<PAGE>


                                    UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC  20549


                                      FORM 10-Q
                                           


                                      (Mark One)
                                           

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

<TABLE>
<CAPTION>

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

</TABLE>

                 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 June 30, 1997, there were 11,141,421 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 JUNE 30, 1997
                                           
                                           
                                           
PART  I:  FINANCIAL INFORMATION


<TABLE>
<CAPTION>

ITEM                                                                                       PAGE
----                                                                                       ----
<S>                                                                                       <C>

1.    Condensed Consolidated Financial Statements (unaudited)

      a.  Condensed Consolidated Balance Sheets - June 30, 1997 and
          December 31, 1996..........................................................        3

      b.  Condensed Consolidated Statements of Operations - Three months and six 
          months ended June 30, 1997 and 1996........................................        4

      c.  Condensed Consolidated Statements of Cash Flows - Six months
          ended June 30, 1997 and 1996...............................................        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

</TABLE>

                                       2
<PAGE>

                             INVISION TECHNOLOGIES, INC.
                        CONDENSED CONSOLIDATED BALANCE SHEETS
                                    (IN THOUSANDS)
                                     (UNAUDITED)
                                           
                                           

                                                       JUNE 30,     DECEMBER 31,
                                                        1997           1996
                                                        ----           ----
Assets

Current assets:
  Cash and short-term investments                     $ 21,836       $  2,363
  Short-term restricted cash                               112             --
  Accounts receivable                                    7,237          5,987
  Inventories                                            8,324          4,810
  Prepaid expenses                                       1,755            292
                                                      --------       --------
    Total current assets                                39,264         13,452

Long-term restricted cash                                  800             --
Property and equipment                                   4,087          1,804
Other assets                                             1,232             --
                                                      --------       --------
                                                      $ 45,383       $ 15,256
                                                      --------       --------
                                                      --------       --------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and other accrued liabilities      $  7,407       $  2,541
  Accrued expenses                                       2,657          1,020
  Deferred revenue                                       2,407          2,443
  Current maturities of obligations under capital 
    leases                                                  32             68
                                                      --------       --------
    Total current liabilities                           12,503          6,072
                                                      --------       --------

Long-term obligations under capital leases                 154            110
                                                      --------       --------

Stockholders' equity:
  Common stock, $0.001 par value, 20,000 shares
  authorized; 11,141and 9,160 shares issued and 
  outstanding                                                8              9
  Additional paid-in capital                            50,179         28,919
  Deferred stock compensation expense                     (178)          (355)
  Accumulated deficit                                  (17,283)       (19,499)
                                                      --------       --------
    Total stockholders' equity                          32,726          9,074
                                                      --------       --------
                                                      $ 45,383       $ 15,256 
                                                      --------       --------
                                                      --------       --------

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

                                       3
<PAGE>

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

<TABLE>
<CAPTION>

                                                      THREE MONTHS ENDED             SIX MONTHS ENDED
                                                            JUNE 30,                     JUNE 30,
                                                      1997           1996           1997          1996
                                                      ----           ----           ----          ----
<S>                                             <C>              <C>           <C>            <C>
Revenues                                          $  13,408       $  3,555      $  22,785      $  7,477 
Cost of revenues                                      6,693          2,188         11,401         4,641 
                                                  ---------       --------      ---------      --------
  Gross profit                                        6,715          1,367         11,384         2,836
                                                  ---------       --------      ---------      --------
Operating expenses:                                        
  Research and development                            2,241            481          3,574         1,066 
  Sales and marketing                                 1,459            638          2,692         1,235 
  General and administrative                          1,220            674          2,563         1,146 
                                                  ---------       --------      ---------      --------
    Total operating expenses                          4,920          1,793          8,829         3,447 
                                                  ---------       --------      ---------      --------
    
Income (loss) from operations                         1,795           (426)         2,555          (611)

Interest expense                                        (41)          (455)           (51)       (1,495)

Other income, net                                       163             51            186            61 
                                                  ---------       --------      ---------      --------
    Income (loss) before provision for income 
      taxes                                           1,917           (830)         2,690        (2,045)
    
Provision for income taxes                              343              -            474             -   

Net income (loss)                                 $   1,574       $   (830)     $   2,216      $ (2,045)
                                                  ---------       --------      ---------      --------
                                                  ---------       --------      ---------      --------

Net income (loss) per share                       $    0.14       $  (0.11)     $    0.21      $  (0.27)
                                                  ---------       --------      ---------      --------
                                                  ---------       --------      ---------      --------

Weighted average shares outstanding (1)              11,188          7,816         10,730         7,499 

</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)
                                           

