Madison Capital Corporation
TSX VENTURE : MDC.P

February 06, 2012 13:10 ET

Madison Announces Proposed Qualifying Transaction With NeutriSci International Inc.

CALGARY, ALBERTA--(Marketwire - Feb. 6, 2012) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH UNITED STATES WIRE SERVICES.

Madison Capital Corporation ("Madison") (TSX VENTURE:MDC.P) a capital pool company listed on the TSX Venture Exchange (the "Exchange" or "TSXV") is pleased to announce that it has entered into a letter of intent dated January 19, 2012 with NeutriSci International Inc. ("NeutriSci"), that sets out the basic terms and conditions pursuant to which it is intended that Madison and NeutriSci will complete a business combination (the "Proposed Transaction").

The Proposed Transaction is intended to be the Qualifying Transaction of Madison pursuant to Policy 2.4 of the Exchange. It is expected that the combined entity, after completion of the Proposed Transaction, will qualify as a Tier 2 Industrial Issuer pursuant to the requirements of the Exchange. The Proposed Transaction will not be a Non-Arm's Length Qualifying Transaction. It is intended that the Proposed Transaction shall take place by way of an amalgamation, arrangement, share exchange or other similar form of transaction.

About NeutriSci

NeutriSci International Inc. is a private company incorporated under the Business Corporations Act (Alberta) on September 17, 2009. NeutriSci is a global sales, marketing, development and distribution company specializing in proprietary nutraceuticals, whole food supplements and cosmetic products. NeutriSci distributes and manufactures such products as Vendrome, Repose, Veaya Lyfe and ZEO-8. Vendrome is a men's dietary supplement designed to combat certain effects of aging in older men and provide improved vitality in younger men. Repose is a liquid sleep therapy system designed to help alleviate insomnia. LYFE is a health-enhancing natural juice drink meant to help support the body's ability to fight off diseases. Zeo8 is a detoxification drink meant to help trap and expel from the body a variety of toxins like mercury, lead and arsenic, biotoxins, pesticides and radioactive material.

NeutriSci has also developed a patent-pending proprietary marketing system called Direct Viral Marketing™ or D.V.M.™. D.V.M.™ is a marketing system utilizing a revolutionary referral platform designed to combine the power of direct marketing with a non invasive referral system. Management believes that D.V.M.™ is a marketing system that could change the future of Network Sales.

NeutriSci is currently in the soft launch, or pre-marketing, phase for several proprietary neutraceuticals products. "Soft launching" is a mechanism by which products are released to a limited audience in order to test viability of the product and the delivery system before a larger marketing effort is implemented.

The senior management of NeutriSci currently includes Keith Bushfield (President and Chief Executive Officer), Glen Rehman (Chief Operating Officer), Roger Jewett, (Chief Financial Officer), William Wagner (VP Business Development and Corporate Secretary) and Thierry Sorhaitz (VP Sales and Marketing). It is expected that Messrs Bushfield, Rehman, Jewett, Wagner and Sorhaitz will be appointed to similar positions in Madison upon completion of the Proposed Transaction. The Board of Directors of NeutriSci is composed of Messrs Bushfield, Rehman, Wagner and Sorhaitz, Cynthia Solano, Michael Rice and Kathryn Witter.

Financial information on NeutriSci will be published in a future press release.

Proposed Transaction

Currently, Madison has 8,100,000 Common Shares, incentive stock options entitling the holders thereof to purchase up to an aggregate of 810,000 Common Shares at a price of $0.10 per share on or before November 21, 2021 and agent's options entitling the holders thereof to purchase up to an aggregate of 600,000 Common Shares at a price of $0.10 per share on or before November 22, 2013.

NeutriSci currently has an aggregate of 4,519,780 Class "A" Shares and 2,227,500 Class "B" Shares outstanding, incentive stock options entitling the holders thereof to purchase up to an aggregate of 1,175,000 common shares at an exercise price of US$0.20 per share until July 1, 2012 and compensation warrants entitling the holders thereof to purchase up to an aggregate of 900,000 common shares at an exercise price of US$0.0001 per share until July 1, 2012 (the "NeutriSci Warrants"). It is expected that up to 700,000 of the incentive stock options will be exercised prior to completion of the Proposed Transaction, thereby adding an additional 700,000 Class "A" Shares to the outstanding capital of NeutriSci (the "Option Shares").

NeutriSci has also entered into agreement pursuant to which it may be required to issue an aggregate of 171,648 Class "A" Shares to an arm's length third party, subject to the fulfilment of certain conditions (the "Contingent Shares").

