<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, 1997 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                       (I.R.S. Employer 
of incorporation or organization)                 Identification No.)   

                  3420 E. THIRD AVENUE, FOSTER CITY, CALIFORNIA 94404
             (Address of principal executive offices, including zip code)


                                     (415) 578-1930
                  (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, 1997, there were 9,204,866 shares of the Registrant's Common 
Stock outstanding.



                                        1

<PAGE>



                             INVISION TECHNOLOGIES, INC.
                        INDEX TO QUARTERLY REPORT ON FORM 10-Q
                         FOR THE QUARTER ENDED MARCH 31, 1997


PART  I:  FINANCIAL INFORMATION


ITEM                                                                     PAGE

1.   Condensed Consolidated Financial Statements (unaudited)

     a. Condensed Consolidated Balance Sheets - December 31, 1996 and
            March 31, 1997..............................................   3
    
     b. Condensed Consolidated Statements of Operations - Three months
            ended March 31, 1996 and 1997...............................   4
    
     c. Condensed Consolidated Statements of Cash Flows - Three months
            ended March 31, 1996 and 1997...............................   5
    
     d. Notes to Condensed Consolidated Financial Statements............   6-7
    

2.  Management's  Discussion  and Analysis of  Financial
        Condition and Results of  Operations............................   8-13

PART  II.  OTHER INFORMATION


1.  Legal Proceedings...................................................   14
2.  Changes in Securities...............................................   14
3.  Defaults Upon Senior Securities.....................................   14
4.  Submission of Matters to a Vote of Security Holders.................   14
5.  Other Information...................................................   14
6.  Exhibits and Reports on Form 8-K....................................   14



    Signature Page......................................................   15

                                        2

<PAGE>


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


<TABLE>
<CAPTION>

                                                        DECEMBER 31,        MARCH 31,
                                                            1996              1997 
                                                        -----------        ----------
<S>                                                   <C>                 <C>
                           ASSETS

Current assets:
   Cash                                                   $2,363             $2,251 
   Restricted cash                                            --              1,365 
   Accounts receivable                                     5,987              5,476 
   Inventories                                             4,810              6,111
   Prepaid expenses                                          292              1,634 
                                                        -----------        ----------
     Total current assets                                 13,452             16,837 

Property and equipment                                     1,804              1,872 
Other assets                                                  --                800 
                                                        -----------        ----------
                                                         $15,256            $19,509 
                                                        -----------        ----------
                                                        -----------        ----------

                         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                        $2,541             $3,960
  Accrued expenses                                         1,020              1,569
  Deferred revenue                                         2,443              3,986
  Current maturities of obligations under capital leases      68                 39
                                                        -----------        ----------
      Total current liabilities                            6,072              9,554
                                                        -----------        ----------
Long-term obligations under capital leases                   110                110
                                                        -----------        ----------
Stockholders' equity:
  Common stock, $0.001 par value, 20,000 shares 
  authorized; 9,160 and 9,205 shares issued and 
  outstanding                                                  9                  9
  Additional paid-in capital                              28,919             28,958
  Deferred stock compensation expense                       (355)              (265)
  Accumulated deficit                                    (19,499)           (18,857)
                                                        -----------        ----------
    Total stockholders' equity                             9,074              9,845
                                                        -----------        ----------
                                                         $15,256            $19,509
                                                        -----------        ----------
                                                        -----------        ----------

</TABLE>

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


                                        3


<PAGE>


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

<TABLE>
<CAPTION>

                                                                     THREE MONTHS ENDED
                                                                         MARCH 31,
                                                                         ---------
                                                                      1996           1997 
                                                                 ------------   -------------
<S>                                                              <C>             <C>
Revenues:                                                           $3,922         $9,377 
Cost of revenues                                                     2,453          4,708 
                                                                 ------------   -------------
     Gross profit                                                    1,469          4,669 
                                                                 ------------   -------------
Operating expenses:
     Research and development                                          585          1,333 
     Sales and marketing                                               597          1,233 
     General and administrative                                        472          1,343 
                                                                 ------------   -------------
Total operating expenses                                             1,654          3,909 
                                                                 ------------   -------------
Income (loss) from operations                                         (185)           760 
Interest expense                                                    (1,040)           (10)
Other income, net                                                       10             23 
                                                                 ------------   -------------
Income (loss) before provision for income taxes                     (1,215)           773 

