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 (Date of earliest date reported):  September 17, 2007

ISONICS CORPORATION

(Exact name of registrant 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 September 17, 2007, we received two letters from the Nasdaq Stock Market (“Nasdaq”) advising us that we failed to meet certain requirements for continued listing.

The first letter from Nasdaq advised us that, based on our Form 10-Q for the three months ended July 31, 2007, we failed to meet the requirements for continued listing found in Marketplace Rule 4310(c)(3), 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 is reviewing our eligibility for continued listing on the Nasdaq Capital Market and has requested that we provide by October 2, 2007, our plan to achieve and sustain compliance with all the Nasdaq Capital Market listing requirements.  If at the conclusion of the review process it is determined that our plan does not adequately address the issues noted, we most likely will be delisted from Nasdaq, although we would have the right to appeal Nasdaq’s decision to a Nasdaq Listing Qualifications Panel.  Due to our current financial condition as disclosed in our Form 10-Q for the three months ended July 31, 2007, we can offer no assurance (and, in fact, it may be less likely than not) that we will be able to provide to Nasdaq a plan which indicates our ability to both meet and sustain compliance with all listing requirements.

The second letter from Nasdaq advised us that the minimum bid price of our common stock had closed below $1.00 per share for the previous 30 consecutive business days, and, as a result, did not comply with Marketplace Rule 4310(c)(4) (the “Rule”).  Therefore, in accordance with Marketplace Rule 4310(c)(8)(D), we have been provided 180 calendar days, or until March 17, 2008, to regain compliance with the Rule (which consists of the bid price of our common stock closing at $1.00 per share or more or a minimum of 10 consecutive business days).  If we are delisted from Nasdaq because of our failure to meet the requirements of Marketplace Rule 4310(c)(3) (discussed above), the requirements of this letter become moot.  If we remain listed on Nasdaq for the 180 day curative period and still fail to obtain compliance with the $1.00 minimum bid price as of March 17, 2008, we will be granted an additional 180 calendar days to obtain compliance as long as we meet the Nasdaq Capital Market initial listing criteria as set forth in Marketplace Rule 4310(c), except for the bid price requirement.  If we are not eligible for the additional compliance period, we may be delisted by Nasdaq at that time.

On September 21, 2007 and in accordance with Marketplace Rule 4803(a), we issued a press release regarding the letters received from Nasdaq, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

2

Item 9.01 – Financial Statements and Exhibits

(a)	Financial Statements of Businesses Acquired.
	Not applicable.
(b)	Pro forma financial information.
	Not applicable.
(d)	Exhibits
	99.1	Press release dated September 21, 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 21st day of September 2007.

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

3

EX-99.1

Exihibit 99.1

Isonics Receives Nasdaq Notifications

GOLDEN, Colo.—(BUSINESS WIRE)—Isonics Corporation (NASDAQ: ISON), a company that is focused on the development and provision of products and services for the semiconductor and homeland security markets, announced today that it received two notifications from Nasdaq, either of which may result in our common stock being delisted from the Nasdaq Capital Market.

The first notice stated that, based on the Form 10-Q for the three months ended July 31, 2007, Isonics fails to comply with Nasdaq Marketplace Rule 4310(c)(3) which requires the Company to have a minimum of $2.5 million in stockholders’ equity or $35 million in market value of securities or $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years. The Company has until October 2, 2007 to submit to Nasdaq a plan to achieve and sustain compliance with all the Nasdaq Capital Market listing requirements.

The second notice stated that for the last 30 consecutive business days, the bid price of the Company’s common stock has closed below the minimum $1.00 per share requirement for continued inclusion under Marketplace Rule 4310(c)(4).  Under the rules, Isonics has 180 days, or until March 17, 2008 to regain compliance. If at anytime before March 17, 2008, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive days, the Nasdaq Staff will notify the Company that it has regained compliance.  Based on the Company’s current financial position as set forth in its most recent Form 10-Q filing, Isonics cannot offer any assurance that it will be able to provide Nasdaq with a plan that will bring it into compliance with the stockholders’ equity requirement; if that remains the case and Nasdaq delists its common stock as a result, the Company’s non-compliance with the market price requirement will be moot.

The Company also announced today financial results for its Semiconductor Division (the “Division”) for the first fiscal quarter ended July 31, 2007. The Division had revenue of $2.1 million for the period ended July 31, 2007, compared to revenue of $2.9 million for the year-earlier period.  The Division had an operating loss of $(361,000) for the fiscal 2008 first quarter, compared to $(199,000) in the same period one year ago. Although the Division reported significant revenue and operating income growth for the year ended April 30, 2007, many of the Division’s top semiconductor customers experienced weakened business results in recent quarters.  In addition, some customers have reported inventory buildup in reclaim and/or test products.  As a result of these two factors, the Division has recently seen a slowdown in orders of reclaim and test materials, which has had a negative impact on operating results. In order to minimize the effect of the slowdown,

Isonics has implemented many cost cutting measures and will continue to do so.  The Company believes that demand will rebound within a relatively short period of time and is hopeful that it will begin to see a recovery during the next six months.  Isonics continues to aggressively pursue and add new customers to mitigate the underlying uncertainties within its existing customer base.  See the Company’s Form 10-Q for the three months ended July 31, 2007 (filed with the SEC on September 14, 2007) for additional information.

About Isonics Corporation

Isonics Corporation is focused on the development and provision of homeland security products and services and the manufacture of 300-millimeter (and smaller diameter) silicon wafer reclaim and test products, wafer thinning and custom wafer products 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-K for the year ended April 30, 2007 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