Prior to the completion of the Proposed Transaction, NeutriSci proposes to complete a private placement of up to 2,500,000 Class "A" Shares at a price of $1.00 per share (the "Financing"). It is a condition to the Proposed Transaction that NeutriSci raise at least $2,000,000 (2,000,000 Class "A" Shares) under the Financing (the "Minimum Amount"). NeutriSci intends to use the proceeds from the Financing to expand its international network, to develop new products lines and to augment the company's working capital. NeutriSci may issue options to agents and finders in connection with their services under the Financing. Details of agents' or finders' compensation will be included in a future press release.

In connection with the Proposed Transaction, and immediately prior thereto, Madison will effect a consolidation of its common shares (the "Consolidation") such that one new share ("Post-Consolidation Madison Share") will be issued for every two pre-consolidation common shares of Madison such that there will be issued and outstanding approximately 4,050,000 Post-Consolidation Madison Shares issued and outstanding at the time of the Proposed Transaction. As a result of the Consolidation, the incentive stock options will be amended such that they will entitle the holders thereof to purchase up to an aggregate of 405,000 Post-Consolidation Madison Shares at a price of $0.20 per share and the agent's options will be amended such that they will entitle the holders thereof to purchase up to an aggregate of 300,000 Post-Consolidation Madison Shares at a price of $0.20 per share.

Pursuant to the Proposed Transaction, Madison and NeutriSci will complete a business combination whereby each of the Class "A" and "B" Common Shares of NeutriSci, including the Option Shares, the Contingent Shares and shares issued under the Financing, will be exchanged for five Post-Consolidation Madison Shares at a deemed price of $0.20 per share, each of the NeutriSci Warrants will be exchanged for warrants of Madison entitling the holders of such warrants to purchase five Post-Consolidation Madison Shares at a price of US$0.00002 per share for a period of 24 months from the date of issue, and any agent's options that may be issued under the Financing will be exchanged for equivalent securities of Madison.

Subject to Exchange approval, pursuant to the Finder's Fee Agreement between Breitling Capital and NeutriSci, Breitling Capital will receive Post-Consolidation Madison Shares equal to 2.5% of the number of Post-Consolidation Madison Shares issued and outstanding in the capital of Madison upon completion of the Proposed Transaction at a deemed price of $0.20 (the "Finder's Shares"). Breitling Capital is at arm's length to both Madison and NeutriSci.

The completion of the Proposed Transaction and the Concurrent Financing are subject to the approval of the Exchange and all other necessary approvals. The completion of the Proposed Transaction is also subject to certain other additional conditions precedent, including, but not limited to: (i) the entering into of a definitive agreement by Madison and NeutriSci on or before May 10, 2012 (the "Definitive Agreement"); (ii) completion of satisfactory due diligence by each of Madison and NeutriSci; (iii) the approval of the Proposed Transaction by each of Madison's and NeutriSci's respective board of directors; (iv) the approval of the shareholders of NeutriSci, if required; (v) completion of the Minimum Amount under the Financing; (vi) approval from the Exchange to list the Resulting Issuer's shares; (vii) the absence of any material change or change in a material fact which might reasonably be expected to have a material adverse effect on the financial and operational conditions or the assets of each of the parties to the Definitive Agreement; and (viii) certain other conditions typical in a transaction of this nature.

Trading in the shares of Madison on the TSXV has been halted and will remain halted pending receipt by the TSXV of applicable documentation.

It is anticipated that a Sponsor will be required for the Proposed Transaction. Disclosure with respect to the proposed Sponsor will be included in a future press release.

Madison after the completion of the Proposed Transaction shall be referred to herein as the "Resulting Issuer".

Capitalization of the Resulting Issuer

Assuming that the Minimum Amount is raised under the Financing and that all of the Option Shares, Contingent Shares and Finder's Shares are issued, upon completion of the Proposed Transaction, approximately 53,448,256 Post Consolidation Madison Shares are anticipated to be issued and outstanding in the capital of the Corporation. If the maximum amount is raised under the Financing, approximately 56,010,756 Post Consolidation Madison Shares are anticipated to be issued and outstanding in the capital of the Corporation. Warrants (issued in exchange for the NeutriSci Warrants) entitling the holders thereof to purchase up to 4,500,000 Post-Consolidation Madison Shares at a price of US$0.00002 per share for a period of 24 months from the date of issue will also be issued and outstanding. In addition, Madison will have issued and outstanding its currently outstanding incentive stock options which, after taking into account the Consolidation, will entitle the holders thereof to purchase up to an aggregate of 405,000 Post-Consolidation Madison Shares at a price of $0.20 per share, and its currently outstanding agent's options which, after taking into account the Consolidation, will entitle the holders thereof to purchase up to an aggregate of 300,000 Post-Consolidation Madison Shares at a price of $0.20 per share. Additional agent's options may also be issued by Madison in exchange for any options that may be issued by NeutriSci in connection with the Financing.

