Apogee Reports Financial Results for The Third Quarter of 2005

Apogee Technology, Inc. (AMEX: ATA), an emerging
Micro-Electromechanical Systems ("MEMS") device supplier, today
reported financial results for the third quarter of 2005. Revenue for
the three months ended September 30, 2005 was $1,520,000 compared with
$1,996,000 for the same period in 2004 as restated, and $1,315,000 for
the prior quarter. The Company's net loss for the third quarter of
fiscal year 2005 was $1,577,000 or ($0.13) per share. This compares to
net loss of $449,000 or ($0.06) per share for the third quarter of
fiscal year 2004 restated and a net loss of $1,599,000 or ($0.14) per
share for the second quarter of 2005.
   For the nine-month period ended September 30, 2005 the Company
reported revenue of $3,950,000 and a loss of $4,614,000 or ($0.39) per
share. This compares to restated revenue of $5,483,000 and net loss of
$1,629,000 or ($0.14) per share for the same period in 2004. The
increase in net loss for the nine-month period was generally due to
increased professional fees associated with the Company's financial
restatement, lower revenue, lower gross margin, and increased R&D
expenses including expenses associated with the formation of the
Company's MEMS division.
   Research and Development expenditures were $785,000 for the third
quarter 2005. This compares with $664,000 as restated for the third
quarter of fiscal year 2004 and $733,000 for the second quarter of
2005. The year on year increase is due to the acquisition of the MEMS
Division and the related increased human resource costs. Selling,
General and Administrative (SG&A) expenditures were $1,159,000 in the
third quarter 2005. This compares with the $633,000 as restated for
the same period in 2004 and $1,293,000 in the second quarter of 2005.
This year on year and quarterly increase is primarily due to increased
professional fees associated with the restatement of the Company's
financials. The Company believes that a majority of the professional
fees are nonrecurring and expects professional fees to be reduced in
the fourth quarter.
   Paul Murphy, Apogee's Chief Financial Officer said, "On October 5,
2005, we completed a transaction with SigmaTel, Inc., whereby we sold
our audio division through the sale of certain assets, including the
Direct Digital Amplifier (DDX(R)) technology, for $9.4 million plus a
one-year earn-out of potentially up to $4.5 million, with $420,000
held in escrow for 18 months. In addition, 21 of the Company's
engineering and marketing staff related to the audio division were
offered positions at SigmaTel as a part of the sale of assets. Our
financial position was significantly strengthened as a result of this
transaction. Part of the proceeds were used to pay off approximately
$2.1 million of secured promissory notes issued to a financial
institution, including the accrued interest, and repay approximately
$500,000 of loans from related parties. We also reduced other
liabilities and trade accounts payables. In total, our Working Capital
increased by $8.2 million, with a positive impact on our cash
position. The transaction increased our Equity by approximately $8.2
million with no tax effects due to NOL carry forwards. We also expect
the run rate of our operating expenses to be reduced by approximately
$750K quarterly, beginning in the fourth quarter of 2005."
   David Meyers, Apogee's Chief Operating Officer said, "We are in
the process of completing the transition of our audio business and are
now focusing our development efforts on commercializing our family of
Sensilica(TM) pressure sensors and our developing our MEMS based
devices to enhance transdermal drug delivery. We recently received
from manufacturing 10 different Sensilica pressure sensors supporting
pressure ranges from 15 to 1000 PSI. These devices are in the
qualification phase and we expect to ship limited quantities of
Sensilica devices to customers this quarter. In the development of our
MEMS-based transdermal drug delivery ("TDD") platform, we completed
initial efficacy testing and are expanding our testing to establish
additional statistical results."

   Recent Accomplishments & Developments

   --  Sold the audio division, including the DDX(R) IP, to Sigmatel
        for $9.4 million with a potential one year earn-out of $4.5
        million.
   --  Increased working capital by $8.2 million.
   --  Paid off outstanding notes and accrued interest thereon
        totaling $2.6 million dollars.
   --  Reduced operating expenses by $750,000 per quarter with the
        transition of staff from Apogee to Sigmatel.
   --  Completed manufacturing of 10 different Sensilica(TM) pressure
        sensors spanning a measurement range from 15 to 1000 PSI.
        These products are currently in qualification testing.
   --  Completed initial testing validating the efficacy of the
        Company's MEMS-based transdermal drug delivery device.

