<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 MARCH 31, 1999 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
         (State or other jurisdiction of incorporation or organization)

                                   94-3123544
                      (I.R.S. Employer 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 March 31, 1999, there were 12,071,189 shares of the Registrant's Common 
Stock outstanding.



                                      
<PAGE>

                           INVISION TECHNOLOGIES, INC.
                                    FORM 10-Q
                                      INDEX

<TABLE>
<CAPTION>

ITEM                                                                                                           PAGE
----                                                                                                           ----
<S>                                                                                                          <C>
PART I:  FINANCIAL INFORMATION


1.  Consolidated Financial Statements (unaudited)

    a.  Consolidated Balance Sheets - March 31, 1999 and December 31, 1998.......................................3

    b.  Consolidated Statements of Income - Three months ended March 31, 1999 and 1998...........................4

    c.  Consolidated Statements of Cash Flows - Three months ended March 31, 1999 and 1998.......................5

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

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



PART  II. OTHER INFORMATION


6.  Exhibits and Reports on Form 8-K............................................................................16

Signature Page .................................................................................................17

Exhibits .......................................................................................................18

</TABLE>




                                      2
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                (UNAUDITED)
                                                                                 MARCH 31,        DECEMBER 31,
                                                                                    1999             1998
                                                                                ------------      ------------
<S>                                                                             <C>               <C> 
ASSETS

Current assets:
    Cash and cash equivalents                                                      $ 14,773          $ 10,462
    Short-term investments                                                              998             1,995
    Restricted cash                                                                       -             1,056
    Accounts receivable                                                              22,790            26,933
    Inventories                                                                      12,459            11,825
    Other current assets                                                              1,660             1,731
                                                                                ------------      ------------
        Total current assets                                                         52,680            54,002

Long-term restricted cash                                                               230               200
Property and equipment, net                                                           8,107             8,035
Other assets                                                                          1,266             1,249
                                                                                ------------      ------------
                                                                                   $ 62,283          $ 63,486
                                                                                ============      ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                                $ 3,867           $ 3,402
    Accrued liabilities                                                               6,800             6,331
    Deferred revenue                                                                    513             1,496
    Short-term debt                                                                     109             2,967
    Current maturities of long-term obligations                                         736               895
                                                                                ------------      ------------
        Total current liabilities                                                    12,025            15,091
                                                                                ------------      ------------

Long-term obligations                                                                 1,484             1,565
                                                                                ------------      ------------

Stockholders' equity:
    Preferred stock, no par value, 5,000,000 shares authorized;                           -                 -
       no shares issued and outstanding
    Common stock, $0.001 par value, 20,000,000 shares                                    12                12
       authorized; 12,071,000 and 12,067,000 issued and outstanding
    Additional paid-in capital                                                       57,502            57,372
    Deferred stock compensation expense                                                (131)             (131)
    Accumulated deficit                                                              (7,744)           (9,558)
    Treasury stock, at cost (115,000 shares)                                           (865)             (865)
                                                                                ------------      ------------
          Total stockholders' equity                                                 48,774            46,830
                                                                                ------------      ------------
                                                                                   $ 62,283          $ 63,486
                                                                                ============      ============
</TABLE>

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



                                      3
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                  THREE MONTHS ENDED
                                                                                      MARCH 31,
                                                                              ---------------------------
                                                                                 1999           1998
                                                                              ------------   ------------
<S>                                                                           <C>            <C>
Revenues                                                                         $ 15,515       $ 15,880
Cost of revenues                                                                    8,524          8,174
                                                                              ------------   ------------
    Gross profit                                                                    6,991          7,706
                                                                              ------------   ------------

Operating expenses:
  Research and development                                                          1,649          1,687
  Sales and marketing                                                               1,303          1,662
  General and administrative                                                        1,994          1,809
                                                                              ------------   ------------
    Total operating expenses                                                        4,946          5,158
                                                                              ------------   ------------

Income from operations                                                              2,045          2,548
Interest expense                                                                      (72)           (58)
Interest and other income, net                                                        161            234
                                                                              ------------   ------------
Income before provision for income taxes                                            2,134          2,724
Provision for income taxes                                                            320            464
                                                                              ------------   ------------
Net income                                                                        $ 1,814        $ 2,260
                                                                              ============   ============

Net income per share:
  Basic                                                                           $  0.15        $  0.19
                                                                              ============   ============
  Diluted                                                                         $  0.14        $  0.18
                                                                              ============   ============

