Nbs update 08 24-11

NeoStem, Inc (NBS) Page 1

Market Data Share Data Most Recent Quarter

Price $0.65 Outstanding 98.0M* Revenue $18.5M

52-Week $0.60-$2.15 Cash/Share $0.21* Net Income ($10.8M)

Market Cap $63.7M* Book/Share $0.44* EPS ($0.13)

Avg. Daily Vol. 615,500 Price/Book 1.5x* Cash $20.4M*

% Short 3.0%* Debt/Share $0.40* Debt $38.8M

Financial Results and Projections

FYE Dec. 31 2009 2010 2011E 2012E 2013E

Revenue $11.5M $69.8M $82.9M $96.5M $112.4M

Net Income ($30.9M) ($23.5M) ($41.6M) ($38.8M) ($37.9M)

EPS ($2.38) ($0.46) ($0.52) ($0.38) ($0.31)

* Includes 13.8M shares for $15.5M net cash proceeds from 7/22/11 financing

Unlocking the Value of Science ™ Boca Raton San Francisco New York

NeoStem, Inc. (NBS)

UPDATE REPORT

August 24, 2011

Rating Target Strong Buy $4.00

Analyst Stephen M. Dunn

Sr. Managing Director Research

[email protected]

(954) 240-9968

William D. Dawson

Senior VP Research

[email protected]

(561) 504-5818

Symbol: NBS

Market: NYSE Amex Equities

420 Lexington Avenue,

Suite 450

New York, NY 10170

(212) 584-4180

www.neostem.com

CEO – Dr. Robin L. Smith

CFO – Larry A. May

AMR-001 Phase II Trial in AMI (Heart Attack) to Begin Q4

China Pharma Sales Down on Strategic Mix Adjustment

Continuing Transition to a Therapeutics-Focused Company

1.) AMR-001 to Begin Phase II Trial: Through the recent acquisition of

Amorcyte (private), NeoStem gained all rights to the company’s lead

development candidate AMR-001, an autologous, bone marrow derived,

pharmaceutical grade cell-based product. AMR-001, is expected to initiate a

Phase II trial in Acute Myocardial Infarction (AMI) by Q4’11 and initiate a

Phase I trial in congestive heart failure during 2012. The AMI Phase II trial is

expected to complete enrollment within 12 months with top-line data 6

months after the last patient is treated or mid-2013.

2.) Suzhou Erye Revenues Down for Q2 2011: China pharmaceutical

revenues for Q2 2011 were $16.2M as compared to $18.1M Q1 2011 and

$19.4M in prior year Q2. The lower sales are reflective of a strategic decision

by management to discontinue selling certain pharmaceutical intermediates, in

order to create capacity within the existing production lines for higher margin

products in the future. Management expects these decreases in sales to be

temporary. It is important for investors to note that management is presently

considering multiple strategies in respect to its majority interest in Suzhou

Erye Pharmaceutical Co. including its possible divestiture (see Possible Sale

of Eyre Pharmaceuticals)

3.) Transition to Cellular Therapeutics Company: While R&D efforts are

ongoing in the U.S., including VSEL™ technology (Very Small Embryonic

Like), AMR-001 therapy for AMI and Athelos T-cell therapy, NeoStem

already has commercialized adult stem cell therapies in China with

indications such as orthopedics, wellness, cosmetic & anti-aging. The

acquisition activity during the past year has highlighted managements desire

to transform NeoStem into a leading international provider (cont. next page)

Please see last two pages for important disclosures and analyst certification

NeoStem, Inc. (NBS) Page 2

www.LifeTechCapital.com August 24, 2011

3.) Transition to Cellular Therapeutics Company (continued): …of cell based therapies and a premier stem cell

service provider through the Progenitor Cell Therapy division. The company is exploring different ways to achieve this

transition including the possible sale of non-core assets such as their majority interest in Suzhou Erye Pharmaceutical Co.

4.) We are maintaining our Strong Buy rating and 12-18 month Price Target of $4.00 based on a 35x multiple on

projected 2017 earnings and discounted 30% to adjust for risk: We have made changes to our financial model

reflecting management’s new business development goals moving forward. We are now including AMR-001 for Acute

Myocardial Infarction (AMI) in our model and accordingly we have raised our discount rate from 20% to 30% to account

for the clinical development risk. We have extended stem cell-based revenues into 2017 where we expect to see growth

driven by both Progenitor Cell Therapy services and approved stem cell therapies in China. Suzhou Erye Pharmaceutical

Co. continues to be a significant revenue generator for NeoStem while management is currently exploring the

monetization of the asset.

Company Description

New York, NY-based NeoStem is a multi-faceted, multinational medical company.

Among their business are adult stem cell collection, processing and storage in the

U.S., research and development for diagnostic and therapeutic applications using

autologous adult stem cells, including their VSEL™ technology (very small

embryonic-like stem cells) and several China-based, adult stem cell therapeutics

operational and R&D activities for adult stem cell therapeutics focused on regenerative medicine. In addition, NeoStem

and the Vatican's Pontifical Council for Culture announced a joint initiative with their charitable foundations to expand

research and raise awareness of adult stem cell therapies. A 3-day international conference at the Vatican on adult stem

cell research, including VSEL™ technology, is planned for 2011 and will focus on medical research presentations and

theological and philosophical considerations and implications of scientific achievements.

In addition to NeoStem’s adult stem cell business in the U.S. and China, NeoStem acquired 51% of Chinese

pharmaceutical company Suzhou Erye Pharmaceuticals in October 2009. Erye is over 50 years old and manufactures and

distributes generic antibiotic products with sales of $70 million during 2010. They have 160+ production certificates from

the Chinese State Food and Drug Administration (SFDA) for both antibiotic prescription drugs and active pharmaceutical

intermediates (APIs).

In January 2011, NeoStem completed their acquisition of Progenitor Cell Therapy (PCT), an internationally recognized

cell therapy services and development company that, through its cell therapy manufacturing facilities and team of

professionals, facilitates the preclinical and clinical development and eventual commercialization of cellular therapies for

clients in the United States and internationally. PCT offers cGMP-compliant cell transportation, manufacturing, storage

and distribution services and supporting clinical trial design, process development, logistics, and regulatory and quality

systems development services.

Finally, on July 14, 2011 NeoStem announced a definitive merger agreement to acquire Amorcyte (private). Amorcyte’s

lead development candidate, AMR-001 is an autologous, bone marrow derived, pharmaceutical grade cell-based product

that uses a CD34+CXCR4+ enriched cell population and is thought to limit the damage of heart muscle that develops

following Acute Myocardial Infarction (AMI). AMR-001 has completed Phase I safety studies and is currently scheduled

to start enrolling for a Phase II study in AMI in Q4, 2011.

AMR-001 (Amorcyte Acquisition)

On July 14, 2011, NeoStem announced a definitive merger agreement to acquire Amorcyte (private) whose lead

candidate, AMR-001, is expected to initiate a Phase II trial in Acute Myocardial Infarction (AMI) by Q4’11 and

initiate a Phase I trial in congestive heart failure during 2012. The AMI Phase II trial is expected to complete

enrollment within 12 months with top-line data 6 months after the last patient is treated or mid-2013.



About AMR-001

AMR-001 is an autologous, bone marrow derived, pharmaceutical grade cell-based product that uses a CD34+CXCR4+

enriched cell population and is thought to limit the damage of heart muscle that develops following AMI.

Mechanism of Action

AMR-001 works by increasing microvascular blood flow in the myocardium via neoangiogenesis, thereby reversing post-

infarct ischemia and rescuing tissue from hibernation and preventing eventual death (apoptosis):

CD34+CXCR4+ cells are harvested from the patient’s own bone marrow and isolated to increase potency

The selected cells are infused via the infarct-related artery 6-10 days following the ST-Elevation MI (STEMI) –the

optimal time frame for cellular intervention, after the pro-inflammatory “hot phase” and prior to permanent scar

formation

The infused CD34+CXCR4+ cells home to the at-risk tissue via the SDF-1 (Stromal Cell-Derived Factor-1)

gradient, inducing neoangiogenesis and a resultant functional benefit

CD34+CXCR4+ Cells are a Natural Repair Mechanism

1.) A distress signal (hypoxia-inducible

factors or HIF) is induced by hypoxia in the

peri-infarct zone

2.) HIF induces synthesis of SDF and

VEGF, which mobilize CD34+CXCR4+

cells

3.) The mobilized cells are trophic to the

peri-infarct zone, preventing apoptosis and

effecting neoangiogenesis

Source: NeoStem Inc.

Phase I Clinical Trial Results

The Phase I clinical trial results of AMR-001 for Acute Myocardial Infarction (AMI) were published in the January 2011

issue of the American Heart Journal in a paper titled “CD34+ cell infusion after ST elevation myocardial infarction is

associated with improved perfusion and is dose dependent” which is summarized below:

Background: The objective of the study was to determine whether the effects of infarct-related artery (IRA) infusion of

autologous bone marrow–derived CD34+ cells after ST elevation myocardial infarction (STEMI) are dependent on the

dose (quantity and mobility) of the cells infused. Beneficial effects of IRA infusion of mononuclear cells after STEMI

have been inconsistent, possibly because of differences in timing, cell type, quantity, and mobility of infused cells.

Methods: Patients were randomized to bone marrow harvest (n = 16) or control (n = 15). At a median of 8.3 days after

coronary stenting for STEMI, CD34+ cells were infused via the IRA at 3 dose levels (5, 10, and 15 × 106) in cohorts of 5

patients each. Baseline and follow-up imaging and ex vivo CD34+ cell mobility were performed.

Results: Cell harvest and infusion were safe. Quantitative rest hypoperfusion score measured by single-photon emission

computed tomography improved at 6 months in the ≥10 million cohorts compared with controls (−256 vs +14, P = .02).

There was a trend toward improved ejection fraction at 6 months (+4.5%) in the ≥10 million cohorts compared with no

change in the controls and 5 million cohort (+0.7%). Improved perfusion and infarct size reduction correlated with the

quantity and mobility of the infused CD34+ cells.



Conclusions: The effects of CD34+ cell IRA infusion during the repair phase after STEMI are dose dependent and,

at a threshold dose of 10 million CD34+ cells, associated with a significant improvement in perfusion that may limit

deterioration in cardiac function.

Note: for the complete clinical trial design see http://clinicaltrials.gov/ct2/show/NCT00313339

Positive Dose Response Demonstrated

Increasing Doses of AMR-001 Reduced the Size of the Infarct Region

Increasing Doses of AMR-001 Reduced RTSS (hypoperfusion)

Source: Quyyumi AA et al “CD34+ cell infusion after ST elevation myocardial infarction is associated with improved perfusion and is dose

dependent” 2011, American Heart Journal; 161(1) 98-105 http://www.ahjonline.com/article/S0002-8703(10)00894-X/abstract

Threshold Dose of 10 Million Cells Shows Significant Improvement in Perfusion

RTSS Cohort Baseline 6 Months Change % Change

Control 259.0 273.5 +14.5 +5.6%

5M Cells 714.2 722.0 +7.8 +1.1%

10M Cells 998.6 635.8 -362.8 -36.4%

15M Cells 584.0 462.0 -122.0 -20.9% Source: Quyyumi AA et al “CD34+ cell infusion after ST elevation myocardial infarction is associated with

improved perfusion and is dose dependent” 2011, American Heart Journal; 161(1) 98-105

http://www.ahjonline.com/article/S0002-8703(10)00894-X/abstract

Subgroup Analysis of ≥10 Million Cell Threshold on Additional Cardiac Functions

RTSS

% Change

Ejection Fraction

% Change

End Systolic Volume

% Change

Drop in Ejection Fraction

% Change

Control & 5M Cells +3.3% +1.3% +4.6% 30%-40%

10M & 15M Cells -31.4%* +9.4 -6.1% 0%

* Statistically Significant p=0.01 Source: Quyyumi AA et al “CD34+ cell infusion after ST elevation myocardial infarction is associated with improved perfusion and is dose dependent” 2011,

American Heart Journal; 161(1) 98-105 http://www.ahjonline.com/article/S0002-8703(10)00894-X/abstract

http://clinicaltrials.gov/ct2/show/NCT00313339






Proposed Phase II Trial Design (subject to change)

The new clinical trial is to investigate the potential of AMR-001 to preserve heart muscle function post-AMI and

consequently improve both quality-of-life and longevity by reducing the incidence and severity of Major Adverse Cardiac

Events (MACE). The Phase II trial is expected to be a 150-patient U.S. multicenter, blinded, prospective, randomized,

controlled clinical trial to evaluate evaluate the efficacy and safety of a single intra-coronary infusion of ≥10 million cells

of AMR-001 after STEMI in subjects with ejection fraction of <48%, as determined by screening CMR 96 hours post

stenting.

