IBIS TECHNOLOGY CORP
CHANGES IN AND   DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE      Not applicable.
CONTROLS AND PROCEDURES      a)              Evaluation of Disclosure Controls and Procedures.  As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management including the Company’s President and Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of the company’s disclosure controls and procedures, as defined in Exchange Acts Rules 13a-15(e) and 15d-15(e). Based upon that evaluation the Company’s President and Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are effective in enabling the Company to record, process, summarize, and report information required to be included in the Company’s periodic SEC filings within the required time period.   b)              Changes in Internal Controls over Financial Reporting. There were no changes in the Company’s internal controls over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the fourth quarter of fiscal year 2005 that has materially affected, or would be reasonably likely to materially affect, the Company’s internal controls over financial reporting.
Other Information      Not applicable.   PART III
DIRECTORS AND OFFICERS   OF THE REGISTRANT      The Response to this item is incorporated by reference from the discussion responsive thereto under the captions “Management” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s Proxy Statement for the 2006 Annual Meeting of Stockholders.
EXECUTIVE COMPENSATION      The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Executive Compensation” in the Company’s Proxy Statement for the 2006 Annual Meeting of Stockholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL   OWNERS AND MANAGEMENT      The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Share Ownership” in the Company’s Proxy Statement for the 2006 Annual Meeting of Stockholders.
CERTAIN RELATIONSHIPS   AND RELATED TRANSACTIONS      The response to this item is incorporated by reference from the discussion responsive thereto under the captions “Certain Transactions” and “Executive Compensation—Employment Contracts and Change of Control Arrangements” in the Company’s Proxy Statement for the 2006 Annual Meeting of Stockholders.
PRINCIPAL ACCOUNTANT FEES AND SERVICES      The response to this item is incorporated by reference from the discussion responsive thereto under the caption “Independent Registered Public Accountants” “Audit and Non Audit Fees” in the Company’s Proxy Statement for the 2006 Annual Meeting of Stockholders.   59
EXHIBITS,   FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K      (a)                                  The following documents are filed as part of this Annual Report on Form 10-K.   (1) and (2)                                         See “Index to Financial Statements and Financial Statement Schedule” at Item 8 to this Annual Report on Form 10-K.  Other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto.   (3)                                 Exhibits   The following is a list of exhibits filed as part of this Annual Report on Form 10-K.      Exhibit   Number       Description     1       Underwriting Agreement dated October 16,   2003, between the Registrant and CDC Securities (Filed as Exhibit 1.1 to   the Company’s Current Report on Form 8-K filed on October 17, 2003   and incorporated herein by reference)     3.1   -   Restated Articles of Organization of   Registrant (Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q   for the Quarter Ended September 30, 2000 and incorporated herein by   reference)     3.1.1   -   Articles of Amendment to the Restated   Articles of Organization of the Registrant (Filed as Exhibit 3.1.1 to   the Company’s Quarterly Report on Form 10-Q for the Quarter Ended September 30,   2000 and incorporated herein by reference)     3.1.2   -   Articles of Amendment to the Restated   Articles of Organization of the Registrant (Filed as Exhibit 3.1.2 to   the Company’s Quarterly Report on Form 10-Q for the Quarter Ended September 30,   2000 and incorporated herein by reference)     3.2   -   Amended and Restated Bylaws of Registrant   (Filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10Q   for the Quarter Ended September 30, 2004 and incorporated herein by   reference)     4.1   -   Article 4 of Restated Articles of   Organization (Filed as Exhibit 4.1*)     4.2   -   Form of Common Stock Certificate   (Filed as Exhibit 4.2*)     10.1   -   Master Agreement, dated as of August 7,   1992, among the Registrant, Dr. Hilton Glavish, and Zimec, Inc.   (Filed as Exhibit 10.1*)     10.2   -   Sublicense Agreement, dated December 21,   1993, among the Registrant, Dr. Hilton Glavish, and Zimec, Inc.   (Filed as Exhibit 10.2*)     @10.3   -   Business Development Agreement, dated as of   July 15, 1994, between the             Registrant and Mitsubishi Materials   Corporation (Filed as Exhibit 10.3*)     10.4   -   Lease Agreement, dated December 22,   1987, as amended, between the Registrant and Thomas J. Flatley d/b/a The   Flatley Company (“Flatley”) (Filed as Exhibit 10.4*)     10.4A   -   Fifth Amendment to Lease Agreement, dated February 4,   1997 between the Registrant and Flatley (Filed as Exhibit 10.4 to the   Registrant’s Quarterly Report on Form 10-Q for the Quarter ended March 31,   1997 and Incorporated herein by reference).     