Weighted average shares outstanding:
  Basic                                                                            12,057         12,022
  Diluted                                                                          12,739         12,905
</TABLE>


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




                                      4
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                               THREE MONTHS ENDED
                                                                                                    MARCH 31,
                                                                                           ---------------------------
                                                                                              1999           1998
                                                                                           -----------    ------------
<S>                                                                                       <C>             <C>
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                           $ 7,042        $    (61)
                                                                                           -----------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Proceeds from (purchases of) short-term investments, net                                      997           3,028
    Purchases of property and equipment                                                          (694)           (521)
    Long-term restricted cash                                                                     (30)          1,254
                                                                                           -----------    ------------
                 Net cash provided by investing activities                                        273           3,761
                                                                                           -----------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from (repayments of) short-term debt, net                                        (2,858)         (1,968)
     Repayments of long-term debt                                                                (276)            (39)
     Proceeds from issuance of common stock, net                                                  130             234
                                                                                           -----------    ------------
                 Net cash used in financing activities                                         (3,004)         (1,773)
                                                                                           -----------    ------------

Net increase in cash and cash equivalents for the period                                        4,311           1,927
Cash and cash equivalents at beginning of period                                               10,462          14,111
                                                                                           -----------    ------------
Cash and cash equivalents at end of period                                                   $ 14,773        $ 16,038
                                                                                           ===========    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Interest paid                                                                             $   48          $   58
     Taxes paid                                                                                $  250          $  622
</TABLE>


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

                                      5
<PAGE>

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


SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.  INTERIM UNAUDITED FINANCIAL INFORMATION

    The accompanying interim unaudited 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 
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, 1998 and 1997 and for each of 
the three years in the period ended December 31, 1998, 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 period ended March 31, 1999 may not 
necessarily be indicative of the results that may be expected for the year 
ended December 31, 1999 or any other future period.

    Certain prior period amounts have been reclassified to conform to the 
current period presentation.

 NET INCOME PER SHARE

    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 (using the treasury stock method).

    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 data):

<TABLE>
<CAPTION>

                                                                 THREE MONTHS ENDED MARCH 31,
                                            ----------------------------------------------------------------------
                                                           1999                                1998
                                            ----------------------------------  ----------------------------------
                                                                       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    $  1,814      12,057    $   0.15    $  2,260      12,022    $   0.19
Effect of dilutive securities:
  Options                                         -           682       (0.01)        -           883       (0.01)
                                            ----------  ----------  ----------  ----------  ----------  ----------
Diluted net income per share:
  Income available to common stockholders
  plus assumed conversions                   $  1,814      12,739    $   0.14    $  2,260      12,905    $   0.18
                                             =========  ==========  ==========  ==========  ==========  ==========

</TABLE>

    The computation of diluted net income per share for the three months 
ended March 31, 1999 does not include shares issuable upon exercise of 
options in the amount of 865,071 because to do so would have been 
anti-dilutive for the periods presented.

                                      6
<PAGE>

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

3.  ACCOUNTS RECEIVABLE

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

<TABLE>
<CAPTION>
                                                                        MAR. 31,      DEC. 31,
                                                                          1999          1998
                                                                      ------------  ------------
<S>                                                                  <C>            <C>
Accounts receivable:
  Billed                                                                 $ 18,397      $ 20,412
  Unbilled                                                                  4,274         6,183
  Other receivables                                                           119           338
                                                                      ------------  ------------
      Total                                                              $ 22,790      $ 26,933
                                                                      ============  ============
</TABLE>


4.  INVENTORIES

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

<TABLE>
<CAPTION>
                                                                        MAR. 31,      DEC. 31,
                                                                          1999          1998
                                                                      ------------  ------------
<S>                                                                    <C>           <C>
Inventories:
  Raw material and purchased components                                   $ 7,908       $ 6,272
  Work-in-process                                                           4,183         4,365
  Finished goods                                                              368         1,188
                                                                      ------------  ------------
      Total                                                              $ 12,459      $ 11,825
                                                                      ============  ============
</TABLE>

5.  PROPERTY AND EQUIPMENT

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

<TABLE>
<CAPTION>
                                                                       MAR. 31,      DEC. 31,
                                                                         1999          1998
                                                                      ------------  ------------
<S>                                                                   <C>           <C>
Property and equipment:
  Machinery and equipment                                                 $ 4,807       $ 4,705
  Self constructed assets                                                   4,184         3,697
  Furniture and fixtures                                                    1,078         1,078
  Leasehold improvements                                                    2,959         2,939
                                                                      ------------  ------------
      Subtotal                                                             13,028        12,419
  Less:  accumulated depreciation and amortization                         (4,921)       (4,384)
                                                                      ------------  ------------
      Total                                                               $ 8,107       $ 8,035
                                                                      ============  ============
</TABLE>



