<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 SEPTEMBER 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)

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

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


                                (510) 739-2400
             (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant: (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  Yes  X   No
                                                    ---

On September 30, 1997, there were 11,882,000 shares of the Registrant's 
Common Stock outstanding.

                                       1
<PAGE>

                          INVISION TECHNOLOGIES, INC.
                                  FORM 10-Q
                                    INDEX
                                       
                                       

PART  I:  FINANCIAL INFORMATION


ITEM                                                                      PAGE
----                                                                      ----
1.     Condensed Consolidated Financial Statements (unaudited)

       a. Condensed Consolidated Balance Sheets - September 30, 1997 and
          December 31, 1996............................................... 3
     
       b. Condensed Consolidated Statements of Operations - Three months 
          and nine months ended September 30, 1997 and 1996............... 4
     
       c. Condensed Consolidated Statements of Cash Flows - Nine months
          ended September 30, 1997 and 1996............................... 5
     
       d. Notes to Condensed Consolidated Financial Statements............ 6
     

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


PART  II.  OTHER INFORMATION


6.   Exhibits and Reports on Form 8-K..................................... 14


       Signature Page..................................................... 16

       Exhibits........................................................... 17

                                       2
<PAGE>

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


                                                     SEPTEMBER 30,  DECEMBER 31,
                                                         1997          1996
                                                         ----          ----
ASSETS

Current assets:

  Cash and cash equivalents                           $ 14,742      $  2,471
  Restricted cash                                          112            --
  Short-term investments                                 3,990            --
  Accounts receivable                                   15,149         6,982
  Inventories                                           11,023         4,899
  Prepaid expenses                                       1,119           344
                                                      --------      --------
    Total current assets                                46,135        14,696

Long-term restricted cash                                  800            --
Property and equipment                                   5,254         2,144
Other assets                                               363           109
                                                      --------      --------
                                                      $ 52,552      $ 16,949
                                                      --------      --------
                                                      --------      --------

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                    $  5,652      $  3,061
  Accrued liabilities                                    3,873         1,182
  Short-term debt                                        2,600           898
  Deferred revenue                                       4,823         2,675
  Current maturities of obligations under capital 
    leases                                                 154           114
                                                      --------      --------
    Total current liabilities                           17,102         7,930
                                                      --------      --------

Long-term obligations under capital leases, 
  less current portion                                     313           144
                                                      --------      --------
Stockholders' equity:
  Common stock, $0.001 par value, 20,000 shares
  authorized; 11,882 and 9,160 shares issued and
  outstanding                                               12            10
  Additional paid-in capital                            56,172        33,487
  Deferred stock compensation expense                     (322)         (384)
  Accumulated deficit                                  (20,725)      (24,238)
                                                      --------      --------
    Total stockholders' equity                          35,137         8,875
                                                      --------      --------

                                                      $ 52,552      $ 16,949
                                                      --------      --------
                                                      --------      --------

The accompanying notes are 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            NINE MONTHS ENDED
                                                                SEPTEMBER 30,                SEPTEMBER 30,
                                                             1997           1996           1997         1996
                                                             ----           ----           ----         ----
<S>                                                  <C>              <C>          <C>           <C>
Revenues                                                $  15,458       $  3,959      $  38,243     $  11,446
Cost of revenues                                            7,731          2,232         19,132         6,873
                                                        ---------       --------      ---------     ---------
  Gross profit                                              7,727          1,727         19,111         4,573
                                                        ---------       --------      ---------     ---------

Operating expenses:
  Research and development                                  1,762            156          5,189         1,889
  Sales and marketing                                       1,399          1,104          4,242         2,662
  General and administrative                                1,457            953          4,486         2,720
  Acquisition Costs                                           685              -            685             -
                                                        ---------       --------      ---------     ---------
Total operating expenses                                    5,303          2,213         14,602         7,271
                                                        ---------       --------      ---------     ---------

Income (loss) from operations                               2,424           (486)         4,509        (2,698)
Interest expense                                              (58)            (7)          (346)       (1,550)
Other income (expense), net                                  (132)            76             70           120
                                                        ---------       --------      ---------     ---------
Income (loss) before provision for income taxes             2,234           (417)         4,233        (4,128)

Provision for income taxes                                    246             --            720            --
                                                        ---------       --------      ---------     ---------

Net income (loss)                                       $   1,988       $   (417)     $   3,513     $  (4,128)
                                                        ---------       --------      ---------     ---------
                                                        ---------       --------      ---------     ---------

Net income (loss) per share                             $    0.15       $  (0.05)     $    0.29     $   (0.50)
                                                        ---------       --------      ---------     ---------
                                                        ---------       --------      ---------     ---------

