<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20569

                                    FORM 10-Q

/X/ Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the Quarterly Period Ended SEPTEMBER 30, 2001

Or

/ / Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

For the transition period from _______________ to ___________________

                                                 Commission file number 0-23150

                           IBIS TECHNOLOGY CORPORATION
-------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                 <C>
         MASSACHUSETTS                                     04-2987600
---------------------------                         ---------------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                         Identification No.)
</TABLE>

                     32 CHERRY HILL DRIVE, DANVERS, MA 01923
-------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (978) 777-4247
-------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes /X/         No / /

         8,390,728 shares of Common Stock, par value $.008, were outstanding on
November 6, 2001.

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                      INDEX

<TABLE>
<CAPTION>
PART 1 - FINANCIAL  INFORMATION                                                                       PAGE
                                                                                                     NUMBER
<S>                                                                                                  <C>
  Item 1 - Financial Statements:

    Balance Sheets
        December 31, 2000 and September 30, 2001 (unaudited)........................................    3

    Statements of Operations
        Three Months Ended September 30, 2000 and 2001 and Nine Months Ended
         September 30, 2000 and 2001 (unaudited)....................................................    4

    Statements of Cash Flows
       Nine Months Ended September 30, 2000 and 2001 (unaudited)....................................    5

    Notes to Unaudited Interim Financial Statements.................................................    6

  Item 2 - Management's Discussion and Analysis of Financial
        Condition and Results of Operations.........................................................   11

  Item 3 - Quantitative and Qualitative Disclosure About Market Risk................................   17

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings..........................................................................   18

Item 2 - Changes in Securities......................................................................   18

Item 3 - Defaults upon Senior Securities............................................................   18

Item 4 - Submission of Matters to a Vote of Security Holders........................................   18

Item 5 - Other Information..........................................................................   18

Item 6 - Exhibits and Reports on Form 8-K...........................................................   18

Signatures..........................................................................................   19
</TABLE>

                                       2

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                DECEMBER 31,         SEPTEMBER 30,
                                                                                                   2000                 2001
                                                                                          --------------------    -----------------
                                                                                                                     (UNAUDITED)
<S>                                                                                       <C>                     <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents .......................................................           $ 26,366,299            $ 15,895,314
   Accounts receivable, trade, net .................................................              1,209,916                 804,685
   Unbilled revenue ................................................................                510,500                 128,348
   Inventories (note 3) ............................................................             10,932,859               1,577,586
   Prepaid expenses and other current assets .......................................                326,103                 221,264
                                                                                               ------------            ------------
         Total current assets ......................................................             39,345,677              18,627,197
                                                                                               ------------            ------------
Property and equipment .............................................................             25,416,692              43,771,788
   Less:  Accumulated depreciation and amortization ................................            (10,875,048)            (12,796,603)
                                                                                               ------------            ------------
         Net property and equipment ................................................             14,541,644              30,975,185
Patents and other assets, net ......................................................              2,411,203               2,205,924
                                                                                               ------------            ------------
         Total assets ..............................................................           $ 56,298,524            $ 51,808,306
                                                                                               ============            ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Capital lease obligation, current (note 4) ......................................           $     11,593            $    821,436
   Accounts payable ................................................................              1,046,960               2,714,589
   Accrued liabilities .............................................................              2,718,240               1,558,426
   Deferred revenue ................................................................              2,984,094               1,505,834
                                                                                               ------------            ------------
         Total current liabilities .................................................              6,760,887               6,600,285
   Capital lease obligation, noncurrent (note 4) ...................................                 18,479               1,634,266
   Deferred gain on capital lease (note 4) .........................................                   --                    35,612
                                                                                               ------------            ------------
         Total liabilities .........................................................              6,779,366               8,270,163
                                                                                               ------------            ------------

STOCKHOLDERS' EQUITY:
   Undesignated preferred stock, $.01 par value
   Authorized 2,000,000 shares; none issued ........................................                   --                      --
   Common stock, $.008 par value.
   Authorized 50,000,000 shares; issued 8,342,709 shares and
       8,390,728 shares in 2000 and 2001, respectively .............................                 66,742                  67,126
   Additional paid-in capital ......................................................             66,183,143              66,440,936
   Accumulated deficit .............................................................            (16,730,727)            (22,969,919)
                                                                                               ------------            ------------
         Total stockholders' equity ................................................             49,519,158              43,538,143
                                                                                               ------------            ------------
         Total liabilities and stockholders' equity ................................           $ 56,298,524            $ 51,808,306
                                                                                               ============            ============
</TABLE>

        See accompanying notes to unaudited interim financial statements.

                                       3
<PAGE>


                           IBIS TECHNOLOGY CORPORATION

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED                 NINE MONTHS ENDED
                                                                    SEPTEMBER                       SEPTEMBER 30,
                                                                2000            2001             2000           2001
                                                           ------------    ----------------  ----------    -------------
<S>                                                        <C>             <C>             <C>             <C>
   NET SALES AND REVENUE:
     Product sales .....................................   $  2,066,965    $    925,550    $  5,152,330    $  4,160,495
     Contract and other revenue ........................         47,520         131,874         381,700         477,767
     Equipment revenue .................................        407,103         386,403       4,946,900       1,262,488
                                                           ------------    ------------    ------------    -------------
        Total net sales and revenue (note 2) ...........      2,521,588       1,443,827      10,480,930       5,900,750

