Newsletter

May 23, 2006

Volume VII, Issue 43

Home Page : www.otcjournal.com
Email Questions or Comments To: editor@otcjournal.com

To OTC Journal Members:

MediStem (OTC BB: MDSM) Shows Some Backbone

January 21, 2006- that was the date of the publication entitled "Trading the Big, Streaky Moves." The edition was published shortly after TLPE made a streaky 40% move over the course of a few days. Readers will recall I suggested the move represented a good opportunity to lock in a trading profit.

That was then, and this is now. The market has pulled a 180- break downs have replaced break outs. So- how do we find profitable trading opportunities? Simple- flip the charts over.

If a big, streaky, overbought move to the upside is a good selling opportunity, then conversely a big, streaky move to the downside can be a great buying opportunity. Recent example: Bad Toys (OTC BB: BYTH)- the stock fell apart last Friday for no detectable fundamental reason. A few sellers coupled with no buying allowed the market makers to clobber the stock on low volume. Several OTC Journal followers had the courage to jump in at $.75- it was back to $1.24 by Monday.

Medistem (OTC BB: MDSM), the company that I described as the Nike of Stem Cells, is now bouncing hard after completing a capitulation phase yesterday.

MDSM is the first company I know of that plans to indirectly begin treating patients with Adult (non-controversial) Stem Cell Therapies. They are doing so by licensing a state of the art Costa Rican clinic to use their technology to treat patients.

The stock has been trading poorly of late as the company still has yet to receive the proper permits to treatments. I thought they were going to "Just Do It" earlier. They haven't Just Done It yet, but I'm hoping they start soon. This could become a rather high profile idea once treatments start.

It appears to be turn around time for MDSM. After a couple months of relative quiet, the company is out with some eye opening news post close today which could keep the rebound rolling.

After the market closed today, MDSM announced it has applied to patent a proprietary adult stem cell treatment for common back pain. What do you think the size of the market might be for that? There is a 90% probability you have had some sort of back pain, along with everyone else you know.

Look at the chart to the left. You can see how far down the stock went yesterday on capitulation day. Now, the stock is rebounding and the company is sharing a very exciting corporate event. The momentum could continue.

I first suggested going long this stock at $.39. It subsequently made a high of $.68. The SSL (suggested stop loss) was $.55 (you can find these in the archive section at the home page.

If you followed my SSL, you should now be out of the stock and looking to get back in. We made money from these levels last time. I would be helpful if history repeated itself. However, when the current correction runs its course, and the market turns its attention back to the Stem Cell sector, I believe the upside in this idea is far greater than the past $.68 high.

Here is the complete text of the news release for your review:

Press Release Source: Medistem Laboratories, Inc.

Medistem Files U.S. Patent Application for Innovative Stem Cell Technology to Treat Lower Back Disorders

Tuesday May 23, 4:01 pm ET

Stem Cell Company's Discovery Could Provide Breakthrough for Patients with Lumbar-Related Ailments by Preventing Disc Degeneration

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--May 23, 2006--Medistem Laboratories, Inc. (OTCBB:MDSM - News; FWB:S2U), committed to the ethical development of next-generation medical therapies from non-controversial adult stem cell sources, announced today its filing of a U.S. patent application for an innovative cellular technology to treat lower back ailments by addressing causal issues and developing methodologies to prevent disc degeneration.

Back pain costs the U.S. economy over $50 billion annually and represents the second most common reason for visits to a doctor. It is estimated that 10% of 50-year-old discs and 60% of 70-year-old discs are severely degenerated. The patent application represents a potential therapeutic breakthrough for patients worldwide who suffer from chronic lumbar pain and related lower back disorders caused by disc degeneration. The novel technology is designed to address these problems through the application of regenerative stem cell-based medicine. The proprietary technology increases the potential market value of Medistem's Intellectual Property portfolio.

"The future success of Medistem lies in the commercialization of the best, most innovative and far-reaching stem cell technologies being developed in the world of science," said Neil Riordan, Ph.D., Chairman, and CEO of Medistem. "This latest patent filing is a significant achievement and we're excited by the potential market opportunities and added corporate value presented by our expanding portfolio of intellectual property."