                                      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 MAIN PRODUCT, INCLUDING THE LOSS OF THE COMPANY'S ORDER FROM 
THE FAA OR THE FAILURE TO OBTAIN ADDITIONAL ORDERS, LOSS OF ANY OF THE 
COMPANY'S SOLE SOURCE SUPPLIERS, INTENSE COMPETITION INCLUDING COMPETITION 
FROM A NEW SUPPLIER OF A CERTIFIED PRODUCT THAT HAS NOW BEGUN ACCEPTING 
ORDERS, RELIANCE ON LARGE ORDERS, CONCENTRATION OF THE COMPANY'S CUSTOMERS, 
RISKS RELATED TO THE LENGTHY SALES CYCLES FOR THE COMPANY'S PRODUCTS, 
BUDGETING LIMITATIONS OF THE COMPANY'S CUSTOMERS AND PROSPECTIVE CUSTOMERS, 
RISKS INHERENT TO THE DEVELOPMENT AND PRODUCTION OF NEW PRODUCTS AND NEW 
APPLICATIONS, AND CERTIFICATION OF CERTAIN OF THESE PRODUCTS, AS WELL AS 
THOSE DISCUSSED IN "ITEM 1. BUSINESS" AND MORE PARTICULARLY IN THE "BUSINESS 
RISKS" SECTION THEREOF IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE 
YEAR ENDED DECEMBER 31 1998.

OVERVIEW

    InVision Technologies, Inc. ("InVision," or together with its 
subsidiaries, the "Company") designs, manufactures and markets explosive 
detection systems ("EDS") based on advanced computed tomography ("CT") 
technology. InVision was formed in September 1990 to design and develop an 
EDS based on CT technology and exited the development stage in 1995 upon the 
first commercial sale of its product, the CTX 5000 system. Today the Company 
markets its more advanced CTX 5500 system and its next generation CTX 9000 
system, and has other products in development. To date, the Company's CTX 
5000 system and the CTX 5500 system (together, the "CTX 5000 Series") are the 
only explosive detection systems certified by the Federal Aviation 
Administration ("FAA") currently deployed for use in the inspection of 
checked luggage on commercial flights. Additionally, the Company's next 
generation CTX 9000 system successfully completed FAA certification testing 
in April 1999. The Company expects the FAA to order several CTX 9000 systems 
this year for installation and operational testing at airports in the United 
States. In the international market, the Company has already begun marketing 
the CTX 9000 system and is seeing interest from both existing and potential 
customers. Since its first sale in 1995, the Company has received orders for 
a total of 169 CTX 5000 Series systems, of which a total of 159 had been 
shipped as of March 31, 1999. For the three months ended March 31, 1999 and 
1998, the Company had revenues of $15.5 million, and $15.9 million, 
respectively, and as of March 31, 1999 had in backlog equipment orders and 
service agreements of $14.5 million.

    InVision's principal subsidiary, Quantum Magnetics, Inc. ("Quantum") 
develops and commercializes patented and proprietary technology for 
inspection, detection and analysis of explosives and other materials based on 
quadrupole resonance ("QR") technology, a form of magnetic resonance, and 
passive magnetic sensing. Its products, in the prototype stage, include 
advanced detection systems for such markets as carry-on luggage screening, 
drug detection, postal inspection, detection of concealed weapons and 
landmine detection. Quantum is also a leading supplier of research and 
development services in the area of QR technology and passive magnetic 
sensing to a number of government agencies. Quantum was acquired by InVision 
in 1997 in a pooling of interests transaction.

    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 CTX
5000 Series hardware and software as well as its next generation system, the CTX
9000 system. At March 31, 1999, the Company had 103 full-time employees engaged
in research and development activities while also using the services of 12
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 agencies and private entities under
research and 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 research and development contracts and grants. During the three
months ended March 31, 1999 and 1998, the Company spent $4.6 million and $4.3
million, respectively, on research and development activities. Of these amounts,
$2.9 million and $2.6 million, respectively, were funded under research and
development contracts and grants. To the extent that research and development
contracts and grants receipts decline in the future, research and development
expenditures borne by the Company would increase, and the Company expects that
its results

                                       8

<PAGE>

of operations would be adversely impacted. As of March 31, 1999, the Company 
had in backlog research and development contracts and grants of $4.2 million.