Weighted average shares outstanding (1)                    12,853          9,112         11,943         8,281

</TABLE>


(1)  Shares outstanding are adjusted for all periods to give effect to the 
2-for-1 stock split in the form of a stock dividend effective as of February 
7, 1997. Shares outstanding also reflect increases due to the follow-on 
offering completed in May 1997, and the acquisition of Quantum Magnetics in 
September 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)


                                                           NINE MONTHS ENDED
                                                              SEPTEMBER 30,
                                                           1997           1996
                                                           ----           ----

Net cash used in operating activities                  $ (2,220)       $ (5,374)
                                                       --------        --------
Cash flows from investing activities:
  Acquisition of property and equipment                  (4,928)           (586)
  Long-term restricted cash                                (800)             --
  Purchase of investments                                (3,990)             --
                                                       --------        --------
    Net cash used in investing activities                (9,718)           (586)
                                                       --------        --------

Cash flows from financing activities:
  Proceeds from debt financing                            4,287           1,000
  Repayments of debt                                     (2,376)         (4,069)
  Proceeds from issuance of common stock, net            22,298          11,971
                                                       --------        --------
    Net cash provided by financing activities            24,209           8,902
                                                       --------        --------

Net increase in cash for the period                      12,271           2,942
Cash at beginning of period                               2,471           3,715
                                                       --------        --------
CASH AT END OF PERIOD                                  $ 14,742        $  6,657
                                                       --------        --------
                                                       --------        --------

SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:
Acquisition of equipment under capital lease           $      9        $     59
Issuance of common stock as compensation               $    240        $     87
Warrants issued in connection with debt
   financings                                          $     56        $    647
Purchase of in process research and
   development and property equipment in
   exchange for notes payable                          $    330        $     --
Sale of equipment in exchange for non
   receivable                                          $    100        $     --

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 InVision Technologies Inc. and its 
subsidiaries (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, and in conjunction with the audited consolidated financial 
statements of Quantum Magnetics, Inc. ("Quantum Magnetics") as of September 
30, 1996 and 1995 and for the two years then ended, including notes thereto, 
both included in the Company's registration statement on form S-4 
(registration no. 333-35341) as amended.

     Operating results for the three month and the nine month periods ended 
September  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. 
All financial data has been restated on a combined basis with Quantum 
Magnetics to reflect the acquisition of Quantum as a pooling of interests.

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 September 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 nine month periods ended September 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):

                                                   SEPTEMBER 30,   DECEMBER 31,
                                                            1997           1996
                                                            ----           ----
Raw material and purchased components                    $ 7,389         $3,003
Work-in-process                                            3,634          1,419
Finished goods                                                --            476
                                                         -------         ------
                                                         $11,023         $4,899
                                                         -------         ------
                                                         -------         ------

                                       6
<PAGE>


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


4.   BUSINESS COMBINATION

     On September 30, 1997, the Company acquired Quantum Magnetics, a 
developer of explosive systems based upon quadruple resonance.  Under the 
terms of the merger, 777,000 shares of common stock and common stock options 
have been issued to Quantum Magnetics shareholders in exchange of all the 
capital stock and common stock options of Quantum Magnetics outstanding prior 
to the merger.  The transaction has been accounted for as a pooling of 
interests in the quarter ended September 30, 1997; therefore, all prior 
periods have been restated.

     Prior to the merger, Quantum used a September 30 fiscal year end. 
Restated financial statements of the Company combine results of Quantum as if 
it had used a December 31 year end.  No adjustments have been made to conform 
accounting policies of the entities.  There were no significant inter-company 
transactions requiring elimination in any period presented.  Non-recurring 
expenses associated with the merger, comprised primarily of outside 
accounting and legal fees, amounted to approximately $700,000 and have been 
included in Acquisition Costs in the statement of operations.

     In July 1997, the Company sold a portion of a prior investment in 
Quantum for net cash proceeds of $312,000, resulting in a loss on sale of 
$402,000 which has been included in Other Income (expense) category in the 
statement of operations.  The sale reduced the Company's ownership interest 
in Quantum in order to comply with pooling-of-interests accounting rules.


