<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                           FORM 10-K (AMENDMENT NO. 1)

                 [X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2007

                                       or

               [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
            For the transition period from ___________ to ___________

                         Commission File Number 0-27035

                                MICROISLET, INC.
                 (Name of Small Business Issuer in its Charter)


                Nevada                                        88-0408274
                ------                                        ----------
    (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                      Identification Number)


   6370 Nancy Ridge Drive, Suite 112, San Diego, California            92121
   --------------------------------------------------------            -----
           (Address of principal executive offices)                  (Zip Code)

                          (858) 657-0287 (Registrant's
                     telephone number, including area code)

           Securities registered under Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $.001 par value
                                (Title of Class)

         Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes |_| No

         Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No |_|

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (ss. 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. |_|


<PAGE>

         Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of "large accelerated filer," "accelerated filer,"
and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated filer |_|   Accelerated filer |_|   Non-accelerated filer| _|
                                                        (Do not check if a
                                                           smaller reporting
                                                               company)

Smaller reporting  company  |X|

         Indicate by check mark whether the registrant is a shell company (as
defined by Rule 12b-2 of the Act). Yes |_| No |X|

         The aggregate market value of the voting stock held by non-affiliates
of the registrant as of June 29, 2007, the last business day of the registrant's
second fiscal quarter, was approximately $16.8 million (based on the closing
price ($0.47 per share) reported on such date by the OTC Bulletin Board of the
registrant's common stock). Shares of common stock held by officers and
directors and holders of 5% or more of the outstanding common stock have been
excluded from the calculation of this amount because such persons may be deemed
to be affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.

         As of March 27, 2008, the number of outstanding shares of the
registrant's common stock was 54,574,426.

                                EXPLANATORY NOTE

         This Amendment No. 1 to Form 10-K is being filed as an amendment to the
registrant's annual report on Form 10-K for the fiscal year ended December 31,
2007, to amend and restate Part III, Items 10-14, and Part IV, Item 15, in their
entirety. An updated certification pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 is also filed with this Amendment No. 1 on Form 10-K.




<PAGE>

                                    PART III

        ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE


DIRECTORS AND EXECUTIVE OFFICERS

The names of our directors and executive officers, their ages as of February 29,
2008, and other information about them are shown below.

<TABLE>
<CAPTION>
<S>     <C>
                 NAME              AGE                POSITION HELD                DIRECTOR SINCE
                 ----              ---                -------------                --------------
Ronald Katz  (1)                    50           Chairman and Director                    2007
Michael J. Andrews                  55           Chief Executive Officer,
                                                 Acting Chief Financial Officer           2007
                                                 and Director
Amaresh Basu, Ph.D.                 50           Vice President, Research and
                                                 Development                              2007
Barry Ritholtz                      46           Director                                 2007
Keith B. Hoffman, Ph.D.             37           Director                                 2007
Robert W. Anderson, M.D. (1)        70           Director                                 2002
Steven T. Frankel (1)               65           Director                                 2002
</TABLE>


(1) Member of Audit, Compensation, and Nominating and Governance Committees

RONALD KATZ. Mr. Katz joined our board of directors and was appointed our
Chairman in June 2007. Mr. Katz is a certified public accountant. Since January
2004, Mr. Katz has been a partner in the public accounting firm, Weiser, LLP;
and from October 1986 to March 2004, Mr. Katz was a partner in the public
accounting firm, Rubin & Katz LLP. He earned a B.S. in Accounting and Management
from New York University. Mr. Katz was an investor in our company before joining
our board, having participated in two prior private financings.

MICHAEL J. ANDREWS. Mr. Andrews has been Chief Executive Officer and a director
of our company since June 2008, and Acting Chief Financial Officer since January
2008. From April 2006 to June 2007, Mr. Andrews served as President of Worldwide
Life Science Technologies, which develops organizations in biotechnology and
life sciences with a focus on Asia and the Pacific Rim. Mr. Andrews is also a
Co-Founder of Ansuma Biologics (antibodies and reagents supplier). From 2001 to
April 2006, Mr. Andrews served as Vice-President of Worldwide Operations at
Chemicon International Inc., a Serologicals Corporation company, with
responsibilities for engineering, manufacturing, process sciences, quality
systems, regulatory, supply chain management, facilities, and animal operations.
At Chemicon, he was also responsible for Chemicon Operations in Australia and
the United Kingdom. From 1998 to 2001 he served as the Senior Director of
Manufacturing and Materials at Ancile Pharmaceuticals, Inc., where he developed
Good Agricultural Practices (GAP) for medicinal plants and was instrumental in
the allowance of a number of Investigational New Drug (IND) applications. From
1995 to 1998 he served as Head of Manufacturing and Material Management at NaPro
BioTherapeutics in Boulder, Colorado and Victoria, British Columbia. Previous to
that, he was Plant Supervisor for Large Scale Fermentation for Synergen
Corporation in Boulder, Colorado from 1992 to 1994. From 1982 to 1992 he served
in various manufacturing positions for Genentech, Inc. in San Francisco,
California. He holds a number of patents in pharmaceutical processes and
formulations. Mr. Andrews holds memberships in the American Chemical Society and
the International Society of Pharmaceutical Engineers.

AMARESH BASU, PH.D. Dr. Basu has been our Vice-President of Research &
Development since October 2007. From November 2003 to October 2007, Dr. Basu was
the Director of Process Sciences and Project Management at Chemicon/Upstate, a
division of Millipore Corporation, where he managed bulk reagents, custom
projects, manufacturing, and quality control processes. Prior to joining
Chemicon in 2003, Dr. Basu held pharmacology, analytical and bioanalytical
chemistry, and product development positions for Galileo Pharmaceuticals
(2001-2003), Ancile Pharmaceuticals (1998-2001), and Trega Biosciences (formerly
Houghten Pharmaceuticals, 1993-1998). He was a Senior Scientist at The Upjohn
Company from 1992 to 1993, where he established high throughput screening for
HIV drugs. He held academic positions in the Department of Biochemistry and
Molecular Biology at UMDNJ-New Jersey Medical School, where he authored
approximately 20 publications in peer reviewed journals. Dr. Basu earned a Ph.D.
from University of Poona, India in biochemistry and conducted a post-doctoral
fellowship in cancer and HIV research in Memorial Sloan-Kettering Cancer Center
in New York.




<PAGE>


BARRY RITHOLTZ. Mr. Ritholtz has been a director of our company since September
2007. Since May 2007, Mr. Ritholtz has served as CEO and Director of Equity
Research at FusionIQ, an independent quantitative research firm. Since June
2006, he has also been Chief Market Strategist for Ritholtz Research, an
independent institutional research firm, and has served as Chief Investment
Officer at Ritholtz Capital Partners, a New York hedge fund. From August 2002 to
January 2006, Mr. Ritholtz was Chief Market Strategist for Maxim Group, a New
York-based investment bank. Mr. Ritholtz is a frequent guest on CNBC, where he
has been guest host of Squawk Box, and is a regular on Kudlow & Company. He has
also appeared on Your World with Neil Cavuto, Bulls & Bears, Wall Street Week,
and is frequent guest on other shows. His perspectives on the markets are quoted
regularly in the Wall Street Journal, Barron's, and other print media. Beyond
weekly commentary and published articles, Mr. Ritholtz writes The Big Picture,
an informal economics weblog covering diverse topics, including investing,
digital media, geopolitics, film and music industries. Since March 2002, Mr.
Ritholtz has been a director of Burst.com (Pink Sheets: BRST.PK), a company
engaged in the business of licensing intellectual property related to the
delivery of video and audio information over networks. Mr. Ritholtz earned a
B.A. in Mathematics, Physics and Political Science at Stony Brook University and
a J.D. from Yeshiva University's Benjamin N. Cardozo School of Law.

KEITH B. HOFFMAN, PH.D. Dr. Hoffman joined our board of directors in June 2007
and has been a consultant to our company for business development and
intellectual property since March 2007. He was a founding stockholder of
MicroIslet of Delaware. Dr. Hoffman has been the Chief Operating Officer of
Thuris Corporation, a developer of medical devices and pharmaceuticals for
central nervous system disorders since June 2002. In such position, he was
responsible for business development, funding and other intellectual property
matters. Dr. Hoffman was also a founder or co-founder of: Thuris, OLAS
Pharmaceuticals, a developer of therapeutics for growth hormone modulation,
Ansuma Biologics, a supplier of antibodies and reagents, and Psych Pain
Therapeutics. Dr. Hoffman has been a business development and intellectual
property consultant since January 1999. His intellectual property experience
includes advising on over 60 patent filings across varied biologic and chemical
technologies. He has been a business development and intellectual property
advisor to Cortex Pharmaceuticals (AMEX: COR), a developer of Ampakine drugs for
cognition-related neurological and psychiatric disorders, Akesis Pharmaceuticals
(OTCBB: AKES), a developer of combination therapeutics for Type 2 diabetes,
Tensor Biosciences, a developer of pharmacology assays for neurotherapeutics
candidates which licenses technology from Matsushita Electronic Industrial Co.,
and Antigen Discovery Incorporated, a developer of whole proteome diagnostics
for infectious diseases. Dr. Hoffman advised on key technology patents for
Ancile Pharmaceuticals, a developer of botanical therapeutics, OLAS, Psych Pain
Therapeutics, Tensor and Thuris. Dr. Hoffman earned a Ph.D. from the University
of California, Irvine for his work on the neuropharmacology of memory formation
and Alzheimer's disease in the laboratory of Dr. Gary Lynch.