    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. For the three months ended March 31, 1999 and 1998, 
$12.6 million, and $11.0 million, respectively, were generated from sales to 
the Company's largest customer, the U.S. government, representing 81.2% and 
69.2% of the Company's revenues, respectively. For the year ended December 
31, 1998, revenues from the Company's largest customer, the U.S. government, 
were approximately $37.9 million, or 59.9% 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 5500 and CTX 
9000 systems primarily through direct sales personnel. Internationally, the 
Company utilizes both a direct sales force and authorized agents to sell its 
products. For the three months ended March 31, 1999 and 1998 and the year 
ended December 31, 1998, international sales represented 17.5%, 30.8% and 
33.7%, respectively, of the Company's revenues.

    The sales cycle of the Company's product line is often lengthy due to the 
protracted approval process that typically accompanies large capital 
expenditures and the time required to manufacture, install and assimilate the 
product. Typically, six to twelve months may elapse between a new customer's 
initial evaluation of the Company's product line and the execution of a 
contract. Another three months to a year may elapse prior to shipment of the 
product as the customer site is prepared and the system 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 achievement of such 
acceptance criteria. The Company typically requires customer deposits in 
advance of shipment on customer purchase orders. Provision for estimated 
installation, training and warranty costs is recorded at the time revenue is 
recognized and adjusted periodically based on historical and anticipated 
experience. Systems typically carry a one-year warranty.

                                       9

<PAGE>

RESULTS OF OPERATIONS

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

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED
                                                                        MARCH 31,
                                                                  -----------------------
                                                                    1999           1998
                                                                  ---------       -------
<S>                                                                <C>             <C>
Revenues                                                            100.0 %         100.0 %
Cost of revenues                                                     54.9            51.5
                                                                   ------          ------
    Gross profit                                                     45.1            48.5
                                                                   ------          ------
Operating expenses
    Research and development                                         10.6            10.6
    Sales and marketing                                               8.4            10.5
    General and administrative                                       12.9            11.4
                                                                   ------          ------
       Total operating expenses                                      31.9            32.5
                                                                   ------          ------

Income from operations                                               13.2            16.0
Interest expense                                                     (0.5)           (0.4)
Income and other (expense), net                                       1.0             1.5
                                                                   ------          ------

Income before income taxes                                           13.7            17.1
Provision for income taxes                                            2.1             2.9
                                                                   ------          ------
Net income                                                           11.6 %          14.2 %
                                                                   ------          ------
                                                                   ------          ------
</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 were $15.5
million for the first quarter of 1999, a decrease of 2.3% from the $15.9 million
in the first quarter of 1998. This decrease was primarily attributable to three
fewer units shipped in the first quarter of 1999 compared to the same quarter a
year ago, partially offset by the shipment of CTX 5500 upgrade kits to the FAA
and the commencement of maintenance related revenues in the domestic market. In
the first quarter of 1999, the Company shipped 13 units (11 units to the FAA and
2 units to an international customer) and the remaining 27 CTX 5500 upgrade kits
purchased by the FAA. In the first quarter of 1998, the Company shipped 16 units
(12 units to the FAA and 4 units to international customers). The Company
typically ships against a backlog of orders for its products. As of March 31,
1999, the Company had in backlog equipment orders and service agreements of
$14.5 million.

    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 and overhead, warranty costs and costs associated with
service agreements. In any given period the Company's gross profit may be
affected by several factors, including revenue mix, product configuration,
location of the installation and complexity of integration into various airport
environments. Gross profit was $7.0 million in the first quarter of 1999, a
decrease of 9.3% from the $7.7 million in the first quarter of 1998. Gross
margins were 45.1% and 48.5%, respectively. The decrease in gross margins was
primarily due to higher manufacturing overhead costs per unit resulting from the
manufacture and shipment of three fewer units in the first quarter of 1999.

    RESEARCH AND DEVELOPMENT. Research and development expenses 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. Research and
development expenditures by the Company are partially offset by amounts
reimbursed by the FAA and other government agencies and private entities under
research and development contracts and grants. These services are provided on
both a cost and cost plus basis. The Company believes that 

                                       10

<PAGE>

research and development expenses in absolute dollars will increase 
substantially in the future regardless of the level of funding received from 
the FAA and other government agencies and private entities.

