<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549

                                  FORM 10-KSB

                        Amendment No. 1 to form 10-KSB

               Annual Report Pursuant to Section 13 or 15 (d) of
                      The Securities Exchange Act of 1934

For Fiscal Year Ended                                   Commission File Number
December 31, 1996                                             0-4671

                              ISOMET CORPORATION
                              ------------------
                                        
State of Incorporation                               IRS Employer Identification
   New Jersey                                               No. 22-1591074

                    Address of Principal Executive Offices
                             5263 Port Royal Road
                          Springfield, Virginia 22151

                  Company's Telephone Number: (703) 321-8301

          Securities Registered Pursuant to Section 12(b) of the Act:

                                     None

          Securities Registered Pursuant to Section 12(g) of the Act:

                         Common Stock Par Value $1.00

             1,905,590 Shares Were Outstanding on January 31, 1997

Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 or 15(d) of The Securities Exchange Act of 1934 during
the preceeding 12 months (or for such shorter period the Company was required to
file such report(s)), and (2) has been subject to such filing requirements for
the past ninety (90) days.  Yes  X     No 
                               -----      -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of regulation SB is not contained herein and will not be contained, to the best
of registrant knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. (X)

On January 31, 1997 the approximate aggregate market value of the voting stock
held by non-affiliates of the Company was $2,030,128.
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                                  SIGNATURES


     Pursuant to the requirement of The Securities and Exchange Act of 1934, the
Registrant has duly caused this Amendment No. 1 to Form 10-KSB for the fiscal
year ended December 31, 1996 to be signed on it's behalf by the undersigned
thereunto duly authorized.



                                              _________________________________
                                              ISOMET CORPORATION
                                              (Registrant)



Date:_________________                        By:______________________________
                                              Jerry W. Rayburn
                                              Executive Vice President, Finance
                                              and Treasurer and Director



 

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                               INDEX TO EXHIBITS

  *3.1  Certificate of Incorporation of Registrant filed May 9, 1956.

  *3.2  Certificate of Amendment of Certificate of Incorporation of Registrant
        filed April 8, 1959.

  *3.3  Certificate of Amendment of Certificate of Incorporation of Registrant
        filed February 8, 1961.

  *3.4  Certificate of Amendment of Certificate of Incorporation of Registrant
        filed June 15, 1966.

  *3.5  Certificate of Amendment of Certificate of Incorporation of Registrant
        filed December 28, 1967.

  *3.6  Certificate of Amendment of Certificate of Incorporation of Registrant
        filed April 7, 1969.

  *3.7  Certificate of Incorporation of Registrant (Restated) filed April 7,
        1969.

 **3.8  Certificate of Amendment to the Certificate of Incorporation of
        Registrant (Restated) filed June 22, 1988.

  *3.9  By-laws of Registrant.

***3.10 Subsidiaries of the Company.

  27    Financial Data Schedule

  13    Annual Report to Shareholders


*   Incorporated by reference to Exhibits to the Registrant Report on Form 10-K
    for the year ended December 31, 1987.

**  Incorporated by reference to Exhibits to the Registrant Report on Form 10-K
    for the year ended December 31, 1988.

*** Incorporated by reference to Exhibits to the Registrant Report on Form 10-K
    for the year ended December 31, 1990.



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