™National Genecular Institute™      Extending and Improving the Quality of Life.©
NGI™ Business PlanNational Genecular Institute™ Inc. (NGI™)is the R&D subsidiary of Dermacia Inc. Der-macia specializes in...
Contents                                Business Philosophy                        1                                BioSci...
Business PhilosophyIt is the mission of NGI™ to focus primarily on those areas of re-       factors to multiply the effecti...
BioScienceResearch Goals                                                        ProductsNGI’s goal of “Extending The Lengt...
ResearchIt is the mission of NGI™ to focus primarily on those areas of research where thereare both an identifiable scienti...
ResearchAnti-Aging & Skin Disease                                                Other products in development include; th...
Researchand link specific genetic alterations to certain conditions or clinicalmanifestations. The detection of validated s...
The BioTrust™NGI™ is developing one of the world’s premier repositories of biolog-      ics advances complex system biolog...
The BioTrust™sively shrinking the therapy gap in theranostics through its broad          ensuring the most stringent guide...
Market Factors Affecting IndustryHistory of The Biotechnology Market                                        ally defines the...
Market Factors Affecting Industrybiotech investment surges supported therapeutics, many compa-           ated with the pros...
NGI™ ManagementScience TeamDr. Tannin Fuja- Director of Research and Chief Scientist.                  Jarett L. Bartholom...
NGI™ Managementthe United States and Brazil. Mr. Nicosia speaks fluent Spanish and      CosmeticsTM. Since co-founding Nati...
NGI™ ManagementJuris Doctorate from the University of the Pacific’s McGeorge School     James C. Short: Vice President of C...
NGI™ Managementdeveloped an automated testing platform. Andrew is thoroughlyfamiliar with a broad range of systems and sof...
Advisory Board & Board of DirectorsAdvisory Board                                                            regarding sur...
FinancialsSecurity Ownership of Certain Beneficial Owners and ManagementThe Company is authorized to issue up to 50,000,000...
Financials(to enforce Federal rights of a corporation including in each case rights under certain Securities and Exchange ...
FinancialsManagement has identified several potential revenue streams in addition to the sale and/or licensing of customize...
Research & Development Master PlanBioTrust™: The BioTrust™ has already begun development. NGI™ has           Proteomics/Pr...
Research & Development Master Planjacent to the future location of University of Iowa’s Hygienic Labora-tory. The goal of ...
ConclusionNGI™ has already taken long strides down the pathway towards innovations,which will transform how wellness is de...
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  1. 1. ™National Genecular Institute™ Extending and Improving the Quality of Life.©
  2. 2. NGI™ Business PlanNational Genecular Institute™ Inc. (NGI™)is the R&D subsidiary of Dermacia Inc. Der-macia specializes in pharmaceuticals and skin care products. NGI™ was formed withthe ideal of extending the quality and length of life. This has become NGI’s overarching“Mission Statement.” NGI™is making advances in biomedical genetic and anti-agingresearch by identifying and characterizing complex human genetic and environmentalfactors affecting aging and disease development, and formulating products and thera-pies to target issues specific to the individual, both for prevention and treatment. NGI’sinnovations serve both the individual and other biotechnology and pharmaceuticalcompanies.In order to meet these goals, positive strategic alliances are critical. NGI™ has affiliateditself with the University of Iowa (UI) by building a 90,000 square foot, state of the artresearch laboratory and business incubator facility on the campus, in furtherance of thiscollaboration. Construction of the project has already begun.
  3. 3. Contents Business Philosophy 1 BioScience 2 Research 3 The BioTrust™ 6 Market Factors Affecting Industry 8 Management 10 Advisory Board and Board of Directors 14 Financials 15 Research & Development Master Plan 18National Genecular Institute660 Newport Ctr Dr, Suite 900Newport Beach, CA 92660Phone: 949.706.6433Fax: 949.706.2320www.genecular.com
  4. 4. Business PhilosophyIt is the mission of NGI™ to focus primarily on those areas of re- factors to multiply the effectiveness of the products to which it issearch where there are both an identifiable scientific need, and added. Silver Nano2 Infusion™ complex is a powerful anti-microbiala substantial market opportunity. This goal is achieved primarily agent and is a key ingredient in Dermacia’s Acne Control productthrough NGI’s relationship with parent Dermacia, Inc. Unlike the line.majority of research and development firms, NGI™ has ready com-mercial outlets for its products and innovations. Further, because Zinc Nano2 Infusion complex contains Nano-zinc ( in which indi-of Dermacia’s established position in medical and pharmaceutical vidual particles of ZnO2 are between 20-100nM). The ingredientsales, the companies are poised for a long term synergistic relation- serves as a physical UV sunblock. In the Dermacia MD products,ship, whereby NGI’s advances and innovations are brought to mar- this yields UV sun protection of SPF 30 without whitening the skinket more efficiently than its competitors. NGI™ has been organized like similar zinc oxide products do. This represents a quantum leapso that research goals are developed and defined, then simultane- forward in the effectiveness of color makeup products. Previously,ously presented to the scientific and business advisory boards of in order to achieve UV sun protection beyond SPF 15, users hadthe Company. The resulting efficient coordination of business and to abandon makeup and live with the appearance of white smearsscientific considerations represents a further advantage of the Com- covering nose, cheeks, etc. Nano2 Infusion technology producespany’s strategy. the most effective and therapeutic physical sunblock available. This is key because chemical sunblocks irritate the skin and detract fromMost scientific R&D companies have significant problems in gener- the other healing aid properties of the product.ating revenues. They also face an extraordinarily high risk of failurein transitioning from R&D to commercially viable products. Typi- Another example of our business model commercializing innova-cally, an R&D company is viewed as an investment “black hole” with tion is NGI’s development team. The team, led by Dr. Fuja, has devel-a low probability of commercial success. NGI™suffers no such liabil- oped a revolutionary, proprietary wound healing system, based onity. Because of its affiliation with Dermacia, NGI™develops products its stem cell research. This system utilizes stem cells to enable scar-and enhancements for specific market needs, and therefore enjoys less healing. The wound healing system is about to begin clinicala ready market and existing channels of distribution. studies at the University of Pennsylvania School of Medicine. When clinical and IRB review has been completed, Dermacia will marketThe success of this forward thinking model for commercializing the product through it’s medical sales and direct to consumer dis-scientific innovation is demonstrated by the following example: Li- tribution channels.censed NGI™ technology is already incorporated in Dermacia prod-ucts. For example, proprietary Zinc Nano2 InfusionTM complex is NGI’s business model has already thrust the company ahead ofused in sunscreen and makeup to achieve previously unattainable many of its competitors. Over time as new innovations and ad-levels of non-irritating UV protection while preserving the color vancements are developed, NGI™ will have the ability to apply themcorrectness of these products. Nano2 InfusionTM technology com- rapidly and efficiently to commercial products and realize revenuesbines nano-particulate metals with proprietary tissue respiratory sooner. 4 1