    Net research and development expenses were $1.6 million in the first 
quarter of 1999 compared to $1.7 million in the same quarter in 1998. Gross 
research and development expenses were $4.6 million in the first quarter of 
1999, an increase of 5.9% from the $4.3 million in the first quarter of 1998. 
Of these amounts, $2.9 million and $2.6 million, respectively, were funded by 
research and development contracts and grants from the FAA and other 
government agencies and private entities. To the extent that research and 
development contracts and grants 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. The 
Company capitalizes internally generated software costs in accordance with 
Statement of Financial Accounting Standards No. 86 ("SFAS 86"), "Accounting 
for Costs of Computer Software to be Sold, Leased or Otherwise Marketed." 
Under SFAS 86, software production costs for computer software that is to be 
used as an integral part of the 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. Software development costs qualifying for 
capitalization were insignificant in the first quarter of 1999 and 1998. As a 
percentage of revenues, net research and development expenses were 10.6% in 
the first quarter of 1999 and 1998. The increase in gross research and 
development expenses is primarily the result of personnel additions and 
increased spending on engineering materials and services.

    SALES AND MARKETING. Sales and marketing expenses consist primarily of 
compensation paid to direct and indirect sales and marketing personnel, 
consultant fees, travel related to the sales process, and other selling and 
distribution costs. Sales and marketing expenses were $1.3 million in the 
first quarter of 1999, a decrease of 21.6% from the $1.7 million in the first 
quarter of 1998. As a percentage of revenues, sales and marketing expenses 
were 8.4% in the first quarter of 1999, compared to 10.5% in the first 
quarter of 1998. The decrease in sales and marketing expenses is primarily 
the result of a decrease in commission expense due to changes in the 
structure of sales incentive compensation plans and the Company's efforts to 
reduce SG&A spending levels in 1999.

    GENERAL AND ADMINISTRATIVE. General and administrative expenses consist 
primarily of compensation paid to administrative personnel, including 
directors, consultant fees, professional service fees, insurance, travel and 
other general expenses. General and administrative expenses were $2.0 million 
in the first quarter of 1999, an increase of 10.2% from the $1.8 million in 
the first quarter of 1998. As a percentage of revenues, general and 
administrative expenses were 12.9% in the first quarter of 1999, compared to 
11.4% in the first quarter of 1998. The increase in general and 
administrative expenses is primarily the result of personnel additions, 
management bonuses and increased legal costs associated with the Vivid 
litigation, partially offset by the Company's efforts to reduce SG&A spending 
levels in 1999.

    INTEREST EXPENSE. Interest expense increased to $72,000 in the first 
quarter of 1999 from $58,000 in the first quarter of 1998. Interest expense 
in the first quarter of 1999 and 1998 resulted primarily from debt financing 
associated with the Company's working capital lines of credit, equipment term 
loans and capital leases.

    INTEREST AND OTHER INCOME, NET. Interest and other income, net, decreased 
to $161,000 in the first quarter of 1999 from $234,000 in the first quarter 
of 1998. The 1999 amount consists primarily of interest income for the 
quarter on cash equivalents and short-term investments of $197,000, partially 
offset by other expense (net) of $36,000. The 1998 amount consists primarily 
of interest income for the quarter on cash equivalents and short-term 
investments of $233,000 and results from the higher cash equivalent and 
short-term investment balances in the first quarter of 1998 as compared to 
the 1999 quarter.

    PROVISION FOR INCOME TAXES. The Company's effective tax rate for the 
first quarter of 1999 and 1998 was 15% and 17%, respectively. The Company's 
effective tax rate for the first quarter of 1999 and 1998 was lower than 
statutory tax rates primarily due to the utilization of net operating loss 
carryforwards. At December 31, 1998, the Company had federal net operating 
loss carryforwards of approximately $6.0 million available to reduce future 
federal taxable income and $1.7 million available to reduce state taxable 
income. The Company's net operating loss carryforwards 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 working capital lines of credit. At 
March 31, 1999, the Company had $15.8 million in cash, cash equivalents and 
short-term investments, compared to $12.5 million at December 31, 1998. 
Working capital was $40.7 million at March 31, 1999 compared to $38.9 million 
at December 31, 1998.

