<PAGE>

                                   UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, DC  20549

                                     FORM 10-Q


(Mark One)


     [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
            EXCHANGE ACT OF 1934
            For the quarterly period ended JUNE 30, 1998 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: 0-28236


                            INVISION TECHNOLOGIES, INC.
               (Exact name of registrant as specified in its charter)

                   DELAWARE                               94-3123544
       (State or other jurisdiction of                (I.R.S. Employer 
        incorporation or organization)               Identification No.)

                                          
                      7151 GATEWAY BOULEVARD, NEWARK, CA 94560
            (Address of principal executive offices, including zip code)

                                   (510) 739-2400
                (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___

On June 30, 1998, there were 12,009,672 shares of the Registrant's Common 
Stock outstanding.



                                       1

<PAGE>

                          INVISION TECHNOLOGIES, INC.
                                   FORM 10-Q
                                     INDEX
                                          
<TABLE>
<CAPTION>
ITEM                                                                  PAGE
----                                                                  ----
<S>                                                                   <C>
PART  I:  FINANCIAL INFORMATION


1.   Condensed Consolidated Financial Statements (unaudited)

   a.   Condensed Consolidated Balance Sheets - June 30, 1998 and
        December 31, 1997 . . . . . . . . . . . . . . . . . . . . . . .3

   b.   Condensed Consolidated Statements of Income - Three months
        and six months ended June 30, 1998 and 1997 . . . . . . . . . .4

   c.   Condensed Consolidated Statements of Cash Flows - Six months
        ended June 30, 1998 and 1997. . . . . . . . . . . . . . . . . .5

   d.   Notes to Condensed Consolidated Financial Statements. . . . . .6

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



PART  II.  OTHER INFORMATION

2.   Changes in Securities and Use of Proceeds. . . . . . . . . . . . .17

4.   Submission of Matters To a Vote of Security Holders. . . . . . . .17

5.   Other Information. . . . . . . . . . . . . . . . . . . . . . . . .18

6.   Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .19

Signature Page. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20

Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
</TABLE>

                                       2
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                       (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                      (UNAUDITED)
                                                        JUNE 30,     DECEMBER 31,
                                                          1998           1997
                                                      -----------    ------------
<S>                                                   <C>            <C>
ASSETS

Current assets:
     Cash and cash equivalents                         $ 12,337       $ 14,111
     Restricted cash                                        302          1,556
     Short-term investments                               2,020          5,079
     Accounts receivable                                 20,673         16,847
     Inventories                                         11,642         10,781
     Other current assets                                 1,130            531
                                                       --------       --------
          Total current assets                           48,104         48,905

Long-term restricted cash                                   800            800
Property and equipment, net                               7,798          7,180
Other assets                                                939            366
                                                       --------       --------
                                                       $ 57,641       $ 57,251
                                                       --------       --------
                                                       --------       --------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                  $  4,950       $  5,097
     Accrued liabilities                                  4,084          4,032
     Short-term debt                                      3,989          4,168
     Deferred revenue                                       520          3,376
     Current maturities of long-term obligations            420            426
                                                       --------       --------
          Total current liabilities                      13,963         17,099
                                                       --------       --------

Long-term obligations                                     1,222          1,336
                                                       --------       --------
Stockholders' equity:
     Common stock, $0.001 par value, 20,000 shares 
       authorized; 12,010 and 11,906 issued and 
       outstanding                                           12             12
     Additional paid-in capital                          57,024         56,602
     Deferred stock compensation expense                   (165)          (199)
     Accumulated deficit                                (13,727)       (17,599)
     Treasury stock, at cost (81 shares in 1998)           (688)            --
                                                        --------       --------
          Total stockholders' equity                     42,456         38,816
                                                       --------       --------
                                                       $ 57,641       $ 57,251
                                                       --------       --------
                                                       --------       --------
</TABLE>

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

                                       3

<PAGE>

                             INVISION TECHNOLOGIES, INC
                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                    (UNAUDITED)

<TABLE>
<CAPTION>
                                                    THREE MONTHS ENDED           SIX MONTHS ENDED
                                                         JUNE 30,                     JUNE 30,
                                                 -----------------------       -----------------------
                                                   1998           1997           1998           1997
                                                 --------       --------       --------       --------
<S>                                              <C>            <C>            <C>            <C>
Revenues                                         $ 15,432       $ 13,408       $ 31,312       $ 22,785
Cost of revenues                                    9,114          6,693         17,288         11,401
                                                 --------       --------       --------       --------
  Gross profit                                      6,318          6,715         14,024         11,384
                                                 --------       --------       --------       --------
Operating expenses:
  Research and development                          1,622          2,348          3,309          3,427
  Sales and marketing                               1,576          1,511          3,238          2,843
  General and administrative                        1,621          1,514          3,430          3,029
                                                 --------       --------       --------       --------
    Total operating expenses                        4,819          5,373          9,977          9,299
                                                 --------       --------       --------       --------

Income from operations                              1,499          1,342          4,047          2,085
Interest expense                                      (24)          (261)           (82)          (288)
Interest and other income, net                        201            180            435            202
                                                 --------       --------       --------       --------
Income before provision for income taxes            1,676          1,261          4,400          1,999

Provision for income taxes                             64            349            528            474
                                                 --------       --------       --------       --------
Net income                                       $  1,612       $    912       $  3,872       $  1,525
                                                 --------       --------       --------       --------
                                                 --------       --------       --------       --------
Net income per share:
     Basic                                       $   0.13       $   0.08       $   0.32       $   0.15
                                                 --------       --------       --------       --------
                                                 --------       --------       --------       --------
     Diluted                                     $   0.13       $   0.08       $   0.30       $   0.13
                                                 --------       --------       --------       --------
                                                 --------       --------       --------       --------
Weighted average shares outstanding:
     Basic                                         12,050         10,892         12,036         10,391
     Diluted                                       12,895         11,962         12,900         11,488
</TABLE>

