Midasco Announces Proposed Change of Business

October 5, 2015 News Release

Midasco Announces Proposed Change of Business

Vancouver, B.C. - Midasco Capital Corp. (the “Company” or “Midasco”) (TSXV: MGC) is pleased to announce that it has entered into a non-binding letter of intent dated effective October 2, 2015 (the “LOI”) with SOFTAC Systems Ltd. (“SOFTAC”) to complete a business combination whereby Midasco has agreed, subject to certain conditions, to acquire all of the issued and outstanding securities of SOFTAC (the “Transaction”). The business combination is an arm’s length transaction that will constitute a change of business (“COB”) pursuant to TSX Venture Exchange (the “Exchange”) Policy 5.2 – Changes of Business and Reverse Takeovers. Upon completion of the Transaction, the combined entity (the “Resulting Issuer”) will continue the business of SOFTAC. Subject to a number of conditions, completion of the Transaction will result in Midasco transitioning from a Resource Issuer to an Industrial Issuer on the Exchange.

About SOFTAC

SOFTAC is currently engaged in the business of operating in the industrial/service technology industry and offering a wide range of products to the forestry, mining and industrial industry. SOFTAC was established over 30 years ago, it is owned and controlled by the chief executive officer, Ian Bowman, a resident of the Province of British Columbia. SOFTAC is a privately owned and operated company incorporated under the Business Corporations Act (British Columbia) located in Surrey, British Columbia. SOFTAC has been involved in sawmill electrical drives and optimization products for most of these 30 years forming a solid customer base throughout Canada the USA, and in overseas markets in Chile, Japan, Australia, New Zealand, Mexico and other locations. SOFTAC is a fully certified CSA & UL manufacturing company with several proprietary in-house product designs. SOFTAC holds the patents for their own laser based scanner heads, Management Information Systems and they manufacture their own line of industrial motor starters and have recently introduced their new earthquake detection system QUAKETRIP.

Within the lumber industry, the SOFTAC assets include sawmill scanners, sorter control and tally systems and inventory management systems. Within the mining industry, the SOFTAC assets include conveyor control panels, voltage state starters, and indexer drives. Within the waste water treatment sector, the SOFTAC assets include electrical kiosks, pump control systems and reduced voltage starters and brakes. Within the industrial motor sector, the SOFTAC assets include chiller starters, ski hill and gondola drives, and specialty drives. SOFTAC’s QUATETRIP is a controlled seismic utility shutdown and notification device that is patented and approved for international building code standards.

The following financial information is derived from the reviewed unaudited financial statements of SOFTAC for the years ended March 31, 2015 and 2014:

Highlights of the Proposed Transaction

In consideration of the Transaction Midasco will issue 15,000,000 common shares at a deemed price of $0.15 per common share (the “Company Payment Shares”) to the existing shareholders of SOFTAC and make staged cash payments of $1,500,000 over a 24 month period.

It will be a condition of Closing that immediately prior to Closing, there will not be outstanding any warrants or options to purchase or securities convertible into common shares of SOFTAC.

Pursuant to the terms of the LOI, and subject to any regulatory, shareholder or such other approvals that may be required, the completion of satisfactory due diligence by each of Midasco and SOFTAC and other conditions contained in the LOI, the parties intend to negotiate and enter into a definitive agreement (the “Definitive Agreement”) which, once executed, will supersede the LOI.

The Definitive Agreement will incorporate the principal terms of the Transaction described in this press release, and in addition, such other terms and provisions of a more detailed structure and nature as the parties may agree upon after receiving further tax, legal and financial advice from their respective advisers. However, there is no assurance that the Definitive Agreement will be successfully negotiated or entered into.

Subject to Exchange approval, the Closing shall be completed on or before the date (the “Closing Date”) that is five (5) business days following the receipt of final acceptance by the Exchange of the listing and the completion of the Transaction and the other matters contemplated by this LOI, or such other date as the Parties mutually agree.

