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 13, 2007

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 3.02 - Unregistered Sale of Equity Securities

The following are transactions in which we issued equity securities that were not registered under the Securities Act and which have not been previously reported in any prior report filed under the Securities Exchange Act of 1934.  Until the transaction outlined below dated June 19, 2007, the equity securities sold in the aggregate since our last periodic report constituted less than 1% of the number of shares of our common stock outstanding and therefore we did not previously disclose the earlier transactions.

1.As consideration for entering into a financial advisory agreement on March 4, 2007 we granted Clayton, Dunning Capital Partners, Inc. (“Clayton Dunning”) a warrant to purchase 100,000 shares of our common stock.   The following is the information required by Item 701 of Regulation S-K.

(a)On March 5, 2007 we granted Clayton Dunning a warrant (which was simultaneously transferred to Roadrunner Capital Group) to purchase 100,000 shares of our common stock at $1.65 per share exercisable for two years.

(b)There was no placement agent or underwriter for the transaction.

(c)The warrant was issued in consideration for services Clayton Dunning will provide to the Company, and the Company received no cash therefore.

(d)We relied on the exemption from registration provided by Sections 4(2) and 4(6) under the Securities Act of 1933 and Regulation D for the issuance of the common stock.   We did not engage in any public advertising or general solicitation in connection with this transaction.  The investor represented to us that it was an accredited investor and had access to all of our reports filed with the Securities and Exchange Commission, our press releases and other financial, business and corporate information.  Based on our investigation, we believe that the investor obtained all information regarding Isonics it requested, received answers to all questions it posed, and otherwise understood the risks of accepting our securities for investment purposes.

(e)The warrant is exercisable or exchangeable into shares of common stock.

(f)No cash proceeds were received.

2.On May 22, 2007 we entered into a consulting agreement with CEOcast Inc., and as partial consideration for the investor relation services CEOcast will provide to Isonics we issued CEOcast 18,750 shares of our restricted common stock.   The following is the information required by Item 701 of Regulation S-K.

(a)On May 22, 2007 we issued CEOcast Inc. 18,750 shares of our restricted common stock.

(b)There was no placement agent or underwriter for the transaction.

(c)The shares were issued in consideration for CEOcast entering into an agreement with Isonics, and the Company received no cash therefore.

2

(d)We relied on the exemption from registration provided by Sections 4(2) and 4(6) under the Securities Act of 1933 and Regulation D for the issuance of the common stock.  We did not engage in any public advertising or general solicitation in connection with this transaction.  The investor represented to us that it was an accredited investor had access to all of our reports filed with the Securities and Exchange Commission, our press releases and other financial, business and corporate information.  Based on our investigation, we believe that the investor obtained all information regarding Isonics it requested, received answers to all questions it posed, and otherwise understood the risks of accepting our securities for investment purposes.

(e)The shares were common stock and, therefore, are not exercisable or exchangeable into shares of common stock.

(f)No cash proceeds were received.

3.On June 19, 2007 we entered into a consulting agreement with Sound Business Solutions, Inc, a corporation controlled by Joanna Lohkamp.  Ms. Lohkamp serves as the Chief Operating Officer of our wholly owned subsidiary Isonics Vancouver Inc.   Pursuant to that agreement we granted Sound Business Solutions options to purchase 200,000 shares of our common stock. The following is the information required by Item 701 of Regulation S-K.

(a)On June 19, 2007 we granted Sound Business Solutions Inc. an option to purchase 200,000 shares of our common stock pursuant to our 2005 Equity Plan (a portion not yet subject to a registration statement).  The options are exercisable at $1.45 and expire on June 18, 2011.  Options to acquire 66,667 shares vested immediately, options to acquire 66,667 shares vest on September 7, 2007, and 66,666 of the options vest on January 31, 2008.

(b)There was no placement agent or underwriter for the transaction.

(c)The options were granted in consideration for Sound Business Solutions Inc. entering into the consulting agreement by which it agreed to provide services to the Company. The Company received no cash for the issuance of the options.