                                                           SIX MONTHS ENDED
                                                                JUNE 30,    
                                                          1997           1996
                                                          ----           ----
Cash flows from operating activities:
  Net income (loss)                                      2,216         (2,045)
  Adjustments to reconcile net income (loss) to net 
  cash used in operating activities:
  Depreciation and amortization                            389            164 
  Amortization of bridge loan warrant                      ---          1,330 
  Stock compensation expense                               178            188 
  Changes in assets and liabilities:
  Restricted cash                                         (912)           --- 
  Accounts receivable                                   (1,250)        (1,343)
  Inventories                                           (3,513)           (27)
  Prepaid expenses                                      (1,469)          (113)
  Other assets                                            (977)           --- 
  Accounts payable                                       2,642         (1,202)
  Accrued liabilities                                    1,545             97 
  Deferred revenues                                         36         (1,756)
                                                      --------       --------
    Net cash used in operating activities               (1,115)        (4,707)
                                                      --------       --------

Cash flows from investing activities:
  Acquisition of property and equipment                 (2,859)          (314)
  Purchase of investments                              (17,737)           ---
                                                      --------       --------
    Net cash provided used in investing activities     (20,596)          (314)
                                                      --------       --------

Cash flows from financing activities:
  Proceeds from short-term debt                          2,200          1,036 
  Proceeds from long-term debt                              44            ---
  Repayments of short-term debt                            118         (4,036)
  Proceeds from issuance of common stock, net           21,085          9,543 
                                                      --------       --------
    Net cash provided by financing activities           23,447          6,543
                                                      --------       --------

Net increase in cash for the period                      1,736          1,522 
Cash at beginning of period                              2,363          1,927 
                                                      --------       --------
CASH AT END OF PERIOD                                 $  4,099       $  3,449
                                                      --------       --------
                                                      --------       --------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Interest paid                                         $     50       $    164


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 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 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), as 
amended.

    Operating results for the three month and the six month periods ended 
June 30, 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 the 
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 in April 1996, 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 June 30, 1996, even though their effect is antidilutive. 

    In February 1997, the Financial Accounting Standards Board issued the 
Statement of Financial Accounting Standards No.128, "Earnings per Share."  
This Statement is effective for the Company's fiscal 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 and six month periods ended June 30, 1997 and 
1996, the Company's income (loss) per share would not have been materially 
different from income (loss) per share as disclosed.

3.  INVENTORIES

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

                                             JUNE 30,    DECEMBER 31,
                                                 1997            1996
                                                 ----            ----
     Raw material and purchased components      $4,789         $3,003
     Work-in-process                             3,461          1,331
     Finished goods                                 74            476
                                                    --            ---
                                                 8,324         $4,810
                                                 -----         ------
                                                 -----         ------


                                       6
<PAGE>


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


4.  FOLLOW-ON EQUITY OFFERING

    On May 14, 1997, the Company sold in a public equity offering 1,875,000 
shares of its common stock at $12.00 per share. The Company received net 
proceeds of $20,531,000. On June 12, 1997, the Company's managing 
underwriter, Robertson, Stephens & Co., under the terms of the over-allotment 
option provided in the equity offering, sold an additional 42,742 shares of 
the Company's common stock at $12.00 per share from which the Company 
received net proceeds of $483,412. 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, 
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, AS WELL AS SUCH OTHER RISKS AS ARE DESCRIBED UNDER 
"BUSINESS RISKS" AND IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR 
ENDED DECEMBER 31, 1996.

OVERVIEW

     InVision Technologies, Inc. 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 112 systems of which a total of 50 had been shipped as of June 30, 
1997. For the six months ended June 30, 1997 and the fiscal year which ended 
December 31, 1996, the Company had revenues of $22.8 million and $15.8 
million, respectively, and by June 30, 1997 had orders in backlog of $62.1 
million.

     The Company considers research and development to be a vital part of its 
operating discipline and continues to dedicate substantial resources for 
research to enhance the performance, functionality and reliability of its CTX 
5000 hardware and software. At June 30, 1997, the Company had 45 full-time 
employees engaged in research and development activities while also using the 
services of 7 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 six months which ended June 30, 1997 and the fiscal year which ended 
December 31, 1996, the Company spent $3.9 million and $4.3 million, 
respectively, on research and development activities, of which $339,000 in 
the first six months of 1997 and $1.5 million in 1996 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 six 
months of 1997, approximately $19.4 million, or 85.3%, of the Company's 
revenues, were generated from sales to the Company's four 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 six 
months ended June 30, 1997 and the years ended December 31, 1996 and 1995, 
international sales represented 62.3%, 76.2% and 89.2%, respectively, of the 
Company's revenues. 

