Securities and Exchange Commission
                              Washington D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

    For the quarterly period ended June 30, 2000

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

     For the transition period from __________ to __________


                         Commission File Number 0-15304


                               AVESIS INCORPORATED
                     ---------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)


            Delaware                                       86-0349350
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


           3724 North Third Street, Suite 300, Phoenix, Arizona 85012
           ---------------------------------------------------------
                    (Address of principal executive offices)


                                 (602) 241-3400
                           ---------------------------
                           (Issuer's telephone number)

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]

The number of outstanding  shares of the  registrant's  Common Stock on July 26,
2000 was 7,619,297.

                 TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT

                           (Check One) [ ] Yes [X] No
<PAGE>
                          PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                               AVESIS INCORPORATED
                                  BALANCE SHEET
                                  JUNE 30, 2000
                                   (Unaudited)


                                     ASSETS

Current assets:
 Cash and cash equivalents                                         $  2,229,226
 Receivables, net                                                       436,643
 Prepaid expenses and other                                             178,536
                                                                   ------------
       Total current assets                                           2,844,405
 Property and equipment, net                                            478,019
 Intangibles, net of amortization                                       530,883
 Deposits and other assets                                              555,879
                                                                   ------------
                                                                   $  4,409,186
                                                                   ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Accounts payable                                                  $    581,172
 Current installments of obligations under capital lease                 10,288
 Accrued expenses-
  Compensation                                                           32,965
  Other                                                                  53,859
 Deferred income                                                         26,425
                                                                   ------------
       Total current liabilities                                        704,709
Obligations under capital lease, excluding current installments           7,384
                                                                   ------------
       Total liabilities                                                712,093
                                                                   ------------

Stockholders' equity:
 Preferred stock $.01 par value, authorized 12,000,000 shares:
  $3.75 Class A, senior nonvoting cumulative convertible
   preferred stock, Series A, $.01 par value; authorized
   1,000,000 shares; 270,260 issued and outstanding
   (liquidation preference of $3.75 per share)                            2,703
  $10 Class A, nonvoting cumulative convertible preferred
   stock, Series 2, $.01 par value; authorized 1,000,000
   shares; 5,000 shares issued and outstanding (liquidation
   preference of $10 per share) and $34,875 of dividends
   in arrears at $6.98 per share; dividends accrue at $.225
   per share per calendar quarter                                            50
 Common stock of $.01 par value, authorized 30,000,000 shares;
   7,619,297 shares issued and outstanding                               76,193
 Additional paid-in capital                                          10,524,189
 Accumulated deficit                                                 (6,906,323)
                                                                   ------------
       Total stockholders' equity                                     3,697,093
                                                                   ------------
                                                                   $  4,409,186
                                                                   ============

        The accompanying notes are an integral part of these statements.

                                       -2-
<PAGE>
                               AVESIS INCORPORATED
                            STATEMENTS OF OPERATIONS
           FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                               Quarters Ended June 30,     Six Months Ended June 30,
                                                             --------------------------    -------------------------
                                                                 2000           1999           2000          1999
                                                             -----------    -----------    -----------   -----------
<S>                                                         <C>            <C>            <C>           <C>
Service revenues:
  Administration fees                                        $ 1,790,120    $ 2,089,337    $ 3,297,140   $ 4,234,916
  Provider fees                                                   24,689         40,111         50,046        72,441
  Buying group                                                   378,174        428,251        812,623       871,192
  Other                                                            1,961          1,337          4,449         5,000
                                                             -----------    -----------    -----------   -----------
  Total service revenues                                       2,194,944      2,559,036      4,164,258     5,183,549

Cost of services                                               1,525,398      1,681,779      2,727,052     3,437,976
                                                             -----------    -----------    -----------   -----------
  Income from services                                           669,546        877,257      1,437,206     1,745,573

General and administrative expenses                              354,787        286,690        698,373       563,924

