<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

[X]  Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
     Act of 1934. FOR THE QUARTERLY PERIOD ENDING DECEMBER 31, 2000.

                                       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 000-25839


                          IMPLANT SCIENCES CORPORATION
             (Exact name of registrant as specified in its charter)


        MASSACHUSETTS                                         04-2837126
--------------------------------                        ----------------------
(State or other jurisdiction                                (IRS Employer
of incorporation or organization)                       Identification number)


        107 Audubon Road, #5                              Wakefield, MA  01880
----------------------------------------                  --------------------
(Address of principal executive offices)


                                  781-246-0700
                           (Issuers telephone number)

                                 NOT APPLICABLE

              (Former name, former address and former fiscal year,
                         if changed since last report.)


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
                                    ---       ---

Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:

          Class                                 Outstanding at December 31, 2000
Common Stock, $.10 par value                                 5,806,439

           Transitional small business disclosure format (check one):


                                YES       NO   X
                                    ---       ---





                                       1



<PAGE>   2




                          IMPLANT SCIENCES CORPORATION

                                      INDEX

                                                                        Page No.
                          PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements:

            Condensed Balance Sheets as of December 31, 2000 and
            June 30, 2000 (unaudited)                                       3


            Condensed Statements of Operations for the Three and Six
            Months Ended December 31, 2000 and December 31, 1999
            (unaudited)                                                     4

            Condensed Statements of Cash Flows for the Six Months Ended
            December  31, 2000 and December 31, 1999 (unaudited)            5

            Notes to Condensed Financial Statements (including data
            applicable  to unaudited periods)(unaudited)                    6

Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                         8

                           PART II. OTHER INFORMATION


Item 1.   Legal Proceedings                                                12

Item 2.   Changes in Securities and Use of Proceeds                        12

Item 3.   Defaults Upon Senior Securities                                  12

Item 4.   Submission of Matters to a Vote of Security-Holders              12

Item 5.   Other Information                                                13

Item 6.   Exhibits and Reports on Form 8-K                                 14

          Signatures                                                       18





                                       2

<PAGE>   3




                          IMPLANT SCIENCES CORPORATION
                          PART I. FINANCIAL INFORMATION
                          Item 1. Financial Statements
                            CONDENSED BALANCE SHEETS
                                   (unaudited)


                                                     December 31,    June 30,
                ASSETS                                  2000           2000
                                                     ------------    --------
Current assets:
  Cash and cash equivalents                          $ 2,060,519    $ 4,837,939
  Accounts receivable, less allowances of $17,602
    at December 31, 2000 and $11,602 at
    June 30, 2000, respectively                          790,308        948,432
  Inventories                                            269,480        100,726
  Deferred income taxes                                   62,000         62,000
  Notes receivable from employees                         37,170         39,464
  Prepaid expenses                                       114,789         54,265
                                                     -----------    -----------
    Total current assets                               3,334,266      6,042,826

Property and equipment, at cost:
  Machinery and equipment                              4,285,512      3,515,369
  Leasehold improvements                                 222,236        218,551
  Computers and software                                 284,137        272,709
  Furniture and fixtures                                 149,268        149,268
  Motor Vehicles                                          14,822         14,822
  Leased property under capital lease                     28,360         28,360
                                                     -----------    -----------
                                                       4,984,335      4,199,079
    Less accumulated depreciation                     (1,361,715)    (1,063,342)
                                                     -----------    -----------
  Net property and equipment                           3,622,620      3,135,737
Other assets:
  Patent costs, net of accumulated amortization of
    $40,629 at December 31, 2000 and $34,629 at
    June 30, 2000                                        226,554        194,235
  Equity investment in Epsilon Medical                    42,800         44,030
  Notes receivable from employees                          5,141          5,141
  Other noncurrent assets                                 94,548         46,788
                                                     -----------    -----------
                                                         369,043        290,194
                                                     -----------    -----------
Total Assets                                         $ 7,325,929    $ 9,468,757
                                                     ===========    ===========

                LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                   $   432,522    $   612,003
  Accrued expenses                                       463,407        840,559
  Current portion of long-term debt                      176,471        176,471
  Obligations under capital lease                          5,672          5,672
                                                     -----------    -----------
                                                       1,078,072      1,634,705
Long term liabilities:
  Long-term debt, net of current portion                 323,529        411,765
  Obligations under capital lease                          8,508         10,996
  Deferred income taxes                                   29,000         29,000
                                                     -----------    -----------
                                                         361,037        451,761
Stockholders' equity:
  Common stock, $0.10 par value; 20,000,000
    authorized 5,806,439 and 5,708,082 outstanding
    at December 31, 2000 and June 30, 2000,
    respectively                                         580,644        570,808
  Additional paid in capital                          10,078,234      9,896,399
  Deferred compensation                                  (30,287)       (60,576)
  Accumulated deficit                                 (4,741,771)    (3,024,340)
                                                     -----------    -----------
    Total Stockholders' Equity                         5,886,820      7,382,291
                                                     -----------    -----------
Total Liabilities and Stockholders' Equity           $ 7,325,929    $ 9,468,757
                                                     ===========    ===========

   The accompanying notes are an integral part of these financial statements.


                                       3

<PAGE>   4





                          IMPLANT SCIENCES CORPORATION
                    PART I. FINANCIAL INFORMATION (continued)
                    Item 1. Financial Statements (continued)

                        CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                          THREE  MONTHS ENDED              SIX MONTHS ENDED
                                                     ----------------------------    ----------------------------
                                                     DECEMBER 31,    DECEMBER 31,    DECEMBER 31,    DECEMBER 31,
                                                         2000           1999             2000           1999
                                                     ------------    ------------    ------------    ------------
<S>                                              <C>             <C>             <C>             <C>

Revenues:
  Product and contract research revenues
    Medical                                          $  849,871      $  824,718       $ 1,589,208     $ 1,561,734
    Semiconductor                                       151,652         136,245           266,720         273,657
  Equipment                                                   0         365,000                 0         365,000
                                                     ----------      ----------       -----------     -----------
      Total revenues                                  1,001,523       1,325,963         1,855,928       2,200,391

Costs and expenses:
  Cost of product and contract research revenues        940,689         720,920         1,722,577       1,212,309
  Cost of equipment                                           0         396,445                 0         396,445
  Research and development                              366,052         290,374           816,233         478,092
  Selling, general and administrative                   567,365         597,868         1,126,054       1,113,980
                                                     ----------      ----------       -----------     -----------
      Total costs and expenses                        1,874,106       2,005,607         3,664,864       3,200,826

Operating loss                                         (872,583)       (679,644)       (1,808,936)     (1,000,435)
Other income (expense)
  Interest income                                        47,034          69,732           119,098         136,464
  Interest expense                                      (13,256)        (21,832)          (26,364)        (42,271)
  Other                                                     (19)         (4,078)           (1,229)         (4,078)
                                                     ----------      ----------       -----------     -----------
Loss before provision (benefit) for income
  Taxes                                                (838,824)       (635,822)       (1,717,431)       (910,320)
Provision (benefit) for income taxes                         --              --                --              --
                                                     ----------      ----------       -----------     -----------
  Net loss                                           $ (838,824)     $ (635,822)      $(1,717,431)    $  (910,320)
                                                     ==========      ==========       ===========     ===========

  Net loss per share - basic                         $    (0.15)     $    (0.12)      $     (0.30)    $     (0.17)
                                                     ==========      ==========       ===========     ===========

  Net loss per share - diluted                       $    (0.15)     $    (0.12)      $     (0.30)    $     (0.17)
                                                     ==========      ==========       ===========     ===========

  Weighted average common shares outstanding used
   for basic earnings per share                       5,806,328        5,207,320        5,789,935       5,195,964
                                                     ==========      ===========      ===========     ===========

  Weighted average common shares outstanding used
   for diluted earnings per share                     5,806,328        5,207,320        5,789,935       5,195,964
                                                     ==========      ===========      ===========     ===========

</TABLE>

   The accompanying notes are an integral part of these financial statements.




