<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 MARCH 31, 2002

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)

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


                     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 ___

         9,412,238 shares of Common Stock, par value $.008, were outstanding on
May 1, 2002.


<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                      INDEX


                                                                          PAGE
PART 1 - FINANCIAL  INFORMATION                                          NUMBER
-------------------------------                                          ------

  Item 1 - Financial Statements:

    Balance Sheets
        December 31, 2001 and March 31, 2002 (unaudited)..................... 3

    Statements of Operations
        Three Months Ended March 31, 2001 and 2002  (unaudited).............. 4

    Statements of Cash Flows
       Three Months Ended March 31, 2001 and 2002 (unaudited)................ 5

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

  Item 2 - Management's Discussion and Analysis of Financial
        Condition and Results of Operations..................................10

  Item 3 - Quantitative and Qualitative Disclosure About Market Risk.........15


PART II - OTHER INFORMATION

Item 1 - Legal
Proceedings..................................................................15

Item 2 - Changes in Securities...............................................15

Item 3 - Defaults upon Senior Securities.....................................15

Item 4 - Submission of Matters to a Vote of Security Holders.................15

Item 5 - Other Information...................................................15

Item 6 - Exhibits and Reports on Form 8-K....................................15

Signatures...................................................................16


                                       2

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                                    DECEMBER 31,     MARCH 31,
                                                                                        2001           2002
                                                                                    ------------   ------------
                                                                                                    (UNAUDITED)
<S>                                                                                 <C>            <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents....................................................... $ 13,087,799   $ 24,434,503
   Accounts receivable, trade, net.................................................    5,765,614      1,869,782
   Inventories (note 3)............................................................    1,535,512      1,548,763
   Deferred costs..................................................................    2,474,264      2,896,454
Prepaid expenses and other current assets..........................................      210,530        292,042
                                                                                    ------------   ------------
         Total current assets......................................................   23,073,719     31,041,544
                                                                                    ------------   ------------
Property and equipment.............................................................   43,039,864     43,719,078
   Less:  Accumulated depreciation and amortization................................  (13,297,308)   (14,794,232)
                                                                                    ------------   ------------
         Net property and equipment................................................   29,742,556     28,924,846
Patents and other assets, net......................................................    2,104,029      2,058,396
                                                                                    ------------   ------------
         Total assets.............................................................. $ 54,920,304   $ 62,024,786
                                                                                    ============   ============

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Capital lease obligation, current............................................... $  1,502,524   $  1,503,945
   Accounts payable................................................................    1,124,180      1,421,373
   Accrued liabilities.............................................................    2,429,956      2,152,471
   Deferred revenue................................................................    6,785,299      7,147,299
                                                                                    ------------   ------------
         Total current liabilities.................................................   11,841,959     12,225,088
    Capital lease obligation, noncurrent...........................................    2,684,766      2,308,496
   Deferred gain on capital lease..................................................       33,705         30,638
                                                                                    ------------   ------------
         Total liabilities.........................................................   14,560,430     14,564,222
                                                                                    ------------   ------------

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 8,412,138 shares and
       9,312,238 shares in 2001 and 2002, respectively.............................       67,297         74,498
    Additional paid-in capital.....................................................   66,618,223     77,498,274
    Accumulated deficit............................................................  (26,325,646)   (30,112,208)
                                                                                    ------------   ------------
         Total stockholders' equity................................................   40,359,874     47,460,564
                                                                                    ------------   ------------
         Total liabilities and stockholders' equity................................ $ 54,920,304   $ 62,024,786
                                                                                    ============   ============

</TABLE>

        See accompanying notes to unaudited interim financial statements.


