Equine Magnetic Therapy, Inc
The BIOflex® Story
BIOflex®, Inc. was incorporated in October, 1986 and is owned by Charles and Ted Zablotsky. The Zablotsky brothers have worked in this field for the past ten years, becoming educated and experienced in this relatively new field. They have developed a vast database of the scientific literature on the subject and have become recognized themselves, as pioneers of modern magnetic field therapy. Prior to this experience, Mr. Charles Zablotsky controlled a major supermarket, shopping center and several small entrepreneurial businesses simultaneously. Dr. Ted Zablotsky, an M.D., has verified the scientific information and advanced the utilization of these products. Their communication skills and credibility have won the loyalty and admiration of the thousands of individuals who have experienced their educational seminars and the benefits of magnetic field therapy.


BIOflex®, Inc. is the exclusive agent for a revolutionary line of therapeutic products manufactured in Germany. Our marketing area is the Americas - North, Central and South, including the Caribbean islands. BIOflex® is the registered trademark of the magnetic device that is so unique it has been protected by international patents. These permanently magnetized flexible pads cause an increase in local blood flow accelerating the body's natural healing process, thus relieving the pain and inconvenience of muscular aches, sprains, tendonitis, muscular low back injury and other nagging injuries. The magnets are intended to be an alternative to the use of such products as heating pads, electrical stimulation units, balms and liniments. Additionally, the use of BIOflex® products could aide in reducing one's requirement for oral anti-inflammatory preparations, muscle relaxants and pain relievers.


The BIOflex® product line fits into today's active lifestyle with products that can accomplish any and all of the beneficial effects of the products mentioned above, with none of the unpleasant features such as thermal or chemical sensitivity. Also, as consumers become more aware of the potential adverse effects to one's intestinal tract, liver and kidneys following prolonged use of non-steroidal anti-inflammatory drugs, (e.g. aspirin, Tylenol, and Motrin), they are going to seek out new products that do not involve chemicals entering the body. BIOflex® truly represents the kind of "common sense medicine" that appeals to our increasingly health conscious population.


The end users of these products are those individuals seeking an economical, effective, natural and safe alternative to current therapeutic modalities. Individuals tired of paying for electricity to power a heating pad or a stimulating device, those who don't appreciate the odor and irritation of balms and liniments, people who are tired of taking aspirin on a daily basis for chronic backaches, athletes who need to get back to peak form with a minimum of down time, workers who can't afford to miss any more work because of sprains or strains, everyone who wants to rid themselves of the nagging aches and pains of everyday living - all are our potential customers.


These initial uses of BIOflex® pads represent the first of what will become a complete line of magnetic products designed for the home health care market as well as for ethical use (i.e. - prescribed and/or utilized by physicians). Low back pain alone motivated the American consumer to spend over $1.5 billion for over - the - counter (OTC) treatments in 1990. The total annual cost to the economy of low back pain exceeded $16 billion. Thirty one percent of all worker's compensation cases are due to low back muscle sprains, averaging about $23,000 per case. Other types of muscle sprains and strains account for an additional nineteen percent of all claims at an average cost of $14,000 per claim. It is not unusual for a Fortune 500 company to contribute $50 - $100 million per year to worker's compensation funds.


With numbers of this magnitude, it is clear why third party insurers are demanding renewable, less costly treatment modalities. The potential economic advantage BIOflex® represents to industry is truly impressive. Our experience has consistently shown a return to work in less than half the normal recovery period. If BIOflex® can return every employee to work even one day earlier than with conventional treatments, imagine the tremendous savings when factored over the man hours lost to minor injuries such as sprained ankles. Treatments that can reduce "down time" resulting from injury are actively sought in this era of medical cost containment - and BIOflex® is the choice.


The timing of introduction to the market for these products is particularly advantageous for us. Due to the concerns about the escalating costs of health care, there is a movement towards the development of renewable sources and options for the consumer. Additionally, there is an increasing awareness of the chemicals being ingested on a daily basis and the desire to lower one's intake of chemicals of every kind. The BIOflex® products are long lasting and designed for multiple applications. There is no waste, no recurring costs and best of all, there are no toxic side effects due to the products. The BIOflex® magnets offer a natural alternative to chemical therapy at a time of increased consumer demand for such products.


BIOflex® represents all the advantages of an electric heating pad with none of the drawbacks that tend to limit its appeal. A heating pad can feel good on a sore shoulder, but only while sitting plugged into the wall. BIOflex® offers all the same benefits as you go about your normal routine, and BIOflex® can be used while sleeping, unlike potentially hazardous electric pads. BIOflex® pads are simply secured over the skin and require no gels, batteries, wires, liniments or special training. BIOflex® pads are economical because they are effective and continue to be effective over and over again. They are safe and cannot be abused as one cannot overdose with them nor is there any systemic effect. BIOflex® truly represents the kind of "common sense medicine" that appeals to our increasingly health conscious population.


The BIOflex® design was conceived by Mr. Horst Baermann of Germany. Mr. Baermann is an internationally renowned physicist and has been involved in magnetic products practically his entire life, either directly or in conjunction with his father, the late Mr. Max Baermann. The elder Mr. Baermann was credited with numerous inventions and was awarded hundreds of patents, many of which are in every day use. For example, refrigerators once had a handle and latch system to operate the door. Thousands of children died every year when they played in discarded units and were trapped with no way to operate the latch from inside. The new refrigerators feature a rubberized magnetic gasket to keep the door closed. Max Baermann received letters from many government officials, including one from The White House, acknowledging the genius of his invention and crediting him with saving the lives of many thousands of children.