                                       4
<PAGE>   5


                          IMPLANT SCIENCES CORPORATION
                    PART 1. FINANCIAL INFORMATION (continued)
                    Item 1. Financial Statements (continued)

                      CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                         SIX MONTHS ENDED
                                                  ------------------------------
                                                  DECEMBER 31,      DECEMBER 31,
                                                     2000              1999
                                                  ------------      ------------

CASH FLOWS OPERATING ACTIVITIES:
        Net loss                                  $(1,717,431)       $ (910,320)

Adjustments to reconcile net loss to net cash
used in operating activities:
  Depreciation and amortization                       306,481           104,242
  Amortization of deferred compensation                30,289            30,289
  Equity in Loss of Epsilon Medical                     1,230             4,078
  Write off of loan financing fees                      3,392                --
Changes in operating assets and liabilities:
  (Increase) decrease in accounts receivable          158,124          (655,708)
  (Increase) decrease in Inventories                 (168,754)          314,397
  (Increase) decrease in prepaid expenses             (60,524)          (20,146)
  (Increase) decrease in notes receivable               2,294                --
  (Increase) decrease in other noncurrent assets      (53,260)          (38,339)
  Increase (decrease) in accounts payable            (179,481)          211,413
  Increase (decrease) in accrued expenses            (377,152)         (410,676)
                                                  -----------        ----------
    Net cash used in operating activities          (2,054,792)       (1,370,770)

CASH FLOWS USED IN INVESTING ACTIVITIES:
  Purchase of property and equipment                 (785,256)         (975,136)
  Investment in Epsilon Medical                            --           (50,000)
  Capitalized patent costs                            (38,319)           (9,071)
                                                  -----------        ----------
    Net cash used in investing activities            (823,575)       (1,034,207)

CASH FLOW USED IN FINANCING ACTIVITIES:
  Proceeds from common stock                          191,671           735,068
  Proceeds from long-term debt                             --                --
  Repayments of long-term debt                        (90,724)          (87,698)
  Repayments of revolving credit line                      --           (50,000)
                                                  -----------        ----------
    Cash provided by financing activities             100,947           597,370

  Net decrease in cash                             (2,777,420)       (1,807,607)
  Cash at beginning of year                         4,837,939         6,152,536
                                                  -----------        ----------
  Cash at end of year                             $ 2,060,519        $4,344,929
                                                  ===========        ==========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Interest paid                                   $    26,364        $   46,073
  Obligations under capital lease                 $    14,180        $   19,505


             See notes to unaudited condensed financial statements.





                                       5

<PAGE>   6



                          IMPLANT SCIENCES CORPORATION
                    PART 1: FINANCIAL INFORMATION (continued)
                    Item 1: Financial Statements (continued)

                     CONDENSED NOTES TO FINANCIAL STATEMENTS

     (Information for the six months ended December 31, 2000 is unaudited.)


1.   DESCRIPTION OF BUSINESS

     Implant Sciences Corporation (the Company) develops products for the
medical device industry using ion implantation and thin film coatings of
radioactive and non-radioactive materials. The Company has received Food and
Drug Administration 510(k) clearance to market its I-Plant(TM) Iodine-125
radioactive seed for the treatment of prostate cancer. The Company also has
under development interventional cardiology devices, radioactive coronary stents
and temporary coronary brachytherapy systems for the prevention of restenosis
(reclosure of the artery after balloon angioplasty). In addition, the Company
modifies the surface characteristics of orthopedic joint implants to reduce
polyethylene wear and thereby increasing the life of the implant and provides
ion implantation of electronic dopants for the semiconductor industry.

2.   INTERIM FINANCIAL STATEMENTS

     The financial information for the six months ending December 31, 2000 is
unaudited but includes all adjustments (consisting only of normal recurring
adjustments) which the Company considers necessary for a fair presentation of
the financial position at such date and of the operating results and cash flows
for these periods. The results of operations and cash flows for the six months
ended December 31, 2000 are not necessarily indicative of results that may be
expected for the entire year. The information contained in the Form 10-QSB
should be read in conjunction with the Company's audited financial statements,
included it its Form 10-KSB as of and for the year ending June 30, 2000 filed
with the Securities and Exchange Commission.

3.   NEW ACCOUNTING STANDARDS

     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin 101, (SAB 101), "Revenue Recognition in Financial
Statements." SAB 101 interprets the application of generally accepted
accounting principals to revenue recognition in financial statements. The
Company will adopt SAB 101 in the fourth quarter of fiscal 2001 and does not
expect SAB 101 to have a material effect on its financial position or results
of operations.

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, as amended by Statement of Financial
Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging
Activities" (collectively SFAS 133), which is effective for fiscal years
beginning after June 15, 2000. SFAS 133 provides a comprehensive and consistent
standard for the recognition and measurement of derivatives and hedging
activities. We do not believe that the adoption of this standard will have a
material impact on our financial position or results of operations.