                                       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 WORDS "ANTICIPATE," "BELIEVE," 
"ESTIMATE" AND "EXPECT" AND SIMILAR EXPRESSIONS AS THEY RELATE TO THE COMPANY 
OR ITS MANAGEMENT ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS.  
THE COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS COULD DIFFER 
MATERIALLY FROM THE RESULTS EXPRESSED IN, OR IMPLIED BY, THESE 
FORWARD-LOOKING  STATEMENTS.  FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH 
DIFFERENCES INCLUDE RISKS RELATED TO MARKET ACCEPTANCE OF THE COMPANY'S 
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, DIFFICULTIES WHICH MAY BE ENCOUNTERED IN CONNECTION 
WITH THE INTEGRATION OF QUANTUM INTO THE OPERATIONS OF THE COMPANY AND/OR 
INTEGRATION OF QUANTUM'S TECHNOLOGY INTO THE TECHNOLOGY OF THE COMPANY, 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, AS AMENDED.

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 66 had been shipped as of 
September 30, 1997. 

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

     For the nine months ended September 30, 1997 and the fiscal year which 
ended December 31, 1996, the Company had revenues of $38.2 million and $15.8 
million, respectively, and by September 30, 1997 had a backlog of 
approximately $47 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 September 30, 1997, the Company had 89 
full-time employees (including Quantum employees) engaged in research and 
development activities while also using the services of 18 specialized 
contract employees and consultants in this area. Total research and 
development expenditures by the Company are partially offset by amounts 
reimbursed by the FAA and other government and private agencies under 
development contracts and grants. The Company believes that investment in 
research and development in absolute dollars will increase substantially to 
meet its future needs regardless of the level of funding received from the 
FAA. During the nine months which ended September 30, 1997 and 1996, the 
Company spent $9.6 million and $5.2 million, respectively, on research and 
development activities, of which $4.5 million in the first nine months of 
1997 and $3.4 million in 1996 were funded by the FAA and other government and 
private agencies under development contracts and grants. To the extent that 
contract and grant receipts decline in the future, research and development 
expenditures borne by the Company would increase, and the Company expects 
that its results of operations would be adversely impacted.

     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 nine 
months of 1997, approximately $32.8 million, or 85.8%, of the Company's 
revenues, were generated from sales to the Company's five 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 
nine months ended September 30, 1997 and the years ended December 31, 1996 
and 1995, international sales represented 48.2%, 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.

<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED            NINE MONTHS ENDED
                                                                  SEPTEMBER 30,                 SEPTEMBER 30,
                                                               1997           1996           1997           1996
                                                               ----           ----           ----           ----
<S>                                                        <C>            <C>             <C>           <C>
Revenues                                                      100.0%         100.0%         100.0%         100.0
Cost of revenues                                               50.0           56.4           50.0           60.0
                                                            -------        -------        -------        -------
  Gross profit                                                 50.0           43.6           50.0           40.0
                                                            -------        -------        -------        -------

  Operating expenses:
Research and development                                       11.4            3.9           13.6           16.5
Sales and marketing                                             9.1           27.9           11.1           23.3
General and administrative                                      9.4           24.1           11.7           23.8
Acquisition Costs                                               4.4             --            1.8             --
                                                            -------        -------        -------        -------
  Total operating expenses                                     34.3           55.9           38.2           63.6
                                                            -------        -------        -------        -------

Income (loss) from operations                                  15.7          (12.3)          11.8          (23.6)
Interest expense                                               (0.4)          (0.2)          (0.9)         (13.5)
Other income, net                                              (0.9)           1.9            0.2            1.0
                                                            -------        -------        -------        -------
  Income (loss) before provision for income taxes              14.4          (10.6)          11.1          (36.1)

  Provision for income taxes                                    1.6             --            1.9             --
                                                            -------        -------        -------        -------
  Net income (loss)                                            12.8%         (10.6)%          9.2%         (36.1)%
                                                            -------        -------        -------        -------
                                                            -------        -------        -------        -------

</TABLE>

                                       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 September 30, 1997 was the Company's third profitable 
quarter since the inception of the Company. Revenues increased by 288% to 
$15.5 million in the third quarter of 1997 from $4.0 million in the third 
quarter of 1996. Revenues for the first nine months ended September 30, 1997 
grew 235% to $38.2 million from $11.4 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 shipments 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 353% to $7.7 million in the third quarter of 
1997 from $1.7 million in the third quarter of 1996. Gross profit increased 
by 315% to $19.1 million in the first nine months of 1997 from $4.6 million 
in the first nine months of 1996. Gross margins were 50.0% in the third 
quarter of 1997 and 43.6% in the third 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 and 
other government and private agencies under development contracts and grants. 
These services are provided on both a cost and cost plus basis. The Company 
believes that research and development expenditures in absolute dollars will 
increase substantially in the future regardless of the level of funding 
received from the FAA.

