Confidential

American Pacific American Pacific Medical GroupMedical Group

China’s New Leader in Providing Premium Medical Services

Investor Presentation

September 2005

-2-Confidential

Confidential

APMG Mission Statement

“To be the premier healthcare service provider specializing in Neurosurgery, Oncology, and other

high-end procedures servicing the growing Chinese affluent middle class”

-3-Confidential

Confidential

What is APMG?

Headquartered in Beijing Founded in 1992 Superior Management Team Successful Portfolio of Medical Services Profitable for past 5 years Innovative and experienced international

management skills

-4-Confidential

Confidential

What is APMG?

Offers state of the art facilities and procedures APMG completed over 2600 gamma-knife (radiation

therapy for brain tumor) procedures in year 2004 – the Shanghai center performed more procedures than any other facility worldwide

Currently APMG operates two hospitals (Beijing and Shanghai) and 4 clinics

All facilities are profitable 85% of APMG patients are local Chinese

-5-Confidential

Confidential

APMG’s Diversified Healthcare Service Portfolio

Service Line Current Facilities

Radiation OncologyShanghai Gamma Hosp.*

Beijing Gamma Knife Ctr.

Shenyang G-Knife Ctr.

Neurosurgery and Rehabilitation

(Beijing) PuHua Neurosurgery and Rehabilitation Hospital

Outpatient/Podiatry Clinics

Beijing Outpatient Polyclinic (inc. Podiatry and Health Screening)

General Hospitals --

*Shanghai Gamma hospital consistently performs the largest number of gamma knife procedures in the world

-6-Confidential

Confidential

APMG Management Has Deep Local Experience

This team of medical veterans founded by prominent U.S. physicians has operated international standard healthcare delivery businesses in China for 10 years

APMG is entering a period of explosive expansion

• Management has guided APMG’s evolution from running a few small VIP units to an independent multi-specialty healthcare corporation

• The significant experience and expertise of these veteran managers will be a key factor in ensuring APMG’s success in this next critical growth phase

-7-Confidential

Confidential

APMG Business Model

-8-Confidential

Confidential

Customer Acquisition : Through External and Internal Referrals

Customer referrals into APMG system driven by physicians who prefer to bring high-end patients to APMG facilities

• Physicians receive larger portion of medical service fees

• APMG facilities are upscale and located next to large academic facilities where these physicians practice

In-system referrals increase revenues without adding incremental cost and can utilize excess capacity

Co-location of future specialty centers within general hospital facilities will add to synergies

General CareHospital

PodiatryClinic

GeneralClinic

NeurosurgeryHospital

Radiation Oncology Treatment Center

Local ReferralLong Distance(or Local) Referral

Referral for use of PuHua surgical suites for Orthopedics

-9-Confidential

Confidential

The Value Proposition ?

A unique opportunity to participate at an early stage in the exponential growth of China’s Healthcare Sector

APMG has diversified high end services with national coverage

Superior portfolio of high margin and niche service products

Proven track record of execution Most importantly : a management team which

focuses on quality and especially on profit

-10-Confidential

Confidential

APMG is a mezzanine stage company with a history of achievements

Proven success in dealing with government authorities

Thorough knowledge of local customers (“Key to large-scale success lies with affluent Chinese customers”)

Extensive experience in establishment, acquisition and divestment of healthcare facilities

• Highly skilled due diligence capabilities• Ability to engage local officials and staff to

support new initiatives• Multiple successes in managing divestment of

healthcare facilities

-11-Confidential

Confidential

Deep Local Experience - Milestones

Success in dealing with government authorities

APMG has successfully secured permission for state insurance coverage of services provided at their facilities

APMG navigated local regulatory process to build several specialty hospitals de novo

Thorough knowledge of local customers

Over 85% of APMG customers are local affluent Chinese

Significant experience in repeated establishment, acquisition, and divestment of healthcare facilities

APMG evolution to current portfolio of clinics, centers, and hospitals has been driven using entirely in-house skills and management expertise

APMG has built and sold several facilities back to the government at a profit

-12-Confidential

Confidential

APMG’s Diversified Healthcare Service Portfolio

Service Line Current Facilities Future Facilities

Radiation OncologyShanghai Gamma Hosp.*

Beijing Gamma Knife Ctr.

Shenyang G-Knife Ctr.

PuHua RadOnc Ctr.

Guangzhou G-Knife Ctr.