   COST OF SALES AND REVENUE:
     Cost of product sales .............................      1,604,800       2,224,616       3,688,641       5,874,923
     Cost of contract and other revenue ................         57,870          90,269         278,310         351,642
     Cost of equipment revenue .........................        168,560         892,372       3,049,761       1,305,807
                                                           ------------    ------------    ------------    -------------
        Total cost of sales and revenue ................      1,831,230       3,207,257       7,016,712       7,532,372
                                                           ------------    ------------    ------------    -------------
        Gross profit (loss) ............................        690,358      (1,763,430)      3,464,218      (1,631,622)
                                                           ------------    ------------    ------------    -------------
   OPERATING EXPENSES:
     General and administrative ........................        427,639         518,414       1,501,841       1,650,970
     Marketing and selling .............................        400,117         379,842       1,255,649       1,400,752
     Research and development ..........................      1,129,771       1,311,172       3,352,624       3,716,428
                                                           ------------    ------------    ------------    -------------
        Total operating expenses .......................      1,957,527       2,209,428       6,110,114       6,768,150
                                                           ------------    ------------    ------------    -------------
        Loss from operations ...........................     (1,267,169)     (3,972,858)     (2,645,896)     (8,399,772)
                                                           ------------    ------------    ------------    -------------
   OTHER INCOME (EXPENSE):
     Interest income ...................................        470,028         150,550       1,467,432         738,900
     Interest expense ..................................           (901)           (624)         (9,196)         (2,087)
     Other income (note 2) .............................           --         1,417,452          (3,609)      1,425,023
                                                           ------------    ------------    ------------    -------------
        Total other income .............................        469,127       1,567,378       1,454,627       2,161,836
                                                           ------------    ------------    ------------    -------------
        Loss before income taxes .......................       (798,042)     (2,405,480)     (1,191,269)     (6,237,936)

   Income tax expense ..................................           --              --             1,256           1,256
                                                           ------------    ------------    ------------    -------------
        Net loss .......................................   $   (798,042)   $ (2,405,480)   $ (1,192,525)   $ (6,239,192)
                                                           ============    ============    ============    =============
   Net loss per common share:
    Basic ..............................................   $      (0.10)   $      (0.29)   $      (0.14)   $      (0.75)
                                                           ============    ============    ============    =============
    Diluted ............................................   $      (0.10)   $      (0.29)   $      (0.14)   $      (0.75)
                                                           ============    ============    ============    =============
   Weighted average number of common shares outstanding:
    Basic ..............................................      8,309,867       8,387,386       8,272,000       8,371,452
                                                           ============    ============    ============    =============
    Diluted ............................................      8,309,867       8,387,386       8,272,000       8,371,452
                                                           ============    ============    ============    =============
</TABLE>

        See accompanying notes to unaudited interim financial statements.

                                       4
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             NINE MONTHS ENDED
                                                                                                SEPTEMBER 30,
                                                                                         2000                  2001
                                                                                    ----------------       -------------
<S>                                                                                 <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss ...................................................................     $ (1,192,525)           $ (6,239,192)
   Adjustments to reconcile net loss to net cash used in
      operating activities:
     Depreciation and amortization ............................................        1,097,641               2,359,106
     (Loss) gain on sale of equipment .........................................           (3,609)                  7,571
     Changes in operating assets and liabilities:
         Accounts receivable, trade ...........................................         (117,801)                405,231
         Unbilled revenue .....................................................        1,349,928                 382,152
         Inventories ..........................................................       (6,547,330)             (2,797,585)
         Prepaid expenses and other current assets ............................          (42,565)                104,839
         Accounts payable .....................................................          915,599               1,667,629
         Accrued liabilities and deferred revenue .............................        1,344,086              (2,638,074)
                                                                                    ------------            ------------
         Net cash used in operating activities ................................       (3,196,576)             (6,748,323)
                                                                                    ------------            ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property and equipment, net ...................................       (6,038,813)             (6,398,061)
   Other assets ...............................................................           11,250                 (44,020)
                                                                                    ------------            ------------
         Net cash used in investing activities ................................       (6,027,563)             (6,442,081)
                                                                                    ------------            ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments of capital lease obligations ......................................           (7,070)                 (7,880)
   Proceeds from sale-leaseback of equipment ..................................             --                 2,469,122
   Exercise of stock options and warrants .....................................          631,966                 258,177
                                                                                    ------------            ------------
         Net cash provided by financing activities ............................          624,896               2,719,419
                                                                                    ------------            ------------
         Net decrease in cash and cash equivalents ............................       (8,599,243)            (10,470,985)
Cash and cash equivalents, beginning of period ................................       36,361,621              26,366,299
                                                                                    ------------            ------------
Cash and cash equivalents, end of period ......................................     $ 27,762,378            $ 15,895,314
                                                                                    ============            ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the period for interest ...................................     $      9,196            $      2,087
                                                                                    ============            ============
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
   Transfer of internally constructed equipment from inventory
    to property and equipment .................................................     $  4,450,393            $ 12,152,858
                                                                                    ============            ============
</TABLE>

        See accompanying notes to unaudited interim financial statements.

                                       5
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

(1) INTERIM FINANCIAL STATEMENTS

         The accompanying financial statements are unaudited, except for the
Balance Sheet as of December 31, 2000, and have been prepared by the Company in
accordance with accounting principles generally accepted in the United States of
America.

         In the opinion of management, the interim financial statements include
all adjustments which consist only of normal and recurring adjustments necessary
for a fair presentation of the Company's financial position and results of
operations. Results of operations for the interim periods are not necessarily
indicative of the results to be expected for the full year. These financial
statements should be read in conjunction with the financial statements of the
Company as of and for the year ended December 31, 2000 which are included in the
Company's Annual Report on Form 10-K.