PROPOSED PHASE II HUMAN CLINICAL TRIAL PROTOCOL

Title Intra-coronary Infusion of Bone Marrow Derived Autologous CD34+ Selected Cells in Patients With Acute

Myocardial Infarction

Trial Design Randomized 1:1, Double-Blind, Placebo-Controlled Phase II Trial

# of Patients 150 (male and female)

Ages 18 to 75 Years

Arm 1: Placebo

Arm 2: Intra-coronary infusion of an autologous bone marrow derived CD34+ stem cell product ≥10 million cells

Primary

Endpoints Increased Cardiac Perfusion (RTSS) measured by SPECT and preservation of LVEF by CMR

Secondary

Endpoints Reduction in cumulative MACE at 12 months and 18 months, KCCQ & SAQ improvement

Centers 25 Centers in United States

Primary Data 18 Months (RTSS 12 months enrollment plus 6 month post-treatment)

Secondary Data 24 through 48 Months (MACE 12 months enrollment plus 12, 18, 24 and 36 months post-treatment) Source: NeoStem Inc.

Progenitor Cell Therapy (PCT)

On January 20, 2011, NeoStem announced they had closed their acquisition

of Progenitor Cell Therapy (PCT) which will continue as a wholly-owned

subsidiary of NeoStem. PCT has served over 100 clients worldwide and has

experience with over 20 different cell based therapeutics. PCT has

performed over 30,000 cell therapy procedures in its cell therapy

manufacturing facilities and processed and stored over 18,000 cell therapy

products (including approximately 7,000 umbilical cord blood units, 10,000

blood and marrow derived stem cells and 1,000 dendritic cells) and arranged the logistics and transportation for over

14,000 cell therapy products for clinical use by over 5,000 patients. PCT Revenues for 2009 were $8.2M and $6.8M

($5.8M excluding NeoStem) YTD Q3 2010. (Investors should note that LifeTech Capital, a division of Aurora Capital

LLC, acted as financial advisor to NeoStem.)

We believe a merger with NeoStem could

provide the critical mass needed by PCT

to increase their clinical service revenues

in the future while reducing costs through

synergies with NeoStem. We also note

that NeoStem and Progenitor Cell

Therapy were already strategic partners for autologous adult stem cell processing

and storage services under current Good

Manufacturing Practices (cGMP) standards

and the construction of a Beijing Facility,

consisting of a clean room for adult stem

cell clinical trial processing, research and

development laboratory space, collection and stem cell storage area and offices, together with the furnishings and

equipment as well as quality control systems consisting of materials management, equipment maintenance and calibration,

PCT CELL THERAPY SERVICES

Source: Progenitor Cell Therapy



environmental monitoring and compliance and adult stem cell processing and preservation which comply with cGMP

standards.

Stem Cell Banking Synergies

Investors should that NeoStem and PCT were already partners for stem cell processing and long-term storage. The

acquisition allows NeoStem to now have

these capabilities as cost. In addition,

NeoStem and PCT were already partners

in building a “Turn-Key” facility in

Beijing China which can also be done at

cost. But perhaps even more importantly,

NeoStem now has the expertise in-house

to leverage for increased scalability for

their projects.

Consulting Synergies

We believe the merger with NeoStem brings

credibility and financial stability to PCT.

With the backing of a sizable, publicly-

traded company with significant revenues

(generated by China pharmaceuticals), PCT

can now bid for contract work with new and

larger clients, which in turn provides more

long-term, complex projects with higher

gross margins. Of note is that PCT played

an instrumental role in manufacturing

Dendreon’s (Nasdaq:DNDN) Provenge®

autologous cellular immunotherapy

through their clinical trials to FDA

approval on April 29, 2010.

Stem Cell R&D Synergies

We believe PCT has the expertise to provide faster and cheaper development timelines for NeoStem’s stem cell therapies

including their VSEL™ development program. PCT brings considerable experience with the FDA and the regulatory

framework that will be needed to progress development.

PCT New Product & Process Development Services

Process development, optimization and scale-up Batch production record development

Cost of goods reduction Product shipping validation

Process validation Analytical test method development

Product comparability studies Product characterization

Stability studies Potency assays & Analytical test methods validation Source: Progenitor Cell Therapy

Details can be found at: http://www.sec.gov/Archives/edgar/data/320017/000114420410066939/v205571_424b3.htm

For a limited time:

Background information can be found at: http://www.progenitorcelltherapy.com

Corporate Presentation: http://www.progenitorcelltherapy.com/~DOCUMENTS/PCT_Corporate_Presentation_11-07.pdf

Transaction Summary

On January 19, 2011 NeoStem completed its acquisition of Progenitor Cell Therapy, LLC. NeoStem acquired all of the

membership interests of PCT, and PCT is now a wholly-owned subsidiary of NeoStem. NeoStem issued 10.6M shares of

common stock for the acquisition. In addition, there are warrants to purchase between 1M and 3M shares of NeoStem

Common Stock, based on the following:

PCT FACILITES (in Square Feet)

Manufacturing Facilities Developed Undeveloped Total

Mountain View, California 17,425 7,599 25,024

Allendale, New Jersey 22,000 8,067 30,067

Total 39,425 15,666 55,091 Source: Progenitor Cell Therapy

PCT CELL PRODUCT EXPERIENCE

Source: Progenitor Cell Therapy

http://www.sec.gov/Archives/edgar/data/320017/000114420410066939/v205571_424b3.htm

http://www.progenitorcelltherapy.com/

http://www.progenitorcelltherapy.com/~DOCUMENTS/PCT_Corporate_Presentation_11-07.pdf



(i) common stock purchase warrants to purchase 1,000,000 shares of NeoStem Common Stock exercisable over a

seven year period at an exercise price of $7.00 per share (the “$7.00 Warrants”), and which will vest only if a

specified business milestone is accomplished within three (3) years of the closing date and

(ii) if the volume weighted average of the closing prices of sales of NeoStem Common Stock on the NYSE-Amex

for the three (3) trading days ending on the trading day that is two (2) days prior to the Closing Date is less than

$2.50, common stock purchase warrants to purchase 1,000,000 shares of NeoStem Common Stock exercisable

over a seven year term at an exercise price of $3.00 per share (the “$3.00 Warrants”); and

(iii) if the Parent Per Share Value is less than $1.70, common stock purchase warrants to purchase 1,000,000

shares of NeoStem Common Stock exercisable over a seven year period at an exercise price of $5.00 per share

(the “$5.00 Warrants” and, collectively with the $7.00 Warrants and the $3.00 Warrants, the “Warrants”).

Background: Prior Partnership Agreements with Progenitor Cell Therapy

In January 2009, NeoStem and Progenitor Cell Therapy (PCT) entered into a Cell Processing and Storage Customer

Agreement. Under the Agreement, PCT provides NeoStem autologous adult stem cell processing and storage services

under current Good Manufacturing Practices (cGMP) standards. Under the Terms of the agreement, NeoStem agreed to

use PCT for processing and storage services for commercial purposes on an exclusive basis after PCT completed certain

preliminary services, consisting of technology transfer, protocol review, revision to ensure that the processing and storage

services are cGMP compliant, and confirmation that PCT ready and able to start the processing and storage services. The

terms were met and NeoStem announced on April 15th, 2009 that they will be utilizing Progenitor Cell Therapy, LLC

exclusively for commercial adult stem cells processing and storage operations. PCT agreed to provide to NeoStem, stem

cell processing and long term storage services for NeoStem’s business on an exclusive basis. The services are provided at

both PCT’s California and New Jersey facilities. The agreement is for four years, and is subject to early termination given

a 1 year notice.

Another agreement between the companies was constructed to include NeoStem’s business operations in China. On

December 31, 2009 NeoStem, NeoStem (China), and PCT entered into an agreement where NeoStem and NeoStem

(China) engaged PCT to:

Construct a Beijing Facility, consisting of a clean room for adult stem cell clinical trial processing and other stem

cell collections, which will have the processing capacity on an annual basis sufficient for at least 10,000 samples,

research and development laboratory space, collection and stem cell storage area and offices, together with the

furnishings and equipment.

Effect the installation of quality control systems consisting of materials management, equipment maintenance and

calibration, environmental monitoring and compliance and adult stem cell processing and preservation which

comply with cGMP standards and regulatory standards that would be applicable in the United States under Good

Tissue Practices (GTP) standards, as well as all regulatory requirements applicable to the program under the laws

of the People’s Republic of China (PRC).

The aggregate cost of the program, including the phase 1 equipment purchases, is expected to be approximately $3

million. The project commenced on April 1, 2010, and is anticipated to take until the end of 2010 to complete. NeoStem

has the option to terminate the agreement without cause with 60 days written notice to PCT. Under these circumstances

NeoStem would be required to pay for any services performed up to the date of termination and certain costs and expenses

incurred by PCT. PCT has agreed to provide at least 90 days of support services to NeoStem for an additional fee after

completion of the project, which is renewable at NeoStem's request for an additional 90 days.

Athelos (Progenitor Cell Therapy)

Through it’s acquisition of Progenitor Cell Therapy, LLC, NeoStem gained 80% ownership in Athelos, a private company

developing regulatory T cells (T-reg) as a therapeutic to treat disorders of the immune system. Imbalance of the immune

system is attributed to multiple different diseases and disorders. T-reg therapy represents a new approach to treating these

diseases by restoring balance to the immune system by enhancing T-reg cell number and function. Athelos has a strong IP

position in the T-reg field and has established a consulting relationship with David Horowitz, MD, Chief of the Division



of Rheumatology and Immunology at the University of Southern California Keck School of Medicine. Pre-clinical and

phase I studies are underway in multiple different indications including T-reg-based therapeutics to prevent and treat Graft

vs. Host Disease, solid organ rejection as well as a broad class of other autoimmune diseases, such as asthma. There are 2

different development initiatives:

Athelos 001- a cord blood or peripheral blood derived T-reg therapy to prevent and treat GvHD and solid organ

rejection

Athelos 002- a peripheral blood derived T-reg therapy for all autoimmune disease

Results from on going trials will determine the next steps in the development of these drug candidates. Though not

included in our model or projections, investors should note that future success in these initiatives could represent potential

upside for NeoStem.

What are Stem Cells?

Stem cells have the ability to grow into different cell types in the body and when a stem cell divides, each new cell can

either remain a stem cell or become another type of cell with a more specialized function, such as a muscle cell, a red

blood cell, or a brain cell.

The two types of stem cells are embryonic and non-embryonic (also called adult stem cells) differ from their origins.

Embryonic stem cells are derived from in vitro fertilized eggs. Because of their early-stage, they are theoretically more

capable of differentiating into any required cell type. The drawbacks to embryonic stem cells are potential for tumors or

teratomas (tumorigenicity) as well as the moral and ethical issues surrounding the source.

In contrast, NeoStem utilizes non-embryonic stem cells (adult stem cells), which are undifferentiated cells within

tissue or organs that can renew and differentiate into some, or all, of the major specialized cell types of the tissue or organ.

The primary roles of adult stem cells are to maintain and repair the tissue in which they are found.

In addition, adult stem cells can be either the patients own (autologous) or donated from someone else (allogeneic).

NeoStem utilizes autologous adult stem cells which eliminates the risk of immune system attack or Graft vs. Host

Disease (GvHD).

Non-Embryonic (Adult Stem Cell) Types and Indications

Stem Cell Type Indication

Hematopoietic These stem cells give rise to all the types of blood cells: red blood cells, B lymphocytes, T lymphocytes, natural

killer cells, neutrophils, basophils, eosinophils, monocytes, and macrophages.

Mesenchymal These stem cells give rise to a variety of cell types: bone cells (osteocytes), cartilage cells (chondrocytes), fat

cells (adipocytes), and other kinds of connective tissue cells such as those in tendons.

Neural These stem cells give rise to its three major cell types: nerve cells (neurons) and two categories of non-neuronal

cells—astrocytes and oligodendrocytes.

Epithelial These stem cells are in the lining of the digestive tract and occur in deep crypts and give rise to several cell

types: absorptive cells, goblet cells, paneth cells, and enteroendocrine cells.

Skin

These stem cells occur in the basal layer of the epidermis and at the base of hair follicles. The epidermal stem

cells give rise to keratinocytes, which migrate to the surface of the skin and form a protective layer. The

follicular stem cells can give rise to both the hair follicle and to the epidermis. Source: U.S. National Institutes of Health (NIH) Resource for Stem Cell Research



Non-Embryonic (Adult) Stem Cell Differentiation

Source: U.S. National Institutes of Health (NIH) Resource for Stem Cell Research

NeoStem VSEL™ Technology

In the US, in addition to the company’s stem cell banking

business, NeoStem is engaged in research and development of

new therapies based on a specific type of bone marrow derived

adult stem cell called VSEL™ (Very Small Embryonic Like).