   About Apogee Technology, Inc.

   Apogee Technology designs, develops and markets proprietary
products using its Micro-Electromechanical Systems ("MEMS")
technologies for the automotive, industrial, consumer and medical
markets. The Company has developed a family of pressures sensors,
under the Sensilica(TM) brand and is currently developing a MEMS based
medical device for enhanced drug delivery. The Company operates a
worldwide marketing and sales organization and has offices in the US,
Hong Kong and Japan. For more information please visit our web site
at: http://www.apogeemems.com.

   Sensilica(TM) is a trademark of Apogee Technology, Inc. All other
product names noted herein may be trademarks of their respective
holders. Certain statements made herein that use the words
"anticipate," "hope," "estimate," "project," "intend," "plan,"
"expect," "believe" and similar expressions are intended to identify
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements involve known and unknown risks and uncertainties, which
could cause the actual results, performance or achievements of the
company to be materially different from those that may be expressed or
implied. Please refer to the company's risk factors as set forth in
the company's filings with the Securities and Exchange Commission,
including its reports on Forms 10-KSB and 10-QSB.

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APOGEE TECHNOLOGY, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS


                                           September 30,  December 31,
                                               2005          2004
                                          ----------------------------
                                            (Unaudited)   (Audited)
ASSETS
Current assets
Cash and cash equivalents                 $     812,485  $  1,886,883
Accounts receivable, net of allowance for
 doubtful accounts of $145,000 and
 $105,000, respectively                         465,456       533,113
Inventories, net                              1,751,900     2,725,308
Deferred costs other                            367,525            --
Deferred note financing costs                   306,000            --
Prepaid expenses and other current assets        61,956       252,728
                                          ----------------------------
Total current assets                          3,765,322     5,398,032
                                          ----------------------------
Property and equipment, net of
 accumulated depreciation of $427,240 and
 $376,951, respectively                         116,526       103,189
                                          ----------------------------
Other assets
Patent, net of accumulated amortization
 of $147,206 and $127,442, respectively         266,387       211,901
                                          ----------------------------
                                           $  4,148,235   $ 5,713,122
                                          ----------------------------

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
Current liabilities
Accounts payable and accrued expenses      $  1,705,754  $  1,107,111
Deferred distributor revenue                  1,724,009     1,955,563
Note payable other                            2,000,000            --
Notes payable Officer and shareholder           500,000            --
Advances                                        205,000            --
Deferred contract revenue                        72,686        95,788
                                          ----------------------------
Total current liabilities                     6,207,449     3,158,462
                                          ----------------------------
Commitments and Contingencies                        --            --

Stockholders' equity (deficiency)
Common stock, $.01 par value; 20,000,000
 shares authorized, 11,838,332 issued and
 outstanding at September 30, 2005 and
 December 31, 2004                              118,383       118,383
Additional paid-in capital                   18,073,223    18,073,223
Accumulated deficit                         (20,250,821)  (15,636,946)
                                          ----------------------------
Total stockholders' equity (deficiency)      (2,059,215)    2,554,660
                                          ----------------------------
                                          $   4,148,235  $  5,713,122
                                          ----------------------------

The accompanying notes in the Company's 10-QSB filing for the three
month period ending September 30, 2005 are an integral part of these
consolidated financial statements.


