Letter from BioElectronics' (OTC PINK: BIEL) Presi

FREDERICK, MD--(Marketwired - Aug 28, 2017) - The following is a statement from BioElectronics ( OTC PINK : BIEL ).

Dear Fellow Shareholders,

These are busy and exciting times at BioElectronics ( OTC PINK : BIEL ).

New Product Opportunities

Over the last few years, there have been two significant developments: 1) There has been a paradigm shift in the medical community's understanding of how chronic pain develops 2) There is evidence that BioElectronics' technology platform (Pulsed Shortwave Therapy) works by regulating the activity of nerves in the body, i.e. by neuromodulation. Together they present an excellent opportunity to position ActiPatch as the ideal therapy against chronic musculoskeletal pain.

When pain signals from an injury repeatedly attack the nervous system, the nerves become "sensitized". Due to this, the nerves "learn" pain and continue to overreact long after the injury has healed, leading to a condition known as "central sensitization". Individuals who have developed central sensitization will experience hyperalgesia (excessive pain) from movements or allodynia (false pain), both of which can become chronic. The key to chronic pain relief lies in disrupting the irregular pain signals. The ActiPatch's signal allows nerves to "learn" this new, harmless information (ActiPatch signal) over time, thus disrupting irregular pain signals. The nerves cannot adapt to ActiPatch's pulsed signal, allowing continuous use for 24/7 pain relief. This short video http://actipatch.com/why-actipatch/ features Kenneth J. McLeod, Ph.D., Director of the Clinical Science and Engineering Research Center at Binghamton University, outlines how ActiPatch mitigates central sensitization. 

Central sensitization is responsible for many other neurological disorders: migraines, overactive bladder, primary dysmenorrhea, endometriosis, fibromyalgia etc. have all been linked to hypersensitive responses of the central nervous system. The neuromodulation basis of the BioElectronics product line supports broad product opportunities in:

• Musculoskeletal Pain
• Menstrual Pain
• Heel and Foot Pain
• Migraine Headaches
• Postoperative Recovery and Pain
• Chronic Wounds
• Overactive Bladder
• Pelvic Pain

Exploiting these market opportunities is contingent on executing our four-point strategic plan:

1. Aggressive sales and marketing programs in both domestic and international markets;  2. Development of political and public support to compel use of our drug free alternative to the opioid; 3. Clinical research to substantiate new product efficacy; and, 4. Lower our cost of capital to finance expansion.

To implement these strategies we are doing the following:

Sales and Marketing We are continuing to solicit new international partners for distribution and licensing, while continuing to strengthen our relationship with existing partners. The absence of a well-defined sales and marketing strategy for over-the-counter medical devices is new to the healthcare industry, leaving us to do much of the groundwork. However, I remain confident that the effectiveness of our products will yield several strong relationships with reputed distributors, going forward.

As part of our efforts to continuously develop new products and improve existing ones, we are:

• Introducing custom-design kinesiology tape strips to affix the device to the body, as a replacement for the existing back and knee wraps. Aside from improving user comfort, this allows us to promote a single SKU, multi-purpose ActiPatch. Moreover, this allows us to introduce boxed versions of the highly successful 7-day trials and a 360-Hour ActiPatch at $19.95 for price sensitive shoppers.
• Redesigning the Smart Insole plantar fasciitis product to enhance user comfort with the insole. 
• Publishing the results of a health economics study, which indicated that using ActiPatch for chronic pain reduces total healthcare costs (medication and cost of services) by 42%.
• Continuing to survey customers and incorporate their feedback to improve our product packaging design and content.

To expand our sales and marketing division, we brought on board Mr. Keith Nalepka as VP of Sales and Marketing. Keith has over 15 years of experience working in the retail sales industry, both with multi-million dollar brands and startups. He has a thorough understanding of all aspects of the healthcare business including sales, marketing and retail distribution. Over the years, Keith has developed working relationships with retail buyers, brokers and well-connected trade members. Having negotiated over $ 500 million in retail acceptance, Keith brings a strong industry background that can expedite our go-to-market strategy in multiple vertical markets.

Keith graduated from the University of Maryland and has spent several years playing professional baseball for the Texas Rangers. He has also completed a Harvard Executive Management certificate program and was a Johns Hopkin's Carey Business School Innovate Scholar winner, selected by the National Science Foundation.

Keith has:

• Provided national retail direction and branding for numerous SKUs in the OTC space;
• Successfully gained national retail acceptance in Walgreens, CVS, RA, Target, and GNC;
• Negotiated multi-year, multi-million-dollar advertising contracts;
• Integrated a plan to successfully manage national broker and buyer relationships; and,
• Developed international distribution in Europe and Middle East.

We are confident that Keith will provide leadership to implement a professional sales and marketing structure that will fully realize the value of our innovative products.  Sales & Marketing Promotional Activities

• Continue 7-Day Trial "Try & Tell" marketing program and customer use analysis to promote the products;
• Implement DIRECTV advertising featuring the 7-Day Trial device focused on chronic pain sufferers;
• Obtain retail product coverage in the three major drugstore chains and the mini chains;
• Establish a US network of independent sales agents and online sales support covering orthopedic physicians, chiropractors, podiatrists, and independent pharmacies; and,
• Solicit Health Maintenance Organizations (HMOs) and other third party payers to use ActiPatch using the UK National Health System economic cost analysis of a 42% reduction in costs. 

Alternative Drug Free Pain Relief

We are continuing our campaign to achieve government and consumer recognition of our products as a viable alternative or adjunctive pain therapy in lieu of opioids or other narcotic medications. We are actively seeking an unassailable sponsor to conduct a direct, publishable clinical trial comparing ActiPatch therapy to opioid use in relieving chronic pain. We are confident that ActiPatch will demonstrate superior efficacy and safety when compared to opioid pain medication.

Clinical Evidence and New Products

The status of our clinical research is as follows:

Study Principal Investigator Primary Outcome Measure Enrollment Status Bilateral Hernia Surgical Recovery University Hospital, Belgium Analgesic medication use and pain over 7 day recovery 20 bilateral 60 unilateral Data Analysis Chronic Back Pain Oxford University Oswestry Disability Index 40 Recruiting Chronic Back Pain Dr. Chandrasekhar Koneru Athens, Alabama Oswestry Disability Index 60 Recruiting ActiPatch Cost Study Ian Rawe Ph. D. Cost basis of pain management 3 months before and 3 months with ActiPatch 30 Results submitted to NHS Migraine Study Dr. Barry Eppley Carmel, Indiana Migraine frequency/ intensity 48 44 Patients recruited Menstrual Pain Professor Clark University of Birmingham SF36 80 IRB Submitted

Cost of Capital

While initial product development was protracted, investment costs were higher than expected and additional modest funding is needed for advertising and working capital, it is to be noted that we have established a:

• Unique, patented technology platform of wearable, safe and cost effective pulsed shortwave neuromodulation devices.
• Category of product opportunities that include, but are not limited to chronic musculoskeletal pain, menstrual pain, chronic wounds, postoperative pain, migraine headaches, overactive bladder, pelvic pain etc.
• Domestic and international market presence with products that have proven marketability and customer acceptance
• Committed, accomplished management team.

Most importantly future growth is not dependent on large capital outlays for research and development.

Thank you for your support.

Sincerely,

Andrew Whelan, President