10.5   -   Form of Noncompetition, Nondisclosure   and Assignment of Inventions Agreement between the Registrant and each   current employee of the Registrant (Filed as Exhibit 10.11*)     †10.6   -   Ibis Technology Corporation 1993 Employee,   Director and Consultant Stock Option Plan as amended (Filed as Exhibit 10.15   to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30,   1996 and Incorporated herein by reference)     †10.7   -   Form of Stock Option Agreement under   1993 Employee, Director and Consultant Stock Option Plan (Filed as Exhibit 10.16*)     10.9   -   Exclusive Patent License Agreement, dated November 1,   1994, between the Registrant and Superion Limited (Filed as Exhibit 10.26*)     10.10   -   License Agreement, dated as of September 1,   1994, between the Registrant and Nissin Electric Co., Ltd. (Filed as Exhibit 10.27*)      60           Exhibit   Number       Description     10.11   -   Equipment Purchase Master Agreement, dated   as of May 22, 1996, between Registrant, and IBM (Filed as Exhibit 10.1   to the Company’s Current Report on Form 8-K/A (File No.0-13078) filed on   September 12, 1996 and incorporated herein by reference).     †10.12   -   Amended and Restated Ibis Technology   Corporation 1997 Employee, Director and Consultant Stock Option Plan (Filed   as Exhibit 99.1 to the Company’s Form S-8 (File No. 333-45247)   filed on January 30, 1998, as amended May 18, 2001 and June 17,   2004 and incorporated herein by reference).     10.13   -   Form of Stock Option Agreement under   1997 Employee, Director and Consultant Stock Option Plan.     @10.14   -   Licensing and Development Agreement, dated June 9,   1998, between the Registrant and IBM (Filed as Exhibit 10.41 to the   Company’s Quarterly Report on Form 10-Q for the Quarter Ended June 30,   1998 and incorporated herein by reference)     10.15   -   Sixth Amendment to Lease dated July 16,   1998, amending Lease Agreement dated December 22, 1987 between the   Company and Thomas J. Flatley d/b/a the Flatley Company (Filed as Exhibit 10.42   to the Company’s Quarterly Report on Form 10-Q for the Quarter Ended September 30,   1998 and incorporated herein by reference)     †10.16   -   Restated Change of Control Agreement, dated   March 24, 2005, between the Registrant and Martin J. Reid. (Filed as Exhibit   10.17 to the Company’s Annual Report on Form 10-K for the Year Ended December   31, 2004 and incorporated herein by reference).     @10.17   -   License Agreement dated July 1, 1999,   between the Registrant and Mitsubishi Materials Silicon Corporation (Filed as   Exhibit 10.45 to the Company’s Annual Report on Form 10-K for the   Year Ended December 31, 1999 and incorporated herein by reference)     10.18   -   Ibis Technology Corporation 2000 Employee   Stock Purchase Plan (Filed as Exhibit 99.1 to the Company’s Form S-8   (File No. 333-36706) filed on May 10, 2000, as amended May31, 2005   and incorporated herein by reference)     @10.19   -   Advantox 150 License Agreement dated November 1,   2000, between the Registrant and Mitsubishi Materials Silicon Corporation   (Filed as Exhibit 10.48 to the Company’s Annual Report on Form 10-K   for the Year Ended December 31, 2000 and incorporated herein by   reference)     †10.20   -   Employment Agreement, dated November 12,   2003 between the Registrant and Martin J. Reid     @10.21   -   License Agreement dated December 15,   2000, between the Registrant and International Business Machines Corporation   (“IBM”) (Filed as Exhibit 10.50 to the Company’s Annual Report on Form 10-K   for the Year Ended December 31, 2000 and incorporated herein by   reference)     10.22   -   Patent License Agreement dated December 15,   2000, between the Registrant and IBM (Filed as Exhibit 10.51 to the   Company’s Annual Report on Form 10-K for the Year Ended December 31,   2000 and incorporated herein by reference)      61           Exhibit   Number       Description                   @10.23       Amended and Restated License Agreement   dated November 14, 2002, between the Registrant and IBM (Filed as Exhibit 10.30   to the Company’s Annual Report on Form 10-K for the Year Ended December 31,   2002 and incorporated herein by reference)     10.24       Amendment to the Patent License Agreement   dated November 14, 2002, between the Registrant and IBM (Filed as Exhibit 10.31   to the Company’s Annual Report on Form 10-K for the Year Ended December 31,   2002 and incorporated herein by reference)     †10.25       Change of Control Agreement, dated March 24,   2005, between the Registrant and William J. Schmidt. (Filed as Exhibit 10.31   to the Company’s Annual Report on Form 10-K for the Year Ended December 31,   2004 and incorporated herein by reference)     11   -   Statement regarding computation of per   share income (loss)     23   -   Report and Consent on Financial Statement Schedule of   KPMG LLP     31.1   -   CEO Certification Pursuant to Section 302   of the Sarbanes-Oxley Act of 2002     31.2   -   CFO Certification Pursuant to Section 302   of the Sarbanes-Oxley Act of 2002     32.1   -   CEO Certification Pursuant to Section 906   of the Sarbanes-Oxley Act of 2002 (18 U.S. Section 1350)     32.2   -   CFO Certification Pursuant to Section 906   of the Sarbanes-Oxley Act of 2002 (18 U.S. Section 1350)       *                 Previously filed with the Commission as Exhibits to, and incorporated herein by reference from, the Company’s Registration Statement filed on Form S-1, File No. 333-1174, effective April 2, 1996.   @            Confidential treatment previously obtained from the Securities and Exchange Commission. The portions of the document for which confidential treatment has been granted are marked “Confidential” and such confidential portions have been filed separately with the Securities and Exchange Commission.   †                  Management contract or compensatory plan, contract or arrangement.   Where a document is incorporated by reference from a previous filing, the Exhibit number of the document in that previous filing is indicated in parentheses after the description of such document.   (B) Financial Statement Schedules   Schedule II – Valuation and Qualifying Accounts   62        SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Danvers, Massachusetts on March 29, 2006.          IBIS TECHNOLOGY CORPORATION                   By:   /s/ Martin J. Reid                 Martin J. Reid             President      Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated and on the dates indicated.      Signatures       Title       Date                           By:   /s/ Martin J. Reid       President, Chief Executive Officer       March 29, 2006     Martin J.   Reid       and Chairman (principal executive officer)                         and Director                                       By:   /s/ William J. Schmidt       Chief Financial Officer,       March 29, 2006     William J.   Schmidt       Treasurer, Clerk, (principal financial                         and accounting officer)                                       By:   /s/ Dimitri A. Antoniadis, Ph.D.       Director       March 29, 2006     Dimitri A.   Antoniadis, Ph.D.                                               By:   /s/ Robert L. Gable       Director       March 29, 2006     Robert L.   Gable                                               By:   /s/ Leslie B. Lewis       Director       March 29, 2006     Leslie B.   Lewis                                               By:   /s/ Donald McGuinness       Director       March 29, 2006     Donald   McGuinness                                               By:   /s/ Lamberto Raffaelli       Director       March 29, 2006     Lamberto   Raffaelli                                           By:   /s/ Cosmo S. Trapani       Director       March 29, 2006     Cosmo S.   Trapani                      63        SCHEDULE II   IBIS TECHNOLOGY CORPORATION VALUATION AND QUALIFYING ACCOUNTS   For the Years Ended December 31, 2003, 2004 and 2005      Description       Balance at   Beginning   of Period       Reclass (1)       Expense       Amounts   Written Off       Balance   at End of   Period                                                           Allowance   for Doubtful Accounts                                                 December 31,   2003       65,000       —       —       —       65,000         December 31,   2004       65,000       —       (37,470   )   (2,530   )   25,000         December 31,   2005       25,000       —       —       —       25,000                                                           Reserve for   Inventory Obsolescence                                                 December 31,   2003       959,000       —       524,000       (47,000   )   1,436,000         December 31,   2004       1,436,000       4,603,000       226,000       (2,493,000   )(2)   3,772,000         December 31,   2005       3,772,000       —       —       (100,000   )   3,672,000           (1)          At December 31, 2003 equipment inventory and the related reserves were included in construction in progress within property and equipment. The balances were reclassified to inventory in the second quarter of fiscal 2004 in connection with the discontinuance of the wafer manufacturing business.   (2)          Includes inventory written off of $1.2 million and inventory reserves included in discontinued operations of $1.3 million.   1         EX-11 2 a06-2219_1ex11.htm STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS       Exhibit 11   IBIS TECHNOLOGY CORPORATION STATEMENT RE:  COMPUTATION OF PER SHARE LOSS              Years Ended December 31,                 2003       2004       2005                 Diluted       Basic       Diluted       Basic       Diluted       Basic         Loss from:                                                         Continuing operations       $   (3,852,162   )   $   (3,852,162   )   $   (5,641,172   )   $   (5,641,172   )   $   (9,460,547   )   $   (9,460,547   )     Discontinued operations       (17,597,627   )   (17,597,627   )   (5,277,369   )   (5,277,369   )   215,242       215,242         Net Loss       $   (21,449,789   )   $   (21,449,789   )   $   (10,918,541   )   $   (10,918,541   )   $   (9,245,305   )   $   (9,245,305   )                                                               Weighted average common shares Outstanding       9,727,513       9,727,513       10,665,842       10,665,842       10,737,924       10,737,924                                                                   Potential common   share equivalents       —               —               —                 Weighted average   shares outstanding       9,727,513               10,665,842               10,737,924                                                                           Earnings (loss)   per common share and common share equivalents:                                                         