issued for convertible note		-			-		-		-		-		1,000		-		-		-
Equity portion on convertible debt issued		-			-		-		-		-		-		-		-		-
Shares subscriptions received		-			-		-		-		-		-		-		-		-
Shares issued for voting control Series B		-			-		-		-		-		-		-		-		1,500,000
Equity portion on convertible subordinated notes		-			-		-		-		-		-		-		-		-
Net loss for the period		-			-		-		-		-		-		-		-		-
Balance, September 30, 2021		-			100		230,000		1,000		-		1,000		-		-		24,972,565

	Amount
	Pref			Pref		Pref		Pref		Pref		Pref		Pref		Pref
	Series A			Series B		Series D		Series E		Series E-1		Series F		Series G		Series H		Common
Balance, December 31, 2020	$	93			-		-		-		-		-		-		-	$	23,472
Cancellation of Preferred Series A		(93	)		-		-		-		-		-		-		-		-
Conversion of debt to Preferred Series D		-			-	$	230		-		-		-		-		-		-
Shares issued for acquisition of assets		-			-		-	$	1		-		-		-		-		-
Shares issued for convertible note		-			-		-		-		-	$	1		-		-		-
Equity portion on convertible debt issued		-			-		-		-		-		-		-		-		-
Shares subscriptions received		-			-		-		-		-		-		-		-		-
Shares issued for voting control Series B		-			-		-		-		-		-		-		-	$	1,500
Equity portion on convertible subordinated notes		-			-		-		-		-		-		-		-		-
Net loss for the period		-			-		-		-		-		-		-		-		-
Balance, September 30, 2021	$	-		$	-	$	230	$	1	$	-	$	1	$	-	$	-	$	24,972

-5-

	Additional Paid In Capital
										Pref		Pref		Pref		Pref
	Pref Series A			Series B		Pref Series D		Pref Series E		Series E-1		Series F		Series G		Series H		Common			Shares Subscribed		Accumulated Deficit			Total
Balance, December 31, 2020	$	343,001			-		-		-		-		-		-		-	$	959,976		$	-	$	(1,484,442	)	$	(157,900	)
Cancellation of Preferred Series A		(343,001	)		-		-		-		-		-		-		-		343,094			-		-			-
Conversion of debt to Preferred Series D		-			-	$	667,984		-		-		-		-		-		-			-		-			668,214
Shares issued for acquisition of assets		-			-		-	$	4,225,061		-		-		-		-		-			-		-			4,225,062
Shares issued for convertible note		-			-		-		-		-		-		-		-		-			-		-			1
Equity portion on convertible debt issued		-			-		-		-		-		-		-		-		30,000			-		-			30,000
Shares subscriptions received		-			-		-		-		-		-		-		-		-			4,600,000		-			4,600,000
Shares issued for voting control Series B		-			-		-		-		-		-		-		-		(1,500	)		-		-			-
Equity portion on convertible subordinated notes		-			-		-		-		-		-		-		-		850,000			-		-			850,000
Net loss for the period		-			-		-		-		-		-		-		-		-			-		(4,961,892	)		(4,961,892	)
Balance, September 30, 2021	$	-		$	-	$	667,984	$	4,225,061	$	-	$	-	$	-	$	-	$	2,181,570		$	4,600,000	$	(6,446,334	)	$	5,253,485

For September 30, 2020

	Number of shares
	Series A		Series B				Series A		Series B				Additional Paid In Capital
	Preferred		Preferred		Common		Preferred		Preferred		Common		Preferred		Preferred				Accumulated
	Shares		Shares		Shares		Amount		Amount		Amount		Series A		Series B		Common		Deficit			Total
Balance, December 31, 2019		-		-		18,057,565	$	-	$	-	$	18,057	$	-	$	-	$	197,845	$	(574,279	)	$	(358,377	)
Net loss for the period		-		-		-		-		-		-		-		-		-		(7,109	)		(7,109	)
Balance, March 31, 2020		-		-		18,057,565		-		-	$	18,057		-		-	$	197,845	$	(581,388	)	$	(365,486	)
Net loss for the period		-		-		-		-		-		-		-		-		-		(11,080	)		(11,080	)
Balance, June 30, 2020		-		-		18,057,565		-		-	$	18,057		-		-	$	197,845	$	(592,468	)	$	(376,566	)
Conversion of debt at $0.01 per share		-		-		1,690,000		-		-		1,690		-		-		15,210		-			16,900
Issuance of shares for services		-		-		95,000		-		-		95		-		-		855		-			950
Shares issued for license		92,999		10,000		-		93		10		-		168,023		174,968		-		-			343,094
Convertible debt issued		-		-		-		-		-		-		-		-		110,000		-			110,000
Net loss for the period		-		-		-		-		-		-		-		-		-		(165,714	)		(165,714	)
Balance, September 30, 2020		92,999		10,000		19,842,565	$	93	$	10	$	19,842	$	168,023	$	174,968	$	323,910	$	(758,182	)	$	(71,366	)

See Accompanying Notes to the Financial Statements

-6-

MADISON TECHNOLOGIES INC.

interim consolidated Statements of cash flows

(Unaudited)

	For the nine			For the nine
	Months Ended			Months Ended
	Sep 30, 2021			Sep 30, 2020
Cash flows from operating activities:
Net loss for the period	$	(4,961,892	)	$	(183,903	)
Adjustments to reconcile net loss to cash used in operating activities:
Amortization		140826			20,884
Amortized interest		372,177			14,633
Accrued interest on notes payable		9,956			7,592
Foreign exchange on notes payable		311			(1,108	)
Loss on disposal of assets		17,147			-
Services paid with shares		-			950
Changes in non-cash working capital items:
Accounts receivables		(136,500	)		-
Interest receivable		(213	)		-
Prepaid expenses		(6,118	)		(61,655	)
Due from related party		(321,139	)		-
Accounts payable and accrued charges		522,052			4,945
Due to related party		44,169			300
Interest payable		17,283			-
Customer deposits		78,813			-
Lease payments		40,729			-
Net cash used in operating activities		(4,182,399	)		(197,362	)
Cash flows from investing activities:
Inventory		(146,324	)		-
Intangible assets		(8,982,906	)		(6,647	)-
Equipment		(1,246,293	)		-
Deposits on investments		(2,339,921	)		-
Note receivable		(138,750	)		-
Disposal of assets		(18,181	)		-
Goodwill		(1,590,156	)		-
		(14,462,531	)		(6,647	)
Cash flows from financing activities:
Proceeds from convertible notes issued		15,030,000			189,000
Shares subscriptions received but not issued		4,600,000			-
Subordinate loan		350,000
Subordinate convertible loans		850,000
Shares for Debts - Series F		1			-
Proceeds from notes payable		-			20,000
Net cash provided by financing activities		20,830,001			209,000
Net increase in cash		2,185,071			4,991
Cash, beginning of year		9,491			1,366
Cash, quarter end	$	2,194,562		$	6,357
Note 22 Additional cash flow information
SUPPLEMENTAL DISCLOSURE
Interest paid	$	1,139,292		$	-
Taxes paid	$	-		$	-

See Accompanying Notes to the Financial Statements

-7-

MADISON TECHNOLOGIES INC.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

September 30, 2021

Note 1 Nature and Continuance of Operations

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

Up until fiscal 2014, the Company (“Madison”) was in the business of mineral exploration. On May 28, 2014, the Company formalized an agreement whereby it purchased assets associated with a smokeless cannabis delivery system. The Company planned to develop this system for commercial purposes. On December 14, 2014, this asset purchase agreement was terminated.

On September 16, 2016, the Company entered into an exclusive distribution product license agreement with Tuffy Packs, LLC to distribute products into the United Kingdom and 43 other essentially European countries. The Company sold ballistic panels which are personal body armors, that conform to the National Institute of Justice (NIJ) Level IIIA threat requirements. The Company’s plan of operations and sales strategy included online and social media marketing, as well as attending various tradeshows and conferences. As the Company failed to make specified payments as required, the agreement was amended to a non-exclusive basis. The Company has closed this business.

On July 17, 2020, the Company entered into an acquisition agreement to acquire the Casa Zeta-Jones Brand License Agreement from Luxurie Legs, LLC of Delaware (“Luxurie”). Luxurie transferred all its rights, title and interest in the License Agreement to the Company in exchange for the Company’s newly issued preferred convertible Series A stock. Upon conversion, the stock could control up to 95% of the outstanding common shares. The agreement also required voting control, represented by newly issued shares of super voting preferred Series B stock.

On September 28, 2020, the Company entered into a share exchange agreement to acquire 51% interest of Posto Del Sole Inc., a jewelry designer company to further develop the Company’s existing brands and create new designer labels. The title and rights will be transferred when all the terms and conditions in the Securities Exchange Agreement are met. At December 31, 2020, the share exchange had not closed and advances made to Posto Del Sole Inc. were expensed. The Company has rescinded the agreement.

On February 16, 2021, the Company entered into a share exchange agreement to acquire 100% interest of Sovryn Holdings Inc. by issuing 1,000 Preferred Series E shares, making Sovryn Holdings Inc. a wholly owned subsidiary of the Company. At the same time, the Company settled all debts including loans, convertible notes and accrued interest by issuing 230,000 Preferred Series D shares.

During the quarter ended March 31, 2021, the Company incorporated CZJ License, Inc. in the State of Nevada, and transferred all the Casa Zeta-Jones Brand License and operations into the subsidiary. The Preferred Series A shares were cancelled. Holders of Preferred Series A received option agreements to purchase shares of CZJ License, Inc. at $10 per share to a maximum of 300,000 shares. The option agreements are exercisable for a period of one year.

During the quarter ended June 30, 2021, the shareholders of the Company approved to amend the Articles of Incorporation to change its name from Madison Technologies, Inc. to Go.TV, Inc. and at the same time, to also amend and restate the Company’s Articles of Incorporation to increase the Company’s authorized common stock from 500,000,000 shares to 6,000,000,000 shares. At the date of this report, the amendment to increase the authorized capital of the Company was approved while the name change is pending regulatory approval.

During the quarter ended September 30, 2021, the Company filed a new series of convertible Preferred Series E-1 of which 1,152,500 shares were designated with a par value of $0.001 and a stated value of $0.87 per share. At the same time, the Company also amended the conversions of Preferred Shares of Series E, Series F and Series G (see Note 20).

Subsequent to the period ended September 30, 2021, the Company filed a new series of convertible Preferred Series H of which 39,895 shares were designated with a par value of $0.001 and a stated value of $1 per share.

-8-

These condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles in the United States or “US GAAP” applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations for its next twelve months. Realization values may be substantially different from carrying values as shown and these consolidated interim financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. The Company had not yet achieved profitable operations, had accumulated losses of $6,446,334 since its inception and expects to incur further losses in the development of its business, all of which casts doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company entered into a number of agreements that provided financing. That said, there is no assurance that the businesses being funded by this additional debt will ultimately be successful.

Note 2 Summary of Significant Accounting Policies

Basis of presentation

While the information presented is unaudited, it includes all adjustments, which are, in our opinion of management, necessary to present fairly the financial position, result of operations and cashflows for the interim period presented in accordance with accounting principles generally accepted in the United States of America. All adjustments are of a normal recurring nature. These consolidated interim financial statements should be read in conjunction with the Company’s December 31, 2020 annual financial statements. Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that can be expected for the period ended December 31, 2021.

The accompanying condensed consolidated interim financial statements include the accounts of the Company and its two wholly owned subsidiaries, CZJ License, Inc. (“CZJ”) and Sovryn Holdings, Inc. (“Sovryn”)

Use of estimates

The preparation of the consolidated interim 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.

Revenue Recognition

Revenues derived from the leasing of television station channels are recognized when services are provided. These revenues are billed in advance, arrears and/or are prepaid. The performance obligation is the monthly services rendered. At the moment, the Company has one main revenue source which is leasing of television channels. Where there is a leasing contract for channels, the Company bills monthly for its services as rendered. Where there is no contract, the revenue is recognized as provided.

-9-

Accounts Receivables

Trade accounts receivable are stated at the amount the Company expects to collect. Management considers the following factors when determining the collectability of specific customer accounts: customer credit worthiness, past transaction history, current economic industry trends and changes in customer payment terms. Past due balances over 90 days and other higher risk amounts are reviewed individually for collectability. Based on the management’s assessment, the Company provides for estimated uncollectible amounts through a charge to earnings and a credit to a valuation allowance. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. As of September 30, 2021, the Company believes there are no receivables considered uncollectible.

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. The Company adopted the new standard April 19, 2021. The Company has elected not to recognize lease assets and lease liabilities for leases with an initial term of 12 months or less.