Assuming that the Minimum Amount is raised under the Financing and that all of the Option Shares, Contingent Shares and Finder's Shares are issued, upon completion of the Proposed Transaction, it is estimated that approximately 90.0% of the Resulting Issuer will be owned by shareholders of NeutriSci at closing or 80.2% on a fully diluted basis. If the maximum amount is raised under the Financing, 90.3% of the Resulting Issuer will be owned by shareholders of NeutriSci at closing or 81.0% on a fully diluted basis. This transaction will represent a reverse takeover of Madison by NeutriSci.

It is intended that the Resulting Issuer will grant additional incentive stock options on closing of the Proposed Transaction, subject to the approval of the Exchange, to employees, consultants, directors, officers of the Resulting Issuer. The number of stock options issued will not exceed 10% of the issued and outstanding shares of the Resulting Issuer.

Upon completion of the Proposed Transaction and the Financing, it is expected that only person that will own 10% or more of the issued and outstanding common shares of the Resulting Issuer on a fully diluted basis will be the CCSK Foundation Ltd., a corporation domiciled in Hong Kong over which Mr. Campbell Davidson has managing control and direction.

Directors and Senior Management of the Resulting Issuer

Subject to and following the closing of the Proposed Transaction, the directors and senior officers of the Resulting Issuer are expected to be the following individuals, all of whom are the directors and senior officers of NeutriSci:

Keith Bushfield: Mr. Bushfield now serves as the President, Chief Executive Officer and Chairman of the Board of NeutriSci. Prior to forming NeutriSci, Mr. Bushfield held controlling interests in, and was a director or officer of several start-up companies including CB Company Ltd., an international real estate development company and Virgin Entertainment Canada, an entertainment and restaurant conglomerate operating concert promotions, event productions and entertainment facilities such as nightclubs, bars and restaurants. Virgin Entertainment also operated several franchise food establishments such as the Cheesecake Cafe and Ricky's Family Restaurants. Mr. Bushfield also held controlling interests in, and was a director and officer of several restaurants including Gargoyles Restaurant and Night Club, Bermuda Triangle and Bourbon Street. Additionally, Mr. Bushfield was a director and officer of Vauntcom Media, a digital media signage company, which sold digital media space in NHL areas, Major League Baseball stadiums and triple-A office buildings. Mr. Bushfield holds a Bachelor of Arts from Marymount University, Virginia, with a major in Business Administration/Marketing.

Glen Rehman: Mr. Rehman is the Chief Operating Officer and a director of NeutriSci. Mr. Rehman was previously a Private Banking Manager for RBC Royal Bank. He has also served as a Senior Director of Operations of Bernard Callebaut Chocolates and was responsible for domestic and international expansion operations. Mr. Rehman most recently served as COO for Vauntcom Media.

Roger Jewett: Mr. Jewett is the Chief Financial Officer of NeutriSci. Mr. Jewett also currently serves as the Chief Financial Officer of Enerjet, a Boeing 737 charter airline based in Calgary, Alberta. Mr. Jewett is also a partner in the interactive marketing firm, Twist Marketing, and a partner in Cambio Merchant Capital, an investment bank. From 2000 to 2007, Mr. Jewett was the Chief Financial Officer and a director of Rare Method Interactive Corp., a public interactive marketing firm which trades on the TSX Venture Exchange, also serving as President of Rare Method from 2002 to 2007. Prior to Rare Method, Mr. Jewett was the Chief Financial Officer of Resorts of the Canadian Rockies, a Canadian ski resort, golf resort and hotel operator, and prior to that, he was a Manager at Coopers & Lybrand. Mr. Jewett holds a Bachelor of Arts degree in Business Administration from the University of New Brunswick and earned his Chartered Accountant designation in 1990.

William Wagner: Mr. Rehman is the Vice President, Business Development, Corporate Secretary and a director of NeutriSci. Mr. Wagner holds a Bachelor of Arts and an Education degree from York University. After a short teaching career, Mr. Wagner moved to Calgary, Alberta as a Regional Manager for Fitness Depot, a Canadian national retail chain. Mr. Wagner's retail career also included helping to introduce and develop the Best Buy brand in Canada. Mr. Wagner then spent three years with a land banking firm, which provides Alberta land banking strategies to investors.