ROBERT W. ANDERSON, M.D. Dr. Anderson has been a director of our company since
April 2002 and was a director of MicroIslet of Delaware from March 2001 to April
2002. From June 1994 to the present, Dr. Anderson has served as the David C.
Sabiston, Jr., Distinguished Professor and Chairman Emeritus of the Department
of Surgery at Duke University Medical Center in Durham, North Carolina. Dr.
Anderson earned a B.S. in Engineering from Duke University, an M.B.A. from
Northwestern University, and an M.D. degree from Northwestern University.

STEVEN T. FRANKEL. Mr. Frankel has been a director of our company since May
2002. Mr. Frankel is Chief Executive Officer of Accumetrics, Inc., a developer,
manufacturer, and marketer of a comprehensive system for the measurement of
platelet function. From October 2003 to October 2006, he was President of ACON
Laboratories, Inc., a provider of rapid diagnostic products, and he was Senior
Advisor to the firm from September 2002 to October 2003. From April 1998 to
February 2004, he was Chief Executive Officer and President of A-Fem Medical
Corp., a developer of women's healthcare products. Before that, he was the Chief
Executive Officer and President of Quidel Corp., a manufacturer of physicians'
office diagnostic test kits from May 1992 to March 1998. Mr. Frankel was also
President of various divisions of Becton, Dickinson and Company from October
1979 to May 1992. Mr. Frankel attended the Executive Program at Stanford
University and received his B.A. in Philosophy from Clark University.

Our directors hold their offices for a term of one year or until their
successors are elected and qualified. Our officers serve at the discretion of
the board of directors. Each officer devotes all of his working time to our
business. There are no family relationships between any directors or executive
officers of our company, and there are no arrangements or understandings between
any directors, executive officers and any other person pursuant to which any
person was or is selected as a director or executive officer, except that
pursuant to a securities purchase agreement we entered into in June 2007, the
purchasers of a majority of the shares had the right to nominate up to four
directors to serve on our board of directors and nominated Mr. Andrews, Mr.
Katz, Dr. Hoffman and Dr. Lakey to the board. Dr. Lakey resigned from our board
in February 2008.


                                       2

<PAGE>

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act requires our officers, directors
and persons who own more than 10% of a class of the our securities registered
under Section 12(g) of the Exchange Act to file reports of ownership and changes
in ownership with the SEC. Officers, directors and greater than 10% stockholders
are required by SEC regulation to furnish us with copies of all Section 16(a)
forms they file.

Based solely on a review of copies of such reports furnished to us and written
representations that no other reports were required during the year ended
December 31, 2007, we believe that all persons subject to the reporting
requirements of Section 16(a) filed the required reports on a timely basis with
the SEC, except as follows: Ronald Katz failed to file timely one Form 4
reporting one transaction, an option grant.

CODE OF ETHICS

We have adopted a "Code of Business Conduct and Ethics," a code of ethics that
applies to all employees, including our executive officers. A copy of the Code
of Business Conduct and Ethics is posted on our Internet site at
www.microislet.com. In the event we make any amendments to, or grant any waiver
of, a provision of the Code of Business Conduct and Ethics that applies to the
principal executive officer, principal financial officer, or principal
accounting officer that requires disclosure under applicable SEC rules, we
intend to disclose such amendment or waiver and the reasons therefore on a Form
8-K or on our next periodic report.

AUDIT COMMITTEE

The Board of Directors has a separately designated a standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange Act. The
audit committee is composed of Mr. Frankel (Chairman), Dr. Anderson and Mr.
Katz.

AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors has determined that Steven T. Frankel is an "audit
committee financial expert" as defined by Item 407(d) of Regulation S-K. The
Board of Directors made this affirmative determination based upon his
experience, training, and education. The Board of Directors further determined
that Mr. Frankel is "independent" as that term is used in Section 121A of the
American Stock Exchange Company Guide.


                                       3

<PAGE>


ITEM 11. EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The table below summarizes the total compensation earned for the fiscal years
ended December 31, 2006 and 2007 by (i) those persons who served as the
principal executive officer or in a similar capacity during fiscal 2007, (ii)
our two most highly compensated executive officers other than the principal
executive officer who were serving as executive officers at the end of fiscal
2007, and (iii) up to two additional individuals for whom disclosure would have
been required but for the fact the individual was not serving as an executive
officer of our company at the end of fiscal 2007 (collectively, the "named
executive officers"). The table below also summarizes the total compensation
earned by Amaresh Basu, Ph.D., our Vice-President of Research & Development, who
is not a named executive officer.

<TABLE>
<CAPTION>
<S>     <C>
                                                                                         All Other
Name and                                                         Option                Compensation
Principal Position           Year          Salary ($)            Awards (1)($)             (2) ($)             Total ($)
------------------------------------------------------------------------------------------------------------------------
Michael J. Andrews,
Chief Executive Officer
and Acting Chief
Financial Officer (3)        2007          90,000                   38,000                      100           128,100

Jonathan Lakey, Ph.D.,
M.S.M. former President
and Chief Scientific
Officer (4)                  2007         172,600 (5)               54,000                    7,500           234,100

Mohamed El-Kalay, Ph.D,
former Vice- President
of Research &
Development (6)              2007          97,400                    7,000 (7)               29,300           133,700

Kevin A. Hainley, former
Interim Chief Financial
Officer (8)                  2007         243,370                       --                       --           243,370
                             2006         265,330 (9)                   --                       --           265,330

James R Gavin, III, M.D.
Ph.D., former President
and Chief Executive
Officer (10)                 2007         275,000 (11)             105,000 (12)              83,500           463,500

                             2006         590,300                1,070,000                   25,200         1,685,500

Amaresh Basu, Ph.D.,
Vice-President of
Research & Development
(13)                         2007          34,400                    3,000                       --            37,400
</TABLE>

(1) Except as otherwise indicated in footnotes 7 and 13 below, the amounts
listed in this column represent the dollar amount we recognized for financial
statement reporting purposes with respect to 2007 and 2006, disregarding an
estimate of forfeitures related to service-based vesting conditions, under
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 123(R), "Share-Based Payment," or SFAS No. 123(R). For a more detailed
discussion on the valuation model and assumptions used to calculate the fair
value of these awards, see note 2 to the consolidated financial statements.

(2) The compensation represented by the amounts for 2006 and 2007 in this column
is detailed in the following table.


                                       4

<PAGE>

<TABLE>
<CAPTION>
<S>     <C>
                                                  Group Term                      Car and        Director
                                                    Life                          Housing         Fees
Name                                  Year        Insurance       Severance      Allowance       Earned                Total
---------------------------------------------------------------------------------------------------------------------------------

Michael J. Andrews                    2007          $   100            --              --            --               $   100
                                      2006               --            --              --            --               $    --

Jonathan Lakey, Ph.D., M.S.M.         2007               --            --         $ 7,500            --               $ 7,500
                                      2006               --            --              --            --               $    --

Mohamed El-Kalay, Ph.D.               2007               --     $  29,300              --            --               $29,300
                                      2006               --            --              --            --               $    --

Kevin A. Hainley                      2007               --            --              --            --               $    --
                                      2006               --            --              --            --               $    --

James R Gavin, III, M.D. Ph.D.        2007               --     $   66,700 (i)    $16,800            --               $83,500
                                      2006               --            --         $23,700       $ 1,500 (ii)          $25,200

Amaresh Basu, Ph.D.                   2007               --            --              --            --               $    --
                                      2006               --            --              --            --               $    --
</TABLE>

       (i) In June 2007, in connection with his resignation, Dr. Gavin received
       a severance package consisting of two months salary and COBRA payments in
       exchange for a general release of claims in favor of our company.

       (ii) Dr. Gavin earned $1,500 in director fees for the month of January
       2006 before he became Interim President and CEO.

(3) Mr. Andrews joined us as Chief Executive Officer on June 28, 2007, and was
appointed Acting Chief Financial Officer on January 3, 2008.

(4) Dr. Lakey became our President in September 2007. His employment with us
terminated on January 25, 2008.

(5) Includes $89,300 in consulting payments paid prior to Dr. Lakey becoming an
employee and executive officer.

(6) Dr. El-Kalay's employment with us terminated on July 19, 2007.

(7) On July 9, 2007, Dr. El-Kalay was granted an option under our 2005 Equity
Incentive Plan to purchase 100,000 shares of our common stock at an exercise
price of $0.57 per share. This option had a grant date fair value of $39,800 and
was conditioned upon continued service, with 2/9 of the option vested upon grant
and the remainder vesting in equal monthly installments beginning July 10, 2007
and ending October 10, 2009.