The Medistem discovery relates to the administration of one or more cell types to stimulate lumbar angiogenesis, decrease inflammation, and stimulate regeneration. Significantly, the concept of therapeutic angiogenesis has been investigated for treatments of heart disease, peripheral arterial disease, and other ischemia-related pathologies but only Medistem's technology teaches its groundbreaking potential use for the treatment of lower back ailments associated with disc degeneration. In addition, while a variety of medical approaches exists today to treat lower back problems and associated pain, none actually prevents the process of disc degeneration.

"Common early intervention methods such as exercise, anti-inflammatories and analgesics do not influence the root cause of these problems, while other more serious interventions including spinal fusion, surgery, and artificial disc implants too often present adverse effects, invasiveness and limited full recovery," Riordan added. "We believe we are on our way to developing a major market alternative and superior regenerative solution that would provide safe, effective relief for people worldwide suffering from lumbar-related ailments."

About Medistem Laboratories, Inc.

Medistem Laboratories is an innovative biotechnology company committed to the creation and commercialization of advanced medical therapies based on non-controversial adult stem cells. Medistem's corporate mission is to transform these stem cells into valuable medical treatments. The Company intends to create these treatments from adult stem cells derived from muscle, bone marrow and fat of adult patients seeking treatment, as well as from full-term, healthy placentas and umbilical cords, but not the controversial embryonic or fetal stem cells that are the focus of ethical and moral debates in some communities. The Company's business strategy calls for the establishment of a series of clinics and laboratories around the world to deliver unprecedented, next-generation cell therapies to help millions of patients. Initial development and treatment focus will use proprietary technology and cells sourced from umbilical cords, fat, bone marrow, and muscle for advanced treatment of cerebral palsy, stroke, cardiovascular disease and orthopedic diseases, primarily for the international marketplace. Additional applications ultimately will be targeted to the treatment of neurological disorders such as Parkinson's, Alzheimer's and certain types of cancer. Medistem believes it may hold a substantial competitive edge in the worldwide emerging market for stem cell-sourced medical solutions, positioning it to become a leading global provider of stem cell treatments on a fee-for-service basis, while accumulating intellectual property based on clinical and laboratory findings. For more information, please visit http://www.trilogy-capital.com/tcp/medistem/. To read or download Medistem's Investor Fact Sheet, please visit http://www.trilogy-capital.com/tcp/medistem/factsheet.html. To obtain daily and historical Company stock quote data, and recent Company news releases, visit http://www.trilogy-capital.com/tcp/medistem/quote.html. Medistem is traded on the Frankfurt, Germany, stock exchange under the symbol S2U.

Cautionary Statement

This document does not constitute an offer to sell or a solicitation of an offer to buy any of our securities. This document contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," or "anticipates," or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. We wish to caution the reader that these forward-looking statements that are not historical facts, are only predictions. No assurances can be given that the future results indicated, whether expressed or implied, will be achieved.

Contact:

Medistem Laboratories, Inc.
Neil Riordan, Ph.D., 954-727-3662
riordan@medisteminc.com

Source: Medistem Laboratories, Inc.

Comments in the BLOG

Many apologies for the lack of BLOG Postings in the OTC Journal over the last couple of weeks. In light of the recent violent correction in the market and the pending quiet summer months, now would be a good time to review all the covered companies. I have been engaged on a side project of late, and not devoting my normal time to the content.

Unless some major news breaks, this should be the last edition before the upcoming Holiday weekend. I will try to get a BLOG posting done for every covered company later this week. Over the weekend and into next week you can review the latest information and submit any questions or comments. You'll get my honest thoughts on what's looking good and what's looking questionable for the coming months.

To use the BLOG, simply go to the home page at www.otcjournal.com - the BLOG will scroll down automatically on the right side of your screen. The most current journal entries appear in the middle of your screen. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels in volatile markets.

Subscribe

Information is power and timely information is profitable. Become informed and profit from OTC Journal Profiles and Trading Alerts by becoming a Preferred Member today. There is no cost associated with your email subscription. Add your email address below and make sure to check your email inbox and confirm your opt-in request to start receiving the OTC Journal Email Newsletter on a regular basis.

