MII Microislet

MicroIslet Announces Restatement of Historical Financial Statements Related to Warrant Accounting SAN DIEGO, June 28 /PRNewswire-FirstCall/ -- MicroIslet Inc. (AMEX:MII) announced today that the company's historical financial statements for 2004 would be restated to change the accounting treatment for certain warrants. As previously disclosed in the company's quarterly reports for the periods ended March 31, 2004 and June 30, 2004, the company issued warrants to settle demands for payment made by certain parties who claimed to have rendered services in connection with the company's financing that closed in March 2004. In the previously issued financial statements, the fair value of these warrants (estimated at approximately $563,000) had been charged against the proceeds of the financing. The company's management has now determined that the value of the warrants should be recorded as a period expense rather than as an offset against the proceeds of the financing. As a result of the change in the accounting treatment for these non-cash charges, a restatement of the financial statements for the fiscal year ended December 31, 2004 and the first quarter of 2005 is required. Commenting on the restatement, John F. Steel IV, the company's Chairman and Chief Executive Officer, noted: "The restatement reflects non-cash adjustments and has no implications on fundamental operations or cash flows of the company." The company plans to file an amended Form 10-KSB/A for the year ended December 31, 2004, which will present restated audited financial statements for the year ended December 31, 2004. The company also plans to file an amended Form 10-QSB for the quarter ended March 31, 2005, which will present restated unaudited financial statements for the three month periods ended March 31, 2004 and 2005. In addition, the company will restate its interim financial information for the three and six month periods ended June 30, 2004, and the nine month period ended September 30, 2004, respectively, on a prospective basis in its quarterly reports on Form 10-QSB for the quarterly periods ending June 30, 2005 and September 30, 2005, respectively. 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 http://www.microislet.com/. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements set forth above include forward-looking statements concerning the company's strategies, plans, objectives and intentions. The company wishes to caution readers that actual results could differ materially from those suggested by the forward-looking statements due to a variety of estimates, risks and uncertainties, known and unknown. One of these risks is that the review and audit may result in different or additional adjustments to the financial statements. Other potential risks and uncertainties are detailed from time to time in the company's filings with the Securities and Exchange Commission. For further information, please contact: William G. Kachioff, Vice President, Finance and Chief Financial Officer of MicroIslet Inc., +1 858-657-0287, . DATASOURCE: MicroIslet Inc. CONTACT: William G. Kachioff, Vice President, Finance and Chief Financial Officer of MicroIslet Inc., +1-858-657-0287, Web site: http://www.microislet.com/

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