samplesample-business-plan.doc business plan

8/20/2019 SampleSample-business-plan.doc Business Plan

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NewAge BIOTECH

BUSINESS PLAN

Business Plan Prepared By

Gerald Sawyer, PhD.President & CEO

NewAge BIOTECH

0000 ain!"w Bl#d.$etr"%"lis, Anystate 0000

'''('''(''''newage!i"te)h.)"*

Date Prepared+anary '00B

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed.


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Disclaimer and Ntice ! Cn!identiality

The in"r*ati"n )"ntained herein is rnished "n the )"nditi"n that it is s"lely "r internal se, "r e#alati"n and %lanning %r%"ses "nly, and this in"r*ati"n shall n"t !e dis)l"sed, d%li)ated,sed in wh"le "r in %art, "r any "ther reas"n whats"e#er.



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TABLE O" CONTENTS

DISCLAI#E$ AND NOTICE O" CON"IDENTIALIT%&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&'

TABLE O" CONTENTS&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&& (

E)ECUTI*E SU##A$%&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&+The C"*%any........................................................................................................................2The $ar3et.............................................................................................................................2

C"*%etiti#e Analysis.............................................................................................................. 2The Pr"d)t4Ser#i)e..............................................................................................................25ale Pr"%"siti"n................................................................................................................... $ar3eting and Sales Plan......................................................................................................$anage*ent and Organi6ati"n.............................................................................................. 1inan)ial S**ary................................................................................................................In#est"r S**ary..................................................................................................................

THE CO#PAN%&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&,Na*e and 7")ati"n................................................................................................................ 81a)ilities.................................................................................................................................87egal 1"r* " Bsiness......................................................................................................... 8E*%l"yees.............................................................................................................................8C"*%any Hist"ry................................................................................................................... 8

#A$-ETIN. PLAN&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&/Indstry Pr"ile.......................................................................................................................9

Crrent Si6e..................................................................................................................... 9Gr"wth P"tential...............................................................................................................9Indstry Trends................................................................................................................9Other Chara)teristi)s.....................................................................................................0Sales Channels..............................................................................................................0

C"*%etiti#e Analysis............................................................................................................ Dire)t C"*%etiti"n..........................................................................................................Indire)t C"*%etiti"n.......................................................................................................

1tre C"*%etiti"n.........................................................................................................C"*%etiti#e Analysis......................................................................................................

$ar3et Analysis....................................................................................................................'Target $ar3et Pr"ile......................................................................................................'Cst"*er Pr"ile............................................................................................................:1tre $ar3ets...............................................................................................................;

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. '


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P$ODUCT0SE$*ICE PLAN&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&'+Pr%"se " Pr"d)t4Ser#i)e.................................................................................................21eatres and Beneits..........................................................................................................25ale Pr"%"siti"n................................................................................................................. 2Pr"" " C"n)e%t..................................................................................................................2Stage " De#el"%*ent.........................................................................................................2Intelle)tal Pr"%erty.............................................................................................................

Dis)l"sre............................................................................................................................Barriers t" e(Engineering...................................................................................................<G"#ern*ental A%%r"#als...................................................................................................... <Pr"d)t4Ser#i)e 7i*itati"ns..................................................................................................8Te)hn"l"gy 7i*itati"ns......................................................................................................... 8Pr"d)t4Ser#i)e 7ia!ility.......................................................................................................8Pr"d)t4Ser#i)e S%%"rt...................................................................................................... 8Pr"d)ti"n............................................................................................................................91a)ilities...............................................................................................................................9&D Partners.......................................................................................................................9S%%liers.............................................................................................................................. 9elated Pr"d)ts4Ser#i)es and S%in("s.............................................................................'0

#A$-ET PENET$ATION AND SALES PLAN&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&('C"*%any I*age............................................................................................................. 'Cst"*er Ser#i)e...........................................................................................................'7")ati"n.........................................................................................................................'Dire)t Sales 1"r)e..........................................................................................................'Sales e%resentati#es................................................................................................... '7i)ensing "r Distri!t"rs.................................................................................................'$ar3eting Allian)es........................................................................................................''

Ad#ertising and Pr"*"ti"n............................................................................................. ''P!li)ity..........................................................................................................................''Tele*ar3eting4Dire)t $ail............................................................................................... ''Internet...........................................................................................................................':

Trade Sh"ws.................................................................................................................. ':$ar3et Penetrati"n Ee)ti#eness...................................................................................':

Pri)ing..................................................................................................................................':Pri)ing Strategy.............................................................................................................. ':Pri)e 7ist........................................................................................................................ ':Pri)ing P"li)ies............................................................................................................... ':Brea3(E#en Analysis......................................................................................................':

#ANA.E#ENT AND O$.ANI1ATION PLAN&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&(+$anage*ent Tea*.............................................................................................................. '2B"ard " Dire)t"rs4Ad#is"ry B"ard.......................................................................................'e)rit*ent and Sele)ti"n " E*%l"yees............................................................................'<

C"*%ensati"n and Ownershi%............................................................................................. '


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OPE$ATIN. AND CONT$OL S%STE#S PLAN&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&23e)ei#ing Orders.................................................................................................................:0=aliying, Billing, and C"lle)ting r"* Cst"*ers...............................................................:0Paying 5end"rs and S%%liers............................................................................................. :0C"ntr"lling In#ent"ry............................................................................................................ :0Handling >arranties and etrns........................................................................................:0Pr"#iding Ser#i)e................................................................................................................. :

Se)rity Syste*s................................................................................................................. :eglat"ry C"*%lian)e........................................................................................................:is3 Analysis........................................................................................................................ :'Sal#aging Assets..................................................................................................................:'

"INANCIAL PLAN&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&221inan)ial S**ary.............................................................................................................. ::Start(?% C"sts..................................................................................................................... ::esear)h and De#el"%*ent C"sts.......................................................................................::Sales Pr"@e)ti"ns.................................................................................................................::In)"*e Pr"@e)ti"ns..............................................................................................................::Cash eire*ents.............................................................................................................::S"r)es " 1inan)ing........................................................................................................... ::

/ey ati"s........................................................................................................................... :; Annal Sna%sh"t..................................................................................................................:;

.$O4TH PLAN&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&2+Ca%ital eire*ents..........................................................................................................:2Pers"nnel eire*ents.....................................................................................................:2Eit Strategy........................................................................................................................ :2

IN*ESTO$ HI.HLI.HTS&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&25

APPENDI)&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&&2, A%%endi 1inan)ial State*ents......................................................................................:8

Pr"@e)ted 1inan)ial State*ents......................................................................................:8

A%%endi ' es*es " Entre%rener and /ey $anage*ent Pers"nnel..........................:8 A%%endi : Other.............................................................................................................. :8

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. ;


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E6ecuti7e Summary

T8e Cmpany

NewAge BIOTECH, In). was "r*ed in t" de#el"%, *ar3et, and li)ense its %atented 6in)

%e%tide te)hn"l"gy. The )"*%any has seen t"tal re#ene gr"w r"* '.< *illi"n in t" anesti*ated . *illi"n in '00B. Alth"gh NewAge BIOTECH e%erien)ed a net l"ss " ;.2

*illi"n in , %r"it " 200,000 is %r"@e)ted in '00B. In '00A, the )"*%anyFs re#ene grew

!y ;0 %er)ent t" . *illi"n r"* ;.< *illi"n the %ri"r year, while "%erating e%enses

in)reased !y "nly .< %er)ent t" ith the 6in) %e%tide "r*lati"n, NewAge

BIOTECH has !een a!le t" enter the %re*i* s3in )are *ar3ets, whi)h )arry a higher %ri)e and

higher gr"ss *argins.

T8e #ar9et

The s3in, hair, and w"nd )are indstries are gr"wing ra%idly. The Ba!y B""*er generati"n is

*"re a)ti#e than their %arents and als" *"re )"n)erned a!"t their a%%earan)e. They ha#e a

%er)ei#ed need t" *aintain a y"thl a%%earan)e thr"gh s3in l"ti"ns, )"s*eti) srgery, and

hair thinning treat*ents. In additi"n, %e"%le are li#ing l"nger, whi)h *eans they *ay ind a need

"r s3illed nrsing h"*es, where the elderly "ten de#el"% )hr"ni) w"nds. A n*!er " largehealth )are )"*%etit"rs ha#e e%ansi#e %r"d)t lines and sell their w"nd )are %r"d)ts at a

%re*i* %ri)e. These sa*e )"*%anies ha#e *a@"r distri!ti"n netw"r3s !t la)3 the %ers"nal

)st"*er ser#i)e that s3in and health )are %r"d)t sales de*and.

Cmpetiti7e Analysis

ather than )"*%eting dire)tly with the large health )are )"*%anies, NewAge BIOTECH has

neg"tiated de#el"%*ent and distri!ti"n agree*ents with "ther large health )are )"*%anies.

There"re, NewAge BIOTECH has !een a!le t" li*it the si6e " its "wn dire)t sales "r)e. The

)"*%any has a)ired "ther s3in )are )"*%anies, ths ra%idly e%anding its %r"d)t "erings.

Its 6in) %e%tide "r*lati"n has %r"#en t" !e *"re ee)ti#e than "ther s3in and w"nd )are%r"d)ts )rrently "n the *ar3et.

The w"rldwide )hr"ni) w"nd )are *ar3et is e%e)ted t" e)eed ; !illi"n. The w"rldwide*ar3et "r thinning hair %r"d)ts is said t" !e .2 !illi"n. The )"s*eti) srgery *ar3et hase)eeded ' !illi"n.

T8e Prduct0Ser7ice

NewAge BIOTECH %lans t" )"ntine its s3in and hair )are %r"d)t de#el"%*ent and has

intr"d)ed a n*!er " anti(aging and related %r"d)ts this %ast year. The )"*%any has

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. 2


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e%ended ,'


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• Agree*ents are in %la)e t" %r"#ide *ar3et share internati"nally.

• The )"*%any has esta!lished a irst()lass re%tati"n.

• in) %e%tide te)hn"l"gy is state " the art and new a%%li)ati"ns are !eing de#el"%ed.



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T8e Cmpany

Name and Lcatin

NewAge BIOTECHFs )"r%"rate headarters and %rin)i%al ?.S. *ana)tring a)ility in$etr"%"lis, Anystate, "))%ies 20,000 sare eet.

"acilitiesNewAge BIOTECH !elie#es that all its *ana)tring and la!"rat"ry a)ilities and la!"rat"ryei%*ent are in satisa)t"ry )"nditi"n and are adeate "r the %r%"ses "r whi)h they aresed. Additi"nal )a%ital ei%*ent is %r"@e)ted "r '00C t" tili6e )a%a)ity and *eet salesde*and.

Legal "rm ! Business

The )"*%any is in)"r%"rated in the state " Anystate.

Emplyees

1"rty(eight e*%l"yees are already in %la)e. 1tre e%ansi"n will reire a s3illed resear)her

and se#eral %r"d)ti"n and sales %ers"nnel.