Segment Reporting

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance of its corporation wide basis in comparison to its various businesses. The Company has three reportable segments. The business of CZJ, Sovryn and Madison Technologies Inc. The segments are determined based on several factors including the nature of products and services, nature of production processes and delivery channels, and rental of television stations. The operating segment’s performance is evaluated based on its segment income. Segment income is defined as the net sales less cost of sales, general and administrative expenses and does not include amortization of any sorts, stock-based compensation or any other charges (income), and interest. As of September 30, 2021, the Company reported revenues for its rental of radio stations.

	For the nine
	months ended
	Sep 30, 2021
Net Revenues
Madison Technologies Inc.	$	213
Sovryn Holdings Inc.		759,840
CZJ License Inc.		-
Total Revenues	$	760,053
Total Assets
Madison Technologies Inc.	$	6,336,682
Sovryn Holdings Inc.		15,988,782
CZJ License Inc.		511,865
Total Assets	$	22,837,329

-10-

Change in significant accounting policies

There has been no change in the accounting policies from those disclosed in the notes to the audited financial statements for the year ended December 31, 2020.

Recently Issued Accounting Pronouncements

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. On August 5, 2020, the FASB issued a new standard (ASU 2020-06) to reduce the complexity of accounting for convertible debt. The standard is effective for Smaller Reporting Companies for fiscal years beginning after December 15, 2023. Management is reviewing this standard as it believes this may impact on its financial reporting Management does not believe that other any pronouncement not yet effective but recently issued would, if adopted, have a material effect on the accompanying financial statements.

Note 3 – Note Receivable

On September 9, 2021, the Company entered into a secured promissory note with Top Dog Productions Inc. The Company agreed to lend an aggregate principal sum of up to $2,000,000 that accrues at a rate of 5% per annum. The note receivable and all accrued interest is due on September 9, 2022. The principal and interest amount of the note may be prepaid in whole or in part at any time, without penalty nor premium. As of September 30, 2021, the loan summary is as follows:

Amount		Interest		Total
$	138,750	$	213	$	138,963

Note 4 - Intangible Assets

The Company has several classes of intangible assets. Except for Federal Communication Commission Licenses (“FCC”), the following intangible assets have finite useful lives and are amortized on a straight-line basis over their useful lives. Amortization starts when the asset is available for use. FCC licenses are considered indefinite-lived intangible assets which are not amortized but instead are tested at least annually for impairment.

	June 30, 2021						December 31, 2020
	Cost		Depreciation		Net		Cost		Depreciation		Net
Tuffy Packs, LLC License	$	50,000	$	50,000	$	-	$	50,000	$	50,000	$	-
Website for Casa-Zeta Jones Brand		10,000		-		10,000		10,000		-		10,000
Domain Name – Go.TV		100,000		-		100,000		-		-		-
Market Advantage		58,843		2,504		56,339		-		-		-
Casa Zeta-Jones Brand License		488,094		139,448		348,646		488,094		64,687		423,407
Licenses		8,824,063		-		8,824,063		-		-		-
	$	9,531,000	$	191,952	$	9,339,048	$	548,094	$	114,687	$	433,407

Note 5 - Goodwill

Goodwill has been recorded on investment purchases where the value of the investment is greater than the identifiable net assets purchased. The amount is not amortized but rather is tested for impairment at least annually. Goodwill was recorded on the following investments:

Purchase of 100% of the common shares of Sovryn Holdings, Inc.	$	4,224,962
KNLA- KNET acquisition		977,059
KVVV acquisition		613,097
Total	$	5,815,118

-11-

Note 6 - Equipment

Equipment are amortized over their useful lives.

		Cost		Additions		Total		Depreciation		Net
Transmitter	10 years	$	684,085	$	-	$	684,085	$	30,015	$	654,070
Antenna	10 years		240,773		-		240,773		9,633		231,140
Tech Equipment	5 years		237,059		54,922		291,981		20,364		271,617
Office Equipment	5 years		7,389		-		7,389		492		6,897
Microwave	5 years		22,065		-		22,065		2,023		20,042
		$	1,191,371	$	54,922	$	1,246,293	$	62,527	$	1,183,766

During the period, the following was disposed:

					Loss/Gain
	Cost		Depreciation		Disposition
Tech Equipment	$	18,181	$	1,034	$	17,147

Note 7 - Inventory

Inventory consists of deposits for tooling, product tubes and bottles for the CZJ product lines. Inventories are stated at the lower of cost or net realizable value. As of September 30, 2021, inventory was $146,323.

Note 8 - Investments

Investments consists of deposits for the acquisitions of various television stations for which Sovryn has entered into and have not closed or have closed but not yet evaluated nor re-allocated to its components. At September 30, 2021, the Company escrowed a total of $2,339,921. As described in Note 13 Asset Purchase, the following were escrowed for asset acquisitions:

Closed for KYMU	$	1,864,920
Closed for K05NH		1
Escrowed for W27EB		300,000
Escrowed for KPHE		100,000
Escrowed for KVSD		75,000
	$	2,339,921

-12-

Note 9 - Right of Use Assets

Sovryn has four (4) operating leases ranging from a period of 34 months to a period of 220.5 months. The annual interest rate used was 15%. As at September 30, 2021, the remaining right of use assets are as follows:

				Accumulated
		Amount		Amortization		Net
Tower lease - 1	174.5 mths	$	547,663	$	17,262	$	530,401
Tower lease - 2	94 mths		244,079		10,386		233,693
Generator lease	174.5 mths		109,507		3,452		106,055
Studio lease	220.5 mths		280,084		5,081		275,003
		$	1,181,333	$	36,181	$	1,145,152

The remaining lease liability at September 30, 2021 was $1,185,883. The current portion of the lease liability was $6,293 and the non-current portion of the lease liability was $1,179,590.

2022	$	183,807
2023		189,546
2024		195,543
2025		207,903
2026		214,960
Remaining		2,040,880
Lease obligations, net		3,032,639
Amt representing interest		1,846,756
		1,185,883
Less current portion		6,293
Non-current lease obligation	$	1,179,590

Note 10 - Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities as of September 30, 2021 are summarized below:

	Sep 30, 2021		Dec 31, 2020
Audit fees	$	12,500	$	25,800
Accounting fees		10,000		8,100
Legal fees		459,382		25,118
General Admin expenses		32,588		335
Consulting fees		72,750		-
Management fees		-		3,000
Total	$	587,220	$	62,353

Note 11 - License Agreements

A The Company entered into an exclusive product license agreement on September 16, 2016 with Tuffy Packs, LLC, a Texas corporation, to sell Ballistic Panels in certain countries, essentially in Europe. The license was for a period of two years and may be renewed for successive terms of two years each. The payment terms for the license was as follows:

1.	$10,000 payable within seven days after the effective date;
2.	An additional $15,000 payable within 30 days after the effective date; and
3.	A final payment of $25,000 payable within 90 days of the effective date.

-13-

At December 31, 2018, the Company had paid $16,500 to the Licensor, leaving an unpaid balance of $33,500. To date, the Company has recorded a total license amortization of $50,000, which fully amortizes the license.

As a result of the failure to make payments as required under the agreement, the Company was informed on March 20, 2017, that going forward, the agreement would be on a non-exclusive basis. During the period ended March 31, 2021, the Company has terminated the business.

B. On July 17, 2020, the Company entered into an acquisition agreement with Luxurie Legs, LLC, a Delaware corporation, to acquire the Casa Zeta-Jones Brand license agreement. The license agreement, as amended, grants the Company the worldwide rights to promote and sell certain products, and license the rights to manufacture, promote and sell such products under the brand Casa Zeta-Jones and more. The license agreement purchase included the issuance of 92,999 Series A 3% Convertible Preferred Series A shares valued at $343,094, 10,000 Preferred Series B voting shares valued at $nil, the assumption of $45,000 in debt and costs incurred of $100,000.

The values were based on the licensor obtaining 95% of the Company’s common shares, whose value was discounted by a 50% factor, given the lightly traded history in its shares.

The Company is subject to the following amended terms:

a. A 4.5 year term as follows:

i.	Year 1: execution – December 31, 2022
ii.	Year 2: January 1, 2022 – December 31, 2023
iii.	Year 3: January 1, 2023 – December 31, 2024

b.	Marketing date Jan 2022, On Shelf Date April 30, 2022
c.	Royalty payments with a rate of 8%, net of sales, subject to guaranteed minimums noted below.
d.	Advance prepayment of $150,000 to be applied against royalties, paid as follows:

i.	$50,000 upon signing (paid)
ii.	$50,000 on July 20, 2020 (paid)
iii.	$50,000 on September 1, 2020 (paid)

e. Guaranteed minimum sales and guaranteed minimum royalties:

Year		Guaranteed Minimum Royalties		Guaranteed Minimum Sales
i.	7/17/20 – 12/31/22	$	250,000	$	3,200,000
ii.	1/1/22 – 12/31/23	$	250,000	$	3,200,000
iii.	1/1/23 – 12/31/24	$	250,000	$	3,200,000

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

-14-

Note 12 - Securities Exchange Agreements

Sovryn Holdings, Inc.

The Company entered into a Securities Exchange Agreement on February 16, 2021 with Sovryn, a Delaware corporation and acquire 100% of the shares of Sovryn in exchange for i) 100 shares of Series B Preferred Stock of the Company to be transferred by Jeffrey Canouse, the Company’s CEO to a designee of Sovryn and ii) 1,000 shares of Series E Convertible Preferred Stock. Upon the effectiveness of an amendment to the Company’s Articles of Incorporation to increase the Company’s authorized common stock, from par value $0.001 to par value $0.0001 per share, from 500,000,000 shares to 6,000,000,000 shares, all shares of Series E Convertible Preferred Stock issued to the shareholders shall automatically convert into approximately 2,305,000,000 shares of common stock of the Company. The Series E Convertible Preferred Stock votes on an as-converted basis with the common stock prior to their conversion. The Series E Preferred Stock shall represent approximately 59% of the fully diluted shares of common stock of the Company after the closing of the transactions contemplated by the Securities Purchase Agreement. The valuation for the Preferred Series E shares was determined to be $4,225,062 (See Note 11). The valuation recorded was based on the market value of the shares of the Company at the date the transaction was exchanged. The transaction was recorded as an asset purchase and the Company recorded goodwill of $4,224,962 which was based on the market value of the shares the Company exchanged at the date of the transaction. The Preferred Series E shares have not been converted to common stock shares as of the date of this report.

Posto Del Sole, Inc.

The Company entered into a Securities Exchange Agreement on September 25, 2020 with Posto Del Sole Inc. (“PDS”) a New York corporation, to acquire 51% of the shares of PDS and in return, the Company will issue 10,000 Preferred Series C shares. (See Note 11). As part of the agreement, the Company is to provide monthly investments to a total aggregate of $1,000,000 during the twelve-month period following the closing. PDS had 60 days from closing to provide the necessary financial statements and notes in order to satisfy regulatory requirements and disclosures. As at December 31, 2020 PDS had not provided any such information, the Securities Exchange Agreement had not closed and as a result, the Company wrote off advances of $165,000 that were made to PDS in anticipation of closing. The Company has rescinded the agreement and has no plans to move forward with the acquisition.

Note 13 - Asset Purchase

KNLA-KNET Acquisition

On February 17, 2021, Sovryn entered into an asset purchase agreement (the “Asset Purchase Agreement”) with NRJ TV III CA OPCO, LLC, a Delaware limited liability company (“OpCo”) and NRJ TV III CA License Co., LLC, a Delaware limited liability company (together with OpCo, “Sellers”). Upon the terms and subject to the satisfaction of the conditions described in the Asset Purchase Agreement, Sovryn will acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the KNET-CD and KNLA-CD Class A television stations owned by the Sellers (the “Acquired Stations”), certain tangible personal property, real property, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Acquired Stations (the “Asset Sale Transaction”). As consideration for the Asset Sale Transaction, Sovryn has agreed to pay the Sellers $10,000,000, $2,000,000 of which was paid to Sellers upon execution of the Asset Purchase Agreement, as follows: (i) an escrow deposit of $1,000,000 to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Sellers (the “Escrow Fee”) and (ii) a non-refundable option fee of $1,000,000 (the “Option Fee”).

The closing of the Asset Sale Transaction (the “Closing”) was subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Acquired Stations, from Sellers to Sovryn (the “FCC Consent”). The Closing shall occur no more than five (5) business days following the later of (i) the date on which the FCC Consent has been granted and (ii) the other conditions to the Closing set forth in the Asset Purchase Agreement. The asset purchase was consummated on April 19, 2021.

