UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2007. OR [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION FROM _______ TO ________. COMMISSION FILE NUMBER 000-51302 MADISON EXPLORATIONS, INC. _________________________________________________________________ (Exact Name of Small Business Issuer as Specified in its Charter) NEVADA _______________________________ ___________________ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 525 Seymour Street, Suite 900 Vancouver, BC, Canada V6B 3H7 ________________________________________ __________ (Address of principal executive offices) (Zip code) Issuer's telephone number: (604) 974-0568 Issuer's fax number: (604) 974-0569 N/A ________________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report. Former Address: 525 Seymour Street, Suite 807, Vancouver, BC, Canada, V6B 3H7) Indicate by check mark whether the registrant (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 / / Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes / / No /X/ Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the Exchange Act). Yes /X/ No / / State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: At March 31, 2007, and as of the date hereof, there were outstanding 113,020,000 shares of the Registrant's Common Stock, $.001 par value. Transitional Small Business Disclosure Format: Yes / / No /X/ -2- PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MADISON EXPLORATIONS, INC. (A Development Stage Enterprise) CONSOLIDATED FINANCIAL STATEMENTS UNAUDITED MARCH 31, 2007 DECEMBER 31, 2006 MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) MANAGEMENT CERFICATION The financial statements attached are prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The financial statements have not been audited. The Company's Treasurer certifies that the statements and the notes thereto, present fairly, in all material respects, the financial position of the issuer and the results of its operations and cash flows for the periods presented, in conformity with accounting principles generally accepted in the United States, consistently applied. Joel Haskins Madison Explorations Inc. Treasurer MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONTENTS FINANCIAL STATEMENTS Consolidated Balance Sheets F-1 Consolidated Statements of Operations F-2 Consolidated Statements of Stockholders' Equity (Deficit) F-3 Consolidated Statements of Cash Flows F-4 Notes to Consolidated Financial Statements F-5 - F-7 ________________________________________________________________________________ MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 2007 2006 __________ ____________ ASSETS CURRENT ASSETS Cash $ 12,064 $ 20,422 Deposits 4,330 4,290 Prepaid Expenses 1,010 1,001 __________ __________ Total current assets $ 17,404 $ 25,713 __________ __________ Total assets $ 17,404 $ 25,713 ========== ========== LIABILITIES AND STOCKHOLDERS' (DEFICIT) CURRENT LIABILITIES Accounts payable and accrued liabilities $ 5,844 $ 2,500 Note payable and accrued interest 29,297 28,797 Deferred revenue 50,000 50,000 Officers loans and advances 26,130 29,128 __________ __________ Total current liabilities $ 111,271 $ 110,425 __________ __________ STOCKHOLDERS' (DEFICIT) Common stock: $.001 par value; authorized 500,000,000 shares; issued and outstanding: 113,020,000 shares at December 31, 2006 and 113,020,000 shares at March 31, 2007 $ 113,020 $ 113,020 Additional paid-in capital (57,118) (57,118) Accumulated other comprehensive income (4,432) (4,295) Accumulated deficit during development stage (145,337) (136,319) __________ __________ Total stockholders' (deficit) $ (93,867) $ (84,712) __________ __________ Total liabilities and stockholders' (deficit) $ 17,404 $ 25,713 ========== ========== See Accompanying Notes to Consolidated Financial Statements. F-1 MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) June 15, 1998 Three months ended inception) to March 31, March 31, March 31, 2007 2006 2007 _____________ _____________ _____________ Revenues $ - $ - $ 94,000 Cost of revenue - - - _____________ _____________ _____________ Gross profit $ - $ - $ 94,000 Operating expenses Exploration and development $ 131 $ 3,766 $ 109,040 General and administrative 8,062 4,978 121,879 _____________ _____________ _____________ Operating (loss) (8,193) (8,744) $ (136,919) Other expense 825 945 8,418 _____________ _____________ _____________ Net loss $ (9,018) $ (9,689) $ (145,337) ============= ============= ============= Net loss per share, basic and diluted $ (0.00) $ (0.00) ============= ============= Average number of shares of common stock outstanding 113,020,000 112,822,222 ============= ============= See Accompanying Notes to Consolidated