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


                                       4
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (IN THOUSANDS)
                                    (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                           SIX MONTHS ENDED
                                                                                                JUNE 30,
                                                                                      --------------------------
                                                                                         1998            1997
                                                                                      ----------      ----------
<S>                                                                                   <C>            <C>

Net cash used in operating activities                                                  $ (3,521)      $ (1,329)
                                                                                      ----------      ----------
Cash flows from investing activities:
      Purchases of  property and equipment                                               (1,428)        (2,665)
      Sales (purchases) of short-term investments, net                                    3,059        (17,737)
      Release of restricted cash                                                          1,254             --
      Additions to other assets                                                            (573)            --
                                                                                      ----------      ----------
          Net cash provided by (used in) investing activities                             2,312        (20,402)
                                                                                      ----------      ----------

Cash flows from financing activities:
      Proceeds from debt financing                                                           --          2,244
      Repayments of debt, net                                                              (299)           (36)
      Repurchases of common stock                                                          (688)            --
      Proceeds from issuance of common stock, net                                           422         21,259
                                                                                      ----------      ----------
          Net cash provided by (used in) financing activities                              (565)        23,467
                                                                                      ----------      ----------

Net increase (decrease) in cash and cash equivalents for the period                      (1,774)         1,736
Cash and cash equivalents at beginning of period                                         14,111          2,363
                                                                                      ----------      ----------
Cash and cash equivalents at end of period                                             $ 12,337       $  4,099
                                                                                      ----------      ----------
                                                                                      ----------      ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
      Interest paid                                                                    $    114       $      2
      Income taxes paid                                                                $    733       $     --

</TABLE>


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


                                       5
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (UNAUDITED)


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.   INTERIM UNAUDITED FINANCIAL INFORMATION

     The accompanying interim unaudited condensed consolidated financial 
statements have been prepared in accordance with generally accepted 
accounting principles and with the instructions to Form 10-Q and Rule 10-01 
of Regulation S-X.  Accordingly, they do not contain all of the information 
and footnotes required by generally accepted accounting principles for 
complete financial statements.  In the opinion of management, the 
accompanying unaudited condensed consolidated financial statements reflect 
all adjustments (consisting only of normal recurring adjustments) considered 
necessary for fair presentation.  These financial statements should be read 
in conjunction with the audited consolidated financial statements of InVision 
Technologies Inc. and its subsidiaries (the "Company") as of  December 31, 
1997 and 1996 and for each of the three years in the period ended December 
31, 1997, including notes thereto, included in the Company's Annual Report on 
Form 10-K (Commission File No. 0-20815).

     Operating results for the three month and six month periods ended June 
30, 1998 may not necessarily be indicative of the results that may be 
expected for the year ended December 31, 1998 or any other future period. 

2.   NET INCOME PER SHARE

     In December 1997, the Company adopted Statement of Financial Accounting 
Standards No. 128 ("FAS 128"), "Earnings Per Share." All historical earnings 
per share information has been restated as required by FAS 128.

     Basic earnings per share is computed by dividing income available to 
common stockholders by the weighted-average common shares outstanding for the 
period. Diluted earnings per share reflects the weighted-average common 
shares outstanding plus the potential effect of dilutive securities or 
contracts which are convertible to common shares such as options, warrants, 
convertible debt and preferred stock.

     The  following  is a  reconciliation  between  the  components  of the 
basic and diluted net income per share calculations for the periods presented 
below (in thousands, except per share amounts):

<TABLE>
<CAPTION>


                                                  Three months ended June 30,
                                    -------------------------------------------------------
                                                1998                         1997
                                    --------------------------    -------------------------
                                                        Per                          Per     
                                                       Share                        Share    
                                    Income   Shares    Amount   Income   Shares     Amount   
                                    ------   ------    ------   ------   ------    ------    
<S>                                 <C>      <C>       <C>       <C>      <C>       <C>                                   
Basic net income per share:
Income available to
Common Stockholders                 $1,612   12,050   $0.13   $  912     10,892   $   0.08   
Effect of dilutive securities:
Options                                         845                       1,070              
Diluted net income per share:       ---------------           -----------------
Income available to Common
Stockholders plus assumed
conversions                         $1,612   12,895   $0.13   $  912     11,962   $   0.08 
                                    ---------------           -----------------
                                    ---------------           -----------------


<CAPTION>
                                                 Six months ended June 30,
                                    -------------------------------------------------------
                                               1998                          1997
                                    --------------------------    -------------------------
                                                        Per                          Per
                                                       Share                        Share
                                    Income   Shares    Amount   Income   Shares     Amount
                                    ------   ------    ------   ------   ------     ------
<S>                                <C>      <C>       <C>       <C>      <C>       <C>
Basic net income per share:
Income available to
Common Stockholders                 $3,872   12,036    $   0.32  $1,525   10,391   $0.15
Effect of dilutive securities:
Options                                         864                        1,097
Diluted net income per share:       ---------------              ---------------
Income available to Common
Stockholders plus assumed
conversions                         $3,872   12,900    $   0.30   $1,525   11,488  $0.13
                                    ---------------              ----------------
                                    ---------------              ----------------

</TABLE>


     The computation of diluted net income per share for the quarter and six 
months ended June 30, 1998 does not include 239,223 shares and 236,719 
shares, respectively, because to do so would have been anti-dilutive for the 
periods presented. 

