Medifocus Inc.

Headnote

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications- application for a decision that the issuer is not a reporting issuer under applicable securities laws -- issuer is not an OTC reporting issuer -- the securities of the issuer are beneficially owned by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders worldwide; no securities of the issuer are traded on a market in Canada or another country -- issuer is not in default of securities legislation except it has not filed certain annual and interim financial statements, related management's discussion and analysis and related certifications -- requested relief to cease to be a reporting issuer granted.

Applicable Legislative Provisions

Securities Act, R.S.O. 1990, c. S.5, as am., s.1(10)(a)(ii).

National Policy 11-206 Process for Cease to be a Reporting Issuer Applications.

February 3, 2023

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the Jurisdiction) AND IN THE MATTER OF THE PROCESS FOR CEASE TO BE A REPORTING ISSUER APPLICATIONS AND IN THE MATTER OF MEDIFOCUS INC. (the Filer)

ORDER

Background

The principal regulator in the Jurisdiction has received an application from the Filer for an order under the securities legislation of the Jurisdiction (the Legislation) that the Filer has ceased to be a reporting issuer in all jurisdictions of Canada in which it is a reporting issuer (the Order Sought).

Under the Process for Cease to be a Reporting Issuer Applications (for a passport application):

(a) the Ontario Securities Commission (the OSC) is the principal regulator for this application; and

(b) the Filer has provided notice that subsection 4C.5(1) of Multilateral Instrument 11-102 Passport System (MI 11-102) is intended to be relied upon in British Columbia and Alberta.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this order, unless otherwise defined.

Representations

This order is based on the following facts represented by the Filer:

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

2. The Filer is a reporting issuer in each of the Provinces of British Columbia, Alberta and Ontario. The Filer is not a reporting issuer in any other jurisdiction in Canada.

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

4. The Filer is subject to a failure-to-file cease trade order (FFCTO) issued by the OSC on September 4, 2020, and effective in each other jurisdiction in which Multilateral Instrument 11-103 Failure-to-File Cease Trade Orders in Multiple Jurisdictions applies and in each jurisdiction that has a statutory reciprocal order provision.

5. The FFCTO was issued as a result of the Filer'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).

6. Except for certain press releases filed by the Filer, the Filer 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).

7. The Filer has concurrently filed an application with the OSC under National Policy 11-207 Failure-to-File Cease Trade Orders and Revocations in Multiple Jurisdictions for an order pursuant to Section 144 of the Legislation revoking the FFCTO without requiring the Filer to file the Unfiled Continuous Disclosure Documents, to be effective on the same date as the Order Sought.

8. The Filer became insolvent and on September 8, 2021, the Filer 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.

9. 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 Filer under the CCAA Proceedings (the Monitor) and authorized the Filer 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 Filer'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.

10. 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 Filer 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 Filer 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 Filer (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 Filer; and

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

11. 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.

12. On August 4, 2022, the Filer received a partial revocation order from the OSC to enable the Issuer to complete the Transaction.

13. 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.

14. ResidualCo is a wholly-owned subsidiary of the Filer. The Filer does not have any other subsidiaries. Pursuant to the Transaction Approval and Reverse Vesting Order, the Monitor, for and on behalf of ResidualCo, will file 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. As a result of the completion of the Transaction, the only outstanding securities of the Filer are the Restructured Shares held by APL. The Filer has no other outstanding securities (including debt securities).

18. The outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 security holders in each of the jurisdictions of Canada and fewer than 51 security holders in total worldwide.

19. No securities of the Filer, including debt securities, are traded in Canada or another country on a marketplace as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.

20. The Filer is not an OTC reporting issuer under Multilateral Instrument 51-105 Issuers Quoted in the U.S. Over-the-Counter Markets.

21. The Filer has no current intention to seek financing by way of a public offering of its securities in Canada.

22. The Filer 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.

23. But for the fact that the Filer is subject to the FFCTO as a result of failing to file the Unfiled Continuous Disclosure Documents, the Filer would be eligible to use the "simplified procedure" under National Policy 11-206 Process for Cease to be a Reporting Issuer Applications.

24. The Filer is applying for an order that the Filer has ceased to be a reporting issuer in all of the jurisdictions of Canada in which it is a reporting issuer.

25. Upon the granting of the Order Sought, the Filer will not be a reporting issuer in any jurisdiction in Canada.

Order

The principal regulator is satisfied that the decision 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 Order Sought is granted.