<PAGE>

                                                                    EXHIBIT 10.3

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE (THE "LAWS"). THESE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF A REGISTRATION AND QUALIFICATION OF THESE SECURITIES UNDER THE ACT
AND THE LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
REGISTRATION AND QUALIFICATION ARE NOT REQUIRED UNDER THE ACT AND THE LAWS.



                                WARRANT AGREEMENT

         THIS WARRANT AGREEMENT (this "AGREEMENT") is entered into and effective
as of May 25, 2004 (the "EFFECTIVE Date"), by and between MicroIslet, Inc., a
Nevada corporation (the "COMPANY"), and Strategic Growth International, Inc.
("WARRANTHOLDER").

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the Company and the Warrantholder certify and agree
as follows:

         1. GRANT OF THE RIGHT TO PURCHASE COMMON STOCK. For value received, the
adequacy of which is hereby acknowledged, the Company hereby grants to
Warrantholder, and Warrantholder is entitled to, upon the terms and subject to
the conditions set forth in this Agreement, a warrant (the "WARRANT") to
subscribe for and purchase from the Company a number of shares (the "SHARES") of
the Company's common stock, $0.001 par value (the "COMMON STOCK") equal to Two
Hundred Thousand (200,000) Shares of the Common Stock at a purchase price of
[Sixty Cents ($0.60)] [Seventy Five Cents ($0.75)] per Share (the "EXERCISE
PRICE"). This Warrant is being issued pursuant to the terms of a letter
agreement between the Company and Warrantholder dated December 15, 2003, as
amended on April 11, 2004 (the "FEE AGREEMENT"). The Fee Agreement is
incorporated herein by reference.

         2. EXPIRATION. The Warrant shall expire and cease to be exercisable at
5:00 p.m. Pacific time on May 25, 2009 (the "Expiration Date").

         3. METHOD OF EXERCISE; PAYMENT; ISSUANCE OF SHARES. Subject to Section
2 hereof, the purchase right represented by the Warrant may be exercised by the
Warrantholder, in whole and not in part, by tendering to the Company a duly
executed Notice of Exercise in the form attached as Appendix A at the principal
office of the Company and by payment to the Company, by check, of an amount
equal to the then applicable Exercise Price multiplied by the number of shares
then being purchased. In the event of any exercise of the rights represented by
this Agreement, certificates for the shares of stock so purchased shall be in
the name of, and delivered to, Warrantholder, or as Warrantholder may direct
(subject to the terms of transfer contained herein). Such delivery shall be made
within thirty (30) days after exercise and at the Company's expense. The shares
so issued upon exercise of the rights represented by this Agreement shall be
duly authorized, validly issued, fully paid and non-assessable.

                                       -1-
<PAGE>

         4. RESERVATION OF SHARES. The Company shall at all times have
authorized and reserved a sufficient number of shares of its Common Stock to
provide for the exercise of the rights to purchase the Shares as provided in
this Agreement.

         5. NO RIGHTS AS STOCKHOLDER. This Agreement does not entitle
Warrantholder to any voting rights or other rights as a stockholder of the
Company prior to the purchase of the Shares as provided in this Agreement.

         6. ADJUSTMENTS. The Exercise Price, the number of Shares purchasable
and/or the Expiration Date hereunder are subject to adjustment from time to time
as follows:

             6.1 RECLASSIFICATION OF SHARES. If the Company at any time shall,
by combination, reclassification, exchange or subdivision of securities or
otherwise, change all of the outstanding shares of Common Stock into the same or
a different number of securities of any other class or classes, this Agreement
shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable hereunder had the Warrantholder exercised
its rights with respect to all of the shares then represented by this Agreement
immediately prior to such combination, reclassification, exchange, subdivision
or other change.

             6.2 SUBDIVISION OR COMBINATION OF SHARES. If the Company at any
time shall combine or subdivide its Common Stock, the Exercise Price shall be
proportionately decreased in the case of a subdivision, or proportionately
increased in the case of a combination.

             6.3 STOCK DIVIDENDS. If the Company at any time shall pay a
dividend payable in the Common Stock, then the Exercise Price shall be adjusted,
from and after the date of determination of shareholders entitled to receive
such dividend, to a price determined by multiplying the Exercise Price in effect
immediately prior to such date of determination by a fraction (i) the numerator
of which shall be the total number of all shares of the Common Stock outstanding
immediately prior to such dividend (assuming all convertible securities are then
converted into Common Stock) and (ii) the denominator of which shall be the
total number of all shares of the Common Stock outstanding immediately after
such dividend (assuming all convertible securities are then converted into
Common Stock). Warrantholder shall thereafter be entitled to purchase, at the
Exercise Price resulting from such adjustment, the number of shares of Common
Stock (calculated to the nearest whole share) obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
shares of Common Stock issuable upon the exercise hereof immediately prior to
such adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.

