ISONICS CORPORATION (NASDAQ: ISON)

URGENT UPDATE: ISONICS BREAKING NEWS!!!

Late last night as the market headed toward a day of mourning in honor of President Ronald Reagan, Isonics Corporation (NASDAQ: ISON) very quietly released one of the most significant news items in its corporate history.

Investors would be wise to take the long weekend to review this news and our May 27th profile (Click Here) on Isonics, a dynamic company already using nanotechnology and manufacturing in critical arenas such as life science applications, semi-conductor and even homeland security.  Last night's news expands its reach to the lucrative advanced silicon wafer industry and provides a platform from which the company can expedite its profitability goal to within a 12 month timeframe.  Read on ...
 

ISONICS CORP.  ***Breaking News ***

Press Release
Source: Isonics Corporation
Thursday June 10, 10:23 pm ET 

GOLDEN, Colo.--(BUSINESS WIRE)--June 10, 2004--Isonics Corporation (Nasdaq:ISON- News), a worldwide leader in the development of isotopically engineered semiconductor materials, and a supplier of silicon-on-insulator (SOI) wafers to the semiconductor industry and isotopes for life sciences and health care applications, announced today that the Company has completed the acquisition of the silicon wafer manufacturing and recycling business and related assets from EnCompass Materials Group Ltd. (EMG) of Vancouver, Washington. The transaction will be effective immediately before midnight on Friday, June 11. 

"This transaction is a major inflection point in Isonics' semiconductor business and Isonics overall," commented James Alexander, chairman and CEO of Isonics. "It will serve as the foundation for building a sizeable and profitable advanced silicon wafer business." 

"We believe that EMG is an excellent platform for launching the production phase of our SOI wafer business," commented Dr. Hans Walitzki, Isonics' vice president of advanced wafer technology. "We have developed a plan to combine our SOI operations with the test wafer business that we have acquired. This plan calls for reaching cash break-even quickly by focusing on growing revenue in market segments that EMG had chosen not to participate in, and by accessing cost savings through productivity improvements in wafer polishing based on know-how we can borrow from our SOI manufacturing processes. With our substantially reinforced sales and marketing team, we can now aggressively seek and accept large volume SOI orders.  With only modest increases in SOI revenue, the combined businesses should turn profitable within 12 months." 

"The timing of this acquisition is excellent," Mr. Alexander continued. "Based on our conversations with our customers and independent market reports from Gartner Dataquest, the silicon wafer market is strong and is projected to strengthen. We are encouraged by the demand in the SOI wafer segment in particular. We now have the facilities and people to really take advantage of this pregnant market opportunity." 

About The Transaction
The transaction is structured as an asset purchase acquisition with consideration consisting of 731,930 shares of Isonics common stock, a $1.7 million note and the assumption of up to $800,000 in liabilities. 

-more-

To read the entire news release Click Here.

Investor Relations:
Trilogy Capital Partners, Inc.
Randall Lewis - 800-342-1467
randy@trilogy-capital.com
 

About Isonics

Isonics develops, commercializes, and markets stable and radioisotope-based products. These ultra-pure materials provide enhanced performance properties. In December 2002, Isonics acquired nuetron-based trace detection technology that can be used to detect explosives and chemical and biological weapons and this entry into the Homeland Security market has been a strong catalyst for the Company's revenues. 

Isonics is a recognized leader in the development of isotopically engineered semiconductor materials, and a supplier of silicon-on-insulator (SOI) wafers and isotopes for life sciences and health care applications. Isonics operates two business segments: Life Sciences and Semiconductor Materials. 

The life sciences segment sells stable and radioisotopes in elemental and simple compound forms for use in life sciences applications. Most of Isonics radioisotopes are man-made and the Company also buys these isotopes on the open market and resells them in the form of common chemical compounds.  The semiconductor materials and products segment sells silicon-on-insulator wafers and is involved in several research and development projects. 

KEY INVESTMENT HIGHLIGHTS • Strong senior management team from GE • Key patents and intellectual property • Loyal customer base with secure long-term contracts in place • $9.1M in sales in fiscal 2003 and growing • Rapidly growing semiconductor segment • Large upside semiconductor segment • Profitable and growing life sciences division

BUSINESS STRATEGY • Grow the Life Sciences segment by strategically re-positioning  aIsonics as a premier radio-pharmaceutical manufacturer • Further invest in Silicon-28 commercialization • Focus on SOI wafer manufacturing processes • Commit to actualize the value of its neutron detection technology  ain FY 2005

INDUSTRY DRIVERS • Need for faster, more energy efficient chips driving  asemiconductor industry to new technologies • Advances in nanotechnology shortening R&D cycles • SOI Wafer market expected to grow to $1.4 billion by 2007,  arepresenting a 10.5% CAGR. • $1.2 billion market for isotopically engineered radio-chemicals  aand radio-pharmaceuticals driven in part by growth in PET imaging  aand positive changes in medical reimbursements

Financial Highlights For Isonics

CONTACT

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