Private Placement Financing

Initial Financing

Prior to the prospective Closing of the Transaction, it is intended that Midasco will issue, by way of a private placement, up to 1,500,000 common shares in the capital of Midasco at a price of $0.10 per common share (the “Private Placement”). The net proceeds of the Private Placement will be used for general working capital purposes in connection with the Transaction. These private placement common shares will be subject to a hold period of four months and a day from the date of closing the Private Placement.

Concurrent Financing

The Transaction is subject to Midasco completing an equity financing (the “Concurrent Financing”) by way of a private placement to raise a minimum $2,000,000 and up to a maximum $3,000,000 at an intended price of $0.15 per share (the “Placement Shares”), which is equal to the deemed issuance price of the Company Payment Shares. The parties acknowledge that the funds from the Concurrent Financing will be held in escrow and not released until the Exchange approves the Transaction on such terms to be more particularly described in the Definitive Agreement. Midasco may pay finder fees in connection with the Concurrent Financing.

The net proceeds from the Concurrent Financing will be used for the development of the business, making staged payments to SOFTAC shareholders and general working capital purposes.

Conditions of the Proposed Transaction

The Transaction is subject to a number of conditions precedent. Unless all of such conditions are satisfied or waived by the party for whose benefit such conditions exist, to the extent they may be capable of waiver, the Transaction will not proceed. There is no assurance that the conditions will be satisfied or waived on a timely basis, or at all. The closing of the Transaction (the “Closing”) is subject to the satisfaction or waiver of the following closing conditions, which are for the benefit of both parties:

a. board approval and shareholder approval (if necessary) of the Transaction and other matters contemplated by the LOI to be obtained by Midasco;

b. board approval and shareholder approval (if necessary) of the Transaction and other matters contemplated by the LOI to be obtained by SOFTAC;

c. completion of due diligence to the satisfaction of the parties;

d. all necessary regulatory approvals with respect to the Transaction and the Concurrent Financing having been obtained, including but not limited to the approval of the Exchange and the other applicable securities regulatory authorities;

e. the signing of the Definitive Agreement;

f. completion of all matters, and the satisfaction of all conditions (unless waived in writing) under the Definitive Agreement required to be completed or satisfied on or before the Closing including but not limited to completion of the Concurrent Financing; and

g. cancellation of SOFTAC's then outstanding options, share purchase warrants and any other securities exercisable or convertible into shares of SOFTAC.

Additional Information

Trading of the common shares of Midasco will remain halted in accordance with Exchange policies until all required documentation with respect to the Transaction has been received and the Exchange is otherwise satisfied that the halt should be lifted.

The Company will seek a waiver from the sponsorship requirements of Policy 2.2—Sponsorship and Sponsorship Requirements of the Exchange, however, there are no assurances that such waiver will be granted by the Exchange.

If and when a Definitive Agreement is executed, Midasco will issue a subsequent press release in accordance with the policies of the Exchange containing the details of the Definitive Agreement and additional terms of the Transaction, including information relating to sponsorship, summary financial information in respect of Midasco and SOFTAC, and to the extent not contained in this press release, additional information with respect to the business of SOFTAC, the Private Placement, the Concurrent Financing, and insiders of the Resulting Issuer upon completion of the Transaction.

On behalf of the Board, William Pettigrew, President & CEO Phone: 604-669-2901

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 news release.

CAUTIONARY STATEMENT

Completion of the transaction is subject to a number of conditions, including Exchange acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Management Information Circular or Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the COB may not be accurate or complete and should not be relied upon. Trading in the securities of the Company should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has not approved nor disapproved of the contents of this press release.

READER ADVISORY

Statements in this press release may contain forward-looking information including, statements regarding the contemplated COB, Private Placement, and the Concurrent Financing. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forwardlooking statements. The reader is cautioned that assumptions used in the preparation of any forwardlooking 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 the Company. Factors that could cause the actual results to differ materially from those in forward-looking statements include, failure to obtain regulatory approval, the continued availability of capital and financing, and general economic, market or business conditions. The reader is cautioned not to place undue reliance on any forward-looking information. There can be no assurance that the proposed change of business or private placements will be completed or, if completed, will be successful.

The forward-looking statements contained in this press release are made as of the date of this press release, and the Company 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 required by securities law.

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