                                       6

<PAGE>

                            INVISION TECHNOLOGIES, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                    (UNAUDITED)


3.   ACCOUNTS RECEIVABLE

      The components of accounts receivable consist of the following
(in thousands):



                                                   JUNE 30,       DEC. 31,
                                                     1998           1997
                                                   --------       --------
Billed                                             $16,395         $11,009
Unbilled                                             4,278           5,838
                                                   --------       --------
                                                   $20,673         $16,847
                                                   --------       --------
                                                   --------       --------

4.   INVENTORIES

     The components of inventory consist of the following (in thousands):

                                                   JUNE 30,       DEC. 31,
                                                    1997           1998
                                                   --------       --------
Raw material and purchased components                $5,993         $6,817
Work-in-process                                       5,077          3,290
Finished goods                                          572            674
                                                   --------        -------
                                                    $11,642        $10,781
                                                   --------       --------
                                                   --------       --------

5.   PROPERTY AND EQUIPMENT

     The components of  property and equipment consist of the following (in
thousands): 

                                                   JUNE 30,       DEC. 31,
                                                     1998           1997
                                                   --------       --------
Machinery and  Equipment                            $4,367         $3,626
Self constructed assets                              2,827          2,249
Furniture and fixtures                               1,045            976
Leasehold improvements                               2,911          2,872
                                                   --------       --------
                                                    11,150          9,723
  Less:  accumulated depreciation                   (3,352)        (2,543)
                                                   --------       --------
                                                    $7,798         $7,180
                                                   --------       --------
                                                   --------       --------

6.   FOLLOW-ON EQUITY OFFERING

     In May 1997, the Company sold 1,875,000 shares of Common Stock in an 
underwritten public offering at $12.00 per share generating net proceeds to 
the Company of approximately $21.2 million including proceeds from the 
underwriters over-allotment option exercised in June 1997.


                                       7
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS


     THE FOLLOWING DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS WHICH 
INVOLVE RISKS AND UNCERTAINTIES. WHEN USED IN THIS DISCUSSION, THE WORDS 
"ANTICIPATE," "BELIEVE," "ESTIMATE," AND "EXPECT" AND SIMILAR EXPRESSIONS AS 
THEY RELATE TO THE COMPANY OR ITS MANAGEMENT ARE INTENDED TO IDENTIFY SUCH 
FORWARD-LOOKING STATEMENTS. THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR 
ACHIEVEMENTS COULD DIFFER MATERIALLY FROM THE RESULTS EXPRESSED IN, OR 
IMPLIED BY, THESE FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR 
CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATED TO MARKET ACCEPTANCE OF 
THE COMPANY'S CURRENT PRODUCTS AND NEW PRODUCTS IN DEVELOPMENT, FLUCTUATIONS 
IN THE COMPANY'S QUARTERLY AND ANNUAL OPERATING RESULTS, THE LOSS OF ORDERS 
OF THE COMPANY'S PRODUCTS OR THE FAILURE TO OBTAIN ADDITIONAL ORDERS, LOSS OF 
ANY OF THE COMPANY'S SOLE SOURCE SUPPLIERS, INTENSE COMPETITION, RELIANCE ON 
LARGE ORDERS, CONCENTRATION OF THE COMPANY'S CUSTOMERS, RISKS RELATED TO THE 
LENGTHY SALES CYCLES FOR THE COMPANY'S PRODUCTS, BUDGETING AND FUNDING 
LIMITATIONS OF THE COMPANY'S CUSTOMERS AND PROSPECTIVE CUSTOMERS, AS WELL AS 
SUCH OTHER RISKS AS ARE DESCRIBED UNDER "BUSINESS RISKS" AND IN THE COMPANY'S 
ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997.

OVERVIEW

     InVision Technologies, Inc. ("InVision," or together with its 
subsidiaries, the "Company") designs, manufactures and markets explosive 
detection systems based on advanced CT technology. InVision was formed in 
September 1990 to design and develop the CTX 5000 and remained in the 
development stage through December 1994. In March 1994, InVision received its 
first commercial order for a CTX 5000 system from the Brussels International 
Airport in Belgium and since such time has received orders for a total of 133 
systems of which a total of 117 had been shipped as of June 30, 1998.  Today 
the Company markets its more advanced CTX 5000 and CTX 5500 explosive 
detection systems (the "CTX 5000 Series") and has other products under 
development.

     On September 30, 1997, InVision acquired Quantum Magnetics, Inc., 
("Quantum") a privately held developer of explosive detection equipment based 
on quadrupole resonance technology.  The transaction has been accounted for 
as a pooling of interests in the quarter ended September 30, 1997; therefore, 
all prior periods have been restated to include Quantum's results.  Quantum 
is currently a development stage company with products in the prototype stage 
and a recent order from the FAA to supply two QSCAN-500 advanced technology 
systems with an option for three more units.  Quantum is also a leading 
supplier of research and development services in the area of magnetic sensing 
and detection technologies to a number of government agencies.

     For the three month and six month periods ended June 30, 1998, the 
Company had revenues of $15.4 million and $31.3 million, respectively, and as 
of June 30, 1998 had backlog equipment orders, service agreements and R&D 
contracts of approximately $25 million.

     The Company considers research and development to be a vital part of its 
operating discipline and continues to dedicate substantial resources for 
research to enhance the performance, functionality and reliability of its 
explosive detection systems based on "CT" or CAT Scan technology. At June 30, 
1998, the Company had 108 full-time employees engaged in research and 
development activities while also using the services of 16 specialized 
contract employees and consultants in this area.  Total research and 
development expenditures by the Company are partially offset by amounts 
reimbursed by the FAA and other government and private agencies under 
development contracts and grants. The Company believes that investment in 
research and development in absolute dollars will increase substantially to 
meet its future needs regardless of the level of funding received from the 
FAA. During the six months ended June 30, 1998 and 1997, the Company spent 
$8.1 million and $5.8 million, respectively, on research and development 
activities. Of these amounts, $4.8 million and $2.4 million, respectively, 
were funded by the FAA and other government and private agencies under 
development contracts and grants. To the extent that contract and grant 
receipts decline in the future, research and development expenditures borne 
by the Company would increase, and the Company expects that its results of 
operations would be adversely impacted.


                                       8
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)

     In any given fiscal year, the Company's revenues have principally 
consisted, and the Company believes will continue to consist, of orders of 
multiple units from a limited number of customers. During the first six 
months of 1998, approximately $21.2 million, or 68%, of the Company's 
revenues, were generated from sales to the Company's largest customer, the 
U.S. government. During the fiscal year ended December 31, 1997, revenues 
from the Company's largest customer, the U.S. government, were approximately 
$32.1 million, or 54%, of the Company's revenues.