Provision for income taxes                                              --            131
                                                                 ------------   -------------
Net income (loss)                                                  $(1,215)          $642
                                                                 ------------   -------------
                                                                 ------------   -------------
Net income (loss) per share                                        $ (0.17)         $0.06 
                                                                 ------------   -------------
                                                                 ------------   -------------
Shares used in per share calculations (1)                            7,081         10,272 



</TABLE>


(1) Shares outstanding reflect the 2-for-1 stock split in the form of a stock
    dividend effective as of February 7, 1997 


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>


                                                                                         THREE MONTHS ENDED 
                                                                                              MARCH 31,
                                                                                        --------------------
                                                                                          1996         1997
                                                                                        ---------   --------
<S>                                                                                     <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                                    $(1,215)       $642 
    Adjustments to reconcile net income (loss) to net                                    
     cash provided by (used in) operating activities:                               
           Depreciation and amortization                                                      79         197 
           Amortization of bridge loan warrant                                               949          --
           Stock compensation expense                                                         99          90 
           Changes in assets and liabilities:
            Restricted cash                                                                   --      (1,365)
            Accounts receivable                                                             (592)        511 
            Inventories                                                                      114      (1,301)
            Prepaid expenses                                                                 (41)     (1,342)
            Other assets                                                                    (268)       (800)
            Accounts payable                                                              (1,206)      1,419 
            Accrued liabilities                                                              199         549 
            Deferred revenues                                                               (452)      1,543 
                                                                                        ---------     --------
              Net cash provided by (used in) operating activities                         (2,334)        143 
                                                                                        ---------     --------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Acquisition of property and equipment                                                     (136)       (265)
                                                                                        ---------     --------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Proceeds from short-term debt                                                          1,000          -- 
    Repayments of capital lease financing                                                     --         (29)
    Proceeds from issuance of common stock, net                                               13          39 
                                                                                        ---------     --------
              Net cash provided by financing activities                                    1,013          10 
                                                                                        ---------     --------
Net decrease in cash for the period                                                       (1,457)       (112)
Cash at beginning of period                                                                1,927       2,363 
                                                                                        ---------     --------
CASH AT END OF PERIOD                                                                    $   470      $2,251 
                                                                                        ---------     --------
                                                                                        ---------     --------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

     Interest paid                                                                       $    62      $    2 

SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING AND INVESTING ACTIVITIES:

   Warrants issued in connection with bridge loan financing                              $   590      $   --   


</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 for interim financial information 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 the Company as of  December 31, 1996 and 
1995 and for each of the three years in the period ended December 31, 1996, 
including notes thereto, included in the Company's Annual Report on Form 10-K 
(Commission File No. 0-28236).

    Operating results for the three month period ended March 31, 1997 may not 
necessarily be indicative of the results that may be expected for the year 
ended December 31, 1997 or any other future period. 

2.  NET INCOME (LOSS) PER SHARE

    Net income (loss) per share is computed using the weighted average number 
of Common Stock and common equivalent shares, when dilutive, from stock 
options and warrants (using the treasury stock method). Pursuant to 
Securities and Exchange Commission Staff Accounting Bulletins, Common Stock 
and common equivalent shares issued by the Company during the 12-month period 
prior to the Company's initial public offering consisting of convertible 
preferred stock (using the if-converted method), and stock options and 
warrants (using the treasury stock method) have been included in the 
calculation as if they were outstanding for all periods prior to and 
including March 31, 1997, even though their effect is antidilutive. 

