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U.S. SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-KSB/A(Amendment No. 1)

|ý                                         | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    
|----------------------------------------- | -----------------------------------------------------------------------------------------
|For the fiscal year ending June 30, 2002.
|Or                                       
|o                                         | 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 000-25839

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IMPLANT SCIENCES CORPORATION(Exact name of registrant as specified in its charter)

|Massachusetts(State or other jurisdiction of
incorporation or organization) |  | 04-2837126(IRS Employer Identification No.)
|--------------------------------------------------------------------------- |  | -------------------------------------------
|107 Audubon Road, #5, Wakefield, MA(Address of Principal Executive Offices) |  | 01880(Zip Code)                            
|781-246-0700(Issuer's telephone number, including area code)               

Securities
registered pursuant to Section 12(b) of the Act:

|Title of Each Class                   |  | Name of Each Exchange on Which Registered                                                    
|------------------------------------- |  | ---------------------------------------------------------------------------------------------
|Common Stock, $.10 par value
Warrants |  | American Stock Exchange, Boston Stock Exchange
American Stock Exchange, Boston Stock Exchange

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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 ý    No o

Check
if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this
Form 10-KSB. o

State
issuer's revenues for its most recent fiscal year: $6,621,000

The
aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $20,289,000 as of August 30, 2002 (based on the closing price for such
stock as of August 30, 2002).

Indicate
the number of shares outstanding of each of the issuer's classes of common stock:

|Class                        |  | Outstanding at September 30, 2002
|---------------------------- |  | ---------------------------------
|Common Stock, $.10 par value |  | 6,216,080                        

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PART III

ITEMS
911 OF THE REGISTRANT'S ANNUAL REPORT ON FORM 10-KSB ARE HEREBY AMENDED BY DELETING THE TEXT THEREOF IN THEIR ENTIRETY AND SUBSTITUTING THEREFOR THE FOLLOWING:

ITEM 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act.

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers, directors and persons who beneficially own more than 10% of a
registered class of our equity securities ("ten percent stockholders") to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Officers, directors and ten
percent stockholders are charged by the SEC regulations to furnish us with copies of all Section 16(a) forms they file.

Since
our initial public offering, Anthony Armini, our President and Chief Executive Officer and Chairman of our board of directors, failed to file three reports to report four
transactions. Patricia Armini, a ten percent stockholder, failed to file one report to report one transaction. Stephen Bunker, our Chief Scientist, Vice President and Director, failed to file two
reports to report three transactions. Alan Lucas, our Vice President of Sales, Marketing and Business Development, failed to file three forms to report four transactions. John J. Munro, III, our
Vice-President of Brachytherapy Products, failed to file three forms to report three transactions. Pasquale Ruggieri, a non-employee director, failed to file one report to
report one transaction. Michael Szycher, a non-employee director, failed to file three forms to report three transactions. David Volpe, our acting Chief Financial Officer, failed to file
one report to report one transaction.

Our
directors, officers and senior management are as follows:

|Name                          |  | Age |  | Position                                                     |  | Position Since
|----------------------------- |  | --- |  | ------------------------------------------------------------ |  | --------------
|Anthony J. Armini             |  | 64  |  | President, Chief Executive Officer and Chairman of the Board |  | 1984          
|Stephen N. Bunker             |  | 59  |  | Vice President and Chief Scientist, Director                 |  | 1988          
|Shunkichi Shimizu (1) (2) (3) |  | 57  |  | Director                                                     |  | 1998          
|Michael Szycher (2) (4) (5)   |  | 64  |  | Director                                                     |  | 1999          
|Pasquale Ruggieri (6) (2) (3) |  | 69  |  | Director                                                     |  | 2001          
|Shaun K. Cave (7) (4) (5)     |  | 56  |  | Director                                                     |  | 2002          
|David B. Eisenhaure (7) (4)   |  | 57  |  | Director                                                     |  | 2002          
|Alan D. Lucas                 |  | 46  |  | Vice President of Marketing, Sales and Business Development  |  | 1998          
|David C. Volpe                |  | 47  |  | Acting Chief Financial Officer                               |  | 2001          
|John J. Munro, III            |  | 54  |  | Vice President, Brachytherapy Products                       |  | 2001          