(d)We relied on the exemption from registration provided by Sections 4(2) and 4(6) under the Securities Act of 1933 for the issuance of the stock options.   We did not engage in any public advertising or general solicitation in connection with this transaction, and we provided the investor with disclosure of all aspects of our business, including providing the investor with our reports filed with the Securities and Exchange Commission, our press releases, access to our auditors, and other financial, business, and corporate information. We believe that Ms. Lohkamp, the sole owner of Sound Business Solutions, is an accredited investor.  We believe that the investor obtained all information regarding Isonics Corporation it requested, received answers to all questions it (and its advisors) posed, and otherwise understood the risks of accepting our securities for investment purposes.

(e)The stock options are exercisable to purchase shares of common stock as described above.

(f)No proceeds were received.

3

4.On June 22, 2007 our wholly owned subsidiary Protection Plus Security Corporation (“PPSC”) entered into an employment agreement (the “Employment Agreement”) with Michael Caridi to serve as PPSC’s Senior Vice President.  Pursuant to the Employment Agreement we granted Mr. Caridi an option to purchase 150,000 shares of our common stock pursuant to our 2007 Restructuring Equity Plan, which plan is subject to shareholder approval.  The following is the information required by Item 701 of Regulation S-K.

(a)On June 22, 2007 we granted Michael Caridi an option to purchase 150,000 shares of our common stock.  The options are exercisable at $1.50 and expire on June 21, 2012.  The option is subject to the following vesting schedule:  (i) 50,000 options vested immediately; (ii) 25,000 shares vest six months from the date of the Employment Agreement;  (iii) 25,000 options  vest nine months from the date of the Employment; and (iv)  50,000 shares vest upon achieving certain operating income levels for the fiscal year ending April 30, 2008.  Options shall only vest if Mr. Caridi is an employee of PPSC on each vesting date.

(b)There was no placement agent or underwriter for the transaction.

(c)The stock options were granted in consideration for Mr. Caridi entering into the employment agreement with our wholly-owned subsidiary, PPSC.  The Company received no cash for the issuance of the options.

(d)We relied on the exemption from registration provided by Section 4(2) under the Securities Act of 1933 for the issuance of the stock options.   We did not engage in any public advertising or general solicitation in connection with this transaction, and we provided the investor with disclosure of all aspects of our business, including providing the investor with our reports filed with the Securities and Exchange Commission, our press releases, access to our auditors, and other financial, business, and corporate information. We believe that the investor obtained all inform ation regarding Isonics Corporation it requested, received answers to all questions he (and its advisors) posed, and otherwise understood the risks of accepting our securities for investment purposes.

(e)The stock options are exercisable to purchase shares of common stock as described above.

(f)No proceeds were received.

Item 8.01 – Other Events

1.Sale of Life Sciences Division

On June 13, 2007 we entered into an Asset Purchase Agreement with Advanced Medical Isotopes Corporation (“AMIC”) whereby AMIC acquired all of the assets of the our life sciences division.  We have previously announced that we were seeking to divest the life sciences assets.  We did not consider the life sciences segment to a significant portion of our business operations, assets, or financial condition, and we do not anticipate that any material charges will be incurred under generally accepted accounting principles relating to the discontinuation of the life sciences segment (and therefore we have not reported this action under Item 1.01, Item 2.01 or Item 2.05 of Form 8-K).

Pursuant to the Agreement, AMIC paid $850,000 for the assets.  Isonics realized net proceeds of approximately $700,000 after paying certain debt and expenses related to the life sciences division.

4

2.Restated Articles of Incorporation

On May 24, 2007, we filed Restated Articles of Incorporation with the California Secretary of State.  The Restated Articles merely restated and do not amend our Articles of Incorporation and, therefore, were not subject to mandatory reporting under Item 3.03 of Form 8-K.  On June 6, 2007, we were notified by the California Secretary of State that Restated Articles had been accepted and are on file with California.

Item 9.01 – Financial Statements and Exhibits

(a)Not applicable

(b)Not applicable.

