LSTM LIFESTEM INTL INC

ITEM 2.01. Completion of Acquisition or Disposition of Assets.

LifeStem International, Inc. has entered into an agreement to acquire International Aerospace Enterprises, Inc., a Nevada company (IAE). IAE is involved in the acquisition and sales of military aircraft parts. By acquisition of IAE, LifeStem International is acquiring over Eleven Million Dollars ($11,000,000) in military aircraft parts that will form the basis of the new direction of the Company. There is a note to pay One Million Dollars ($1,000,000) for the newly acquired military aircraft parts. The note becomes due in June of 2010. LifeStem International has attempted for a number of years to launch its Stem Cell Microbank Service and the Company recognizes that such launch has been extremely difficult. Further, the Stem Cell Microbank Service relies upon adults having discretionary income and considering the current economy and the likely probability that the US economy is in a recession, management has determined that the necessary course of action for improving shareholder value is to enter into the business of military defense by selling needed airplane parts. Furthermore, due to budget deficits and the worldwide economic recession, management feels that the U.S. military, as well as the military of other nations, are more likely to buy spare and replacement parts for their existing aircraft than to build new aircraft. Subsequent to this initial acquisition, IAE is seeking to identify other potential acquisitions of surplus military parts in order to increase its asset base and create a larger portfolio of military aircraft parts for sale.

The next steps that the Company will take is to merge IAE into LifeStem International and rename the Company International Aerospace Enterprises, Inc. Following the name change, there will be a CUSIP change and a new trading symbol that will be issued by NASDAQ. The current subsidiaries in LifeStem International will be transferred out of LifeStem International to eliminate some outstanding liabilities as detailed in Exhibit 10.13, attached, and provide to IAE, upon completion of all expected transactions, a balance sheet that has greater assets and fewer liabilities and thereby allowing IAE to focus exclusively on the military aircraft parts business.

International Aircraft Enterprises has included an Executive Summary in order for investors to learn more about the newly acquired wholly-owned subsidiary.