The research and development is being conducted in collaboration

with the Stem Cell Biology Program at the James Graham Brown

Cancer Center at the University of Louisville. The head of the

Stem Cell Biology Program, Dr. Mariusz Ratajczak, has shown

that bone marrow contains a natural population of stem cells that

have properties similar to those of embryonic stem cells, and that

these cells can be collected in the peripheral blood in substantial

quantity when a patient has been treated with granulocyte-colony

stimulating factor, also known as Neupogen®.

NeoStem’s VSEL technology identifies and collects circulating

stem cells in the blood that have many physical characteristics typically found in embryonic stem cells using apheresis

flow cytometry. These VSELs are very small in size, around 3.6 μm across. The cells also exhibit specific cell surface

proteins (Oct-4+CXCR4+SSEA-1+Sca-1+CD45-lin-) and possess large nuclei containing unorganized chromatin

(euchromatin). When these cells are place in co-cultures with C2C12 cells, they form embryoid body-like spheres (VSEL-

DSs) that contain primitive stem cells that are capable of differentiating into cells from all three germ layers (e.g.,

myocardium, neural tissue, and pancreas).1 Data from a study by the Univeristy of Louisville and collaborators published

at the 50th annual ASH meeting in late 2008 concluded that VSELs show a similar methylation pattern to progenitor germ

cells (precursors to embryonic stem cells) in very specific regions. It is this similarity that supports their ability to

VSEL™ (Very Small Embryonic Like Stem Cell)

Source: James Graham Brown Cancer Center, University of Louisville



differentiate in ways analogous to embryonic stem cell differentiation. The scientist went on to further surmise that the

developmental origin of VSEL’s is directly form the epiblast/germ line, stating that that they are deposited during

embryogenesis in the adult

tissues as a backup for tissue

committed stem cells.1

Therefore, VSEL technology

seems to have the potential and

potency of embryonic stem cell

techniques without the moral

and regulatory hangs ups that

accompany the development of

them.

More published studies at the

University of Louisville have

shown that VSEL stem cells

have a role in cardiac

regeneration and may help

identify those at risk for

cardiovascular disease. Both

animal and human studies have

shown that the level or amount

of VSELs in the circulating peripheral blood increases after acute myocardial infarction and other stress inducing events

such as stroke. This suggests that VSELs may be the body’s natural way of repairing damage to many different types of

tissue when called upon by certain stresses and mobilized to the circulating bloodstream. This discovery supports the use

of VSEL’s in therapy for MI and other cardiac indications.

Congruent with the research being preformed and the University of Louisville, NeoStem is performing research of its

own. The Company opened an 8,000 square foot, state-of-the-art facility at the Riverside Technology Center in

Cambridge, Massachusetts on April 27th 2010. This facility will

focus on expanding the current VSEL™ technology; performing

detailed characterization, purification and expansion of the stem

cells. There will also be collection rooms for the harvesting of

Autologous VSELs for storage and private use. Research into the

use of VSEL technology for both therapeutic as well as

diagnostic purposes will be preformed on premises. One specific

diagnostic potential currently under investigation is a stem cell

biomarker screening panel. Such a test would use anti bodies to

quantify levels of several stem cell populations that are known to

be found circulating in the bloodstream, including VSELs. These

levels could then be compared to an age adjusted reference level

of circulating stem cells to give researchers a better indication of

the overall wellness of an individual.

There has been supporting evidence of VSELs effectiveness in treating conditions other than in cardiac indications. A

study published in the Perspectives of Stem Cells found the same correlation of VSEL mobilization to the peripheral blood

in patients following a stroke as previously mentioned in patients experiencing myocardial infarction. What is more is that

there was a positive correlation between the amounts of circulating VSELs found in the patient and the extensiveness of

the stoke, suggesting the possible use of prognostic type of test and the possibility of these cells importance in neural

regeneration.2 On August 11

th, 2010 NeoStem Announced a sponsored research agreement (SRA) with the Schepens Eye

Research Institute, a charitable corporation of Massachusetts and an affiliate of Harvard Medical School. Under the

agreement NeoStem will collaborate with Schepens in research focused on VSEL therapy for both age-related macular

degeneration (AMD) and Glaucoma. The principal investigators are Dr. Michael Young, Ph.D., Director of the Institute's

Minda de Gunzburg Center for Ocular Regeneration, and Dr. Kameran Lashkari, M.D. The research will examine the

VSEL Differentiation into all Three Germ Layers

Source: The National Institutes of Health: Resource for Stem Cell Research

Collection Room at Cambridge Facility

Source: NeoStem, Inc



regenerative potential of VSEL™ Technology in the visual system through the engraftment of very small embryonic-like

stem cells in animal models.

Reference References 1Shin, Ph.D., Dong-Myung, Mariusz Z. Ratajczak, M.D, Ewa K. Zuba-Surma, Ph.D, and Magdalena Kucia. "The Unique Pattern of

Somatic Imprint in Oct-4+ Very Small Embryonic Like (VSEL) Stem Cells Isolated from Adult Tissues Further Supports Both Their

Epiblast/Germ Line Origin and Explains Quiescent Status: Potential Modification of Somatic Imprint as a Key to Longevity?" Online

Programs and Abstracts. 50th ASH Annual Meeting and Exposition, 8 Dec. 2008. Web.

http://ash.confex.com/ash/2008/webprogram/Paper8719.html 2Ratajczak, Mariusz Z., Ewa Zuba-Surma, Magda Kucia, Przemyslaw Nowacki, and Bogdan Machalinski. "Potential Application of

Very Small Embryonic Like (VSEL) Stem Cells in Neural Regeneration." Perspectives of Stem Cells (2010): 231-43. SpringerLink.

Web. 2 Sept. 2010. http://www.springerlink.com/content/h3nh4261663x1579/

Adult Stem Cell Business in the United States

NeoStem is a leading provider in the U.S. of adult stem cell collection, processing and storage services. The practice of

collecting and storing adult stem cells at a younger age for later autologous use should they be needed has been termed by

the company as a “Bio-Insurance” program. Autologous cells have many advantages to currently used allogenic

procedures most notably being that a patient would have a known quantity of cells that have no risk for rejection or Graft

versus Host Disease (GvHD). NeoStem has focused on a select group of customers initially, concentrating on people who

could potentially benefit from having a supply of their stem cells available for personal therapeutic use, including:

Individuals with a family history of serious diseases

Those at high risk for burns, wounds and other trauma, such as first responders and military personnel

Individuals at occupational risk from prolonged radiation or chemical exposure, such as healthcare

providers, laboratory personnel and nuclear power plant workers

Wellness, cosmetic and anti-aging focused individuals

Athletes and others who could benefit from regenerative therapies

NeoStem has collection center strategically positioned in Southern California and the Northeast, and plans to have 10

centers opened by the end of 2010. The procedure of stem cell collection and storage has both an upfront and a recurring

fee. They charge $7,500 dollars for the stem cell collection, which involves treating the patient with a low-dose, short-

course of mobilizing agent granulocyte-colony stimulating factor, also known as Neupogen™ (for an additional $1,000

fee). Neupogen™ stimulates the migration of the stem cells from the bone marrow into the peripheral blood stream where

they can be collected through a minimally invasive procedure called apheresis. The cells are then processed and sorted

using flow cytometry and stored in multiple vials containing different stem cell types. The process does not change or

alter the underlying cells and does not require expansion technology. There is a recurring fee of $750 per year (if paid

monthly or $699 if paid annually) for the storage of the stem cells. NeoStem uses Progenitor Cell Therapy (PCT) on an

exclusive basis for the storage of all stem cell samples. (see Partnerships)

http://ash.confex.com/ash/2008/webprogram/Paper8719.html



United States Department of Defense (DoD) Contracts

NeoStem continues to strengthen its ties to the Department of Defense (DoD) with another possible, and larger, grant for

using VSEL™ technology to treat osteoporosis. This follows their previous DoD contract for rapid wound healing.

Update:

On August 8, 2011 NeoStem announced that the Department of Defense, Peer Reviewed Medical Research Program of

the Office of the Congressionally Directed Medical Research Programs awarded NeoStem $1,780,049 to be applied

towards funding VSEL™ Technology. The award will support investigation of Very Small Embryonic-Like (VSEL) stem

cells, for its bone building and regenerative effects in the treatment of osteoporosis. The award is being made under the

NeoStem’s FY2010 Technology/Therapeutic Development Award application number PR101055.

On July 12th 2010, NeoStem announced it had been awarded a $700,000 contract from the U.S. Army Medical Research

and Materiel Command, Telemedicine and Advanced Technology Research Center (USAMRMC-TATRC). The U.S.

Army Medical Research Acquisition Activity contract number: (W81XWH-10-2-0039) is for the purpose of evaluating

the use of topically applied bone marrow-derived adult mesenchymal stem cells (MSCs) for rapid wound healing.

Development in this field could help save soldiers from amputations and immobilization due to injuries. This First step by

the Department of Defense could represent the beginning of more collaborative projects in regenerative therapy for

combat soldiers including spinal cord injury and retinal damage.

Adult Stem Cell Business in China

NeoStem has made significant progress in commercializing their approved stem cell therapies in China, including

additional sites, pricing and reimbursement allowances.

On December 9, 2010, NeoStem announced that an affiliated entity had entered into an agreement with Shijiazhuang

Third Hospital in the People's Republic of China (PRC) to offer NeoStem's licensed treatments for orthopedic

applications. Shijiazhuang Third Hospital is located in Shijiazhuang, Hebei Province, approximately 170 miles south of

Beijing. Shijiazhuang Third Hospital has 800 beds, 350 of which are dedicated to orthopedics. Shijiazhuang Third

Hospital specializes in orthopedics with extensive experience in spinal, joint, and hand and foot surgeries. It also boasts a

highly regarded orthopedic trauma emergency room.

This follows the November 2, 2010 announcement that Weihai Municipal Price Bureau, the local authority in charge of

pricing for public medical services in China, approved the pricing for single side and bilateral arthroscopic orthopedic

autologous adult stem cell based treatment being administered at Wendeng Orthopedic Hospital ("Wendeng Hospital"),

one of the leading specialist orthopedic hospitals in China based in Wendeng, Shandong Province, China. Additionally,

Weihai Municipal Labor Bureau Medical Insurance Office approved Wendeng Hospital's application for reimbursement

effective November 1, 2010, whereby patients are eligible to receive reimbursement for up to 80% of the cost of the

orthopedic procedure under the new technology category.

Update:

On May 17, 2011 Neostem announced that an affiliated entity has entered into an agreement with Tianjin Nankai Hospital

in the People's Republic of China (PRC) to offer NeoStem's licensed treatments for orthopedic applications. This new

agreement with Tianjin Nankai Hospital is now the third location where Chinese citizens can receive adult stem cell

treatments for arthritis and orthopedic conditions based on technology exclusively licensed by NeoStem for Asia. Nankai

Hospital is located in Tianjin, approximately 80 miles from Beijing, less than a 30 minute ride on the new high-speed

train. Tianjin is a city with a population of over 14 million and has over 400 hospitals. Tianjin Nankai Hospital has

approximately 1,100 patient beds, of which approximately 88 are dedicated to orthopedics. Following the completion of

its planned new hospital building, orthopedic beds are expected to be expanded to approximately 1,000 beds.



China’s regulatory and scientific environment is more accepting of cellular based therapies. In addition to the more

relaxed regulatory framework, China also has a rapidly expanding upper and middle class that are interested in

regenerative medicine and have the means to pay for such therapies. In 2009, NeoStem began to address this potential

market by creating a separate stem cell business unit. Regulations in the Peoples Republic of China are restrictive to

foreign business. NeoStem created a wholly foreign-owned entity (WFOE), by the name NeoStem (China) Inc. to

alleviate some of these potential restrictions to their business. In addition to the creation of the WFOE the stem cell

business initiates are being conducted via two Chinese domestic entities to further comply with PRC law. Qingdao Niao

Bio-Technology Ltd. and Beijing Ruijieao Bio-Technology Ltd are the domestic entities and are controlled by the WFOE

through various contractual arrangements. All of the stem cell based initiatives in China are being led by US employees

who are utilizing Chinese experts in the respective applications and markets being pursued. The current focuses of the

company include the following initiatives in China:

Developing a pipeline of regenerative medicine therapies initially focused on orthopedic conditions utilizing

licensed procedure, Regenexx™.

Developing wellness, cosmetic and anti-aging applications through in-licensed technology from Vincent

Giampapa, M.D.

Participating in the medical tourism market for regenerative medical treatments.