(8) Mr. Hainley's service with us terminated on December 6, 2007.

(9) Includes $75,330 of consulting payments paid in 2007 for services performed
in 2006. In 2006, $41,586 was paid to Resources Global Professionals for Mr.
Hainley's services. Mr. Hainley became an independent consultant on March 16,
2006.

(10) Dr. Gavin's employment with us terminated on June 28, 2007.

(11) Dr. Gavin agreed to lower his salary from $600,000 per year to $400,000 per
year effective May 16, 2007.

(12) On January 20, 2006, Dr. Gavin was granted an option under our 2005 Equity
Incentive Plan to purchase 1,750,000 shares of our common stock at an exercise
price of $2.20 per share. This option had a grant date fair value of $2,273,900
and was conditioned upon continued service, with 1/4 of the option vested upon
grant and 1/4 vesting on the first, second and third anniversaries of the date
of grant. Additionally, on May 14, 2007, Dr. Gavin was granted an option under
our 2005 Equity Incentive Plan to purchase 250,000 shares of our common stock at
an exercise price of $0.52 per share. This option had a grant date fair value of
$90,300 and was conditioned upon continued service, with 1/4 of the option
vested upon grant and 1/4 vesting on the first, second and third anniversaries
of the date of grant.

(13) Dr. Basu was appointed as our Vice President, Research and Development on
October 12, 2007.

NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE

We compensate our executive officers through a combination of a base salary,
options to purchase shares of our common stock and occasionally, a cash bonus.
We paid no cash bonuses to our named executive officers in 2007 or 2006. In
addition, we have provided other perquisites to our named executive officers,
such as car expenses and a housing allowance for our former President and Chief
Executive Officer and our former President and Chief Scientific Officer. We do
not have a formal plan for determining the compensation of our executive
officers. Instead, each executive officer negotiates their respective employment
agreement with us.

EMPLOYMENT AGREEMENTS WITH NAMED EXECUTIVE OFFICERS

The following narrative discusses employment agreements between us and certain
of our current and former named executive officers.

MICHAEL J. ANDREWS

In June 2007, we agreed that Michael J. Andrews, our current Chief Executive
Officer and Acting Chief Financial Officer, would receive an annual salary of
$180,000 plus standard benefits, to be reviewed after five months of service. He
also received at that time a stock option to purchase 200,000 shares of company
stock vesting as to 25% of the shares upon grant and an additional 25% of the
shares on each of July 1, 2008, 2009, 2010, subject to continuing service. The
option had an exercise price equal to the fair market value on the date of
grant, which was two business days after public announcement of his appointment.
On December 10, 2007, our compensation committee recommended and our board
approved an increase in the annual base salary of Mr. Andrews to $250,000,
effective January 1, 2008. We have not entered into a written employment
agreement with Mr. Andrews.

JONATHAN LAKEY, PH.D., M.S.M.

For information regarding the employment agreement between us and Dr. Lakey, see
Part II, Item 9B above.

                                       5

<PAGE>

KEVIN A. HAINLEY

In January 2006, Kevin A. Hainley was appointed as our Interim Chief Financial
Officer. In connection with this appointment, we entered into a Professional
Services Agreement with Resources Global Professionals, or RGP, of which Mr.
Hainley was an associate. Under this agreement, RGP was an independent
contractor, with Mr. Hainley designated as the associate assigned to us. RGP was
compensated for Mr. Hainley's time at the rate of $155 per hour, and $232.50 per
hour for each hour over eight in one day or forty in one week. This agreement
was terminated in March 2006, at which time we entered into a Professional
Services Agreement directly with Mr. Hainley pursuant to which he served as a
consultant to us. We paid RGP a $12,000 fee in consideration of our direct
retention of Mr. Hainley. Either party was able to terminate this agreement on
30 days prior written notice to the other party. Mr. Hainley was compensated for
his time at the rate of $135 per hour. This agreement terminated in December
2006 upon the effectiveness of Mr. Hainley's resignation.

JAMES R. GAVIN, III, M.D. PH.D.

In March 2006 we entered into an employment agreement with James R. Gavin III,
M.D., Ph.D., our President and Chief Executive Officer. Dr. Gavin was also a
director of our company and a member of the executive committee of the board,
and until his appointment as Interim President and Chief Executive Officer in
January 2006, served as a member of the compensation committee, nominating and
governance committee and audit committee. The employment agreement with Dr.
Gavin contained the following terms:

         o        Dr. Gavin earned a base salary of $600,000 per year.

         o        The agreement had an initial term of one year commencing
                  January 20, 2006, and would be renewed automatically for
                  additional one year periods unless either party provided
                  notice at least 90 days prior to the expiration of
                  then-current term of its intent not to renew.

         o        During the term of the agreement we agreed to recommend to the
                  nominating and governance committee, and to the board, that
                  Dr. Gavin be included on management's slate of directors at
                  each meeting of our stockholders at which directors are
                  elected and that he continue to serve as a member of the
                  executive committee of the board.

         o        Dr. Gavin was an at-will employee and either we or Dr. Gavin
                  could terminate employment at any time. However, if Dr.
                  Gavin's employment was terminated by us without cause (as that
                  term is defined in the employment agreement), Dr. Gavin would
                  be entitled, subject to his execution of a general release of
                  claims, to a severance payment equal to the amount of base
                  salary that would have been paid for the remainder of the
                  then-current term, subject to a minimum severance payment
                  equal to three months' base salary.

         o        Dr. Gavin was reimbursed for reasonable expenses incurred
                  under the agreement including travel between San Diego and Dr.
                  Gavin's primary residence in Atlanta, housing and automobile
                  expenses in San Diego of up to $2,900 per month.

         o        Dr. Gavin was entitled to all benefits including vacation,
                  health and disability benefits, for which he is eligible under
                  the terms and conditions of our standard benefit plans
                  provided generally to senior level executives, as such may be
                  in effect from time to time.

This agreement terminated in connection with Dr. Gavin's resignation.

Dr. Gavin also received on his employment start date, January 20, 2006, an
option to purchase 1,750,000 shares of our common stock under our 2005 Equity
Incentive Plan at an exercise price per share of $2.20, which was the closing
price of our common stock as reported on the American Stock Exchange on that
date. The option has a ten year life subject to continuing service to our
company. The option vested as to 25% of the shares immediately when granted and
would vest an additional 25% on each of the first, second, and third
anniversaries of the date of grant, subject to Dr. Gavin's continuing to serve
as our principal executive officer. Vesting of the option would accelerate upon
a change of control. This option expired following Dr. Gavin's resignation.

In May 2007, Dr. Gavin agreed to voluntarily reduce his base salary to $400,000
per year. Dr. Gavin was also issued an option at that time to purchase 250,000
shares of our common stock under our 2005 Equity Incentive Plan at an exercise
price per share of $0.52, which was the closing price of our common stock as
reported on the Over the Counter Bulletin Board on that date. The option had a
ten year life subject to continuing service to our company. The option vested as
to 25% of the shares immediately when granted and would vest an additional 25%
on each of the first, second, and third anniversaries of the date of grant,
subject to Dr. Gavin's continuing to serve as our principal executive officer.
This option expired following Dr. Gavin's resignation.


                                       6

<PAGE>


OUTSTANDING EQUITY AWARDS AT FISCAL-YEAR END

The following table presents information regarding outstanding options held by
our named executive officers as of the end of our fiscal year ended December 31,
2007. The table below also summarizes the option holdings of Amaresh Basu,
Ph.D., our Vice-President of Research & Development, who is not a named
executive officer. Dr. Gavin, Dr. El-Kalay and Mr. Hainley had no outstanding
options at December 31, 2007.

<TABLE>
<CAPTION>
<S>     <C>

                                       Number of       Number of
                                      Securities       Securities
                                      Underlying       Underlying
                                      Unexercised     Unexercised
                                        Options         Options                 Option       Option
                                          (#)             (#)                  Exercise      Expiration
Name                                  Exercisable    Unexercisable             Price         Date


Michael J. Andrews                        50,000           150,000   (1)      $ 0.57          7/9/2017

                                              --           600,000   (2)      $ 0.525       12/10/2017


Jonathan Lakey, Ph.D. M.S.M.             100,000           400,000   (3)      $ 0.57          7/9/2017


Amaresh Basu, Ph.D.                           --           100,000   (4)      $ 0.55        10/12/2007
</TABLE>

(1) On July 9, 2007, Mr. Andrews was awarded an option to purchase 200,000
shares under our 2005 Equity Incentive Plan. The option was exercisable as to
25% of the shares upon grant, and an additional 25% of the shares become
exercisable on each of July 1, 2008, 2009 and 2010, subject to continuing
service.

