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                                MICROISLET, INC.
                        6370 NANCY RIDGE DRIVE, SUITE 112
                           SAN DIEGO, CALIFORNIA 92121
                              PHONE: (858) 657-0287
                               FAX: (858) 657-0288
                               WWW.MICROISLET.COM

June 30, 2005

VIA EDGAR AND FEDEX

--------------------------------------------------------------------------------
Mr. Jim B. Rosenberg
Senior Assistant Chief Accountant
Securities and Exchange Commission
Mail Stop 0407
450 Fifth Street, N.W.
Washington, D.C. 20549
--------------------------------------------------------------------------------

         Re:      MicroIslet, Inc. - Form 10-KSB for the Fiscal Year Ended
                  December 31, 2004 (File No. 0-27035)

Dear Mr. Rosenberg:

         We are responding to the comments in your letter to Mr. John F. Steel
IV, Chairman and Chief Executive Officer, MicroIslet, Inc., dated April 29,
2005, concerning our Form 10-KSB for the Fiscal Year Ended December 31, 2004
(File No. 0-27035). We refer to such filing as the Form 10-KSB.

         Set forth below are our responses to the Staff's comments. For
convenience, we have included each of the Comments in italicized text before the
corresponding response. The Comments and our responses thereto are numbered to
correspond with the paragraph numbers in the Staff's comment letter.

RESPONSES:

FINANCIAL STATEMENTS
--------------------

NOTE 4. LICENSE AGREEMENT, PAGE F-12
------------------------------------

     1.  PROVIDE US YOUR JUSTIFICATION FOR NOT DISCLOSING ALL THE COLLABORATIONS
         DESCRIBED ON PAGES 3 AND 4 IN THE NOTES TO THE FINANCIAL STATEMENTS.

         Note 4 to the financial statements includes a discussion of our
         agreement with Duke University. Our license agreement with Duke grants
         to us an exclusive license to the technology enabling our primary
         product candidate. The agreement also provides for our issuance of
         securities and payment of royalties to Duke University on future
         commercial products contingent upon the occurrence of certain events.
         The agreement therefore establishes the foundation of our intellectual
         property portfolio and contains material financial obligations.

<PAGE>
Mr. Jim B. Rosenberg
June 30, 2005
Page 2

         Unlike the Duke University agreement, our agreements with The Scripps
         Research Institute, the California National Primate Research Center and
         the University of Alberta are research collaboration agreements, under
         which we contract with those entities to conduct studies and trials on
         our technologies. We do not license any intellectual property from
         these institutions or have any material, long-term financial
         obligations to these institutions. We make payments to the entities for
         their actual costs and overhead. We therefore concluded that these
         agreements were entered into in the ordinary course of business,
         without a need for discussion in the notes to the financial statements.

         We will however provide additional disclosure of our research and
         collaboration agreements in the notes to the financial statements to be
         included in our Form 10-KSB for the fiscal year ending December 31,
         2005.

NOTE 6. MERGER OF MICROISLET AND WHOLLY-OWNED SUBSIDIARY OF ALD, PAGE F-13
--------------------------------------------------------------------------

     2.  WE NOTE THAT UNDER THE PRIVATE OFFERING COMPLETED ON APRIL 24, 2002,
         MICROISLET OF DELAWARE WAS OBLIGATED TO ISSUE ADDITIONAL SHARES TO
         THESE INVESTORS IF AT A FUTURE POINT IN TIME IT SOLD ANY SECURITIES FOR
         LESS THAN $6.00 PER SHARE. AS DISCLOSED IN NOTE 7, YOU SOLD 9.8 MILLION
         SHARES AT $1.30 PER SHARE IN MARCH 2004. PLEASE EXPLAIN TO US AND
         DISCLOSE HOW YOUR OBLIGATIONS UNDER THE PRIVATE OFFERING IN 2002 WERE
         AFFECTED BY THIS FINANCING IN 2004.

         Note 6 to the Financial Statements describes a private offering
         completed by MicroIslet of Delaware in April 2002. As described in Note
         6, simultaneous with such financing, MicroIslet, Inc., a Nevada
         corporation then known as ALD Services, Inc. (which we refer to as the
         parent entity), acquired MicroIslet of Delaware in a reverse triangular
         merger through which MicroIslet of Delaware became a wholly-owned
         subsidiary of the parent entity. The parent entity did not assume any
         of MicroIslet of Delaware's obligations under the private offering
         agreements as a result of the merger.

