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The Protective Medicine Group, Inc

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The Protective Medicine Group, Inc

    The Protective Medicine Group, Inc.

    Practice Management & Business Development

    Health - Beauty - Longevity

    Executive Summary

    January 2009

Executive Summary

The Protective Medicine Group, Inc. is committed to providing a leading edge in the medical

    field to patients and physicians alike by bringing the latest innovation in health disciplines to each

    of our clinics.

The Protective Medicine Group’s vision is to integrate the Protective Medicine model of the

    Keller Medical Institute within PMG’s system of Clinic Management and Business Development to

    direct and manage strategically located clinics. This model captures not only the burgeoning

    aesthetics procedure market, but also the growing corporate wellness, diagnostic, and anti-aging

    markets by providing a varied and rich compendium of cash based procedures. On top of

    expanding the Protective Medicine model, it is PMG’s vision to stay ahead of the field by not only

    adapting to change, but by anticipating it. PMG plans to create additional streams of revenue by

    capturing corporate transacted venues such as: physician training, FDA clinical trails, fat cell/stem

    storage, and synergistic strategic alliances that drive procedures into the clinics and share profits

    into the corporation.

The Protective Medicine Group’s competitive advantage:

    ? Existing successful model that has responded well in the current medical climate.

    ? Streamlines in new technology for the physician and patient.

    o Includes cutting edge access to equipment, procedures, and products.

    o Geared toward affordable procedures.

    ? Carries intellectual property rights with LifeStem.

    ? Diversified revenue streams.

    o Technology: Clinic management fees, medical training programs, equipment

    leasing, FDA trials.

    o Clinic laboratories: Blood and fat stem cell storage, outsourced lab contracts,

    genetic test analysis, lab test analysis.

The Protective Medicine Group’s approach:

PMG’s approach is to co-partner and provide management, operations, and additional revenue

    streams to 10-12 PMG strategically located clinics by year end 2010. PMG’s model provides a management umbrella for physicians so they can concentrate on practicing medicine profitably.

    ? Business Development

    o Strategic planning

    o New contract development

    o Sales and marketing

    ? Clinic Management

    o Ensuring clinic profitability

    o Program installation

    o Management services

    ? Physician S Corporation

    o Medical compliance

    o Staffing / Programs

    o Technology review

All potential clinics and their locations will be heavily evaluated by The Protective Medicine

    Group. It is PMG’s vision to have each clinic operating at or above the current models 1standards. PMG will analyze potential clinics by: demographics, current revenue, area

    competition, debt ratio, and other aspects that may help or hinder success. Once selected, PMG

    will monitor new the new clinic/s and their monthly revenue closely. To ensure the success rate of

    new clinics, PMG will assist in achieving the necessary required milestones.

Pharmaceuticals companies will have to look to replace lost revenues due to the vast amount of

    patent expirations on high revenue drugs. More efficient fruition of drugs is seen as one of the six

    future high growth areas of the industry by the Continuing Evolution of the Pharmaceutical

    Industry’s study. The study suggests that, “Additionally, because of the finite life of any drug

    patent, finding ways of reducing the time required from discovery through regulatory approval will 2be a focus of pharmaceutical companies.”

Furthermore, "With Revenues under pressure, pharmaceutical companies are reducing costs by

    shrinking the size of their workforces. […] No one can precisely predict how many additional

    people will be displaced. However, two CEOs interviewed believe that 'an entire generation' of 3upper-middle and senior-level executives (as many as 50,000 individuals) will be displaced."

PMG’s believes it can help provide a one solution for pharmaceutical companies by having 10-12

    strategically located clinics for FDA trials. PMG’s management estimates that with PMG clinical

    trials, it would be possible to eliminate up to a year off clinical trail preparation for

    pharmaceuticals. Not only would this save pharmaceuticals money, but also valuable patent time.

