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BioElectronics Corporation - Substantial International Expansion Producing Sustained Revenue Growth-Company Reaches Monthly Break Even
Date:5/22/2008

e ActiPatch with a 70%+ gross margin. These margins put us well in line with the industry norms for cost structures for both pharmaceutical and medical device companies and have allowed us to achieve profitability much sooner than if we had left all of our manufacturing within the United States.

Increased User Acceptance of ActiPatch -- Over the past few quarters we have seen significantly increased user acceptance of ActiPatch. Much of this effort was achieved through the hard work of our field sales personnel and the distributors who have done a lot of footwork in the field. It has been a lot of basic blocking and tackling -- going out to see physicians and surgeons to explain the benefits of the product and convincing them to take that initial step to try it on the first patient. When these physicians have taken that step most have become strong believers in the technology. As one physician or surgeon started using the product they start telling others about the benefits. This same momentum is occurring relative to the patients on which ActiPatch was used. These patients have told other candidates for plastic surgery who then request that their surgeon try ActiPatch on them. This word- of-mouth process is meaningfully contributing to our success. We are pleased about this momentum and we see it continuing through the end of the year and well into 2009.

Product Line Enhancements -- Over the past few months BioElectronics has introduced a host of new products to the market. These include not only updates and enhancements to the plastic surgery oriented line, but we have also released several new products targeted at the sports injury and general soft tissue injury market for use outside of the United States where we already have a significant level of over-the-counter approval. We believe we have right product line in order to address a wide range of plastic surgery, general surgery and soft tissue injury related markets.

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