United states
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| quarterly report under section 13 0r 15(d) of the securities exchange act of 1934 |
For
the quarterly period ended
| transition report under section 13 0r 15(d) of the securities exchange act of 1934 |
For the transition period from ________________________ to _______________________
Commission
file number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) | |
| (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act: None.
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 ☒
Indicate by check mark whether the registrant has submitted electronically 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 such files).
☐
Yes ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Larger accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐
Yes ☒
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 May 14, 2024 | |
| Common Stock, $0.001 par value per share |
MADISON TECHNOLOGIES INC.
TABLE OF Contents
FORM 10-Q
September 30, 2023
| Page | ||
| Part I. | FINANCIAL INFORMATION | |
| Item 1. | CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) | |
| Condensed Consolidated Balance Sheets | 1 | |
| Condensed Consolidated Statements of Operations | 2 | |
| Condensed Consolidated Statements of Stockholders’ Deficit | 3 | |
| Condensed Consolidated Statements of Cash Flows | 4 | |
| Notes to the Condensed Consolidated Financial Statements | 5 | |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 28 |
| Item 4. | Controls and Procedures | 28 |
| Part II. | OTHER INFORMATION | 31 |
| Item 1. | Legal Proceedings | 31 |
| Item 1A. | Risk Factors | 31 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 31 |
| Item 3. | Defaults upon Senior Securities | 31 |
| Item 4. | Mine Safety Disclosures | 32 |
| Item 5. | Other Information | 32 |
| Item 6. | Exhibits | 32 |
| Signatures | 34 | |
MADISON TECHNOLOGIES INC.
condensed consolidated Balance Sheets
(Unaudited)
| September 30, 2023 | December 31, 2022 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Prepaid expenses | ||||||||
| Assets from discontinued operations | ||||||||
| Investments | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Derivative liability | ||||||||
| Promissory notes | ||||||||
| Convertible notes | ||||||||
| Interest payable on senior secured notes | ||||||||
| Senior secured notes, net of discount | ||||||||
| Liabilities from discontinued operations | ||||||||
| Total current liabilities | ||||||||
| Preferred Shares–- Series C, $
par value; | ||||||||
| Preferred Shares–- Series D, $ par value; convertible, stated value $ per share, shares designated, shares issued and outstanding, September 30, 2023 and December 31, 2022, respectively; converted | ||||||||
| Preferred Shares–- Series E, $ par value; convertible, stated value $ per share, shares designated, issued and outstanding, September 30, 2023 and December 31, 2022, respectively; shares exchanged for Series E-1 | ||||||||
| Preferred Shares – Series E-1, $ par value; convertible, stated value $ per share, shares designated, shares issued and outstanding, September 30, 2023 and December 31, 2022, respectively; | ||||||||
| Preferred Shares – Series F, $ par value; convertible, stated value $ per share, shares designated, issued and outstanding, September 30, 2023 and December 31, 2022, respectively; shares converted | ||||||||
| Preferred Shares – Series G, $ par value; convertible, stated value $ per share, shares designated, issued and outstanding, September 30, 2023 and December 31, 2022, respectively; shares converted | ||||||||
| Preferred Shares – Series H, $ par value; convertible, stated value $ per share, shares designated, issued and outstanding, September 30, 2023 and December 31, 2022, respectively; | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Capital Stock: | ||||||||
| Preferred Shares – shares authorized, $ par value; | ||||||||
| Preferred Shares–- Series A, $
par value; | ||||||||
| Preferred Shares–- Series B, $ par value; shares designated, shares issued and outstanding, September 30, 2023 and December 31, 2022, respectively | ||||||||
| Common Shares - $ par value; shares authorized, shares issued and outstanding, September 30, 2023 and December 31, 2022, respectively | ||||||||
| Additional paid in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities and stockholders’ deficit | $ | $ | ||||||
See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
1
MADISON TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||
| Revenues | $ | $ | $ | $ | ||||||||||||
| Operating Expenses | ||||||||||||||||
| Selling, general and administrative | ||||||||||||||||
| Professional fees | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Loss before other expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Other income (expenses) | ||||||||||||||||
| Other income | ||||||||||||||||
| Loss on disposition of assets | ( | ) | ||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Loss from continuing operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income (loss) from discontinued operations | ( | ) | ( | ) | ||||||||||||
| Net loss and comprehensive loss | $ | ( | ) | $ | ( | ) | ( | ) | ( | ) | ||||||
| Net loss per share-Basic and diluted | $ | ( | ) | $ | ( | ) | ( | ) | ( | ) | ||||||
| Average number of shares of common stock outstanding | ||||||||||||||||
See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
2
MADISON TECHNOLOGIES INC.
CONDENSED CONSOLIDATED StatementS of stockholders’ DEFICIT
(Unaudited)
| Additional | ||||||||||||||||||||
| Common | Paid In | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance, December 31, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss for the period | — | ( | ) | ( | ) | ( | ) | |||||||||||||
| Balance, September 30, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Additional | ||||||||||||||||||||
| Common | Paid In | Accumulated | ||||||||||||||||||
| Shares | Amount | Capital | Deficit | Total | ||||||||||||||||
| Balance, December 31, 2021 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
| Net loss for the period | — | ( | ) | ( | ) | |||||||||||||||
| Balance, September 30, 2022 | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||
See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
3
MADISON TECHNOLOGIES INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| For the Nine Months Ended | ||||||||
| September 30, 2023 | September 30, 2022 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss from continuing operations for the period | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to cash used in operating activities: | ||||||||
| Amortized interest | ||||||||
| Accrued interest on notes receivable | ( | ) | ||||||
| Fair value of Warrant issued for services | ||||||||
| Loss on disposal of assets | ||||||||
| Changes in assets and liabilities: | ||||||||
| Accounts payable and accruals | ||||||||
| Prepaid expenses | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of equipment, intangible assets and goodwill | ( | ) | ||||||
| Funds advanced for note receivable | ( | ) | ||||||
| Net cash used in investing activities | ( | ) | ||||||
| Cash flows from financing activities: | ||||||||
| Proceeds from convertible and subordinate notes sold, net | $ | $ | ||||||
| Net cash provided by financing activities | ||||||||
| Cash flows used in continuing operations | ( | ) | ||||||
| Cash flows from discontinued operations: | ||||||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Cash flows from discontinued operations | ( | ) | ||||||
| Net decrease in cash | ( | ) | ||||||
| Cash, beginning of period | ||||||||
| Cash, end of period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE | ||||||||
| Interest paid | $ | $ | ||||||
| Taxes paid | $ | $ | ||||||
See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements
4
MADISON TECHNOLOGIES INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
September 30, 2022
Note 1 Nature of Operations
Madison Technologies Inc. (“Madison” or the “Company” or “we” or “us” or “our”) was incorporated on June 15, 1998 in the State of Nevada, and our shares of common stock, par value $0.001 per share (“Common Stock”), are quoted on the Experts Market tier of the over-the-counter market operated by OTC Markets, Inc.
We are seeking to create, develop and launch BlockchainTV (“BCTV”), the first-to-market 24/7 television broadcast and streaming communications network designed to bring the most up-to-date crypto information and entertainment to the masses in the U.S. and around the world.
Note 2 Going Concern
The
accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which
contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. For the year ended
December 31, 2022, we generated no revenues from continuing operations, incurred a net loss of $
Note 3 Summary of Significant Accounting Policies
Use of estimates
The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.
5
Consolidation
The accompanying condensed consolidated financial statements include the accounts of our current and former wholly owned subsidiaries, Blockchain.tv, Inc. and SovRryn Holdings Inc. (“Sovryn”). Sovryn is consolidated up until January 31, 2023 and recognized as a discontinued operation. All the intercompany balances and transactions have been eliminated in the consolidation.
Interim Reporting
While the information presented in the accompanying interim three-month financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies and methods of their application as the Company’s December 31, 2022 annual financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s December 31, 2022 annual financial statements. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that can be expected for the year ended December 31, 2023.
Segment reporting
Our chief operating decision maker is our chief executive officer, who reviews information on an aggregated basis.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation.
Revenue recognition
We adopted the ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). We recognize revenue when we transfer promised services to the customer. The performance obligation is the monthly services rendered. We have one main revenue source which is leasing of television station channels. Accordingly, we recognize revenue when services are provided as time passes the customers have access to utilize the channel. These revenues are billed in advance, arrears and/or are prepaid. The performance obligation is the monthly services rendered. For January 2023, we had one main revenue source, which is the leasing of television channels, and no revenue source thereafter. Where there is a leasing contract for channels, we bill monthly for our services as rendered. Where there is no contract, the revenue is recognized as provided.
We recognize revenue in accordance with ASC 606 using the following 5 steps to identify revenues:
| ● | identify the contract with a customer; |
| ● | identify the performance obligations in the contract; |
| ● | determine the transaction price; |
| ● | allocate the transaction price to performance obligations in the contract; and |
| ● | recognize revenue as the performance obligation is satisfied. |
6
Advances from client deposits are contract liabilities with customers that represent our obligation to either transfer goods or services in the future, or refund the amount received. Where possible, we obtain retainers to lessen our risk of non-payment by our customers. Advances from client deposits are recognized as revenue as we meet specified performance obligations as detailed in the contract.
Impairment of Long-Lived Assets
In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment and intangible assets we hold and use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.
Financial instruments
Our financial instruments consist principally of accounts payable, accrued liabilities and notes payable. The carrying amounts of such financial instruments in the accompanying financial statements approximate their fair values due to their relatively short-term nature or the underlying terms are consistent with market terms. It is the management’s opinion that we are not exposed to any significant currency or credit risks arising from these financial instruments.
Fair value measurements
We follow the guidelines in ASC Topic 820 “Fair Value Measurements and Disclosures”. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.
We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. All financial instruments approximate their fair value.
| Level 1 — Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities traded in active markets. | |
| Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities | |
| Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. |
Convertible Notes with Fixed Rate Conversion Options
We may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. We record the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the note date with a charge to interest expense in accordance with ASC 480–- “Distinguishing Liabilities from Equity”.
7
Derivative Liabilities
We have certain financial instruments that are derivatives or contain embedded derivatives. We evaluate all of our financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with us, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on extinguishment.
Net Loss Per Share
Basic
loss per share is calculated by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding
for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in our earnings
(loss). Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares
outstanding for the period and dilutive potential shares outstanding unless such dilutive potential shares would result in anti-dilution.
As of September 30, 2023 and 2022, no options were outstanding and and warrants were outstanding and exercisable,
respectively. Additionally, as of September 30, 2023 and 2022, the outstanding principal balance, including accrued interest of the
third-party convertible debt, totaled $
| September 30, 2023 | September 30, 2022 | |||||||
| Warrants | ||||||||
| Convertible Preferred Stock | ||||||||
| Convertible debt | ||||||||
| Total | ||||||||
8
Related Party Transactions
We follow FASB ASC subtopic 850-10, “Related Party Transactions”, for the identification of related parties and disclosure of related party transactions.
Pursuant to ASC 850-10-20, related parties include: (a) our affiliates; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of management; (d) our principal owners; ©) our management; (f) other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
Material related party transactions are required to be disclosed in the condensed consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Discontinued operations
Discontinued operations are components of an entity that either have been disposed or abandoned or is classified as held for sale. Additionally, in order to qualify as a discontinued operation, the disposal or abandonment must represent a strategic shift that has or will have a major effect on an entity’s operations and financial results.
Income taxes
We follow the guideline under ASC Topic 740 Income Taxes. “Accounting for Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Due to the uncertainty regarding our future profitability, the future tax benefits of its losses have been fully reserved.
Recently Issued Accounting Pronouncements
We adopt new pronouncements relating to generally accepted accounting principles applicable to us as they are issued, which may be in advance of their effective date.
We do not believe that any recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.
9
Note 2 Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities are summarized below:
| September 30, 2023 | December 31, 2022 | |||||||
| Accounts payable | $ | $ | ||||||
| Accrued expenses | ||||||||
| Accrued interest | ||||||||
| Total | $ | 1,129,692 | $ | 741,399 | ||||
Note 3 Derivative Liability
We
incur a derivative liability when we issue warrants in connection with the sale of notes payable. Management has determined that
the daily closing price of our Common Stock is not a reliable factor for determining the value of the warrants and corresponding
derivative liability on the basis that (i) the total volume of our Common Stock traded is approximately 3,700,000 shares since
January 1, 2023, representing 0.2% of our outstanding shares and (ii) since July 2022 through the date of this Quarterly Report
on form 10-Q, our Common Stock is listed on the OTC Expert Market that limits visibility of our Common Stock to investors. Valuation
methods such at Black-Scholes rely on daily closing prices and their volatility.
For the nine months ended September 30, 2023, our derivative liability was as follows:
| September 30, 2023 | ||||
| Balance at January 1, 2023 | $ | |||
| Liability for Warrants issued | ||||
| Balance at September 30, 2023 | $ | |||
In
the nine months ended September 30, 2023, we issued warrants to purchase up to
Note 4 Promissory Notes
On
December 28, 2021, we issued a $
10
On
January 14, 2022, we issued an unsecured $
On
January 14, 2022, we issued an unsecured $
On
April 27, 2022, we issued a $
Note 5 Convertible Notes Payable
Our convertible notes payable, all of which are current liabilities, are as follows as of:
| September
30, 2023 | December
31, 2022 | |||||||||||
| Series 1 | (a) | |||||||||||
| Series 2 | (b) | |||||||||||
| Series 3 | (c) | |||||||||||
| Series 4 | (d) | |||||||||||
| Series 5 | (e) | |||||||||||
| Series 6 | (f) | |||||||||||
| Principal outstanding | ||||||||||||
| Less discount | ||||||||||||
| Principal outstanding, net | $ | $ | ||||||||||
11
| (a) |
We
issued a total of $ |
| (b) |
On
January 6, 2022, we issued to one of our shareholders a $
On
January 14, 2022, we issued to one of our shareholders a $
On
February 17, 2022, we issued a $ |
| (c) |
On
February 15, 2022, we issued two $ |
| (d) |
On
May 5, 2022, we issued a shareholder a convertible subordinate note totaling $
On
June 24, 2022, we issued a convertible subordinate note totaling $ |
12
| (e) |
On
May 5, 2022, we issued an $
On
May 5, 2022, we issued a $
On
October 14, 2022, we issued a $
On
December 2, 2022, we issued a $ |
| (f) |
On
September 16, 2022, we issued a $ |
On
February 17, 2022, we issued a $
13
Note 6 Senior Secured Notes
On February 17, 2021, we entered into a securities purchase agreement with the Investors pursuant to which we issued the Notes. The Notes are secured by a blanket lien on all of the Company’s assets and the shares of our Common Stock and Preferred Stock (the “Pledged Assets”) held by Philip Falcone, FFO1 2021 Irrevocable Trust, FFO2 2021 Irrevocable Trust and Korr Value LP (the “Pledgors”), which shares may be voted by the Investors in the event of default.
In
connection with the issuance of the Notes, we issued to the Investors warrants to purchase an aggregate of
|
On September 24, 2021, the Company and the Investors amended the Notes and related closing documents, by executing the Limited Waiver and First Amendment the closing documents. Such amendment also waived specified events of default. The Notes were henceforth convertible at any time, at the holder’s option, into shares of our Common Stock at a price of $ per share, subject to an event of default adjustment. Notwithstanding the foregoing, at any time during the continuance of any event of default, the conversion price in effect equals the alternate conversion price provided in the Notes. If at any time the conversion price as determined for any conversion would be less than the par share value of the Common Stock, then at the sole discretion of the Holder, such conversion price equals such par value for such conversion and the conversion amount for such conversion may be increased to include Additional Principal (defined as such additional amount to be added to the principal amount of the Note to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the conversion price not been adjusted by the holder thereof to the par value price, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The conversion price was also subject to adjustment due to certain events, including stock dividends, stock splits and in connection with our issuance of our Common Stock or common stock equivalents at an effective price per share lower than the conversion price then in effect. We did not have a right to redeem the Notes.