Financial Statements. F-2 MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (UNAUDITED) Accumulated Deficit Accumulated Common Stock Additional During Other ___________________________ Paid in Development Comprehensive Shares Amount Capital Stage Income Total ___________ ___________ __________ ___________ _____________ _________ June 15, 1998, issue common stock 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430 Net loss, December 31, 1999 - - - - - ___________ ___________ __________ ___________ ___________ _________ Balance, December 31, 1999 53,750,000 $ 53,750 $ (53,320) - $ - $ 430 Net loss, December 31, 2000 - - - - - ___________ ___________ __________ ___________ ___________ _________ Balance, December 31, 2000 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430 Net loss, December 31, 2001 - - - - - ___________ ___________ __________ ___________ ___________ _________ Balance, December 31, 2001 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430 Net loss, December 31, 2002 - - - - - ___________ ___________ __________ ___________ ___________ _________ Balance, December 31, 2002 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430 Net loss, December 31, 2003 - - - - - ___________ ___________ __________ ___________ ___________ _________ Balance, December 31, 2003 53,750,000 $ 53,750 $ (53,320) $ - $ - $ 430 Issuance of common stock for cash 59,070,000 59,070 (58,598) 472 June 14, 2004 forward stock split 5000:1 Capital contribution 5,000 5,000 Foreign currency adjustments (2,554) (2,554) Net loss, December 31, 2004 - - - (49,108) (49,088) ___________ ___________ __________ ___________ ___________ _________ Balance, December 31, 2004 112,820,000 $ 112,820 $ (106,918) $ (2,554) $ (49,088) $ (45,740) Foreign currency adjustments (444) (444) Net loss, December 31, 2005 - - - (48,720) (48,720) ___________ ___________ __________ ___________ ___________ _________ Balance, December 31, 2005 112,820,000 $ 112,820 $ (106,918) $ (2,998) $ (97,808) $ (94,904) Issuance of common stock for cash 200,000 200 49,800 50,000 Foreign currency adjustments (1,297) (1,297) Net loss, December 31, 2006 - - - (38,511) (38,511) ___________ ___________ __________ ___________ ___________ _________ Balance, December 31, 2006 113,020,000 $ 113,020 $ (57,118) $ (4,295) $ (136,319) $ (84,712) Foreign currency adjustments (137) (137) Net loss, March 31, 2007 - - - (9,018) (9,018) ___________ ___________ __________ ___________ ___________ _________ Balance, March 31, 2007 113,020,000 $ 113,020 $ (57,118) $ (4,432) $ (145,337) $ (93,867) =========== =========== ========== =========== =========== ========= See Accompanying Notes to Consolidated Financial Statements. F-3 MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Dec. 3, 1998 Three months ended (inception) to March 31, March 31, March 31, 2007 2006 2007 __________ __________ _____________ Cash Flows From Operating Activities Net loss $ (9,018) $ (9,689) $ (145,337) Adjustments to reconcile net loss to cash used in operating activities: Changes in assets and liabilities (Increase) in deposits (40) - (4,330) (Increase) in prepaid expenses (9) - (1,010) Increase (decrease) in accounts payable and accruals 3,344 252 5,844 Increase in deferred revenue - - 50,000 __________ __________ __________ Net cash used in operating activities $ (5,723) $ (9,437) (94,833) __________ __________ __________ Cash Flows From Investing Activities Net cash provided used in investing activities $ - $ - - __________ __________ __________ Cash Flows From Financing Activities Issuance of common stock $ - $ 50,000 $ 50,902 Capital contribution - - 5,000 Officer loans and advances (2,998) 321 26,130 Note payable 500 500 29,297 __________ __________ __________ Net cash provided by (used in) financing activities $ (2,498) $ 50,821 $ 111,329 __________ __________ __________ Effect of exchange rate changes on cash and cash equivalents $ (137) $ (141) $ (4,432) __________ __________ __________ Net increase (decrease) in cash $ (8,358) $ 41,243 $ 12,064 Cash, beginning of period 20,422 56,288 - __________ __________ __________ Cash, end of period $ 12,064 $ 97,531 $ 12,064 ========== ========== ========== See Accompanying Notes to Consolidated Financial Statements. F-4 MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS NOTE 1. BASIS OF PRESENTATION The accompanying unaudited Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-QSB. They do not include all information and notes required by generally accepted accounting principles for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the consolidated financial statements included in the Annual Report on Form 10-SB of Madison Explorations, Inc. for the year ended December 31, 2006. When used in these notes, the terms "Company," "we," "us" or "our" mean Madison Explorations, Inc. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2006. NOTE 2. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES GOING CONCERN The accompanying financial statements have been prepared assuming the Company will continue as a going concern. These financial statements show that Madison Explorations, Inc. had a substantial working capital deficiency and that it has suffered losses since inception. Management believes that the Company will still need additional financing of approximately $2,000,000 to continue to operate as planned during the twelve-month period subsequent to March 31, 2007. These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements have been prepared on the basis of generally accepted accounting principles as applicable to a going concern, however the future of Madison Explorations, Inc. will depend upon the company's ability to obtain adequate financing, successfully resolve any outstanding contingencies and attain profitable operations. Although the successful resolution of these uncertainties is not assured, management is of the opinion that current negotiations for financing and ultimate satisfactory settlement of any contingencies will allow the company to continue its operations. Management plans to obtain such financing through private and public offerings of debt and equity securities. However management cannot assure that the Company will be able to obtain any or all of the additional financing it will need to continue to operate through at least March 31, 2008 or that, ultimately, it will be able to generate any profitable commercial mining operations. If the Company is unable to obtain the required financing, it may have to curtail or terminate its operations and liquidate its remaining assets and liabilities. The accompanying financial statements do not include any adjustments related to the recoverability and classifications of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue its operations as a going concern F-5 MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS NOTE 2. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) RECENT ACCOUNTING PRONOUNCEMENTS SFAS No. 159 In February 2007, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS No. 159"). SFAS No. 159 provides the option to report certain financial assets and liabilities at fair value, with the intent to mitigate volatility in financial reporting that can occur when related assets and liabilities are recorded on different bases. This statement is effective for us beginning January 1, 2008. We do not expect SFAS No. 159 to have a material impact on our consolidated financial statements. FASB Interpretation No. 48 In July 2006, the FASB issued Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes--an Interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 clarifies the recognition threshold and measurement of a tax position taken on a tax return. FIN 48 also requires expanded disclosure with respect to the uncertainty in income taxes. Effective January 1, 2007, we adopted the provisions of FIN 48 EITF Issue No. 06-10 In March 2007, the Emerging Issues Task Force ("EITF") reached a consensus on EITF Issue No. 06-10, "Accounting for Deferred Compensation and Postretirement Benefit Aspects of Collateral Assignment Split-Dollar Life Insurance Arrangements" ("EITF 06-10"). EITF 06-10 provides that an employer should recognize a liability for the postretirement benefit related to collateral assignment split-dollar life insurance arrangements in accordance with either SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," or APB No. 12 "Omnibus Opinion." Entities should recognize the effects of applying EITF 06-10 through either (i) a change in accounting principle through a cumulative-effect adjustment to retained earnings or to other components of equity or net assets in the statement of financial position as of the beginning of the year of adoption or (ii) a change in accounting principle through retrospective application to all prior periods. The provisions of EITF 06-10 are effective as of January 1, 2008 and are not expected to have a material impact on our consolidated financial statements. F-6 MADISON EXPLORATIONS, INC. (A DEVELOPMENT STAGE ENTERPRISE) CONSOLIDATED NOTES TO FINANCIAL STATEMENTS NOTE 3. STOCKHOLDERS' EQUITY NET LOSS PER COMMON SHARE Net loss per share is calculated in accordance with SFAS No. 128, "EARNINGS PER SHARE." The weighted-average number of common shares outstanding during each period is used to compute basic loss per share. Diluted loss per share is computed using the weighted averaged number of shares and