    In February 1997, the Financial Accounting Standards Board issued 
Statement of Financial Accounting Standards No.128, "Earnings per Share."  
This Statement is effective for the Company's year ending December 31, 
1997.  The Statement redefines earnings per share under generally accepted 
accounting principles.  Under the new standard, primary earnings per share is 
replaced by basic earnings per share and fully diluted earnings per share is 
replaced by diluted earnings per share.  If the Company had adopted this 
Statement for the three month periods ended March 31, 1996 and 1997, the 
Company's income (loss) per share would have been as follows:

                                            THREE MONTHS ENDED
                                                 MARCH 31,
                                          ----------------------
                                            1996           1997
                                          --------       -------
Basic income (loss) per share             $(16.42)        $ 0.07
Diluted income (loss) per share           $ (0.17)        $ 0.06

                                        6

<PAGE>



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

3.   INVENTORIES

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


                                                  December 31,     March 31,
                                                      1996           1997
                                               -----------------  -----------
Raw material and purchased components                $3,003         $3,582
Work-in-process                                       1,331          2,124
Finished goods                                          476            405
                                               -----------------  -----------
                                                     $4,810         $6,111
                                               -----------------  -----------
                                               -----------------  -----------

4.     LINE OF CREDIT

     In February 1997, the Company entered into two one-year revolving line 
of credit agreements with Silicon Valley Bank. The first agreement provides 
for maximum borrowings generally in an amount up to the lower of 80% of 
eligible domestic accounts receivable or $4.5 million. Borrowings under this 
agreement generally bear interest at the bank's prime rate plus 1.00% per 
annum (9.25% at December 31, 1996). The second agreement is partially 
guaranteed by the Export-Import Bank of the United States and provides for 
maximum borrowings generally in an amount up to the lower of (i) the sum of 
90% of eligible export accounts receivable plus 70% of eligible raw materials 
and work-in-process inventory designated for export customers, (ii) $4.5 
million less outstanding letters of credit or (iii) $3.0 million. Borrowings 
under this agreement generally bear interest at the bank's prime rate plus 
0.75% per annum (9.00% at December 31, 1996). Borrowings under both 
agreements are secured by all of the Company's assets. The agreements 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 the first line of credit may be used for 
general corporate purposes and proceeds of loans under the second line of 
credit must be used to finance goods intended for export.


5.      SUBSEQUENT EVENT

     On March 14, 1997 the Company filed a registration statement with the 
Securities and Exchange Commission in connection with a proposed underwritten 
public offering of shares of its Common Stock. On May 14, 1997, 1,875,000 of 
such shares were sold by the Company with resulting net proceeds to the 
Company estimated at $20.5 million. The Company intends to use the net 
proceeds from the offering to purchase capital equipment and undertake 
facility improvements, to fund research and development, for working capital 
and for other general corporate purposes and to pursue possible acquisitions.

                                        7

<PAGE>


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


    THE FOLLOWING DISCUSSION MAY CONTAIN FORWARD-LOOKING STATEMENTS WHICH
INVOLVE RISKS AND UNCERTAINTIES. 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
SINGLE PRODUCT, FLUCTUATIONS IN THE COMPANY'S QUARTERLY AND ANNUAL OPERATING
RESULTS, THE LOSS OF ORDERS OF THE COMPANY'S PRODUCT, INCLUDING THE LOSS OF THE
COMPANY'S MOST RECENT ORDER FROM THE FAA, 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
CTX 5000, BUDGETING LIMITATIONS OF THE COMPANY'S CUSTOMERS AND PROSPECTIVE
CUSTOMERS, AND THE RISK RELATED TO THE COMPANY'S MANUFACTURING EXPERIENCE. 

OVERVIEW

    InVision designs, manufactures and markets an explosive detection system 
based on advanced CT technology. The Company was formed in September 1990 to 
design and develop the CTX 5000 and remained in the development stage through 
December 1994. In March 1994, the Company 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 107 systems, of which a 
total of 37 had been shipped as of March 31, 1997. For the fiscal year ended 
December 31, 1996 and the quarter ended March 31, 1997, the Company had 
revenues of $15.8 million and $9.4 million, respectively, and at March 31, 
1997 had orders in backlog in the amount of $68.6 million.

