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Extending and Improving the Quality of Life.©

National Genecular Institute™

™

National Genecular Institute™ Inc. (NGI™)is the R&D subsidiary of Dermacia Inc. Der-

macia specializes in pharmaceuticals and skin care products. NGI™ was formed with

the ideal of extending the quality and length of life. This has become NGI’s overarching

“Mission Statement.” NGI™is making advances in biomedical genetic and anti-aging

research by identifying and characterizing complex human genetic and environmental

factors affecting aging and disease development, and formulating products and thera-

pies to target issues specific to the individual, both for prevention and treatment. NGI’s

innovations serve both the individual and other biotechnology and pharmaceutical

companies.

In order to meet these goals, positive strategic alliances are critical. NGI™ has affiliated

itself with the University of Iowa (UI) by building a 90,000 square foot, state of the art

research laboratory and business incubator facility on the campus, in furtherance of this

collaboration. Construction of the project has already begun.

NGI™ Business Plan

Contents

Business Philosophy 1

BioScience 2

Research 3

The BioTrust™ 6

Market Factors Affecting Industry 8

Management 10

Advisory Board and Board of Directors 14

Financials 15

Research & Development Master Plan 18

National Genecular Institute660 Newport Ctr Dr, Suite 900Newport Beach, CA 92660 Phone: 949.706.6433 Fax: 949.706.2320www.genecular.com

4

Business Philosophy

It is the mission of NGI™ to focus primarily on those areas of re-

search where there are both an identifiable scientific need, and

a substantial market opportunity. This goal is achieved primarily

through NGI’s relationship with parent Dermacia, Inc. Unlike the

majority of research and development firms, NGI™ has ready com-

mercial outlets for its products and innovations. Further, because

of Dermacia’s established position in medical and pharmaceutical

sales, the companies are poised for a long term synergistic relation-

ship, whereby NGI’s advances and innovations are brought to mar-

ket more efficiently than its competitors. NGI™ has been organized

so that research goals are developed and defined, then simultane-

ously presented to the scientific and business advisory boards of

the Company. The resulting efficient coordination of business and

scientific considerations represents a further advantage of the Com-

pany’s strategy.

Most scientific R&D companies have significant problems in gener-

ating revenues. They also face an extraordinarily high risk of failure

in transitioning from R&D to commercially viable products. Typi-

cally, an R&D company is viewed as an investment “black hole” with

a low probability of commercial success. NGI™suffers no such liabil-

ity. Because of its affiliation with Dermacia, NGI™develops products

and enhancements for specific market needs, and therefore enjoys

a ready market and existing channels of distribution.

The success of this forward thinking model for commercializing

scientific innovation is demonstrated by the following example: Li-

censed NGI™ technology is already incorporated in Dermacia prod-

ucts. For example, proprietary Zinc Nano2 InfusionTM complex is

used in sunscreen and makeup to achieve previously unattainable

levels of non-irritating UV protection while preserving the color

correctness of these products. Nano2 InfusionTM technology com-

bines nano-particulate metals with proprietary tissue respiratory

factors to multiply the effectiveness of the products to which it is

added. Silver Nano2 Infusion™ complex is a powerful anti-microbial

agent and is a key ingredient in Dermacia’s Acne Control product

line.

Zinc Nano2 Infusion complex contains Nano-zinc ( in which indi-

vidual particles of ZnO2 are between 20-100nM). The ingredient

serves as a physical UV sunblock. In the Dermacia MD products,

this yields UV sun protection of SPF 30 without whitening the skin

like similar zinc oxide products do. This represents a quantum leap

forward in the effectiveness of color makeup products. Previously,

in order to achieve UV sun protection beyond SPF 15, users had

to abandon makeup and live with the appearance of white smears

covering nose, cheeks, etc. Nano2 Infusion technology produces

the most effective and therapeutic physical sunblock available. This

is key because chemical sunblocks irritate the skin and detract from

the other healing aid properties of the product.

Another example of our business model commercializing innova-

tion is NGI’s development team. The team, led by Dr. Fuja, has devel-

oped a revolutionary, proprietary wound healing system, based on

its stem cell research. This system utilizes stem cells to enable scar-

less healing. The wound healing system is about to begin clinical

studies at the University of Pennsylvania School of Medicine. When

clinical and IRB review has been completed, Dermacia will market

the product through it’s medical sales and direct to consumer dis-

tribution channels.

NGI’s business model has already thrust the company ahead of

many of its competitors. Over time as new innovations and ad-

vancements are developed, NGI™ will have the ability to apply them

rapidly and efficiently to commercial products and realize revenues

sooner.

1

BioScience

Research GoalsNGI’s goal of “Extending The Length and Quality of Life” is pursued

on two fronts. First, the development of tools and research aids

which advance ours, as well as many other companies’ research

and development of innovations. This is the

function of our Bio

Trust™ discussed below. Second, using ge-

netic information collected and studying it

to NGI™ develops customized treatments for

individuals based upon their unique genetic

structure. Further, NGI™ develops more gen-

eral biotherapuetics that treat more broad

spectrums of the population as a whole.

NGI™ is already a leader in these areas and

our continued research and strategic allianc-

es will continue to serve the population as a

whole, and one individual at a time.

ProductsDeveloping newer more efficient tools for research and develop-

ment of innovations in the biotechnology sector is the first element

of NGI’s two step approach to meeting its goal. The second is de-

livering therapies for existing conditions and

pioneering customized treatments for peo-

ple based on their specific genetic factors.

NGI™ meets the needs of medicine, which

could never have been met before. NGI™

continues to develop new treatments and

therapies, which before us had not been

available.

2

Research

It is the mission of NGI™ to focus primarily on those areas of research where there

are both an identifiable scientific need, and a substantial market opportunity. This goal

is achieved primarily through NGI’s relationship with parent Dermacia, Inc. Unlike the

majority of research and development firms, NGI™ has ready commercial outlets for its

products and innovations. Because of Dermacia’s established position in medical and

pharmaceutical sales, the companies are poised for a long term synergistic relationship,

whereby NGI’s advances and innovations are brought to market more efficiently than

its competitors.

