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BioElectronics Corp. (OTC PK: BIEL)

BioElectronics Corp. (BIEL) engages in the development of revolutionary drug-free therapeutic devices for a variety of medical conditions. Its family of inexpensive, disposable drug-free anti-inflammatory products are made under the names ActiPatch™ Therapy, RecoveryRx™ Devices, HealFast™ Therapy and Allay™. The Company’s first product, ActiPatch Therapy, is a dermal patch with an embedded battery operated microchip that delivers weeks of continuous pulsed therapy. This product provides the most advanced pain relief by delivering a pulsed radio frequency signal of 27 megahertz (MHz) into the body’s affected area to induce a low frequency electromagnetic field to damaged tissue cells. ActiPatch addresses pain and inflammation associated with medical surgeries, chronic wounds, oral surgeries, sprains, strains, lower back pain, as well as chronic repetitive stress injuries.

BIEL was incorporated in April 2000 and began employee-based operations in 2003.

Financial Summary

Year on year, BIEL’s revenue grew 72.29% from $350,000 to $603,000 while net income improved from a loss of $2.76 million to a smaller loss of $1.93 million. The Company has had no audit of its financial performance since 2006 but looks to become a reporting company by year-end.

Analyst Consensus

No analyst follows BIEL at this time.

Investment Highlights

BIEL engages in the development of revolutionary drug-free therapeutic devices for a variety of medical conditions. Its family of inexpensive, disposable drug-free anti-inflammatory products include the ActiPatch™ Therapy, RecoveryRx™ Devices, HealFast™ Therapy (www.healfasttherapy.com) and the Allay™. The Company’s first product, ActiPatch Therapy is a dermal patch with an embedded battery operated microchip that delivers weeks of continuous pulsed therapy. This product provides the most advanced pain relief by delivering a pulsed radio frequency signal of 27 megahertz (MHz) into the body’s affected area to induce a low frequency electromagnetic field to damaged tissue cells. ActiPatch addresses pain and inflammation associated with medical surgeries, chronic wounds, oral surgeries, sprains, strains, lower back pain, as well as chronic repetitive stress injuries.

Taking a new approach to healing, BIEL offers drug-free therapeutic devices for a variety of medical conditions. The Company offers drug-free, anti-inflammatory patches that are aimed at addressing some of the key issues facing chronic pain sufferers. These patches contain an embedded microchip and battery that deliver pulsed electromagnetic energy, which effectively reduces swelling and significantly speeds the healing process with no known side effects. Addressing women’s health, the Company also offers drug-free solution for dysmenorrhea, a medical condition characterized by severe uterine pain during menstruation. The Company has also refocused on Plastic Surgery, Orthopedic and Sports Medicine markets.

BIEL’s drug-free approach to healing was recently highlighted amid the growing concerns related to the use of non-steroidal anti-inflammatory drugs (NSAIDs), acetaminophen and Tylenol in pain management. Industry leading acetaminophen brand, Tylenol, was especially the subject of safety concern in June when the U.S. Food and Drug Administration’s (FDA) said that the drug raises the risk of liver damage and death associated with liver dysfunctions. Meanwhile, aspirin and ibuprofen were also linked to significant risks and adverse effects, including, nausea, dyspepsia, gastrointestinal ulceration/bleeding, raised liver enzymes, diarrhea, epistaxis, headache, dizziness, priapism, rash, salt and fluid retention, hypertension, heart failure, hyperkalaemia, renal impairment, confusion and bronchospasm.

Moving forward in the heel and foot pain treatment market, the Company recently announced the completion of a clinical study that shows significant results. As stated by BIEL CEO Andrew Whelan, the data showed that study participants were able to reduce the amount of pain medication when using ActiPatch therapy. Whelan added that the Company will be using the data to support its upcoming pre-marketing submission to the FDA. If approved, BIEL will be providing the drug-free treatment to tens of millions of people suffering from heel and foot pain, and plantar fasciitis (painful inflammatory condition of the foot) worldwide. In the U.S, it has been reported that plantar fasciitis affects 2 million Americans a year and 10% of the population over a lifetime.

In addition, the Company announced a study to compare the use of ActiPatch Therapy for muscle pain and soreness to Tylenol, with conclusion expected to be available over the next 60 days. Although not significant for its currently planned FDA filings, the Company said the additional studies will further enhance its position in both the clinical setting and consumer markets. The Company also expects to file additional applications with the FDA for indications for general surgical recovery.

Market observers believe drug-free solution to pain management and healing will continue to gain in popularity amid the ongoing debate on the use of over-the-counter pain medications.

According to a report by BBC Research, the global pain-management market is worth around $30.9 billion in 2007, and is forecast to grow at a compound annual growth rate (CAGR) of 5.63% to reach $40.6 billion by the end of the 2012. The report added that the pharmaceuticals segment of the pain-management market is valued at $29 billion in 2007, and will be worth $38 billion by 2012 at a CAGR of 5.6%. By the end of 2012, the report forecast the medical devices segment, which is around $1.9 billion in 2007, to grow at a CAGR of 6.5% to reach $2.6 billion. BIEL can look forward to an enormous market opportunity as consumers grow wary of over-the-counter pain medications.

The Company intends to build a worldwide brand for drug-free pain relief. On August 26, the Company announced it is continuing its aggressive international expansion in the Republic of Korea, India and Italy, backed by a recent guarantee by the U.S. Government’s Export-Import Bank, which will assist the Company in its expansion efforts.

Technical Analysis

Source: http://stockcharts.com/h-sc/ui

BIEL’s MACD currently indicates a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9-day moving average or signal line. This suggests that positive momentum has begun to slow.

BIEL is below its 13-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

The stock’s Bollinger Bands indicate a relatively stable condition as reflected by tighter than normal band width. Trading within its Bollinger Bands, the OTC stock reflects neither an overbought nor oversold condition relative to its recent price trend.

Comparative Analysis

BIEL offers novel anti-inflammatory devices. Currently, the Company does not have any significant competitors. The table below shows comparative analysis among medical device makers.

Insider Trading Activity

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We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice.

The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report. Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

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