Invictus MD Strategies to buy 35% of Focus Distribution

INVICTUS MD STRATEGIES CORP. ANNOUNCES NON-BINDING LETTER OF INTENT TO ACQUIRE 35% OF SMOKAZON.COM

Invictus MD Strategies Corp. has entered into non-binding letter of intent whereby the company would purchase 35 per cent of Focus Distribution LLC, located in Southfield, Mich., which operates as Smokazon, in exchange for cash, membership interests and warrants of the company.

Smokazon is an American on-line-based multinational corporation engaged in worldwide marketing and selling of aromatherapy-related gear and accessories. Within the past year, Smokazon has provided an exciting destination for a variety of brand name smoking accessories and gear. They have created a unique store that offers its customers the ability to find what they want quickly together with free shipping, hassle-free returns, lowest-price guaranty and a 30-day returns window.
 
Pursuant to the LOI, the company would acquire 35 per cent of the membership interests of Smokazon in exchange for a cash payment of $120,000; the issuance of common shares valued at $228,930; and the issuance of 300,000 share purchase warrants, exercisable at 50 cents for a period of 24 months after the date of issuance. The common shares to be issued will be based on the highest closing share price during the first 60 days of trading, and the minimum share price will be set at 90 cents per share. The common shares will be held in escrow, subject to a voluntary pooling agreement, with one-third released each quarter after the later of the closing date or the 60-day trading period described above. Invictus MD will have an option to purchase an additional 14 per cent of Smokazon (based on Smokazon's fully diluted capitalization on closing of the transaction) at a price of four times trailing 12 months earnings before tax, interest, depreciation and amortization on the 24th- and 36th-month anniversary of the definitive agreement, and will have a right of first refusal to purchase additional membership interests.

The non-binding LOI is subject to the execution of a definitive agreement between the parties by Jan. 23, 2015, or such other date as may be mutually agreed. In the event the definitive agreement is executed, the closing of the transaction will be subject to a number of other conditions precedent, including but not limited to final board approval by the company and receipt of applicable regulatory approvals.