Exhibit 4.2
                          Generation Capital Associates
                     1085 Riverside Trace, Atlanta, GA 30328
                        Tel 404/303-8450 Fax 404/255-2218

                          Implant Sciences Corp. (IMX)
                    107 Audubon Road, #5, Wakefield, MA 01880
                        Tel 781/246-0700 Fax 781/246-1167

                            Financing Terms Agreement
                                December 11, 2001

1.  Amount of Financing            $1,500,000 (Purchase Price).

2.  Purchaser(s)                   Generation Capital Associates (GCA) and other
                                   accredited investors (collectively
                                   Purchaser(s)), and their transferees and
                                   assigns (Holder(s)).

3.  Securities - Units             Units (Units) consisting of one share of IMX
                                   Common Stock and one warrant (IMX Warrant).
                                   Two IMX Warrants are exercisable into one
                                   share of IMX common stock. The per unit
                                   purchase price for the Units (Unit Purchase
                                   Price) shall be 80% of the Market Price. The
                                   Market Price shall be the average closing bid
                                   price of the IMX common stock for the 20
                                   trading days commencing on the day following
                                   the mutual execution (Execution Date) of this
                                   Financing Terms Agreement (Agreement). The
                                   twentieth such trading day shall be the
                                   Market Price Determination Date.

               - IMX Warrants      The strike price of the IMX Warrants shall be
                                   the Market Price. The IMX Warrants shall be
                                   exercisable for five years commencing from
                                   the Execution Date and shall contain
                                   customary anti-dilution provisions. The IMX
                                   Warrants shall be exercisable for cash;
                                   provided however, commencing one year from
                                   the Execution Date, the IMX Warrants shall be
                                   "cashless exercise," at the option of the
                                   Holder(s), unless the underlying shares (IMX
                                   Warrants Shares) may be sold without
                                   restriction pursuant to an effective
                                   registration statement with current
                                   prospectus available.

4.  Number of Units                The number of Units shall be $1,500,000
                                   divided by the Unit Purchase Price, provided
                                   however, IMX shall not be required to issue
                                   Units comprising more than 20% of the
                                   aggregate number of shares of IMX common
                                   stock (including shares issuable upon
                                   exercise of the IMX Warrants) outstanding on
                                   the Execution Date without obtaining
                                   shareholder approval.

5.  Document Preparation Fee       IMX shall pay to GCA a document preparation
                                   fee of $5,000 and 20,000 IMX Warrants. The
                                   $5,000 fee shall be paid to GCA within two
                                   business days following the Closing Date (as
                                   defined herein); and the 20,000 IMX Warrants
                                   shall be delivered to GCA within two business
                                   days following the Market Price Determination
                                   Date.

6.  Placement Agent                IMX and GCA acknowledge that Investors
                                   Capital Corp. has acted as the placement
                                   agent (Placement Agent) in arranging this
                                   transaction and that the Placement Agent
                                   shall be compensated solely by IMX in
                                   accordance with the terms of a separate
                                   agreement between IMX and Placement Agent.
                                   [Cash compensation of $105,000 (payable on
                                   the Closing Date), plus 24,000 IMX Warrants.]

7.  Escrow                         David A. Rapaport, General Counsel of GCA,
                                   shall act as Escrow Agent for the IMX Shares,
                                   the IMX Warrants, and the IMX Warrants
                                   Shares. The address of the Escrow Agent is
                                   333 Sandy Springs Circle, Suite 230, Atlanta,
                                   GA 30328. (Tel 404/257-9150, Fax
                                   404/257-9125).

8.  Registration                   (a) IMX shall file a Registration Statement
                                   on Form S-3 for the IMX Shares, the IMX
                                   Warrants and the IMX Warrants Shares as soon
                                   as reasonably possible, but within 30 days
                                   following the Closing Date.

                                   (b) IMX shall use its best efforts to have
                                   the registration statement made effective
                                   with a current prospectus available within 90
                                   days following the Closing Date.

                                   (c) If the Registration Statement is not
                                   filed within 30 days following the Closing
                                   Date and/or is not effective within 90 days
                                   following the Closing Date, IMX shall issue
                                   2% more IMX Units for each month or part
                                   thereof that the Registration Statement has
                                   not been filed and/or is not made effective
                                   with a current prospectus available for up to
                                   twenty-four months following the Closing
                                   Date, or until the IMX Shares, the IMX
                                   Warrants and the IMX Warrants Shares may be
                                   sold under SEC Rule 144, subject only to
                                   Holder(s) compliance with the Form 144 filing
                                   and manner of sale requirements. In addition,
                                   the strike price of the IMX Warrants shall be
                                   reduced 5% for the first month or part
                                   thereof, and 2% for each additional month or
                                   part thereof, that the Registration Statement
                                   has not been filed and/or is not made
                                   effective with a current prospectus available
                                   for up to twenty-four months following the
                                   Closing Date, or until the IMX Shares, the
                                   IMX Warrants and the IMX Warrants Shares may
                                   be sold under SEC Rule 144, subject only to
                                   Holder(s) compliance with the Form 144 filing
                                   and manner of sale requirements.