                                       8
<PAGE>

                             INVISION TECHNOLOGIES, INC.
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                     (CONTINUED)
                                           
                                           
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       SIX MONTHS ENDED
                                          JUNE 30,                JUNE 30,
                                      1997        1996        1997        1996
                                      ----        ----        ----        ----

Revenues                             100.0 %     100.0 %     100.0 %     100.0 %
Cost of revenues                      49.9        61.5        50.0        62.1
                                  --------    --------    --------    --------
    Gross profit                      50.1        38.5        50.0        37.9
                                  --------    --------    --------    --------

    Operating expenses:
Research and development              16.7        13.5        15.7        14.3
Sales and marketing                   10.9        17.9        11.8        16.5
General and administrative             9.1        19.0        11.2        15.3
                                  --------    --------    --------    --------
    Total operating expenses          36.7        50.4        38.7        46.1
                                  --------    --------    --------    --------

Income (loss) from operations         13.4       (11.9)       11.3        (8.2)
Interest expense                      (0.3)      (12.8)       (0.2)      (20.0)
Other income, net                      1.2         1.4         0.8         0.8
                                  --------    --------    --------    --------
    Income (loss) before taxes        14.3       (23.3)       11.9       (27.4)

Provision for income taxes             2.6         0.0         2.1         0.0
                                  --------    --------    --------    --------
    Net income (loss)                 11.7 %     (23.3)%       9.8 %     (27.4)%
                                  --------    --------    --------    --------
                                  --------    --------    --------    --------

                                       9
<PAGE>

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

    The quarter ended June 30, 1997 was the Company's second profitable 
quarter since the inception of the Company. Revenues increased by 272% to 
$13.4 million in the second quarter of 1997 from $3.6 million in the second 
quarter of 1996. Net revenues for the first six months ended June 30, 1997 
grew 205% to $22.8 million from $7.5 million in the same period last year. 
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 378.6% to $6.7 million in the second quarter of 
1997 from $1.4 million in the second quarter of 1996. Gross profit increased 
by 302% to $11.4 million in the first half of 1997 from $2.8 million in the 
first half of 1996. Gross margins were 50.0% in the second quarter of 1997 
and 38.5% in the second 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 357.4% to $2.2 
million in the second quarter of 1997 from $481,000 in the second quarter of 
1996. Total research and development expenditures for the six months ended 
June 30, 1997 increased by 95.0% to $3.9 million from $2.0 million in the 
first half of 1996. Of these amounts, $339,000 and $894,000, respectively, 
were funded by research and development contracts and grants from the FAA in 
the first six months of 1997 and 1996. As a percentage of revenues, total net 
research and development expenditures increased to 16.4% in the second 
quarter of 1997 from 13.5% in the second quarter of 1996 and for the first 
six months of 1997 research and development expenditures increased to 15.8% 
from 14.3% in the first six months 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 128.7% to $1.5 million in 
the second quarter of 1997 from $638,000 in the second quarter of 1996. Sales 
and marketing expenditures for the first half of 1997 increased 118% to $2.7 
million from $1.2 million in the same period last year. As a percentage of 
revenues, sales and marketing expenditures declined to 10.9% in the second 
quarter of 1997 from 17.9% in the second quarter of 1996 and to 11.8% for the 
first six months of 1997 from 16.5% for the same period last year. The 

                                       10
<PAGE>

                                           
                             INVISION TECHNOLOGIES, INC.
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                     (CONTINUED)
                                           
increased level of expenditures in the 1997 periods 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. 

     General and administrative expenses increased by 81% to $1.2 million in 
the second quarter of 1997 from $674,000 in the second quarter of 1996. As a 
percentage of revenues, general and administrative expenses decreased to 0.1% 
in the second quarter of 1997 from 19.0% in the second quarter of 1996. 
General and administrative expenses for the first six months of 1997 
increased 123.6% to $2.6 million from $1.1 million in the corresponding 
period of 1996. The increase in general and administrative expenses in 
absolute dollars 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 $41,000 in the second 
quarter of 1997 from $455,000 in the second quarter of 1996. For the first 
six months, interest expense decreased to $51,000 from $1.5 million in the 
corresponding period of 1996. Interest expense in the first half of 1996 
reflects the effect of a non-cash charge of $1.3 million resulting from the 
amortization of a bridge loan warrant discount arising in December 1995. 

     INCOME TAXES.  The provision for income taxes was $343,000 for the 
second quarter of 1997 and $474,000 for the first six months of 1997 
representing an effective tax rate of 17.0%. No provision for income taxes 
was recorded in the first six months of 1996. The Company's effective tax 
rate of 17.0% for the first half 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 carry-forwards. At December 31, 1996 the Company had federal net 
operating loss carry-forwards of approximately $11.0 million available to 
reduce future federal taxable income. The Company's net operating loss 
carry-forwards 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 carry-forwards 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 $21.2 million in a second public offering in May 1997, and 
$3.2 million of short-term borrowings. At June 30, 1997, the Company had 
$21.8 million in cash and short-term investments.

