**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-K**





**[
      X]**  **ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**





For
      the
      fiscal year ended December 31, 2006





Or





**[  
      ]**  **TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934**





For
      the
      transition period from _______ to ________





Commission
      file number: **000-49933**





**BioStem,
      Inc.**


(Exact
      name of registrant as specified in its charter)







**Nevada******
            **95-4886474**State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization
            Identification
                No.)





**200
      Hannover Park Road, Suite 120, Atlanta, Georgia 30350**


(Address
      of principal executive offices) (Zip Code)





**(770)
      650-1733**


Registrant’s
      telephone number, including area code





Securities
      registered pursuant to Section 12(b) of the Act:




Title of each
      class Name
      of
      each exchange on which registered




None.





Securities
      registered pursuant to section 12(g) of the Act:





Common
      Stock, $0.001 Par Value Per Share





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


Yes
      [   ] No [X]










Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or Section 15(d) of the Act.




Yes
      [   ] No [X]





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.




Yes
      [X]
      No [   ]





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not
      be contained, to the best of registrant’s knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-K
      or any amendment to this Form 10-K.




Yes
      [   ] No [X]





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one):





Large
      accelerated filer [ 
 ]                  
Accelerated filer
      [X]                       
Non-accelerated filer [   ]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Act).




Yes
      [   ] No [X]





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      last sold, or the average bid and asked price of such common equity, as of
      the
      last business day of the registrant’s most recently completed second fiscal
      quarter was $119,827,816.





There
      were 175,218,044 shares of the Registrant’s common stock outstanding as of
      January 19, 2007.













**BIOSTEM,
        INC.**
 FORM
        10-K
 INDEX
 
 **Part
        I**
  Item
                    1.
                Business.
                4Item
                    1A.
                Risk
                    Factors.
                19Item
                    1B.
                Unresolved
                    Staff Comments.
                31Item
                    2.
                Properties.
                31Item
                    3.
                Legal
                    Proceedings.
                31Item
                    4.
                Submission
                    of Matters to a Vote of Security Holders.
                32
  
 **Part
        II**
 
 Item
                  5.
              Market
                  for Registrant’s Common Equity, Related Stockholder Matters and Issuer
                  Purchases of Equity Securities.
              33Item
                  6.
              Selected
                  Financial Data.
              34Item
                  7.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operation.
              35Item
                  7A.
              Quantitative
                  and Qualitative Disclosures About Market Risk.
              39Item
                  8.
              Financial
                  Statements and Supplementary Data.
              39Item
                  9.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure.
              41Item
                  9A.
              Controls
                  and Procedures.
              41Item
                  9B.
              Other
                  Information.
              44
 
 **Part
        III**
 
 Item
                  10.
              Directors,
                  Executive Officers and Corporate Governance.
              45Item
                  11.
              Executive
                  Compensation
              47Item
                  12.
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              52Item
                  13.
              Certain
                  Relationships, Related Transactions, and Director Independence.
              52Item
                  14.
              Principal
                  Accountant Fees and Services
              53
 
 **Part
        IV**
 
  
 Item
                    13.
                Exhibits,
                    Financial Statement Schedules
                54Signatures
                
                57









**PART
      I**





**ITEM
      1. BUSINESS.**





CERTAIN
      STATEMENTS IN THIS ANNUAL REPORT ON FORM 10-K (THIS "FORM 10-K"), CONSTITUTE
      "FORWARD LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
      ACT OF 1934, AS AMENDED, AND THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
      1995 (COLLECTIVELY, THE "REFORM ACT"). CERTAIN, BUT NOT NECESSARILY ALL, OF
      SUCH
      FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
      TERMINOLOGY SUCH AS "BELIEVES", "EXPECTS", "MAY", "SHOULD", OR "ANTICIPATES",
      OR
      THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY,
      OR
      BY DISCUSSIONS OF STRATEGY THAT INVOLVE RISKS AND UNCERTAINTIES. SUCH
      FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
      OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS
      OF
      BIOSTEM, INC. ("BIOSTEM", THE "COMPANY", "WE", "US" OR "OUR") TO BE MATERIALLY
      DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR
      IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. REFERENCES IN THIS FORM 10-K, UNLESS
      ANOTHER DATE IS STATED, ARE TO DECEMBER 31, 2006.





**BUSINESS
      DEVELOPMENT**





BioStem,
      Inc., formerly National Parking Systems, Inc. (the "Company," "we," and "us")
      was originally incorporated under the name Web Views Corporation ("Web Views")
      in the State of Nevada on November 2, 2001. In June 2003, the Company acquired
      100% of Cascade Mountain Mining Corp. ("Cascade Corp.") pursuant to an exchange
      agreement. As a result of the acquisition of Cascade Corp., and the change
      in
      focus of the Company's business, the Company changed its name from Web Views
      Corporation to Cascade Mountain Mining Company, Inc. on June 17, 2003, in
      connection with a Certificate of Amendment to the Company's Articles of
      Incorporation. The Certificate of Amendment also affected a 60:1 forward stock
      split, which became effective on June 24, 2003.





The
      Company filed a Certificate of Amendment ("Amendment") to its Articles of
      Incorporation with the Secretary of State of Nevada, which became effective
      January 7, 2005 to affect a name change of the Company to "National Parking
      Systems, Inc.", affect a 1:4,000 reverse stock split, re-authorized 300,000,000
      shares of common stock, par value $.001 per share, and re-authorized 10,000,000
      shares of preferred stock, par value $.001 per share, in anticipation of the
      Company's entry into the Exchange, described below.





In
      October 2005, the Company's board of directors approved a 4:1 forward stock
      split for shareholders of record as of October 20, 2005. Unless otherwise stated
      all share amounts disclosed in this Form 10-K retroactively take into affect
      the
      June 2003, 60:1 forward stock split, the January 2005, 1:4,000 reverse stock
      split, and the October 2005, 4:1 forward stock split (the "Stock
      Splits").




-4-





On
      January 13, 2005, the Company, acquired 100% of the issued and outstanding
      shares of ABS Holding Company, Inc., a Nevada corporation ("ABS") and BH Holding
      Company, Inc., a Nevada corporation ("BH") in exchange for 161,400,000
      restricted shares (the "Shares") of the Company's common stock, an aggregate
      of
      $86,750 in Junior Convertible Debentures ("Junior Debentures"), and the
      assumption of $335,000 of ABS's and BH's obligations under a Senior Secured
      Convertible Debenture (the "Senior Debenture") (collectively, the "Exchange"),
      in connection with a Stock Exchange Agreement, entered into between the Company,
      ABS, BH, The Morpheus Trust ("Morpheus"), Livingston Investments, Ltd.
      ("Livingston"), Burton Partners, LLC ("Burton"), Picasso, LLC ("Picasso"),
      and
      The Gateway Real Estate Investment Trust ("Gateway") (the "Exchange
      Agreement").





In
      connection with the Exchange Agreement, the Company also entered into a Security
      Agreement providing that the Senior Debenture shall be secured by all of the
      assets of the Company ("Security Agreement").





Pursuant
      to the Exchange, the Company's Chief Executive Officer, Marc Ebersole, who
      was
      the sole shareholder of the common stock of both ABS and BH prior to the
      Exchange, received 130,400,000 restricted shares of the Company's common stock
      in exchange for his common stock shares of ABS and BH. Mr. Ebersole subsequently
      transferred 4,400,000 of those restricted shares to two individuals, and
      4,000,000 restricted shares to his niece, Christine Ebersole, who is also an
      employee of the Company. Additionally, Morpheus, Livingston, Burton, Picasso
      and
      Gateway (the "Preferred Stock Sellers") each exchanged their right to receive
      1,000 preferred shares of ABS and 1,000 preferred shares of BH to the Company,
      for 6,200,000 restricted shares of the Company's common stock and a $17,350
      Junior Debenture, for an aggregate of 31,000,000 shares and $86,750 in Junior
      Debentures.





Effective
      on November 18, 2005, the Company filed a Certificate of Amendment to its
      Articles of Incorporation with the Secretary of State of Nevada to affect a
      name
      change to "BioStem, Inc.," and affect a change to the Articles of Incorporation
      regarding the Company's Board of Directors to provide that the number of
      directors may, pursuant to the Bylaws, be increased or decreased by the Board
      of
      Directors at any time, provided there shall be no less than one (1) nor more
      than nine (9) Directors at any one time.





**JUNIOR
      DEBENTURES**





In
      addition to the 6,200,000 restricted shares of the Company's common stock which
      each of the Preferred Stock Sellers received, each Preferred Stock Seller
      received a Junior Debenture in the amount of $17,350, for a total of $86,750.
      The Junior Debentures do not bear interest and are payable on January 31, 2010.
      Additionally, the Junior Debentures are convertible at the request of the
      holder, at the lesser of (i) 30% of the average of the three lowest closing
      prices in the twenty (20) trading days immediately preceding the date of
      conversion or (ii) $0.00025. Each Junior Debenture has a provision limiting
      the
      Junior Debenture holder to not beneficially own more than 4.99% of the Company's
      outstanding common stock. However, in the event of an "event of default" under
      the Junior Debentures, the conversion price will be 50% of the conversion price
      then in effect, and if an event of default continues for Sixty (60) days, the
      4.9% ownership limit will not apply.




-5-





The
      main
      "events of default" under the Junior Debentures include: if the Company does
      not
      make the payment of the principal of the Junior Debenture when it becomes due,
      the Company does not issue the proper amount of shares, within seven business
      days of the Company's receipt of a valid notice of conversion, the Company
      defaults under any indebtedness or obligation where the amount is equal to
      at
      least $100,000, the Company's common stock is delisted from any securities
      exchange, or if the Company commences a voluntary petition under bankruptcy
      law.
      If an event of default occurs under the Junior Debenture, the Preferred Stock
      Seller may declare the remaining principal amount of the Junior Debenture
      immediately due and payable.





Pursuant
      to each Junior Debenture, the Preferred Stock Sellers can currently each convert
      their $17,350 Junior Debenture into 69,400,000 shares of the Company's common
      stock (347,000,000 total), based on a conversion price of $0.00025, provided
      however, that under each Junior Debenture, no Preferred Stock Seller may hold
      more than 4.99% of the Company's outstanding common stock at one time. The
      total
      original amount of the Junior Debentures remains outstanding as of the filing
      of
      this report as none of the Junior Debenture holders have converted any of their
      Junior Debentures and no amount of the Junior Debentures has been repaid by
      us
      to date.





**SENIOR
      DEBENTURE**





In
      connection with the Exchange, the Company assumed ABS's and BH's obligations
      under a $1,000,000 Senior Secured Convertible Debenture, entered into between
      ABS, BH and Hyde Investments, Ltd. ("Hyde") as of October 15, 2004. As of
      December 31, 2006, $552,500 had been advanced by Hyde pursuant to the Senior
      Debenture. Under the Senior Debenture, and as of the filing of this report
      $592,500 has been advanced under the Senior Debenture. The Company is obligated
      to pay interest on the outstanding amount of the Senior Debenture at the rate
      of
      Ten Percent (10%) per year, payable on the first day of each month, until the
      principal amount is paid in full or the total amount owed is converted. The
      maturity date of the Senior Debenture was October 15, 2005; however, the due
      date of the Senior Debenture was extended by Hyde and the Company, pursuant
      to
      an "Agreement To Extend Senior Secured Convertible Debenture," (the "Extension")
      entered into on October 1, 2005, to June 30, 2006, which date has further been
      extended verbally by Hyde to December 31, 2007. The Company does not currently
      have cash on hand to repay the Senior Debenture. The Senior Debenture is
      personally guaranteed by the Company's Chief Executive Officer, Marc
      Ebersole.





The
      conversion rate of the Senior Debenture is the lower of (i) 30% of the average
      of the three lowest closing prices in the twenty (20) trading days immediately
      preceding the date of conversion or (ii) $0.025. An event of default under
      the
      Senior Debenture occurs if, the Company does not make payment of the principal
      of the Senior Debenture when due and payable at maturity, the Company does
      not
      make a payment other than the total owed at maturity within five (5) days of
      the
      due date, the Company defaults under any indebtedness or obligation where the
      amount is equal to at least $100,000, or if the Company commences a voluntary
      petition under bankruptcy law, among others. Upon an event of default under
      the
      Senior Debenture, Hyde may declare the remaining amount of the principal,
      together with all accrued interest to be due and payable. None of the Senior
      Debentures have been converted into shares.




-6-





**Consulting
      Agreement**





On
      January 5, 2005, the Company entered into a Consulting Agreement with London
      Finance Group, Ltd., a California corporation ("London"), which Consulting
      Agreement was amended on November 23, 2005. Under the Consulting Agreement,
      London agreed to provide the Company management consulting services and to
      assist the Company in its operations, strategy and in its negotiations with
      vendors, negotiating and structuring business sales and/or acquisitions,
      assisting the Company with customers and strategic partners and the
      implementation of the Company's business plan (the "Consulting Agreement").
      The
      term of the Consulting Agreement will be until January 31, 2009, and after
      that
      date, either London or the Company may terminate the Consulting Agreement upon
      at least 90 days written notice. Pursuant to the Consulting Agreement, we agreed
      to pay London a non-refundable retainer in the amount of Five Thousand dollars
      ($5,000) a month between the date of the original Consulting Agreement and
      the
      amendment, effective as of November 23, 2005, at which time pursuant to the
      amendment, we agreed to pay London twenty thousand dollars ($20,000) per month,
      which amounts have not been paid to London, but which have been accrued as
      of
      the date of this filing. Additionally, in connection with our entry into the
      Consulting Agreement, we issued 12,000,000 shares of the Company's common stock
      common stock to London and granted London warrants to purchase up to 4,000,000
      shares of the Company's common stock at $0.10 per share, which Warrants were
      later amended by the amendment of the Consulting Agreement to provide for the
      purchase of up to 1,500,000 shares of the Company's common stock at $1.00 per
      share ("Warrants") which vested immediately on January 5, 2005.





Additionally,
      under the Consulting Agreement, London will receive a fee equal to ten percent
      (10%) of the aggregate consideration paid by the Company for any acquisition
      or
      sale of any business, corporation or division ("Consulting Fee"). The Consulting
      fee shall be paid to London in connection with stock purchase agreements, merger
      agreements, plans of reorganizations, asset purchase agreements and licensing
      agreements ("Transactions"), and shall be paid to London when the consideration
      for these agreements is actually paid by or received by the Company. The
      aggregate consideration paid by the Company shall include all cash and stock
      paid to the seller or sellers upon closing of the transaction in addition to
      any
      contingent payments to the seller or sellers, for the purposes of determining
      the Consulting Fee. Additionally, London shall be entitled to share in any
      fees
      or commissions payable to third parties in connection with any Transaction,
      and
      under the Consulting Agreement, the Company agreed to waive any conflict of
      interest that may arise due to the dual representation by London. As the Company
      has entered into the Merger Agreement with Cryobanks, as described below under
      "Merger Agreement," it is anticipated that London will earn fees of
      approximately 10% of the aggregate consideration paid by Cryobanks, if the
      Merger closes, of which there can be no assurance.




-7-





Under
      the
      Consulting Agreement, the Company, with London's consent, may choose to issue
      London its Consulting Fee in restricted common stock or freely tradable
      registered common stock. Restricted common stock shall be issued to London
      in
      consideration for the Consulting fee at a rate equal to the lesser of (i) Fifty
      percent (50%) of the market price of the Company's common stock on the day
      prior
      to the closing date of the Transaction, or (ii) $0.10 per share. Registered
      common stock, without restrictive legend shall be issued to London in
      consideration for the Consulting Fee at a rate equal to seventy percent (70%)
      of
      the market price of the Company's common stock on the day prior to the closing
      of the Transaction.





Additionally,
      under the Consulting Agreement, the Company agreed to provide London piggy
      back
      registration rights in the event the Company shall file a registration statement
      with the Securities and Exchange Commission.





The
      Company may terminate the Consulting Agreement at any time for cause, if London
      engages in gross and willful misconduct that is materially and significantly
      injurious to the Company, and, after written notice of such conduct, London
      fails to cure such conduct within thirty (30) days. After giving notice to
      London, London will be entitled to a hearing in front of the Company's entire
      Board of Directors, whereby it will have the opportunity to hear the Board's
      reason for termination and be given a chance to rebut the charges against it.
      In
      the event the Company terminates the Consulting Agreement without cause, the
      Company shall be obligated to pay London liquidated damages in the amount of
      (a)
      $250,000 or (b) the greater of (i) 4,000,000 shares of common stock (subject
      to
      adjustment for any stock splits or combinations) which shall be registered
      with
      the Securities and Exchange Commission or (ii) the total value of all fees
      and
      other compensation paid or payable to London over the 12 months prior to the
      date given by the Company of its intended intent to terminate the
      relationship.





In
      connection with the Consulting Agreement the Company signed an Indemnification
      Agreement, whereby it agreed to hold London, its affiliates, directors,
      officers, agents and employees, including any person which provides consulting
      or other services to the Company, from any losses, claims, damages, judgments,
      assessments, costs and other liabilities incurred in investigating, preparing,
      pursuing or defending any claim, action, proceeding or investigation in
      connection with the Transactions.





In
      connection with the Consulting Agreement, the Company and London entered into
      a
      Warrant Agreement for 4,000,000 Warrants to purchase shares of the Company's
      common stock ("Warrant Agreement"), which was later amended to provide for
      1,500,000 Warrants to purchase shares of the Company's common stock pursuant
      to
      the amendment to the Consulting Agreement. The Warrants granted to London vested
      immediately on January 5, 2005, and shall remain valid until January 5, 2009.
      Under the Warrant Agreement, London shall only be entitled to exercise its
      Warrants if after exercised, London will beneficially own shares representing
      no
      more than 4.99% of the Company's outstanding common stock, unless waived by
      the
      Company in writing. The Warrants are exercisable at a price of $1.00 per
      share.




-8-





Additionally,
      London has cashless exercise rights pursuant to the Warrants, whereby it can
      exercise its rights under the Warrant Agreement by accepting less shares and
      without paying any cash to the Company. Additionally, the Company provided
      London piggyback registration rights in connection with the Warrants, which
      means if the Company decides to file a registration statement for its securities
      in the future, London can provide notice to the Company and have any shares
      which it was issued pursuant to the Warrants included in any registration
      statement.





**DESCRIPTION
      OF THE COMPANY'S**


**CURRENT
      BUSINESSES FOCUS**





The
      Company's focus is parking and parking related services, including valet parking
      services which the Company operates through its wholly owned subsidiary BH
      holding Company, Inc., a Nevada corporation ("BH") and vehicle immobilization
      services which the Company operates through its wholly owned subsidiary ABS
      Holding Company, Inc., a Nevada corporation ("ABS"), described in greater detail
      below. Approximately seventy-six percent (76%) of the Company's revenues come
      from BH, with the remaining twenty-four percent (24%) coming from
      ABS.





The
      Company has a website at www.nationalparkingsystems.com, which website contains
      information the Company does not wish to be made a part of this
      filing.





**BH
      HOLDING COMPANY, INC.**





BH
      was
      incorporated in the State of Nevada on November 4, 2004. BH operates through
      its
      wholly owned subsidiary, J & K Parking, d/b/a B&H Parking, Inc., a
      Georgia corporation ("J&K") that specializes in valet parking services and
      was purchased by BH in November 2004. At the time J&K was purchased by BH,
      it was co-owned by the Company's Chief Executive Officer, Marc Ebersole, and
      Scott Pringle, who is unaffiliated with the Company. BH purchased J&K for a)
      $175,000 in cash, b) $25,000 in the form of a promissory note payable to Mr.
      Pringle, in connection with a Covenant Not to Compete, which has been paid
      in
      full, c) $30,000 in the form of a promissory note to Mr. Ebersole, which has
      been paid in full, and d) 10,000 shares of BH common stock which were issued
      to
      Mr. Ebersole, and later exchanged with the Company pursuant to the Exchange,
      for
      ownership of J&K (throughout this Form 10-K, references to BH include
      J&K).





Under
      Mr.
      Pringle's Covenant Not to Compete, he agreed not to engage in, be employed
      in,
      or have any interest in any occupation or business similar to that of BH, within
      the Southeast United States, including Georgia, Alabama, Louisiana, Tennessee,
      Florida, South Carolina, North Carolina and any location where BH conducts
      valet
      parking, parking management and vehicle immobilization, for three (3) years
      from
      the date of the closing of the Covenant Not to Compete, which was November
      2,
      2004, in return for the $25,000 promissory note, which has been paid in full
      to
      date.




-9-





BH
      currently operates in the Atlanta, Georgia area, however, BH may expand its
      operations to other locations in the future, funding permitting, if our
      management believes it is in our best interest to do so.





The
      bulk
      of BH's clients, are ongoing relationships, however BH routinely gets calls
      from
      individuals and entities which are having private parties and need valet parking
      services on an intermittent basis. Currently, BH operates valet operations
      in
      approximately 42 locations. Additionally, for some of BH's ongoing clients,
      BH
      not only supplies the valet parking employees, but also has control over the
      parking lots of these clients. As a result of fluctuations in seasonal need
      for
      valet parking services, the Company is busier in the winter and spring and
      around convention season in Atlanta.





**Insurance**





Currently,
      BH employees park between 50,000 and 60,000 cars per week. Because of this,
      BH
      carries garage keeper's liability insurance on its parkers and operations,
      whereby BH is covered if any damage occurs to the cars they are parking or
      anything is stolen from the cars themselves. BH averages one claim a week for
      damage done to the cars they park, which is normally just dents or dings. The
      average claim made to BH is approximately $1,500. BH's current insurance carries
      a $1,000 deductible per claim. However, it has been BH's policy not to submit
      claims to its insurance company unless the estimated loss is greater than $5,000
      and as a result, BH chooses to pay a significant amount of its claims itself,
      which currently average approximately $4,500 per month.





**Employee
      Screening**





Strangers
      trust BH employees with their cars and their belongings when they valet park
      with BH, because of this, BH takes precautions in who they hire to work as
      valets. BH screens potential employees by looking at their motor vehicle report,
      and will disqualify job candidates based on things like excessive speeding
      tickets and reckless driving charges.





-10-







**ABS
      HOLDING COMPANY, INC.**





ABS,
      which is in the business of providing vehicle immobilization services to parking
      lot owners in Atlanta, Georgia, was incorporated in the State of Nevada on
      November 4, 2004. In November 2004, ABS purchased the assets of Blue Sky
      Parking, Inc. ("Blue Sky"). Blue Sky had obtained its assets from Advanced
      Booting Services, Inc., which was originally co-founded by the Company's Chief
      Executive Officer, Marc Ebersole, in November 1999, and later sold to Blue
      Sky,
      in August 2003. The assets of Blue Sky were purchased by ABS for $200,000,
      of
      which $100,000 was paid in cash and $100,000 in the form of a promissory note
      to
      Blue Sky. The $100,000 note bears no interest and is payable in thirty-six
      installments of $2,777.78, of which approximately $29,236 remained outstanding
      as of December 31, 2006.





ABS
      owns
      approximately forty (40) vehicle immobilization boots, which are attached to
      the
      wheel of a vehicle which is illegally parked, and are intended to prevent
      vehicles from moving until the owners pay a fine, which is currently
      $50.00.