Establishing a network of collection, processing and storage facilities through a partnership with Enhance

BioMedical Holdings Limited.

Engaging in research and development designed to improve and expand our service and product offerings

Regenexx™ Therapy and the Orthopedic Market

In March 2009, NeoStem acquired an exclusive license for Asia to use the Regenexx™ stem cell procedure, developed by

Colorado-based Regenerative Sciences, Inc. (see Partnerships). The patented procedure uses autologous mesenchymal

stem cell isolated from bone marrow for the treatment of a host of different orthopedic conditions including osteoarthritis,

meniscus tears of the knee, avascular necrosis and bulging lumbar discs. NeoStem plans to utilize there already proven

peripheral blood stem cell collection technique with the Regenexx™, which they feel will only increase the procedures

marketability in the Asian market due to the non-invasive nature of the collection. NeoStem is creating a network of

hospitals in China to provide the Regenexx™ procedure through Qingdao Niao Bio-Technology Ltd, the domestic entity

controlled by the WFOE (see China Corporate Structure). In June 2009, Wendeng Hospital and Qingdao Niao entered

into a five-year agreement to treat patients and conduct clinical research regarding the application of autologous stem cells

for the treatment of a variety of orthopedic conditions. Close to 90% of patients at Wendeng Hospital are seeking medical

attention in the orthopedic field and the hospital is considered to be one of the leading specialty orthopedic hospitals in

China. Personnel at the Wendeng have completed training by Regenerative Sciences, Inc. and operations began in the first

quarter of 2010.

Wellness, Cosmetic & Anti-Aging Applications

In February 2009, NeoStem entered into a world wide exclusive in-licensing agreement from Dr. Vincent Giampapa,

M.D. for autologous adult stem cell based skin rejuvenation therapies. The company plans to advance this regenerative

medicine business in both the United States and China. In the three year agreement, Dr. Giampapa agreed to provide

consulting services in the anti-aging giving guidance on a range of different cosmetic procedures. The procedures were to

be provided at Qingdao Second Sanatorium of Jinan Military Command through Qingdao Niao Bio-Technology Ltd.

Construction related delays at the hospital have prompted NeoStem to explore other options for the initial launch of these

therapies.

Medical Tourism

Medical tourism represents a significant potential source of revenue for NeoStem, as the trend of people traveling outside

of their country for access to medical therapies not currently available or affordable at home is projected to continue to

rise. In 2007, 750,000 Americans traveled outside of the US in order to undergo medical procedures. The World Bank

estimates that number could increase to 6 million by 2010 and the market world wide to be as large as 10 billion by 2011.

China has become and is continuing to become a desirable destination for patients seeking procedures in a diverse range



of medical specialties. Both private and government hospitals in major Chinese cities have begun to capitalize on this

trend by establishing medical tourism departments to provide treatment to international patients using advanced Western

medical technology and techniques, including stem cell-based therapies. NeoStem plans to use this Chinese development

as both a driver for their stem cell collection business as well as their stem cell therapy businesses.

Stem Cell Collection and Storage Business

In June 2009, NeoStem entered into a ten-year, exclusive, royalty bearing agreement with Enhance BioMedical Holdings

Limited to develop an adult stem cell collection and treatment network of doctors and hospitals in Shanghai, Taiwan, and

the Chinese provinces of Jiangsu, Zhejiang, Fujian, Anhui and Jiangxi (Network Territory). Enhance BioMedical

Holdings Limited is a Shanghai corporation and a subsidiary of Enhance Holding Corporation, a multinational

conglomerate. Under the terms of the Agreement, NeoStem will provide Enhance BioMedical with the training, technical,

and other assistance required for it to offer stem cell-based therapies, for which the company will receive a six figure

technical assistance fee. After training is completed, the agreement gives Enhance BioMedical the exclusive right to

utilize NeoStem’s proprietary adult stem cell technologies to provide adult stem cell services and therapies in the

territories aforementioned. NeoStem will receive milestone payments and royalties on gross revenues derived from stem

cell based therapies from Enhance BioMedical. Subject to certain conditions, the agreement is renewable at the option of

Enhance BioMedical for an additional 10 years. The agreement also gives NeoStem the option to acquire up to a 20%

fully diluted equity interest in Enhance BioMedical until June 2014.

Enhance BioMedical already has relationships with doctors and hospitals in the territories covered in the agreement, and

also the Anti-Aging and Prevention Medical Center in Taipei, Taiwan. The Anti-Aging and Prevention Medical Center

focuses on the development of stem cell bases anti aging therapies and could principally benefit from the technology in-

licensed from Dr. Giampapa (See Wellness, Cosmetic & Anti-Aging Applications).

Research and Development

In May 2009, NeoStem through Qingdao Niao Bio-Technology Ltd., leased space from Beijing Zhongguancum Life

Science Park Development Corp., Ltd at the Life Science Innovation Center, Life Science Park, in Zhongguancum,

Beijing. The Facility is to be used for collection, processing and storage of adult stem cells as well as research and

development of cellular based therapies in China. The facility will support the development of the Regenexx™ procedure

at Wendeng Hospital. In addition to the therapies currently being pursued commercially in China, NeoStem will also be

conducting research on their VSEL technology at the Beijing Facility that could include their therapeutic use in neural,

cardiac and ophthalmic disease. In order to conduct cell-based clinical trials in collaboration with specialty hospitals,

NeoStem was required under PRC law to form a not-for-profit organization. In July 2009, NeoStem entered into a

cooperation agreement with their Chinese consultant, Shandong Life Science and Technology Research Institute (SLSI)

for assistance in the formation of the NPO. The organization was funded by NeoStem in the amount of 730,000 dollars

and another 500,000 dollars of funding is expected in the near future. NeoStem entered into an agreement Progenitor Cell

Therapy, LLC for the construction of the Beijing Facility on December 31, 2009 (see Partnerships)

China Corporate Structure & Suzhou Erye Pharmaceuticals Businesses

NeoStem China Corporate Structure

NeoStem has 2 business units in China, their China pharmaceutical business unit which owns 51% in Suzhou Erye

Pharmaceuticals Company and their China adult stem cell business unit conducted their wholly foreign-owned entity

(WFOE) NeoStem (China) with two Variable Interest Entities (VIE) Qingdao Niao Bio-Technology Ltd. and Beijing

Ruijieao Biotechnology Ltd.



NeoStem China Corporate Structure & Ownership

VIE = Variable Interest Entities Source: NeoStem Inc. & LifeTech Capital

China Adult Stem Cell Business

Due to PRC restrictions on foreign entities from conducting certain activities, NeoStem operates the stem cell business

through NeoStem (China), a wholly foreign-owned entity (WFOE). To comply with China’s foreign investment

prohibition on stem cell research and development, this business is conducted via two Variable Interest Entities (VIEs)

Qingdao and Beijing Ruijieao under which NeoStem (China) is providing technical and management services to the VIEs

in exchange for substantially all net income of the VIEs. One VIE will be devoted to adult stem cell related research and

development activities and the other will be devoted to the commercialization of stem cell-based therapies in collaboration

with hospitals.

Also due to PRC restrictions, NeoStem (China) with their China consultant, SLSI, is forming a not-for-profit organization

to conduct various clinical trials in China. SLSI has taken responsibility for establishing and structuring clinical trials with

third parties, other research institutes and a number of partner hospitals.

China Pharmaceutical Business

On October 30, 2009, NeoStem completed a merger with China Biopharmaceuticals Holdings (CBH) resulting in a 51%

controlling interest in Suzhou Erye Pharmaceuticals Company (Erye). The remaining 49% ownership is represented by

Suzhou Erye Economy and Trading Co. (EET) through a joint venture agreement.

Suzhou Erye Pharmaceuticals Business

Suzhou Erye Pharmaceuticals (Erye) was founded over 50 years ago and is a vertically-integrated pharmaceutical

business, focused primarily on the manufacturing and sale of antibiotics. Specifically, Erye focuses on manufacturing and

distribution of generic antibiotic products and has received more than 160 production certificates from China’s State Food

& Drug Agency (SFDA) covering both antibiotic prescription drugs and active pharmaceutical ingredients (APIs). 2009

revenue was over $60 million (unaudited) with approximately 536 full-time and 209 part-time employees of December

31, 2009.

Update - Possible Sale of Eyre Pharmaceuticals

Following their January 2011 acquisition of PCT, NeoStem is pursuing strategic alternatives with respect to its 51%

interest in Erye. NeoStem is planning to devote its resources and management efforts to cell therapy manufacturing and

development, and other related activities, including adult stem cell collection and storage, and in further developing their

regenerative medicine business in China. NeoStem believes that the proposed acquisition of Amorcyte is in keeping with

NeoStem’s strategic mission. NeoStem also believes that if they could monetize Erye, NeoStem would have additional

capital needed to pursue the development of multiple cell therapies. As such, in June 2011, NeoStem engaged a financial

advisor to lead the effort to pursue the possible divesture of its 51% interest in Erye. Marketing efforts have commenced

however it is too early to determine whether such efforts will lead to a proposal to purchase at a price and on terms that

NeoStem would consider acceptable or whether, in the event a proposal or proposals on prices and terms acceptable to

NeoStem are received, whether a transaction would be completed. More information can be found in their 8-K (page 42)

at: http://www.sec.gov/Archives/edgar/data/320017/000114420411040514/v228561_8k.htm

http://www.sec.gov/Archives/edgar/data/320017/000114420411040514/v228561_8k.htm



Pharmaceutical Products

Erye offers a highly diversified portfolio of pharmaceuticals with no single drug accounting for more than 10% of sales.

Erye’s top 10 products in sales for 2010 are shown below:

Erye Top Ten Drugs in 2010 (37% of Total Sales) % of Sales

Acetylspiramycin 5%

Cefamandole Natate for injection (0.5g) 4%

Oxacillin Sodium 4%

Amoxicillin/Sulbactum Sodium for injection 4%

Cefamandole Natate for injection (1.0g) 4%

Mezlocillin sodium for injection 4%

Amoxicillin & Clavulanate Potassium sodium 3%

Azlocillin sodium 3%

Ceftizoxime sodium for injection (0.5g) 3%

Ceftizoxime sodium for injection (1.0g) 3% Source: NeoStem Inc.

It should be noted that currently, approximately 70% of their drug products are covered by insurance, and which is

expected to grow in the future.

New Pharmaceutical Pipeline

Erye also has a pipeline of recently approved pharmaceuticals, submitted pharmaceuticals and candidates currently in

clinical trials as show:

ERYE PHARMACEUTICAL PIPELINE

Status Indication Drug

Approved – Launch Pending GERD Omeprazol Capsules

Approved – Launch Pending Anti-Infective Cloxacillin Sodium

Awaiting Approval Antibiotic Clindamycin Phosphate Injection

Awaiting Approval HBV/HIV Adefovi Capsules & API

Clinical Trials Anti-Infective Faropenem sodium API

Clinical Trials Anti-Infective Faropenem Sodium Tablets

Clinical Trials HBV Tiopronin Enteric-Coated Capsules Source: NeoStem Inc.

Distribution Channels

In China, pharmaceutical manufacturers are prohibited from selling directly to hospitals where the majority of

prescriptions are written. Erye has a distributor network that that covers all of mainland China’s provinces and

municipalities. Erye has over 40 internal sales and marketing personnel to supervise the distributor network through three

channels: exclusive distributors for newer higher-margin prescription drugs, non-exclusive distributors for mature, lower-

margin prescription drugs and exclusive distributors for active pharmaceutical ingredient sales to large pharmaceutical

manufacturers.

Manufacturing Erye currently operates a production facility in the City of Suzhou, containing approximately 33,490 square meters of

offices, dormitories, a food court, warehouse and production facilities, including 8 cGMP production lines certified by the

SFDA, workshops and laboratory areas. Erye is currently transitioning to a new, state-of-the-art production facility in the

Xiangcheng District of Suzhou. The new facility includes 12 buildings containing a total of approximately 53,000 square

meters of space, for which the external building construction has been completed and manufacturing equipment is being

assembled and tested. Erye began transferring its operations in January 2010 and received notification that the SFDA has

approved the cGMP certification to manufacture solvent crystallization sterile penicillin and freeze dried raw sterile

penicillin at the new facility. Erye’s goal is to become one of the largest antibiotics producers in Eastern China.



Update:

On April 26, 2011 NeoStem announced their majority-owned Suzhou Erye Pharmaceutical Company received 2 awards at

the 4th annual Chempharm Brand Summit 2011 in China where companies in the pharmaceutical industry are recognized

for outstanding achievement in specific categories. Specifically, Erye Pharmaceutical was awarded "Top 10 Anti-Infection

Drug Award" and "Top 100 Brand Names Award".