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Dr. Anthony J. Arminihas been our President, Chief Executive Officer, and Chairman of the board of directors since our
incorporation. From 1972 to 1984, prior to our founding, Dr. Armini was Executive Vice President at Spire Corporation. From 1967 to 1972, Dr. Armini was a Senior Scientist at McDonnell
Douglas Corporation. Dr. Armini received his Ph.D. in nuclear physics from the University of California, Los Angeles in 1967. Dr. Armini is the author of eighteen patents and five
patents pending in the field of implant technology and fourteen publications in this field. Dr. Armini has over thirty years of experience working with cyclotrons and linear accelerators, the
production and characterization of radioisotopes, and fifteen years experience with ion implantation in the medical and semiconductor fields. Dr. Armini has been on the board of directors of
CardioTech International, Inc., a publicly traded company of which Dr. Szycher is President and Chief Executive Officer, since October 2000.

Dr. Stephen N. Bunkerhas served as our Vice President and Chief Scientist since 1987 and a Director since 1988. Prior to joining
us, from 1972 to 1987, Dr. Bunker was a Chief Scientist at Spire Corporation. From 1971 to 1972, Dr. Bunker was an Engineer at McDonnell Douglas Corporation. Dr. Bunker received
his Ph.D. in nuclear physics from the University of California, Los Angeles in 1969. Dr. Bunker is the author of ten patents in the field of implant technology.

Pasquale Ruggierijoined our Board of Directors in December 2001. In November 2002, Mr. Ruggieri resigned from our Board of
Directors. He has served as the Vice President of Investment Banking for Schneider Securities, Inc., a full service broker dealer, since 1991. Prior to that Mr. Ruggieri was Executive
Vice President and Director of Investment Banking for Jonathan Alan, Inc., a full service broker dealer. He holds a B.S. in Business Administration from Bryant College.

Shunkichi Shimizujoined our Board of Directors in March 1998. In July 2002, Mr. Shimizu resigned from our Board of
Directors to pursue other interests. He has been the Executive Vice President of TK Holdings, Inc. of Delaware, a subsidiary of Takata Corporation since 1997. Takata Corporation is a
manufacturer of seat belts and airbags. Prior to joining Takata Corporation, he served as Head of International Financial Institutions Division at the Bank of Tokyo-Mitsubishi, Ltd.,
Headquarters.

Michael Szycherjoined our Board of Directors in December 1999. He has been President and Chief Executive Officer and Director of
CardioTech International, Inc., a publicly traded manufacturer of medical devices and biocompatible polymers since 1996. From 1988 to 1996, Dr. Szycher was Chairman and Chief Technology
Officer of Polymedica Industries. Dr. Szycher is a recognized authority on polyurethanes and blood compatible polymers. He is the editor of six books on various subjects in blood compatible
materials and devices and the author of eighty original research articles. Dr. Szycher is also Editor-in-Chief of the quarterly publication Journal of Biomaterial Applications.

Shaun K. Cavehas served on our board of directors since November 2002. Mr. Cave co-founded Cynosure Laser
Corporation in 1992 and has been responsible for Marketing and Sales since August 2000. From January 1988 until September 1990, Mr. Cave served as Vice President of Sales
of Candela Laser Corporation.

David B. Eisenhaurehas served on our board of directors since November 2002. He has been the President, Chief Executive Officer
and Chairman of the Board of SatCon Technology Corporation since 1985. From 1974 until 1985, Mr. Eisenhaure was associated with the Charles Stark Draper Laboratory, Incorporated and with its
predecessor, the Massachusetts Institute of Technology's Instrumentation Laboratory, from 1967 to 1974. Mr. Eisenhaure also holds an academic position at M.I.T., as a lecturer in the Department
of Mechanical Engineering. Mr. Eisenhaure serves on the board of directors of

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Mechanical Technology Incorporated and Beacon Power. He holds a S.B., S.M. and an Engineer's Degree in Mechanical Engineering from M.I.T.