ABS
      currently has contracts to provide booting services to forty (40) parking
      locations, which lots are owned by four separate entities.





When
      someone is illegally parked in one of ABS's client's parking lots, the client
      or
      another individual in charge of the client's parking lot will call ABS to
      provide booting services. ABS contracts with approximately six independent
      booters, who have permits granted by the Atlanta Police Department. When ABS
      gets a call, they contact one of their booters who will then find the illegally
      parked vehicle and install a boot on one of the vehicle's tires. The vehicle
      owner must then pay $50.00 to get the boot removed from his vehicle. ABS
      receives the majority of that payment, with the independent contractor booters
      being paid a set amount by the Company, for each boot they attach.





**Competitive
      Business Conditions**





The
      valet
      parking and vehicle immobilization industries are highly competitive. Currently,
      BH is well diversified and has many clients, while ABS currently depends on
      three clients for its revenues. BH has approximately three competitors in the
      Atlanta, Georgia area.





**Copyrights,
      Patents, Trademarks & Licenses**





Neither
      ABS nor BH has any copyrights, patents, trademarks, or other types of
      intellectual property. ABS does hold a license for booting services in the
      Atlanta, Georgia area.





**Need
      For Governmental Approval and The Effects Of
      Regulations**





In
      connection with ABS's vehicle immobilization services, ABS must be licensed
      by
      the city of Atlanta, Georgia, to operate its booting operations. Additionally,
      the booters which the Company deals with must have permits issued by the Atlanta
      Police Department. In the past, the Company has not had any trouble obtaining
      its license to operate its booting services, which are valid for one year from
      the date of issuance.




-11-





**Research
      & Development Over The Past Two Years**





The
      Company has spent no money on research and development over the past two
      years.





**Employees**





BH
      currently employs seven (7) full-time employees and approximately one hundred
      and twenty (120) independent contractors, as valet parking personnel, although
      the number of parking personnel employed by BH varies seasonally.





ABS
      currently employs one (1) individual on a full-time basis, one (1) individual
      on
      a part-time basis and approximately six (6) independent contractors who actually
      attach ABS's vehicle immobilization boots to the illegally parked
      vehicles.





**MERGER
      AGREEMENT**





On
      November 22, 2005, we entered into an Agreement and Plan of Merger (the "Merger
      Agreement" and the "Merger") with Cryobanks International, Inc., a Delaware
      corporation ("Cryobanks"). Pursuant to the Merger Agreement, shares of common
      stock, warrants and preferred stock of Cryobanks which are issued and
      outstanding immediately prior to the effective date of the Merger ("Effective
      Date") will be converted into the right to receive common stock of the Company.
      Pursuant to the Merger, Cryobanks will be merged with and into BioStem
      Acquisition Company, Inc., a yet to be formed subsidiary of the Company and
      a
      Delaware corporation ("Acquisition Company"), and the separate existence of
      Cryobanks shall cease. The closing date of the Merger is the business day after
      satisfaction or waiver of the conditions set forth below ("Closing
      Date").





Pursuant
      to the Merger Agreement, the aggregate number of shares of the Company issued
      and outstanding immediately prior to the Closing shall be no more than
      15,650,000 shares of common stock, and there shall be no more than 2,000,000
      warrants outstanding which shall have an exercise price of $1.00 per
      share.





Among
      other conditions described in the Merger Agreement, a material condition to
      the
      effectiveness and Closing of the Merger is the successful completion of a
      financing by Cryobanks which results in net proceeds to Cryobanks of at least
      $10,000,000 pursuant to a Private Placement, which attempts to sell 10,000,000
      shares of Cryobanks preferred stock to investors at $1.00 per share and warrants
      to purchase 3,000,000 shares of Cryobanks common stock, exercisable at $1.10
      per
      share, on or before the Closing. The preferred shares issued by Cryobanks in
      such financing will be convertible into one share of the Company for each share
      of preferred stock issued to such investors. These Company shares (which are
      in
      addition to the 120,000,000 shares issued to the holders of Cryobanks common
      stock and warrants), and 2,000,000 shares which are issuable upon conversion
      of
      $2,000,000 of debt of Cryobanks, will not be subject to any restriction or
      lock-up, and will be registered for resale by the Company on a registration
      statement.




-12-





Cryobanks
      has an agreement with the holder of its Series A Preferred Stock, of which
      there
      are 7,000,000 shares outstanding, that fifty percent of the proceeds of the
      above financing will be used to redeem the Series A Preferred Stock at a
      redemption price of $1.00 per share, up to $10.0 million of gross proceeds,
      and
      100% of gross proceeds in excess of $10.0 million will be used to redeem the
      balance of such shares of Series A Preferred Stock.





The
      Board
      of Directors of both the Company and Cryobanks have approved the merger
      agreement, and the majority shareholders of both companies have consented to
      the
      Merger Agreement.





The
      Merger Agreement originally was to terminate if the Merger had not been
      consummated by March 1, 2006, however this date was extended to June 30, 2006,
      pursuant to the First Amendment to Agreement and Plan of Merger entered into
      between Cryobanks and the Company as of March 1, 2006, to September 30, 2006,
      due to the Second Amendment to Agreement and Plan of Merger, entered into
      between Cryobanks and the Company as of July 1, 2006, to March 31, 2007,
      pursuant to the Third Amendment to Agreement and Plan of Merger, entered into
      between Cryobanks and the Company effective as of September 30, 2006, and most
      recently, to June 30, 2007, pursuant to the Fourth Amendment to Agreement and
      Plan of Merger, which had an effective date of March 20, 2007.





Assuming
      the Closing of and pursuant to the terms of the Merger Agreement, the Company
      will divest itself of its two operating subsidiaries, and will have no more
      than
      $25,000 of accrued but unpaid liabilities on the effective date of the merger.
      On the effective date of the merger, Cryobanks will merge with and into the
      Acquisition Company, which will become the surviving corporation in the Merger.
      All of the outstanding shares of Series A Preferred, Series B Preferred Stock
      and warrants of Cryobanks will be converted into shares of common stock of
      the
      Company at an exchange ratio of 0.852578 (meaning that for each share of
      Cryobanks stock, the holder will be issued 0.852578 shares of the Company,
      the
      "Exchange Ratio"), unless such Series A Preferred Stock, Series B Preferred
      Stock and warrants are issued pursuant to the planned Private Placement
      (described below). The total amount of shares to be issued in connection with
      the conversion of the Series A Preferred Stock, Series B Preferred Stock and
      warrants shall total 120,000,000 shares of the Company's common stock (the
      "Merger Consideration"), and such Exchange Ratio shall be adjusted if any shares
      of the Company's common stock are issued prior to the Closing, by dividing
      120,000,000 by the sum of the then outstanding shares of the Company's common
      stock and warrants.





Shareholders
      of Cryobanks, who dissent to the Merger are able to receive payment for their
      shares (as calculated in the Merger Agreement) in lieu of shares of the
      Company.




-13-







All
      warrants to purchase shares of Cryobanks common stock which are outstanding
      prior to the Merger will be assumed by the Company as provided in the Merger
      Agreement. Assuming the Closing of the Merger, the Company will issue
      120,000,000 shares of its common stock to the shareholders of Cryobanks, and
      the
      board of directors of Cryobanks will be appointed to the Company's board, and
      the current members of the Company's board will resign. On the effective date
      of
      the merger, immediately prior to the merger, the Company will have 15,650,000
      shares of common stock outstanding, and warrants to purchase 2,000,000 shares
      of
      common stock with an exercise price of $1.00 per share. All other shares then
      outstanding will be cancelled in exchange for the transfer by the Company of
      all
      of the common stock of its two current operating subsidiaries, BH Holdings,
      Inc.
      and ABS Holdings, Inc., to those shareholders canceling shares (as described
      below under "Agreement to Purchase Subsidiaries and Cancel
      Shares").





Assuming
      the Closing of the Merger, it is anticipated that the Company and Cryobanks
      will
      cause to be filed a registration statement on Form S-4 registering the issuance
      of the 120,000,000 shares to the Cryobanks shareholders. Notwithstanding this
      registration, all of the 120,000,000 shares to be issued shall be subject to
      a
      one year restriction against transfer, except for approximately 91,879,402
      shares held by the majority shareholder of Cryobanks, which will be subject
      to a
      six-month lockup.





**Agreement
      to Purchase Subsidiaries and Cancel Shares**





On
      November 22, 2005, our Chief Executive Officer, Marc Ebersole and our Directors,
      Scott Schweber and Christine Ebersole (the "Management Shareholders"), entered
      into an Agreement to Purchase Subsidiaries and Cancel Shares ("Spinoff
      Agreement"), with certain shareholders who hold Senior and Junior debentures
      with the Company (together with the Management Shareholders, the "Security
      Holders" as described below). Pursuant to the Spinoff Agreement, the Security
      Holders agreed to cancel the shares of the Company's common stock which they
      held in return for the transfer to them of the Company's two wholly owned
      subsidiaries ABS Holding Company, Inc. ("ABS") and BH Holding Company, Inc.
      ("BH"). Pursuant to the Spinoff Agreement, each Security Holder will receive
      one
      share of both ABS and BH for each four shares of the Company which they hold
      and
      the Company will then cancel each share of the Company's common stock which
      they
      held.





Additionally,
      pursuant to the Agreement to Purchase Subsidiaries and Cancel Shares, Hyde
      Investments, Ltd. ("Hyde"), which the Company currently owes $592,500 to in
      connection with the Senior Debenture, described above, has agreed to release
      the
      Company from any obligations under the Senior Debenture, upon the closing of
      the
      Merger, and that in exchange for such release, ABS and BH will both assume
      50%
      of the $592,500 outstanding under the Senior Debenture.





The
      Spinoff Agreement is to be effective on the day following the closing of the
      Merger (described above).






-14-







Pursuant
      to the Spinoff Agreement, the following Security Holders have agreed to cancel
      the following share amounts:





o
            Marc
                Ebersole 122,000,000 shareso
            Christine
                Ebersole 4,000,000 shareso
            Scott
                A. Schweber 4,000,000 shareso
            The
                Morpheus Trust 5,460,018 shareso
            Livingston
                Investments 6,200,000 shareso
            The
                Gateway Real Estate Investment Trust 5,090,026 shareso
            Burton
                Partners, LLC 6,200,000 shareso
            Picasso,
                LLC 6,200,000 shares


-------------------------------------------------------------------


Total
      159,150,044 shares





Assuming
      the Closing of the Merger and the subsequent closing of the Spinoff Agreement,
      the Company will no longer have any interest in the operations of ABS and BH,
      the shareholders of Cryobanks will become the majority shareholders of the
      Company, and the Company's new business focus will be stem cells and the banking
      of stem cells as described below.





**London
      Finance Group, Ltd.**





Pursuant
      to a term sheet dated November 1, 2005, London Finance Group, Ltd. ("LFG")
      agreed, if requested by Cryobanks, to use its best efforts to assist the
      post-merger company in the completion of an additional financing of at least
      $5,000,000, based on the then existing market capitalization of the post-merger
      company. LFG also agreed to assist as a financial advisor in identifying
      investment banking, venture capital and other financial firms that the
      post-merger company may consider retaining. LFG is a warrant holder in the
      Company, and has a consulting agreement with the Company, which will remain
      in
      effect post-merger.





**RECENT
      EVENTS**





**Cryobank
      Letter of Intent**





On
      January 31, 2007, Cryobanks International, Inc., a Delaware corporation
      (“Cyrobanks”), which had previously entered into an Agreement and Plan of Merger
      with us (the “Merger,” as described in greater detail above), entered into a
      Letter of Intent with Samarium Technology Group, Ltd. (the “Letter of Intent”
and “Samarium”), which Letter of Intent was agreed to and accepted by Samarium
      on February 13, 2007, but which acceptance was not communicated to Cryobanks
      until February 28, 2007. The Merger, which is contingent upon Cryobanks raising
      at least $10,000,000 pursuant to a private placement was originally scheduled
      to
      terminate if the Merger had not been consummated by March 1, 2006 but through
      various amendments has been extended to June 30, 2007.







-15-







Pursuant
      to the Letter of Intent, subject to completion of due diligence, by
      Samarium, which originally was required to be completed within thirty days,
      but
      which has since been extended until April 30, 2007,  Samarium agreed to
      purchase $9,000,000 Class A Secured Convertible Debentures of Cryobanks, which
      are to bear interest at the rate of 10% per annum, are convertible into 7.5%
      of
      Cryobank’s outstanding common stock on a fully diluted basis, and are due and
      payable on December 31, 2008 (the “Samarium Debentures”). The Samarium
      Debentures automatically convert into registered shares of the Company’s common
      stock upon the completion of the Merger and the subsequent effectiveness of
      a
      registration statement on Form S-4 registering the shares which the Samarium
      Debentures are convertible into (the “Effectiveness Date”).





Pursuant
      to the Letter of Intent, Cryobanks is to receive $2,000,000 of the proceeds
      from
      the Samarium Debentures upon the execution of final documents regarding the
      transactions contemplated by the Letter of Intent (the “Closing”), with the
      remaining $7,000,000 payable on the Effectiveness Date.





The
      Letter of Intent calls for the Form S-4 registration statement to be filed
      by
      the Company within 60 days of the Closing and to obtain effectiveness of such
      Form S-4 registration statement within 150 days of the Closing. If the Form
      S-4
      registration statement is not declared effective by the 150 th day
      following the Closing, the Samarium Debentures shall bear interest at the rate
      of 15% per annum until paid in full, and Cryobanks shall commence monthly
      interest only payments starting the first day of the month following the
      expiration of such 150 day period.





The
      Letter of Intent also calls for Samarium to be able to elect two members to
      the
      Company’s Board of Directors, following the increase in the Company’s Board of
      Directors from three members to five members.





Samarium
      will also receive warrants in connection with the Closing, including a five
      year
      Class A Warrant to purchase up to 3.5% of Cryobanks’ outstanding common stock on
      a fully diluted basis (which includes the shares issuable in connection with
      the
      conversion of the Samarium Debentures), with an exercise price equal to the
      conversion price of the Samarium Debentures; and a five year Class B Warrant
      to
      purchase up to 3.75% of Cryobanks’ outstanding common stock on a fully diluted
      basis (which includes the shares issuable in connection with the conversion
      of
      the Samarium Debentures), with an exercise price equal to $0.001 per
      share.





The
      Letter of Intent additionally includes a closing fee equal to 13% of the
      proceeds received by Cryobanks, and a separate warrant to purchase 1.125% of
      Cryobank’s outstanding common stock on a fully diluted basis (which includes the
      shares issuable in connection with the conversion of the Samarium Debentures),
      on the same terms as the Samarium warrants to a consultant, as well as a $35,000
      structuring fee payable to Samarium.





Finally,
      the Letter of Intent requires that all of the current shareholders of Cryobanks
      agree to lockup the shares which they currently hold for one year from the
      effective date of the Merger, which lockup shall terminate as to 25% of the
      shares locked up by each shareholder on the 90th,
      180th,
      270thand
      365thday
      following the Merger.







-16-





The
      Closing is anticipated to occur during the second quarter of 2007, of which
      there can be no assurance, subject to completion of due diligence by Samarium
      in
      its sole discretion. The provisions of the final Closing documents to be
      executed by Cryobanks and Samarium may or may not contain the terms and
      provisions described above and in the Letter of Intent.





**Amendment
      To Senior Debenture**





In
      March
      2007, with an effective date of December 31, 2006, the Company, ABS Holding
      Company, Inc. and BH Holding Company, Inc., our wholly owned subsidiaries,
      Marc
      Ebersole, our Chief Executive Officer and Hyde Investments, Ltd. (“Hyde”),
      entered into an “Amendment Dated as of 12/31/06 to Senior Secured Convertible
      Debenture” (the “Second Extension”), to amend the terms of our Senior Secured
      Convertible Debenture originally entered into with Hyde on October 15, 2004
      (“Senior Debenture”). The Senior Debenture had a balance of $552,500 as of
      December 31, 2006, which pursuant to the then terms of the Senior Debenture
      was
      due and payable on December 31, 2006. Pursuant to the Second Extension the
      due
      date of the Senior Debenture was extended to December 31, 2007. Subsequent
      to
      December 31, 2006, we borrowed an additional $40,000 under the Senior Debenture,
      bringing the total outstanding amount of the Senior Debenture to $592,500 as
      of
      the filing of this report.





**Amendment
      to Merger Agreement**





On
      or
      about March 20, 2007, we entered into the “Fourth Amendment to Agreement and
      Plan of Merger,” with Cryobanks, whereby we amended the date Cryobanks was
      required to close the Merger by from March 31, 2007, to June 30, 2007. All
      other
      terms of the Merger Agreement remained the same as originally
      signed.





**DESCRIPTION
      OF THE BUSINESS OF CRYOBANKS**





Cryobanks
      International, Inc. ("CI," or "Cryobanks") is a Delaware corporation,
      incorporated in May 1999, located in Altamonte Springs, Florida, a suburb of
      Orlando. Cryobanks believes it is one of the leading companies in the
      collection, processing, and banking of stem cells derived from the umbilical
      cord immediately after birth. The units of cord blood ("CB") are processed
      and
      stored by the company for use in unrelated transplants (where the donor is
      a
      histocompatible match, but is anonymous and unrelated to the recipient) and
      for
      personal storage and use. Cryobanks believes that in recent years, cord blood
      transplants ("CBTs") have become widely recognized as a safe, effective, and
      in
      many ways preferable, alternative to bone marrow transplant ("BMT"). Cryobanks
      believes that there is tremendous potential need for CBTs in the United States
      and worldwide, and that Cryobanks is well poised to help meet that
      need.







-17-







Cryobanks
      was formed in 1994 as a blood and semen banking facility. In mid-1995, CI
      expanded its scope of business into the field of CB banking. The main goal
      of
      Cryobanks is to become the largest provider of cord blood stem cells ("CBSCs")
      for transplant and research purposes in the world.





Cord
      blood contains a very concentrated source of stem cells which ultimately may
      differentiate into all other cells in the body, such as red or white blood
      cells, platelets, brain cells, liver cells or any other cell type. Transplanted
      into humans with a variety of diseases, CBSCs can often reverse or even cure
      the
      disease. CB is a non-controversial source of stem cells, as it does not involve
      the use or destruction of an embryo or fetal tissue and would otherwise be
      discarded as medical waste. In addition to therapeutic uses through transplant,
      CB stem cells can be used to develop new therapies and as sources of specific
      cell types for research purposes. A new legislation, expected to be soon enacted
      by Congress, underscores the importance of this technology and should create
      a
      rapid expansion of a national cord blood inventory. The company is poised to
      be
      at the heart of this expansion.





Cryobanks
      is engaged in three core businesses, all related to CB collection, storage
      and
      use. The first business is the collection and storage of CB units donated by
      the
      parents at birth for unrelated cord blood transplants ("Donor Units"). While
      Cryobanks bears the cost of collection and processing, these Donor Units have
      three distinct uses for therapeutic purposes: for CB transplant, for research
      in
      the discovery of new therapeutics, and for sale of the stem cells for other
      research purposes. Currently, the company lists its unrelated transplantable
      units on three key worldwide registries.





The
      second business involves the collection of CB units for personal storage
      ("Storage Units"), to be used, if necessary, by the donor family or its
      designees. In this case, the donating family pays for collection, processing
      and
      storage, plus an annual fee for continued storage.





The
      third
      business involves technology licensing. Cryobanks has been asked by many
      international groups to help them set up CB collection and storage facilities.
      Cryobanks has developed a model for assisting other parties in this endeavor
      and
      already has agreements to assist in the formation of several facilities, in
      India and Greece.





Additionally,
      Cryobanks expects to help sponsor research in areas related to stem cell
      therapy. In return, Cryobanks will have first rights to licensing and royalty
      income when and if the therapies based on this research are developed. Due
      to
      the long, 10 to 12 year, development time of biological therapeutics, Cryobanks
      does not expect to see significant revenues from this business within the first
      five years. Cryobanks has signed one Material Transfer Agreement with a
      well-known cancer research center and has several other agreements pending,
      which there can be no assurance will close.








-18-







**COMPETITION**





Cryobanks
      has two categories of competitors. The first category is the personal storage
      for fee business. To date, this has been by far the most lucrative area of
      cord
      blood banking. For personal storage, a family will pay a large initial fee
      (usually $1,300 to $2,000) to process and store their cord blood for private
      use, plus an annual storage fee of $95 to $150. The primary companies in this
      area are Cord Blood Registry and ViaCell. Cord Blood Registry. Cryobanks
      believes that the prices it charges for the storage of cord blood is competitive
      with other companies. Additionally, the other companies that offer this service
      are for-profit companies.





Another
      category of competition in the cord blood arena is the collection of unrelated
      donated units (donations not from relatives), at no charge to the donor.
      Cryobanks invests its own money to process these units. The units are then
      placed on international registries with the expectation that these units will
      be
      selected for transplant. If a unit is selected for transplant, Cryobanks will
      receive approximately $20,000 as reimbursement for each transplantable CB unit.
      Not every unit donated will be selected for transplant and a facility must
      have
      a large inventory, estimated at 20,000 or greater, in order to have sales at
      a
      rate of 10 percent. The largest existing inventory is at the New York Blood
      Center - with approximately 16,000 stored and registered units of which over
      approximately 1,700 have already been used for transplant. The competing
      facilities in this category are hospitals and universities that are primarily
      funded through private or government grants. Historically, processing costs
      are
      high and efficiencies are low resulting in the failure or constant
      start-up/shut-down of their operations.





**The
      Scientific & Medical Board of Advisors (Samba)**





Cryobanks
      relies on a highly acclaimed team of scientists and doctors to provide guidance
      to its operations and activities.





**ITEM
      1A. RISK FACTORS.**





**COMPANY
      RISK FACTORS**





**Need
      For Additional Financing.**





The
      Company requires approximately $25,000 of additional financing to pay amounts
      owed in legal and accounting fees, which amounts the Company believes it will
      be
      able to pay from future sales revenue and future advances from Hyde, assuming
      the Company has approximately the same number of clients and receives
      approximately the same amount of income from its services, of which there can
      be
      no assurance. Additionally, the Company owed $552,500 to Hyde as of December
      31,
      2006 and owes $592,500 to Hyde as of the filing of this report, in connection
      with its Senior Debenture (as described above), and approximately $480,000
      of
      consulting fees to London, in connection with the Consulting Agreement,
      described above as of December 31, 2006, which the Company currently does not
      have sufficient funds to repay. Additionally, the Company's current goal is
      to
      acquire or merge with a company in the stem cell business. The amount of money
      the Company will require for this acquisition or merger is dependent on what
      acquisition or merger the Company may choose to make. While the amount of
      additional financing the Company will require is currently unknown, the Company
      anticipates that it will require a substantial amount of additional financing.
      Currently, the Company does not have any commitments or identified sources
      of
      capital from third parties or from the Company's officers, directors or majority
      shareholders. There is no assurance that additional financing will be available
      on favorable terms, if at all. If the Company is unable to raise such financing,
      it may not be able to pay its continuing obligations, including its Senior
      Debenture with Hyde, and/or complete any acquisitions or mergers, and may be
      forced to curtail or abandon its business plan.







