FREDERICK, Md., Feb. 8, 2016 /PRNewswire/ -- BioElectronics Corporation (OTC Pink: BIEL), the maker of advanced consumer medical devices, announced today that it is responding to a notice of an order for administrative proceedings from the Securities and Exchange Commission posted on the agency website.
"Although neither the Company nor any of the respondents have been formerly served, we have reviewed the allegations on the website. We want our shareholders to know that we consider the SEC position to be without merit or foundation in fact," said Richard Staelin, Chairman of the Board of BioElectronics Corporation and the Edward and Rose Donnell Professor of Business Administration at The Fuqua School of Business, Duke University.
Staelin explained that the SEC's document contains numerous factual errors and boils down to two issues, both of which have been disclosed previously to BioElectronics shareholders. These issues are:
- Revenue recognition for two sales in 2009. Both sales were final and paid in full. Independent SEC-reporting consultants prepared the Company's financial statements and an independent, 225-person audit firm audited the transactions and determined they met the criteria required to recognize the revenue in the audit report and in the SEC filed 10k. The transactions are not a question of income recognition but an issue of when to record the sales.
- Use of convertible shareowner loans to fund the Company. As fully disclosed in Company financials, BioElectronics has financed its development operations in part with convertible loans.
It appears that the SEC objects to the Whelans sale of some of its loans to different individuals and entities. All note sales were to qualified investors in accordance with SEC Rule 144 and held for longer than the SEC mandated holding period. The sales were fully disclosed and reviewed by legal and accounting advisors. The Whelans reinvested the proceeds of the loans in the Company, which represents only $1 for every $2.60 of their additional $5.6 million loans to the Company since 2010. It is not clear in the complaint if the SEC objects to shareholder sales or investing the proceeds in the Company.
Staelin also said that BioElectronics has filed with the SEC on two occasions and was stymied by administrative requirements that were not affordable by a small company. "We are confident that the Company and the respondents identified (including the head auditor) will be vindicated," Staelin concluded.
About BioElectronics Corporation
BioElectronics Corporation is a leader in biophysics and the maker of an industry leading family of disposable, drug-free, pain therapy devices: ActiPatch® Therapy, over-the-counter treatment for back pain and other musculoskeletal complaints; RecoveryRx® Devices for chronic and post-operative wound care; Allay® Menstrual Pain Therapy; and HealFast® Therapy for dogs, cats and horses. For more information, please visit www.bielcorp.com.
SOURCE BioElectronics Corporation