  5. 5. BioScienceResearch Goals ProductsNGI’s goal of “Extending The Length and Quality of Life” is pursued Developing newer more efficient tools for research and develop-on two fronts. First, the development of tools and research aids ment of innovations in the biotechnology sector is the first elementwhich advance ours, as well as many other companies’ research of NGI’s two step approach to meeting its goal. The second is de-and development of innovations. This is the livering therapies for existing conditions andfunction of our Bio pioneering customized treatments for peo-Trust™ discussed below. Second, using ge- ple based on their specific genetic factors.netic information collected and studying it NGI™ meets the needs of medicine, whichto NGI™ develops customized treatments for could never have been met before. NGI™individuals based upon their unique genetic continues to develop new treatments andstructure. Further, NGI™ develops more gen- therapies, which before us had not beeneral biotherapuetics that treat more broad available.spectrums of the population as a whole.NGI™ is already a leader in these areas andour continued research and strategic allianc-es will continue to serve the population as awhole, and one individual at a time. 2
  6. 6. ResearchIt is the mission of NGI™ to focus primarily on those areas of research where thereare both an identifiable scientific need, and a substantial market opportunity. This goalis achieved primarily through NGI’s relationship with parent Dermacia, Inc. Unlike themajority of research and development firms, NGI™ has ready commercial outlets for itsproducts and innovations. Because of Dermacia’s established position in medical andpharmaceutical sales, the companies are poised for a long term synergistic relationship,whereby NGI’s advances and innovations are brought to market more efficiently thanits competitors. 3
  7. 7. ResearchAnti-Aging & Skin Disease Other products in development include; the wound healing systemUsing a systems biology approach to our research, NGI’s initial area and detection kits for disorders and diseases.of research and innovation involves the systems which reflect thesymptoms of again most clearly. The skin is an obvious starting NGI™ also looks at the genetic factors affecting aging. By studyingpoint. In addition to be- the small mutations, which occur in a person’s genetic makeup froming the largest organ in both environmental sources (e.g. sun, pollution, smoking) and he-the body, it is the most reditary conditions (e.g.accessible. Licensed premature wrinkling,NGI™ technology is al- hypersensitivity to theready incorporated in sun) NGI™ is working onDermacia products. For treatments at a geneticexample, proprietary level to prevent damageZinc Nano2 InfusionTM to the cells, and preventcomplex is used in sun- and treat these condi-screen and makeup to tions. A central part ofachieve previously unat- NGI’s focus here is detec-tainable levels of non-irritating UV protection while preserving the tion of cancer regulatorycolor correctness of these products. Nano2 InfusionTM technology pathways which affectcombines nano-particulate metals with proprietary tissue respirato- the occurrence and treatment of skin cancers such as basal cell car-ry factors to multiply the effectiveness of the products to which it is cinoma and malignant melanoma.added. Zinc Nano2 Infusion complex contains Nano-zinc ( in whichindividual particles of ZnO2 are between 20-100nM). The ingredi- Disease Preventionent serves as a physical UV sun block. In the Dermacia MD products, The immune system plays an important role in protecting the bodythis yields UV sun protection of SPF 30 without whitening the skin against foreign viral and bacterial infections. When this system mal-like familiar zinc oxide products do. This represents a quantum leap functions, the same immune cells that once defended the bodyforward in the effectiveness of color makeup products. Previously, against foreign pathogens can cause a number of auto-immunein order to achieve UV sun protection beyond SPF 15, users had and inflammatory disorders capable of affecting numerous otherto abandon makeup and live with the appearance of white smears body systems. Disorders such as; arthritis, diabetes, multiple sclero-covering nose, cheeks, etc. Nano2 Infusion technology produces sis, psoriasis, and inflammatory bowel disease. The immune systemthe most effective and therapeutic physical sun block available. This can also play a contributory role in a number of other inflamma-is key because chemical sun blocks irritate the skin and detract from tory disorders, including atherosclerosis and heart attack. NGI™ isthe other healing aid properties of the product. working to develop more effective tools for understanding how the body reacts to disease. NGI™ utilizes biobanked material to identify 4
  8. 8. Researchand link specific genetic alterations to certain conditions or clinicalmanifestations. The detection of validated single nucleotide poly-morphisms (SNPs) is a substantial product output of this node. De-tection kits will be sold directly to consumers, and identified geneticanomalies requiring alteration will provide valuable targets for thedevelopment of customized cosmeceutical and pharmacogenomicproductsNGI™ is intensely dedicated to the study and application of cell-based therapies including stem cells in response to a given condi-tion or disease state. By seeding basic research at an early phase,this dynamic operational node will benefit from the synergy anddata from the other early operational nodes. Initial research willfocus on cutaneous (skin) stem cells and embryonic stem cell re-search as an important means to understand aging, differentiationand cellular regeneration potential.The development of clinical devices which can be synergisticallyused with other customized NGI™ products and services is also animportant aspect of prevention as well. Initial products of immedi-ate interest to NGI™ include proprietary laser applications, biode-gradable scaffolds and nano-activating technology. The value ofthis node is in the generation of products and the synergy with cus-tomized NGI™ products. 5