As
part of such purchase agreement with the Investors, we issued warrants to purchase up to
14
On October 27, 2022, the agent (the “Agent”) for the Investors notified us that certain events of default have occurred and were continuing under the Notes. On November 21, 2022, we, the Investors and the Agent entered into a Forbearance Agreement, pursuant to which, among other things, we acknowledged the outstanding principal balances of the Notes, that we have an obligation for interest, including default interest, fees and expenses in connection with the Notes, that we have no rights of offset, defenses, claims or counterclaims with respect to our obligations and pursuant to a side letter, dated as of November 21, 2022, we agreed to achieve certain milestones by the dates as set forth therein. The Forbearance Agreement expired on December 30, 2022.
As of September 30, 2023 and December 31, 2022, the outstanding liability for the Notes is as follows:
| September
30, 2023 | December 31, | |||||||
| Principal | $ | $ | ||||||
| Less discount | ||||||||
| Principal, net of discount | $ | $ | ||||||
As
of September 30, 2023 and December 31, 2022, accrued interest payable was $
Note 7 Related Party
Effective
January 1, 2022, we entered into a management consulting agreement with GreenRock LLC, a company controlled by Philip Falcone,
for a period of one year ending December 31, 2022, under which we provided monthly remuneration of $35,000, plus expenses in connection
with his duties, responsibilities and performance as chief executive officer. In February 2021, Sovryn entered into consulting
agreement with GreenRock LLC to provide us with chief executive officer services. In the nine months ended September 30, 2023
and 2022, we paid GreenRock LLC $
During the three months ended September
30, 2022, our Chief Executive Officer advanced us funds for our operations and as of September 30, 2022, we owed $
15
Note 8 Mezzanine Equity
We account for certain of our Preferred Stock in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity. Based on this guidance, preferred stock that is conditionally redeemable is classified as temporary or “mezzanine” equity. Accordingly, the various series of our Preferred Stock, which is subject to conditional redemption, is presented at redemption value as mezzanine equity outside of the stockholders’ equity section of the condensed consolidated balance sheets.
Preferred Shares
Series A Preferred Stock
There
are designated and authorized shares of Series A Preferred Stock, subject to a
On
July 17, 2020, we issued Series A Preferred Stock at a value of $
As of September 30, 2023, no shares of Series A Preferred Stock are outstanding.
Series C Preferred Stock
There
are designated and authorized shares of Series C Preferred Stock, containing a
Series D Preferred Stock
There
are designated and authorized shares of Series D Preferred Stock, subject to a
On
February 16, 2021, we settled $
16
Series E Preferred Stock
There are designated and authorized shares of Series E Preferred Stock having a stated value of $ per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series E are issued. Series E are ranked pari passu with the Series D Preferred Stock and Series F Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock. It has voting rights equal to the number of shares of Common Stock into which the Series E Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. To the extent that holders of shares Series E Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series E Preferred Stock, constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of shares of Series E Preferred Stock are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series E Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series E Preferred Stock are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series E Preferred Stock are outstanding, we may not, without the affirmative vote of the holders of all the then outstanding shares of Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock or alter or amend the Series E certificate of designations (the “Series E Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing.
On
September 16, 2021,
On
February 16, 2021, we issued shares of Series E Preferred Stock to acquire Sovryn that we valued at $
On
September 16, 2021, the holders of our Series E Preferred Stock entered into an exchange agreement with us whereby on October
11, 2021, the Series E Preferred shares were exchanged for Series E-1 Preferred shares and shares
of Common Stock. We valued the exchange at the same $
17
Series E-1 Preferred Stock
There are designated and authorized shares of Series E-1 Preferred Stock, which have a stated value of $ per share. Shares of Series E-1 Preferred Stock are pari passu with the Series D Preferred Stock and Series F Preferred Stock and are senior in dividend rights and liquidation preference to our Common Stock and all other Common Stock Equivalents. It has votes equal to the number of shares of common stock into which the Series E-1 Preferred Stock would be convertible on the record date for the vote or consent of stockholders, and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. It has votes equal to the number of shares of common stock into which the Series E-1 Preferred Stock would be convertible on the record date for the vote or consent of stockholders, and shall otherwise have voting rights and powers equal to the voting rights and powers of Common Stock. To the extent that holders of shares of Series E-1 Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series E-1 Preferred Stock constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of Series E-1 Preferred Stock are entitled to vote on matters with holders of shares of Common Stock and vote together as one class, each share of Series E-1 Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series E-1 Preferred Stock are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series E-1 Preferred Stock are outstanding, we cannot, without the affirmative vote of the Holders of all the then outstanding shares of Series E-1 Preferred Stock, (a) alter or change adversely, the powers, preferences or rights given to the Series E-1 Preferred Stock or alter or amend the Series E-1 certificate of designations (the “Series E-1 Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing. On October 11, 2021, the Series E-1 shares were issued. At September 30, 2023 and December 31, 2022, shares of Series E-1 Preferred Stock remain outstanding.
Each share of Series E-1 Preferred Stock may be converted into shares of Common Stock.
Series F Preferred Stock
There
are designated and authorized shares of Series F Preferred Stock, which have a stated value of $
18
On
February 17, 2021, we issued to the Investors shares of Series F Preferred Stock that convert into shares of
Common Stock, which we valued at $
On
September 16, 2021,
On
October 11, 2021, the shares of Series F Preferred Stock were converted into
As of September 30, 2023 and December 31, 2022, shares of Series F Preferred Stock are outstanding.
Series G Preferred Stock
On
August 20, 2021, the certificate of designation for the Series G Preferred Stock was amended. There are now designated and
authorized Series G Preferred Stock, subject to a
On
September 16, 2021,
19
We
received $ in subscriptions for of shares Series G Preferred Stock that we valued at $
Series H Preferred Stock
On
November 5, 2021, we designated shares of Series H Preferred Stock, which have a stated value of $ 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.
On
November 11, 2021, pursuant to an exchange agreement that we entered into with the Investors, of our shares of Common
Stock held by the Investors were exchanged for shares of our Series H Preferred Stock and we cancelled the 39,895,000 shares.
We valued the shares and shares of Series H Preferred Stock at $
Note 9 Shareholders’ Equity
Preferred Stock
As of September 30, 2023 and December 31, 2022, we are authorized to issue shares of Preferred Stock, with designations, voting, and other rights and preferences to be determined by our Board of Directors of which remain available for designation and issuance.
Series B Preferred Stock
There
are designated and authorized shares of Series B Preferred Stock.
On
July 17, 2020, Series B Preferred Stock were issued to acquire the Casa Zeta-Jones Brand License Agreement (the “License
Agreement”) from Luxurie Legs, LLC, a limited liability company organized pursuant to the laws of the State of Delaware
(“LUXURIE”), pursuant to which, at the effective time, LUXURIE transferred all of its right, title and interest in
the License Agreement to Madison in exchange for a controlling interest in Madison represented by newly issued preferred stock.
On February 17, 2021, the shares Series B Preferred Stock were transferred from Mr. Canouse (our former director and Chief Executive Officer), to the FFO1 2021 Irrevocable Trust, a company Mr. Falcone (our director and CEO) is the trustee and has the voting and dispositive power. The 100 shares of Series B Preferred are included in the Pledged Assets.
At September 30, 2023 and December 31, 2022, there were Series B Preferred shares outstanding, respectively.
Common Stock
As of September 30, 2023 and December 31, 2022 there were , shares outstanding.
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Warrants
On
January 10, 2023, we issued two unsecured convertible subordinate notes totaling $
The Warrants issued were loan incentives. The value was allocated to the warrants based on its fair value on the date of the grant, as determined using the Black-Scholes option pricing model.
For the nine months ended September 30, 2023, a summary of our warrant activity is as follows:
| Number
of Warrants | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Weighted- Grant- Value | Aggregate Intrinsic Value | ||||||||||||||||
| Outstanding and exercisable at January 1, 2023 | $ | $ | $ | |||||||||||||||||
| - | ||||||||||||||||||||
| Issued | $ | $ | ||||||||||||||||||
| Exercised | — | — | — | — | — | |||||||||||||||
| Expired | — | — | — | — | — | |||||||||||||||
| Outstanding and exercisable at September 30, 2023 | $ | $ | $ | |||||||||||||||||
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Note 10 Discontinued Operations
In the fourth quarter of 2022, management at that time determined that Sovryn’s television broadcast business was not an efficient use of our resources to develop and launch BCTV, our core business, and management sought to exit Sovryn’s business and pay down the Company’s senior debt associated with acquiring Sovryn’s assets and creating its business. As a result, Sovryn is recognized as a discontinued operation in the accompanying condensed consolidated financial statements. Effective February 1, 2023, we assigned 100% ownership of Sovryn to the Investors. The previous year’s assets, liabilities and expenses have been similarly classified for comparative purposes. The following is a summary of Sovryn for the nine months ended September 30, 2023 and 2022:
| September 30, | September 30, | |||||||
| 2023 | 2022 | |||||||
| Assets | ||||||||
| Current assets | $ | $ | ||||||
| Property, equipment and right-of-use assets | ||||||||
| Intangible assets | ||||||||
| Liabilities | ||||||||
| Accounts payable and accrued liabilities | ||||||||
| Lease liability obligations | ||||||||
| Revenues | ||||||||
| Selling, general and administrative | ( | ) | ( | ) | ||||
| Television operation | ( | ) | ||||||
| Amortization | ( | ) | ||||||
| Professional fees | ( | ) | ||||||
| Interest expense | ( | ) | ||||||
| Gain (loss) on asset disposals | ( | ) | ||||||
| Impairment loss | ||||||||
| Gain (loss) from discontinued operations | $ | $ | ( | ) | ||||
Note 11 Income Taxes
Income tax recovery differs from that which would be expected from applying the effective tax rates to the net income (loss) as follows:
September 30, 2023 | September 30, 2022 | |||||||
| Net loss for the nine-month period | $ | ) | $ | ( | ) | |||
| Statutory and effective tax rates | % | % | ||||||
| Income taxes expenses (recovery) at the effective rate | $ | ( | ) | $ | ( | ) | ||
| Effect of change in tax rates | ||||||||
| Permanent differences | ||||||||
| Valuation allowance | ||||||||
| Income tax expense and income tax liability | $ | $ | ||||||
As of September 30, 2023 and December 31, 2022, the tax effect of the temporary timing differences that give rise to significant components of deferred income tax asset are noted below. A valuation allowance has been recorded, as management believes it is more likely than not that the deferred income tax asset will not be realized.
September 30, 2023 | December 31, 2022 | |||||||
| Tax loss carried forward | $ | $ | ||||||
| Deferred tax assets | $ | $ | ||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Deferred taxes recognized | $ | $ | ||||||
Tax
losses of approximately $
22
Note 12 Subsequent Events
On September 21, 2023, the Agent for the Investors delivered a notice to us that the Agent has exercised the Investors’ rights to vote the Pledged Interests (as defined in such notice) and to exercise the Investors’ rights, powers and privileges, to pass certain resolutions and to amend our bylaws then in effect to, among other things, (i) remove the board of directors of the Company (the “Board of Directors”) and all officers of the Company, and (ii) reduce the number of the Board of Directors from three to one director. As a result of the Agent delivering such notice and exercising its rights to vote the Pledged Interests, a change of control of the Company occurred (the “Change of Control”).
On the two-year anniversary of the October 11, 2021 issuance of the Series E-1 shares, the shares were to be automatically converted into shares of our Common Stock, however we did not process the conversion and have not to date.
On November 6, 2023, the shareholders of the Company removed Philip Falcone and Warren Zenna as our directors and appointed Thomas Amon as the sole member of our board of directors. Mr. Amon removed all Company officers and appointed himself as the Company’s President, Secretary, Treasurer, Chief Executive Officer, Chief Financial Officer, Principal Executive Officer and Principal Accounting Officer.
On
February 18, 2024, Agile Capital Funding LLC (“Agile”) filed a Confession of Judgment executed by Philip Falcone with
the Supreme Court of the State of New York County of New York that affirmed that the Company owes Agile for funds received on
January 30, 2023, less funds the Company subsequently repaid, and for accrued interest and collection fees, which Agile determined
to be $
Presently,
we are default on all of our outstanding promissory and convertible notes payable (See Notes 4, 5 and 6), which have $
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Forward-Looking Statements
The following discussion and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2023, should be read together with our condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Form 10-Q”). This Form 10-Q and such discussion contains forward-looking statements that have been made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations, estimates, and projections about our industry, management’s beliefs, and certain assumptions made by management that may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include our expectations regarding our capital needs, future cash flows, financial results, business strategy, business plans and objectives, current and future operations, intentions, expectations any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. In some cases, words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “estimates,” variations of these words, and similar expressions are intended to identify forward-looking statements. The statements are not guarantees of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict; therefore, actual results may differ materially from those expressed or forecasted in any forward-looking statements. Risks and uncertainties of our business include those set forth in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the U.S. Securities and Exchange Commission (“SEC”) on January 25, 2024 (the “Annual Report”), under “Item 1A. Risk Factors” as well as additional risks described in this Form 10-Q. Unless required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. However, readers should carefully review the risk factors set forth in other reports or documents that we file from time to time with the SEC, particularly the Quarterly Reports on Form 10-Q and any Current Reports on Form 8-K.
Recent Developments
On September 21, 2023, the Agent delivered a notice to us that the Agent exercised the Investors’ rights to vote the Pledged Interests and to exercise the Investors’ rights, powers and privileges, to pass certain resolutions and to amend our bylaws then in effect to, among other things, (i) remove the Board of Directors and all Company officers, and (ii) reduce the number of the Board of Directors from three directors to one director. As a result of the Agent sending such notice and exercising its rights to vote the Pledged Interests, the Change of Control occurred.
On the two-year anniversary of the October 11, 2021 issuance of the Series E-1 shares, the shares were to be automatically converted into 1,152,500,000 shares of our Common Stock, however we did not process the conversion and have not to date.
In addition to the defaults described above, as of the date of this Form 10-Q, and since the last day of the quarter ended September 30, 2023, we are in default under a certain loans payable for failure to pay principal and accrued interest on such loans, with an aggregate of approximately $4.3 million and $3.8 million of principal, accrued interest and late fees, as of such date and as of September 30, 2023 respectively. As a result of the Change of Control, we intend to strategize with the holders of such notes to extend, modify or otherwise revisit the terms of such indebtedness in order to resolve such outstanding defaults.
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On November 6, 2023, the shareholders of the Company removed Philip Falcone and Warren Zenna as our directors and appointed Thomas Amon as the sole member of our board of directors. Mr. Amon removed all our officers and was appointed as the Company’s President, Secretary, Treasurer, Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer.
On November 10, 2023, Philip Falcone, individually and on behalf of the Company and other named defendants, filed a Confession of Judgment affirming that the Z4 Note had been issued by the Company, dated December 28, 2021, by Z4, which was guaranteed by each of FFO1 2021 Irrevocable Trust and FFO2 2021 Irrevocable Trust. The Z4 Note was initially payable on February 15, 2022, and had an original principal balance of $500,000 with an interest rate of 12% per annum. The Z4 Note’s expiration date was extended to July 5, 2022, then further extended to March 31, 2023, and as of October 1, 2023, the revised principal balance, along with interest accrued, totaled $581,304. On such date, Z4 filed an Affidavit of Default affirming that the Z4 Note was in default and requesting a judgment in the amount of $581,304 against the Company, FFO1 2021 Irrevocable Trust, FFO2 2021 Irrevocable Trust, and Mr. Falcone personally, in favor of Z4. On December 5, 2023, a judgement in favor Z4 Management in the sum of $581,304 was rendered against us, Mr. Falcone, FFO1 2021 Irrevocable Trust and FFO2 2021 Irrevocable Trust.