    The Company considers research and development to be a vital part of its 
operating discipline and continues to dedicate substantial resources to 
research to enhance the performance, functionality and reliability of its CTX 
5000 hardware and software. At March 31, 1997, the Company had 38 full-time 
employees engaged in research and development activities, and also was using 
the services of 9 specialized contract employees and consultants in this 
area. Beginning in 1991, total research and development expenditures by the 
Company have been partially offset by amounts reimbursed by the FAA 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 year ended December 31, 1996 and the quarter ended March 31, 
1997, the Company spent $4.3 million and $1.7 million, respectively, on 
research and development activities, of which $1.5 million in 1996 and 
$339,000 in the quarter ended March 31, 1997 were funded by the FAA under 
development contracts and grants. To the extent that FAA 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.

    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 quarter 
of 1997, approximately $8.3 million, or 88.9%, of the Company's revenues were 
generated from sales to the Company's three largest customers. During the 
fiscal year ended December 31, 1996, revenues from the Company's six largest 
customers were approximately $14.0 million, or 88.4%, 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 primarily 
through direct sales personnel. Internationally, the Company utilizes both a 
direct sales force and authorized agents to sell its products. During the 


                                        8

<PAGE>



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

quarter ended March 31, 1997 and the years ended December 31, 1996 
and 1995, international sales represented 49.3%, 76.2% and 89.2%, 
respectively, of the Company's revenues. 

    The sales cycle of the CTX 5000 is often lengthy due to the protracted 
approval process that typically accompanies large capital expenditures and 
the time required to manufacture the CTX 5000 and install and assimilate the 
CTX 5000. 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 
as the customer site is prepared and the CTX 5000 is manufactured. During 
this period the Company expends substantial funds and management resources 
but recognizes no associated revenue.

    The Company recognizes revenue on 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. 

RESULTS OF OPERATIONS

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

                                                        THREE MONTHS ENDED
                                                             MARCH 31,
                                                     -----------------------
                                                         1996        1997
                                                     -----------   ---------
Revenues                                                100.0%      100.0%
Cost of revenues                                         62.5        50.2
                                                     -----------   ---------
    Gross profit                                         37.5        49.8
                                                     -----------   ---------
Operating expenses:
    Research and development                             14.9        14.2
    Sales and marketing                                  15.2        13.1
    General and administrative                           12.0        14.3
                                                     -----------   ---------
         Total operating expenses                        42.1        41.6
                                                     -----------   ---------
Income (loss) from operations                            (4.6)        8.2
Interest expense                                        (26.5)       (0.1)
Other income, net                                         0.2         0.2
                                                     -----------   ---------
Income (loss) before income taxes                       (30.9)        8.3
Provision for income taxes                                 --         1.4
                                                     -----------   ---------
Net income (loss)                                       (30.9)%       6.9%
                                                     -----------   ---------
                                                     -----------   ---------

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

                                        9


<PAGE>



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


    The quarter ended March 31, 1997 was the Company's first profitable 
quarter since the inception of the Company. Revenues increased by 139% to 
$9.4 million in the first quarter of 1997 from $3.9 million in the first 
quarter of 1996. This increase was primarily the result of the growth in unit 
shipments generated from initial deliveries on the 54 unit order by the FAA, 
and continuing demand from international markets. 

     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 increased by 218% to $4.7 million in the first quarter of 
1997 from $1.5 million in the first quarter of 1996. Gross margins were 49.8% 
in the first quarter of 1997 and 37.5% in the first quarter of 1996. This 
increase in gross margins is largely the result of improved manufacturing 
efficiencies and lower overhead cost per unit resulting from increased 
production volume. 

     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 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 under 
development contracts and grants. 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. 

    Total research and development expenditures increased by 41.7% to $1.7 
million in the first quarter of 1997 from $1.1 million in the first quarter 
of 1996. Of these amounts, $339,000 and $538,000, respectively, were funded 
by research and development contracts and grants from the FAA in the first 
quarters of 1997 and 1996. As a percentage of revenues, total research and 
development expenditures decreased to 17.8% in the first quarter of 1997 from 
28.6% in the first quarter of 1996. The growth in total 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 107% to $1.2 million in the 
first quarter of 1997 from $597,000 in the first quarter of 1996. As a 
percentage of revenues, sales and marketing expenditures declined to 13.1% in 
the first quarter of 1997 from 15.2% in the first quarter of 1996. The 
increased level of expenditures in the first quarter of 1997 reflects higher 
commissions and other direct selling expenses resulting from the increase in 
revenues, as well as increases in staffing. 

