SAN DIEGO, April 3, 2007 (PRIME NEWSWIRE) -- MicroIslet, Inc. (AMEX:MII) announced that it filed its Annual Report on Form 10-KSB for the year ended December 31, 2006, with the Securities and Exchange Commission yesterday. The Company reported a net loss of $10.7 million in 2006 compared to $8.5 million in 2005. Grant revenue of $631,000 in 2006 and $153,000 in 2005 consisted entirely of research grants.
Research and development expenses increased $1.5 million to $7.1 million in 2006, from $5.6 million in 2005. These increases were due to (1) stock-based compensation expense under the newly implemented SFAS 123R ($610,000); (2) expanded research collaborations costs with the Scripps Research Institute, UC Davis, and the Mayo Foundation ($660,000); and (3) employee costs ($420,000) resulting from an increase in headcount. These increases were offset by decreased material costs from cost control ($200,000) and legal fees ($90,000).
General and administrative expenses increased $1.1 million to $4.3 million in 2006, from $3.2 million in 2005. The increases related to (1) stock-based compensation expense under SFAS 123R ($870,000); (2) temporary consulting fees in excess of 2005 salary costs ($380,000); (3) severance paid in 2006 to the former President and Chief Operating Officer ($120,000); and (4) stock issuances to certain stockholders resulting from contractual liquidated damages owed them ($110,000). These increases were offset by a reduction in legal settlements ($350,000) and related legal fees ($60,000).
At the end of 2006, the Company had $1.8 million in cash and cash equivalents; a decrease of $2.7 million from 2005. The decrease in cash position represented approximately $9.5 million of cash used in operations, offset by approximately $3.7 million in net proceeds from a private placement of our common stock and warrants in August 2006, and $3.1 million in proceeds from exercise of outstanding stock options and warrants.
The Company reported that its independent registered public accounting firm included an explanatory paragraph in their opinion in connection with the 2006 audit, relating to the Company's ability to continue as a going concern. A similar qualifier was contained in the report of the independent registered public accounting firm included in the Company's Form 10-KSB for the year ended December 31, 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 conditions requiring cell-based replacement treatments, with a focus on type 1, or insulin-dependent diabetes. MicroIslet's patented islet transplantation technology, exclusively licensed from Duke University, along with its own developments, constitute methods for isolating, culturing, cryopreservation, and immuno-protection (microencapsulation) of islet cells. MicroIslet intends to continue its research and development efforts, and ultimately, to introduce products to the market.
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 need to raise immediate, substantial additional funds in order 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.