-19-





**We
      Have Outstanding Liabilities Which We Do Not Currently Have Financial Resources
      To Pay.**





The
      Company currently owes $592,500 to Hyde in connection with the Senior Debenture
      described above. The Senior Debenture is due and payable on December 31, 2007.
      As of December 31, 2006, the Company had negative working capital of $1,381,416
      and had no commitments from any officers, directors or third parties to provide
      any financing to the Company. If the Company does not have the $592,500 to
      repay
      the Senior Debenture on December 31, 2007, Hyde will be able to convert the
      Senior Debenture into shares of the Company's common stock at the lesser of
      30%
      of the average of the three lowest closing prices for the twenty (20) trading
      days proceeding the date of conversion or $0.025. If the Company is unable
      to
      extend or pay the Senior Debenture, Hyde could convert the Senior Debenture
      into
      shares of the Company's common stock and take substantial control of the
      Company. If this were to happen, the Company could be forced to abandon or
      curtail its operations and any investment in the Company could become
      worthless.





**A
      Large Percentage Of Our Revenues For The Year Ended December 31, 2006, Came
      From
      A Small Number Of Parking Lots And If We Were To Lose Those Parking Lots As
      Clients, Our Revenues Would Be Adversely Affected.**





During
      the year ended December 31, 2006, approximately 23% of our revenues came from
      valet parking services in connection with one parking lot, and a total of
      approximately 51% of our revenues came from a total of only three parking lots.
      Because of this high concentration of revenues, if we were to lose any of those
      three parking lots as clients, our revenues would likely decrease substantially.
      As a result, if we were to lose any of those lots as clients, and were not
      able
      to replace such lot or lots with similarly sized clients, we could be forced
      to
      curtail or abandon our business operations and any investment in our common
      stock could decline in value and/or become worthless.





**We
      Are Currently In Negotiations To Acquire And/Or Merge With A Company In The
      Stem
      Cell Industry, Which Will Likely Cause Us To Change Our Business Focus,
      Discontinue Our Current Operations, Result In Dilution To Our Current
      Shareholders And Will Likely Cause The Composition Of The Company's Management
      And Board Of Directors To Change.**







-20-





The
      Company has entered into a Merger Agreement with Cryobanks, a stem cell company.
      The Company has entered into agreements with a consultant, Financial Systems
      International, which is to provide consulting services to the Company in
      connection with such Merger. The Company can make no assurances that the Company
      will be able to acquire and/or merge with Cryobanks and/or that it will have
      sufficient funds to support its current operations until such acquisition and/or
      merger is complete, if ever. Additionally, in connection with London's
      Consulting Agreement, described above, London will receive 10% of any
      compensation paid to the Company in connection with any merger, acquisition
      or
      exchange entered into, including the Merger Agreement. In the event the Company
      does close the Merger, the Company's majority shareholders will change and
      new
      shares of common stock will be issued resulting in dilution to current
      shareholders. Additionally, the Company's new majority shareholders will change
      the composition of the Company's Board of Directors and replace the Company's
      management. The new management will change the Company's business focus to
      the
      stem cell field and currently plan to spin-off the Company's current operations
      to a separate private company, not affiliated with us. The Company can make
      no
      assurances that the Company's new management will be able to properly manage
      the
      direction of the Company or that this change in the Company's business focus
      will be successful. If the Company does close the Merger, and the Company's
      new
      management fails to properly manage and direct the Company, the Company may
      be
      forced to scale back or abandon its operations, which will cause the value
      of
      the Company's common stock to decline. The Company will continue with its
      current business in the event a merger or acquisition is not
      completed.





**We
      Have Significant Debts For Which We Have Payment Obligations We May Not
      Meet.**





We
      had
      total current liabilities of $1,404,692 at December 31, 2006. We had current
      assets of $66,175, and negative working capital of $1,338,517 as of December
      31,
      2006. Based on our financial condition, there are substantial risks that we
      will
      not meet our payment obligations. If any of our creditors were to seek repayment
      of amounts outstanding, the Company may be forced to curtail or abandon its
      business and an investment in our Company could become worthless.





**We
      Will Face Substantial Additional Expenses In The Future, Which Expenses We
      May
      Not Be Able To Afford, In Connection With The Fact That We Will Become An
      Accelerated Filer, And Therefore Be Required To Perform An Annual Report Of
      Our
      Controls And Procedures.**





Starting
      with this Form 10-K for the year ended December 31, 2006, we are classified
      as
      an "accelerated filer," are no longer be able to file small business reports,
      will be required to file our quarterly reports within 40 days (subject to a
      five
      calendar day extension) of our year end and our annual reports (including our
      Form 10-K for the year ended December 31, 2006) within 75 days of our year
      end
      (subject to a 15 calendar day extension), and be required to conduct an annual
      assessment of our internal controls and procedures. We anticipate these
      increased and accelerated filing requirements will require us to expend
      substantial additional legal and accounting expenses. Furthermore, our
      management will likely need to devote a substantial amount of time to these
      new
      compliance and filing requirements, which could take away from the time they
      have to spend on company matters. Finally, the required testing of our internal
      controls by us and our independent registered public accounting firm, may reveal
      deficiencies in our internal controls over financial reporting which are deemed
      to be material weaknesses and may require us to expend additional substantial
      expenses in bringing such controls and procedures in check with the Commission's
      guidelines. If we are not able to file our quarterly and annual reports within
      the accelerated deadlines set forth by the Commission, and we fail to file
      such
      reports on a timely basis three (3) times in any twenty-four (24) month period,
      of which we have already been late once during the current twenty-four (24)
      month period, our securities will be de-listed from the OTC Bulletin Board
      and
      the value of our common stock could become worthless. Additionally, the
      significant additional time and expense our status as an "accelerated filer"
      will create for us and our management could take away from the time and capital
      we have to spend on our business operations and could cause the value of our
      common stock to decline in value. Furthermore, if we are found to have
      deficiencies in our controls and procedures, and are not able to comply with
      the
      requirements in a timely manner, the market price of our stock could decline,
      and we could be subject to sanctions or investigations by the Commission or
      other regulatory authorities, which would likely require us to expend additional
      financial and management resources, which resources we may not have, and which
      may force us to curtail or abandon our business operations.





-21-





**We
      Depend Heavily On Marc Ebersole, The Company's Chief Executive
      Officer.**





The
      success of the Company depends heavily upon the personal efforts and abilities
      of Marc Ebersole, the Company's Chief Executive Officer and Director. The
      Company has entered into a Five (5) year employment agreement with Mr. Ebersole.
      However, the Company currently has no key man insurance or life insurance
      policies on Mr. Ebersole. The loss of Mr. Ebersole could have a material adverse
      effect on our business, results of operations and/or financial condition. In
      addition, the absence of Mr. Ebersole will force us to seek a replacement who
      may have less experience or who may not understand our business, or we may
      not
      be able to find a suitable replacement. If this were to happen, the Company
      may
      be forced to curtail or abandon its business plan.





**Growth
      Will Place Significant Strains On Our Managerial, Administrative And Other
      Resources.**





Any
      growth that we experience is expected to place a significant strain on our
      managerial and administrative resources. Marc Ebersole is our only officer.
      We
      have limited employees who perform administrative functions. Further, if our
      business grows, we will be required to manage multiple relationships with
      various clients and third parties and numerous valet parking personnel. These
      requirements will be exacerbated in the event of further growth. There can
      be no
      assurance that our other resources such as our systems, procedures or controls
      will be adequate to support our growing operations or that we will be able
      to
      achieve the rapid execution necessary to successfully offer our services and
      implement our business plan. Assuming that our business grows, our future
      success will depend on our ability to add additional management and
      administrative personnel to help compliment our current employees as well as
      other resources. If we are unable to add additional managerial and
      administrative resources, it may prevent us from continuing our business plan
      and could have an adverse effect on the value of our securities.







-22-










**Marc
      Ebersole Can Vote Approximately 69.6% Of Our Common Stock And Can Exercise
      Control Over Corporate Decisions Including The Appointment Of New
      Directors.**





Marc
      Ebersole, our Chief Executive Officer, can vote an aggregate of 122,000,000
      shares or approximately 69.6% of our outstanding common stock. Accordingly,
      Mr.
      Ebersole will exercise control in determining the outcome of all corporate
      transactions and other matters, including the election of directors, mergers,
      consolidations, the sale of all or substantially all of our assets, and also
      the
      power to prevent or cause a change in control. Any investors who purchase shares
      of the Company's common stock, will be minority shareholders and as such will
      have little to no say in the direction of the Company and the election of
      Directors. Additionally, it will be difficult if not impossible for investors
      to
      remove Mr. Ebersole as a Director of the Company, which will mean he will remain
      in control of who serves as officers of the Company, as well as whether any
      changes are made in the Company's Board of Directors. As a potential investor
      in
      the Company, you should keep in mind that even if you own shares of the
      Company's common stock and wish to vote them at annual or special shareholder
      meetings, your shares will likely have little effect on the outcome of corporate
      decisions.





**Dilution
      To Current Shareholders.**





In
      the
      event the Agreement and Plan of Merger is successfully completed, this will
      result in dilution to the Company's shareholders as new stock will be issued
      in
      connection with both the Agreement and Plan of Merger as well as the private
      placement. Such dilution may result in a decrease in our share
      price.





**Our
      Management Has Concluded Pursuant To A Review Of Our Internal Controls Over
      Financial Reporting, That Our Controls And Procedures Are Not Effective To
      Insure That Information Is Timely Communicated To Our Management To Allow Timely
      Decisions Regarding Our Required Disclosures.**





Our
      management evaluated the effectiveness of our disclosure controls and procedures
      as of December 31, 2006 and based on that evaluation and the existence of
      certain material weaknesses in our internal controls, concluded that such
      disclosure controls and procedures were not effective as of December 31, 2006.
      That conclusion was based on several weaknesses which were found in our internal
      control over financial reporting which are disclosed in greater detail below
      under “Item 9A. Controls and Procedures.”







-23-







Although
      our management will attempt to address and eliminate those weaknesses during
      the
      2007 fiscal year, until such weaknesses are addressed, if ever, they may prevent
      us from timely filing our periodic reports with the Commission (which could
      in
      turn force us to be delisted from the OTCBB, as described in greater detail
      below) or could result in a misstatement in our annual or interim consolidated
      financial statements, which could materially misstate one or many of our
      financial results or disclosures and could require that such financial
      information will need to be restated and/or corrected in the future. Until
      we
      address and correct the weaknesses in our internal controls, our financial
      statements may be materially incorrect and/or need to be corrected or restated
      in the future, which could cause us to expend substantial funds and resources
      in
      the correction and/or restatement of such financial information, if such errors
      or omissions are found, of which there can be no assurance. The required payment
      of such funds and/or the misstatement of our financial statements could cause
      the value of our common stock to decrease and/or become worthless and could
      also
      open us up to investor lawsuits, if investors purchase our common stock based
      on
      inaccurate or materially misleading financial information.





**The
      Company Faces Potential Liability for the Debts Of Its Former Wholly-Owned
      Subsidiary.**





The
      Company's former Chief Executive Officer, Wayne Daley, represented to the
      Company's former auditor that $200,000 in notes payable of the Company's former
      wholly-owned subsidiary ("Notes") belonged to him, and that he therefore was
      able to release the Company from the obligations of the Notes in connection
      with
      a General Release and Settlement Agreement he entered into with the Company.
      The
      Company has received an executed release for liability for $100,000 of such
      notes. The Company has been unable to determine whether the remaining $100,000
      in notes was validly assigned; however, as the remaining note was an obligation
      of the Company's former wholly-owned subsidiary, the Company is taking the
      position that it has no liability in connection with that note. There is a
      possibility that creditors of the Company's former wholly-owned subsidiary
      could
      make claims against the Company alleging various successor liability
      theories.





While
      the
      Company believes that such claims would have no merit, it cannot assure that
      such claims will not be successful. If the Company is forced to pay liabilities
      associated with the Company's former wholly-owned subsidiary, the Company may
      be
      liable for the $100,000 note, any accrued and unpaid interest, as well as any
      other liabilities associated with the Company's former wholly-owned subsidiary
      which are unknown to the Company at this time. If the Company is forced to
      defend or pay for liabilities associated with the Company's former wholly-owned
      subsidiary, it could have a materially adverse effect on the Company's results
      of operations and financial condition.





**The
      Issuance And Sale Of Common Stock Underlying The Junior Debentures May Depress
      The Market Price Of Our Common Stock.**







-24-







As
      of
      January 29, 2007, we had 175,218,044 shares of common stock outstanding. The
      Preferred Stock Sellers may convert their Junior Debentures into 347,000,000
      shares of our common stock at a conversion price of $0.00025 per share, of
      which
      no shares have been issued as of the date of this report. Even though the
      Preferred Stock Sellers cannot own more than 4.99% of our outstanding common
      stock at any one time, they can continuously convert their debt and sell their
      sales over a period of time and stay below the 4.99% maximum ownership limit.
      As
      sequential conversions and sales take place, the price of our common stock
      may
      decline and other shareholders in the Company may have their shares diluted
      by
      the conversions of the Preferred Stock Sellers.





**The
      Company Faces Competition for Its Services.**





The
      Company faces intense competition for both its valet parking services and its
      vehicle immobilization services. These competitors include larger companies
      which compete with the Company in both the valet parking and vehicle
      immobilization industries, those companies may have financial resources,
      equipment, and expertise in the valet parking and vehicle immobilization fields
      which is greater than the Company's. As a result, the Company may be unable
      to
      compete with these larger companies and may be forced to abandon or curtail
      its
      business plan.





**ABS
      Currently Relies On Approximately Three Major Customers For Its
      Revenue.**





All
      of
      ABS's revenue currently comes from approximately three major clients. While
      the
      Company hopes to diversify ABS's client base in the future, if ABS were to
      lose
      its customers and fail to find additional clients for its booting services,
      it
      would have an adverse effect on the Company's operations. If this were to
      happen, the Company could be forced to abandon or curtail its vehicle
      immobilization operations, which would likely decrease the value of the
      Company's securities.





**Our
      Auditors Have Expressed An Opinion That There Is Substantial Doubt About Our
      Ability To Continue As A Going Concern.**





Our
      auditors have expressed an opinion that there is substantial doubt about our
      ability to continue as a going concern primarily because we incurred a net
      loss
      of $2,051,539 for the year ended December 31, 2006, and because we had an
      accumulated deficit of $15,190,930 at December 31, 2006. The accompanying
      financial statements have been prepared assuming that the Company will continue
      as a going concern. The financial statements do not include any adjustments
      that
      might result from our inability to continue as a going concern. If we are unable
      to continue as a going concern, you will lose your entire
      investment.





**If
      We Are Late Two More Times In Filing Our Quarterly Or Annual Reports With The
      SEC In The Current Twenty-Four (24) Month Period, Or Are Late Three Times In
      Any
      Subsequent Twenty-Four (24) Month Period, We Will Be De-Listed From The Over-The
      -Counter Bulletin Board.**







-25-







Pursuant
      to new Over-The-Counter Bulletin Board ("OTCBB") rules relating to the timely
      filing of periodic reports with the SEC, any OTCBB issuer which fails to file
      a
      periodic report (Form 10-'s or 10-K's) by the due date of such report (not
      withstanding any extension granted to the issuer by the filing of a Form
      12b-25), three (3) times during any twenty-four (24) month period is
      automatically de-listed from the OTCBB. Such removed issuer would not be
      re-eligible to be listed on the OTCBB for a period of one-year, during which
      time any subsequent late filing would reset the one-year period of de-listing.
      As we were late in filing our Form 10-KSB for the period ending December 31,
      2005, if we are late in our periodic filings two more times during the next
      five
      fiscal quarters and/or late three times in any subsequent twenty-four (24)
      month
      period, we will be de-listed from the OTCBB, and as a result, our securities
      may
      become worthless, and we may be forced to curtail or abandon our business
      plan.





**Investors
      May Face Significant Restrictions On The Resale Of Our Common Stock Due To
      Federal Regulations Of Penny Stocks.**





Our
      common stock will be subject to the requirements of Rule 15(g)9, promulgated
      under the Securities Exchange Act as long as the price of our common stock
      is
      below $4.00 per share. Under such rule, broker-dealers who recommend low-priced
      securities to persons other than established customers and accredited investors
      must satisfy special sales practice requirements, including a requirement that
      they make an individualized written suitability determination for the purchaser
      and receive the purchaser's consent prior to the transaction. The Securities
      Enforcement Remedies and Penny Stock Reform Act of 1990, also requires
      additional disclosure in connection with any trades involving a stock defined
      as
      a penny stock. Generally, the Commission defines a penny stock as any equity
      security not traded on an exchange or quoted on NASDAQ that has a market price
      of less than $4.00 per share. The required penny stock disclosures include
      the
      delivery, prior to any transaction, of a disclosure schedule explaining the
      penny stock market and the risks associated with it. Such requirements could
      severely limit the market liquidity of the securities and the ability of
      purchasers to sell their securities in the secondary market.





**If
      There Is A Market For Our Common Stock, Our Stock Price May Be
      Volatile.**





If
      there
      is a market for our common stock, we anticipate that such market will be subject
      to wide fluctuations in response to several factors, including, but not limited
      to:


(1)
              actual
                  or anticipated variations in our results of operations;(2)
              our
                  ability or inability to generate new revenues;(3)
              the
                  number of shares in our public float;(4)
              increased
                  competition; and(5)
              conditions
                  and trends in the parking and vehicle immobilization
                  industries.




Furthermore,
        because our common stock is traded on the NASD over the counter bulletin
        board,
        our stock price may be impacted by factors that are unrelated or
        disproportionate to our operating performance. These market fluctuations,
        as
        well as general economic, political and market conditions, such as recessions,
        interest rates or international currency fluctuations may adversely affect
        the
        market price of our common stock.




-26-







Additionally,
      at present, we have a very limited number of shares in our public float, and
      as
      a result, there could be extreme fluctuations in the price of our common stock.
      Further, due to the limited volume of our shares which trade and our limited
      public float, we believe that our stock prices (bid, asked and closing prices)
      are entirely arbitrary, are not related to the actual value of the Company,
      and
      do not reflect the actual value of our common stock (and in fact reflect a
      value
      that is much higher than the actual value of our common stock). Shareholders
      and
      potential investors in our common stock should exercise caution before making
      an
      investment in the Company, and should not rely on the publicly quoted or traded
      stock prices in determining our common stock value, but should instead determine
      value of our common stock based on the information contained in the Company's
      public reports, industry information, and those business valuation methods
      commonly used to value private companies.





**RISK
      FACTORS RELATING TO**


**CRYOBANKS***





*
      Please
      see "Company Risk Factors," above for a discussion of the risks facing the
      Company's current business operations.





The
      risk
      factors described below are only some of the risks associated with the business
      of Cryobanks.





**Cryobanks
      Must Complete A Ten Million Dollar Private Placement To Close The
      Merger.**





The
      Agreement and Plan of Merger has various conditions precedent in order for
      the
      parties to effect the merger, one of which includes Cryobanks raising a minimum
      of $10,000,000 in a private placement. Although $-0- has been raised to date,
      Cryobanks has entered into a Letter of Intent with a third party to raise
      approximately $9,000,000 in funding as described above under “Recent Events.” In
      the event Cryobanks is successful in raising a minimum of $10,000,000 of which
      there can be no assurance, $5,000,000 of such funds will be used to redeem
      $5,000,000 of Cryobanks Series A Preferred Stock. As of the filing of this
      report, Cryobanks has not raised any of the $10,000,000 which it is required
      to
      raise prior to the closing of the Merger. Cryobanks may never raise any money
      in
      a private offering and as a result, the Merger may never close. If this were
      to
      happen, the value of our common stock could decrease in value and/or become
      worthless.





**CBSC
      Transplant Procedures Will Not Become Popular Or Will Not Grow In Numbers Fast
      Enough To Meet Projections.**





While
      there is strong indication that CBSC transplants are in many ways superior
      to
      the current common practice of bone marrow transplants, and there appears to
      be
      an increasing use of CBSC transplants in place of bone marrow transplants,
      a
      significant portion of Cryobanks' projected revenues over the next five years
      is
      dependent on this trend to continue and increase even more over time. The
      slowing down of this trend would represent a significant risk to Cryobanks.
      Further, a major adverse event in the use of cord blood for transplant could
      adversely affect Cryobanks main business.







-27-





**Personal
      Cord Blood Storage May Become Less Desirable Than
      Anticipated.**





Some
      medical groups have recommended that birthing mothers not store cord blood
      for
      personal use. Reasons include the low likelihood that the personal unit will
      ever be used for homogeneic transplant (to the child). If there is a need within
      a family, there is a greater chance of a match, and the family members could
      take advantage of the stored unit. While estimations are that with 300,000
      registered units in storage there would be sufficient units and matches to
      treat
      the world's population in need of transplant, these units are not yet available.
      A fraction of Cryobanks intended revenues comes from the projected building
      of
      the personal storage units business. Other companies have been able to build
      banks of 30,000 and 45,000 stored units, indicating the desirability of personal
      storage. However, the continued popularity of the practice of personal storage
      of cord blood cannot be guaranteed.





**New
      Technology Replaces Use of CB Cells in Transplant.**





Technology
      related to stem cells, regeneration of blood and immunological function and
      other therapeutic actions of CB is always being advanced. It is possible that
      some, currently undiscovered technology will be able to effect hematopoietic
      cell rejuvenation or the reversal of specific diseases that CB transfers will
      be
      targeting. While advances of these types cannot be ruled out, the time lag
      for
      development, regulatory approval, and acceptance likely gives Cryobanks a lead
      of five to ten years.





Additionally,
      a suite of patents held by Biocyte Corporation and its successors PharmaStem
      Therapeutics have been alleged to require licensing. In October 2003, PharmaStem
      won a jury verdict against ViaCell, Cryo-Cell International, CorCell and CBR
      Systems, the four largest personal storage unit companies. Following suit,
      the
      trial court invalidated the jury's findings and multiple appeals thereafter
      followed. Concurrently, the European Patent Office invalidated the patents
      on
      the continent of Europe and, after challenge, the United States Patent Office
      has invalidated one of the underlying patents. Despite these facts, and the
      fact
      that the United States patents expire in 2007, Cryobanks was named as a
      defendant in a patent infringement suit brought by PharmaStem.





Cryobanks
      has determined the cost and risks of litigation would likely far outweigh costs
      and risks of entering into a royalty agreement with PharmaStem. Accordingly,
      an
      agreement was reached which calls for payment of a sum for past violations
      and
      payment of a royalty on an ongoing basis. The agreement terminates if the
      patents are determined to be invalid or at the expiration of the patents,
      whichever is first to occur.





**Increasing
      Competition and Limited Barrier To Entry.**





-28-








There
      is
      no intellectual property that would prohibit human serum storage companies
      from
      entering into the business, or prohibit new companies from being formed in
      this
      area. Cryobanks believes that the Federal guidelines regulating cord blood
      collection and storage will create a significant barrier to entry to many other
      groups. Cryobanks believes it meets or exceeds all requirements in the new
      legislation.





