Viabuilt Ventures Inc. - Quarter Report: 2016 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE) 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ___________

Commission File No. 333-188753

1810 E Sahara Ave Suite 583

Las Vegas, NV 89104

(Address of principal executive offices, zip code)

(866) 239-0577

(Registrant's telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

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

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes ¨ No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS

As of August 12, 2016, there were 28,400,000 shares of common stock, $0.001 par value per share, outstanding.

 MADISON VENTURES INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED JUNE 30, 2016

INDEX

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of Madison Ventures Inc., a Nevada corporation (the "Company"), contains "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: our ability to continue licensing and integrate the technology from Ocure Ltd. Into the Company's business and the Company's need for and ability to obtain additional financing, and other factors over which we have little or no control; and other factors discussed in the Company's filings with the Securities and Exchange Commission ("SEC").

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management's experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

Madison Ventures Inc.

Condensed Consolidated Balance Sheets

The accompanying notes are an integral part of these condensed consolidated financial statements

Condensed Consolidated Statements of Operations (Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements

Madison Ventures Inc.

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)

Note: All share and per share information has been restated for all periods presented giving retroactive effect of the April 11, 2016 approved four to one forward stock split (see note 8).

The accompanying notes are an integral part of these condensed consolidated financial statements

Madison Ventures Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

The accompanying notes are an integral part of these condensed consolidated financial statements

Madison Ventures Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2016

1. Condensed financial statements

The accompanying unaudited condensed consolidated financial statements are presented in United States dollars and are prepared using the accrual method of accounting which conforms to generally accepted accounting principles in the United States of America ("US GAAP") for interim financial reporting and the instructions for Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all information and footnote disclosures necessary for a complete presentation of the financial position, results of operations, cash flows, and stockholders equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature.

The unaudited condensed consolidated balance sheet of the Company as of June 30, 2016, and the related consolidated balance sheet of the Company as of March 31, 2016, which is derived from the Company's audited financial statements, the unaudited condensed consolidated statement of operations and cash flows for the Three Months ended June 30, 2016 and 2015 and the condensed consolidated statement of stockholders equity for the period of March 31, 2015 to June 30, 2016 and are included in this document. These unaudited condensed consolidated financial statements should be read in conjunction with the March 31, 2016 audited financial statements and related notes included in the Company's most recent Form 10-K as filed with the Securities and Exchange Commission on July 18, 2016.

Operating results for the Three Months ended June 30, 2016 are not necessarily indicative of the results that can be expected for the year ending March 31, 2017.

2. Nature of operations

Madison Ventures Inc. ("Company") was incorporated in the State of Nevada as a for-profit company on September 14, 2009 and established a fiscal year end of March 31. The Company initially was engaged in the acquisition, exploration and development of natural resource properties. On February 27, 2015, the Company terminated the acquisition of the mineral claim and entered into a letter of intent with Ocure Ltd. ("Ocure"), pursuant to which the Company agreed to exclusively license certain technology from Ocure related to the development of products and devices for the treatment of anal fissures (the "Ocure LOI"). On July 9, 2015, the Company established the wholly-owned subsidiary Madison-IL Ltd., incorporated under the laws of the country of Israel to address the Company's requirement for an Israeli company to operate and hold the assets associated with Ocure LOI. The Company has no revenues and has limited operating history.

The success of the Company is dependent upon the development of products for the treatment of anal fissures, the ability of the Company to obtain the necessary financing to complete the acquisition, development and commercialize of the Licensed Technology, and upon future profitable operations.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain 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 revenues and expenses during the reporting periods presented. The Company is required to make judgments and estimates about the effect of matters that are inherently uncertain. The Company regularly evaluates estimates and assumptions related to the useful life and recoverability of long-lived assets, deferred income tax asset valuations and loss contingences. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. Although, we believe our judgments and estimates are appropriate, actual future results may be different; if different assumptions or conditions were to prevail, the results could be materially different from our reported results.