Neurosurgery and Rehabilitation

(Beijing) PuHua Neurosurgery and Rehabilitation Hospital

PuHua Hospital Phase II

Outpatient/Podiatry Clinics

Beijing Outpatient Polyclinic (inc. Podiatry and Health Screening)

Clinics 2-8 in multiple cities

General Hospitals --Guangdong Hospital

Sichuan Hospital

*Shanghai Gamma hospital consistently performs the largest number of gamma knife procedures in the world

-13-Confidential

Confidential

Business model captures broad spectrum of consumers strong contribution to top and bottom line

Tot

al M

argi

n

Ave

rage

Cus

tom

er A

fflu

ence

Revenue (per facility) Specialization

Outpatient/Podiatry

RadiationOncology

PuHuaHospital

GeneralHospital General

Hospital

PuHuaHospital

RadiationOncology

Outpatient/Podiatry

Confidential

China Healthcare Services MarketChina Healthcare Services Market

-15-Confidential

Confidential

The Market Then :

Monolithic, bureaucratic, and primitive healthcare options

Highly regulated environment Unsophisticated medical consumers Less focus on quality outcomes Emphasis on basic services; high-end medical

solutions rare/nonexistent

-16-Confidential

Confidential

Significant Opportunities Now

Market Constrained

TightRegulation

LaggingHealthcare Spending

Few Upper/Middle Class

RegulatoryReform

IncreasingHealthcareSpending

GrowingAffluent Patient Base

Past Future

Expanding Market

-17-Confidential

Confidential

The Market Now :Healthcare Sector to Grow Substantially

Reach US $170bn by 2010; 8yr CAGR of 12% Driver: Previously inadequate spending reaching parity

with national growth Experts expect healthcare spending to outpace GDP

0

50

100

150

200

1990 1995 2000 2001 2002 2010E

0%

2%

4%

6%

8%

Health Expense %(Health Expense/GDP)

Source: TongRen Hospital

China Healthcare Spending

US

$B

illio

ns

4,090

2,339

1,741

587

310

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

U.S. Germany Japan Korea China

Source: Development Research Center of the State Council Network

US

Do

llars

/Ye

ar

Per Capita Healthcare Spending 2002-2004

-18-Confidential

Confidential

The Market Now :Unsatisfied Demand for High-End Medical Care

Demand fueled by quickly expanding upper and middle class socioeconomic groups• BNP Paribas forecasts that the number of middle class

families will grow to 100 million in 2010

Chinese medical consumers increasingly willing to pay for a superior medical experience• Improved process (shorter wait, better service/environment)• Improved outcomes (advanced treatments, new techniques)

-19-Confidential

Confidential

The Market Now :An Opening Regulatory Environment

Path for foreign-owned private healthcare facilities is now open• Before: Regulations unclear, generally only smaller facilities

possible, significant bureaucratic obstacles• Now: Regulations codified, government committed to

privatization, less red-tape (but still requires local expertise)Year 2000

“Temporary Measures for Management of Sino-Foreign Joint and Cooperative Medical Institutions”

Year 2005

Tentative opinion on healthcare reform

Foreign ownership of healthcare facilities will be by joint-venture, allowed up to 70% ownership

Minimum investment: US $2.4M

Expected to result in emphasis on privatization of state enterprise-owned public hospitals vs. government/health bureau-owned hospitals

-20-Confidential

Confidential

Growth Drivers : APMG is Positioned to Benefit from Deregulation In Multiple areas of the Healthcare Sector

PastMarket/ APMG

ChangesFuture

SpecialtyMedicine

Market Demand

ModerateGrowing affluence

Larger

APMG Presence

YesAPMG expansion

Increased Presence

GeneralMedicine

Market Demand

Large healthcareSpending

Larger

APMG Presence

NoAPMG hospital purchases

Yes

-21-Confidential

Confidential

New Technologies, New Opportunities

Radiation Oncology Neurosurgery/RehabilitationComing radiation oncology center willinclude “next generation” radiosurgery/radiotherapy device

Increased versatility Expanded patient mix

Accuray CyberKnife®

Varian Trilogy™

Elekta Synergy®

Stem cell therapy center for neurological disordersis in start-up process at PuHua Hospital

Favorable regulatory environment Significant advances made in China PuHua has infrastructure in place International stature

Stem cells are out of the laboratory- clinical indications include: spinal cord injury, traumatic brain injury, Parkinson’s disease, cerebral palsy, and stroke

Hospitals a springboard for further expansion: APMG general hospitals will provide established facilities with in-place infrastructure at which to co-locate future boutique specialty centers

-22-Confidential

Confidential

Competitive Landscape

SectorAPMG

CompetitorAPMG Specific Advantages

Healthcare Holding Company Chindex

Focus on local Chinese markets (both middle and upper class) instead of limited expat community; focus on medical services (not products); diversified general and specialty medical portfolio