-15-

KVVV Acquisition

On March 14, 2021 Sovryn entered into an asset purchase agreement (the “KVVV Asset Purchase Agreement”) with Abraham Telecasting Company, LLC, a Texas limited liability company (the “Houston Seller”). Upon the terms and subject to the satisfaction of the conditions described in the KVVV Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the KVVV-LD low power television station owned by the Houston Seller (the “Houston Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Houston Acquired Station (the “KVVV Asset Sale Transaction”). As consideration for the KVVV Asset Sale Transaction, Sovryn has agreed to pay the Houston Seller $1,500,000 in cash, $87,500 of which was paid to the Houston Seller and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Houston Seller (the “KVVV Escrow Fee”).

The closing of the KVVV Asset Sale Transaction (the “KVVV Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Houston Acquired Station, from the Houston Seller to Sovryn (the “Houston FCC Consent”). The KVVV Closing shall occur no more than ten (10) business days following the later to occur of (i) the date on which the Houston FCC Consent has been granted and (ii) the other conditions to the KVVV Closing set forth in the KVVV Asset Purchase Agreement. The closing of the KVVV asset purchase consummated on June 1, 2021.

KMYU Acquisition

On March 29, 2021, Sovryn, entered into an asset purchase agreement (the “KYMU Asset Purchase Agreement”) with Seattle 6 Broadcasting Company, LLC, a Washington limited liability company (the “Seattle Seller”). Upon the terms and subject to the satisfaction of the conditions described in the KYMU Asset Purchase Agreement, Sovryn agreed to acquire the licenses and FCC authorizations to the KYMU-LD low power television station owned by the Seattle Seller (the “Seattle Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Seattle Acquired Station (the “KYMU Asset Sale Transaction”). As consideration for the Seattle Asset Sale Transaction, Sovryn has agreed to pay the Seattle Seller $1,800,000, $87,500 of which was paid to the Seattle Seller and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Seattle Seller (the “Seattle Escrow Fee”).

The closing of the KYMU Asset Sale Transaction (the “KMYU Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Seattle Acquired Station, from Seattle Seller to Sovryn (the “Seattle FCC Consent”). The Seattle Closing shall occur no more than ten (10) business days following the later to occur of (i) the date on which the Seattle FCC Consent has been granted and (ii) the other conditions to the KMYU Closing set forth in the KMYU Asset Purchase Agreement. The closing of the KYMU asset purchase consummated at the end of September 2021.

W27EB Acquisition

On June 9, 2021, Sovryn entered into an asset purchase agreement (the “W27EB Asset Purchase Agreement”) with Local Media TV Chicago, LLC, a Delaware limited liability company (the “Chicago Seller”). Upon the terms and subject to the satisfaction of the conditions described in the W27EB Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the W27EB-LD low power television station owned by the Chicago Seller (the “Chicago Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Chicago Acquired Station (the “W27EB Asset Sale Transaction”). As consideration for the W27EB Asset Sale Transaction, Sovryn has agreed to pay the Chicago Seller the amended price of $6,000,000 in cash, $300,000 of which was paid to the Chicago Seller and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Chicago Seller, as amended (the “W27EB Escrow Fee”).

The closing of the W27EB Asset Sale Transaction (the “W27EB Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Chicago Acquired Station, from the Chicago Seller to Sovryn (the “Chicago FCC Consent”). The W27EB Closing shall occur no more than the three (3) business days following the later to occur of (i) the date on which the Chicago FCC Consent has been granted and (ii) the other conditions to the W27EB Closing set forth in the W27EB Asset Purchase Agreement. As at September 30, 2021, the transaction has not closed.

-16-

KPHE Acquisition

On July 13, 2021, Sovryn entered into an asset purchase agreement (the “KPHE Asset Purchase Agreement”) with Lotus TV of Phoenix LLC, an Arizona limited liability company (the “Phoenix Seller”). Upon the terms and subject to the satisfaction of the conditions described in the KPHE Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the KPHE-LD low power television station owned by the Phoenix Seller (the “Phoenix Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Phoenix Acquired Station (the “KPHE Asset Sale Transaction”). As consideration for the KPHE Asset Sale Transaction, Sovryn has agreed to pay the Phoenix Seller $2,000,000 in cash, $100,000 of which was paid to the Phoenix Seller during the period ended September 30, 2021 and a further $350,000 was paid subsequent to the period end, and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Phoenix Seller (the “KPHE Escrow Fee”).

The closing of the KPHE Asset Sale Transaction (the “KPHE Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Phoenix Acquired Station, from the Phoenix Seller to Sovryn (the “Phoenix FCC Consent”). The KPHE Closing shall occur no more than the three (3) business days following the later to occur of (i) the date on which the Phoenix FCC Consent has been granted and (ii) the other conditions to the KPHE Closing set forth in the KPHE Asset Purchase Agreement. At September 30, 2021, the transaction had not closed.

K05NH Acquisition

On August 20, 2021, Sovryn entered into an asset purchase agreement (the “K05NH Asset Purchase Agreement”) with Mako Communications, LLC, a Texas Limited Liability Company (the “Boise” Seller). Upon the terms and subject to the satisfaction of the conditions described in the Boise Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the K05NH-D low power television station construction permit owned by the Boise Seller (the “Boise Acquired Station”) in connection with the Boise Acquired Station (the “Boise Asset Sale Transaction”). As consideration for the Boise Asset Sale Transaction, Sovryn has agreed to pay the Boise Seller $1 in cash.

The closing of the Boise Asset Sale Transaction (the “Boise Closing”) is subject to, among other things, consent by the FCC to the assignment of the construction permits pertaining to the Boise Station, from the Boise Seller to Sovryn (the “Boise FCC Consent”). The Boise Closing shall occur no more than the three (3) business days following the later to occur of (i) the date on which the Boise FCC Consent has been granted and (ii) the other conditions to the Boise Closing set forth in the Boise Asset Purchase Agreement. During the period ended September 30, 2021, the K05NH asset purchase was consummated.

KVSD Acquisition

On August 31, 2021, Sovryn entered into an asset purchase agreement (the “KVSD Asset Purchase Agreement”) with D’Amico Brothers Broadcasting Corp., a California company (the “San Diego Seller”). Upon the terms and subject to the satisfaction of the conditions described in the KVSD Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the KVSD-LD low power television station owned by the San Diego Seller (the “San Diego Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the San Diego Acquired Station (the “KVSD Asset Sale Transaction”). As consideration for the KVSD Asset Sale Transaction, Sovryn has agreed to pay the San Diego Seller $1,500,000 in cash, $75,000 of which was paid to the San Diego Seller during the period ended September 30, 2021 and a further $150,000 was paid subsequent to the period end, and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the San Diego Seller (the “KVSD Escrow Fee”).

The closing of the KVSD Asset Sale Transaction (the “KVSD Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the San Diego Acquired Station, from the San Diego Seller to Sovryn (the “San Diego FCC Consent”). The KVSD Closing shall occur no more than the three (3) business days following the later to occur of (i) the date on which the San Diego FCC Consent has been granted and (ii) the other conditions to the KVSD Closing set forth in the KVSD Asset Purchase Agreement. As at September 30, 2021, the transaction has not closed.

-17-

K07AAJ and W05DK Acquisition

On October 25, 2021, Sovryn entered into an asset purchase agreement (“Bakerfiled and San Juan Asset Purchase Agreement”) with Mako Communications, LLC, a Texas Limited Liability company (the “Bakerfield and San Juan Seller”). Upon the terms and subject to the satisfaction of the conditions described in the Bakerfield and San Juan Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the K07AAJ-D and W05DK-D low power television stations construction permits owned by the Bakerfield and San Juan Seller (the “Bakerfield and San Juan Acquired Station”) in connection with the Bakerfield and San Juan Acquired Station (the “Bakerfield and San Juan Asset Sale Transaction”). As consideration for the Bakerfield and San Juan Asset Sale Transaction, Sovryn has agreed to pay the Bakerfield and San Juan Seller $115,000 in cash, $10,000 of which was paid to the Bakerfield and San Juan Seller subsequent to the period ended September 30, 2021, and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Bakerfield and San Juan Seller (the “Bakerfield and San Juan Escrow Fee”).

The closing of the Bakerfield and San Juan Asset Sale Transaction (the “Bakerfield and San Juan Closing”) is subject to, among other things, consent by the FCC to the assignment of the construction permits pertaining to the Bakerfield and San Juan Acquired Station, from the Bakerfield and San Juan Seller to Sovryn (the “Bakerfield and San Juan FCC Consent”). The Bakerfield and San Juan Closing shall occur no more than the three (3) business days following the later to occur of (i) the date on which the Bakerfield and San Juan FCC Consent has been granted and (ii) the other conditions to the Bakerfield and San Juan Closing set forth in the Bakerfield and San Juan Asset Purchase Agreement.

WANN Acquisition

On November 3, 2021, Sovryn entered into an asset purchase agreement (“WANN Asset Purchase Agreement”) with Prism Broadcasting Network Inc, a Georgia corporation (the “Atlanta Seller”). Upon the terms and subject to the satisfaction of the conditions described in the WANN Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the WANN-CD low power television station owned by the Atlanta Seller (the “Atlanta Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Atlanta Acquired Station (the “WANN Asset Sale Transaction”). As consideration for the WANN Asset Sale Transaction, Sovryn has agreed to pay the Atlanta Seller $5,250,000 in cash, $200,000 of which was paid to the Atlanta Seller subsequent to the period ended September 30, 2021, and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Atlanta Seller (the “Atlanta Escrow Fee”).

The closing of the WANN Asset Sale Transaction (the “WANN Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Atlanta Acquired Station, from the Atlanta Seller to Sovryn (the “Atlanta FCC Consent”). The WANN Closing shall occur no more than the ten (10) business days following the later to occur of (i) the date on which the WANN FCC Consent has been granted and (ii) the other conditions to the WANN Closing set forth in the WANN Asset Purchase Agreement.

Note 14 - Note Payable

The Company had one note payable that was accruing interest at 5% per annum. The note was unsecured and matured on June 30, 2021. On February 16, 2021, the note and accrued interest was settled with Convertible Preferred Series D shares. Each Series D Convertible Preferred Stock shall be convertible into common stock of the Company at a ratio of 1,000 shares of common stock for each share of Series D Convertible Preferred Stock held.

	February 16, 2021		December 31, 2020
Note payable bearing interest at 5%	$	20,000	$	20,000
Accrued interest thereon		616		486
	$	20,616	$	20,486

-18-

Note 15 - Convertible Notes and Accrued Interest Payable

On February 16, 2021, the Company settled the following debts and interests thereof including the note payable above (Note 8), with 23,000 shares of Convertible Preferred Series D shares. Each Series D Convertible Preferred Stock shall be convertible into common stock of the Company at a ratio of 1,000 shares of common stock for each share of Series D Convertible Preferred Stock held. A summary of the convertible notes and accrued interest payable were settled as follow:

Face Value		Conversion Rate		Interest rate			Due Date		Accrued Interest		Carrying Value		Feb 15 2021 Total		Dec 31 2020 Total
$	10,000	$	0.005		-			-	$	-	$	500	$	500	$	500	(a)
$	85,000	$	0.01		-			-		-		50,800		50,800		50,800	(b)
$	50,000	$	0.01		10	%		05/01/2022		2,500		50,000		52,500		52,500	(c)
$	5,000	$	0.01		10	%		05/01/2022		259		5,000		5,259		5,259	(d)
$	12,500	$	0.01		10	%		6/23/2021		457		7,500		7,957		7,957	(d)
$	20,000	$	0.04		-			-		-		20,000		20,000		20,000
$	68,490	$	0.05		-			-		-		68,490		68,490		68,490	(e)
$	25,000	$	0.05		12	%		-		20,056		25,000		45,056		44,682	(f)
$	25,000	$	0.05		8	%		-		32,047		25,000		57,047		56,797	(f)
$	23,622	$	0.05		5	%		-		16,388		23,622		40,010		39,551	(f)
$	684,000	$	0.05		10	%		Various		22,066		220,799		242,865		154,444	(g)
$	75,000				10	%		Various		1,788		55,331		57,119		51,771	(h)
									$	95,561	$	552,042		647,603	$	552,751
		Less long-term portion														57,759
		Current portion											$	647,603	$	494,992

All notes are unsecured and, except where specifically noted, are due on demand. Except for notes denoted below under (e). No conversion shall result in the Holder holding in excess of 9.99% of the total issued and outstanding common stock of the Company at any time.

