Dow Jones 10444.73 -28.11 2:00 pm PST, April 26, 2004  NASDAQ 2036.77 -13.00 For info, visit access.smallcapnetwork.com S & P 500 1135.53 -5.07 To be removed, please click here Russell 2000 589.45 -1.26 VOLUME 04: ISSUE 30  Trading Alert: Isonics - Better, faster through Nanotech. In our continuing quest to bring the SmallCap readership the most unique companies with extremely compelling--and, we believe, profitable-- stories, we are pleased to introduce you to Colorado-based Isonics Corp (NASDAQ: ISON).  The company has a technology portfolio based on nanotech processes or as enablers for the manufacture of nanotech devices. Isonics constitutes two divisions--Semiconductors and Life Sciences--and has released its strategic plan for 2005 (release below). As you will no doubt recall, we profiled nanotech concern Biophan (OTCBB: BIPH) last December at 35 cents. The shares moved with all haste to a high of $1.65 by mid-January.  In keeping with the theme of nanotechnologies, we believe that accumulation of Isonics shares at current levels will prove to be a prescient investment for risk-oriented investors over the next 6-12 months.  The shares of Isonics have retraced 50 percent of a price run to $2 earlier this month. Entry at this level looks to have good risk/reward parameters over the short to medium term. While there is good support at $1, traders would be prudent to put in a stop loss order at 94-95 cents. Salient points for investors: 13.75 million shares outstanding. Float 10.2 million Market cap $18.75 million  FY 2003 revenue $9 million (FY 2002 revenues $8.15 million) Trailing 12 month (ttm) revenues as at Jan 31 2004 --$8.8 million Price to sales ratio 2:1 (ttm) Negligible debt. $1.43 million in cash (as at most recent quarter) Incredibly deep management expertise Plans to triple Life Sciences segment revenues within three years beginning in FY2005 Implementing strategies to improve the efficiency --and profitability--of its semiconductor thermal conductor, silicon-28. Recent acquisition of ISO-qualified wafer manufacturer, tester and recycler EnCompass Materials Group provides Isonics with large order capability for silicon on insulator wafers (SOI) to drive company toward profitability in FY 2005 Plans to actualize neutron-based detection (explosive, chemical, biological weapons) technology for the Homeland Security sector in FY 2005. Semiconductors are us. Isonics is a world leader in isotopically engineered semiconductor materials. The company intends to focus and significantly invest in SOI applications including pure silicon-28 epitaxil wafers. Silicon-28 has superior thermal conductivity properties to current materials while being virtually identical to naturally occurring silicon as a semiconductor constituent. Translation: What that means is that as the heat requirements for semiconductors continues to increase, so does the need for materials that can efficiently handle those heats. Silicon-28 will conduct that increased heat better than existing natural mediums. Clear?  In essence, Isonics has developed the technology that makes chips faster, cheaper, and significantly more heat resistant. The time for Semi's? As one can see from the Philadelphia Semiconductor Index (SOX), semiconductors have been less than appealing in the recent past. We believe that trend is changing.  Since September of 2002, when the index approached 200, the subsequent reversal has seen it more than double to a current level of 477. We believe that the upside tide will continue and should well lift all semiconductor 'boats'. There is little doubt that as the economy rallies the semiconductor sector will continue to improve.  Specialized, state of the art semiconductor products from the likes of Isonics will likely drive that recovery. Isonics doesn't want to follow the market; it intends to lead through research and development. Life Sciences are us, as well.... Isonics also markets and sells stable and radio isotopes for the health care industry through long-standing relationships with global producers. The company has stated that it intends to reposition itself by diversifying supply of isotopes and add value to its products. While already a stable and profitable business, Isonics believes that this initiative will triple its Life Science revenues within three years. While this may seem like rocket science to the uninitiated, it is. And, it isn't. Both divisions work in established and significantly growing markets, producing and developing next generation applications through advances in nanotechnology. Quality management. As compelling as the products and business plan are, the superior quality of the management team requires comment. Full bios, as well as other information can be viewed at www.isonics.com. Suffice it to say, senior management, including President, Chairman, CEO