  9. 9. The BioTrust™NGI™ is developing one of the world’s premier repositories of biolog- ics advances complex system biological interaction and networksical materials. NGI™ is creating the largest known global tissue must be considered. There are increasing interactions betweenand genetic storage facility . This resource will serve as the world’s regulatory pathways which cannot be predicted or accounted forpremier repository of biological materials to advance research and without continuing to update the donor’s medical history. Addi-development in customized medicine. Called a BioTrust™ because tionally, complex human disease does not occur in a vacuum. Typi-it links the material donor to the research process where the legal cally these diseases or conditions are dual occurrences. Throughowner of the materials is NGI™ [ownership by NGI™ ensures greater NGIs BioTrust™, these complexities will be able to be tested for thesecurity, standardization, and confidentiality. More importantly, it first time on the scale and scope necessary to promote the efficien-ensures a more broad and efficient use of the samples], by con- cies and statistical power required.tinuing to report medical and additional patient history the donorbecomes an “owner” of the process. The BioTrust™ facility will be lo- Why a BioTrust?cated in Iowa City, Iowa. For many years human genetic studies have suffered from narrow research aims that focused on a single disease or condition; as wellAs research into customized medicine evolves to enable the de- as from a lack of resource sharing. With the establishment of its pre-tection, treatment, and prevention of diseases based on a person’s mier BioTrust™, NGI™ will create the most sophisticated and virtuallyunique genetic and biomolecular makeup, the comprehensive, inexhaustible research tool. This will include the most genetic andstandardized storage of this material has become an essential driv- ethnically-diverse sample pool to be used by both NGI™ to developer for such research. It allows scientists to utilize stored biological and market its own brand of customized products, and to conductsamples and link findings to updated medical histories of donors. third-party research into customized medicine for complex humanNGI’s BioTrust™ provides scientists with necessary biological ma- diseases and conditions such as; cancer, hypertension, diabetes,terial from which to derive and test novel customized medicines. Alzheimer’s, MS, and Parkinson’s.NGI’s BioTrust™ offers scientists with unprecedented access to aglobal repository of ethnically diverse biological materials. Because With the development of the custom and fully automated BioTrust™of the critical role that cell culture plays in biotechnological advanc- system or sample preparation/purification, storage and retrieval,es in customized medicine, NGI’s BioTrust™ uniquely includes im- NGI™is developing numerous research methods and technologiesmortalized cell cultures in addition to DNA, RNA, serum and tissue that will transition to medical devices in the near future.samples. Furthermore, NGI’ BioTrust™ links these samples to donorclinical histories. The development of these resources provides an important tool in the advancement of critical, and lucrative, diagnostic tests andThe current biobank model is a linear research model generally fo- methods, and offers far more than a traditional biobank in that it iscuses on a single demographic, geographic subset, or disease. Fur- a powerful and nearly inexhaustible resource in the developmentther, biobanks do not commonly continue to update medical and of novel therapies. Closing the theranostic gap is a key componentsocial histories of its donors. As development of pharmacogenom- to the BioTrust™ model. The NGI™ BioTrust™ is dedicated to aggres- 6
  10. 10. The BioTrust™sively shrinking the therapy gap in theranostics through its broad ensuring the most stringent guidelines for donor privacy.transdisciplinary research, while serving as a powerful resource forthe worldwide biotechnology research community. To NGI™ the most important aspect of its sample collection protocol will be ensuring the continuous updates on clinical information forWhat is the Process? each donor. When possible, clinical information on each donor willUnlike most biobanks, the sample collection for NGI’s BioTrust™ will be updated every six months to ensure expansive, future researchnot be limited to a geographic region, specific population or dis- from each sample. This process of not only collection innovation,ease. NGI™ plans to collect samples from individuals world wide. but obtaining complete cellular lines, and then tracking them forThe goal of our recruitment program is to collect 100,000 ethnically updates in their medical and personal history which is one of thediverse samples by 2011 and reach 15 million samples by 2020. In prime distinguishing factors of NGI’s BioTrust™ . NGI’s BioTrust™ uti-order to facilitate the sample collection process, NGI™ is develop- lizes sophisticated computational algorithms and programs to tracking emerging technologies for non-invasive sample collection to samples through processing to storage and then retrieval. Theseincrease volunteer rates globally, even in remote populations. integrated IT systems also maintain donor clinical histories in care- fully protected and secured databases. Furthermore, these systemsCell samples will then be carefully cryopreserved and banked us- facilitate the detection of complex disease associations and, uponing NGI’s proprietary technologies and will be stored in secure cry- request of the donor, notify the donor of sample use and results.ovaults. Retrieval of samples is completely automated and designedto carefully maintain the integrity of each sample, while preserving Anticipating and preemptively responding to such patient and do-an untouched original stock of each immortalized sample. Unlike nor/research confidentiality concerns, NGI™ Is adopting safeguardssamples at other biobanks, with NGI’s patent pending technology and internal controls designed to protect personally identifiableemployed in its BioTrust™ facility, it is virtually impossible to run out data. The protection extends beyond the requirements of currentof a sample. TheBioTrust™ will be located in Iowa City in a 25,000 laws and government regulations. NGI™ is also a strong advocate insquare foot facility, which is part of a larger campus of research fa- the advancement of genetic and biomolecular non-discriminationcilities and offices being developed by NGI™ In Iowa City, Iowa. The policy.BioTrust™ facility will be less than 5 miles from NGI’s joint researchfacility with the University of Iowa in Coralville, Iowa.How will NGI™ Establish a Donor Base?NGI™ has established a protocol to attract donors that will set anew standard for existing and future biobanks. NGI™ is partneringwith hospitals, academic research institutions, government healthagencies, and third party healthcare providers to attract patients in-terested in helping advance personalized medicine research, while 7