Madison Ventures Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2016

2. Nature of operations (continued)

License Agreement

On February 27, 2015, we entered into a letter of intent (the "Letter of Intent") with Ocure Ltd. ("Ocure"), an Israeli corporation, pursuant to which the Company would be obligated to exclusively license certain technology from Ocure under terms of a license agreement to be negotiated between the Company and Ocure. The Letter of Intent terminated when the Company did not make the second required payment, however the Company continued to negotiate with Ocure. On August 5, 2015, as amended February 26, 2016, the company entered into an exclusive license agreement (the "License Agreement") with Ocure and Madison-IL Ltd., a wholly-owned subsidiary of the Company incorporated in Israel on July 9, 2015 (the "Subsidiary"). Pursuant to the License Agreement, Ocure granted to the Subsidiary an exclusive, sub-licensable, worldwide, license (the "License") to Ocure's semi-occlusive wound dressing for ambulatory treatment of acute and chronic anal fissure, pursuant to Ocure's patents and patent applications (the "Licensed Technology") and to its production, use, import, offer for sale, sell, lease, distribute, or otherwise commercialize the Licensed Technology for uses classified as medical devices, or those otherwise approved ultimately as an OTC (over-the-counter) remedy.

Under the License Agreement, the Company is obligated as consideration for the Licensed Technology to provide the Subsidiary $250,000 for the commercialization of the Licensed Technology, payable according to the following schedule: $10,000 upon execution of the Letter of Intent (paid February 27, 2015 to Ocure), $90,000 at the later of May 11, 2015 or the final signing date of the License Agreement (the "Effective Date"), and $50,000 on or before March 4, 2016, and $100,000 on or before April 8, 2016 (collectively, the "First $250,000 Tranche"). The Effective Date will occur upon satisfaction of the Condition Precedent, as defined in the License Agreement, and approval of the Agreement by the Chief Scientist of the Israeli Ministry of the Economy. The License Agreement Effective Date is November 11, 2015; the date approval of the Chief Scientist of the Israeli Ministry of the Economy was received. Upon the 6-month anniversary of the Effective Date, if the Company has paid the First $250,000 Tranche, then Ocure will transfer certain assets, as defined, to the Subsidiary, and the Company will be obligated to provide the Subsidiary a second $250,000 tranche, payable as follows: $100,000 on or before August 12, 2016, $100,000 on or before September 23, 2016, and $50,000 on or before October 28, 2016. The License Agreement terminates, on a country-by-country basis, the later of: (a) the date of expiration of the last to expire of Ocure's rights in Ocure Patents in such country or such other grant of statutory exclusivity, or (b) the end of a period of fifteen (15) years from the date of making the first commercial sale, as defined, in such country; unless sooner terminated pursuant to the terms of the License Agreement. As of June 30, 2016 and March 31, 2016, the Company has advanced $221,850 and $131,850, respectively, to the Subsidiary and paid Ocure $10,000 in furtherance of the commercialization of the Licensed Technology.

Immediately after the Effective Date of the License Agreement and for the period ending March 31, 2016 (as amended), the shareholders of Ocure and certain individuals designated by Ocure will have opportunity to purchase up to an aggregate of 7,100,000 (1,775,000 presplit) shares of the Company's Common Stock at the par value of $0.001 per share. In addition, the Company will establish an incentive stock option plan reserving up to 20% of the Company's issued share capital, as of the closing. The right to purchase an aggregate of 7,100,000 (1,775,000 presplit) shares of the Company's Common Stock expired unexercised, but by mutual agreement the purchase right will be extended under similar terms.

In consideration of the license for the Licensed Technology and with respect to any inventions, improvement, development or enhancement based upon, consists of, comprises, contains or incorporates the Licensed Technology invented following the Effective Date by the Subsidiary, its affiliate or sublicensee (the "New Inventions"), the Subsidiary will pay to Ocure royalties calculated as 5% of gross sales. In addition, the Subsidiary will pay to Ocure 20% of any cash or non-cash consideration received, whether for sublicense initiation fee, annual fee, sublicense milestone payments, or other such non-sale based royalty consideration payable by a sublicense as consideration for or under a sublicense.

Madison Ventures Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2016

2. Nature of operations (continued)

Mineral Properties

Mineral property acquisition costs are capitalized in accordance with Codification topic 930 "Extractive Activities - Mining". Mineral property pre-exploration and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property are capitalized. The Company did not establish any reserves on its mineral properties prior to terminating its option under the Revised and Restated Mineral Property Option Agreement (see footnote 3).