             6.4 MERGER AND SALE OF ASSETS. If at any time there shall be (i) a
reorganization of the shares of the Common Stock (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for
herein), or (ii) a merger or consolidation of the Company with or into another
corporation where the Company is not the surviving corporation, or a reverse
triangular merger in which the Company is the surviving entity but the shares of
the Company's capital stock outstanding immediately prior to the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash, or otherwise, or (iii) the sale of all or substantially all of
the Company's properties and assets to any other person, then, the Company shall
give written notice to Warrantholder at least twenty (20) days prior to the
consummation of such reorganization, merger, consolidation or sale. Following
the giving of such notice, if this Warrant is not exercised prior to the
consummation date of such reorganization, merger, consolidation or sale (which
date shall not be earlier than the anticipated consummation date set forth in
the notice), this Warrant will expire and no longer be exercisable upon the
consummation of such reorganization, merger, consolidation or sale.

                                      -2-
<PAGE>

         7. WARRANT NONTRANSFERABLE. The Warrant may not be sold, pledged,
assigned or transferred in any manner without the prior written consent of the
Company.

         8. RESTRICTED SHARES/REGISTRATION.

             8.1 RESTRICTED SHARES. Warrantholder understands that the Shares
issuable upon the exercise of the Warrant under this Agreement shall be
"restricted securities" as that term is defined in Rule 144 promulgated under
the Securities Act of 1933, as amended, and shall bear a legend in the form
substantially as follows:

         THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933 (THE "ACT") OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE
         (THE "LAWS"). THESE SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE,
         PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION AND
         QUALIFICATION OF THESE SECURITIES UNDER THE ACT AND THE LAWS OR AN
         OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION
         AND QUALIFICATION ARE NOT REQUIRED UNDER THE ACT AND THE LAWS.

             8.2 PIGGYBACK REGISTRATION.

                  (a) If, at any time commencing after the Effective Date and
expiring two (2) years thereafter, the Company proposes to register any shares
of its common stock with the Securities and Exchange Commission (the "SEC")
under the Act on a registration statement (other than under a registration
statement pursuant to Form S-8 or Form S-4), the Company will give written
notice, at least ten (10) days prior to the filing of each such registration
statement, to the Warrantholder of the Company's intention to do so. If the
Warrantholder notifies the Company within five (5) days after receipt of any
such notice of its desire to include any of its Shares subject to the Warrant
(the "Registrable Securities") in such proposed registration statement, the
Company shall afford the Warrantholder the opportunity to have any Registrable
Securities registered under such registration statement or any other available
registration statement.

                  (b) Notwithstanding the provisions of this Section 8.2, the
Company shall have the right at any time after it shall have given written
notice pursuant to this Section 8.2 (irrespective of whether a written request
for inclusion of any such securities shall have been made) to elect not to file
any such proposed registration statement, or to withdraw the same after the
filing but prior to the effective date of the registration statement.


                                      -3-
<PAGE>

             8.3 DEMAND REGISTRATION.

                  (a) At any time commencing after the first anniversary of the
Effective Date and expiring one (1) year thereafter, the Warrantholder shall
have the right, exercisable by written notice to the Company, to have the
Company prepare and file with the Commission, on one occasion, a registration
statement under the Act covering the registration of all of the Registrable
Securities then subject to this Warrant or held by Warrantholder. The Company
shall then use commercially reasonable efforts to effect, as soon as practicable
after receipt of such request, the registration under the Act of all Registrable
Securities.

                  (b) Any written request by the Warrantholder made pursuant to
this Section 8.3 shall: (i) specify the minimum price at which the Warrantholder
intends to offer and sell such securities; (ii) state the intention of the
Warrantholder to offer such securities for sale; (iii) describe the intended
method of distribution of such securities; and (iv) contain an undertaking on
the part of the Warrantholder to provide all such information and materials
concerning the Warrantholder and take all such action as may be reasonably
required to permit the Company to comply with all applicable requirements of the
Commission and to obtain acceleration of the effective date of the registration
statement.

             8.4 REGISTRATION EXPENSES. All costs, fees and expenses in
connection with all registration statements filed pursuant to Sections 8.2 and
8.3 hereof including, without limitation, the Company's legal and accounting
fees, printing expenses, blue sky fees and expenses will be borne by the
Company; provided, that Warrantholder shall pay for (i) any brokerage or
underwriting commissions or discounts relating to Registrable Securities sold by
Warrantholder, and (ii) fees of counsel to Warrantholder.