Alan D. Lucashas served as our Vice President of Marketing, Sales and Business Development since March 1998. Prior to joining us,
Mr. Lucas accumulated over 20 years experience in various marketing and business development positions for medical device companies. Most recently, from 1996 to 1998, Mr. Lucas
was the Director of Corporate Development at ABIOMED, Inc. From 1994 to 1996, Mr. Lucas was a strategic marketing and sales consultant focused on medical technology. From 1991 to
1994, Mr. Lucas was the Director of Marketing at Vision Sciences, Inc., a developmental stage medical device company.

David C. Volpehas served as our Acting Chief Financial Officer since May 2001. Mr. Volpe has also been serving as the
Acting Chief Financial Officer of CardioTech International, Inc. since June 1999. Since May 1996, Mr. Volpe has been the Managing Director of VC Advisors, Inc.,
providing financial management, business development and financing expertise to a variety of companies in the Internet, medical, telecommunications, software and high technology fields. From 1991
through 2000, Mr. Volpe was a senior financial executive with several private venture-backed and publicly held, technology based companies, including Chief Financial Officer of
Cynosure Inc. and FaxNet Corporation. Prior to that, Mr. Volpe was a Manager at Price Waterhouse focusing on emerging growth, technology-based companies. Mr. Volpe holds a B.S.
degree from California State University and is a member of the AICPA.

John J. Munro, IIIhas been our Vice President of Brachytherapy Products since 2001. From March 2000 until December 2000, he
served as our Director of Brachytherapy Products and from November 1999 until March 2000 as our Project Manager of Temporary Brachytherapy. From August 1998 until
October 1999, he served as Chief Executive Officer of GammaMed, USA, Inc and from July 1997 until August 1998 Mr. Munro was the Director of Source Operations at
CIS-US, Inc.

ITEM 10. Executive Compensation

The following table sets forth the aggregate cash compensation paid by us with respect to the three fiscal years ended June 30, 2000, 2001 and 2002 to our
chief executive officer and each of the four other most highly compensated executive officers in fiscal 2002 (the "named executive officers"). We have no other executive officers.

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Summary Compensation Table

|                                                                               |  | Annual Compensation |  | Long-Term
Compensation
Awards
|------------------------------------------------------------------------------ |  | ------------------- |  | -----------------------------
|
|Anthony J. Armini
President, Chief Executive Officer
and Chairman of the Board |  | 2002
2001
2000      |  | $$$                          
|Stephen N. Bunker
Vice President,
Chief Scientist and Director                 |  | 2002
2001
2000      |  | $$$                          
|David C. Volpe
Acting Chief Financial Officer                                  |  | 2002
2001           |  | $                            
|Alan D. Lucas
Vice President of Sales, Marketing
and Business Development      |  | 2002
2001
2000      |  | $$$                          
|John J. Munro, III
Vice President, Brachytherapy
Products                      |  | 2002
2001
2000      |  | $$$                          

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Employment Agreements

Anthony J. Armini.On September 26, 1998, we entered into an employment agreement, with an initial term of five years.
Under this employment agreement, Dr. Armini serves as our President and Chief Executive Officer at a base salary of $125,000. In addition, Dr. Armini may participate in our employee
fringe benefit plans or programs generally available to employees of comparable status and position. We and Dr. Armini are entitled to terminate his employment for any material breach of his
employment agreement at any time upon at least 30 days' written notice. In the event we terminate Dr. Armini's employment without cause, we will pay him 12 month's salary. Under
his employment agreement, he is subject to restrictive covenants, including confidentiality provisions. Also, during his employment and for a period of two years after the term of the employment
agreement, Dr. Armini is subject to a non-competition provision.