(c)Not applicable.

(d)Exhibits

3.1Restated Articles of Incorporation

99Press Release dated June 18, 2007

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 25th day of June 2007.

Isonics Corporation
By:	/s/ John Sakys
	John Sakys
	President

5

EX-3.1

Exhibit 3.1

RESTATED ARTICLES OF INCORPORATION
OF
ISONICS CORPORATION

ARTICLE I
NAME

The name of this corporation is: Isonics Corporation (the “Corporation”).

ARTICLE II
PURPOSE

The purpose of this Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

ARTICLE III
AUTHORIZED SHARES

The aggregate number of shares of capital stock which this Corporation shall be authorized to issue is One Hundred Eighty Two Million Six Hundred and Fifty Thousand (182,650,000), which shall consist of:

(a)One Hundred Seventy-Five Million (175,000,000) shares which shall be designated as Common Stock; and

(b)Seven Million Six Hundred and Fifty Thousand (7,650,000) shares which shall be designated as Preferred Stock.

ARTICLE IV
PREFERRED STOCK

A.Preferred Stock – General.  The shares of this corporation’s Preferred Stock may be issued from time to time in one or more series as the Board of Directors may from time to time determine.  The Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to or imposed upon, any wholly unissued series of Preferred Stock, and to, and to fix the number of shares of any series of Preferred Stock and the designation of any such series of Preferred Stock.  The Board of Directors, within the limits and restrictions stated in any resolution or resolution of the Board of Directors originally fixing the number of shares constituting any series, may increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series prior to or subsequent to the issuance of shares of that series.

B.Series B Convertible Preferred Stock.  Pursuant to a Certificate of Determination filed with the California Secretary of State on October 11, 2001, and amended on

A-1

or about July 10, 2006, the Board of Directors of the Corporation established the Series B Convertible Preferred Stock which has the following rights, preferences, privileges and restrictions:

1.Number and Designation.  This series shall consist of 2,500,000 shares of Preferred Stock of the Corporation and shall be designated the Series B Convertible Preferred Stock (“Series B Stock”).  The number of authorized shares of Series B Stock may be reduced to the extent any shares are not issued and outstanding by further resolution duly adopted by the Board of Directors of the Corporation and by filing amendments to the Certificate of Determination pursuant to the provisions of the Corporations Code of the State of California stating that such reduction has been so authorized, but the number of authorized shares of this Series shall not be increased except pursuant to majority vote of the Series B Holders.

2.Dividends.  When and as any dividend or distribution is declared or paid by the Corporation on Common Stock, whether payable in cash, property, securities or rights to acquire securities, the Series B Holders will be entitled to participate with the holders of Common Stock in such dividend or distribution as set forth in this Section 2.  At the time such dividend or distribution is payable to the holders of Common Stock, the Corporation will pay to each Series B Holder such holder’s share of such dividend or distribution equal to the amount of the dividend or distribution per share of Common Stock payable at such time multiplied by the number of shares of Common Stock then obtainable upon conversion of such holder’s Series B Stock.

3.Voting Rights.

(a)The Series B Holders shall be entitled to notice of any shareholders’ meeting and to vote as a single class with the Common Stock upon any matter submitted for approval by the holders of Common Stock on the following basis: the Series B Holders shall have that number of votes equal to the number of shares of Common Stock into which such Series B Stock is then convertible.

(b)In addition to any other rights provided by law, so long as any Series B Stock is outstanding, the Corporation, without first obtaining the affirmative vote or written consent of the holders of not less than a majority of such outstanding shares of Series B Stock, will not amend or repeal any provision of, or add any provision to, the Corporation’s Articles of Incorporation or By-Laws if such action would alter adversely the liquidation preferences of, or the rights or restrictions provided for the benefit of, any Series B Stock.

