Medifocus Inc.

Headnote

National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions -- Section 144 of the Securities Act (Ontario) -- Application for revocation of cease trade order -- issuer subject to cease trade order as a result of failure to file annual and interim financial statements, related management's discussion and analysis and related certificates -- issuer is also in default for failing to file interim financial statements and certificates subsequent to the cease trade order -- issuer is also seeking to cease to be a reporting issuer in all jurisdictions of Canada in which it is currently a reporting issuer -- full revocation granted effective as of the date the issuer is determined to not be a reporting issuer.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., ss. 127 and 144.

February 3, 2023

MEDIFOCUS INC.

REVOCATION ORDER

Under the securities legislation of Ontario (the Legislation)

Background

Medifocus Inc. (the Issuer) is subject to a failure-to-file cease trade order (the FFCTO) issued by the Ontario Securities Commission (the Principal Regulator) on September 4, 2020.

The Issuer has applied to the Principal Regulator under National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions (NP 11-207) for an order revoking the FFCTO.

This order is effective in each jurisdiction of Canada that has a statutory reciprocal order provision, subject to the terms of the local securities legislation.

Interpretation

Terms defined in National Instrument 14-101 Definitions or in NP 11-207 have the same meaning if used in this order, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Issuer:

1) The Issuer was incorporated under theBusiness Corporations Act (Ontario) on April 25, 2005.

2) The Issuer is a reporting issuer in each of the Provinces of British Columbia, Alberta and Ontario (collectively, the Jurisdictions). The Issuer is not a reporting issuer in any other jurisdiction in Canada.

3) The Issuer does not have a physical head office. The registered office of the Issuer is located at 1090 Don Mills Rd, Suite #404, Toronto, Ontario M3C 3R6 and the mailing address of the Issuer is located at 8630-M Guilford Rd #342 Columbia, MD USA 21046.

4) The FFCTO was issued as a result of the Issuer's failure to file the following continuous disclosure materials as required by applicable Canadian securities laws:

(i) audited financial statements for the year ended March 31, 2020;

(ii) management's discussion and analysis relating to the audited annual financial statements for the year ended March 31, 2020;

(iii) interim financial statements for the period ended June 30, 2020;

(iv) management's discussion and analysis relating to the interim financial statements for the period ended June 30, 2020; and

(v) certifications of the foregoing filings as required by National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings;

(collectively, the Unfiled Documents).

5) Except for certain press releases filed by the Issuer, the Issuer has not filed continuous disclosure documents required to be filed by applicable Canadian securities laws since the date of the FFCTO (together with the Unfiled Documents, the Unfiled Continuous Disclosure Documents).

6) The Issuer became insolvent and on September 8, 2021, the Issuer filed a Notice of Intention to Make a Proposal under the Bankruptcy and Insolvency Act (Canada) (the NOI Proceedings). msi Spergel Inc. (MSI) was appointed as proposal trustee under the NOI Proceedings.

7) On October 7, 2021, the NOI Proceedings were continued under the Companies' Creditors Arrangement Act (the CCAA and such proceedings being the CCAA Proceedings) pursuant to an Initial Order (the Initial Order) granted by the Superior Court of Justice (Commercial List) (the Court). Pursuant to the Initial Order, the Court, inter alia, appointed MSI as monitor of the Issuer under the CCAA Proceedings (the Monitor) and authorized the Issuer to obtain a loan from Asset Profits Limited (APL), a corporation existing under the laws of the British Virgin Islands, in the maximum amount of $700,000 in order to finance the Issuer's working capital requirements and for other general corporate purposes and expenditures (the DIP Loan). As of the closing of the Transaction (as defined herein), $700,000 was outstanding under the DIP Loan.