3

Research

Anti-Aging & Skin DiseaseUsing a systems biology approach to our research, NGI’s initial area

of research and innovation involves the systems which reflect the

symptoms of again most clearly. The skin is an obvious starting

point. In addition to be-

ing the largest organ in

the body, it is the most

accessible. Licensed

NGI™ technology is al-

ready incorporated in

Dermacia products. For

example, proprietary

Zinc Nano2 InfusionTM

complex is used in sun-

screen and makeup to

achieve previously unat-

tainable levels of non-irritating UV protection while preserving the

color correctness of these products. Nano2 InfusionTM technology

combines nano-particulate metals with proprietary tissue respirato-

ry factors to multiply the effectiveness of the products to which it is

added. Zinc Nano2 Infusion complex contains Nano-zinc ( in which

individual particles of ZnO2 are between 20-100nM). The ingredi-

ent serves as a physical UV sun block. In the Dermacia MD products,

this yields UV sun protection of SPF 30 without whitening the skin

like familiar zinc oxide products do. This represents a quantum leap

forward in the effectiveness of color makeup products. Previously,

in order to achieve UV sun protection beyond SPF 15, users had

to abandon makeup and live with the appearance of white smears

covering nose, cheeks, etc. Nano2 Infusion technology produces

the most effective and therapeutic physical sun block available. This

is key because chemical sun blocks irritate the skin and detract from

the other healing aid properties of the product.

Other products in development include; the wound healing system

and detection kits for disorders and diseases.

NGI™ also looks at the genetic factors affecting aging. By studying

the small mutations, which occur in a person’s genetic makeup from

both environmental sources (e.g. sun, pollution, smoking) and he-

reditary conditions (e.g.

premature wrinkling,

hypersensitivity to the

sun) NGI™ is working on

treatments at a genetic

level to prevent damage

to the cells, and prevent

and treat these condi-

tions. A central part of

NGI’s focus here is detec-

tion of cancer regulatory

pathways which affect

the occurrence and treatment of skin cancers such as basal cell car-

cinoma and malignant melanoma.

Disease Prevention The immune system plays an important role in protecting the body

against foreign viral and bacterial infections. When this system mal-

functions, the same immune cells that once defended the body

against foreign pathogens can cause a number of auto-immune

and inflammatory disorders capable of affecting numerous other

body systems. Disorders such as; arthritis, diabetes, multiple sclero-

sis, psoriasis, and inflammatory bowel disease. The immune system

can also play a contributory role in a number of other inflamma-

tory disorders, including atherosclerosis and heart attack. NGI™ is

working to develop more effective tools for understanding how the

body reacts to disease. NGI™ utilizes biobanked material to identify

4

and link specific genetic alterations to certain conditions or clinical

manifestations. The detection of validated single nucleotide poly-

morphisms (SNPs) is a substantial product output of this node. De-

tection kits will be sold directly to consumers, and identified genetic

anomalies requiring alteration will provide valuable targets for the

development of customized cosmeceutical and pharmacogenomic

products

NGI™ is intensely dedicated to the study and application of cell-

based therapies including stem cells in response to a given condi-

tion or disease state. By seeding basic research at an early phase,

this dynamic operational node will benefit from the synergy and

data from the other early operational nodes. Initial research will

focus on cutaneous (skin) stem cells and embryonic stem cell re-

search as an important means to understand aging, differentiation

and cellular regeneration potential.

The development of clinical devices which can be synergistically

used with other customized NGI™ products and services is also an

important aspect of prevention as well. Initial products of immedi-

ate interest to NGI™ include proprietary laser applications, biode-

gradable scaffolds and nano-activating technology. The value of

this node is in the generation of products and the synergy with cus-

tomized NGI™ products.

Research

5

NGI™ is developing one of the world’s premier repositories of biolog-

ical materials. NGI™ is creating the largest known global tissue

and genetic storage facility . This resource will serve as the world’s

premier repository of biological materials to advance research and

development in customized medicine. Called a BioTrust™ because

it links the material donor to the research process where the legal

owner of the materials is NGI™ [ownership by NGI™ ensures greater

security, standardization, and confidentiality. More importantly, it

ensures a more broad and efficient use of the samples], by con-

tinuing to report medical and additional patient history the donor

becomes an “owner” of the process. The BioTrust™ facility will be lo-

cated in Iowa City, Iowa.

As research into customized medicine evolves to enable the de-

tection, treatment, and prevention of diseases based on a person’s

unique genetic and biomolecular makeup, the comprehensive,

standardized storage of this material has become an essential driv-

er for such research. It allows scientists to utilize stored biological

samples and link findings to updated medical histories of donors.

NGI’s BioTrust™ provides scientists with necessary biological ma-

terial from which to derive and test novel customized medicines.

NGI’s BioTrust™ offers scientists with unprecedented access to a

global repository of ethnically diverse biological materials. Because

of the critical role that cell culture plays in biotechnological advanc-

es in customized medicine, NGI’s BioTrust™ uniquely includes im-

mortalized cell cultures in addition to DNA, RNA, serum and tissue

samples. Furthermore, NGI’ BioTrust™ links these samples to donor

clinical histories.

The current biobank model is a linear research model generally fo-

cuses on a single demographic, geographic subset, or disease. Fur-

ther, biobanks do not commonly continue to update medical and

social histories of its donors. As development of pharmacogenom-

ics advances complex system biological interaction and networks

must be considered. There are increasing interactions between

regulatory pathways which cannot be predicted or accounted for

without continuing to update the donor’s medical history. Addi-

tionally, complex human disease does not occur in a vacuum. Typi-

cally these diseases or conditions are dual occurrences. Through

NGIs BioTrust™, these complexities will be able to be tested for the

first time on the scale and scope necessary to promote the efficien-

cies and statistical power required.