  11. 11. Market Factors Affecting IndustryHistory of The Biotechnology Market ally defines the industry. Because many biotechnology companiesThe discovery of the structure of DNA in 1953 and the identification must partner with larger firms to complete product development,of DNA as the genetic material in all life allowed for great leaps in merger and acquisition activity is monitored to gauge the maturityour understanding of life-forms from bacteria to plants to humans. of the industry. Amgen and Genentech two of the biggest biotechArmed with a better understanding of how organisms “work,” we companies, but scores of smaller companies such as Biogen, Humanare now able to engineer life to suit our needs. Biotechnology is a Genome Sciences, Incyte, and Millenium Pharmaceuticals have ag-general term describing the directed modification of biological pro- gressive research programs that could potentially produce productscesses. This may be accomplished by introducing new genes into to bring them to the top.organisms, breeding organisms to form new variants, or treating or-ganisms with specific compounds. Biomedicine is medicine based Biotechnology Markets Todayupon the principles of biology and biochemistry - the application of The Biotech Industry remains among the strongest and fastestbiotechnology to medicine. growing sectors in business today. Biotechs in the S&P 500 gained 16.2% in 2005 compared to an overallBiotechnology-derived products have gain of 4% for the S&P (CNN/Money. “Healthcare in the united states and other nationsthe potential to positively change our com, April 17, 2006). The reasons for is on a collision course with patient needs and eco- this strength are, like the industry itself,society, from improving health careand increasing agricultural products to nomic reality…we will need to shift the economic multifaceted.producing a cleaner environment. The equation from one that utilizes over 75% of everypublic markets recognize this potential, healthcare dollar on the care of the chronically ill to Despite the recent volatility in theand a lot of money has flowed into bio- biotech market this past spring and one that invests more in innovation and technolo-technology companies. Sales, revenues the current flatness of the market as a gies designed to promote wellness.” – G. Stevenand market capitalization all more than whole, the biotechnology sector looks Burrill, Personalized Medicine Report, November 2006.doubled during the period from 1993 stronger than ever. Late last year, Evo-to 1999. 2000 saw more money invest- tec raised $68 million in an initial publiced in biotechnology firms than the pre- offering, the best performance of a bio-vious five years combined. The business models have matured and tech company in five years. Four more companies followed, postingthe tools of biotechnology research are refined to the extent that similarly impressive gains. In previous biotech rallies in 1991-2 andthe industry is ready for unprecedented dramatic growth. 1995-6, $5.1 and $6.5 billion were raised, respectively. In the first half of this year, public offerings have already raised $9.3 billion. In ad-Developments such as the sequencing of the human genome pro- dition to the money raised publicly, private placements have raisedvide a foundation that will support decades of research and discov- $18 billion thus far, further demonstrating support for the biotechery. An important issue in the biotechnology industry is intellectual sector. There are also qualitative differences between the currentproperty - some argue that the scope of patent protection actu- biotech investing surge and previous episodes. Whereas previous 8
  12. 12. Market Factors Affecting Industrybiotech investment surges supported therapeutics, many compa- ated with the prospectors in the California gold rush. Some gotnies currently raising money are developing tools and techniques rich, many did not, but those people who sold picks and supplies toto develop areas such as genomics. The potential advances in tools the prospectors all made money, NGI™ understands these inherentand techniques have the potential to produce even greater gains. weaknesses. Its biobank is an essential element in the research aAdditionally, the amount of money that each company is currently majority of biotech companies today. Therefore, our biobank notraising is greater than in the previous rallies. only puts our own research far ahead of potential competitors, but will be called upon by many of the companies working in the fieldIn addition to public offerings, biotech stocks and mutual funds today.have also benefited from the current positive interest in the indus-try. Many stocks are performing well in an otherwise relatively flat Further, a significant weakness of many companies in the biotech ismarket, and popular biotech funds are up 30-80% for the year. that they lack the commercial element which can bring their prod- ucts / innovations to market. NGI™ has already developed productsThe market most closely linked to Biotech, Pharmaceuticals, is expe- and compounds used in the products of Dermacia. By providingriencing a leveling off. According to Thomson / Baseline’s research an avenues for the commercialization of it’s products and advances,“[p]atents are expiring, and generics are squeezing profits in the Big Dermacia affords NGI™ the single most critical element to any busi-Pharma market.” Biotech companies are younger and have literally ness, a market in which they can sell their products. NGI™ has al-decades of use of their patents before expiration. Further, because ready generated revenues from these products through licensingof the nature products which are crafted with the use of micro- agreements with Dermacia.organisms and DNA, are far more difficult to emulate as genericsthan the comparatively simple molecular compounds that serve asthe basis for the pharmaceutical companies (e.g. About $21 billionworth of name brand drugs will lose their patents in 2006). How-ever, Pharmaceutical companies’ troubles related to its age as anindustry creates another avenue for revenue in Biotechs. U.S. pre-scription drug sales rose 5.4 % in 2005. However, according to IMSHealth, a health care related research firm, the increase was drivenby the sales of biotech drugs which jumped 17.2% in 2005.Yet, even the Biotech industry comes with its own dangers. “Manyof the companies [in biotech] are young, money losing startups.”(CNNMoney.com, March 23, 2006). Significant players within theBiotech industry are the companies that sell products and servicesto the biotech industry. A good example might be the risks associ- 9
  13. 13. NGI™ ManagementScience TeamDr. Tannin Fuja- Director of Research and Chief Scientist. Jarett L. Bartholomew-Staff Scientist / Research Tool DeveloperTannin J. Fuja, Ph.D., directs all scientific research for National Genec- [Pending Offer]ular Institute, Inc. Prior to joining NGI, Dr. Fuja headed the Molecular Mr. Bartholomew received his B.S. from Weber State University andand Cell Biology Research Group at the his Master’s from University of California Irvine. Jarett is an expert inNational Center for Voice and Speech, the field of optical design and implementation in the developmentwith an Adjunct professorship in the of lasers. He has been an Electro-Optic engineer with LockheedDepartment of Speech Pathology & Au- Martin as well as a staff scientist at Metro Laser in California. Part ofdiology. Dr. Fuja oversaw the building, Jarett’s responsibilities at NGI™ includes the research, development,development and execution of the first and production of optical instruments for use in the biomedicalMolecular Voice research laboratory field. These optical instruments will be for use as research tools as Dr. Tannin Fujain the world. In addition to being a well well as for diagnosis and treatment of medical conditions. Jarett’spublished scientific investigator, Dr. Fuja