Medifocus Inc.

OTCQX : MDFZF
TSX VENTURE : MFS


Medifocus Inc.

December 18, 2013 09:16 ET

Medifocus Inc. Announces Closing of First Tranche of $3,540,000 Convertible Debenture Financing

COLUMBIA, MARYLAND and TORONTO, ONTARIO--(Marketwired - Dec. 18, 2013) - Medifocus Inc. (OTCQX:MDFZF)(TSX VENTURE:MFS) announced today the initial closing of a non-brokered private placement of 354 units at a price of $10,000 per unit (the Units). The $3,540,000 is part of the Company's non-brokered private placement (the Offering) of $6,000,000 previously announced in August 2013. The Company expects to complete the remainder of the Offering on or before January 17, 2014.

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 Shares at a price of $0.30 per Share a period of 36 months following the completion of the Offering. Any securities issued under the first tranche of the Offering are subject to a hold period until April 19, 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 $314,100 in cash and issue 1,256,400 Finder's Warrants to Asset Profits Limited, Shop 204 G/F The Arcade, 100 Cyberport Road, Hong Kong. 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® line of business and for working capital.

Dr. Augustine Y. Cheung, President and CEO stated, "The completion of the first tranche of our $6 million private placement enables us to build upon and accelerate the tremendous progress we have made in rolling out our Prolieve® product and positioning it at the forefront of the BPH market. Since the acquisition of Prolieve in late July last year, we have tripled our Prolieve user sites from 60 to over 200. Given Prolieve's® proven success and the immediate market need for the treatment, we believe that this recent funding will allow us to significantly enhance our sales potential and move closer to break even."

"While our immediate focus remains on commercializing the Prolieve® product, we will continue to advance our APA 1000 Phase III clinical trials to eventually break into multiple cancer treatment markets. We are extremely pleased that we have completed the first portion of our private placement and can build upon the progress we have made to date. With the extension of the remainder of the unit offering, we will have an additional opportunity to move forward with additional growth opportunities for our proprietary heat systems in the near future."

About Medifocus

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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