SAN DIEGO, Nov. 15, 2006 (PRIMEZONE) -- MicroIslet, Inc. (AMEX:MII) announced that it filed its Quarterly Report on Form 10-QSB for the quarter ended September 30, 2006 with the Securities and Exchange Commission yesterday. The Company reported a net loss of $8.1 million for the first nine months of 2006 compared to a net loss of $5.8 million during the same period of 2005. Grant revenue was $187,000 and $482,000 for the three and nine months ended September 30, 2006, respectively, and consisted entirely of research grants. No grant revenue was recognized for the first nine months of 2005.
Research and development expenses increased $622,000 to $1.8 million for the three months ended September 30, 2006, from $1.1 million in the same period in 2005, and increased $1,466,000 to $5.3 million for the nine months ended September 30, 2006, from $3.9 million in the same period in 2005. These increases for the nine months ended September 30, 2006 were due to increased costs from our collaborations with the Mayo Foundation and U.C. Davis ($260,000); an increase in headcount for lab personnel ($380,000); increases in materials and services relating to testing of our technology in animals ($90,000) and compensation expense from the new accounting treatment for share-based compensation ($517,000). We are projecting increases in our research and development expenses beginning the fourth quarter of 2006 as we approach a pre-IND meeting with the FDA and the commencement of Phase I/II allotransplantation clinical trials.
General and administrative expenses decreased $117,000 to $693,000 for the three months ended September 30, 2006 compared to $810,000 for the same period in 2005, and increased $1,261,000 to $3.3 million for the nine months ended September 30, 2006, compared to $2.1 million for the same period in 2005. The increases for the nine months ended September 30, 2006 were due to higher salaries and fees paid to senior management ($140,000), temporary consultant fees to fill open positions ($280,000), increased legal expenses ($130,000), stock issuances to certain stockholders resulting from contractual liquidated damages owed them ($100,000), and increased compensation expense from the new accounting treatment for stock based compensation in the first six months of 2006 ($740,000).
At the end of 2005, the Company had $4.5 million in cash and cash equivalents and at the end of the third quarter of 2006, the Company's cash position had decreased to $3.4 million. The decrease in cash position represented approximately $7.3 million of cash used in operations, offset by approximately $3.8 million in net proceeds from a private placement of our common stock and warrants in August 2006, and $2.5 million in proceeds from exercise of outstanding stock options and warrants. Accordingly, the Company will require external financing to sustain its operations. More information about the Company's need for capital and potential sources of capital is contained in the Company's most recent filings with the Securities and Exchange Commission.
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, exclusively licensed from Duke University, 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 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 MicroIslet's ability to continue as a going concern, the risks and uncertainties inherent in medical treatment discovery, development and commercialization, the risks and uncertainties associated with MicroIslet's early stage allo- and xenotransplantation technologies, the risks and uncertainties of governmental approvals and regulation, dependence on the Mayo Foundation for Medical Education and Research as a sole source supplier of animal parts for pre-clinical and clinical studies, MicroIslet's need to raise substantial additional capital to proceed through human clinical trials and bring any product to market, the risks that MicroIslet's competitors will develop or market technologies or products that are more effective or commercially attractive than MicroIslet's products, and other risks detailed from time to time 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 more information, please visit our Web site at www.microislet.com.