has a broad experience in work has already made tremendous advancements in the develop-the application of molecular methodologies relating to complex ment of NGI’s Terahertz lasers. There is evidence that exposure tohuman diseases and development including a wide spectrum of terahertz radiation encourages the growth and healing of wounds.specialties from human cancer biology to stem cell research. This evidence needs further research and development in order to verify and maximize the effect. Jarett will be a key member of theDr. Fuja is a member of the Holden Comprehensive Cancer Center, team working on this research.and the UI Center on Aging. He has studied the role of candidatetumor suppressor genes in breast cancer and is currently studying Management Teamtheir role in laryngeal carcinogenesis. He is a member of the Inter- Matt Nicosia: Chief Executive Officer and Co-Founder.national Society for Stem Cell Research and has also collaborated Mr. Nicosia is one of our founders and is responsible for the com-with the National Human Neural Stem Cell Resource in studying an pany’s vision and overall organization. Matt is one of those rareasymmetric pattern of cell division in human neural stem cells. In businessmen who combine top management skills with true en-addition, Dr. Fuja has also developed a novel patent-pending tech- trepreneurship to inspire, challenge and motivate employees andnology that is less expensive and faster than widely used expression business partners. Mr. Nicosia is Co-founder and CEO of Dermaciamicroarrays. This technology comparatively analyzes changes in Inc. (www.dermacia.com) a cosmeceutical company that producesgene expression using microsphere beads and flow cytometry. Dr. consumer, prescription and OTC products distributed through plas-Fuja received his Bachelors of Science degree from Brigham Young tic surgeons and dermatologists, as well as through retail and otherUniversity, a certificate in Human Subject Research Ethics from the mass-marketing channels. He is also a Director and Co-founder ofUniversity of Washington (Seattle) and his Doctorate in Biological Quantum Sphere, Inc., and a producer of nanomaterials and relatedSciences in the Department of Developmental and Cell Biology technologies (www.qsinano.com). Previously he acted as a busi-from the University of California Irvine. ness development consultant for five years, consulting mainly in 10
  14. 14. NGI™ Managementthe United States and Brazil. Mr. Nicosia speaks fluent Spanish and CosmeticsTM. Since co-founding National Genecular Institute™ hePortuguese and possesses a broad range of international business has created LycogelTM, AffirmTM, LumaireTM, AirlineTM, FirmaireTMexperience. He also sits on the Board of Directors and is a principal and GenreTM (see brands).of Integrity Equity, a business development group specializing inassisting young companies in high growth markets and sits on the Under Knapp’s leadership, Dermacia’s mission is to continually ad-board of several private companies. Mr. Nicosia received his Bache- vance and improve skin care and cosmetics technology, making itlor of Arts degree from Brigham Young University and his MBA from more effective and capable of performing multiple functions. EsteePepperdine University. Lauder Creative Director and VP of Creative of Elizabeth Arden, Joe Spellman, has recently called Knapp’s work at Dermacia “true ge-Barry Knapp: President and Co-Founder. nius”.National Genecular Institute™’s other co-founder is the President,and guiding force in the direction and strategic positioning of Na- Mr. Knapp and Dermacia’s advisory team of physicians, chemists,tional Genecular Institute™’s portfolio of products. Mr. Knapp is the and scientists have been at the forefront of applications of nano-President and Co-Founder of Dermacia Inc. (www.dermacia.com) a technology and DNA gene mapping in formulating and bringingcosmeceutical company that produces consumer, prescription and to market a new generation of personal care products. Barry KnappOTC products distributed through plastic surgeons and dermatolo- continues to create products that produce strong and enduringgists as well as through retail and other mass-marketing channels., consumer brand loyalty around the world.Mr. Knapp has spent the last 20 years developing and marketingluxury cosmetic, cosmeceutical and skin care lines that have sold in Brandon Powell: General Counsel.more than 20 countries. Mr. Powell, a member of the California and New Mexico State Bar Associations, has broad experience in corporate, securities and busi-A native of Los Angeles, Mr. Knapp showed an interest in cosmet- ness law. He is also experienced in estate planning/estate admin-ics and skin care at age 14 when he began working with makeup istration. During his fourteen years of legal work (for both publicartists and estheticians. By age 20 Mr. Knapp was the Founder and and private corporate clients and individuals), Mr. Powell has pre-Creative Director of a salon and spa company, which he grew to 20 pared, negotiated and enforced agreements and settlements of alllocations before selling. He has produced a number of television kinds. He has represented a diverse clientele from different indus-shows including (what was at the time) the most viewed makeover tries before state and federal courts and administrative bodies inshow featuring Placido Domingo’s family. The show was seen by cases ranging from employment and business law to contract andover 87 million people worldwide. estate disputes, personal injury, and tax matters. Mr. Powell began his law career as an Associate with Langlois, MacDonald & WebsterPrior to co-founding National Genecular Institute, Mr. Knapp has in Sacramento, CA, and was also a law clerk with Littler, Mendelson,developed and marketed a number of top selling brands, including Fastiff, Tichy & Mathiason; a leading national labor and employmentColor StoryTM, True ColorsTM, Color InstituteTM and Renae Knapp law firm in its San Francisco headquarters. Mr. Powell received his 11
  15. 15. NGI™ ManagementJuris Doctorate from the University of the Pacific’s McGeorge School James C. Short: Vice President of Client Servicesof Law in Sacramento, where he also earned the American Jurispru- Mr. Short earned his undergraduate degree from The Ohio Statedence Award in estate planning. University, Columbus Ohio Spring 1996. James has a strong back- ground in building businesses. He was one of the key architectsMr. Powell’s skills and experience extend beyond law practice to of Dermacia’s success by utilizing his expansive skills as a commu-general management and strategic planning. He has been General nicator. James was helped develop Dermacia’s message and wasCounsel and Executive Vice President of several public and private integral in getting that message heard. He also has had tremen-companies. He has also consulted extensively for a variety of com- dous success as a major and Universal Account Manager for severalpanies on startup strategy and becoming a publicly traded corpo- major Telecommunication providers. He received Presidents Clubration and has authored or co-authored business and legal articles and many other awards monthly, quarterly and annually for TCG,and legislation; including amendments to New Mexico’s Limited Winstar, Convergant, Telepacific and Epoch