Thierry Sorhaitz: Mr. Sorhaitz is the Vice President, Sales and Marketing, and a director of NeutriSci. Mr. Sorhaitz holds a Bachelor of Science degree from the Marriott School of Management, Brigham Young University and a Masters of Business Administration in Marketing from the David Eccles School of Business, University of Utah. In 1989, Mr. Sorhaitz began a career in the Network Marketing and Direct Selling Industries as a Sales Agent and Field Leader for Nu Skin International (NYSE:NUS), is a direct selling company that distributes anti-aging products in both the personal care and nutritional supplements categories. In 1999, Mr. Sorhaitz became the General Manager of South-East Asia/Pacific and in 2003, the Regional General Manager of Western Europe for Tahitian Noni International, multi-level marketing company that markets products made from the noni plant. Most recently, Mr. Sorhaitz acted as VP and Managing Director of Neways International's North American division. Neways International is a privately held American multi-level marketing organization that manufactures and distributes personal care products, nutritional supplements, and household cleaning products.

Cynthia Solano: Ms. Solano is a director of NeutriSci. Ms. Solano is a partner at the law firm of Tingle Merrett LLP. Her business law practice is concentrated in the areas of public and private equity and debt financing, stock exchange listings and related matters. She has extensive experience with mergers and acquisitions, corporate reorganizations and other commercial transactions, and her experience includes technology licensing, distribution, acquisitions and divestitures. Ms. Solano was formerly the Vice President, Corporate Finance, of a small Investment bank and Corporate Counsel and has also been Corporate Secretary of a start-up oil and gas company. Ms. Solano has been with Tingle Merrett LLP since 2011, prior to which she was an associate with Parlee McLaws LLP. Ms. Solano holds a Bachelor of Science degree in Cellular, Molecular and Microbial Biology from the University of Calgary and a Bachelor of Laws degree from the University of Calgary.

Michael Rice: Mr. Rice is a director of NeutriSci. Mr. Rice has specialized in compliance and operations management for over ten years. Mr. Rice graduated from the University of Utah with a Bachelor of Science degree in Economics and Consumer Studies. Mr. Rice is also the VP of operations and CFO for Emerald Bay Energy, a TSX-V listed corporation based in Calgary.

Kathryn Witter: Ms. Witter is a director of NeutriSci. Ms. Witter, has in excess of 28 years of public company experience, working in many aspects of the public markets: brokerage, venture capital, shareholder communication and, since 1987 as a founder and President of Marketworks, Inc., a company specializing in providing small cap emerging companies with a range of financial and consulting services Since founding Marketworks, Inc., Ms. Witter has helped to implement a large and diverse number of companies business strategies; from assisting with going public, mergers and acquisitions, financing, marketing, cross border registrations and implementing regulatory and financial reporting structures in Canada, the USA and on a lesser scale the EU. In recent years, Ms. Witter has focused primarily on compliance, corporate governance as well as regulatory and financial reporting for public companies. While normally working with the Board of Directors and Executive Management on a consulting level, Ms. Witter has been a director, CFO and/or senior officer and committee member of a number of publicly listed companies.

All information contained in this news release with respect to Madison and NeutriSci was supplied by the parties respectively, for inclusion herein, and Madison and its directors and officers have relied on NeutriSci for any information concerning them.

READER ADVISORY

Investors are cautioned that, except as disclosed in the information circular or filing statement to be prepared in connection with the Proposed Transaction, any information released or received with respect to the Proposed Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

Statements in this press release may contain forward-looking information including, operating costs, administrative costs, acquisitions and dispositions, capital spending, access to credit facilities, income taxes, regulatory changes, and other components of cash flow and earnings. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects" and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of Madison. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The forward-looking statements contained in this press release are made as of the date of this press release, and Madison does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.

THIS PRESS RELEASE, REQUIRED BY APPLICABLE CANADIAN LAWS, IS NOT FOR DISTRIBUTION TO U.S. NEWS SERVICES OR FOR DISSEMINATION IN THE UNITED STATES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO SELL ANY OF THE SECURITIES DESCRIBED HEREIN IN THE UNITED STATES. THESE SECURITIES HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS UNLESS REGISTERED OR EXEMPT THEREFROM.

Completion of the Proposed Transaction is subject to a number of conditions, including but not limited to, Exchange acceptance, and, if applicable pursuant to Exchange Requirements, majority of the minority shareholder approval. Where applicable, the Proposed Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Proposed Transaction will be completed as proposed or at all.

THE TSX VENTURE EXCHANGE HAS IN NO WAY PASSED UPON THE MERITS OF THE PROPOSED TRANSACTION AND HAS NEITHER APPROVED NOR DISAPPROVED THE CONTENTS OF THIS PRESS RELEASE.

NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS PRESS RELEASE.

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