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<PAGE>

    Net cash provided by operating activities was $7.0 million in the three 
month period ended March 31, 1999, compared to $61,000 used in operating 
activities in the same period of 1998. Cash provided by operating activities 
in the first quarter of 1999 primarily resulted from net income of $1.8 
million, the $0.6 million non cash effect from depreciation and amortization, 
the release of restricted cash of $1.1 million, a $4.1 million decrease in 
accounts receivable and a $0.9 million increase in accounts payable and 
accrued liabilities, partially offset by a $1.0 million decrease in deferred 
revenues and a $0.6 million increase in inventories. Cash used in operating 
activities in the first quarter of 1998 primarily resulted from net income of 
$2.3 million and the $0.3 million non cash effect from depreciation and 
amortization, offset by a $1.0 million increase in accounts receivable, a 
$0.4 million increase in other current assets, a $0.3 million increase in 
inventories and a $0.9 million decrease in deferred revenues.

    Net cash provided by investing activities was $273,000 in the three month 
period ended March 31, 1999, compared to $3.8 million in the same period of 
1998. Net cash provided by investing activities in the first quarter of 1999 
primarily resulted from $1.0 million in proceeds on sales of short-term 
investments (net of purchases), partially offset by $0.7 million in 
acquisitions of capital equipment. Net cash provided by investing activities 
in the first quarter of 1998 primarily resulted from $3.0 million in proceeds 
on sales of short-term investments (net of purchases) and a $1.3 million 
release of long-term restricted cash, partially offset by $0.5 million in 
acquisitions of capital equipment. The Company has no significant capital 
spending or purchase commitments other than normal purchase commitments and 
commitments under leases.

    Net cash used in financing activities was $3.0 million in the three month 
period ended March 31, 1999, compared to $1.8 million in the same period of 
1998. Net cash used in financing activities in the first quarter of 1999 was 
primarily due to $3.1 million in repayments of debt financing (principally, 
short-term borrowings under the lines of credit), partially offset by 
$130,000 in proceeds from sales under the employee stock purchase plan and 
exercises of incentive stock options. Net cash used in financing activities 
in the first quarter of 1998 was primarily due to $2.0 million in repayments 
of debt financing (principally, short-term borrowings under the lines of 
credit), partially offset by $234,000 in proceeds from sales under the 
employee stock purchase plan and exercises of incentive stock options.

    In May 1999, the Company renewed its two one-year revolving line of 
credit agreements with Silicon Valley Bank. The first agreement provides for 
maximum borrowings of $5.0 million. 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, net of advance 
payments and deposits, or $2.5 million. Borrowings under both agreements bear 
interest at the bank's prime rate (7.75% at March 31, 1999) and are secured 
by all of the Company's assets other than its intellectual property. The 
agreements expire in April 2000 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. At March 31, 1999, the 
Company was in compliance with the loan covenants. Proceeds of loans under 
both lines of credit may be used for general corporate purposes. At March 31, 
1999, the Company had an outstanding guarantee to a customer through issuance 
of a letter of credit secured by the lines of credit totaling $0.5 million. 
There were no outstanding borrowings under the lines of credit at March 31, 
1999.

    In May 1999, the Company renewed its committed equipment line of credit 
agreement with Silicon Valley Bank that transforms into a term loan after 
drawdown. The agreement expires in April 2000 and provides for borrowings up 
to $0.5 million. Borrowings under this agreement bear interest at the bank's 
prime rate (7.75% at March 31, 1999) plus 0.25% or the bank's prime rate plus 
0.25% during the draw period and a fixed rate equal to 3.5% above the yield 
of a 36 month Treasury Note (5.11% at March 31, 1999) during the amortization 
period. Borrowings are secured by the assets purchased or financed. At March 
31, 1999, the Company had no outstanding borrowings under the line of credit.

    The Company believes that existing cash, cash equivalents and short-term 
investments together with available borrowings under its lines of credits and 
funds expected to be generated from operations will be sufficient to finance 
its working capital and capital expenditure requirements for at least the 
next 12 months.

BUSINESS RISKS

    HISTORY OF LOSSES; NO ASSURANCE OF CONTINUED PROFITABILITY. 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 

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<PAGE>

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 a substantial portion of the $100 million of funds 
appropriated by Congress to purchase explosive detection systems equipment in 
fiscal 1999 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.

    FLUCTUATIONS IN OPERATING RESULTS. 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.

    PUBLIC AGENCY CONTRACT AND BUDGET CONSIDERATIONS. 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

    DEFINITION. The Year 2000 issue is the result of a common computer 
programming convention that represents years in two digits (e.g. "98" for 
"1998"). Beginning in the year 2000, these date code fields may need to 
accept four digit entries to distinguish 21st century dates from 20th century 
dates. When the millennium date change occurs, these date sensitive systems 
and products may 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 
system failure or cause systems to process critical operational or financial 
information incorrectly.

