UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549











FORM 10-Q













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





For the quarterly period ended September 30, 2010





Or





r TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the transition period from ___________ to ___________





Commission File Number: 333-142666





MADISON ENTERPRISES GROUP, INC.


(Exact Name of Small Business Issuer as specified in its charter)





Delaware

20-8380322(State or other jurisdiction of incorporation or organization)

(I.R.S. employer identification no.)





488 Madison Avenue


Suite 1100


New York, NY 10022


(Address of principal executive offices) (Zip Code)





(212) 486-2500


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 Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports):   Yes x       No o





(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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes oNo o





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.





Large Accelerated Filer   o            Accelerated Filer                      o


Non-Accelerated Filer     o            Smaller Reporting Company   x





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





3,210,000 shares of the registrant's Common Stock, $0.001 per share, were outstanding as of November 12, 2010.














Tableof Contents





PART I FINANCIAL INFORMATION
PageItem 1.
Financial Statements
3Balance Sheets as of September 30, 2010 (Unaudited)  and December 31, 2009
3Statements of Operations for the Three and Nine Months Ended September 30, 2010 and 2009 (Unaudited)
4Statements of Changes in Stockholders’ Equity as of September 30, 2010 (Unaudited)
5Statements of Cash Flows for the Three and Nine Months Ended September 30, 2010 and 2009 (Unaudited)
6Notes to Financial Statements
7Item 2.
Management's Discussion and Analysis of Financial Condition or Plan of Operation
13Item 3.
Qualitative and Quantitative Disclosures About Market Risk
16Item 4T.
Controls and Procedures
16PART II OTHER INFORMATIONItem 1.
Legal Proceedings
17Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
17Item 3.
Defaults upon Senior Securities
17Item 4.
Submission of Matters to a Vote of Security Holders
17Item 5.
Other Information
17Item 6.
Exhibits and Reports on Form 8-K
18Signatures
19

















ITEM1. FINANCIAL STATEMENTS


MADISONENTERPRISES GROUP, INC.


(A Development Stage Company)


BALANCE SHEETS


September 30,


December 31,2010


2009(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
-


$
-Total Current Assets


-



-Cash in escrow


3,319



7,907Total Assets

$
3,319


$
7,907LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIES:

$
2,500


$
1,805STOCKHOLDERS' EQUITY:Preferred Stock $0.01 par value; authorized 5,000,000 shares; none issued


-



-Common stock  $0.001 par value; authorized 50,000,000 shares; 3,210,000 shares issued and outstanding for both periods


3,210



3,210Additional paid-in capital


17,790



17,790Deficit accumulated during the development stage


(20,181
)


(14,898
)Total Stockholders' Equity


819



6,102Total Liabilities and Stockholders' Equity

$
3,319


$
7,907


See notes to financial statements.





3




MADISONENTERPRISES GROUP, INC.


(A Development Stage Company)


Statements of Operations


(Unaudited)


Three Months Ended

September 30,


Nine Months Ended

September 30,


Period from August 17, 2006 (inception) to2010


2009


2010


2009


September 30, 2010Revenue

$
-


$
-


$
-


$
-


$
-Costs and expensesOrganization and related expenses


3,262



2,326



5,283



5,732



32,181Operating loss


(3,262
)


(2,326
)


(5,283
)


(5,732
)


(32,181
)Other income (expense)Miscellaneous income –related parties


-



12,000



-



12,000



12,000Income (loss) before income tax expense


(3,262
)


9,674



(5,283
)


6,268



(20,181
)Income tax expenseNet income (loss)

$
(3,262
)

$
9,674


$
(5,283
)

$
6,268



(20,181
)Basic and diluted earnings (loss) per share

$
(.0010
)

$
.0030


$
(.0016
)

$
.0020Weighted average number of common shares outstanding basic and diluted


3,210,000



3,210,000



3,210,000



3,210,000


See notes to financial statements.





4




MADISONENTERPRISES GROUP, INC.


