Medifocus Inc.
TSX VENTURE : MFS
OTCQX : MDFZF

Medifocus Inc.

June 21, 2012 19:48 ET

Medifocus Inc. Announces Closing of Private Placement Medifocus Inc.

TORONTO, ONTARIO--(Marketwire - June 21, 2012) -

(NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA)

Medifocus Inc. (Medifocus or the Company) (TSX VENTURE:MFS)(OTCQX:MDFZF) announces that it has completed the second tranche of its previously announced private placement. As part of the second tranche, the Company issued 22,200,000 units (each a Unit) at a price of $0.15 per Unit for gross proceeds of $3,330,000. Each Unit is comprised of one common share (a Common Share) and one Series B Common Share purchase warrant (a Warrant). Each Warrant entitles the holder to purchase one additional Common Share at a price of $0.20 for a period of 24 months following the completion of the Offering. 13,333,333 Warrants were issued to Integrated Asset Management (ASIA) Ltd. (Integrated) and may not be exercised until shareholders of the Company approve the creation of Integrated as a new Control Person since upon exercise of the Warrants Integrated would own more than 20% of the issued and outstanding shares of Medifocus and therefore be considered a "Control Person under the polices of the TSX Venture Exchange (the Exchange).

If, at any time prior to April 26, 2014, the daily volume weighted average trading price of the Common Shares on the Exchange exceeds $0.75 for at least 10 consecutive trading days, Medifocus may, within 30 days of such occurrence, give an expiry acceleration notice to the holders of Warrants and, if it does so, the Warrants will, unless exercised, expire on the 30th day after the expiry acceleration notice is given. The Common Shares and Warrants issued in connection with the private placement, and any Common Shares issued upon the exercise of the Warrants, will have a hold period in Canada until October 22, 2012.

$2,000,000 of the gross proceeds raised, representing 13,333,333 Units, closed in trust pending final Exchange approval.

The proceeds of this offering will be primarily used for working capital and to continue its pivotal phase III clinical trials using Medifocus APA 1000 System for the treatment of breast cancer (including all related professional expenses).

As part of the private placement, Integrated purchased, for gross proceeds of $2,000,000, 13,333,333 Units of the Company comprising of 13,333,333 Common Shares and 13,333,333 Warrants. The Units were acquired pursuant to the accredited investor prospectus exemption of National Instrument 45-106 - Prospectus and Registration Exemptions (NI 45-106). Integrated owned no Common Shares or other securities of the Company prior to acquiring the Units. Therefore, as at June 21, 2012 Integrated owns approximately 17.8% of all issued and outstanding Common Shares of the Company and 26.2% of all issued and outstanding common share purchase warrants of the Company, regardless of series. Integrated has advised the Company that there is no agreement, arrangement, commitment or understanding with respect to the voting of any of its securities in the Company. The Units were acquired for investment purposes and Integrated may, in the future, take such actions in respect of its holdings as it deems appropriate in light of the circumstances then existing.

As part of the private placement, Gwynneth Gold Limited (Gwynneth) purchased, for gross proceeds of $1,330,000, 8,866,667 Units of the Company comprising of 8,866,667 Common Shares and 8,866,667 Warrants. The Units were acquired pursuant to the accredited investor prospectus exemption of NI 45-106. Prior to acquiring the Units, Gwynneth owned 1,950,000 Common Shares and no common share purchase warrants of the Company, regardless of series. Under the private placement, Gwynneth acquired approximately 11.9% of the Company's Common Share and 17.4% of the Company common share purchase warrants, regardless of series. Therefore, as at June 21, 2012 Gwynneth owns approximately 14.5% of all issued and outstanding Common Shares of the Company and 17.4% of all issued and outstanding common share purchase warrants of the Company. Gwynneth has advised the Company that there is no agreement, arrangement, commitment or understanding with respect to the voting of any of its securities in the Company. The Units were acquired for investment purposes and Gwynneth may, in the future, take such actions in respect of its holdings as it deems appropriate in light of the circumstances then existing.

Medifocus owns a patented microwave focusing technology platform (the Adaptive Phased Array ("APA") technology), which can precisely target and control microwave energy to cause heating in cancerous tumors anywhere in the body reliably and repeatedly. The ability to target tumors with a precision controlled dose of heat can be used to destroy tumors at higher temperatures, to treat tumors in combination with chemotherapy and/or radiation at moderate temperatures for increased effectiveness and reduced toxicity and to trigger the targeted release of therapeutic drugs and genes at tumor sites at lower temperatures. While the core technology has been licensed from the Massachusetts Institute of Technology, Medifocus has further refined the precision of the microwave focusing and control ability and developed a commercial system dedicated exclusively for the treatment of Breast Cancer. Please visit www.medifocusinc.com for more details.

For further information about Integrated: Room 1501 Bank of East Asia Harbour View Centre, 56 Gloucester Road, Wanchai, Hong Kong

For further information about Gwynneth: Room 1902, Cheung Kong Center, 2 Queen's Road Central, Hong Kong

Neither the TSX Venture Exchange nor its regulation services provider (as that term is defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the proposed transactions and neither of the foregoing entities has approved or disapproved of the contents of this press release.

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