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

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(R) 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(R)
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(R) 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(R) 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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Medifocus, Inc.
John Mon
COO
410-290-5734
[e-mail]
www.medifocusinc.com


Investor Relations Contact:
Consulting for Strategic Growth 1
Robert Giordano
917-327-3938
[e-mail]