                                       3

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                       THREE MONTHS ENDED
                                                                            MARCH 31,
                                                                       2001          2002
                                                                    -----------   -----------
<S>                                                                 <C>           <C>
   NET SALES AND REVENUE:
     Product sales................................................  $ 2,463,395   $ 1,406,330
     Contract and other revenue...................................      200,887        72,278
     Equipment revenue............................................      536,223       146,738
                                                                    -----------   -----------
        Total net sales and revenue (note 2)......................    3,200,505     1,625,346

   COST OF SALES AND REVENUE:
     Cost of product sales........................................    1,792,608     2,968,352
     Cost of contract and other revenue...........................       66,789        81,883
     Cost of equipment revenue....................................      251,444        64,265
                                                                    -----------   -----------
        Total cost of sales and revenue...........................    2,110,841     3,114,500
                                                                    -----------   -----------

        Gross profit (loss).......................................    1,089,664    (1,489,154)
                                                                    -----------   -----------

   OPERATING EXPENSES:
     General and administrative...................................      542,976       529,607
     Marketing and selling........................................      491,652       372,545
     Research and development.....................................    1,181,329     1,454,721
                                                                    -----------   -----------
        Total operating expenses..................................    2,251,957     2,356,873
                                                                    -----------   -----------
        Loss from operations......................................   (1,126,293)   (3,846,027)
                                                                    -----------   -----------

   OTHER INCOME (EXPENSE):
     Interest income..............................................      343,157        64,085
     Interest expense.............................................         (766)       (3,364)
     Other income.................................................          --            --
                                                                    -----------   -----------
        Total other income........................................      342,391        60,721
                                                                    -----------   -----------
        Loss before income taxes..................................     (783,902)   (3,785,306)

   Income tax expense.............................................        1,256         1,256
                                                                    -----------   -----------
        Net loss..................................................  $  (785,158)  $(3,786,562)
                                                                    ===========   ===========

   Net loss per common share:
    Basic.........................................................  $     (0.09)  $     (0.44)
                                                                    ===========   ===========
    Diluted.......................................................  $     (0.09)  $     (0.44)
                                                                    ===========   ===========

   Weighted average number of common shares outstanding:
    Basic.........................................................    8,352,450     8,512,238
                                                                    ===========   ===========
    Diluted.......................................................    8,352,450     8,512,238
                                                                    ===========   ===========

</TABLE>

        See accompanying notes to unaudited interim financial statements.


                                       4

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                   THREE MONTHS ENDED
                                                                                        MARCH 31,
                                                                                    2001         2002
                                                                                -----------   -----------
<S>                                                                             <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss...................................................................  $  (785,158)  $(3,786,562)
   Adjustments to reconcile net loss to net cash provided by
    operating activities:
     Depreciation and amortization............................................      696,496      1,577,998
     Changes in operating assets and liabilities:
         Accounts receivable, trade...........................................     (879,632)     3,895,832
         Unbilled revenue.....................................................      254,807           --
         Inventories..........................................................      496,472       (13,251)
         Prepaid expenses and other current assets............................      (33,306)     (503,702)
         Accounts payable.....................................................    1,176,253       297,193
         Accrued liabilities and deferred revenue.............................     (302,092)       84,515
                                                                                -----------   -----------

         Net cash provided by operating activities............................      623,840     1,552,023
                                                                                -----------   -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Additions to property and equipment, net...................................   (4,504,315)     (679,215)
   Other assets...............................................................        5,657       (35,440)
                                                                                -----------   -----------

         Net cash used in investing activities................................   (4,498,658)     (714,655)
                                                                                -----------   -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Payments of capital lease obligations......................................       (2,555)     (377,916)
   Exercise of stock options and warrants.....................................       59,921             2
   Proceeds from sale of common stock
     net of issuance costs....................................................          --     10,887,250
                                                                                -----------   -----------

         Net cash provided by financing activities............................       57,366    10,509,336
                                                                                -----------   -----------

         Net increase (decrease) in cash and cash equivalents.................   (3,817,452)   11,346,704

Cash and cash equivalents, beginning of period................................   26,366,299    13,087,799
                                                                                -----------   -----------

Cash and cash equivalents, end of period......................................  $22,548,847   $24,434,503
                                                                                ===========   ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the period for interest...................................  $       767   $     3,364
                                                                                ===========   ===========

</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, 2001, 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, 2001 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.