Stephen N. Bunker.On September 26, 1998, we entered into an employment agreement with Dr. Bunker in
substantially the same form as that described for Dr. Armini. Dr. Bunker serves as our Vice President and Chief Scientist at a base annual salary of $100,000.

Alan D. Lucas.We entered into a one year employment agreement with Mr. Lucas, with an effective date of
June 1, 2002. Under this employment agreement, Mr. Lucas serves as our Vice President of Sales, Marketing and Business Development at a base annual salary of $160,000. In addition,
Mr. Lucas may participate in our employee fringe benefit plans or programs generally available to employees of comparable status and position. Mr. Lucas is eligible to receive a bonus up
to

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10% of his annual base salary, subject to certain performance goals and the approval of the compensation committee of the board of directors. In the event that we terminate Mr. Lucas'
employment without cause, we will pay him four month's salary and the vesting of his options will accelerate. Under his employment agreement, he is subject to restrictive covenants, including
confidentiality provisions. Also, during his employment and for a period of two years after the term of the employment agreement, Mr. Lucas is subject to a non-competition
provision.

Director Compensation

Our directors who are our employees do not receive any compensation for service on the board of directors. Directors who are not our employees are paid a yearly
stipend of $2,500 and are reimbursed for reasonable travel expenses incurred in connection with attendance at board and committee meetings.

Under
the 2000 Incentive and Nonqualified Stock Option Plan, each director who is not our employee, other than Mr. Shimizu, automatically receives an annual grant of options to
purchase 2,000 shares of our common stock at an exercise price equal to the closing price of the common stock on the date of grant for each year of service. Each such option has a term of five years
and vests in full on the date of the grant.

Option Grants in Fiscal 2002

The following table sets forth certain information regarding stock options held as of June 30, 2002, by the named executive officers.

Option Grants in Fiscal 2002

|Name and Principal Position                               |  | Number of
Securities
Underlying
Options Granted |  | % of Total Granted
to Employees in
Fiscal Year |   | Exercise
Price ($/Sh) |      | Expiration
Date
|--------------------------------------------------------- |  | ----------------------------------------------- |  | ---------------------------------------------- | - | --------------------- | ---- | ---------------
|David C. Volpe
Acting Chief Financial
Officer             |  | 15,000                                          |  | 14                                             | % | $                     | 7.55 |                
|John J. Munro, III
Vice President,
Brachytherapy Products |  | 30,000                                          |  | 27                                             | % | $                     | 8.85 |                

Fiscal Year-End Option Values

No named executive officer exercised any options in fiscal 2002. The following table sets forth information regarding exercisable and unexercisable options held
as of June 30, 2002, be each of the executive officers.

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Fiscal-Year Option Values

|                                                                               |  | Number of Securities
Underlying Unexercised
Options at June 30, 2002 |  | Value of Unexercised
In-the-Money Options
at June 30, 2002 (1)
|------------------------------------------------------------------------------ |  | -------------------------------------------------------------------- |  | --------------------------------------------------------------
|
|
|Anthony J. Armini
President, Chief Executive Officer
and Chairman of the Board |  | 90,000                                                               |  |                                                              
|David C. Volpe
Acting Chief Financial Officer                                  |  | 15,000                                                               |  |                                                              
|Alan D. Lucas
Vice President of Sales, Marketing
and Business Development      |  | 118,400                                                              |  | 6,800                                                         
|John J. Munro
Vice President, Brachytherapy
Products                           |  | 3,300                                                                |  | 31,700                                                        

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Equity Compensation Plan Disclosure

The following table sets forth certain information as of June 30, 2002, regarding securities authorized for issuance under our equity compensation plans,
including individual compensation arrangements. Our equity compensation plans include the 1992 Stock Option Plan, 1998 Incentive and Nonqualified Stock Option Plan, 2000 Incentive and Nonqualified
Stock Option Plan and the 1998 Employee Stock Purchase Plan. All of these equity compensation plans have been approved by our stockholders.