(A Development Stage Company)


Statement of changes in Stockholders’ Equity


Common StockNumbers of Shares


Amount


Additional paid-in capital


Deficit Accumulated During the Development Stage


Total Stockholders’ EquityAugust 17, 2006 (inception) Shares issued to founders


3,000,000


$
3,000


$
(3,000
)

$
-


$
-November Shares issued for cash


120,000



120



11,880



-



12,000Net loss


-



-



-



(1,710
)


(1,710
)Balance, December 31, 2006


3,120,000



3,120



8,880



(1,710
)


10,290January 2007 Shares issued for cash


90,000



90



8,910







9,000Net loss


-



-



-



(7,055
)


(7,055
)Balance, December 31, 2007


3,210,000



3,210



17,790



(8,765
)


12,235
 
 Net loss


-



-



-



(10,243
)


(10,243
)Balance, December 31, 2008


3,210,000



3,210



17,790



(19,008
)


1,992
 
 Net income


-



-



-



4,110



4,110Balance, December 31, 2009


3,210,000



3,210



17,790



(14,898
)


6,102
 
 Net loss


-



-



-



(5,283
)


(5,283
)Balance, September 30, 2010 (unaudited)


3,210,000


$
3,210


$
17,790


$
(20,181
)

$
819


See notes to financial statements.





5




MADISONENTERPRISES GROUP, INC.


(A Development Stage Company)


Statements of Cash Flows


(Unaudited)


Nine Months Ended

September 30,


Period from

August 17, 2006(inception) to2010


2009


September 30, 2010CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)

$
(5,283
)

$
6,268


$
(20,181
)Changes in operating assets and liabilitiesAccounts payable


695



1,250



2,500Net Cash  (used in) provided by Operating Activities


(4,588
)


7,518



(17,681
)CASH FLOWS FROM FINANCING ACTIVITIES:Sale of common stock










21,000Cash in escrow


4,588



(7,518
)


(3,319
)Net cash provided by (used in) Financing Activities


4,588



(7,518
)


17,681(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS


-



-



-CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD


-



-



-CASH AND CASH EQUIVALENTS AT END OF PERIOD

$
-


$
-


$
-Supplemental disclosure of cash flows information:Interest paid

$
-


$
-


$
-Income taxes paid

$
-


$
-


$
-


See notes to financial statements.





6




MADISONENTERPRISES GROUP, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009


(Unaudited)





NOTE 1 -- ORGANIZATION





Madison Enterprises Group, Inc. (the "Company") was incorporated under the laws of the State of Delaware on August 17, 2006 and has been inactive since inception.  The Company intends to serve as a vehicle to effect an asset acquisition, merger, exchange of capital stock or other business combination with a domestic or foreign business.





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 has incurred losses since inception resulting in an accumulated deficit of $20,181 as of September 30, 2010 and further losses are anticipated 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.  Management intends to finance operating costs over the next twelve months with existing cash on hand and loans from directors and or private placement of common stock. These financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.





NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Basis of Presentation - Development Stage Company





The Company has not earned any revenue from operations.  Accordingly, the Company's activities have been accounted for as those of a "Development Stage Enterprise" as set forth under the provisions of Accounting Standards Codification 825 (ASC 825).  Among the disclosures required by ASC 825 are that the Company's financial statements be identified as those of a development stage company, and that the statements of operations, stockholders' equity and cash flows disclose activity since the date of the Company's inception.





A.  Accounting Method





The Company's financial statements are prepared using the accrual method of accounting.  The Company has elected a fiscal year ending on December 31.





7





MADISON ENTERPRISES GROUP, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009


(Unaudited)


B.  Income Taxes





The Company accounts for income taxes under the Financial Accounting Standards Board (FASB) Statement No. 109, "Accounting for Income Taxes" "Statement 109") (ASC 740-10-25).  Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.  Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.  There were no current or deferred income tax expenses or benefits due to the Company not having any material operations since inception.