Internet Solutions forLiability Company Act. Mr. Powell serves on several private com- outstanding sales and marketing achievement. Today, Mr. Shortpany boards and is a charter member of the CEO Council, a group is using those communication and business building skills to helpof executives who have been instrumental in SEC rulemaking and NGI™ meet its goals.NASD policymaking proceedings. Mr. Powell also is a member ofthe Sovereign Society and the Federalist Society. He has spent time Andrew Chandler: CTO, Chief Technical Officerliving and working in Switzerland and Germany and is fluent in Ger- Andrew earned his Bachelor of Science degree from the Univer-man. Mr. Powell received his undergraduate education at California sity of California at Irvine. His education emphasized distributedState University, Fullerton and at Brigham Young University. systems and database theory. He has done postgraduate work at California State University, Northridge in database theory and dis-Todd Smith: Vice President of Business Development. tributed computing. Andrew holds various professional designa-Todd Received his Bachelor of Arts degree from Westmont College tions and certificates, including DB2 UDB 8 DBA certification andin Santa Barbara, California in 1990. Thereafter he graduated from IBM WMQI Systems Developer/Integrator certification. Mr. ChandlerWhittier Law School in 1993. From 1993-2003 Mr. Smith practiced is highly respected in his field as an innovator for creating systemlaw in the fields of securities and corporate law, as well as litiga- integration solutions. He is also an accomplished Internet and In-tion. Although no longer practicing, Todd brings those years of tranet Designer.valuable experience to the table as NGI’s Vice President of BusinessDevelopment. Todd has sat on the board of directors for several Mr. Chandler is the Chief Technical Officer of Dermacia Inc. and wascorporations including Telecommunications companies and soft- the Lead Software Architect for Countrywide Financial Services, Inc.ware developers. Mr. Smith has negotiated mergers and acquisition a company with extensive and complex IT systems. He implement-agreement for publicly and privately held corporations. He has sig- ed systems and integration at Countrywide that resulted in thenificant experience in the areas of strategic planning and capitaliza- detection of thousands of errors in mortgages, worth many timestion for emerging growth companies. the project cost. As lead software architect for Epicor Software, he 12
  16. 16. NGI™ Managementdeveloped an automated testing platform. Andrew is thoroughlyfamiliar with a broad range of systems and software. Mr. Chandlercontinually demonstrates an ability to create and manage technicalsolutions on a grand scale. He has also acted as CTO for compa-nies including Transafari, Inc., Boating1.com and many others, andhas developed applications as a consultant to companies includingBlack and Decker, CaliforniaMatch.com, and Protocol Systems. 13
  17. 17. Advisory Board & Board of DirectorsAdvisory Board regarding surgery for patients who come to Dr. Grazer for correctionPerry J. Viscounty: Attorney, Latham & Watkins. Mr. Viscounty of unsatisfactory results they obtained with a previous physician.and Latham & Watkins have been retained as NGI’s Patent Portfolio He has been featured in articles in the Ladies Home Journal, Dues-attorneys. In addition, Mr. Viscounty is a member of NGI’s Advisory seldorf Times (Germany) and other regional, national and interna-Board for the purpose of developing both short and long term pat- tional publications. Dr. Grazer is also the author of the chapter onent strategy. Mr. Viscounty, recently named one of the “Top 30 In- liposuction for the textbook Plastic Surgery, Indications, Operationstellectual Property Lawyers” in California by the Los Angeles Daily and Outcomes. Among numerous other international papers andJournal, is a graduate of the University of California, Law School. Mr. presentations, Dr. Grazer also co-authored a scholarly paper with Dr.Viscounty is also a member of the Meetings Committee for the In- Ignarro, the 1999 Nobel Laureate in Medicine.ternational Trademark Association and chairs the Trade Secret Com-mittee of the Orange County Patent Attorney Association. Dr. Gary Tearston, M.D., F.A.C.A. Board Certified Plastic Sur- geon. Dr. Tearston is a well respected and successful Plastic surgeonRonald M. DiSalvo, Ph.D., Cchem FRSC. Dr. DiSalvo is Director in Southern California, with over 30 years of practice in the field.of Research & Product Development at John Paul Mitchell Systems, His clinic is highly regarded and serves many celebrities and oth-and President of Integrated Research. He is former Vice President of ers in the entertainment industry. He is the former Chief Of PlasticResearch & Product Development at Redken Laboratories, Inc. An Surgery at Cedars Sinai Hospital’s world-famous Plastic Surgery De-instructor in Cosmetic Chemistry at UCLA, Dr. DiSalvo is author or partment.contributing author of more than 20 books on cosmetic science,plus numerous articles in professional journals. More than 100 Dr. Barry Weintraub M.D., F.A.C.A. Board Certified Plastic Sur-articles about his work with skin and hair have appeared in such geon. Dr. Weintraub is the current spokesperson for the Americanmagazines as Vogue, Harper’s Bazaar, Mademoiselle, Glamour, La- Society of Plastic and Reconstructive Surgery and has a successfuldies Home Journal, Self, Seventeen, Vanity Fair, GQ and Los Angeles practice in both New York and Beverly Hills. Dr. Weintraub has beenMagazine. featured on Oprah, BBC Worldwide, NBC, and many other programs and broadcasts regarding plastic surgery.Dr. Jon M. Grazer, M.D., M.P.H. Board Certified Plastic and Re-constructive Surgeon. Dr. Grazer is the current president of the Board of DirectorsOrange County Plastic Surgery Society. He practices in Newport Our current Board Members are Mr. Nicosia and Mr. Knapp. TheBeach and Palm Desert, California, specializing in aesthetic body company is actively seeking extremely well-qualified outside candi-contouring and reconstructive surgery. Dr. Grazer is a second-gen- dates to serve as additional, independent directors. It is anticipatederation plastic surgeon. His father, Frederick M. Grazer, M.D., was that additional board seats will be filled only by authoritative andresponsible for the U.S. introduction of liposuction as well as much well-connected business figures who are able to significantly ad-of the current literature on the “tummy tuck” procedure. Dr. Grazer vance the business of the Company.has been featured on the Discovery Channel and other broadcasts 14