Rehabilitation Provisions

The Company was subject to various government laws and regulations relating to environmental disturbances which are caused by exploration and evaluation activities. The Company will record the present value for the estimated costs of legal and constructive obligations required to restore the exploration sites in the period in which the obligation is incurred. The nature of the rehabilitation activities includes restoration, reclamation and re-vegetation of the affected exploration sites. The Company has determined that there were no rehabilitation provisions at February 27, 2015 when the option to acquire the mineral claim was terminated.

Share-based Compensation

Codification topic 718 "Stock Compensation" requires that the cost resulting from all share-based transactions be recorded in the financial statements and establishes fair value as the measurement objective for share-based payment transactions with employees and acquired goods or services from non-employees. The codification also provides guidance on valuing and expensing these awards, as well as disclosure requirements of these equity arrangements. The Company adopted the codification upon creation of the company and will expense share based costs in the period incurred. The Company has not adopted a stock option plan or completed a share-based transaction; accordingly no stock-based compensation has been recorded to date.

Recent Accounting Pronouncements

The Company's management has evaluated all the recently issued, but not yet effective, accounting standards that have been issued or proposed by the FASB or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company's financial position and results of operations.

3. Mineral claim

On March 3, 2012, the Company entered into a Revised and Restated Mineral Property Option Agreement with 3 individuals (the "Optionors") for an exclusive and irrevocable three year option to acquire a 100% undivided interest in three contiguous unpatented mining claims comprising 34 units (the "Claim" or the "Property") situated in the Thunder Bay Mining Division in the province on Ontario, Canada (the "Agreement"). The option payments aggregating $30,000 (U.S. Dollars) (the "Option Price") were due: i) $15,000 upon signing but deferred for eight months, ii) $5,000 on or before March 3, 2013, iii) $5,000 on or before March 3, 2014, and iv) $5,000 on or before March 3, 2015 (the "Option Payments"). During the term of the Agreement the Company is granted free and unrestricted access and use of the Property to act as the operator of the Property with the right to bring buildings, plant, equipment, machinery, tools, appliances and supplies onto the Property. The Optionors hold title to the Property until the full payment of the Option Price. Upon full payment of the Option Price the Optionors would deliver a duly executed transfer of mining claims in respect of the Property to transfer a 100% undivided interest in the Property to the Company free and clear of all encumbrances except for a retained net smelter return royalty (the "NSR"). The NSR is a 2% royalty paid within 30 days of each calendar month calculated, as defined, from gross Property revenues less permissible deductions. The Company had the right, at any time, to reduce the NSR to a 1% royalty by a One Million Dollar payment to the Optionors.

Madison Ventures Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2016

3. Mineral claim(continued)

Upon the February 27, 2015 termination of the Agreement had the Company brought any buildings, plant, equipment, machinery, tools, appliances and supplies onto the Property it would have been responsible to remove all such items not later than twelve months after termination of the Agreement unless arrangements are made with the Optionors to retain some or all of the items brought onto the Property.

The Company deferred the first option payment for an eight month term and made the $15,000 payment on October 27, 2012. Upon execution of the Agreement, the Company recorded the first option payment net of imputed interest as $14,984 and accrued the imputed interest ratably over the deferral period. Annually the Company had the option to retain the mineral claim and make the next contractual Option Payment or to terminate the Agreement. The Company made the March 3, 2013 Option Payment on March 1, 2013 and the March 3, 2014 Option Payment on February 25, 2014. On February 27, 2015, the Company concluded to terminate the Agreement and not make the final Option Payment. The aggregate total of $24,984 previously included in the mineral claim was expensed as a discontinued operation.

Previously in response to the new GPS standards for unpatented claims issued by the Ontario Ministry of Northern Development and Mines, the Company expended $1,975 to provide upgraded geo-referenced location information on its Claim during the quarter ended September 30, 2013. An aggregate total of zero and $1,975 have been expensed for exploration and evaluation of the Company's Claim as of March 31, 2015 and 2014, respectively.

4. Investment in technology license

On August 5, 2015, as amended February 26, 2016, the company entered into an exclusive license agreement (the "License Agreement") with Ocure and Madison-IL Ltd., a wholly-owned subsidiary of the Company incorporated in Israel on July 9, 2015 (the "Subsidiary"). Pursuant to the License Agreement, Ocure granted to the Subsidiary an exclusive, sub-licensable, worldwide, license (the "License") to Ocure's semi-occlusive wound dressing for ambulatory treatment of acute and chronic anal fissure, pursuant to Ocure's patents and patent applications (the "Licensed Technology") and to its production, use, import, offer for sale, sell, lease, distribute, or otherwise commercialize the Licensed Technology for uses classified as medical devices, or those otherwise approved ultimately as an OTC (over-the-counter) remedy.