Selling and marketing expenses                                   209,666        283,143        432,093       569,916
                                                             -----------    -----------    -----------   -----------
  Income from operations                                         105,093        307,424        306,740       611,733
                                                             -----------    -----------    -----------   -----------
Non-operating income:
  Other income                                                       485            586          1,816        47,619
  Interest income                                                 33,730         28,864         67,775        52,548
  Interest expense                                                  (526)          (957)        (1,136)       (1,884)
  Loss on asset disposal                                              --        (18,466)            --       (18,466)
                                                             -----------    -----------    -----------   -----------
  Net non-operating income                                        33,689         10,026         68,455        79,816
                                                             -----------    -----------    -----------   -----------
  Income before income taxes and cumulative effect of
   change in accounting principle                                138,782        317,450        375,195       691,549

Income taxes                                                          --        (38,000)        23,641       (38,000)
                                                             -----------    -----------    -----------   -----------
Income before cumulative effect of change in accounting
 principle                                                       138,782        355,450        351,554       729,549

Cumulative effect of change in accounting principle, net
 of income taxes of $51,000                                           --        470,000             --       470,000
                                                             -----------    -----------    -----------   -----------
  Net income                                                 $   138,782    $   825,450    $   351,554   $ 1,199,549
                                                             ===========    ===========    ===========   ===========
Preferred stock dividends                                         23,928         26,535         47,856        53,071

  Net income available to common stockholders                $   114,854    $   798,915    $   303,698   $ 1,146,478
                                                             ===========    ===========    ===========   ===========
Basic earnings per share:
  Income before cumulative effect of change in accounting
   principle                                                 $      0.02    $      0.04    $      0.04   $      0.09

  Cumulative effect of change in accounting principle                 --           0.06             --          0.06
                                                             -----------    -----------    -----------   -----------
Net income                                                   $      0.02    $      0.10    $      0.04   $      0.15
                                                             ===========    ===========    ===========   ===========
Diluted earnings per share:
  Income before cumulative effect of change in accounting
   principle                                                 $      0.01    $      0.03    $      0.03   $      0.07

  Cumulative effect of change in accounting principle                 --           0.05             --          0.05
                                                             -----------    -----------    -----------   -----------
Net income                                                   $      0.01    $      0.08    $      0.03   $      0.12
                                                             ===========    ===========    ===========   ===========
Weighted average common and equivalent shares outstanding -
 Basic                                                         7,617,484      7,356,297      7,448,275     7,356,297
                                                             ===========    ===========    ===========   ===========
Weighted average common and equivalent shares outstanding -
 Diluted                                                      10,603,661     10,402,484     10,693,182    10,387,563
                                                             ===========    ===========    ===========   ===========
</TABLE>
        The accompanying notes are an integral part of these statements.

                                       -3-
<PAGE>
                               AVESIS INCORPORATED
                            STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2000 AND 1999
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                        2000              1999
                                                                    -----------        -----------
<S>                                                                 <C>              <C>
Cash flows from operating activities:
 Net income                                                         $   351,554        $ 1,199,549
                                                                    -----------        -----------
 Adjustments to reconcile net income to net
  cash provided by in operating activities:
  Depreciation and amortization                                          98,729             67,500
  Provision for losses of accounts receivable                            (3,901)            (1,488)
  Loss on fixed asset disposal                                               --             18,245
  Increase (decrease) in cash resulting from changes in:
    Accounts receivable                                                (131,694)           (26,540)
    Prepaid expenses and other                                           (1,436)           (21,357)
    Deposits and other assets                                          (123,371)            26,062
    Accounts payable                                                    (98,479)          (732,938)
    Accrued expenses                                                     27,086             46,396
    Deferred income                                                      12,361             (3,435)
    Accrued rent                                                             --            (33,344)
                                                                    -----------        -----------
         Total adjustments                                             (220,705)          (660,899)
                                                                    -----------        -----------
         Net cash provided by operating activities                      130,849            538,650
                                                                    -----------        -----------
Cash flows from investment activities:
 Purchases of property and equipment                                    (46,684)          (129,834
 Proceeds from dispositions of property and equipment                        --              9,745
 Asset acquisition                                                     (286,842)                --
                                                                    -----------        -----------
         Net cash used in investing activities                         (333,526)          (120,089)
                                                                    -----------        -----------
Cash flows from financing activities:
 Principal payments under capital lease obligation                       (6,230)            (5,482)
 Payment of dividend on preferred stock                                 (45,606)           (50,821)
 Payments for repurchase of common and preferred stock                       --            (16,255)
                                                                    -----------        -----------
         Net cash used in financing activities                          (51,836)           (72,558)
                                                                    -----------        -----------
         Net (decrease) increase in cash and cash equivalents          (254,513)           346,003

