OVERVIEW

Cosmetic Surgery and Aesthetic Services of America (CSASA), was developed to provide management and marketing services to Positive Changes for Health & Beauty, a self-image health care company, which was formed to make affordable plastic surgery and cosmetic enhancements available to the average American. CSASA's concept is to open cosmetic enhancement centers in existing physician's offices as well as form alliances with cosmetic companies or major department stores and develop distribution channels through direct contracting with managed care companies and major corporations that are self insured. After significant operational experience and capital expenditures are justified, outpatient mini-surgical centers will be established in the city. The focus initially will be to establish market dominance through marketing, client service, pricing, affordable payment plans and geographic accessibility in cities with the criteria detailed.

CSASA will primarily provide non-medical services and contract with part time surgeons as independent contractors to implement other procedures, and obtain the support of physicians in Houston, developing experience working in a medical setting from a retail perspective. The initial services provided include the following:

• Comprehensive Vein Treatment combining the newer technologies of Photoderm and laser for spider veins, and vein stripping for significant major vein varicosities.

• Epilight Hair Removal System--an intense "pulse light" system that is similar to laser but has been shown to be superior

• Laser Facial Resurfacing -This treatment is provided by specialists who are trained in laser techniques, such as general surgeons, dermatologists, otolaryngologists, and opthalmologists.

• Microdermabrasion (Bella Derma) - the lunch time peel used in Europe for 5- 10 years and only recently introduced in the U.S. for fine wrinkles, improvement in skin tone and reduction of acne scars. It replaces chemical peels, one of the most common procedures currently done by aestheticians, spas and in cosmetic surgeons' offices.

• Cosmetic Injection - Non-surgical wrinkle and frown line removal for the face utilizing Botox - (bella visage) - Now it is used regularly for fine to coarse wrinkles and frown lines primarily on the forehead, between the brows and adjacent to the eyes (crow's feet). Combining and supplementing the treatments with microdermabrasion, partial laser resurfacing and facial, aesthetic and cosmetic services enhances wrinkle reduction and aging of the skin.

• Cosmetic , Aesthetic, and Masseuse Services

CSACA will expand its service to include medical procedures such as:

• Laser resurfacing, Body Sculpting and Liposuction, eyelid surgery (blepheroplasty), breast augmentation ,face lift ,nose reshaping

Current and Planned Conditions

CSASA began recruiting and training its staff at its first location in the prime business location, the Galleria in Houston in September 1998. This office became fully operationally utilizing basic cosmetic services (epilight hair removal, microdermabrasion, botox cosmetic injection therapy, and comprehensive vein treatment, utilizing sclerotherapy and photoderm (but not vein ligation and removal) in April, 1999. The 3 other provisionary offices have opened in stage fashion and have begun to offer similar services; however capital constraint has limited the ability to train additional staff and open the other centers.

CSASA began training staff for cosmetic services in March and began to provide those services in two suburbs of Houston, Clear Lake/NASA and Fort Bend, one of the top 10 fastest growing areas in the U.S. There will be additional locations in Houston and in Austin, Texas by the end of 1999. Thereafter it will expand by opening four locations per city upon funding. Each location will employ:

• A Nurse Practitioner, a Technician ,a Receptionist, an Aesthetician, a Center Manager

Presently 2 opthalmologists with experience in laser resurfacing, blepheroplasty and LASIK surgery are available for services, as well as a plastic surgeon and ear, nose and throat specialist, who will provide liposuction, nose reshaping and other cosmetic procedures. We are the first center in Texas to provide selective laser treatment, the "lunch time peel".

Each city will employ:

• A Plastic Surgeon who will perform medical procedures and serve as the Medical Director for a given city will have the following responsibilities:

Recruit, supervise nurse practitioners, meet regulatory, educational, and risk management, quality and review of at least 10% of the medical procedures performed by the nurse and be available on site for those procedures that require a physician , and supervision of laser procedures and assessment of treatment of the more difficult or complicated cases.