C.  Cash Equivalents





The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.





D.  Use of Estimates





The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenues and expenses during the reporting period.  Actual results could differ from those estimates.





The net asset value per share of our outstanding shares of common stock will be determined quarterly, as soon as practicable after, and as of the end of, each calendar quarter, by dividing the value of total assets minus total liabilities by the number of shares outstanding at the date as of which such determination is made.





In calculating the value of our total assets, we will value securities that are publicly traded at the closing price on the valuation date for exchange traded and NASDAQ listed securities or the average of the bid and asked prices for other securities.  Debt and equity securities that are not publicly traded will be valued at fair value as determined in good faith by the valuation committee of our board of directors based on the recommendation by our investment adviser and under valuation guidelines adopted by our board of directors, and then approved by our entire board of directors.  Initially, the fair value of these securities will be their original cost. Debt securities valued at cost would be revalued for significant events affecting the issuer's performance and equity securities valued at cost would be revalued if significant developments or other factors affecting the investment provide a basis for valuing the security at a price other than cost, such as results of subsequent financing, the availability of market quotations, the portfolio company's operations and changes in market conditions.





Debt securities with remaining maturities of 60 days or less at the time of purchase will be valued at amortized cost.  Debt securities which are publicly traded will be valued by using market quotations obtained from pricing services or dealers.  Our valuation guidelines are subject to periodic review by our board of directors and may be revised in light of our experience, regulatory developments or otherwise.





8





MADISON ENTERPRISES GROUP, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009


(Unaudited)





Determination of fair values involves subjective judgment and estimates not susceptible to substantiation by auditing procedures.  Accordingly, under current auditing standards, the notes to our financial statements will refer to the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our financial statements.





E.  Basic Loss Per Common Share





Basic loss per common share has been calculated based on the weighted average number of shares outstanding during the period.  (There are no dilutive securities at September 30, 2010 for purposes of computing fully diluted earnings per share.)





F.  Impact of New Accounting Standards





Because the Company has been recently organized and has not yet transacted any business, the new accounting standards have no significant impact on the current financial statements and related disclosures.





As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.





G.   Interim Financial Reporting





The Company's accounting period is the year ended December 31.  The Company's management has determined that the accounting policies used to account for the interim periods ending September 30, 2010 and 2009 are in accordance with generally accepted accounting principles, applied on a consistent basis, and that no adjustments are necessary for a fair statement of the results for the interim period presented.





New Accounting Pronouncements





The Company has adopted all recently issued accounting pronouncements.  The adoption of the accounting pronouncements, including those not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.





9





MADISON ENTERPRISES GROUP, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009


(Unaudited)








NOTE 3 – STOCKHOLDERS’ EQUITY





From August 2006 until the present, the Board of Directors issued 3,210,000 shares of common stock consisting 3,000,000 shares to our founders issued as of August, 2006 and 120,000 shares of common stock for $12,000 in cash to 12 investors of the Company in 2006 and 90,000 shares of common stock for $9,000 in cash to 9 investors of the Company in 2007 to fund initial and operating costs.





Preferred Stock





The Company has authorized, but not issued, 5,000,000 shares of preferred stock at $.001 per share.  The board of directors has the authority to establish and fix the designation, powers, or preferences of preferred shares without further vote by the stockholders.





As of September 30, 2010, the Company has no shares of preferred stock issued and outstanding.





Common Stock





The Company has authorized 50,000,000 shares of common stock with a par value of $0.001 per share.  As of September 30, 2010, the Company has 3,210,000 shares of common stock issued and outstanding.





During the nine months ended September 30, 2010, the Company did not issue any shares of common stock.





The holders of the Company's common stock:





- Have equal ratable rights to dividends from funds legally available for payment of dividends when, as and if declared by the board of directors;





- Are entitled to share ratably in all of the assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of our affairs;





- Do not have preemptive, subscription or conversion rights, or redemption or access to any sinking fund; and





- Are entitled to one noncumulative vote per share on all matters submitted to stockholders for a vote at any meeting of stockholders.