     The Company markets its products both directly through internal sales 
personnel and indirectly through authorized agents, distributors and systems 
integrators. In the United States, the Company markets its CTX 5000 Series 
primarily through direct sales personnel. Internationally, the Company 
utilizes both a direct sales force and authorized agents to sell its 
products. During the six months ended June 30, 1998 and the year ended 
December 31, 1997, international sales represented 35% and 46% respectively, 
of the Company's revenues. 

     The sales cycle of the CTX 5000 Series is often lengthy due to the 
protracted approval process that typically accompanies large capital 
expenditures and the time required to manufacture the CTX 5000 Series and 
install and assimilate the CTX 5000 Series. Typically, six to twelve months 
may elapse between a new customer's initial evaluation of the Company's 
system and the execution of a contract. Another three months to a year may 
elapse prior to shipment of the CTX 5000 Series as the customer site is 
prepared and the CTX 5000 Series is manufactured. During this period the 
Company expends substantial funds and management resources but recognizes no 
associated revenue.

     The Company recognizes revenue upon shipment unless extended acceptance 
criteria exist, in which case revenue is recognized upon completion of such 
acceptance criteria. The Company typically requires significant customer 
deposits and progress payments in advance of shipment on customer purchase 
orders. Provision for estimated installation, training and warranty costs is 
recorded at the time revenue is recognized. Systems typically carry a 
one-year warranty.


                                       9
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS 
                                   (CONTINUED)

RESULTS OF OPERATIONS

     The following table sets forth certain income and expenditure items from 
the Company's condensed consolidated statements of operations expressed as a 
percentage of revenues for the periods indicated.


<TABLE>
<CAPTION>

                                               THREE MONTHS ENDED                           SIX MONTHS ENDED
                                                      JUNE 30,                                    JUNE 30,
                                          ---------------------------                 ----------------------------
                                             1998              1997                      1998               1997
                                             ----              ----                      ----               ----
<S>                                        <C>               <C>                       <C>                <C>
Revenues                                    100.0%            100.0%                    100.0%             100.0%
Cost of revenues                             59.1              49.9                      55.2               50.0
                                          -------           -------                   -------            -------
      Gross profit                           40.9              50.1                      44.8               50.0
                                          -------           -------                   -------            -------

Operating expenses:

         Research and development            10.5              17.5                      10.6               15.0
         Sales and marketing                 10.2              11.3                      10.3               12.5
         General and administrative          10.5              11.3                      11.0               13.3
                                          -------           -------                   -------            -------
             Total operating expenses        31.2              40.1                      31.9               40.8
                                          -------           -------                   -------            -------

Income from operations                        9.7              10.0                      12.9                9.2
Interest expense                             (0.2)             (1.9)                     (0.3)              (1.3)
Interest and other income, net                1.3               1.3                       1.4                0.9
                                          -------           -------                   -------            -------
Income before provision for income taxes     10.8               9.4                      14.0                8.8


Provision for income taxes                    0.4               2.6                       1.7                2.1
                                          -------           -------                   -------            -------
      Net income                             10.4 %             6.8%                     12.3%               6.7%
                                          -------           -------                   -------            -------
                                          -------           -------                   -------            -------
</TABLE>

CURRENT QUARTER COMPARED TO PRIOR YEAR QUARTER

     REVENUES.   The Company's revenues are comprised of system revenues, 
which include sales of the CTX 5000 Series, accessories, installation and 
configuration, and maintenance related to product support. 

     Revenues increased by 15.1% to $15.4 million for the second quarter of 
1998, compared to $13.4 million in the second quarter of 1997. This increase 
was primarily the result of the growth in unit shipments generated from the 
54 unit order by the FAA in December 1996 and continuing shipments into 
international markets.   In the second quarter of 1998, the company shipped 
17 units (10 units to the FAA and 7 units to international customers), 
compared to 13 units (4 units to the FAA and 9 units to international 
customers), in the second quarter of 1997.  The Company typically ships 
against a backlog of orders for its products.  The backlog (excluding R&D 
contracts) as of June 30, 1998 was $18.2 million, compared to $62.1 million 
as of June 30, 1997.

     Quantum research and development contracts were reported as revenues 
prior to the acquisition by Invision.  All Quantum research and development 
revenues have been classified as a reduction to research and development 
expense to conform with the Company's policy.


                                       10
<PAGE>

                          INVISION TECHNOLOGIES, INC.
              MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)

      GROSS PROFIT.  Cost of revenues primarily consists of purchased 
materials procured for use in the assembly of the Company's products, as well 
as manufacturing labor, overhead and warranty costs. In any given period the 
Company's gross profit may be affected by several factors, including product 
configuration, location of the installation, and complexity of integration 
into various airport environments.   Gross profit decreased 5.9% to $6.3 
million in the second quarter of 1998 from $6.7 million in the second quarter 
of 1997.  Gross margins were 40.9% and 50.1%, respectively.  The decrease in 
gross margins was primarily due to configurations of units shipped and volume 
discounts in the second quarter of 1998 that resulted in lower average 
selling prices of systems shipped during the period. In the absence of any 
unusual circumstances or events, the Company expects the average selling 
prices and gross margins of systems to increase in future quarters.

     RESEARCH AND DEVELOPMENT.  Research and development expenditures consist 
primarily of compensation paid to personnel engaged in research and 
development activities, amounts paid for outside services, and costs of 
materials utilized in the development of hardware products, including 
prototype units. All software and hardware research and development costs are 
expensed as incurred. Beginning in 1991, total research and development 
expenditures by the Company have been partially offset by amounts reimbursed 
by the FAA and other government and private agencies under development 
contracts and grants. These services are provided on both a cost and cost 
plus basis. The Company believes that research and development expenditures 
in absolute dollars will increase substantially in the future regardless of 
the level of funding received from the FAA. 