4.Preference Upon Liquidation.  Upon any liquidation, dissolution or winding up of the Corporation, each Series B Holder will be entitled to be paid, before any distribution or payment is made upon any Junior Securities of the Corporation, an amount in cash equal to the aggregate Liquidation Value (as defined in Section 6(c) below) of all shares of Series B Stock held by such holder, plus accrued dividends, if any; thereafter, each Series B Holder will participate in any distribution or payment on a pro rata basis with all Junior Securities as if the Series B Stock had been converted into Common Stock.

A-2

5.Conversion into Conversion Stock.

(a)Conversion.  Each share of Series B Stock will automatically convert into a single share of Common Stock (the “Conversion Ratio”) on the date that the Corporation authorizes sufficient additional Common Stock as evidenced by filing articles of amendment with the Secretary of State of California.

(i)The conversion of Series B Stock will be deemed to have been effected automatically and without any action by the Series B Holder as of the close of business on the date on which the articles of amendment are filed with the Secretary of State of California.  At such time as such conversion has been effected, the rights of the holder of such Series B Stock as such holder will cease and the person or persons in whose name or names any certificate or certificates for shares of Conversion Stock are to be issued upon such conversion will be deemed to have become the holder or holders of record of the shares of Conversion Stock represented thereby.

(ii)As soon as possible after a conversion has been effected, the Corporation will deliver to the converting holder a certificate or certificates representing the number of shares of Common Stock issuable by reason of such conversion in such name or names and such denomination or denominations as the converting holder has specified.

(iii)The issuance of certificates for shares of Common Stock upon conversion of Series B Stock will be made without charge.

(b)Subdivision or Combination of Common Stock.  If the Corporation at any time subdivides (by any stock split, stock dividend or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Conversion Ratio in effect immediately prior to such subdivision will be proportionately reduced, and if the Corporation at any time combines (by reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the Conversion Ratio in effect immediately prior to such combination will be proportionately increased.

(c)Certain Events.  If any event occurs of the type contemplated by the provisions of this Section 5 but not expressly provided for by such provisions, then the Board of Directors of the Corporation will make an appropriate adjustment in the Conversion Ratio so as to protect the rights of the Series B Holders; provided that no such adjustment will increase the Conversion Ratio as otherwise determined pursuant to this Section 5 or decrease the number of shares of Common Stock issuable upon conversion of each share of Series B Stock.

(d)Notices.

(i)Immediately upon any adjustment of the Conversion Ratio, the Corporation will send written notice thereof to all Series B Holders.

(ii)All notices and other communications from the Corporation to a Series B Holder shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Corporation in writing by such holder, or, until an address is so furnished, to and at the address of the last holder who has so furnished an address to the Corporation.

A-3

(e)Converted or Redeemed Shares.  Any shares of Series B Stock which are converted pursuant to this Section 5 or redeemed pursuant to Section 6 will be canceled and will not be reissued, sold or transferred.

6.Miscellaneous.

(a)Registration of Transfer.  The Corporation will keep at its principal office a register for the registration of Series B Stock.  Upon the surrender of any certificate representing Series B Stock at such place, the Corporation will, at the request of the record holder of such certificate, execute and deliver (at the Corporation’s expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of shares represented by the surrendered certificate.  Each such new certificate will be registered in such name and will represent such number of shares as is requested by the holder of the surrendered certificate and will be substantially identical in form to the surrendered certificate.

(b)Replacement.  Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder will be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing one or more shares of Series B Stock, and in the case of any such loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to the Corporation, the Corporation will (at its expense) execute and deliver in lieu of such certificate a new certificate representing the number of shares represented by such lost, stolen, destroyed or mutilated certificate.

(c)Definitions.  For purposes hereof:

“Common Stock” means the Common Stock of the Corporation, no par value per share, and includes all stock of any class or classes (however designated) of the Company, authorized upon the Original Issue Date or thereafter, the holders of which shall have the right, without limitation as to amount, either to all or to a share of the balance of current dividends and liquidating dividends after the payment of dividends and distributions on any shares entitled to preference, and the holders of which shall ordinarily, in the absence of contingencies, be entitled to vote for the election of a majority of directors of the Company (even though the right so to vote has been suspended by the happening of such a contingency).