dilutive potential common shares outstanding. Dilutive potential common shares are additional common shares assumed to be exercised. The Company has no warrants or options outstanding at March 31, 2007 or December 31, 2006. NOTE 4. NOTE PAYABLE The Company has a note payable in the amount of $25,000 from Pale Face Holdings, Ltd. The note provides for interest payable at 8% annually. Accrued interest on the note payable was $4,297 as at March 31, 2007 and $3,797 for the year ended December 31, 2006. The note payable balance including accrued interest was $29,297 and $28,797 at March 31, 2007 and December 31, 2006, respectively. NOTE 5. RELATED PARTY TRANSACTIONS The officers of the Company have advanced funds to the Company to continue ongoing operations. On June 25, 2004, two officers executed demand notes at 5% interest for $15,000 in CAD ($12,992 USD) each. Also, funds were advanced to the Company to form its subsidiary. A total of $147 in US dollars was advanced for this purpose. Since all funds advanced are due on demand, this amount has been classified as a liability in the accompanying financial statements. The officers of the Company also submit expense reports on a regular basis of expenses incurred on behalf of the Company in the normal performance of their duties. These payable to the officers for unreimbursed expenses totaled $0 and $0 in Canadian funds at March 31, 2007 and December 31, 2006, respectively. Interest on the notes payable for the quarter ended March 31, 2007, was $325 and $1,314 for the year ended December 31, 2006. As of March 31, 2007 and December 31, 2006, the officer advances were $26,130 and $29,128, including $0 and $1,314 in accrued interest, respectively. NOTE 6. COMPREHENSIVE INCOME Accumulated other comprehensive income consists of the following: March 31, 2007 Dec. 31, 2006 ______________ _____________ Foreign currency translation adjustment $ (4,432) $ (4,295) ============== ============= The components of other comprehensive income for the three-month period ended March 31, 2007 and the year ended December 31, 2006: March 31, 2007 Dec. 31, 2006 Inception to date ______________ _____________ _________________ Foreign currency translation adjustment $ (137) $ (1,297) $ (4,432) ============== ============= ================= F-7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The following discussion regarding the Company and our business and operations contains "forward-looking statements." These statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as "may," "expect," "anticipate," "estimate" or "continue" or its negative or other variations or comparable terminology. All forward-looking statements are necessarily speculative and there are certain risks and uncertainties that could cause actual events or results to differ materially from those referred to in such forward-looking statements. PLAN OF OPERATION The Company was incorporated in June of 1998 under the name of "Madison-Taylor General Contractors, Inc." and intended to engage as a general contractor for constructing temporary buildings at exploratory mining locations. Madison-Taylor General Contractors, Inc. was unable to implement the business and remained inactive from 1998 until 2004. The Company commenced operations under its current name in April of 2004. After implementing the Company's current plan of operation, the Company has relied on advances and contributions of capital of approximately $28,100 from our principal stockholders, an additional shareholder loan of $25,000 and proceeds of approximately $144,000 from the sale of a 20% interest in one of the Company's claims (Bulls Eye), the sale of a 15% interest in another claim (Bronco), and a further sale of 15% in another claim (Woodmountain North) to support its limited operations. The Company has also entered into a private placement agreement whereby the Company issued 200,000 Regulation S Common shares in exchange for $50,000. As of March 31, 2007, the Company had approximately $12,064 of cash. The Company will need additional equity or debt financing of up to $2,000,000 to fully implement its planned exploration program. GEOLOGICAL REPORT: SOUTHERN SASKATCHEWAN The Company has several specific exploration objectives: (1) To locate one or more Kimberlite/Lamproite pipes, dykes or sills; (2) To determine whether the Kimberlite/Lamproite contains Diamonds; and (3) To determine if the diamond-bearing pipe could be the source of an economically viable mine. Even if the Company locates Kimberlite, the finding of diamonds in Kimberlite is rare and the finding of a commercial grade of diamonds is rarer. We believe that exploration is by its very nature is evolutionary. Each subsequent step