Medistem Laboratories Announces Key 2006 Strategic Initiatives for Clinical and Revenue Expansion.

SCOTTSDALE, Ariz. -- Please replace the release with the following corrected version due to multiple revisions.

The corrected release reads:

MEDISTEM LABORATORIES ANNOUNCES KEY 2006 STRATEGIC INITIATIVES FOR CLINICAL AND REVENUE EXPANSION; INNOVATOR OF BREAKTHROUGH NON-CONTROVERSIAL STEM CELL THERAPIES TO OPEN FIRST CLINIC AND DELIVER PROPRIETARY THERAPIES IN FIRST QUARTER 2006

Medistem Laboratories, Inc. (OTCBB:MDSM), a developer of breakthrough medical therapies from non-controversial adult stem-cell sources, released today an outline of the Company's Strategic Initiatives for the calendar year 2006, describing key elements of Medistem's business plan to capitalize on the potential estimated $30 billion per year industry for stem-cell therapies and products.

"Medistem has laid the scientific and business groundwork to enable us to establish our leadership and expertise as clinical pioneers in the exciting and burgeoning new field of stem-cell based therapies," said Neil Riordan, PhD, Chairman and CEO of Medistem Laboratories. "Medistem is poised to significantly expand its ability to develop and deliver breakthrough, medically important therapies for millions of people worldwide suffering from a broad range of diseases, injuries and conditions, including serious neurological impairment from stroke and other conditions.

"The strategic initiatives described here outline our plans to launch and expand clinical and revenue-generating phases of our strategic business plans, starting in the first quarter next year," Riordan added.

Strategic Initiatives for Medistem in the coming 12-month period include:

Strategic Initiative 1: Open First Clinic to Deliver Medistem Therapies

Medistem intends to commence revenue-generating operations through the delivery of our proprietary stem cell treatments at clinical laboratory sites. Initiatives include:

--Anticipated opening of the first clinic to commence in San Jose, Costa Rica, by Q2 2006;

--Implement revenue-generating business model immediately following clinic opening, via fee-based stem cell treatments using Medistem technology and therapies.

Strategic Initiative 2: Continue Laboratory Research to Develop Treatments for Stroke and Other Conditions

The Company's business strategy calls for continued research and development to create new treatments and applications of stem cell therapies. Areas of initial therapeutic development focus include treatments for stroke victims. Initiatives include:

--Advance laboratory research concurrently with clinical work in affiliated laboratory sites;

--Research objectives initially targeted to advancing stroke treatments.

Strategic Initiative 3: Expansion of Intellectual Property Portfolio

Medistem currently holds international rights to a patent-pending method of expansion of stem cells. The method requires the use of no animal products, which have been linked to rejection reactions to stem cells. Medistem also holds international rights to a patent pending method for the treatment of cancer using umbilical cord and placental stem cells and other compositions. Initiatives include:

--Expedite IP expansion through continued clinical developments, particularly of new methods for expansion of stem cell types;

--Build additional IP through acquisitions of targeted proprietary technologies;

Strategic Initiative 4: Expand Business and Revenue Growth Opportunities

It is estimated that the stem cell industry could produce revenues of $30 billion per annum following approvals by the U.S. FDA. The Company is embracing the opportunity for the clinical application of stem cells in internationally based, licensed medical facilities. Initiatives include:

--Replicate fee-for-service revenue model in new global clinics/markets;

--Identify and pursue establishment of new global locations for clinics, with plans to open clinics approximately every 9-12 months.

Medistem will release additional details of Management's Strategic Initiatives and corporate vision for 2006 on a forward-going basis.

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 creates 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 remedies 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, including those for the U.S. marketplace, will ultimately 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.

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.