Cmpany Histry

NewAge BIOTECH, In). was "r*ed in t" de#el"%, *ar3et, and li)ense its %atented 6in)

%e%tide te)hn"l"gy. The )"*%any has seen t"tal re#ene gr"w r"* '.< *illi"n in t" an

esti*ated . *illi"n in '00B. Alth"gh NewAge BIOTECH e%erien)ed a net l"ss " ;.2

*illi"n in , %r"it " 200,000 is %r"@e)ted in '00B. In '00A, the )"*%anyFs re#ene grew

!y ;0 %er)ent t" . *illi"n r"* ;.< *illi"n the %ri"r year, while "%erating e%enses

in)reased !y "nly 2 %er)ent t" ith the 6in) %e%tide "r*lati"n, NewAgeBIOTECH has !een a!le t" enter the %re*i* s3in )are *ar3ets, whi)h )arry a higher %ri)e andhigher gr"ss *argins



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#ar9eting Plan

Industry Pr!ile

Current Size

A))"rding t" JChr"ni) >"nd CareK ?.S. $ar3ets "r >"nd $anage*ent Pr"d)tsL MMedical

Data International , an esti*ated si *illi"n %e"%le ser r"* )hr"ni) w"nds in the ?nited

States. O the si *illi"n %e"%le with )hr"ni) w"nds, nearly three *illi"n ha#e %ressre s"res,"#er tw" *illi"n ha#e dia!eti) l)ers, and "#er "ne *illi"n ser r"* #en"s stasis l)ers.

Dia!eti) l)ers are res%"nsi!le "r 0,000 li*! a*%tati"ns ea)h year, a))"nting "r *"re than

hal " all s)h %r")edres n"t related t" tra*a. 5en"s stasis disease and %ressre s"res

"ten ali)t the elderly, wh" )"nstitte the *"st ra%idly gr"wing seg*ent " the ?.S. %"%lati"n

and a))"nt "r a dis%r"%"rti"nately large share " t"tal ?.S. health )are e%enditres. The

w"nd )are seg*ent " the ?.S. health )are indstry generated a%%r"i*ately 2 !illi"n in

e%enditres in . The w"nd )are *ar3et anti)i%ates )"ntined gr"wth de t" the aging

%"%lati"n and the in)reasing in)iden)e " health dis"rders, s)h as dia!etes, whi)h *ay lead

t" )hr"ni) w"nds.

The retail *ar3et "r sal"n hair )are %r"d)ts, in)lding the newly intr"d)ed thinning hair*ar3et )hannels, was in e)ess " ; !illi"n in the ?nited States in '00A, a))"rding t" Dn &

Bradstreet. It is a ra%idly gr"wing *ar3et seg*ent with "#er 0 *illi"n *en and w"*en ae)ted

!y thinning hair as %art " the aging %r")ess. The )"*%anyFs *issi"n is t" de#el"%, *ar3et, "r

li)ense its %atented 6in) %e%tide te)hn"l"gy as the net wa#e in dyna*i) s3in )are, %shing

%ast the satrated AHA and retin"l %r"d)ts. The )"*%any has its "wn sales "r)e )alling "n

der*at"l"gists and %lasti) and )"s*eti) srge"ns, where it has esta!lished %r"d)t ei)a)y

and )redi!ility. The )"*%any is %resently li)ensing its te)hn"l"gy t" *a@"r s3in )are )"*%anies

in #ari"s s3in )are *ar3et seg*ents.

Growth Potential

The re#ene "%%"rtnity t" NewAge BIOTECH is si6a!le as the w"rldwide s3in )are *ar3et is

esti*ated t" !e "#er '' !illi"n. The )"*%any h"%es t" ha#e *ar3eting arrange*ents with 0

t" 2 well(%la)ed )"*%anies !y the end " '00C, whi)h )an generate re#enes in e)ess " 20

*illi"n !y '001. Hair l"ss ae)ts ;0 *illi"n *en and '0 *illi"n in the ?nited States a))"rding t"

The Hair Loss Watch. The 1DA has esti*ated that the hair re%la)e*ent *ar3et is at !illi"n

annally. The A*eri)an A)ade*y " 1a)ial Plasti) and e)"nstr)ti#e Srgery has re%"rted that

"#er ' !illi"n %er year is !eing s%ent "n )"s*eti) srgery. The w"rldwide *ar3et "r w"nd

)are %r"d)ts is esti*ated t" !e : !illi"n !y the A*eri)an >"nd Care Ass")iati"n. The

gr"wth rate "r the ?.S. w"nd )are *ar3et is '.' %er)ent with annal re#enes " ' *illi"n

a))"rding t" Dn & Bradstreet.

Industry Trends

As *"re and *"re a%%earan)e()"ns)i"s Ba!y B""*ers age, new )hallenges and

"%%"rtnities arise "r hair )are *ana)trers. Thinning hair and !aldness ha#e ty%i)ally !een

)"nsidered a *ale %r"!le*, !t it )an als" !e a %r"!le* "r w"*en )ased !y stress "r

%regnan)y. Stdies ha#e sh"wn that nearly :0 *illi"n w"*en in this )"ntry ser r"*

hereditary hair thinning. As Ba!y B""*ers trned 20 in the 990s, the *ar3et "r %r"d)ts t"

ight aging grew )"nsidera!ly. $any are willing t" se whate#er is a#aila!le t" re*ain y"ng,

in)lding )"s*eti) srgery.



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A))"rding t" the A*eri)an A)ade*y " 1a)ial Plasti) and e)"nstr)ti#e Srgery, %lasti)

srgery is "ne " the astest gr"wing s%e)ialties in the nati"n, de in %art t" the itness

*"#e*ent. As the ?.S. %"%lati"n )"ntines t" li#e l"nger, the in)iden)e " )hr"ni) w"nds is

als" e%e)ted t" rise, )reating in)reasing de*and "r w"nd )are %r"d)ts. The astest gr"wing

seg*ents " the ad#an)ed w"nd )are *anage*ent %r"d)ts *ar3et are "r n"#el thera%ies

s)h as gr"wth a)t"rs and s3in s!stittes. $ana)trers will need t" de*"nstrate that these

thera%ies s%eed the healing %r")ess and that the initial high )"sts " these s"lti"ns will !e!alan)ed "t !y the )"st sa#ings in the l"ng rn. The 6in) %e%tide %r"d)ts %atented !y

NewAge BIOTECH )an *a3e this )lai*.

Other Characteristics

There is s"*e seas"nality t" the s3in )are %r"d)t line, es%e)ially in areas where %r"te)ti"nr"* the da*aging rays " the sn is needed. H"we#er, as distri!ti"n !e)"*es *"reinternati"nal the ee)ts " seas"nality are negligi!le.

NewAge BIOTECHFs %r"d)ts are s"ld and sed w"rldwide. The )"*%anys w"nd )are

%r"d)ts are s"ld %ri*arily t" s%e)ialty distri!t"rs, d"*esti) and "reign, and its s3in health andhair )are %r"d)ts are s"ld %ri*arily t" %hysi)ians.

Sales Channels

In De)e*!er , NewAge BIOTECH entered int" an e)lsi#e distri!ti"n agree*ent

)"#ering the ?nited States and Canada, with the A)*e $edi)al Di#isi"n "r the h"s%ital, nrsing

h"*e, and etended )are *ar3ets. Isle Hydrating Gel, Isle >"nd Cleanser , and Isle >"nd

Dressing were added t" the A)*e $edi)al Di#isi"n sales e"rt in +anary . A)*e

$edi)al Di#isi"n is reired t" *a3e )ertain *ini** annal %r)hases, !t has n"t a)hie#ed

that le#el. NewAge BIOTECH has agreed t" )"ntine the A)*e $edi)al Di#isi"n agree*ent

thr"gh '00B "n a n"n(e)lsi#e !asis, while it e#alates its "%ti"ns in this )"nne)ti"n.

S!seent t" the agree*ent with the A)*e $edi)al Di#isi"n, NewAge BIOTECH entered int"

e)lsi#e distri!ti"n agree*ents "r the registrati"n and distri!ti"n " )ertain " its w"nd )are

%r"d)ts in #ari"s "reign )"ntries, in)lding thr"gh en"n /gaA "r 7atin A*eri)a and

S"th Ari)a. The initial shi%*ent " %r"d)ts t" Bra6il was *ade in the third arter " '00A.

Additi"nal shi%*ents t" "ther 7atin A*eri)an )"ntries are e%e)ted t" !egin in '00B. Adelade

S%A, an Italian *edi)al %r"d)ts )"*%any, signed an agree*ent in "r 1ran)e and Italy.

NewAge BIOTECH has als" gi#en Adelade a right " irst neg"tiati"n "r distri!ti"n t" the rest

" Er"%e, )"ntingent %"n "!taining CE $ar3 registrati"n. Initial %r"d)t shi%*ent sh"ld !egin

in late '00B.

NewAge BIOTECH has als" entered int" a distri!ti"n agree*ent with Beta Phar*aInternati"nal, In)., a di#isi"n " Beta Bi"syste*s, In)., "r )"ntries in the 1ar East, !t as areslt " ne%e)ted reglat"ry and distri!ti"n isses with its distri!t"r, Beta did n"t a)hie#ethe *ini** le#el " annal %r)hases s%e)iied in the agree*ent, and the agree*ent waster*inated in $ar)h '00A, with registrati"ns re#erting t" the )"*%any. NewAge BIOTECHanti)i%ates that %r"d)t registrati"n in )ertain )"ntries *ay ta3e well "#er a year t" se)re,

Cmpetiti7e Analysis

Direct Competition- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. 0


12/39

C"*%etiti"n in the w"nd )are, s3in health, and hair )are *ar3ets is intense. NewAge

BIOTECHFs )"*%etit"rs in)lde well(esta!lished %har*a)eti)al, )"s*eti), and health )are

)"*%anies as well as e*erging !i"te)hn"l"gy )"*%anies. $any " these )"*%etit"rs ha#e

s!stantial inan)ial res"r)es, large resear)h and de#el"%*ent stas, etensi#e e%erien)e

and )a%a!ilities in resear)hing, de#el"%ing and testing " %r"d)ts in )lini)al trials, and in

"!taining 1DA and "ther reglat"ry a%%r"#als. Their *ana)tring a)ilities, *ar3eting

res"r)es, and distri!ti"n netw"r3s als" )"ntri!te t" their a!ility t" )"*%ete in the w"nd

)are, s3in health, and hair )are *ar3ets.

Indirect Competition

Indire)t )"*%etiti"n is negligi!le in the w"nd )are *ar3et. Alternati#e thera%ies )a%tre "nly ara)ti"n " the *ar3et%la)e and n"t the *ainstrea* *edi)al *ar3et. N"n(s)ientii) "r*lati"ns)"*%ete hea#ily as alternati#es t" e%ensi#e s3in and hair )are %r"d)ts.

Future Competition

1tre )"*%etiti"n will )"*e in the "r* " new te)hn"l"gy. Brea3thr"gh )"*%"nds thatw"ld *a3e 6in) %e%tide "!s"lete are n"t li3ely in the net 2 years !ased "n )rrent resear)hreslts. New Age Bi"te)h )"ntines t" *"nit"r all rele#ant resear)h and e%e)ts t" eit %ri"r t"*a@"r te)hn"l"gy ad#an)es.

Competitive Analysis

O#erall, )"*%anies )"*%ete !y !eing a leading %r"#ider " a ll line " te)hn"l"gi)ally

ad#an)ed s3in and w"nd )are %r"d)ts, s%%"rted !y e)e%ti"nal )st"*er ser#i)e, e%ansi#e

*ar3eting %r"gra*s, ed)ati"n, and )lini)al s%%"rt. The %ri*ary area that ae)ts )"*%etiti"n

in the s3in )are *ar3et is ad#ertising. A well(%la)ed ad %r")lai*ing the ee)ts " a )"*%anyFs

anti(aging %r"d)ts "r )"s*eti) srgery ser#i)es g"es a l"ng way in %r"#iding a )"*%etiti#e

edge.

