Announces Record 294% Increase in Q2/FY 2014 Revenue

Medifocus, Inc. Announces Announces Record 294% Increase in Q2/FY 2014 Revenue

Submitted by Medifocus Inc. on Wednesday, 12/4/2013

COLUMBIA, Md. and Toronto, ON- December 4, 2013 Medifocus, Inc. (OTCQX: MDFZF and TSXV: MFS) (Medifocus or the Company), a leader in the use of focused microwave energy to treat cancer and other tumors, is pleased to announce its financial results for the three and six month periods of fiscal 2014 ending September 30, 2013.

Revenue for the second quarter of fiscal 2014 ending September 30, 2013 was CN$1.23M compared to revenue of CN$313,281 in the second quarter of fiscal 2013, representing a 294% increase. Revenue for the six months ending September 30, 2013 reached a record CN$2.55M, representing a 40% increase over total revenue in fiscal year 2013 of CN$1.81M. The revenue increase for both periods reflects the continued successful rollout and strong market acceptance of the Company’s Prolieve® Thermodilatation System for treatment of Benign Prostatic Hyperplasia (BPH).

The Company’s APA 1000 Breast Cancer Treatment System has already received allowance from the U.S. FDA and Health Canada to conduct a pivotal Phase III clinical trial as a final step towards pre-marketing approval (PMA) for commercialization. ICG will assist Medifocus in recruiting additional clinical sites in China to expedite the completion of the study and also initiate the process to seek simultaneous CFDA approval for the APA 1000 for treatment of breast cancer.

The Company has maintained a gross margin of 66%, excluding the amortization expense. The net loss for the second quarter of fiscal 2014, was (CN$1.47M), or (CN$0.013 per share) and for the first six months was (CN$2.70M), or (CN$0.023 per share). The net loss for both time periods is primarily due to the significant resources the Company has expended in rolling out the Prolieve® system and the increase in general and administrative expenses following the acquisition and commercialization of the Prolieve® systems by the Company. The net loss for the second quarter of fiscal 2013 was (CN$1.02M), or (CN$0.014 per share), and for the six months was (CN$1.43M), or (CN$0.019) per share. These reporting periods in fiscal 2013 reflect only two months of Prolieve® operations.

Since acquiring the Prolieve® business, the Company has increased its market penetration from 60 accounts in July 2012 to about 200 accounts in September 2013. (See the attached chart showing the growth of the Prolieve® system in terms of users).

Dr. Augustine Y. Cheung, President and CEO of Medifocus, commented, “Since acquiring Prolieve® in July of 2012, we have invested significantly in our sales force and infrastructure. In a little over a year, we have expanded our operations and streamlined our infrastructure, while successfully demonstrating the value of the Prolieve® system. We are pleased with our growth in both revenue and new account acquisition to date as they continue to reveal the growth opportunity for our thermotherapy treatments and we look forward to continued sales growth in the remainder of fiscal 2014.”

About Medifocus:

Medifocus is a leader in the use of focused microwave energy to treat cancer and other tumors. It owns two fully developed technology platforms with comprehensive US and international patent protection: (1) 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 U.S. 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 (2) The Adaptive Phased Array (APA) Microwave Focusing Platform-invented by MIT, licensed to Medifocus, directs precisely focused microwave energy at tumor center to induce shrinkage or eradication of tumors without undue harm to surrounding tissue. The Company’s APA 1000 Breast Cancer Treatment System, developed from the APA technology platform has received approval from the U.S. FDA and Health Canada to conduct the pivotal Phase III clinical trials. The Company 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.

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Forward-Looking Statements

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 to the benefit to Medifocus’ future growth resulting from the acquisition of additional intellectual property rights, additional treatment possibilities and the expectation that sales from Prolieve® may accelerate as a consequence. 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, the Company 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.

Company Relations: John Mon, COO, Medifocus, Inc. Tel: 410-290-5734