         As disclosed on page 12 of the forepart of the Form 10-KSB, in November
         2001, MicroIslet of Delaware sold 166,668 shares of its common stock at
         a price of $6.00 per share in a private offering, which raised gross
         proceeds of $1 million. This earlier private offering was arranged by
         the same placement agent that arranged the April 2002 private offering.
         Under the terms of this earlier private offering, the investors were
         granted the right to receive additional shares of common stock if
         MicroIslet of Delaware sells any securities for less than $6.00 per
         share. In the event of such a sale, these investors would be entitled
         to an additional number of shares equal to the number of additional
         shares they would have received had their initial investment been made
         at the lower price. These rights were not granted to the investors in
         the April 2002 private offering.

         Accordingly, Note 6 will be amended in a Form 10-KSB/A to be filed as
         soon as practicable following the date of this letter to remove the
         erroneous reference to these anti-dilution rights.

<PAGE>
Mr. Jim B. Rosenberg
June 30, 2005
Page 3

         Supplementally, we advise you that the anti-dilution rights granted by
         MicroIslet of Delaware in the November 2001 private offering apply only
         to the future sales of securities by MicroIslet of Delaware, and not to
         sales of securities by the parent entity. Therefore, none of MicroIslet
         of Delaware's anti-dilution obligations were affected by the March 2004
         financing or any other financings entered into by the parent entity
         since our acquisition of MicroIslet of Delaware.

         We also supplementally advise you that the private offering conducted
         after the merger that is also described in Note 6 did not contain an
         anti-dilution provision.

NOTE 7. RELATED PARTIES/ISSUANCE OF WARRANTS, PAGE F-14
-------------------------------------------------------

     3.  WE UNDERSTAND THAT YOU ACCOUNTED FOR WARRANTS ISSUED IN SETTLEMENT OF
         LEGAL CLAIMS MADE BY CERTAIN PARTIES AS WARRANTS ISSUED FOR SERVICES
         RENDERED IN CONNECTION WITH THE PRIVATE PLACEMENT. PLEASE REFER US TO
         THE TECHNICAL GUIDANCE UPON WHICH YOU BASED YOUR ACCOUNTING FOR THESE
         TRANSACTIONS.

         Note 7 to the financial statements in the Form 10-KSB contains the
         following two paragraphs:

                  Following completion of this financing, we received a demand
                  from a purported investor claiming that we had breached an
                  agreement to sell $750,000 of securities to the purported
                  investor. In April 2004, we settled this demand and a related
                  claim by another investor through issuance of two warrants to
                  purchase 150,000 shares each at an exercise price of $1.30 per
                  share. These warrants are deemed issued for services rendered
                  in connection with the private placement. The warrants were
                  exercisable until July 30, 2004. As of December 31, 2004,
                  warrants for 150,000 shares have been exercised and warrants
                  for 150,000 shares have expired.

                  Also following completion of the private placement in March
                  2004, a placement agent engaged by the Company claimed that it
                  was entitled to payment of a cash transaction fee and a
                  warrant for services rendered in the private placement.
                  Effective September 22, 2004, the Company settled this claim
                  through the issuance of a warrant to purchase 60,000 shares at
                  an exercise price of $1.30 per share. The warrant is
                  exercisable until September 27, 2009. The warrant is deemed
                  issued for services rendered in connection with the private
                  placement.

         The first paragraph refers to warrants issued to SBI Brightline VII,
         LLC, which we refer to as SBI; and BetaDynamics, LLC, which we refer to
         as BetaDynamics. The second paragraph refers to a warrant issued to
         Alexander Dunham Securities, which we refer to as ADS.