On June 13, 2011 Neostem announced that Erye Pharmaceutical had received approval from the State Food and Drug

Administration (SFDA) in China for its lyophilized (freeze dried) powder for injection production line which is

responsible for the production of over 20 finished pharmaceutical products, 80% of which are on the National Insurance

Drug List. The combined production lines now certified by the SFDA are six of eight planned and were responsible for

approximately 99% of Erye’s 2010 revenues. Approvals for the 2 remaining product lines (the oral active pharmaceutical

ingredient (API) line and the capsule line) are expected by year end. The approval of this cGMP product line importantly

removes the capacity constraints associated with old Erye manufacturing facility.

Erye Pharmaceuticals Facilities and Planned Campus

Source: NeoStem Inc.

NeoStem and Vatican Pontifical Council Initiative on Adult Stem Cells

On May 19, 2010 NeoStem and the Vatican's Pontifical Council for Culture announced a joint initiative with their

charitable foundations to expand research and raise awareness of adult stem cell therapies. NeoStem's Stem for Life

Foundation and the Pontifical Council's STOQ (Science Theology and the Ontological Quest) International foundation,

will work on collaborative activities advancing scientific research on adult stem cells, exploring clinical applications in

regenerative medicine and the cultural relevance on theological and ethical issues. Reverend Tomasz Trafny, of the

Pontifical Council for Culture stated “We are particularly excited about NeoStem's VSEL™ technology and believe that

mutual collaboration between NeoStem and the Pontifical Council for Culture could lead to significant financial

commitment to support VSEL™ technology research."

A 3-day international conference at the Vatican on adult stem cell research, including VSEL™ technology, is planned for

2011 and will focus on medical research presentations and theological and philosophical considerations and implications

of scientific achievements.

Update:

NeoStem and the Vatican's Pontifical Council for Culture announced more details regarding their partnership designed to

advance adult stem cell research and their upcoming signature event, the international Vatican conference on adult

stem cells which will be held November 9th

– 11th

at the Vatican.

The conference will include the foremost experts in adult stem cell research and recognized leaders in medicine as well as

Church and scientific leaders, policymakers, ethicists, educators, Ministers of Health from around the world, ambassadors

to the Holy See, and representatives of the stem cell therapeutic business community. The conference goal is to create a

greater awareness of adult stem cells and their promise and discuss the latest research and developments along with the

implications for the future of culture, medicine, religion, and public policy. The event will also be broadcast via radio and

television. The conference website can be accessed at www.adultstemcellconference.org

http://www.adultstemcellconference.org/



NeoStem's charitable organization, “Stem for Life Foundation” and the Pontifical Council's Foundation, STOQ

International (Science Theology and the Ontological Quest) are also sponsors of the efforts. More information on these

can be found at www.stemforlifefoundation.com and www.stoqinternational.org

The joint mission of the partnership, with the complete support of the Pontifical Council for Health Care Workers and the

Pontifical Academy for Life, will be to:

1) Foster the highest levels of scientific research on adult stem cells and to explore the cultural, ethical and human

implications of their use.

2) Seek to create awareness about the promise of scientific research in concordance with ethical values through the further

development of adult stem cell technology.

3) Determine short-term and long-term actions which political, scientific, educational, and religious leaders can take to be

part of the cultural paradigm shift arising from the next wave - regenerative medicine.

4) Lay the groundwork for a collaborative network of scientists and patrons who embrace the promise of adult stem cells

to reduce human suffering, advance scientific research on adult stem cells and explore their clinical application in the field

of regenerative medicine, as well as the cultural impact of such research.

5) Advance adult stem cell research and facilitate its safe transformation from the lab to the clinic.

Partnerships

University of Louisville

NeoStem is engaged in research and development of new therapies based on VSEL technology with the University of

Louisville Research Foundation, or ULRF, and has a worldwide exclusive license rights. The agreement was previously

made with Stem Cell Technologies, Inc. (SCTI). SCTI was acquired by NeoStem in November of 2007. Under the

License Agreement, The Company agreed to engage in a diligent program to develop the VSEL technology. Certain

license fees and royalties are to be paid to University of Louisville Research Foundation (“ULRF”) by NeoStem, and the

Company is responsible for all payments for patent filings and related applications. The Agreement has an initial term of

20 years and portions of the license may become non-exclusive if NeoStem does not diligently develop the VSEL™

technology. The Agreement can be terminated entirely if NeoStem chooses to not pay for the filing and maintenance of

any patents. The License Agreement calls for the following specific payments:

Reimbursement of $29,000 for all expenses related to patent filing and prosecution incurred before the effective

date (“Effective Date”) of the license agreement

Non-refundable prepayment of $20,000 creditable against the first $20,000 of patent expenses incurred after the

Effective Date

Non-refundable license issue fee of $46,000

Non-refundable annual license maintenance fee of $10,000 upon issuance of the licensed patent in the United

States

Royalty of 4% on net sales

Specified milestone payments

Specified payments in the event of sublicensing.

The agreement was amended February 2009 and items 2 and 3 were paid in March 2009. The License Agreement contains

certain provisions relating to "stacking," permitting NeoStem to pay royalties to ULRF at a reduced rate in the event it

is required to also pay royalties to third parties exceeding a specified threshold for other technology in furtherance of

the exercise of its patent rights or the manufacture of products using the VSEL technology.

Regenerative Sciences, Inc.

In March 2009, NeoStem acquired an exclusive license for Asia to use the RegenexxTM stem cell procedure.

RegenexxTM was developed by Colorado-based Regenerative Sciences, Inc. and is an innovative process that expands a

http://www.stemforlifefoundation.com/

http://www.stoqinternational.org/



patient’s own adult stem cells to treat a variety of musculoskeletal diseases. The licensed procedure uses autologous

mesenchymal stem cells extracted from bone marrow for the treatment of various orthopedic conditions, including

osteoarthritis, meniscus tears of the knee, avascular necrosis and bulging lumbar discs. Under the Terms of the

agreement, RSI must provide consulting services to NeoStem in the area of stem cell-based orthopedic therapies for the

Asia market. The company feels that the integration of peripheral blood collection processes (instead of invasive bone

marrow collection) into the RegenexxTM procedure will enhance its marketability in the Asian market.

Immuneregen Biosciences

On April 22, 2010 NeoStem entered into a Collaborative Research Agreement with ImmuneRegen BioSciences, Inc., a

wholly owned subsidiary of IR BioSciences Holdings, Inc. (IRBS.OB). The Agreement is focused on the development of

ImmuneRegen’s advanced, adult human stem cell product called Homspera®. Under the agreement, NeoStem will

investigate the effects of Homspera®, which has been shown to enhance stem cell activity, in combination with

NeoStem's VSEL technology. Under the collaboration, NeoStem has the right to execute an option agreement to negotiate

an exclusive license to resulting technology.

Enhance BioMedical Holdings Limited

In June 2009, NeoStem entered into a ten-year, exclusive, royalty bearing agreement with Enhance BioMedical Holdings

Limited, a Shanghai corporation and a subsidiary of Enhance Holding Corporation, a multinational conglomerate. The

Agreement is to develop an adult stem cell collection and treatment network of doctors and hospitals in Shanghai, Taiwan,

and the Chinese provinces of Jiangsu, Zhejiang, Fujian, Anhui and Jiangxi (Network Territory). Under the terms of the

Agreement, NeoStem will provide Enhance BioMedical with the training, technical, and other assistance required for it to

offer stem cell-based therapies, for which the company will receive a six figure technical assistance fee. After training is

completed, the agreement gives Enhance BioMedical the exclusive right to utilize NeoStem’s proprietary adult stem cell

technologies to provide adult stem cell services and therapies in the territories aforementioned. NeoStem will receive

milestone payments and royalties on gross revenues derived from stem cell based therapies from Enhance BioMedical.

Subject to certain conditions, the agreement is renewable at the option of Enhance BioMedical for an additional 10 years.

The agreement also gives NeoStem the option to acquire up to a 20% fully diluted equity interest in Enhance BioMedical

until June 2014.

Enhance BioMedical already has relationships with doctors and hospitals in the territories covered in the agreement, and

also the Anti-Aging and Prevention Medical Center in Taipei, Taiwan. The Anti-Aging and Prevention Medical Center

focuses on the development of stem cell bases anti aging therapies and could principally benefit from the technology in-

licensed from Dr. Giampapa (See Wellness, Cosmetic & Anti-Aging Applications).

In addition to being a partner with NeoStem, Enhance BioMedical is also a large share holder in the company as well. The

companies CEO, Jack Ling, invested $5M in an $11M April 13th, 2009 private placement financing. As of March 15,

2010, Enhance BioMedical owned approximately 16.7% of NBS common stock

Intellectual Property

NeoStem has a number of patents and patent applications as shown below. We expect additional patent applications will

be filed in the future as development progresses.

NUMBER DESCRIPTION FILED

Selected NeoStem UNITED STATES Intellectual Property Filings

7414021 Method and Compositions for Restoration of Age Related Tissue Loss

in the Face or Selected Areas of the Body

Granted

8/19/08

11/396,238 Elective Collection and Banking of Autologous Peripheral Blood Stem

Cells 3/30/06

11/763,655 Processing Procedure for Peripheral Blood Stem Cells 6/15/07

61/266,825 Mesenchymal Stem Cells Isolated from Mobilized Peripheral Blood 12/04/09

61/266,860 Method of Isolation of Stem Cell Populations from Peripheral Blood

Using Size-Based Separation 12/4/09

12/096,754 Very Small Embryonic-Like Stem Cells and Methods of Isolating and 11/02/06



Using the Same

12/261,958 Very Small Embryonic-Like Stem Cells and Methods of Isolating and

Using the Same 10/30/08

PCT/US2008/081832 Transplantation of Very Small Embryonic-Like Stem Cells for Cardiac

Repair Following Myocardial Infarction 10/30/08

PCT/US2009/005414 Methods for Isolating Very Small Embryonic-Like Stem Cells from

Cord Blood 9/30/09

61/039,941

Autologous Bone Marrow-Derived Cultured Mesenchymal Stem Cells

Delivered in a Fibrin Spray Accelerate Healing in Murine and Human

Cutaneous Wounds

3/27/07

12/413,250



Cutaneous Wounds

3/27/09

PCT/US2009/038666



Cutaneous Wounds

3/27/09

12/218,334 Method and Compositions for Restoration of Age Related Tissue Loss

in the Face or Selected Areas of the Body 7/14/08

61/175,275 Method and Composition for Restoration of Age Related Tissue Loss

in the Face or Selected Areas of the Body 5/04/09

60/761,441 Mesenchymal Stem Cell Isolation and Transplantation Method and

System to be Used In a Clinical Setting 1/24/06

PCT/US2007/60889 Mesenchymal Stem Cell Isolation and Transplantation Method and


12/161,911 Mesenchymal Stem Cell Isolation and Transplantation Method and


11/773,774 Methods and Compositions for Optimized Expansion and Implantation

of Menechymal Stem Cells 7/05/07

PCT/US2008/68202 Methods and Compositions for Optimized Expansion and Implantation

of Menechymal Stem Cells 6/25/08

61/014,987 Compositions to Promote Implantation and Engraftment of Stem Cells 12/19/07

PCT/US2008/87452 Compositions to Promote Implantation and Engraftment of Stem Cells 12/18/08

61/036,551 Compositions and Method for Cartilage Repair 3/14/08

PCT/US2009/037126 Compositions and Method for Cartilage Repair 3/13/09

61/120,098 Methods and Compositions for Intervertabral Disc Repair 12/05/08

61/154,874 Methods and Compositions for Intervertabral Disc Repair 2/24/09

Selected NeoStem EUROPE Intellectual Property Filings

07809600.95 Processing Procedure for Peripheral Blood Stem Cells 6/15/07

06827358.0 Very Small Embryonic-Like Stem Cells and Methods of Isolating and


07762515.0 Mesenchymal Stem Cell Isolation and Transplantation Method and


Selected NeoStem CHINA Intellectual Property Filings

200780030328.6 Processing Procedure for Peripheral Blood Stem Cells 6/15/07

200680052508.X Very Small Embryonic-Like Stem Cells and Methods of Isolating and


Selected NeoStem CANADA Intellectual Property Filings

2548580 Elective Collection and Banking of Autologous Peripheral Blood Stem

Cells 4/05/04

2640185 Mesenchymal Stem Cell Isolation and Transplantation Method and


Selected NeoStem HONG KONG Intellectual Property Filings

09103392.9 Mesenchymal Stem Cell Isolation and Transplantation Method and


Source: NeoStem, Inc



Recent Financing Activity

On July 22, 2011, NeoStem completed an underwritten offering of 13,750,000 units at a purchase price of $1.20 per unit

yielding gross proceeds of $16.5M with each unit consisting of one share of Common Stock and a five year warrant to

purchase 0.75 of a share of Common Stock (10,312,500 shares) at an exercise price of $1.45 per share.

