MicroIslet Inc. Reports Third Quarter Financial Results

SAN DIEGO, Nov. 22 /PRNewswire-FirstCall/ -- MicroIslet, Inc. has announced financial results for the period ended September 30, 2005.

For the quarter ended September 30, 2005, the company reported a net loss of $1,915,168 or $0.05 per share compared with a net loss of $1,412,257 or $0.04 per share, for the same period in 2004. Net loss was $5,849,472 or $0.15 per share for the nine months ended September 30, 2005 compared with a net loss of $4,785,163 or $0.13 per share, for the same period in 2004.

Weighted-average common shares outstanding for the quarters ended September 30, 2005 and 2004 were 40.0 million and 39.6 million, respectively. The results for the 2004 period were restated to correct errors in the accounting treatment for certain non-cash expenses relating to warrants issued to service providers in 2004.

General and administrative expenses increased to $809,776 for the three months ended September 30, 2005 compared to $633,955 for the same period in 2004, and decreased to $2,088,149 for the nine months ended September 30, 2005 compared to $2,927,533 for the same period in 2004. The increase of $175,821 for the three month period was primarily due to higher legal and accounting expenses in the current year offset by lower investor relations expenses. The decrease of $839,384 for the nine month period was primarily due to lower investor relations expense for the current year offset by an increase in legal and accounting expenses. Included in our legal expenses and in accordance with our charter and bylaws, we are advancing the litigation expenses of our Chairman and Chief Executive Officer, subject to his undertaking to repay those expenses if it is ultimately determined by a court of competent jurisdiction that he is not entitled to be indemnified for such expenses.

Research and development expenses increased to $1,141,482 for the three months ended September 30, 2005 from $811,460 in the same period in 2004, and increased to $3,872,181 for the nine months ended September 30, 2005 from $1,923,109 in the same period in 2004. These increases were due mainly to an increase in headcount for lab personnel, the company's partnership with the Mayo Foundation, and materials and services relating to testing of the company's technology in animals.

The company reported $4.0 million in cash at September 30, 2005.

About MicroIslet

MicroIslet is a biotechnology company engaged in the research, development, and commercialization of patented technologies in the field of transplantation therapy for people with insulin-dependent diabetes. MicroIslet's patented islet transplantation technology includes methods for isolating, culturing, cryopreservation, and immuno-protection (microencapsulation) of islet cells. MicroIslet is working to develop and commercialize a first product, called MicroIslet-P(TM), a microencapsulated porcine islet cell suspension that will be used for transplantation in patients with insulin-dependent diabetes. Additional information about MicroIslet can be found at www.microislet.com.

Except for the historical information contained herein, the matters set forth in this press release, including the expectation of securing additional working capital, are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including that capital may not be available on terms and conditions acceptable to MicroIslet, or at all, the substantial dilution that may occur to existing stockholders if MicroIslet raises capital through the sale of equity securities, and other risks detailed in MicroIslet's most recent filings with the Securities and Exchange Commission. These forward-looking statements speak only as of the date hereof. MicroIslet disclaims any intent or obligation to update these forward-looking statements.

For further information, please contact: William G. Kachioff, Vice President, Finance and Chief Financial Officer of MicroIslet Inc., +1 858-657-0287, info@microislet.com.

MicroIslet, Inc. (A Development Stage Company) Condensed Consolidated Balance Sheets (unaudited) September 30, December 31, 2005 2004 Assets Current Assets: Cash and cash equivalents $4,011,453 $8,777,364 Prepaid expenses 409,368 223,284 Total current assets 4,420,821 9,000,648 Property and equipment, net 380,408 203,018 Patents, net 10,693 11,048 Deposits and other assets 56,814 57,602 Total assets $4,868,736 $9,272,316 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable and accrued expenses $1,171,613 $393,270 Current portion of capital lease obligation 32,143 -- Total current liabilities 1,203,756 393,270 Capital lease obligation - net of current portion 68,825 -- Total liabilities 1,272,581 393,270 Stockholders' Equity: Common stock - $.001 par value: 100,000,000 shares authorized; 40,242,469 and 39,646,846 shares issued and outstanding at September 30, 2005 and December 31, 2004 respectively 40,242 39,647 Additional paid-in capital 31,001,903 30,435,917 Deficit accumulated during the development stage (27,445,990) (21,596,518) Total stockholders' equity 3,596,155 8,879,046 Total liabilities and stockholders' equity $4,868,736 $9,272,316 MicroIslet, Inc. (A Development Stage Company) Condensed Consolidated Statements of Operations (unaudited) Three Months Ended Nine Months Ended September 30, September 30, 2005 2004 2005 2004 Grant revenue $-- $-- $-- $-- Expenses: Research and development expenses 1,141,482 811,460 3,872,181 1,923,109 General and administrative expenses 809,776 633,955 2,088,149 2,927,533 Operating expenses 1,951,258 1,445,415 5,960,330 4,850,642 Loss from operations (1,951,258) (1,445,415) (5,960,330) (4,850,642) Other income (expense): Interest income 37,496 33,877 121,190 68,970 Interest expense (1,906) (43) (1,917) (163) Other 500 (676) (8,415) (3,328) Total other income (expense) 36,090 33,158 110,858 65,479 Net loss $(1,915,168) $(1,412,257) $(5,849,472) ($4,785,163) Basic and diluted net loss per share ($0.05) ($0.04) ($0.15) ($0.13) Weighted average number of shares outstanding used in calculation 40,043,431 39,646,846 39,904,078 36,755,651 August 21, 1998 (Inception) to Sept. 30, 2005 Grant revenue $409,790 Expenses: Research and development expenses 14,148,408 General and administrative expenses 13,800,436 Operating expenses 27,948,844 Loss from operations (27,539,054) Other income (expense): Interest income 285,738 Interest expense (174,811) Other (17,863) Total other income (expense) 93,064 Net loss $(27,445,990) Basic and diluted net loss per share $(1.17) Weighted average number of shares outstanding used in calculation 23,473,998

MicroIslet Inc.

CONTACT: William G. Kachioff, Vice President, Finance and Chief FinancialOfficer of MicroIslet Inc., +1-858-657-0287, info@microislet.com

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