(2) REVENUE RECOGNITION

         The Company recognizes revenue from product sales, equipment sales and
the sales of spare parts when all of the following criteria have been met: (1)
evidence exists that the customer is bound to the transaction; (2) the product
has been delivered to the customer; (3) the sales price to the customer has been
fixed or is determinable; and (4) collectibility of the sales price is
reasonably assured. Provisions for estimated sales returns and allowances are
made at the time the products are sold. Revenue derived from services is
recognized upon performance. Contract revenue is recognized on the
percentage-of-completion method. Provisions for anticipated losses are made in
the period in which such losses become determinable. Unbilled revenue under
customer contracts represents revenue earned under the percentage-of-completion
method but not yet billable under the terms of the contract. These amounts are
billable based on the terms of the contract, which can include shipment of the
product, achievement of milestones or completion of the contract.

         In the third quarter of 2001, the Company recognized a non-recurring
gain in other income of approximately $1.4 million which is the result of an
expired wafer production capacity option that was entered into in September
1995. Under this agreement, a customer advanced non-refundable cash to the
Company to ensure dedicated wafer production capacity over a five-year period.
As wafers were produced, amounts were recognized in revenue over this five-year
period, which ended December 2000. During the third quarter ended September 30,
2001, Ibis completed its negotiations with this customer and decided not to
extend the agreement further. Accordingly, the remaining amount deferred under
this agreement was recognized in income as no further obligations exist.

(3) INVENTORIES

         Inventories consist of the following:

<TABLE>
<CAPTION>
                                                                     DECEMBER 31,            SEPTEMBER 30,
                                                                         2000                    2001
                                                                  -----------------          ------------
                  <S>                                             <C>                        <C>
                  Raw materials ...............................      $   392,708                $   540,504
                  Work in process .............................          332,844                    289,571
                  Finished goods ..............................          218,210                    747,511
                                                                     -----------                -----------
                  Subtotal wafer inventory ....................          943,762                  1,577,586
                  Equipment inventory .........................        9,989,097                         --
                                                                     -----------                -----------
                      Total inventories .......................      $10,932,859                $ 1,577,586
                                                                     ===========                ===========
</TABLE>

                                       6
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

         Equipment inventory at December 31, 2000 included Ibis 1000 implanters
under construction for either resale or the Company's own use. In view of the
continued downturn in the semiconductor industry and the fact that an upturn
from the present economic and industry conditions and Ibis 1000 implanter sales
are not visible, the Company intends to use a majority of the implanters under
construction in its internal wafer production facility. Accordingly, the Company
transferred its equipment inventory to property and equipment as of June 30,
2001.

(4) LEASE COMMITMENTS

         In September 2001, the Company entered into an amendment of a
non-cancelable operating lease for its office and manufacturing facility. The
lease was modified to include expansion premises consisting of an additional
18,674 square feet of space. As of September 30, 2001, the aggregate commitment
for this additional space is approximately $748,000 over 44 months.

         In September 2001, the Company entered into a $4.5 million equipment
lease line, of which approximately $2.4 million was drawn down during the
quarter under a sale-leaseback transaction. The obligation under this capital
leaseback is secured by the underlying equipment and all other property and
equipment of Ibis, will be paid over 36 months and bears interest at
approximately 8%. The gain of approximately $36,000 under the sale and leaseback
has been deferred and will be amortized as a reduction of depreciation expense
over the life of the lease.

(5) STOCK OPTION PLANS

         On May 3, 2001, the stockholders of the Company approved an amendment
to the Company's 1997 Employee, Director and Consultant Stock Option Plan to
increase by 600,000 shares the aggregate number of shares of common stock for
which stock options may be granted under this plan.

(6) NET LOSS PER SHARE

         Net loss per share of common stock is computed based upon the weighted
average number of shares outstanding during each period and including the
dilutive effect, if any, of stock options and warrants. SFAS 128 requires the
presentation of basic and diluted earnings (loss) per share for all periods
presented. As the Company was in a net loss position for the three and nine
months ended September 30, 2000 and September 30, 2001, common stock equivalents
of 373,344, 455,671, 2,444 and 270,577, respectively, were excluded from the
diluted loss per share calculation, as they would be antidilutive. As a result,
diluted loss per share is the same as basic loss per share for all periods
presented.

(7) INDUSTRY SEGMENTS

         The Company's reportable segments are SIMOX Wafer Products, SIMOX
Equipment and Other Products or Services. For purposes of segment reporting,
equipment, equipment spares and field service revenue are combined and reported
as SIMOX Equipment. Government contracts, other services and license revenue are
combined and reported as Other Products or Services.

                                       7
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

         The table below provides unaudited information for the three and nine
months ended September 30, 2000 and 2001 pertaining to the Company's three
industry segments.

<TABLE>
<CAPTION>
                                                   SIMOX WAFER        SIMOX            OTHER PRODUCTS
                                                    PRODUCTS        EQUIPMENT            OR SERVICES          TOTAL
                                                   -----------      ---------          --------------         -----
<S>                                               <C>                <C>                <C>                <C>
NET SALES AND REVENUE
Three Months Ended September 30, 2000             $ 2,066,965         $ 407,103            $  47,520       $ 2,521,588
Three Months Ended September 30, 2001                 925,550           386,403              131,874         1,443,827
Nine Months Ended September 30, 2000                5,152,330         4,946,900              381,700        10,480,930
Nine Months Ended September 30, 2001                4,160,495         1,262,488              477,767         5,900,750

OPERATING INCOME (LOSS)
Three Months Ended September 30, 2000                  34,699          (863,878)             (10,352)         (839,531)
Three Months Ended September 30, 2001              (2,007,784)       (1,488,265)              41,605        (3,454,444)
Nine Months Ended September 30, 2000                  308,560        (1,556,006)             103,390        (1,144,056)
Nine Months Ended September 30, 2001               (3,797,057)       (3,077,870)             126,125        (6,748,802)

ASSETS
September 30, 2001                                 31,737,951         3,123,305              194,086        35,055,342

CAPITAL EXPENDITURES
Three Months Ended September 30, 2000               2,973,143           391,948                   --         3,365,091
Three Months Ended September 30, 2001               1,528,781           240,052                   --         1,768,833
Nine Months Ended September 30, 2000                4,972,470           800,552                   --         5,773,022
Nine Months Ended September 30, 2001                5,873,630           287,860                   --         6,161,490

DEPRECIATION AND AMORTIZATION OF PROPERTY AND
EQUIPMENT
Three Months Ended September 30, 2000                 348,900            21,585                  833           371,318
Three Months Ended September 30, 2001                 699,756           144,185                   --           843,941
Nine Months Ended September 30, 2000                  909,930           106,655                2,319         1,018,904
Nine Months Ended September 30, 2001                1,908,765           356,497                   --         2,265,262
</TABLE>

                                       8
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

         The table below provides the reconciliation of reportable segment
operating loss and assets to Ibis' totals.