There are a n*!er " )"*%etit"rs in the s3in, hair, and w"nd )are indstries. $any " these

)"*%anies are ite large s)h as :$, /endall, C"n#ate) and Ethi)"n. $any " these

)"*%anies are di#isi"ns " *a@"r health )are )"*%anies s)h as Brist"l $yers Si!! and+"hns"n and +"hns"n. Being a di#isi"n " a *)h larger )"*%any is !"th a strength and a

wea3ness. It "ers the strength " a large distri!ti"n netw"r3 !t is als" a wea3ness in that

res%"nse t" )st"*ersF needs *ay !e )"*%r"*ised. Oten, the larger %arent )"*%any will

di)tate the !siness strategy " the s*aller ir*. Alth"gh the )"*%anies na*ed )"ntr"l a

signii)ant share " the *ar3et, NewAge BIOTECH eels that the strength " its %r"%rietary 6in)

%e%tide )"*%"siti"n will n"t "nly a))elerate its entran)e int" the signii)ant *ar3et share !t

all"w it t" )reate new %r"d)t "%%"rtnities as well.

7arge health )are )"*%anies ha#e signii)ant inan)ial res"r)es t" %t t"ward new %r"d)t

de#el"%*ent and ha#e large de%art*ents de#"ted t" *a3ing the ne)essary reglat"ry

s!*issi"ns t" the 1DA. NewAge BIOTECH has !een a!le t" s%"ns"r resear)h at *a@"r

ni#ersities t" 3ee% its resear)h and de#el"%*ent %i%eline ll. Be)ase large health )are

)"*%anies ha#e *any %r"d)t lines !ey"nd s3in, hair, and w"ld )are, it is n"t n)"**"n "r

)ertain %r"d)ts t" !e)"*e de(e*%hasi6ed "#er ti*e. NewAge BIOTECH sets a *ar3eting

strategy and re*ains ")sed "n the de#el"%*ent " the *ar3et "r a %arti)lar %r"d)t "r

%r"d)t line. Pri)ing !y larger )"*%etit"rs is intense at ti*es, with s%e)ial %ri)ing %r"#ided

thr"gh gr"% )"ntra)ts. >hen this "))rs, NewAge BIOTECH ")ses its e"rts "n higher(

*argin %r"d)ts ntil it )an again atte*%t t" !id "n gr"% %lans.



13/39

The s*all( t" *edi*(si6ed )"*%anies s)h as 7ie)"re Bi"*edi)al and Carringt"n 7a!s

)"*%ete in ni)he *ar3ets with %r"d)t "r*lati"ns that they )"nsider t" !e s%eri"r t" th"se

that are )rrently in the *ar3et. $any " these )"*%anies d" n"t ha#e the &D !dgets t"

generate the s)ientii) %a%ers that s%%"rt their %r"d)t )lai*s. In additi"n, their distri!ti"n

netw"r3s are li*ited and ad#ertising and *ar3eting !dgets are *ini*al. They als" )"*%ete "n

%ri)e and tend t" disr%t the %ri)ing *"del " )"*%anies against whi)h they !id. Cst"*ers will

"ten !y "n %ri)e al"ne, !t will i)3ly see3 "ther %r"d)ts i ser#i)e "r ality !e)"*es an

isse. There"re, NewAge BIOTECH *aintains a #ery )st"*er(")sed e"rt in !"th theCst"*er Ser#i)e and Te)hni)al Ser#i)e De%art*ents. Ea)h )st"*er and te)hni)al ser#i)e

re%resentati#e has res%"nsi!ility "r a %arti)lar regi"n " the )"ntry, s" that )st"*ers i)3ly

get t" 3n"w their re%resentati#e %ers"nally "r n"t "nly "rder %r")essing, !t als" )"n)erns they

need addressed.

#ar9et Analysis

Target ar!et Pro"ile

NewAge BIOTECH e%e)ts that %res)ri%ti"n %har*a)eti)al %r"d)ts )"ntaining )ertain deined

drg s!stan)es will reire a s!stantial degree " de#el"%*ent e"rt and e%ense. Be"re

g"#ern*ental a%%r"#al t" *ar3et any s)h %r"d)t is "!tained, the )"*%any *ay li)ense these%r"d)ts "r )ertain indi)ati"ns t" "ther %har*a)eti)al )"*%anies in the ?nited States "r

"reign )"ntries and reire s)h li)ensees t" nderta3e the ste%s ne)essary t" "!tain

*ar3eting a%%r"#al in a %arti)lar )"ntry "r "r s%e)ii) indi)ati"ns.

Si*ilarly, NewAge BIOTECH intends t" li)ense t" third %arties t" *ar3et %r"d)ts )"ntaining

deined )he*i)al entities "r )ertain h*an indi)ati"ns when it la)3s the e%ertise "r inan)ial

res"r)es t" *ar3et s)h %r"d)ts ee)ti#ely. I the )"*%any is na!le t" enter int" s)h

agree*ents, it *ay nderta3e *ar3eting the %r"d)ts itsel "r s)h indi)ati"ns. The si6e " the

hair )are *ar3et "r thinning hair "n !"th *en and w"*en is .2 !illi"n w"rldwide. There"re,

NewAge BIOTECH has de#el"%ed a strategy t" sell its hair )are %r"d)ts dire)tly t" )"ns*ers

thr"gh its we!site at www.newage!i"te)h.)"*. The a#erage yearly )"st t" *aintain thewe!site is 0,000.

NewAge BIOTECHFs w"nd )are %r"d)ts are *ar3eted d"*esti)ally t" h"s%itals, nrsing

h"*es, h"*e health )are agen)ies, and a)te )are %r"#iders. This *ar3et has )"ntined t" !e

#ery )"*%etiti#e and %ri)e sensiti#e as a reslt " %ressres t" )"ntr"l health )are )"sts and has

!e)"*e in)reasingly )"**"dity "riented. In additi"n, the *ar3et is hea#ily inlen)ed !y

g"#ern*ental rei*!rse*ent %r"gra*s. The h"*e health )are seg*ent " the *ar3et again

e%erien)ed signii)ant tr*"il in '00A as *any " NewAge BIOTECHFs )st"*ers either went

"t " !siness "r %r)hased )"**"dity %r"d)ts. Nrsing h"*es were als" i*%a)ted !y

g"#ern*ental reglati"ns in , as g"#ern*ent(*andated rei*!rse*ent )hanges de t"

!egin in +anary were %"st%"ned ntil late '00A. $any nrsing h"*e dire)t"rs and the

dealers wh" s%%ly the* %"st%"ned !ying de)isi"ns and liidated in#ent"ry in anti)i%ati"n "

the reglati"ns ta3ing ee)t. The )"*%anyFs NewAge Thera%y s3in )are %r"d)ts are

*ar3eted and s"ld w"rldwide as anti(aging and s3in re@#enati"n %r"d)ts.

1r"st & Slli#an ha#e "re)asted that the w"nd )are *anage*ent *ar3et will rea)h '. !illi"n!y '001. Be)ase the d"*esti) and "reign *ar3ets are ite large, NewAge BIOTECH hasstr)tred distri!ti"n agree*ents with se#eral )"*%anies t" rea)h *ar3ets w"rldwide. 1"rinstan)e, dring the year ending De)e*!er :, '00A, the selling, general and ad*inistrati#e

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. '


14/39

e%enses were 9"nd )are %r"d)ts ha#e !een *"st %r"*inently sed in nrsing h"*es and h"s%itals. The

elderly in nrsing h"*es and dia!eti)s h"s%itali6ed with ""t l)ers are the *"st reent

)st"*ers "r w"nd )are %r"d)ts. In these instan)es, in)"*e le#el is " n" )"n)ern "r th"se

h"s%itali6ed "r in a nrsing h"*e sitati"n, !e)ase $edi)are, $edi)aid, "r health insran)e)"*%anies n"r*ally )"#er w"nd )are treat*ent. >hen it )"*es t" w"nd )are, !"th *ales

and e*ales ha#e "nd a need "r the )"*%anyFs %r"d)ts. Other )st"*ers sing this %r"d)t

line in)lde th"se with an a)ti#e, healthy liestyle wh" tend t" in)r in@ries r"* %arti)i%ati"n in

s%"rts. These in@ries "ten reslt in w"nds in need ", at a *ini**, irst aid and %"ssi!ly a

*"re aggressi#e regi*en. NewAge BIOTECH has "nd that its w"nd )are %r"d)ts ha#e a

w"rldwide )st"*er !ase.

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. :


15/39

Future ar!ets

NewAge BIOTECH is !ilding s3in and hair )are re#enes "n at least eight distin)t seg*entsK

. NewAge Bi"te)h is %resently selling in the %hysi)ian *ar3ets with its "wn sales "r)e,esta!lishing !rand %reeren)e and )redi!ility "r the te)hn"l"gy.

'. In '00A we li)ensed the 6in) %e%tide te)hn"l"gy t" Ai"n " +"hns"n & +"hns"n "r the*ass retail *ar3et. They e%e)t t" lan)h their initial %r"d)ts in early '00B, whi)h)"ld generate % t" *illi"n in re#ene.

:. >e ha#e an agree*ent in %la)e "r the %restigi"s de%art*ent st"re *ar3et Me.g., Sa3sand N"rdstr"*. This agree*ent is %resently generating re#ene "r NewAge BIOTECH.

;. >e re)ently )"*%leted "r irst in"*er)ial "r TrieliteQ hair )are %r"d)ts, whi)h will !eaired in the irst arter '00B.

2. >e will enter the hair )are sal"n *ar3et with "r TrieliteQ 6in) %e%tide hair )are %r"d)tss"*e ti*e in '00B. A *ar3et test is nder way in the s%a *ar3et "r s3in )are %r"d)ts.There is a gr"wing trend t"wards a *edi)al s%a *ar3et, and we are in an e)ellent

%"siti"n t" )a%tre a *a@"r %"rti"n " it.

. $lti(le#el *ar3eting is an"ther *a@"r "%%"rtnity "r "r s3in )are te)hn"l"gy. $"stli3ely we will see %r"d)ts s"ld in this seg*ent in '00C.

e e%e)t t" enter the h"*e sh"%%ing seg*ent in *id t" late '00B.

8. Crrently, we are selling %r"d)ts thr"gh "r "wn >e! site and sele)ted %hysi)ian and)"s*eti) Internet sites.

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. ;


16/39

Prduct0Ser7ice Plan

Purpse ! Prduct0Ser7ice

>"nd )are %r"d)ts )an !e sed t" treat dia!eti) l)ers, n"n(healing w"nds, !rns, tra*a

w"nds, s!)tane"s tra*a, and #ari"s "r*s " der*atitis. In additi"n, the %r"d)ts are

als" sel in red)ing the "r*ati"n " s)ar tisse. NewAge BIOTECHFs w"nd )are %r"d)ts

are sed in h"s%itals, nrsing h"*es, h"*e )are nits, and "ther health )are a)ilities. The)"*%anyFs s3in l"ti"ns, )leansers, and hydrating gels are sed t" treat %atients "ll"wing

)he*i)al %eels, *i)r"der* a!rasi"n, and laser treat*ents, as well as th"se with s%e)ii) s3in

)"nditi"ns. The )"*%anyFs hair )are %r"d)ts are sed !y !"th *en and w"*en t" treat

thinning hair.

