01.04.2005 22:02:00

Isonics Executes Letter of Intent to Acquire NeutroTest Technology Dev

Isonics Executes Letter of Intent to Acquire NeutroTest Technology Development Partner IUT-Berlin; Acquisition Expected to Expand Pipeline of Isonics Homeland Security Products and Proprietary Technology


    Business Editors/High-Tech Writers/Government Writers

    GOLDEN, Colo.--(BUSINESS WIRE)--April 1, 2005--Isonics Corporation (NASDAQ:ISON), committed to the development of next-generation technology for the homeland security market, has announced the execution of a letter of intent to acquire its longtime technology partner IUT-Berlin. Isonics Chairman and CEO James Alexander made the announcement.
    IUT-Berlin is Isonics' development partner for NeutroTest(TM), the next-generation neutron-based explosive scanning and detection device that Isonics is developing for commercial sales. IUT has also developed a number of other products and technologies that will enrich Isonics' life sciences and homeland security divisions, and expand the Company's pipeline of proprietary technologies and products. Isonics had owned 6% of the Germany-based advanced technology company since 1998. Under the terms of the Letter of Intent and subject to a definitive agreement and normal closing conditions, Isonics will increase its ownership to 100%. Isonics will pay approximately $1.4 million in a combination of cash and common stock.
    "We expect that the acquisition of IUT-Berlin will provide Isonics several benefits. We expect to obtain incremental revenue and margin for our life sciences segment by virtue of IUT-Berlin's isotope product sales. With control of IUT-Berlin, we expect to be able to better expedite NeutroTest commercialization and other related products in that pipeline," said Mr. Alexander. "Additionally if the acquisition is completed, we will obtain ownership of IUT's ion mobility spectroscopy (IMS) technology and product line. IMS is a 'sniffer' technology that has proven capability to identify explosives as well as chemical and biological agents. IUT-Berlin has developed a series of products incorporating the IMS technology. We are excited about the additional revenue potential that we expect this to provide when we begin marketing it as stand-alone products and in combination with other Isonics technologies for homeland security."
    IUT-Berlin, (Institut fur Umwelttechnologien in German or The Institute for Environmental Technologies in English), was founded in 1992, and possesses extensive experience in isotope technologies, sensor development, plasma technology, radiation measurement, and analytical chemistry. Among its products are Ion Mobility Spectrometers that measure airborne impurities and contaminants, highly sensitive Total Reflection X-ray Spectrometers, and advanced long-distance metal detectors for preparation of building sites and detection of explosive mines. IUT's laboratories have been proven to meet Germany's highest standards of scientific accuracy and quality.
    The acquisition of IUT-Berlin is one of Isonics' early significant steps to expand its homeland security division since the recent completion of a $22 million financing designed to increase the Company's revenue and growth. In February, Isonics completed the $22 million convertible debt financing, allocating at least 50% of the net proceeds to accelerate revenue growth in its homeland security division through acquisitions of profitable (or potentially profitable) and/or cash-flow positive companies. Isonics is also completing its due diligence in the acquisition of New York-based Protection Plus Security Consultants, an international homeland security firm with an estimated $12 million in unaudited annual revenues.

    About Isonics Corporation

    Isonics Corporation has three business divisions: (1) Isonics Semiconductor, (2) Isonics Life Sciences, and (3) Isonics Homeland Security and Defense. 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. Isonics' Life Sciences division markets and sells isotopes to the health care industry for the imaging and treatment of cancer. Stable isotopes can be thought of as ultra pure materials. This high degree of purification provides enhanced properties as compared to natural materials. Our efforts in the Homeland Security segment are nascent at the present time as we proceed to develop further our neutron-based detection technologies. Additional information may be obtained at the Company's Web site at http://www.isonics.com. For more investor-specific information, including daily and historical Company stock quote data and recent news releases, please visit http://www.trilogy-capital.com/tcp/isonics. To read or download the Company's Investor Fact Sheet visit http://www.trilogy-capital.com/tcp/isonics/factsheet.html. A presentation about Isonics' NeutroTest(TM) explosive detection prototype can be found at http://www.trilogy-capital.com/tcp/isonics/presentation.html. A video demonstrating the functioning NeutroTest prototype can be viewed at http://www.trilogy-capital.com/tcp/isonics/video.html.

    Cautionary Statement

    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, 2004, and its quarterly report on Form 10-QSB for the nine months ended January 31, 2005, both as 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 the Company's filings with the Securities and Exchange Commission. Isonics cautions investors that there are currently no commercial NeutroTest products, and no guarantee there will be. Isonics has made no NeutroTest sales and no government agency or other person has expressed an interest in purchasing NeutroTest. There can be no assurance that Isonics will be able to manufacture the NeutroTest for the market at a cost and with capabilities that meet the needs of prospective customers.
    This announcement may contain forward-looking statements made by senior management of Isonics that involve risks and uncertainties, such as statements about plans, objectives, expectations, assumptions or future events. These statements involve estimates, assumptions, known and unknown risks, uncertainties and performances, or achievements expressed or implied by the forward-looking statements. Actual future results and trends may differ materially from those made in -- or suggested by -- statements made in this announcement due to a variety of factors. Consequently, you should not place undue reliance on any forward-looking statements made in this announcement. For more information about Isonics and risks arising from investing in Isonics, you are directed to the Company's most recent Form 10-KSB filed with the Securities and Exchange Commission.

--30--MS/la*

CONTACT: Isonics Corporation Boris Rubizhevsky, 303-279-7900 or Investor Relations: Trilogy Capital Partners, Inc. Paul Karon, 800-592-6067 paul@trilogy-capital.com

KEYWORD: COLORADO GERMANY INTERNATIONAL EUROPE INDUSTRY KEYWORD: CHEMICALS/PLASTICS ADVERTISING/MARKETING GOVERNMENT MERGERS/ACQ SOURCE: Isonics Corporation

Copyright Business Wire 2005

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