(a)	On October 28, 2020, $9,500 was converted into 1,900,000 common shares.
(b)	On July 23, 2020, $16,900 in debt and $950 in costs were converted into 1,785,000 common shares and on November 2, 2020, $17,300 was converted into 1,730,000 common shares.
(c)	The notes are convertible into common stock at the discretion of the Holder at the lesser of $0.01 or 50% of the lowest closing bid price for the Company’s stock during the 20 immediately preceding the date of delivery by Holder to the Company of the Conversion Notice.
(d)	The notes are convertible into common stock at the discretion of the Holder at 50% of the lowest closing bid price for the Company’s common stock during the 30 trading days immediately preceding the date of delivery by Holder to the Company of the Conversion Notice.
(e)	Included in this debt is $490 due to the former CEO. The debt was repaid via check.
(f)	On April 2, 2020, these notes terms were changed from non-convertible to convertible at $0.05 debt to 1 common share. They were also amended to include the above noted clause with respect to holding less than 9.99% of the issued and outstanding common stock. During the year ended December 31, 2020, interest accrued on this debt was $6,164 (2019 - $6,146).
(g)	Based on the intrinsic value of the beneficial conversion feature, as per FASB topic ASC 470-20 Debt with Conversion and other Options, it was determined that all of the value of the following notes that were issued should be allocated to equity and amortized to interest, based on the due date of the debt. A summary of the balances is as follows as at February 15, 2021:

-19-

Allocated to			Amortized		Accrued
Equity		Due Date	as interest		at 10%		Total
$	30,000	03-31-2021	$	24,293	$	1,627	$	25,920
	100,000	07-20-2021		56,051		5,726		61,777
	60,000	08-31-2021		27,406		2,860		30,266
	20,000	09-30-2021		7,688		816		8,504
	60,000	10-31-2021		18,715		2,022		20,737
	50,000	10-31-2021		14,504		1,507		16,011
	50,000	10-31-2021		14,504		1,507		16,011
	10,000	11-04-2021		2,671		277		2,948
	110,000	11-18-2021		25,476		2,622		28,098
	55,000	11-19-2021		12,262		1,310		13,572
	27,000	12-31-2021		4,292		481		4,773
	27,000	12-31-2021		4,292		481		4,773
	20,000	12-31-2021		2,976		318		3,294
	30,000	12-31-2021		3,747		382		4,129
	17,500	01-31-2022		961		65		1,026
	17,500	01-31-2022		961		65		1,026
$	684,000		$	220,799	$	22,067	$	242,865

(h) Based on the intrinsic value of the beneficial conversion feature, as per FASB topic ASC 470-20 Debt with Conversion and other Options, it was determined that a portion of the value of the following notes issued should be allocated to equity and amortized to interest, based on the due date of the debt. These notes are convertible into common stock at the discretion of the Holder at 70% of the lowest closing bid price for the Company’s common stock during the 20 trading days immediately preceding the date of delivery by Holder to the Company of the Conversion Notice. The face value of each note is $25,000 and a summary of the balances is as follows as at February 15, 2021:

Allocated to equity		Due date	Amortized as Interest		Accrued Interest at 10%		Total
$	10,714	07-31-2021	$	4,397	$	822	$	19,505
	10,714	08-31-2021		3,279		610		18,175
	7,468	09-30-2021		1,501		404		19,438
$	28,896		$	9,177	$	1,836	$	57,118

Note 16 – Convertible Notes Payable and Interest Payable

Arena Investors LP convertible promissory notes

On February 17, 2021, the Company entered into a securities purchase agreement with funds affiliated with Arena Investors LP (the “Investors”) pursuant to which it issued convertible notes in an aggregate principal amount of $16.5 million for an aggregate purchase price of $15 million (collectively, the “Notes”). In connection with the issuance of the Notes, the Company issued to the Investors warrants to purchase an aggregate of 192,073,017 shares of Common Stock (collectively, the “Warrants”) and 1,000 shares of series F convertible preferred stock (the “Series F Preferred Stock”).

-20-

The Notes each have a term of thirty-six months and mature on February 17, 2023, unless earlier converted. The Notes accrue interest at a rate of 11% per annum, subject to increase to 20% per annum upon and during the occurrence of an event of default. Interest is payable in cash on a quarterly basis beginning on March 31, 2021. Notwithstanding the above, at the Company’s election, any interest payable on an applicable payment date may be paid in registered Common Stock of the Company (rather than cash) in an amount equal (A) the amount of the interest payment due on such date, divided by (B) an amount equal to 80% of the average VWAP of the Common Stock for the five (5) days immediately preceding the date of conversion.

On September 24, 2021, the Company and the Investors amended the Notes. The Notes are convertible at any time, at the holder’s option, into shares of our common stock equal to $0.02 per share subject to adjustment. Notwithstanding the foregoing, at any time during the continuance of any Event of Default, the Conversion price in effect shall be equal to the alternate conversion price. If at any time the conversion price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the conversion price hereunder may equal such par value for such conversion and the conversion amount for such conversion may be increased to include Additional Principal, where Additional Principal means such additional amount to be added to the principal amount of this 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 to the par value price, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The conversion price is also subject to adjustment due to certain events, including stock dividends, stock splits and in connection with the issuance by the Company of common stock or common stock equivalents at an effective price per share lower than the conversion price then in effect. The Notes may not be redeemed by the Company.

At September 30,2021, the loan summary was:

Face		Loan		Amortized		Carrying		Accrued
Value		Proceeds		Interest		Value		Interest 11%		Total
$	16,500,000	$	15,00,0000	$	258,098	$	15,258,098	$	-	$	15,258,098

As part of the agreement with the Investors, the Company issued 192,073,016 warrants. On September 24, 2021, the Company and the Investor amended the warrant agreement such that each Warrant is exercisable for a period of five (5) years from the date of issuance at an initial exercise price equal to $0.025 per share, subject to adjustment herein, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. The Holder may be eligible for cashless exercise.

The Series F Preferred Stock have no voting rights and shall convert into 4.9% of our issued and outstanding shares of common stock on a fully diluted basis upon Shareholder Approval. The Series F Preferred Stock was issued but not converted to common shares as of September 30, 2021.

Each of the Investors have contractually agreed to restrict their ability to exercise the Warrants and convert the Notes such that the number of shares of the Company common stock held by each of them and their affiliates after such conversion or exercise does not exceed 9.99% of the Company’s then issued and outstanding shares of common stock.

-21-

Note 17 - Subordinate Loans

There are 4 convertible subordinate loans accruing interest at 6% per annum. The notes are unsecured and mature on December 31, 2022. The loans may be converted to common shares at $0.021 per share, subject to a beneficial ownership limitation of 4,99%. The Holder may, upon request, to increase the beneficial ownership limitation to 9.99% of the total number of shares of common stock outstanding immediately after giving effect to the issuance of common stock upon conversion. Based on the intrinsic value of the beneficial conversion feature, it was determined that a portion of the value of the following notes issued should be allocated to equity and amortized to interest, based on the due date of the loan.

Allocated to			Amortized		Accrued
Equity		Due Date	as Interest		Interest at 6%		Total
$	250,000	Dec 31, 2022	$	15,047	$	1,250	$	16,297
	250,000	Dec 31, 2022		8,050		625		8,675
	250,000	Dec 31, 2022		4,129		292		4,421
	100,000	Dec 31, 2022		1,652		116		1,768
$	850,000		$	28,878	$	2,283	$	31,161

There was a $350,000 subordinate loan with a fixed interest amount of $15,000 that matured on September 30, 2021. This was paid out on October 5, 2021.

Note 18 - Related Party

On September 28, 2020, the Company entered into a renewable employment agreement with Jeff Canouse, former President and CEO of the Company as described in Note 23, Commitments. The former President is the CEO and sole director of CZJ License Inc., the Company’s wholly owned subsidiary. As of September 30, 2021, Mr. Canouse had received $48,000 pursuant to his employment agreement (2020 - $34,000 in management fees, $24,000 of which was pursuant to the employment agreement) and is owed $24,000 at September 30, 2021. As of September 30, 2021, Mr. Canouse was owed $44,169 for out-of-pocket costs.

On April 7, 2021, the Company issued 1,500,000 common shares to Jeff Canouse in exchange for transferring his 100 shares of the Company’s Series B Preferred Stock to Phil Falcone. The shares were valued at $1,500.

The Company entered into a consulting agreement with a director of the Company, Warren Zenna of Zenna Consulting Group to provide oversight of marketing and communications services. The agreement commenced March 1, 2021 through to December 31, 2021. The Company pays Zenna Consulting Group a monthly retainer of $15,000. As of September 30, 2021, the Company paid $57,000 in fees.

Philip Falcone is the President and CEO of the Company who currently holds 100 Series B Preferred Super Voting shares which gives him 51% voting control regardless of the number of common or other voting securities issued by the Company at present or at any time in the future, such that the holder of the Series B shares shall maintain majority voting control of the Company. Philip Falcone is also the CEO of Sovryn Holdings, Inc., the Company’s wholly owned subsidiary. For the quarter ended September 30, 2021, Green Rock LLC, Mr. Falcone’s company, was paid $90,000. For the year to date period as of September 30, 2021, an aggregate of $321,139 was owing from Green Rock LLC for net advances paid by the Company.

-22-

Note 19 - Common Stock

During the nine-month period ended September 30, 2021, the Company issued 1,500,000 common shares to Jeff Canouse in exchange for transferring his 100 shares of the Company’s Series B Preferred Stock to Phil Falcone. The shares were valued at $1,500. (see Note 18)

The Company issued 192,073,016 warrants to Arena Investors LP (See Note 16). The warrants are exercisable for a period of 5 years from the date of issuance.

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

On July 23, 2020, the Company issued 1,785,000 shares of common stock pursuant to the conversion of a note payable of $16,900 at $0.01 per share plus legal fees of $950, totaling $17,850.

On October 28, 2020, the Company issued 1,900,000 shares of common stock pursuant to the conversion of a note payable of $9,500 at $0.005 per share.

On November 2, 2020, the Company issued 1,730,000 shares of common stock pursuant the conversion of a note payable of $17,300 at $0.01 per share.

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

Note 20 - Preferred Shares

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

There are 100,000 designated and authorized Series A 3% convertible preferred stock with a 9.99% conversion cap and anti-dilution rights for 24 months from time of issuance. Holders of Series A 3% Preferred Stock shall be entitled to receive, when and as declared, dividends equal to 3% per annum on the stated value, payable in additional shares of Series A Preferred Stock. Holders of Series A 3% Convertible Preferred Stock have the right to vote on any matter that may be submitted to the Company’s shareholders for vote, on an as converted basis, either by written consent or by proxy. Each share of Series A 3% Convertible Preferred Stock may be convertible into 3,420 shares of Common Stock, or as adjusted to equal the conversion ratio multiplied by a fraction, the numerator of which shall be the number of shares outstanding on a fully diluted basis after the issuance of the dilution shares, and the denominator shall be 360,000,000. (See Form 8K filing on August 6, 2020, Exhibit 10.3)

On July 17, 2020, 92,999 Series A 3% Convertible Preferred Stock were issued pursuant to the License Agreement at a value of $343,094 The acquisition cost was derived using the current market price of $0.04 x 95% of the number of the issued and outstanding shares of the Company at the time (18,057,565) x 50% of the value. (See Note 4).

On February 16, 2021, the Company cancelled all the Preferred Series A shares. In exchange, the holders of Series A Preferred shares received option agreements to purchase shares of the wholly owned subsidiary, CZJ License, Inc. at $10 per share for up to 300,000 shares. The option agreements are exercisable for a period of one year.

At September 30, 2021, there were no Series A Preferred shares outstanding.

Series B Super Voting Preferred Stock, par value $0.001

There are 100 designated and authorized Series B Super Voting Preferred Stock. Holders with Series B Super Voting Preferred Stock have the right to vote on all shareholder matters equal to 51% of the total vote of common stockholders. The Series B Super Voting Preferred Stockholder is entitled to 51% voting rights regardless of the number of common shares or other voting shares issued by the company at any time. Such provision grants the holder of Series B Super Voting Preferred Stock majority control of the Company, unless otherwise canceled.

On July 17, 2020, 100 Series B Super Voting Preferred Stock were issued pursuant to the License Agreement. The Series B Super Voting Preferred Stock was valued at par at $0.001. Although the Series B Super Voting Preferred Stock is entitled to 51% voting rights as described above, the stock has no dividend rate nor conversion feature. Furthermore, the shares were not issued to the investors but rather were granted to new unrelated management.

On February 17, 2021, the 100 Series B Super Voting Preferred Stock were transferred from Jeff Canouse, former director and CEO, to Philip Falcone, director and CEO of the Company.