On July 14, 2011, the NeoStem announced their intention to acquire Amorcyte, Inc. and will issue 6,821,283 shares of

common stock plus warrants to purchase 1,881,008 shares of NeoStem common stock. In addition, 4,092,768 shares of

NeoStem stock will vest upon achievement of AMR-001 milestones. Amorcyte shareholders will receive additional

consideration in the form of an earn-out upon commercialization. The closing of the merger is subject to approval by

NeoStem and Amorcyte stockholders.

On April 5, 2011, NeoStem completed a private placement with nine persons and entities of 1,244,375 shares of Common

Stock at a purchase price of $1.28 for gross proceeds of $1.6M.

On March 3, 2011, NeoStem completed a private placement of 2,343,750 shares of Common Stock at a purchase price of

$1.28 a share for gross proceeds of $3M. Five persons and entities were involved in the private placement including

Steven S. Myers, a NeoStem director who purchased 390,625 shares, and Dr. Andrew L. Pecora, Chief Medical Officer of

NeoStem’s subsidiary PCT who purchased 78,125 shares

PCT Acquisition Transaction Summary

On January 19, 2011 NeoStem completed its acquisition of Progenitor Cell Therapy, LLC. NeoStem acquired all of the

membership interests of PCT, and PCT is now a wholly-owned subsidiary of NeoStem. NeoStem issued 10.6M shares of

common stock for the acquisition. In addition, there are warrants to purchase between 1M and 3M shares of NeoStem

Common Stock, based on the following:

(i) common stock purchase warrants to purchase 1,000,000 shares of NeoStem Common Stock exercisable over a

seven year period at an exercise price of $7.00 per share (the “$7.00 Warrants”), and which will vest only if a

specified business milestone is accomplished within three (3) years of the closing date and

(ii) if the volume weighted average of the closing prices of sales of NeoStem Common Stock on the NYSE-Amex

for the three (3) trading days ending on the trading day that is two (2) days prior to the Closing Date is less than

$2.50, common stock purchase warrants to purchase 1,000,000 shares of NeoStem Common Stock exercisable

over a seven year term at an exercise price of $3.00 per share (the “$3.00 Warrants”); and

(iii) if the Parent Per Share Value is less than $1.70, common stock purchase warrants to purchase 1,000,000

shares of NeoStem Common Stock exercisable over a seven year period at an exercise price of $5.00 per share

(the “$5.00 Warrants” and, collectively with the $7.00 Warrants and the $3.00 Warrants, the “Warrants”).

On November 19, 2010, NeoStem, completed concurrent offerings of (i) an underwritten offering of 6,337,980 common

stock units at a purchase price of $1.45 per unit, with each unit consisting of one share of common stock par value $0.001

and a warrant to purchase 0.5 of a share of common stock with an exercise price of $1.85 per share, and (ii) a registered

direct offering of 10,582,011 preferred stock units at a purchase price of $0.945 per unit, with each unit consisting of one

share of Series E 7% Senior Convertible Preferred Stock, par value $0.01 per share, convertible at $2.0004, maturing May

20, 2013; a warrant to purchase 0.25 of a share of common stock with an exercise price of $2.0874 per share; and 0.0155

of a share of common stock.

As of June 30, 2011, there were 23.6 million warrants to purchase shares outstanding with a weighted average price of

$2.70, a weighted average remaining life of 3.7 years as shown in the table. Also as of June 30, 2011, there were 16

million stock options issued with a weighted average price of $1.76 and a weighted average remaining life of 7.7 years

under the U.S. Equity Plan. Of these, 8.1 million stock options were vested and exercisable as of June 30, 2011.

Additionally, as of June 30, 2011, there were 3.1 million stock options issued with a weighted average price of $1.95 and

a weighted average remaining life of 8.8 years under the Non-U.S. Equity Plan. Of these, 817K stock options were vested

and exercisable as of June 30, 2011. Finally, as of August 10, 2011, there were 98,048,447 shares common stock

outstanding.



Management

Dr. Robin L. Smith, Chairman and CEO: Dr. Smith joined the Company as Chairman of its Advisory Board in

September 2005 and, effective June 2, 2006, became the Chief Executive Officer and Chairman of the Board. Dr. Smith,

who received a medical degree from Yale University in 1992 and a master's degree in business administration from the

Wharton School in 1997, brings to the Company extensive experience in medical enterprises and business development.

From 2000 to 2003, Dr. Smith served as President & Chief Executive Officer of IP2M, a multi-platform media company

specializing in healthcare. During her term, the company was selected as being one of the 10 fastest growing technology

companies in Houston. IP2M was sold to a publicly-traded company in February 2003. Previously, from 1998 to 2000,

she was Executive Vice President and Chief Medical Officer for HealthHelp, Inc., a National Radiology Management

company that managed 14 percent of the healthcare dollars spent by large insurance companies.

Dr. Smith has acted as a senior advisor and investor to both publicly traded and privately held companies where she has

played a significant role in restructuring and or growing the companies. Dr. Smith served on the Board of Directors of two

privately held companies, Talon Air and Biomega, and also served on the Chemotherapy Foundation Board of Trustees

and The New York Theatre Ballet. She currently serves on the Board of Trustees of the NYU Medical Center Board, is

past Chairman of the Board of Directors for the New York University Hospital for Joint Diseases where she headed up

new development efforts and board member recruitment, and served on the Board of Choose Living. Dr. Smith is the

President and serves on the Board of Directors of The Stem for Life Foundation.

Larry A. May, CFO: Mr. May, the former Treasurer of Amgen (NasdaqGS: AMGN), one of the world’s largest

biotechnology companies, initially joined NeoStem to assist with licensing activities in September 2003. He became an

officer upon our acquisition of the business of NS California in January 2006. For the last 25 years, Mr. May has worked

in the areas of life sciences and biotechnology. From 1983 to 1998, Mr. May worked for Amgen as Corporate Controller

(1983 to 1988), Vice President/Corporate Controller/Chief Accounting Officer (1988 to 1997), and Vice

President/Treasurer (1997 to 1998). At Amgen, Mr. May helped build Amgen’s accounting, finance and IT organizations.

From 1998 to 2000, Mr. May served as the Senior Vice President, Finance and Chief Financial Officer of Biosource

International, Inc., a provider of biologic research reagents and assays. From 2000 to May 2003, Mr. May served as the

Chief Financial Officer of Saronyx, Inc., a company focused on developing productivity tools and secure communication

systems for research scientists. From August 2003 to January 2005, Mr. May served as the Chief Financial Officer of NS

California. In March 2005, Mr. May was appointed CEO of NS California and in May 2005 he was elected to the Board

of Directors of NS California. He received a Bachelor of Science degree in Business Administration & Accounting in

1971 from the University of Missouri.

Joseph Talamo, VP Corporate Controller and Chief Accounting Officer: Mr. Talamo formerly held various senior

positions at OSI Pharmaceuticals, Inc., a publicly-traded biopharmaceutical company focused on discovering, developing

and commercializing products for the treatment of cancer, diabetes and obesity, and most recently served as its Vice

President and Corporate Controller. While at OSI from 1996 to 2010, Joe helped build the accounting and finance

infrastructure to support the clinical development and commercial launch of Tarceva®, OSI's targeted therapy approved

for the treatment of patients with non-small cell lung cancer and pancreatic cancer. Prior to OSI, Joe worked at Bristol-

Myers Squibb from 1995 to 1996 in the Financial Reporting and Consolidations Group, and at KPMG from 1993 to 1995

in the Health Care and Life Sciences Audit Group. Joe also served as Treasurer of OSI Pharmaceuticals Foundation from

2008 to 2010.

Catherine M Vaczy, VP and General Counsel: Ms. Vaczy joined NeoStem in April 2005 as Vice President and General

Counsel and is responsible for overseeing our legal affairs. From 1997 through 2003, Ms. Vaczy held various senior

positions at ImClone Systems Incorporated, a then publicly-traded company developing a portfolio of targeted biologic

treatments to address the medical needs of patients with a variety of cancers, most recently as its Vice President, Legal

and Associate General Counsel. While at ImClone (NasdaqGS: IMCL), Ms. Vaczy served as a key advisor in the day-to-

day operation of the company and helped forge a number of important strategic alliances, including a $1 billion co-

development agreement with Bristol Myers Squibb (NYSE: BMY) for Erbitux® and ImClone’s targeted therapy approved

for the treatment of metastatic colorectal and head and neck cancers. From 1988 through 1996, Ms. Vaczy served as a

corporate attorney advising clients in the life science industry at the New York City law firm of Ross & Hardies. Ms.



Vaczy is Secretary and serves on the Board of Directors of The Stem for Life Foundation. Ms. Vaczy received a Bachelor

of Arts degree in 1983 from Boston College and a Juris Doctor from St. John’s University School of Law in 1988.

Dr. Alan G. Harris M.D., Ph.D., Vice President of Regenerative Medicine, Drug Development and Regulatory

Affairs: Dr. Harris has been NeoStem’s Vice President of Regenerative Medicine, Drug Development and Regulatory

Affairs since July 2009. In June 2009, Dr. Harris was a consultant to NeoStem, providing strategic advice in connection

with NeoStem’s research and development initiatives. Prior to joining NeoStem, he was Senior Vice President and Chief

Medical Officer of NPS Pharmaceuticals Inc, a Biotechnology Company focused on the development of therapeutics for

rare gastrointestinal and endocrine disorders with high-unmet medical needs. From February 2006 to December 2007 he

was Chief Medical Officer of Manhattan Pharmaceuticals, Inc., a specialty healthcare product company focused on

developing products for obesity and psoriasis. Prior to this, from January 2004, Dr. Harris was head of the Worldwide

Medical Endocrine Care group at Pfizer, Inc. (NYSE: PFE) in New York City, where he oversaw the Medical Affairs

clinical development of the growth hormone Genotropin® for the treatment of pediatric short stature conditions and of

GH deficiency in adults, Pegylated GH antagonist Somavert®, for the treatment of GH producing tumors. Prior to Pfizer

he served in a number of capacities at Schering-Plough Corporation (Kenilworth, NJ) from 1995 to 2003, most recently as

vice president, Global Healthcare Research & Outcomes, where he represented the Medical Affairs Department at

Schering Plough in the joint venture with Merck in the clinical development of the novel cholesterol absorption inhibitor

medication, ezetimibe (Zetia®). Other responsibilities at Schering-Plough included Medical Affairs research in products

(Claritin®, Nasonex®, Asmanex®) for the treatment of allergic conditions and asthma, Hepatitis C (Peg-Intron®) and

Cardiovascular and Metabolic diseases. During his tenure at Sandoz (Novartis) Pharmaceuticals in Basel, Switzerland

(1984-1991), Dr. Harris headed the clinical development of the first long-acting somatostatin analog, octreotide

(Sandostatin®), approved worldwide for the treatment of hormone producing gastrointestinal endocrine tumors

(carcinoids, VIPomas) and growth hormone producing tumors (acromegaly). Dr Harris received an M.D. degree cum

laude from the Louis Pasteur Faculty of Medicine, University of Strasbourg, France and a Ph.D. in Endocrinology from

Erasmus University, Rotterdam, The Netherlands. He is currently an adjunct professor of medicine at New York

University Medical School and visiting professor of medicine in the Department of Endocrinology at Liege University

Medical School, Belgium and in the Department of Pharmacology and Clinical Toxicology at the University Hospital of

Lausanne, Switzerland. Dr. Harris is a Fellow of the American College of Physicians, the Royal College of Physicians

(UK). Dr. Harris was Associate Professor of Medicine of UCLA School of Medicine, Director of the Division of Clinical

Pharmacology in the Department of Medicine with a joint appointment as Medical Director of the Department of

Technology Development and Transfer and Clinical Trials at Cedars-Sinai Medical Center/UCLA School of Medicine,

Los Angeles (1992-1994). He was co-chairman of the R&D Sub Committee of the Biotechnology Industry Organization

(BIO) (1992-1998) and has served on the NIH Center for Scientific Review Special Emphasis Panel for Clinical

Cardiovascular Sciences Study Section from 1998 – 2002. Dr. Harris served on the editorial boards of several

international peer reviewed medical journals and has authored 120 peer reviewed scientific papers.

Anthony Salerno, Vice President, Strategic Development and Academic Affairs: Mr. Salerno joined NeoStem in

August, 2009 and has more than 25 years of experience as an executive and entrepreneur in the life sciences industry.