**Future
      Economic Downturns May Adversely Affect The Ability To Grow
      Cryobanks.**





Historically,
      the general level of economic activity has significantly affected the demand
      for
      scientific research and advancement. If the general level of economic activity
      slows, our clients may not require our services and may delay or cancel plans
      that involve using our services and technology. Consequently, the time from
      initial contact with a potential client to the time of sale could increase
      and
      the demand for our services could decline, resulting in a loss of revenue
      harming our business, operating results and financial condition.





**Cryobanks
      May Not Be Able To Grow Its Client Base And Revenue Because Of The Number Of
      Competitors, Resources Available To It And The Variety Of Sources Of Competition
      Its Faces.**





Cryobanks
      future success will depend on its ability to grow and maintain its client base
      and revenue. This will require that Cryobanks offer services that are superior
      to the services being offered by its competitors and that its services are
      priced competitively.





**Cryobanks
      May Not Be Able To Strengthen And Maintain Awareness Of Its Brand
      Name.**





Cryobanks
      believes that its success will depend to a large extent on its ability to
      successfully develop, strengthen and maintain its brand recognition and
      reputation. In order to strengthen and maintain its brand recognition and
      reputation, we invest and will need to continue to invest substantial resources
      in our marketing efforts and maintain high standards for actual and perceived
      quality, and security. If it fails to successfully promote and maintain its
      brand name, particularly after incurring significant expenses in promoting
      its
      brand name, or encounters legal obstacles which prevent its continued use of
      its
      brand name, its business, operating results and financial condition could be
      materially adversely affected. Moreover, even if Cryobanks does continue to
      provide quality service to its clients, factors outside of its control,
      including actions by organizations that are mistaken for it and factors
      generally affecting its industry, could affect its brand and the perceived
      quality of its services.





**Cryobanks
      Business Could Suffer If Financing Is Not Available When Required Or Is Not
      Available On Acceptable Terms.**









-29-







Cryobanks
      future capital requirements depend on a number of factors, including its ability
      to grow its revenue. It is possible that Cryobanks may need to raise additional
      funds sooner than expected in order to fund expansion, develop new and enhance
      existing, services or acquire complementary businesses or technologies or if
      its
      revenues are less or its expenses are greater than is expected. Cryobanks
      business could suffer if financing is not available when required or is not
      available on acceptable terms.





**Cryobanks'
      Business Could Be Adversely Affected If It Is Unable To Protect Its Proprietary
      Technologies.**





Cryobanks
      success depends to a significant degree upon the protection of its proprietary
      technologies and brand names. The unauthorized reproduction or other
      misappropriation of its proprietary technologies could provide third parties
      with access to its technologies without payment. If this were to occur,
      Cryobank's proprietary technologies would lose value and its business, operating
      results and financial condition could be materially adversely affected.
      Cryobanks relies upon a combination of copyright, trade secret and trademark
      laws and non-disclosure and other contractual arrangements to protect its
      proprietary rights. The measures it has taken to protect its proprietary rights,
      however, may not be adequate to deter misappropriation of proprietary
      information or protect Cryobanks if misappropriation occurs. Policing
      unauthorized use of Cryobank's technologies and other intellectual property
      is
      difficult, particularly because of the global nature of its industry. Cryobanks
      may not be able to detect unauthorized use of its proprietary information and
      take appropriate steps to enforce its intellectual property rights. If Cryobanks
      resorts to legal proceedings to enforce its intellectual property rights, the
      proceedings could be burdensome and expensive and could involve a high degree
      of
      risk.





**Cryobanks
      May Become Subject To Burdensome Government Regulation, Which Could Increase
      Its
      Costs Of Doing Business, Restrict Its Activities And/Or Subject It To
      Liability.**





Uncertainty
      and new regulations relating to the biotechnology or stem cell storage could
      increase Cryobank's costs of doing business, prevent it from providing its
      services, slow the growth of its business model or subject it to liability,
      any
      of which could adversely affect its business, operating results and prospects.
      In addition to new laws and regulations being adopted, existing laws may be
      applied to the stem cell research business.





**Dependence
      on Key Personnel.**





Cryobanks
      is highly dependent upon the efforts of its senior management team, including
      Dwight C. Brunoehler, its President. The loss of the services of such individual
      could impede the achievement of product development, commercialization, and
      operational objectives. Cryobanks does not have key personnel life insurance
      on
      the life of such individual. Due to the specialized nature of Cryobanks
      business, Cryobanks is also highly dependent upon its ability to attract and
      retain qualified key management personnel.







-30-







There
      is
      intense competition for qualified personnel in the areas of Cryobanks'
      activities. Cryobanks' may have to hire additional personnel to meet its
      business goals. There can be no assurance that Cryobanks will be able to attract
      and retain qualified personnel necessary for the development of its
      business.





**Cryobanks
      May Be Exposed To Product Liability Risks.**





Cryobanks
      faces an inherent risk of exposure to product liability claims if the use of
      its
      products results, or is alleged to result in injury to persons who receive
      stem
      cell transplants from core blood supplied by Cryobanks. With respect to product
      liability claims, Cryobanks maintains product liability insurance. There can
      be
      no assurance that such insurance will continue to be available at a reasonable
      cost, or; if available, will adequately cover the Company's liabilities. If
      Cryobanks does not have adequate insurance, product liabilities relating to
      defective products could have a material adverse effect on Cryobanks' business,
      financial condition and results of operations.





**Cryobanks
      May Have Potential Weaknesses In Intellectual Property
      Protection.**





Cryobanks
      intends to rely on a combination of common law trademark rights, U.S. federal
      registration rights, patent and/or trade secret laws to protect its proprietary
      rights. Cryobanks received certain patent protection for certain elements of
      its
      technology.





There
      can
      be no assurance that Cryobanks will be able to enforce its proprietary rights
      or
      that it will be granted patent protection. Although the Company's technique
      for
      certain of its systems may be trade secrets, it may be independently developed
      or duplicated.





**ITEM
      1B. UNRESOLVED STAFF COMMENTS.**





None.





**ITEM
      2. PROPERTIES** .





The
      Company currently rents approximately 1,530 square feet of office space at
      200
      Hannover Park Road, Suite 120, in Atlanta, Georgia, at a current monthly rental
      cost of $1,460.16. The Company's current lease began on April 1, 2004, and
      will
      expire on March 31, 2009. The Company paid base rent of $1,350 per month from
      April 1, 2004 to March 30, 2006 and base rent of $1,460.16 per month from April
      1, 2006 to March 30, 2007. The Company’s rent will increase to $1,518.57 per
      month of base rent from April 1, 2007 to March 30, 2008 and to $1,579.31 per
      month of base rent from April 1, 2008 to March 30, 2009. The Company is also
      responsible for various expenses in connection with its rental space during
      the
      term of the lease.





**ITEM
      3. LEGAL PROCEEDINGS.**





Allstate
      filed a lawsuit in Fulton County, GA, against the Company, in December 2004,
      alleging property damage, which was settled by the Company in March 2005, for
      $4,900, to be paid by the Company at the rate of $150 per month. The Company
      has
      been delinquent in making the monthly payments to Allstate.







-31-





In
      March
      2006, the Company received correspondence from an individual residing in Arizona
      regarding the unauthorized faxing of unsolicited facsimiles. In March 2006,
      the
      Company received correspondence from the Idaho Attorney General's office
      regarding a potential violation of Idaho law in connection with the unauthorized
      faxing of unsolicited facsimiles. The letter was sent for informational purposes
      only, and the Company was not responsible for the unsolicited faxing of such
      facsimiles; however, the Company does not expect to receive any further
      correspondence from the Idaho Attorney General's office regarding such
      faxes.





From
      time
      to time, we may become party to litigation or other legal proceedings that
      we
      consider to be a part of the ordinary course of our business. Other than the
      legal proceedings listed above, which have both been settled or dismissed,
      we
      are not currently involved in legal proceedings that could reasonably be
      expected to have a material adverse effect on our business, prospects, financial
      condition or results of operations. However, we may become involved in material
      legal proceedings in the future.





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
      HOLDERS.**





None.
















-32-







**PART
      II**





**ITEM
      5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
      PURCHASES OF EQUITY SECURITIES.**





"Bid"
      and
      "asked" offers for our common stock are listed on the NASDAQ OTC-Bulletin Board
      published by the National Quotation Bureau, Inc.








Prior
      to
      June 2003, the Company's trading symbol was "WBVW," and from June 2003, to
      January 7, 2005, the Company's trading symbol was "CSCA." On January 7, 2005,
      in
      connection with the Company's name change and change in business focus, the
      Company's securities began trading under the symbol "NPKG." On or about November
      18, 2005, in connection with the Company's name change to BioStem, Inc., the
      Company's securities began trading under the symbol "BTEM."





The
      following table sets forth the high and low bid prices for the Company's common
      stock for the periods indicated as reported by the NASDAQ OTC-Bulletin Board.
      The quotations reflect inter-dealer prices, without retail mark-up, mark-down
      or
      commission and may not represent actual transactions.





**Bid
      Prices(1)***




**Quarter
                Ended**
            **High**
            **Low**December
                31, 2006
            3.40
            1.40September
                30, 2006
            3.00
            1.50June
                30, 2006
            4.50
            1.25March
                31, 2006
            6.80
            3.76December
                31, 2005(1)
            3.40
            0.01September
                30, 2005
            0.66
            0.38June
                30, 2005
            1.00
            0.60March
                31, 2005(1)
            1.25
            0.31





*
      Approximate





(1)
      The
      Company affected a 4:1 forward stock split for shareholders of record as of
      October 20, 2005, and the bid prices for the quarter ended December 31, 2005,
      retroactively reflect this split. Additionally, the Company affected a 1 for
      4,000 reverse stock split effective January 7, 2005 and a 60 for 1 forward
      stock
      split effective June 24, 2003.







-33-







There
      were approximately 29 holders of record of the Company's common stock as of
      January 29, 2007. The Company has never paid a cash dividend on its common
      stock
      and does not anticipate the payment of a cash dividend in the foreseeable
      future. The Company intends to reinvest in its business operations any funds
      that could be used to pay a cash dividend. The Company's common stock is
      considered a "penny stock" as defined in the Commission's rules promulgated
      under the Exchange Act. In general, a security which is not quoted on NASDAQ
      or
      has a market price of less than $5.00 per share where the issuer does not have
      in excess of $2,000,000 in net tangible assets (none of which conditions the
      Company meets) is considered a penny stock. The Commission's rules regarding
      penny stocks impose additional sales practice requirements on broker-dealers
      who
      sell such securities to persons other than established customers and accredited
      investors (generally persons with net worth in excess of $1,000,000 or an annual
      income exceeding $200,000 or $300,000 jointly with their spouse). For
      transactions covered by the rules, the broker-dealer must make a special
      suitability determination for the purchaser and receive the purchaser's written
      agreement to the transaction prior to the sale. Thus, the Rules affect the
      ability of broker-dealers to sell the Company's shares should they wish to
      do so
      because of the adverse effect that the Rules have upon liquidity of penny
      stocks. Unless the transaction is exempt under the Rules, under the Securities
      Enforcement Remedies and Penny Stock Reform Act of 1990, broker-dealers
      effecting customer transactions in penny stocks are required to provide their
      customers with (i) a risk disclosure document; (ii) disclosure of current bid
      and ask quotations if any; (iii) disclosure of the compensation of the
      broker-dealer and its sales personnel in the transaction; and (iv) monthly
      account statements showing the market value of each penny stock held in the
      customer's account. As a result of the penny stock rules the market liquidity
      for the Company's securities may be severely adversely affected by limiting
      the
      ability of broker-dealers to sell the Company's securities and the ability
      of
      purchasers of the securities to resell them.





**Recent
      Sales of Unregistered Securities**





We
      issued
      no shares of common stock during the three months ended December 31,
      2006.





**ITEM
      6. SELECTED FINANCIAL DATA.**







You
      should read the following selected consolidated financial data in conjunction
      with “Management’s Discussion and Analysis of Financial Condition and Results of
      Operations” and our consolidated financial statements and the related notes
      appearing elsewhere in this Form 10-K.




The
      consolidated statements of income data for the years ended December 31,
      2006, 2005, and 2004 and the consolidated balance sheet data at
      December 31, 2006 and 2005, are derived from our audited consolidated
      financial statements appearing elsewhere in this Form 10-K. The consolidated
      statements of income data for the years ended December 31, 2002 and 2003,
      and the consolidated balance sheet data at December 31, 2002, 2003 and
      2004, are derived from our audited consolidated financial statements, which
      are
      not included in this Form 10-K, but which have previously been filed in our
      previous Form 10-KSB filings with the Commission for the years ended December
      31, 2002, 2003 and 2004. The historical results are not necessarily indicative
      of the results to be expected in any future period.






-34-






**Year
                  Ended December 31,****2002**
              
              **2003**
              
              **2004**
              
              **2005**
              
              **2006****Consolidated
                  Statements of Income Data:**Revenues
              
              $
              2,661
              
              $
              -0-
              
              $
              317,595
              
              $
              1,085,057
              
              $                1,762,241Costs
                  and expenses:Cost
                  of revenuesGeneral
                  and administrative expenses
              
              
              1,336
              
              
              1,163,215
              
              
              168,807
              
              
              1,634,466
              
              1,911,461Interest
                  expense
              
              
              
              
              
              19,434
              
              
              5,182,355
              
              
              6,960,806
              
              1,392,390Other
                  expenses
              
              
              22,560
              
              
              129,300
              
              
              166,851
              
              
              346,909
              
              509,929Total
                  costs and expenses
              
              
              23,896
              
              
              1,311,949
              
              
              5,518,013
              
              
              8,942,181
              
              3,813,780Net
                  income (loss)
              
              $
              21,235
              
              $
              (1,311,949
              )
              $
              (5,200,418
              )
              $
              (7,857,124
              )
              $           
                     (2,051,539)Net
                  income (loss) per share (basic and diluted)
              
              $
              (0.00
              )
              $
              (0.01
              )
              $
              (0.03
              )
              $
              (0.05
              )
              $                      
                   (0.01)






**As
                  of December 31,****2002**
              
              **2003                 
                     2004**
              
              **2005**
              
              **2006****Consolidated
                  Balance Sheet Data:**Cash,
                  cash equivalents and marketable securities
              
              $
              5,201
              
              $
              10,630
              
              $
              9,110
              
              $
              89,117
              
              $
              66,175Total
                  assets
              
              
              5,201
              
              
              10,630
              
              
              28,989
              
              
              445,081
              
              
              248,902Total
                  current liabilities
              
              
              1,000
              
              
              52,054
              
              
              395,778
              
              
              855,303
              
              
              1,404,692Total
                  long-term liabilities
              
              
              -
                  0 -
              
              
              -
                  0 -
              
              
              159,598
              
              
              120,567
              
              
              86,750Total
                  stockholders’ equity (deficit)
              
              $
              5,201
              
              $
              (41,424
              )
              $
              (26,387
              )
              $
              (530,789
              )
              $
              (1,242,540







**ITEM
      7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATION.**





**PLAN
      OF OPERATIONS**





If
      the
      Company is unable to close the Merger (described above), the Company's goal
      will
      be to grow its operations by acquiring additional booting and/or parking
      companies in the Atlanta, Georgia area and possibly throughout the South East,
      which may include the acquisition of valet parking, parking management, parking
      control, or parking equipment companies, or possibly purchasing existing parking
      lots or lots which the Company can make into parking lots. The amount of money
      the Company will require for these acquisitions is dependent on what
      acquisitions the Company may choose to make, but is expected to be substantial.
      As of the date of this filing, the Company has no definite plans for future
      acquisitions, or financing in place to complete any future acquisitions, if
      any.
      The Company believes it will require an additional $100,000 in funding to
      continue its business operations for the next 12 months at its current levels
      and approximately $250,000 within the next 12 months to expand its business
      operations, which there can be no assurances will be available through
      additional drawdown’s on the Hyde note.







-35-









**COMPARISON
      OF OPERATING RESULTS**





**YEAR
      ENDED DECEMBER 31, 2006 COMPARED TO THE YEAR ENDED DECEMBER 31,
      2005**





We
      had
      net sales of $1,762,241 for the year ended December 31, 2006, compared to net
      sales of $1,085,057 for the year ended December 31, 2005, an increase in net
      sales of $677,184 or 62.4%. The increase in net sales was mainly due to new
      valet parking service contracts entered into during the end of 2005, which
      led
      to increased revenues for the year ended December 31, 2006, compared to the
      prior year.





We
      had
      total costs and expenses of $3,813,780 for the year ended December 31, 2006,
      compared to total costs and expenses of $8,942,181 for the year ended December
      31, 2005, a decrease in total costs and expenses of $5,128,401 or 57.4% from
      the
      prior period. The decrease in total costs and expenses was mainly due to the
      decrease of $5,568,416 or 80% in interest expense, which was due to the
      beneficial conversion features on the Junior and Senior Convertible Debentures
      and the $255,383 or 36.1% decrease in professional and consulting fees, offset
      by an increase in compensation and benefits of $160,988 for the year ended
      December 31, 2006 from the year ended December 31, 2005, a $368,869 increase
      in
      lot lease expense for the year ended December 31, 2006 compared to the year
      ended December 31, 2005, and a $163,020 increase in other operating expenses
      for
      the year ended December 31, 2006 compared to the year ended December 31,
      2005.





We
      had a
      net loss of $2,051,539 for the year ended December 31, 2006, compared to a
      net
      loss of $7,857,124 for the year ended December 31, 2005, a decrease in net
      loss
      of $5,805,585 or 73.9% from the prior year. The decrease in net loss was mainly
      due to the $5,568,416 or 80% decrease in interest expense, in connection with
      the decrease in the beneficial conversion feature of the Junior and Senior
      Convertible Debentures, an increase in net sales of $677,184 and the decrease
      in
      professional and consulting fees of $255,383 or 36.1% for the year ended
      December 31, 2005 compared to the year ended December 31, 2006.





**LIQUIDITY
      AND CAPITAL RESOURCES**





We
      had
      total assets as of December 31, 2006 of $248,902, which included current assets
      of $66,175 relating to accounts receivable of $56,012 and cash of $10,163,
      equipment, net of depreciation of $30,030 and intangible assets, consisting
      of
      our covenant not-to-competes with various parties with whom we have purchased
      assets from in the past, including the former owner of the assets of Blue Sky
      and BH as described above, net of amortization of $152,697. This represented
      a
      decrease in total assets of $196,179 or 44% from total assets of $445,081 as
      of
      December 31, 2005, which decrease was mainly due to the $163,916 or 51.7%
      decrease in covenant-not-to-compete from covenant-not-to-compete of $316,613
      as
      of December 31, 2005 to covenant-not-to-compete of $152,697 as of December
      31,
      2006, and the $67,500 decrease in prepaid consulting fees from prepaid
      consulting fees of $67,500 at December 31, 2005 compared to prepaid consulting
      fees of $0 at December 31, 2006.







-36-





Total
      current assets as of December 31, 2006 consisted solely of accounts receivable
      of $56,012 and cash of $10,163.





Equipment
      net of accumulated depreciation as of December 31, 2006 was $30,030, which
      included a Company van, booting equipment, and valet equipment including signs,
      key storage equipment and various other valet parking equipment.





Liabilities
      as of December 31, 2006 totaled $1,491,442, and included current liabilities
      of
      $1,404,692 and long term liabilities relating to loans payable of $86,750 which
      included amounts owed on an installment loan for equipment assumed in the ABS
      and BH acquisition transaction, amounts owed to a former shareholder in
      connection with the ABS and BH acquisition transaction, which amount is
      non-interest bearing and is payable at the rate of $2,778 per month, and amounts
      owed pursuant to our Junior Debentures, which are non-interest bearing,
      convertible into the Company's common stock (as described above under "Junior
      Debentures"), and are due January 31, 2010, less current portion of long-term
      debt.





Current
      liabilities, which increased $549,389 or 64.2% to $1,404,692 as of December
      31,
      2006, compared to current liabilities of $855,303 as of December 31, 2005 were
      mainly made up of $692,585 of accrued expenses, which was mainly due to
      approximately $480,000 owed to London pursuant to the Consulting Agreement,
      described above, as of December 31, 2006, and $584,618 of current portion of
      long-term debt, which included the $552,500 which we had borrowed under the
      Hyde
      note as of December 31, 2006, and certain amounts of accrued but unpaid interest
      on such note, which was payable in full on December 31, 2006, but which has
      since been extended by Hyde to December 31, 2007.





As
      of
      December 31, 2006, we had negative net working capital of $1,338,517 and an
      accumulated deficit of $15,190,930.





We
      had
      $73,329 of net cash used in operating activities for the year ended December
      31,
      2006, which was mainly due to $2,051,539 of net loss and $35,306 of accounts
      receivable, offset by $1,339,788 of beneficial conversion feature in connection
      with the Junior and Senior Debentures, $333,815 of accrued expenses, $174,787
      of
      depreciation and amortization, $97,626 of accounts payable and $67,500 of
      amortization of prepaid consulting fees.







-37-







We
      had
      $1,550 in cash used in investing activities for the year ended December 31,
      2006, which was from the purchase of fixed assets.





We
      had
      $90,398 of net cash provided by financing activities for the year ended December
      31, 2006, which included proceeds from senior debenture of $132,500, which
      represented additional amounts borrowed under the Hyde note during the year
      ended December 31, 2006, which note had an outstanding balance of $552,500
      as of
      December 31, 2006, and a $3,800 loan from officer, which represented amounts
      loaned to the Company from the Company's Chief Executive Officer, Marc Ebersole,
      which was offset by $40,603 of payments on debt.





We
      owed
      $552,500 in connection with the Hyde note as of December 31, 2006, and have
      borrowed an additional $40,000 under the Hyde note as of the filing of this
      report, bringing the balance of such note to $592,500, which note is due and
      payable on December 31, 2007, and bears interest at the rate of 10% per annum
      until paid, which amount is being accrued to date. The repayment of the Hyde
      note is secured by a security interest in all of our assets. The Hyde note
      is
      also convertible into shares of our common stock at any time at the lower of
      (i)
      30% of the average of the three lowest closing prices in the twenty (20) trading
      days immediately preceding the date of conversion or (ii) $0.025.





We
      owed
      $86,750 under our Junior Debentures as of December 31, 2006, which are described
      in greater detail herein, and which are non-interest bearing and due and payable
      on January 31, 2010. The Junior Debentures are convertible into shares of our
      common stock at the request of the holders, at the lesser of (i) 30% of the
      average of the three lowest closing prices in the twenty (20) trading days
      immediately preceding the date of conversion or (ii) $0.00025.





In
      January 2007, we borrowed $5,000 under a business line of credit with the Bank
      of America, which amount bears 18.24% interest per annum.





On
      January 12, 2007, we entered into a vehicle lease for a van to be used for
      parking services, which lease provides for us to pay $1,184 per month for a
      term
      of forty-seven (47) months.





Due
      to
      the $15,190,930 of accumulated deficit and negative working capital of
      $1,338,517 as of December 31, 2006, as well as the $592,500 which we currently
      owe under the Hyde note and amounts owed to the Junior Debenture holders, we
      will require a substantial amount of additional funding to continue to meet
      our
      ongoing commitments throughout fiscal 2007. Meeting these commitments may be
      easier, assuming the Merger is finalized with Cryobanks, as pursuant to the
      Spinoff Agreement, certain of these liabilities will be assumed by our current
      officers and Directors and transferred to our current wholly owned subsidiaries
      which will be spun off into stand alone entities, of which there can be no
      assurance. The Company does not have any commitments or identified sources
      of
      additional capital from third parties or from its officers, directors or
      majority shareholders. There is no assurance that additional financing will
      be
      available on favorable terms, if at all. If the Company is unable to raise
      such
      additional financing, it would have a materially adverse effect upon the
      Company's ability to implement its business plan and may cause the Company
      to
      curtail, scale back, or abandon its current operations and/or its stem cell
      operations if the Merger closes.