(3) INVENTORIES

         Inventories consist of the following:

<TABLE>
<CAPTION>

                                                                               DECEMBER 31,  MARCH 31,
                                                                                   2001        2002
                                                                               ------------ ----------
                  <S>                                                          <C>          <C>
                  Raw materials...............................................  $  390,345  $  363,752
                  Work in process.............................................     262,449     316,899
                  Finished goods..............................................     882,718     868,112
                                                                               ------------ ----------
                  Total inventory.............................................  $1,535,512  $1,548,763
                                                                               ============ ==========

</TABLE>

(4) CAPITALIZATION

         In March 2002, Ibis completed a public offering of 900,000 shares of
common stock at $13 per share, and on April 1, 2002, 100,000 shares were
exercised as an over allotment option by the underwriter. Net proceeds to the
Company were approximately $12,100,000.


                                       6

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

(5) 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 months ended
March 31, 2001 and March 31, 2002, common stock equivalents of 290,076 and
122,935, 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.

(6) 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.

       The table below provides unaudited information for the three months ended
March 31, 2001 and 2002 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 March 31, 2001             $ 2,463,395    $ 536,223    $  200,887       $ 3,200,505
Three Months Ended March 31, 2002               1,406,330      146,738        72,278         1,625,346

OPERATING INCOME (LOSS)
Three Months Ended March 31, 2001                 126,382     (843,796)      134,097          (583,317)
Three Months Ended March 31, 2002              (2,201,848)  (1,104,967)       (9,605)       (3,316,420)

ASSETS
March 31, 2002                                 29,405,639    6,888,864       508,224        36,802,727

CAPITAL EXPENDITURES
Three Months Ended March 31, 2001               2,766,695    1,691,024            --         4,457,719
Three Months Ended March 31, 2002                 619,152       34,482            --           653,634

DEPRECIATION AND AMORTIZATION OF PROPERTY AND
EQUIPMENT
Three Months Ended March 31, 2001                 591,217       76,718            --           667,935
Three Months Ended March 31, 2002               1,139,261      404,568            --         1,543,829

</TABLE>


                                       7

<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
                                                                           MARCH 31,
SEGMENT RECONCILIATION                                                 2001         2002
                                                                   -----------  -----------
<S>                                                                <C>          <C>
Loss Before Income Taxes:
    Total operating loss for reportable segments                    $ (583,317) $(3,316,420)
    Corporate general & administrative expenses                       (542,976)    (529,607)
    Net other income                                                   342,391       60,721
                                                                   -----------  -----------
    Loss before income taxes                                          (783,902)  (3,785,306)
                                                                   ===========  ===========
Capital Expenditures:
    Total capital expenditures for reportable segments               4,457,719      653,634
    Corporate capital expenditures                                      46,596       25,581
                                                                   -----------  -----------
    Total capital expenditures                                       4,504,315      679,215
                                                                   ===========  ===========

Depreciation and Amortization:
    Total depreciation and amortization for reportable segments        667,935    1,543,829
    Corporate depreciation and amortization                             28,561       34,169
                                                                   -----------  -----------
    Total depreciation and amortization                                696,496    1,577,998
                                                                   ===========  ===========

</TABLE>

<TABLE>
<CAPTION>

                                                                              BALANCE AS OF
                                                                                 3/31/02
                                                                              -------------
<S>                                                                           <C>
Assets:
    Total assets for reportable segments                                         36,802,727
    Cash & cash equivalents not allocated to segments                            24,434,503
    Other unallocated assets                                                        787,556
                                                                              -------------
    Total assets                                                                 62,024,786
                                                                              =============

</TABLE>

 (7) NEW ACCOUNTING PRONOUNCEMENTS

         Statement of Financial Accounting Standards No. 141, "Business
Combinations", ("SFAS 141"), issued in June 2001, addresses financial accounting
and reporting for business combinations which were initiated after June 30,
2001. This Statement also applies to all business combinations accounted for
using the purchase method for which the date of acquisition is July 1, 2001, or
later. The implementation of SFAS 141 did not have any impact on its financial
condition or results of operations.