(2) On December 10, 2007, Mr. Andrews was awarded an option to purchase 600,000
shares under our 2005 Equity Incentive Plan. The option vests as follows: of the
600,000 shares subject to the option: (i) 1/72 of such shares will vest, subject
to Mr. Andrews' continuing service, on each monthly anniversary of the date of
grant until the third anniversary of such date, at which time 300,000 shares in
the aggregate will be vested; and (ii) 300,000 shares will vest, subject to Mr.
Andrews' continuing service, upon the commencement of human clinical trials for
the issuer's MicroIslet-P product, provided that all required regulatory
approvals for such trials are obtained before commencement and such trials begin
on or before December 31, 2008.

(3) On July 9, 2007, Mr. Lakey was awarded an option to purchase 400,000 shares
under our 2005 Equity Incentive Plan. The option was exercisable as to 25% of
the shares upon grant, and an additional 25% of the shares were to become
exercisable on each of July 1, 2008, 2009 and 2010, subject to continuing
service. As a result of the termination of Dr. Lakey's service on February 28,
2008, the vested portion of the option will expire May 28, 2008 unless sooner
exercised.

(4) On October 12, 2007, Dr. Basu was awarded an option to purchase 100,000
shares under our 2005 Equity Incentive Plan. The option vests as follows:
Subject to continuing service by Dr. Basu, 1/6 of the option vests six months
after the grant date, and the balance of the option vests monthly in equal
increments until the third anniversary of the grant date, at which time the
option will be fully vested.

OVERVIEW OF DIRECTOR COMPENSATION

CASH COMPENSATION PAID TO BOARD MEMBERS

In October 2006, our compensation committee recommended and our board ratified
an increase in the monthly retainer for our non-employee directors from $1,500
per month to $2,000 per month, effective November 2006. Former Chairman John J.
Hagenbuch did not receive director fees. In addition, our compensation committee
recommended and our board ratified an annual $10,000 retainer to be paid to the
chair of the audit committee. The current chair of our audit committee, Steven
T. Frankel, was credited for his service for all of calendar year 2006.

In June 2007, the board unanimously agreed to cancel payment of all unpaid
director fees as of that date. The board also resolved to continue to waive the
payment of director fees until further action of the board. As of April 18,
2008, the board has not taken any further action on this matter.

STOCK BASED INCENTIVE COMPENSATION

From time to time, we award stock options to directors who are not employees of
our company. The determination of which directors receive awards and the amount
of these awards is discretionary.


                                       7

<PAGE>

DIRECTOR COMPENSATION

The table below summarizes the compensation we paid to directors who were not
employees of our company for the fiscal year ended December 31, 2007.


<TABLE>
<CAPTION>
<S>     <C>

                                              Fees Earned        Option             All Other
                                               or Paid in       Awards ($)          Compens-
Name (1)                                         Cash ($)           (2)               ation ($)                Total ($)
---------------------------------------------------------------------------------------------------------------------------
Ronald Katz, Chairman                                   --       137,000  (4)               --                  137,000

Robert W. Anderson, M.D.                             6,000            --                    --                    6,000
Steven T. Frankel                                    8,500            --                    --                    8,500

Keith B. Hoffman, Ph.D.                                 --        37,000  (5)           75,000  (8)             112,000
Barry Ritholtz                                          --        11,000  (6)               --                   11,000
John J. Hagenbuch (3)                                   --            --                    --                       --
Bertram E. Walls, M.D. (3)                           6,000            --                    --                    6,000
Myron A. Wick, III (3)                               6,000        14,000  (7)               --                   20,000
</TABLE>

(1) Michael J. Andrews, our Chief Executive Officer and Acting Chief Financial
Officer, and James R Gavin, III, M.D. Ph.D., our former President and Chief
Executive Officer, are not included in this table because they were employees of
the company in 2007 and received no additional compensation for their services
on the board of directors. The compensation received by Mr. Andrews and Dr.
Gavin as employees of the company are shown in the Summary Compensation Table
above.

(2) The amounts listed in this column represent the dollar amount we recognized
for financial statement reporting purposes with respect to 2007, disregarding an
estimate of forfeitures related to service-based vesting conditions, under
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 123(R), "Share-Based Payment," or SFAS No. 123(R). For a more detailed
discussion on the valuation model and assumptions used to calculate the fair
value of these awards, see note 2 to the consolidated financial statements.

(3) Messrs. Hagenbuch, Walls and Wick and Dr. Gavin each resigned from the board
of directors in June 2007. Mr. Hagenbuch served as Chairman until his
resignation from the board.

(4) On July 16, 2007, Mr. Katz was granted an option under our 2005 Equity
Incentive Plan to purchase 100,000 shares of our common stock at an exercise
price of $0.57 per share. This option had a grant date fair value of $38,900 and
was conditioned upon continued service, with 1/36 of the option vesting in equal
monthly installments beginning July 25, 2007 and ending July 25, 2010. In 2007,
we recorded $13,900 of compensation expense related to this option in accordance
with SFAS No. 123(R). Additionally, on October 23, 2007, Mr. Katz was granted an
option under our 2005 Equity Incentive Plan to purchase 1,750,000 shares of our
common stock at an exercise price of $0.55 per share. This option had a grant
date fair value of $663,700 and was conditioned upon continued service, with
1/12 of the option vested upon grant and 1/36 vesting in equal monthly
installments beginning October 25, 2007 and ending June 25, 2010. In 2007, we
recorded $122,600 of compensation expense related to this option in accordance
with SFAS No. 123(R).

(5) On July 16, 2007, Dr. Hoffman was granted an option under our 2005 Equity
Incentive Plan to purchase 207,633 shares of our common stock at an exercise
price of $0.57 per share. This option had a grant date fair value of $80,800 and
was conditioned upon continued service, with 1/4 of the option vested on grant,
and 1/4 vesting on each of March 27, 2008, 2009 and 2010. In 2007, we recorded
$33,600 of compensation expense related to this option in accordance with SFAS
No. 123(R). Additionally, on December 20, 2007, Dr. Hoffman was granted an
option under our 2005 Equity Incentive Plan to purchase 250,000 shares of our
common stock at an exercise price of $0.525 per share. This option had a grant
date fair value of $89,900 and vests as follows: of the 250,000 shares subject
to the option: (i) 1/72 of such shares will vest, subject to Dr. Hoffman's
continuing service, on each monthly anniversary of the date of grant until the
third anniversary of such date, at which time 125,000 shares in the aggregate
will be vested; and (ii) 125,000 shares will vest, subject to Dr. Hoffman's
continuing service, upon the commencement of human clinical trials for our
MicroIslet-P product, provided that all required regulatory approvals for such
trials are obtained before commencement and such trials begin on or before
December 31, 2008. In 2007, we recorded $4,500 of compensation expense related
to this option in accordance with SFAS No. 123(R).

(6) On September 28, 2007, Mr. Ritholtz was granted an option under our 2005
Equity Incentive Plan to purchase 250,000 shares of our common stock at an
exercise price of $0.61 per share. This option had a grant date fair value of
$105,400 and was conditioned upon continued service, vesting over three years in
equal installments. In 2007, we recorded $11,000 of compensation expense related
to this option in accordance with SFAS No. 123(R).

(7) On August 10, 2004, Mr. Wick was granted an option under our 2000 Stock
Option Plan to purchase 100,000 shares of our common stock at an exercise price
of $1.13 per share. This option had a grant date fair value of $91,200 and was
conditioned upon continued service, vesting in three equal annual installments
ending August 10, 2007. The vested portion of the option expired unexercised in
September 2007. In 2007, we recorded $15,000 of compensation expense related to
this option in accordance with SFAS No. 123(R)

(8) The amount shown in this column represents $75,000 in consulting fees that
we paid to Dr. Hoffman in 2007.


                                       8

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the ownership of
our common stock as of February 29, 2008, by: (i) each director; (ii) each
person who is known to us to be the beneficial owner of more than five percent
of our outstanding common stock; (iii) each of our named executive officers; and
(iv) all our current executive officers and directors as a group. Except as
otherwise indicated in the footnotes all information with respect to share
ownership and voting and investment power has been furnished to us by the
persons listed.

<TABLE>
<CAPTION>
<S>     <C>

                                                           Number of Shares
Name Beneficial Owner (1)                                Beneficially Owned (2)        Percent of Class (2)
-------------------------                               -----------------------        --------------------
John F. Steel IV                                                8,954,084 (3)                       16.4%
2783 Costabelle
La Jolla, CA 92037

John J. Hagenbuch                                               4,973,313 (4)                        8.9%
c/o M&H Realty Partners
353 Sacramento Street
21st Floor
San Francisco, CA 94171

Ronald Katz                                                     4,352,249 (8)                        8.9%

Richard Schoninger                                              3,405,183 (5)                        6.2%
25 Columbus Circle, Apt 69C
New York, NY 10019

Keith B. Hoffman, Ph.D.                                           320,864 (9)                        *

Robert W. Anderson, M.D.                                          190,648 (6)                        *

Steven T. Frankel                                                 144,000 (6)                        *

Jonathan Lakey, Ph.D., M.S.M.                                     100,000 (6)                        *

Michael J. Andrews                                                 83,333 (6)                        *

Barry Ritholtz                                                     51,611 (6)                        *

Mohamed El-Kalay, Ph.D.                                                --                            *
2117 Pleasant Grove Rd.
Encinitas, CA 92024-4328

Kevin A. Hainley                                                    3,000                            *
6901 S.E. Oaks Parkway, Slip 24
Portland, OR 97202

James R. Gavin III, M.D., Ph.D.                                        --                            *
10104 Senate Drive
Lanham, MD 20706

All current executive officers and directors as a
group (7 in number)                                             6,261,760 (7)                       11.1%
</TABLE>

* Less than one percent.