-23-

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

There are 10,000 designated and authorized Series C 2% convertible preferred stock with a 9.99% conversion cap. Holders of Series C 2% Preferred Stock shall be entitled to receive, when and as declared, dividends equal to 2% per annum on the stated value, payable in additional shares of Series C Preferred Stock. So long as any shares of Series C Preferred Stock remain outstanding, neither the Company nor any subsidiary thereof shall, without the consent of the Holders of 80% of the shares of Series C Preferred Stock then outstanding, redeem, repurchase or otherwise acquire directly or indirectly any Junior Securities nor shall the Company directly or indirectly pay or declare or make any distribution upon, nor shall any distribution be made in respect of, any Junior Securities, nor shall any monies be set aside for or applied to the purchase or redemption of any Junior Securities. Each holder of the Series C Preferred Stock shall have the right to vote on any matter that may from time to time be submitted to the Company’s shareholders for a vote, on an as converted basis, either by written consent or by proxy. Each share of Series C 2% Convertible Preferred Stock may be convertible into 100 shares of Common Stock. (See Note 5)

As of September 30, 2021, no Series C Convertible Preferred shares were issued or outstanding.

Series D Convertible Preferred Stock, par value $0.001 with a stated value of $3.32 per share

There are 230,000 designated and authorized Series D convertible preferred stock with a 4.99% conversion cap which may be increased to a maximum of 9.99% by holder by written notice to the Company. 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 a Senior Preferred Stock and have no voting rights. Each share of Series D Preferred Stock may be converted to 1,000 common shares.

On February 16, 2021, all outstanding debts including note payables, convertible notes payable, discounts, accrued interests and thereof totaling $688,214, were settled for the Company’s Series D convertible Preferred stock.

As of September 30, 2021, 230,000 Series D Preferred Shares were issued but not converted.

Series E Convertible Preferred Stock, par value $0.001 with a stated value of $1,000 per share

There are 1,000 designated and authorized Series E convertible preferred stock. There is 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 as a Senior Preferred Stock. It has voting rights equal to the number of shares of common stock into which the Series E 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 Series E votes 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, shall constitute the approval of such action by both the class or the series as applicable. To the extent that Series E are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series E shall entitle 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 shall be 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 are outstanding, the Company shall not, without the affirmative vote of the Holders of all the then outstanding shares of Series F, (a) alter or change adversely the powers, preferences or rights given to the Series E or alter or amend the Certificate of Designations, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the Holder, or (c) enter into any agreement with respect to any of the foregoing.

-24-

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, divided by (ii) the total number of shares of Series E, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares shall be set as of, and shall not change after the Approval Date. Based on the current fully-diluted shares outstanding, this equates to 2,243,888,889 common shares. The 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.

On February 16, 2021, the Company entered into a Share Exchange Agreement with Sovryn Holdings Inc. (See Note 5). The Company issued 1,000 Series E convertible preferred shares to the shareholders of Sovryn Holdings Inc. valued at $4,225,062 (23,472,565 x $0.20 x 90%). The valuation was based on the market value of the shares of the Company at the date of the transaction.

As of September 30, 2021, 1,000 Series E Preferred Shares were issued but not converted.

On September 16, 2021, the Convertible Preferred Series E Holders entered into an Exchange Agreement whereby the aggregate 1,000 Series E preferred shares were exchanged for 1,152,500 Convertible Series E-1 preferred shares and 1,091,388,889 shares of common stock. As of September 30, 2021, no convertible Series E-1 preferred shares and none of the 1,091,288,889 shares of common stock were issued.

Series E-1 Convertible Preferred Stock, par value $0.001 with a stated value of $0.87 per share

There are 1,152,500 designated and authorized Series E-1 convertible preferred stock. There is a stated value of $0.87 per share. Series E-1 are ranked just above the Junior Stock, behind the Senior Preferred Stock. It has votes equal to the number of shares of common stock into which the Series E-1 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 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 Series E-1 votes 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, shall constitute the approval of such action by both the class or the series as applicable. To the extent that Series E-1 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 shall entitle 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 shall be 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 are outstanding, the Company shall not, without the affirmative vote of the Holders of all the then outstanding shares of Series E-1, (a) alter or change adversely, the powers, preferences or rights given to the Series E-1 or alter or amend the Certificate of Designations, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the Holder, or (c) enter into any agreement with respect to any of the foregoing. As of September 30, 2021, none of the Series E-1 shares were issued.

Each share of Series E-1 Preferred Stock may be converted to 1,000 common shares.

-25-

Series F Convertible Preferred Stock, par value $0.001 with a stated value of $1 per share

There are 1,000 designated and authorized Series F convertible preferred stock. There is a stated value of $1 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. Series F are ranked as a Senior Preferred Stock. It has voting rights equal to the number of shares of common stock into which the Series F 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 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 Series F votes 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, shall constitute the approval of such action by both the class or the series as applicable. To the extent that Series F are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series F shall entitle 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 shall be 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 are outstanding, the Company shall not, without the affirmative vote of the Holders of all the then outstanding shares of Series F, (a) alter or change adversely the powers, preferences or rights given to the Series F or alter or amend the Certificate of Designations, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the 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 F Preferred Stock was amended to equal (i)(a) 4.84% multiplied by, (b) the Fully-Diluted shares as of the Approval Date, divided by (ii) the total number of shares of Series F, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares shall be set as of, and shall not change after the Approval Date. Based on the full-diluted shares outstanding, this equates to 192,073,017 shares of common stock on the Approval Date. The 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.

As of September 30, 2021, 1,000 Series F Preferred Shares were issued but not converted.

Series G Convertible Preferred Stock, par value $0.001 with a stated value of $1,000 per share

On August 20, 2021, the Series G Convertible Preferred Stock was amended. There are now 4600 designated and authorized Series G convertible preferred stock with a 4.99% conversion cap which may be increased to a maximum of 9.9% by holder by written notice to the Company. There is 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 are issued. Series G are ranked as a Junior Preferred Stock. It has voting rights equal to the number of shares of common stock into which the Series G 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 Series G votes 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, shall constitute the approval of such action by both the class or the series as applicable. To the extent that Series G are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series G shall entitle 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 shall be 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 are outstanding, the Company shall not, without the affirmative vote of the Holders of all the then outstanding shares of Series G, (a) alter or change adversely the powers, preferences or rights given to the Series G or alter or amend the Certificate of Designations, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the Holder, or (c) enter into any agreement with respect to any of the foregoing.

-26-

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, divided by (ii) the total number of shares of Series F, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares shall be set as of, and shall not change after the Approval Date. Based on the full-diluted shares outstanding, this equates to 192,073,017 shares of common stock on the Approval Date. The 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.

As of September 30, 2021, 1,000 Series F Preferred Shares were issued but not converted.

Series G Convertible Preferred Stock, par value $0.001 with a stated value of $1,000 per share

On August 20, 2021, the Series G Convertible Preferred Stock was amended. There are now 4600 designated and authorized Series G convertible preferred stock with a 4.99% conversion cap which may be increased to a maximum of 9.9% by holder by written notice to the Company. There is 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 are issued. Series G are ranked as a Junior Preferred Stock. It has voting rights equal to the number of shares of common stock into which the Series G 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 Series G votes 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, shall constitute the approval of such action by both the class or the series as applicable. To the extent that Series G are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series G shall entitle 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 shall be 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 are outstanding, the Company shall not, without the affirmative vote of the Holders of all the then outstanding shares of Series G, (a) alter or change adversely the powers, preferences or rights given to the Series G or alter or amend the Certificate of Designations, (b) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the 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, divided by (ii) the total number of shares of Series G, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares shall be set as of, and shall not change after the Approval Date. Based on the current fully-diluted shares outstanding, this equates to 255,555,556 shares of common stock on the Approval Date. The 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.

As of September 30, 2021, no Series G Preferred Shares were issued or outstanding. The Company received $4,600,000 in subscriptions for 4,600 of Series G Preferred Shares.

Series H Convertible Preferred Stock, par value $0.001 with a stated value of $1 per share

On November 5, 2021, the Company designated 39,895 Series H Convertible Preferred Stock. There is a stated value of $1 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. Series H are ranked after the Junior Preferred Stock. It has no voting rights. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof, into one thousand (1,000) shares of Common Stock subject to the ownership limitations (with a maximum ownership limit of 9.99%)

Note 21 - Warrants

On February 17, 2021, the Company provided Arena Partners LLP with 192,073,016 warrants. Each Warrant is exercisable for a period of five (5) years from the date of issuance. On September 24, 2021, the warrant agreement was amended. The exercise price was amended to $0.025 per share, subject to adjustment herein, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations.

Note 22 - Options

On February 16, 2021, the Company cancelled all the Series A Preferred shares and offered holders of Series A Preferred shares option agreements to purchase up to 300,000 shares of CZJ License, Inc., a wholly owned subsidiary of the Company at an option price of $10 per share. The option agreements are exercisable for a period of one year from the date of issuance.

As of September 30, 2021, no options were exercised.

Note 23 - Commitments

The Company entered into a one-year employment agreement with Jeffrey Canouse on September 28, 2020 as President and Chief Executive Officer. The term may be renewed or non-renewed with not less than thirty days’ notice prior to the expiration of the initial employment term. The employment may be terminated by death or disability, terminated with or without cause or terminated by the employee. If the employee is terminated by the Company without cause or by the employee for good reason, then the Company will continue to pay his base salary of $8,000 for the remainder of the employment term or renewal term. Beginning on the first anniversary date of the initial salary increase and continue on each anniversary of the increase date, the base salary shall be increased by an amount not less than 5% times the base salary in effect, plus any additional amount as determined by the Company’s Board of Directors. As of September 30, 2021, Mr. Canouse had received $48,000 pursuant to his employment agreement (2020 - $34,000 in management fees, $24,000 of which was pursuant to the employment agreement) and $24,000 is owing to Mr. Canouse for management fees. As of September 30, 2021, Mr. Canouse was owed $44,169 for out-of-pocket costs.

-27-

The Company entered into a one-year employment agreement with Walter Hoelzel on September 29, 2020 as Chief Marketing Officer. The term may be renewed or non-renewed with not less than thirty days’ notice prior to the expiration of the initial employment term. The employment may be terminated by death or disability, terminated with or without cause or terminated by the employee. If the employee is terminated by the Company without cause or by the employee for good reason, then the Company will continue to pay his base salary of $5,000 for the remainder of the employment term or renewal term. As of September 30, 2021, Mr. Hoelzel had received $45,000 pursuant to his employment agreement (2020 - $25,000 in consulting fees, $15,000 of which were pursuant to the employment agreement).

The Company entered into a one-year employment agreement with Stuart Sher on September 29, 2020 as Chief Creative Officer. The term may be renewed or non-renewed with not less than thirty days’ notice prior to the expiration of the initial employment term. The employment may be terminated by death or disability, terminated with or without cause or terminated by the employee. If the employee is terminated by the Company without cause or by the employee for good reason, then the Company shall continue to pay his base salary for the remainder of the employment term or renewal term. As of September 30, 2021, Mr. Sher had received $45,000 pursuant to his employment agreement (2020 - $25,000 in consulting fees, $15,000 of which were pursuant to the employment agreement).

The Company entered into a consulting agreement with Virtue Development Company on September 29, 2020 for project consultancy. The consulting agreement is for 6 months with 6 months renewal options at the beginning of the 5^th month. The monthly compensation is $4,250 and as of September 30, 2021, the Company had incurred $38,250 (2020 - $12,750) in fees pursuant to this agreement and $17,000 was owing to Virtue Development Company.

The Company entered into a consulting agreement with Oscaleta Partners LLC on November 1, 2020 as project manager. The consulting agreement may be terminated by either party at the end of the initial 6 months term by giving 30 days written notice to the other party or at any time with cause. The monthly compensation is $25,000 and as of December 31, 2020, the Company incurred $75,000 in consulting fees. The consulting agreement with Oscaleta Partners LLC had been terminated.

The Company entered into a one-year consulting agreement with Bernt Ullmann on November 23, 2020 to provide market exposure services. The monthly compensation is $5,000 per month and as of September 30, 2021, the Company incurred $45,000 (2020 - $5,000) fees and owe Mr. Ullmann $10,000 for consulting fees.

On February 17, 2021, the Company and its subsidiaries entered into a Security Agreement and a Guaranty Agreement with Arena Investors LP, for securing the loans evidenced by the $16.5 million notes to the Company. The Security Agreement includes all chattels, properties, equipment, inventory, documents, instruments, interests, stocks, securities, rights, grants, intellectual properties, general intangibles, records, cash, computer programs, all FCC licenses, contracts, agreements, and goods, etc. without limitation. On September 24, 2021, the Security Agreement and Guaranty Agreement was amended to include the Company and Sovryn Holdings Inc. only.

The Company entered into a consulting agreement with a director of the Company, Warren Zenna of Zenna Consulting Group to provide oversight of marketing and communications services. The agreement commenced March 1, 2021 and ended on July 31, 2021. The Company paid Zenna Consulting Group a monthly retainer of $15,000. As of September 30, 2021, the Company paid $57,000 in fees to date.