10





MADISON ENTERPRISES GROUP, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009


(Unaudited)





Options





There are no stock options outstanding.





Warrants





There are no warrants outstanding.





NOTE 4: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES





Accounts payable and accrued liabilities consisted of the following:





September 30, 2010


December 31, 2009Accounts payable

$
2,500


$
1,805Total

$
2,500


$
1,805





NOTE 5: MISCELLANEOUS INCOME - RELATED PARTY TRANSACTIONS





Reimbursement of Expenses





On September 30, 2009, we received a reimbursement of a portion of our expenses, which has been disclosed as miscellaneous income – related parties, in the amount of $6,000 from each of Madison Acquisition Ventures, Inc., and Madison Venture Capital Group, Inc., two companies which are currently owned by the same shareholders as ourselves and which expect to derive benefits from the expenses which we have incurred to date.





NOTE 6: INCOME TAXES





In July 2006, the ASC 740-10-25 (formerly referred to as Financial Accounting Standards Board (FASB) issued interpretation No. 48, Accounting for Uncertainty in Income Taxes – an Interpretation of FASB Statement No. 109 (FIN 48)). ASC 740-10-25 is intended to clarify the accounting for uncertainty in income taxes recognized in a company's financial statements and prescribes the recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10-25 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.





11




MADISON ENTERPRISES GROUP, INC.


(A Development Stage Company)


NOTES TO FINANCIAL STATEMENTS


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009


(Unaudited)





Under ASC 740-10-25, evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.





Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met.





The adoption of ASC 740-10-25 at January 1, 2007 did not have a material effect on the Company's financial position.





The Company has not earned any income since inception and has not filed income tax returns with the Internal Revenue Service or State taxing authorities. The reimbursements received by Company on September 30, 2009 from Madison Acquisition Ventures, Inc., and Madison Venture Capital Group, Inc., two companies which are currently owned by the same shareholders as ourselves and which expect to derive benefits from the expenses which we have incurred to date have been disclosed as miscellaneous income – related parties upon the Company’s Financial Statements but have not been disclosed as revenue due to the fact that such miscellaneous income were merely reimbursements for expenses incurred by the Company on behalf of each of Madison Acquisition Ventures, Inc., and Madison Venture Capital Group, Inc.





NOTE 7: EARNINGS PER SHARE





ASC 260-10-45 (formerly referred to as SFAS 128) requires a reconciliation of the numerator and denominator of the basic and diluted earnings per share (EPS) computations. The Company did not issue any securities which were not included in the calculation of diluted earnings per share because their effect was anti-dilutive.





NOTE 8:  SUBSEQUENT EVENTS





The Company has evaluated subsequent events through the filing date of this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010 and there have been no subsequent events that warrant disclosure by the Company.





12





ITEM2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION





The following discussion and analysis should be read in conjunction with our financial statements and the notes related thereto. The discussion of results, causes and trends should not be construed to infer conclusions that such results, causes or trends necessarily will continue in the future.





We were organized as a vehicle to investigate and, if such investigation warrants, merge or acquire a target company or business seeking the perceived advantages of being a publicly held corporation. As of the date of this prospectus, we have no particular acquisitions in mind and have not entered into any negotiations with respect to the possibility of a merger or acquisition between us and such other company.





Our principal business objective for the next twelve (12) months and beyond such time will be to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. We will not restrict our potential candidate target companies to any specific business, industry or geographical location and, thus, may acquire any type of business.





We do not currently engage in any business activities. We do not currently have any cash flow. The costs of investigating and analyzing business combinations for the next twelve (12) months and beyond such time will be paid with money in our treasury or will be loaned to or invested in us by our stockholders, management or other investors.  There can be no assurance that we will be able to obtain any additional money for our treasury should it become necessary.  We have raised capital which we believe will be sufficient until we consummate a merger or other business combination. If not, we will either cease operations or will need to raise additional capital through the issuance of additional shares or through debt. There is no existing commitment to provide additional capital, and there can be no assurance that we shall be able to receive additional financing.