Under the License Agreement, the Company is obligated as consideration for the Licensed Technology to provide the Subsidiary $250,000 for the commercialization of the Licensed Technology, payable according to the following schedule: $10,000 upon execution of the Letter of Intent, $90,000 at the later of May 11, 2015 or the final signing date of the License Agreement (the "Effective Date"), and $50,000 on or before March 4, 2016, and $100,000 on or before April 8, 2016 (collectively, the "First $250,000 Tranche"). The License Agreement Effective Date is November 11, 2015; the date approval of the Chief Scientist of the Israeli Ministry of the Economy was received. Upon the 6-month anniversary of the Effective Date, if the Company has paid the First $250,000 Tranche, then Ocure will transfer certain assets, as defined, to the Subsidiary, and the Company will be obligated to provide the Subsidiary a second $250,000 tranche, payable as follows: $100,000 on or before August 12, 2016, $100,000 on or before September 23, 2016, and $50,000 on or before October 28, 2016. The License Agreement terminates, on a country-by-country basis, the later of: (a) the date of expiration of the last to expire of Ocure's rights in Ocure Patents in such country or such other grant of statutory exclusivity, or (b) the end of a period of fifteen (15) years from the date of making the first commercial sale, as defined, in such country; unless sooner terminated pursuant to the terms of the License Agreement. As of June 30, 2016 and March 31, 2016, the Company has advanced $221,850 and $131,850, respectively, to the Subsidiary and paid Ocure $10,000 in furtherance of the commercialization of the Licensed Technology.

As of June 30, 2016 and March 31, 2016, the Company has expended and aggregate of $169,606 and $70,998 recorded as the investment in technology license, respectively.

The Company was in default of its payment schedule by June 30, 2016 and no assets had been transferred to the Company's subsidiary. As of the date of filing of this 10-Q, the Company is also in default of its $100,000 payment that was due August 12, 2016. There is no extension agreement or amendment negotiated, and there is a risk that the License will be cancelled.

Madison Ventures Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2016

5. Due to related party

Due to related parties at June 30, 2016 and March 31, 2016 consisted of the following:

On July 3, July 8, July 10, August 12, November 12, November 13, 2014, January 23, February 27, March 5, May 16, June 17, June 30, July 6, August 13, November 17, 2015, February 13, February 20, March 7, and March 17,2016 a shareholder of the Company advanced the Company $2,000, $775, $1,460, $2,000, $2,000, $1,763, $2,000, $10,000, $3,525, $4,093, $2,755, $1,083, $5,000, $3,000, $2,041, $961, $5,000, $3,300, and $50,000, respectively, as a series of unsecured obligations. The funds aggregating $102,756 were used to pay operating costs of the Company. The aggregate obligations bears no interest, has no fixed term and is not evidenced by any written agreement. The shareholder is under no obligation to advance additional funds to the Company.

On December 3, December 24, 2015, January 4, January 6, and January 15, 2016 a shareholder of the Company advanced the Company $37,473, $7,500, $7,326, $8,412, and $49,975, respectively, as a series of unsecured obligations. The funds aggregating $110,686 were used to pay operating costs of the Company. On January 8, 2016, the aggregate advances received and future advances were structured as a noninterest bearing unsecured non-recourse loan due January 31, 2017. The shareholders, if requested by the Company, agreed to advance additional funds to the Company up to a maximum of $250,000 subject to certain timing limitation as defined.

6. Long-term debt

Long term debt at June 30, 2016 and March 31, 2016 consisted of the following:

On April 18, 2016, the Company entered into a five year non-interest bearing loan agreement for $110,000. Proceeds were used to fund the Technology acquisition and operations. If the loan is not repaid on or before April 15, 2021 the loan amount will be subject to default interest on the amount then outstanding of ten percent (10%) per month during the first 30 days of delinquency, fifteen percent (15%) per month during the 31 to 60 days of delinquency, twenty percent (20%) per month during the 61 to 90 days of delinquency (the "Default Interest"). If the loan amount remains unpaid after 90 days the lender, at its option, will be entitled to a default payment of one hundred fifty-nine percent (159%) of the then outstanding loan amount inclusive of the Default Interest.