     Total research and development expenditures increased by 108% to $3.8 
million in the third quarter of 1997 from $1.9 million in the third quarter 
of 1996. Total research and development expenditures for the nine months 
ended September 30, 1997 increased by 84% to $9.6 million from $5.2 million 
in the first nine months of 1996. Of these amounts, $2.1 million and $1.8 
million, respectively, were funded by research and development contracts and 
grants from the FAA and other governmental and private entities for the third 
quarters of 1997 and 1996, and $4.5 million and $3.4 milion for the first 
nine months of 1997 and 1996 respectively. As a percentage of revenues, net 
research and development expenditures increased to 11.4% in the third quarter 
of 1997 from 3.9% in the third quarter of 1996 and for the first nine months 
of 1997 research and development expenditures decreased to 13.6% of revenues 
from 16.5% in the first nine months of 1996. The growth in research and 
development expenditures is primarily the result of personnel additions and 
increased spending on engineering materials and services.

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

     Sales and marketing expenditures increased by 27% to $1.4 million in the 
third quarter of 1997 from $1.1 million in the third quarter of 1996. Sales 
and marketing expenditures for the first nine months of 1997 increased 56% to 
$4.2 million from $2.7 million in the same period last year. As a percentage 
of revenues, sales and marketing expenditures declined to 9.1% in the third 
quarter of 1997 from 27.9% in the third quarter of 1996 and to 11.1% for the 

                                       10
<PAGE>

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

first nine months of 1997 from 23.3% for the same period last year. The 
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 125% to $2.1 million in 
the third quarter of 1997 from $953,000 in the third quarter of 1996. As a 
percentage of revenues, general and administrative expenses decreased to 
13.8% in the third quarter of 1997 from 24.1% in the third quarter of 1996. 
General and administrative expenses for the first nine months of 1997 
increased 90% to $5.2 million from $2.7 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, and a one-time cost related to Quantum 
Magnetics, Inc. acquisition.  The acquisition costs were approximately 
$700,000 or 4.4% of the total revenues.

     INTEREST EXPENSE.  Interest expense increased to $58,000 in the third 
quarter of 1997 from $7,000 in the third quarter of 1996. For the first nine 
months, interest expense decreased to $346,000 from $1.6 million in the 
corresponding period of 1996. Interest expense in the first nine months 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 $246,000 for the third 
quarter of 1997 and $720,000 for the first nine months of 1997 representing 
an effective tax rate of 17.0%. No provision for income taxes was recorded in 
the first nine months of 1996. The Company's effective tax rate of 17.0% for 
the first nine 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 $15.0 million available to reduce future 
federal taxable income. The Company's net operating loss carry-forwards 
expire from 2005 to 2011.  The tax benefit of the net operating loss and 
credit carryforwards may be limited due to the impact of the Tax Reform Act 
of 1986.  Events which may cause the tax benefit to be limited include, but 
are not limited to, a cumulative stock ownership change of more than 50%, as 
defined, over a three-year period and the timing of utilization of various 
tax benefits carried forward.

LIQUIDITY AND CAPITAL RESOURCES

     Since inception, the Company has financed its operations primarily 
through private sales of $21.7 million of Preferred and Common Stock (of 
which $6.7 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 ("May 
1997 Public Offering"), and $2.6 million of short-term borrowings. At 
September 30, 1997, the Company had $18.7 million in cash, cash equivalents 
and short-term investments compared to $2.4 million in cash, cash equivalents 
and short-term investments at December 31, 1996.

     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.  
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 $2.2 million in the first nine 
months of 1997 and $5.4 million in first nine months of 1996. Reduction in 
cash used in operating activities in the first nine months of 1997 was 
primarily due to net income of $3.5 million versus a net loss of $4.1 million 
in first nine months of 1996 and increases in accounts receivable, inventory, 
accounts payable and accrued liabilities over the same period prior year.


                                       11
<PAGE>

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

     Net cash used in investing activities was $9.7 million in the first nine 
months of 1997 and $586,000 in the first nine months of 1996, primarily due 
to the purchase of property and equipment and short-term investments.  The 
Company has no significant capital spending or purchase commitments other 
than normal purchase commitments and commitments under leases.  The Company 
has approximately $4.0 million in short-term investments.

     Net cash provided by financing activities was $24.2 million in the first 
nine months of 1997 and $8.9 million in the first nine months of  1996. The 
increase in the first nine months of 1997 was primarily due to $21.2 million 
in net proceeds from issuance of common stock in the Company's May 1997 
Public Offering.

     The Company believes that existing cash and cash equivalents of $14.7 
million as of September 30, 1997 and available borrowings under the Company's 
line of credit agreements will be sufficient to finance its working capital 
and capital expenditure requirements for at least the next 12 months.