“Conversion Ratio” shall have the meaning set forth in Section 5(a).

“Corporation” means Isonics Corporation.

“Junior Securities” means the Common Stock and any equity securities of any kind (but not including any debt securities convertible into equity securities) which the Corporation or any Subsidiary at any time issues or is authorized to issue other than the Series B Stock unless the terms of such security explicitly state that such security shall be senior to or on a par with the Series B Stock.

“Liquidation Value” of any share of Series B Stock as of any particular date will be $1.50.

“Original Issue Date” means the date the Series B Stock is first issued.

A-4

“Person” and “person” means an individual, a partnership, a corporation, a limited liability company, a trust, a joint venture, an unincorporated organization and a government or any department or agency thereof.

“Series B Holder” shall mean a registered holder of Series B Stock.

“Series B Stock” shall have the meaning set forth in Section 1.

“Subsidiary” means any corporation of which the shares of stock having a majority of the general voting power in electing the board of directors are, at the time as of which any determination is being made, owned by the Corporation either directly or indirectly through Subsidiaries.

(d)Amendment and Waiver.  No amendment, modification or waiver will be binding or effective with respect to any provision hereof without the prior approval of a majority of the outstanding shares of Series B Stock; provided notwithstanding Section 3(b) above that no such action will change or affect (i) the Conversion Ratio of the Series B Stock, (ii) the Liquidation Value of the Series B Stock, or (iii) the amount of cash, securities or other property receivable or to be received by the Series B Holders.

(e)Generally Accepted Accounting Principles.  When any accounting determination or calculation is required to be made, such determination or calculation (unless otherwise provided) will be made in accordance with generally accepted accounting principles, consistently applied, except that if because of a change in generally accepted accounting principles the Corporation would have to alter a previously utilized accounting method or policy in order to remain in compliance with generally accepted accounting principles, such determination or calculation will continue to be made in accordance with the Corporation’s previous accounting methods and policies unless the Corporation has obtained the prior written consent of the holders of a majority of the Series B Stock then outstanding.

ARTICLE V

6.1Liability of Directors.  The liability of directors of the corporation for monetary damages shall be eliminated to the fullest extent permissible under California Law.

6.2Indemnification.  The corporation is authorized to provide indemnification of agents (as defined in Section 317 of the California Corporations Code) through Bylaw provisions, agreements with agents, votes of shareholders or disinterested directors, or otherwise, to the fullest extent permissible under California law.

6.3Amendment or Modification.  Any amendment, repeal or modification of any provision of this Article V shall not adversely affect any right or protection of an agent of this corporation existing at the time of such amendment, repeal or modification.

A-5

EX-99

Exhibit 99

Isonics Completes Sale of Life Sciences Division

Company To Record Gain on Sale

GOLDEN, Colo.—(BUSINESS WIRE)—Isonics Corporation (NASDAQ: ISON), a provider of innovative solutions for the homeland security and semiconductor markets, announced today that it has completed the sale of its Life Sciences division for gross proceeds of $850,000 (net proceeds of approximately $700,000 after retirement of related debt and expenses of the sale) and expects to record a gain on the transaction. The sale of this division is part of Isonics’ plan to achieve operating profitability by focusing on its core businesses.

“The completion of this previously announced transaction will allow us to deploy additional capital in our Semiconductor and Homeland Security and Defense divisions and allow management to devote its full attention to growing these two businesses,” said Christopher Toffales, Chairman of Isonics. “We remain focused on executing on our recently announced business model which is targeted at generating higher-margin business. The sale of the Life Sciences division is consistent with this objective.”

About Isonics Corporation

Isonics Corporation is an advanced materials and technology company focused on the development and provision of homeland security products and services and provides 300-millimeter products and services, wafer thinning and silicon-on-insulator wafers for the semiconductor industry.  Additional information may be obtained at the Company’s Web site at www.isonics.com.

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, 2006 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

John Sakys, 303-279-7900

or

CEOcast, Inc. for Isonics

Andrew Hellman, 212-732-4300