Implant Sciences Corporation, incorporated in August 1984, develops products for the medical device and explosives detection industry. The Company's core technology involves ion implantation and thin-film coatings of radioactive and non-radioactive materials. It operates in three segments: Medical, Semiconductor and Explosives. The Medical segment includes radioactive seeds, orthopedic coatings, medical related government contracts and other related activities. The Explosives Detection segment includes development contracts and products sales related to the Company's trace explosives detection devices. The Semiconductor segment includes ion implantation, disk refurbishment, source conditioning equipment and semiconductor analysis services. Implant Sciences Corporation has received the United States Food and Drug Administration (FDA) 510(k) clearance to market both its I-Planta Iodine-125 radioactive seed for the treatment of prostate cancer and its ytterbium (Yb)-192 source for breast cancer therapy. The Company also modifies the surface characteristics of orthopedic joint implants to reduce polyethylene wear and thereby increasing the life of the implant. The Company is developing a device for the treatment of ocular melanoma using brachytherapy. Implant Sciences Corporation also has other radiation therapy devices in various stages of development, including devices for biliary duct cancer and dural irradiation. Medical Products Implant Sciences Corporation has developed and has been granted two United States patents covering radioactive seeds, implants and methods of manufacturing radioactive seed implants by a process. The FDA 510(k) clearance for the marketing of I-Plant Iodine-125 radioactive seed, permits treatment of any localized tumors treatable by temporary or permanent brachytherapy. The Company's production method, involving a dry fabrication process, does not use radioactive wet chemistry. Using this dry fabrication process, seed cores can be fabricated and inventoried in large quantities and activated only when ordered. These radioactive seeds are being sold in the United States. On May 6, 2005, the Company acquired a treatment planning technology from Rosses Medical Systems, Inc. and further enhanced it into its I-Plant TPS product. In its latest version, Implant Sciences Corporation has developed a module that aids the physician in making two and three-dimensional maps of the stage, grade and location of cancer within the prostate gland. This Pathology Mapping Module is in addition to the standard treatment planning function used for prostate brachytherapy and will provide for image guided, focal treatment for the disease. Implant Sciences Corporation is developing a radioactive source to be used in a delivery system designed to provide breast cancer treatment. This treatment called accelerated partial breast irradiation therapy following lumpectomy can be completed in five days rather than seven weeks of daily treatments using external beam radiation. The Company has also developed a lower energy source, Yb-169, which can deliver the therapeutic dose similar to that of an iridium-192 source, to the lumpectomy cavity and does not require a concrete shielded treatment room. The procedure can be done in an ordinary treatment room with some portable shielding around the patient using a conventional afterloader system. The Company provides surface engineering technology to manufacturer orthopedic hip and knee total joint replacements. It implants cobalt chromium components of total joint replacements made by its customers with nitrogen ions. Nitrogen ion implantation of these components reduces polyethylene wear by modifying the native oxide present in cobalt chromium alloys. Implant Sciences Corporation is also developing ceramic ion beam synthesis techniques for total joint replacements. The Company receives untreated cobalt chromium total joint replacements from customers and implants them at its facility. Implant Sciences Corporation has developed methods for applying radiopaque coat

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