  18. 18. FinancialsSecurity Ownership of Certain Beneficial Owners and ManagementThe Company is authorized to issue up to 50,000,000 shares of Common Voting Stock and 5,000,000 shares of preferred stock. The follow-ing table sets forth, at the date of this Memorandum, after giving effect to the sale of the Common Shares offered hereby, information withrespect to (1) any person known by the Company to own beneficially more than five (5%) percent of the Company’s Common Stock (2)Common Stock owned beneficially by each officer or director of the Company and (3) the total of the Company’s Common Stock ownedbeneficially, directly or indirectly, by the Company’s Officers and Directors as a group: Name of Number of Shares Percent Owned Number of Shares Percent Owned After Owner Owned Before Before Offering (1) Owned After Offering (2) Offering Offering Dermacia, Inc. 8,800,000 88% 8,800,000 59% Additional 1,200,000 12% 6,200,000 41% Shareholders Total 10,000,000 100% 15,000,000 100%(1) Based upon 10,000,000 issued and outstanding prior to this Offering. (2) Assumes that all Common Shares offered will be sold. (3) This includes employee shareholders, and allother independent shareholders of record.Fiduciary ResponsibilityThe Officers and Managers of the Company are accountable to the Company as fiduciaries and consequently must exercise integrity andgood faith in dealings with respect to Company affairs. In the event they violate such obligations, there can be no assurance that adequateremedies will be available to the Shareholders.The Officers and Directors of the Company are not liable to the Company or Shareholders for errors in judgment or other acts or omissionsnot amounting to gross negligence, willful misconduct or intentional breach of fiduciary duty. The By-Laws contain broad provisions forexoneration and indemnification of the officers and managers. Therefore, purchasers of the Shares may have a more limited right of actionthan they would, absent such limitations in the By-Laws.Courts have held that a Shareholder may institute legal action on behalf of himself or all other similarly situated Shareholders (a class action)in order to recover damages from a Company for violation of management’s fiduciary duties, or on behalf of the Company (a companyderivative action) to recover damages from a third party where management fails or refuses to take such action. In addition, on the basisof federal statutes and rules and decisions by federal courts, it appears that (i) Shareholders have the right to bring class actions in thefederal courts (to enforce the federal rights of all shareholders similarly situated) and Shareholder derivative actions in the federal courts 15
  19. 19. Financials(to enforce Federal rights of a corporation including in each case rights under certain Securities and Exchange Commission Rules), and (ii)Shareholders may bring appropriate actions against one or more companies for rescission of the purchase of their Shares or for damagesbased upon rules promulgated by the Securities and Exchange Commission under the Federal Securities Act of 1933 and the SecuritiesExchange Act of 1934, as well as under applicable state laws. Investors should consult with their independent counsel as to the status ofthe law at present as well as at any future time. The cost of litigation, however, may be prohibitively high and any judgment obtained maynot be collectible; the Company is not bonded and its net worth is limited. An investment decision should be based on the judgment of aprospective investor considering the investment factors described in this Memorandum rather than upon reliance upon the right to bringlegal action or to control the activities of the Company.Notwithstanding their fiduciary relationship, the Officers and Directors of the Company have broad discretionary power, under the terms ofthe By-Laws and under applicable Nevada law, to manage the affairs of the Company with the assistance, if desired, of consultants or othersretained for the account of the Company. Generally, actions taken by the officers and managers are not subject to direct vote or review bythe Shareholders, except to the limited extent provided in the By-Laws and under applicable laws and regulations.Discussion and Plan of OperationNational Genecular Institute™ will continue to invest the majority of its capital into the laboratory facilities located close to the Universityof Iowa, in Iowa City. Management’s philosophy is to operate with a close-knit, small and agile team with a strong history of performancedirecting the strategy and operations of the Company. Management’s devotion to excellence must be relentless and must be demon-strated in their work to the employees, shareholders and customers of the Company. Management is committed to the guiding principlethat the best, uncompromising products and services will always enjoy market success. Those are the only kinds of products and servicesthat National Genecular Institute™ will offer, now and in the future.It is presently anticipated by the Company, that its current operational plan for the next twelve months will require the raising of capital inexcess of this current offering. The source of this “excess” capital are several. First, NGI™ has been in lengthy discussions with the State ofIowa, the city of Coralville, and the University of Iowa, regarding their desire to be participants in the building of our laboratory facilities, aswell as our long term employment needs. In addition, the Company has been in negotiations with private equity funds and others regard-ing additional funding that would permit the Company to take advantage of opportunities in an expedited manner. Operational expensesare expected to increase significantly upon the completion of the laboratory facility, in particular the Company’s research, developmentand employment costs. It is anticipated that increased expenditures will be covered by incoming revenue streams as the Company’santicipated products and services are introduced to the marketplace. However, there is strong likelihood that NGI™ will bring on one ormore financing partners to provide a steady stream of capital (both debt and equity) to fund these operations. NGI™ has already receiveda substantial number of offers for capital and continues to weigh each opportunity as it is presented. 16
  20. 20. FinancialsManagement has identified several potential revenue streams in addition to the sale and/or licensing of customized cosmeceuticals that isthe main focus of NGI’s business. Several are inherent in the primary research and development efforts of NGI, and the others are tangen-tial to the primary R&D. Those revenue streams will emerge and develop following the introduction of NGI’s first products. The potentialadditional revenue streams are as follows: 1. Development of BioTrust™ of immortalized DNA samples; 2. Development and distribution of customized comseceuticals; 3. Development of customized medical treatments and medical tools; 4. Licensing of discovered SNPs and other intellectual property.National Genecular Institute’s two initial products, developed from the Company’s research to date and related research by NGI™ affiliates,are proprietary substances exclusively licensed to Dermacia, Inc. which will be used as ingredients in Dermacia’s therapeutic cosmeticscommencing Summer, 2006. The substances consist of nanoparticulate zinc oxide and silver powders. The nanoparticles in these ingredi-ents are of a revolutionary uniform size of approximately 30 nM. The tiny and comparatively uniform particle size allows these ingredientsto be dramatically more effective than the same substances at larger particle sizes. For example, nano-zinc oxide permits UVA and UVB sunprotection in excess of SPF 40 while maintaining a transparent appearance on the skin, without the white paste normally associated withzinc oxide sunscreens. Nano-silver is a powerful antibacterial agent that is also transparent on the skin while eliminating a wide range ofmicrobial agents, including bacteria involved in acne and other skin problems.Management expects a series of other products to continue to result as ancillary benefits of NGI’s core research and development overtime.Use of ProceedsNGI™ is currently raising $30,000,000.00 for its ongoing operations, and execution of it’s long term strategic plan. The $30,000,000.00 will bespent, roughly, as spelled out below. The costs set forth in the following narrative are estimates only. Actual use of the funds is left to thediscretion of the Company’s directors, officers and managers.Capital Equipment 2,500,000Construction of Phase II BioTrust™ Facility 5,000,000Detection & Diagnostic Tool Development 8,000,000Proteomics & Skin Care Division 7,000,000Medical Devices 4,000,000ORP Research Lab Infrastructure 3,500,000 17