    4Market Size and Potential Growth

    Market 2008 2012 Annual Growth%

Health Corporate Wellness $49 $138 30%

     Weight Loss $58 $74 6%

Beauty Cosmetic Procedures $2 $3 9%

     Cosmeceuticals $15 $16 11%

     Aesthetics $27 $54 28%

Longevity Hormones, Diagnostics $66 $95 10%

     & Nutrient Therapy

     (All numbers in Billions)

     Sources: 2002 Corp. Wellness Study, Market Data Enterprises Study: “US Weight Loss & Diet”, Freedonia 9/2006, Mkt. Research Cosmeceutical Summit 2006, American Society of Aesthetic Surgery, Business Communication Company 2005

The number of "aesthetic procedures" performed each year has doubled since 2000 in this

    country. Most cosmetic/anti aging procedures are not covered by insurance, but people are

    willing to pay directly or charge them. The result is that profits are higher and costs can be lower

    by incorporating business efficiencies, economies of scale and strategic partnerships. More than

     1 Current model has a two year study on the model clinic for standards and figure comparison. 2 Steiner, Michael, "Continuing Evolution of the Pharmaceutical Industry: Career Challenges and

    Opportunities," by Regent Atlantic Capital LLC and Fiduciary Network, LLC. December 2007. p19 3 Steiner, Michael, "Continuing Evolution of the Pharmaceutical Industry: Career Challenges and

    Opportunities," by Regent Atlantic Capital LLC and Fiduciary Network, LLC. December 2007. p17 4 Projected numbers for 2008

a fifth of these procedures were done on people age 19-34. The largest age group for this kind of

    treatment is 35 to 60 years old.

The United States market alone for Baby boomers, according to AARP is currently estimated to

    be at 78 million individuals and growing. The other health conscience group Echo Boomers are

    estimated to spend $2.45 trillion by 2015 with a major portion being for Health and Wellness. Anti-

    aging, hormone replacement, diagnostics, and supplements rose from $47 billion in 1996 to $150 5billion in 2007. The Health and Wellness industry has grown to be a multi-billion dollar industry.

Americans spent just under $13.2 billion on cosmetic procedures in 2007. In terms of procedures

    in numbers, non-surgical cosmetic procedures done in the United States are the large majority.

    Of the 11.7 million cosmetic procedures in 2007, roughly 82% of said procedures were non-

    surgical. The Keller Model has used this to its advantage while offering affordable procedures to 6its patients.

The top five surgical cosmetic procedures in 2007 were: liposuction; breast augmentation; eyelid

    surgery; abdominoplasty; and breast reduction. The top five nonsurgical cosmetic procedures in

    2007 were: Botox injections; hyaluronic acid; laser hair removal; microdermabrasion; and IPL

    laser treatment. Of the doctors surveyed, 70 percent say they do not offer "spa" services (e.g.

    wraps, facials, massages) in conjunction with their medical practices. 86 percent of the doctors

    say they do not work in conjunction with medical spas where nonsurgical procedures, such as 7injections and laser procedures are performed.

PMG completes its Health Beauty and Longevity model by paying close attention to the current

    health care climate. It is PMG’s vision to having patients not only look great, but feel great –

    which directly increases efficiency for the patients, their work, and ultimately their entire

    surroundings. Health care expenditures are increasing at a rate of 8-14% annually; this 8expenditure literally threatens the profitability and survival of companies of all sizes. The Wall

     5 National Institutes of Health: Alternative/Complementary Medicine 6 American Society for Aesthetic Plastic Surgery. http://www.surgery.org/download/2007Surgical_Nonsurgical.pdf 7 American Society for Aesthetic Plastic Surgery. http://www.surgery.org/download/2007QFacts.pdf 8 ROI-based Analysis of Employee Wellness Programs. US Corporate Wellness, Inc. February 8, 2008

Street Journal suggests health care costs per capita will reach $7,500 in 2008, which is more

    than double from 1993.