On February 18, 2024, Agile Capital Funding LLC (“Agile”) filed a Confession of Judgment executed by Philip Falcone with the Supreme Court of the State of New York County of New York that affirmed that the Company owes Agile for funds received on January 30, 2023, less funds the Company subsequently repaid, and for accrued interest and collection fees, which Agile determined to be $190,444 as of February 18, 2024. To date, the liability for the judgment has not been satisfied.
Since October 2023, and as a result of the Change of Control, we have had minimal operations and nominal assets consisting almost entirely of cash. However, in December 2023, we held discussions with the head of content production of BCTV regarding initial plans to continue the Company’s business plans described above as intended prior to the Change of Control. However, we cannot make any guarantee as of the date of the filing of this Form 10-Q as to the timing and success of these plans, business relationships or reaching any self-imposed expectations, or that we will ultimately continue the Company’s business as so described. See “Forward-Looking Statements” in this Item 2 above.
RESULTS OF OPERATIONS
Our condensed consolidated unaudited financial statements included herein have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of equity and/or debt securities.
Three months ended September 30, 2023 and 2022
Selling, general and administrative expenses
Selling, general and administrative expenses decreased to $0 for the three months ended September 30, 2023 from $130,664 for the three months ended September 30, 2022 primarily as a result of winding down operating activities due to a lack of funds.
Professional Fees
Professional fees decreased to $0 for the three months ended September 30, 2023, from $206,623 for the three months ended September 30, 2022 primarily as a result of winding down operating activities due to a lack of funds.
Interest Expense
Interest expense decreased to $1,034,496 for the three months ended September 30, 2023 from $1,450,495 for the three months ended September 30, 2022. The decrease resulted primarily from the interest cost of our debt held the Investors that accrued interest at an 11% rate per annum for the three months ended September 30, 2023 and did not include an assessment for default interest at 9% per annum that we accrued for the three months ended September 30, 2022. In addition, the costs of other financings associated with the acquisitions of television stations and development of BlockchainTV had amortization periods that expired prior to December 31, 2022.
Discontinued Operations
Our loss from discontinued operations was $0 and $101,525 for the three months ended September 30, 2023 and 2022, respectively. Effective February 1, 2023, we entered into an agreement with the Investors in which we exchanged our ownership of the assets associated with Sovryn’s broadcast television business in exchange for a $11,600,000 reduction in our obligation for the Notes. As a result, our discontinued operations terminated on February 1, 2023.
25
Net Loss
Net loss decreased to $1,034,496 for the three months ended September 30, 2023, from $1,879,273 for the three months ended September 30, 2022. The decrease was primarily the result of the decrease in operating and interest expenses and the termination of our discontinued operations. The net loss per basic diluted share was $0.001 and $0.002, respectively, with basic and diluted weighted averages shares outstanding of 1,603,095,243 and 1,599,095,027 for the respective periods.
Nine months ended September 30, 2023 and 2022
Selling, general and administrative expenses
Selling, general and administrative expenses increased to $351,022 for the nine months ended September 30, 2023 from $327,855 for the nine months ended September 30, 2022 primarily as a result of a $145,000 increase BlockchainTV content development costs.
Professional Fees
Professional fees decreased to $107,740 for the nine months ended September 30, 2023, from $1,484,393 for the nine months ended September 30, 2022 primarily as a result of winding down operating activities in the three months ended September 30, 2023 due to a lack of funds.
Interest Expense
Interest expense decreased to $3,248,679 for the nine months ended September 30, 2023 from $4,466,875 for the nine months ended September 30, 2022. The decrease resulted primarily from the interest cost of our debt held the Investors that accrued interest at an 11% rate per annum for the nine months ended September 30, 2023 and did not include an assessment for default interest at 9% per annum that we accrued for the nine months ended September 30, 2022. In addition, the costs of other financings associated with the acquisitions of television stations and development of BlockchainTV had amortization periods that expired prior to December 31, 2022.
Discontinued Operations
Our gain from discontinued operations was $6,685,344 for the nine months ended September 30, 2023 as compared to a loss of $597,864 for the nine months ended September 30, 2022. Effective February 1, 2023, we entered into an agreement with the Investors in which we exchanged our ownership of the assets associated with Sovryn’s broadcast television business in exchange for a $11,600,000 reduction in our obligation for the Notes. As a result, the revenues, expenses, assets and liabilities of Sovryn are included as discontinued operations for the nine months ended September 30, 2023 and 2022. The increase in our gain from discontinued operations resulted from Sovryn’s liabilities being transferred as part of the ownership transfer.
Loss on Disposition of Assets
Sovryn owed us $15,850,990 as of the Sovryn ownership transfer on February 1, 2023. The amount owed to us resulted primarily from funds that we advanced to Sovryn in order to purchase the television station assets. We wrote off the amount owed and recognized the loss, which is consistent with the terms of the ownership transfer.
Net Loss
Net loss increased to $12,882,087 for the nine months ended September 30, 2023, from $5,070,158 for the nine months ended September 30, 2022. The increase was primarily the result of the $15,850,990 loss from the disposition of Sovryn in the nine months ended September 30, 2023, 2023 that was partially offset by a $6,685,344 gain from the discontinued operations of Sovryn as described above. The net loss per basic diluted share was $0.008 and $0.003, respectively, with basic and diluted weighted averages shares outstanding of 1,603,095,243 and 1,599,095,027 for the respective periods.
Liquidity and Capital Resources
Cash and Working Capital
As of September 30, 2023, we had $0 in cash and a $13,759,634 working capital deficit, compared to cash of $0 and working capital deficit of $16,733,223 as at December 31, 2022. Our working capital deficit decreased primarily because of transferring ownership of Sovryn on February 1, 2023.
We will require additional capital to meet our long- and short-term operating requirements. For the year ended December 31, 2022 and nine months ended September 30, 2023, our principal source of liquidity was our cash that we obtained from borrowings. Our principal use of cash was to fund operations. We expect that the principal uses of cash in the future will be for continuing operations associated with rolling out the business plan and repayment of notes payable that are not converted into our Common Stock or renegotiated.
Net Cash Used in Operating Activities
We used $7,014,071 cash in operating activities during the nine months ended September 30, 2023, compared to cash used of $2,256,779 in operating activities during the previous year’s nine-month period. The increase was primarily the result of an increase in our operating loss.
Net Cash Used in Investing Activities
We used cash of $0 in investing activities during the nine months ended September 30, 2023, compared to cash used of $89,301 in investing activities during the previous year’s nine-month period. The decrease was the result of the deferral of investing activities in the nine months ended September 30, 2023 due to cash constraints.
Net Cash Provided by Financing Activities
Net cash provided by financing activities of $328,726 for the nine months ended September 30, 2023 were from the proceeds of subordinated notes payable and Warrants that we sold to investors, compared to $1,452,000 of cash provided by financing activities during the previous fiscal year that we generated from proceeds of subordinated notes payable and warrants that we sold to investors.
Net Cash from Discontinued Operations
For the nine months ended September 30, 2023, we use $6,685,345 of cash from discontinued operations which ceased on February 1, 2023, as compared to generating $611,388 of cash from discontinued operations in the nine months ended September 30, 2022.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements including arrangements that would affect our liquidity, capital resources, market risk support and credit risk support or other benefits.
Going Concern
The independent auditor’s report accompanying our December 31, 2022 and 2021 consolidated audited financial statements in the Annual Report contain an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. Such consolidated financial statements and the condensed consolidated financial statements in this Form 10-Q have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.
26
Transactions with Related Parties
Effective January 1, 2022, we entered into a management consulting agreement with GreenRock LLC, a company controlled by Mr. Falcone, for a period of one year ending December 31, 2022, pursuant to which we provided monthly remuneration of $35,000, plus expenses in connection with his duties, responsibilities and performance as our chief executive officer. In February 2021, Sovryn entered into a consulting agreement with GreenRock LLC to provide us with chief executive officer services. The agreements expired on December 31, 2022 and were not renewed. In the nine months ended September 30, 2023 and 2022, we paid GreenRock LLC $42,530 and $270,000 in fees, respectively. We paid GreenRock LLC bonuses of $128,473 and $488,934 for the nine months ended September 30, 2023 and 2022, respectively.
On February 1, 2023, we entered into the Partial Foreclosure Agreement with the Investors pursuant to which we transferred ownership of our Federal Communications Commission (“FCC”) licenses and other broadcast television assets to a third-party entity controlled by the Investors. In consideration therefor, the Investors agreed to reduce the indebtedness under the Notes by $11,600,000. On September 21, 2023, the Agent for the Investors delivered to us a notice that the Agent has exercised the Investors’ rights to vote the Pledged Interests, including the 100 shares of our Series B Preferred Stock, and to exercise the Investors’ rights, powers and privileges to pass certain resolutions and to amend our bylaws then in effect to, among other things, (i) remove the Board of Directors and all Company officers, and (ii) reduce the number of the Board of Directors from three directors to one director. As a result of the Agent sending such notice and exercising its rights to vote the Pledged Interests, the Change of Control occurred.
Material Commitments for Capital Expenditures
We had no contingencies or long-term commitments at September 30, 2023.
Critical Accounting Policies
We follow certain significant accounting policies when preparing our consolidated financial statements. A complete summary of these policies is included in Note 1 of the Notes to the condensed consolidated financial statements included in this Form 10-Q. Certain of the policies require management to make significant and subjective estimates or assumptions that may deviate from actual results. In particular, management makes estimates regarding the useful life of long-lived assets related to depreciation and amortization expense, estimates regarding fair value of our reporting units and future cash flows with respect to assessing potential impairment of both long-lived assets and goodwill and estimates of expense related to our debt and equity instruments. Each of these estimates is discussed in greater detail in the following discussion.
Derivative Liabilities
We have certain financial instruments that are derivatives or contain embedded derivatives. We evaluate all of our financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with us, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on extinguishment.
27
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this Form 10-Q, an evaluation was carried out by our management, with the participation of our Chief Executive Officer, who also serves as our Chief Financial and Chief Accounting Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of September 30, 2023. 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, to allow timely decisions regarding required disclosures.
Based on that evaluation, our management concluded, as of the end of the period covered by this report, that our 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, we identified material weaknesses in internal control over financial reporting, as discussed below.
Management’s Report on Internal Controls over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act. Our internal control framework over financial reporting is a process designed under the supervision of our Chief Executive Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with U.S. generally accepted accounting principles (“US GAAP”). 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 our 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 our 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.
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Management conducted an assessment of the effectiveness of our internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). As a result of this assessment, management identified material weaknesses in internal control over financial reporting.
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 our 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 no outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of US GAAP and SEC disclosure requirements; and (4) ineffective controls over period end financial disclosure and reporting processes. The aforementioned material weaknesses were identified and communicated to management in connection with the preparation and audit of our financial statements as of December 31, 2022, and the preparation of this Form 10-Q.
As a result of the material weakness in internal control over financial reporting described above, management has concluded that, as of September 30, 2023, our internal control over financial reporting was not effective based on the criteria in Internal Control – Integrated Framework issued by COSO.
Management believes that the material weaknesses set forth in items (2), (3) and (4) above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and no outside directors on our Board of Directors caused and continues to cause an ineffective oversight in the establishment and monitoring of the required internal controls over financial reporting.
We are committed to improving our financial organization. As part of this commitment and when funds are available, we will create a position to segregate duties consistent with control objectives and will increase its personnel resources and technical accounting expertise within the accounting function by: (i) appointing additional outside directors to its board of directors who will also be appointed to our audit committee, resulting in a fully functioning audit committee that 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.
Management believes that the appointment of additional 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 our 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 our internal controls if personnel turn-over issues within the department occur. This, coupled with the appointment of additional outside directors, is designed to greatly decrease any control and procedure issues we may encounter in the future.
Management will continue to monitor and evaluate the effectiveness of our 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.
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Our independent auditors have not issued an attestation report on management’s assessment of our internal control over financial reporting. As a result, this Quarterly Report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. We are not required to have, nor have we, engaged our independent registered public accounting firm to perform an audit of internal control over financial reporting pursuant to the temporary rules of the SEC that permit us to provide only management’s report in this Form 10-Q.
Changes in Internal Controls over Financial Reporting
There were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the quarter ended September 30, 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Part II – Other Information
ITEM 1. LEGAL PROCEEDINGS.
Other than the following proceedings, we are not a party to any material pending legal proceedings and, to the best of our knowledge, none of our property or assets are the subject of any material pending legal proceedings.
On January 30, 2023, in the Supreme Court of the State of New York, Philip A. Falcone provided Agile Capital Funding LLC (“Agile”) with an affidavit of confession of judgement for an obligation due to Agile from Sovryn and the Company’s failure to deliver to Agile accounts receivable, which were purchased by Sovryn and the Company pursuant to the Agreement for the Purchase and Sale of Future Receipts dated January 30, 2023. Agile filed an affidavit of facts in the Supreme Court in the State of New York on February 18, 2024 requesting an entry of judgement against Sovryn and the Company in the sum of $190,443.62 less any payments made in a timely manner. On January 30, 2023 the Supreme Court of the State of New York adjudged that Agile does recover the sum of $190,443.62.
On October 12, 2023, the Supreme Court of the State of New York in the County of Albany entered a final judgment against the Company approving the request of the Workers’ Compensation Board of the State of New York, the plaintiff in the case, seeking recovery of an outstanding assessment/award in the sum of $7,500.
On November 10, 2023, Philip Falcone, individually and on behalf of Madison and other named defendants, filed a Confession of Judgment affirming that the Z4 Note had been issued to the Company, dated December 28, 2021, by Z4 Management, which was guaranteed by each of FFO1 and FFO2. The Z4 Note was initially payable on February 15, 2022, and had an original principal balance of $500,000.00 with an interest rate of 12% per annum. The Z4 Note’s expiration date was extended to July 5, 2022, then further extended to March 31, 2023, and as of October 1, 2023, the revised principal balance, along with interest accrued, totaled $581,304. On such date, Z4 Management filed an Affidavit of Default affirming that the Z4Note was in default and requesting a judgment in the amount of $581,304 against Madison, FFO1, FFO2, and Mr. Falcone personally in favor of Z4 Management. On December 5, 2023, a judgement in favor Z4 Management in the sum of $581,304 was rendered against Madison, Mr. Falcone, FFO1 and FFO2.
ITEM 1A. RISK FACTORS
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
On January 10, 2023, we sold a total of $220,000 of notes payable that may be converted into our Common Stock at fixed prices of $0.02 per share, and we issued certain noteholders warrants to purchase an aggregate of 40,000,000 shares of our Common Stock, exercisable for $0.02 per share.
The sale and the issuance of such securities were offered and sold in reliance upon exemptions from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder. Such determination was made based on the representations of such investors which included, in pertinent part, that such investors were either (A) an “accredited investor” within the meaning of Rule 501 of Regulation D or (B) a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act, and upon such further representations from each investor that (i) such investors acquired the securities for its own account for investment and not for the account of any other person and not with a view to or for distribution, assignment or resale in connection with any distribution within the meaning of the Securities Act, (ii) such investors agreed not to sell or otherwise transfer the purchased securities unless they are registered under the Securities Act and any applicable state securities laws, or an exemption or exemptions from such registration are available, (iii) such investors had knowledge and experience in financial and business matters such that it was capable of evaluating the merits and risks of an investment in us, (iv) such investors had access to all of our documents, records, and books pertaining to the investment and was provided the opportunity to ask questions and receive answers regarding the terms and conditions of such offer and sale and to obtain any additional information which we possessed or were able to acquire without unreasonable effort and expense, and (v) such investors had no need for the liquidity in its investment in us and could afford the complete loss of such investment. In addition, there was no general solicitation or advertising for such securities issued in reliance upon these exemptions.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
On October 27, 2022, the Agent for the Investors notified us that certain Events of Default have occurred and are continuing under the Notes. On November 21, 2022, we, the Investors and the Agent entered into a Forbearance Agreement, pursuant to which, among other things, we acknowledged the outstanding principal balances of the Notes, that we have an obligation for interest, including default interest, fees and expenses in connection with the Notes, that we have no rights of offset, defenses, claims or counterclaims with respect to our obligations and pursuant to a side letter, dated as of November 21, 2022, we agreed to achieve certain milestones by the dates as set forth therein. The Forbearance Agreement expired on December 30, 2022.