During the next twelve (12) months we anticipate incurring costs related to:





(i) filing of Exchange Act reports, and





(ii) costs relating to consummating a merger or acquisition.





We may consider a business which has recently commenced operations, is a developing company in need of additional funds for expansion into new products or markets, is seeking to develop a new product or service, or is an established business which may be experiencing financial or operating difficulties and is in need of additional capital. In the alternative, a business combination may involve the acquisition of, or merger with, a company which does not need substantial additional capital, but which desires to establish a public trading market for its shares, while avoiding, among other things, the time delays, significant expense, and loss of voting control which may occur in a public offering.





None of our  officers  or  directors  has had any  preliminary contact or discussions with any representative of any other entity regarding a business combination with us.  Any target business which is selected by us may be a financially unstable company or an entity in its early stages of development or growth, including entities without established records of revenues or earnings.  In that event, we will be subject to numerous risks inherent in the business and operations of financially unstable and early stage or potential emerging growth companies.  In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.





13





Our management anticipates that it will likely be able to effect only one business combination, due primarily to our limited financing, and the dilution of interest for present and prospective stockholders, which is likely to occur as a result of our management's plan to offer a controlling interest to a target business in order to achieve a tax free reorganization.  This lack of diversification should be considered a substantial risk in investing in us, because it will not permit us to offset potential losses from one venture against gains from another.





We intend to seek to carry out our business plan as discussed herein.  In order to do so, we need to pay ongoing expenses, including particularly accounting fees incurred in conjunction with preparation and filing of future compliance with our on-going reporting obligations.  Although we have raised capital pursuant to a private offering to pay these anticipated expenses, we may not have sufficient funds to pay all or a portion of such expenses.  If we fail to pay such expenses, we have not identified any alternative sources.  We have raised capital which we believe will be sufficient until we consummate a merger or other business combination.  If not, we will either cease operations or we will need to raise additional capital through the issuance of additional shares or through debt.  There is no existing commitment to provide additional capital. There can be no assurance that we shall be able to receive additional financing.





We do not intend to make any loans to any prospective merger or acquisition candidates or unaffiliated third parties.  We have adopted a policy that we will not seek an acquisition or merger with any entity in which any of our officers, directors, and controlling stockholders or any affiliate or associate serves as an officer or director or holds any ownership interest.





We anticipate that the selection of a business combination will be complex and extremely risky. Because of general economic conditions, rapid technological advances being made in some industries and shortages of available capital, our management believes that there are numerous firms seeking the perceived benefits of becoming a publicly traded corporation.  Such perceived benefits of becoming a publicly traded corporation include, among other things, facilitating or improving the terms on which additional equity financing may be obtained, providing liquidity for the principals of and investors in a business, creating a means for providing incentive stock options or similar benefits to key employees, and offering greater flexibility in structuring acquisitions, joint ventures and the like through the issuance of stock.  Potentially available business combinations may occur in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex.





We do not currently intend to retain any entity to act as a finder to identify and analyze the merits of potential target businesses.  However, we presently contemplate that Michael Zaroff, one of our officers, directors and controlling stockholders, may introduce potential business combinations to us.  No finder’s fees will be paid to Mr. Zaroff.





Our officers and directors intend to contact a number of registered broker-dealers to advise them of our existence and to determine if any companies or businesses they represent have an interest in considering a merger or acquisition with us.  Business opportunities may also come to our attention from various sources, including professional advisers such as attorneys and accountants, venture capitalists, members of the financial community, and others who may present unsolicited proposals.  If such person is not a registered broker-dealer, we will not pay any fees unless legally permitted to do so.  All securities transactions effected in connection with our business plan as described in this prospectus will be conducted through or effected by a registered broker-dealer.