is based on the foundation established by previous results. Even then, diverse factors affect the process. Weather and seasons influence when work can be commissioned. Previous results determine the direction for future exploration and the availability of funds dictates what work can be budgeted for each phase of exploration. The Company has completed its initial phase of work on the Scout Lake properties and now intends to continue the initial phase of work on some of its other properties in the Wood Mountain District. The results at our Scout Lake properties do not warrant spending further time and money at this location. Phase one work should consist of a ground magnetometer survey at approximately 500 meter line-spacing. At the same time, surface samples should be taken of till for heavy mineral evaluation. About 50 samples would cover the grid area satisfactorily. If results warrant, a few lines of gravimetric surveying could be done. Two or three RC drill holes (about 500 meter) would then test the anomaly. Phase 1 - Initial Wood Mountain Evaluation - Ground Magnetometer - 1 month Instrument Rental 1,800 - 50 Sample Collections - Processing @ $50 each 2,500 - Gravimetric Survey - Instrument Rental 600 - Chemical Analysis - 50 @ $10 each 500 - Personnel - Geologist 2 weeks @ $300/day 4,200 - Personnel - Assistant 2 weeks @ $200/day 2,800 - Accommodation - $100/day x 2 2,800 - Transportation - Truck Rental, Maintenance 2,000 Engineering & Supervision - Engineering & Supervision 2,000 - Contingencies approximately 5% 900 Phase 1 Total $20,100 Phase Two - Regional Program The regional program of exploration is being proposed to locate kimberlite diatremes. At present, we have regional to detailed heavy mineral anomalies and regional to detailed magnetic anomalies. Unfortunately, the heavy mineral dispersion is too widespread and the magnetic anomalies are too numerous to allow reasonable drill target selection. The following systematic approach may help us to alleviate this problem: Regional Structural Study Kimberlite pipe emplacement is governed by deep-seated structures that penetrate stable Archean Cratons and allow the rapid rise of lower mantle ultramafic magmas through diamond-bearing strata. Some of the major structures in southern Saskatchewan are known, but it appears that a satellite imagery interpretation, in particular of radar data, would be of value to us. Regional Heavy Mineral Study Heavy mineral data is already available to us from the government and other available for purchase proprietary surveys. However, a large proportion of the area of our interest remains without data. It is proposed that a detailed heavy mineral survey be conducted over the area with one sample being taken per township to start. The usual method of processing heavy mineral samples, which includes, washing, sizing, gravity separation by jig, tables or heavy liquids, microscopic hand-picking and microprobe analysis would be prohibitively expensive. Therefore, the following processing methodology is suggested: (a) Sample till or stream sediments (about 20 kg). (b) Wash and sieve sample in the field or nearby portable equipment to obtain a clean, sized fraction suitable for hydrosizing. (c) Use a laboratory-sized elutriator (hydrosizer) to obtain a sized, heavy mineral fraction. Adjust density to retain all indicator minerals. (d) Analyze for chromium and nickel and other trace elements by total fusion and ICP. This will provide an indicator for ultramafic rocks. (e) Plot results and evaluate for trends. (f) Some detailed HM testing, - microprobing grain-picking. Wood Mountain Formation Study Heavy minerals including standard indicator minerals and micro-diamonds have been recovered from the unconsolidated sand and gravel deposits of the Wood Mountain formation. We believe that a heavy mineral study of this formation and a paleo-current study should be undertaken. The samples should be processed in the same manner as in the "Regional Heavy Mineral Study." Compilation of Geophysical Data (a) Aeromagnetic (b) Ground magnetic (c) Gravimetric (d) Seismic G.I.S. Compilation of all Data A G.I.S. (Geographic Information Systems) compilation of the following data should be undertaken in order to select the best drill targets: (a) Bedrock Geology (b) Surficial Geology (i.e. land surface to approximately 5 feet below) (c) Our HM Surveys (d) Government surveys (e) Federal-provincial geochem and HM (f) Aeromagnetic Data surveys (g) Gravity Data (h) Seismic Data (i) Ground Magnetic Data (j) Cratonic Age Data (k) Satellite Radar Imagery Interpretation Phase 2 - Regional Program Regional Structural Study - Satellite Photos - 10 @ $200 each 2,000 - Interpretation - 10 hours @ $500 5,000 - Digitizing 3,000 Regional Heavy Mineral Study - Sample collection - 600 samples @ $15 each 9,000 - Vehicle - FWD - 3 months @ $2,000/month 6,000 - Detail Sample Collection - 1000 samples @ $15 each 15,000 - Initial Processing 24,000 - Washer/Sieve rental - 3 months @ $2,000/month 6,000 - Sample Bags - 1,600 20Kg bags @ $1 each 1,600 - Sample Bags - 1,600 2Kg bags @ $1 each 1,600 - Elutriation (Hydraulic Separation of HM) - 1600 @ $18.75 each 30,000 - ICP (Induced Coupled Polarization) (total) - 1600 @ $10 each 16,000 - Digitizing 3,000 Regional Surficial Geology Study - Data Interpretation 4,000 - Digitizing 3,000 Compilation of Geophysical Data - Data Collection 2,500 - Data Interpretation 5,000 - Digitizing 4,000 G.I.S. Compilation - Additional Data Collection 5,000 - Data Interpretation 5,000 - Digitizing 5,000 Engineering & Supervision - Engineering & Supervision 15,000 - Contingencies approximately 5% 7,800 Phase 2 Total $178,500 Phase Three - Drilling and Confirmation The goal of this phase will be to locate anomalous areas by the use of ground magnetic surveys, and to prioritize each for test drilling. Gravimetric Surveys will be completed over the ground magnetic anomalies - 1 or 2 lines per anomaly. Test Drilling will then be conducted to test the best targets. Phase 3 - Drilling and Confirmation Ground Magnetic Surveys - Instrument Rental - 3 months @ $1,600/month 4,800 - Field computer Rental - 3 month @ $300/month 900 - Operator/Assistant - 70 Days @ $300/day 21,000 Gravimetric Survey - Instrument Rental - 3 months @ $1,600/month 3,000 - Operator/Assistant - 70 Days @ $300/day 21,000 - Surveying 6,000 Test Drilling - 5,000 ft. @ $10 50,000 - Cutting Analysis - 50 samples @ $500 each 25,000 Engineering & Supervision - Engineering & Supervision 13,000 Contingencies approximately 5% 6,700 Phase 3 Total $151,400 24 Month Exploration Budget on new and future claims The Company intends to option additional property by way of claim staking or acquiring companies with promising mineral claims in the area of Southern Saskatchewan and Northern Montana ________________________________________________________________________________ Planned Exploration on future Claims Year 1 Year 2 ________________________________________________________________________________ Claim Staking/property acquisition 50,000 50,000 ________________________________________________________________________________ Property Exploration Expenditures 500,000 650,000 ________________________________________________________________________________ $550,000 $700,000 ________________________________________________________________________________ The Company's business plan for the year 2007 will consist of further exploration on the properties over which we hold mineral exploration claims and options. As part of Phase Two, the Company also plans to continue staking strategically important areas as more information becomes available with respect to the geology of Southern Saskatchewan. The Company intends to use third party contractors to collect soil samples, process and analyze the results, plot drill targets, drill the identified targets and other exploration related work. The Company completed its drill program at Scout Lake in 2005. The results of the drill program do not warrant spending further time and money at this location. The main thrust of our program will now be in the Val Marie area of the Wood Mountain district in Southern Saskatchewan. As of May 15, 2007 the Company has 56 mineral claims in Southern Saskatchewan. The combination of numerous indicator minerals (pyrope garnets and chrome diopsides) and magnetic anomalies make this area a prime target. The indicator mineral suite is identical chemically to that of the Fort a la Corne district. An early drilling program is anticipated for this area. Additional targets in the Wood Mountain district and other areas will also be investigated. Keating analysis of existing geophysical data over the Company's claim holdings has identified 6 potential diamond targets, including the 3 targets that were previously designated as high priority drill targets. Preliminary investigation of these targets will be carried out to assess the possibility of diamond deposits existing on the Company's properties. The Company estimates that we will require approximately $2,000,000 Canadian to conduct its full exploration program over a two year period. This amount will be used to pay for prospecting and geological mapping, airborne surveys, lodging and food for workers, transportation of workers to and from the work sites, fuel, pick-up truck rentals, assays, drilling, equipment rental, additional claim staking, and