         Statement of Financial Accounting Standards No. 142, "Goodwill and
Other Intangible Assets", ("SFAS 142"), issued in June 2001, addresses financial
accounting and reporting for acquired goodwill and intangible assets. The
provisions of SFAS 142 are required to be applied starting with fiscal years
beginning after December 15, 2001. Early application is permitted for entities
with fiscal years beginning after March 15, 2001, provided that the first
interim financial statements have not previously been issued. Impairment losses
for goodwill and indefinite-lived intangible assets that arise due to the
initial application of this Statement (resulting from a transitional impairment
test) are to be reported as resulting from a change in accounting principle. The
implementation of SFAS 142 did not have any impact on its financial condition or
results of operations.


                                       8

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                 NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS


         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 applies to all entities that have a legal obligation associated
with the retirement of a tangible long-lived asset and 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 implementation
of SFAS 144 did not have any impact on its financial condition or results of
operations.


                                       9

<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
when we began operations in 1988, most of our revenue was derived from research
and development contracts and sales of SIMOX-SOI wafers for military
applications. During 1995 to 2001, sources from sales of SIMOX-SOI wafers for
commercial applications surpassed those from military applications and in 1996
we began selling our proprietary oxygen ion implanter, the Ibis 1000. Our
revenues have been primarily derived from commercial sales of wafers for
evaluation purposes and from commercial equipment sales. In 1999, we commenced a
program to design and develop the i2000 and in January 2002, we successfully
performed the first implants using the i2000. The final steps in the development
of the i2000 are expected to be completed during the first half of 2002. Ibis
expects to expand its commercial applications in 2002 through the introduction
of the next generation SIMOX-SOI, which includes both the licensed modified low
dose ("MLD") wafer process and the i2000, an oxygen ion implanter that is
capable of producing eight and twelve inch (or 200 and 300 mm) SIMOX-SOI wafers.
We anticipate 2002 to be a year focused on wafer sales as opposed to implanter
system sales and that in future years our business is more likely to include a
growing component of equipment sales.

         Commercial shipments of our wafers have been used principally for
evaluation purposes or pilot production in products, including microprocessors,
gate arrays, ASICs (application specific integrated circuits), memories (DRAMs,
SRAMs, etc.), and cellular and mobile radio components. From our customers'
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.

         Each of these stages has many steps, 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.

         During the first quarter of 2002, we received initial production orders
for 200 mm Advantox(R) MLD wafers, signaling what we expect is the start of a
critical transition from shipping MLD wafers for test and evaluation purposes to
delivering wafers for volume production of semiconductor products. We expect
orders of this type to increase over the next several quarters. During the
quarter, we also introduced our new oxygen ion implanter, the i2000,
specifically designed for volume manufacturing of high quality, low-cost, 200
and 300mm SIMOX-SOI wafers for advanced semiconductor devices. We also announced
the receipt of orders for 300mm Advantox MLD wafers, which will be produced on
the i2000 system.


                                       10

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

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


         To date, most of our customers have purchased wafers for the purpose of
characterizing and evaluating the wafers, developing prototype products or for
pilot production, consequently historical sales are not necessarily an
indication of future operations. As a result, inventory valuation is a critical
accounting policy for Ibis. Our policy is to value our wafers at market when
costs exceed market and to reserve for a possible over supply of wafers
utilizing inventory aging records and for obsolescence when engineering changes
or other technological advances indicate that obsolescence has occurred.

         Ibis has experienced quarterly and annual fluctuations in revenue and
results of operations due to the timing of implanter equipment sales and
dependence on a limited number of customers. We expect these fluctuations to
continue in the foreseeable future. We recognize implanter revenue in accordance
with SAB 101, which includes among other criteria, the shipment and factory
installation of the implanter at the customer's location. As a result, deferral
of revenue may extend longer due to meeting this criteria.