Objectives

CSACA has established specific objectives for its 5-year planning horizon in the following areas: growth, profitability, and reputation of service.

Growth

Over a 5-year term, CSASA plans to have approximately 40 locations in 8 different cities by opening 4 locations per city in 2 new cities per year. CSASA maintains specific criteria for choosing a new city to begin operations. Within these cities, there are certain criteria for choosing physicians with which to affiliate.

The following charts details the number of cities in which CSACA will be located and the total number of CSACA locations at the end of each year:

Profitability

CSASA expects to recognize high profit margins of 35-50% through: Strategic alliances with physicians, cosmetic surgeons, savings on operating expenses by running operations inside physician offices and focusing on elective procedures and avoiding opening large stand-alone facilities, avoiding complex, intensive procedures by utilizing physician extenders and knowledgeable sales consultants, efficient corporate administration of management, marketing administration and development, opening 4 locations per city simultaneously to maximize support personnel, marketing, and advertising efforts in each city.

Reputation

Reputation is the most important aspect for a retail medical center to achieve long-term success. CSACA plans to establish high standards of customer service to guarantee consistency and build customer loyalty. One of CSASA's criteria for choosing a physician to work with is an exemplary reputation in the community. By operating in a well-respected physician's office, credibility is added to CSACA over a clinic or a spa. CSACA spends a considerable amount of time with the customer up front to determine exactly what the customer desires.

Strategy

CSASA's strategy is to open four self-image enhancement health care facilities per city in two cities per year with 50% of the locations being in a physician's office. CSACA will affiliate by renting office space or subleasing the office several days a week with a physician in each of its locations per city. The physician will have large client population that has a need for such services, as well as subcontract with other physicians for cosmetic surgery and aesthetic services, such as family practitioners, primary care physicians, dermatologists, obstetricians, gynecologists, ophthalmologists, optometrists, and otolaryngologists. The business operations for locations in each city is overseen by a Regional Manager and a plastic surgeon will perform plastic surgery procedures and serve as a medical consultant to nurse practitioners and technicians.

Long Term Strategy

CSASA plans to evaluate the feasibility and profitability of acquiring at least 33% or as much as a 67% interest in existing plastic surgery practices or pursue joint ventures with cosmetic surgery specialists or developing profit sharing or management and marketing services for cosmetic services for medical, including cosmetic surgery, groups. Negotiations are ongoing to purchase and to develop training sites for aesthetics, spa services, laser, oculoplastic and liposuction using this model. It is to be emphasized that this not a physician practice management but a corporate model to develop those services through marketing and management by a team of physicians and management and marketing specialists. By purchasing practices with minimum gross revenues of $500,000 to $700,000, CSASA will be able to accelerate its growth in new cities. To be conservative, these purchases, associated revenues and costs have not been projected. These groups have a significant competitive advantage as the company revenues are generated increasingly from surgical procedures. This will provide additional sources of revenues in that many of these surgeons have the capabilities to perform day surgery in their facilities and have relations or employ nurse anesthetists. CSASA will consider developing product lines for cosmetic anti-aging that will be private labeled and distributed through beauty salons and cosmetic stores. It will also pursue aesthetic and healthcare related products and services that can be adapted to mass-marketing utilizing product differentiation and quality by identification with a medical service company. In order to minimize capital expenses and gain experience, services such as LASIK vision correction would be the first to consider, through contracting with established practitioners. When significant operational presence has been established, exploration of international opportunities will be explored. This is indicated because of the increasing per capita income, the reputation of American medicine, and lastly, the opportunity to gain experience with new procedures and technologies that were introduced 3-5 years earlier than in the U.S. because of regulatory issues.