8) On February 8, 2022, the Court granted an order under the CCAA (the Transaction Approval and Reverse Vesting Order) pursuant to which, inter alia, (i) the Court vested all liabilities of the Issuer of any kind or nature whatsoever, other than the DIP Loan and liabilities accruing after the date of delivery of the Monitor's certificate, in 1000101532 Ontario Inc. (ResidualCo) and released the Issuer from same; and (ii) the Court authorized the completion of a reorganization transaction (the Transaction) partially comprised of the following steps:

(i) APL shall subscribe for 18,498,421,500 common shares of the Issuer (the Common Shares and such Common Shares subscribed for by APL being the Restructured Shares) via private placement pursuant to Section 2.11(a) of National Instrument 45-106Prospectus Exemptions, to be paid by the forgiveness by APL of the DIP Loan;

(ii) the Common Shares (including the Restructured Shares) shall be consolidated on the basis of one new Common Share for every 184,984,215 old Common Shares (the Consolidation) and any fractional Common Shares outstanding following the Consolidation shall be cancelled, such that APL shall become the sole shareholder of the Issuer; and

(iii) all equity interests, compensation plans and other securities of the Issuer, other than the Restructured Shares, shall be cancelled for no consideration such that APL shall become the sole securityholder of the Issuer.

9) Pursuant to the Transaction Approval and Reverse Vesting Order, the Court ordered that no shareholder approval or other approval was required to complete the Transaction.

10) On August 4, 2022, the Issuer received a partial revocation order (the Partial Revocation Order) from the Principal Regulator to enable the Issuer to complete the Transaction.

11) The Issuer has satisfied every condition of the Partial Revocation Order.

12) The Transaction was completed on August 12, 2022. On August 15, 2022, the Filer disseminated a news release announcing the completion of the Transaction and filed such news release as well as a material change report on the Filer's profile on the System for Electronic Document Analysis and Retrieval.

13) As a result of the completion of the Transaction, the only outstanding securities of the Issuer are the Restructured Shares held by APL. The Issuer has no other outstanding securities (including debt securities).

14) ResidualCo is a wholly-owned subsidiary of the Issuer. The Issuer does not have any other subsidiaries. Pursuant to the Transaction Approval and Reverse Vesting Order, the Monitor, for and on behalf of ResidualCo, has filed an assignment in bankruptcy pursuant to the Bankruptcy and Insolvency Act (Canada).

15) The Common Shares previously traded on the TSX Venture Exchange (the TSXV) under the trading symbol "MFS". The Common Shares were suspended from trading on the TSXV in connection with the FFCTO. The Common Shares were delisted from the TSXV effective as of the close of business on August 19, 2022.

16) The Common Shares were previously quoted for trading on the OTC Pink in the United States (the OTC Pink) under the symbol "MDFZF". The Common Shares were delisted from the OTC Pink prior to market open on August 22, 2022.

17) The Issuer has filed a passport application with the Principal Regulator, as principal regulator, for an order pursuant to section 1(10)(a)(ii) of the Legislation to cease to be a reporting issuer in the Jurisdictions (the Cease Reporting Relief).

18) The Issuer expects the Cease Reporting Relief to be granted on the same date as this decision.

19) Upon the granting of the Cease Reporting Relief, the Issuer will not be a reporting issuer in any jurisdiction in Canada.

20) The Issuer is not in default of any requirements of the FFCTO or the applicable securities legislation of any jurisdiction in Canada or the rules and regulations made pursuant thereto, other than its obligations to complete and file the Unfiled Continuous Disclosure Documents.

21) All of the continuous disclosure documents required to be filed by the Issuer under applicable securities legislation of each Jurisdiction have been filed with the relevant securities regulatory authority, except for the Unfiled Continuous Disclosure Documents.

Order

The Principal Regulator is satisfied that the order to revoke the FFCTO meets the test set out in the Legislation for the Principal Regulator to make the decision.

The decision of the Principal Regulator under the Legislation is that the FFCTO is revoked as of the date on which the Issuer ceases to be a reporting issuer under the Legislation.

"Marie-France Bourret"
Manager, Corporate Finance
Ontario Securities Commission

OSC File #: 2022/0338