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Implant Sciences Completes $2,000,000 Financing

WAKEFIELD, Mass.--(BUSINESS WIRE)--Sept. 5, 2003--Implant Sciences Corporation (AMEX: "IMX", "IMX.WS") today announced that it closed a $2,000,000 follow on private financing with Laurus Funds on August 28, 2003. The Company issued 200,000 shares of Series B 5% Cumulative Convertible Preferred Stock, which can be converted into the Company's common stock at a fixed conversion price, up to a maximum of approximately 390,000 shares, over an eighteen (18) month period. The preferred stock provides for monthly redemptions to be paid at the option of the Company, subject to certain restrictions, in cash or shares of the Company commencing on December 1, 2003. In addition, Laurus was granted a warrant to purchase 70,000 shares of the Company's common stock at prices between $6.87 and $8.25 per share. The Company plans to utilize the proceeds from the financing to complete the commercialization of its hand-held, portable trace explosives detection system, the development of its breast brachytherapy technology, and for working capital. The financing documents will be attached as exhibits to our Annual Report on Form 10-KSB for the fiscal year ended June 30, 2003.

"With this $2,000,000 investment from Laurus Funds we can accelerate the commercialization of our portable, hand-held explosives detector product," stated Dr. Anthony J. Armini, President and CEO of Implant Sciences. "The overall market for explosive-detection technologies is currently estimated at $1 billion annually and we continue to believe that our technology is superior to other portable explosives detection devices. This funding will also enable us to aggressively focus our resources on our collaboration with the Memorial Sloan-Kettering Cancer Center brachytherapy physics team in New York City for the development of a lower energy radiation source for breast cancer."

David C. Volpe, VP of Strategic Development of Implant Sciences further commented, "This follow on investment is a direct result of Laurus' confidence in the technology and resultant products developed by Implant Sciences. This financing was provided to the Company on very favorable terms and clearly demonstrates that Laurus is more than a funding source, rather it has become a valued business partner of the Company."

David Grin, Fund Manager of Laurus Master Fund, stated, "Since our initial $2,500,000 investment in October 2002, Implant Sciences' management has demonstrated its ability to execute its business plan and develop its technology. We continue to be impressed by the management team and the potential for the Company's technologies and look forward to our continuing long-term relationship with the Company."

About Implant Sciences

Implant Sciences, incorporated in 1984, is using its core ion technology to develop, manufacture and market products for national security, industry, and medicine. Under commercial development is a portable trace explosives detection device to identify explosives, narcotics and other toxic materials. Implant has received development grants from the US Army, Navy, Marines and Air Force, and, signed a cooperative R&D agreement with the Transportation Security Administration, which facilitates equipment evaluation and new government contracts. Using its proprietary ion implantation and thin film coating technologies, Implant also manufactures and markets radioactive and non-radioactive products for medical use. Implant derives a portion of its revenues from its radioactive seeds for treating prostate cancer that are distributed throughout the US by its direct sales force and MED-TEC, Inc. Implant is also developing brachytherapy products for the treatment of breast, eye, and other cancers. Additionally, Implant modifies the surface characteristics of orthopedic joint implants to reduce polyethylene wear, thereby increasing the life of the implants.

This press release includes statements that may constitute "forward-looking" statements, usually containing the words "believe", "estimate", "project", "expect" or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's products and services in the marketplace, the ability of the Company to develop effective new products and receive governmental approvals of such products, competitive factors, dependence upon third-party vendors, and other risks detailed in the Company's periodic report filings with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

    CONTACT: Investor contact:
             Aurelius Consulting Group:
             Ed Sasso, 407/681-8899
             Dave Gentry, 407/644-4256
             Implant Sciences Corporation:
             David C. Volpe, 508/523-3141
             Media contact:
             The Investor Relations Group
             Lisa Lindberg or Janet Vasquez
             Dian Griesel

    SOURCE: Implant Sciences