In January 2023, outstanding principal amounts under the Notes of not less than $16.5 million were accelerated by Arena in its capacity as Agent due to the occurrence of certain events of default under the Notes, which ultimately resulted in the Change of Control.
On January 28, 2023, the Agent for the Investors sent us an Event of Default/Notice of Intention to Seek Appointment of Receiver (the “Acceleration Notice”). The Acceleration Notice stated that the Agent and Investors (a) elected to cause the outstanding principal amount of the Notes, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof to become immediately due and payable in cash, (b) inform us of the Agent’s and Investors’ intent to commence legal action to collect any or all of the obligations under the Notes, and (c) seek the appointment of a receiver or trustee as a means of realizing proceeds on their collateral.
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On February 1, 2023, we entered into a partial strict foreclosure agreement with the Investors pursuant to which we transferred ownership of our FCC licenses and other broadcast television assets to a third party entity controlled by the Investors and received $11,600,000 in credit toward our indebtedness to the Investors.
On February 3, 2023, we entered into a securities purchase agreement with a third party lender pursuant to which we borrowed $88,760 that accrues interest a 12% per annum and is repayable in 10 monthly installments starting March 15, 2023.
On September 21, 2023, the Agent for the Notes sent us a notice that the Agent has exercised the Investors’ rights to vote the Pledged Assets and to exercise the rights, powers and privileges as Investors, to pass certain resolutions and to amend our bylaws to, among other things, (i) remove the Board of Directors and all officers of the Company, and (ii) reduce the number of the Board of Directors from three to one director. As a result of the Agent for the Notes sending such notice and exercising their rights to vote the Pledged Assets and exercising their rights, powers and privileges as Investors, the Change of Control occurred.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
On January 10, 2023, we entered into securities purchase agreements with two investors (the “January 10th SPAs”). Pursuant to the January 10th SPAs, we sold a total of $220,000 of notes (the “January Notes”) that may be converted into our Common Stock at fixed prices of $0.02 per share, and we issued such investors warrants (the “January Warrants”) to purchase an aggregate of 40,000,000 shares of our Common Stock, exercisable for $0.02 per share. Copies of the forms of the January 10th SPAs, January Notes and January Warrants are attached as Exhibit 10.4, 4.1 and 4.2, respectively, to this Form 10-Q. The foregoing descriptions of the January 10th SPAs, the January Notes and the January Warrants are summaries and do not purport to be complete and are qualified in their entirety by reference to Exhibits 10.4, 4.1 and 4.2, respectively.
On February 1, 2023, we entered into a partial strict foreclosure agreement with the Investors (the “Partial Strict Foreclosure Agreement”) pursuant to which we transferred ownership of our FCC licenses and other broadcast television assets to a third party entity controlled by the Investors and received $11,600,000 in credit toward our indebtedness to the Investors. Also on February 1, 2023, the Company, Sovryn, Station Break Holdings, LLC, the Investors and several financial institutions who were parties to a 2021 purchase agreement with the Company entered into a restructuring agreement (the “Restructuring Agreement”) pursuant to which, among other things, in order to help address the continuing events of default under outstanding indebtedness owed to the Investors, Station Break Holdings, LLC was formed in order to assume the right to certain transferred collateral previously held by Sovryn and assumed the rights to certain obligations of the rights to such collateral held by the secured parties identified in the Partial Strict Foreclosure Agreement, upon approval from the FCC. On February 1, 2022, Sovryn entered into a local marketing agreement (the “Local Marketing Agreement”) with Station Break Operating, LLC, whereby Sovryn granted Station Break Operating, LLC rights to utilize its broadcast transmission facilities and assets in exchange for the partial satisfaction of certain existing loan obligations of the Company and Sovryn in connection with the Partial Strict Foreclosure Agreement. Copies of the Partial Strict Foreclosure Agreement, the Restructuring Agreement and the Local Marketing Agreement are attached as Exhibits 10.1, 10.2 and 10.3, respectively, to this Form 10-Q. The foregoing descriptions of the Partial Strict Foreclosure Agreement the Restructuring Agreement and Local Marketing Agreement are summaries and do not purport to be complete and are qualified in their entirety by reference to Exhibits 10.1, 10.2 and 10.3, respectively.
On February 3, 2023, we entered into a securities purchase agreement (the “February 2023 SPA”) with a third party lender pursuant to which we borrowed $88,760 and issued a promissory note (the “February 2023 Note”) that accrues interest a 12% per annum and is repayable in 10 monthly installments starting March 15, 2023. Copies of the February 2023 SPA and the February 2023 Note are attached as Exhibits 10.5 and 4.3, respectively, to this Form 10-Q. The foregoing descriptions of the February 2023 SPA and February 2023 Note are summaries and do not purport to be complete and are qualified in their entirety by reference to Exhibits 10.5 and 4.3, respectively.
ITEM 6. EXHIBITS
| (a) | Index to and Description of Exhibits |
All exhibits required to be filed with the Form 10-Q are included in this quarterly report or incorporated by reference to Madison’s previous filings with the SEC, which can be found in their entirety at the SEC website at www.sec.gov under SEC File Number 000-51302.
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| 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.
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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: May 20, 2024 | By: | /s/ Thomas Amon |
| Name: | Thomas Amon | |
| Title: | Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) | |
34
Exhibit 31.1
madison Technologies Inc.
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Thomas Amon, certify that:
1. I have reviewed this quarterly report on Form 10-Q for the quarter ended September 30, 2023 of Madison Technologies Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: May 20, 2024 | |
| /s/ Thomas Amon | |
| Thomas Amon | |
|
Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND
OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Madison Technologies Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Amon, Chief Executive Officer of the Company and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| (1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Thomas Amon | |
| Thomas Amon | |
|
Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer) |
|
| May 20, 2024 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Income Statement [Abstract] | ||||
| Revenues | ||||
| Operating Expenses | ||||
| Selling, general and administrative | 130,664 | 351,022 | 327,855 | |
| Professional fees | 206,623 | 107,740 | 1,484,393 | |
| Total operating expenses | 337,287 | 458,762 | 1,812,248 | |
| Loss before other expense | (337,287) | (458,762) | (1,812,248) | |
| Other income (expenses) | ||||
| Other income | 10,034 | 29,081 | ||
| Loss on disposition of assets | (15,859,990) | |||
| Interest expense | (1,034,496) | (1,450,495) | (3,248,679) | (4,466,875) |
| Total other expense | (1,034,496) | (1,440,461) | (19,108,669) | (4,437,794) |
| Loss from continuing operations | (1,034,496) | (1,777,748) | (19,567,431) | (6,250,042) |
| Income (loss) from discontinued operations | (101,525) | 6,685,344 | (699,389) | |
| Net loss and comprehensive loss | $ (1,034,496) | $ (1,879,273) | $ (12,882,087) | $ (6,949,431) |
| Net loss per share-Basic and diluted | $ (0.001) | $ (0.002) | $ (0.008) | $ (0.003) |
| Average number of shares of common stock outstanding | 1,603,095,243 | 1,599,095,027 | 1,603,095,243 | 1,599,095,027 |
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) |
Common Stock [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
Total |
|---|---|---|---|---|
| Beginning balance, value at Dec. 31, 2021 | $ 1,599,095 | $ 10,473,261 | $ (15,747,021) | $ (3,674,665) |
| Beginning balance (in shares) at Dec. 31, 2021 | 1,599,095,027 | |||
| Net loss for the period | (6,949,431) | (6,949,431) | ||
| Ending balance, value at Sep. 30, 2022 | $ 1,599,095 | 10,473,261 | (22,696,452) | (10,652,096) |
| Ending balance (in shares) at Sep. 30, 2022 | 1,599,095,027 | |||
| Beginning balance, value at Dec. 31, 2022 | $ 1,603,095 | 10,549,265 | (28,886,831) | (16,734,471) |
| Beginning balance (in shares) at Dec. 31, 2022 | 1,603,095,243 | |||
| Net loss for the period | (100) | (12,882,087) | (12,882,187) | |
| Ending balance, value at Sep. 30, 2023 | $ 1,603,095 | $ 10,549,165 | $ (41,768,918) | $ (29,616,658) |
| Ending balance (in shares) at Sep. 30, 2023 | 1,603,095,243 |
Nature of Operations |
9 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Nature of Operations | Note 1 Nature of Operations
Madison Technologies Inc. (“Madison” or the “Company” or “we” or “us” or “our”) was incorporated on June 15, 1998 in the State of Nevada, and our shares of common stock, par value $0.001 per share (“Common Stock”), are quoted on the Experts Market tier of the over-the-counter market operated by OTC Markets, Inc.
We are seeking to create, develop and launch BlockchainTV (“BCTV”), the first-to-market 24/7 television broadcast and streaming communications network designed to bring the most up-to-date crypto information and entertainment to the masses in the U.S. and around the world. |
Going Concern |
9 Months Ended |
|---|---|
Sep. 30, 2023 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Going Concern | Note 2 Going Concern
The accompanying condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. For the year ended December 31, 2022, we generated no revenues from continuing operations, incurred a net loss of $13,139,810 and as of December 31, 2022, had a working capital deficit and an accumulated deficit of $13,860,314 and $28,886,831, respectively. It is management’s opinion that these matters raise substantial doubt about our ability to continue as a going concern for a period of twelve months from the issuance date of this report. Our ability to continue as a going concern is dependent upon management’s ability to raise additional capital as needed from the sales of stock or debt and further implement our business plan. The accompanying condensed consolidated financial statements do not include any adjustments that might be required should we be unable to continue as a going concern. |
Summary of Significant Accounting Policies |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | Note 3 Summary of Significant Accounting Policies
Use of estimates
The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates.
Consolidation
The accompanying condensed consolidated financial statements include the accounts of our current and former wholly owned subsidiaries, Blockchain.tv, Inc. and SovRryn Holdings Inc. (“Sovryn”). Sovryn is consolidated up until January 31, 2023 and recognized as a discontinued operation. All the intercompany balances and transactions have been eliminated in the consolidation.
Interim Reporting
While the information presented in the accompanying interim three-month financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies and methods of their application as the Company’s December 31, 2022 annual financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s December 31, 2022 annual financial statements. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that can be expected for the year ended December 31, 2023.
Segment reporting
Our chief operating decision maker is our chief executive officer, who reviews information on an aggregated basis.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation.
Revenue recognition
We adopted the ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). We recognize revenue when we transfer promised services to the customer. The performance obligation is the monthly services rendered. We have one main revenue source which is leasing of television station channels. Accordingly, we recognize revenue when services are provided as time passes the customers have access to utilize the channel. These revenues are billed in advance, arrears and/or are prepaid. The performance obligation is the monthly services rendered. For January 2023, we had one main revenue source, which is the leasing of television channels, and no revenue source thereafter. Where there is a leasing contract for channels, we bill monthly for our services as rendered. Where there is no contract, the revenue is recognized as provided.
We recognize revenue in accordance with ASC 606 using the following 5 steps to identify revenues:
Advances from client deposits are contract liabilities with customers that represent our obligation to either transfer goods or services in the future, or refund the amount received. Where possible, we obtain retainers to lessen our risk of non-payment by our customers. Advances from client deposits are recognized as revenue as we meet specified performance obligations as detailed in the contract.
Impairment of Long-Lived Assets
In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment and intangible assets we hold and use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.
Financial instruments
Our financial instruments consist principally of accounts payable, accrued liabilities and notes payable. The carrying amounts of such financial instruments in the accompanying financial statements approximate their fair values due to their relatively short-term nature or the underlying terms are consistent with market terms. It is the management’s opinion that we are not exposed to any significant currency or credit risks arising from these financial instruments.
Fair value measurements
We follow the guidelines in ASC Topic 820 “Fair Value Measurements and Disclosures”. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.
We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. All financial instruments approximate their fair value.
Convertible Notes with Fixed Rate Conversion Options
We may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. We record the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the note date with a charge to interest expense in accordance with ASC 480–- “Distinguishing Liabilities from Equity”.
Derivative Liabilities
We have certain financial instruments that are derivatives or contain embedded derivatives. We evaluate all of our financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with us, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on extinguishment.
Net Loss Per Share
Basic loss per share is calculated by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in our earnings (loss). Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless such dilutive potential shares would result in anti-dilution. As of September 30, 2023 and 2022, no options were outstanding and and warrants were outstanding and exercisable, respectively. Additionally, as of September 30, 2023 and 2022, the outstanding principal balance, including accrued interest of the third-party convertible debt, totaled $23,656,587 and $19,874,163, respectively, and was convertible into and shares of Common Stock, respectively. We issued shares of preferred stock (“Preferred Stock”) that may be converted into our Common Stock. Of the outstanding shares of Preferred Stock as of September 30, 2023, as applicable, Series A Preferred Stock was convertible into shares of Common Stock, Series D Preferred Stock was convertible into shares of Common Stock, Series E-1 Preferred Stock was convertible into shares of Common Stock and Series H Preferred Stock was convertible into shares of Common Stock. The total potentially dilutive shares calculated are and as of September 30, 2023 and 2022, respectively. It should be noted that contractually the limitations on the third-party notes (and the related warrants) limit the number of shares converted into either 4.99% or 9.99% of the then outstanding shares. As of September 30, 2023 and 2022, potentially dilutive securities consisted of the following:
Related Party Transactions
We follow FASB ASC subtopic 850-10, “Related Party Transactions”, for the identification of related parties and disclosure of related party transactions.
Pursuant to ASC 850-10-20, related parties include: (a) our affiliates; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of management; (d) our principal owners; ©) our management; (f) other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
Material related party transactions are required to be disclosed in the condensed consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.
Discontinued operations
Discontinued operations are components of an entity that either have been disposed or abandoned or is classified as held for sale. Additionally, in order to qualify as a discontinued operation, the disposal or abandonment must represent a strategic shift that has or will have a major effect on an entity’s operations and financial results.
Income taxes
We follow the guideline under ASC Topic 740 Income Taxes. “Accounting for Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Due to the uncertainty regarding our future profitability, the future tax benefits of its losses have been fully reserved.
Recently Issued Accounting Pronouncements
We adopt new pronouncements relating to generally accepted accounting principles applicable to us as they are issued, which may be in advance of their effective date.
We do not believe that any recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements.
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Accounts Payable and Accrued Liabilities |
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| Accounts Payable and Accrued Liabilities | Note 2 Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities are summarized below:
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Derivative Liability |
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| Derivative Liability | Note 3 Derivative Liability
We incur a derivative liability when we issue warrants in connection with the sale of notes payable. Management has determined that the daily closing price of our Common Stock is not a reliable factor for determining the value of the warrants and corresponding derivative liability on the basis that (i) the total volume of our Common Stock traded is approximately 3,700,000 shares since January 1, 2023, representing 0.2% of our outstanding shares and (ii) since July 2022 through the date of this Quarterly Report on form 10-Q, our Common Stock is listed on the OTC Expert Market that limits visibility of our Common Stock to investors. Valuation methods such at Black-Scholes rely on daily closing prices and their volatility. As a better representation of value, management used a share price of $0.018 per share to determine the derivative liability from warrants issued through December 31, 2022, which was the per share price used in connection with the issuance of 255,555,556 shares of Common Stock issued upon conversion of the Series G Preferred Stock on November 2, 2021. For warrants issued since January 1, 2023, management used a $0.000 price to determine the derivative liability given the absence of trading volume and our financial condition.