     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 0.50% per 
annum (9.25% at June 30, 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 0.25% 
per annum (9.00% at June 30, 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. 

                                       11
<PAGE>

                                           
                             INVISION TECHNOLOGIES, INC.
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                     (CONTINUED)
                                           
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 used in operating activities was $1.1 million in the first six 
months of 1997 and $4.7 million in first six months of 1996. Net cash used in 
operating activities in the first half of 1997 principally due to net income 
of $2.2 million and a $4.2 million increase in accounts payable and accrued 
expenses, which were partially offset by a $912,000 increase in restricted 
cash, a $3.5 million increase in inventories and a $1.3 million increase in 
accounts receivable and a $1.4 million increase in prepaid expenses. Net cash 
used in operations for the first half of 1996 was primarily due to the net 
loss of $2.0 million, a $1.3 million increase in accounts receivable, a $1.2 
million decrease in accounts payable and accrued liabilities and a $1.7 
million decrease in deferred revenues which were partially offset by a 
non-cash charge for the amortization of the warrant discount of $1.3 million.

     Net cash used in investing activities was $20.6 million in the first 
half of 1997 and $314,000 in the first half 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 $23.4 million in the first 
half of 1997 and $6.5 million in the first half of  1996. The increase in the 
first six months of 1997 was primarily due to $21.1 million in net proceeds 
from issuance of common stock in its May 1997 Public Offering.

     On May 14, 1997, the Company sold in a public equity offering of 
1,875,000 shares of its common stock at $12.00 per share. The Company 
received net proceeds of $20,531,000. On June 12, 1997, the Company's 
managing underwriter, Robertson, Stephens & Co., under the terms of the 
over-allotment option provided in the equity offering, sold an additional 
42,742 shares of the Company's common stock, at $12.00 per share. The Company 
received net proceeds of $483,412.

     The Company believes that existing cash of $4.1 million as of June 30, 
1997 and available borrowings under the Company's line of credit agreements, 
together with the net proceeds from the Company's recent public offering of 
common stock will be sufficient to finance its working capital and capital 
expenditure requirements for at least the next 12 months.

BUSINESS RISKS

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

The first two quarters of 1997 were the Company's profitable quarters 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, 
including the timing and announcement of orders, delays in shipments caused 
by customer readiness or integration issues, the timing of new or enhanced 

                                       12
<PAGE>

                             INVISION TECHNOLOGIES, INC.
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                     (CONTINUED)
                                           
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 - Not Applicable

Item 3:  Defaults Upon Senior Securities - Not Applicable 

Item 4:  Submission of Matters to a Vote of Security Holders 

         The Annual Meeting of the Stockholders was held June 12, 1997. Matters
         voted at that meeting were:

           (i)   The election of the Class I director to hold office until 2000 
                 Annual Meeting of Stockholders and until his successor is 
                 elected and qualified.
           (ii)  The amendment of Company's Equity Incentive Plan, to increase 
                 the aggregate number of shares of Common Stock authorized for 
                 issuance by 640,000 shares to 2,221,818 shares.
           (iii) The ratification of the selection of Price Waterhouse LLP as 
                 independent auditors of the Company for its fiscal year ending 
                 December 31, 1997.

         Tabulations for each proposal were as follows:
           Proposal I.  Election of Class I director

           Director                     For               Withheld
           --------                     ---               --------
           Dr. Sergio Magistri          8,485,462         15,698

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

           For            Against            Abstain          Not Voted
           ---            -------            -------          ---------
           6,195,054      133,532            34,131           1,787,443

           Proposal III.  Ratification of the selection of Price Waterhouse

           For            Against            Abstain        
           ---            -------            -------          
           8,448,276      26,382             26,502

           Continuing Directors:
             Dr. Giovanni Lanzara, the Class II director, and Dr. Douglas P. 
             Boyd and Dr. Bruno Trezza, the Class III directors, continued as 
             directors following the Annual Meeting.

Item 5:  Other Information - Not Applicable

Item 6:  Exhibits and Reports on Form 8-K
         (a)  Exhibits 

10.4     The Company's Equity Incentive Plan, as amended through August 8, 1997.
11.1     Statement regarding calculation of net income (loss) per share.
27       Financial Data Schedule.

         (b)  The Company filed no reports on Form 8-K during the quarter 
              ended June 30, 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: August 14, 1997                  /s/ Dr. Sergio Magistri
                                       -----------------------------
                                       Dr. Sergio Magistri
                                       President and
                                       Chief Executive Officer
     
     


Date: August 14, 1997                  /s/ Curtis P. DiSibio
                                       -----------------------------
                                       Curtis P. DiSibio
                                       Chief Financial Officer 


                                       15