8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report:  June 26, 2006

ISONICS CORPORATION

(Name of small business issuer as specified in its charter)

California	001-12531	77-0338561
State of	Commission File	IRS Employer
Incorporation	Number	Identification No.

5906 McIntyre Street, Golden, Colorado 80403
Address of principal executive offices

303-279-7900
Telephone number, including
Area code

Not applicable
Former name or former address if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o            Written communications pursuant to Rule 425 under the Securities Act

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 3.01 — Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

On June 26, 2006, we received a letter from the Nasdaq Stock Market that advised us that we failed to meet the requirements for continued listing found in Marketplace Rule 4310(c)(2)(B), which requires that, for continued listing on Nasdaq, we maintain any one of the following:

(i)stockholders’ equity of $2.5 million;

(ii)market value of listed securities of $35 million; or

(iii)net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.

The letter went on to state that Nasdaq has provided us until July 26, 2006, to regain compliance with the market value requirement (clause (ii)). There is no stated compliance period for the stockholders’ equity deficiency (clause (i)) or the net income deficiency (clause (iii)). On June 30, 2006 and in accordance with Marketplace Rule 4803(a), we issued a press release regarding the letter received from Nasdaq.

The letter of June 26, 2006, was the first written notification that we received from Nasdaq staff on this subject during this year. Based on information being generated in preparation of our Form 10-KSB for the year ended April 30, 2006, expected to be filed no later than July 31, 2006, and considering our recent financing with Cornell Capital Partners, LP (as discussed in our Form 8-K dated May 31, 2006) and our recent payments in common stock of principal amounts due on our convertible debentures, we believe it is likely that we will be in compliance with the Nasdaq requirement for stockholders’ equity upon the filing of that Form 10-KSB and we will be engaged in discussions with Nasdaq staff on the relevant points. To the extent that we receive a delisting notification from the Nasdaq Stock Market, we intend to request a hearing to appeal the determination before a Nasdaq hearing panel.

Item 8.01 — Other Events

A holder of our 8% Convertible Debentures, with remaining principal outstanding in the amount of $625,000, has informed us of its belief that the issuance of the 6% Convertible Debentures may have breached our obligations to the remaining 8% Debenture holders. We intend to contest any claims that we breached our obligations to the 8% Debenture holders and we believe we have appropriate grounds to do so.

Item 9.01 — Financial Statements and Exhibits

(a)           Financial Statements of Businesses Acquired.

Not applicable.

(b)           Pro forma financial information.

Not applicable.

(c)           Exhibits

99.1 Press release dated June 30, 2006.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 30th day of June 2006.

Isonics Corporation
By:	/s/ James E. Alexander
	James E. Alexander
	President and Chief Executive Officer

EX-99.1

Exhibit 99.1

Isonics Corporation Receives Notification From Nasdaq

GOLDEN, Colo.—(BUSINESS WIRE)—June 30, 2006—Isonics Corporation (Nasdaq: ISON), a provider of innovative solutions for the homeland security and semiconductor markets, announced today that it has received a letter from the Nasdaq Stock Market advising the Company that it fails to meet the requirements for continued listing found in Nasdaq Marketplace Rule 4310(c)(2)(B), which requires a company to meet any one of the following requirements:

a)stockholders’ equity of $2.5 million, or

b)market value of listed securities of $35 million, or

c)net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.

The Company has been provided until July 26, 2006, to regain compliance with the market value requirement of listed securities.

The Company believes that when it files its Form 10-KSB for its fiscal year ended April 30, 2006 that it will meet the stockholders’ equity requirement and therefore be deemed in compliance with Nasdaq Marketplace Rule 4310(c)(2)(B). The Company intends to file this Form 10-KSB on or before the July 26, 2006 deadline.

The Company could also regain compliance if the closing bid price of its common stock exceeds $0.76 for a minimum of 10 consecutive business days based on 46,358,044 shares currently outstanding, which would exceed the $35 million threshold for market value of listed securities.

If the Company receives a delisting notification from the Nasdaq Stock Market, it intends to request a hearing to appeal the determination before a Nasdaq Listing Qualifications Panel.

About Isonics Corporation

Isonics Corporation has three business divisions: (1) Homeland Security and Defense (2) Semiconductor, and (3) Life Sciences. Isonics is a world leader in isotopically engineered materials and through its semiconductor division produces isotopically pure silicon-28 chemicals, silicon-on-insulator wafers, wafer reclaim services and test wafers, including 300mm, for the semiconductor industry. Isonics’ Life Sciences division markets and sells isotopes to the health care industry for the imaging and treatment of cancer. Stable isotopes can be thought of as ultra pure materials. This high degree of purification provides enhanced properties as compared to natural materials. Additional information may be obtained at the Company’s Web site at www.isonics.com.

Cautionary Statement

Except for historical information contained herein, this document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve estimates, assumptions, known and unknown risks and uncertainties that may cause the Company’s actual results or outcomes to be materially different from those anticipated and discussed herein. Further, the Company operates in industries where securities values may be volatile and may be influenced by regulatory and other factors beyond the Company’s control. Other important factors that the Company believes might cause such differences are discussed in the risk factors detailed in the Company’s 10-KSB for the year ended April 30, 2005 and reports subsequently filed with the Securities and Exchange Commission, which include the Company’s historical cash flow difficulties, dependence on significant customers, and rapid development of technology, among other risks. In assessing forward-looking statements contained herein, readers are urged to carefully read all cautionary statements contained in these filings with the Securities and Exchange Commission.

Contact:
Isonics Corporation
James E. Alexander, 303-279-7900