HILLSBORO, Ore., Oct. 28 /PRNewswire-FirstCall/ -- MathStar, Inc. today announced results for its third quarter of 2008, ended Sept. 30, 2008. Revenue in the third quarter was $80,000 compared with $63,000 in the same period last year. For the nine months ended September 30, 2008, revenue was $360,000 compared with revenue of $275,000 in the nine months ended Sept. 30, 2007. Net loss in the third quarter of 2008 was $661,000 or a loss of $0.07 per share compared with a net loss of $4,393,000 or a loss of $0.48 per share in the same period last year. For the nine months ended Sept. 30, 2008, MathStar had a net loss of $14,317,000 or a loss of $1.56 per share compared with a net loss of $14,395,000 or a loss of $2.37 per share in the same period last year. The company has scheduled its third quarter 2008 financial results conference call for Tuesday, Oct. 28, 2008 at 1:30 p.m. Pacific time. To listen to the call, please dial 303-205-0033 or 800-257-2182. A replay of the call will be made available on the company's website at http://www.mathstar.com/. Statements in this press release, other than historical information, may be "forward-looking" in nature within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to various risks, uncertainties and assumptions. These statements are based on management's current expectations, estimates and projections about MathStar and include, but are not limited to, those set forth in the section of MathStar's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2008 under the heading "Risk Factors," as updated in our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2008 and June 30, 2008. MathStar undertakes no obligation to update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release. MathStar, Inc. Condensed Consolidated Balance Sheets (Unaudited) (in thousands, except per share data) December 31, September 30, 2007 2008 Assets Current assets Cash and cash equivalents $4,339 $6,824 Restricted cash 107 Investments in marketable securities - short term 22,200 7,942 Accounts receivable 271 130 Inventory 623 Prepaid expenses and other current assets 1,326 221 Total current assets 28,866 15,117 Property and equipment, net 557 76 Investments in marketable securities - long term 2,599 799 Other assets 435 25 Total assets $32,457 $16,017 Liabilities and Stockholders' Equity Current liabilities Accounts payable $930 $26 Deferred revenue 162 Accrued expenses 1,416 536 Total current liabilities 2,508 562 Other long term liabilities 453 302 Total liabilities 2,961 864 Stockholders' equity Preferred stock, $0.01 par value; 10,000 shares authorized; no shares issued and outstanding - - Common stock, $0.01 par value; 18,000 shares authorized; 9,181 shares issued and outstanding at December 31, 2007 and September 30, 2008 459 92 Additional paid-in capital 155,539 155,909 Accumulated deficit (126,502) (140,819) Accumulated other comprehensive loss - (29) Total stockholders' equity 29,496 15,153 Total liabilities and stockholders' equity $32,457 $16,017 MathStar, Inc. Condensed Consolidated Statements of Operations (Unaudited) (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2007 2008 2007 2008 Revenue $63 $80 $275 $360 Cost of sales 58 - 181 1,195 Gross profit (loss) 5 80 94 (835) Operating expenses: Research and development 2,655 165 8,387 7,259 Selling, general and administrative 2,164 666 6,733 4,228 Restructuring and impairment charges - 17 - 2,618 4,819 848 15,120 14,105 Operating loss (4,814) (768) (15,026) (14,940) Interest income 426 132 652 622 Other income, net (5) (25) (21) 1 Net loss $(4,393) $(661) $(14,395) $(14,317) Basic and diluted loss per share from continuing operations $(0.48) $(0.07) $(2.37) $(1.56) Weighted average basic and diluted shares outstanding 9,181 9,181 6,081 9,181 DATASOURCE: MathStar, Inc. CONTACT: Douglas Pihl of MathStar, Inc., +1-503-726-5500, ; or Alexis Pascal of Stapleton Communications, +1-650-470-0200, , for MathStar, Inc. Web site: http://www.mathstar.com/

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