                                       6
<PAGE>   7


                          IMPLANT SCIENCES CORPORATION
                    PART 1: FINANCIAL INFORMATION (continued)
                    ITEM 1: FINANCIAL STATEMENTS (continued)

                     CONDENSED NOTES TO FINANCIAL STATEMENTS


4.   EARNINGS PER SHARE

     Basic earnings per common share are computed by dividing net income by the
weighted-average number of common shares outstanding. Diluted earnings per share
are computed by dividing net income by the sum of the weighted-average number of
common shares outstanding plus the dilutive effect of shares issuable through
the exercise of stock options (common stock equivalents) unless their inclusion
would be antidilutive.

5.   ACCOUNTS RECEIVABLE

     Contract revenue under cost sharing research and development agreements is
recognized as eligible expenses are incurred. Invoicing of research and
development contracts occurs in accordance with the terms of the contact.
Revenue recognized but unbilled is recorded as unbilled accounts receivable. At
December 31, 2000 unbilled accounts receivable represented approximately 28.5%
of total accounts receivable.

6.   INVESTMENT

     On October 6, 1999 the Company entered into an agreement to acquire 38% of
the shares outstanding of Epsilon Medical, Inc. for $50,000. The Company has
accounted for this investment under the equity method and included the
investment in other assets. The carrying amount of the investment reflects the
Company's share of all losses as of December 31, 2000.

7.   CREDIT ARRANGEMENTS

        The Company has an unsecured revolving line of credit of $750,000 at
prime interest rate and the entire balance was available at December 31, 2000.
This  line of credit was renewed in January 2001 and is renewable annually. The
Company also has a $750,000 equipment purchase facility of which $500,000 was
outstanding at December 31, 2000. The Company's loan agreement requires
compliance with two financial covenants, measured annually, consistent with the
Company's year end. At June 30, 2000 the Company's net loss covenant exceeded
the required amount. The Company's bank has waived its rights under the loan
agreement with respect to compliance with this financial covenant for a period
of one year from June 30, 2000.





                                       7

<PAGE>   8



                          IMPLANT SCIENCES CORPORATION
                    PART 1: FINANCIAL INFORMATION (continued)
            ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

     The following management discussion and analysis should be read in
conjunction with the financial statements and notes thereto as filed in the
Company's Form 10-KSB for the year ended June 30, 2000. In addition to
historical information, this Quarterly Report on Form 10-QSB contains
forward-looking statements. The forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those reflected in such forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
reflect management's opinions only as of the date hereof. The Company undertakes
no obligation to revise or publicly release the results of any revision to these
forward-looking statements. Readers should carefully review documents that the
Company files from time to time with the Securities and Exchange Commission,
including the Company's Quarterly Reports and Annual Report filed by the Company
in fiscal 1999 and 2000.

RESULTS OF OPERATIONS

THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999

     Revenues. Total revenues decreased to approximately $1,002,000 in the three
months ended December 31, 2000 from $1,326,000 in the three months ended
December 31, 1999. This $324,000 or 24.4% decrease was primarily attributable to
a $365,000 decrease in equipment revenue as the Company has discontinued
manufacturing and selling low margin customized manufacturing equipment and a
31.7% decrease in government contract and grant revenue as several contracts
reach completion. This decrease was offset by a 27.9% increase in medical
revenues primarily from sales of the Company's radioactive medical products and
radiopaque coating of medical devices. Less than 5% of all revenues were derived
from foreign sources.

     The Company's two major customers, the Howmedica/Osteonics Division of
Stryker Corporation and Biomet Incorporated, accounted for 32.6% of revenue for
the three months ended December 31, 2000 and 26.7% in the three months ended
December 31, 1999. The Company's government contract and grant revenue accounted
for 22.4% and 24.8% of revenue for the three months ended December 31, 2000 and
1999, respectively.

     Cost of Product and Contract Research Revenues. Cost of product and
contract research revenue increased to approximately $941,000 from approximately
$721,000 for the three months ended December 31, 2000 and increased as a percent
of revenues to 93.9% from 75.0% in the same periods. This increase in cost is
primarily attributable to the completion and staffing of the manufacturing
facility for brachytherapy seed production in support of the recent product
launch.