For the nine months ended September 30, 2023, our derivative liability was as follows:
In the nine months ended September 30, 2023, we issued warrants to purchase up to 40,000,000 shares of Common Stock at $ per share. |
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Promissory Notes |
9 Months Ended |
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Sep. 30, 2023 | |
| Promissory Notes | |
| Promissory Notes | Note 4 Promissory Notes
On December 28, 2021, we issued a $500,000 promissory note that bears interest at 12% per annum and matured on March 31, 2023. In connection with such issuance, we issued 500,000 warrants that expire on December 31, 2023 and may be converted in shares of our Common Stock on or after June 26, 2022 at a price of $ per share. We estimate the value such warrant to be approximately $9,000, based on a value of $ per share of our Common Stock as of December 28, 2021. The promissory note is subordinate to the convertible notes having an aggregate principal amount of $16.5 million (collectively, the “Notes”), which we issued to funds affiliated with Arena Investors, LP (collectively, the “Investors”). As of September 30, 2023, $500,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default.
On January 14, 2022, we issued an unsecured $150,000 note payable with $15,000 in fees payable upon its April 5, 2022 maturity date, which we treated as deferred financing fees and amortize over the term of the note. The obligation is subordinate to the Notes we issued to the Investors. As of September 30, 2023, $120,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default.
On January 14, 2022, we issued an unsecured $150,000 note payable with $15,000 in fees payable upon its April 5, 2022 maturity date, which we treated as deferred financing fees and amortized over the term of the note. The obligation is subordinate to the Notes we issued to the Investors. As of September 30, 2023, $135,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default.
On April 27, 2022, we issued a $125,000 unsecured note payable that has a $12,500 original issue discount and matured on December 31, 2022. In connection with such issuance, we issued the noteholder a warrant to purchase up to 2,500,000 shares of our Common Stock at $0.025 per share that is exercisable starting September 15, 2022 and until April 15, 2024. We estimate the total value of such warrants to be $45,000, based on a $ price per share of our Common Stock that we treat as a debt discount and amortize over the term of the note. As of September 30, 2023, $125,000 in note principal is outstanding. We have not yet repaid the noteholder and are in default. |
Convertible Notes Payable |
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| Convertible Notes Payable | Note 5 Convertible Notes Payable
Our convertible notes payable, all of which are current liabilities, are as follows as of:
On February 17, 2022, we issued a $50,000 unsecured note payable that bears interest at 12% per annum and matured on April 6, 2022. In connection with the note sale, we issued the noteholder a Warrant to purchase 1,250,000 shares of our Common Stock at $0.021 per share at any time starting July 1, 2022 and ending July 1, 2024. We estimate the value of the Warrant to be $22,500, based on a $ price per share of our Common Stock that we treat as a debt discount that we amortized over the term of the note. In April 2022, we repaid the note. |
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Senior Secured Notes |
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| Senior Secured Notes | Note 6 Senior Secured Notes
The Notes have a term of thirty-six months and mature on February 17, 2024, unless earlier converted. The Notes accrue interest at a rate of 11% per annum, subject to increase to 20% per annum upon default. Interest is payable in cash on a quarterly basis beginning on March 31, 2021. Notwithstanding the above, at our election, any interest payable on an applicable payment date may be paid in registered shares of our Common Stock in an amount equal (A) the amount of the interest payment due on such date, divided by (B) an amount equal to 80% of the average volume-weighted average price of our Common Stock for the five (5) days immediately preceding the date of conversion. At September 30, 2023 and December 31, 2022, accrued and unpaid interest was $4,661,250 and $3,300,000, respectively.
On September 24, 2021, the Company and the Investors amended the Notes and related closing documents, by executing the Limited Waiver and First Amendment the closing documents. Such amendment also waived specified events of default. The Notes were henceforth convertible at any time, at the holder’s option, into shares of our Common Stock at a price of $ per share, subject to an event of default adjustment. Notwithstanding the foregoing, at any time during the continuance of any event of default, the conversion price in effect equals the alternate conversion price provided in the Notes. If at any time the conversion price as determined for any conversion would be less than the par share value of the Common Stock, then at the sole discretion of the Holder, such conversion price equals such par value for such conversion and the conversion amount for such conversion may be increased to include Additional Principal (defined as such additional amount to be added to the principal amount of the Note to the extent necessary to cause the number of conversion shares issuable upon such conversion to equal the same number of conversion shares as would have been issued had the conversion price not been adjusted by the holder thereof to the par value price, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The conversion price was also subject to adjustment due to certain events, including stock dividends, stock splits and in connection with our issuance of our Common Stock or common stock equivalents at an effective price per share lower than the conversion price then in effect. We did not have a right to redeem the Notes.
As part of such purchase agreement with the Investors, we issued warrants to purchase up to 192,073,017 shares of Common Stock. On September 24, 2021, we and the Investors amended the warrants such that each warrant became exercisable for a period of five (5) years from the date of issuance at an initial exercise price equal to $ per share, adjusted to $ per share when interest is paid late, subject to certain beneficial ownership limitations (with a maximum ownership limit of 9.99%). The exercise price is also subject to adjustment due to certain events, including stock dividends, stock splits and recapitalizations. The Investors could exercise the warrants on a cashless exercise basis.
The Series F Preferred Stock has no voting rights and converts into 4.9% of our issued and outstanding shares of our Common Stock on a fully diluted basis upon the date on which stockholder approval for such issuance is obtained. The Series F Preferred Stock was subsequently converted and 192,073,017 shares of Common Stock, which were issued on October 11, 2021.
On October 27, 2022, the agent (the “Agent”) for the Investors notified us that certain events of default have occurred and were continuing under the Notes. On November 21, 2022, we, the Investors and the Agent entered into a Forbearance Agreement, pursuant to which, among other things, we acknowledged the outstanding principal balances of the Notes, that we have an obligation for interest, including default interest, fees and expenses in connection with the Notes, that we have no rights of offset, defenses, claims or counterclaims with respect to our obligations and pursuant to a side letter, dated as of November 21, 2022, we agreed to achieve certain milestones by the dates as set forth therein. The Forbearance Agreement expired on December 30, 2022.
As of September 30, 2023 and December 31, 2022, the outstanding liability for the Notes is as follows:
As of September 30, 2023 and December 31, 2022, accrued interest payable was $4,661,250 and $3,300,000, respectively, with interest accruing at 11% per annum for the nine months ended September 30, 2023. |
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Related Party |
9 Months Ended |
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Sep. 30, 2023 | |
| Related Party Transactions [Abstract] | |
| Related Party | Note 7 Related Party
Effective January 1, 2022, we entered into a management consulting agreement with GreenRock LLC, a company controlled by Philip Falcone, for a period of one year ending December 31, 2022, under which we provided monthly remuneration of $35,000, plus expenses in connection with his duties, responsibilities and performance as chief executive officer. In February 2021, Sovryn entered into consulting agreement with GreenRock LLC to provide us with chief executive officer services. In the nine months ended September 30, 2023 and 2022, we paid GreenRock LLC $35,000 and $270,000 in fees, respectively. Mr. Falcone is the managing member of GreenRock LLC and was our Chief Executive Officer until November 6, 2023. We paid GreenRock LLC bonuses of $0 and $163,473 for the three and nine months ended September 30, 2023. We paid GreenRock LLC bonuses of $255,794 and $488,934 for the three and nine months ended September 30, 2022.
During the three months ended September 30, 2022, our Chief Executive Officer advanced us funds for our operations and as of September 30, 2022, we owed $28,658 in advances. |
Mezzanine Equity |
9 Months Ended |
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| Mezzanine Equity | |
| Mezzanine Equity | Note 8 Mezzanine Equity
We account for certain of our Preferred Stock in accordance with the guidance in ASC Topic 480, Distinguishing Liabilities from Equity. Based on this guidance, preferred stock that is conditionally redeemable is classified as temporary or “mezzanine” equity. Accordingly, the various series of our Preferred Stock, which is subject to conditional redemption, is presented at redemption value as mezzanine equity outside of the stockholders’ equity section of the condensed consolidated balance sheets.
Preferred Shares
Series A Preferred Stock
There are designated and authorized shares of Series A Preferred Stock, subject to a 9.99% conversion limitation and anti-dilution rights for 24 months from the time of issuance. Holders of Series A Preferred Stock are entitled to receive, when and as declared, dividends equal to 3% per annum on the stated value, payable in additional shares of Series A Preferred Stock. Holders of Series A Preferred Stock have the right to vote on any matter submitted to our shareholders for vote, on an as-converted basis. Each share of Series A Preferred Stock may be convertible into shares of Common Stock, or as adjusted to equal the conversion ratio multiplied by a fraction, the numerator of which is the number of shares outstanding on a fully diluted basis after the issuance of the dilution shares, and the denominator is
On July 17, 2020, we issued Series A Preferred Stock at a value of $343,094, with the acquisition cost derived using the $0.04 market price on that date of $0.04 multiplied by 95% of the number of our issued and outstanding shares at the time (18,057,565) and multiplied by 50% of that value.
As of September 30, 2023, no shares of Series A Preferred Stock are outstanding.
Series C Preferred Stock
There are designated and authorized shares of Series C Preferred Stock, containing a 9.99% conversion limitation. Holders of Series C Preferred Stock are entitled to receive, when and as declared, dividends equal to 2% per annum on the stated value, payable in additional shares of Series C Preferred Stock. So long as any shares of Series C Preferred Stock remain outstanding, without the consent of the holders of 80% of the shares of Series C Preferred Stock then outstanding, we may not redeem, repurchase or otherwise acquire directly or indirectly any securities deemed junior to such Series C Preferred Stock (“Junior Securities”) nor may we directly or indirectly pay or declare or make any distribution upon, nor may any distribution be made in respect of, any Junior Securities, nor may any monies be set aside for or applied to the purchase or redemption of any Junior Securities. Each holder of the Series C Preferred Stock has the right to vote on any matter submitted to our shareholders for a vote, on an as converted basis. Each share of Series C Preferred Stock may be convertible into shares of our Common Stock. As of September 30, 2023, no shares of Series C Preferred Stock are outstanding.
Series D Preferred Stock
There are designated and authorized shares of Series D Preferred Stock, subject to a 4.99% conversion limitation, which may be increased to a maximum of 9.99% by a holder by written notice to us. There is a stated value of $ per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series D are issued. Series D are ranked as pari passu with the Series E Preferred Stock and the Series F Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock and have no voting rights. Each share of Series D Preferred Stock may be converted into common shares.
On February 16, 2021, we settled $1,028,000 in note payables, convertible notes payable and accrued interest for 230,000 shares of our Series D Preferred Stock, of which shares of Series D Preferred Stock were converted into shares of our Common Stock and Series D Preferred shares remain unconverted and outstanding as of September 30, 2023.
Series E Preferred Stock
There are designated and authorized shares of Series E Preferred Stock having a stated value of $ per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series E are issued. Series E are ranked pari passu with the Series D Preferred Stock and Series F Preferred Stock and as senior to all previously issued series of Preferred Stock and the Common Stock. It has voting rights equal to the number of shares of Common Stock into which the Series E Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. To the extent that holders of shares Series E Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series E Preferred Stock, constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of shares of Series E Preferred Stock are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series E Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series E Preferred Stock are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series E Preferred Stock are outstanding, we may not, without the affirmative vote of the holders of all the then outstanding shares of Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series E Preferred Stock or alter or amend the Series E certificate of designations (the “Series E Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing.
On September 16, 2021, the conversion rate for each share of Series E Preferred Stock was amended to equal (i)(a) 56.60% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series E Certificate), divided by (ii) the total number of shares of Series E Preferred Stock, (iii) rounded to the nearest thousandth. The total number of Fully-Diluted Shares is set as of, and cannot change after the Approval Date. Based on the current fully-diluted shares outstanding, this equated to 2,243,888,889 shares of Common Stock. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.4340.
On February 16, 2021, we issued shares of Series E Preferred Stock to acquire Sovryn that we valued at $4,225,062 based on a value of 100% of the per share price of Common Stock at the time.
On September 16, 2021, the holders of our Series E Preferred Stock entered into an exchange agreement with us whereby on October 11, 2021, the Series E Preferred shares were exchanged for Series E-1 Preferred shares and shares of Common Stock. We valued the exchange at the same $4,225,062 value as was assigned to the shares of Series E Preferred Stock. As of September 30, 2023, shares of Series E Preferred Stock are outstanding.
Series E-1 Preferred Stock
There are designated and authorized shares of Series E-1 Preferred Stock, which have a stated value of $ per share. Shares of Series E-1 Preferred Stock are pari passu with the Series D Preferred Stock and Series F Preferred Stock and are senior in dividend rights and liquidation preference to our Common Stock and all other Common Stock Equivalents. It has votes equal to the number of shares of common stock into which the Series E-1 Preferred Stock would be convertible on the record date for the vote or consent of stockholders, and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. It has votes equal to the number of shares of common stock into which the Series E-1 Preferred Stock would be convertible on the record date for the vote or consent of stockholders, and shall otherwise have voting rights and powers equal to the voting rights and powers of Common Stock. To the extent that holders of shares of Series E-1 Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series E-1 Preferred Stock constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of Series E-1 Preferred Stock are entitled to vote on matters with holders of shares of Common Stock and vote together as one class, each share of Series E-1 Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series E-1 Preferred Stock are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series E-1 Preferred Stock are outstanding, we cannot, without the affirmative vote of the Holders of all the then outstanding shares of Series E-1 Preferred Stock, (a) alter or change adversely, the powers, preferences or rights given to the Series E-1 Preferred Stock or alter or amend the Series E-1 certificate of designations (the “Series E-1 Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing. On October 11, 2021, the Series E-1 shares were issued. At September 30, 2023 and December 31, 2022, shares of Series E-1 Preferred Stock remain outstanding.
Each share of Series E-1 Preferred Stock may be converted into shares of Common Stock.
Series F Preferred Stock
There are designated and authorized shares of Series F Preferred Stock, which have a stated value of $1.00 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series F are issued. Shares of Series F Preferred Stock are pari passu with the Series D Preferred Stock and Series F Preferred Stock and senior in dividend rights and liquidation preference to our Common Stock and all other Common Stock Equivalents. It has voting rights equal to the number of shares of common stock into which the Series F Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. It has votes equal to the number of shares of common stock into which the Series F Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. To the extent that holders of shares of Series F Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series F Preferred Stock constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of shares of Series F Preferred Stock are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series F Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series F Preferred Stock are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series F Preferred Stock are outstanding, we cannot, without the affirmative vote of the holders of all the then outstanding shares of Series F Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series F Preferred Stock or alter or amend the Series F certificate of designations (the “Series F Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing.
On February 17, 2021, we issued to the Investors shares of Series F Preferred Stock that convert into shares of Common Stock, which we valued at $864,000, based on the underlying value of shares our Common Stock that were $ per share at the time.
On September 16, 2021, the conversion rate for each share of Series F Preferred Stock was amended to equal (i)(a) 4.84% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series F Certificate), divided by (ii) the total number of shares of Series F Preferred Stock, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares is set as of, and can not change after the Approval Date. Based on the full-diluted shares outstanding, this equated to 192,073,017 shares of Common Stock on the Approval Date. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.9516.
On October 11, 2021, the shares of Series F Preferred Stock were converted into 192,073,017 shares of Common Stock.
As of September 30, 2023 and December 31, 2022, shares of Series F Preferred Stock are outstanding.