<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                    NINE MONTHS ENDED
                                                                        SEPTEMBER 30,                        SEPTEMBER 30,
                                                                 -------------------------             -------------------------
SEGMENT RECONCILIATION                                            2000               2001                2000             2001
                                                                 ------             ------             -------          --------
<S>                                                         <C>                   <C>                <C>                <C>
Loss Before Income Taxes:
 Total operating loss for reportable segments                 $   (839,531)       $(3,454,444)       $(1,144,056)       $(6,748,802)
 Corporate general & administrative
 expenses                                                         (427,638)          (518,414)        (1,501,840)        (1,650,970)
 Net other income                                                  469,127          1,567,378          1,454,627          2,161,836
                                                              ------------        -----------        -----------        -----------
Loss before income taxes                                          (798,042)        (2,405,480)        (1,191,269)        (6,237,936)
                                                              ============        ===========        ===========        ===========
Capital Expenditures:
 Total capital expenditures for reportable
 segments                                                        3,365,091          1,768,833          5,773,022          6,161,490
 Corporate capital expenditures                                    119,256            105,285            265,791            236,571
                                                              ------------        -----------        -----------        -----------
Total capital expenditures                                       3,484,347          1,874,118          6,038,813          6,398,061
                                                              ============        ===========        ===========        ===========
Depreciation and Amortization:
 Total depreciation and amortization for
 reportable segments                                               371,318            843,941          1,018,904          2,265,262
 Corporate depreciation and amortization                            45,336             33,783             78,737             93,844
                                                              ------------        -----------        -----------        -----------
 Total depreciation and amortization                               416,654            877,724          1,097,641          2,359,106
                                                              ============        ===========        ===========        ===========

                                                                                                                     BALANCE AS OF
                                                                                                                        9/30/01
Assets:
 Total assets for reportable segments                                                                                    35,055,342
 Cash & cash equivalents not allocated to
   segments                                                                                                              15,895,314
 Other unallocated assets                                                                                                   857,650
                                                                                                                        -----------
 Total assets                                                                                                            51,808,306
                                                                                                                        ===========
</TABLE>

(8) NEW ACCOUNTING PRONOUNCEMENTS

         In June 1998, the Financial Accounting Standards Board issued SFAS 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133") that
establishes accounting and reporting requirements for derivative instruments and
for hedging activities. SFAS 133 requires companies to recognize all derivatives
as either assets or liabilities in the statement of financial position at fair
value. If certain conditions are met, a derivative may be specifically
designated as a hedge of the exposures to changes in fair value of recognized
assets or liabilities or unrecognized firm commitments, a hedge of the exposure
to variable cash flows of a forecasted transaction, or a hedge of the foreign
currency exposure of a net investment in a foreign operation, unrecognized firm
commitments, an available-for-sale security or a foreign-currency denominated
forecasted transaction. The accounting for changes in fair value under SFAS 133
depends on the intended use of the derivative and the resulting designation. In
June 1999, the FASB decided that the effective date for adopting the
requirements of

                                       9
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

SFAS 133 should be delayed to fiscal years beginning after June 15, 2000. This
delay, published as SFAS 137, applies to quarterly and annual financial
statements. In June 2000, the FASB issued SFAS 138, which addresses a limited
number of issues causing implementation difficulties for numerous entities that
apply SFAS 133. Ibis adopted the provisions of SFAS 133 as amended, on January
1, 2001. The adoption of these provisions had no impact on the Company's
financial condition or results of operations.

         Statement of Financial Accounting Standards No. 143, "Accounting For
Asset Retirement Obligations", ("SFAS 143"), issued in August 2001, addresses
financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets and for the associated retirement
costs. SFAS 143 which applies to all entities that have a legal obligation
associated with the retirement of a tangible long-lived asset is effective for
fiscal years beginning after June 15, 2001. The Company does not expect the
implementation of SFAS 143 to have a material impact on its financial condition
or results of operations.

         Statement of Financial Accounting Standards No. 144, "Accounting for
the Impairment or Disposal of Long-Lived Assets", ("SFAS 144"), issued in
October 2001, addresses financial accounting and reporting for the impairment or
disposal of long-lived assets. SFAS 144, which applies to all entities, is
effective for fiscal years beginning after December 15, 2001. The Company does
not expect the implementation of SFAS 144 to have a material impact on its
financial condition or results of operations.



                                       10
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

         Ibis Technology Corporation ("Ibis") was formed in October 1987 and
commenced operations in January 1988. Ibis' initial activities consisted of
producing and selling SIMOX-SOI wafers and conducting research and development
activities. This research led to the development of proprietary next generation
oxygen implanters, the Ibis 1000 and Ibis 2000, and to other proprietary process
technology.