As to date there have been no discussions, agreements or understandings with any broker-dealers or finders regarding our search for business opportunities. Our management is not affiliated with any broker-dealers, and has not in the past retained a broker-dealer to search for business opportunities.





14





In the event of a successful acquisition or merger, we may pay a finder's fee, in the form of cash or common stock in the merged entity retained by us, to individuals or entities legally authorized to do so, if such payments are permitted under applicable federal and state securities law.  The amount of any finder's fee will be subject to negotiation, and cannot be estimated at this time, but is expected to be comparable to consideration normally paid in like transactions.  Management believes that such fees are customarily between 1% and 5% of the size of the transaction, based upon a sliding scale of the amount involved.  Such fees are typically in the range of 5% on a $1,000,000 transaction ratably down to 1% in a $4,000,000 transaction.  Any cash finder's fee earned will need to be paid by the prospective merger or acquisition candidate, because we do not have sufficient cash assets with which to pay any such obligation.  If we are required pursuant to applicable federal or state securities laws, any finder retained by us will be a registered broker-dealer, who shall be compensated solely in accordance with FINRA regulations.  No fees of any kind will be paid by us to our promoters and management or to our associates or affiliates.





Results of Operations





Because we currently do not have any business operations, we have not had any revenues during our fiscal years ended December 31, 2007 and 2008.  During the year ended December 31, 2009, we received a reimbursement of a portion of our expenses, which has been disclosed as miscellaneous income – related parties, in the amount of $6,000 from each of Madison Acquisition Ventures, Inc., and Madison Venture Capital Group, Inc., two companies which are currently owned by the same shareholders as ourselves and which expect to derive benefits from the expenses which we have incurred to date.   Total expenses for the twelve (12) month period ended December 31, 2008 were $10,243.   Total expenses for the twelve (12) month period ended December 31, 2009 were $7,890, a decrease of $2,353 due to the fact that our expenses generally consist solely of the accounting and filing fees related to our filing of Registration Statements, with the exception of a one-time expenditure in August, 2008 in the amount of $5,000 to Wilmington Trust Company to act as our escrow agent.  Accordingly, notwithstanding the fact that we filed fewer amendments to our Registration Statement in the twelve (12) months ended December 31, 2008 than in the twelve (12) months ended December 31, 2009, we incurred greater expenses in the twelve (12) months ended December 31, 2008 than in the twelve (12) months ended December 31, 2009. Total expenses for the nine (9) months ended September 30, 2010 were $5,283 compared to total expenses for the nine (6) months ended September 30, 2009 of $5,732, a decrease of $449 due to the fact that we filed three Amendments to our Registration Statement on Form S-1 during the nine months ended September 30, 2009, which entailed incurring slightly greater costs with respect to accountant and filing fees in view of our “shell” company status than our filing of three quarterly reports upon Form 10-Q and one annual report upon Form 10-K during the nine months ended September 30, 2010.





We currently have no material commitments for capital expenditures.  Our future growth is dependent upon our ability to identify suitable candidates for acquisitions.  While we believe that our currently available working capital, after receiving the aggregate proceeds of the sale of common stock, should be adequate to sustain our operations at our current levels through at least the next twelve (12) months, there can be no assurance that current capital will be sufficient to meet our needs until the consummation of a merger or business combination. We have raised capital which we believe will be sufficient until we consummate a merger or other business combination.  If not, we will either cease operations or we will need to raise additional capital through the issuance of additional shares or through debt.  There is no existing commitment to provide additional capital. There can be no assurance that we shall be able to receive additional financing.





We believe that our currently available working capital should be adequate to sustain our operations at our current levels through at least the next twelve (12) months.