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8.  Registration (cont'd.)         (d) As soon as reasonably possible after the
                                   effective date of the Registration Statement,
                                   Escrow Agent shall submit the Escrow
                                   Certificates (as defined herein) with legend
                                   to the IMX transfer agent. IMX shall cause
                                   the IMX transfer agent to return the
                                   unlegended Escrow Certificates to Escrow
                                   Agent registered in the name of Escrow Agent
                                   within seven days of receipt by transfer
                                   agent, so that Escrow Agent can deposit the
                                   IMX Shares into a securities escrow account
                                   at a brokerage firm. IMX shall issue 2% more
                                   Units for each week or part thereof beyond
                                   such seven day time period that the Escrow
                                   Agent has not received the unlegended Escrow
                                   Certificates. If at any time Escrow Agent is
                                   required to deliver IMX Shares, IMX Warrants
                                   or IMX Warrants Shares that are not covered
                                   by a current prospectus under a valid
                                   registration statement, or eligible to be
                                   transferred pursuant to a valid exemption
                                   from registration, Escrow Agent shall request
                                   IMX or its transfer agent to place a standard
                                   144 restrictive legend on the certificates
                                   for such securities prior to transfer and
                                   delivery of such certificates.

9.  Accuracy of IMX SEC            IMX represents and warrants that its filings
    filings                        with the SEC in the last two years are true
                                   and complete and do not omit any material
                                   information or fail to include any
                                   information which is necessary to make the
                                   information set forth therein not misleading.

10.  Time  Schedule                (a) This Agreement shall not be valid unless
                                   signed by each of the parties by December 12,
                                   2001.

                                   (b) Within ten business days following the
                                   Execution Date, Purchaser(s) shall deposit
                                   the $1,500,000 Purchase Price with Escrow
                                   Agent.

                                   (c) Within ten business days following the
                                   Execution Date, IMX shall deposit
                                   certificate(s) (Escrow Certificates and
                                   Escrow Shares) for 300,000 shares of IMX
                                   common stock (20 x 10,000 plus 20 x 5,000),
                                   as a deposit for delivery to Purchaser(s)
                                   and/or Holder(s) of the IMX Shares and IMX
                                   Warrant Shares (upon exercise of the IMX
                                   Warrants). The Escrow Certificates shall be
                                   registered in the name of Escrow Agent and
                                   shall bear a standard Rule 144 restrictive
                                   legend.

                                   (d) Within ten business days following the
                                   Execution Date, IMX shall deposit ten IMX
                                   Warrants forms, which shall be blank as to
                                   the name of the Purchaser(s), the number of
                                   warrants, the strike price and the date of
                                   issue. Within two business days of the Market
                                   Price Determination Date, Escrow Agent shall
                                   complete the blank terms in accordance with
                                   Sections 3 and 4 above, and deliver the
                                   completed IMX Warrants forms to Purchaser(s)
                                   and a copy of the completed IMX Warrants
                                   forms to IMX. Escrow Agent shall also return
                                   to IMX any uncompleted IMX Warrants forms.

                                   (e) Within two business days of the receipt
                                   of the Purchase Price from Purchaser(s) and
                                   of the receipt of the Escrow Certificates and
                                   the ten blank IMX Warrants forms from IMX,
                                   Escrow Agent shall wire the $1,500,000
                                   Purchase Price to IMX. The date upon which
                                   the Escrow Agent wires the $1,500,000
                                   Purchase Price to IMX is the Closing Date.

                                   (f) Within two business days following the
                                   Market Price Determination Date, Escrow Agent
                                   shall return to IMX the certificates for any
                                   excess Escrow Shares, which is the difference
                                   between the number of IMX Shares purchased by
                                   Purchaser(s) in accordance with Sections 3
                                   and 4 above plus the number of IMX Warrants
                                   Shares issuable to Purchaser(s) upon exercise
                                   of the IMX Warrants, and the 300,000 Escrow
                                   Shares.

                                   (g) On the Closing Date the Purchaser(s)
                                   shall be deemed to be the owners of the IMX
                                   Shares and the IMX Warrants.

11.  Binding Agreement             The parties shall be legally bound by the
                                   above terms and shall execute such further
                                   documents as may be required to implement the
                                   provisions of this Agreement.

Implant Sciences Corporation

By: /s/ Anthony J. Arminin                              Date: December 12, 2001
    ---------------------------------------------             ------------------
    Anthony J. Armini, President, CEO & Chairman

Generation Capital Associates

By: /s/ Frank E. Hart                                   Date: December 12, 2001
    ---------------------------------------------             ------------------
    Frank E. Hart, General Partner

Escrow Agent

/s/ David A. Rapaport                                   Date: December 12, 2001
    ---------------------------------------------             ------------------
    David A. Rapaport


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