<PAGE>

Mr. Jim B. Rosenberg
June 30, 2005
Page 4

         To enhance our fundraising capabilities, we decided to use multiple,
         non-exclusive placement agents in connection with the financing which
         closed in March 2004. We refer to this financing as the Financing. SBI
         and its principals, many of whom were also affiliated with
         BetaDynamics, provided material services to us in connection with the
         Financing. These services included participating in the preliminary
         design of the terms of the transaction, allowing their names to be
         associated with the Financing, and responding to questions about the
         Financing from other investors. ADS was retained by us in February 2004
         as a non-exclusive placement agent for the Financing. As a result of
         the material services provided by each of these entities and/or their
         principals, and as a result of explicit language in the settlement
         agreements with SBI and BetaDynamics stating that the warrants were
         issued for services rendered in connection with the Financing, we
         initially concluded that the issuances of warrants to these entities in
         satisfaction of their various claims associated with the Financing was
         an incremental cost directly attributable to the Financing.
         Accordingly, the fair value related to the issuance of these warrants
         was calculated using the Black-Scholes pricing model under FASB No. 123
         and charged against the proceeds of the offering in accordance with
         Staff Accounting Bulletin Topic 5-A.

         In the course of responding to this comment, we reviewed the
         circumstances leading to the issuances of these warrants. We considered
         the following factors:

                  o        While we had orally discussed with the principals of
                           SBI and BetaDynamics an expectation that they would
                           be compensated for their services in connection with
                           the Financing, we did not have a written agreement
                           with SBI, BetaDynamics or any of their principals
                           concerning compensation for their services.

                  o        The terms of the warrants issued to SBI and
                           BetaDynamics were negotiated after completion of the
                           Financing, and took into account, in addition to
                           services performed by these entities and their
                           principals, our rejection of subscriptions by certain
                           investors associated with SBI and BetaDynamics as a
                           result of the Financing being oversubscribed in
                           relation to the available authorized shares of common
                           stock.

                  o        While we did have a written placement agent agreement
                           with ADS, we initially concluded that no compensation
                           was owed to ADS, since the two investors introduced
                           by ADS initially declined to invest in the Financing,
                           and agreed to invest only after they were
                           reintroduced by another placement agent, which
                           placement agent was compensated promptly following
                           the Financing. Through negotiations that continued
                           into September 2004, we were able to settle this
                           claim through issuance of a two-year warrant for
                           60,000 shares at $1.30 per share.

         As a result of this review, we concluded that these warrants did not
         qualify as incremental costs directly related to the Financing as
         contemplated by Topic 5-A, and accordingly, the fair value of the
         warrants issued to each of these entities should have been recorded as
         general and administrative expenses for the periods in which the
         settlements were deemed to be both probable and reasonably estimable in
         accordance with Statement of Financial Accounting Standards No. 5,
         Accounting for Contingencies. We therefore intend to restate our
         financial statements for the fiscal year ended December 31, 2004,
         including the first and second quarters of such year, and for the
         quarter ended March 31, 2005. We plan to file an amended Form 10-KSB
         for the year ended December 31, 2004, which will present restated
         audited financial statements for the year ended December 31, 2004. We
         also plan to file an amended Form 10-QSB for the quarter ended March
         31, 2005, which will present restated unaudited financial statements
         for the three month periods ended March 31, 2004 and 2005. In addition,
         we will restate our interim financial information for the three and six
         month periods ended June 30, 2004, and the nine month period ended
         September 30, 2004, respectively, on a prospective basis in our
         quarterly reports on Form 10-QSB for the quarterly periods ending June
         30, 2005 and September 30, 2005, respectively.

<PAGE>
Mr. Jim B. Rosenberg
June 30, 2005
Page 5

         On June 28, 2005, we filed a Form 8-K containing disclosure in Item
         4.02 concerning non-reliance on previously issued financial statements,
         and issued a related press release.

REQUEST FOR ACKNOWLEDGEMENT
---------------------------

         In connection with this response, we hereby acknowledge that:

         o        The company is responsible for the adequacy and accuracy of
                  the disclosure in the filings;

         o        Staff comments or changes to disclosure in response to staff
                  comments in the filings reviewed by the staff do not foreclose
                  the Commission from taking any action with respect to the
                  filing; and

         o        The company may not assert staff comments as a defense in any
                  proceeding initiated by the Commission or any person under the
                  federal securities laws of the United States.

         If you have any questions, please contact me at (858) 657-0287.

                                            Very truly yours,

                                            /s/ William G. Kachioff

                                            William G. Kachioff
                                            Vice President,
                                            Finance and Chief Fin