Growth of the Industry

It is well known that the medical industry is expanding rapidly and the plastic surgery segment is no exception. The number of plastic surgery procedures in the United States more than quadrupled from 1990 through 1996, from 643,910 to approximately 3.2 million in 1996. The growth rate will be in the next five years at least 40%. This is based on the baby boomers entering their 50's, the increasing acceptance of cosmetic surgery in both women and more recently men and the desire of a quality of life now that the lifespan has increased as well as the increase of net assets and disposable income in this age of prosperity and the increasing new techniques and technology to enhance beauty and youth.

Contrary to a misconception held by some people, most cosmetic surgery patients are not motivated by vanity. Very often, patients are seeking alteration of physical attributes that may not impair physical functioning, but limit quality of life by promoting a negative self-image and psychological stress.

The number of people who approve of cosmetic surgery, for themselves or others, has increased 50 percent over the last decade. This surgery is no longer performed only on the wealthy. In fact, 65 percent of persons who have cosmetic surgery have family incomes under $50,000 per year. Because of this, financing programs and payment plans are an essential part of the service and marketing activity.

Growth in the Cosmetic Surgery Healthcare Industry

The following is a two-year and five-year trend in the Cosmetic Enhancement industry:

Emerging Trends in the Industry

Some of the emerging trends in the cosmetic surgery industry which will be emphasized are:

• Morphing

• Laser Surgery/Resurfacing

• Anti- Aging Skin Care and Skin Care Products

• Ultasound liposuction

• Comprehensive Vein treatment

• Hair Transplant

Selection of Joint Ventures with Physicians

Choosing cities or suburban location with rapid population growth and low unemployment, focusing on affiliation with 2-3 physicians who maintain a good reputation and involvement in the community as well as recruitment of physicians who are knowledgeable, willing to develop and who have an understanding of the strategy of the company, i.e., developing relationships with and recruiting physicians such as: Dermatologist, OB/GYN, Opthamologist ,Otolarynotogist, Family Practitioners and Spas.

Management and Advisory Board

Leo J. Borrell, M.D. - Chairman, Chief Executive Officer and Chief Operating Officer

Dr. Borrell is the Chief Executive Officer and President of CSASA. He is responsible for overall strategic planning and development. Dr. Borrell has had a successful career in blending his clinical interests with teaching and patient care. Dr. Borrell consults to healthcare facilities. He has successfully founded and managed several healthcare companies, and hospitals. In addition, Dr. Borrell has teaching appointments: Baylor College of Medicine, Houston, Texas and University of Texas College of Medicine, Houston, Texas, University of Houston School of Entrepreneurship and Innovation,. He has developed expertise in understanding integrating management and providing medical services through his initiative in developing a large multi-specialty clinic, several psychiatric hospital and facilities, and medical, surgical and radiological diagnostic medical software companies in the past ten years. He has been involved in investment and commercial banking since 1990.

He has demonstrated performance in corporate finance and venture capital, business planning, development and negotiation, general management, organizational development and strategic planning, research and consulting services and marketing. He gained experience in the retail industry through his 10-year ownership and management of an art gallery and gift shop. Dr Borrell has published various articles in business and medical journals. Further, Dr. Borrell holds many organizational offices and sits on the board of many organizations.

Dr. Borrell has earned an undergraduate degree from Emory University, Atlanta, Georgia, an M.D. from Emory University School of Medicine, Atlanta Georgia, and was a Harvard Medical Training Fellow and has obtained postgraduate training in management at the international management development institute (IMD) in Lausanne, Switzerland.

Judy Borrell - President, Chief Financial Officer & Marketing Director

Sherry Sadler - Regional Manager & Clinical Coordinator

George L. Sadler, III - Organizational Development & Continuous Quality Improvement

Mr. Sadler serves as an advisor to the C.E.O. and C.O.O regarding human relations FUNCTIONS. His primary responsibility will be Organizational Development and Quality improvement in order to monitor the strategic plan and develop the capabilities to manage the rapid growth His role is to establish CSASA operating system and total quality management program as well as setting benchmark standards. Mr. Sadler's experience is extensive within the arena of Total Quality Management. He has worked as an adjunct Professor at the University of Houston, Graduate School of Training and Development. He is a Malcomb Baldridge National Quality Award Assessor and has extensive consulting experience within the Quality field where he has established Total Quality programs for 16 companies, including Compaq and Brown & Root, a major opthamological medical group as it merged to form the core group to become a public company in a national roll up Mr. Sadler has developed technical, administrative MIS systems, and performed technical training and human development programs. Mr. Sadler has a BS in Engineering from USMA, West Point, NY.