         At December 31, 2001, we had Ibis 1000 implanter capacity available to
produce up to approximately 150,000 200 mm SIMOX wafers; this varies depending
on product mix. Ibis has no plans to build additional Ibis 1000 implanters.
Based upon existing orders and anticipated demand for 300 mm SIMOX-SOI wafers
and i2000 implanters, this year we intend to upgrade our i2000 manufacturing
facility, build three additional i2000's and increase our 300 mm wafer
processing operations (anneal, clean and metrology). It should be noted that a
majority of the 300 mm equipment could also accommodate 200 mm wafers.

         Management of Ibis believes that our financial results will continue to
reflect losses in the near term, until such time as demand for our products
approaches our capacity. Although our implanters are currently underutilized,
Management does not believe that these assets are impaired. We will continue to
review our assumptions about our long-lived assets on a periodic basis for
potential impairment in future quarters. We cannot be sure that our implanters
or other long-lived assets will not become impaired in the future. In addition,
the impairment factors evaluated by Management may change in subsequent periods,
given the current trends of the business environment.


                                       11

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

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


RESULTS OF OPERATIONS

FIRST QUARTER ENDED MARCH 31, 2002 COMPARED TO FIRST QUARTER ENDED MARCH 31,
2001

         PRODUCT SALES. Wafer product sales decreased $1,057,065 or 43%, to
$1,406,330 for the first quarter ended March 31, 2002 from $2,463,395 for the
first quarter ended March 31, 2001. This decrease in product sales is primarily
attributable to a 89% decrease in wafer sales by Ibis in Europe where one of our
largest wafer production customers in the optical components arena substantially
reduced their requirements. Sales by Ibis in the United States increased 141%
this quarter due to increased Advantox MLD wafer sales.

         CONTRACT AND OTHER REVENUE. Contract and other revenue includes revenue
derived from government contracts, license agreements, characterization and
other services. Contract and other revenue decreased for the first quarter ended
March 31, 2002 to $72,278 from $200,887 for the first quarter ended March 31,
2001, a decrease of $128,609 or 64%. This decrease is attributable to a decrease
in royalties earned.

         EQUIPMENT REVENUE. Equipment revenue represents revenue recognized from
sales of implanters, spare parts and field service revenue. Equipment revenue
decreased to $146,738 for the first quarter ended March 31, 2002 from $536,223
for the first quarter ended March 31, 2001, a decrease of $389,485 or 73%.
Equipment revenue in both quarters consisted solely of parts and service
revenue. Field service revenue accounted for $70,800 of equipment revenue for
the first quarter ended March 31, 2002 as compared to $293,150 of equipment
revenue for the same period last year. Sales of spare parts accounted for
$75,938 of equipment revenue for the first quarter ended March 31, 2002 as
compared to $243,073 of equipment revenue for the first quarter ended March 31,
2001.

         TOTAL NET SALES AND REVENUE. Total net revenue for the first quarter
ended March 31, 2002 was $1,625,346, a decrease of $1,575,159, or 49%, from
total revenue of $3,200,505 for the first quarter ended March 31, 2001. This
decrease resulted primarily from a decrease in wafer product sales.

         TOTAL COST OF SALES AND REVENUE. Cost of wafer product sales for the
first quarter ended March 31, 2002 was $2,968,352, compared to $1,792,608 for
the first quarter ended March 31, 2001, an increase of $1,175,744 or 66%. This
increase is primarily attributable to an increase in fixed costs associated with
production, mainly depreciation and amortization. Royalty expenses incurred on
the MLD process and repair and maintenance also increased. In addition, we
increased our reserve for wafer inventory obsolescence by approximately $74,000
due to the aging of 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 first quarter ended March 31, 2002 was $81,883, as
compared to $66,789 for the first quarter ended March 31, 2001, an increase of
$15,094, or 23%. 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 first quarter ended March 31, 2002 was $64,265
as compared to $251,444 for the first quarter ended March 31, 2001, a decrease
of $187,179 or 74%. This is due to decreased demand for parts and services. As a
result of the foregoing, the total cost of sales and revenue for the first
quarter ended March 31, 2002 was $3,114,500 as compared to $2,110,841 for the
first quarter ended March 31, 2001, an increase of $1,003,659 or 48%. The gross
margin for all sales was a negative 92% for the first quarter ended March 31,
2002 as compared to a positive gross