    Since the market for explosive detection systems certified by the FAA is 
the Company's largest market and the FAA is the Company's largest customer, 
the Company has determined to apply the FAA definition of Year 2000 
compliance as stated in the FAA's Year 2000 Certificate of Compliance to all 
of its products and operations:

    Year 2000 compliant means information technology that accurately processes
    date/time data (including, but not limited to, calculating, comparing, and
    sequencing) from, into, and between the twentieth and twenty-first
    centuries, and the years 1998, 1999, 2000, and leap year calculations.
    Furthermore, year 2000 compliant information technology, when used in
    combination with other information technology, shall accurately process
    date/time data if the other information technology properly exchanges date
    and time data with it.

    METHODOLOGY: ACHIEVING YEAR 2000 READINESS. In 1997, the Company began 
Year 2000 product assessment and planning to identify and remediate any 
compliance issues regarding product operation. In December 1998, the Company 
instituted a more comprehensive Year 2000 project designed to identify and 
assess the risks associated with its operations and infrastructure, 
information systems, suppliers and customers that were not Year 2000 
compliant, and to develop, implement, and test remediation and contingency 
plans to mitigate these risks. The project, which is still in process, 
comprises four phases: (1) identification of risks; (2) assessment of risks; 
(3) development of remediation and contingency plans; and (4) 

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<PAGE>

implementation and testing.

    THE STATUS OF THE COMPANY'S PRODUCTS.

    CTX 9000 SYSTEM. The FAA has tested the current version of the CTX 9000 
by applying its Year 2000 compliance definition as stated in the FAA Year 
2000 (Y2K) Repair Process and Standards Handbook, as managed by a third-party 
contracted by the FAA. The Company has been advised verbally by the FAA that 
the CTX 9000 has passed the Year 2000 certification testing. The Company 
expects to receive the formal document from the FAA that the CTX 9000 is 
compliant with its Year 2000 compliance definition by the end of the second 
quarter of 1999.

    CTX 5500 SYSTEM AND UPGRADE KITS. The FAA has tested and certified that 
the current version of the CTX 5500 and the CTX 5500 upgrade kit are 
compliant with its Year 2000 compliance definition. This testing and 
certification was performed using the FAA Year 2000 (Y2K) Repair Process and 
Standards Handbook, as managed by a third-party contracted by the FAA. All 
CTX 5500 systems shipped beginning in 1999 match the certified version. All 
CTX 5500 systems purchased by the FAA and shipped prior to January 1, 1999, 
have been upgraded to match the certified version. Other CTX 5500 systems 
shipped prior to January 1, 1999 are not the same as the certified version 
but will be upgraded to match the certified version by InVision at no charge 
to the customer if under an InVision warranty or service contract. During the 
first quarter of 1999 an additional minor Year 2000 problem was identified in 
a data report with no system operational impact. The fix has already been 
designed and tested. All CTX 5500 customers under an InVision warranty or 
service contract will receive this additional fix at no charge.

    CTX 5000 SYSTEM. Identification and assessment of risks and establishment 
of fixes and upgrades have been completed for all released product software. 
With respect to hardware the Company has recently completed a component 
review for embedded chips, clocks and supplier testing of Year 2000 
compliance and found no material compliance issues. Although it will not be 
tested by the FAA, the fix for the CTX 5000 has been designed to meet the FAA 
Year 2000 compliance definition and the Company plans to use a test plan on 
the CTX 5000 similar to the one used by the FAA in certifying compliance of 
the CTX 5500. The CTX 5000 Year 2000 fix is planned to be released by the end 
of the second quarter of 1999. Customers under warranty or service contract 
will receive this fix at no charge. Alternatively, CTX 5000 customers may 
purchase a CTX 5500 upgrade kit which provides the compliance certified by 
the FAA (and also offers other operational benefits). This upgrade kit has 
been purchased and installed on all CTX 5000 systems previously purchased by 
the FAA.

    COMPANY INFRASTRUCTURE. With respect to the Company's internal 
computerized systems in its manufacturing, information, facilities and 
financial and administrative areas, the Company has completed phases one and 
two (identification and assessment of risks) and is nearing the end stage of 
phase three (development of remediation and contingency plans). Outside 
consultants have been engaged to assist the Director of Quality Assurance and 
the Executive Staff under the direction of the Chief Operating Officer to 
complete this process, including the implementation of any necessary 
solutions and the design of any necessary contingency plans. At this point in 
its review, the Company is not currently aware of any Year 2000 problems 
relating to systems operated by the Company which cannot be resolved which 
could have a material adverse effect on the Company's business, results of 
operations or financial condition. The Company expects to have all phases of 
this portion of the project completed by the end of the second quarter of 
1999.