     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. 

                                        10

<PAGE>

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

    General and administrative expenses increased by 185% to $1.3 million in 
the first quarter of 1997 from $472,000 in the first quarter of 1996. As a 
percentage of revenues, general and administrative expenses increased to 
14.3% in the first quarter of 1997 from 12.0% in the first quarter of 1996. 
The increase in general and administrative expenses is primarily the result 
of personnel additions and increased professional and consulting costs 
incurred to prepare for planned growth, increased insurance costs, and 
increased costs of operations associated with being a publicly traded 
company. 

     INTEREST EXPENSE.  Interest expense decreased to $10,000 in the first 
quarter of 1997 from $1.0 million in the first quarter of 1996. Interest 
expense in the first quarter of 1996 reflects the effect of a non-cash charge 
of $949,000 resulting from the amortization of a bridge loan warrant discount 
arising in December 1995. 

     INCOME TAXES.  The provision for income taxes was $131,000 for the first 
quarter of 1997 representing an effective tax rate of 17.0%. No provision for 
income taxes was recorded in the first quarter of 1996. The Company's 
effective tax rate of 17.0% for the first quarter of 1997 is lower than the 
U.S. federal statutory rate of 34.0% as a result of utilization of net 
operating loss and other credit carryforwards. At December 31, 1996 the 
Company had federal net operating loss carryforwards of approximately $11.0 
million available to reduce future federal taxable income. The Company's net 
operating loss carryforwards expire from 2005 to 2011. As a result of changes 
in ownership that occurred in the 1995 financings, future utilization of 
certain of the Company's carryforwards are limited to not more than 
approximately $500,000 per year.

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, and $3.2 million of short-term borrowings. At March 31, 1997, the 
Company had $2.3 million in cash and no outstanding borrowings.

    In February 1997, the Company entered into two one-year revolving line of 
credit agreements with Silicon Valley Bank. The first agreement provides for 
maximum borrowings generally in an amount up to the lower of 80% of domestic 
eligible accounts receivable or $4.5 million. Borrowings under this agreement 
generally bear interest at the bank's prime rate plus 1.00% per annum (9.25% 
at March 31, 1997). The second agreement is partially guaranteed by the 
Export-Import Bank of the United States and provides for maximum borrowings 
generally in an amount up to the lower of (i) the sum of 90% of eligible 
export accounts receivable plus 70% of eligible raw materials and 
work-in-process inventory designated for export customers,  (ii) $4.5 million 
less outstanding letters of credit or (iii) $3.0 million. Borrowings under 
this agreement generally bear interest at the bank's prime rate plus 0.75% 
per annum (9.00% at March 31, 1997). Borrowings under both agreements are 
secured by all of the Company's assets. The agreements 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 the first line of credit may be used for general 
corporate purposes, and proceeds of loans under the second line of credit 
must be used to finance goods intended for export. 

    Cash provided by operating activities was $143,000 in the first quarter 
of 1997. Cash used in operating activities was $2.3 million in first quarter 
of 1996. Net cash provided by operating activities in the first quarter of 


                                        11

<PAGE>


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

1997 was principally due to the net income of $642,000, a $2.0 million 
increase in accounts payable and accrued expenses and a $1.5 million increase 
in deferred revenues, which more than offset a $1.4 million increase in 
restricted cash, a $1.3 million increase in inventories and a $1.3 million 
increase in prepaid expenses. Net cash used in operating activities for the 
first quarter of 1996 was primarily due to the net loss of $1.2 million, a 
$592,000 increase in accounts receivable, a $1.0 million decrease in accounts 
payable and accrued liabilities and a $452,000 decrease in deferred revenues 
which were partially offset by a non-cash charge for the amortization of the 
warrant discount of $949,000.

    Net cash used in investing activities was $265,000 in the first quarter 
of 1997 and $136,000 in the first quarter of 1996, in each case due primarily 
to the purchase of property and equipment. The Company anticipates spending 
approximately $2.0 million for facility improvements and approximately $1.5 
million for purchases of capital equipment in the second and third quarters 
of 1997 in connection with a move of the Company's principal executive 
offices and manufacturing facility. The Company has no other significant 
capital spending or purchase commitments other than normal purchase 
commitments and commitments under leases. 