From 2008 to 2009, he served as Vice President Strategic Business Development with GenomeQuest, Inc., where he was

responsible for guiding their entry into the next-generation DNA sequencing bioinformatics market. From 2002 through

2007, Mr. Salerno was Director, Market and Business Intelligence with Agilent Technologies, Inc. (NYSE: A) where he

built and managed a global team charged with providing strategic insights to their $2 billion Life Science and Chemical

Analysis division. Before joining Agilent, he was a successful entrepreneur with notable accomplishments in technology

planning, market development and strategy. Mr. Salerno was Founder and President of VectorObjects LLC, the earliest

commercial entrant in the emerging field of synthetic biology, and was Managing Director of BioDynamics Associates, a

life sciences marketing and strategy consulting firm. In addition, he was Senior Marketing Consultant at Vysis, Inc., now

part of Abbott Diagnostics (NYSE: ABT), and also the founding Vice President, Sales and Marketing at Tropix, Inc., now

part of Life Technologies, Inc. (NYSE: LIFE). He began his career in the clinical diagnostics industry, and managed

several product lines for Diagnostic Products Corporation, recently acquired by Siemens AG (NYSE: SI). Mr. Salerno

obtained his Bachelor of Arts degree from the College of the Holy Cross, and studied biochemistry and molecular biology

in the Graduate School of Arts and Sciences, Harvard University.

Jason Kolbert, Vice President of Strategic Business Development, MBA: Jason Kolbert was formerly a managing

director of National Securities where he founded the firm's research effort in emerging biotechnology companies. Mr.

Kolbert's coverage universe has been focused on cell therapeutic companies focused in oncology and regenerative



medicine, where NeoStem was one of his covered companies. He has spent the past 16 years on Wall Street as an analyst

both managing biotechnology dedicated investments (buy-side) and covering biotechnology companies (sell-side). Prior

to his career on Wall Street he spent several years in the pharmaceutical industry with Schering-Plough in Japan where he

developed an extensive working knowledge of pharmaceutical operations in Asia. Mr. Kolbert has an undergraduate

degree in Chemistry (New Paltz) and an MBA in Finance (University of New Haven).

Jian Zhang, General Manager of Erye Pharmaceuticals: Ms. Zhang Jian has been the General Manager of Erye since

2003. She was elected the Chairwoman and a director of CBH on April 30, 2007. Prior to being the General Manager for

Erye, she served for more than 5 years as the deputy general manager of Suzhou Number 2 Pharmaceutical Company and

more than a year as the deputy general manager of Suzhou Number 4 Pharmaceutical Company after working in various

positions in charge of human resources and quality control. Ms. Zhang graduated from Central Television University

majoring in electronics and later graduated with a certificate in accounting from Suzhou Adult Education University and a

graduate degree in finance and accounting from the School of Finance and Economics of Suzhou University. Ms. Zhang

has extensive background and experience in the pharmaceuticals industry, having worked in various managerial positions

and various aspects of the industry. She is an expert in managing a growth company, having turned Erye into a successful

operation after taking it over from the PRC government with Mr. Shi Mingsheng and others in 2003. From the end of

2007 until the consummation of the Merger, Ms. Zhang Jian was the Chief Financial Officer (CFO) of CBH.

Ian Zhang, Ph.D., MBA, President and Managing Director of NeoStem China: Dr. Zhang is the former Head of Asia

Pacific Integration at Life Technologies, where he served on the steering committee managing the acquisition and

integration of Applied BioSystems. He is also the former Head of Corporate Development (Asia Pacific) for Invitrogen

responsible for growth strategy and acquisitions and integrations, where he had also managed the acquisition and

integration of BioAsia, Dynal, Zymed, and Caltech by Invitrogen. Dr. Zhang also served as the President and General

Manager for Dynal Biotech (Beijing) Ltd. (a wholly owned subsidiary of Invitrogen Corporation). Dr. Zhang received his

MBA at the University of Chicago, Graduate School of Business and holds a Ph.D. in biotechnology from Simon Fraser

University. He continued his education as a postdoctoral fellow at Yale University School of Medicine.

Peter Sun, General Manager of NeoStem China: Peter Sun has been General Manager of NeoStem (China), Inc. since

2009. Mr. Sun brings to NeoStem nearly twenty years of business experience in pharmaceutical, biotech and medical

sectors. He is a licensed physician in the PRC specializing in endocrinology. Previously, Mr. Sun was Vice President of

Operations at Sun Biomedical Laboratories, a U.S. based medical device manufacturing and marketing company that is a

leader in rapid test devices using saliva samples. He was also Chief Executive Officer and President at Panagin

Pharmaceuticals, a biotechnology research and development and marketing company based in Vancouver, Canada. It is

focused on saponin-based small molecules, including their pharmaceuticals clinical development and marketing. Mr. Sun

has a Master’s degree in Biotechnology and Pharmacology from the University of British Columbia.

Andrew L. Pecora, M.D., F.A.C.P. – Chief Medical Officer - PCT: Dr. Pecora was previously the Chairman and Chief

Executive Officer for Progenitor Cell Therapy and also served as PCT’s Chief Medical Officer. Dr. Pecora is a Professor

of Medicine at the University of Medicine and Dentistry of New Jersey. He is a scientific advisor for numerous state,

national, and international organizations, and serves on the Board of Directors for the American Society for Blood and

Marrow Transplantation (ASBMT). In addition, he has also served on the Board of Directors for the International Society

of Hematotherapy and Graft Engineering (ISHAGE), now the International Society for Cellular Therapy (ISCT); the

Accreditation Committee of the Affiliated Physicians Network; and as an Inspector for the Foundation for Accreditation

of Hematopoietic Cell Therapy (FACT). Dr. Pecora received his medical degree from the University of Medicine and

Dentistry of New Jersey, graduating with honors. He went on to complete his medical education in internal medicine at

New York Hospital and in hematology and oncology at Memorial Sloan-Kettering Cancer Center, both in New York City.

He is board certified in internal medicine, hematology, and oncology.

Robert A. Preti, Ph.D. – President – PCT: Dr. Preti was Progenitor Cell Therapy’s President, Chief Scientific Officer,

and a member of the Company's Board of Managers. Previous positions held by Dr. Preti include Scientific Director of

HUMC's stem cell laboratory and Scientific Director of the Clinical Services Division at the New York Blood Center

(NYBC). He is one of the country's leading authorities on hematopoietic stem cell engineering and the principal

investigator for a number of clinical trials relating to stem cell transplantation. He was a founding member and Treasurer

of the International Society for Hematotherapy and Graft Engineering (ISHAGE), now the International Society for

Cellular Therapy (ISCT), and is currently both an active member and speaker. Dr. Preti has authored numerous papers in



the field of cell and tissue processing, cell production, and clinical research. He speaks at national and international

meetings related to the laboratory aspects of stem cell transplantation. In addition to serving as an inspector for the

Foundation for Accreditation of Cellular Therapy (FACT), Dr. Preti also serves on professional, state and federal

regulatory committees charged with the development of regulations for cellular therapy. Dr. Preti received his Doctor of

Philosophy degree from New York University, graduating with distinction.

George S. Goldberger: Mr. Goldberger was PCT's Chief Business and Financial Officer. Before joining PCT, Mr.

Goldberger was President and Chief Executive Officer of Goldberger & Associates Inc., an international management

consulting firm with offices in New York, Budapest, Bucharest and Kiev: they served multinational companies with a

focus on health care services. Through Goldberger & Associates, Mr. Goldberger assisted National Medical Care (now

part of Fresenius Medical Care) in establishing and developing dialysis center operations in Europe. Prior to that, Mr.

Goldberger was in charge of mergers and acquisitions at Figgie International Inc., a diversified conglomerate. Before

working at Figgie International Inc., Mr. Goldberger was Assistant to J. Peter Grace, then Chairman and Chief Executive

Officer of W. R. Grace & Co., with corporate development and financial management responsibilities in the United States

and the Far East. Mr. Goldberger began his career as a management consultant with Booz, Allen & Hamilton. Mr.

Goldberger holds an M.B.A. in Finance from the Wharton School of the University of Pennsylvania and a B.S. in Systems

Engineering

BOARD OF DIRECTORS

Dr. Robin L. Smith, Chairman and CEO: Dr. Smith joined the Company as Chairman of its Advisory Board in

September 2005 and, effective June 2, 2006, became the Chief Executive Officer and Chairman of the Board. (see

Management for full biography)

Drew Bernstein: Mr. Bernstein was appointed to NeoStem’s Board of Directors in June 2009 and serves as Chairman of

the Audit Committee. The Board of Directors has determined that Mr. Bernstein qualifies as an “audit committee financial

expert” as defined in applicable SEC rules. Mr. Bernstein co-founded Bernstein & Pinchuk LLP (B&P) in 1983, a fast

growing accounting firm headquartered in New York. His early recognition of the global marketplace and his extensive

travel in China resulted in the aggressive expansion of the firm’s services to the PRC where he has established associate

offices to better serve client needs. In addition, his diverse experience in retail, manufacturing, hospitality, professional

practices and real estate contributed to the expansion of the firm’s client base abroad. He is a frequent speaker at industry,

investment banking and university conferences. Mr. Bernstein provides business advisory and specialized auditing

services to clients throughout Europe including the Czech Republic, France, Germany, Switzerland and in Israel. Mr.

Bernstein serves as an accountant and advisor to numerous entities across the U.S., China and Europe and has been

responsible for more than 200 real estate transactions with an aggregate value in excess of US$3 billion. He is qualified to

perform accounting and auditing services for public companies and has qualified as an expert witness. He is an active

member of the board of directors and an officer of a prestigious foundation that was honored with the President’s

Voluntary Action Award by the late President Ronald Reagan. Mr. Bernstein received his BS degree from the University

of Maryland Business School, is licensed in the states of New York, Connecticut, California, Texas and Maryland and is a

member of the AICPA, the NYSSCPA and the NSA. Mr. Bernstein is the chairman of the audit committee for China

Wind Systems, Inc. (OTCBB: CWSI.OB), a leading supplier of forged products and industrial equipment to the

windpower and other industries in China. We believe that Mr. Bernstein’s diversified financial, accounting and business

expertise, including his extensive background in accounting and auditing services, his knowledge of the global

marketplace and his extensive work in China, give him the qualifications and skills to serve as a director.

Eric H.C. Wei: Pursuant to the terms of the Merger Agreement, Eric H.C. Wei was appointed to NeoStem’s Board of

Directors upon consummation of the Merger in October 2009. Eric H.C. Wei is one of the founders and the Managing

Partner of RimAsia Capital Partners, L.P., a private equity firm focused on the pan-Asian mid-market sector and a greater-

than-5% stockholder of NeoStem. Prior to establishing RimAsia in January 2005, Mr. Wei was a managing director of

Gilbert Global Equity Partners, a US$1.2 billion global private equity fund; a founding partner of Crimson Asia Capital

Partners, a US$435 million Asian private equity program; a founder and investment committee member of the US$800

million Asian Infrastructure Fund, and an investor and director of The Asian MBO Fund. Mr. Wei has also previously

been an investment banker with over 10 years of experience at Peregrine Capital, Prudential Securities, Lazard Freres and

Citibank. Mr. Wei received a Bachelor of Science degree in Math and Economics from Amherst College and a Master of



Business Administration degree from the Wharton Graduate School of Management at the University of Pennsylvania.

We believe that Mr. Wei’s diversified financial and business expertise, including his background in investment banking,

his extensive experience in managing private equity funds, and his familiarity with the pan-Asian mid-market sector, give

him the qualifications and skills to serve as director.

Mingsheng Shi: Pursuant to the terms of the Merger Agreement, Mingsheng Shi was appointed to NeoStem’s Board of

Directors on March 11, 2010. Shi Mingsheng has been serving as chairman of the board of directors of Suzhou Erye

Pharmaceuticals Company Ltd. (“Erye”) (of which entity NeoStem has acquired a 51% interest) since 2003. Currently,

Mr. Shi is also the chairman of Suzhou Erye Economy and Trading Co. Ltd. (“EET”), which entity owns the remaining

49% ownership interest in Erye. Prior to these affiliations, Mr. Shi served for five years as the assistant director of Suzhou

No. 4 Pharmaceutical Limited Company, for seven years as the deputy director of Suzhou No. 4 Pharmaceutical Limited

Company, and for five years as the factory director of Suzhou No. 2 Pharmaceutical Limited Company, the predecessor

company of Erye. Mr. Shi has a bachelor’s degree in Economics & Management from the Party School of the CPC. Mr.

Shi holds a professional title of Senior Economist. We believe that Mr. Shi’s expertise in business and economics,

including his extensive management experience in the pharmaceutical industry in general and at Erye in particular, give

him the qualifications and skills to serve as director.