Why a BioTrust?For many years human genetic studies have suffered from narrow

research aims that focused on a single disease or condition; as well

as from a lack of resource sharing. With the establishment of its pre-

mier BioTrust™, NGI™ will create the most sophisticated and virtually

inexhaustible research tool. This will include the most genetic and

ethnically-diverse sample pool to be used by both NGI™ to develop

and market its own brand of customized products, and to conduct

third-party research into customized medicine for complex human

diseases and conditions such as; cancer, hypertension, diabetes,

Alzheimer’s, MS, and Parkinson’s.

With the development of the custom and fully automated BioTrust™

system or sample preparation/purification, storage and retrieval,

NGI™is developing numerous research methods and technologies

that will transition to medical devices in the near future.

The development of these resources provides an important tool

in the advancement of critical, and lucrative, diagnostic tests and

methods, and offers far more than a traditional biobank in that it is

a powerful and nearly inexhaustible resource in the development

of novel therapies. Closing the theranostic gap is a key component

to the BioTrust™ model. The NGI™ BioTrust™ is dedicated to aggres-

The BioTrust™

6

sively shrinking the therapy gap in theranostics through its broad

transdisciplinary research, while serving as a powerful resource for

the worldwide biotechnology research community.

What is the Process?Unlike most biobanks, the sample collection for NGI’s BioTrust™ will

not be limited to a geographic region, specific population or dis-

ease. NGI™ plans to collect samples from individuals world wide.

The goal of our recruitment program is to collect 100,000 ethnically

diverse samples by 2011 and reach 15 million samples by 2020. In

order to facilitate the sample collection process, NGI™ is develop-

ing emerging technologies for non-invasive sample collection to

increase volunteer rates globally, even in remote populations.

Cell samples will then be carefully cryopreserved and banked us-

ing NGI’s proprietary technologies and will be stored in secure cry-

ovaults. Retrieval of samples is completely automated and designed

to carefully maintain the integrity of each sample, while preserving

an untouched original stock of each immortalized sample. Unlike

samples at other biobanks, with NGI’s patent pending technology

employed in its BioTrust™ facility, it is virtually impossible to run out

of a sample. TheBioTrust™ will be located in Iowa City in a 25,000

square foot facility, which is part of a larger campus of research fa-

cilities and offices being developed by NGI™ In Iowa City, Iowa. The

BioTrust™ facility will be less than 5 miles from NGI’s joint research

facility with the University of Iowa in Coralville, Iowa.

How will NGI™ Establish a Donor Base?NGI™ has established a protocol to attract donors that will set a

new standard for existing and future biobanks. NGI™ is partnering

with hospitals, academic research institutions, government health

agencies, and third party healthcare providers to attract patients in-

terested in helping advance personalized medicine research, while

ensuring the most stringent guidelines for donor privacy.

To NGI™ the most important aspect of its sample collection protocol

will be ensuring the continuous updates on clinical information for

each donor. When possible, clinical information on each donor will

be updated every six months to ensure expansive, future research

from each sample. This process of not only collection innovation,

but obtaining complete cellular lines, and then tracking them for

updates in their medical and personal history which is one of the

prime distinguishing factors of NGI’s BioTrust™ . NGI’s BioTrust™ uti-

lizes sophisticated computational algorithms and programs to track

samples through processing to storage and then retrieval. These

integrated IT systems also maintain donor clinical histories in care-

fully protected and secured databases. Furthermore, these systems

facilitate the detection of complex disease associations and, upon

request of the donor, notify the donor of sample use and results.

Anticipating and preemptively responding to such patient and do-

nor/research confidentiality concerns, NGI™ Is adopting safeguards

and internal controls designed to protect personally identifiable

data. The protection extends beyond the requirements of current

laws and government regulations. NGI™ is also a strong advocate in

the advancement of genetic and biomolecular non-discrimination

policy.

The BioTrust™

7

Market Factors Affecting Industry

History of The Biotechnology MarketThe discovery of the structure of DNA in 1953 and the identification

of DNA as the genetic material in all life allowed for great leaps in

our understanding of life-forms from bacteria to plants to humans.

Armed with a better understanding of how organisms “work,” we

are now able to engineer life to suit our needs. Biotechnology is a

general term describing the directed modification of biological pro-

cesses. This may be accomplished by introducing new genes into

organisms, breeding organisms to form new variants, or treating or-

ganisms with specific compounds. Biomedicine is medicine based

upon the principles of biology and biochemistry - the application of

biotechnology to medicine.

Biotechnology-derived products have

the potential to positively change our

society, from improving health care

and increasing agricultural products to

producing a cleaner environment. The

public markets recognize this potential,

and a lot of money has flowed into bio-

technology companies. Sales, revenues

and market capitalization all more than

doubled during the period from 1993

to 1999. 2000 saw more money invest-

ed in biotechnology firms than the pre-

vious five years combined. The business models have matured and

the tools of biotechnology research are refined to the extent that

the industry is ready for unprecedented dramatic growth.

Developments such as the sequencing of the human genome pro-

vide a foundation that will support decades of research and discov-

ery. An important issue in the biotechnology industry is intellectual

property - some argue that the scope of patent protection actu-

ally defines the industry. Because many biotechnology companies

must partner with larger firms to complete product development,

merger and acquisition activity is monitored to gauge the maturity

of the industry. Amgen and Genentech two of the biggest biotech

companies, but scores of smaller companies such as Biogen, Human

Genome Sciences, Incyte, and Millenium Pharmaceuticals have ag-

gressive research programs that could potentially produce products

to bring them to the top.

Biotechnology Markets TodayThe Biotech Industry remains among the strongest and fastest

growing sectors in business today. Biotechs in the S&P 500 gained

16.2% in 2005 compared to an overall

gain of 4% for the S&P (CNN/Money.

com, April 17, 2006). The reasons for

this strength are, like the industry itself,

multifaceted.

