XCEL Associates Announces Investment Opinion on Elast Technologies, Inc.

Business Editors

NOTE TO EDITORS: The following is an investment opinion issued

by XCEL Associates

NEW YORK--(BUSINESS WIRE)--May 15, 2000

ELAST TECHNOLOGIES, INC.

(OTC BB: ESTG-$1.375)

SUMMARY AND CONCLUSION

The Present Company: Elast Technologies, Inc. -

Elast Technologies, Inc. (OTC BB symbol "ESTG") is a technology-development company in the medical equipment field, based in Las Vegas, NV. Its Electronic Allergo-Sensitivity Test (ELAST) Device(tm) is an allergy-sensitivity testing instrument whose technology is based on the flow of electricity in the human body. The Company holds a patent on its invention, which could have a brilliant medical/economic future, especially if it receives FDA approval, because of the huge number of allergy-sensitive humans worldwide. A fully S.E.C.-reporting company, it was incorporated in NV in 1996 as a result of a reverse acquisition (with a public company) in October 1998, at which time ESTG shares began trading publicly. Robert D. Milne, M.D., the Inventor of the ELAST Device(tm) and the Founder of the Company, is recognized in the integrative medicine/allergy field. He practices family/integrative medicine, out of which came insights which led to his creation of the ELAST Device(tm). There are currently 9.3 million common shares outstanding, of which 4.0 million shares are in the float. The Founder and President together own 30% and there is an apparent constituency of shareholders with an unusual faith in the Company's outlook (many are Dr. Milne's patients). The 52-week price range of ESTG is $3.125-$0.75. Trading volume averaged about 14,000 shares per day from October 1998-February 2000, but has been 50,000 shares over the past 90days. The two-day combined total of almost 1,000,000 shares traded in mid-March was extraordinary. We attribute this volume surge to growing investor awareness of ESTG's potential, spurred by the Company's activities at the time to raise capital. It obtained $1 million which should cover final product development, clinical trials, and FDA filing next year.

The Proposed Company: Elast Bioelectronics Corporation -

Elast Technologies, Inc. has entered into a merger agreement with Bioelectronics Corporation ("Bioelectronics") of Germantown, MD, a private company. Bioelectronics is a technology-development firm also engaged in the bioelectric medical equipment field. It has also developed one product - the Portic Electronic Bandage ("Portic"). The Portic has successfully demonstrated, on over 2,000 patients, the capability to reduce the healing time of tissue injuries (hard and soft) by 20% - 30%, without any side effects. Bioelectronics is seeking FDA approval of the Portic.

The terms of the merger agreement call for a share-for-share exchange, after which there would be 18.6 million shares outstanding. Voting by shareholders is scheduled for early June. We are assuming that the proposed merger will be approved because of the strong desire of controlling shareholders of both companies to quickly consummate a friendly union. The surviving public company will be renamed Elast Bioelectronics Corporation ("Elast Bioelectronics"). Dr. Robert Milne, currently Chairman of Elast Technologies, and Thomas Krucker, currently President/CEO of Elast Technologies, will both assume the same titles and functions with the newly formed entity. Mr. Andrew J. Whelan, currently Chairman/President of Bioelectronics Corp., will become Chief Operating Officer of Elast Bioelectronics Corp. The Board of Directors of the combined company will consist of representation of current Elast and Bioelectronics' directors, with a majority coming from Elast's Board.

Investment Opinion -

We strongly recommend purchase of ESTG (with its imminent transformation into Elast Bioelectronics Corp.) for its large, long-term capital appreciation potential, in aggressive/risk-tolerant accounts, for several reasons.

1. The potential markets are huge for each of the two bioelectric

products. The ELAST DeviceTM detects allergy-sensitivity

conditions, which millions suffer from, and which we estimate to

be a $6 billion annual market in the U.S. (and $12 billion

worldwide). The Portic Electronic Bandage (and planned companion

products) promotes faster healing of tissue injuries. We estimate

there are 100 million tissue injuries annually in the U.S. and

that the Portic could be therapeutically applied to some 40

million wounds. This implies a potential $5 billion annual market

in the U.S. (and $10 billion worldwide).