BUSINESS RISKS

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

     The first three quarters of 1997 were the Company's only 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 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.

     In addition, as a result of the consummation of the acquisition of 
Quantum Magnetics, Inc. in the third quarter of 1997, the Company's operating 
expenses may potentially increase.  There can be no assurance that the 
integration of the business can be successfully completed in a timely 
fashion, or at all, or that the revenues from the acquired business will be 
sufficient to support the costs associated with the business, without 
adversely affecting the Company's operating margins.  Any failure to 
successfully complete the integration in a timely fashion or to generate 
sufficient revenues from the acquired business could have a material adverse 
effect on the Company's business and results of operations.

                                       12
<PAGE>
     
                          INVISION TECHNOLOGIES, INC.
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
                                  (CONTINUED)
     
     The Company regularly evaluates acquisition opportunities and is likely 
to make acquisitions in the future.  Future acquisitions by the Company could 
result in potentially dilutive issuances of equity securities, the incurrence 
of debt and contingent liabilities and amortization expenses related to 
goodwill and other intangible assets, which could materially adversely affect 
the Company's results of operations.  The Company's management has had 
limited experience in assimilating acquired organizations.  No assurance can 
be given as to the ability of the Company to integrate successfully any 
operations, personnel or products that have been acquired or that might be 
acquired in the future, and the failure of the Company to do so could have a 
material adverse effect on the Company's results of operations.

                                       13
<PAGE>

                         PART  II.  OTHER INFORMATION

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

Exhibit No.    Description
-----------    -----------

2.1*           Agreement and Plan of Merger and Reorganization dated as of 
               September 3, 1997, among InVision Technologies, Inc., a Delaware 
               corporation, QP Acquisition Corp., a California corporation, and 
               Quantum Magnetics, Inc., a California corporation, (the 
               "Registration Agreement").

2.2**          Form of Agreement of Merger between Quantum Magnetics, Inc. and 
               QP Acquisition Corp.

2.3**          Form of Escrow Agreement between the Registrant, Quantum 
               Magnetics, Inc., Randall R. Lunn and the Escrow Agent.

11.1           Statement regarding calculation of net income (loss) per share.

27             Financial Data Schedule.

*              Previously filed with InVision's Current Report on Form 8-K 
               (File No. 0-28236) dated September 3, 1997 and filed September 
               10, 1997.

**             Previously filed with InVision's Registration Statement on Form 
               S-4 (Registration No. 333-35341) filed September 10, 1997.


                                       14
<PAGE>

                         PART  II.  OTHER INFORMATION
                                  (CONTINUED)


                   (b)  REPORTS ON FORM 8-K

     The Company filed two Reports on Form 8-K related to events which took 
place during the quarter ended September 30, 1997.  The first was filed on 
September 10, 1997 and reported the execution of a definitive agreement to 
acquire Quantum Magnetics, Inc. on September 3, 1997.  The second was filed 
on October 7, 1997 and reported the closing of the Quantum acquisition on 
September 30, 1997.  This latter Report contained financial statements of the 
acquired business and pro forma financial information of the combined 
entities as required by Item 7(a) and (b) of Form 8-K .

                                       15
<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: November 14, 1997                 /S/ Sergio Magistri
                                        -----------------------
                                        Dr. Sergio Magistri
                                        President and
                                        Chief Executive Officer and
                                        Duly Authorized Officer
     
     


Date: November 14, 1997                 /S/ Curtis P. DiSibio
                                        ---------------------
                                        Curtis P. DiSibio
                                        Chief Financial Officer and
                                        Duly Authorized Officer

     
                                       16
<PAGE>



                                 EXHIBIT INDEX

Exhibit No.    Description
-----------    -----------

2.1*           Agreement and Plan of Merger and Reorganization dated as of 
               September 3, 1997, among InVision Technologies, Inc., a Delaware 
               corporation, QP Acquisition Corp., a California corporation, and 
               Quantum Magnetics, Inc., a California corporation.

2.2**          Form of Agreement of Merger between Quantum Magnetics, Inc. and 
               QP Acquisition Corp.

2.3**          Form of Escrow Agreement between the Registrant, Quantum 
               Magnetics, Inc., Randall R. Lunn and the Escrow Agent.

11.1           Statement regarding calculation of net income (loss) per share.

27             Financial Data Schedule.

*              Previously filed with InVision's Current Report on Form 8-K 
               (File No. 0-28236) dated September 3, 1997 and filed September 
               10, 1997.

**             Previously filed with InVision's Registration Statement on Form 
               S-4 (Registration No. 333-35341) filed September 10, 1997.