Despite the recent volatility in the

biotech market this past spring and

the current flatness of the market as a

whole, the biotechnology sector looks

stronger than ever. Late last year, Evo-

tec raised $68 million in an initial public

offering, the best performance of a bio-

tech company in five years. Four more companies followed, posting

similarly impressive gains. In previous biotech rallies in 1991-2 and

1995-6, $5.1 and $6.5 billion were raised, respectively. In the first half

of this year, public offerings have already raised $9.3 billion. In ad-

dition to the money raised publicly, private placements have raised

$18 billion thus far, further demonstrating support for the biotech

sector. There are also qualitative differences between the current

biotech investing surge and previous episodes. Whereas previous

“Healthcare in the united states and other nations

is on a collision course with patient needs and eco-

nomic reality…we will need to shift the economic

equation from one that utilizes over 75% of every

healthcare dollar on the care of the chronically ill to

one that invests more in innovation and technolo-

gies designed to promote wellness.” – G. Steven

Burrill, Personalized Medicine Report, November 2006.

8

biotech investment surges supported therapeutics, many compa-

nies currently raising money are developing tools and techniques

to develop areas such as genomics. The potential advances in tools

and techniques have the potential to produce even greater gains.

Additionally, the amount of money that each company is currently

raising is greater than in the previous rallies.

In addition to public offerings, biotech stocks and mutual funds

have also benefited from the current positive interest in the indus-

try. Many stocks are performing well in an otherwise relatively flat

market, and popular biotech funds are up 30-80% for the year.

The market most closely linked to Biotech, Pharmaceuticals, is expe-

riencing a leveling off. According to Thomson / Baseline’s research

“[p]atents are expiring, and generics are squeezing profits in the Big

Pharma market.” Biotech companies are younger and have literally

decades of use of their patents before expiration. Further, because

of the nature products which are crafted with the use of micro-

organisms and DNA, are far more difficult to emulate as generics

than the comparatively simple molecular compounds that serve as

the basis for the pharmaceutical companies (e.g. About $21 billion

worth of name brand drugs will lose their patents in 2006). How-

ever, Pharmaceutical companies’ troubles related to its age as an

industry creates another avenue for revenue in Biotechs. U.S. pre-

scription drug sales rose 5.4 % in 2005. However, according to IMS

Health, a health care related research firm, the increase was driven

by the sales of biotech drugs which jumped 17.2% in 2005.

Yet, even the Biotech industry comes with its own dangers. “Many

of the companies [in biotech] are young, money losing startups.”

(CNNMoney.com, March 23, 2006). Significant players within the

Biotech industry are the companies that sell products and services

to the biotech industry. A good example might be the risks associ-

ated with the prospectors in the California gold rush. Some got

rich, many did not, but those people who sold picks and supplies to

the prospectors all made money, NGI™ understands these inherent

weaknesses. Its biobank is an essential element in the research a

majority of biotech companies today. Therefore, our biobank not

only puts our own research far ahead of potential competitors, but

will be called upon by many of the companies working in the field

today.

Further, a significant weakness of many companies in the biotech is

that they lack the commercial element which can bring their prod-

ucts / innovations to market. NGI™ has already developed products

and compounds used in the products of Dermacia. By providing

an avenues for the commercialization of it’s products and advances,

Dermacia affords NGI™ the single most critical element to any busi-

ness, a market in which they can sell their products. NGI™ has al-

ready generated revenues from these products through licensing

agreements with Dermacia.

Market Factors Affecting Industry

9

NGI™ Management

Science TeamDr. Tannin Fuja- Director of Research and Chief Scientist.

Tannin J. Fuja, Ph.D., directs all scientific research for National Genec-

ular Institute, Inc. Prior to joining NGI, Dr. Fuja headed the Molecular

and Cell Biology Research Group at the

National Center for Voice and Speech,

with an Adjunct professorship in the

Department of Speech Pathology & Au-

diology. Dr. Fuja oversaw the building,

development and execution of the first

Molecular Voice research laboratory

in the world. In addition to being a well

published scientific investigator, Dr. Fuja has a broad experience in

the application of molecular methodologies relating to complex

human diseases and development including a wide spectrum of

specialties from human cancer biology to stem cell research.

Dr. Fuja is a member of the Holden Comprehensive Cancer Center,

and the UI Center on Aging. He has studied the role of candidate

tumor suppressor genes in breast cancer and is currently studying

their role in laryngeal carcinogenesis. He is a member of the Inter-

national Society for Stem Cell Research and has also collaborated

with the National Human Neural Stem Cell Resource in studying an

asymmetric pattern of cell division in human neural stem cells. In

addition, Dr. Fuja has also developed a novel patent-pending tech-

nology that is less expensive and faster than widely used expression

microarrays. This technology comparatively analyzes changes in

gene expression using microsphere beads and flow cytometry. Dr.

Fuja received his Bachelors of Science degree from Brigham Young

University, a certificate in Human Subject Research Ethics from the

University of Washington (Seattle) and his Doctorate in Biological

Sciences in the Department of Developmental and Cell Biology

from the University of California Irvine.

Jarett L. Bartholomew-Staff Scientist / Research Tool Developer

[Pending Offer]

Mr. Bartholomew received his B.S. from Weber State University and

his Master’s from University of California Irvine. Jarett is an expert in

the field of optical design and implementation in the development

of lasers. He has been an Electro-Optic engineer with Lockheed

Martin as well as a staff scientist at Metro Laser in California. Part of

Jarett’s responsibilities at NGI™ includes the research, development,

and production of optical instruments for use in the biomedical

field. These optical instruments will be for use as research tools as

well as for diagnosis and treatment of medical conditions. Jarett’s

work has already made tremendous advancements in the develop-

ment of NGI’s Terahertz lasers. There is evidence that exposure to

terahertz radiation encourages the growth and healing of wounds.

This evidence needs further research and development in order to

verify and maximize the effect. Jarett will be a key member of the

team working on this research.