The Company entered into a one-year employment agreement with Henry Turner on May 15, 2021 as the Company’s Chief Technology Officer and Chief Operations Officer. Mr. Turner may be terminated at any time, with or without reason, with notice. His annual base compensation is $150,000. As of September 30, 2021, the Company paid $23,077 in fees pursuant to his employment agreement.

-28-

Note 24 - Additional Cash Flow Information

During the nine months ended September 30, 2021, the following transaction did not involve cash:

(a)	Demand notes, convertible notes and interest with a carrying value of $668,214 were exchanged for 230,000 preference shares of Series D.
(b)	$715,228 in operating leases for equipment were capitalized and leases payable of the same amount were recorded.
(c)	1,000 Series E preference shares were issued 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. Common shares of $100 were eliminated on consolidation.

Note 25 - Subsequent Events

Subsequent to the period ended September 30, 2021, the President and director of CZJ License Inc. loaned the Company $15,000.

A further aggregate estimate of $245,280 was advanced to the CEO and director of Madison Technologies.

Sovryn paid additional deposits in the aggregate amount of $760,000 in escrow pursuant to the asset sale transactions with several companies for their low power television stations.

On October 11, 2021, the Series E Preferred Shareholders entered into an Exchange Agreement to exchange their 1,000 Series E Preferred Shares to Series E-1 Preferred Shares. As part of this exchange, 1,091,388,889 common shares were issued and 1,152,500 Series E-1 Preferred Shares were issued. Each Series E-1 preferred share converts to 1,000 common shares. As of the date of this report, none of the Series E-1 preferred shares were converted.

On October 11, 2021, the Series F Preferred Shareholders converted their 1,000 preferred shares and 192,073,017 common shares were issued.

On October 20, 2021, the Company entered into a Stock Acquisition Agreement with Top Dog Productions Inc., Jay Blumefield and Anthony Marsh whereby the Company will acquire all of the shares of Top Dog Productions Inc., and in exchange, the Company will pay the purchase price of $10,000,000 in shares of the common stock of the Company.

The number of shares of common stock to be issued will be subject to a “collar”, with a minimum number of 16,666,667 shares in the event that the closing bid and ask price before the Closing for the Company’s stock is $0.60 or greater, and a maximum number of 25,000,000 shares in the event that the closing bid and ask price before the Closing for the Company’s stock is $0.40 or less, with ratable adjustments for a Closing Price between $0.40 and $0.60. The Closing is subject to receipt of audited and other financial statements of Top Dog Productions, other deliverables, and terms and conditions. This agreement is also subject to standard termination provisions including if the Closing had not occurred within 60 days of the execution of the Agreement.

On October 25, 2021, Sovryn entered into an asset purchase agreement with Mako Communications, LLC, a Texas Limited Liability company to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the K07AAJ-D and W05DK-D low power television stations construction permits for the Bakerfield and San Juan. As consideration for the Bakerfield and San Juan Asset Sale Transaction, Sovryn has agreed to pay $115,000 in cash, $10,000 of which was paid in escrow pursuant to the terms of an escrow agreement entered into between the Company and Mako Communications LLC.

On November 2, 2021, the subscribers of $4,600,000 for Series G Preferred Shares were issued an aggregate of 255,555,556 common shares.

On November 3, 2021, Sovryn entered into an asset purchase agreement with Prism Broadcasting Network Inc, a Georgia corporation to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the WANN-CD low power television station. As consideration for the WANN Asset Sale Transaction, Sovryn has agreed $5,250,000 in cash, $200,000 of which was paid to in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Prism Broadcasting Network Inc.

On November 8, 2021, the Series F Preferred Shareholders entered into an Exchange Agreement to exchange 39,895,000 common shares for 39,895 Series H Preferred Shares. Each of the Series H Preferred Shares converts to 1,000 common shares. A total of 39,895 Series H Preferred Shares were issued.

On November 15, 2021, the Company entered into a Purchase and Sale agreement with ZA Group Inc. to sell CZJ License Inc., one of the wholly owned subsidiaries of the Company for $250,000. At Closing, the 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.

On November 24, 2021, 75,000 Preferred Series D shares were converted to 75,000,000 common shares.

-29-

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

This Quarterly Report on Form 10-Q includes forward-looking statements. These forward-looking statements are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Factors that might cause or contribute to such forward-looking statements include, but are not limited to, those set forth in the Risk Factors section of the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2021. The following discussion should be read in conjunction with our financial statements and related notes thereto included elsewhere in this report.

GENERAL

Overview

We, through our wholly-owned subsidiary, Sovryn Holdings, Inc. (“Sovryn”), have embarked on an acquisition strategy, rolling-up un-affiliated Class A/LPTV TV stations in the top 100 DMA’s (Designated Market Areas) with a goal of building out a nationwide platform through one or more station acquisitions per DMA. Each licensed TV station can broadcast between 10 and 12 or channels creating more revenue “streams” over-the-air, 24 hours per day/7 days per week. Management’s strategy is to stage the acquisitions focusing on DMA’s 1-30 and expanding thereafter on DMA’s 31-100, acquiring one station per DMA and building a portfolio of 100 stations within 18-24 months. Management has currently identified and held discussions with a number stations owners, has received FCC approval for three stations which have been acquired: (i) KNLA/KNET, a Class A television station in Los Angeles, and (ii) KVVV, a low power television station in Houston and has entered into asset purchase agreements for the following television stations: (iii) KYMU-LD, a low power television station in Seattle; three stations in which we anticipate closing in Janauary 2022 (i) W27EB, a Class A television station in Chicago (ii) KPHE-LB, a low power television station in Phoenix and (iii) KVSD-LD, a low power station in San Diego. We have also entered into purchase agreements for operating stations in New York and Atlanta and Construction Permits (“CP”) in San Juan Puerto Rico, Boise, ID and Bakersfield, CA. In addition, Sovryn has entered into non-binding letters of intent to acquire stations in Miami, Tampa and St. Louis and has also entered into a binding LOI to acquire Top Dog Productions, Inc., a television production company d/b/a “The Jay & Tony Show”, which produces content for third party networks.

Madison’s objective is to not only create one the largest, most comprehensive, state of the art, broadcast Over-The-Air (“OTA”) content distribution platforms to capitalize on the changing media and distribution landscape and on the growing OTA viewership in the U.S. but also embark on unique content development and network creation for distribution over its platform. The over-the-air programming carried on these stations is initially expected to include entertainment, shopping, weather, sports as well as religious networks and networks targeting select ethnic groups with lease agreements as the prime source of revenue. Pricing of lease agreements is in part determined by market rank, signal contour and number of OTA TV households in a given market, as well as supply and demand.

-30-

As the platform is built out, management not only anticipates substantial operational synergies from the roll-up but also an expansion in the revenue base with greater channel utilization, the addition of high-quality third-party content providers that are currently not reaching the “OTA” viewers, which now stands at an estimated 20mm households (44mm people) out of 108mm TV HH’s nationwide as well as revenue generated via the acquisition of “The Jay & Tony Show”

Station Operations

Madison’s plan is to acquire 50 independent TV stations in the top 30 DMA’s over the next 8-12 months. In addition, Madison expects to grow the station base to 100 tv stations nationwide through additional acquisitions targeting the top 100 DMA’s across the nation, ultimately covering 80% of the population of the U.S. over the next 18-24 months.

Each licensed TV station has the capability of delivering 10+ different revenue “streams” (channels) of content Over-the-Air, 24 hours per day/7 days per week . If converted to the new FCC approved ATSC 3.0 technology, the streaming capacity will increase to 25+ channels or more, giving Sovryn the potential to stream content upon completion of the roll-up to over 2500 channels aggregated over expected 100 stations.

Madison will operate the stations remotely and centrally, eliminating the need for in-market personnel or a studio facility. Remote operations of stations results in significant cost efficiencies. Recent FCC deregulation in TV broadcasting has eliminated the need for full time employees and studio facilities operating Class A and Low Power stations allowing for greater cost efficiency.

Recent Developments

On February 16, 2021, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with Sovryn Holdings, Inc. (“Sovryn”) and the holders (the “Sovryn Shareholders”) of Sovryn’s issued and outstanding shares of common stock, par value $0.0001 per share (“Sovryn Common Shares”), pursuant to which the Shareholders exchanged 100% of the outstanding Sovryn Common Shares, for (i) 100 shares of series B preferred stock, par value $0.001 per share (“Series B Preferred Stock”), of the Company which was transferred by Jeffrey Canouse, the Company’s controlling shareholder and existing Chief Executive Officer (the “Controlling Shareholder”), to the designee of Sovryn and (ii) 1,000 shares of series E convertible preferred stock, par value $0.001 per share of Sovryn (“Series E Preferred Stock,” and together with Series B Preferred Stock, the “Preferred Exchange Shares,” and the foregoing exchange of Sovryn Common Shares for Preferred Exchange Shares being the “Equity Exchange”).

Upon the effectiveness of an amendment to our Articles of Incorporation to increase the Company’s authorized common stock, par value $0.0001 per share, from 500,000,000 shares to 6,000,000,000 shares, all shares of Series E Preferred Stock issued to the Shareholders shall automatically convert into approximately 2,305,000,000 shares of common stock of the Company (“Shareholder Approval”). The Series E Convertible Preferred Stock votes on an as-converted basis with the common stock prior to their conversion. The Series E Preferred Stock shall represent approximately 57% of the fully-diluted shares of common stock of the Company after the closing of the transactions contemplated by the Securities Purchase Agreement (as defined below).

Immediately prior to the closing of, and as a condition to, the Share Exchange Agreement, the Company entered into a Share Transfer Agreement (the “Share Transfer Agreement”), pursuant to which the Controlling Shareholder transferred all of the shares of Series B Preferred Stock held by him to an entity controlled by Philip Falcone, the Company’s new chief executive officer. The Series B Preferred Stock entitles the holder thereof to majority voting control of the Company by virtue of the 51% super voting rights attributed to the holder of the Series B Preferred Stock. The Controlling Shareholder owned all 100 Shares of Series B Preferred Stock, entitling him to 51% of the aggregate votes taken by shareholders of any class on all matters being voted upon.

-31-

Immediately prior to the closing of the Share Exchange Agreement, we entered into Exchange Agreements (the “Convertible Note Exchange Agreements”) with the holders of our outstanding convertible promissory notes (the “Convertible Notes”). Pursuant to Convertible Note Exchange Agreements, the holders of the Convertible Notes were issued, in exchange for their Convertible Notes, a total of 230,000 shares of our newly-designated Series D Convertible Preferred Stock. Our new Series D Convertible Preferred Stock is convertible into common stock at a ratio of 1,000 shares of common stock for each share of preferred stock held. Immediately prior to the closing of the Share Exchange Agreement, we entered into Exchange Agreements (the “Preferred Stock Exchange Agreements” and together with the Convertible Note Exchange Agreements, the “Exchange Agreements”) with the holders of our outstanding series A convertible preferred stock (the “Series A Preferred Stock”). Pursuant to the Preferred Stock Exchange Agreements, the holders of the Series A Convertible Preferred Stock were issued, in exchange for their Series A Preferred Stock, options to purchase a majority of the outstanding shares of common stock of a newly to be formed wholly owned subsidiary of the Company to be called CZJ License, Inc.

On February 17, 2021, we entered into a securities purchase agreement with funds affiliated with Arena Investors LP (the “Investors”) pursuant to which the company issued convertible notes in an aggregate principal amount of $16.5 million for an aggregate purchase price of $15 million (collectively, the “Notes”). In connection with the issuance of the Notes, we issued to the Investors warrants to purchase an aggregate of 192,073,017 shares of Common Stock (collectively, the “Warrants”) and 1,000 shares of series F convertible preferred stock (the “Series F Preferred Stock”).

The Notes each have a term of thirty-six months and mature on February 17, 2023, unless earlier converted. The Notes accrue interest at a rate of 11% per annum, subject to increase to 20% per annum upon and during the occurrence of an event of default. Interest is payable in cash on a quarterly basis beginning on March 31, 2021. Notwithstanding the above, at the Company’s election, any interest payable on an applicable payment date may be paid in registered Common Stock of the Company (rather than cash) in an amount equal (A) the amount of the interest payment due on such date, divided by (B) an amount equal to 80% of the average VWAP of the Common Stock for the five (5) days immediately preceding the date of conversion.