The Baermanns have their inventions in such common items as copying machines and personal computers. An integral part of the copying process relies on a magnetic roller bar invented by Mr. Baermann and is now licensed to Xerox. Every Porsche, BMW, Audi and Volkswagen utilizes Baermann magnets. The meter that measures one's electricity use at home features Baermann designed magnets as does the light metering system used on SLR cameras. In short, this is an established company with an international reputation for quality and innovation. BIOflex® pads represent the first of many inventions with applications for medical use.


MARKET


Our market is composed of several segments, some that tend to overlap. The competition horse market is our oldest division and represents steady to slightly increasing sales. BIOflex® has become well known in the Thoroughbred industry as the most economical and effective treatment for leg problems. Some of the most respected and successful trainers in the industry, Woody Stephens, Jack Van Berg and Charlie Whitingham, have endorsed BIOflex® in our advertising. Their only incentive for the testimonial was the effectiveness of the pads - they received no compensation whatsoever. BIOflex® pads save the horseman time and money and allow him to get his horse back into training sooner than with any other therapy. Also on the veterinary side are those products designed for the domestic animal.


In the U.S. these products are sold with limited claims and are only described as providing a natural and safe benefit and restoring a state of wellness. This market will be dramatically expanded when regulatory approval permits us to expand our claims as a medical device. Clinical testing to investigate the physiologic effects of the BIOflex® products will continue. Through the accumulation of such data we will construct an irrefutable case to present to the regulatory authorities to gain F.D.A. approval as a medical device. However, in the interim, we will continue to distribute the products with limited claims, thus allowing for some revenues until that time when we are allowed to expand our claims and, therefore, our market.


We have been registered by Health and Welfare Canada to market BIOflex® with full claims as a medical device. Magnetic therapy is already an accepted entity in Canada and there are several magnetic products already on sale in Canadian pharmacies. The marketing task is slightly different than in the U.S. because Canadians are more accepting of alternative therapy. The challenge is to convince them that BIOflex® represents the state of the art in magnetism.


Professional sales also represent a specialized market segment in which magnets of more sophisticated design and esoteric application can be distributed. Direct sales to major employers, insurers and labor unions is another developing market. All these products will feature the concentric circular magnetization, thus assuring a market niche to be exploited. A new company has been formed by an orthopedic surgeon with a nationally recognized reputation. He was President of his professional society and is accredited as one of only two hundred disability evaluating physicians for major industry. He has arranged a council representing industry, medicine, insurers and labor to promote proper care of low back pain injuries. BIOflex® products are an integral component of this new treatment paradigm which will be tested in Texas and then taken nationwide when proven successful. It is projected that this new approach to what is essentially muscle sprain due to accumulated trauma, will save industry millions while restoring a greater level of functioning an quality of life in the affected individual. Productivity will improve because the worker will see that management is keenly interested and involved in his recuperative process. This physician has also started a business which will detail the physicians in Texas and surrounding states educating the physicians and offering the BIOflex® products for sale.


The BIOflex® magnets represent a safe and effective product that lasts for extended periods and is offered at a fair price. BIOflex® will be proven to be more effective, more economical and safer than any other home therapy system. An additional benefit of representing this product is the fact that BIOflex® has already been proven to be a product with excellent consumer acceptance. At one time we were affiliated with a network marketing company that experienced remarkable growth due to the catalyst our product supplied. This company already had a line of magnetic products which were being sold in seven foreign countries during the last fifteen years and had been in the U.S. for about a year with around 400 distributors. After 14 months with BIOflex®, their distributor base expanded to over 18,000 due to the excitement our product line ignited . The wholesale cost of the goods sold to them was over $3 million during that time.


The barometer of any new product's potential must hinge on its market niche, quality, effectiveness and price. Certainly, a product designed for multiple applications, that does not require any special training, external wires or batteries, with no potential for adverse side effects, with a design so unique that it is exponentially more effective than its competition, one that is reasonably priced and extremely safe to use - this product has a very promising future.


People in the US and Canada are now becoming more aware of the powers of natural remedies. This information has been wide spread for years in Japan where magnetic devices are more well known. This represents another huge marketing opportunity as a patent has also been granted protecting that country, joining the patents in effect in the US and Europe. Likewise in Europe, magnetic devices and natural remedies are more generally accepted and such products enjoy good success in Switzerland, Germany, Italy and Spain. Magnetic facial treatments are in use in France as are electro-magnetic acupuncture and energy treatments. A tremendous marketing advantage is the protection provided by these international patents, provided there are funds to defend the patents.
Magnetic field therapy will be utilized due to the economic imperative and the developing understanding of its mechanisms of action. We intend on continuing our R&D to provide some of the insights into these mechanisms and to stay at the front of the pack in the development of new products and applications. We have strengths of two types. One is to show the advantages of magnetic therapy over the other modalities currently in use. The other is the advantages over our competitors and the inferior magnetic products they sell.


We believe that the BIOflex® products are second to none in their effectiveness, economy or ease of use. Thousands of happy consumers who share this view are the proof that there is a tremendous appeal in the market for the BIOflex® magnetic products. At this time we see a need for several changes to be made in our organization to 1) facilitate the acquisition of the scientific data that will make FDA approval a reality and 2) develop the marketing strategy to deal with the opportunity created by that reality.

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