Implant Sciences Closes $5.0 Million Private Placement of Common Stock with Institutional Investors.

WAKEFIELD, Mass. -- Implant Sciences Corporation (AMEX: "IMX", "IMX.WS") a developer and manufacturer of products for national security, medicine and industry, today announced the completion of a $5.0 million private placement of its common stock with four institutional investors. The offering was priced at a 15% discount from the $12.55 closing price of the common stock on June 16, 2004 resulting in an initial issuance of 468,604 shares of the Company's common stock. The investors also received a five-year warrant to purchase an additional 117,151 shares of common stock at an exercise price of $14.43 per share. Additionally, the Company has granted to the investors the right to purchase an additional 215,332 shares of common stock at a price of $11.61 within 100 days of the date upon which a registration statement is declared effective or February 16, 2005, whichever is first to occur. No additional warrants are to be issued if this right is exercised. PacificWave Partners Limited acted as the financial advisor on the transaction.

Dr. Anthony J. Armini, PhD., CEO of Implant Sciences, stated, "This financing is an extremely important step in the growth of Implant Sciences. The financing represents a vote of confidence by institutional investors in our Company, our business plan and our management's ability to execute on the plan. And as part of our plan, the Company plans to utilize a portion of the financing proceeds for an accretive acquisition which is currently under preliminary evaluation."

Dr. Armini further commented, "We continue to be on track with the production of the recently announced Army purchase order for 12 units of our Quantum Sniffer hand-held explosives detection device, and the 3 units that are scheduled for delivery to the Navy. We understand that the explosives detection division of our business is an important new commercial opportunity for our company; we believe we have the necessary internal funding, operational resources and sales and marketing resources to bring the Quantum Sniffer to market. However, we also believe that the Company's semiconductor and radiation therapy business units also provide additional opportunity that will increase shareholder value. As a result, this financing provides us additional financial strength and the ability to seek and complete other accretive acquisitions to maximize the overall value that can be provided to our shareholders."

About Implant Sciences

Implant Sciences, incorporated in 1984, is using its core ion technology to develop, manufacture and market products for national security, medicine, and industry. Under development are portable and bench-top trace element detection devices to identify explosives, narcotics and other toxic materials. The Company has also received government grants from the US Army, Navy and Air Force, and the Transportation Security Administration to adapt the Company's explosive detection technology to a wide number of security requirements.

Using its proprietary ion implantation and thin film coating technologies, Implant Sciences has a sophisticated production line that modifies the surface characteristics of orthopedic joint implants to reduce polyethylene wear, thereby substantially increasing the life of the implants. The company also manufactures and markets radioactive and non-radioactive products for medical use, including radioactive seeds for treating prostate cancer that are distributed throughout the United States by its own direct sales force. In parallel with the production of these seeds, it is also developing additional brachytherapy products for the treatment of breast, eye, and other cancers.

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 to fund and consummate an accretive acquisition, 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.