    Financial Projections

Calculations-Anti Dilution Ratchet Illustration

Private company raises $8 million for 20% of Company

Potential Exit IPO

5 Year Estimated IPO Values

    (millions of dollars)

     2009 2010 2011 2012 2013

EBITA .6 6.01 12.58 19.10 23.09

IPO Range 1.2-2.4 12.02-12.04 25.16-50.32 38.20-76.40 46.18 - 92.36

Angel 3-5X Y Y Y

VC’s Min10x Y

     9Based on a discount rate of 20%

     9 With $8M present, total equals 33,370,148.68

     Year 1 Year 2 Year 3 Year 4 Year 5 Income Sources

1. Clinic Revenue 968,160 3,583,200 7,463,280 10,306,008 12,460,362

2. Laboratories

     LifeStem 658,736 3,652,256 6,651,721 10,218,535 12,458,255

     Fat/Breast Aug. 120,000 500,000 900,000 1,200,000 1,500,000

     Storage

3. Business Dev.

     Phys. Training 250,000 400,000 600,000 800,000 1,000,000

     Clinical Trials 400,000 800,000

     1,996,896 8,135,456 15,615,001 22,924,543 28,218,617

Expenses Corporate (see also per site allocations)

    Year 1 Year 2 Year 3 Year 4 Year 5

Payroll & Benefits 750,000 925,000 1,118,000 1,230,000 1,352,000

Phys. group contracts 250,000 300,000 350,000 500,000 600,000

Facility 30,000 31,500 33,000 35,000 36,000

Corporate Office supplies 10,000 11,000 12,000 13,000 15,000

Marketing Development 150,000 396,000 722,000 840,000 1,312,000

IT & Telephone 120,000 132,000 145,000 160,000 175,000

G&A 100,000 330,500 657,000 1,050,000 1,640,000

TOTAL EXPENSE 1,410,000 2,126,000 3,037,000 3,828,000 5,130,000

NET REVENUE 586,896 6,009,456 12,578,001 19,096,543 23,088,617

Use of Funds

The Protective Medicine Group, Inc. is seeking a total of $8 million in two phases of $4 million 10each to establish and initiate long term revenue streams.

    Phase 1 funding will be used to implement the infrastructure of PMG to add appropriate clinics, employees, corporate housing or offices, and general systems. The first round also guarantees acquisition of LifeStem and its patent-pending technology. Phase 2 funding, within 12 months, will be used to complete expansion to 10 - 12 clinics initializing FDA trial revenue.

     10 Full Use of Funds breakdown available in Business Plan.

Key Management

Robert P.K. Keller, M.D., Co-Founder of The Protective Medicine Group, Inc.; Founder and

    Chief Executive Officer of KMI and Chief Executive Officer of Keller Physician Management Group. - Dr. Keller has been a practicing physician with over thirty-seven years of clinical experience in medicine. In addition, he has a wide range of business and management experience at the clinic, hospital and corporate level. He has been a medical director of Community Hospital, Chairman of the Department of three ERs and CEO of Acute Medical Services, employing 37 healthcare providers. He has been responsible for $8-10 million in annual budgets and responsible for over 2000 employees. He holds multiple Board of Directors, Board of Medical Directors and CMO positions. Currently, he sits on Genelink, Signature Genetics, Sryex and BioBanc International Board of Medical Advisors.

Carol Chludzinski, Co-Founder & President of Keller International Corporation - Carol is a

    management executive with over 29 years of operational experience and 17 years of senior executive management in medical technology and software companies; Accomplished in all phases of start-up organizations; Incorporation & Founding, Intellectual Property, Financing, IPO, Equity Sale and Turnaround. Consistent above expectation performance and a reputation for achieving results through strong leadership and strategic growth initiatives resulted in promotions within each corporation. Carol has been responsible for expansion partnerships, alliances and mergers.