(1) Except as otherwise indicated, all persons have addresses at 6730 Nancy
Ridge Drive, Suite 112, San Diego, CA 92121. Dr. Lakey's present address is not
known by us.


                                       9

<PAGE>

(2) Unless otherwise indicated in the footnotes to this table and subject to
community property laws where applicable, we believe that each of the
stockholders named in this table has sole voting and investment power with
respect to the shares indicated as beneficially owned. Applicable percentages
are based on 54,574,426 shares outstanding on February 29, 2008, adjusted as
required by rules promulgated by the SEC.

(3) Excludes 15,000 shares held by Mr. Steel's children. Mr. Steel disclaims
beneficial ownership of such shares, as he does not have voting or investment
control over such shares.

(4) Includes 1,758,772 shares held by Jackson St. Partners; 1,851,080 shares
held by a trust affiliated with Mr. Hagenbuch; and 10,000 shares held by Mr.
Hagenbuch's minor children, for which Mr. Hagenbuch may be deemed to share
voting and investment control with his spouse. Also includes 950,000 shares
subject to immediately exercisable warrants issued to a trust affiliated with
Mr. Hagenbuch.

(5) Includes 3,000 shares held by Mr. Schoninger's minor son, for which Mr.
Schoninger may be deemed to share voting and investment control with the child's
mother. The ownership information for Mr. Schoninger in this table is based
solely on information provided by Mr. Schoninger in September 2006.

(6) For each person, the shares shown represent shares that are issuable upon
exercise of options exercisable within 60 days of February 29, 2008.

(7) Includes 1,672,837 shares issuable upon exercise of options and warrants
exercisable within 60 days of February 29, 2008.

(8) Includes 73,700 shares held by King Louie Enterprises, over which Mr. Katz
has sole voting and investment control, 15,000 shares held by Mr. Katz's sister,
21,000 shares held by Mr Katz's minor son, 2,352,941 shares held by a trust for
which Mr. Katz is a co-trustee of the trust. Mr. Katz shares voting and
investment control over such shares, but is not affiliated with the
beneficiaries of the trust. Includes 772,222 shares that are issuable upon
exercise of options and warrants exercisable within 60 days of February 29,
2008. Excludes 21,000 shares held by a child of Mr. Katz, over which shares Mr.
Katz disclaims beneficial ownership, as he does not have voting or investment
control over such shares.

(9) Includes 117,706 shares that are issuable upon exercise of options
exercisable within 60 days of February 29, 2008.

We are aware of no arrangements which may result in a change of control of
MicroIslet.

EQUITY COMPENSATION PLAN INFORMATION

The following table gives information as of December 31, 2007:

<TABLE>
<CAPTION>
<S>     <C>
                                       Number of securities                                Number of securities remaining
                                       to be issued upon         Weighted-average          available for future issuance under
                                       exercise of outstanding   exercise price of         equity compensation plans
                                       options, warrants and     outstanding options,      (excluding securities reflected in
Plan Category                          rights                    warrants and rights       column (a))
------------------------------------ ------------------------- ------------------------- -------------------------------------

                                               (a)                       (b)                             (c)
Equity compensation plans approved
by security holders                           5,474,999                 $0.63                         2,996,340
Equity compensation plans not
approved by security holders                    882,184  (1)             1.23                                --
                                              ---------                                               ---------
Total                                         6,357,183                 $0.69                         2,996,340
                                              =========                                               =========
</TABLE>


(1) Consists of individual stock options, warrant grants and restricted stock
units to employees, directors, consultants, and advisors. Options representing
50,000 shares of common stock were granted outside of the 2000 Stock Option Plan
each to Dr. Robert W. Anderson and Steven T. Frankel in November 2003. Options
representing those 100,000 shares remain outstanding. Dr. Anderson and Mr.
Frankel are directors of our company. Warrants representing 738,038 shares in
the aggregate were granted in 2004 to finders in consideration of services
rendered in connection with our March 2004 private placement. Of those, warrants
representing 28,450 shares remain outstanding. Warrants representing 625,000
shares in the aggregate were granted in 2004 to investor relations consulting
firms in consideration of investor relations services rendered. Of those,
warrants representing 362,334 shares remain outstanding. Warrants representing
91,400 shares in the aggregate were granted in 2005 to finders in consideration
of services rendered in connection with our December 2005 private placement
pursuant. Of those, 91,400 shares remain outstanding. Restricted stock units
representing the right to receive 300,000 shares of common stock were issued in
December 2007 to two individuals associated with an investor relations firm.
None of such units were vested at December 31, 2007.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
         INDEPENDENCE

TRANSACTIONS WITH RELATED PERSONS

The following is a description of transactions since January 1, 2005 to which we
have been a party, in which the amount involved exceeds $18,105 (1% of the
average of our total assets at December 31, 2007 and 2006) in any fiscal year
and in which any of our directors, executive officers or holders of more than
five percent of our stock had or will have a direct or indirect material
interest. This does not include employment compensation or compensation for
board of directors service, which are described elsewhere in this report.


                                       10

<PAGE>

PAYMENT OF LEGAL EXPENSES OF FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Our wholly owned subsidiary, MicroIslet of Delaware, and John F. Steel IV, our
former Chairman and Chief Executive Officer, were named as defendants in a
lawsuit brought in the Superior Court of California, County of Orange, by Donald
Gallego. We were obligated under our articles of incorporation, and MicroIslet
of Delaware was obligated under its bylaws, to advance expenses to Mr. Steel for
his defense of this lawsuit. From November 2004 to March 2006, we paid an
aggregate of $190,000 in legal fees incurred by Mr. Steel in defense this
action. This lawsuit was settled at the beginning of 2006.

CONSULTING ARRANGEMENT WITH KEITH B. HOFFMAN

In March 2007, we entered into a consulting arrangement with Keith B. Hoffman,
Ph.D., under which Dr. Hoffman provides advice to our company regarding business
development and intellectual property matters. In 2007, we paid Dr. Hoffman
$75,000 pursuant to this consulting arrangement.

LIQUIDATED DAMAGES ASSOCIATED WITH DECEMBER 2005 FINANCING

In connection with a private placement of common shares and warrants in December
2005, we are obligated to maintain a registration statement available for the
resale of the common shares and the shares underlying the warrants sold in such
financing. In April 2007, we notified the investors that the registration
statement which registered such shares for resale was no longer available, and
accordingly, we became subject to liquidated damages beginning on May 20, 2007.
The liquidated damages are equal to 0.0003 times the purchase price of the
securities the investors continue to own for each day the registration statement
is not available, other than securities that may be resold under Rule 144
without restriction. We are permitted to pay any such liquidated damages in cash
or in shares of common stock at its election. If we elect to issue shares, such
shares are to be valued based on the volume weighted average price of shares of
common stock for the five trading days prior to the date of issue. We are
required to pay such damages no later than the first trading day of each
calendar month immediately following the month in which the damages accrue.

In March 2006, a committee of our board of directors resolved to pay these
liquidated damages in shares, and to issue the shares in payment of those
damages as of the first trading day of each calendar month immediately following
the month in which the damages accrue, using the valuation formula described
above. Through December 31, 2007, liquidated damages of $143,000 had accrued,
and we discharged $132,000 of such obligation through the issuance of 267,684
shares of common stock in 2007. 30,192 of these shares were issued to the Ronald
Katz, our Chairman, who was an investor in the financing. Liquidated damages
decreased approximately $8,000 per month in January 2008 as a result of shares
sold in the financing and held by non-affiliates being eligible for sale without
volume restrictions under Rule 144. Liquidated damages on all outstanding
warrants issued in the December 2005 financing, and on shares held by Mr. Katz
and the holder of the promissory note issued in September 2007 will continue to
accrue at approximately $12,000 per month until we file and the SEC declares
effective a post-effective amendment to the registration statement containing
updated financial and other information concerning our company. We intend to
continue to pay such amounts by issuing shares of its common stock.