         Initially, much of our revenue was derived from research and
development contracts and sales of wafers for military applications. Over the
years, there was a shift in revenue to sales of SIMOX-SOI wafers for commercial
applications and the nature of our business has evolved through stages where
sometimes our revenues primarily resulted from selling wafers for evaluation
purposes, and sometimes our revenue was generated primarily from equipment
sales. This is a normal path to follow while developing and promoting a
fundamental new technology, especially when it relates to the semiconductor
industry embracing any change that affects fabrication operations. We believe
that we are in the technology rollout stage of our corporate life cycle. Our
fundamental SIMOX-SOI technology has been developed, refined and proven over the
last dozen years. Ibis is at a point of introducing the next generation
production-worthy SIMOX-SOI, which includes both the recently licensed modified
low dose ("MLD") wafer process and the Ibis 2000 which will be capable of
producing eight and twelve inch (or 200 and 300mm) SIMOX-SOI wafers. The first
Ibis 2000 is anticipated to be complete by the end of the year. We believe we
are now at a stage where customers are actively and seriously taking steps
toward adopting our SIMOX-SOI technology in their mainstream manufacturing
processes.

         Looking at it from our customer's perspective, the pathway to SOI
adoption is complex and time consuming. Typically, a customer will go through
three major stages:

         o Sampling, where preliminary performance characteristics are explored
           and verified;

         o R&D, where specific customer specifications are tested and developed;
           and

         o Production, where yield and cost benefits are optimized.

         There are many steps within each of these stages, and customers must
evaluate each new wafer technology that essentially lays a new foundation for
substantially all other processes they have spent billions of dollars and
decades of time developing. Accordingly, it takes anywhere from 12 to 36 months
for a customer to proceed from initial sampling through R&D to initial
production, which is not unlike the standard process for qualifying any new
wafer material. These steps apply each time there is a change in the customer's
fabrication process, such as a feature-size change or new material. Ibis has a
number of customers going through this process right now. We have several
customers in the sampling and R&D stages and four customers are already in the
production stage.

         Since most of our customers have purchased wafers for the purpose of
characterizing and evaluating the wafers, developing prototype products or for
pilot production, historical sales are not necessarily indicative of future
operations because such sales would not be considered of a recurring nature.

         Ibis has experienced quarterly and annual fluctuations in revenue and
results of operations due to the timing of receipt of equipment orders and
dependence on a limited number of customers. We may continue to experience
fluctuations in revenue and results of operations due to equipment sales and
shifts in customer demands during the various stages of the SIMOX-SOI adoption
cycle.

                                       11
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

         During the third quarter of 2001, three to four of our Ibis 1000 oxygen
implanters were used by Ibis to generate SIMOX-SOI wafer sales and four to five
implanters were used for non-revenue generating activities, such as research and
development. Ibis currently has eleven Ibis 1000 oxygen implanters, including
two owned by a customer which reside at Ibis pursuant to terms of a consignment
agreement.

         On April 12, 2001, Ibis announced in a press release that one of our
largest customers, an optical components manufacturer, had informed us that it
expected to order substantially reduced quantities of wafers for the remainder
of 2001. As a result, second and third quarter results were adversely affected
and we expect the remaining quarter to be affected as well.

         Another major factor affecting our revenue and results is that Ibis is
in the midst of a major SIMOX technology transition where customers are focusing
their activities on sampling or qualifying our new Advantox MLD wafers and
anticipating the availability of the Ibis 2000 implanter. In addition, we
believe the semiconductor industry downturn is slowing the Advantox MLD
qualification process because in some cases our customers' resources are being
limited. In view of the continued downturn in the semiconductor industry and the
fact that an upturn from the present economic and industry conditions is not
visible, Ibis intends to use a majority of the implanters under construction for
internal wafer production. Accordingly, we transferred our equipment inventory
to property and equipment as of June 30, 2001 and are evaluating projected
demand versus capacity for potential impairment in future quarters. In the third
quarter of 2001, spare parts from this equipment inventory have been segregated
and amortization of these parts has commenced using the straight line method
over an eight year period.

RESULTS OF OPERATIONS

THIRD QUARTER ENDED SEPTEMBER 30, 2001 COMPARED TO THIRD QUARTER ENDED SEPTEMBER
30, 2000

         PRODUCT SALES. Wafer product sales decreased $1,141,415 or 55%, to
$925,550 for the third quarter ended September 30, 2001 from $2,066,965 for the
third quarter ended September 30, 2000. This decrease in product sales is
attributable to decreased wafer sales by Ibis in Europe as one of our largest
wafer production customers in the optical components arena substantially reduced
their requirements this year. Sales by Ibis in the United States and Pacific Rim
increased this quarter and approximately half of these sales represented wafers
shipped to customers in the sampling and R&D stages.

         CONTRACT AND OTHER REVENUE. Contract and other revenue includes revenue
derived from government contracts, license agreements, characterization and
other services. Contract and other revenue increased for the third quarter ended
September 30, 2001 to $131,874 from $47,520 for the third quarter ended
September 30, 2000, an increase of $84,354 or 178%. This increase is
attributable to an increase in royalties earned.

         EQUIPMENT REVENUE. Equipment revenue represents revenue recognized from
sales of implanters, spare parts and field service revenue. Equipment revenue
decreased to $386,403 for the third quarter ended September 30, 2001 from
$407,103 for the third quarter ended September 30, 2000, a decrease of $20,700
or 5%. Equipment revenue this quarter consisted solely of parts and service
revenue. Field service revenue accounted for $309,650 of equipment revenue for
the third quarter ended September 30, 2001 as compared to $326,300 of equipment
revenue for the same period last year. Sales of spare parts accounted for
$76,753 of equipment revenue for the third quarter ended September 30, 2001 as
compared to $80,803 of equipment revenue for the third quarter ended September
30, 2000.

                                       12
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

         TOTAL NET SALES AND REVENUE. Total net revenue for the third quarter
ended September 30, 2001 was $1,443,827, a decrease of $1,077,761, or 43%, from
total revenue of $2,521,588 for the third quarter ended September 30, 2000. This
decrease resulted primarily from a decrease in wafer product sales.