     Net research and development expenses would have been $2.1 million in 
the second quarter of 1998 without the capitalization of software development 
costs in accordance with Statement of Financial Accounting Standards No. 86 
("FAS 86"), "Accounting for the Costs of Computer Software to be Sold, 
Leased, or Otherwise Marketed." Under FAS 86, software production costs for 
computer software that is to be used as an integral part of a product or 
process are to be capitalized once technological feasibility has been 
established for the software and all research and development activities for 
the other components of the product or process have been completed.  No 
software development costs were capitalized in the second quarter of 1997 
because research and development on the new product line had not been 
completed.  Before considering the impact of software capitalization, gross 
research and development expenditures increased by 30.3% to $4.3 million in 
the second quarter of 1998 from $3.3 million in the second quarter of 1997. 
Of these amounts, $2.1 million and $0.9 million, respectively, were funded by 
research and development contracts and grants from the FAA and other 
governmental and private entities.  As a percentage of revenues, net research 
and development expenditures decreased to 10.5% in the second quarter of 1998 
from 17.5% in the second quarter of 1997. The increase in research and 
development expenditures is primarily the result of personnel additions and 
increased spending on engineering materials and services. 

     SALES AND MARKETING.  Sales and marketing expenditures consist primarily 
of compensation paid to direct and indirect sales and marketing personnel, 
payments to consultants, travel related to the sales process, and other 
selling and distribution costs. 

     Sales and marketing expenditures increased by 4.3% to $1.6 million in 
the second quarter of 1998 from $1.5 million in the second quarter of 1997. 
As a percentage of revenues, sales and marketing expenditures decreased to 
10.2% in the second quarter of 1998 from 11.3% in the second quarter of 1997. 

     GENERAL AND ADMINISTRATIVE.  General and administrative expenses consist 
primarily of compensation paid to administrative personnel, including 
directors, payments to consultants, professional service fees, and travel and 
other general expenses. 

     General and administrative expenses increased by 7.1% to $1.6 million in 
the second quarter of 1998 from $1.5 million in the second quarter of 1997. 
As a percentage of revenues, general and administrative expenses decreased to 
10.5% in the second quarter of 1998 from 11.3% in the second quarter of 1997. 
The increase in general and administrative expenses in absolute dollars is 
primarily the result of personnel additions and increased professional and 
consulting costs associated with the Company's growth, increased insurance 
costs, and increased costs of operations associated with being a publicly 
traded company.

     INTEREST EXPENSE.  Interest expense decreased to $24,000 in the second 
quarter of 1998 from $261,000 in the second quarter of 1997. Interest expense 
in the first six months of 1997 consists primarily of a non-cash charge 
resulting from the amortization of a loan warrant discount.


                                       11
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)

     INTEREST AND OTHER INCOME, NET.  Interest and other income, net, 
increased to $201,000 in the second quarter of 1998 from $180,000 in the 
second quarter of 1997.  The 1998 amount consists primarily of interest 
income for the quarter and results from the significantly higher cash and 
short-term investment balances in the second quarter of 1998 as compared to 
the same quarter in 1997.

PROVISION FOR INCOME TAXES.  The Company revised the effective tax rate in 
the second quarter of 1998 based on current estimates for the year. The 
provision for income taxes of $64,000 in the quarter reflects the effects of 
the cumulative adjustment based on an effective tax rate of 12.0% for the 
year.

CURRENT SIX MONTH PERIOD COMPARED TO PRIOR SIX MONTH PERIOD

     REVENUES.  Revenues increased by 37.4% to $31.3 million for the first 
six months of 1998, compared to $22.8 million in the first six months of 
1997. This increase was primarily the result of the growth in unit shipments 
generated from the 54 unit order by the FAA in December 1996 and continuing 
shipments into international markets. In the first half of 1998, the Company 
shipped 33 units (22 units to the FAA and 11 units to international 
customers), compared to 22 units (9 units to the FAA and 13 units to 
international customers), in the first half of 1997.  The Company typically 
ships against a backlog of orders for its products.  The backlog (excluding 
R&D contracts) as of June 30, 1998 was $18.2 million, compared to $62.1 
million as of June 30, 1997.

     Quantum research and development contracts were reported as revenues 
prior to the acquisition by Invision. All Quantum research and development 
revenues have been classified as a reduction to research and development 
expense to conform with the Company's policy. 

      GROSS PROFIT.   Gross profit increased 23.2% to $14.0 million in the 
first six months of 1998 from $11.4 million in the first six months of 1997.  
Gross margins were 44.8% and 50.0%, respectively.  The decrease in gross 
margin percentage was primarily due to configurations of units shipped and 
volume discounts in the second quarter of 1998 that resulted in lower average 
selling prices of systems shipped during the quarter.  In the absence of any 
unusual circumstances or events, the Company expects the average selling 
prices and gross margins of systems to increase in future periods.

     RESEARCH AND DEVELOPMENT.  Beginning in 1991, research and development 
expenditures by the Company have been partially offset by amounts reimbursed 
by the FAA and other government and private agencies under development 
contracts and grants.  These services are provided on both a cost and cost 
plus basis. The Company believes that research and development expenditures 
in absolute dollars will increase substantially in the future regardless of 
the level of funding received from the FAA. 

     Net research and development expenses would have been $3.8 million in 
the first six months of 1998 without the capitalization of software 
development costs in accordance with FAS 86.  No software development costs 
were capitalized in the first six months of 1997 because research and 
development on the new product line had not been completed.  Before 
considering the impact of software capitalization, gross research and 
development expenditures increased by 48.3% to $8.6  million in the first six 
months of 1998 from $5.8 million in the first six months of 1997. Of these 
amounts, $4.8 million and $2.4 million, respectively, were funded by research 
and development contracts and grants from the FAA and other governmental and 
private entities.  As a percentage of revenues, net research and development 
expenditures decreased to 10.6% in the first six months of 1998 from 15.0% in 
the first six months  of 1997. The increase in research and development 
expenditures is primarily the result of personnel additions and increased 
spending on engineering materials and services. 