Richard Berman: Mr. Berman joined NeoStem’s Board of Directors in November 2006, serves as Chairman of the

Compensation Committee and until March 2009 and June 2009, respectively, served as Chairman of the Nominating

Committee and Chairman of the Audit Committee. Mr. Berman continues to serve as a member of the Audit Committee

and the Nominating Committee. Mr. Berman’s business career spans over thirty-five years of venture capital,

management and merger and acquisitions experience. Mr. Berman is on the board of directors of five additional public

companies: Broadcaster, Inc. (OTC: BCSR.OB), NexMed, Inc. (Nasdaq: NEXM), National Investment Managers, Inc.

(Chairman) (OTC: NIVM.OB), Advaxis, Inc. (OTC: ADXS.OB) and Easylink Services International, Inc. (Nasdaq:

ESIC). Previously, Mr. Berman worked at Goldman Sachs, and was Senior Vice President of Bankers Trust Company,

where he started the M&A and Leverage Buyout Departments. Mr. Berman helped create the largest battery company in

the world by merging Prestolite, General Battery and Exide to form Exide Technologies (Nasdaq: XIDE),helped create

what is now Soho (NYC) by developing five buildings, and advised on over $4 billion of M&A transactions. Mr. Berman

is a past director of the Stern School of Business of NYU, where he received B.S. and M.B.A. degrees. Mr. Berman also

has United States and foreign law degrees from Boston College and The Hague Academy of International Law,

respectively. We believe that Mr. Berman’s financial and business expertise, including his background in investment

banking and mergers and acquisitions, as well as his extensive and diversified experience as a director in the public

company context, give him the qualifications and skills to serve as director.

Steven S. Myers: Mr. Myers joined NeoStem’s Board of Directors in November 2006 and serves on the Compensation

Committee, Audit Committee and Nominating Committee. In March 2009, Mr. Myers became Chairman of the

Nominating Committee. Mr. Myers is the founder and, until his retirement in March 2007, was the Chairman and CEO of

SM&A (NasdaqGM:WINS), the world’s leading provider of Competition Management Services. SM&A helps businesses

win structured competitive procurements and design successful transitions from proposals to programs. Since 1982,

SM&A has managed over 1,000 proposals worth more than $340 billion for its clients. SM&A routinely supports clients

such as Boeing, Lockheed Martin, Accenture, Raytheon, Northrop Grumman, Motorola, and other Fortune 500

companies. Mr. Myers graduated from Stanford University with a B.S. in Mathematics and had a successful career in the

aerospace and defense sector supporting DoD and NASA programs before founding SM&A. He has a strong technical

background in systems engineering and program management. Mr. Myers is also founder, President and CEO of Dolphin

Capital Holdings, Inc, which owns, operates and leases business jet aircraft and does private equity investing in innovative

enterprises. A serial entrepreneur, Mr. Myers has spearheaded a number of business innovations in aerospace and defense

and in business aviation. He is a highly accomplished aviator. We believe that Mr. Myers’ technical background and

diversified entrepreneurial and business expertise, including his having established and managed innovative enterprises

(in the areas of proposal development for competitive procurements, aircraft leasing and private equity investment),

together with his technical experience in the aerospace and defense sector, give him the qualifications and skills to serve

as director.

Dr. Edward C. Geehr M.D.: Dr. Geehr was appointed to NeoStem’s Board of Directors upon the consummation of the

Merger in October 2009, at which time Dr. Geehr also was appointed to the Board’s Nominating Committee. Until 2009,

Dr. Geehr served as Executive Vice President of Operations for Abraxis BioScience, a fully integrated biotechnology



company developing progressive therapeutics and core technologies for cancer and other clinical illnesses, where he was

responsible for global commercial operations. Prior to joining Abraxis in 2008, Dr. Geehr served as President of Allez

Spine, LLC in 2004, a developer, manufacturer and distributor of medical devices. Dr. Geehr was a co-founder and

executive chairman of IPC — The Hospitalist Company (NasdaqGM: IPCM) through 2001, which became a publicly-

traded company in 2008. Dr. Geehr received his undergraduate degree from Yale University and his medical degree from

Duke University. He trained in Emergency Medicine at UCLA and subsequently obtained Board certification. Dr. Geehr

is the author of many scientific articles and books and held a faculty appointment at the University of California, San

Francisco School of Medicine. We believe that Dr. Geehr’s diversified expertise in business and medicine, including his

executive experience in medical-based companies involving large-scale operations, and his medical knowledge and Board

certification (including writing and teaching engagements), give him the qualifications and skills to serve as director.

(Expected during 2011) Andrew L. Pecora, M.D., F.A.C.P. – Chief Medical Officer - PCT: Dr. Pecora was previously

the Chairman and Chief Executive Officer for Progenitor Cell Therapy and also served as PCT’s Chief Medical Officer.

(see Management for full biography)

SCIENTIFIC ADVISORY BOARD

Wayne A. Marasco M.D., Ph.D., Chairman, Scientific Advisory Board- Associate Professor, Department of

Cancer Immunology & AIDS at the Dana-Farber Cancer Institute, Associate Professor of Medicine at Harvard

Medical School

Roberto Bolli M.D., Chief of Cardiovascular Medicine and Director at the Institute of Molecular Cardiology,

University of Louisville.

Vincent Falanga M.D., Professor at Boston University School of Medicine, Chairman of the Department of

Dermatology and Training Program at the Roger Williams Medical Centre, Providence, Rhode Island

Douglas W. Losordo M.D., Professor of Medicine at Northwestern University, Director of the Feinberg

Cardiovascular Research Institute and Program in Cardiovascular Regenerative Medicine.

Mariusz Ratajczak M.D., Ph.D., D.Sci., Director of the Stem Cell Institute at James Graham Brown Cancer

Center, Professor in Department of Microbiology and Immunology, University of Louisville.

Jerome Ritz M.D., Director of the Connell-O'Reilly Cell Manipulation Core Facility (CMCF) and Professor of

Medicine at Harvard Medical School.

MEDICAL ADVISORY BOARD

Wayne A. Marasco M.D., Ph.D., Chairman, Scientific Advisory Board- Associate Professor, Department of

Cancer Immunology & AIDS at the Dana-Farber Cancer Institute, Associate Professor of Medicine at Harvard

Medical School

Thomas A. Einhorn M.D., Chairman of the Department of Orthopaedic Surgery and Professor of Orthopaedic

Surgery, Biochemistry and Biomedical Engineering at Boston University

Richard Goldfarb M.D., 20 years of surgical experience, including liposuction, and has been performing

Smartlipo since its inception.

Ron Rothenberg M.D., F.A.C.E.P., Fellow of the American College of Emergency Physicians (FACEP) and

founder of the California HealthSpan Institute in Encinitas, California.

George Smith M.D., Medical Director of Laboratory Operations

Joseph D. Zuckerman M.D., Chairman of the NYU Hospital for Joint Diseases Department of Orthopaedic

Surgery and the Walter A. L. Thompson Professor of Orthopaedic Surgery at the New York University School of

Medicine.



Risks

Some of the operational and financial risks to NeoStem are:

FDA and Regulatory risks: All of NeoStem’s products are ultimately reliant on regulatory approvals by the

U.S. FDA, China SFDA and other national regulatory bodies. There can be no guarantee of timely or definite

regulatory approvals for any of their marketed or pipeline products.

Public Policy: NeoStem uses adult stem cells in their products. Although they are not embryonic stem cells, a

negative public policy shift could adversely affect some or all stem cell development companies.

Patent Litigation: The stem cell space is relatively new and patent issues could arise at any time, requiring

NeoStem to spend time and money on defending their intellectual property rights up to and including adverse

judgments against NeoStem.

Long Time-Horizons: Due to the nature of stem cell products, the development timelines may be significantly

longer than typical drug development programs.

China: In addition to foreign exchange exposure, the legal, regulatory and political landscape in China is

subject to potentially sudden and unexpected changes that may adversely impact NeoStem. In addition to

medical regulatory risks, the government of China sets regulatory restrictions on foreign-ownership and asset

transfers. Any changes to the current allowed foreign-ownership corporate regulatory framework may

adversely impact NeoStem.

Acquisitions: Although NeoStem appears selective in their acquisition strategy, such as Suzhou Erye

Pharmaceuticals Company (Erye), Progenitor Cell Therapy (PCT) and Amorcyte, significant and/or

unexpected issues may arise as these operations are integrated into NeoStem which could adversely impact

the projected benefits and synergies of their acquisitions.

Need to Raise Additional Funds: While NeoStem has sufficient cash for near-term development, we believe

that NeoStem will be required to raise additional funds through the issuance of stock which would be dilutive

to existing shareholders and could potentially affect the share price. We have included estimates of future

share issuance in our financial model but there can be no guarantee that our estimates are accurate.

Sector Rotation: NeoStem is a small biotechnology development company in the stem cell space often kept in

a portfolio with similar companies. In such cases, a significant event for one company may have a material

impact on the valuation of all similar companies regardless of their unique qualities.





DISCLOSURES

Ratings and Price Target Changes over Past 3 Years

Initiated September 10, 2010 – Strong Buy - Price Target $3.75

Updated January 21, 2011 – Strong Buy - Price Target $4.00

Analyst Certification: We, Stephen M. Dunn and William D. Dawson, the authors of this research report certify that a.) All of the views

expressed in this report accurately reflect our personal views about any and all of the subject securities or issuers discussed b.) No part of our compensation is directly or indirectly related to the specific recommendations or views expressed in this research report and c.) We may be eligible to receive other compensation based upon various factors, including total revenues of the Firm and its affiliates as well as a portion of the proceeds from a broad pool of investment vehicles consisting of components of the compensation generated by investment banking activities, including but not limited to shares of stock and/or warrants, which may or may not include the securities referenced in this report.

DISCLOSURES

Does the Analyst or any member of the Analyst’s household have a financial interest in any securities of the Company? NO

Does the Analyst or any member of the Analyst's household or Firm serve as an officer, director or advisory board member of the Company?

NO

Has the Analyst or any member of the Analyst’s household received compensation directly or indirectly from the Company in the previous 12 months?

NO

Does the Firm or affiliates beneficially own ≥1% of the Company’s common stock? NO

Has the Firm or affiliates received investment banking services compensation in previous 12 months? YES

Has the Firm or affiliates received non-investment banking securities-related services compensation in previous 12 months? NO

Does the Firm or affiliates expect to receive or intend to seek investment banking compensation in next 3 months? YES

Has the Firm or affiliates received non-securities services compensation in previous 12 months? YES

Does the Firm or affiliates make a market in the Company’s securities? NO

The Firm and/or its directors and employees may own securities of the company(s) in this report and may increase or decrease holdings in the future. The Firm, its officers, directors, analysts or employees may effect transactions in and have long or short positions in the securities (or options or warrants with respect thereto) mentioned herein. The Firm may effect transactions as principal or agent in the securities mentioned herein. Ratings Definitions: 1) Strong Buy: the stock is expected to appreciate and produce a total return of at least 40% over the next 12-18 months; 2) Buy: the stock is expected to appreciate and produce a total return of at least 20% over the next 12-18 months; 3) Strong Speculative Buy: the stock is expected to appreciate and produce a total return of at least 40% over the next 12-18 months but the volatility and investment risk is substantially higher than our "Strong Buy" recommendation; 4) Speculative Buy: the stock is expected to appreciate and produce a total return of at least 20% over the next 12-18 months but the volatility and investment risk is substantially higher than our "Buy" recommendation; 5) Neutral: the stock is fairly valued for the next 12-18 months; 6) Avoid/Sell: the stock is expected to decline at least 20% over the next 12-18 months and should be avoided or sold if held; 7) Under Review: the

previous rating and/or price target is suspended due to a significant event which now requires additional analysis and the previous rating and/or price target cannot be relied upon; 8) Not Rated: the stock has too much business or financial uncertainty to form an investment conclusion or is currently in the process of being acquired and 9) Restricted: coverage cannot be initiated or has been

temporarily suspended to comply with applicable regulations and/or firm policies in certain circumstances such as investment banking or an advisory capacity involving the company.



LifeTech Capital Research

Research Coverage

Investment Banking

FINRA RULE 2711

Research Coverage

Investment Banking

Ratings Distribution % of Total % of Total Ratings Distribution % of Total % of Total

Strong Buy 17% 50% Buy 83% 50%

Strong Speculative Buy 67% 50% Hold/Neutral 8% 100%

Buy 0% 0% Sell 8% 100%

Speculative Buy 0% 0% Total 100% 58%

Neutral 8% 100%

Avoid/Sell 8% 100%

Under Review 0% 0%

Not Rated 0% 0%

Restricted 0% 0%

Total 100% 58%

Legal Disclaimer

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