AUGUST 2006 FINANCING

In August 2006, we completed a private placement to accredited investors of
2,552,061 shares of common stock and warrants to purchase 1,403,634 shares of
common stock resulting in gross proceeds of $3,892,580. In this private
placement, we issued and sold the shares at a purchase price of $1.67 per share,
and issued the warrants with an exercise price of $1.67 per share, if the
investor is a director, officer, employee or consultant of the company, or an
affiliate of such person, and $1.50 per share otherwise. Myron A. Wick, III, a
former director of our company, and D-W Investments LLC, an entity affiliated
with Mr. Wick, purchased a total of 329,341 shares and a warrant exercisable for
181,138 shares in this private placement. We received a total of $550,000 in
gross proceeds from them.

JANUARY 2007 FINANCING

On January 12, 2007, John J. Hagenbuch, our former Chairman, lent us $2 million
under the terms of an unsecured subordinated promissory note. The note accrues
simple interest at the prime rate as published in the Wall Street Journal from
time to time. All outstanding principal and accrued interest under the note
became due on January 12, 2008.

In connection with this loan, we issued a 10-year detachable warrant to Mr.
Hagenbuch allowing for a purchase for cash of up to 500,000 shares of our common
stock at an exercise price of $1.00 per share. On May 10, 2007, this warrant was
amended to remove a condition to exercisability based on American Stock Exchange
approval, which approval was no longer required due to the removal of our common
stock from the American Stock Exchange. This warrant is now fully exercisable.


                                       11

<PAGE>

MAY 2007 FINANCING

On May 15, 2007, Mr. Hagenbuch lent us an additional $1 million under the terms
of an unsecured promissory note. The note accrues simple interest at the prime
rate as published in the Wall Street Journal from time to time. The terms of the
note restrict us from incurring senior indebtedness or pledging our intellectual
property. All outstanding principal and accrued interest under the note became
due on January 12, 2008.

In connection with this loan, we issued a 10-year detachable warrant to Mr.
Hagenbuch allowing for a purchase for cash of up to 250,000 shares of our common
stock at an exercise price of $0.75 per share.

NOVEMBER 2007 FINANCING

On November 16, 2007, we entered into a securities purchase agreement with a
private trust for which Ronald Katz, our Chairman, serves as co-trustee. Under
the agreement, we agreed to issue and sell 2,352,941 shares of our common stock
for cash at a purchase price of $0.425 per share for gross proceeds of
$1,000,000. In connection with this financing, we issued a warrant to the
investor, which is exercisable, commencing on the earlier of the one-year
anniversary of the closing date or the date of any of certain fundamental
transactions involving our company (including a merger, a sale of substantially
all of our assets, the commencement of a tender or exchange offer or a
reclassification of our common stock) until the six-year anniversary of the
closing date, for an aggregate of 1,294,118 shares of our common stock at an
exercise price of $0.60 per share. The trust's beneficiaries are not affiliated
with Mr. Katz.

Also in connection with this financing, we entered into a registration rights
agreement pursuant to which we agreed to register for resale the shares of
common stock sold in the financing and the shares of common stock issuable upon
the exercise of the warrants in the next registration statement filed with the
SEC relating to an offering for any of our equity securities, other than a
registration statement relating to equity securities to be issued solely in
connection with an acquisition of another entity, in an exchange offer for our
securities, or in connection with stock option or other employee benefit plans.
If the SEC requires us to omit some of the shares purchased in the financing or
upon exercise of the warrants in order for the offering to retain the status of
a secondary offering under SEC Rule 415, we will be obligated to issue to each
holder, as liquidated damages, a warrant exercisable beginning one year after
the closing date at an exercise price of $0.60 per share and expiring on the
date six years after the closing date, for a number of shares of our common
stock equal to 4% of the number of shares held by the holder which were required
to be omitted.

JANUARY 2008, MARCH 2008 AND APRIL 2008 FINANCINGS

On January 25, 2008, we entered into a securities purchase agreement with a
private trust for which Ronald Katz, our Chairman, serves as co-trustee. The
trust's beneficiaries are not affiliated with Mr. Katz. The purchase agreement
permitted us to issue up to $2,000,000 in aggregate principal amount of
Subordinated Convertible Unsecured Revolving Promissory Notes due March 31, 2008
and warrants to purchase a number of shares of common stock equal to the
quotient of the aggregate funds advanced to us under the notes, divided by
$2.50. Each note accrues interest at the rate of 10% per annum until maturity
and 24% per annum thereafter. Interest is payable monthly in arrears, and may,
at our option, either be capitalized and added to the outstanding principal
balance of the note, or paid to the holder in cash. The holder of a note may, at
its option, convert all or a portion of the principal and accrued interest into
the securities sold in our next equity financing transaction in which we raise
at least $3 million, on the same terms as the securities purchased by the other
investors in the financing. Each warrant has an exercise price of $0.40 per
share and is exercisable for a period of five years, commencing on the earlier
of the one year anniversary of the grant and the occurrence of any specified
fundamental transaction involving our company. The holder may elect a cashless
exercise of the warrant under certain circumstances.

In connection with the purchase agreement, on January 25, 2008, we issued to the
trust (1) a note in the principal amount of $1,000,000 (January Note), and (2) a
warrant (January Warrant) to purchase a number of shares of common stock equal
to the quotient of the aggregate funds advanced to us under the January Note,
divided by $2.50, up to a maximum of 400,000 shares. The full $1,000,000 under
the January Note has been drawn down by us, and accordingly, the January Warrant
is exercisable for 400,000 shares.

Pursuant to the purchase agreement, on January 25, 2008, we also entered into a
registration rights agreement with the trust, pursuant to which we have agreed
to register for resale the shares of common stock issuable upon exercise of the
warrants issued pursuant to the purchase agreement on the next registration
statement we file with the SEC relating to an offering for any of our equity
securities, other than a registration statement relating to equity securities to
be issued solely in connection with an acquisition of another entity, in an
exchange offer for our securities, or in connection with stock option or other
employee benefit plans.


                                       12

<PAGE>

On March 17, 2008, we entered into a First Amendment to Securities Purchase
Agreement and Promissory Note with the trust. Pursuant to the amendment, the
maximum aggregate original principal amount of the notes issuable under the
purchase agreement was increased from $2,000,000 to $2,500,000, and the maturity
date of the notes was extended to May 31, 2008. The maturity date may be
accelerated by the trust upon the occurrence and during the continuance of an
event of default.

In connection with the amendment, on March 17, 2008, we issued to the trust (1)
a note in the principal amount of $1,500,000 (March Note), and (2) a warrant
(March Warrant), to purchase a number of shares of common stock equal to the
quotient of the aggregate funds advanced to us under the March Note, divided by
$2.50, up to a maximum of 600,000 shares. On that same date, the trust advanced
to us $500,000 under the terms of the March Note. Prior to the maturity of the
March Note, we may request additional advances from the trust, up to a total
aggregate principal amount of $1,500,000, which the trust may agree to make in
its sole discretion.

We entered into a Second Amendment to Securities Purchase Agreement with the
trust effective April 2, 2008. Pursuant to the amendment, the maximum aggregate
original principal amount of the notes issuable under the purchase agreement was
increased from $2,500,000 to $4,500,000.

On April 18, 2008, we issued a note under the purchase agreement, as amended, to
Ronald Katz, our Chairman. On that same date, Mr. Katz advanced us $200,000
under the terms of the note. Prior to the maturity of the note, we may request
additional advances from Mr. Katz, up to a total aggregate principal amount of
$500,000, which Mr. Katz may agree to make in its sole discretion.

We issued a warrant to Mr. Katz in connection with the aforementioned note that
is exercisable for up to 200,000 shares. The terms and conditions of the note
and warrant are otherwise substantially similar to the March Note and March
Warrant.

DIRECTOR INDEPENDENCE

The board of directors, upon the recommendation of the nominating and governance
committee, has affirmatively determined that Dr. Anderson and Messrs. Frankel,
Katz and Ritholtz are independent directors within the meaning of Section 121A
of the American Stock Exchange Company Guide ("Section 121A"). Mr. Andrews does
not meet the independence requirements under Section 121A because he is our
Chief Executive Officer and Acting Chief Financial Officer, and Dr. Hoffman does
not meet the independence requirements under Section 121A because in 2007 we
paid him consulting fees of $75,000. In the course of determining whether Dr.
Anderson and Messrs. Frankel, Katz and Ritholtz were independent under Section
121A, the board of directors considered the following transactions,
relationships and arrangements not required to be disclosed under "Transactions
with Related Persons" above:

         o        Although Mr. Katz beneficially owns 8.9% of our common stock
                  as of February 29, 2008, and has been involved in certain of
                  our recent financings, the board of directors concluded that
                  he had no relationship with our company which, in the opinion
                  of the board of directors, would interfere with his exercise
                  of independent judgment in carrying out the responsibilities
                  of a director.

         o        The board of directors considered the preparation by Mr.
                  Ritholtz of an independent research report on our company in
                  2006. Mr. Ritholtz was not compensated for his preparation of
                  this report. The board of directors concluded that he had no
                  relationship with our company which, in the opinion of the
                  board of directors, would interfere with his exercise of
                  independent judgment in carrying out the responsibilities of a
                  director.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table summarizes the aggregate fees billed to us by KMJ Corbin &
Company, our current independent registered public accounting firm, for the
audit of our annual financial statements for the year ended December 31, 2007,
and by Deloitte & Touche, our former independent registered public accounting
firm, for the audit of our annual financial statements for the year ended
December 31, 2006. The following table also summarizes fees billed for other
services rendered by KMJ Corbin & Company and Deloitte & Touche LLP for the
years ended December 31, 2007 and 2006, respectively.