-38-










**ITEM
      7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK.**





We
      do not
      engage in transactions in derivative financial instruments or derivative
      commodity instruments. As of December 31, 2006, our financial instruments were
      not exposed to significant market risk due to interest rate risk, foreign
      currency exchange risk, commodity price risk or equity price risk.





**ITEM
      8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.**







-39-




BIOSTEM,
        INC.
 (Formerly
        National Parking Systems, Inc.)
 
 AUDITED
        FINANCIAL STATEMENTS
 
 FOR
        THE
        THREE YEARS ENDED DECEMBER 31, 2006
 (2005
        and
        2004 Restated)
              
 
 
  CONTENTS__________________________________________________________________________________________PageReports
                        of Independent Registered Public Accounting Firm
                    F
                      1Consolidated
                        Balance Sheets
                    F
                          5Consolidated
                        Statements of Operations
                    F
                        6Consolidated
                        Statements of Cash Flows
                    F
                        7Consolidated
                        Statement of Stockholders’ Deficit
                    F
                        8Notes
                        to Consolidated Financial Statements
                    F
                        9
 
 Internal
            Control—Integrated Framework
 F-1
 
 
 MEYLER
        & COMPANY, LLC
 CERTIFIED
        PUBLIC ACCOUNTANTS
 ONE
        ARIN
        PARK
 1715
        HIGHWAY 35
 MIDDLETOWN,
        NJ 07748
 
 
 Report
        of
        Independent Registered Public Accounting Firm
 
  To
        the
        Board of Directors and
 Stockholders
        of Biostem, Inc.
   We
        have
        audited management’s assessment, included in Management’s Report on Internal
        Control Over Financial Reporting, that Biostem, Inc. did not maintain effective
        internal control over financial reporting as of December 31, 2006, based
        on
        criteria established in *Internal
        Control—Integrated Framework* issued
        by the Committee of Sponsoring Organization of the Treadway Commission (COSO).
        Biostem’s management is responsible for maintaining effective internal control
        over financial reporting and for its assessment of the effectiveness of internal
        control over financial reporting. Our responsibility is to express an opinion
        on
        management’s assessment and an opinion on the effectiveness of the company’s
        internal control over financial reporting based on our audit.
  We
        conducted our audit in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether effective
        internal control over financial reporting was maintained in all material
        respects. Our audit included obtaining an understanding of internal control
        over
        financial reporting, evaluating management’s assessment, testing and evaluating
        the design and operating effectiveness of internal control, and performing
        such
        other procedures as we considered necessary in the circumstances. We believe
        that our audit provides a reasonable basis for our opinion.
  A
        company’s internal control over financial reporting is a process designed to
        provide reasonable assurance regarding the reliability of financial reporting
        and the preparation of financial statements for external purposes in accordance
        with generally accepted accounting principles. A company’s internal control over
        financial reporting includes those policies and procedures that (1) pertain
        to
        the maintenance of records that, in reasonable detail, accurately and fairly
        reflect the transactions and dispositions of the assets of the company; (2)
        provide reasonable assurance that transactions are recorded as necessary
        to
        permit preparation of financial statements in accordance with generally accepted
        accounting principles, and that receipts and expenditures of the company
        are
        being made only in accordance with authorizations of management and directors
        of
        the company; and (3) provide reasonable assurance regarding prevention or
        timely
        detection of unauthorized acquisition, use, or disposition of the company’s
        assets that could have a material effect on the financial
        statements.
   Because
        of its inherent limitations, internal control over financial reporting may
        not
        prevent or detect misstatements. Also, projections of any evaluation of
        effectiveness to future periods are subject to the risk that controls may
        become
        inadequate because of changes in conditions, or that the degree of compliance
        with the policies or procedures may deteriorate.
  A
        material weakness is a control deficiency, or combination of control
        deficiencies, that results in more than a remote likelihood that a material
        misstatement of the annual or interim financial statements will not be prevented
        or detected. The following material weaknesses have been identified and included
        in management’s assessment:
  *1.*
              *The
                  Company’s financial and accounting organization was not adequate to
                  support our financial accounting and reporting needs.*Specifically,
                  the Company did not maintain a sufficient number of personnel with
                  an
                  appropriate level of accounting knowledge commensurate with the
                  Company’s
                  financial reporting requirements and in fact, none of the Company’s
                  personnel have significant technical and reporting experience.
                  The lack of
                  a sufficient number of personnel with an appropriate level of accounting
                  knowledge contributed to the control deficiencies noted in items 2
                  through 5 below.
 
  F-2
 
  *2.*
              *The
                  Company did not maintain an Audit Committee, Compensation Committee,
                  Code
                  of Conduct or Ethics and/or a “whistle-blower” hotline.*The
                  Company does not currently have an independent Audit Committee
                  to provide
                  oversight of the Company’s financial statements. Additionally, the Company
                  does not currently have an independent Compensation Committee to
                  provide
                  oversight of executive compensation, a Code of Conduct and Ethics
                  for
                  senior management or employees, or a “whistle-blower” hotline to
                  anonymously report suspicious
                  activity.
 *3.*
              *The
                  Company does not maintain effective controls against the risk of
                  fraud.*Specifically,
                  an inadequate number of controls exist to ensure that safeguarding
                  of the
                  Company’s assets and to address potential fraud; the Company has not
                  completed a fraud risk assessment; neither a Code of Conduct or
                  Ethics has
                  been implemented for the Company’s senior management; the Company does not
                  have an internal control department; and as stated above, no
                  “whistle-blower” policy or hotline is in
                  effect.
 *4.*
              *The
                  Company places an overwhelming amount of reliance on manual controls.*In
                  connection with management’s review of accounting procedures as of
                  December 31, 2006, it was determined that 94% of controls were
                  manual and
                  that those manual controls were conducted infrequently, i.e. either
                  monthly, quarterly, annually or on an unscheduled
                  basis.
 *5.*
              *Additional
                  material weaknesses are present in the Company’s control framework,
                  including that:*
 ·
              Cash
                  is not adequately secured prior to depositing such cash in the
                  bank;
 ·
              Contracts
                  are not properly executed before work under such contracts
                  begin;
 ·
              No
                  controls exist to ensure that all revenue, accounts receivable
                  and cash
                  receipt transactions have been posted to the correct account or
                  recorded
                  in the prior period;
 ·
              No
                  controls exist to ensure that all expense, accounts payable and
                  cash
                  disbursement transactions have been posted to the correct account
                  or
                  recorded in the proper period;
 ·
              No
                  controls exist to ensure that fixed assets accounted for physically
                  exist;
 ·
              No
                  controls exist to ensure that purchases have been properly approved
                  or
                  goods/services rendered; and
 ·
              An
                  inadequate number of employees has created issues regarding those
                  employees separation of duties and job
                  functions
 
  These
        material weaknesses were considered in determining the nature, timing, and
        extent of audit tests applied in our audit of the 2006 consolidated financial
        statements, and this report does not affect our report dated March 28, 2007
        on
        those consolidated financial statements.
  In
        addition to the above material weaknesses identified by the Company, we
        identified the following specific misstatements which were subsequently
        corrected in the consolidated financial statements:
  ·
              Revenues
                  relating to certain booting contracts were initially not recorded
                  by the
                  Company.
  ·
              Certain
                  operating expenses were paid in cash without supporting
                  documentation.
  ·
              Amounts
                  paid to the President of the Company were initially recorded as
                  advances
                  rather than as Compensation
                  expense.
  ·
              The
                  Company restated its financial statements for the years ended December
                  31,
                  2005 and 2004 to account for beneficial conversion features on
                  the senior
                  and junior debentures.
  In
        our
        opinion, management’s assessment that Biostem, Inc did not maintain effective
        internal control over financial reporting as of December 31, 2006, is fairly
        stated, in all material respects, based on criteria established in *Internal
        Control—Integrated Framework* issued
        by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
        Also, in our opinion, because of the effect of the material weakness described
        above on the achievement of the objectives of the control criteria, Biostem,
        Inc. has not maintained effective internal control over financial reporting
        as
        of December 31, 2006, based on criteria established in *Internal
        Control—Integrated Framework* issued
        by the Committee of Sponsoring Organizations of the Treadway Commission
        (COSO).
  
 F-3
 We
        have
        also audited, in accordance with the standards of the Public Company Accounting
        Oversight Board (United States), the consolidated financial statements of
        Biostem, Inc. and our report dated March 28, 2007 expressed an unqualified
        opinion with an explanatory paragraph regarding the Company’s ability to
        continue as a going concern.
  
  /s/
        Meyler & Company, LLC
 
 
 Middletown,
        NJ
 March
        28,
        2007
  
  
 F-4
    
 BIOSTEM,
          INC.
 (Formerly
          National Parking Systems, Inc.)
 
 CONSOLIDATED
          BALANCE SHEETS
     December 31,2006
                2005(Restated)
 CURRENT
                    ASSETSCash
                
                $
                10,163Accounts
                    receivable
                
                
                56,012
                
                $
                20,706Prepaid
                    consulting fees
                
                
                
                
                
                67,500Advance
                    receivable-related party
                
                
                
                
                
                911Total
                    Current Assets
                
                $
                66,175
                
                
                89,117EQUIPMENT,
                    net of accumulated depreciationof
                    $21,520 and $10,649
                
                
                30,030
                
                
                39,351COVENANT
                    NOT TO COMPETE, net of amortizationof
                    $339,053 and $163,913
                
                
                152,697
                
                
                316,613Total
                    Assets
                
                $
                248,902
                
                $
                445,081
 
 LIABILITIES
          AND STOCKHOLDERS’ DEFICIT
 
 
 CURRENT
                    LIABILITIESBank
                    overdraft
                
                
                
                $
                5,356Accounts
                    Payable
                $
                125,207
                
                
                27,581Notes
                    payable to an individual, unsecured
                
                893
                
                
                4,693Accounts
                    payable to related parties
                
                1,389Current
                    portion of long-term debt
                
                584,618
                
                
                458,904Accrued
                    expenses
                
                692,585
                
                
                358,769Total
                    Current Liabilities
                
                1,404,692
                
                
                855,303LONG-TERM
                    DEBTLoans
                    payable, net of current portion
                
                86,750
                
                
                120,567STOCKHOLDERS'
                    DEFICITPreferred
                    stock, par value $0.001 authorized10,000,000
                    shares, none issued and outstandingCommon
                    stock authorized 300,000,000shares:
                    par value $0.001: issuedand
                    outstanding 175,218,044shares
                    at December 31, 2006 and 2005
                
                175,218
                
                
                175,218Additional
                    paid-in capital
                
                13,773,172
                
                
                12,433,384Accumulated
                    deficit
                
                (15,190,930
                )
                
                (13,139,391
                )Total
                    Stockholders' Deficit
                
                (1,242,540
                )
                
                (530,789
                )Total
                    Liabilities and Stockholders' Deficit
                $
                248,902
                
                $
                445,081
 
 See
          accompanying notes to financial statements.
    F-5
   BIOSTEM,
            INC.
 (Formerly
            National Parking Systems, Inc.)
 
 CONSOLIDATED
            STATEMENTS OF OPERATIONS
 
 
  Year
                      Ended December 31,2006
                  
                  2005
                  
                  2004(Restated)
                  
                  (Restated)NET
                      SALES
                  
                  $
                  1,762,241
                  
                  $
                  1,085,057
                  
                  $
                  317,595COSTS
                      AND EXPENSESCompensation
                      and benefits
                  
                  
                  737,974
                  
                  
                  576,986
                  
                  
                  80,216Professional
                      and consulting fees
                  
                  
                  451,827
                  
                  
                  707,210
                  
                  
                  12,385Depreciation
                      and amortization
                  
                  
                  174,787
                  
                  
                  173,915
                  
                  
                  11,871Lot
                      lease expense
                  
                  
                  527,863
                  
                  
                  158,994
                  
                  
                  49,226Interest
                      expense
                  
                  
                  1,392,390
                  
                  
                  6,960,806
                  
                  
                  5,182,355Rent
                      expense
                  
                  
                  19,010
                  
                  
                  17,361
                  
                  
                  15,109Other
                      operating expenses
                  
                  
                  509,929
                  
                  
                  346,909
                  
                  
                  166,851Total
                      Costs and Expenses
                  
                  
                  3,813,780
                  
                  
                  8,942,181
                  
                  
                  5,518,013LOSS
                      BEFORE PROVISION FOR INCOME TAXES
                  
                  $
                  (2,051,539
                  )
                  $
                  (7,857,124
                  )
                  $
                  (5,200,418
                  )PROVISION
                      FOR INCOME TAXES
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -NET
                      LOSS
                  
                  $
                  (2,051,539
                  )
                  $
                  (7,857,124
                  )
                  $
                  (5,200,418
                  )NET
                      LOSS PER COMMON SHARE(BASIC
                      AND DILUTED)
                  
                  $
                  (0.01
                  )
                  $
                  (0.05
                  )
                  $
                  (0.03
                  )WEIGHTED
                      AVERAGE COMMONSHARES
                      OUTSTANDING
                  
                  
                  175,218,044
                  
                  
                  173,909,523
                  
                  
                  161,700,044
 
 
 See
            accompanying notes to financial statements.
 F-6
 BIOSTEM,
          INC.
 (Formerly
          National Parking Systems, Inc.)
 
 CONSOLIDATED
          STATEMENTS OF CASH FLOWS
 
  Year Ended December 31,2006
                
                2005
                
                2004(Restated)
                
                (Restated)CASH
                    FLOWS FROM OPERATING ACTIVITIESNet
                    loss
                
                $
                (2,051,539
                )
                $
                (7,857,124
                )
                $
                (5,200,418
                )Adjustments
                    to reconcile net loss to cash usedin
                    operating activities:Depreciation
                    and amortization
                
                
                174,787
                
                
                173,915
                
                
                11,871Amortization
                    of prepaid consulting fees
                
                
                67,500
                
                
                22,500Stock
                    and warrants issued for services
                
                
                
                
                
                302,700Beneficial
                    conversion feature
                
                
                1,339,788
                
                
                6,917,122
                
                
                5,177,589Change
                    in operating assets and liabilities:Accounts
                    receivable
                
                
                (35,306
                )
                
                (17,061
                )
                
                6,074Accounts
                    payable
                
                
                97,626
                
                
                24,096
                
                
                3,485Accrued
                    expenses
                
                
                333,815
                
                
                396,903
                
                
                4,766Net
                    cash provided by (used in) operating activities
                
                
                (73,329
                )
                
                (36,949
                )
                
                3,367CASH
                    FLOWS FROM INVESTING ACTIVITIESPurchase
                    of fixed assets
                
                
                (1,550
                )
                
                (10,000
                )Net
                    cash used in investing activities
                
                
                (1,550
                )
                
                (10,000
                )CASH
                    FLOWS FROM FINANCING ACTIVITIESRelated
                    party advance
                
                
                2,301Payments
                    on notes payable to related parties
                
                
                
                
                
                (30,000
                )
                
                (9,638
                )Proceeds
                    from senior debenture
                
                
                132,500
                
                
                135,000Payments
                    on debt
                
                
                (40,603
                )
                
                (61,954
                )
                
                (13,625
                )Loan
                    from individual
                
                
                (3,800
                )
                
                (6,007
                )
                
                29,000Net
                    cash provided by used in financing activities
                
                
                90,398
                
                
                37,039
                
                
                5,737INCREASE
                    (DECREASE) IN CASH
                
                
                15,519
                
                
                (9,910
                )
                
                9,104CASH
                    (OVERDRAFT), BEGINNING OF PERIOD
                
                
                (5,356
                )
                
                4,554
                
                
                (4,550
                )CASH
                    (OVERDRAFT), END OF PERIOD
                
                $
                10,163
                
                $
                (5,356
                )
                $
                4,554SUPPLEMENTAL
                    CASH FLOW INFORMATION:Issuance
                    of notes/loans for equipment
                
                
                
                
                
                
                
                $
                40,000Issuance
                    of notes/loans for covenant-not-to-compete
                
                
                
                
                
                
                
                
                491,750Notes
                    payable to related parties
                
                
                
                
                
                
                
                
                (30,000
                )Notes
                    payable for equipment
                
                
                
                
                
                
                
                
                (40,000
                )Senior
                    Secured Convertible Note
                
                
                
                
                
                
                
                
                (275,000
                )Junior
                    Convertible Debenture
                
                
                
                
                
                
                
                
                (86,750
                )Note
                    payable for non-compete-agreement
                
                
                
                
                
                
                
                
                (100,000
                )NON-CASH
                    EXPENDITURESIssuance
                    of 1,500,000 shares of common stockfor
                    prepaid consulting fees
                
                
                
                
                
                90,000Issuance
                    of 1,000,000 warrants in connectionwith
                    merger agreement
                
                
                
                
                
                42,900
   See
          accompanying notes to financial statements.
   F-7
  BIOSTEM,
        INC.
 (Formerly
        National Parking Systems, Inc.)
 
 CONSOLIDATED
        STATEMENT OF STOCKHOLDERS’ DEFICIT
 (Restated)
 
 
 Additional
              
              
              
              TotalCommon
                  Stock
              
              Paid
                  in
              
              Accumulated
              
              Stockholders'Shares
              
              Amount
              
              Capital
              
              Deficit
              
              DeficitIssuance
                  of shares to stockholders
              
              4,000
              
              $
              4,000
              
              $
              (3,000
              )
              
              
              
              $
              1,000Net
                  income for year endedDecember
                  31, 2002
              
              
              
              
              
              
              
              
              
              $
              7,071
              
              
              7,071Balance,
                  December 31, 2002
              
              4,000
              
              
              4,000
              
              
              (3,000
              )
              
              7,071
              
              
              8,071Reverse
                  merger (Note A)Exchange
                  of shares
              
              (4,000
              )
              
              (4,000
              )
              $
              4,000Outstanding
                  common stock ofBioStem,
                  Inc.
              
              1,200,000,000
              
              
              1,200,000
              
              
              747,611
              
              
              (1,947,611
              )Redemption
                  of shares at merger
              
              (1,199,699,956
              )
              
              (1,199,700
              )
              
              1,199,700Capitalization
                  of prior losses
              
              
              
              
              
              
              
              (1,908,186
              )
              
              1,908,186Issuance
                  of shares on merger
              
              161,400,000
              
              
              161,400
              
              
              (161,400
              )Net
                  loss for year endedDecember
                  31, 2003
              
              
              
              
              
              
              
              
              
              
              (49,495
              )
              
              (49,495
              )Balance,
                  December 31, 2003
              
              161,700,044
              
              
              161,700
              
              
              (121,275
              )
              
              (81,849
              )
              
              (41,424
              )Additional
                  capital contributedby
                  stockholders
              
              
              
              
              
              
              
              37,866
              
              
              
              
              
              37,866Beneficial
                  conversion factor associated
              
              
              
              
              
              
              
              5,177,589
              
              
              
              
              
              5,177,589with
                  convertible debentureNet
                  loss for year endedDecember
                  31, 2004
              
              
              
              
              
              
              
              
              
              
              (5,200,418
              )
              
              (5,200,418
              )Balance,
                  December 31, 2004
              
              161,700,044
              
              
              161,700
              
              
              5,094,180
              
              
              (5,282,267
              )
              
              (26,387
              )Issuance
                  of stock for services
              
              12,018,000
              
              
              12,018
              
              
              290,682
              
              
              
              
              
              302,700Issuance
                  of stock for services
              
              1,500,000
              
              
              1,500
              
              
              88,500
              
              
              
              
              
              90,000Issuance
                  of warrants for services
              
              
              
              
              
              
              
              42,900
              
              
              
              
              
              42,900Beneficial
                  conversion factor associatedwith
                  convertible debenture
              
              
              
              
              
              
              
              6,917,122
              
              
              
              
              
              6,917,122Net
                  loss for year endedDecember
                  31, 2005
              
              
              
              
              
              
              
              
              
              
              (7,857,124
              )
              
              (7,857,124
              )Balance,
                  December 31, 2005
              
              175,218,044
              
              
              175,218
              
              
              12,433,384
              
              
              (13,139,391
              )
              
              (530,789
              )Beneficial
                  conversion factor associatedwith
                  convertible debenture
              
              
              
              
              
              
              
              1,339,788
              
              
              
              
              
              1,339,788Net
                  loss for year endedDecember
                  31, 2006
              
              
              
              
              
              
              
              
              
              
              (2,051,539
              )
              
              (2,051,539
              )Balance,
                  December 31, 2006
              
              175,218,044
              
              $
              175,218
              
              $
              13,773,172
              
              $
              (15,190,930
              )
              $
              (1,242,540
              )
 
 
 See
        accompanying notes to financial statements.
  
 F-8
  BIOSTEM
 (Formerly
        National Parking Systems, Inc.)
   
 NOTE
        A -
        RESTATMENTS
 
 The
        Company’s consolidated financial statements for the years ended December 31,
        2005 and 2004 have been restated to record the effects of the beneficial
        conversion features on the Senior and Junior Debentures and to reclassify
        warrants issued in 2005 from Accrued expenses to Additional paid-in capital.
        The
        effects of the restatements are presented in the following table:
 
 **December
                  31, 2005**
              
              **December
                  31, 2004****As**
              
              **As**
              
              **As**
              
              **As****Reported**
              
              **Restated**
              
              **Reported**
              
              **Restated**Accrued
                  Expenses
              
              401,669
              
              
              358,769
              
              
              4,766
              
              
              4,766Additional
                  Paid-in Capital
              
              295,773
              
              
              12,433,384
              
              
              37,866
              
              
              5,094,180Accumulated
                  Deficit
              
              (1,044,680
              )
              
              (13,139,391
              )
              
              (104,678
              )
              
              (5,282,267
              )Interest
                  Expense
              
              43,684
              
              
              6,960,806
              
              
              4,766
              
              
              5,182,355Net
                  Loss
              
              (940,002
              )
              
              (7,857,124
              )
              
              (22,829
              )
              
              (5,200,418
              )Loss
                  Per Share
              
              (0.01
              )
              
              (0.05
              )
              
              (0.01
              )
              
              (0.03
              )
 
 The
        restatements related to the beneficial conversion features results in an
        increase in $6,917,122 and $5,177,589 in Interest expense and Additional
        paid-in
        capital in 2005 and 2004, respectively (See also Note J). The restatement
        related to the warrants results in a $42,900 decrease in Accrued liabilities
        and
        corresponding increase in Additional paid-in capital in 2005.
 
 The
        Statement of Stockholders’ Deficit has been retrospectively restated to give
        effect to the stock split which occurred October 20, 2005. Additionally,
        the
        weighted average shares outstanding for the year ended December 31, 2004
        were
        restated from 173,700,044 to 161,700,044 to reflect a typographic
        error.
 