and co-founder James Alexander come with first class credentials, including significant senior management positions at the likes of General Electric, where Mr. Alexander spent 21 years. At his departure, he held the position of Manager of Technology Programs. The balance of the management team has equally impressive credentials. Looking forward is the actualization of the company's neutron detection technology. Acquired in December 2002, this isotope based technology detects explosives, chemical and biological weapons. The company intends to develop and realize the value in this technology during FY 2005. The timing feels right. Isonics appears positioned to successfully execute its business plan in FY2005 for the benefit of the company and its shareholders. The technologies are currently beyond cutting edge with the stated plan of developing even more exciting applications.  Shareholders who see the value of the company's approach will undoubtedly be interested in accumulating the shares to participate both in the technology development as well as the significant market growth--and subsequent revenues-- that we believe is at hand for Isonics.     Press release Isonics Corporation Announces Strategic Initiatives for Fiscal Year 2005 Monday April 26, 4:01 pm ET GOLDEN, Colo.--(BUSINESS WIRE)--April 26, 2004--Isonics Corporation (NASDAQ: ISON - News), a leader in the development of isotopically engineered semiconductor materials, a supplier of silicon-on-insulator (SOI) wafers and isotopes for life sciences and health care applications, announced today its Strategic Initiatives for its 2005 fiscal year. The announcement was made by James E. Alexander, chairman, president and CEO of Isonics. Mr. Alexander stated, "With our year-end coming to a close on April 30, and Isonics' strategic plan successfully being executed, we are enthusiastically announcing our strategic initiatives - which outline what we believe to be a compelling vision for the future of the company - for the upcoming 2005 fiscal year." During FY 2004 we successfully:     * Solidified our life sciences segment by signing long-term supply agreements with existing and new customers for oxygen-18 and extending the joint production agreement with our Russian supplier, Global Scientific Technologies.     * Further developed our silicon-on-insulator (SOI) wafer manufacturing processes and signed a letter-of-intent to acquire the silicon wafer manufacturing business and related assets from EnCompass Materials Group Ltd. (EMG) of Vancouver, Washington, where (if we complete the acquisition) we plan to implement that SOI technology in high-volume manufacturing.     * Made significant advances with high thermal conductivity silicon-28 in customer evaluations, one of which may lead to our first commercial win     * Received a U.S. patent for isotopically engineered wafers, "Semiconductor Wafers with Integrated Heat Spreading Layer"     * Solidified our position in the homeland security market through the Company's subsidiary IUT Detection Technologies and its advanced neutron-based technology for detection of explosives and chemical/biological agents     * Raised over $5.5 million in equity financing which has positioned the Company for boldly executing our strategic initiatives  Strategic Initiative 1 - Commitment to Grow the Life Sciences Segment Our Life Sciences segment, which serves the healthcare industry by providing products for the imaging and treatment of cancer, is a solid business. Our leading product is Oxygen-18 ,which is the essential raw material that supports the fast growing positron emission tomography (PET) imaging technology. This business, while solid, has shown growth only commensurate with the industry. In fiscal 2005, we will begin executing plans that, we believe, will triple segment revenues within three years while generating improved gross margins. We will do this by executing plans to broaden our product offerings and by vertically integrating, either forward or backward or both, to add value to our products and better serve our customers. Related to this will be the diversification of isotope supply, which now is exclusively from the former Soviet Union, but will be expanded to European and North American sources as well. However, we will continue to seek those new isotope products from Russia that also complement the objectives of this strategic initiative. Strategic Initiative 2 - Invest in Silicon-28 Commercialization Isotopically-pure silicon-28 has superior thermal properties compared to normal silicon. As heat is becoming an ever-increasing problem to chip designers, silicon-28 is attracting more and more interest. Customers are beginning to see meaningful temperature benefits in actual products made from Isonics' supplied silicon-28 epitaxial wafers. It appears that the more silicon-28 