Bio-Matrix Scientific Group (OTC:BMSN) Now Banks Revenue by Banking Stem Cells  The anticipated entry into the world of revenue is now a reality for Bio-Matrix Scientific Group, Inc. (OTC:BMSN). Three weeks ago the company filed a routine disclosure document saying they had been in discussions with NeoCell Inc. as well as with its parent company, ViviCell International Inc. Since then, the possibility has become reality ... Bio-Matrix will now be getting paid to handle NeoCell's and AdultCells Incorporated's clients stem cells. Both NeoCell and AdultCells are ViviCell subsidiaries.  In short, Bio-Matrix Scientific Group has agreed to cryogenically bank and process umbilical cord blood and adult peripheral blood stem cells for NeoCell's and AdultCell's clients. Both companies will be transferring their existing client's stem cells to the Bio-Matrix facility for storage. And yes, this will generate revenue for Bio-Matrix.  Additionally, the agreement may also lead to cryogenic banking and processing of menstrual blood and other human stem cells for NeoCell and AdultCell. Those samples would require Bio-Matrix's later approval.  Most likely for proprietary reasons, none of the SEC filings or the recent press releases specify what sort of dollars the deal will entail. However, based on our research, we believe this contract could mean annual revenue generation of seven figures, or perhaps even more as NeoCell's and AdultCell's business grows.  That's not the important part though. The best part of all is for investors. Storing these cells generates not only a one-time processing fee, but also an annual fee to be collected by Bio-Matrix. Translation: Recurring revenue - this business model doesn't always require an uphill battle be fought to generate sales.  What's equally exciting here is how Bio-Matrix is essentially being taken off the life support of private capital infusion, and instead starting to breathe and live on its own ... and on its own revenue. In other words, it's on its way to being self-sustaining.  Based on recent income statements, only a couple of more comparable deals would likely be needed to put the company into the black. This first one, though, means the flexibility of cash flow is now in place.    The Fringe Benefit As we mentioned in our last discussion, there's another benefit for Bio-Matrix by partnering with NeoCell and AdultCells ... marketing. Our initial due diligence research of Bio-Matrix Scientific Group uncovered that their facility may literally be one of the very few, and one of the very best, cryogenic storage facilities in the country. In fact, Bio-Matrix was the only company we could find at the time offering this particular kind of adult stem-cell storage service. We've heard of no new competition popping up in the meantime.  So, scientifically speaking, Bio-Matrix could be considered the effective authority when it comes to the storage technology behind the business model. ViviCell and its subsidiaries bring a different talent to the table ... experience with marketing and promoting a comparable storage service. Both NeoCell and AdultCells are at least moderately talented in this regard, as they both already have a client base to hand over to Bio-Matrix.  That's not to say NeoCell and AdultCells were using an inferior facility, but let's face it - NeoCell and AdultCells were previously competing with Bio-Matrix, but then chose to meet their own needs by outsourcing their service to their competition. The decision speaks very highly of Bio-Matrix's cryogenic storage facility. The arrangement essentially lets both parties do more of what they do best. ViviCell can focus on marketing the service, and Bio-Matrix can focus on performing the service. In business terms, it's the principle of synergy. Both companies mutually benefit from one another, and by extension, so do BMSN shareholders.   Down the Road As with any news from a publicly-traded company, the NeoCell and AdultCells news prompts questions about the near-term and longer-term impact for Bio-Matrix. We have a handful of items to highlight in that regard. First, make a note of this symbiotic, recurring revenue relationship between ViviCell and Bio-Matrix, as it's the same business model the company intends to replicate with other groups in need of cryogenic cell storage. The one-time processing fee is nice, but the recurring revenue is the really exciting aspect. Second, we've heard multiple times from Bio-Matrix that the company is in talks with other prospective customers with similar needs ... and it's no small matter. Just for perspective, by 2012 the stem cell research industry could be worth $8 billion. All those samples need to be stored somewhere. Carving out a fraction of that amount with just a couple more deals like the ViviCell agreement could be enough to push the company into the black, based on our recent study of the company's books. Third, Bio-Matrix is more diversified than one might initially think.  The bulk of their success and opportunity so far has centered around blood stem cells. That's not the company's only potential revenue-generator though. Bio-Matrix's facility is also capable of storing adipose (fat) tissue samples, as well as functioning as a gene coding lab. In fact, the property offers three research laboratories, an aseptic cellular/tissue class 10,000/100 processing laboratory, hematology, microbiology and flow cytometry laboratories. We won't be surprised to see these other businesses cultivated in the future. Fourth (and our bottom line), the NeoCell/AdultCells agreement will create real revenue, officially making Bio-Matrix more than just a concept. The first dollar always seems to be the toughest dollar to earn. Now that Bio-Matrix has its first customers and revenue on the way though, the momentum can be built upon.  Our calculations suggest their 15,000 square foot facility is capable of producing cryogenic storage revenues of up to $30 million annually. The recent contract won't get them all the way there, but Bio-Matrix has taken its first step on that path. As with most biotech stocks, however, it may be more fruitful to invest during the beginning of the journey rather than when the company reaches its destination.