                                       8
<PAGE>   9

     Research and Development. Research and development expenses increased to
approximately $366,000 from approximately $290,000 in the three months ended
December 31, 2000, a 26.2% increase, due to increased staff, direct materials
and depreciation expense in support of product development. The Company
anticipates in future periods its research and development expenses will
continue to increase in total dollars expended as a result of its new product
development plans.

     Selling, General and Administrative. Selling, general and administrative
expenses decreased to approximately $567,000 from approximately $598,000 in the
three months ended December 31, 2000. The 5.2% decrease in selling, general and
administrative expenses is primarily attributable to a reduction in recruiting
costs, office supplies and stationary and printing expenses. The Company
anticipates that in future periods its selling, general and administrative
expenses will increase in total dollars expended as a result of its plans to
commercialize new products.

     Other Income and Expense, Net. Other income and expense, net consists
primarily of interest earned on the Company's short-term investments and
interest expense on loans. Other income and expenses decreased to approximately
$34,000 in the three months ended December 31, 2000 from approximately $44,000
in the three months ended December 31, 1999. This decrease primarily reflects a
reduction in interest income of approximately $23,000 on the Company's short
term investments offset by a reduction in interest expense of $9,000 on the
Company's loans and $4,000 of expenses associated with the investment in Epsilon
Medical, Inc.

SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999

Revenues. Total revenues decreased to approximately $1,856,000 in the six months
ended December 31, 2000 from $2,200,000 in the six months ended December 31,
1999. This $344,000 or 15.7% decrease was primarily attributable to a $365,000
decrease in equipment revenue as the Company made a one time sale last fiscal
year of a low margin customized piece of manufacturing equipment and a 34.0%
decrease in government contract and grant revenue as several contracts reach
completion. This decrease was offset by a 25.3% increase in medical revenues
primarily from sales of the Company's radioactive medical products and
radiopaque coating of medical devices. Less than 5% of all revenues were derived
from foreign sources.

     The Company's two major customers, the Howmedica/Osteonics Division of
Stryker Corporation and Biomet Incorporated, accounted for 38.6% of revenue for
the six months ended December 31, 2000 and 39.5% in the six months ended
December 31, 1999. The Company's government contract and grant revenue accounted
for 21.1% and 26.9% of revenue for the six months ended December 31, 2000 and
1999, respectively.

     Cost of Product and Contract Research Revenues. Cost of product and
contract research revenue increased to approximately $1,723,000 from
approximately $1,212,000 for the six months ended December 31, 2000 and
increased as a percent of revenues to 92.8% from 66.1% in the same periods. This
increase in cost is primarily attributable to the completion and staffing of the
manufacturing facility for brachytherapy seed production in support of the
recent product launch.




                                       9

<PAGE>   10

     Research and Development. Research and development expenses increased to
approximately $816,000 from approximately $478,000 in the six months ended
December 31, 2000, a 70.7% increase, due to increased staff, direct materials
and depreciation expense in support of product development. The Company
anticipates in future periods its research and development expenses will
continue to increase in total dollars expended as a result of its product
development plans.

     Selling, General and Administrative. Selling, general and administrative
expenses were essentially flat at approximately $1,126,000 for the six months
ended December 31, 2000 from approximately $1,114,000 in the six months ended
December 31, 1999. The Company anticipates that in future periods its selling,
general and administrative expenses may increase in total dollars expended as a
result of its plans to commercialize new products.

     Other Income and Expense, Net. Other income and expense, net consists
primarily of interest earned on the Company's short-term investments and
interest expense on loans. Other income and expenses increased to approximately
$92,000 in the six months ended December 31, 2000 from approximately $90,000 in
the six months ended December 31, 1999. This increase primarily reflects a
decrease in interest income of approximately $17,000 on the Company's short-term
investments offset by a decrease in interest expense $16,000 on the Company's
loans and $3,000 of expenses associated with the investment in Epsilon Medical,
Inc.

