Medifocus Announces $2 Million Second Tranche Closing Of $6 Million Convertible Debenture Financing

COLUMBIA, MD and TORONTO, ON--(Marketwired - March 11, 2014) -

Medifocus, Inc. (OTCQX: MDFZF) (TSX VENTURE: MFS) announced today the closing of the second tranche of $2 million of its previously announced $6 million convertible debenture financing. The first tranche of $3,540,000 was completed on December 18, 2013.

The current financing consists of 200 units at a price of $10,000 per unit (the Units). Each Unit consists of (i) a $10,000 redeemable promissory note (“Note”), bearing 8% annual interest payable on a quarterly basis, which are convertible into Common Shares at a conversion price of $0.25 per Common Share, and which are payable 36 months after the closing of the Offering; and (ii) Common Share purchase Warrants (“Series C Warrants”) to purchase 20,000 common shares at a price of $0.30 per share for a period of 36 months following the completion of the Offering. Any securities issued under the second tranche of the Offering are subject to a hold period until July 7, 2014.

If, at any time after the date that is 12 months following the closing of the Offering, the daily volume weighted average trading price of the Common Shares on the TSX Venture Exchange or the OTCQX in the United States exceeds $0.50 (or its equivalent in U.S. dollars) for at least 20 consecutive trading days, Medifocus may at its sole discretion, within 30 days of such occurrence, provide a redemption notice to the holders of Notes and, if it does so, Medifocus will redeem Notes by paying the holders thereof the principal amount of such Notes plus any accrued but unpaid interest on the 30th day after the redemption notice is given.

If, at any time after the date that is 12 months following the closing of the Offering, the daily volume weighted average trading price of the common shares on the TSX Venture Exchange or the OTCQX in the United States exceeds $0.60 (or its equivalent in U.S. dollars) for at least 20 consecutive trading days, Medifocus may, within 30 days of such occurrence, provide an expiry acceleration notice to the holders of Series C Warrants and, if it does so, the Series C Warrants will, unless exercised, expire on the 30th day after the acceleration notice is given.

Medifocus will pay finder’s fees of $161,100 in cash and issue 644,400 finder’s Warrants in respect of the financing. Each finder’s Warrant will entitle the holder to purchase one additional Common Share at a price of $0.30 per Common Share for a period of 36 months following the completion of the Offering.

The net proceeds of the Offering will be used to accelerate the commercialization of the Prolieve® technology and for working capital.

Dr. Augustine Y. Cheung, President and CEO, stated, “We are extremely pleased to have raised $5.5 million of our $6 million private placement. This capital injection will allow us to move forward with our plans for the growth of our Prolieve® business. We have surpassed our goals by increasing Prolieve® user sites from 61 in July 2012, when we first purchased the Prolieve® business, to over 240 today. With the excellent safety and efficacy profile of our Prolieve® treatment, we expect continued growth in both revenue and user sites in 2014 and the further strengthening of our position in the market place.”

About Medifocus, Inc.

Medifocus owns two fully developed technology platforms with comprehensive United States and international patent protection: (i) The Endo-thermotherapy Platform-a catheter-basis focused heat technology platform that utilizes natural body openings to deliver precise microwave thermotherapy to the diseased sites. The United States Food and Drugs Administration (FDA) approved Prolieve Thermodilatation System for the treatment of Benign Prostatic Hyperplasia (BPH) was developed based on the Endo-thermotherapy and is currently generating revenue; and (ii) the Adaptive Phased Array (APA) Microwave Focusing Platform, invented by the Massachusetts Institute of Technology, licensed to Medifocus directs precisely focused microwave energy at tumor center to induce shrinkage or eradication of tumors without undue harm to surrounding tissue. Medifocus’ APA 1000 Breast Cancer Treatment System, developed from the APA technology platform, has received approval from the FDA and Health Canada to conduct the pivotal Phase III clinical trials. Medifocus believes that these two technology platforms can provide the design basis for the development of multiple cancer treatment systems for surface, subsurface and deep seated localized and regional cancers. Please visit www.medifocusinc.com, www.prolieve.com and http://www.facebook.com/pages/Medifocus-Inc-Company-Page/546315028715627 for more details.

Forward-Looking Statements and Information

This news release contains “forward-looking statements” and “forward-looking information,” which may not be based on historical facts. Forward-looking statements and forward-looking information, include, but are not limited to, information and statements with respect the structure and the proceeds of the Offering and the expected use of the proceeds. Forward-looking statements are frequently characterized by words such as “plan,” “expect,” “project,” “intend,” “believe,” “anticipate,” “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made. Such forward-looking statements and forward-looking information involve known and unknown risks, uncertainties and other factors that may cause the actual results events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements or forward-looking information. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements and forward-looking information. Except as required by applicable securities laws, Medifocus disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements or forward-looking information contained herein to reflect future results, events or developments.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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