Management TeamMatt Nicosia: Chief Executive Officer and Co-Founder.

Mr. Nicosia is one of our founders and is responsible for the com-

pany’s vision and overall organization. Matt is one of those rare

businessmen who combine top management skills with true en-

trepreneurship to inspire, challenge and motivate employees and

business partners. Mr. Nicosia is Co-founder and CEO of Dermacia

Inc. (www.dermacia.com) a cosmeceutical company that produces

consumer, prescription and OTC products distributed through plas-

tic surgeons and dermatologists, as well as through retail and other

mass-marketing channels. He is also a Director and Co-founder of

Quantum Sphere, Inc., and a producer of nanomaterials and related

technologies (www.qsinano.com). Previously he acted as a busi-

ness development consultant for five years, consulting mainly in

Dr. Tannin Fuja

10

the United States and Brazil. Mr. Nicosia speaks fluent Spanish and

Portuguese and possesses a broad range of international business

experience. He also sits on the Board of Directors and is a principal

of Integrity Equity, a business development group specializing in

assisting young companies in high growth markets and sits on the

board of several private companies. Mr. Nicosia received his Bache-

lor of Arts degree from Brigham Young University and his MBA from

Pepperdine University.

Barry Knapp: President and Co-Founder.

National Genecular Institute™’s other co-founder is the President,

and guiding force in the direction and strategic positioning of Na-

tional Genecular Institute™’s portfolio of products. Mr. Knapp is the

President and Co-Founder of Dermacia Inc. (www.dermacia.com) a

cosmeceutical company that produces consumer, prescription and

OTC products distributed through plastic surgeons and dermatolo-

gists as well as through retail and other mass-marketing channels.,

Mr. Knapp has spent the last 20 years developing and marketing

luxury cosmetic, cosmeceutical and skin care lines that have sold in

more than 20 countries.

A native of Los Angeles, Mr. Knapp showed an interest in cosmet-

ics and skin care at age 14 when he began working with makeup

artists and estheticians. By age 20 Mr. Knapp was the Founder and

Creative Director of a salon and spa company, which he grew to 20

locations before selling. He has produced a number of television

shows including (what was at the time) the most viewed makeover

show featuring Placido Domingo’s family. The show was seen by

over 87 million people worldwide.

Prior to co-founding National Genecular Institute, Mr. Knapp has

developed and marketed a number of top selling brands, including

Color StoryTM, True ColorsTM, Color InstituteTM and Renae Knapp

CosmeticsTM. Since co-founding National Genecular Institute™ he

has created LycogelTM, AffirmTM, LumaireTM, AirlineTM, FirmaireTM

and GenreTM (see brands).

Under Knapp’s leadership, Dermacia’s mission is to continually ad-

vance and improve skin care and cosmetics technology, making it

more effective and capable of performing multiple functions. Estee

Lauder Creative Director and VP of Creative of Elizabeth Arden, Joe

Spellman, has recently called Knapp’s work at Dermacia “true ge-

nius”.

Mr. Knapp and Dermacia’s advisory team of physicians, chemists,

and scientists have been at the forefront of applications of nano-

technology and DNA gene mapping in formulating and bringing

to market a new generation of personal care products. Barry Knapp

continues to create products that produce strong and enduring

consumer brand loyalty around the world.

Brandon Powell: General Counsel.

Mr. Powell, a member of the California and New Mexico State Bar

Associations, has broad experience in corporate, securities and busi-

ness law. He is also experienced in estate planning/estate admin-

istration. During his fourteen years of legal work (for both public

and private corporate clients and individuals), Mr. Powell has pre-

pared, negotiated and enforced agreements and settlements of all

kinds. He has represented a diverse clientele from different indus-

tries before state and federal courts and administrative bodies in

cases ranging from employment and business law to contract and

estate disputes, personal injury, and tax matters. Mr. Powell began

his law career as an Associate with Langlois, MacDonald & Webster

in Sacramento, CA, and was also a law clerk with Littler, Mendelson,

Fastiff, Tichy & Mathiason; a leading national labor and employment

law firm in its San Francisco headquarters. Mr. Powell received his

NGI™ Management

11

Juris Doctorate from the University of the Pacific’s McGeorge School

of Law in Sacramento, where he also earned the American Jurispru-

dence Award in estate planning.

Mr. Powell’s skills and experience extend beyond law practice to

general management and strategic planning. He has been General

Counsel and Executive Vice President of several public and private

companies. He has also consulted extensively for a variety of com-

panies on startup strategy and becoming a publicly traded corpo-

ration and has authored or co-authored business and legal articles

and legislation; including amendments to New Mexico’s Limited

Liability Company Act. Mr. Powell serves on several private com-

pany boards and is a charter member of the CEO Council, a group

of executives who have been instrumental in SEC rulemaking and

NASD policymaking proceedings. Mr. Powell also is a member of

the Sovereign Society and the Federalist Society. He has spent time

living and working in Switzerland and Germany and is fluent in Ger-

man. Mr. Powell received his undergraduate education at California

State University, Fullerton and at Brigham Young University.

Todd Smith: Vice President of Business Development.

Todd Received his Bachelor of Arts degree from Westmont College

in Santa Barbara, California in 1990. Thereafter he graduated from

Whittier Law School in 1993. From 1993-2003 Mr. Smith practiced

law in the fields of securities and corporate law, as well as litiga-

tion. Although no longer practicing, Todd brings those years of

valuable experience to the table as NGI’s Vice President of Business

Development. Todd has sat on the board of directors for several

corporations including Telecommunications companies and soft-

ware developers. Mr. Smith has negotiated mergers and acquisition

agreement for publicly and privately held corporations. He has sig-

nificant experience in the areas of strategic planning and capitaliza-

tion for emerging growth companies.