 NOTE
        B -
        MERGER AGREEMENT
 
 Merger
        Agreement
 
 On
        November 22, 2005, the Company entered into an Agreement and Plan of Merger
        with
        Cryobanks International Inc., a Delaware corporation ("Cryobanks"). Pursuant
        to
        the Merger Agreement, shares of common stock, warrants and preferred stock
        of
        Cryobanks which are issued and outstanding immediately prior to the effective
        date of the merger will be converted into the right to receive common stock
        of
        the Company. Pursuant to the merger, Cryobanks will be merged with and into
        BioStem Acquisition Company, Inc., a to be formed subsidiary of the Company
        and
        a Delaware corporation ("Acquisition Company") and Cryobanks shall be dissolved.
        The closing date of the merger is the business day after satisfaction or
        waiver
        of the conditions set forth below. (“Closing Date”)
 
 Pursuant
        to the Merger Agreement, the aggregate number of shares of the Company issued
        and outstanding immediately prior to the closing shall be no more than
        15,650,000 shares of common stock, and there shall be no more than 2,000,000
        warrants outstanding which shall have an exercise price of $1.00 per
        share.
 
 Among
        other conditions described in the Merger Agreement, a material condition
        to the
        effectiveness and closing of the merger is the successful completion of a
        financing by Cryobanks which results in net proceeds to Cryobanks of at least
        $10,000,000 pursuant to a Private Placement, which attempts to sell 10,000,000
        shares of Cryobanks preferred stock to investors at $1.00 per share and warrants
        to purchase 3,000,000 shares of Cryobanks common stock, exercisable at $1.10
        per
        share, on or before the closing date of the merger. The preferred shares
        issued
        by Cryobanks in such financing will be convertible into one share of the
        Company
        for each share of preferred stock issued to such investors. These Company
        shares
        (which are in addition to the 120,000,000 shares issued to the holders of
        Cryobanks common stock and warrants), and
   F-9
 
 
 NOTE
        B -
        MERGER AGREEMENT (Continued)
 
 Merger
        Agreement (Continued)
 
 2,000,000
        shares which are issuable upon conversion of $2,000,000 of debt of Cryobanks,
        will not be subject to any restriction or lock-up, and will be registered
        for
        resale by the Company through a registration statement.
 
 Cryobanks
        has an agreement with the holder of its Series A Preferred Stock, of which
        there
        are 7,000,000 shares outstanding, that fifty percent of the proceeds of the
        above financing will be used to redeem the Series A Preferred Stock at a
        redemption price of $1.00 per share, up to $10.0 million of gross proceeds,
        and
        100% of gross proceeds in excess of $10.0 million will be used to redeem
        the
        balance of such shares of Series A Preferred Stock.
 
 The
        boards of directors of both the Company and Cryobanks have approved and the
        majority shareholders of both companies have consented to the merger
        agreement.
 
 The
        Merger Agreement stated that the agreement would terminate if the merger
        was not
        consummated by March 1, 2006, or by the mutual written consent of the Company
        and Cryobanks, or for any other reason as described in the Merger Agreement.
        Such agreement has been extended until March 31, 2007.
 
 Pursuant
        to the terms of the Merger Agreement, the Company will divest itself of its
        two
        operating subsidiaries, and will have no more than $25,000 of accrued but
        unpaid
        liabilities on the effective date of the merger. On the effective date of
        the
        merger, Cryobanks will merge with and into the Acquisition Company, which
        will
        become the surviving corporation in the merger. All of the outstanding shares
        of
        Series A Preferred, Series B Preferred Stock and warrants of Cryobanks will
        be
        converted into shares of common stock of the Company at an exchange ratio
        of
        0.852578, unless such Series A Preferred Stock, Series B Preferred Stock
        and
        warrants are issued pursuant to the planned Private Placement. The total
        amount
        of shares to be issued in connection with the conversion of the Series A
        Preferred Stock, Series B Preferred Stock and warrants shall total 120,000,000
        shares of the Company's common stock, and the exchange ratio shall be adjusted
        if any shares of the Company's common stock are issued prior to the closing,
        by
        dividing 120,000,000 by the sum of the then outstanding shares of the Company's
        common stock and warrants.
 
 Shareholders
        of Cryobanks who dissent to the Merger are entitled to receive payment for
        their
        shares in lieu of shares of the Company.
 
 All
        warrants to purchase shares of Cryobanks common stock which are outstanding
        prior to the Merger will be assumed by the Company as provided in the Merger
        Agreement.
 
 Upon
        the
        closing of the merger, the Company will issue 120,000,000 shares of its common
        stock to the shareholders of Cryobanks, and the board of directors of Cryobanks
        will be appointed to the Company's board, and the current members of the
        Company's board will resign. On the effective date of the merger, immediately
        prior to the merger, the Company will have 15,650,000 shares of common stock
        outstanding, and warrants to purchase 2,000,000 shares of common stock with
        an
        exercise price of $1.00 per share. All other shares currently outstanding
        shares
        (159,150,044 shares) will be cancelled in exchange for the transfer by the
        Company of all of the common stock of its current two operating subsidiaries
        to
        those shareholders canceling shares.
 
 Subsequent
        to the Merger, the Company and Cryobanks will cause to be filed a registration
        statement on Form S-4 registering the issuance of the 120,000,000 shares
        to the
        Cryobanks shareholders. Notwithstanding this registration, all of the
        120,000,000 shares so issued shall be subject to a one year restriction against
        transfer, except for approximately 91,879,402 shares held by the majority
        shareholder of Cryobanks, which will be subject to a six-month
        restriction.
    F-10
 
 
 NOTE
        B -
        MERGER AGREEMENT (Continued)
 
 Agreement
        to Purchase Subsidiaries and Cancel Shares
 
 On
        November 22, 2005, the Chief Executive Officer, Marc Ebersole, and Directors,
        Scott Schweber and Christine Ebersole (the "Management Shareholders"), entered
        into an Agreement to Purchase Subsidiaries and Cancel Shares ("Spin-off
        Agreement"), with certain shareholders who hold Senior and Junior debentures
        with the Company (together with the Management Shareholders, the "Security
        Holders" as described below.) Pursuant to the Spin-off Agreement, the Security
        Holders agreed to cancel the shares of the Company's common stock which they
        held in return for the transfer to them of the Company's two wholly owned
        subsidiaries, ABS Holding Company (“ABS”) and BH Holding Company, Inc. (“BH”).
        Pursuant to the Spin-off Agreement, each Security Holder will receive one
        share
        of both ABS and BH for each four shares of the Company which they hold and
        the
        Company will then cancel each share of the Company's common stock which they
        held.
 
 Additionally,
        pursuant to the Agreement to Purchase Subsidiaries and Cancel Shares, Hyde,
        to
        which the Company currently owes $552,500 ($420,000 at December 31, 2005)
        in
        connection with a Senior Debenture, agreed to release the Company from any
        obligations under the Senior Debenture and in exchange for such release,
        ABS and
        BH would both assume 50% of the then outstanding under the Senior
        Debenture.
 
 The
        Spin-off Agreement is to be effective on the day following the closing of
        the
        merger with Cryobanks.
 
 Pursuant
        to the Spin-off Agreement, the following Security Holders agreed to cancel
        share
        amounts as follows:
 
 Marc
                        Ebersole
                    122,000,000
                        sharesChristine
                        Ebersole
                    4,000,000
                        sharesScott
                        A. Schweber
                    4,000,000
                        sharesThe
                        Morpheus Trust
                    5,460,018
                        sharesLivingston
                        Investments
                    6,200,000
                        sharesThe
                        Gateway Real EstateInvestment
                        Trust
                    5,090,026
                        sharesBurton
                        Partners, LLC
                    6,200,000
                        sharesPicasso,
                        LLC
                    6,200,000sharesTotal
                    159,150,044
                        shares
  
 Assuming
        the closing of the merger and the subsequent closing of the Spin-off Agreement,
        the Company will no longer have any interest in the operations of ABS and
        B&H, and the shareholders of Cryobanks will become the majority shareholders
        of the Company.
 
 NOTE
        C
        -  SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES
 
 Nature
        of Business
 
 BioStem,
        Inc. (formerly National Parking Systems, Inc.) (the “Company”) presently
        provides parking and valet services to establishments and booting services
        to
        parking garages and lots in Atlanta, Georgia through its wholly owned
        subsidiaries: BH Holding Company, Inc., which owns J&K Parking, Inc., and
        ABS Holding Company, Inc. BH Holding Company, Inc. and ABS Holding Company,
        Inc.
        are Nevada Corporations and J&K Parking, Inc. is a Georgia Corporation. All
        of these companies were under the common control of one individual prior
        to the
        reverse merger.
    F-11
 
 NOTE
        C
        -  SUMMARY
        OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Reverse
        Merger
 
 On
        January 13, 2005, the Company entered into a stock exchange agreement with
        Cascade Mountain Mining Company, Inc. (“Cascade”) which subsequently changed its
        name to National Parking Systems, Inc, and then BioStem, Inc. whereby Cascade
        issued 40,350,000 shares of its common stock to acquire BioStem, Inc.
        Additionally, Cascade authorized a 1 for 4,000 reverse split of its common
        stock
        prior to the merger. In connection with the merger, BioStem, Inc. became
        a
        wholly owned subsidiary of Cascade. Prior to the merger, Cascade was a
        non-operating “shell” corporation. Pursuant to Securities and Exchange
        Commission rules, the merger of a private operating company, BioStem, Inc.,
        into
        a non-operating public shell corporation, with nominal net assets, is considered
        a capital transaction. At the time of the merger, the officers and directors
        of
        Cascade resigned and were replaced with the officers and directors of BioStem,
        Inc. For financial statement presentation, the merger has been reflected
        in the
        financial statements as though it occurred on December 31, 2004. The historical
        financial statements prior to December 31, 2004 are those of BioStem, Inc.
        Since
        the merger is a recapitalization and not a business combination, pro forma
        information is not presented.
   Going
        Concern
 
 As
        shown
        in the accompanying financial statements, the Company has incurred net losses
        of
        $2,051,539 in 2006, $7,857,124 in 2005 and $5,200,418 in 2004, has negative
        working capital of $1,338,517, and a stockholders’ deficit of $1,242,540 at
        December 31, 2006. Management’s plans include the raising of capital through the
        equity markets to fund future operations, seeking additional acquisitions,
        the
        generating of revenue through its business, and the merger with Cryobanks
        International Inc. as discussed in Note G. Failure to raise adequate capital
        and
        generate adequate sales revenues could result in the Company having to curtail
        or cease operations. Additionally, even if the Company does raise sufficient
        capital to support its operating expenses and generate adequate revenues,
        there
        can be no assurances that the revenue will be sufficient to enable it to
        develop
        business to a level where it will generate profits and cash flows from
        operations. These matters raise substantial doubt about the Company’s ability to
        continue as a going concern. However, the accompanying financial statements
        have
        been prepared on a going concern basis, which contemplates the realization
        of
        assets and satisfaction of liabilities in the normal course of business.
        These
        financial statements do not include any adjustments relating to the recovery
        of
        the recorded assets or the classification of the liabilities that might be
        necessary should the Company be unable to continue as a going
        concern.
 
 Consolidated
        Financial Statements
 
 The
        consolidated financial statements include the Company and its wholly owned
        subsidiaries. All significant intercompany transactions and balances have
        been
        eliminated in consolidation.
 
 Use
        of
        Estimates
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        reported amounts of revenues and expenses during the reporting period. Actual
        results could differ from those estimates.
 
 Cash
        Equivalents
 
 For
        purposes of reporting cash flows, cash equivalents include investment
        instruments purchased with an original maturity of three months or less.
 
 
  F-12
 
 
 NOTE
        C -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Fair
        Values of Financial Instruments
 
 The
        Company uses financial instruments in the normal course of business. The
        carrying values of cash, accounts receivable, advance receivable, bank
        overdraft, accounts payable and accrued expenses approximate their fair value
        due to the short-term maturities of these assets and liabilities. The carrying
        values of notes payable and loans payable approximate their fair value based
        upon management’s estimates using the best available information.
 
 Property
        and Equipment and Depreciation
 
 Property
        and equipment is stated at cost and is depreciated using the straight line
        method over the estimated useful lives of the respective assets. Routine
        maintenance, repairs and replacement costs are expensed as incurred and
        improvements that extend the useful life of the assets are capitalized. When
        property and equipment is sold or otherwise disposed of, the cost and related
        accumulated depreciation are eliminated from the accounts and any resulting
        gain
        or loss is recognized in operations.
 
 Net
        Loss Per Common Share
 
 The
        Company computes per share amounts in accordance with Statement of Financial
        Accounting Standards (“SFAS”) No. 128, “Earnings per Share”. SFAS No. 128
        requires presentation of basic and diluted EPS. Basic EPS is computed by
        dividing the income (loss) available to Common Stockholders by the
        weighted-average number of common shares outstanding for the period. Diluted
        EPS
        is based on the weighted-average number of shares of Common Stock and Common
        Stock equivalents outstanding during the periods.
 Although
        there were common stock equivalents outstanding at December 31, 2006, they
        were
        not included in the calculation of earnings per share because they would
        have
        been considered antidilutive.
  Revenue
        Recognition Policy
 
 Revenue
        is recognized for the valet and parking establishments when the service is
        performed. Cash is collected immediately and deposited in the bank the next
        day.
        In connection with the booting services, revenue is recognized when the service
        is performed
 
 Stock-Based
        Compensation
 
 The
        Company accounts for employee stock based compensation and stock issued for
        services using the fair value method. In accordance with SFAS No. 123R, the
        measurement date of shares issued for services is the date at which the
        counterparty’s performance is complete.
 
 The
        Company accounts for stock issued for services using the fair value method.
        In
        accordance with Emerging Issues Task Force (“EITF”) 96-18, the measurement date
        of shares issued for services is the date at which the counterparty’s
        performance is complete.
 
 Impairment
        of Long-Lived Assets
 
 The
        Company reviews long-lived assets for impairment whenever events or changes
        in
        circumstances indicate the carrying amount of an asset may not be recoverable.
        Recoverability of assets to be held and used is measured by a comparison
        of the
        carrying amount of an asset to future undiscounted net cash flows expected
        to be
        generated by the asset. If such assets are considered to be impaired, the
        impairment to be recognized is measured by the amount by which the carrying
        amount of the assets exceeded the fair value of the assets.
 
 
 
 F-13
  
 
 NOTE
        C -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Income
        Taxes
 
 The
        Company utilizes SFAS No. 109, *Accounting
        for Income Taxes* .
        Under
        this method, the Company recognizes a deferred tax liability or asset for
        temporary differences between the tax basis of an asset or liability and
        the
        related amount reported on the financial statements.
 
 Beneficial
        Conversion Features
 
 The
        Company follows EITF 00-27, “Application of Issue No. 98-5 to Certain
        Convertible Instruments”, and EITF 98-5, “Accounting for Convertible Securities
        with Beneficial Conversion Features or Contingently Adjustable Conversion
        Ratios” in accounting for beneficial conversion features associated with its
        convertible debentures. A beneficial conversion feature is computed as the
        difference between the effective conversion price and the fair value of the
        stock at the commitment date multiplied by the number of shares which the
        security is convertible.
 
 Recent
        Accounting Pronouncements
 
 In
        June 2006, the Financial Accounting Standards Board (“FASB”) issued
        Interpretation 48, “Accounting for Income Tax Uncertainties” (“FIN 48”). FIN 48
        defines the threshold for recognizing the benefits of tax return positions
        in
        the financial statements as “more-likely-than-not” to be sustained by the taxing
        authority. Recently issued literature also provides guidance on the
        derecognition, measurement and classification of income tax uncertainties,
        along
        with any related interest and penalties. FIN 48 also includes guidance
        concerning accounting for income tax uncertainties in interim periods and
        increases the level of disclosures associated with any recorded income tax
        uncertainties. FIN 48 is effective for fiscal years beginning after
        December 15, 2006. The Company expects to adopt the provisions of FIN 48
        beginning in the first quarter of 2007. The Company is currently in the process
        of determining the impact, if any, of adopting the provisions of FIN 48 on
        its
        financial position, results of operations and liquidity.
  In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
        defines fair value, establishes a framework for measuring fair value under
        other
        accounting pronouncements that permit or require fair value measurements,
        changes the methods used to measure fair value and expands disclosures about
        fair value measurements. In particular, disclosures are required to provide
        information on the extent to which fair value is used to measure assets and
        liabilities; the inputs used to develop measurements; and the effect of certain
        of the measurements on earnings (or changes in net assets). SFAS No. 157
        is
        effective for fiscal years beginning after November 15, 2007 and interim
        periods
        within those fiscal years. Early adoption, as of the beginning of an entity’s
        fiscal year, is also permitted, provided interim financial statements have
        not
        yet been issued. The Company expects to adopt the provisions of FIN 48 beginning
        in the first quarter of 2008. The Company is currently evaluating the potential
        impact, if any, that the adoption of SFAS No. 157 will have on its consolidated
        financial statements.
  In
        September 2006, the Securities and Exchange Commission issued Staff Accounting
        Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when
        Quantifying Misstatements in Current Year Financial Statements” (“SAB No. 108”).
        SAB No. 108 provides guidance on how prior year misstatements should be
        considered when quantifying misstatements in the current year financial
        statements. SAB No. 108 requires registrants to quantify misstatements using
        both a balance sheet and an income statement approach and evaluate whether
        either approach results in quantifying a misstatement that, when all relevant
        quantitative
 and
        qualitative factors are considered, is material. SAB No. 108 does not change
        the
        guidance in SAB No. 99, “Materiality,” when evaluating the materiality of
        misstatements. SAB No. 108 is effective for fiscal years ending after November
        15, 2006. Upon initial application, SAB No. 108 permits a one-time cumulative
        effect adjustment to beginning retained earnings. The Company adopted SAB
        No.
        108 for the fiscal year ended December 31, 2006. Adoption of SAB No. 108
        did not
        have a material impact on the consolidated financial statements.
   
 F-14
  
 NOTE
        C -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
        Accounting Pronouncements (Continued)
 
 In
        February 2007, the FASB issued SFAS No. 159, *The
        Fair Value Option for Financial Assets and Financial Liabilities* (“SFAS 159”).
        SFAS 159 allows entities to measure at fair value many financial
        instruments and certain other assets and liabilities that are not otherwise
        required to be measured at fair value. SFAS 159 is effective for fiscal
        years beginning after November 15, 2007. We have not determined what
        impact, if any, that adoption will have on our results of operations, cash
        flows
        or financial position.
 
 
 NOTE
        D -
        EQUIPMENT
 
 Equipment
        at December 31, 2006 and 2005 is as follows:
 Average2006
                
                2005
                
                Useful
                    LifeAutomobile
                $15,000
                
                $
                    15,000
                
                3Booting
                    equipment
                26,550
                
                25,000
                
                10Valet
                    equipment
                10,000
                
                10,000
                
                351,550
                
                50,000Less:
                    accumulated depreciation
                (21,520)
                
                (10,649)$30,030
                
                $
                    39,351
  
 Depreciation
        expense of $10,871, $9,999 and $650 is included within Depreciation and
        amortization expense on the Statement of Operations for the years ended December
        31, 2006, 2005 and 2004, respectively.
 
 NOTE
        E -
        COVENANT-NOT-TO-COMPETE
 
 On
        November 4, 2004 and prior to the reverse merger, Mr. Marc Ebersole, the
        Chief
        Executive Officer of National Parking Systems, Inc. formed two corporations:
        (1)
        BH Holding Company, Inc. (BH) and (2) ABS Holding Company, Inc. (ABS). Each
        company had 500 common shares outstanding.
 
 On
        November 4, 2004, BH acquired J&K Parking, Inc. d/b/a B&H Parking. Mr.
        Ebersole, who owned 50% of B&H Parking, merged his interest in BH for a
        $30,000 promissory note for assets and a three year covenant not to compete.
        Since the company had no other assets, the value was placed on the covenant
        not
        to compete. BH acquired the other 50% from Mr. Ebersole’s partner for $200,000.
        Of this amount, $175,000 was loaned under the Senior Secured Convertible
        Debenture and the Company issued an additional $25,000 promissory note to
        Mr.
        Ebersole’s partner. No value was placed on the customer lists, the only other
        asset since the contracts were not binding on either party and were considered
        month to month.
 
 On
        November 4, 2004, ABS acquired the assets of Blue Sky Parking, Inc. for
        $200,000. Blue Sky was primarily in the booting business. A value of $25,000
        was
        placed on the booting equipment which was deemed to be the fair market value
        at
        date of acquisition. A payment of $100,000 was made from borrowings under
        the
        Senior Secured Convertible Promissory Note and ABS issued a $100,000 promissory
        note to the former owners. The purchase price of $200,000 contained a
        non-compete agreement. Blue Sky had two informal booting contracts and one
        was
        cancelled prior to acquisition. The other agreement was on a month to month
        basis.
 
 The
        share
        exchange agreement exchanges all of the outstanding common stock of BH and
        ABS
        for 130,000,000 shares of National Parking Systems’, Inc. common stock. The
        share exchange agreement
    F-15
 
 
 NOTE
        E -
        COVENANT-NOT-TO-COMPETE (Continued)
 
 contained
        a non-compete agreement. Additionally,
        the right to receive preferred stock of BH and ABS was exchanged for 31,000,000
        shares of National Parking Systems’, Inc. common stock and a Junior Convertible
        Debenture in the amount of $86,750. These
        share exchange agreements contained non-compete agreements with the owners
        of
        the acquired business.
 
 The
        following is a summary of the covenants not to compete at December 31, 2005
        and
        2004 :
   2006
              
              2005Covenants
                  not to compete
              
              $
              491,750
              
              $
              491,750Less:
                  accumulated amortization
              
              
              (339,053
              )
              
              (175,137
              )$
              152,697
              
              $
              316,613
 
 
 Amortization
        expense of $163,916, $163,916 and $11,221 is included within Depreciation
        and
        amortization expense on the Statement of Operations for the years ended December
        31, 2006, 2005 and 2004, respectively. Estimated amortization for 2007 is
        $152,697.
 
 NOTE
        F -
        RELATED PARTY TRANSACTIONS
 
 In
        connection with the original merger, the Company issued a $30,000 note to
        the
        President and Chief Executive Officer, who was also the majority owner of
        one of
        the companies acquired, for a non-compete agreement. The note is payable
        at the
        rate of $900 per month commencing December 1, 2004 with a final balloon payment
        due on November 1, 2005. The note is unsecured and bears interest at the
        rate of
        18% per annum. During 2005, this amount was repaid. The President, at December
        31, 2005, has an outstanding advance from the Company of $911 and a balance
        due
        from the company of $1,389 at December 31, 2006.
 
 Professional
        and consulting fees in 2006 and 2005 to Hyde Investments, Ltd. (“Hyde”) and
        London Finance Group, Ltd. (“London”) which are under common control, amounted
        to $240,000 and $582,900 and interest of $48,122 and $41,455 was also incurred
        to Hyde in 2006 and 2005.
 
 
 NOTE
        G -
        LONG-TERM DEBT
 December 31,2006
                
                2005Installment
                    loan payable, dated November 2, 2004, for equipment
                    assumedin
                    the merger. The loan is secured by a vehicle and is payable at
                    $464per
                    month including interest of 6%.
                $
                2,882
                
                $
                8,832Note
                    payable, dated November 2, 2004, in connection with the merger
                    to
                    aformer
                    shareholder for $100,000 for a 3 year non-compete agreement.The
                    note is unsecured, non-interest bearing, and is payable in 36
                    monthsat
                    $2,778 per month.
                
