Update from the Company, October 5, 2016

After such a flying start to the fiscal year, July 1, 2016 - June 30, 2017, we believe it’s high time for a status update.  Briefly summarized as everything is running according to plan in terms of development and research. The good news is that sales also exceeded expectations.

Launch of new Foot Device

The company's new foot instrument will be ready in 2017, with the required CE approval. Sales are estimated to start in Q4 2017, but it is too early forecast volumes.

Currently, we are working to develop a detailed launch plan, but the main elements are already in place. The launch will be divided into several phases and the first pre-launch phase has already started. In this context it is important to point out that the successful launch of a new medical device requires that you can prove that it will provide added clinical value. Medical health care systems are currently under extreme pressure and it is not enough to develop new technologies that provide only a marginal improvement.

This basic idea has been the main driver for the launch plan of the foot instrument. As a consequence, we will initially focus on selling the foot device to researchers and research institutions. We believe that this business is large enough to generate attractive revenues for the company, since our product aims at diagnosis within diabetes, the world's most widespread disease.

However, this is only our first milestone. Once we have received, what we call an "academic consensus" from leading diabetes scientists, the plan is to press ahead with the next phase. This will involve changing our target and focusing on reimbursement systems, diabetes centres and patient organizations. The last step is the "Roll Out" phase, where real growth will occur.

Pre-Launch of new Foot Device

The Pre-launch is the first step in our development plan where the goal is to communicate our presence and to find relevant research groups that are interested in the new device. The pre-launch is a preparation for the planned sales start, in Q4 2017, and it will continue running until then.

The annual EASD congress, held this year in Munich, was the start of our pre-launch. The purpose of our participation was to get in touch with researchers who are interested in doing research with our instruments.

Physician Eero Lindholm's oral presentation, where he presented his research findings obtained with our prototype foot device gave us a great boost. We were fully occupied most days presenting our technology for diabetes researchers, without the usual dips between seminars.

A number of contacts were made, some more valuable than others, and my judgment is that this may result in interesting research studies. We also received a lot of interest from doctors and academics from Russia and China.

This autumn and winter, we will continue our pre-launch. VibroSense will participate in the "French-Swedish Life Science Day 2016" in Paris on 20 October. Moreover, VibroSense will participate as an exhibitor at the Medica fair in In Dusseldorf in November 2016. Medica is the world's largest trade fair in medical technology.

VibroSense has also engaged an international public relations company, who in a very short time has managed to generate five articles, three of which in the international media and two in the Swedish media.

Development of the foot device

The development runs on unabated. The design concept is set and the mechanical design has come far. The detailed design of the electronics has been completed and all parts of the Alpha-prototype will be manufactured soon. This will be a working prototype that includes both new mechanics and new electronics.

The Alfa prototype will be used for tests of both functionality and pre- CE marking. The Alpha prototype will be showcased at Medica fair, but only as a model since we do not want to reveal critical functionality in advance and thus avoid limiting our ability to get a strong IP protection.

During autumn and winter we will carefully evaluate and select a contract manufacturer that will manufacture the new foot device. We will also select and contract a global Type Approval provider who will handle the required approval process of the foot device, including the CE marking.

The Type Approval supplier must be a so-called "Notified Body", since this significantly facilitates the process of obtaining type approvals in most countries outside the EU.

On-going Research Studies

This activity has increased gradually during September after a pause during the summer vacation. Shortly, we will replace the existing foot-prototypes with new devices possessing much greater dynamics than the current prototypes. The new prototype supports a significant larger frequency range, i.e. from 4-250 Hz.

At the moment we have collected reference data from about 500 healthy people. The plan is that the data collection will be completed during the first quarter of 2017, collating reference data from 400 women and 400 men, equally distributed between 20 to 70 years of age.

Dr. Lindholm is very positive about the upgraded foot prototype (4-250 Hz) as it may reveal further new knowledge about diabetes-related impaired sensitivity on the sole of the feet.

Toni Speidel, CEO, VibroSense Dynamics AB, +46 40 650 14 12, info@vibrosense.com, www.vibrosense.com

VibroSense Dynamics AB (public) develops and markets efficient systems for early detection and diagnosis of peripheral sensory neuropathy, i.e. disease of large nerve fibres and nerve trunks in the legs and arms.

The Company, founded in 2005, has been listed on the Small Cap list AktieTorget since May 2015. The product portfolio includes a CE-marked medical device, the VibroSense Meter, for diagnostics of impaired sensitivity in the hands.