On September 24, 2021, the Company and the Investors amended the Notes. The Notes are convertible at any time, at the holder’s option, into shares of our common stock equal to $0.02 per share subject to adjustment. Notwithstanding the foregoing, at any time during the continuance of any Event of Default, the Conversion price in effect shall be equal to the alternate conversion price. If at any time the conversion price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the conversion price hereunder may equal such par value for such conversion and the conversion amount for such conversion may be increased to include Additional Principal, where Additional Principal means such additional amount to be added to the principal amount of this 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 to the par value price, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The conversion price is also subject to adjustment due to certain events, including stock dividends, stock splits and in connection with the issuance by the Company of common stock or common stock equivalents at an effective price per share lower than the conversion price then in effect. The Notes may not be redeemed by the Company

As part of the agreement with the Investors, the Company issued 192,073,016 warrants. On September 24, 2021, the Company and the Investor amended the warrant agreement such that each Warrant is exercisable for a period of five (5) years from the date of issuance at an initial exercise price equal to $0.025 per share, subject to adjustment herein, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. The Holder may be eligible for cashless exercise.

The Series F Preferred Stock have no voting rights and shall convert into approximately 192,073,017 shares of common stock upon Shareholder Approval. Subsequent to the period ended September 30, 2021, the 1,000 Series F Preferred Stock were converted to 192,073,017 common shares. On November 8, 2021, the Series F Preferred Shareholders entered into an Exchange Agreement to exchange 39,895,000 common shares for 39,895 Series H Preferred Shares. Each of the Series H Preferred Shares converts to 1,000 common shares. A total of 39,895 Series H Preferred Shares were issued.

-32-

On February 17, 2021, Sovryn, entered into an asset purchase agreement (the “Asset Purchase Agreement”) with with NRJ TV II CA OPCO, LLC, a Delaware limited liability company (“OpCo”) and NRJ TV III CA License Co., LLC, a Delaware limited liability company (together with OpCo, “Sellers”). Upon the terms and subject to the satisfaction of the conditions described in the Asset Purchase Agreement, Sovryn will acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the KNET-CD and KNLA-CD Class A television stations owned by the Sellers (the “Acquired Stations”), certain tangible personal property, real property, contracts, intangible property, files, claims and prepaid items together with certain assumed liablities in connection with the Acquired Stations (the “Asset Sale Transaction”). As consideration for the Asset Sale Transaction, Sovryn has agreed to pay the Sellers $10,000,000, $2,000,000 of which was paid to Sellers upon execution of the Asset Purchase Agreement, as follows: (i) an escrow deposit of $1,000,000 to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Sellers (the “Escrow Fee”) and (ii) a non-refundable option fee of $1,000,000 (the “Option Fee”). The closing of the Asset Sale Transaction took place on April 19, 2021.

On March 14, 2021, Sovryn entered into an asset purchase agreement (the “KVVV Asset Purchase Agreement”) with Abraham Telecasting Company, LLC, a Texas limited liability company (the “Houston Seller”). Upon the terms and subject to the satisfaction of the conditions described in the KVVV Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the KVVV-LD low power television station owned by the Houston Seller (the “Houston Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Houston Acquired Station (the “KVVV Asset Sale Transaction”). As consideration for the KVVV Asset Sale Transaction, Sovryn has agreed to pay the Houston Seller $1,500,000 in cash, $87,500 of which was paid to the Houston Seller and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Houston Seller (the “KVVV Escrow Fee”). The closing of the KVVV Asset Sale Transaction (the “KVVV Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Houston Acquired Station, from the Houston Seller to Sovryn (the “Houston FCC Consent”). The KVVV Closing shall occur no more than ten (10) business days following the later to occur of (i) the date on which the Houston FCC Consent has been granted and (ii) the other conditions to the KVVV Closing set forth in the KVVV Asset Purchase Agreement. The closing of the KVVV Asset Sale Transaction took place on June 1, 2021.

On March 29, 2021, Sovryn, entered into an asset purchase agreement (the “KYMU Asset Purchase Agreement”) with Seattle 6 Broadcasting Company, LLC, a Washington limited liability company (the “Seattle Seller”). Upon the terms and subject to the satisfaction of the conditions described in the KYMU Asset Purchase Agreement, Sovryn agreed to acquire the licenses and FCC authorizations to the KYMU-LD low power television station owned by the Seattle Seller (the “Seattle Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Seattle Acquired Station (the “KYMU Asset Sale Transaction”). As consideration for the Seattle Asset Sale Transaction, Sovryn has agreed to pay the Seattle Seller $1,750,000, $87,500 of which was paid to the Seattle Seller and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Seattle Seller (the “Seattle Escrow Fee”). The closing of the KYMU Asset Sale Transaction (the “KMYU Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Seattle Acquired Station, from Seattle Seller to Sovryn (the “Seattle FCC Consent”). The Seattle Closing occurred at the end of September 2021.

On June 9, 2021, Sovryn, entered into an asset purchase agreement (the “W27EBAsset Purchase Agreement”) with Local Media TV Chicago, LLC, a Delaware limited liability company (the “Chicago Seller”). Upon the terms and subject to the satisfaction of the conditions described in the W27EB Asset Purchase Agreement, Sovryn agreed to acquire the licenses and FCC authorizations to the W27EB-D Class A television station owned by the Chicago Seller (the “Chicago Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Chicago Acquired Station (the “W27EBAsset Sale Transaction”). As consideration for the Chicago Asset Sale Transaction, Sovryn has agreed to pay the Chicago Seller an amended price of $6,000,000, $300,000 of which was paid to the Chicago Seller and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Chicago Seller (the “Chicago Escrow Fee”). The assignment has been approved for transfer by the FCC , The company has since amended the closing of the W27EB Asset Sale Transaction (the “W27EB Closing”) to December 28^th, 2021.

-33-

On July 13, 2021, Sovryn, entered into an asset purchase agreement (the “KPHE Asset Purchase Agreement”) with Lotus TV of Phoenix LLC, an Arizona limited liability company (the “Arizona Seller”). Upon the terms and subject to the satisfaction of the conditions described in the KPHE Asset Purchase Agreement, Sovryn agreed to acquire the licenses and FCC authorizations to the KPHE-LD low power television station owned by the Arizona Seller (the “Arizona Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Arizona Acquired Station (the “Arizona Asset Sale Transaction”). As consideration for the Arizona Asset Sale Transaction, Sovryn agreed to pay the Arizona Seller $2,000,000, $100,000 of which was paid to the Arizona Seller to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Arizona Seller (the “Arizona Escrow Fee”).The FCC has since consented to the transfer and Sovryn, which is currently in discussions to amend the closing date to January 14^th, has increased the escrowed amount to $450,000 as a result.

On August 31, 2021, Sovryn entered into an asset purchase agreement (the “KVSD Asset Purchase Agreement”) with D’Amico Brothers Broadcasting Corp., a California company (the “San Diego Seller”). Upon the terms and subject to the satisfaction of the conditions described in the KVSD Asset Purchase Agreement, Sovryn agreed to acquire the licenses and Federal Communications Commission (“FCC”) authorizations to the KVSD-LD low power television station owned by the San Diego Seller (the “San Diego Acquired Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the San Diego Acquired Station (the “KVSD Asset Sale Transaction”). As consideration for the KVSD Asset Sale Transaction, Sovryn has agreed to pay the San Diego Seller $1,500,000 in cash, $75,000 of which was paid to the San Diego Seller (subsequent to the period end) and to be held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the San Diego Seller (the “KVSD Escrow Fee”). The FCC has since consented to the transfer, and Sovryn, which is currently in discussions to amend the closing date to January 14^th, has increased the escrowed amounts to $275,000.

Sovryn, entered into an asset purchase agreements (the “WXNY and WANN Asset Purchase Agreements”) with New York Spectrum Holdings Corp. (“WXNY New York Seller”) and Prism Broadcasting (the “WANN Atlanta Seller”). The FCC has consented to the transfer of the WXNY license and Sovryn is currently in the process of scheduling a closing date. Purchase price for the New York station in total is $5.4mm. Upon the terms and subject to the satisfaction of the conditions described in the WANN Agreement Asset Purchase Agreement, Sovryn agreed to acquire the licenses and FCC authorizations to the WANN-CD, a Class A low power television station owned by the Prism Broadcasting (the “Atlanta Station”), certain tangible personal property, certain real property leases, contracts, intangible property, files, claims and prepaid items together with certain assumed liabilities in connection with the Atlanta Station (the “WANN Asset Sale Transaction”). As consideration for the Atlanta Asset Sale Transaction, Sovryn has agreed to pay the Atlanta Seller $5,250,000, $200,000 of which was paid and is held in escrow pursuant to the terms of an escrow agreement entered into between Sovryn and the Atlanta seller. The closing of the WANN Asset Sale Transaction (the “WANN Closing”) is subject to, among other things, consent by the FCC to the assignment of the FCC authorizations pertaining to the Atlanta Acquired Station, from Atlanta Seller to Sovryn (the “ Atlanta FCC Consent”). The Atlanta Closing shall occur no more than ten (10) business days following the later to occur of (i) the date on which the Atlanta FCC Consent has been granted and (ii) the other conditions to the WANN Closing set forth in the WANN Asset Purchase Agreement.

In addition, Sovryn entered into an Asset Purchase Agreement (the “San Juan, Boise and Bakersfield Construction Permits) with Mako Communications (“the CP Seller”). Purchase price for the three CP’s is $115,000, $10,000 of which has been paid and held in Escrow. The FCC has consented to the transfer and Sovryn is in discussions with Mako to schedule a closing date.

RESULTS OF OPERATIONS

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long term operating requirements. We expect to raise additional capital through, among other things, the sale of equity or debt securities.

-34-

Nine months ended September 30, 2021 and September 30, 2020

Sales

Net Sales increased to $760,053 for the nine months ended September 30, 2021 from $401 for the nine months ended September 30, 2020. The increase resulted from the acquisition of KNLA/KNET, KVVV and KYMU television stations and the revenues associated with the existing lease agreements held by those stations.

Amortization

Amortization increased to $140,826 for the nine months ended September 30, 2021 from $20,884 for the nine months ended September 30, 2020. The increase resulted from the acquisition of tangible and intangible assets of KNLA/KNET, KVVV and KYMU television stations.

Consulting Fees

Consulting Fees increased to $348,500 for the nine months ended September 30, 2021 from $40,000 for the nine months ended September 2021. The increase was primarily the result of agreements put in place by the company for sales, finance and general consulting purposes.

General and administrative fees

General and Administrative fees increased to $149,905 for the nine months ended September 30,2021 from $18, 009 for the nine months ended September 20, 2020. The increase was primarily the result expenses for associated administrative and salary expenses related to headcount.

Lender Fees

Arena Capital Lender Fees increased to $1,606,275 for the nine months ended September 30,2021 from $0 for the nine months ended September 30, 2020. The increase was primarily the result of various expenses associated with the covenant and regulatory filings and financing documentation.

Management Fees

Management Fees increased to $360,462 for the nine months ended September 30, 2021 from $10,000 for the nine months ended September 30, 2020. The increase was primarily the result of management agreements put in place up on the acquisition of Sovryn, its television stations and associated financings.

Marketing and Product Development Fees

Marketing and Product Development Fees increased to $207,325 for the nine months ended September 30, 2021 from $0 for the nine months ended September 30, 2020. The increase resulted from fee arrangements put in place for marketing related activities.

Professional Fees

Professional Fees increased to $1,041,630 for the nine months ended September 30, 2021 from $31,519 for the nine months ended September 30, 2020. The increase was primarily the result of an increase in the legal and accounting expense associated with the acquisitions of Sovryn, KNLA/KNET, KVVV and KYMU television stations, the financing associated with those acquisitions , the expense associated with the Asset Purchase Agreements for WXNY and WANN and, the expense associated with regulatory filings for the SEC, including the Form S1 Registration.

-35-

Royalty Expense

Royalty expense decreased to $35,323 for the nine months ended September 30, 2021 from $41,667 for the nine months ended September 30, 2020. The decrease resulted from amended terms in the agreement with CZJ products.

Amortized Interest

Amortized Interest increased by to $372,177 for the nine months ended September 30, 2021 from $0 for the nine months ended September 30, 2020. The increase resulted from financing associated with the acquisition of KNLA/KNET, KVVV and KYMU television stations.

Interest

Interest increased to $1,151,531, the nine months ended September 30, 2021 from $7,592 for the nine months ended September 30, 2020. The increase was the result of financing put in place for working capital and the acquisition of KNLA/KNET, KVVV and KYMU television stations.

Net Loss

Net Loss increased to $4,961,892 for the nine months ended September 30, 2021 from $183,902 for the nine months ended September 30, 2020. The increase was primarily the result of an increase in expenses associated with the build-out and roll-out of the Sovryn Holdings business plan, notably, expenses associated with the professional fees incurred with the acquisitions and other necessary regulatory filings as well as interest expense from the Arena Capital credit facility.

Three months ended September 30, 2021 and September 30, 2020

Sales

Net sales increased to $464,028 for the three months ended September 30, 2021 from $179 for the three months ended September 30, 2020. The increase was the result of the acquisition of KNLA/KNET , KVVV and KYMU television stations and the revenues associated with the existing lease agreements held by those stations.