     SALES AND MARKETING. Sales and marketing expenses increased by 13.9% to 
$3.2 million in the first six months of 1998 from $2.8 million in the first 
six months of 1997. As a percentage of revenues, sales and marketing expenses 
decreased to 10.3% in the first six month period of 1998 from 12.5% in the 
first six months of 1997. The increased level of spending in the first six 
months of 1998 reflects higher commissions and other direct selling expenses 
resulting from the increase in revenues, as well as increases in staffing.

                                       12
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)


     GENERAL AND ADMINISTRATIVE. General and administrative expenses 
increased by 13.2% to $3.4 million in the first six months of 1998 from $3.0 
million in the first six months of 1997. As a percentage of revenues, general 
and administrative expenses decreased to 11.0% in the first six months of 
1998 from 13.3% in the first six months of 1997. The increase in general and 
administrative expenses in absolute dollars is primarily the result of 
personnel additions and increased professional and consulting costs 
associated with the Company's growth, increased insurance costs, and 
increased costs of operations associated with being a publicly traded company.

     INTEREST EXPENSE.  Interest expense decreased to $82,000 for the first 
six months of 1998 from $288,000 for the first six months  of 1997.  Interest 
expense in the first six months of 1997 consists primarily of a non-cash 
charge resulting from the amortization of a loan warrant discount.

     INTEREST AND OTHER INCOME, NET.  Interest and other income, net, 
increased to $435,000 in the first six months of 1998 from $202,000 in the 
first six months of 1997.  The 1998 amount consists primarily of interest 
income for the period and results from the significantly higher cash and 
short-term investment balances in the first six months of 1998 as compared to 
the same period in 1997.

     PROVISION FOR INCOME TAXES.  The provision for income taxes was $528,000 
in the first six months of 1998 and $474,000 in the first six months of 1997, 
representing an effective tax rate of 12.0% and 23.7%.  The Company's 
effective tax rate of 12.0% in the first half of 1998 is lower than the 
statutory tax rates primarily due to the utilization of net operating loss 
and other credit carryforwards. At December 31, 1997 the Company had federal 
net operating loss carryforwards of approximately $13.7 million available to 
reduce future federal taxable income and $2.0 million available to reduce 
State taxable income.  The Company's net operating loss carry-forwards expire 
from 2005 to 2011. 

LIQUIDITY AND CAPITAL RESOURCES 

     Since inception, the Company has financed its operations primarily 
through private sales of $16.5 million of Preferred and Common Stock (of 
which $5.6 million represents indebtedness converted to equity), the sale of 
$9.5 million of Common Stock in the Company's initial public offering in 
April 1996, the sale of $21.2 million in the Company's follow-on offering in 
May 1997 and short-term borrowings under a working capital line of credit. At 
June 30, 1998, the Company had $14.4 million in cash, cash equivalents and 
short-term investments, compared to $19.2 million in cash, cash equivalents 
and short-term investments at December 31, 1997.

     Net cash used in operating activities was $3.5 million in the first six 
months of 1998, compared to $1.3 million for the first six months of 1997.  
Cash used in operating activities in the first six months of 1998 primarily 
resulted from net income of $3.9 million and the non-cash effect from 
depreciation and amortization of $0.8 million, offset by an increase in 
accounts receivable due to the timing of revenues (i.e., late in the second 
quarter of 1998), a decrease in deferred revenues and an increase in 
inventory.

     Net cash provided by investing activities was $2.3 million in the first 
six months of 1998, compared to $20.4 million used in investing activities in 
the first six months of 1997.  Net cash provided by investing activities 
primarily resulted from the sale of short-term investments and release of 
restricted cash, partially offset by the purchase of capital equipment and 
additions to other assets.  The Company has no significant capital 
spending or purchase commitments other than normal purchase commitments and 
commitments under leases.  The Company had $2.0 million in short-term 
investments at June 30, 1998.

                                       13
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)
                                          
     Net cash used in financing activities was $565,000 in the first six 
months of 1998, compared to the $23.5 million provided by financing 
activities in the first six months of 1997.  Net cash used in financing 
activities in the first six months of 1998 primarily resulted from the 
repurchase of common stock at prevailing market prices and the repayment 
debt, partially offset by proceeds from sales under the employee stock 
purchase plan and exercises of incentive stock options. Future repurchases of 
the Company's common stock would be based on market conditions and evaluated 
on a case by case basis.

     In April 1998, the Company renewed its two one-year revolving line of 
credit agreements with Silicon Valley Bank.  The first agreement provides for 
maximum borrowings in an amount up to the lower of 80% of domestic eligible 
accounts receivable or $4.5 million.  Borrowings under this agreement bear 
interest at the bank's prime rate (8.50% at June 30, 1998). The second 
agreement is partially guaranteed by the Export-Import Bank of the United 
States and provides for maximum borrowings in an amount up to the lower of 
the sum of 90% of eligible export accounts receivable plus 70% of eligible 
raw materials and work-in-process inventory designated for export customers 
or $4.5 million. Borrowings under this agreement bear interest at the bank's 
prime rate (8.50% at June 30, 1998). Borrowings under both agreements are 
secured by all of the Company's assets other than its intellectual property. 
The agreements expire in April 1999 and require that the Company maintain 
certain financial ratios and levels of tangible net worth and profitability 
and also prohibit the Company from paying cash dividends. Proceeds of loans 
under both lines of credit may be used for general corporate purposes.  As of 
June 30, 1998, the Company had borrowings of $4.0 million.

     In April 1998, the Company renewed its committed equipment line of credit 
with Silicon Valley Bank that transforms into a term loan (computer equipment 
- 36 months; furniture and fixtures - 60 months) after drawdown. The agreement 
expires in April 1999 and provides for borrowings up to $1.75 million. 
Borrowings under this agreement bear interest at the bank's prime rate (8.50% 
at June 30, 1998) and are secured by the assets purchased or financed. As of 
June 30, 1998, the Company had borrowings of $1.25 million under the 
agreement.