|Plan Category                                              |  | Number of
securities to be
issued upon exercise
of outstanding
options warrants
and rights |  | Weighted-average
exercise price of
outstanding options,
warrants and rights |      | Number of securities
remaining available
for future issuance
under equity
compensation plans |          
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------------ |  | --------------------------------------------------------------------------- | ---- | -------------------------------------------------------------------------------------------- | ---------
|Equity Compensation Plans Approved by Security Holders     |  | 449,700                                                                                    |  | $                                                                           | 6.94 |                                                                                              | 318,014(1
|Equity Compensation Plans Not Approved by Security Holders |  |                                                                                           |  |                                                                             |     |                                                                                              |         
|                                                           |  |                                                                                            |  |                                                                             |      |                                                                                              |          
|Total                                                      |  | 449,700                                                                                    |  | $                                                                           | 6.94 |                                                                                              | 318,014(1
|                                                           |  |                                                                                            |  |                                                                             |      |                                                                                              |          

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ITEM 11. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information with respect to beneficial ownership of our common stock as of September 30, 2002, by (i) each
person known by us to own beneficially more than five percent of our common stock as of such date, (i) each current director, (iii) each of the persons named in the executive
compensation table above, and (iv) all of our current directors and officers as a group.

Beneficial
ownership is determined in accordance with the rules of the Securities and Exchange Commission. Shares of our common stock issuable by us pursuant to options which may be
exercised within 60 days after September 30, 2002, are deemed to beneficially owned and outstanding for purposes of calculating the number of shares and the percentage beneficially owned
by the applicable person. However, these shares are not deemed to be beneficially owned and outstanding for purposes of computing the percentage beneficially owned by any other person or entity.

|Name of Beneficial Owner                                                                      |  | Number of Shares
Beneficially Owned (1) |  | Percent of
Class (2) |  
|--------------------------------------------------------------------------------------------- |  | --------------------------------------- |  | -------------------- | -
|Patricia A. Armini
12 Harvard Drive
Bedford, MA 01730                                         |  | 781,122                                 |  | 12.6                 | %
|Casparin Corporation (3)
Gorsiraweg 14
P.O. Box 3889
Willemstad, Curacao
Netherlands Antilles |  | 770,618                                 |  | 12.4                 | %
|MedTec Iowa, Inc.
1401 8th Street
Orange City, Iowa 51041                                     |  | 500,000                                 |  | 8.0                  | %
|Anthony J. Armini (4)                                                                         |  | 1,305,222                               |  | 20.7                 | %
|Stephen N. Bunker                                                                             |  | 637,848                                 |  | 10.3                 | %
|Shaun K. Cave                                                                                 |  | 0                                       |  | *                    |  
|David B. Eisenhaure                                                                           |  | 0                                       |  | *                    |  
|Alan D. Lucas (5)                                                                             |  | 118,400                                 |  | 1.9                  | %
|John J. Munro, III (6)                                                                        |  | 4,791                                   |  | *                    |  
|Michael Szycher (7)                                                                           |  | 6,000                                   |  | *                    |  
|David Volpe (8)                                                                               |  | 15,000                                  |  | *                    |  
|All Directors and Officers as a group (8 persons)                                             |  | 2,087,261                               |  | 32.3                 | %

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

|                       |  | IMPLANT SCIENCES CORPORATION
|---------------------- |  | ----------------------------
|Date: December 9, 2002 |  | By:                         

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CERTIFICATIONS

I,
Anthony J. Armini, President and Chief Executive Officer of Implant Sciences Corporation, certify that:



| |  | Date: December 9, 2002
/s/ANTHONY J. ARMINIAnthony J. Armini
President and Chief Executive Officer
| |  | --------------------------------------------------------------------------------------------------

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I, David C. Volpe, Acting Chief Financial Officer of Implant Sciences Corporation, certify that:



| |  | Date: December 9, 2002
/s/DAVID C. VOLPEDavid C. Volpe
Acting Chief Financial Officer
| |  | -------------------------------------------------------------------------------------

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