Isilon Not in Compliance With NASDAQ Requirements

On November 21, 2007, Isilon Systems received a Nasdaq Staff Determination letter, indicating that the company is not in compliance with the Nasdaq continued listing requirements set forth in Marketplace Rule 4310(c) (14). The Determination letter relates to the delayed filing of the company’s Form 10-Q for the third quarter of 2007 ended September 30, 2007 ("Third Quarter Form 10-Q"). Isilon plans to request a hearing before the Nasdaq Listing Qualifications Panel. Pending a decision by the Panel, Isilon shares will remain listed on the Nasdaq Global Market. However, there can be no assurance that the Panel will grant the company’s request for continued listing.

As indicated in its Current Report on Form 8-K filed on November 8, 2007, the company’s Audit Committee is conducting an independent review of certain sales to resellers and other customers to determine whether commitments were made that have an impact on the timing and treatment of revenue recognition and whether the company’s internal controls relating to revenue recognition were sufficient. Until the Audit Committee’s independent review is completed, the company will not report its financial results or file the Third Quarter Form 10-Q. Due to the pending independent review, the company was unable to file the Third Quarter Form 10-Q on or before the prescribed due date of November 14, 2007. The company intends to file the Third Quarter Form 10-Q as soon as practicable following the completion of the Audit Committee’s review.