Series G Preferred Stock
On August 20, 2021, the certificate of designation for the Series G Preferred Stock was amended. There are now designated and authorized Series G Preferred Stock, subject to a 4.99% conversion limitation, which may be increased to a maximum of 9.9% by a holder by written notice to us. The Series G Preferred Stock has a stated value of $1,000 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series G Preferred Stock are issued. The Series G Preferred Stock is ranked as a as a series of junior Preferred Stock. It has voting rights equal to the number of shares of common stock into which the Series G Preferred Stock would be convertible on the record date for the vote or consent of stockholders and shall otherwise have voting rights and powers equal to the voting rights and powers of common stock. To the extent that holders of shares of Series G Preferred Stock voting separately as a class or series, as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of a majority of the shares of the outstanding Series G Preferred Stock constitutes the approval of such action by both the class or the series as applicable. To the extent that holders of shares of Series G Preferred Stock are entitled to vote on matters with holders of shares of Common Stock, voting together as one class, each share of Series G Preferred Stock entitles the holder thereof to cast that number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible using the record date as of which the conversion rate is calculated. Holders of Series G are entitled to written notice of all stockholder meetings or written consents with respect to which they would be entitled by vote. As long as any shares of Series G Preferred Stock are outstanding, we cannot, without the affirmative vote of the holders of all the then outstanding shares of Series G Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series G Preferred Stock or alter or amend the Series G certificate of designations (the “Series G Certificate”), (b) amend our articles of incorporation or other charter documents in any manner that adversely affects any rights of a holder, or (c) enter into any agreement with respect to any of the foregoing.
On September 16, 2021, the conversion rate for each share of Series G Preferred Stock was amended to equal (i)(a) 6.45% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series G Certificate, divided by (ii) the total number of shares of Series G Preferred Stock, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares is set as of, and does not change after the Approval Date. Based on the current fully-diluted shares outstanding, this equated to 255,555,556 shares of common stock on the Approval Date. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.9355.
We received $ in subscriptions for of shares Series G Preferred Stock that we valued at $1,000 per share based on the cash price. On November 2, 2021, all the shares of Series G Preferred Stock were converted into shares of our Common Stock. At September 30, 2023, shares of Series G Preferred Stock are outstanding.
Series H Preferred Stock
On November 5, 2021, we designated shares of Series H Preferred Stock, which have a stated value of $ per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the date which the Series H are issued. Shares of Series H Preferred Stock have no voting rights and are senior in dividend rights and liquidation preference to our Common Stock and all other Common Stock Equivalents. Each share of Series H Preferred Stock may be converted into 1,000 shares of Common Stock, subject to a maximum ownership limit of 9.99%.
On November 11, 2021, pursuant to an exchange agreement that we entered into with the Investors, of our shares of Common Stock held by the Investors were exchanged for shares of our Series H Preferred Stock and we cancelled the 39,895,000 shares. We valued the shares and shares of Series H Preferred Stock at $3,989,500. At September 30, 2023 and December 31, 2022, shares of Series H Preferred Stock remain outstanding. |
Shareholders’ Equity |
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| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shareholders’ Equity |
Note 9 Shareholders’ Equity
Preferred Stock
As of September 30, 2023 and December 31, 2022, we are authorized to issue shares of Preferred Stock, with designations, voting, and other rights and preferences to be determined by our Board of Directors of which remain available for designation and issuance.
Series B Preferred Stock
There are designated and authorized shares of Series B Preferred Stock. Holders of Series B Preferred Stock have the right to vote on all shareholder matters equal to 51% of the total voting power of each class of stock outstanding. Holders of shares of Series B Preferred are entitled to such 51% voting rights regardless of the number of voting shares issued by the company at any time.
On July 17, 2020, Series B Preferred Stock were issued to acquire the Casa Zeta-Jones Brand License Agreement (the “License Agreement”) from Luxurie Legs, LLC, a limited liability company organized pursuant to the laws of the State of Delaware (“LUXURIE”), pursuant to which, at the effective time, LUXURIE transferred all of its right, title and interest in the License Agreement to Madison in exchange for a controlling interest in Madison represented by newly issued preferred stock. Although the Series B Preferred Stock is entitled to 51% voting rights as described above, the stock has no dividend rate nor conversion feature.
On February 17, 2021, the shares Series B Preferred Stock were transferred from Mr. Canouse (our former director and Chief Executive Officer), to the FFO1 2021 Irrevocable Trust, a company Mr. Falcone (our director and CEO) is the trustee and has the voting and dispositive power. The 100 shares of Series B Preferred are included in the Pledged Assets.
At September 30, 2023 and December 31, 2022, there were Series B Preferred shares outstanding, respectively.
Common Stock
As of September 30, 2023 and December 31, 2022 there were , shares outstanding.
Warrants
On January 10, 2023, we issued two unsecured convertible subordinate notes totaling $220,000 and in connection with one of the notes sold, we issued the noteholder a warrant to purchase up to shares of our Common Stock at $ per share starting January 10, 2023 and ending January 10, 2030.
The Warrants issued were loan incentives. The value was allocated to the warrants based on its fair value on the date of the grant, as determined using the Black-Scholes option pricing model.
For the nine months ended September 30, 2023, a summary of our warrant activity is as follows:
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Discontinued Operations |
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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations | Note 10 Discontinued Operations
In the fourth quarter of 2022, management at that time determined that Sovryn’s television broadcast business was not an efficient use of our resources to develop and launch BCTV, our core business, and management sought to exit Sovryn’s business and pay down the Company’s senior debt associated with acquiring Sovryn’s assets and creating its business. As a result, Sovryn is recognized as a discontinued operation in the accompanying condensed consolidated financial statements. Effective February 1, 2023, we assigned 100% ownership of Sovryn to the Investors. The previous year’s assets, liabilities and expenses have been similarly classified for comparative purposes. The following is a summary of Sovryn for the nine months ended September 30, 2023 and 2022:
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Income Taxes |
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| Income Taxes | Note 11 Income Taxes
Income tax recovery differs from that which would be expected from applying the effective tax rates to the net income (loss) as follows:
As of September 30, 2023 and December 31, 2022, the tax effect of the temporary timing differences that give rise to significant components of deferred income tax asset are noted below. A valuation allowance has been recorded, as management believes it is more likely than not that the deferred income tax asset will not be realized.
Tax losses of approximately $30 million will expire in 2039 and 2040. |
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Subsequent Events |
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| Subsequent Events [Abstract] | |
| Subsequent Events | Note 12 Subsequent Events
On September 21, 2023, the Agent for the Investors delivered a notice to us that the Agent has exercised the Investors’ rights to vote the Pledged Interests (as defined in such notice) and to exercise the Investors’ rights, powers and privileges, to pass certain resolutions and to amend our bylaws then in effect to, among other things, (i) remove the board of directors of the Company (the “Board of Directors”) and all officers of the Company, and (ii) reduce the number of the Board of Directors from three to one director. As a result of the Agent delivering such notice and exercising its rights to vote the Pledged Interests, a change of control of the Company occurred (the “Change of Control”).
On the two-year anniversary of the October 11, 2021 issuance of the Series E-1 shares, the shares were to be automatically converted into shares of our Common Stock, however we did not process the conversion and have not to date.
On November 6, 2023, the shareholders of the Company removed Philip Falcone and Warren Zenna as our directors and appointed Thomas Amon as the sole member of our board of directors. Mr. Amon removed all Company officers and appointed himself as the Company’s President, Secretary, Treasurer, Chief Executive Officer, Chief Financial Officer, Principal Executive Officer and Principal Accounting Officer.
On November 10, 2023, Philip Falcone, individually and on behalf of the Company and other named defendants, filed a Confession of Judgment affirming that a promissory note (the “Z4 Note”) had been issued by the Company, dated December 28, 2021, by Z4 MGMT LLC (“Z4”), which was guaranteed by each of FFO1 2021 Irrevocable Trust and FFO2 2021 Irrevocable Trust. The Z4 Note was initially payable on February 15, 2022, and had an original principal balance of $500,000 with an interest rate of 12% per annum. The Z4 Note’s expiration date was extended to July 5, 2022, then further extended to March 31, 2023, and as of October 1, 2023, the revised principal balance, along with interest accrued, totaled $581,304. On such date, Z4 filed an Affidavit of Default affirming that the Z4 Note was in default and requesting a judgment in the amount of $581,304 against the Company, FFO1 2021 Irrevocable Trust, FFO2 2021 Irrevocable Trust, and Mr. Falcone personally, in favor of Z4. On December 5, 2023, a judgement in favor Z4 Management in the sum of $581,304 was rendered against us, Mr. Falcone, FFO1 2021 Irrevocable Trust and FFO2 2021 Irrevocable Trust.
On February 18, 2024, Agile Capital Funding LLC (“Agile”) filed a Confession of Judgment executed by Philip Falcone with the Supreme Court of the State of New York County of New York that affirmed that the Company owes Agile for funds received on January 30, 2023, less funds the Company subsequently repaid, and for accrued interest and collection fees, which Agile determined to be $190,444 as of February 18, 2024. To date, the liability for the judgment has not been satisfied.
Presently, we are default on all of our outstanding promissory and convertible notes payable (See Notes 4, 5 and 6), which have $4.1 million in aggregate principal outstanding plus accrued interest, penalties and fees. |
Summary of Significant Accounting Policies (Policies) |
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| Use of estimates | Use of estimates
The preparation of the condensed consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Changes in estimates are recognized in accordance with the accounting rules for the estimate, which is typically in the period when new information becomes available to management. Actual results could differ from those estimates. |
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| Consolidation | Consolidation
The accompanying condensed consolidated financial statements include the accounts of our current and former wholly owned subsidiaries, Blockchain.tv, Inc. and SovRryn Holdings Inc. (“Sovryn”). Sovryn is consolidated up until January 31, 2023 and recognized as a discontinued operation. All the intercompany balances and transactions have been eliminated in the consolidation. |
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| Interim Reporting | Interim Reporting
While the information presented in the accompanying interim three-month financial statements is unaudited, it includes all adjustments, which are, in the opinion of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. These interim financial statements follow the same accounting policies and methods of their application as the Company’s December 31, 2022 annual financial statements. All adjustments are of a normal recurring nature. It is suggested that these interim financial statements be read in conjunction with the Company’s December 31, 2022 annual financial statements. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that can be expected for the year ended December 31, 2023. |
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| Segment reporting | Segment reporting
Our chief operating decision maker is our chief executive officer, who reviews information on an aggregated basis. |
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| Reclassifications | Reclassifications
Certain prior year amounts have been reclassified to conform to the current year presentation. |
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| Revenue recognition | Revenue recognition
We adopted the ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). We recognize revenue when we transfer promised services to the customer. The performance obligation is the monthly services rendered. We have one main revenue source which is leasing of television station channels. Accordingly, we recognize revenue when services are provided as time passes the customers have access to utilize the channel. These revenues are billed in advance, arrears and/or are prepaid. The performance obligation is the monthly services rendered. For January 2023, we had one main revenue source, which is the leasing of television channels, and no revenue source thereafter. Where there is a leasing contract for channels, we bill monthly for our services as rendered. Where there is no contract, the revenue is recognized as provided.
We recognize revenue in accordance with ASC 606 using the following 5 steps to identify revenues:
Advances from client deposits are contract liabilities with customers that represent our obligation to either transfer goods or services in the future, or refund the amount received. Where possible, we obtain retainers to lessen our risk of non-payment by our customers. Advances from client deposits are recognized as revenue as we meet specified performance obligations as detailed in the contract. |
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| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets
In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment and intangible assets we hold and use are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. |
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| Financial instruments | Financial instruments
Our financial instruments consist principally of accounts payable, accrued liabilities and notes payable. The carrying amounts of such financial instruments in the accompanying financial statements approximate their fair values due to their relatively short-term nature or the underlying terms are consistent with market terms. It is the management’s opinion that we are not exposed to any significant currency or credit risks arising from these financial instruments. |
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| Fair value measurements | Fair value measurements
We follow the guidelines in ASC Topic 820 “Fair Value Measurements and Disclosures”. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.
We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. All financial instruments approximate their fair value.
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| Convertible Notes with Fixed Rate Conversion Options | Convertible Notes with Fixed Rate Conversion Options
We may enter into convertible notes, some of which contain, predominantly, fixed rate conversion features, whereby the outstanding principal and accrued interest may be converted by the holder, into common shares at a fixed discount to the market price of the common stock at the time of conversion. This results in a fair value of the convertible note being equal to a fixed monetary amount. We record the convertible note liability at its fixed monetary amount by measuring and recording a premium, as applicable, on the note date with a charge to interest expense in accordance with ASC 480–- “Distinguishing Liabilities from Equity”. |
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| Derivative Liabilities | Derivative Liabilities
We have certain financial instruments that are derivatives or contain embedded derivatives. We evaluate all of our financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 810-10-05-4 and 815-40. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with us, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on extinguishment. |
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| Loss per share |
Net Loss Per Share
Basic loss per share is calculated by dividing the loss attributable to stockholders by the weighted-average number of shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in our earnings (loss). Diluted loss per share is computed by dividing the loss available to stockholders by the weighted average number of shares outstanding for the period and dilutive potential shares outstanding unless such dilutive potential shares would result in anti-dilution. As of September 30, 2023 and 2022, no options were outstanding and and warrants were outstanding and exercisable, respectively. Additionally, as of September 30, 2023 and 2022, the outstanding principal balance, including accrued interest of the third-party convertible debt, totaled $23,656,587 and $19,874,163, respectively, and was convertible into and shares of Common Stock, respectively. We issued shares of preferred stock (“Preferred Stock”) that may be converted into our Common Stock. Of the outstanding shares of Preferred Stock as of September 30, 2023, as applicable, Series A Preferred Stock was convertible into shares of Common Stock, Series D Preferred Stock was convertible into shares of Common Stock, Series E-1 Preferred Stock was convertible into shares of Common Stock and Series H Preferred Stock was convertible into shares of Common Stock. The total potentially dilutive shares calculated are and as of September 30, 2023 and 2022, respectively. It should be noted that contractually the limitations on the third-party notes (and the related warrants) limit the number of shares converted into either 4.99% or 9.99% of the then outstanding shares. As of September 30, 2023 and 2022, potentially dilutive securities consisted of the following:
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| Related Party Transactions | Related Party Transactions
We follow FASB ASC subtopic 850-10, “Related Party Transactions”, for the identification of related parties and disclosure of related party transactions.
Pursuant to ASC 850-10-20, related parties include: (a) our affiliates; (b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c) trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of management; (d) our principal owners; ©) our management; (f) other parties with which we may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.
Material related party transactions are required to be disclosed in the condensed consolidated financial statements, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a) the nature of the relationship(s) involved; (b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which statements of operation are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c) the dollar amounts of transactions for each of the periods for which statements of operations are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement. |
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| Discontinued operations | Discontinued operations
Discontinued operations are components of an entity that either have been disposed or abandoned or is classified as held for sale. Additionally, in order to qualify as a discontinued operation, the disposal or abandonment must represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. |
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| Income taxes | Income taxes
We follow the guideline under ASC Topic 740 Income Taxes. “Accounting for Income Taxes” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Due to the uncertainty regarding our future profitability, the future tax benefits of its losses have been fully reserved. |
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| Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements
We adopt new pronouncements relating to generally accepted accounting principles applicable to us as they are issued, which may be in advance of their effective date.
