02/13/03 SageGroup Strategies Successfully Completes Major Managerial Reorganization and Other Major Transitional Steps

Alameda, CA -- February 13, 2003. SageGroup Strategies announces that it has successfully completed a major managerial reorganization and other major transitional steps over the past two months. These were very timely and appropriate because of the major national and international growth and development of SageGroup and its achieved status as the largest Professional Troubled-Company Specialist firm nationally and internationally.

Some major aspects are summarized below. Additional information is available upon request.

MAJOR MANAGERIAL REORGANIZATION. The major managerial reorganization includes:

A) SGS's de facto CEO continues to be the SGS Senior Council, which consists of all 130+ SGS Senior and Managing Directors.

B) Reporting to the SGS Senior Council is the SGS Managing Council, which consists of the currently-three SGS Managing Directors.

C) Also reporting to the SGS Senior Council is the SGS National Coordination Office, which coordinates most SGS activities nationally. The NCO also maintains all strictly-confidential SGS files and records, including those relating to clients, SGS financial records, and SGS Associates personnel files. (For SGS strategic and other reasons, these files and records are strictly confidential and are kept by the SGS Coordinator.)

D) Reporting to the SGS Managing Council are several proactive team-managed SGS entities, including the Marketing Council, the International Council, the Strategic Council, the various Industry and other Divisions, the various geographical Coordination Councils (e.g., San Francisco Bay Area CC, New England CC, the various State Coordination Councils, et.al.), and any appropriate other entities.

E) Also reporting to the SGS Managing Council is the SGS Leadership Council, which consists of most Office Co-Managers, most Division Co-Managers, and all other SGS Associates who have been proactive leaders in the continuing rapid growth and development of the Firm. Council members receive special recognition and rewards by the Firm, including preferential selection to SGS Client Project Teams.

WEBSITE UPGRADE. The SGS website has been heavily upgraded, including the wording of every section. Also, the Articles and Press Releases section each week is being expanded with additional: a) articles about SGS; and b) SGS press releases about new Offices and other SGS developments. All SGS Associates should try to review website additions weekly.

ACCEPTANCE OF NEW CLIENTS AND ASSOCIATES. The Firm has strongly raised the minimum standards for new clients and Associates to be accepted by the Firm.

ACCEPTANCE OF CURRENT CLIENTS AND ASSOCIATES. The Firm has also raised the minimum standards for current clients and Associates to remain within the Firm. In order for the Firm to continue its rapid growth and development, the preferred clients and proactive Associates must be allowed to move forward rapidly, with the other clients and Associates being allowed to fall behind or leave the Firm.

CONFIDENTIALITY. The Firm has strongly reaffirmed its very strong rules about following strict need-to-know confidentiality policies. Confidentiality relates not only to clients' names and identities (as required under the standard SGS Professional Services Agreement for over ten years), but also to the Firm's own information of various types.

SELECTION OF CLIENT PROJECT TEAMS. The Firm has reaffirmed its criteria in the selection of specific SGS Associates for the SGS Client Project Teams for specific client engagements. As a basic requirement stated in the standard SGS Professional Services Agreement, the Firm must always be doing whatever is in the best interests of the client. Assuming that the basic requirement is always met, each Client Project Team is staffed by: 1) First, Associates whom the client already favorably knows; 2) Second, by members of the SGS Leadership Council (if appropriate geographically, functionally, etc.); and then 3) Third, by other SGS Associates where still needed.

USA EXPANSION. The Firm continues to grow very rapidly within the USA, with a major priority being to open new SGS Offices in every USA metropolitan area that has a reasonable population base and business community. Virtually every USA metropolitan area has many troubled companies which desperately need -- but cannot find -- quality broad-based professional help that the Firm can provide. All SGS Associates should either be part of strong local SGS Offices or should be part of strong SGS programs to open such local SGS Offices. This program is being orchestrated mainly by the SGS National Coordination Office.

INTERNATIONAL AND MULTINATIONAL EXPANSION. During the last ten years the Firm has not been heavily focused on international and multinational expansion, instead focusing mostly on its USA-based activities. In a major strategic change which is now appropriate, the Firm is now implementing the international and multinational objectives originally stated in the Firm's original 1992 business plan. SGS's first non-USA Office is expected to be in Beijing later this month, then the Firm will expand into other non-USA Offices as part of a 2003 strategic program. The SGS International Council has direct responsibility for this, and reporting to this Council are the new SGS China Division and other current and planned Country Divisions.

If any Associate has any questions and/or wants to participate in any current or potential SGS Office, Division, or other entity, please contact an appropriate Co-Manager or the SGS National Coordination Office at 510-865-2480.