         TOTAL COST OF SALES AND REVENUE. Cost of wafer product sales for the
third quarter ended September 30, 2001 was $2,224,616, as compared to $1,604,800
for the third quarter ended September 30, 2000, an increase of $619,816 or 39%.
This increase is primarily attributable to the increase in fixed costs
associated with production, which include depreciation and amortization,
utilities, occupancy expenses, and repair and maintenance. Ibis also increased
its reserve for wafer inventory obsolescence due to market conditions and
decreased demand for certain products. Cost of contract and other revenue
consists of labor and materials expended during the quarter. Cost of contract
and other revenue for the third quarter ended September 30, 2001 was $90,269, as
compared to $57,870 for the third quarter ended September 30, 2000, an increase
of $32,399, or 56%. This increase is primarily attributable to subcontract work
performed on contracts. Cost of equipment revenue represents the cost of
equipment, the cost for spare parts along with labor incurred for field service.
Cost of equipment revenue for the third quarter ended September 30, 2001 was
$892,372 as compared to $168,560 for the third quarter ended September 30, 2000,
an increase of $723,812 or 429%. This is due to a $700,000 increase in the
reserve for excess or obsolete equipment parts due to decreased demand for
equipment and parts. As a result of the foregoing, the total cost of sales and
revenue for the third quarter ended September 30, 2001 was $3,207,257 as
compared to $1,831,230 for the third quarter ended September 30, 2000, an
increase of $1,376,027 or 75%. The gross margin for all sales was a negative
122% for the third quarter ended September 30, 2001 as compared to a gross
margin of 27% for the third quarter ended September 30, 2000. This decrease in
gross margin for all sales is attributable to decreased wafer sales, an increase
in fixed wafer costs and the increase in reserve for excess or obsolete parts.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses for the third quarter ended September 30, 2001 were $518,414 (or 36% of
total revenue) as compared to $427,639 (or 17% of total revenue) for the third
quarter ended September 30, 2000, an increase of $90,775, or 21%. This is
primarily a result of an increase in professional service fees.

         MARKETING AND SELLING EXPENSES. Marketing and selling expenses for the
third quarter ended September 30, 2001 were $379,842 (or 26% of total revenue)
as compared to $400,117 (or 16% of total revenue) for the third quarter ended
September 30, 2000, a decrease of $20,275, or 5%. The decrease in marketing and
selling expenses is primarily a result of a decrease in professional services.

         RESEARCH AND DEVELOPMENT EXPENSES. Internally funded research and
development expenses increased by $181,401 or 16%, to $1,311,172(or 91% of total
revenue) for the third quarter ended September 30, 2001, as compared to
$1,129,771 (or 45% of total revenue) for the third quarter ended September 30,
2000. This increase in absolute dollars is primarily due to increased material
expenses on Ibis' SIMOX-SOI wafer development programs.

         OTHER INCOME (EXPENSE). Total other income for the third quarter ended
September 30, 2001 was $1,567,378 as compared to $469,127 for the third quarter
ended September 30, 2000, an increase of $1,098,251, or 234%. The increase in
total other income is attributable to non-recurring income amounting to
approximately $1.4 million which is the result of an expired wafer production
capacity option. In September 1995, Ibis entered into a strategic business
development agreement with a customer whereby the customer advanced cash to Ibis
to ensure dedicated wafer production capacity over a five-year period. As wafers
were produced, amounts were recognized

                                       13
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

in revenue over this five-year period, which ended December 2000. During the
third quarter ended September 30, 2001, Ibis completed its negotiations with
this customer and decided not to extend the agreement further.

NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2000

         PRODUCT SALES. Wafer product sales decreased $991,835 or 19%, to
$4,160,495 for the nine months ended September 30, 2001 from $5,152,330 for the
nine months ended September 30, 2000. The decrease in product sales is
attributable to decreased wafer sales by Ibis in Europe as the impact of the
order cutback announced in mid-April 2001 from one of our largest wafer
customers was realized. In the Pacific Rim wafer sales increased overall during
the nine months ended September 30, 2001. Sales by Ibis in the United States
increased overall during the nine months ended September 30, 2001, even though
our largest domestic customer is delaying further SIMOX-SOI wafer purchases
until our new Advantox MLD process is qualified. In December 2000, Ibis entered
into a royalty-bearing license agreement with this customer which gives Ibis the
right to manufacture and sell SIMOX-SOI wafers using the licensed process. Ibis
began shipping sample quantities of this material in May 2001.

         CONTRACT AND OTHER REVENUE. Contract and other revenue increased for
the nine months ended September 30, 2001 to $477,767 from $381,700 for the nine
months ended September 30, 2000, an increase of $96,067 or 25%. This increase is
primarily attributable to an increase in royalty revenue.

         EQUIPMENT REVENUE. Equipment revenue decreased to $1,262,488 for the
nine months ended September 30, 2001 from $4,946,900 for the nine months ended
September 30, 2000, a decrease of $3,684,412 or 74%. Equipment revenue last year
included an implanter sale, whereas this year consisted solely of parts and
service revenue. Field service revenue accounted for $727,035 of equipment
revenue for the nine months ended September 30, 2001 as compared to $469,400 of
equipment revenue for the nine months ended September 30, 2000. Sales of spare
parts accounted for $535,453 of equipment revenue for the nine months ended
September 30, 2001 as compared to $547,500 of equipment revenue for the nine
months ended September 30, 2000.

         TOTAL NET SALES AND REVENUE. Total revenue for the nine months ended
September 30, 2001 was $5,900,750, a decrease of $4,580,180, or 44%, from total
revenue of $10,480,930 for the nine months ended September 30, 2000. This
decrease resulted from lack of implanter sales and decreased wafer sales.