Amortization

Amortization decreased to ($74,276) for the three months ended September 30, 2021 from $20,884 for the three months ended September 30, 2020. The decrease resulted from a change in allocation of capitalized purchased costs arising from updated valuation reports.

Consulting Fees

Consulting Fees increased to $69,000 for the three months ended September 30, 2021 from $40,000 for the three months ended September 30, 2020. The increase was primarily the result of agreements put in place by the company for sales, finance and general consulting purposes

General and administrative fees

General and Administrative fees increased to $110,936 for the 3 months ended September 30, 2021 from $6,320 for the three months ended September 30, 2020. The increase was primarily the result of expenses for associated administrative and salary expenses related to headcount.

-36-

Lender Fees

Lender Fees increased to $1,320,692 for the three months ended September 30, 2021 from $0 for the three months ended September 30, 2020. The increase resulted from various expenses associated with the Arena Capital financing.

Management Fees

Management Fees increased to $154,385for the three months ended September 30, 2021 from $10,000 for the three months ended September 30, 2020. The increase was primarily the result of management agreements put in place up on the acquisition of Sovryn and the television stations and associated financings.

Marketing and Product Development Fees

Marketing and Product Development Fees increased to $28,790 for the three months ended September 30, 2021 from $0 for the three months ended June 30, 2020. The increase was primarily the result of fee arrangements put in place for marketing related activities.

Professional Fees

Professional Fees increased to $517,911 for the three months ended September 30, 2021 from $27,870 for the three months ended September 30, 2020. The increase was primarily the result of an increase in legal and accounting expense associated with the acquisitions of Sovryn, KNLA/KNET, KVVV and KYMU television stations and the financing associated with those acquisitions.

Royalties

Royalty expense decreased for the three months ended September 30, 2021 from $41,667 for the three months ended September 30, 2020. The decrease was primarily the result of the amended terms of the agreement with CZJ products.

Amortized Interest

Amortized Interest increased by to $135,855 for the three months ended September 30, 2021 from $14,633 for the three months ended September 30, 2020. The increase was primarily the result of financing associated with the acquisition of KNLA/KNET, KVVV and KYMU television stations.

Interest

Interest increased 471,033 $453,750 for the three months ended September 30, 2021 from $4,519 for the three months ended September 30, 2020. The increase was primarily the result of the financing put in place for working capital and the acquisition of KNLA/KNET, KVVV and KYMU television stations.

Net Loss

Net Loss increased to $2,405,292 for the three months ended September 30, 2021 from $165,714 for the 3 months ended September 30, 2020. The increase was primarily the result of an increase in expenses associated with the build-out and roll-out of the Sovryn business plan and expenses associated with the financing and Sovryn acquisitions.

-37-

Liquidity and Capital Resources

Cash and Working Capital

As at September 30, 2021, Madison had cash of $2,194,562 and a working capital surplus of $1,721,845, compared to cash of $9,491 and working capital deficit of $100,141 as at December 31, 2020.

We will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through the sale of equity and/or debt securities; however, there is no assurance that we will be successful at raising additional capital in the future. If our plans are not achieved and/or if significant unanticipated events occur, we may have to further modify our business plan, which may require us to raise additional capital. As of September 30, 2021, our principal source of liquidity was our cash, which totaled $2,194,562 .Historically, our principal sources of cash have included proceeds from the sale of common stock and preferred stock and related party loans. Our principal uses of cash have included cash used in operations and acquisitions. We expect that the principal uses of cash in the future will be for continuing operations, acquisitions and expenses associated with rolling out the business plan.

Net Cash Used in Operating Activities

Madison used cash of $4,182,399 in operating activities during the first nine months of fiscal 2021 compared to cash used of $33,851 in operating activities during the same period in the previous fiscal year. The increase was primarily the result of increase in expenses associated with the build out and roll out of Sovryn’s business plan.

Net Cash Provided (Used in) Investing Activities

Madison used cash of $14,462,531 in investing activities during the first nine months of fiscal 2021 compared to cash used of $0 in investing activities during the same period in the previous fiscal year. The increase was the result of acquisitions and expenses associated with KNLA/KNET, KVVV , KYMU television stations, deposits associated with signed purchase agreements and loans made to Top Dog Productions Inc.

Net Cash Provided by Financing Activities

Net cash flows provided by financing activities of $20,830,001 for the first nine months of fiscal 2021, were from the proceeds of the Arena financing in February 2021 and Share subscriptions received but not issued for our Series G preferred stock and proceeds from subordinated loans, compared to cash used of $209,000 in financing activities during the same period in the previous fiscal year.

Off-balance Sheet Arrangements

Madison has no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Going Concern

Madison has not attained profitable operations and is dependent upon obtaining financing to pursue any extensive business activities. For these reasons, Madison’s auditors stated in their report that they have substantial doubt Madison will be able to continue as a going concern.

-38-

Tabular Disclosure of Contractual Obligations

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

Critical Accounting Policies

Madison’s financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Management believes that understanding the basis and nature of the estimates and assumptions involved with the following aspects of Madison’s financial statements is critical to an understanding of Madison’s financial statements.

Use of estimates

The preparation of the consolidated interim 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.

Change in significant accounting policies

There has been no change in the accounting policies from those disclosed in the notes to the audited financial statements for the year ended December 31, 2020.

Recently Issued Accounting Pronouncements

The Company adopts new pronouncements relating to generally accepted accounting principles applicable to the Company as they are issued, which may be in advance of their effective date. On August 5, 2020, the FASB issued a new standard (ASU 2020-06) to reduce the complexity of accounting for convertible debt. The standard is effective for Smaller Reporting Companies for fiscal years beginning after December 15, 2023. Management is reviewing this standard as it believes this may impact on its financial reporting Management does not believe that other any pronouncement not yet effective but recently issued would, if adopted, have a material effect on the accompanying financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was carried out by Madison’s management, with the participation of the Chief Executive Officer, of the effectiveness of Madison’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)) as of September 30, 2021. Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, Madison’s management concluded, as of the end of the period covered by this report, that Madison’s disclosure controls and procedures were not effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the SEC rules and forms and that such information was accumulated or communicated to management to allow timely decisions regarding required disclosure. In particular, Madison has identified material weaknesses in internal control over financial reporting, as discussed below.

-39-

Madison’s internal control over financial reporting is a process designed under the supervision of Madison’s Chief Executive Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Madison’s financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:

● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of Madison’s assets;

● provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the Board of Directors; and

● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Madison’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of Madison’s annual or interim financial statements will not be prevented or detected on a timely basis.

The matters involving internal controls and procedures that management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee and lack of a majority of outside directors on Madison’s board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified by Madison’s Chief Financial Officer in connection with the audit of its financial statements as of December 31, 2020 and communicated the matters to management.

Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on Madison’s financial results. However, management believes that the lack of a functioning audit committee and lack of a majority of outside directors on Madison’s board of directors caused and continues to cause an ineffective oversight in the establishment and monitoring of the required internal controls over financial reporting.

Madison is committed to improving its financial organization. As part of this commitment and when funds are available, Madison will create a position to Madison to segregate duties consistent with control objectives and will increase its personnel resources and technical accounting expertise within the accounting function by: (i) appointing one or more outside directors to its board of directors who will also be appointed to the audit committee of Madison resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls over financial reporting; and (ii) preparing and implementing sufficient written policies and checklists that will set forth procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements.

-40-

Management believes that the appointment of one or more outside directors, who will also be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on Madison’s Board. In addition, management believes that preparing and implementing sufficient written policies and checklists will remedy the following material weaknesses: (i) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (ii) ineffective controls over period end financial close and reporting processes. Further, management believes that the hiring of additional personnel who have the technical expertise and knowledge will result proper segregation of duties and provide more checks and balances within the department. Additional personnel will also provide the cross training needed to support Madison if personnel turn-over issues within the department occur. This coupled with the appointment of additional outside directors will greatly decrease any control and procedure issues Madison may encounter in the future.

Management will continue to monitor and evaluate the effectiveness of Madison’s internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Changes in Internal Controls over Financial Reporting

There were no changes in Madison’s internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended September 30, 2021, that materially affected, or are reasonably likely to materially affect, Madison’s internal control over financial reporting.

Limitations on the Effectiveness of Controls and Procedures

Management, including our President and Chief Financial Officer, does not expect that Madison’s controls and procedures will prevent all potential error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Part II – Other Information

ITEM 1. LEGAL PROCEEDINGS.

Madison is not a party to any pending legal proceedings and, to the best of Madison’s knowledge, none of Madison’s property or assets are the subject of any pending legal proceedings.

ITEM 1A. RISK FACTORS

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 17, 2021, the Company entered into a securities purchase agreement with funds affiliated with Arena Investors LP (the “Investors”) pursuant to which we issued convertible notes in an aggregate principal amount of $16.5 million for an aggregate purchase price of $15 million (collectively, the “Notes”). In connection with the issuance of the Notes, the Company issued to the Investors warrants to purchase an aggregate of 192,073,017 shares of Common Stock (collectively, the “Warrants”) and 1,000 shares of series F convertible preferred stock (the “Series F Preferred Stock”).

The Notes each have a term of thirty-six months and mature on February 17, 2023, unless earlier converted. The Notes accrue interest at a rate of 11% per annum, subject to increase to 20% per annum upon and during the occurrence of an event of default. Interest is payable in cash on a quarterly basis beginning on March 31, 2021. Notwithstanding the above, at the Company’s election, any interest payable on an applicable payment date may be paid in registered Common Stock of the Company (rather than cash) in an amount equal (A) the amount of the interest payment due on such date, divided by (B) an amount equal to 80% of the average VWAP of the Common Stock for the five (5) days immediately preceding the date of conversion.

On September 24, 2021, the Company and the Investors amended the Notes. The Notes are convertible at any time, at the holder’s option, into shares of our common stock equal to $0.02 per share subject to adjustment. Notwithstanding the foregoing, at any time during the continuance of any Event of Default, the Conversion price in effect shall be equal to the alternate conversion price. If at any time the conversion price as determined hereunder for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the conversion price hereunder may equal such par value for such conversion and the conversion amount for such conversion may be increased to include Additional Principal, where Additional Principal means such additional amount to be added to the principal amount of this 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 to the par value price, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The conversion price is also subject to adjustment due to certain events, including stock dividends, stock splits and in connection with the issuance by the Company of common stock or common stock equivalents at an effective price per share lower than the conversion price then in effect. The Notes may not be redeemed by the Company

As part of the agreement with Arena, the Company issued 192,073,016 warrants. On September 24, 2021, the Company and the Investor amended the warrant agreement such that each Warrant is exercisable for a period of five (5) years from the date of issuance at an initial exercise price equal to $0.025 per share, subject to adjustment herein, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. The Holder may be eligible for cashless exercise.

The Series F Preferred Stock have no voting rights and shall convert into approximately 192,073,017 shares of common stock upon Shareholder Approval. Subsequent to the period ended September 30, 2021, the 1,000 Series F Preferred Stock were converted to 192,073,017 common shares. On November 8, 2021, the Series F Preferred Shareholders entered into an Exchange Agreement to exchange 39,895,000 common shares for 39,895 Series H Preferred Shares. Each of the Series H Preferred Shares converts to 1,000 common shares. A total of 39,895 Series H Preferred Shares were issued.

During the three months ended September 30, 2021, the Company entered into Subordinated Loan Agreements for gross proceeds of $1,200,000, of which $350,000 was paid off subsequent to the quarter end.

The Loans were not registered under the Securities Act or the securities laws of any state, and were offered and sold in reliance on the exemption from registration afforded by Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder and corresponding provisions of state securities laws, which exempt transactions by an issuer not involving any public offering. The investors in such securities are each an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act. 

On November 2, 2021, the subscribers of $4,600,000 for Series G Preferred Shares were issued an aggregate of 255,555,556 common shares. Proceeds from the financing will be used for operations and general working capital.

On November 24, 2021, 75,000 Preferred Series D shares were converted to 75,000,000 common shares.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

No report required.

-41-

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No report required.

ITEM 5. OTHER INFORMATION

No report required.

ITEM 6. EXHIBITS

Exhibit Number	Description
31.1*	Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith.
**	Furnished.

-42-

Signatures

In accordance with the requirements of the Securities Exchange Act of 1934, Madison Technologies, Inc. has caused this report to be signed on its behalf by the undersigned duly authorized person.

	Madison Technologies, Inc.
Dated: December 21, 2021	By:	/s/ Philip A. Falcone
	Name:	Philip A. Falcone
	Title:	CEO
		(Principal Executive Officer and Principal Financial and Accounting Officer)

-43-