built into a wafer, the larger the thermal benefit obtained. Isonics believes that silicon-28 wafer can be sold at a substantial premium to the price of a normal silicon wafer silicon-28 and still be a commercial success. However, pricing will dictate the amount of market that we may penetrate. Therefore, Isonics will institute a silicon-28 cost reduction strategic initiative. We will invest in commercializing a promising new isotope enrichment technology as well as improving the economics of the mature gas centrifuge technology, which presently provides our silicon-28. We will also look at ways to improve the efficiency of deposition of epitaxial silicon-28. Doubling the efficiency from the industry typical 10% to 20% by process and equipment innovations would reduce our cost by 50%. To the extent we are successful in reducing costs, our market penetration and profitability will be greatly influenced. Strategic Initiative 3 - Silicon-on-Insulator Wafer Manufacturing Isonics' leadership position in its market segments is not only dependent upon superior materials, but the processes used to manufacture products, particularly in the price-sensitive semiconductor market. Last month, we announced that we signed a letter of intent to acquire the silicon wafer manufacturing business and related assets from EnCompass Materials Group Ltd. (EMG) of Vancouver, Washington. EMG manufactures silicon test wafers and provides wafer re-cycling services for leading semiconductor manufacturers. We want to acquire this company to exploit its people and manufacturing systems to produce higher margin SOI wafers using Isonics' developed intellectual property, such as our Sigma I process that is capable of transferring silicon layers only tens' of nanometers in thickness. With this ISO-qualified manufacturing facility under our control, we can then confidently accept large commercial orders, which we now routinely decline. Growth of revenues in the segment will play a major role in driving the overall company toward profitability this fiscal year. Strategic Initiative 4 - Homeland Security - Neutron Detection Technology Isonics, through its IUT Detection Technologies subsidiary, has been quietly promoting its technology for neutron-based detection technology that we believe is useful for identification of explosive and chemical and biological agents. In fiscal 2005 we are committed to actualizing the value of this technology to our shareholders. We are pursuing strategic relationships from leading industry participants, as well as direct financial investments into the subsidiary. No specific plan has been established at this time, but management is dedicated in fiscal 2005 to completing one or more transactions that will provide the financial and personnel resources necessary to bring this technology to the commercial level. Summary Isonics is a diverse technology company, with burgeoning opportunities in semiconductors, pharmaceuticals, and homeland security. Much of our technology portfolio is based on nanotechnology processes or are enablers for the manufacture of nanotechnology devices. Our motto -- "building businesses one atom at a time" -- is reflective of this. Mr. Alexander continued: "We are extraordinarily enthusiastic about our early successes and the numerous milestones we have achieved to date. Most importantly, Isonics looks forward to substantial growth in revenues, earnings and, ultimately, in shareholder value." About Isonics Corporation Isonics Corporation is divided into two segments: (1) Isonics Semiconductor and (2) Isonics Life Sciences. Isonics is a world leader in isotopically engineered materials and through its semiconductor division produces isotopically pure silicon-28 chemicals and wafers for the semiconductor industry. Through advances in nanotechnology, the Company is also focused on research and development opportunities for further, value-added product and application development. Isonics' Life Sciences division markets and sells stable isotopes for the health care industry such as carbon-13 for diagnostic breath tests and drug design, and radioisotopes and stable isotopes, such as oxygen-18 for positron emission tomography (PET) imaging. 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 http://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 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, 2003, and its quarterly report on Form 10-QSB for the nine months ended January 31, 2004, both as filed with the Securities and Exchange Commission, which include the Company's 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 the Company's filings with the Securities and Exchange Commission. Contact: Isonics Corporation James Alexander, 303-279-7900 or Investor Relations: Trilogy Capital Partners, Inc. 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