         TOTAL COST OF SALES AND REVENUE. Cost of wafer product sales for the
nine months ended September 30, 2001 was $5,874,923, as compared to $3,688,641
for the nine months ended September 30, 2000, an increase of $2,186,282 or 59%.
This increase is primarily attributable to the increase in fixed costs
associated with production, which include depreciation and amortization,
utilities, occupancy expenses, and repair and maintenance. Cost of contract and
other revenue for the nine months ended September 30, 2001 was $351,642 as
compared to $278,310 for the nine months ended September 30, 2000, an increase
of $73,332 or 26%. This increase is primarily attributable to subcontract work
on contracts. Cost of equipment revenue for the nine months ended September 30,
2001 was $1,305,807 as compared to $3,049,761 for the nine months ended
September 30, 2000, a decrease of $1,743,954 or 57%. This decrease is due to
lack of implanter sales in the current period compared to the same period in the
prior year which included the cost of an implanter, thus no equipment costs were
recognized in this nine month period. As a result of the foregoing, the total
cost of sales and revenue for the nine months ended September 30, 2001 was
$7,532,372 as compared to $7,016,712 for the nine months ended September 30,
2000, an increase of $515,660 or 7%. The gross margin for all sales was a
negative 28% for the nine months ended September 30, 2001 as compared to a
positive 33% for the nine months ended September 30, 2000. This decrease

                                       14
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

in gross margin for all sales is attributable to decreased wafer sales, the lack
of implanter sales, increased fixed wafer costs and an increase in reserve for
excess or obsolete parts.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses for the nine months ended September 30, 2001 were $1,650,970 (or 28% of
total revenue) as compared to $1,501,841 (or 14% of total revenue) for the nine
months ended September 30, 2000, an increase of $149,129, or 10%. This is
primarily a result of an increase in professional service fees.

         MARKETING AND SELLING EXPENSES. Marketing and selling expenses for the
nine months ended September 30, 2001 were $1,400,752 (or 24% of total revenue)
as compared to $1,255,649 (or 12% of total revenue) for the nine months ended
September 30, 2000, an increase of $145,103, or 12%. The increase in marketing
and selling expenses is primarily a result of an increase in public relations
and professional services.

         RESEARCH AND DEVELOPMENT EXPENSES. Internally funded research and
development expenses increased by $363,804 or 11%, to $3,716,428 (or 63% of
total revenue) for the nine months ended September 30, 2001, as compared to
$3,352,624 (or 32% of total revenue) for the nine months ended September 30,
2000. This increase is primarily due to increased material expenses on Ibis'
SIMOX-SOI wafer development programs.

         OTHER INCOME (EXPENSE). Total other income for the nine months ended
September 30, 2001 was $2,161,836 as compared to $1,454,627 for the nine months
ended September 30, 2000, an increase of $707,209, or 49%. The increase in total
other income is attributable to non-recurring income amounting to approximately
$1.4 million which is the result of an expired wafer production capacity option.
This was offset by decreased interest income earned as a result of lower average
cash balances and a reduction in interest rates.

LIQUIDITY AND CAPITAL RESOURCES

         As of September 30, 2001, Ibis had cash and cash equivalents of
$15,895,314, reflecting in large part our receipt of approximately $25 million
in net proceeds from the August 1999 public sale of 1,000,000 shares of Common
Stock. During the nine months ended September 30, 2001, Ibis used $6,748,323 in
cash from operating activities as compared to cash used by operations in the
amount of $3,196,576 for the same period in 2000. Depreciation and amortization
expense for the nine months ended September 30, 2001 and 2000 was $2,359,106 and
$1,097,641, respectively. This accounted for 40% and 10% of total revenue,
respectively. Due to the capital intensive nature of Ibis' business and the
recent expansion of our facilities and production capacity, management expects
that depreciation and amortization will continue to be a significant portion of
its expenses. To date, Ibis' working capital requirements have been funded
primarily through debt and equity financings. The principal use of cash during
the nine months ended September 30, 2001 was to fund additions to property and
equipment which totaled $6,398,061. At September 30, 2001, Ibis had commitments
to purchase approximately $880,790 in material or subassemblies to be used for
manufacturing Ibis 1000 and the first Ibis 2000 implanters and $904,143 in
capital equipment purchases.

         In September 2001, Ibis entered into a $4.5 million equipment lease
line with Heller Financial's Commercial Equipment Finance Group. The lease line
will be used to finance the purchase of the balance of process equipment for
wafer production, primarily for 300 mm wafers. During the quarter, Ibis drew
down approximately $2.4 million of this line in a sale-leaseback transaction
bearing interest at approximately 8% with a term of three years, and a monthly
rent payment of $67,895. Ibis has a fair market value purchase option at the end
of the lease term. The lease line is secured by the underlying assets and all
other property and equipment of Ibis.

                                       15
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

         Our existing cash resources, equipment lease line, along with funds
generated from operations are believed to be sufficient to support Ibis'
operations on our anticipated scale for at least the next 12 months. Management
of Ibis currently believes that this anticipated scale of operations will
include the purchase of support equipment and the build of the next generation
oxygen implanter, the Ibis 2000. We anticipate that we may be required to raise
substantial additional capital in the future in order to finance further
expansion of our manufacturing capacity and our research and development
programs.

EFFECTS OF INFLATION

         Ibis believes that over the past three years inflation has not had a
significant impact on Ibis' sales or operating results.

BUSINESS OUTLOOK

         During October 2001, Ibis received an order for an Ibis 1000 oxygen
implanter, including spare parts and other options, from the Shanghai Institute
of Metallurgy (SIM), Chinese Academy of Sciences. The system will be used by the
Shanghai Simgui Technology Co., Ltd. (STC), a company formed by SIM and others,
to manufacture SIMOX-SOI wafers in Shanghai, China, for chipmakers serving the
growing Chinese consumer electronics market. Ibis expects to ship the implanter
late this year, but revenue from the sale will not be recognized until next year
when installation and acceptance of the system takes place.