    Net cash provided by financing activities was $10,000 in the first 
quarter of 1997 and $1.0 million in the first quarter of 1996. The increase 
in the first quarter of 1996, primarily due to $1.0 million in net proceeds 
from short-term debt financing. 

    On March 14, 1997, InVision filed a registration statement with the 
Securities and Exchange Commission in connection with the proposed 
underwritten offering of shares of Common Stock.  On May 14, 1997 1,875,000 
of such shares were sold by the Company with resulting net proceeds to the 
Company estimated at $20.5 million. The Company intends to use the net 
proceeds from the offering to purchase capital equipment and undertake 
facility improvements, to fund research and development, and for working 
capital and other general corporate purposes and to pursue possible 
acquisitions.  The Company did not receive any proceeds from the sale of 
Common Stock by the selling stockholders.  

    The Company believes that existing cash of $2.3 million as of March 31, 
1997 and available borrowings under the Company's line of credit agreements, 
together with the net proceeds from the Underwritten Offering, 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. During 
1996, as the number of orders shipped and associated revenues increased, the 
overall variability of the Company's gross profits decreased. 

    The first quarter of 1997 was the Company's first profitable quarter 
since inception. There can be no assurance that the Company will continue to 
be profitable on a quarterly basis or will become profitable on 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, 


                                        12

<PAGE>


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

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 it's competitors, 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 availability of manufacturing capacity, the Company's ability to rapidly 
increase production, and fluctuations in demand driven by general conditions 
impacting the aviation industry beyond the control of the Company. The 
Company's revenues in any period are generally derived from a limited number 
of customers. 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.


                                        13

<PAGE>


PART  II.  OTHER INFORMATION


Item 1:       Legal Proceedings - Not Applicable

Item 2:       Changes in Securities:
                  On February 7, 1997, the Company effected a 2-for-1 stock
                  split in the form of a stock dividend.

Item 3:       Defaults Upon Senior Securities - Not Applicable 

Item 4:       Submission of Matters to a Vote of Security Holders 
              - Not Applicable

Item 5:       Other Information - Not Applicable

Item 6:       Exhibits and Reports on Form 8-K
                (a)  Exhibits 
    
                (b)  The Company filed no reports on Form 8-K during the 
                     quarter ended March 31, 1997.


                                        14


<PAGE>


                                      SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1994, the 
Registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                                       INVISION TECHNOLOGIES, INC.
                                       REGISTRANT

    Date: May 15, 1997                 /S/ Curtis P. DiSibio
                                       Curtis P. DiSibio
                                       Chief Financial Officer and 
                                       Duly Authorized Officer



    Date: May 15, 1997                 /S/ Dr. Sergio Magistri
                                       Dr. Sergio Magistri
                                       President and
                                       Chief  Executive Officer and 
                                       Duly Authorized Officer


                                        15

<PAGE>


                                  EXHIBIT INDEX

<TABLE>
<CAPTION>

EXHIBIT
NUMBER                            DESCRIPTION OF DOCUMENT
----------                       -------------------------
<S>               <C>
10.12*             Lease, dated as of February 11, 1997, between the Registrant
                    and WHLNF Real Estate L.P.
10.17*             Loan and Security Agreement, dated as of February 20, 1997,
                    between the Registrant and Silicon Valley Bank.
10.18*             Revolving Promissory Note, dated February 20, 1997, between
                    the Registrant and Silicon Valley Bank.
10.19*             Export-Import Bank Loan and Security Agreement, dated as of
                    February 20, 1997, between the Registrant and 
                    Silicon Valley Bank.
10.20*             Intellectual Property Security Agreement, dated as of
                    February 20, 1997, between the Registration and 
                    Silicon Valley Bank.
11.1               Statement regarding calculation of net income (loss) per share.
27                 Financial Data Schedule.


</TABLE>

___________

(*) Filed as the like-numbered exhibit to the Registrant's Registration
    Statement on Form  S-1 (Registration No. 333-23413) on March 14, 1997 and
    incorporated  herein by reference thereto.