Newsletter

March 11, 2006

Volume VII, Issue 23

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

To OTC Journal Members:

Medistem (OTC BB: MDSM) Gets Favorable Forecast

Remember Medistem? MDSM is my microcap idea with a stem cell theme. If you don't follow this one, a review of the original presentation is warranted. To read the original presentation published February 1, simply click here.

I called MDSM the Nike of stem cells as they are going to "Just Do It" with stem cell therapy. The company has licensed a lab in Costa Rica to use its non controversial stem cell therapy to begin treating patients. The company will have cash flow and a more valuable asset- the IP (intellectual property) associated with the treatments.

On Friday morning, Beacon Equity Research pegged the stock at $1.20, and it traded up nicely on the day on volume far in excess of average daily activity. For details, read the press release below.

The MDSM chart is illustrative of a precept I covered last weekend. In the section entitled "Let Volume Be Your Guide" we looked at how to judge pull backs in stocks. I suggested low volume pullbacks were buying opportunities. High volume sell offs suggest you might need to take your loss and move on. Read the March 4th edition for the whole story.

Here's another component- the February 19th edition entitled "Setting Your Stop Losses". I suggested a $.55 stop loss for MDSM.

The company has been nearly dead silent for a month now, and the stock has drifted down in kind. However, as you can see from the circle on the chart, there has been little volume associated with the pullback.

Friday's volume back to the upside was considerably greater than the last three of four days combined. Therefore, whether you sold it at the stop loss or not, the pullback is in my view a great opportunity to accumulate, not a reason to sell.

I continue to believe this company could generate a significant amount of publicity as they begin treating patients with stem cells and announcing results. This stock should end up on a lot of radar screens.

Here is the complete text of Friday's news for your review:

Press Release Source: Medistem Laboratories

Medistem Laboratories Announces Beacon Equity Research Initiates Coverage of Medistem with Target Share Price of $1.20 and 'Speculative Buy' Rating

Friday March 10, 11:40 am ET

Report Cites Medical Promise of Medistem's Non-Controversial Adult Stem Cell Technology

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--March 10, 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, has announced that fee-based investment research firm Beacon Equity Research has rated Medistem as a "Speculative Buy," and has targeted the Company's 12-month share price at $1.20.

The report provides an overview of Medistem's strategic business initiatives, proprietary technologies and competitive advantages as it seeks to develop new stem cell-based therapies for a range of medical conditions. Among the competitive advantages noted in the report is Medistem's focus on research and clinical development of adult stem cells derived from non-controversial sources.

"Initially, the firm plans to focus on the use of proprietary technology and cells sourced from umbilical cords, placentas, fat, bone marrow, and muscle for the advanced treatment of cerebral palsy, stroke, cardiovascular disease and orthopedic diseases, primarily for the international marketplace," noted the report, authored Shailesh Dhuri, Senior Research Analyst for Beacon.

The report also provides a review of Medistem's business strategy, noting the establishment of a series of international clinics that license Medistem's technology. The clinics will conduct advanced clinical research as well as deliver stem cell therapies to patients on a fee-for-service basis. "Medistem's strategy is to establish licensing agreements with clinics in nations that are 'friendly' to stem cell research and deliver next-generation medical treatments that are regenerative and not just palliative," the report wrote. "In the process, Medistem seeks to help enrich the lives of millions of patients."

The report adds: "Management believes that it may hold a substantial competitive edge as the worldwide market is widening 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."

"In particular, Medistem's custom medical treatments on a fee-for-service basis are anticipated to generate revenues exceeding $3 million within the first year of clinical operation, according to management," the report states.

"The Beacon Equity Research report provides an excellent overview and investment-oriented analysis of Medistem's business and technology, and will serve as a valuable research resource for the investment community," said Neil Riordan, Ph.D., Medistem's CEO.

Medistem has compensated Beacon Equity Research under the terms described below to conduct a thorough and objective analysis of the company. Beacon's report on Medistem is available at http://www.beaconequityresearch.com and http://www.investrendresearch.com.

About Beacon Equity Research

Beacon Equity Research, LLC is a fee-based, comprehensive investment research firm, focusing primarily on the underserved small-cap sector. All Beacon analysts are seasoned industry professionals and adhere to the CFA Institute's (CFAI) stringent ethics and standards of practice guidelines. Beacon Research does not have any investment banking relationships with any of the companies covered. All analysts are compensated prior to performing their investment research and are not compensated in any way based on the future performance of the equities they follow. Both Beacon Equity Research and Investrend subscribe to the "Standards for Independent Research Providers" at http://www.firstresearchconsortium.com. Beacon Research Partners has been compensated $18,000 by Medistem Laboratories, Inc. for 12 months of enrollment in its research program. Complete information is available at the company's InvestorPower page at http://www.investrend.com/company/list.asp?sPathParam=yes. Investors are advised to read disclosures carefully before trading in the equities of any enrolled company. Anyone interested in receiving alerts regarding Medistem Laboratories, Inc. research should email contact@investrend.com with "MDSM" in the subject line.

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

Comments in the BLOG

One new BLOG posting. Had to BLOG the 30% move in HDY on 1.2 million shares of Friday. I am on the sidelines and looking silly. Check the BLOG for comments. Also, a lot of people are looking for my thoughts on Family Room (OTC BB: FMLY)- Check the ride side column of today's edition.

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. You can look there by company. The most current journal entries appear in the middle of your screen in chronological order. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels or in volatile markets. Your questions and postings do not automatically appear, so don't bother posting the same question multiple times. I personally go through to moderate and respond to every reasonable question.

Family Room (OTC BB: FMLY) Update

For those inquiring minds who want to know, I did jump in there on Friday and pick up 250k shares of FMLY at about $.02. However, I am not optimistic about any big score here.

The reason I jumped in is because the stock was rebounding, and I am convinced the financiers have simply run out of stock to sell. Therefore, despite the significant volume slow down, I believe the supply is finally dried up. I simply compared the number of shares in the registration to the amount the shares Issued and outstanding have grown, and the recent volume.

On the slightly negative side, it doesn't look like 16 Blocks will create a big windfall. It only grossed $11.8 million the first weekend- a bit of a disappointment. FMLY probably won't see any big pay day here. Also, the volume is pulling back.

Nevertheless, I dropped back and punted. Be forewarned I won't have a lot of patience. I might sell at any moment as soon as I see daylight.

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