APOGEE TECHNOLOGY, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


                    THREE MONTHS ENDED          NINE MONTHS ENDED
                      September, 30               September, 30
                 -----------------------------------------------------
                      2005         2004          2005         2004
                 -----------------------------------------------------
                   (Restated)   (Restated)
Revenues
Product sales    $  1,157,789 $  1,388,132  $  3,326,238 $  3,926,841
Royalties             212,397      446,415       473,328      890,388
Consulting            150,000      161,270       150,000      665,754
                 -----------------------------------------------------
                    1,520,186    1,995,817     3,949,566    5,482,983
                 -----------------------------------------------------

Costs and expenses
Product sales       1,122,084    1,153,299     2,975,312    3,240,038
Research and
 development          785,403      664,032     2,308,410    1,982,625
Selling, general
 and administrative 1,158,569      632,733     3,251,653    1,905,500
                 -----------------------------------------------------
                    3,066,056    2,450,064     8,535,375    7,128,163
                 -----------------------------------------------------
Operating loss     (1,545,870)    (454,247)   (4,585,809)  (1,645,180)
                 -----------------------------------------------------

Other (expense) income
Interest/finance
 expense              (35,552)          --       (38,930)          --
Interest income         4,814        5,365        10,865       16,249
                 -----------------------------------------------------
                      (30,738)       5,365       (28,065)      16,249
                 -----------------------------------------------------
Net loss           (1,576,608)    (448,882)   (4,613,874)  (1,628,931)
Accumulated
 deficit -
 beginning        (18,674,212) (13,431,796) $(15,636,946)$(12,251,748)
                 -----------------------------------------------------
Accumulated
 deficit -
 ending          $(20,250,820)$(13,880,678) $(20,250,820)$(13,880,678)
                 -----------------------------------------------------
Basic and diluted
 loss per common
 share           $      (0.13)$      (0.06) $      (0.39)$      (0.14)
                 -----------------------------------------------------
Weighted average
 common shares
 outstanding -
 basic and
 diluted           11,838,332   11,566,166    11,838,332   11,438,871
                 -----------------------------------------------------


The accompanying notes in the Company's 10-QSB filing for the three
month period ending September 30, 2005 are an integral part of these
consolidated financial statements.


APOGEE TECHNOLOGY, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS (unaudited) (in Thousands)



                                           Effect of DDX
                              As Reported    Sale and      Pro Forma
                              September 30,    Note      September 30,
                                 2005        Repayment        2005
                              ----------------------------------------
ASSETS
Current assets
Cash and cash equivalents       $      812     $5,519 (1)(2)  $ 6,331
Accounts receivable, net of
 allowance                             465         --             465
Inventories, net                     1,952         --           1,952
Deferred costs other                   368       (368)(3)          --
Deferred note financing costs          306       (306)(4)          --
Prepaid expenses and other
 current assets                         62         --              62
                              ----------------------------------------
Total current assets                 3,965      4,845           8,810
                              ----------------------------------------
Property and equipment, net of
 accumulated depreciation of $427      117       (100)(3)          17
                              ----------------------------------------
Other assets
Patent, net of accumulated
 amortization of $147                  266       (170)(3)          96
Escrow                                  --        320 (1)(3)      320
                              ----------------------------------------
                                $    4,348     $4,895         $ 9,243
                              ----------------------------------------
LIABILITIES AND STOCKHOLDERS'
 EQUITY (DEFICIENCY)
Current liabilities
Accounts payable and accrued
 expenses                       $    1,706     $ (676)(1)(2)  $ 1,030
Deferred distributor revenue         1,724          -           1,724
Note payable other                   2,000     (2,000)(2)          --
Officer and shareholder loans          500       (500)(2)          --
Advances                               205       (205)(1)          --
Deferred contract revenue               73         --              73
                              ----------------------------------------
Total current liabilities            6,208     (3,381)          2,827
                              ----------------------------------------
Commitments and Contingencies           --         --              --

Stockholders' equity (deficiency)
Common stock, $.01 par value;
 20,000,000 shares authorized,
 11,838,332 issued and
 outstanding at September 30,
 2005 and December 31, 2004            118         --             118
Additional paid-in capital          18,074         --          18,074
Accumulated deficit                (20,052)     8,276 (3)(4)  (11,776)
                              ----------------------------------------
Total stockholders' equity
 (deficiency)                       (1,861)     8,276           6,416
                              ----------------------------------------
                                $    4,348     $4,895         $ 9,243
                              ----------------------------------------

The accompanying notes in the Company's 10-QSB filing for the three
month period ending September 30, 2005 are an integral part of these
consolidated financial statements.
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