Mary Pavellas, Controller/Financial Management Executive - Mary is a financial executive with

    25+ years of accounting and management experience in healthcare and other industries. As a Business Consultant in Monterey, she has successfully guided local owners through startup, expansion and exit plans, by developing and strengthening business systems and strategies. Her strong accounting, budgeting and forecasting skills, coupled with her broad operations experience, bring essential support to KIC expansion goals.

The Protective Medicine Group’s Medical Advisory Board

Robert PK Keller, MD ASCS, ACP, ACEP. Co-chairman. (See bio)

    Dominique Charron, MD, PhD Co-Chairman. Internationally known physician, formerly with Stanford Medical Center, now Chairman Dept. Immunology, Paris University, and Paris, France.

    Harry Nervino, MD Board Certified Internal Medicine, Expert in clinical applications of cellular medicine, anti-aging and hormone replacement.

    Anthony Sinetos, MD, PhD Board Certified Cardiologist, formerly of Duke Medical Center, non-invasive cardiology specializing in cellular restoration of the cardio-vascular system.

    Marc Wexler, MD, PhD Professor Medicine, Columbia University, world expert in anti-aging and cellular medicine.

    Michele Sadalain, MD, PhD Professor and chairmen immuno-genetics, Sloan-Kettering and Columbia Medical Center, NYC. Leading researcher in cellular and genetic therapies.

    Douglas Sunde, MD Board Certified Plastic Surgeon, Clinical Professor, Stanford Medical Center, expert in new technologies for plastic surgery.

Business Description

The Protective Medicine Group is incorporated in California. PMG will contract strategically

    located subsidiaries or joint ventures clinics in each target area as needed with the goal to

    support FDA clinical trials. PMG will be responsible for all corporate functions (e.g., treasury,

    controllership, strategy, etc.) and will coordinate the regional activities of the clinics while allowing

    in-house management to address local needs. PMG Clinics are based off the Protective Medicine

    model of the Keller Medical Institute.

While very profitable, The Protective Medicine Group has a strong commitment to the patient

    and physicians. To that end, we plan to:

    ? Provide affordable procedures and rates for the patient.

    ? Provide the latest access to technology and diagnostics to both the physician and patient.

    ? Maintain the Health Beauty and Longevity model standard.

    ? Seek new patents, ultimately staying ahead of the curve.

    ? Help physicians manage the business, so they can concentrate on the practice.

Notwithstanding, the financial return is substantial and rapid.

While acquisition or merger is a possible outcome, the PMG expects to become a public

    company, creating liquidity and providing funds for growth.

Given the possibilities, projected cash flow and profitability will vary by clinic. In all instances

    considered, however, PMG anticipates positive cash flow in the first year.

Summary

    There is a triangulation of health-care emerging within the United States today: Physicians are, by necessity, looking for cash based procedures and business solutions to supplement their

    decreasing insurance based practices; the growing Baby Boomer segment is well funded and looking for health solutions to keep them young, healthy and looking beautiful; and finally the diagnostic and technology markets are exponentially expanding the sources and solutions for this market. We believe that the Protective Medicine Group’s solution capitalizes on this environment

    and provides the market solution for a profitable venture.

    PMG will have multiple income streams from wholly-owned clinics and joint-venture clinics, equipment leasing, FDA testing, PMG Aesthetics; Stem Cell Storage and management contracts as well as other revenues that result from planned business development. PMG clinics are based on the proven track record of The Keller Medical Institute, and the existing management team of Doctor Keller, Carol Chludzinski, and Mary Pavellas.

    ? Successful concept for the current and future medical climates.

    ? Two year track record with the KMI model.

    ? PMG diversifies its revenue streams in high growth specialties.

    ? Experienced management team guided by an excellent medical advisory board

    ? Five year exit strategy

    Thank you.

    For any further information, a full business plan, or general inquires -- please contact:

Robert A. Mellino

    RAM Business Consulting

    (831)233-2229

    rmellino@mbay.net

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