  21. 21. Research & Development Master PlanBioTrust™: The BioTrust™ has already begun development. NGI™ has Proteomics/Protein Engineering: NGI™ is dedicated to the studyalready entered Phase II of the BioTrust™ program. NGI™ has secured and application of modified proteins as key pharmaceutical re-property in the Northgate Research park in Iowa City for the construc- agents. Target validation is currently a significant bottleneck of bio-tion and development of the next phase of the BioTrust™ develop- pharmaceutical drug development, and through NGI’s synergisticment. Architects and lab design teams have already begun designing operational strategy target validation will be advanced by a clearand estimating for the project. The estimated capital equipment cost genetic understanding, or the condition as obtained through otherfor this node is approximately $5 million and will be completed in operational nodes. Such methods as siRNA, protein arrays, masslate 2008. Operating the BioTrust will require ten full-time scientists spectrometer, chromatographic and crystallographic analysis willand technicians. provide a comprehensive basic science platform driven by the ap- plication of the biomolecules and proteins in customized pharma-Detection: NGI™ will utilize the biobanked material to identify and link ceutical products. The value of this node is its development of keyspecific genetic alterations to certain conditions or clinical manifesta- reagents and targets for these customized products. The estimatedtions. The detection of validated single nucleotide polymorphisms continued three year operational cost for this node is approximately(SNPs) is a substantial product output of this node. Detection kits $7 million and will require an additional fifteen scientists and tech-will be sold directly to consumers and identified genetic anomalies nicians.requiring alteration will provide valuable targets for the developmentof customized cosmeceutical and pharmacogenomic products. The Clinical Devices & Nano-Delivery: The development of clinicalestimated three year operational cost for this node is approximately devices, which can be synergistically used with other customized$4.5 million and will require an additional six scientists and techni- NGI™ products and services, is crucial. Initial products of immedi-cians. ate interest to NGI™ include proprietary laser applications, biode- gradable scaffolds and nano-activating technology. The value ofResearch Devices: NGI™ will aggressively develop devices to be this node is in the generation of products and the synergy withused in the advancement of its own research, and will also be sold customized NGI™ products. NGI™ also seeks to develop second-to outside research institutions where possible. Device prototypes ary non-cellular or partially cellular products that may be useful inwill be used and tested in a research setting prior to advancing the extending quality of life. The product, i.e., value, of this node will bedevelopment of the device clinically. This will allow for more im- the product itself. The continued three year operational cost for thismediate product output and will also synergistically advance the node is approximately $4 million, and will require an additional tenbasic science research of the other operational nodes. Given this scientists and technicians.significant value, NGI™ seeks to development these devices as anearly phase operation. The estimated continued 3-year operational ORP Research Lab Infrastructure : The project in ORP consists ofcost for this node is approximately $3.5 million and will require an the design, development and construction of a 90,000 sq. ft., stateadditional five scientists and technicians. of the art research and business incubator facility located on Lot 1 of the ORP. Lot 1 is the site selected by the University and will be ad- 18
  22. 22. Research & Development Master Planjacent to the future location of University of Iowa’s Hygienic Labora-tory. The goal of this joint project between the University and NGI™is to create a facility which not only meets both parties’ needs now,but can be used in such a way as to spur collaboration betweenNGI™, the University and its incubating businesses; as well with thegrowing local biotechnology business community.The developer selected by the University and NGI™ for this project isRyan Companies US, Inc (Ryan). Ryan will own the facility. The twoprimary tenants will be The University of Iowa occupying roughly38,000 gross square feet, and NGI™ occupying 52,000 net squarefeet of space.This facility will become the anchor of the ORP, and will be usedto attract additional private research companies into the park. TheUniversity’s portion of the facility will house burgeoning researchcompanies as they grow from academia to the private sector. TheUniversity of Iowa is already recognized as one of the premiere sci-entific research universities in the nation, this joint facility stronglyenhances that reputation. NGI™ is benefited from attracting otherbiotech research companies there as the collaboration betweencompanies enhances synergy. The synergistic approach to researchis a centerpiece of our short and long term strategic and scientificgoals.NGI™ has already been awarded $655,000.00 in direct state assis-tance from the Iowa Department of Economic Development andanother $1,200,000.00 from the city of Coralville for this project. Ad-ditional public funds are available to the project in the future. 19
  23. 23. ConclusionNGI™ has already taken long strides down the pathway towards innovations,which will transform how wellness is defined and maintained. Traditional mod-els of post illness diagnosis and therapies are no long a workable model. With health-care costs continuing to spiral out of control, maintaining wellness and preventionthrough detection are the critical elements to preventing the system from collapsingupon itself.The technology for such a paradigm shift exists. NGI™ is a leading force in that shift.By continuing to provide innovation for today’s circumstances, while answering thecall for tomorrow’s needs, NGI™ is poised to take the initiative in current critical careand future growth in the field.As a company which can serve its partners needs for tools and research development,as well is it’s own production of detection and theranostic solutions, NGI’s BioTrustand other research initiatives ensure the company’s short and long term success. 20

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