"eatures and Bene!its

in) le#els in *"st h*ans ha#e !een sh"wn t" de)line with age. esear)h sh"ws that a 6in)

dei)ien)y is ass")iated with i*%aired w"nd healing. The )"*%anyFs %r"%rietary "r*lati"ns,

in)lding its 6in) %e%tide te)hn"l"gy, are )a%a!le " a))elerating tisse gr"wth, re%air, and

regenerati"n !y sti*lating )"llagen synthesis and new !l""d #essel gr"wth. Hair "lli)lesreire high )"n)entrati"ns " !i"l"gi)al 6in), and Trielite %r"d)ts deli#er 6in) al"ng with

a*in" a)ids "r n"rishing and sti*lating the hair and s)al% "r i*%r"#ed health, strength, and

a%%earan)e.

*alue Prpsitin

The latest te)hn"l"gy Pr"#en sae and *"re ee)ti#e than "ther treat*ents

C"ntin"s resear)h and %r"d)t i*%r"#e*ents

S%%"rt literatre e%laining ei)a)ies and %r")edres

Pr! ! Cncept

Se#eral re)ent stdies ha#e )"nir*ed the ad#antages " %r"d)ts )"ntaining the 6in) %e%tide"r*lati"n #erss *ateris s)h as trentin"in and 5ita*in C, and "ther %"%lar anti(aging ands3in re@#enati"n %r"d)ts. S)ientii) literatre d")*ents the a!ility " 6in) %e%tide w"nd )aregels and )rea*s t" sti*late )"llagen synthesis, new !l""d #essel gr"wth, and tisse re%air. A!i!li"gra%hy " sa*%le stdies and d")*ents is in the a%%endi.

Stage ! De7elpment

NewAge BIOTECH C"r%"rati"n was "nded in and has its )"r%"rate "i)es in

$etr"%"lis, Anystate. Its irst )"**er)ial %r"d)t was de#el"%ed in . New Age Bi"te)h is a

health )are )"*%any that de#el"%s, *ana)tres,and *ar3ets %r"d)ts "r s3in, hair, and

w"nd )are. $any " the )"*%anys %r"d)ts in)"r%"rate its %atented 6in) %e%tide te)hn"l"gy.The )"*%anys %r"d)ts are targeted "r se in der*at"l"gy, %lasti) and )"s*eti) srgery

*ar3ets, and "r thera%eti) *aintenan)e " the s3in and hair. The )"*%anys ")s has

re)ently e%anded t" in)lde a wide #ariety " )"ns*er *ar3ets "r s3in )are %r"d)ts #ia

strategi) %artners.

NewAge BIOTECHFs *issi"n is t" *ar3et "r li)ense %atented 6in) %e%tide te)hn"l"gies "r s3in

and hair )are a%%li)ati"ns. Its n"#el 6in) %e%tide te)hn"l"gy is @st !eginning t" e%and int" the

)"ns*er *ar3et, and has the %"tential "r signii)ant, ra%id gr"wth "ll"wing in the ste%s "



17/39

AHAs Mal%ha hydr"y a)ids and retin"l. The g"al is t" generate %r"its r"* the sale " the

%r"d)ts that the )"*%any de#el"%s and li)enses. T" ag*ent the )"**er)iali6ati"n " its

te)hn"l"gy, NewAge BIOTECH has entered int" distri!ti"n and li)ense agree*ents %ri*arily in

the )"ns*er *ar3ets and, t" a lesser etent, the w"nd )are *ar3ets. C"nsistent with this

g"al, the )"*%any intends t" retain and e%and its %r"%rietary rights t" its %r"d)ts and

te)hn"l"gies.

Intellectual Prperty

As is indstry %ra)ti)e, NewAge BIOTECH has a %"li)y " sing %atents, trade*ar3s, and trade

se)rets t" %r"te)t the reslts " its resear)h and de#el"%*ent a)ti#ities and, t" the etent it *ay

!e ne)essary "r ad#isa!le, t" e)lde "thers r"* a%%r"%riating its %r"%rietary te)hn"l"gy. The

)"*%anys %"li)y is t" aggressi#ely %r"te)t its %r"%rietary te)hn"l"gy !y see3ing and en"r)ing

%atents in a w"rldwide %r"gra*.

NewAge BIOTECH has "!tained %atents "r iled %atent a%%li)ati"ns in the ?nited States and

a%%r"i*ately ' "ther )"ntries in three series regarding the )"*%"siti"ns " 6in) %e%tide

deri#ati#es, the %r")esses !y whi)h they are %r"d)ed, and the *eth"ds " their se. The irst

?nited States %atent a%%li)ati"n in this irst series, )"#ering the )"*%"siti"n )lai*s " 6in)%e%tide deri#ati#es, *atred int" ?nited States Patent N". 0,,9:2 Mthe 9:2 Patent, issed

"n A%ril 2, .

?nited States Patent N". 0,',890 Mthe 890 Patent was issed "n A%ril


18/39

The ra*% % ti*e and e%ense " re(engineering "r te)hn"l"gy *a3e it an nli3ely "%ti"n "r)"*%etit"rs. Or li)ensing and distri!ti"n agree*ents *a3e "r te)hn"l"gy a#aila!le t" *any" the *a@"r %layers in the *ar3et%la)e. $a@"r )"*%etit"rs ha#e in %la)e %"%lar and s))esslte)hn"l"gies. 7ess e%ensi#e te)hn"l"gy is realisti)ally at least 2 t" '0 years away a))"rdingt" the !est @dg*ent " e%erts in#"l#ed in )rrent resear)h.

.7ernmental Appr7als

NewAge BIOTECH is n"t )rrently nder any restri)ti"ns !y a reglating g"#ern*ental agen)y.The *ana)tring and *ar3eting " the )"*%anyFs %r"d)ts are s!@e)t t" etensi#e reglati"n

in the ?nited States !y the ederal g"#ern*ent, %rin)i%ally !y the 1DA, and in "ther )"ntries !y

si*ilar health and reglat"ry ath"rities. The 1ederal 1""d, Drg and C"s*eti) A)t, and the

reglati"ns %r"*lgated therender, and "ther ederal and state stattes g"#ern, a*"ng "ther

things, the testing, *ana)tre, saety, la!eling, st"rage, re)"rd(3ee%ing, ad#ertising, and

%r"*"ti"n " )"s*eti) %r"d)ts and *edi)al de#i)es. Pr"d)t de#el"%*ent and a%%r"#al "r

)learan)e within the reglat"ry ra*ew"r3 reires a n*!er " years and in#"l#es the

e%enditre " s!stantial res"r)es.

NewAge BIOTECHFs %r"d)ts and %r"d)t )andidates *ay !e reglated !y any " a n*!er "

di#isi"ns " the 1DA. The %r")ess " "!taining and *aintaining reglat"ry a%%r"#als "r the*ana)tring "r *ar3eting " the )"*%anys eisting and %"tential %r"d)ts is )"stly and ti*e(

)"ns*ing and is s!@e)t t" nanti)i%ated delays. eglat"ry reire*ents lti*ately i*%"sed

)"ld als" ad#ersely ae)t the a!ility " the )"*%any t" )lini)ally test, *ana)tre, "r *ar3et

%r"d)ts.

In the ?nited States, %r"d)ts that d" n"t see3 t" *a3e ee)ti#eness )lai*s !ased "n h*an

)lini)al e#alati"n *ay !e s!@e)t t" re#iew and reglati"n nder the 1DAFs )"s*eti) "r 20M3

*edi)al de#i)e gidelines. Si*ilar gidelines eist "r s)h %r"d)ts in "ther )"ntries. S)h

%r"d)ts, whi)h in)lde w"nd )are dressings and )ertain "int*ents and gels, *st sh"w

saety and s!stantial ei#alen)y with %redi)ate %r"d)ts already )leared !y the 1DA t" !e

*ar3eted.

In additi"n t" "!taining a%%r"#al "r )learan)e r"* the 1DA "r "reign reglat"ry !"dies t"

*ar3et a %r"d)t, NewAge BIOTECHFs ality )"ntr"l and *ana)tring %r")edres *st

)"n"r* t" )rrent g""d *ana)tring %ra)ti)es M)G$P gidelines, "r ISO 9000 standards,

when a%%r"%riate. In )"*%lying with these reglati"ns, whi)h are s!@e)t t" )hange at any ti*e

with"t n"ti)e, NewAge BIOTECH *st )"ntine t" e%end ti*e, e"rt, and inan)ial res"r)es

in %r"d)ti"n and ality )"ntr"l. In additi"n, the )"*%anyFs *ana)tring %lant is s!@e)t t"

the reglati"ns " and ins%e)ti"ns !y "ther "reign, ederal, state, "r l")al agen)ies, s)h as

l")al and regi"nal water and waste treat*ent agen)ies, and state and ederal saety and health

agen)ies.

NewAge BIOTECH als" is "r *ay !e)"*e s!@e)t t" #ari"s "ther ederal, state, l")al, and

"reign laws, reglati"ns, and %"li)ies relating t", a*"ng "ther things, sae w"r3ing )"nditi"ns,

g""d la!"rat"ry %ra)ti)es, and the se and dis%"sal " ha6ard"s "r %"tentially ha6ard"s

s!stan)es sed in )"nne)ti"n with resear)h, de#el"%*ent, and *ana)tring. 1ailre t"

"!tain reglat"ry a%%r"#als "r its %r"d)t )andidates "r t" attain "r *aintain )"*%lian)e with

)G$P "r "ther *ana)tring reire*ents w"ld ha#e a *aterially ad#erse ee)t "n the

)"*%anys !siness.



19/39

The %a)3aging, la!eling and ad#ertising " the NewAge BIOTECHFs %r"d)ts are s!@e)t t"reglati"n !y "ne "r *"re ederal agen)ies, in)lding the 1DA, the 1TC, the ?SDA, and theEPA. These a)ti#ities are als" reglated !y #ari"s agen)ies " the states, l")alities, and"reign )"ntries t" whi)h the )"*%anyFs %r"d)ts are distri!ted and s"ld. The DietaryS%%le*ent Health and Ed)ati"n A)t " MDSHEA re#ised the %r"#isi"ns " the 11DC

A)t )"n)erning the )"*%"siti"n and la!eling " dietary s%%le*ents and, in the @dg*ent " theNewAge BIOTECH, is a#"ra!le t" the dietary s%%le*ent indstry. The legislati"n )reated anew statt"ry )lass " Rdietary s%%le*entR whi)h in)ldes #ita*ins, *inerals, her!s, a*in"a)ids, and "ther dietary s!stan)es "r h*an se t" s%%le*ent the diet. DSHEAgrandathered, with )ertain li*itati"ns, dietary ingredients "n the *ar3et !e"re O)t"!er 2,. A dietary s%%le*ent whi)h )"ntains a new dietary ingredient"ne n"t "n the *ar3et!e"re O)t"!er 2, reires e#iden)e " a hist"ry " se "r "ther e#iden)e " saetyesta!lishing that it will reas"na!ly !e e%e)ted t" !e sae. The *a@"rity " the %r"d)ts*ar3eted !y NewAge BIOTECH are )lassiied as dietary s%%le*ents nder DSHEA.

Prduct0Ser7ice Limitatins

NewAge BIOTECHFs s3in )are %r"d)ts *ay n"t !e ee)ti#e "r e#ery"ne. Cst"*ers sh"ld)"nslt a %hysi)ian when )"nsidering a %r"d)t "r their s3in ty%e. I a s3in "r hair )are %r"d)t

eli)its an allergi) rea)ti"n s)h as it)hing, redness "r swelling, a %hysi)ian sh"ld !e )"nta)tedi**ediately. >"nd )are %r"d)ts sh"ld n"t !e sed as a %ri*ary treat*ent "r "ng"ingine)ti"ns. In the )ase " %ersistent inla**ati"n, a %hysi)ian sh"ld !e )"nslted and treat*entdis)"ntined. In the )ase " dee% w"nds "r seri"s !rns, the )"*%anyFs w"nd )are %r"d)tssh"ld "nly !e sed as re)"**ended !y a %hysi)ian. Cst"*ers sh"ld a#"id dire)t )"nta)t "s3in )are and w"nd )are %r"d)ts with the eyes.

