Audit Committee:
Joseph Levangie (Chairman)
Michael Szycher
Michael Turmelle

Compensation Committee:
Michael Turmelle (Chairman)
David Eisenhaure
Joseph Levangie

Nominating Committee:
Michael Szycher (Chairman)
Michael Turmelle
David Eisenhaure
Joseph Levangie

The Board of Directors and Its Committees
The board of directors held eight meetings during the fiscal year ended June 30, 2006. No current director attended fewer than 80% of the total number of meetings held by the board or committees of the board on which he served. Directors are expected to attend all meetings. All of our directors are expected to attend the Annual Meeting. Five directors attended last year’s Annual Meeting. The board of directors currently has three standing committees: the audit committee, the compensation committee and the nominating committee. The committees receive their authority and assignments from the board of directors and report to the board of directors. Each committee operates under a charter that has been approved by the board of directors. Three members of the board are independent. Stockholders who wish to communicate with one or more directors may do so by mailing such communications to the Company’s principal offices 107 Audubon Road, #5, Wakefield, MA 01880, attention: Diane Ryan, Chief Financial Officer. The Chief Financial Officer will then relay all communications to the appropriate director(s).

Director Independence
The Board has reviewed each of the director’s relationships with the Company in conjunction with Section 121 (A) of the listing standards of the American Stock Exchange (“AMEX”) and has affirmatively determined that three of our directors, Michael Turmelle, Dr. Michael Szycher and David Eisenhaure, are independent of management and free of any relationship that would interfere with their independent judgment as members of the Audit Committee.

Audit Committee
The Board has designated from among its members an Audit Committee, which consists of Mr. Michael Turmelle (Chairman), Dr. Michael Szycher and Mr. David Eisenhaure, all of whom are independent members under the AMEX listing standards. Mr. Turmelle meets the requirements to qualify as an “audit committee financial expert” as defined in 401(h) of Regulation S-K. The Audit Committee has the responsibility to ascertain that the Company’s financial statements reflect fairly the financial condition and operating results of the Company and to appraise the soundness, adequacy and application of accounting and operating controls. The Audit Committee recommends the independent auditors to the Board, reviews the scope of the audit functions of the independent auditors and reviews the audit reports. The Audit Committee is responsible for pre-approving all audit related services and fees. The Audit Committee held a meeting each quarter during fiscal 2006. The responsibilities of the Audit Committee are outlined in a written charter available for review on the Company’s website: www.implantsciences.com.

Compensation Committee
The Compensation Committee, which met one time during fiscal 2006, had two members, Mr. David Eisenhaure (Chairman) and Mr. Michael Turmelle both of whom are independent board members under the AMEX listing standards. The Compensation Committee reviews and determines on both an annual and an as-needed basis the compensation of the Company’s chief executive officer (the “CEO”). The Compensation Committee determines all elements of the CEO’s compensation, including salary, bonus, options, benefits and all other aspects of the total compensation package based on the compensation earned by a CEO in a similar corporation and industry. Additional responsibilities of the Compensation Committee are outlined in a written charter available for review on the Company’s website: www.implantsciences.com.

No person serving on the Compensation Committee at any time during fiscal 2006 was a present or former officer or employee of the Company or any of its subsidiaries. During fiscal 2006, other than Dr. Armini, no executive officer of the Company served as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of another entity. In addition, none of the members of the Compensation Committee had any relationships with the Company or any other entity that require disclosure under the proxy rules and regulations promulgated by the SEC. During fiscal 2006, Dr. Armini served on the board of directors of CardioTech International, one of whose executive officers served on the Company’s Board or Compensation Committee as well as on the board of directors of CorNova.

Nominating Committee
The members of the nominating committee are Messrs. Szycher, Eisenhaure and Turmelle. The committee selects nominees for election as our directors. The committee will give the same consideration to a nominee for election to the board of directors recommended by a stockholder of record if such recommendation is timely in accordance with, and is accompanied by the information required by, our By-laws. The nominating committee met two times during fiscal 2006.

Code of Conduct and Ethics
Our Board of Directors has adopted a Code of Ethics which is applicable to all our directors, officers, employees, agents and representatives, including our principal executive officer and principal financial officer, principal accounting officer or controller, or other persons performing similar functions. We have made available on our website copies of our Code of Ethics and charters for the committees of our Board and other information that may be of interest to investors.