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| Number of Warrants | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Weighted- Grant- Value | |||||||||||||
| Outstanding and exercisable at January 1, 2025 | $ | 0.021 | $ | |||||||||||||
| Expired | ( | ) | — | — | — | |||||||||||
| Outstanding and exercisable at March 31, 2025 | $ | $ | ||||||||||||||
In determining the fair value of these equity-classified features, the Company considered the fact that its common stock is quoted on the OTC Expert Market, where trading volume is minimal and pricing is not reliably observable. Due to the absence of active market inputs, the Company determined that a quoted market price could not be used to value the conversion features.
Instead, the Company referred to the most recent observable transaction price from a private placement conducted in 2021, in which it issued shares of Series G Preferred Stock for total proceeds of $. On November 2, 2021, these preferred shares were converted into shares of common stock, implying an effective per-share price of $. The Company used this price as the best available input to support the fair value assessment.
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as of February 17, 2024, representing funds received on January 30, 2023, net of repayments, together with accrued interest and collection fees.
Management has reviewed this matter and concluded that Madison has no obligation arising from this Confession of Judgment. The funds in question were received by Sovryn, which was a subsidiary of Madison at the time and was sold to Arena Group Holdings Inc. in February 2023, including all of Sovryn’s assets and liabilities. Accordingly, management believes that the Confession of Judgment relates to obligations of Sovryn prior to its sale.
Madison has not received any demand or claim for payment in connection with this matter. Based on the information available, management believes it is unlikely that this matter will result in any obligation for Madison. No amount has been recognized in the financial statements, as any potential liability, if any, cannot be reasonably determined at this time.
Our principal executive office, at which minimal operations are conducted and which we do not own or lease, is located at 2500 Westchester Avenue, Suite 401, Purchase, New York.
We do not have an employment agreement with our Chief Executive Officer.
in additional funding from its principal shareholder, Arena. These funds were provided to support the Company’s ongoing operations and working capital requirements.
Management believes that this continued financial support from Arena demonstrates the shareholder’s commitment and provides the Company with sufficient liquidity to continue operations for the foreseeable future.
Other than the above, management has determined that there are no other subsequent events.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation. Shareholders’ Equity General.
THE FOLLOWING PRESENTATION OF OUR PLAN OF OPERATION OF SHOULD BE READ IN CONJUNCTION WITH THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS AND OTHER FINANCIAL INFORMATION INCLUDED HEREIN.
RESULTS OF OPERATIONS
Our consolidated financial statements included herein have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the sale of stock or debt securities and further implement our business plan.
Three Months Ended March 31, 2025 and 2024
General and administrative expenses
General and administrative expenses increased to $60,976 for the three months ended March 31, 2025, from $15,472 for the three months ended March 31, 2024. The increase was primarily because of the expenses necessary to process our SEC filings.
Professional Fees
Professional fees decreased to $56,904 for the three months ended March 31, 2025, from $124,703 for the three months ended March 31, 2024. The decrease was primarily because of the expenses incurred in the quarter ended March 31, 2024 for the transfer of Sovryn to the Investors that resulted in a $9,159,907 reduction in principal on the senior secured notes on February 1, 2023.
Amortization expense and interest expense
Total amortization expense and interest expense decreased to $Nil for the three months ended March 31, 2025, from $130,226 for the three months ended March 31, 2024. Amortization expense is derived from discounts recognized when we issued debt and then amortized the discount over the terms of the debt. Most of our debt matured in 2023 and the discounts were fully amortized in 2023. In 2024, we amortized all the remaining debt discounts.
Net Loss
Net loss decreased to $709,477 for the three months ended March 31, 2025, from $830,912 for the three months ended March 31, 2024. The decrease was primarily the result of decreases in amortized interest expense and professional fees that was partially offset by an increase in general and administrative expenses. The net loss per basic and diluted share was $0.0004 and $0.0005, respectively, with basic and diluted weighted averages shares outstanding of 1,603,095,243 for the respective periods.
Liquidity and Capital Resources
Cash and Working Capital
As at March 31, 2025, we had $Nil in cash and a $21,095,772 working capital deficit, compared to cash of $Nil and working capital deficit of $20,386,294 as at December 31, 2023. The increase in the working capital deficit primarily resulted from the accrual of interest on our debt.
We will require additional capital to meet our long- and short-term operating requirements. For the three months ended March 31, 2025, our principal source of liquidity was our cash that we obtained from funds provided by the Investors. Our principal use of cash was to fund operations. We expect that the principal uses of cash in the future will be for continuing operations associated with rolling out our business plan and repayment of notes payable that are not converted into our Common Stock or renegotiated.
Net Cash Used in Continuing Operating Activities
We used $90,693 in cash from continuing operating activities for the three months ended March 31, 2025, compared to cash used of $140,496 from continuing operating activities during the three months ended March 31, 2024.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $90,693 during the three months ended March 31, 2025, compared to $140,496 of cash provided by financing activities during the three months ended March 31, 2024.
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No cash was used in investing activities during the three months ended March 31, 2025 and 2024.
Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations and has a significant accumulated deficit. In addition, the Company continues to experience negative cash flow from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management’s plans in regards to this matter include raising additional equity financing and borrowing funds under a private credit facility and/or other credit sources.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
In connection with the preparation of this annual report on Form 10-K, an evaluation was carried out by the sole member of our Board of Directors and our Chief Executive Officer of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of December 31, 2022. 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. |
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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.
Management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024, 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, 2024.
As a result of the material weakness in internal control over financial reporting described above, management has concluded that, as of March 31, 2025, 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.
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 quarterly report.
Changes in Internal Controls
There were no changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the year ended December 31, 2024, 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.
None.
Item 1A. Risk Factors.
Not required under Regulation S-K for smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
.
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Item 6. Exhibits.
The following exhibits are attached hereto:
| Exhibit No. | Description of Exhibit | |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-15(e) and 15d-15(e), promulgated under the Securities and Exchange Act of 1934, as amended, filed herewith. | |
| 32.1 | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith | |
| 101 | Interactive data files pursuant to Rule 405 of Regulation S-T |
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Madison Technologies, Inc. | |||
| By: | /s/ Thomas Amon | ||
| Thomas Amon | |||
| Chief Executive Officer and Chief Financial Officer | |||
| (Principal Executive Officer and Principal Financial Officer) | |||
| December 23, 2025 | |||
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