     The Company believes that existing cash and cash equivalents of $12.3 
million as of June 30, 1998, short-term investments of $2.0 million, and 
available borrowings under the Company's line of credit agreements will be 
sufficient to finance its working capital and capital expenditure 
requirements for at least the next 12 months.

BUSINESS RISKS

     The Company's quarterly revenues have fluctuated significantly in the 
past and are expected to fluctuate significantly in the future. These 
fluctuations are the result of a variety of factors, including the Company's 
delivery cycle, variations in product configuration, timing of orders, and 
suitability of client sites. The Company's cost of revenues fluctuates from 
quarter to quarter consistent with fluctuations in such revenues. In 
addition, the Company's gross margins may be affected by, among other 
factors, the configuration of systems sold, the mix between system and add-on 
sales, and the breakdown between domestic and international sales. 

     The quarter ended March 31, 1997 was the Company's first profitable 
quarter since inception. Although the Company has reported a profit in each 
subsequent quarter, there can be no assurance that the Company will continue 
to be profitable on a quarterly basis or annual basis. The Company's past 
operating results have been, and its future operating results will be, 
subject to fluctuations resulting from a number of factors, including the 
timing and announcement of orders, delays in shipments caused by customer 
readiness or integration issues, the timing of new or enhanced product 
offerings by the Company or its competitors and the certification of certain 
of these products, the mix between sales to domestic and international 
customers, market acceptance of any new or enhanced version of the Company's 
products, availability of key components, the Company's ability to rapidly 
increase production, and fluctuations in demand driven by general conditions 
impacting the aviation security industry beyond the control of the Company. 
The Company's revenues in any period are generally derived from a limited 
number of customers, a high percentage of which are public agencies which are 
subject to legislative budgeting and other limitations, including with 
respect to its largest customer, the U.S. Government, the risk that the FAA 
may not complete the reconciliation of reprogrammed funds under the current 
budget to purchase additional explosive detection systems ("EDS") in fiscal 
1998 or that Congress may not appropriate the proposed $100 million of funds 
to purchase EDS equipment in fiscal 1999 or that, if appropriated, a 
substantial portion of the funds will not be used to purchase the Company's 
products. The Company may also choose to reduce prices or increase spending 
in response to competition or to pursue new market opportunities, all of 
which may adversely affect the Company's business, financial condition and 
results of operations.

                                       14
<PAGE>

                            INVISION TECHNOLOGIES, INC.
                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                        CONDITION AND RESULTS OF OPERATIONS
                                    (CONTINUED)

     The Company regularly evaluates acquisition opportunities and is likely 
to make acquisitions  in the future.  Future acquisitions by the Company 
could result in potentially dilutive issuances of equity securities, the 
incurrence of debt and contingent liabilities and amortization expenses 
related to goodwill and other intangible assets, which could materially 
adversely affect the Company's results of operations.  The Company's 
management has had limited experience in assimilating acquired organizations. 
 No assurance can be given as to the ability of the Company to integrate 
successfully any operations, personnel or products that have been acquired or 
that might be acquired in the future, and the failure of the Company to do so 
could have a material adverse effect on the Company's results of operations.

     Substantially all of InVision's customers and a high percentage of 
Quantum's research and development customers to date have been public 
agencies or quasi-public agencies.  In contracting with public agencies, the 
Company is subject to public agency contract requirements which vary from 
jurisdiction to jurisdiction and are subject to budgetary processes and 
expenditure constraints.  Budgetary allocations for explosive detection 
systems are dependent, in part, upon governmental policies which fluctuate 
from time to time in response to political and other factors, including the 
public's perception of the threat of commercial airline bombings.  Many 
domestic and foreign government agencies have experienced budget deficits 
that have led to decreased capital expenditures in certain areas.  The 
Company's results of operations may be subject to substantial 
period-to-period fluctuations as a result of these and other factors 
affecting capital spending.  A reduction of funding for explosive detection 
technology deployment could materially and adversely affect the Company's 
business, financial condition or results of operations. Future sales to 
public agencies will depend, in part, on the Company's ability to meet public 
agency contract requirements, certain of which may be onerous or even 
impossible for the Company to satisfy. In addition, public agency contracts 
are frequently awarded only after formal competitive bidding processes, which 
have been and may continue to be protracted, and typically contain provisions 
that permit cancellation in the event that funds are unavailable to the 
public agency. There can be no assurance that the Company will be awarded any 
of the contracts for which its products are bid or, if awarded, that 
substantial delays or cancellations of purchases will not result from 
protests initiated by losing bidders.

     YEAR 2000 COMPLIANCE.  The CTX 5000 Series contains installed computer 
systems and software products which are coded to accept only two digit 
entries in the date code field. Beginning in the year 2000, these date code 
fields will need to accept four digit entries to distinguish 21st century 
dates from 20th century dates. While uncertainty exists concerning the 
potential effects associated with such compliance, the Company does not 
believe that year 2000 compliance will result in a material adverse effect on 
its financial condition or results of operations.

The Company also currently uses software and related computerized information 
systems that will be affected by the date change in the year 2000. The year 
2000 issue exists because many computer systems and applications currently 
utilize two-digit date fields, rather than four-digit date fields, to define 
the applicable year. When the millenium date change occurs, date-sensitive 
systems will recognize the year 2000 as the year 1900, or not at all. This 
inability to recognize or properly treat the year 2000 may result in systems 
failure or cause systems to process critical financial and operational 
information incorrectly.