    SUPPLIERS AND CUSTOMERS. The Company has submitted a survey to all 
current suppliers of products and services. Approximately two-thirds of these 
suppliers have responded to date and the Company is in the process of 
contacting the remaining by telephone. Based on our review of the responses 
received, no significant problems have been identified. Even when completed, 
where the information provided is not subject to verification by internal 
testing, the Company is vulnerable to any failure by its major suppliers, 
service providers and customers (including airports and airlines which are 
the end-users of its products) to identify the full extent of and 
successfully remedy their own internal Year 2000 issues. This failure could 
have a material adverse effect on the Company's supplies, orders or 
installation schedules. The Company is unable to estimate the nature or 
extent of any potential adverse impact resulting from the failure of third 
parties to achieve Year 2000 compliance. Moreover, such third parties, even 
if Year 2000 compliant, could experience difficulties resulting from Year 
2000 issues that may affect their suppliers, service providers and customers. 
As a result, although the Company does not currently anticipate that it will 
experience any material shipment delays from its major product suppliers or 
any material sales delays from its major customers due to Year 2000 issues 
based on information developed through the current stage of its Year 2000 
project, these third parties may nonetheless experience Year 2000 problems. 
Any such problems could have a material adverse effect on the Company's 
results of operations and financial condition.

    COSTS OF COMPLIANCE. Based on the status of the Company's efforts to date 
to prepare for the Year 2000, the Company believes that the costs of 
compliance with respect to both its products and its infrastructure, 
including third party suppliers, will not exceed $500,000. As of March 31, 
1999, approximately $115,000 had already been incurred.

    RISKS OF NON-COMPLIANCE. The Company has not yet completed its 
assessments, developed remediation or contingency plans for all problems, or 
completely implemented or tested any of its remediation plans other than for 
the CTX 5500 system and CTX 5500 upgrade. As the Year 2000 project continues, 
the Company may discover additional Year 2000 problems, may not be able to 
develop, implement, or test remediation and contingency plans, or may find 
that the costs of these

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<PAGE>


activities exceed current estimates of not more than $500,000. To the extent 
the Company does not identify any material non-compliant systems operated by 
the Company or by third parties, such as the Company's suppliers, service 
providers or customers, the most reasonably likely worst-case scenario is a 
systemic failure beyond the control of the Company, such as a prolonged 
telecommunications or electrical failure, or a general disruption in the 
United States or global business activities that could result in a 
significant downturn. The Company believes that the primary business risks, 
in the event of such failure or other disruption, would include but not be 
limited to, loss of customers or orders, delays in installation, increased 
operating costs, inability to obtain inventory on a timely basis, disruptions 
in product shipments, or other business interruptions of a material nature, 
as well as claims of mismanagement, misrepresentation, or breach of contract, 
any of which could have a material adverse effect on the Company's business, 
results of operations and financial condition.

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<PAGE>

                           PART II. OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a)    Exhibits

               10.31    Amended and Restated Loan and Security Agreement dated
                        May 4, 1999, between the Registrant and Silicon Valley
                        Bank.

               10.32    Amended and Restated Export-Import Bank Loan and
                        Security Agreement dated May 4, 1999, between the
                        Registrant and Silicon Valley Bank.

               10.33    Negative Pledge Agreement, dated May 4, 1999, covering
                        all of the Registrant's Intellectual Property 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 March 31, 1999.

                                       16

<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: May 14, 1999                     /s/ SERGIO MAGISTRI
                                       -------------------
                                       Dr. Sergio Magistri
                                       President and Chief Executive Officer
                                       (PRINCIPAL EXECUTIVE OFFICER)


Date: May 14, 1999                     /s/ TIM BLACK
                                       -------------
                                       Tim Black
                                       Chief Operating Officer and Acting Chief 
                                       Financial Officer
                                       (PRINCIPAL FINANCIAL OFFICER)


Date: May 14, 1999                     /s/ JIM B. ROBBINS
                                       ------------------
                                       Jim B. Robbins
                                       Corporate Controller
                                       (PRINCIPAL ACCOUNTING OFFICER)

                                       17