Type of Fee               2007         2006
---------------------------------------------
Audit Fees (1)           $ 94,100   $212,000

Audit Related Fees (2)     12,400     77,000

Tax Fees (3)                   --      4,000
All Other Fees (4)             --         --
                         --------   --------
Total                    $106,500   $293,000
                         ========   ========


                                       13

<PAGE>

(1) Audit Fees include fees and expenses for professional services rendered in
connection with the audit of our financial statements for those years, reviews
of the financial statements included in each of our quarterly reports on Form
10-QSB during those years and services that are normally provided by the
independent registered public accounting firm in connection with statutory and
regulatory filings or engagements.

(2) Audit Related Fees consist of fees billed for assurance related services
that are reasonably related to the performance of the audit or review of our
financial statements and are not reported under "Audit Fees."

(3) Tax Fees include the aggregate fees paid by us during the fiscal year
indicated for professional services for tax compliance, tax advice and tax
planning.

(4) All Other Fees consist of fees for products and services other than the
services reported above. During fiscal years 2007 and 2006, there were no such
services rendered to us by KMJ Corbin & Company or Deloitte & Touche LLP,
respectively.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

All audit and non-audit services are pre-approved by the Audit Committee, which
considers, among other things, the possible effect of the performance of such
services on the auditors' independence. The Audit Committee pre-approves the
annual engagement of the principal independent registered public accounting
firm, including the performance of the annual audit and quarterly reviews for
the subsequent fiscal year, and pre-approves specific engagements for tax
services performed by such firm. The Audit Committee has also established
pre-approval policies and procedures for certain enumerated audit and audit
related services performed pursuant to the annual engagement agreement with such
firm, including the following: such firm's attendance at and participation at
Board and committee meetings; services associated with SEC registration
statements approved by the Board of Directors; review of periodic reports and
other documents filed with the SEC or other documents issued in connection with
securities offerings, such as comfort letters and consents; assistance in
responding to any SEC comments letters; and consultations with such firm as to
the accounting or disclosure treatment of transactions or events and the actual
or potential impact of final or proposed rules, standards or interpretations by
the SEC, Public Company Accounting Oversight Board (PCAOB), Financial Accounting
Standards Board (FASB), or other regulatory or standard-setting bodies. In
addition, the Audit Committee has authorized the Chair of the Committee to
pre-approve audit and non-audit services to be provided by the principal
independent registered public accounting firm (to the extent such services are
not subject to the pre-approval policies and procedures specified above), on a
case-by-case basis, provided the fees and expenses for such services
pre-approved by the Chair of the Committee shall not exceed $25,000 per
engagement without further approval of the full Committee. The Audit Committee
is informed of each service performed pursuant to its pre-approval policies and
procedures.

The Audit Committee has considered the role of KMJ Corbin & Company in providing
services to us for the fiscal year ended December 31, 2007, and has concluded
that such services are compatible with such firm's independence.


                                       14

<PAGE>


                                     PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) CONSOLIDATED FINANCIAL STATEMENTS. Previously filed.

(a)(2) FINANCIAL STATEMENT SCHEDULES.

All schedules have been omitted as they are not required, not applicable, or the
required information is otherwise included. (a)(3) EXHIBITS.

<TABLE>
<CAPTION>
<S>     <C>

--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
Exhibit No.     Description                        Filed        Previously   Incorporated   Form       Date Filed    Exhibit
                                                   Herewith     Filed        by Reference                            No.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
3.1             Articles of Incorporation                                          X        10-SB      Aug. 13,      3.(a)
                                                                                                       1999
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
3.2             Certificate of Amendment to the                                    X        SB-2       July 25,      3.2
                Articles of Incorporation                                                              2002
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
3.3             Certificate of Amendment to the                                    X        8-A12B     May 27, 2004  3.1C
                Articles of Incorporation
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
3.4             Amended and Restated Bylaws                                        X        10-KSB     April 6,      3.3
                                                                                                       2006
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
4.1             Specimen Common Stock Certificate                                  X        SB-2/A     Nov. 20,      4.1
                                                                                                       2002
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.1            Amended and Restated 2000 Stock                                    X        10-KSB     March 30,     10.1
                Option Plan, as amended and                                                            2004
                restated January 30, 2004*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.2            Form of Stock Option Grant                                         X        10-KSB     March 30,     10.2
                Notice and Stock Option                                                                2005
                Agreement under 2000 Stock
                Option Plan*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.3            License and Sponsored Research                                     X        SB-2/A     Feb. 10,      10.3
                Agreement dated September 15,                                                          2003
                1998, between MicroIslet of
                Delaware and Duke University
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.4            Amendment to License and                                           X        SB-2/A     Feb. 10,      10.14
                Sponsored Research Agreement                                                           2003
                dated February 5, 1999, between
                MicroIslet of Delaware and Duke
                University
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.5            Research Funding and Option                                        X        10-KSB     March 28,     10.6
                Agreement dated February 20,                                                           2003
                2003, between MicroIslet, Inc.
                and the Scripps Research
                Institute, a California
                            nonprofit public benefit
                corporation +
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------


                                       15

<PAGE>

10.6            Standard Industrial/Commercial                                     X        SB-2       July 25,      10.6
                Multi-Tenant Lease dated July 3,                                                       2002
                2002, between MicroIslet, Inc.
                and Nancy Ridge Technology
                Center, L.P.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.7            First Amendment dated February                                     X        8-K        Feb. 24,      99.1
                17, 2005, to the Lease dated                                                           2005
                July 3, 2002 between MicroIslet,
                Inc. and Nancy Ridge Technology
                Center, L.P.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.8            Warrant Agreement, dated April                                     X        SB-2       April 15,     10.19
                11, 2003, between MicroIslet,                                                          2003
                Inc. and John J. Hagenbuch,
                Trustee U/D/T dated September
                13, 1995
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.9            Warrant Agreement, dated May 12,                                   X        8-K        May 13, 2003  10.2
                2003 between MicroIslet, Inc.
                and John J. Hagenbuch, Trustee
                U/D/T dated September 13, 1995
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.10           Warrant Amendment, dated August                                    X        8-K        Aug. 28,      10.2
                26, 2003, between MicroIslet,                                                          2003
                Inc. and John J. Hagenbuch,
                Trustee U/D/T dated September
                13, 1995
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.11           Warrant Amendment, dated August                                    X        8-K        Aug. 28,      10.4
                26, 2003, between MicroIslet,                                                          2003
                Inc. and John J. Hagenbuch,
                Trustee U/D/T dated September
                13, 1995
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.12           Form of Warrant dated October                                      X        8-K        Nov. 3, 2003  10.2
                31, 2003
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.13           Form of Special Stock Option                                       X        S-8        Sept. 26,     99.2
                used in connection with option                                                         2003
                grants outside of MicroIslet,
                Inc.'s stock option plans*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.14           Special Stock Option granted to                                    X        10-KSB     March 30,     10.34
                Robert W. Anderson on November                                                         2004
                10, 2003*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.15           Special Stock Option granted to                                    X        10-KSB     March 30,     10.36
                Steven T. Frankel on November                                                          2004
                10, 2003*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.16           Form of Securities Purchase                                        X        10-KSB     March 30,     10.37
                Agreement dated as of March 16,                                                        2004
                2004
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.17           Form of Warrant Agreement dated                                    X        10-KSB     March 30,     10.38
                as of March 16, 2004                                                                   2004
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------

                                       16

<PAGE>

10.18           Warrant Agreement, dated January                                   X        10-QSB     May 13, 2004  10.3
                30, 2004, between MicroIslet,
                Inc. and Strategic Growth
                International, Inc.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.19           Warrant Agreement, dated May 25,                                   X        10-QSB     Aug. 13,      10.3
                2004, between MicroIslet, Inc.                                                         2004
                and Strategic Growth
                International, Inc.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.20           Amended and Restated MicroIslet,                                   X        S-8        Apr. 6, 2007  4.2
                Inc. 2005 Equity Incentive Plan*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.21           Form of Stock Option Grant                           X
                Notice and Stock Option
                Agreement under 2005 Equity
                Incentive Plan (revised December
                2007)*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.22           Form of Stock Award Agreement                                      X        8-K        Jan. 19,      99.2
                under 2005 Equity Incentive Plan*                                                      2006
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.23           System lease dated August 23,                                      X        10QSB      Nov. 14,      10.1
                2005, between MicroIslet, Inc.                                                         2005
                and Beckman Coulter Corporation
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.24           Securities Purchase Agreement                                      X        8-K        Dec. 27,      99.1
                dated as of December 23, 2005,                                                         2005
                between MicroIslet, Inc. and
                certain purchasers
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.25           Registration Rights Agreement                                      X        8-K        Dec. 27,      99.2
                dated as of December 23, 2005,                                                         2005
                between MicroIslet, Inc. and
                certain investors
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.26           Form of Warrant dated December                                     X        8-K        Dec. 27,      99.3
                23, 2005                                                                               2005
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.27           Long Term Supply Agreement dated                                   X        8-K/A      Jan. 1, 2006  99.2
                November 15, 2005, between
                MicroIslet, Inc. and Mayo
                Foundation for Medical Education
                and Research +
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.28           Professional Services Agreement                                    X        8-K        Jan. 19,      99.3
                dated January 18, 2006, between                                                        2006
                MicroIslet, Inc. and Resources
                Connection, LLC*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.29           Securities Purchase Agreement                                      X        8-K        August 1,     99.1
                dated July 27, 2006, among                                                             2006
                MicroIslet, Inc. and certain
                purchasers
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------