Tec8nlgy Limitatins

As %re#i"sly stated, new te)hn"l"gy is a generati"n away. New a%%li)ati"ns "r New AgeBIOTECHFs )rrent te)hn"l"gy )"ntine t" !e de#el"%ed. The )"*%any %r"@e)ts )"ntinedgr"wth and eisting te)hn"l"gyl i*%r"#e*ents "r the net 2 t" '2 years.

Prduct0Ser7ice Lia


20/39

Prductin

Pr"d)ti"n " all NewAge BIOTECHFs %r"d)ts "ll"ws the ste%s !el"wK

. The %r"d)ti"n %r")ess !egins with the "r*lating " the %r"d)t in a %arti)lar !at)hsi6e.

'. I the %r"d)t reires sterili6ati"n, it will !e stea* sterili6ed %er s%e)ii)ati"ns.:. $any " the %r"d)ts tili6e a %reser#ati#e t" *aintain a l"w !i"!rden "

*i)r""rganis*s.;. The %r"d)t is then dis%ensed thr"gh a sterili6ed *lti#a) t!ing syste* int" thea%%r"%riate )"ntainer.

2. e%resentati#e sa*%les are re*"#ed "r ality )"ntr"l and sterility.. All "ther %r"d)ts are %a)3aged and sent t" arantine.hen released !y ality )"ntr"l, the %r"d)t is *"#ed r"* arantine t" shi%%ing.

"acilities

NewAge BIOTECH !elie#es that all its *ana)tring and la!"rat"ry a)ilities and la!"rat"ryei%*ent are in satisa)t"ry )"nditi"n and are adeate "r the %r%"ses "r whi)h they are

sed. Additi"nal )a%ital ei%*ent is %r"@e)ted "r '00C t" tili6e )a%a)ity and *eet sales

de*and. The )"*%anyFs )"r%"rate headarters and %rin)i%al ?.S. *ana)tring a)ility in

$etr"%"lis, Anystate, "))%ies 20,000 sare eet. The )"*%any "wns the a)ility. The

*ana)tring "%erati"ns "))%y a%%r"i*ately :2,000 sare eet " the a)ility, and

ad*inistrati#e "i)es "))%y a%%r"i*ately 2,000 sare eet. The )"*%anys in(h"se

resear)h and de#el"%*ent and ality assran)e a)ti#ities are )"nd)ted in a se)ti"n " the

s%a)e de#"ted t" ad*inistrati"n. >areh"sing and distri!ti"n are )"ntained in the

*ana)tring "%erati"ns se)ti"n " the a)ility.

$=D Partners

The )"*%any s%"ns"rs a resear)h and de#el"%*ent la!"rat"ry at the ?ni#ersity " Central Ohi"

t" e%and %re)lini)al resear)h in #ari"s %r"d)t a%%li)ati"ns and *e)hanis*s " a)ti"n. >ith

this arrange*ent, NewAge BIOTECH has a))ess t" leading ath"rities in i**n"l"gy and )ell

!i"l"gy, as well as a)ilities and ei%*ent t" engage in e%eri*entati"n and analysis at the

!asi) resear)h le#el.

Suppliers

Che*i)als, %lasti) ware, and glassware are "!tained r"* nati"nal s)ientii) s%%ly h"ses

s)h as 1isher S)ientii) and Sig*a Che*i)al C"*%any. NewAge BIOTECH has annal%r)hasing )"ntra)ts "r %"wdered )he*i)als r"* leading )he*i)al s%%ly h"ses. These)he*i)al s%%ly h"ses are all"wed t" !id "r the )"ntra)t ea)h year. The award " the !id is!ased "n n"t "nly the l"west %ri)e !t als" the a!ility " the s%%lier t" *aintain si)ientin#ent"ry " the raw *aterials and shi% in a ti*ely *anner

$elated Prducts0Ser7ices and Spin;!!s

Dring , NewAge BIOTECH a)ired NewDer*, In)., and with it the rights t" se#eral

%r"d)ts in #ari"s stages " de#el"%*ent. The )"*%any intr"d)ed its irst %r"d)t !ased "n- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. 9


21/39

the a)ired te)hn"l"gy dring the third arter '00A as %art " the NewAgeM "ily s3in

%r"d)t line. The )"*%any intr"d)ed a n*!er " anti(aging %r"d)ts and related %r"d)ts in

'00A and %lans t" )"ntine its s3in health and hair )are %r"d)t de#el"%*ent. The )"*%any

als" %lans t" )"ntine t" e#alate )"*%anies, %r"d)ts, and te)hn"l"gies that "er synergisti)

"%%"rtnities "r NewAge BIOTECH t" le#erage its %"siti"n in the *edi)al *ar3et%la)e "r

a)isiti"n "r distri!ti"n.

NewAge BIOTECH !elie#es that its %r"d)tsF n)ti"nality and4"r %har*a)"l"gi)al a)ti#ity *a3ethe* %"tential )andidates "r rther de#el"%*ent as %har*a)eti)al "r thera%eti) agents. The

)"*%anys %re)lini)al e"rts will )"ntine t" ")s "n s%%"rting eisting !siness thr"gh

de#el"%ing J%r"" " )"n)e%tL data "r %"tential %har*a)eti)al %artners.

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. '0


22/39

#ar9et Penetratin and Sales Plan

Company Image

NewAge BIOTECH has esta!lished a re%tati"n within the indstry as a t"% ality )"*%anywith %r"d)ts !ased "n s"lid resear)h !a)3ed !y de*"nstra!le reslts. As the )"*%any *"#es*"re int" the )"ns*er *ar3ets, that i*age will !e e#iden)ed with irst )lass %a)3aging as wellas high end retail %artners.

As %r"ita!ility gr"ws, %r"#iding w"nd )are %r"d)ts t" health "rgani6ati"ns in de#el"%ing)"ntries is a natral it as a way "r the )"*%any t" s%%"rt a *eaningl )ase.

Customer Service

NewAge BIOTECH will isse a ll rend when the nsed %"rti"n " the %r"d)t is retrnedwith a written des)ri%ti"n " the )st"*er )"n)ern. The )"*%any als" %r"#ides a t"ll(reen*!er "r !"th te)hni)al in"r*ati"n and )st"*er ser#i)e assistan)e. The )"*%any %ridesitsel in !eing *)h *"re sensiti#e t" the )st"*ersF reests "r retrns than *"st )"*%aniesin this indstry. etaining a )st"*er wh" has had a %r"d)t %r"!le* )"sts less thande#el"%ing a new )st"*er.

#ocation

NewAge BIOTECH intends t" stay in its )rrent headarter in $etr"%"lis, Anystate, "r at leastthe net si years.

Direct Sales Force

This %ast year, NewAge BIOTECH )"*%leted a sales "r)e e%ansi"n in its dire)t *ar3eting t"

%hysi)ians. There are n"w '; sales sta *e*!ers and tw" ield sales *anagers. This

e%ansi"n %r"#ides dire)t )"#erage "#er 90 %er)ent " the )"*%anyFs %"tential %hysi)ian

)st"*ers. Selling, general and ad*inistrati#e )"sts in)reased 8.2 %er)ent "#er de t"

the e%ansi"n " the sales and *ar3eting e"rt "r new %r"d)ts and *ar3ets. Pr"d)t literatre

has !een standardi6ed and %graded )"**ensrate with the )"*%anyFs %re*i* a%%r"a)h t"

the *ar3et%la)e.

Sin)e in)e%ti"n, NewAge BIOTECH has ")sed "n the )hr"ni) w"nd )are *ar3et. >"rldwide,

this *ar3et is esti*ated t" e)eed 2 !illi"n. It is highly rag*ented, with *any )"*%etit"rs and

%ri)e )"nstraints and w"ld reire a signii)ant in#est*ent in s%%"rting a dedi)ated sales

"rgani6ati"n " 20(00 re%resentati#es. 1"r these reas"ns, the )"*%any )"lla!"rates with

%artners t" *ar3et its )hr"ni) w"nd )are %r"d)ts. The )"*%any has signed distri!ti"n

agree*ents with *a@"r )"*%anies "r the ?nited States, 7atin A*eri)a, and Er"%e rather than

indi#idal agree*ents "r ea)h )"ntry.

Sales $epresentativesThe se " "tside sales re%resentati#es is n"t )"nte*%lated at this ti*e. The )"*%anyFsstrategi) %artners, distri!t"rs, and li)ensees lill this r"le.

#icensing or Distri%utors

The li)ense and s%%ly agree*ents gi#e Ai"n w"rldwide rights t" the 6in) %e%tide te)hn"l"gy

"r s3in )are in the *ass retail *ar3ets. NewAge BIOTECH als" entered int" a s%%ly and

*ar3eting agree*ent with Genera C"r%"rati"n, gi#ing the* a li*ited, w"rldwide, n"n(

transera!le right t" %r)hase and se "ne " NewAge BIOTECHFs 6in) %e%tide )"*%"nds "r

*a3ing and selling s3in )are %r"d)ts t" the %restige s3in )are *ar3et. The irst %r"d)t- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. '


23/39

*ar3eted nder this agree*ent was lan)hed in as 1irst 7e#el, an anti(aging

"r*lati"n s"ld at )"s*eti) )"nters in st"res s)h as Sa3s and Nei*ann $ar)s. Additi"nal

6in) %e%tide %r"d)ts are *ar3eted nder the Ageless !rand at %restigi"s s%as.

In , NewAge BIOTECH entered int" an e)lsi#e distri!ti"n agree*ent with A)*e

$edi)al, In)., gi#ing A)*e the e)lsi#e rights t" distri!te w"nd )are %r"d)ts *ana)tred

!y the )"*%any in the ?nited States. Dring , NewAge BIOTECH entered int" a

distri!ti"n agree*ent with Beta Phar*a "r sales " Isle Hydrating Gel and Isle >"ndDressing in China and Taiwan. Beta Phar*a re)ei#ed a%%r"#al " its a%%li)ati"n t" register the

%r"d)ts in China, and the initial "rders were shi%%ed in De)e*!er . Ater the initial

shi%*ent, Beta Phar*a e%erien)ed ne%e)ted reglat"ry and distri!ti"n isses with its

distri!t"r and did n"t a)hie#e the *ini** sales le#els s%e)iied in the agree*ent. In $ar)h

'00A, Beta Phar*a and NewAge BIOTECH ter*inated the agree*ent, with the registrati"ns

re#erting t" NewAge BIOTECH. NewAge BIOTECH is )rrently e#alating its distri!ti"n

"%ti"ns "r the 1ar East.

In , NewAge BIOTECH entered int" an e)lsi#e distri!ti"n agree*ent with en"n.

en"n is a 2 !illi"n Ger*an %har*a)eti)al )"*%any. The en"n agree*ent %r"#ides "r the

registrati"n, %r"*"ti"n, and distri!ti"n " the )"*%anyFs w"nd )are %r"d)ts t" the )hr"ni)

w"nd )are *ar3ets in 7atin A*eri)a and S"th Ari)a. NewAge BIOTECH e%e)ts that

shi%*ents t" $ei)" and Per will !egin dring the irst hal " '00B.

