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 event reported): August 14, 2006

LIPID SCIENCES, INC.

(Exact name of registrant as specified in its charter)

Delaware	0-497	43-0433090
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S Employer Identification No.)

7068 Koll Center Parkway, Suite 401, Pleasanton, California	94566
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (925) 249-4000

(Former name or former address, if changed since last report.) N/A

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 (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

On August 14, 2006, Lipid Sciences, Inc. (the “Company”) received a letter from the Listing Qualifications Staff of the Nasdaq Stock Market, Inc. notifying the Company that based on its June 30, 2006 balance sheet contained in its quarterly report on Form 10-Q, the Company did not comply with the minimum $10,000,000 stockholders’ equity requirement for continued listing on the Nasdaq Global Market set forth in Nasdaq Marketplace Rule 4450(a)(3). As a result of the completion of the Company’s $6.3 million private placement on August 8, 2006, the Company currently meets the Nasdaq minimum stockholders’ equity requirement. The Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement for continued listing on the Nasdaq Global Market. A copy of the press release issued by the Company disclosing the receipt of the notice from the Nasdaq is attached hereto as Exhibit 99.1 and incorporated by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit 99.1

Press release entitled “Lipid Sciences, Inc. In Compliance With Nasdaq Global Market Listing Requirements.”

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Lipid Sciences, Inc.


Date: August 17, 2006	By:	/s/ Sandra Gardiner
		Sandra Gardiner
		Chief Financial Officer

Exhibit 99.1

FOR FURTHER INFORMATION CONTACT:
Deborah S. Lorenz Vice President, Investor Relations and Corporate Communications Lipid Sciences, Inc. 925-249-4031 dlorenz@lipidsciences.com	Wolfe Axelrod Weinberger Associates, LLC Donald C. Weinberger don@wolfeaxelrod.com Media: Alisa Steinberg alisa@wolfeaxelrod.com 212-370-4500

FOR IMMEDIATE RELEASE:
August 17, 2006

LIPID SCIENCES, INC. IN COMPLIANCE WITH NASDAQ GLOBAL MARKET LISTING REQUIREMENTS

PLEASANTON, Calif., August 17, 2006 — Lipid Sciences, Inc. (Nasdaq:LIPD) announced today that on August 14, 2006, the Company was advised by the Nasdaq Listing Qualifications Staff that based on the Company’s June 30, 2006 balance sheet contained in its quarterly report on Form 10-Q, filed on August 9, 2006, the Company did not comply with the minimum $10,000,000 stockholders’ equity requirement for continued listing on The Nasdaq Global Market set forth in Nasdaq Marketplace Rule
4450(a)(3). The Company reported stockholders’ equity of $8,412,000 as of June 30, 2006.

The Company has notified Nasdaq that as a result of the closing of its $6.3 million private placement of common stock and warrants on August 8, 2006, it currently meets the stockholders’ equity threshold and is in compliance with The Nasdaq Global Marketing listing requirements.

As with all companies listed on Nasdaq, the exchange will continue to monitor Lipid Sciences’ ongoing compliance with the stockholders’ equity requirement for continued listing on The Nasdaq Global Market.

Lipid Sciences, Inc. is a development-stage biotechnology company engaged in the research and development of products and processes intended to treat major medical indications, in which lipids, or fat components, play a key role. The Company’s HDL Therapy platform (HDL Selective Delipidation and HDL mimetic peptides) is aimed at developing treatments for the reversal of atherosclerosis, a systemic disease of the blood vessels caused by the build-up of cholesterol-filled plaques in the vascular system and, most critically, in the coronary arteries. Regression of such plaques may have a major impact on reducing the risk of acute coronary events. The Company’s Viral Immunotherapy platform is focused on the removal of the lipid coatings from lipid-enveloped viruses and other lipid-containing infectious agents by application of Lipid Sciences’ proprietary delipidation technology. The Company believes that removing the virus’ protective lipid coating enhances the processing and presentation of viral proteins to stimulate the body’s immune system to effectively fight the disease. Conditions that could potentially be impacted by this technology include HIV, Hepatitis B and Hepatitis C, West Nile, SARS and influenza.

This release should be read in conjunction with the consolidated financial statements and notes thereto included in our most recent reports on Form 10-K and Form 10-Q. Copies are available through the SEC’s Electronic Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov. Lipid Sciences assumes no obligation to update the forward-looking statements included in this document.

Press releases for Lipid Sciences, Inc. are available on our website: www.lipidsciences.com. If you would like to receive our press releases via email, please contact: info@lipidsciences.com.