Continuing   operations       $   (0.40   )   $   (0.40   )   $   (0.53   )   $   (0.53   )   $   (0.88   )   $   (0.88   )     Discontinued   operations       (1.81   )   (1.81   )   (0.49   )   (0.49   )   0.02       0.02         Net loss       $   (2.21   )   $   (2.21   )   $   (1.02   )   $   (1.02   )   $   (0.86   )   $   (0.86   )      1         EX-23 3 a06-2219_1ex23.htm CONSENTS OF EXPERTS AND COUNSEL       Exhibit 23     REPORT AND CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM     The Board of Directors and Stockholders Ibis Technology Corporation:   The audits referred to in our report dated February 17, 2006, except as to note 3 which is as of March 14, 2006, included the related financial statement schedule for each of the years in the three-year period ended December 31, 2005, included in the annual report on Form 10-K.  The financial statement schedule is the responsibility of the Company’s management.  Our responsibility is to express an opinion on the financial statement schedule based on our audits.  In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.   We consent to the incorporation by reference in the registration statements (No. 333-108438) on Form S-3, (No. 333-09237) on Form S-3, (No. 333-82497) on Form S-3, (No. 333-09239) on Form S-8, (No. 333-45247) on Form S-8, (No. 333-36706) on Form S-8, (No. 333-61184) on Form S-8, and (No. 333-116568) on Form S-8 of Ibis Technology Corporation of our report dated February 17, 2006, except as to note 3 which is as of March 14, 2006, with respect to the balance sheets of Ibis Technology Corporation as of December 31, 2004 and 2005, and the related statements of operations, stockholders’ equity, and cash flows, and the related financial statement schedule, for each of the years in the three-year period ended December 31, 2005, which reports appear in the December 31, 2005 annual report on Form 10-K of Ibis Technology Corporation.                    /s/ KPMG LLP                                       Boston,   Massachusetts                             March 29,   2006                              1         EX-31.1 4 a06-2219_1ex31d1.htm 302 CERTIFICATION      EXHIBIT 31.1 CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002  I, Martin J. Reid, certify that:   1.               I have reviewed this Annual Report on Form 10-K of Ibis Technology Corporation;   2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;   3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;   4.               The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))  for the registrant and have:   (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;   (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and   (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and   5.               The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:   (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and   (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.      Date: March 29,   2006                                         /s/ Martin J. Reid                 Martin J.   Reid             President   and Chief Executive Officer                    1           EX-31.2 5 a06-2219_1ex31d2.htm 302 CERTIFICATION       EXHIBIT 31.2  CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002  I, William J. Schmidt, certify that:   1.               I have reviewed this Annual Report on Form 10-K of Ibis Technology Corporation;   2.               Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;   3.               Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;   4.               The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:   (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;   (b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and   (c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and   5.               The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:   (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and   (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.      Date: March 29,   2006                 /s/ William   J, Schmidt         William J. Schmidt     Chief   Financial Officer      1           EX-32.1 6 a06-2219_1ex32d1.htm 906 CERTIFICATION       EXHIBIT 32.1   CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002(18 U.S.C. SECTION 1350) In connection with the accompanying Annual Report of Ibis Technology Corporation (the “Company”) on Form 10-K for the fiscal year ended December 31, 2004 (the < font style="font-style:italic;">“Report”), I, Martin J. Reid, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company    Dated: March 29, 2006           /s/ Martin J. Reid     Martin J. Reid    President and   Chief Executive Officer                EX-32.2 7 a06-2219_1ex32d2.htm 906 CERTIFICATION      EXHIBIT 32.2 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002(18 U.S.C. SECTION 1350) In connection with the accompanying Annual Report of Ibis Technology Corporation (the “Company”) on Form 10-K for the fiscal year ended December 31, 2004 (the “Report”), I, William J Schmidt Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge: (1) The Report fully complies with the requirements of S ection 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company    Dated: March 29, 2006           /s/ William J. Schmidt     William J. Schmidt    Chief Financial   Officer      1           -----END PRIVACY-ENHANCED MESSAGE-----