James C. Short: Vice President of Client Services

Mr. Short earned his undergraduate degree from The Ohio State

University, Columbus Ohio Spring 1996. James has a strong back-

ground in building businesses. He was one of the key architects

of Dermacia’s success by utilizing his expansive skills as a commu-

nicator. James was helped develop Dermacia’s message and was

integral in getting that message heard. He also has had tremen-

dous success as a major and Universal Account Manager for several

major Telecommunication providers. He received Presidents Club

and many other awards monthly, quarterly and annually for TCG,

Winstar, Convergant, Telepacific and Epoch Internet Solutions for

outstanding sales and marketing achievement. Today, Mr. Short

is using those communication and business building skills to help

NGI™ meet its goals.

Andrew Chandler: CTO, Chief Technical Officer

Andrew earned his Bachelor of Science degree from the Univer-

sity of California at Irvine. His education emphasized distributed

systems and database theory. He has done postgraduate work at

California State University, Northridge in database theory and dis-

tributed computing. Andrew holds various professional designa-

tions and certificates, including DB2 UDB 8 DBA certification and

IBM WMQI Systems Developer/Integrator certification. Mr. Chandler

is highly respected in his field as an innovator for creating system

integration solutions. He is also an accomplished Internet and In-

tranet Designer.

Mr. Chandler is the Chief Technical Officer of Dermacia Inc. and was

the Lead Software Architect for Countrywide Financial Services, Inc.

a company with extensive and complex IT systems. He implement-

ed systems and integration at Countrywide that resulted in the

detection of thousands of errors in mortgages, worth many times

the project cost. As lead software architect for Epicor Software, he

NGI™ Management

12

developed an automated testing platform. Andrew is thoroughly

familiar with a broad range of systems and software. Mr. Chandler

continually demonstrates an ability to create and manage technical

solutions on a grand scale. He has also acted as CTO for compa-

nies including Transafari, Inc., Boating1.com and many others, and

has developed applications as a consultant to companies including

Black and Decker, CaliforniaMatch.com, and Protocol Systems.

NGI™ Management

13

Advisory BoardPerry J. Viscounty: Attorney, Latham & Watkins. Mr. Viscounty

and Latham & Watkins have been retained as NGI’s Patent Portfolio

attorneys. In addition, Mr. Viscounty is a member of NGI’s Advisory

Board for the purpose of developing both short and long term pat-

ent strategy. Mr. Viscounty, recently named one of the “Top 30 In-

tellectual Property Lawyers” in California by the Los Angeles Daily

Journal, is a graduate of the University of California, Law School. Mr.

Viscounty is also a member of the Meetings Committee for the In-

ternational Trademark Association and chairs the Trade Secret Com-

mittee of the Orange County Patent Attorney Association.

Ronald M. DiSalvo, Ph.D., Cchem FRSC. Dr. DiSalvo is Director

of Research & Product Development at John Paul Mitchell Systems,

and President of Integrated Research. He is former Vice President of

Research & Product Development at Redken Laboratories, Inc. An

instructor in Cosmetic Chemistry at UCLA, Dr. DiSalvo is author or

contributing author of more than 20 books on cosmetic science,

plus numerous articles in professional journals. More than 100

articles about his work with skin and hair have appeared in such

magazines as Vogue, Harper’s Bazaar, Mademoiselle, Glamour, La-

dies Home Journal, Self, Seventeen, Vanity Fair, GQ and Los Angeles

Magazine.

Dr. Jon M. Grazer, M.D., M.P.H. Board Certified Plastic and Re-

constructive Surgeon. Dr. Grazer is the current president of the

Orange County Plastic Surgery Society. He practices in Newport

Beach and Palm Desert, California, specializing in aesthetic body

contouring and reconstructive surgery. Dr. Grazer is a second-gen-

eration plastic surgeon. His father, Frederick M. Grazer, M.D., was

responsible for the U.S. introduction of liposuction as well as much

of the current literature on the “tummy tuck” procedure. Dr. Grazer

has been featured on the Discovery Channel and other broadcasts

regarding surgery for patients who come to Dr. Grazer for correction

of unsatisfactory results they obtained with a previous physician.

He has been featured in articles in the Ladies Home Journal, Dues-

seldorf Times (Germany) and other regional, national and interna-

tional publications. Dr. Grazer is also the author of the chapter on

liposuction for the textbook Plastic Surgery, Indications, Operations

and Outcomes. Among numerous other international papers and

presentations, Dr. Grazer also co-authored a scholarly paper with Dr.

Ignarro, the 1999 Nobel Laureate in Medicine.

Dr. Gary Tearston, M.D., F.A.C.A. Board Certified Plastic Sur-

geon. Dr. Tearston is a well respected and successful Plastic surgeon

in Southern California, with over 30 years of practice in the field.

His clinic is highly regarded and serves many celebrities and oth-

ers in the entertainment industry. He is the former Chief Of Plastic

Surgery at Cedars Sinai Hospital’s world-famous Plastic Surgery De-

partment.

Dr. Barry Weintraub M.D., F.A.C.A. Board Certified Plastic Sur-

geon. Dr. Weintraub is the current spokesperson for the American

Society of Plastic and Reconstructive Surgery and has a successful

practice in both New York and Beverly Hills. Dr. Weintraub has been

featured on Oprah, BBC Worldwide, NBC, and many other programs

and broadcasts regarding plastic surgery.

Board of DirectorsOur current Board Members are Mr. Nicosia and Mr. Knapp. The

company is actively seeking extremely well-qualified outside candi-

dates to serve as additional, independent directors. It is anticipated

that additional board seats will be filled only by authoritative and

well-connected business figures who are able to significantly ad-

vance the business of the Company.

Advisory Board & Board of Directors

14

Financials

Security Ownership of Certain Beneficial Owners and ManagementThe Company is authorized to issue up to 50,000,000 shares of Common Voting Stock and 5,000,000 shares of preferred stock. The follow-

ing table sets forth, at the date of this Memorandum, after giving effect to the sale of the Common Shares offered hereby, information with

respect to (1) any person known by the Company to own beneficially more than five (5%) percent of the Company’s Common Stock (2)

Common Stock owned beneficially by each officer or director of the Company and (3) the total of the Company’s Common Stock owned

beneficially, directly or indirectly, by the Company’s Officers and Directors as a group:

(1) Based upon 10,000,000 issued and outstanding prior to this Offering. (2) Assumes that all Common Shares offered will be sold. (3) This includes employee shareholders, and all other independent shareholders of record.