Madison Ventures Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

As of June 30, 2016

7. Related party transactions

Employment Agreements

On April 2, 2014, Mr. Gene Gregorio was appointed the Company's President, Chief Executive Officer, Chief Financial Officer and sole Director. On April 20, 2014, the Company agreed to issue Mr. Gregorio 1,000,000 (250,000 presplit) restricted shares of the Company's Common Stock, valued at $25,000, based on the market close, as compensation for his services for an initial term of one year (the "April 20^th Agreement"). On March 31, 2015, the Company issued Mr. Gregorio the agreed 250,000 restricted shares of the Company's Common Stock. At March 31, 2015, $1,387 was recorded as a prepaid expense for the period April 1 to April 20, 2015.

In addition, if during the term of the April 20^th Agreement Mr. Gregorio's direct efforts result in a consummated financing for the Company he shall be paid a 5.0% fee on such financing received by the Company, at his option, as either cash or shares of Company's Common Stock at the offering price. Additionally, the Company will grant Mr. Gregorio a 2 year stock option priced at the current market trading price equal to 5% of the aggregate shares issued to investors within the financing.

On April 14, 2015, the April 20^th Agreement with Mr. Gene Gregorio was extended for a second year under the same terms and conditions. Mr. Gregorio will be issued 1,000,000 (250,000 presplit) restricted shares of the Company's Common Stock, valued at $25,000, based on the market close, as compensation for his services for the second year the extended April 20^th Agreement. At June 30, 2016, $25,000 was recorded as an accrued liability for the period April 21, 2015 to April 20, 2016.

On August 9, 2016, the Company issued Mr. Gregorio the agreed 1,000,000 (presplit 250,000) restricted shares of the Company's Common Stock.

8. Going concern

These financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company anticipates future losses in the development of its business raising substantial doubt about the Company's ability to continue as a going concern. The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. The Company's operating expenditure plan for the next fiscal year ending March 31, 2017 will require cash of approximately $500,000. Management intends to finance operating costs over the next twelve months with the issuance of common shares and/or related party borrowings.

9. Capital stock

The Company's capitalization is 300,000,000 shares of common stock, with a par value of $0.001 per share, with 28,400,000 shares issued and outstanding at March 31, 2016 and 2015. On April 11, 2016, the Company effected a four for one forward stock split of our i) authorized and ii) issued and outstanding shares of common stock. All share information has been restated for all periods presented giving retroactive effect of the April 11, 2016 four to one forward stock split. Prior to the forward stock split the Company had 75,000,000 authorized shares of common stock, with a par value of $0.001 per share and 7,100 shares issued and outstanding at March 31, 2016 and 2015.

As of June 30, 2016 and March 31, 2016, the Company has not granted any stock options or stock warrants. As a requirement of the Ocure License Agreement, the Company will establish an incentive stock option plan reserving up to 20% of the Company's issued and outstanding common stock, as of the closing of the License Agreement.

Madison Ventures Inc.

Notes to Condensed Consolidated Financial Statements

As of June 30, 2016

10. Contingency Liability

The Licensed Technology requires an aggregate first tranche payment to the Subsidiary of $250,000 by April 8, 2016; an aggregate of $231,850 has been advanced to the Subsidiary as of June 30, 2016. Upon the 6-month anniversary of the Effective Date, if the Company has paid the First $250,000 Tranche, then Ocure will transfer certain assets, as defined, to the Subsidiary, and the Company will be obligated to provide the Subsidiary a second $250,000 tranche, payable as follows: $100,000 on or before August 12, 2016, $100,000 on or before September 23, 2016, and $50,000 on or before October 28, 2016.

11. Subsequent events

On August 9, 2016, pursuant to the terms of the April 20^th Agreement the Company issued 1,000,000 (250,000 presplit) shares of the Company's Common Stock at Mr. Gene Gregorio the Company's President, Chief Executive Officer, Chief Financial Officer and sole Director.

On August 12, 2016, the Company failed to pay an amount due under the August 5, 2015 Licensing Agreement. The Company has not negotiated the terms of any extension and there is a substantial risk the agreement will be cancelled.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following information should be read in conjunction with (i) the financial statements of Madison Ventures Inc., a Nevada corporation (the "Company"), an development stage company, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the March 31, 2016 audited financial statements and related notes included in the Company's Form 10-K (File No. 333-188753; the "Form 10-K"), as filed with the Securities and Exchange Commission on July 18, 2016. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute "forward-looking" statements

OVERVIEW

The Company was incorporated in the State of Nevada on September 14, 2009 and established a fiscal year end of March 31. It is a development-stage company.