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LIQUIDITY AND CAPITAL RESOURCES





The September 30, 2010, financial statements have been prepared assuming the Company will continue as a going concern. However, the Company has incurred a loss of $20,181 from inception through September 30, 2010.  We do not have any revenues from operations, with the exception of reimbursement of a portion of our expenses on September 30, 2009, which has been disclosed as miscellaneous income – related parties, in the amount of $6,000 from each of Madison Acquisition Ventures, Inc., and Madison Venture Capital Group, Inc., two companies which are currently owned by the same shareholders as ourselves and which expect to derive benefits from the expenses which we have incurred to date and, absent a merger or other combination with an operating company, or a public or private sale of our equity or debt securities, the occurrence of either of which cannot be assured, we will be dependent upon future loans or equity investments from our present stockholders or management, for which there is no existing commitment.  Although we have no present commitment from any such parties to provide funding, if our company reaches the point where it would need funds to remain in operation, we will attempt to raise funds from our present stockholders or management in the form of equity or debt.  If, in such situation, we are unable to raise funds from those parties, it is likely that our business would cease operations.  During the period from November 1, 2006 through December 31, 2006, $12,000 was raised by selling Common Stock.   As of December 31, 2006, we had a cash balance of $10,290 and working capital of $10,290.  During the twelve (12) months ended December 31, 2007, $9,000 was raised by selling Common Stock.  As of September 30, 2010, we had a cash balance of $3,319, and working capital of $819.  As of September 30, 2010, we had liabilities of $2,500.  On September 30, 2009, we received a reimbursement of a portion of our expenses, which has been disclosed as miscellaneous income – related parties, in the amount of $6,000 from each of Madison Acquisition Ventures, Inc., and Madison Venture Capital Group, Inc., two companies which are currently owned by the same shareholders as ourselves and which expect to derive benefits from the expenses which we have incurred to date.  We have raised capital which we believe will be sufficient until we consummate a merger or other business combination.  If we later determine that our capital reserves are insufficient, we will either cease operations or we will need to raise additional capital through the issuance of additional shares or through debt.  There is no existing commitment to provide additional capital. In such situation, there can be no assurance that we shall be able to receive additional financing, and if we are unable to receive sufficient additional financing upon acceptable terms, it is likely that our business would cease operations.





Commitments


We do not have any commitments which are required to be disclosed in tabular form as of September 30, 2010.





Off-Balance Sheet Arrangements


We are not currently a party to, or otherwise involved with, any off-balance sheet arrangements which have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.





ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





This information has been omitted, as the Company qualifies as a smaller reporting company.





ITEM4T.  CONTROLS AND PROCEDURES





Evaluation of Disclosure Controls and Procedures





Our principal executive and financial officers, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report (the "Evaluation Date"), have concluded that as of the Evaluation Date, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate to allow timely decisions regarding required disclosure, and (ii) is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms.





There has been no change in our internal control over financial reporting identified during the period covered by this report which have materially affected or is likely to materially affect our internal control over financial reporting.








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PART II





ITEM1. LEGAL PROCEEDINGS





None.





ITEM2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





(a) None.





(b) None.





(c) None.





ITEM3. - DEFAULTS UPON SENIOR SECURITIES





None.





ITEM4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.





ITEM5. OTHER INFORMATION





None.





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ITEM6. EXHIBITS AND REPORTS ON FORM 8-K





(a) Form 8-K





None.





(b) Exhibits





Exhibit Number

Description3.1

Articles of Incorporation (Previously filed with the Securities and Exchange Commission as Exhibit 3.1 to the Registrant’s Registration Statement on Form S-1 on July 24, 2009 and incorporated herein by reference)*3.2

By-Laws (Previously filed with the Securities and Exchange Commission as Exhibit 3.2 to the Registrant’s Registration Statement on Form S-1 on July 24, 2009 and incorporated herein by reference)*31.01

Certification of President pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.02

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.01

Certification of President pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.02

Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


____________


* Incorporated by reference to a previously filed exhibit or report.








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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 Enterprises Group, Inc.Date: November 15, 2010
By:
/s/ Alan P. FraadeAlan P. FraadeVice President and Principal Financial and Accounting Officer

(Principal Financial Officer and duly authorized signatory)








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