We do not believe that any recently issued but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying condensed consolidated financial statements. |
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Summary of Significant Accounting Policies (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Potentially Dilutive Securities |
|
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Accounts Payable and Accrued Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts payable and accrued liabilities are summarized below: | Accounts payable and accrued liabilities are summarized below:
|
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Derivative Liability (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||
| Schedule of Derivative Liability | For the nine months ended September 30, 2023, our derivative liability was as follows:
|
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Convertible Notes Payable (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Convertible Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Convertible Notes Payable | Our convertible notes payable, all of which are current liabilities, are as follows as of:
|
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Senior Secured Notes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Senior Secured Notes | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of senior secured Note | As of September 30, 2023 and December 31, 2022, the outstanding liability for the Notes is as follows:
|
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Shareholders’ Equity (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the nine months ended September 30, 2023, a summary of our warrant activity is as follows: | For the nine months ended September 30, 2023, a summary of our warrant activity is as follows:
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Discontinued Operations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of previous year assets liabilities and expenses |
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax recovery differs from that which would be expected from applying the effective tax rates to the net income (loss) as follows: | Income tax recovery differs from that which would be expected from applying the effective tax rates to the net income (loss) as follows:
|
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| Schedule of deferred income tax asset |
|
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Going Concern (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
| Net income loss | $ (1,034,496) | $ (1,879,273) | $ (12,882,087) | $ (6,949,431) | $ 13,139,810 |
| Working capital deficit | 13,860,314 | ||||
| Accumulated deficit | $ 41,768,918 | $ 41,768,918 | $ 28,886,831 | ||
Schedule of Potentially Dilutive Securities (Details) - shares |
9 Months Ended | |
|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total | 3,164,248,596 | 2,592,691,302 |
| Warrant [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total | 286,173,016 | 231,173,016 |
| Convertible Preferred Stock [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total | 1,665,451,580 | 1,347,395,000 |
| Convertible Debt [Member] | ||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
| Total | 1,212,624,000 | 1,014,123,286 |
Accounts payable and accrued liabilities are summarized below: (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Accounts payable | $ 390,737 | $ 371,987 |
| Accrued expenses | 293,209 | 174,078 |
| Accrued interest | $ 445,746 | $ 195,334 |
Schedule of Derivative Liability (Details) |
9 Months Ended |
|---|---|
|
Sep. 30, 2023
USD ($)
| |
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
| Balance at January 1, 2023 | $ 4,429,329 |
| Liability for Warrants issued | |
| Balance at September 30, 2023 | $ 4,429,329 |
Derivative Liability (Details Narrative) |
9 Months Ended |
|---|---|
|
Sep. 30, 2023
USD ($)
$ / shares
| |
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
| Derivative liability description | As a better representation of value, management used a share price of $0.018 per share to determine the derivative liability from warrants issued through December 31, 2022, which was the per share price used in connection with the issuance of 255,555,556 shares of Common Stock issued upon conversion of the Series G Preferred Stock on November 2, 2021. |
| Warrants liability | $ | $ 40,000,000 |
| Common stock per share | $ / shares | $ 0.02 |
Schedule of Convertible Notes payable (Details) (Parenthetical) - USD ($) |
1 Months Ended | 9 Months Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 02, 2022 |
Oct. 14, 2022 |
Oct. 14, 2022 |
Sep. 16, 2022 |
Sep. 16, 2022 |
Jun. 24, 2022 |
May 05, 2022 |
May 05, 2022 |
Feb. 17, 2022 |
Jan. 14, 2022 |
Jan. 06, 2022 |
Feb. 17, 2021 |
Feb. 15, 2022 |
Sep. 30, 2022 |
Jan. 10, 2024 |
Sep. 30, 2023 |
Dec. 31, 2022 |
Apr. 27, 2022 |
Oct. 11, 2021 |
Sep. 24, 2021 |
|
| Common stock per share | $ 0.02 | |||||||||||||||||||
| Share issued price per share | $ 0.001 | $ 0.001 | ||||||||||||||||||
| Adjustment of warrants | $ 9,000 | |||||||||||||||||||
| Series F Preferred Stock [Member] | ||||||||||||||||||||
| Share issued price per share | $ 0.0045 | |||||||||||||||||||
| Securities Purchase Agreement [Member] | Investors [Member] | ||||||||||||||||||||
| Interest rate, percentage | 11.00% | |||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 192,073,017 | |||||||||||||||||||
| Securities Purchase Agreement [Member] | Investors [Member] | Series F Preferred Stock [Member] | ||||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 1,000 | 192,073,017 | 192,073,017 | |||||||||||||||||
| Adjustment of warrants | $ 864,000 | |||||||||||||||||||
| Common Stock [Member] | ||||||||||||||||||||
| Warrants and rights outstanding | $ 45,000 | |||||||||||||||||||
| Common stock per share | $ 0.02 | $ 0.018 | ||||||||||||||||||
| Share issued price per share | $ 0.02 | |||||||||||||||||||
| Common Stock [Member] | Securities Purchase Agreement [Member] | Investors [Member] | ||||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 192,073,017 | |||||||||||||||||||
| Common stock per share | $ 0.0045 | $ 0.02 | ||||||||||||||||||
| Series 4 [Member] | Common Stock [Member] | ||||||||||||||||||||
| Common stock per share | $ 0.02 | |||||||||||||||||||
| Unsecured Notes PayableTwo [Member] | Common Stock [Member] | ||||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 2,500,000 | |||||||||||||||||||
| Warrant exercise price | $ 0.025 | |||||||||||||||||||
| Unsecured Notes PayableTwo [Member] | Series 2 [Member] | ||||||||||||||||||||
| Notes payable | $ 50,000 | $ 25,000 | $ 250,000 | |||||||||||||||||
| Interest rate, percentage | 12.00% | 12.00% | 12.00% | |||||||||||||||||
| Maturity date | Apr. 06, 2022 | |||||||||||||||||||
| Warrant exercise price | $ 0.021 | $ 0.021 | ||||||||||||||||||
| Unsecured Notes PayableTwo [Member] | Series 2 [Member] | Common Stock [Member] | ||||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 1,250,000 | 600,000 | 6,250,000 | |||||||||||||||||
| Warrant exercise price | $ 0.021 | |||||||||||||||||||
| Warrants and rights outstanding | $ 22,500 | $ 10,800 | $ 112,500 | |||||||||||||||||
| Common stock per share | $ 0.018 | $ 0.018 | ||||||||||||||||||
| Unsecured Notes Payable Three [Member] | ||||||||||||||||||||
| Warrants and rights outstanding | $ 90,000 | |||||||||||||||||||
| Unsecured Notes Payable Three [Member] | Common Stock [Member] | ||||||||||||||||||||
| Share issued price per share | $ 0.018 | |||||||||||||||||||
| Unsecured Notes Payable Three [Member] | Series 3 [Member] | ||||||||||||||||||||
| Notes payable | $ 137,500 | |||||||||||||||||||
| Interest rate, percentage | 11.25% | |||||||||||||||||||
| Maturity date | Feb. 23, 2023 | |||||||||||||||||||
| Issue discount | $ 15,000 | |||||||||||||||||||
| Unsecured Notes Payable Three [Member] | Series 3 [Member] | Common Stock [Member] | ||||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 2,500,000 | |||||||||||||||||||
| Warrant exercise price | $ 0.10 | |||||||||||||||||||
| Unsecured Notes Payable Four [Member] | Series 4 [Member] | ||||||||||||||||||||
| Notes payable | $ 110,000 | $ 110,000 | ||||||||||||||||||
| Interest rate, percentage | 12.00% | |||||||||||||||||||
| Maturity date | May 05, 2023 | |||||||||||||||||||
| Unsecured Notes Payable Four [Member] | Series 4 [Member] | Common Stock [Member] | ||||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 5,000,000 | |||||||||||||||||||
| Debt instrument convertible | $ 0.02 | |||||||||||||||||||
| Unsecured Notes Payable Five [Member] | Series 5 [Member] | ||||||||||||||||||||
| Notes payable | $ 82,500 | |||||||||||||||||||
| Interest rate, percentage | 12.00% | 12.00% | ||||||||||||||||||
| Maturity date | May 05, 2023 | |||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 3,750,000 | 3,750,000 | ||||||||||||||||||
| Warrant exercise price | $ 0.02 | $ 0.02 | ||||||||||||||||||
| Issue discount | $ 7,500 | $ 7,500 | ||||||||||||||||||
| Notes payable | 82,500 | 82,500 | ||||||||||||||||||
| Unsecured Notes Payable Five [Member] | Series 5 [Member] | Common Stock [Member] | ||||||||||||||||||||
| Warrants and rights outstanding | $ 67,500 | $ 67,500 | ||||||||||||||||||
| Share issued price per share | $ 0.018 | $ 0.018 | ||||||||||||||||||
| Unsecured Notes Payable Six [Member] | ||||||||||||||||||||
| Notes payable | $ 55,000 | |||||||||||||||||||
| Unsecured Notes Payable Six [Member] | Series 5 [Member] | ||||||||||||||||||||
| Notes payable | $ 220,000 | $ 110,000 | $ 110,000 | |||||||||||||||||
| Interest rate, percentage | 12.00% | 12.00% | 12.00% | 12.00% | ||||||||||||||||
| Maturity date | Oct. 14, 2023 | May 05, 2023 | ||||||||||||||||||
| Class of warrant or right number of securities called by warrants or right | 10,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||||
| Warrant exercise price | $ 0.02 | $ 0.02 | $ 0.02 | $ 0.02 | ||||||||||||||||
| Warrants and rights outstanding | $ 180,000 | $ 90,000 | $ 90,000 | |||||||||||||||||
| Issue discount | $ 20,000 | $ 10,000 | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||||||
| Share issued price per share | $ 0.018 | $ 0.018 | $ 0.018 | |||||||||||||||||
| Notes payable | $ 110,000 | $ 110,000 | $ 220,000 | |||||||||||||||||
| Unsecured Notes Payable Six [Member] | Series 5 [Member] | Common Stock [Member] | ||||||||||||||||||||
| Warrants and rights outstanding | $ 90,000 | $ 90,000 | ||||||||||||||||||
| Share issued price per share | $ 0.018 | $ 0.018 | ||||||||||||||||||
| Unsecured Notes Payable Six [Member] | Series Six [Member] | ||||||||||||||||||||
| Notes payable | $ 55,000 | |||||||||||||||||||
| Interest rate, percentage | 12.00% | 12.00% | ||||||||||||||||||
| Maturity date | Sep. 16, 2023 | |||||||||||||||||||
| Issue discount | $ 5,000 | $ 5,000 | ||||||||||||||||||
| Unsecured Notes Payable Six [Member] | Series Six [Member] | Common Stock [Member] | ||||||||||||||||||||
| Share issued price per share | $ 0.001 | $ 0.001 | ||||||||||||||||||
Convertible Notes Payable (Details Narrative) - USD ($) |
Feb. 17, 2022 |
Oct. 11, 2021 |
Feb. 17, 2021 |
Jan. 10, 2024 |
Sep. 30, 2023 |
Dec. 31, 2022 |
Apr. 27, 2022 |
Sep. 24, 2021 |
|---|---|---|---|---|---|---|---|---|
| Common stock per share | $ 0.02 | |||||||
| Securities Purchase Agreement [Member] | Investors [Member] | ||||||||
| Debt instrument interest rate stated percentage | 11.00% | |||||||
| Class of warrant or right number of securities called by warrants or right | 192,073,017 | |||||||
| Debt conversion description | The Notes have a term of thirty-six months and mature on February 17, 2024, unless earlier converted. The Notes accrue interest at a rate of 11% per annum, subject to increase to 20% per annum upon default. Interest is payable in cash on a quarterly basis beginning on March 31, 2021. Notwithstanding the above, at our election, any interest payable on an applicable payment date may be paid in registered shares of our Common Stock in an amount equal (A) the amount of the interest payment due on such date, divided by (B) an amount equal to 80% of the average volume-weighted average price of our Common Stock for the five (5) days immediately preceding the date of conversion. | |||||||
| Interest payable current and noncurrent | $ 4,661,250 | $ 3,300,000 | ||||||
| Securities Purchase Agreement [Member] | Investors [Member] | Maximum [Member] | ||||||||
| Common stock per share | $ 0.025 | |||||||
| Securities Purchase Agreement [Member] | Investors [Member] | Minimum [Member] | ||||||||
| Common stock per share | $ 0.020 | |||||||
| Securities Purchase Agreement [Member] | Investors [Member] | Series F Preferred Stock [Member] | ||||||||
| Class of warrant or right number of securities called by warrants or right | 192,073,017 | 1,000 | 192,073,017 | |||||
| Voting rights description | The Series F Preferred Stock has no voting rights and converts into 4.9% of our issued and outstanding shares of our Common Stock on a fully diluted basis upon the date on which stockholder approval for such issuance is obtained | |||||||
| Common Stock [Member] | ||||||||
| Warrants and rights outstanding | $ 45,000 | |||||||
| Common stock per share | $ 0.02 | $ 0.018 | ||||||
| Common Stock [Member] | Securities Purchase Agreement [Member] | Investors [Member] | ||||||||
| Class of warrant or right number of securities called by warrants or right | 192,073,017 | |||||||
| Common stock per share | $ 0.0045 | $ 0.02 | ||||||
| Unsecured Notes Payable [Member] | ||||||||
| Proceeds from unsecured note payable | $ 50,000 | |||||||
| Debt instrument interest rate stated percentage | 12.00% | |||||||
| Maturity date | Apr. 06, 2022 | |||||||
| Warrants and rights outstanding | $ 22,500 | |||||||
| Unsecured Notes Payable [Member] | Common Stock [Member] | ||||||||
| Class of warrant or right number of securities called by warrants or right | 1,250,000 | |||||||
| Warrant exercise price | $ 0.021 | |||||||
| Common stock per share | $ 0.018 |
Schedule of senior secured Note (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Senior Secured Notes | ||
| Principal | $ 16,500,000 | $ 16,500,000 |
| Less discount | 644,325 | 1,900,760 |
| Principal, net of discount | $ 15,855,675 | $ 14,599,240 |
Senior Secured Notes (Details Narrative) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Senior Secured Notes | ||
| Accrued interest payable | $ 4,661,250 | $ 3,300,000 |
Related Party (Details Narrative) - Chief Executive Officer [Member] - USD ($) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
| Related Party Transaction [Line Items] | ||||
| Advance funds | $ 28,658 | |||
| Green Rock L L C [Member] | ||||
| Related Party Transaction [Line Items] | ||||
| Consulting fees | $ 35,000 | $ 270,000 | ||
| Payment for bonus | $ 0 | $ 255,794 | $ 163,473 | $ 488,934 |
Mezzanine Equity (Details Narrative) - USD ($) |
9 Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 11, 2021 |
Nov. 05, 2021 |
Nov. 02, 2021 |
Oct. 11, 2021 |
Sep. 16, 2021 |
Aug. 20, 2021 |
Feb. 17, 2021 |
Feb. 16, 2021 |
Jul. 17, 2020 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Feb. 15, 2022 |
|
| Debt instrument converted shares | 1,212,624,000 | 1,014,123,286 | |||||||||||
| Convertible note spayable | $ 2,545,500 | $ 2,305,500 | |||||||||||
| Common stock, par value | $ 0.001 | $ 0.001 | |||||||||||
| Common Stock [Member] | |||||||||||||
| Conversion of convertible shares | 255,555,556 | 192,073,017 | 75,000,000 | ||||||||||
| Common stock, par value | $ 0.02 | ||||||||||||
| Common Stock [Member] | Exchange Agreement [Member] | |||||||||||||