                                       12

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

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


margin of 34% for the first quarter ended March 31, 2001. This decrease in gross
margin for all sales is attributable to decreased wafer sales, an increase in
fixed wafer costs, increases in repair and maintenance, royalties and reserve
for excess or obsolete wafer parts, and decreased parts and service sales.

         GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
expenses for the first quarter ended March 31, 2002 were $529,607 (or 33% of
total revenue) as compared to $542,976 (or 17% of total revenue) for the first
quarter ended March 31, 2001, a decrease of $13,369, or 2%. This is primarily a
result of a decrease in legal and transfer agent fees, which were offset by
increases in D&O insurance, recruiting and investor relations expenses.

         MARKETING AND SELLING EXPENSES. Marketing and selling expenses for the
first quarter ended March 31, 2002 were $372,545 (or 23% of total revenue) as
compared to $491,652 (or 15% of total revenue) for the first quarter ended March
31, 2001, a decrease of $119,107, or 24%. The decrease in marketing and selling
expenses is primarily a result of decreases in payroll and payroll related
expenses, advertising and public relations.

         RESEARCH AND DEVELOPMENT EXPENSES. Internally funded research and
development expenses increased by $273,392 or 23%, to $1,454,721 (or 90% of
total revenue) for the first quarter ended March 31, 2002, as compared to
$1,181,329 (or 37% of total revenue) for the first quarter ended March 31, 2001.
This increase is mainly due to increased material expenses on Ibis' SIMOX-SOI
wafer development programs and depreciation on fixed assets, specifically the
Ibis 1000 R&D tool and i2000 test stands which Ibis began depreciating in the
second half of 2001. These increases were offset by decreases in payroll and
payroll related expenses.

         OTHER INCOME (EXPENSE). Total other income for the first quarter ended
March 31, 2002 was $60,721 as compared to $342,391 for the first quarter ended
March 31, 2001, a decrease of $281,670, or 82%. The decrease in total other
income is primarily attributable to decreased interest income earned as a result
of lower average cash balances and a reduction in interest rates.

LIQUIDITY AND CAPITAL RESOURCES

         As of March 31, 2002, Ibis had cash and cash equivalents of
$24,434,503, reflecting in large part our receipt of approximately $11 million
in net proceeds from the March 2002 public sale of 900,000 shares of Common
Stock. On April 1, 2002, 100,000 shares were exercised as an over allotment
option by the underwriter and Ibis received approximately $1.2 million in net
proceeds. During the three months ended March 31, 2002, Ibis generated
$1,552,023 in cash from operating activities as compared to $623,840 for the
same period in 2001. Depreciation and amortization expense for the three months
ended March 31, 2002 and 2001 was $1,557,998 and $696,496, respectively. This
accounted for 96% and 22% of total revenue, respectively. Due to the capital
intensive nature of Ibis' business and the planned upgrade of our facilities and
expansion of 300 mm SIMOX-SOI wafer 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 three
months ended March 31, 2002 was to fund additions to property and equipment
which totaled $679,215. At March 31, 2002, Ibis had commitments to purchase
approximately $4,428,536 in material to be used for manufacturing additional
i2000 implanters and wafer manufacturing and $754,333 in capital equipment
purchases.