     Liquidity and Capital Resources. As of December 31, 2000 the Company
had approximately $2,061,000 in cash in the form of checking and short-term
investments. The Company also had a $750,000 revolving line of credit from a
commercial bank at the prime interest rate of which the entire balance was
available at December 31, 2000. This credit line was renewed on January 22,
2001. The Company also has an equipment purchase facility with a commercial
bank, under which approximately $500,000 outstanding at December 31, 2000. The
Company also has available a new $750,000 equipment purchase facility of which
zero was outstanding at December 31, 2000. Under the provisions of its Loan
Agreement, the Company is required to maintain compliance with two financial
covenants, minimum levels of net worth and net loss limits. At June 30, 2000
the Company's net loss covenant exceeded the required amount. The Company's
bank waived its rights under the Loan Agreement with respect to compliance with
this financial covenant for a period of one year from June 30, 2000. The
Company expects to raise additional capital in the near future. No assurances
can be given that we will be successful. During the six months ending December
31, 2000, operating activities used cash of approximately $2,055,000. Net cash
used by operating activities primarily reflects the net loss, a decrease in
accounts payable and accrued expenses offset by an increase in depreciation and
amortization, inventory and other noncurrent assets and a decrease in accounts
receivable.

     During the six months ending December 31, 2000, investing activities used
cash of approximately $824,000. Net cash used by investing activities included
approximately $785,000 in purchases of property and equipment and $38,000 of
patent fees. Although the Company does not have significant capital commitments,
the Company intends to make significant investments over the next several years
to support the development and commercialization of new products and the
expansion of manufacturing equipment and



                                       10

<PAGE>   11

facilities.

     During the six months ended December 31, 2000, financing activities
provided approximately $101,000 in cash. Net cash provided by financing
activities primarily includes approximately $192,000 in proceeds from the
exercise of employee stock options and warrants offset by payments on the
Company's equipment loan. The Company plans to further increase expenditures to
complete development and commercialize new products, to increase its
manufacturing capacity, to ensure compliance with international regulations and
to broaden its sales and marketing capabilities. The Company believes it has and
will be able to obtain sufficient resources to fund its operating activities.
















                                       11


<PAGE>   12



                            PART II OTHER INFORMATION


Item 1. Legal Proceedings

        Not Applicable

Item 2. Changes in Securities and Use of Proceeds

        Not Applicable

Item 3. Defaults Upon Senior Securities

        Not Applicable

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

     On December 7, 2000 and in conjunction with the Company's 2000 Annual
Meeting of Stockholders, stockholders were asked to vote on two proposals.

     Proposal One - To elect five directors of the Company to serve until the
2001 Annual Meeting and until their respective successors are duly elected and
qualified. The Board of Directors nominated Anthony J. Armini, Stephen N.
Bunker, Robert E. Hoisington, Shunkichi Shimizu and Michael Szycher. The
following votes were cast in favor of the five nominees:

                                                                   NUMBER OF
                                   NUMBER OF                   SHARES FOR WHICH
                                SHARES VOTED FOR              AUTHORITY WITHHELD
                                ----------------              ------------------

Anthony J. Armini                  5,715,836                         5,000
Stephen N. Bunker                  5,715,836                         5,000
Robert E. Hoisington               5,715,936                         4,900
Shunkichi Shimizu                  5,715,936                         4,900
Michael Szycher                    5,715,836                         5,000

     Proposal Two - To adopt the addition of the 2000 Incentive and Nonqualified
Stock Option Plan and the reservation of 300,000 shares thereunder.

                             NUMBER OF         NUMBER OF           NUMBER OF
                           SHARES VOTED       SHARES VOTED          SHARES
                               FOR              AGAINST            ABSTAINED
                           ------------       ------------         ---------
                             4,626,753           20,879              7,340





                                       12




<PAGE>   13
Item 5. Other Information

     Not Applicable

                                            13

<PAGE>   14
Item 6. List of Exhibits

(a)  The following exhibits, required by Item 601 of Regulation S-B, are filed
     as part of this Quarterly Report on Form 10-QSB. Exhibit numbers, where
     applicable, in the left column correspond to those of Item 601 of
     Regulation S-B.

(b)  The registrant has filed no reports on Form 8-K during the quarter ended
     December 31, 2000.





                                       14
<PAGE>   15

     The following exhibits are filed as part of this report:

<TABLE>
<CAPTION>
EXHIBIT                               DESCRIPTION
NO.----                               -----------
<C>           <S>
       *3.2   By-Laws of the Company
       *3.3   Articles of Amendment to the Articles of Organization of the
              Company, dated June 9, 1999
       *3.4   Restated Articles of Organization of the Company, dated June
              9, 1999
      **4.1   Specimen certificate for the Common Stock of the Company
      **4.2   Specimen certificate for the Redeemable Warrants of the
              Company
     ***4.3   Specimen certificate for the Units of the Company
     **10.1   Employment Agreement with Anthony J. Armini, dated September
              26, 1998
     **10.2   Employment Agreement with Stephen N. Bunker, dated September
              26, 1998
      *10.3   Employment Offer Letter to Darlene Deptula-Hicks, dated June
              15, 1998
      *10.4   Employment Offer Letter to Alan Lucas, dated March 20, 1998
      *10.5   Amendment to Employment Offer Letter to Alan Lucas, dated
              September 24, 1998
      *10.6   Form of Employee Agreement on Ideas, Inventions, and
              Confidential Information used between 1993 and 1995
      *10.7   Form of Employee Agreement on Ideas, Inventions, and
              Confidential Information used in 1993
      *10.8   Form of Employee Agreement on Ideas, Inventions, and
              Confidential Information used between 1997 and 1998
      *10.9   Loan Agreement between the Company and US Trust, dated May
              1, 1996
      *10.10  $100,000 Commercial Promissory Note signed by the Company in
              favor of US Trust, dated May 1, 1996
      *10.11  $300,000 Commercial Promissory Note signed by the Company in
              favor of US Trust, dated May 1, 1996
      *10.12  Guaranty of Loan Agreement between the Company and US Trust,
              by Anthony J. Armini, dated May 1, 1996
      *10.13  Security Agreement between the Company and US Trust, dated
              May 1, 1996
      *10.14  Lessor's Subordination and Consent between the Company and
              Teacher's Insurance and Annuity Association of America,
              dated May 1, 1996
      *10.15  First Amendment to Loan Agreement between the Company and US
              Trust, dated July 24, 1997
      *10.16  $300,000 Commercial Promissory Note signed by the Company in
              favor of US Trust, dated July 24, 1997
      *10.17  $94,444.40 Commercial Promissory Note signed by the Company
              in favor of US Trust, dated August 12, 1997
      *10.18  Second Amendment to Loan Agreement between the Company and
              US Trust, dated January 16, 1998
      *10.19  $750,000 Commercial Promissory Note signed by the Company in
              favor of US Trust, dated January 16, 1998
      *10.20  Promissory Note signed by Anthony J. Armini in favor of the
              Company, dated September 26, 1998
</TABLE>

                                      15
<PAGE>   16

<TABLE>
<CAPTION>
EXHIBIT                               DESCRIPTION
NO.----                               -----------
<C>           <S>
      *10.21  Shareholders Agreement between NAR Holding Corporation and
              Anthony J. Armini, dated July 15, 1987
      *10.22  Lease between the Company and Teachers Insurance and Annuity
              Association of America, dated September 29, 1995
      *10.23  First Amendment to Lease and Expansion Agreement between the
              Company and Teachers Insurance and Annuity Association of
              America, dated July 29, 1998
      *10.24  Standard Cooperative Research and Development Agreement
              between the Company and the Naval Research Laboratory, dated
              January 21, 1997+
      *10.25  Cooperative Agreement between the Company and the United
              States of America U.S. Army Tank-Automotive and Armaments
              Command Armamanet Research, Development and Engineering
              Center, dated September 30, 1997+
      *10.26  Vendor Agreement Memorandum between the Company and
              Osteonics, dated February 2, 1998+
      *10.27  Sample Purchase Order between the Company and MicroSpring
              Company, Inc., dated October 24, 1996+
      *10.28  Asset Purchase Agreement between the Company and Falex
              Corporation, dated November 17, 1995+
      *10.29  Settlement between the Company and Erik Akhund, dated July
              1, 1998
      *10.30  1992 Stock Option Plan
      *10.31  Form of Stock Option Agreement under the 1992 Stock Option
              Plan
      *10.32  1998 Incentive and Nonqualified Stock Option Plan
     **10.33  Form of Incentive Stock Option under the 1998 Incentive and
              Nonqualified Stock Option Plan
     **10.34  Form of Nonqualified Stock Option under the 1998 Incentive
              and Nonqualified Stock Option Plan
     **10.35  Form of Nonqualified Stock Option for Non-Employee Directors
              under the 1998 Incentive and Nonqualified Stock Option Plan
      *10.36  Form of Lock-Up Agreement
     **10.37  Agreement Appointing Transfer Agent and Registrar between
              the Company and American Securities Transfer & Trust, Inc.,
              dated October 19, 1998
     **10.38  Certification of Corporate Secretary dated October 19, 1998
              concerning Agreement Appointing Transfer Agent and Registrar
              between the Company and American Securities Transfer &Trust,
              Inc.
     **10.39  Research and Development Agreement between the Company and
              Guidant Corporation, dated May 20, 1998+
     **10.40  Letter Agreement between the Company and Guidant
              Corporation, dated September 29, 1998+
    ***10.41  Form of Medical Advisory Board Agreement
    ***10.42  Form of Loan Agreement, dated January 7, 1999, between the
              Company and the following employees in the following
              amounts: Donald J. Dench ($12,500), Diane J. Ryan ($12,500),
              Mark and Kathleen Gadarowski ($12,500), Gregory Huntington,
              Sr. ($12,500), Leonard DeMild ($25,000), Michael Nelson
              ($12,500), Richard Sahagian ($12,500), Darryl Huntington
              ($12,500), Dennis Gadarowski ($12,500) and David Santos
              ($12,500)
    ***10.43  Terms and Conditions from Sample Purchase Order between the
              Company and Biomet, Incorporated
</TABLE>