To ensure newsletter delivery, you can add any additional email addresses you may have to the OTC Journal Member List. Receiving the OTC Journal Newsletter in multiple locations is the best way of making sure you don't miss the next investing or trading opportunity! For web based email addresses, the OTC Journal recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery.

Note: Your email address will be kept strictly confidential, and will not be shared with any other entity for any purpose at any time. If you no longer wish to receive the OTC Journal, simply follow the instructions located at the bottom of every OTC Journal Newsletter Edition.

Disclaimer

The OTCjournal.com Newsletter is an independent electronic publication committed to providing our readers with factual information on selected publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward maximizing the upside potential for investors while minimizing the downside risk, whenever possible. Moreover, as detailed below, this publication accepts compensation from certain of the companies which it features. Likewise, this newsletter is owned by MarketByte, LLC. To the degrees enumerated herein, this newsletter should not be regarded as an independent publication.

Go Here to view our compensation on every company we have ever covered, or visit the following web address: http://www.otcjournal.com/disclaimer.html for our full profiles and http://www.otcjournal.com/trading-alerts/disclaimer.html for Trading Alerts. For its services in connection with this report and other internet marketing services, MarketByte LLC has been paid a fee of $30,000, and has received warrants to purchase 500,000 shares of the common stock of Medistem Laboratories, Inc. for $0.25 per share, which warrants expire in 2008. Medistem Laboratories, Inc. is obligated to register the resale of the shares underlying the warrants under the Securities Ac of 1933 . These warrants were transferred by Trilogy Capital Partners, Inc., which received the warrants from Medistem Laboratories, Inc. as part of the compensation for the investor relations services to be provided by Trilogy Capital Partners, Inc.

All statements and expressions are the sole opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.

From time to time MarketByte LLC sells shares in the open market it receives as compensation for coverage of client companies. Since the shares are received as compensation for services as previously disclosed, and not for investment purposes, the editors do not view the sale of the shares as contradictory to any advice delivered in the content. This should be viewed as a conflict of interest by shareholders or prospective shareholders of the client companies.

The editor, members of the editor's family, and/or entities with which they are affiliated aside from MarketBtye LLC itself, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication unless specifically disclosed in the newsletter. Some of the companies featured in the OTC Journal pay a cash ESP fee to an affiliated technology company ranging from $2,000 to $5,000 per month for internet related technology services.

The Trustee of the MarketByte LLC Defined Benefit and Trust (“the MarketByte Pension Plan”) has invested approximately $140,0000 in Dutchess Private Equities II LP (“the Dutchess Limited Partnership”), a limited partnership in which the MarketByte Pension Plan is a limited partner. The Trustee of the MarketByte LLC Defined Benefit and Trust (“the MarketByte Pension Plan”) has invested approximately $190,0000 in the Longview Fund (“the Longview Limited Partnership”), both limited partnerships in which the MarketByte Pension Plan is a limited partner. No one associated with the MarketByte Pension Plan has any knowledge, information, or control as to any past, present, or future investment activities of the Dutchess Limited Partnership or the Longview Fund. The Dutchess Limited Partnership is one of two hedge funds managed by Dutchess Advisors. Dutchess Advisors and Longview periodically refers companies to MarketByte LLC for possible coverage by one of the MarketByte LLC publications, which publications include The OTCJournal.com Newsletter. Dutchess Advisors or Longview may or may not own shares in the companies that it so refers to MarketByte. MarketByte has no information (outside of information readily accessible to the general public such as SEC filings) as to whether Dutchess Advisors or Longview owns any shares in the companies that it refers to MarketByte LLC. The above relationships should be viewed as a potential and/or actual conflict of interest by shareholders and prospective shareholders of MarketByte LLC client companies.

The profiles, critiques, and other editorial content of the OTCjournal.com may contain statements that appear foward relating to the expected capabilities of the companies mentioned herein.

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF THE EDITORS OF OTCjournal.com.

We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at http://www.sec.govand/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm. Disclaimer ID:$subst('Recip.userid') Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site. MarketByte LLC's mailing address is 3525 Del Mar Heights Rd #334, San Diego, CA 92130.

You can unsubscribe from this list at any time by Clicking Here. If you are having difficulty removing yourself or wish to change your address please go to http://www.otcjournal.com/opt.html?.