             8.5 DELAY OF REGISTRATION; FURNISH INFORMATION.

                  (a) Warrantholder shall not have any right to obtain or seek
an injunction restraining or otherwise delaying any such registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 8.

                  (b) It shall be a condition precedent to the obligations of
the Company to take any action pursuant to this Section that the Warrantholder
furnish to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of such securities
as shall be required to effect the registration of its Registrable Securities.

             8.6 NO ASSIGNMENT OF REGISTRATION RIGHTS. The rights of the
Warrantholder described in this Section 8 are personal to the Warrantholder and
are not assignable or transferable to any person or entity other than an
affiliate of the Warrantholder.

         9. MISCELLANEOUS.

             9.1 GOVERNING LAW. This Agreement is entered into in San Diego,
California, shall be performed in California, and shall be interpreted, enforced
and adjudicated in San Diego, California under the internal laws of the State of
California without regard to California's conflict-of-law provisions.


                                      -4-
<PAGE>

             9.2 ENTIRE AGREEMENT. This Agreement and the Fee Agreement
constitute the final, complete and exclusive agreement between the parties
pertaining to the subject of this Agreement, and supersede all prior and
contemporaneous agreements. This Agreement represents the Warrant required to be
delivered pursuant to the Fee Agreement upon approval of Warrantholder's
engagement by the Company's board of directors. None of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other provision,
whether or not similar, nor shall any waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making the
waiver. Any changes or supplements to this Agreement must be in writing and
signed by the Company and the Warrantholder.

             9.3 ASSIGNMENT. Not in derogation of Section 7 hereof, this
Agreement shall be binding on, and shall inure to the benefit of, the parties
and their respective heirs, legal representatives, successors and assigns.

             9.4 NOTICES, ETC. Any notice required or authorized to be given
hereunder or any other communications between the parties provided for under the
terms of this Agreement shall be in writing and shall be served personally, or
by reputable express courier service, or by facsimile transmission addressed to
the relevant party at the address stated on the signature page hereto or at any
other address provided by that party to the other as its address for service.
Any notice so given personally shall be deemed to have been served on delivery,
any notice so given by express courier service shall be deemed to have been
served two (2) business days after the same shall have been delivered to the
relevant courier, and any notice so given by facsimile transmission shall be
deemed to have been received on dispatch. In proving such service, it shall be
sufficient to produce the receipt of a reputable courier company showing the
correct address of the addressee or prove that the facsimile transmission was
followed by an activity report showing the correct facsimile number of the party
on whom notice is served and the correct number of pages transmitted.

             9.5 SEVERABILITY. In the event that any one or more of the
provisions contained in this Agreement or in any other document referenced in
this Agreement, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other such
document.

             9.6 TIME IS OF THE ESSENCE. Time is absolutely of the essence in
construing each provision of this Agreement.

             9.7 INTERPRETATION. The headings set forth in this Agreement are
for convenience only and shall not be used in interpreting this Agreement.

             9.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. A faxed signature shall
be as valid as an originally executed signature.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


                                      -5-
<PAGE>





         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date.

                                   MICROISLET, INC.,
                                   a Nevada corporation



                                   By: /s/ John F. Steel IV
                                       -----------------------------------------
                                       John F. Steel IV, Chief Executive Officer

                                   Address:
                                   6370 Nancy Ridge Drive, Suite 112
                                   San Diego, California 92121
                                   Phone: 858-657-0287
                                   Fax: 858-657-0288

WARRANTHOLDER ADDRESS:

Strategic Growth International, Inc.
__________________________________________
__________________________________________
__________________________________________
Phone: ___________________________________
Fax:______________________________________




                            [WARRANT SIGNATURE PAGE]
<PAGE>



                                   Appendix A
                                   ----------

                               Notice of Exercise
                               ------------------



To:      Chief Financial Officer
         MicroIslet, Inc.

1.       The undersigned hereby elects to purchase ________ Warrant Shares of
         MicroIslet, Inc. pursuant to the terms of the attached Warrant
         Agreement dated May 25, 2004, and tenders herewith payment of the
         exercise price in full, together with all applicable transfer taxes.

2.       The Warrantholder is an "accredited investor" as defined in Regulation
         D promulgated under the Securities Act of 1933, as amended.

3.       Please issue a certificate representing the shares of the Common Stock
         in the name of the undersigned or in such other name as is specified
         below:

                           Name:  _________________________________
                           Address: _______________________________
                           Taxpayer I.D No.: ______________________

                                             WARRANTHOLDER



                                             By:________________________________
                                                Name: __________________________
                                                Title:__________________________

                                             Date:______________________________