C"%ies " all these agree*ents a%%ear in the A%%endi.

ar!eting Alliances

The )"*%any en@"ys the !eneit " the *ar3eting e"rts " all " its distri!t"rs and li)ensees.

Advertising and Promotion

Signii)ant "%%"rtnities eist in *lti(le#el *ar3eting, s%a, sal"n, and in"*er)ial *ar3ets "r

li)ensing t" a leading )"*%any in th"se )ateg"ries. NewAge BIOTECH has signed a distri!ti"nagree*ent with a h"*e sh"%%ing and in"*er)ial )"*%any "r a "ne(year test %r"gra* t"

e#alate the ee)ti#eness " selling the Trielite %r"d)ts #ia T5 and )atal"g *ar3eting

%r"gra*s. NewAge BIOTECH has initiated a series " )"ns*er ad#ertise*ents ")sed

s%e)ii)ally "n the hair )are needs and )"n)erns " an aging Ba!y B""*er %"%lati"n. Press

releases ha#e !een %r"#ided t" The Wall Street Journal . The gr"wing Internet *ar3et is

addressed thr"gh the )"*%anys we!sites, !i"te)h.)"*. and . As a %r"*"ti"nal strategy,

NewAge BIOTECH "ers an ed)ati"nal #ide" "r %r"d)t a%%li)ati"n and w"nd *anage*ent

training.

Pu%licityNewAge BIOTECH %!lishes in trade @"rnals as IP %r"te)ti"n is in %la)e "n new te)hn"l"giesand a%%li)ati"ns are de#el"%ed. As the s3in and hair )are lines *"#e in t" high(end retail"%erati"ns, regi"nal @"int %r"d)t lan)h etra#agan6as will !e h"sted at lagshi% st"res.

Telemar!eting&Direct ail

NewAge BIOTECH has e*%l"yed tele*ar3eters t" rea)h the 0 %er)ent " the %hysi)ian *ar3etthat it )ann"t rea)h with its dire)t sales "r)e. The )"*%anyFs sales, *ar3eting, and te)hni)alstas %re%are the s)ri%t "r the tele*ar3eters.

Internet- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. ''


24/39

NewAge BIOTECH has de#el"%ed a strategy t" sell its hair )are %r"d)ts dire)tly t" )"ns*ers

thr"gh its >e! site at www.newage!i"te)h.)"*. The a#erage yearly )"st t" *aintain the >e!

site is 0,000.

Trade Shows

NewAge BIOTECH attends the "ll"wing annal *eetingsK A*eri)an A)ade*y " Der*at"l"gy,

A*eri)an $edi)al Ass")iati"n, Annal Sy*%"si* "n Ad#an)ed >"nd Care and $edi)alesear)h 1"r* "n >"nd e%air, Ass")iati"n " C"s*eti) Srgery, and Ass")iati"n " S3in

and Hair Care Pr"d)ts. NewAge BIOTECH ehi!its at all " the a!"#e trade sh"ws with a ity(

!y 20 20 ""t !""th. These trade sh"ws are held in *a@"r )ities s)h as New "r3, Dallas,

H"st"n, $ia*i, and >ashingt"n, D.C. The t"tal )"st t" the )"*%any t" attend ea)h sh"w is

a%%r"i*ately '0,000, whi)h in)ldes !""th s%a)e rental, !""th trans%"rt, registrati"n "

)"*%any re%resentati#es, h"sing, *eals and entertain*ent )"sts, and trans%"rtati"n "

)"*%any re%resentati#es. NewAge BIOTECH re)ei#es "n a#erage 800 )"nta)ts %er "r(day

trade sh"w. C"nta)t in"r*ati"n is !r"ght !a)3 t" the )"*%anyFs headarters and assi*ilated

!y the sta " the $ar3eting De%art*ent "r rther "ll"w(%.

ar!et Penetration '""ectiveness

The )"*%anyFs *ar3eting strategies ha#e %r"#en ee)ti#e garneringK ; %er)ent " the ?.S.w"nd )are *ar3et .0:8 %er)ent " the internati"nal w"nd and s3in4hair )are *ar3et thr"ghdistri!ti"n agree*ents and .02: %er)ent " the d"*esti) s3in4hair )are *ar3et.

Pricing

Pricing Strategy

The %r"d)t line is )"nsidered t"% " the line and is %ri)ed a))"rdingly.

Price #ist

The %ri)ing %r"ile is as "ll"wsK

Pr"d)t Si6e Pri)e>"nd )are %r"d)ts ;484 "6. '0.004:8.0042.00Internal e%air CrU*e ; "6. '0.00Cleanser "6. '2.00Hydrating Gel 8 "6 :0.00P"st 7aser 7"ti"n ' "6. ;0.00New Age Starter /it "r Oily, "r Dry S3in 0 "6. M' 0.00Trielite Sha*%"" "6. ;2.00Trielite C"nditi"ner "6. ;0.00Trielite 1"lli)le Thera%y ' "6. :0.00

Pricing Policies

NewAge BIOTECH "ers dis)"nts "r yearly )"ntra)ts. Intr"d)t"ry "ers are a#aila!le andare generally "ered dring the irst year that the %r"d)t "r %r"d)t line is !eing *ar3eted.$"st sales Me)e%t t" the )"ns*er *ar3et are *ade !y the )ase.

(rea!)'ven Analysis

e#enes ha#e gr"wn !y "#er ;0 %er)ent t" . *illi"n in '00A r"* ;.< *illi"n in the %ri"ryear, while "%erating e%enses in)reased !y "nly .< %er)ent t"


25/39

2.: *illi"n "r M0.:2 %er share, whi)h in)ldes a .9 *illi"n "ne(ti*e restr)tring )harge.NewAge BIOTECH e%e)ts t" re)ei#e a !etter re#ene *i in '00B r"* sales and r"yaltyin)"*e de r"* shi%*ents " %r"%rietary *aterials t" )"r%"rate %artners. Other li)enseagree*ents will als" enhan)e r"yalty in)"*e. There will als" !e an e"rt t" *aintain "%eratinge%ense gr"wth "n sales and *ar3eting in '00B and !ey"nd at 2 %er)ent 2 %er)ent.

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. ';


26/39

#anagement and Organi:atin Plan

#anagement Team

NewAge BIOTECHFs *anage*ent, Gary S*ith, Ph.D., +e +"nes, Pal Talent, and Gary

Sawyer, Ph.D., *a3e % a seas"ned and start(% sa##y tea* that )"ntri!te )"*%le*entary

e%ertise in )lini)al resear)h, !i"%har*a)eti)al de#el"%*ent, strategi) %lanning, and !siness

ad*inistrati"n. The tea* "ers nearly 20 years " )"*!ined !i"te)hn"l"gy e%erien)e and hasa s))essl tra)3 re)"rd in drg testing and a%%r"#al. The indi#idal *e*!ers " the

*anage*ent tea* ha#e w"r3ed t"gether in %re#i"s s))essl #entres.

Gerald L. Sawyer, Ph.D., President & C!. Dr. Sawyer is an e%erien)ed !siness ee)ti#e

and entre%rener with "#er 2 years in seni"r *anage*ent in the !i"te)hn"l"gy indstry. He

has )"("nded and ser#ed "n the !"ard " dire)t"rs " tw" s))essl start(% *edi)al

te)hn"l"gy )"*%anies. He is the "r*er %resident & CEO " Phar*a, In)., a %ri#ate drg

deli#ery )"*%any whi)h he "nded and esta!lished "%erati"ns "r in Den#er, C"l"rad". His

e%erien)e als" in)ldes ser#i)e as the #i)e %resident " s)ientii) aairs and COO at I**ne

C"r%"rati"n, a %!li)ly traded !i"te)hn"l"gy )"*%any engaged in the resear)h and

de#el"%*ent " )an)er i**n"thera%eti)s. Dr. Sawyer has als" ser#ed as *anager " DrgDeli#ery esear)h at A#e 7a!"rat"ries In)., where he %arti)i%ated in the start(%, s%in"t, and

initial %!li) "ering a)ti#ities " the )"*%any, and as dire)t"r " "%erati"ns at Inh"se

esear)h Institte, In)., a s))essl )"ntra)t t"i)"l"gy )"*%any that he )"("nded.

Thr"gh"t his )areer, Dr. Sawyer has reined his e%ertise in the start(% !siness

en#ir"n*ent in)lding s*all !siness ad*inistrati"n, "%erati"ns, tea* !ilding, nd(raising,

and strategi) !siness de#el"%*ent. Dr. Sawyer h"lds a !a)hel"r " s)ien)e in )he*istry r"*

>ayne State ?ni#ersity and re)ei#ed his d")t"rate in !i")he*istry r"* C"l"rad" State

?ni#ersity.

Gary J. S"ith, Ph.D., #ice President, $esearch & De%elo"ent. Dr. S*ith has 2 years "

e%erien)e in !"th the !i"%har*a)eti)al indstry and ederal g"#ern*ent, *"st re)entlyser#ing as #i)e %resident " drg de#el"%*ent at Phar*a, In). and dire)t"r " %har*a)"l"gy

and t"i)"l"gy at S"*ne, In). Pri"r t" that, Dr. S*ith was a tenred s)ientist and %r"@e)t

*anager at the Nati"nal Institte " Health and re)ently )"*%leted a ter* "n the !"ard "

dire)t"rs " the A*eri)an B"ard " T"i)"l"gy. Dr. S*ith has written *"re than 0 %eer(re#iewed

%!li)ati"ns and !""3 )ha%ters and is the in#ent"r "n %atents in the area " inla**ati"n and

he*at"%"iesis. Dr. S*ith re)ei#ed his Ph.D. r"* New "r3 ?ni#ersity and h"lds a Di%l"*ate

r"* the A*eri)an B"ard " T"i)"l"gy.

Je''rey L. Jones, #P Clinical De%elo"ent. $r. +"nes is a aliied )lini)al resear)h *anager

with "#er 0 yearsF e%erien)e in the !i"%har*a)eti)al indstry. He has ser#ed as *edi)al

resear)h *anager "r Clini)al esear)h, In)., where his res%"nsi!ilities in)"r%"rated the design,i*%le*entati"n, and dire)ti"n " *lti()enter )lini)al resear)h trials in #ari"s thera%eti) areas

in)lding dia!etes, der*at"l"gy, and "n)"l"gy. $r. +"nesFs drg de#el"%*ent !a)3gr"nd

en)"*%asses all le#els " )lini)al trial *anage*ent, ha#ing held %"siti"ns as seni"r )lini)al

resear)h ass")iate with Phar*a)eti)al esear)h Ass")iates, In)., regi"nal )lini)al resear)h

ass")iate and %r"@e)t *anager with P77 Phar*a, In)., )lini)al *"nit"r with A#e 7a!"rat"ries,

In)., and )lini)al stdies )""rdinat"r with Tele)tr"ni)s. $r. +"nes als" ser#ed as %re)lini)al

stdies gr"% leader at A#e 7a!"rat"ries, In). $r. +"nes re)ei#ed his BS degree in !i"l"gy

r"* C"l"rad" State ?ni#ersity and trained as a ?.S. ar*y *edi) s%e)iali6ing in light, E, and



27/39

tra*a *edi)ine. He is als" )ertiied in G""d $ana)tring Pr")ess $anage*ent. $r. +"nes

has ath"red n*er"s %!li)ati"ns and h"lds se#eral %atents related t" )lini)al resear)h and

drg "r*lati"n de#el"%*ent.