supervision. The officers and directors have agreed to pay all costs and expenses of having the Company comply with the federal securities laws (and being a public company) should the Company be unable to do so. We estimate that these costs will be approximately $20,000 per year. Our officers and directors have also agreed to pay the other expenses of the Company, excluding those direct costs and expenses of data gathering and mineral exploration, should the Company be unable to do so. To implement our business plan, we will need to secure financing for our business development. We have no source for funding at this time. If we are unable to raise additional funds to satisfy our reporting obligations, investors will no longer have access to current financial and other information about our business affairs. Additional funding to conduct either our full exploration program or a partial exploration program will depend upon our ability to secure loans or obtain either private or public financing. We have had some preliminary negotiations for funding that have been unsuccessful and we currently have not undertaken any further negotiations. There is no assurance that we will be able to obtain such funding on any terms or terms acceptable to us and if adequate funds are not available, we believe that our business development will be adversely affected. Accordingly, there is no assurance that we will be able to continue in business. OFF-BALANCE SHEET ARRANGEMENTS The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders. ITEM 3. CONTROLS AND PROCEDURES. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of March 31, 2007 were effective at a level that provides reasonable assurance to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. There have been no changes in our internal controls over financial reporting or in other factors that could materially affect, or are reasonably likely to affect, our internal controls over financial reporting during the quarter ended March 31, 2007. PART II OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS None ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS There were no unregistered sales of equity securities during the three month period ended March 31, 2007. ITEM 3 - DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES None ITEM 4 - SUBMISSION OF MATTER TO VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION. BOARD MEETING. Our board held one meeting during the current quarter, which was a special meeting by written consent. AUDIT COMMITTEE. Our board of directors has not established an audit committee. In addition, we do not have any other compensation or executive or similar committees. We will not, in all likelihood, establish an audit committee until such time as the Company generates a positive cash flow of which there can be no assurance. We recognize that an audit committee, when established, will play a critical role in our financial reporting system by overseeing and monitoring management's and the independent auditors' participation in the financial reporting process. At such time as we establish an audit committee, its additional disclosures with our auditors and management may promote investor confidence in the integrity of the financial reporting process. Until such time as an audit committee has been established, the full board of directors will undertake those tasks normally associated with an audit committee to include, but not by way of limitation, the (i) review and discussion of the audited financial statements with management, and (ii) discussions with the independent auditors the matters required to be discussed by the Statement On Auditing Standards No. 61 and No. 90, as may be modified or supplemented. Our board of directors consistent with our intent to enhance the reliability and credibility of our financial statements, have submitted the financial statements included in this Form 10-QSB to our independent auditor prior to the filing of this report. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K There were no reports on Form 8-K filed during the quarter for which this report is filed. The following exhibits are filed with this report: 31.1 Certification of Chief Executive Officer. 31.2 Certification of Chief Financial Officer. 32.1 Section 906 Certification of Chief Executive Officer. 32.2 Section 906 Certification of Chief Financial Officer. 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. DATED: May 15, 2007 MADISON EXPLORATION, INC. BY: /s/ KEVIN M. STUNDER ________________________________________ Kevin M. Stunder Chief Executive Officer and Director BY: /s/ JOEL HASKINS ________________________________________ Joel Haskins Chief Financial Officer and Director