         This Form 10-Q contains forward-looking statements within the meaning
of the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995 including statements regarding the anticipated completion of the first
Ibis 2000, the adoption by our customers of SIMOX-SOI technology in their
mainstream manufacturing processes, the continuation of fluctuations in revenue
and results of operations, the expectation that revenues for the remaining
quarter of 2001 will be affected by the reduced orders of one of our largest
wafer customers, the intention to use a majority of the implanters under
construction for internal wafer production, the expectation that depreciation
and amortization will continue to be a significant portion of expenses, the need
for future additional capital, the sufficiency of our current capital, the
anticipated scale of Ibis' operations, and the timing of the recognition of
revenue for the sale of an Ibis 1000 implanter to SIM. Such statements are based
on our current expectations and are subject to a number of factors and
uncertainties which could cause actual results to differ materially from those
described in the forward-looking statements. Such factors and uncertainties
include, but are not limited to, the uncertainty that the performance advantages
of SIMOX-SOI wafers will continue to be realized commercially or that a
commercial market for SIMOX-SOI wafers will continue to develop; the dependence
by Ibis on key customers (during 1998, 1999 and 2000, revenues from two
customers averaged in the aggregate between 78% and 81% of our revenues, so that
the loss of one or more of these major customers and the failure of Ibis to
obtain other sources of revenue could have a material adverse impact on us); the
loss of the services of one or more of our key individuals, which could have a
material adverse impact on Ibis; the dependence by Ibis on key suppliers, so
that the loss of services of one or more suppliers could have a material adverse
impact on us; the development of competing or superior technologies and products
from manufacturers, many of which have substantially greater financial,
technical and other resources than us; Ibis' lack of experience in producing
commercial quantities of our products at acceptable costs; our ability to
successfully complete the manufacture of

                                       16
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
            FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

our implanters and the uncertainty of commercial acceptance of these implanters
by our customers; Ibis' ability to develop and maintain strategic alliances for
the manufacturing, marketing and distribution of our products and sale of
equipment; the cyclical nature of the semiconductor industry, which has
negatively affected our sales of SIMOX-SOI wafers during industry downturns and
which could continue to do so in the future; the limited availability of
critical materials and components for wafer products and implanters, as a
shortage of such materials and components or a significant increase in the price
thereof could have a material adverse effect on our business and results of
operations; the availability of additional capital to fund expansion on
acceptable terms, if at all; and general economic conditions. All information
set forth in this Form 10-Q is as of the date of this Form 10-Q, and Ibis
undertakes no duty to update the information, unless required by law.

                                 PART I - ITEM 3

           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The exposure of market risk associated with risk-sensitive instruments
is not material to the Company, as the Company does not transact its sales
denominated in other than United States dollars, invests primarily in short-term
commercial paper, holds its investments until maturity and has not entered into
hedging transactions.




                                       17
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                     PART II

                                OTHER INFORMATION

Item 1 - LEGAL PROCEEDINGS
         None
Item 2 - CHANGES IN SECURITIES
         None
Item 3 - DEFAULTS UPON SENIOR SECURITIES
         None
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         None
Item 5 - OTHER INFORMATION
         None
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits furnished as Exhibits hereto:

<TABLE>
<CAPTION>
             EXHIBIT NO.       DESCRIPTION
             <S>               <C>
             10.53             Amendment of Lease Agreement dated September 25, 2001,
                               between the Company and Thomas J. Flatley  d/b/a the
                               Flatley Company

             10.54             Master Lease Agreement dated September 25, 2001, between
                               the Company and Heller Financial Leasing, Inc., including
                               Additional Collateral Rider and Schedule A to Additional
                               Collateral Rider

             10.55             Amendment to Warrant Agreement dated June 1,
                               2001, between the Company and International
                               Business Machines Corporation
</TABLE>

         (b) Reports on Form 8-K:

             The Company filed with the Securities and Exchange Commission on
             July 10, 2001 a Current Report on Form 8-K for the July 9, 2001
             event announcing preliminary second quarter results.

             The Company filed with the Securities and Exchange Commission on
             July 17, 2001 a Current Report on Form 8-K for the July 16, 2001
             event announcing the installation of and qualification of an Ibis
             1000 implanter at Mitsubishi Materials Silicon Corporation.

             The Company filed with the Securities and Exchange Commission on
             July 18, 2001 a Current Report on Form 8-K for the July 18, 2001
             event announcing its financial results for the second quarter ended
             June 30, 2001.

             The Company filed with the Securities and Exchange Commission on
             August 23, 2001 a Current Report on Form 8-K for the August 22,
             2001 event announcing the election of Dr. Yuri Erokhin as Vice
             President of Wafer Technology and the resignation of two directors.

             The Company filed with the Securities and Exchange Commission on
             September 28, 2001 a Current Report on Form 8-K for the September
             27, 2001 event announcing that it had secured a $4.5 million
             equipment lease line with Heller Financial's Commercial Equipment
             Finance Group.

                                       18
<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                   SIGNATURES

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, thereunto duly authorized.

                                   Ibis Technology Corporation

Date:  November 6, 2001            By: /s/ Debra L. Nelson
                                       ----------------------------------------
                                   Debra L. Nelson
                                   Chief Financial Officer, Treasurer and Clerk
                                   (principal financial and accounting officer)

Date: November 6, 2001             By: /s/ Thomas F. Lacey
                                       ----------------------------------------
                                       Thomas F. Lacey
                                       Controller and Assistant Treasurer



                                       19