John (ass, #P Sales & Mar)etin*. $r. Bass has "#er '0 yearsF e%erien)e in sales and

*ar3eting. He ser#ed as #i)e %resident " sales and *ar3eting "r S"thern Bi"te)h s%er#ising

'0 sales re%resentati#es and "r regi"nal *anagers. Pri"r t" that he was #i)e %resident "

*ar3eting "r Netra)eti)als, In)., where he had res%"nsi!ility "r a sales "r)e " '2 and"#ersight "r ad#ertising and %r"*"ti"n. $r. Bass has a *asterFs degree in *ar3eting and a

!a)hel"r " s)ien)e in !siness ad*inistrati"n.

Paul +. Talent, Controller. $r. Talent is an e%erien)ed !siness de#el"%*ent ee)ti#e with

"#er : years " e%erien)e in #ari"s indstries. He dire)ted the sales and *ar3eting gr"%s

"r Shelt"n C"r%"rati"n, "ll"wing %r"*"ti"ns r"* sales re%resentati#e, area sales *anager,

and regi"nal sales dire)t"r. He has !een re)"gni6ed nati"nally and re)ei#ed n*er"s awards

"r his sales e%ertise in n*er"s )ateg"ries and is re)"gni6ed !y his %eers "r his s3ills in

)l"sing *lti(*illi"n d"llar deals. He has etensi#e e%erien)e in new !siness and, in this

)a%a)ity, has ser#ed as a )"nsltant t" se#eral *edi)al te)hn"l"gy )"*%anies, in)lding

Phar*a, In)., and $ed7in) C"r%"rati"n. $r. Talent has als" ser#ed as a *anaging %artner in a

%ri#ate ir* "r h"*e and )"**er)ial l"ans. $r. Talent attended 7"ng Bea)h State ?ni#ersity

where he *a@"red in !siness and )"**ni)ati"ns.

Bard ! Directrs0Ad7isry Bard

In additi"n t" Drs. S*ith and Sawyer the )"*%anyFs B"ard " Dire)t"rs in)ldesK

Sunil J. +dil, M.D., Ph.D., M$CPath, $CP. Dr. Adil is a %hysi)ian(s)ientist and in#ent"r " the

)"*%anyFs te)hn"l"gy. He is )rrently %r"ess"r " general *edi)ine and end")rin"l"gy and a

%r"ess"r in the Gradate S)h""l " Phar*a)"l"gy at the ?ni#ersity " New "r3 $edi)al

S)h""l. He als" h"lds ailiati"ns in the De%art*ent " Internal $edi)ine and the De%art*ent "

Phar*a)"l"gy & T"i)"l"gy. He gradated r"* *edi)al s)h""l in Peradeniya, Sri 7an3a, in

9


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ser#ed as a s)ientii) ad#iser and )"nsltant t" A!!"tt 7a!"rat"ries, Pi6er Phar*a)eti)als,

B"ehringer $annhei*, >inthr"% Phar*a)eti)als, Ci!a(Geigy, and 7"rs Phar*a)eti)als.

Charles H. Se%erson, M.D. -Pendin*. Dr. Se#ers"n is the )hair*an, CEO, %resident, and )"(

"nder " S"lid")3, In)., a %ri#ately held, #entre(!a)3ed health )are )"*%any !ased in

Den#er, C"l"rad". Pri"r t" "nding S"lid")3, Dr. Se#ers"n ser#ed as )"("nder, CEO, and

)hair*an " "den Syste*s, In)., a *edi)al in"r*ati"n ser#i)es )"*%any that, "#er the )"rse

" three years, grew t" 20 *illi"n in annal re#enes. Dr. Se#ers"n als" has !een )hair*an,CEO, %resident, and "nder " S"*ne, a %!li)ly traded !i"%har*a)eti)al )"*%any and was

CEO and %resident " S"*ne Instr*ents, whi)h was s"ld t" Be)3*an Instr*ents in 989.

Dring his a)ade*i) )areer, Dr. Se#ers"n re)ei#ed n*er"s awards and re)"gniti"ns. He was

a tea)hing and resear)h s)h"lar and a ell"w " the A*eri)an C"llege " Chest Physi)ians. He

has held the %"siti"ns " %r"ess"r " *edi)ine, )lini)al dire)t"r, and dire)t"r " the H"se Sta

Training Pr"gra* " the De%art*ent " $edi)ine at the ?ni#ersity " C"l"rad" and seni"r

s)ientist and #i)e %resident " the Elean"r ""se#elt Institte. Dr. Se#ers"n is !"ard )ertiied in

internal *edi)ine and %l*"nary *edi)ine. He earned his *edi)al degree r"* the ?ni#ersity "

C"l"rad", training in internal *edi)ine at D3e ?ni#ersity, and %l*"nary *edi)ine and )riti)al

)are at the ?ni#ersity " C"l"rad", and training in *"le)lar and )elllar !i"l"gy at the

?ni#ersity " C"l"rad" and the Elean"r ""se#elt Institte. NewAge BIOTECH is )rrently in

dis)ssi"n with Dr. Se#ers"n t" inali6e his a%%"int*ent t" the !"ard " dire)t"rs.

Clinical and Scienti!ic Ad7isry Bard

NewAge BIOTECH has asse*!led an e%ert )lini)al and s)ientii) ad#is"ry !"ard )"*%"sed "

leading idea %e"%le in srgery, tra*a, reglat"ry aairs, and general *edi)ine.

Ad#is"r.......................................................................................S%e)iali6ati"n

+"n C. Philli%s, P.D...............................................................................T"i)"l"gy

Edgar D. Star, $.D., Ph.D...............................................Srgery, >"nd Healing

Bar!ara Greenw""d..................................................Clini)al & eglat"ry Aairs

"!ert >. >""d, Ph.D................................................%e%tide Drg De#el"%*ent

+dith Brawn, N...........................................................................$anaged Care

"nald Shi%ley, $.D...............................................................................On)"l"gy

Gerry Cets, $.D......................................................................................Tra*a

Harry "!y, $.D................................................................................>"nd Care

Arthr . Sand*an, $.D...........................................................General $edi)ine

$ecruitment and Selectin ! Emplyees

E*%l"yees ha#e !een re)rited thr"gh the netw"r3s " the *anage*ent tea*. High ality%ers"nnel ha#e !een attra)ted t" the ality " the )"*%anyFs te)hn"l"gy and re%tati"n.

Cmpensatin and Owners8ip

NewAge BIOTECH n)ti"ns as a )"r%"rati"n. The salaries " the *anage*ent tea* are listed

!el"w. The st")3 "%ti"ns listed "r $r. Bass are !ased "n )ertain *ilest"ne e#ents. These

*ilest"ne e#ents in)lde, !t are n"t li*ited t", an in)rease in annal sales, new )st"*ers

generated, *aintenan)e " sales and *ar3eting e%enses, et).- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. '


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C"**"n St")3 N*!er " Shares

Gerald 7. Sawyer '00,0004yr 200,000

Gary +. S*ith :0,0004yr '20,000

+erey 7. +"nes :0,0004yr +"hn Bass '2,0004yr Pal A. Talent 90,0004yr

'20,000MO%ti"ns '20,000','20,000

Emplyee $eward and Incenti7e Plan

The shareh"lders ha#e a%%r"#ed a n"n(e*%l"yee dire)t"r st")3 %lan, reser#ing '00,000 shares

"r issan)e t" dire)t"rs. Tw" hndred th"sand additi"nal shares were a%%r"#ed "r the %lan at

the )"*%anyFs annal shareh"lders *eeting "n $ay ':, '00A. ?nder this %lan eligi!le dire)t"rs

re)ei#e all "r a %"rti"n " their arterly retainer ees in shares " the )"**"n st")3 " the

)"*%any. The n*!er " shares ea)h eligi!le dire)t"r re)ei#es is !ased "n the a#erage air

*ar3et #ale " the )"**"n st")3 "r the last '0 !siness days " the is)al arter. NewAge

BIOTECH has st")3 "%ti"n %lans "r dire)t"rs, "i)ers, e*%l"yees, and )"nsltants that %r"#ide

"r grants " n"naliied and in)enti#e st")3 "%ti"ns. O%ti"ns generally are granted at air

*ar3et #ale, e%ire !etween i#e and 0 years r"* grant date and #est rata!ly "#er three t"

i#e years.

Cmmunicatin

The %resident *eets as needed with #i)e %residents !t n" less "ten than "n)e a *"nth.>ee3ly sta *eetings are held !y the #i)e %resident " ea)h se)ti"n " the )"*%any, s)has )lini)al de#el"%*ent, resear)h and de#el"%*ent, ad*inistrati"n, and sales and*ar3eting. These *eetings are sed t" in"r* %ers"nnel " )hanging )"*%any %"li)ies, as3%ers"nnel "r in%t t" de#el"% )"*%any strategy, and )reate awareness " the a)ti#ities "the #ari"s de%art*ents within the )"*%any. E*%l"yees are t" re%"rt all in)idents ")"n)ern t" their res%e)ti#e #i)e %resident. It is then the res%"nsi!ility " that #i)e %resident t"in"r* the %resident t" deter*ine i any a)ti"n is t" !e ta3en.

In!rastructure

Crprate Cunsel

H"gan & Harts"n, 77P000 Br"adwaySite '00B"lder, CO 80:0'1ees range r"* 20('204hr



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Auditr

Arthr Andersen 77P000 Se#enteenth StreetSite :00Den#er, CO 80'0'1ees range r"* 00('004hr

Ban9ing

Sili)"n 5alley Ban3000 Ara%ah"e A#eneSite ''2$etr"%"lis, /S 0(


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Operating and Cntrl Systems Plan

$ecei7ing Orders

Ph"ne, a, e(*ail and *ail(in "rders are re)ei#ed in the Cst"*er Ser#i)e De%art*ent. The

"rders are entered int" the )"*%ter "r i**ediate %r")essing !y the Shi%%ing De%art*ent.

NewAge BIOTECH %rides itsel in shi%%ing "rders the sa*e day they are re)ei#ed. I in#ent"ry

is la)3ing "n an "rdered %r"d)t, the )"*%ter syste* )al)lates the *ai** in#ent"ry t" !e%r"d)ed and "rwards that reest t" the Pr"d)ti"n $anager "r re#iew. On)e the %r"d)t has

!een %r"d)ed, ality )"ntr"lled and released r"* arantine, !a)3 "rders are illed.

Distri!t"r "rders are %re(%a)3ed r"* %r"d)t reests re)ei#ed a wee3 in ad#an)e. These

"rders are generally sed t" )"*%lete the *ai** in#ent"ries )arried !y that distri!t"r.

>uali!ying? Billing? and Cllecting !rm Custmers

Cst"*ers are !illed net :0 days with a %er)ent dis)"nt "r "rders %aid within 0 days. A)redit )he)3 is d"ne "n all new )st"*er a))"nts.

A *ai** " 90 days is all"wed "r a))"nts re)ei#a!le. One a))"nts re)ei#a!le

re%resentati#e is res%"nsi!le "r "ll"w(% "n a))"nts "#er :0 days. A n"tii)ati"n is sent "t "n"#erde a))"nts at ;2 days and 0 days %ast de. I we are n"t s))essl in )"lle)ting "n 90(day a))"nts, they are trned "#er t" a l")al )"lle)ti"n agen)y.