| Conversion of shares | 39,895,000 | ||||||||||||
| Number of shares issued | 1,091,388,889 | ||||||||||||
| Series A Preferred Stock [Member] | |||||||||||||
| Temporary equity, shares authorized | 100,000 | ||||||||||||
| Debt instrument conversion percentage | 9.99% | ||||||||||||
| Debt instrument converted shares | 3,420 | ||||||||||||
| Diluted shares | 360,000,000 | ||||||||||||
| Number of shares issued | 92,999 | ||||||||||||
| Shares issued for license | $ 343,094 | ||||||||||||
| Preferred stock, shares outstanding | 0 | 0 | |||||||||||
| Series C Preferred Stock [Member] | |||||||||||||
| Debt instrument conversion percentage | 9.99% | ||||||||||||
| Temporary equity, shares authorized | 10,000 | 10,000 | |||||||||||
| Temporary equity, shares outstanding | 0 | 0 | |||||||||||
| Temporary equity, stated value | $ 0.001 | $ 0.001 | |||||||||||
| Temporary equity, stated value | $ 100 | $ 100 | |||||||||||
| Series C Preferred Stock [Member] | Common Stock [Member] | |||||||||||||
| Debt instrument converted shares | 100 | ||||||||||||
| Series D Preferred Stock [Member] | |||||||||||||
| Temporary equity, shares authorized | 230,000 | 230,000 | |||||||||||
| Temporary equity stated value per share | $ 3.32 | ||||||||||||
| Notes payable | $ 1,028,000 | ||||||||||||
| Convertible note spayable | $ 230,000 | ||||||||||||
| Conversion of convertible shares | 75,000 | ||||||||||||
| Preferred stock, shares outstanding | 155,000 | ||||||||||||
| Temporary equity, shares outstanding | 155,000 | 155,000 | |||||||||||
| Temporary equity, stated value | $ 0.001 | $ 0.001 | |||||||||||
| Temporary equity, stated value | $ 3.32 | $ 3.32 | |||||||||||
| Series D Preferred Stock [Member] | Minimum [Member] | |||||||||||||
| Debt instrument conversion percentage | 4.99% | ||||||||||||
| Series D Preferred Stock [Member] | Maximum [Member] | |||||||||||||
| Debt instrument conversion percentage | 9.99% | ||||||||||||
| Series D Preferred Stock [Member] | Common Stock [Member] | |||||||||||||
| Debt instrument converted shares | 1,000 | ||||||||||||
| Series E Preferred Stock [Member] | |||||||||||||
| Temporary equity, shares authorized | 1,000 | 1,000 | |||||||||||
| Temporary equity stated value per share | $ 1,000 | ||||||||||||
| Temporary equity description | the conversion rate for each share of Series E Preferred Stock was amended to equal (i)(a) 56.60% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series E Certificate), divided by (ii) the total number of shares of Series E Preferred Stock, (iii) rounded to the nearest thousandth. The total number of Fully-Diluted Shares is set as of, and cannot change after the Approval Date. Based on the current fully-diluted shares outstanding, this equated to 2,243,888,889 shares of Common Stock. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.4340 | ||||||||||||
| Temporary equity, shares outstanding | 0 | 0 | |||||||||||
| Temporary equity, stated value | $ 0.001 | $ 0.001 | |||||||||||
| Temporary equity, stated value | $ 1,000 | $ 1,000 | |||||||||||
| Series E Preferred Stock [Member] | Exchange Agreement [Member] | |||||||||||||
| Conversion of convertible shares | 1,000 | ||||||||||||
| Conversion of shares | 1,000 | ||||||||||||
| Conversion of convertible securities | $ 4,225,062 | ||||||||||||
| Series E Preferred Stock [Member] | Sovryn Holdings, Inc [Member] | |||||||||||||
| Number of shares issued on acquisition, shares | 1,000 | ||||||||||||
| Number of shares issued on acquisition | $ 4,225,062 | ||||||||||||
| Series E-1 Preferred Stock [Member] | |||||||||||||
| Temporary equity, shares authorized | 1,152,500 | 1,152,500 | |||||||||||
| Temporary equity, shares outstanding | 1,152,500 | 1,152,500 | |||||||||||
| Temporary equity, stated value | $ 0.001 | $ 0.001 | |||||||||||
| Temporary equity, stated value | $ 0.87 | $ 0.87 | |||||||||||
| Series E-1 Preferred Stock [Member] | Exchange Agreement [Member] | |||||||||||||
| Number of shares issued | 1,152,500 | ||||||||||||
| Series E One Convertible Preferred Stock [Member] | |||||||||||||
| Temporary equity, shares authorized | 1,152,500 | ||||||||||||
| Temporary equity, shares outstanding | 1,152,500 | ||||||||||||
| Temporary equity, stated value | $ 0.87 | ||||||||||||
| Shares converted into common stock | 1,000 | ||||||||||||
| Series F Preferred Stock [Member] | |||||||||||||
| Shares issued for license | $ 864,000 | ||||||||||||
| Temporary equity, shares authorized | 1,000 | 1,000 | |||||||||||
| Conversion of convertible shares | 1,000 | ||||||||||||
| Temporary equity description | the conversion rate for each share of Series F Preferred Stock was amended to equal (i)(a) 4.84% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series F Certificate), divided by (ii) the total number of shares of Series F Preferred Stock, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares is set as of, and can not change after the Approval Date. Based on the full-diluted shares outstanding, this equated to 192,073,017 shares of Common Stock on the Approval Date. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.9516. | ||||||||||||
| Temporary equity, shares outstanding | 0 | 0 | |||||||||||
| Temporary equity, stated value | $ 0.001 | $ 0.001 | |||||||||||
| Temporary equity, stated value | $ 1 | $ 1 | |||||||||||
| Common stock, par value | $ 0.0045 | ||||||||||||
| Series F Preferred Stock [Member] | Sovryn Holdings, Inc [Member] | |||||||||||||
| Number of shares issued on acquisition, shares | 1,000 | ||||||||||||
| Number of shares issued on acquisition | $ 192,073,017 | ||||||||||||
| Series G Preferred Stock [Member] | |||||||||||||
| Number of shares issued | 4,600 | ||||||||||||
| Shares issued for license | $ 1,000 | ||||||||||||
| Temporary equity, shares authorized | 4,600 | 4,600 | 4,600 | ||||||||||
| Conversion of convertible shares | 4,600 | ||||||||||||
| Temporary equity description | the conversion rate for each share of Series G Preferred Stock was amended to equal (i)(a) 6.45% multiplied by, (b) the Fully-Diluted shares as of the Approval Date (each as defined in the Series G Certificate, divided by (ii) the total number of shares of Series G Preferred Stock, (iii) rounded to the nearest thousandths place. The total number of Fully-Diluted Shares is set as of, and does not change after the Approval Date. Based on the current fully-diluted shares outstanding, this equated to 255,555,556 shares of common stock on the Approval Date. Fully-Diluted means the aggregate of (A) the total number of shares of Common Stock outstanding as of such date, (B) the number of shares of Common Stock (including all such Common Stock equivalents) into which all Convertible Securities outstanding as of such date could be converted or exercised, and (C) the number of shares of Common Stock (including all such Common Stock equivalents) issuable upon exercise of all options outstanding as of such date of exercise, divided by 0.9355. | ||||||||||||
| Temporary equity, shares outstanding | 0 | 0 | |||||||||||
| Temporary equity, stated value | $ 0.001 | $ 0.001 | |||||||||||
| Temporary equity, stated value | $ 1,000 | $ 1,000 | |||||||||||
| Temporary equity, value, subscriptions | $ 4,600,000 | ||||||||||||
| Series G Preferred Stock [Member] | Minimum [Member] | |||||||||||||
| Debt instrument conversion percentage | 4.99% | ||||||||||||
| Series G Preferred Stock [Member] | Maximum [Member] | |||||||||||||
| Debt instrument conversion percentage | 9.90% | ||||||||||||
| Series H Preferred Stock [Member] | |||||||||||||
| Temporary equity, shares authorized | 39,895 | 39,895 | 39,895 | ||||||||||
| Temporary equity, shares outstanding | 39,895 | 39,895 | |||||||||||
| Temporary equity, stated value | $ 1.00 | $ 0.001 | $ 0.001 | ||||||||||
| Temporary equity, stated value | $ 1 | $ 1 | |||||||||||
| Voting rights, description | Shares of Series H Preferred Stock have no voting rights and are senior in dividend rights and liquidation preference to our Common Stock and all other Common Stock Equivalents. Each share of Series H Preferred Stock may be converted into 1,000 shares of Common Stock, subject to a maximum ownership limit of 9.99% | ||||||||||||
| Series H Preferred Stock [Member] | Exchange Agreement [Member] | |||||||||||||
| Conversion of shares | 39,895 | ||||||||||||
| Number of shares issued | 39,895 | ||||||||||||
| Conversion of shares | $ 3,989,500 | ||||||||||||
For the nine months ended September 30, 2023, a summary of our warrant activity is as follows: (Details) |
9 Months Ended |
|---|---|
|
Sep. 30, 2023
USD ($)
$ / shares
shares
| |
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |
| Aggregate intrinsic value, issued | |
| Warrant [Member] | |
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |
| Number of warrants, balance, beginning of year | shares | 246,173,016 |
| Weighted average exercise price, beginning of year | $ / shares | $ 0.021 |
| Weighted average life excercised (in years) | 4 years 1 month 16 days |
| Weighted average grant date fair value, beginning of period | $ 399,783 |
| Aggregate intrinsic value , beginning balance | $ 4,431,114 |
| Weighted average exercise price, issued | $ / shares | $ 0.020 |
| Weighted average life (years), issued | 4 years 1 month 16 days |
| Weighted average grant date fair value, issued | |
| Aggregate intrinsic value, issued | |
| Number of warrants, balance, end of period | shares | 286,173,016 |
| Weighted average exercise price, ending of year | $ / shares | $ 0.021 |
| Weighted average life excercised (in years) | 4 years 1 month 16 days |
| Weighted average grant date fair value, end of period | $ 343,904 |
| Aggregate intrinsic value, ending balance | $ 4,431,114 |
| Warrant [Member] | February Seventeen Twenty Twenty One [Member] | |
| Accumulated Other Comprehensive Income (Loss) [Line Items] | |
| Number of warrants, issued | shares | 40,000,000 |
Shareholders’ Equity (Details Narrative) - USD ($) |
9 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|
Jan. 10, 2024 |
Jul. 17, 2020 |
Sep. 30, 2023 |
Feb. 17, 2022 |
Dec. 31, 2022 |
Apr. 27, 2022 |
|
| Class of Stock [Line Items] | ||||||
| Preferred stock, shares authorized | 50,000,000 | 50,000,000 | ||||
| Preferred stock, shares designated | 48,617,400 | 48,617,400 | ||||
| Common stock, shares outstanding | 1,603,095,243 | 1,603,095,243 | ||||
| Common stock per share | $ 0.02 | |||||
| Common Stock [Member] | ||||||
| Class of Stock [Line Items] | ||||||
| Common stock per share | $ 0.02 | $ 0.018 | ||||
| Unsecured Convertible Notes Payable [Member] | Warrant [Member] | ||||||
| Class of Stock [Line Items] | ||||||
| Proceeds from unsecured notes payable | $ 220,000 | |||||
| Unsecured Convertible Notes Payable [Member] | Common Stock [Member] | ||||||
| Class of Stock [Line Items] | ||||||
| Warrants purchase | 40,000,000 | |||||
| Series B Preferred Stock [Member] | ||||||
| Class of Stock [Line Items] | ||||||
| Preferred stock, shares authorized | 100 | 100 | ||||
| Preferred stock, voting rights | Although the Series B Preferred Stock is entitled to 51% voting rights as described above, the stock has no dividend rate nor conversion feature. | Holders of Series B Preferred Stock have the right to vote on all shareholder matters equal to 51% of the total voting power of each class of stock outstanding. Holders of shares of Series B Preferred are entitled to such 51% voting rights regardless of the number of voting shares issued by the company at any time. | ||||
| Preferred stock, shares outstanding | 100 | 100 | ||||
| Series B Preferred Stock [Member] | Mr. Canouse [Member] | ||||||
| Class of Stock [Line Items] | ||||||
| Conversion of shares | 100 | |||||
| Series B Preferred Stock [Member] | License Agreement [Member] | ||||||
| Class of Stock [Line Items] | ||||||
| Preferred stock, shares authorized | 100 |
Schedule of previous year assets liabilities and expenses (Details) - USD ($) |
3 Months Ended | 9 Months Ended |
|---|---|---|
Mar. 31, 2022 |
Sep. 30, 2023 |
|
| Assets | ||
| Current assets | $ 92,970 | |
| Property, equipment and right-of-use assets | 2,664,994 | |
| Intangible assets | 12,024,012 | |
| Total Assets | 14,781,976 | |
| Liabilities | ||
| Accounts payable and accrued liabilities | 1,025,720 | |
| Lease liability obligations | 1,465,584 | |
| Total Liabilities | 2,492,305 | |
| Revenues | 1,431,762 | 163,620 |
| Selling, general and administrative | (425,524) | (173,359) |
| Television operation | (257,483) | |
| Amortization | (242,481) | |
| Professional fees | (1,072,374) | |
| Interest expense | (80,622) | |
| Gain (loss) on asset disposals | (52,668) | 6,695,083 |
| Impairment loss | ||
| Gain (loss) from discontinued operations | $ (699,389) | $ 6,685,344 |
Income tax recovery differs from that which would be expected from applying the effective tax rates to the net income (loss) as follows: (Details) - USD ($) |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
| Income Tax Disclosure [Abstract] | |||||
| Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ 1,034,496 | $ 1,879,273 | $ 12,882,087 | $ 6,949,431 | $ (13,139,810) |
| Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | $ (1,034,496) | $ (1,879,273) | $ (12,882,087) | $ (6,949,431) | $ 13,139,810 |
| Statutory and effective tax rates | 21.00% | 21.00% | |||
| Income taxes expenses (recovery) at the effective rate | $ (4,109,161) | $ (1,459,380) | |||
| Effect of change in tax rates | |||||
| Permanent differences | |||||
| Valuation allowance | 4,109,161 | 1,459,380 | |||
| Income tax expense and income tax liability | |||||
Schedule of deferred income tax asset (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
|---|---|---|
| Income Tax Disclosure [Abstract] | ||
| Tax loss carried forward | ||
| Deferred tax assets | 6,868,521 | 2,759,360 |
| Valuation allowance | (6,868,521) | (2,759,360) |
| Deferred taxes recognized |
Income Taxes (Details Narrative) $ in Millions |
Sep. 30, 2023
USD ($)
|
|---|---|
| ExpireIn Twenty Thirty Nine [ Member] | |
| Operating Loss Carryforwards [Line Items] | |
| Tax losses | $ 30 |
| Expire in Twenty Forty [Member] | |
| Operating Loss Carryforwards [Line Items] | |
| Tax losses | $ 30 |
Subsequent Events (Details Narrative) - USD ($) |
Nov. 10, 2023 |
Sep. 21, 2023 |
Feb. 18, 2024 |
|---|---|---|---|
| Subsequent Event [Line Items] | |||
| Other subsequent description | On November 10, 2023, Philip Falcone, individually and on behalf of the Company and other named defendants, filed a Confession of Judgment affirming that a promissory note (the “Z4 Note”) had been issued by the Company, dated December 28, 2021, by Z4 MGMT LLC (“Z4”), which was guaranteed by each of FFO1 2021 Irrevocable Trust and FFO2 2021 Irrevocable Trust. The Z4 Note was initially payable on February 15, 2022, and had an original principal balance of $500,000 with an interest rate of 12% per annum. The Z4 Note’s expiration date was extended to July 5, 2022, then further extended to March 31, 2023, and as of October 1, 2023, the revised principal balance, along with interest accrued, totaled $581,304. On such date, Z4 filed an Affidavit of Default affirming that the Z4 Note was in default and requesting a judgment in the amount of $581,304 against the Company, FFO1 2021 Irrevocable Trust, FFO2 2021 Irrevocable Trust, and Mr. Falcone personally, in favor of Z4 | ||
| Subsequent Event [Member] | |||
| Subsequent Event [Line Items] | |||
| Accrued interest and collection fees | $ 190,444 | ||
| Accrued interest, penalties and fees | $ 4,100,000 | ||
| Common Stock [Member] | |||
| Subsequent Event [Line Items] | |||
| Shares converted | 1,152,500,000 |