Newsletter

August 10, 2006

Volume VII, Issue 61

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To OTC Journal Members:

Medistem (OTC BB: MDSM): The Nike Of Stem Cells is Finally Going To Just Do It

Finally- Medistem can become the Nike of Stem Cells- they are "Just Going To Do It". Those who have been following the situation remember the metaphor; I called Medistem the "Nike" of Stem Cells akin to the brillian Nike slogan "Just Do It". Now, that's branding at its finest.

My original coverage goes back to February 1st and a $.48 priced stock which saw a high of $.68 within the first month. The SSL on that one for the summer sell off was $.55.

Now, we're grinding on light volume in the high $.30's, and perhaps the story is finally going to start to gel. There was a major positive change at the company today.

At long last MDSM has been granted the license to begin treating patients at the clinic of its Costa Rican based licensee. The Costa Rican government views stem cell therapy as akin to blood transfusion therapy- a naturally occuring substance in the body which can be used to augment the healing process.

Many in the medical community feel Stem Cell research has progressed to the point where safety is no longer an issue- efficacy is the next frontier. Devising formulations that create results for distressed patients is the next step.

MDSM, through its Costa Rican licensee, now has a full adult (non-controversial) stem cell bank and treatment facility opened and operating. In the initial stages, the clinic will focus on the treatment of stroke, cerebral palsy and other neurological disorders.

Over the coming months, I would expect to learn of treatment strategies, case histories, and patient volumes. The company will not only generate revenues, but will in fact own a tremendous asset in their "IP" (intellectual property) as treatments start yielding results. It should also generate some "buzz" about the stock.

As those who follow them know, the OTC Journal's two stem cell ideas are currently in the proverbial market toilet. The headlines, which mostly focus on terrorism, oil prices, interest rates, and Middle Eastern conflict do not lend themselves to a vibrant market for biotechnology related start ups. That pendullum has swung. By definition, the pendullum will swing back.

Owning shares of MDSM at this time is a contrarian investment. You have to be the kind of investor who likes to accumulate stocks in out of favor industries while they are cheap, and no one is watching or paying attention. While it requires some patience, stylistically it can be the most rewarding time to invest in progressive companies.

The Four Year cycle (covered in a past edition) will come to an end soon and new leadership will dominate the headlines. Today's foiled terrorist attacks on British Airlines resulted in both oil and gold coming down hard. This could represent the beginnings of the unwinding of those big trades. Big pharma (check out PFE in the last two months) appears to be making a comeback. Can biotech be far behind?

Note the volume blip on the chart- interest is starting to pick up again on this stock.

Huge news on MDSM today- what other Stem Cell stock can you own where the company (indirectly in this case) is treating patients and generating revenues? None. That's what makes this a unique idea. I would expect some media coverage on this one in the not too distant future.

Here's today's press release for you to keep up:

Press Release Source: Medistem Laboratories, Inc.

Medistem's International Affiliate ICM Granted License to Operate Adult Stem Cell Bank and Clinic

Thursday August 10, 4:01 pm ET

Opening of Pioneering Facility Represents Threshold Event in Medistem's Business Plan to Deliver Stem Cell Therapies

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Aug. 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 its affiliate, the Institute for Cellular Medicine (ICM), has received approval from the Costa Rican Health Ministry to begin operations of its adult stem cell bank and clinic.

With the state-of-the-art stem cell bank and clinic now open, ICM will begin working hand-in-hand with medical doctors in the treatment of patients with stem-cell therapies based on Medistem's proprietary technologies. The ICM lab will apply Medistem's proprietary adult stem cell technologies that can be sourced from umbilical cords, placentas, fat, bone marrow, and muscle.

The opening of the ICM bank and clinic represents a critical milestone in Medistem's primary business plan to develop and deliver pioneering stem cell treatments on a fee-for-service basis through its international affiliates at facilities worldwide. Under its strategic business plan, Medistem with its affiliates plans to create potentially valuable intellectual property in the field of stem cell medicine.

The ICM laboratory will be one of the first stem cell banks in Latin America to produce the adult stem cells necessary for the development of stem cell based medical treatments. "We are very excited to be able to use Medistem's stem cell technology to produce stem cells for use by the medical community," said Dr. Fabio Solano, Medical Director of ICM. "We believe their technology holds a great deal of promise in the creation of important therapeutic solutions for seriously debilitating diseases."

The stem cell bank and clinic will work with the medical community in the treatment of patients with stroke, cerebral palsy and other neurological disorders. ICM also intends to develop treatments for a range of other health care needs, including cardiovascular disease.

Under a licensing agreement with ICM, which is controlled by Medistem's Chief Executive Officer, Medistem granted a license to ICM to use certain of its intellectual property and agreed to fund all necessary operating expenses in exchange for certain revenues and gross profits involving both adult stem cells and non-stem cell based activities.

More information can be found on ICM's website at www.cellmedicine.com, or by calling 1-800-980-STEM.

About Medistem Laboratories, Inc.

Medistem Laboratories is an innovative biotechnology company committed to the creation, licensing and commercialization of advanced medical therapies based on non-controversial adult stem cells. The Company intends to use adult stem cells generated from muscle, bone marrow and fat of adult patients seeking treatment, as well as from full-term, healthy placentas and umbilical cords, which the Company believes to be non-controversial sources of stem cells. 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. For more information on Medistem please visit http://www.trilogy-capital.com/tcp/medistem/. Medistem common stock 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.
Chris McGuinn, 602-318-3535
chris.mcguinn@medisteminc.com

--------------------------------------------------------------------------------
Source: Medistem Laboratories, Inc.

USEI in the BLOG

There's a new BLOG entry up on US Energy, hot off the presses today at about 11:00 Pacific. The stock has made a nice resurgence of late, but stalled in the $.24 to $.25 range against a backdrop of the highest volume seen in the stock in nearly 2 months.

I put my thoughts on the resistance into the BLOG posting. In short, it would appear there was some stock for sale in that $.24 range, but this week's volume may have set the table for higher levels.

Over the weekend I hope to be reviewing the NWKI earnings release, which should be out today or tomorrow. Perhaps that low volume sell off situation will reverse course.

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.

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