Fiduciary ResponsibilityThe Officers and Managers of the Company are accountable to the Company as fiduciaries and consequently must exercise integrity and

good faith in dealings with respect to Company affairs. In the event they violate such obligations, there can be no assurance that adequate

remedies will be available to the Shareholders.

The Officers and Directors of the Company are not liable to the Company or Shareholders for errors in judgment or other acts or omissions

not amounting to gross negligence, willful misconduct or intentional breach of fiduciary duty. The By-Laws contain broad provisions for

exoneration and indemnification of the officers and managers. Therefore, purchasers of the Shares may have a more limited right of action

than they would, absent such limitations in the By-Laws.

Courts have held that a Shareholder may institute legal action on behalf of himself or all other similarly situated Shareholders (a class action)

in order to recover damages from a Company for violation of management’s fiduciary duties, or on behalf of the Company (a company

derivative action) to recover damages from a third party where management fails or refuses to take such action. In addition, on the basis

of federal statutes and rules and decisions by federal courts, it appears that (i) Shareholders have the right to bring class actions in the

federal courts (to enforce the federal rights of all shareholders similarly situated) and Shareholder derivative actions in the federal courts

Name ofOwner

Dermacia, Inc.

Additional Shareholders

Total

Number of Shares Owned Before

Offering

8,800,000

1,200,000

10,000,000

Percent Owned Before Offering (1)

88%

12%

100%

Number of Shares Owned After

Offering

8,800,000

6,200,000

15,000,000

Percent Owned After Offering (2)

59%

41%

100%

15

(to enforce Federal rights of a corporation including in each case rights under certain Securities and Exchange Commission Rules), and (ii)

Shareholders may bring appropriate actions against one or more companies for rescission of the purchase of their Shares or for damages

based upon rules promulgated by the Securities and Exchange Commission under the Federal Securities Act of 1933 and the Securities

Exchange Act of 1934, as well as under applicable state laws. Investors should consult with their independent counsel as to the status of

the law at present as well as at any future time. The cost of litigation, however, may be prohibitively high and any judgment obtained may

not be collectible; the Company is not bonded and its net worth is limited. An investment decision should be based on the judgment of a

prospective investor considering the investment factors described in this Memorandum rather than upon reliance upon the right to bring

legal action or to control the activities of the Company.

Notwithstanding their fiduciary relationship, the Officers and Directors of the Company have broad discretionary power, under the terms of

the By-Laws and under applicable Nevada law, to manage the affairs of the Company with the assistance, if desired, of consultants or others

retained for the account of the Company. Generally, actions taken by the officers and managers are not subject to direct vote or review by

the Shareholders, except to the limited extent provided in the By-Laws and under applicable laws and regulations.

Discussion and Plan of OperationNational Genecular Institute™ will continue to invest the majority of its capital into the laboratory facilities located close to the University

of Iowa, in Iowa City. Management’s philosophy is to operate with a close-knit, small and agile team with a strong history of performance

directing the strategy and operations of the Company. Management’s devotion to excellence must be relentless and must be demon-

strated in their work to the employees, shareholders and customers of the Company. Management is committed to the guiding principle

that the best, uncompromising products and services will always enjoy market success. Those are the only kinds of products and services

that National Genecular Institute™ will offer, now and in the future.

It is presently anticipated by the Company, that its current operational plan for the next twelve months will require the raising of capital in

excess of this current offering. The source of this “excess” capital are several. First, NGI™ has been in lengthy discussions with the State of

Iowa, the city of Coralville, and the University of Iowa, regarding their desire to be participants in the building of our laboratory facilities, as

well as our long term employment needs. In addition, the Company has been in negotiations with private equity funds and others regard-

ing additional funding that would permit the Company to take advantage of opportunities in an expedited manner. Operational expenses

are expected to increase significantly upon the completion of the laboratory facility, in particular the Company’s research, development

and employment costs. It is anticipated that increased expenditures will be covered by incoming revenue streams as the Company’s

anticipated products and services are introduced to the marketplace. However, there is strong likelihood that NGI™ will bring on one or

more financing partners to provide a steady stream of capital (both debt and equity) to fund these operations. NGI™ has already received

a substantial number of offers for capital and continues to weigh each opportunity as it is presented.

Financials

16

Management has identified several potential revenue streams in addition to the sale and/or licensing of customized cosmeceuticals that is

the main focus of NGI’s business. Several are inherent in the primary research and development efforts of NGI, and the others are tangen-

tial to the primary R&D. Those revenue streams will emerge and develop following the introduction of NGI’s first products. The potential

additional revenue streams are as follows:

1. Development of BioTrust™ of immortalized DNA samples;

2. Development and distribution of customized comseceuticals;

3. Development of customized medical treatments and medical tools;

4. Licensing of discovered SNPs and other intellectual property.

National Genecular Institute’s two initial products, developed from the Company’s research to date and related research by NGI™ affiliates,

are proprietary substances exclusively licensed to Dermacia, Inc. which will be used as ingredients in Dermacia’s therapeutic cosmetics

commencing Summer, 2006. The substances consist of nanoparticulate zinc oxide and silver powders. The nanoparticles in these ingredi-

ents are of a revolutionary uniform size of approximately 30 nM. The tiny and comparatively uniform particle size allows these ingredients

to be dramatically more effective than the same substances at larger particle sizes. For example, nano-zinc oxide permits UVA and UVB sun

protection in excess of SPF 40 while maintaining a transparent appearance on the skin, without the white paste normally associated with

zinc oxide sunscreens. Nano-silver is a powerful antibacterial agent that is also transparent on the skin while eliminating a wide range of

microbial agents, including bacteria involved in acne and other skin problems.