Based on ongoing assessments, the Company has determined that it will be 
required to modify or upgrade portions of its computer software so that its 
computer systems will properly use and recognize dates beyond December 31, 
1999. Based on preliminary information compiled by the Company, the Company 
does not believe that the costs of addressing the year 2000 issue will be 
material to the Company. Other factors that may affect the Company's costs in 
addressing the year 2000 issue include, but are not limited to, the 
availability and cost of personnel trained in this area, the ability to 
locate and correct all relevant computer codes, and similar uncertainties. 
The Company expects to complete all year 2000 programming changes during 
fiscal 1999. The estimated costs of and time frame related to this project 
are based on estimates of the Company's management, and there can be no 
assurance that actual costs will not differ materially from the current 
expectations. In addition, the Company's ability to interface with its 
customers, particularly with respect to electronic data interchange programs, 
may be impacted by the failure of its customers to make the appropriate 
upgrades or modifications to their programs to address the year 2000 issue. 
Nevertheless, the Company does not expect that the costs of addressing 
potential problems relating to the year 2000 issue will have a material 
adverse impact on the Company's financial position, results of operations or 
cash flows in future periods. Although the Company plans to devote the 
necessary resources to resolve all significant year 2000 issues in a timely 
manner, if such processing issues are not resolved in a timely manner, the 
year 2000 issue could have a material impact on the operations and financial 
conditions of the Company.

                                       15
<PAGE>

                         PART  II.  OTHER INFORMATION

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

     The Company recently amended Section 5 of its Bylaws to revise the time
period in which stockholders who wish to bring matters or propose nominees for
director at the Company's annual meeting must give advance notice.   Under the
amended bylaw, such advance notice must be received by the Company between 60
and 90 days of the first anniversary of the preceding year's annual meeting
date, subject to certain adjustments in the event that such anniversary date
differs by more than 30 days from the current year annual meeting date.   This
amendment does not affect the advance notice and other requirements for
including stockholder proposals in the Company's proxy statement under the
Securities Exchange Act of 1934, which are governed by such Act and the rules
and regulations thereunder.

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 

     The 1998 Annual Meeting of the Stockholders was held May 28, 1998.  
Matters voted at that meeting were:

     (i)    The election of the Class II directors to hold office until 2001
            Annual Meeting of Stockholders and until their successors are
            elected and qualified.
     (ii)   The amendment of the Company's Equity Incentive Plan, to increase
            the aggregate number of shares of Common Stock authorized for
            issuance by 400,000 shares to 2,621,818 shares.
     (iii)  The ratification of the selection of Pricewaterhouse Coopers LLP as
            independent auditors of the Company for its fiscal year ending
            December 31, 1998.

     Tabulations for each proposal were as follows:

           Proposal I.  Election of Class II Directors

                  Director                          For                Withheld
                  --------                          ---                --------
           DR. GIOVANNI LANZARA                   7,115,104              84,650
           AMBASSADOR MORRIS D. BUSBY             7,115,929              83,825

           Proposal II. Amendment of the Company's Equity Incentive Plan

              For              Against             Abstain
              ---              -------             -------
           6,754,046           383,154             62,554

           Proposal III.  Ratification of the selection of
           PricewaterhouseCoopers LLP

              For              Against             Abstain
              ---              -------             -------

           7,142,388           13,331              44,035

           Continuing Directors:
           Dr. Sergio Magistri, the Class I director, and Dr. Douglas P. Boyd
           and Dr. Bruno Trezza, the Class III directors, continued as
           directors following the Annual Meeting.

ITEM 5.   OTHER INFORMATION

     Pursuant to the Company's bylaws, stockholders who wish to bring matters 
or propose nominees for director at the Company's 1999 annual meeting of 
stockholders must provide specified information to the Company between 
February 27, 1999 and March 29, 1999 (unless such matters are included in the 
Company's proxy statement pursuant to Rule 14a-8 under the Securities 
Exchange Act of 1934, as amended).  However, if the date of the 1999 annual 
meeting of stockholders is held on a date more than 30 days from May 28, 
1999, such specified information must be provided to the Company not earlier 
than the close of business on the 90th day prior to the 1999 annual meeting 
and not later than the close of business on the later of the 60th day prior 
to such annual meeting or, in the event public announcement of the date of 
such annual meeting is first made by the Company fewer than 70 days prior to 
the date of the 1999 annual meeting, the close of business on the 10th day 
following the day on which public announcement of the date of the 1999 annual 
meeting is first made by the Company.

                                       16
<PAGE>

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

           3.2      Bylaws of Registrant, as amended

          10.25     Loan Modification Agreement, dated April 15, 1998, to the
                    Domestic Loan and Security Agreement, dated
                    February 20, 1997, and the Export-Import Bank Loan and
                    Security Agreement, dated February 20, 1997, between the
                    Registrant and Silicon Valley Bank

          10.26     Release of Security Agreement, dated April 15, 1998, for
                    the release of security interest in the Registrant's 
                    trademarked works set forth in the Intellectual Property
                    Security Agreement, dated February 20, 1997, between the
                    Registrant and Silicon Valley Bank

          10.27     Release of Security Agreement, dated April 
                    15, 1998, for the release of security interest in the 
                    Registrant's patented works set forth in the Intellectual 
                    Property Security Agreement, dated February 20, 1997, 
                    between the Registrant and Silicon Valley Bank

          10.28     Negative Pledge Agreement, dated April 15, 
                    1998, covering all of the Registrant's Intellectual Property
                    between the Registrant and Silicon Valley Bank

          10.29     Consent Letter, dated June 1, 1998, from 
                    Silicon Valley Bank for the Registrant's Stock Repurchase 
                    Program in connection with the Loan and Security Agreements,
                    dated February 20, 1997, and as amended by the Loan 
                    Modification Agreement, dated April 15, 1998, between the 
                    Registrant and Silicon Valley Bank

          27        Financial Data Schedule

     (b)  The Registrant filed no Reports on Form 8-K during the quarter ended
          June 30, 1998.


                                       17

<PAGE>

                                     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.

                             INVISION TECHNOLOGIES, INC.




Date: August 14, 1998        /s/ Sergio Magistri
                             -------------------
                             Dr. Sergio Magistri
                             President and Chief Executive Officer
                             (PRINCIPAL EXECUTIVE OFFICER)


Date: August 14, 1998        /s/ Curtis P. DiSibio
                             -------------------
                             Curtis P. DiSibio
                             Senior Vice President and Chief Financial Officer
                             (PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER)


                                       18