                29,236
                
                
                63,889Senior
                    Secured Convertible Debenture dated October 15, 2004,
                    maturingOctober
                    15, 2005 to include advances not to exceed $1,000,000 withan
                    interest rate of 10% per annum secured by all of the
                    Company’sassets
                    extended until December 31, 2007 under terms of “Agreement toExtend
                    Senior Convertible Debenture”. (See Note J - Commitmentsand
                    Contingencies)
                
                552,500
                
                
                420,000
  
 F-16
 NOTE
            G -
            LONG-TERM DEBT (Continued)
 
  December
                      31,2006
                  
                  2005Junior
                      Convertible Debentures in the amount of $86,750 due January
                      31,2010.
                      The Debentures are non-interest bearing and are convertible
                      intothe
                      Company’s common stock. (See also Note J - Commitmentsand
                      Contingencies)
                  
                  
                  86,750
                  
                  
                  86,750671,368
                  
                  
                  579,471Less:
                      current portion
                  
                  
                  (584,618
                  )
                  
                  (458,904
                  )Long-term
                      portion
                  
                  $
                  86,750
                  
                  $
                  120,567
 NOTE
        H -
        INCOME TAXES
 
 The
        principal types of differences, which are measured at current tax rates,
        are net
        operating loss carry forwards. At December 31, 2006 and 2005, these differences
        resulted in a deferred tax asset of approximately $652,000 and $328,000,
        respectively. SFAS No. 109 requires the establishment of a valuation allowance
        to reflect the likelihood of realization of deferred tax assets. Since
        realization is not assured, the Company has recorded a valuation allowance
        for
        the entire deferred tax asset, and the accompanying financial statements
        do not
        reflect any net asset for deferred taxes at December 31, 2006 and,
        2005.
 
 The
        Company’s net operating loss carry forwards amounted to approximately $1,917,000
        and $980,000 at December 31, 2006 and 2005 respectively, which will expire
        through 2021.
 
 NOTE
        I -
        STOCKHOLDERS’ DEFICIT
 
 The
        Company’s certificate of incorporation was amended January 4, 2005 to change the
        name of the company from Cascade Mountain Mining Company, Inc. to National
        Parking, Inc. Additionally, a 1 to 4,000 reverse stock split was effected.
        The
        financial statements give effect to these transactions.
 
 In
        connection with the reverse merger, 161,400,000 shares of the Company’s common
        stock were issued to acquire National Parking, Inc.
 
 In
        July
        2005, the Company issued 12,000,000 shares under an approved S-8 stock plan
        to
        consultants for services rendered in connection with the Company’s reverse
        merger. The shares were valued at $0.25 per share. Accordingly, stock for
        services in the amount of $300,000 was recorded and included in professional
        and
        consulting fees expense.
 
 In
        October 2005, the Company issued 18,000 shares of common stock to attorneys
        in
        consideration for legal services rendered to the Company. The shares were
        valued
        at $0.15 per share. Accordingly, stock for services in the amount of $2,700
        was
        recorded and included in professional and consulting fees expense.
 
 The
        Company affected a 4:1 forward stock split for shareholders of record as
        of
        October 20, 2005. All tabular data and EPS have been adjusted.
 
 In
        November 2005, the Company issued 1,500,000 shares of common stock to
        consultants. The shares were valued at $0.06 per share. Accordingly, stock
        for
        services in the amount of $90,000 was recorded, of which $67,500 was recorded
        in
        Prepaid consulting fees and $22,500 was recorded in professional and consulting
        fees expense. The Prepaid consulting fees are being amortized over the life
        of
        the consulting agreement.
 
 
 
 F-17
 
 
 NOTE
        J -
        COMMITMENTS AND CONTINGENCIES
 
 Senior
        Secured Convertible Debenture
 
 On
        October, 15, 2004, the Company issued a Senior Secured Convertible Debenture
        which allows for the Company to borrow up to $1,000,000. $552,500 and $420,000
        were outstanding at December 31, 2006 and 2005, respectively. The Debenture
        was
        due October 15, 2005; however, the due date of the Senior Debenture was extended
        by Hyde and the Company. As a result of the extension, the due date was extended
        to December 31, 2007. The Debenture bears interest at the rate of 10% per
        annum,
        and has a general security lien against all of the Company’s assets. The
        Debenture, including accrued interest, is convertible into the Company’s common
        stock at the lesser of a) 30% of the average of the three lowest closing
        prices
        in the twenty (20) trading days immediately preceding the conversion date
        or, b)
        $0.10 (pre-split). The Debenture contains restrictions on the issuance of
        additional shares of preferred or common stock, payment of dividends, or
        issuance of additional debentures without the consent of a majority of the
        Senior Convertible Debenture holders and is personally guaranteed by the
        Company’s CEO.
 
 The
        Company computed a beneficial conversion feature of $7,980,815, which consisted
        of $5,177,589, $1,463,438, and $1,339,788 in 2004, 2005, and 2006, respectively.
        This feature was determined by subtracting the effective conversion price
        of
        from the fair value of the Company’s stock at the dates of issuance, multiplied
        by the shares which the debenture is convertible according to the debenture
        agreements. The entire beneficial conversion is included in Interest Expense
        as
        the debenture is immediately convertible into common stock.
 
 Junior
        Convertible Debenture
 
 In
        connection with the merger, the Company issued $86,750 in 5 year Junior
        Convertible Debentures dated January 13, 2005. The Debentures are due January
        31, 2010 and are non-interest bearing. The holder of the Debentures is entitled
        to convert the Debentures into common stock of the Company at the lesser
        of a)
        30% of the average of the three lowest closing prices in the twenty (20)
        trading
        days immediately preceding the conversion date or, b) $0.10
        (pre-split).
 
 The
        Company computed a beneficial conversion feature of $5,453,684 for the year
        ended December 31, 2005. This feature was determined by subtracting the
        effective conversion price of from the fair value of the Company’s stock at the
        dates of issuance, multiplied by the shares which the debenture is convertible
        according to the debenture agreements. The entire beneficial conversion is
        included in Interest Expense as the debenture is immediately convertible
        into
        common stock.
 
 Warrant
        Agreements
 
 In
        connection with the merger, the Company, on January 5, 2005, issued a warrant
        to
        London for 1,000,000 shares of the Company’s common stock at an exercise price
        of $0.10 per share (pre-split). The warrants vest immediately and expire
        January
        5, 2009. The warrants have participating rights should the Company file a
        registration statement with the Securities and Exchange Commission. The Company
        recorded $42,900 in professional and consulting fees, which represents the
        fair
        value of the warrants at the time services were performed.
 
 The
        Company entered into a consulting agreement with Vijay Alimchandani, dba
        Financial Systems International (“Financial”), on November 11, 2005 which lasted
        until June 30, 2006. In connection with this agreement, the Company gave
        Financial a warrant to purchase 500,000 shares of common stock at an exercise
        price of $1.00 per share. The warrants vested immediately and expire November
        1,
        2010. Since the Company did not complete the merger with Cryobanks by June
        30,
        2006, the Company has the right to purchase the warrant, along with the
        1,500,000 shares issued to consultants in November of 2005 (see Note I),
        for
        $1,000. No expense was recorded for the warrants since they were determined
        to
        have no value at the time services were performed.
 
 
 F-18
  
 NOTE
        J -
        COMMITMENTS AND CONTINGENCIES (CONTINUED)
 
 Consulting
        Agreement
 
 The
        Company, on January 5, 2005, entered into a 2 year consulting agreement with
        London for services relating to mergers, acquisitions, and the establishment
        of
        investment banking relationships. Under the terms of the consulting arrangement,
        the Company is to a) pay a non-refundable retainer of $5,000 per month, b)
        issue
        3,000,000 shares of the Company’s common stock to be registered as promptly as
        possible but no later than the date the Company files its first registration
        statement, c) pay a fee of 10% of the consideration paid for any acquisition
        or
        sale by the Company and d) reimburse London for reasonable travel expenses.
        Additionally, the Company would issue to London a warrant to purchase up
        to
        1,000,000 shares of the Company’s common stock at an exercise price of $0.10 per
        share (pre-split). The common stock issuable upon exercise will be registered
        at
        the Company’s expense. The warrants vest immediately.
 
 On
        November 23, 2005, the Company amended the London agreement to reduce the
        number
        of warrants to be issued from 4,000,000 post 4:1 forward split shares to
        1,500,000 post 4:1 forward split shares, and increased the exercise price
        of
        those warrants from $0.025 to $1.00 per share. Additionally, the fee was
        increased to $20,000 per month and the expiration date extended to January
        31,
        2009. As of December 31, 2006 and 2005 the Company has accrued $480,000 and
        $240,000 respectively as consulting expense related to this
        agreement.
 
 Employment
        Agreement
 
 The
        Company, on December 1, 2004, entered into a 3 year employment agreement
        with
        the President and Chief Executive Officer. The agreement allows for an annual
        salary of $120,000 plus health benefits and an auto allowance.
 
 Lease
        Agreement
 
 On
        February 13, 2004, the Company entered into a 5 year lease agreement for
        its
        corporate headquarters. Rent expense was $19,010, $17,361, and $15,109 for
        the
        years ended December 31, 2006, 2005, and 2004, respectively.
 
 The
        Company also has various equipment leases for surveillance cameras and automated
        parking stations.
 
 License
        Agreements
 
 On
        January 2, 2006, the Company entered into two separate three year license
        agreements to provide valet and other parking services at two locations in
        the
        Atlanta area. These agreements, with a 60 day cancellation clause, call for
        annual rental payments by the Company of $354,000 ($29,500 monthly) in exchange
        for managing, monitoring, and collection of all fees for the “work of the
        properties”. Lot rental expense including late fees as $356,000 for the year
        ended December 31, 2006.
 
 The
        minimum annual rental payments for the agreements described above are as
        follows:
 
 
 2007
              
              2008
              
              2009
              
              2010
              
              TotalRent
                  Agreements
              
              $
              18,047
              
              $
              18,770
              
              $
              4,738
              
              
              -
              
              $
              41,555Equipment
                  Leases
              
              
              19,645
              
              
              19,645
              
              
              12,818
              
              $
              990
              
              
              53,098License
                  Agreements
              
              
              354,000
              
              
              354,000
              
              
              -
              
              
              -
              
              
              708,000$
              391,692
              
              $
              392,415
              
              $
              17,556
              
              $
              990
              
              $
              802,653
 
   F-19
 
 NOTE
        K -
        CONCENTRATIONS
 
 For
        the
        year ended December 31, 2006, approximately 23% of the Company’s sales were with
        one lot and approximately 51% were with three lots.
 
 NOTE
        L -
        SEGMENT INFORMATION
 
 The
        Company’s two reportable segments are Parking and Booting. In evaluating these
        segments, the Company analyzes Sales, Income (Loss) Before Depreciation,
        Amortization and Interest, and Net Income (Loss). The following summarizes
        the
        Company’s reportable segments.
 
  **Parking**
                
                **Booting**
                
                **Corporate/**
                  **Eliminations**
                
                **Total****2006**Net
                    Sales
                
                
                1,340,292
                
                
                421,949
                
                
                -
                
                
                1,762,241Income
                    (Loss) Before Depreciation,Amortization
                    and Interest Expense
                
                
                (185,358
                )
                
                97,232
                
                
                (396,236
                )
                
                (484,362
                )Depreciation
                    and Amortization
                
                
                (105,583
                )
                
                (65,872
                )
                
                (3,332
                )
                
                (174,787
                )Interest
                    Expense
                
                
                (4,480
                )
                
                -
                
                
                (1,387,910
                )
                
                (1,392,390
                )Net
                    Loss
                
                
                (295,421
                )
                
                31,360
                
                
                (1,787,478
                )
                
                (2,051,539
                )Total
                    Assets
                
                
                157,999
                
                
                207,290
                
                
                (116,387
                )
                
                248,902**2005**Net
                    Sales
                
                
                676,622
                
                
                408,435
                
                
                -
                
                
                1,085,057Income
                    (Loss) Before Depreciation,Amortization
                    and Interest Expense
                
                
                (60,577
                )
                
                97,834
                
                
                (759,660
                )
                
                (722,403
                )Depreciation
                    and Amortization
                
                
                (105,584
                )
                
                (65,832
                )
                
                (2,499
                )
                
                (173,915
                )Interest
                    Expense
                
                
                (2,295
                )
                
                (37
                )
                
                (6,958,474
                )
                
                (6,960,806
                )Net
                    Loss
                
                
                (168,456
                )
                
                31,965
                
                
                (7,720,633
                )
                
                (7,857,124
                )Total
                    Assets
                
                
                225,812
                
                
                208,945
                
                
                10,324
                
                
                445,081**2004**Net
                    Sales
                
                
                267,355
                
                
                50,240
                
                
                -
                
                
                317,595Income
                    (Loss) Before Depreciation,Amortization
                    and Interest Expense
                
                
                (11,187
                )
                
                6,885
                
                
                (1,890
                )
                
                (6,192
                )Depreciation
                    and Amortization
                
                
                (6,360
                )
                
                (5,511
                )
                
                -
                
                
                (11,871
                )Interest
                    Expense
                
                
                -
                
                
                -
                
                
                (5,182,355
                )
                
                (5,182,355
                )Net
                    Loss
                
                
                (17,547
                )
                
                1,374
                
                
                (5,184,245
                )
                
                (5,200,418
                )Total
                    Assets
                
                
                315,857
                
                
                213,132
                
                
                -
                
                
                528,989
  
 NOTE
        M -
        SUBSEQUENT EVENTS
 
 The
        Company has entered into a vehicle lease agreement effective January 12,
        2007.
        The agreement calls for annual rental payments by the company of $14,205
        ($1,184
        monthly) for a total of forty-seven months.
 
 The
        Company has borrowed an additional $40,000 under the Senior Convertible
        debenture subsequent to December 31, 2006 bringing the total outstanding
        to
        $592,500.
 
 
 F-20
 
 
 NOTE
        M -
        SUBSEQUENT EVENTS (Continued)
 
 The
        Company has borrowed $5,000 under a business credit line issued by the Bank
        of
        America. The annual percentage rate on this credit line is 18.24%.
 
 NOTE
        N-
        QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
 
 The
        following summarizes the unaudited quarterly financial information of the
        Company:
 
 12/31/06
              
              9/30/06
              
              6/30/06
              
              3/31/06
              
              TotalNet
                  Sales
              
              
              527,535
              
              
              405,058
              
              
              434,077
              
              
              395,571
              
              
              1,762,241Net
                  Loss
              
              
              (741,666
              )
              
              (278,727
              )
              
              (501,544
              )
              
              (529,602
              )
              
              (2,051,539
              )Loss
                  Per Share
              
              
              (0.01
              )
              
              (0.01
              )
              
              (0.01
              )
              
              (0.01
              )
              
              (0.01
              )12/31/05
              
              
              9/30/05
              
              
              6/30/05
              
              
              3/31/05
              
              
              TotalNet
                  Sales
              
              
              303,740
              
              
              291,939
              
              
              287,720
              
              
              201,658
              
              
              1,085,057Net
                Loss
              
              
              (1,617,504
              )
              
              (407,655
              )
              
              (101,402
              )
              
              (5,730,563
              )
              
              (7,857,124
              )Loss
                Per Share
              
              
              (0.01
              )
              
              (0.01
              )
              
              (0.01
              )
              
              (0.03
              )
              
              (0.05
              )


F-21






**ITEM
      9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE.**





None.





**ITEM
      9A. CONTROLS AND PROCEDURES.**





(a) *Disclosure
      Controls and Procedures —* We
      maintain disclosure controls and procedures that are designed to ensure that
      the
      information disclosed in the reports we file with the SEC under the Exchange
      Act
      of 1934 as amended (the Exchange Act) is recorded, processed, summarized and
      reported within the time periods specified in the SEC’s rules and forms, and
      that such information is accumulated and communicated to our management,
      including our CEO and CFO, as appropriate, to allow timely decisions regarding
      required disclosure.




Management,
      including our Chief
      Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), Marc Ebersole,
      evaluated the effectiveness of our disclosure controls and procedures, as of
      December 31, 2006, in accordance with Rules 13a-15(b) and 15d-15(b) of
      the Exchange Act. Based on that evaluation and the existence of certain material
      weaknesses discussed below under “Management’s Report on Internal Control Over
      Financial Reporting,” our CEO and CFO concluded that our disclosure controls and
      procedures were not effective as of December 31, 2006.







*(b)*  *Management’s
      Report on Internal Control Over Financial Reporting —* Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting (as defined in Rules 13a-15(f) and
      15d-15(f) under the Exchange Act). A company’s internal control over financial
      reporting is a process designed to provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial statements
      for external purposes in accordance with U.S. GAAP. A company’s internal
      control over financial reporting includes those policies and procedures that
      (1) pertain to the maintenance of records that, in reasonable detail,
      accurately and fairly reflect the transactions and disposition of the assets
      of
      the company; (2) provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with GAAP, and that receipts and expenditures of the company are
      being made only in accordance with authorizations of management and the
      oversight of the board of directors of the company; and (3) provide
      reasonable assurance regarding prevention or timely detection of unauthorized
      acquisition, use, or disposition of the company’s assets that could have a
      material effect on the financial statements.







Because
      of its inherent
      limitations, internal control over financial reporting may not prevent or detect
      misstatements. Also, projections of any evaluation of effectiveness to future
      periods are subject to the risk that controls may become inadequate because
      of
      changes in conditions, or that the degree of compliance with the policies or
      procedures may deteriorate.







-41-









Under
      the supervision of our CEO and CFO, management conducted an assessment of the
      effectiveness of our internal control over financial reporting as of
      December 31, 2006, using the criteria set forth in the framework
      established by the Committee of Sponsoring Organizations of the Treadway
      Commission (COSO) in *Internal
      Control — Integrated Framework.*







A
      material weakness is a
      control deficiency, or combination of control deficiencies, that results in
      more
      than a remote likelihood that a material misstatement of a company’s annual or
      interim financial statements will not be prevented or detected. Management
      identified the following material weaknesses in our internal control over
      financial reporting as of December 31, 2006:










(1)
            
            *Our
                financial and accounting organization was not adequate to support
                our
                financial accounting and reporting needs.*Specifically,
                we did not maintain a sufficient number of personnel with an appropriate
                level of accounting knowledge commensurate with our financial reporting
                requirements and in fact, none of our personnel have significant
                technical
                and reporting experience. The lack of a sufficient number of personnel
                with an appropriate level of accounting knowledge contributed to
                the
                control deficiencies noted in items 2 through 5 below.(2)
            
            *We
                do not maintain an Audit Committee, Compensation Committee, Code
                of
                Conduct or Ethics and/or a “whistle-blower” hotline.*We
                do not currently have an independent Audit Committee to provide oversight
                of our financial statements. Additionally, we do not currently have
                an
                independent Compensation Committee to provide oversight of executive
                compensation, a Code of Conduct and Ethics for our senior management
                or
                employees, or a “whistle-blower” hotline to anonymously report suspicious
                activity.(3)
            
            *We
                do not maintain effective controls against the risk of fraud.*Specifically,
                an inadequate number of controls exist to ensure that safeguarding
                of our
                assets and to address potential fraud; we have not completed a fraud
                risk
                assessment; neither a Code of Conduct or Ethics has been implemented
                for
                our senior management; we do not have an internal control department;
                and
                as stated above, no “whistle-blower” policy or hotline is in
                effect.(4)
            
            We
                place an overwhelming amount of reliance on manual controls.In
                connectionwith
                our management’s review of accounting procedures as of December 31, 2006,
                it was determined that 94% of our controls were manual and that those
                manual controls were conducted infrequently, i.e. either monthly,
                quarterly, annually or on an unscheduled
                basis.






-42-







(5)
            *Additional material weaknesses are present in our control framework,
                including that:*·Cash is not adequately secured prior to depositing such
                  cash in the
                  bank;·Contracts are not properly executed before work under such
                  contracts begin;·No controls exist to ensure that all revenue, accounts
                  receivable and cash receipt transactions have been posted to the
                  correct
                  account or recorded in the prior period;·No controls exist to ensure that all
                  expense, accounts payable and cash disbursement transactions have
                  been
                  posted to the correct account or recorded in the proper
                  period;·No controls exist to ensure that fixed assets accounted
                  for
                  physically exist;·No controls exist to ensure that purchases have been properly
                  approved or goods/services rendered; and·An inadequate number of employees has created issues regarding
                  those employees separation of duties and job
                  functions





The control deficiencies in item (1) above, and to a lesser extent, the control
      deficiencies listed in items (2) through (5) above resulted in us filing our
      Annual Report on Form 10-KSB for the period ended December 31, 2005, past such
      deadline as required by the Securities and Exchange Commission, and caused
      us to
      file several other of our Quarterly Reports on Form 10-QSB on the extended
      deadline such reports are required to be filed with the Commission.
      Additionally, each of the control deficiencies described in items (1) through
      (5) above could result in a misstatement in our annual or interim consolidated
      financial statements that would not be prevented or detected. Management has
      determined that each of the control deficiencies described in Items (1)
      through (5) constitutes a material weakness to our controls over financial
      reporting.





As a result of these material weaknesses, management has concluded that we
      did
      not maintain effective internal control over financial reporting as of
      December 31, 2006, based on criteria established in *Internal
      Control — Integrated Framework* issued
      by
      the COSO. Management’s assessment of the effectiveness of our internal control
      over financial reporting as of December 31, 2006, has been audited by
      Meyler & Company, LLC, our independent registered public accounting firm, as
      stated in its report, which appears in Item 8 of this Annual Report on
      Form 10-K.







*Plan
      for Remediation of Material Weaknesses —* The
      deficiencies set forth above have been noted by our management. Throughout
      fiscal 2007, we hope to put in place controls and procedures and/or plans of
      action to address the deficiencies set forth in items (1) through (5) above,
      of
      which there can be no assurance.







-43-








(c)  Changes
      in internal control over financial reporting. There were no changes in the
      Company's internal control over financial reporting during the fourth fiscal
      quarter that materially affected, or are reasonably likely to materially affect,
      the Company's internal control over financial reporting.





**ITEM
      9B. OTHER INFORMATION.**





None.









-44-





**PART
      III**





**ITEM
      10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
      GOVERNACE.**





**DIRECTORS
      AND OFFICERS**





The
      Directors and Officers of the Company are as follows:







**Name**
            **Age**
            **Position**Marc
                Ebersole
            49
            Chief
                Executive Officer,
              President,
                Treasurer,
              Secretary
                and DirectorChristine
                Ebersole
            37
            DirectorScott
                Schweber
            46
            Director





**Marc
      Ebersole**





Marc
      Ebersole has served as the Company's Chief Executive Officer and Director since
      September 1, 2004. He has served as Chief Executive Officer of the Company's
      wholly owned subsidiaries ABS Holding Company, Inc. ("ABS") and BH Holding
      Company, Inc. ("BH"), since their inception on November 4, 2004. Since June
      1988, he has served as Chief Executive Officer of BH's wholly owned subsidiary
      J
& K Parking d/b/a B&H Parking ("J&K"). From May 1984 to June 1988,
      he served as General Manager of J&K Parking and from October 1980 to May
      1984, Mr. Ebersole was employed as a valet with J&K Parking.