ADVISORY BOARD

Peter Boland, Ph.D.

Dr. Boland serves as Vice President of Corporate and Managed Care relations He is responsible for developing a strategic plan for national contracts and advising the CEO of the changing environment in healthcare and monitoring emerging competitors and developing strategic alliances with other national medical and healthcare companies in order to establish and maintain dominance in this industry. He is one of the country's leading authorities on managed care. He is an independent thinker whose results-oriented approach frequently challenges the conventional wisdom of the healthcare industry.

As president of BOLAND, Berkeley, California, he assists providers and purchasers in analyzing health plan effectiveness, creating performance-bases arrangements, and assessing the impact of industry dynamics on the cost and quality of health services.

Dr. Boland is the editor of the new journal, Managed Care Quarterly (Aspen). He received a doctorate from UCLA, a master's degree from the University of Michigan, and a post graduate certification from Harvard University's Executive Program in Health Policy and Management.

Dr. Boland's role is a joint venture partner is developing a strategy for relationships with managed care companies. He has an understanding of the healthcare community locally since he helped Methodist develop a managed care strategy. He also has a national reputation as a healthcare consultant having written several books and as well as editing several journals regarding managed care. In addition, Dr. Boland consults with fortune 500-companies regarding healthcare needs.

Ms. Cheryl Farnsworth, formerlt CEO of a national MRI company and presently CEO of Health Help, a radiology company that was recently funded with $10 million from a venture capitalist.

James Meadows, founder and former chairman of Citizen's National Bank. This bank, for the past 5 years, has been ranked nationally in the top 10, based on return on equity. Mr. Meadows recently sold his bank to Banco Popular and remains involved in an advisory capacity.

Loretta Marmino, formerly associated with Deloitte & Touche in Houston, Texas, the Williams Company and Wiltel in Tulsa, Oklahoma. She recently accepted a position with a start-up company in Washington, D.C., wareonearth.com.

Discussions are being undertaken to finalize the participation of several experienced healthcare executives with growing healthcare companies in the hospital and day surgery sector. A medical advisory board is being formed with experienced clinicians in various cosmetic surgery services and in different geographic areas.

FINANCIAL ADVISORS

Keith Schilit - Mr. Schilit is an accomplished entrepreneur, consultant, author and lecturer. Early in his career, he developed and/or implemented strategic planning programs for Fortune 500 companies, governmental agencies, and industry associations. Over the past 15 years, his consulting efforts have been almost exclusively for smaller, emerging growth businesses, including such well celebrated companies as Intermedia Communications (Entrepreneur of the Year for the State of Florida), MedTech (finalist for Entrepreneur of the Year for the State of Florida), Lenny & Vinny's New York Pizzeria (Inc. 500), Feldman Orthodontics (1st Runner-Up Small Business of the Year for the State of Florida), Sam Seltzer's Steakhouse, and Cleaners Hanger Co. In addition, he has been an active member of the board of directors (and has served as Chairman of the Compensation and Benefits Committee or the Audit Committee) of four publicly held, NASDAQ-listed companies - Chico's FAS (Entrepreneur of the Year for the State of Florida), Check Express, Dataflex, Prestige Cosmetics and director of the ASM Fund. He has written 60 articles and six books on venture capital, IPOs, and emerging growth ventures. He holds an MBA and Ph.D. in strategic planning from the University of Maryland and has served on the faculties of Keio University (in Tokyo), Syracuse University, and the University of South Florida (in Tampa), where he has been the director of the Program in Entrepreneurship.