2. The ELAST Device(TM) and the Portic both offer promising

technologies, which would dramatically improve the medical

state-of-art. We believe both products have attractive odds of

achieving proprietary positions in their market niches, based on

their patents, superior features, and presumed commercial lead

time.

3. The Company's senior management trio has impressive and

complementary skills, in our opinion. Dr. Robert Milne, Chairman,

is the inventor of the ELAST DeviceTM; Thomas Krucker, President,

has a strong record of business successes as a manager and

entrepreneur; and Andrew J. Whelan, the new COO, has outstanding

credentials in financial management and health care

entrepreneurship.

4. Very rapid revenue/EPS growth is projected by us. On a pro-forma,

post-merger basis, we estimate that revenues will soar from about

$4 million in 2001 to over $190 million in 2005 and that EPS will

escalate from break-even in 2001 to about $2.25 in 2005.

5. A premium market P/E Ratio is likely, given the projected growth

rates and product leadership.

6. The equity capitalization is small, so increasing investor

awareness and positive future events could propel the stock price.

7. Long-run buy-out potential should develop, assuming our future

expectations are met.

The cavaets for this still development-stage company are its needs: to raise capital to fund full ramp-up; to obtain FDA approval for both products; and to successfully commence production and marketing of the products. Also, as a Bulletin Board stock, above-average volatility is likely.

But on its prospects, we believe ESTG is substantially undervalued at $1.375 per share - only a $13 million market cap valuation for a "two-way" play on the exciting technology of bioelectric medicine and its vast potential markets.

William N. Walling, Jr., CFA, Director of Research

Bill Walling, a Chartered Financial Analyst, has several decades of experience on the brokerage and fiduciary sides of the investment profession. These positions include Vice President at White, Weld and Shearson and former Trust Investment Officer at Empire Trust Company and Southeast Bank. He is a former four-time member of the "Institutional Investor Magazine" All-America Research Team.

Neither the information nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives, related to such securities ("related investments"). Xcel Associates, Inc. ("Xcel") and its affiliates may trade for their own accounts in any securities of the issue(s) or in related involvements. Xcel, its affiliates, directors, officers and employees, may have a long or short position in any securities of this issue(s) or in related investments. Xcel or its affiliates may from time to time perform investment banking or other services for, or solicit investment banking or other business from, any entity mentioned in this report. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objective, financial situation and the particular need of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Copyright 2000 Xcel Associates, Inc.

Although Xcel does not believe that its activities come within the purview of Section 17(b) of the Securities Act of 1933, in an abundance of caution and in the interest of full disclosure, we call the reader's attention to the fact that Xcel recently purchased 100,000 shares of common stock of ("ESTG") in a private transaction for a purchase price of $1.40 per share. Xcel also received 6,000 shares of ESTG common stock as reimbursement for expenses incurred by Xcel in its performance of due diligence relating to ESTG. As of this report, Xcel and its associates have purchased in the open market an additional 455,000 shares between $1.25 and $2.75 per share. In addition, Xcel has reached an understanding with ESTG that ESTG has retained Xcel to perform certain financial consulting services on behalf of ESTG in consideration of the issuance to Xcel of options to purchase 1,000,000 shares of ESTG common stock at a purchase price of $1.50 per share.

XCEL'S TRADING PHILOSOPHY!

When a stock has appreciated 50%, we sell 25% of our current position. When a stock has appreciated 75%, we sell another 25% of our current position. When a stock has appreciated 100%, we are usually out of our total position although we may hold a portion in the firm's account or the principles' accounts as a long-term investment. We always try to at least recover our cost of any trade that we do!

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