Paying *endrs and Suppliers

S%%liers are %aid within 90 days "ll"wing the re)ei%t " the *aterials. All s%%liers are reiredt" gi#e NewAge BIOTECH a yearly "te "n *aterials reired "r in#ent"ry in the )"*ing year.This all"ws the )"*%any t" !dget "r %r"d)t *aterials and )"ntr"l the )"st " g""ds. 1"r large!at)hes " raw *aterials, the s%%lier *ay %r"#ide a "te "r a :(2 year %eri"d. Alth"gh this%r")edre *ay a%%ear t" !ind the )"*%any t" a %arti)lar s%%lier, the s%%lier agree*ent isw"rded t" all"w the )"*%any the a!ility t" ter*inate nder )ertain )"nditi"ns.

Cntrlling In7entry

In#ent"ry is )"ntr"lled thr"gh the se " the $IP )"*%ter s"tware syste*, whi)h )"*%aresthe *"#e*ent " the %re#i"s yearFs in#ent"ry at this ti*e " the year, t" that whi)h is )rrentlya#aila!le. It will then at"*ati)ally ad@st the %r"d)ti"n s)hedle as needed. The %r"d)ti"n*anager is res%"nsi!le "r setting the *ini** and *ai** in#ent"ries "r all %r"d)ts. Hewill *"nit"r daily the l"w " the %r"d)ts that generate the *"st sales, s" that they d" n"t!e)"*e !a)3"rdered. The %r"d)ti"n *anager will w"r3 )l"sely with the sales *anager t"ad@st the in#ent"ry data s%%lied t" the $IP syste* as new )st"*er sales in)rease "r a l"ss" )st"*er a))"nts "))rs

Handling 4arranties and $eturns

The )"*%any *aintains !"th Te)hni)al Ser#i)e and Cst"*er Ser#i)e De%art*ents.Per"r*an)e(!ased )st"*er )"n)erns are handled !y the Te)hni)al Ser#i)e De%art*ent. TheCst"*er Ser#i)e De%art*ent handles n"n(%er"r*an)e )st"*er )"n)erns, s)h as %r"d)tlea3age, *ishandled "rders, r"6en "r "#er(heated %r"d)t, "r sh"rt "rders. All )st"*er)"n)erns are a))*lated in a data!ase and re#iewed *"nthly !y the s%er#is"r " theTe)hni)al Ser#i)es De%art*ent "n %er"r*an)e(!ased isses and the s%er#is"r " the

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. :0


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Cst"*er Ser#i)e De%art*ent "n n"n(%er"r*an)e(!ased isses. The )"*%any res%e)ts theright " the )st"*er t" as3 "r re%la)e*ent %r"d)t

Pr7iding Ser7ice

NewAge BIOTECHFS %r"d)ts d" n"t reire "ng"ing ser#i)e.

Security SystemsSensiti#e d")*ents are st"red "n site in a ire%r"" l")3ed )a!inet. Ba)3(% ta%es " )"*%terin"r*ati"n are *ade nightly and d%li)ates are st"red " site. Petty )ash is st"red in the)"*%any sae. An alar* syste* with %assw"rd entry has !een installed and is a)ti#ated "n)ethe Shi%%ing De%art*ent %ers"nnel ha#e )"*%leted their %a)3ing " the dayFs "rders and arelea#ing "r the day. C"*%any "i)ials wh" ha#e a))ess t" sensiti#e in"r*ati"n, ha#e signed a)"nidentiality agree*ent.

$egulatry Cmpliance

The *ana)tring, %r")essing, "r*lating, %a)3aging, la!eling, and ad#ertising " NewAge

BIOTECHFs %r"d)ts are s!@e)t t" reglati"n !y "ne "r *"re ederal agen)ies, in)lding the

1DA, the 1TC, the ?SDA, OSHA, and the EPA. These a)ti#ities are als" reglated !y #ari"s

agen)ies " the states, l")alities and "reign )"ntries t" whi)h the )"*%anyFs %r"d)ts are

distri!ted and s"ld. The 1DA, in %arti)lar, reglates the "r*lati"n, *ana)tre, and la!eling

" #ita*in and "ther ntriti"nal s%%le*ents.

Prduct de7elpment @ standard prcedures

New %r"d)t de#el"%*ent "))rs when reested !y )st"*ers, )"*%any sales and

*ar3eting, "r resear)h and de#el"%*ent %ers"nnel. These reests are re#iewed !y the New

Pr"d)t C"**ittee, whi)h has as its *e*!ers re%resentati#es " sales and *ar3eting,

te)hni)al ser#i)es, and resear)h and de#el"%*ent. At ti*es, the New Pr"d)t C"**ittee *ay

reest ")s gr"%s t" gain in%t "n the )st"*er a))e%tan)e " a new %r"d)t )"n)e%t. I the

)"**ittee de)ides t" %r")eed, the esear)h & De#el"%*ent De%art*ent will !egin designing a

"r*lati"n t" test the %r"d)t "r its intended se. Per"r*an)e and sta!ility testing will !e

institted "n)e a inal "r*lati"n is sele)ted.

I the %er"r*an)e and sta!ility testing are satisa)t"ry and the *ar3eting resear)h %er"r*ed

!y the Sales and $ar3eting De%art*ent sh"ws a %"tential *ar3et, then the )"*%any will see3

the a%%r"%riate reglat"ry a%%r"#als. eglat"ry a%%r"#als *ay ta3e r"* three *"nths t" as

l"ng as tw" years, de%ending "n the le#el " ris3 t" the end ser. eglat"ry a%%r"#al "ten

dri#es the ti*eline "r %r"d)t entry in t" the *ar3et%la)e.

#anu!acturing @ standard prcedures

1"ll"wing are ti*e lines "r the %r"d)ti"n " %r"d)t and its e#ental release r"* arantine.$ana)tring " %r"d)t is initiated within tw" days " re)ei#ing a reest r"* the $IP syste*.

On)e the %r"d)t is *ade, it is ta3en t" the =ality C"ntr"l De%art*ent "r sterility and

%er"r*an)e testing. Per"r*an)e testing is generally )"*%leted within three days. Sterility *ay

reire % t" 0 days and is de%endent "n the %r"d)t s%e)ii)ati"ns that ha#e !een de#el"%ed

!y the esear)h & De#el"%*ent De%art*ent. The %r"d)t re*ains in arantine while the

a%%r"%riate sterility and %er"r*an)e testing is !eing )"*%leted. On)e the testing %r")edres

sh"w the %r"d)t t" !e satisa)t"ry, the =ality C"ntr"l De%art*ent releases the %r"d)t r"*

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. :


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arantine. The Shi%%ing De%art*ent then st")3s the %r"d)t "n its designated shel#es either

at r""* te*%eratre "r rerigerati"n, i a%%r"%riate.

$is9 Analysis

There )an !e n" assran)e that NewAge BIOTECHFs )rrent %r"d)ts "r %"tential %r"d)ts will

)"ntine t" !e s))esslly )"**er)iali6ed and a))e%ted "r se !y %hysi)ians, health )are

%r"#iders, and )"ns*ers. The s))essl )"**er)iali6ati"n " the )"*%anyFs eisting andtre %r"d)ts in the )"ns*er *ar3ets and w"nd )are *ar3ets will de%end "n its a!ility t"

enter int" and ee)ti#ely *anage )"r%"rate %artnershi%s. There )an !e n" assran)e that any

" NewAge BIOTECHFs )"lla!"rat"rs will %er"r* their "!ligati"ns nder their agree*ents with

the )"*%any "r that th"se )"*%anyFs %r"d)ts "r the %r"d)ts " "thers that in)"r%"rate

NewAge BIOTECHFs %r"d)ts "r te)hn"l"gy will !e s))esslly )"**er)iali6ed.

1rther*"re, there )an !e n" assran)e that NewAge BIOTECH will !e s))essl in

esta!lishing )"r%"rate allian)es in the tre, "r that it will !e s))essl in *aintaining eisting

"r any tre )"r%"rate allian)es. $"re"#er, there )an !e n" assran)e that the interests and

*"ti#ati"ns " any )"r%"rate %artner, distri!t"r "r li)ensee w"ld !e "r re*ain )"nsistent with

th"se " NewAge BIOTECH, "r that s)h %artners, distri!t"rs "r li)ensees w"ld s))esslly

%er"r* the ne)essary te)hn"l"gy transer, )lini)al de#el"%*ent, reglat"ry )"*%lian)e,

*ana)tring, *ar3eting, "r "ther "!ligati"ns. The %atent %"siti"ns " !i"te)hn"l"gy, *edi)al

de#i)e, and health )are %r"d)ts )"*%anies are "ten n)ertain and in#"l#e )"*%le legal and

a)tal esti"ns, and the !readth " )lai*s all"wed in s)h %atents )ann"t !e %redi)ted.

NewAge BIOTECHFs %r")esses and %"tential %r"d)ts *ay )"nli)t with %atents that ha#e !een"r *ay !e granted t" )"*%etit"rs and "thers. As the !i"te)hn"l"gy, *edi)al de#i)e, and health)are indstries e%and and *"re %atents are issed, the ris3 in)reases that the )"*%anyFs%r")esses and %"tential %r"d)ts *ay gi#e rise t" )lai*s that they inringe the %atents " "thers.NewAge BIOTECHFs %r"d)ts and %r"d)t )andidates *ay !e reglated !y any " a n*!er "

di#isi"ns " the 1DA. The %r")ess " "!taining and *aintaining reglat"ry a%%r"#als "r the*ana)tring "r *ar3eting " the )"*%anyFs eisting and %"tential %r"d)ts is )"stly and ti*e()"ns*ing and is s!@e)t t" nanti)i%ated delays. eglat"ry reire*ents lti*ately i*%"sed)"ld als" ad#ersely ae)t the a!ility " the )"*%any t" )lini)ally test, *ana)tre, "r *ar3et%r"d)ts.

Sal7aging Assets

NewAge BIOTECHFs %"rt"li" " %atents w"ld ha#e #ale i NewAge BIOTECH were t" !eliidated. The #ale " the %atent %"rt"li" w"ld !e de%endent "n the re*aining *ar3eta!ility" the te)hn"l"gies. Patents are "ten "t(li)ensed t" )"*%eting )"*%anies "r !e)"*e an asseti the )"*%any were t" !e a)ired. Eisting in#ent"ry )"ld !e s"ld ", ei%*ent and

rnitre a)ti"ned ". Cst"*er lists and a))"nts re)ei#a!le w"ld als" ha#e #ale t")"*%anies wh" wish t" a)ire NewAge BIOTECH.

- '00 Ewing $ari"n /a*an 1"ndati"n. All ights eser#ed. :'


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"inancial Plan

"inancial Summary

NewAge BIOTECH, In). was "r*ed in t" de#el"%, *ar3et, and li)ense its %atented 6in)%e%tide te)hn"l"gy. The )"*%any has seen t"tal re#ene gr"w r"* '.< *illi"n in t" anesti*ated . *illi"n in '00B. Alth"gh NewAge BIOTECH e%erien)ed a net l"ss " ;.2*illi"n in , %r"it " ;00,000 is %r"@e)ted in '00B, in)reasing t" :; *illi"n !y '00G. In

'00A, the )"*%anyFs re#ene grew !y ;0 %er)ent t" . *illi"n r"* ;.< *illi"n the %ri"r year,while "%erating e%enses in)reased !y "nly 2 %er)ent t"


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-ey $atis

As ei)ien)ies in)rease, )"st " g""ds s"ld red)es r"* '' %er)ent t" 9 %er)ent. Bt *"rei*%ressi#e is the "%erating ei)ien)ies that all"w the )"*%any t" rea)h :< %er)ent %r"ita!ilitysi years "t. This is de t" the w"rldwide

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