Management expects a series of other products to continue to result as ancillary benefits of NGI’s core research and development over

time.

Use of ProceedsNGI™ is currently raising $30,000,000.00 for its ongoing operations, and execution of it’s long term strategic plan. The $30,000,000.00 will be

spent, roughly, as spelled out below. The costs set forth in the following narrative are estimates only. Actual use of the funds is left to the

discretion of the Company’s directors, officers and managers.

Capital Equipment 2,500,000

Construction of Phase II BioTrust™ Facility 5,000,000

Detection & Diagnostic Tool Development 8,000,000

Proteomics & Skin Care Division 7,000,000

Medical Devices 4,000,000

ORP Research Lab Infrastructure 3,500,000

Financials

17

BioTrust™: The BioTrust™ has already begun development. NGI™ has

already entered Phase II of the BioTrust™ program. NGI™ has secured

property in the Northgate Research park in Iowa City for the construc-

tion and development of the next phase of the BioTrust™ develop-

ment. Architects and lab design teams have already begun designing

and estimating for the project. The estimated capital equipment cost

for this node is approximately $5 million and will be completed in

late 2008. Operating the BioTrust will require ten full-time scientists

and technicians.

Detection: NGI™ will utilize the biobanked material to identify and link

specific genetic alterations to certain conditions or clinical manifesta-

tions. The detection of validated single nucleotide polymorphisms

(SNPs) is a substantial product output of this node. Detection kits

will be sold directly to consumers and identified genetic anomalies

requiring alteration will provide valuable targets for the development

of customized cosmeceutical and pharmacogenomic products. The

estimated three year operational cost for this node is approximately

$4.5 million and will require an additional six scientists and techni-

cians.

Research Devices: NGI™ will aggressively develop devices to be

used in the advancement of its own research, and will also be sold

to outside research institutions where possible. Device prototypes

will be used and tested in a research setting prior to advancing the

development of the device clinically. This will allow for more im-

mediate product output and will also synergistically advance the

basic science research of the other operational nodes. Given this

significant value, NGI™ seeks to development these devices as an

early phase operation. The estimated continued 3-year operational

cost for this node is approximately $3.5 million and will require an

additional five scientists and technicians.

Proteomics/Protein Engineering: NGI™ is dedicated to the study

and application of modified proteins as key pharmaceutical re-

agents. Target validation is currently a significant bottleneck of bio-

pharmaceutical drug development, and through NGI’s synergistic

operational strategy target validation will be advanced by a clear

genetic understanding, or the condition as obtained through other

operational nodes. Such methods as siRNA, protein arrays, mass

spectrometer, chromatographic and crystallographic analysis will

provide a comprehensive basic science platform driven by the ap-

plication of the biomolecules and proteins in customized pharma-

ceutical products. The value of this node is its development of key

reagents and targets for these customized products. The estimated

continued three year operational cost for this node is approximately

$7 million and will require an additional fifteen scientists and tech-

nicians.

Clinical Devices & Nano-Delivery: The development of clinical

devices, which can be synergistically used with other customized

NGI™ products and services, is crucial. Initial products of immedi-

ate interest to NGI™ include proprietary laser applications, biode-

gradable scaffolds and nano-activating technology. The value of

this node is in the generation of products and the synergy with

customized NGI™ products. NGI™ also seeks to develop second-

ary non-cellular or partially cellular products that may be useful in

extending quality of life. The product, i.e., value, of this node will be

the product itself. The continued three year operational cost for this

node is approximately $4 million, and will require an additional ten

scientists and technicians.

ORP Research Lab Infrastructure : The project in ORP consists of

the design, development and construction of a 90,000 sq. ft., state

of the art research and business incubator facility located on Lot 1

of the ORP. Lot 1 is the site selected by the University and will be ad-

Research & Development Master Plan

18

jacent to the future location of University of Iowa’s Hygienic Labora-

tory. The goal of this joint project between the University and NGI™

is to create a facility which not only meets both parties’ needs now,

but can be used in such a way as to spur collaboration between

NGI™, the University and its incubating businesses; as well with the

growing local biotechnology business community.

The developer selected by the University and NGI™ for this project is

Ryan Companies US, Inc (Ryan). Ryan will own the facility. The two

primary tenants will be The University of Iowa occupying roughly

38,000 gross square feet, and NGI™ occupying 52,000 net square

feet of space.

This facility will become the anchor of the ORP, and will be used

to attract additional private research companies into the park. The

University’s portion of the facility will house burgeoning research

companies as they grow from academia to the private sector. The

University of Iowa is already recognized as one of the premiere sci-

entific research universities in the nation, this joint facility strongly

enhances that reputation. NGI™ is benefited from attracting other

biotech research companies there as the collaboration between

companies enhances synergy. The synergistic approach to research

is a centerpiece of our short and long term strategic and scientific

goals.

NGI™ has already been awarded $655,000.00 in direct state assis-

tance from the Iowa Department of Economic Development and

another $1,200,000.00 from the city of Coralville for this project. Ad-

ditional public funds are available to the project in the future.

Research & Development Master Plan

19

Conclusion

NGI™ has already taken long strides down the pathway towards innovations,

which will transform how wellness is defined and maintained. Traditional mod-

els of post illness diagnosis and therapies are no long a workable model. With health-

care costs continuing to spiral out of control, maintaining wellness and prevention

through detection are the critical elements to preventing the system from collapsing

upon itself.

The technology for such a paradigm shift exists. NGI™ is a leading force in that shift.

By continuing to provide innovation for today’s circumstances, while answering the

call for tomorrow’s needs, NGI™ is poised to take the initiative in current critical care

and future growth in the field.

As a company which can serve its partners needs for tools and research development,

as well is it’s own production of detection and theranostic solutions, NGI’s BioTrust

and other research initiatives ensure the company’s short and long term success.

20