                                      16

<PAGE>   17

<TABLE>
<CAPTION>
EXHIBIT                               DESCRIPTION
NO.----                               -----------
<C>           <S>
   ****10.44  Unit and Warrant Agreement between the Company and American
              Securities Transfer & Trust, Inc., dated April 9, 1999
      *10.45  Agreement between the Company and U.S. Army Space and
              Missile Defense Command, dated May 27, 1999
  *****10.46  Second Amendment to Lease and Extension Agreement
  *****10.47  Sublease Agreement
  *****10.48  Consent to Sublease Agreement
******+10.52  Distributorship agreement, dated January 26, 2000, by and
              between Implant Sciences Corporation and Medtec Iowa, Inc.
              Portions of this exhibit have been omitted pursuant to a
              request for confidential treatment
 ******10.53  Stock Purchase Agreement, dated March 2, 2000, by and
              between Implant Sciences Corporation and Medtec Iowa, Inc.
 ******10.54  Research and Development Agreement, dated March 13, 2000, by
              and between Implant Sciences Corporation and Cardiotech
              International
      *21.1   Subsidiaries of the Company
*******23.1   Consent of Independent Auditors
      *23.2   Consent of Foley, Hoag & Eliot LLP
      *24.1   Power of Attorney
</TABLE>

---------------
      * Previously filed in the Registration Statement on Form SB-2
        (Registration No. 333-64499) filed on September 29, 1998.

     ** Previously filed in Amendment No. 1 to the Registration Statement, filed
        on December 21, 1998.

    *** Previously filed in Amendment No. 2 to the Registration Statement, filed
        on February 11, 1999.

   **** Previously filed in Amendment No. 3 to the Registration Statement, filed
        on April 30, 1999.

  ***** Previously filed in Form 10QSB for quarter ending December 31, 1999,
        filed on February 14, 2000.

 ****** Previously filed in Form 10QSB for the quarter ending March 31, 2000,
        filed on May 15, 2000.

******* Previously filed in Form 10KSB for the fiscal year ending June 30,
        2000, filed on September 19, 2000.

      + Filed under application for confidential treatment.


                                      17
<PAGE>   18




                          IMPLANT SCIENCES CORPORATION



--------------------------------------------------------------------------------

                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                           Implant Sciences Corporation

Date: February 13, 2001                    /s/ Anthony J. Armini
                                           ---------------------------
                                           Anthony J. Armini
                                           President and CEO

Date: February 13, 2001                    /s/ Darlene M. Deptula-Hicks
                                           -----------------------------
                                           Darlene M. Deptula-Hicks
                                           Vice President and Chief Financial
                                           Officer (Principal Financial and
                                           Accounting Officer)

Date: February 13, 2001                    /s/ Stephen N. Bunker
                                           ---------------------------
                                           Stephen N. Bunker
                                           Vice President and Chief Scientist,
                                           Director

Date: February 13, 2001                    /s/ Robert E. Hoisington
                                           ------------------------------
                                           Robert E. Hoisington
                                           Director


Date: February 13, 2001                    /s/ Shunkuchi Shimizu
                                           -------------------------
                                           Shunkuchi Shimizu
                                           Director


Date: February 13, 2001                    /s/ Michael Szycher
                                           --------------------------
                                           Michael Szycher
                                           Director




                                       18