                                       13

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 PART I - ITEM 2

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


         In September 2001, Ibis entered into a $4.5 million equipment lease
line with Heller Financial's Commercial Equipment Finance Group. The lease line
was used to finance the purchase of process equipment for wafer production,
primarily for 300 mm wafers. During the third and fourth quarter of 2001, Ibis
drew down this line in a sale-leaseback transaction bearing interest at
approximately 8% with a term of three years, and a monthly rent payment of
$131,212. 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.

         Our existing cash resources are believed to be sufficient to support
Ibis' operations on our anticipated scale for at least the next 12 months. Our
anticipated scale of operations assumes a modest increase in wafer sales in the
second quarter of 2002 over the first quarter of 2002 and indications suggest
that qualification of our Advantox MLD wafers and completion of the i2000, could
lead to increased wafer sales in the second half of 2002 for both 200mm and
300mm Advantox MLD wafers. Our plans also include the purchase of production and
support equipment, facility improvements and the build of at least three more
i2000 oxygen implanters. We may be required to raise additional capital in the
future in order to finance further expansion of our manufacturing capacity and
our research and development programs.

         During December 2001, Ibis delivered an Ibis 1000 oxygen implanter and
spare parts to Shanghai Simgui Technology Co., Ltd. (STC), a company formed by
the Shanghai Institute of Metallurgy (SIM), Chinese Academy of Sciences and
others. STC plans to manufacture SIMOX-SOI wafers in Shanghai, China, for
chipmakers serving the growing Chinese consumer electronics market. Revenue from
this sale will be recognized this 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 impact that the MLD process and i2000
oxygen implanter is expected to have on future financial results, belief that in
future years our business is more likely to include a growing component of
equipment sales, the anticipated schedule for the i2000 implanter, our plan to
build at least three additional i2000's in 2002, the adoption by our customers
of SIMOX-SOI technology in their mainstream manufacturing processes, anticipated
increase in 200 mm and 300 mm Advantox MLD wafer sales, the continuation of
fluctuations in revenue and results of operations, 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 capital
resources, 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 are referenced in the Company's SEC filings from time to time,
including, but not limited to those described above and in our Form 10-K for the
year ended December 31, 2001. 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 this
information, unless required by law.

EFFECTS OF INFLATION

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


                                       14

<PAGE>

                           IBIS TECHNOLOGY CORPORATION

                                 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.


                                     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:

                  None

         (b)      Reports on Form 8-K:

                  The Company filed with the Securities and Exchange Commission
                  on January 15, 2002 a Current Report on Form 8-K for the
                  January 14, 2002 event announcing Fourth Quarter 2001 results.

                  The Company filed with the Securities and Exchange Commission
                  on February 22, 2002 a Current Report on Form 8-K for the
                  February 20, 2002 event announcing Fourth Quarter and Fiscal
                  Year 2001 results.

                  The Company filed with the Securities and Exchange Commission
                  on March 20, 2002 a Current Report on Form 8-K for the March
                  20, 2002 event announced it has booked its initial production
                  orders for 300 mm Advantox MLD wafers from multiple large
                  manufacturers of semiconductor devices.

                  The Company filed with the Securities and Exchange Commission
                  on March 20, 2002 a Current Report on Form 8-K for the March
                  20, 2002 event announcing the introduction of its new i2000
                  oxygen ion implanter.

                  The Company filed with the Securities and Exchange Commission
                  on March 22, 2002 a Current Report on Form 8-K for the March
                  22, 2002 event announcing the pricing of a public offering of
                  900,000 newly issued shares of its common stock at $13 per
                  share, with an option of an additional 100,000 shares of
                  Common Stock to cover over-allotments.


                                       15

<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: May 7, 2002              By: /s/ DEBRA L. NELSON
                                   --------------------------------------------
                                   Debra L. Nelson
                                   Chief Financial Officer, Treasurer and Clerk
                                   (principal financial and accounting officer)



Date: May 7, 2002              By: /s/ THOMAS F. LACEY
                                   --------------------------------------------
                                   Thomas F. Lacey
                                   Controller and Assistant Treasurer