                                       17

<PAGE>

10.30           Amendment dated December 7, 2006                                   X        8-K        December      99.1
                to Securities Purchase Agreement                                                       12, 2006
                dated July 27, 2006, among
                MicroIslet, Inc. and certain
                purchasers
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.31           Registration Rights Agreement                                      X        8-K        August 1,     99.2
                dated July 27, 2006, among                                                             2006
                MicroIslet, Inc. and certain
                investors
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.32           Form of Warrant dated July 27,                                     X        8-K        August 1,     99.3
                2006                                                                                   2006
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.33           Unsecured Subordinated                                             X        8-K        January 17,   99.1
                Promissory Note dated January                                                          2007
                12, 2007, issued by MicroIslet,
                Inc. to John J. Hagenbuch,
                Trustee U/D/T dated September
                13, 2005
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.34           Warrant Agreement dated January                                    X        8-K        January 12,   99.2
                12, 2007, between MicroIslet,                                                          2007
                Inc. and John J. Hagenbuch,
                Trustee U/D/T dated September
                13, 2005
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.35           Unsecured Promissory Note dated                                    X        8-K        May 15, 2007  99.1
                May 15, 2007, issued by
                MicroIslet, Inc. to John J.
                Hagenbuch, Trustee U/D/T dated
                September 13, 2005
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.36           Warrant Agreement dated May 15,                                    X        8-K        May 15, 2007  99.2
                2007, between MicroIslet, Inc.
                and John J. Hagenbuch, Trustee
                U/D/T dated September 13, 2005
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.37           Amendment to Warrant Agreement                                     X        8-K        May 15, 2007  99.3
                dated May 10, 2007, for the
                benefit of John J. Hagenbuch,
                Trustee U/D/T dated September
                13, 2005
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.38           Securities Purchase Agreement                                      X        8-K        June 21,      99.1
                dated June 20, 2007, among                                                             2007
                MicroIslet, Inc. and certain
                purchasers
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.39           Registration Rights Agreement                                      X        8-K        June 21,      99.2
                dated June 20, 2007, among                                                             2007
                MicroIslet, Inc. and certain
                investors
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.40           Form of Warrant dated June 20,                                     X        8-K        June 21,      99.3
                2007                                                                                   2007
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.41           Summary of Certain Compensation                                    X        10QSB      Aug. 20,      10.6
                Arrangements                                                                           2007
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.42           Unsecured Subordinated                                             X        8-K        Sept. 21,     99.1
                Convertible Promissory Note                                                            2007
                dated September 20, 2007, issued
                by MicroIslet, Inc. to Peter
                Knobel
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.43           Warrant Agreement dated                                            X        8-K        Sept. 21,     99.2
                September 20, 2007, between                                                            2007
                MicroIslet, Inc. and Peter Knobel
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.44           Registration Rights Agreement                                      X        8-K        Sept. 21,     99.3
                dated September 20, 2007,                                                              2007
                between MicroIslet, Inc. and
                Peter Knobel
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.45           Employment Agreement dated                                         X        10QSB      Nov. 19,      10.4
                September 4, 2007, between                                                             2007
                MicroIslet, Inc. and Jonathan R.
                T. Lakey, Ph.D., M.S.M.*
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.46           Services Agreement dated                                           X        10QSB      Nov. 19,      10.5
                September 1, 2007, between                                                             2007
                MicroIslet, Inc. and Progenitor
                Cell Therapy, LLC.+
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.47           Securities Purchase Agreement                        X
                dated November 16, 2007, between
                MicroIslet, Inc. and SMR 1996
                Trust III
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.48           Registration Rights Agreement                        X
                dated November 16, 2007, between
                MicroIslet, Inc. and SMR 1996
                Trust III
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.49           Form of Warrant dated                                X
                November 16, 2007, issued to SMR
                1996 Trust III
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.50           Securities Purchase Agreement                                      X        8-K        Jan. 31,      99.1
                dated January 24, 2008, among                                                          2008
                MicroIslet, Inc. and certain
                purchasers
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.51           Subordinated Convertible                                           X        8-K        Jan. 31,      99.2
                Unsecured Revolving Promissory                                                         2008
                Note dated January 25, 2008,
                issued to SMR 1996 Trust III
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.52           Form of Warrant dated January                                      X        8-K        Jan. 31,      99.3
                25, 2008                                                                               2008
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.53           Registration Rights Agreement                                      X        8-K        Jan. 31,      99.4
                dated January 24, 2008, among                                                          2008
                MicroIslet, Inc. and certain
                purchasers
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------

                                       18

<PAGE>

--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.54           First Amendment to Securities                                      X        8-K        Mar. 21,      99.1
                Purchase Agreement and                                                                 2008
                Promissory Note dated March 17,
                2008, between MicroIslet, Inc.
                and SMRH 1996 Trust III
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.55           Subordinated Convertible                                           X        8-K        Mar. 21,      99.2
                Unsecured Revolving Promissory                                                         2008
                Note dated March 17, 2008,
                issued to SMR 1996 Trust III
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.56           Warrant dated March 17, 2008,                                      X        8-K        Mar. 21,      99.3
                issued to SMR 1996 Trust III                                                           2008
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
10.57           Letter agreement dated October                       X
                8, 2007 between MicroIslet, Inc.
                and Amaresh Basu, Ph.D *
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
16.1            Letter from Deloitte & Touche                                      X        8-K        July 24,      16.1
                LLP, Independent Registered                                                            2007
                Public Accounting Firm.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
21.1            List of Subsidiaries of                                            X        SB-2       July 25,      21.1
                MicroIslet, Inc.                                                                       2002
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
23.1            Consent of  KMJ Corbin &                             X
                Company  LLP, Independent
                Registered Public Accounting
                Firm.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
23.2            Consent of  Deloitte & Touche                        X
                LLP, Independent Registered
                Public Accounting Firm.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
24.1            Power of Attorney (included as a                     X
                part of the signature page
                attached hereto)
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
31.1            Certification of Michael J.             X
                Andrews, Principal Executive and
                Financial Officer, pursuant to
                Rule 13a-14(a) or 15d-14(a) of
                the Securities Exchange Act of
                1934, as adopted pursuant to
                Section 302 of the
                Sarbanes-Oxley Act of 2002.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
32.1            Certificate pursuant to 18                           X
                U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002, executed
                by Michael J. Andrews,
                Principal Executive and Financial Officer.
--------------- ---------------------------------- ------------ ------------ -------------- ---------- ------------- ----------
</TABLE>


+ Confidential treatment has been requested with respect to certain portions of
this exhibit. Omitted portions have been filed separately with the Securities
and Exchange Commission.

*Management contract or compensatory plan or arrangement.


                                       19

<PAGE>


                                   SIGNATURES

         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

MICROISLET, INC.

By:   /s/ Michael J. Andrews                            Date:    April 24, 2008
      ----------------------
      Michael J. Andrews
      Chief Executive Officer and
      Acting Chief Financial Officer
      (Principal Executive Officer and
      Principal Financial and Accounting
      Officer)

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of registrant in the capacities
and on the dates indicated.

<TABLE>
<CAPTION>
<S>     <C>

Signature                                                Title                               Date
---------                                                -----                               ----

/s/ Michael J. Andrews                         Chief Executive Officer,                     April 24, 2008
-----------------------------------            Acting Chief Financial Officer
Michael J. Andrews                             and Director (Principal Executive
                                               Officer and Principal Financial
                                               and Accounting Officer)

               *                               Chairman and Director                        April 24, 2008
-----------------------------------
Ronald Katz

               *                               Director                                     April 24, 2008
-----------------------------------
Robert W. Anderson, M.D.

               *                               Director                                     April 24, 2008
-----------------------------------
Steven T. Frankel

-----------------------------------            Director
Keith B. Hoffman, Ph.D

               *                               Director                                     April 24, 2008
-----------------------------------
Barry Ritholtz

*/s/ Michael J. Andrews
-----------------------------------
By Michael J. Andrews, as attorney-in-fact

</TABLE>