During early 2015, we decided to abandon our mineral exploration properties and on February 27, 2015, we entered into a letter of intent with Ocure, pursuant to which we agreed to exclusively license certain technology from Ocure related to the development of products and devices for the treatment of anal fissures under terms of a license agreement to be negotiated between us and Ocure.

On August 5, 2015, as amended February 25, 2016, our company and Madison-IL Ltd. entered into an exclusive license agreement with Ocure to license Ocure's semi-occlusive wound dressing for ambulatory treatment of acute and chronic anal fissure, pursuant to Ocure's patents and patent applications and to its production, use, import, offer for sale, sell, lease, distribute, or otherwise commercialize the Licensed Technology for uses classified as medical devices, or those otherwise approved ultimately as an OTC (over-the-counter) remedy.

With this licensing we are focusing our efforts on the development of products for the treatment of anal fissures. We abandoned our efforts in the mineral exploration industry.

Based on the licensed technology, we intend to develop and produce propriety devices that present a novel approach for treating anal fissures that is safe and simple to use by patients with minimal discomfort. However, we are in default of our obligations under the August 5, 2015 Licensing Agreement and cannot be sure that it will be brought into good standing. We don't currently have the resources to pay the outstanding amounts we owe under the agreement, and there is a substantial risk the license we negotiated will be cancelled.

Going Concern

To date the Company has little operations or revenues and consequently has incurred recurring losses from operations. No revenues are anticipated until we complete the financing we endeavor to obtain, as described in the Form 10-K, and implement our initial business plan. The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company's ability to continue as a going concern.

The Company plans to raise additional funds through debt or equity offerings. There is no guarantee that the Company will be able to raise any capital through this or any other offerings.

PLAN OF OPERATION

Our intended plan of operation for the twelve months following the date of this filing is to continue to attempt to meet the conditions of the Exclusive License Agreement in order to continue licensing and integrate technology from Ocure related to the development of products and devices for the treatment of anal fissures into our business.

RESULTS OF OPERATIONS

Three-Months Ended June 30, 2016 and 2015

We recorded no revenues for the three months ended June 30, 2016 and 2015.

For the three months ended June 30, 2016, total operating costs were $20,069, consisting of consulting and professional fees of $14,885, stock-based compensation of $1,387 and general and administrative expenses of $3,797. By comparison, for the three months ended June 30, 2015, total operating costs were $21,827, consisting of $15,577 of consulting and professional fees and $6,250 of stock-based compensation. There were net losses of $23,401 and $21,827, respectively, during these periods. The decrease in net loss is due primarily to a $4,863 decrease in stock based compensation offset by a $3,797 increase in other general and administrative expenses and Foreign exchange loss $3,332.

Liquidity and Capital Resources

At June 30, 2016, we had a cash balance of $92,541, total current liabilities of approximately $292,233 and working capital deficit of $195,076 and a stockholders' deficit of approximately $135,470. We do not have sufficient cash on hand to fund our ongoing operational expenses. We will need to raise funds to commence fund our ongoing operational expenses. Additional funding will likely come from equity financing from the sale of our common. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our operations and our business will fail.

Subsequent Events

On August 9, 2016, pursuant to the terms of the April 20^th Agreement the Company issued 1,000,000 (250,000 presplit) shares of the Company's Common Stock at Mr. Gene Gregorio the Company's President, Chief Executive Officer, Chief Financial Officer and sole Director.

On August 12, 2016, we failed to pay an amount due under the August 5, 2015 Licensing Agreement. We have not negotiated the terms of any extension and there is a substantial risk the agreement will be cancelled.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

ITEM 4. CONTROLS AND PROCEDURES.

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, our principal executive officer and principal financial officer are responsible for conducting an evaluation of the effectiveness of the design and operation 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 of the end of the fiscal quarter covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of June 30, 2016.

There were no changes in the Company's internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company's business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

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.

None.

ITEM 6. EXHIBITS.

(a) Exhibits required by Item 601 of Regulation SK.

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 

EXHIBIT INDEX

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* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.