| Note 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 and on August 5, 2015, entered
into an exclusive license agreement to Ocures semi-occlusive wound dressing for ambulatory treatment of acute and chronic
anal fissure (the Ocure License). 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 Companys requirement for an Israeli company to
operate and hold the assets associated with Ocure License. However, the Company has not made all payments required under the Ocure
License and is in breach of that agreement, although Ocure has not provided formal notice of termination. The Israeli management
team has not achieved the projected development milestones and the Company has elected to terminate the Ocure License. The Company
has no revenues and has limited operating history. The
success of the Company is dependent upon the identification of products or services, the ability of the Company to obtain the
necessary financing to develop such products or services, 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.
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 Ocures semi-occlusive wound dressing for ambulatory treatment of acute and chronic anal fissure, pursuant to Ocures
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 Ocures 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 December 31, 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 such, the Company is in breach of its obligations under the License Agreement, but has not yet
received notice of termination from Ocure. The Israeli management team has not achieved the projected development milestones and
the Company has elected to terminate the Ocure License. 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 Companys 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 Companys issued share capital, as of the closing. The right to purchase an
aggregate of 7,100,000 (1,775,000 presplit) shares of the Companys 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. As the Company is in breach of the License Agreement, it is highly
doubtful that the terms of the License Agreement will be carried out. The Israeli management team has not achieved the projected
development milestones and the Company has elected to terminate the Ocure License. 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
Companys 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 Companys financial position and results
of operations. |