**Christine
      Ebersole**





Christine
      Ebersole has served as a Director of the Company since August 12, 2005. She
      has
      served as the Company's Office Manager since November 2004. From June 2003
      to
      April 2004, she worked as a waitress at the Executive Club in New York City,
      New
      York. From September 2002 to June 2003, she was employed as an Office Manager
      with Sanford and Associates, in New York City, New York. From September 1999
      to
      September 2002, she was employed as territory manger and pet sitter for Critter
      Sitters in Atlanta, Georgia. Ms. Ebersole is the niece of our Chief Executive
      Officer and Director, Marc Ebersole.





**Scott
      Schweber**





Scott
      Schweber has served as a Director of the Company since August 12, 2005. Mr.
      Schweber has provided various legal services to the Company since November
      2004.
      Since January 2004, he has served as "Of Counsel" to Dietrick, Evans, Scholz
      & Williams, L.L.C. in Atlanta, Georgia. From January 1993 to January 2004,
      he served as a partner with the law firm Schweber, Izenson & Anderson, LLP,
      in Atlanta Georgia. Mr. Schweber obtained a Bachelors degree in Social Thought
      and Political Economy in 1982, from the University of Massachusetts and a Juris
      Doctorate from Emory University in 1985. Mr. Schweber is admitted to the State
      Bar of Georgia.







-45-





All
      Directors of the Company will hold office until the next annual meeting of
      the
      shareholders, and until their successors have been elected and qualified.
      Officers of the Company are elected by the Board of Directors and hold office
      at
      the pleasure of the Board. Christine Ebersole is the niece of our Chief
      Executive Officer and Director, Marc Ebersole.





**Changes
      in the Company's Officers and Directors**





On
      January 14, 2005, Ari Kaplan resigned as a Director of the Company, leaving
      Marc
      Ebersole as the sole office and Director of the Company. On August 12, 2005,
      the
      Company's Board of Directors appointed Scott Schweber and Christine Ebersole,
      who is the niece of our Chief Executive Officer and Director, Marc Ebersole,
      as
      Directors of the Company.





**Employment
      Agreement**





On
      November 4, 2004, Marc Ebersole, the Company's Chief Executive officer entered
      into an Employment Agreement with the Company ("Employment Agreement"). Mr.
      Ebersole's duties under the Employment Agreement include responsibility for
      the
      day to day operations of the Company and other duties associated with his
      position as the Company's Chief Executive Officer. The term of the Employment
      Agreement is for a period of five (5) years terminating on October 31, 2009.
      Under the Employment Agreement, Mr. Ebersole is entitled to One Hundred and
      Twenty Thousand dollars ($120,000.00) a year (his "Basic Compensation"), as
      well
      as an automobile allowance of $950.00 a month, until such time as Mr. Ebersole's
      vehicle is paid in full, and $500.00 a month as a healthcare allowance.
      Additionally, Mr. Ebersole is eligible for annual bonuses under the Employment
      Agreement, not to exceed Fifty percent (50%) of his Basic Compensation. The
      Company also agreed to reimburse Mr. Ebersole for all necessary and usual
      expenses incurred by him on behalf of the Company.





Under
      the
      Employment Agreement, Mr. Ebersole is entitled to paid vacation days pursuant
      to
      the Company's vacation policies, which shall not exceed fifteen (15) days per
      year. Unused vacation days shall expire at the end of each calendar year.
      Additionally, under the Employment Agreement, the Company agrees to indemnify
      Mr. Ebersole for all claims and causes of action asserted against him relating
      to his position as an officer and Director of the Company, including
      reimbursement for all of the fees and expenses of his counsel associated with
      such claims and causes of actions.





In
      connection with the Employment Agreement and BH's acquisition of J&K from
      Mr. Ebersole and Mr. Pringle, Mr. Ebersole signed a covenant not to compete
      ("Covenant").







-46-







Under
      the
      Covenant, Mr. Ebersole agreed not to engage in, be employed in, or have any
      interest in any occupation or business similar to that of BH or ABS, within
      the
      Southeast United States, including Georgia, Alabama, Louisiana, Tennessee,
      Florida, South Carolina, North Carolina and any location where BH and/or ABS
      conduces valet parking, parking management and vehicle immobilization, for
      three
      (3) years from the date of the termination of this employment with the
      Company.





**SECTION
      16 (A) BENEFICIAL OWNERSHIP**


**REPORTING
      COMPLIANCE**





Section
      16(a) of the securities Exchange Act of 1934, as amended, requires the Company's
      directors, executive officers and persons who own more than 10% of a class
      of
      the Company's equity securities which are registered under the Exchange Act
      to
      file with the Securities and Exchange Commission initial reports of ownership
      and reports of changes of ownership of such registered securities. Such
      executive officers, directors and greater than 10% beneficial owners are
      required by Commission regulation to furnish the Company with copies of all
      Section 16(a) forms filed by such reporting persons.





To
      the
      Company's knowledge, based solely on a review of the copies of such reports
      furnished to the Company and on representations that no other reports were
      required, no person required to file such a report failed to file during fiscal
      2004. Based on stockholder filings with the SEC, Marc Ebersole, Christine
      Ebersole and Scott Schweber are subject to Section 16(a) filing
      requirements.





**ITEM
      11. EXECUTIVE COMPENSATION.**




**SUMMARY
        COMPENSATION TABLE**
 **ANNUAL
        COMPENSATION**
 
 **Other****Annual**
              
              **Total****Name
                  & Principal**
              
              
              
              
              
              **Bonus**
              
              **Compen-**
              
              **Compen-********Position******
              
              **Year******
              
              ******Salary($)**
              
              ******($)**
              
              ******sation******
              
              ******sation********Marc
                  Ebersole (1)(2)**
              
              
              2006(1)
              
              $
              58,808
              
              $
              17,400
              
              $
              -0-
              
              $
              76,208CEO,
                  President
              
              
              2005(1)
              
              $
              125,000
              
              $
              18,600
              
              $
              17,400
              
              $
              161,000CFO
                  (Principal Accounting
              
              
              2004
              
              $
              -0-
              
              $
              -
                  0 -
              
              $
              -
                  0-
              
              $
              -
                  0 -Officer),
                  Secretary,Treasurer,
                  and Director**Christine
                  Ebersole**
              
              
              2006
              
              $
              46,870
              
              $
              -0-
              
              $
              -0-
              
              $
              46,870Director**Scott
                  Schweber**
              
              
              2006
              
              $
              -0-
              
              $
              -0-
              
              $
              -0-
              
              $
              -0-Director**Ari
                  Kaplan(2)**
              
              
              2004
              
              $
              -0-
              
              $
              -0
                  -
              
              $
              -
                  0 -
              
              $
              -
                  0 -Former
                  CEO andFormer
                  Director**Wayne
                  Daley(3)**
              
              
              2004
              
              $
              56,000
              
              $
              -
                  0 -
              
              $
              -
                  0 -
              
              $
              -
                  0 -Former
                  CEO,Former
                  Presidentand
                  Former Director







-47-





*
      Does
      not include perquisites and other personal benefits which amounts total less
      than 10% in aggregate of the executive’s total compensation as disclosed above.
      No executive officers were issued any restricted stock awards, options or SARs,
      LTIP payouts, non-equity incentive plan compensation, non-qualified deferred
      compensation, during the years presented above. Other than the executive
      officers named above, no officer of the Company made more than $100,000 during
      the years presented above.





(1)
      Pursuant to Mr. Ebersole's Employment Agreement, described above, we agreed
      to
      pay Mr. Ebersole $125,000 per year in salary until the expiration of the
      Employment Agreement on October 31, 2009. We also agreed to pay him $950 a
      month
      in compensation for his automobile and $500 per month as a healthcare allowance
      pursuant to his Employment Agreement, which amounts are included under the
      "Other Annual Compensation" column of the table above.





(2)
      Mr.
      Ebersole was appointed Chief Executive Officer of the Company on September
      1,
      2004. On the same day, Ari Kaplan resigned as Chief Executive Officer of the
      Company. Mr. Kaplan subsequently resigned from his position as a Director of
      the
      Company on January 14, 2005.





(3)
      Wayne
      Daley resigned as Chief Executive Officer and Director of the Company on August
      1, 2004. On the same date, Mr. Kaplan was appointed Chief Executive Officer
      and
      Director of the Company. Mr. Daley was paid $5,000 per month as salary and
      $2,000 per month as reimbursement for business expenses, under a two year
      employment contract he signed with the Company in July 2003.





**COMPENSATION
      DISCUSSION AND ANALYSIS**





**Director
      Compensation**





No
      non-executive members of our Board of Directors have ever received any
      compensation for any services performed in their capacity as a Director of
      the
      Company, however, the Board of Directors reserves the right in the future to
      award the members of the Board of Directors cash or stock based consideration
      for their services to the Company, which awards, if granted shall be in the
      sole
      determination of the Board of Directors.










-48-






Executive Compensation Philosophy





Our
      Board
      of Directors, consisting of Marc Ebersole (our sole executive officer for the
      year ended December 31, 2006), Christine Ebersole (an employee of us) and Scott
      Schweber, determines the compensation given to our executive officers in their
      sole determination. Our executive compensation program is designed to attract
      and retain talented executives to meet our short-term and long-term business
      objectives. In doing so, we attempt to align our executives’ interests with the
      interests of our shareholders by providing an adequate compensation package
      to
      such executives. This compensation package includes a base salary, which we
      believe is competitive with other companies of our relative size. In addition,
      although we have not to date, our Board of Directors also reserves the right
      to
      award incentive bonuses which are linked to our performance, as well as to
      the
      individual executive officer’s performance. This package may also include
      long-term, stock based compensation to certain executives which is intended
      to
      align the performance of our executives with our long-term business strategies.
      While our Board of Directors has not granted any performance base stock options
      to date, the Board of Directors reserves the right to grant such options in
      the
      future, if the Board in its sole determination believes such grants would be
      in
      the best interests of the Company.





**Base
      Salary**





The
      base
      salary of our sole executive officer, Marc Ebersole, our Chief Executive
      Officer, Chief Financial Officer, Secretary and Treasurer, was established
      by
      the Employment Agreement which we entered into with Mr. Ebersole in December
      2005, which base salary was established by evaluating the range of
      responsibilities of his positions, as well as the anticipated impact Mr.
      Ebersole could have in meeting our strategic objectives. The established base
      salary is then benchmarked to comparable positions with that of industry best
      practices. Base salaries are adjusted to reflect the varying levels of position
      responsibilities and individual executive performance.




**Incentive
      Bonus**





Along
      with Mr. Ebersole’s base salary under his Employment Agreement, the Board of
      Directors reserves the right to give Mr. Ebersole incentive bonuses, which
      bonuses the Board of Directors may grant in its sole discretion, if the Board
      of
      Directors believes such bonuses are in the Company’s best interest, after
      analyzing our current business objectives and growth, if any, and the amount
      of
      revenue we are able to generate each month, which revenue is a direct result
      of
      the actions and ability of Mr. Ebersole.





As
      of the
      date of this filing, no executive officers or Directors hold any outstanding
      options to purchase shares of common stock in the Company, nor were there any
      outstanding options to purchase shares in the common stock of the Company as
      of
      December 31, 2006 or 2005.





**Long-term,
      Stock Based Compensation**





In
      order
      to attract, retain and motivate executive talent necessary to support the
      Company’s long-term business strategy we may award certain executives with
      long-term, stock based compensation in the future, in the sole discretion of
      our
      Board of Directors, which we do not currently have any immediate plans to
      award.







-49-





**Criteria
      for Compensation Levels**




The
      Company has always sought to attract and retain qualified executives and
      employees able to positively contribute to the success of the Company for the
      benefit of its various stakeholders, the most important of which is its
      shareholders, but also including its customers, its employees, and the
      communities in which the Company operates.




The
      Board
      of Directors (in establishing compensation levels for Chief Executive Officer)
      and the Company (in establishing compensation levels for other executives,
      if
      any) considers many factors, including, but not limited to, the individual’s
      abilities and executed performance that results in: the advancement of corporate
      goals of the Company, execution of the Company’s business strategies,
      contributions to positive financial results, and contributions to the
      development of the management team and other employees. An officer must
      demonstrate his or her ability to deliver results in his or her areas of
      responsibility, which can include, among other things: business development
      with
      new and existing customers, development of new products, efficient management
      of
      operations and systems, implementation of appropriate changes and improvements
      to operations and systems, personnel management, financial management, and
      strategic decision making. In determining compensation levels, the Board of
      Directors also considers: competitiveness of compensation packages relative
      to
      other comparable companies, both inside and outside of the valet parking and
      vehicle immobilization industry, and the experience level of each particular
      individual.




Compensation
      levels for executive officers are generally reviewed upon the expiration of
      such
      executive’s employment agreement (if any), or annually, but may be reviewed more
      often as deemed appropriate.




**Compensation
      Philosophy and Strategy**




In
      addition to the “Criteria for Compensation Levels” set forth above, the Company
      has a “Compensation Philosophy” for all employees of the Company (set forth
      below), and a “Compensation Strategy for Key Management Personnel” (set forth
      below), a substantial portion of which also applies to all employees of the
      Company.




**Compensation
      Philosophy**




The
      Company’s compensation philosophy is as follows:




•
            
            The
                Company believes that compensation is an integral component of its
                overall
                business and human resource strategies. The Company’s compensation plans
                will strive to promote the hiring and retention of personnel necessary
                to
                execute the Company’s business strategies and achieve its business
                objectives.






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•
            
            The
                Company’s compensation plans will be strategy-focused, competitive, and
                recognize and reward individual and group contributions and results.
                The
                Company’s compensation plans will strive to promote an alignment of the
                interests of employees with the interests of the shareholders by
                having a
                portion of compensation based on financial results and actions that
                will
                generate future shareholder value.




•
            
            In
                order to reward financial performance over time, the Company’s
                compensation programs generally will consist of: base compensation,
                and
                may also consist of short-term variable incentives and long-term
                variable
                incentives, as appropriate.




•
            
            The
                Company’s compensation plans will be administered consistently and fairly
                to promote equal opportunities for the Company’s employees.




**Compensation
      Strategy for Key Management Personnel**




The
      Company’s compensation strategy for its key management personnel is as follows:




•
            
            Total
                compensation will include base salary and short-term and long-term
                variable incentives based on annual performance, and long-term variable
                incentives, in each case, where appropriate.




•
            
            Compensation
                will be comparable to general and industry-specific compensation
                practices.




•
            
            Generally,
                base compensation, and targeted short and long-term variable compensation,
                if any, will be established within the range of compensation of similarly
                situated companies. The Company’s organization size and complexity will be
                taken into account, and therefore similarly situated companies includes
                companies of similar size and complexity whether or not such companies
                are
                in the Company’s industry or not.




•
            
            When
                determining compensation for officers and managers, the Company takes
                into
                account the employee’s knowledge and experience, including industry
                specific knowledge and experience, to the extent such knowledge and
                experience contributes to the Company’s ability to achieve its business
                objectives.




•
            
            The
                Company reserves the right to adjust annual base salaries of employees
                if
                individual performance is at or above pre-established performance
                expectations.





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**ITEM
      12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      STOCKHOLDER MATTERS.**





The
      following table sets forth information as of January 29, 2007, with respect
      to
      the beneficial ownership of the common stock by (i) each director and officer
      of
      the Company, (ii) all directors and officers as a group and (iii) each person
      known by the Company to own beneficially 5% or more of the common
      stock:





**Name**
            **No.
                of shares**
            **Percentage(1)**Marc
                Ebersole
            122,000,000
            69.6%Christine
                Ebersole
            4,000,000
            2.3%Scott
                Schweber
            4,000,000
            2.3%**All
                the officers**
            **130,000,000**
            **74.2%****and
                Directors****as
                a group (3 persons)**





(1)
      Using
      175,218,044 shares issued and outstanding as of January 29, 2007





**Changes
      in Control of Registrant**





At
      the
      Closing of the Merger (described above), of which there can be no assurance,
      it
      is anticipated that the officers and Directors of Cryobanks will become the
      officers and Directors of the Company until the earlier of their resignation
      or
      removal or until their respective successors are duly elected and qualified.
      It
      is possible that the officers and Directors of Cryobanks set forth below may
      change prior to the Closing of the Merger.





**ITEM
      13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
      INDEPENDENCE.**





On
      November 4, 2004, the Company entered into an Employment Agreement with the
      Company's Chief Executive Officer, Marc Ebersole. Under the Employment
      Agreement, Mr. Ebersole is to serve as the Company's Chief Executive Officer
      and
      perform the day to day operations of the Company. The Employment Agreement
      is
      for a term of Five (5) years, ending on October 31, 2009. Mr. Ebersole is to
      be
      paid One Hundred and Twenty Thousand dollars($120,000.00) a year ("Basic
      Compensation"), and is eligible for an annual bonus not to exceed Fifty percent
      (50%) of his Basic Compensation. Mr. Ebersole's Employment Agreement is
      described in further detail under "Item 9. Directors, Executive Officer,
      Promoters and Control Persons Compliance with Section 16(a) of the Exchange
      Act," above.





On
      January 24, 2005, the Company issued the Company's Chief Executive Officer,
      Marc
      Ebersole, 130,400,000, restricted shares of the Company's common stock in
      connection with an Exchange Agreement entered into between Mr. Ebersole and
      the
      Company. Subsequent to this issuance, Mr. Ebersole transferred 4,400,000
      restricted shares to two individuals, and 4,000,000 restricted shares to his
      niece, Christine Ebersole, who is also a Director of the Company, leaving him
      the current beneficial owner of 122,000,000 shares of the Company's common
      stock.







-52-





**ITEM
      14. PRINCIPAL ACCOUNTING FEES AND SERVICES.**





**Audit
      Fees**





The
      aggregate fees billed for the fiscal years ended December 31, 2006 and 2005,
      for
      professional services rendered by the Company's principal accountants, Meyler
      & Company, LLC ("Meyler") for the audit of the Company's annual financial
      statements was $23,700 and $25,000, respectively.





The
      aggregate fees billed for each of the fiscal years ended December 31, 2006
      and
      2005 for professional services rendered by the Company's principal independent
      auditor Meyler, for the years ended December 31, 2006 and 2005, for review
      of
      the financial statements included in the Company's Form 10-QSB’s or for services
      that are normally provided by the accountant in connection with statutory and
      regulatory filings or engagements for those fiscal years was $13,000 and
      $10,000, respectively.





**Audit
      Related Fees**





None.





**Tax
      Fees**





None.





**All
      Other Fees**





None.








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**PART
      IV**





**ITEM
      15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.**





Exhibit
                No.
            Description2.1(1)
            Agreement
                and Plan of Merger2.2(1)
            Subsidiary
                Transfer Agreement2.3(+)
            First
                Amendment to Agreement and Plan of Merger2.4(5)
            Second
                Amendment to Agreement and Plan of Merger10.1(2)
            Stock
                Exchange Agreement10.2(2)
            Junior
                Convertible Debenture - The Morpheus Trust10.3(2)
            Junior
                Convertible Debenture - The Gateway Real Estate Investment
                Trust10.4(2)
            Junior
                Convertible Debenture - Picasso, LLC10.5(2)
            Junior
                Convertible Debenture - Burton Partners, LLC10.6(2)
            Junior
                Convertible Debenture - Livingston Investments, Ltd.10.7(2)
            Senior
                Secured Debenture with Hyde Investments, Ltd.10.8(2)
            Security
                Agreement10.9(2)
            Marc
                Ebersole's Employment Agreement10.10(2)
            Marc
                Ebersole's Covenant Not To Compete10.11(2)
            Consulting
                Agreement10.12(2)
            Warrant
                Agreement10.13(3)
            Addendum
                to Stock Exchange Agreement10.14(3)
            General
                Release and Settlement Agreement10.15(4)
            Consulting
                Agreement with Financial Systems International10.16(4)
            Warrant
                Agreement with Financial Systems
                International







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10.17(4)
            Agreement
                to Extend Senior Secured Convertible Debenture with
                Hyde10.18(1)
            Amendment
                to Consulting Agreement10.19(6)
            Third
                Amendment to Agreement and Plan of Merger10.20(7)
            Letter
                of Intent between Cryobanks and Samarium10.21(7)
            Amendment
                to Senior Debenture10.22(8)
            Fourth
                Amendment and Plan of Merger with Cryobanks31.1*
            Certificate
                of the Chief Executive Officer and Chief Financial Officer pursuant
                to
                Section 302 of the Sarbanes-Oxley Act of 200232.1*
            Certificate
                of the Chief Executive Officer and Chief Financial Officer pursuant
                to
                Section 906 of the Sarbanes-Oxley Act of
                2002





(1)
      Filed
      as Exhibits to the Company's Form 8-K filed on November 28, 2005, and
      incorporated herein by reference.





(2)
      Filed
      as Exhibits to the Company's Form 8-K filed on January 28, 2005, and
      incorporated herein by reference.





(3)
      Filed
      as Exhibits to the Company's Form 10-QSB filed on November 21, 2005 and
      incorporated herein by reference.





(4)
      Filed
      as Exhibits to the Company's Form 10-KSB filed on May 3, 2005, and incorporated
      herein by reference.





(+)
      Filed
      as an exhibit to our Form 10-QSB filed on May 22, 2006, and incorporated herein
      by reference.





(5)
      Filed
      as an exhibit to our Form 10-QSB filed on August 21, 2006, and incorporated
      herein by reference.





(6)
      Filed
      as an exhibit to our Form 10-QSB filed on November 20, 2006, and incorporated
      herein by reference.





(7)  Filed
      as
      exhibits to our Form 8-K filed on March 14, 2007, and incorporated herein by
      reference.





(8)  Filed
      as
      an exhibit to our Form 8-K filed on March 22, 2007, and incorporated herein
      by
      reference.







-55-








*
      Filed
      herein.





Reports
      on Form 8-K:





We
      filed
      a report on Form 8-K during the period covered by this Annual Report on November
      28, 2006, to report Cryobanks dissemination of a power point presentation in
      connection with the planned Merger.





We
      filed
      a report on Form 8-K subsequent to the period covered by this Annual Report
      on
      March 14, 2007, to report Cryobanks entry into the Letter of Intent with
      Samarium and our entry into the amendment to the Hyde Note.













-56-







**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.





BIOSTEM, INC.





DATED:  
      April 2, 2007


By:
      /s/ Marc Ebersole


Marc
      Ebersole


Chief
      Executive Officer and Chief Financial Officer (Principal Accounting
      Officer)





In
      accordance with the Securities Exchange Act of 1934, this report has been signed
      below by the following persons on behalf of the Registrant and in the capacities
      and on the dates indicated.





NAME TITLE DATE





/s/
      Marc
      Ebersole Chief
      Executive
      Officer, April
      2, 2007


Marc
      Ebersole Chief
      Financial Officer,


(Principal
      Accounting Officer)


Secretary,
      Treasurer and Director





/s/
      Christine Ebersole  Director                                                 April
      2 ,
      2007


Christine
      Ebersole











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