Specialty

Centers

Radiation

Oncology

Shenzen –

AoHua

APMG Swedish-manufactured gamma knife is world gold standard- superior beam focus and less damage to healthy tissue compared to AMS domestic model

Neuro-

Surgery

Sanbo HospitalPuHua serves as private surgical center for all Tiantan faculty and associated patient streams- Sanbo limited to its own current medical staff drawing power

Other Neuro-Hospitals

More complementary than competitive- PuHua attracts premium patients with short wait times, top-level facilities, and better compensation for surgeons

PodiatryLocal

Orthopedics

PuHua clinicians trained by American podiatrists; orthopedics does not adequately address podiatric needs

Comprehensive / General

Hospitals

Local General

Hospitals

APMG target-hospitals already have significant patient flow. Maintaining and improving service levels while cutting costs will be a key challenge

-23-Confidential

Confidential

Management

Board of Directors have long-term operational and clinical experience on both sides of the Pacific

Management is a balanced mix of cross-functional expertise : 30 full time staff• Local on-the-ground experience working in both clinical

practice and medical/hospital management in China• Have business training and work experience in both China

and the West

-24-Confidential

Confidential

Core Management Team

Michael Choy, DPM, FACFS : Founder, Chairman, CEO: Michael has held these positions since incorporation of APMG in 1992. He is a Diplomate of the American Board of Podiatric Surgery and a Fellow of the American College of Foot and Ankle Surgery. Prior to starting APMG, he formed healthcare joint ventures including outpatient surgery centers, MRI imaging facilities, and medical arts buildings.

Chuk W. Kwan, MD : Co-founder, Director, Chief Medical Officer. Chuk is a Clinical Professor of Medicine at University of California, San Francisco and a board certified internist and cardiologist.

Andrew Chow : Group Financial Controller: 10 years with APMG. Andrew is a Fellow of the Chartered Association of Certified Accountants and an Associate of the Chartered Institute of Management Accountants.

Yan Z. Yong : SVP, Shanghai Gamma Knife Hospital : 12 years with APMG. Z. Yong

has over fifteen years experience managing Sino-Foreign joint ventures.

-25-Confidential

Confidential

Core Management Team (2)

He Ping, MD : SVP, PuHua Hospital and Clinics: 3 years with APMG. Ping was previously SVP at ChinaCare and president of Beijing Puren hospital.

Zhang Jing : VP, PuHua Hospital and Clinics: 9 years with APMG. Jing is the former executive administrator to the president of Beijing Tiantan Hospital.

Chase Chen, MD : VP, M&A: 8 years with APMG. Chase received his medical degree from Guangzhou Medical College and MBA from University of Western Sydney.

Sherwood Yang, MD : VP, PuHua Hospital: 3 years with APMG. Sherwood is a board certified general surgeon and a former VP at ChinaCare. He received his MBS in Finance from Massey University Auckland, NZ.

Fang Zhi Liang : VP, Beijing Gamma Knife Center: 8 years with APMG. Zhi Liang is the former vice president of a China-Hong Kong import & export corporation.

-26-Confidential

Confidential

Financial Highlights

APMG has been consistently profitable in high-margin business lines (firm cost controls plus value added services)

A healthy and conservative balance sheet• No Debt - Company has avoided debt financing, minimally

leveraged capital structure• Cash in the bank • Positive cash flow from operations

(Units USD000) 2002 2003 2004 2005E 2006E 2007E 2008E

Total revenue 8,268 7,497 8,496 10,232 29,282 49,118 57,427

Net profit before tax/minority interest

1,267 1,116 1,588 1,666 5,072 10,805 14,554

Margin 15.3% 14.9% 18.7% 16.3% 17.3% 22.0% 25.3%

APMG Earnings Summary

Source: APMG and ChinaVest estimates

-27-Confidential

Confidential

………so, why is the company sourcing new capital?

We seek $15-$20 Million in expansion capitalTo scale more quickly, expand market share, make strategic acquisitions and aggressively pursue our branding strategy

We seek credibility from financial markets through this Private Placement

-28-Confidential

Confidential

Planned Expenditures

Service LineExpenditure

(USD)Use of Funds

Radiation Oncology$5,500,000

Next 1-1.5yrs

Start-up/capital equipment costs of PuHua Radiation Oncology Center

Acquire Guangzhou Gamma Knife Ctr.

Neurosurgery and Rehabilitation

$3,000,000

Next 1.5yrsBuilding and startup costs of PuHua Hospital Phase II

Outpatient/Podiatry Clinics

$3,500,000

Next 0.5-2yrsBuilding and startup costs of Clinics 2-8 in multiple cities

General Hospitals$9,000,000

Next 1yr

Acquire General Hospital in Guangdong

Acquire General Hospital in Sichuan