Cash and cash equivalents, beginning of period                        2,483,739          2,181,385
                                                                    -----------        -----------
Cash and cash equivalents, end of period                              2,229,226          2,527,388
                                                                    ===========        ===========

Non-cash investing activities:
  Net assets acquired, financed through the issuance of
    Common Stock                                                     $  262,500        $        --
                                                                     ==========        ===========
</TABLE>
        The accompanying notes are an integral part of these statements.

                                       -4-
<PAGE>
                               AVESIS INCORPORATED
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                             JUNE 30, 2000 AND 1999
                                   (Unaudited)

NOTE 1. BASIS OF PRESENTATION

     The accompanying  unaudited condensed  consolidated financial statements of
Avesis Incorporated,  and its wholly-owned  subsidiaries,  Avesis of Washington,
D.C., Avesis Third Party Administrators,  Inc., Avesis Reinsurance  Incorporated
and Avesis of New York, Inc. (collectively, the "Company") have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information  and pursuant to the rules and  regulations  of the  Securities  and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes  required by generally accepted  accounting  principles for a complete
financial statement presentation.  In the opinion of Management,  such unaudited
interim  information  reflects  all  adjustments,  consisting  only of a  normal
recurring nature,  necessary to present the Company's financial position and the
results of operations and cash flows for the periods  presented.  The results of
operations for interim periods are not necessarily  indicative of the results to
be expected  for a full fiscal  year.  These  condensed  consolidated  financial
statements should be read in conjunction with the Company's audited consolidated
financial statements included in the Company's Annual Report on Form 10-KSB, for
the seven month transition period ended December 31, 1999.

NOTE 2. EARNINGS PER SHARE

     A summary of the  reconciliation  from basic  earnings per share to diluted
earnings per share for the quarter and six month periods ended June 30, 2000 and
1999 follows:

<TABLE>
<CAPTION>
                                                             Quarter ended       Quarter ended
                                                             June 30, 2000       June 30, 1999
                                                              -----------         -----------
<S>                                                           <C>                 <C>
     Income before cumulative effect of change in
       accounting principle                                   $   138,782         $   355,450
     Less: preferred stock dividends                               23,928              26,535
                                                              -----------         -----------
     Income available to common stockholders                  $   114,854         $   328,915
                                                              ===========         ===========
     Basic EPS - weighted average shares outstanding            7,617,484           7,356,297
                                                              ===========         ===========
     Basic earnings per share before cumulative effect
       of change in accounting principle                      $      0.02         $      0.04
                                                              ===========         ===========
     Basic EPS - weighted average shares outstanding            7,617,484           7,356,297
     Effect of dilutive securities:
       Stock Purchase Options - common stock                      269,264              15,071
       Convertible preferred stock                              2,716,913           3,031,116
                                                              -----------         -----------
     Dilutive EPS - weighted average shares outstanding        10,603,661          10,402,484
     Income before cumulative effect of change in
       accounting principle                                   $   138,782         $   355,450
                                                              -----------         -----------
     Diluted earnings per share before cumulative
       effect of change in accounting principle               $      0.01         $      0.03
                                                              ===========         ===========
</TABLE>
                                       -5-
<PAGE>
<TABLE>
<CAPTION>
                                                            Six months ended    Six months ended
                                                             June 30, 2000       June 30, 1999
                                                              -----------         -----------
<S>                                                           <C>                 <C>
     Income before cumulative effect of change in
       accounting principle                                   $   351,554         $   729,549
     Less: preferred stock dividends                               47,856              53,071
                                                              -----------         -----------
     Income available to common stockholders                  $   303,698         $   676,478
                                                              ===========         ===========
     Basic EPS - weighted average shares outstanding            7,448,275           7,356,297
                                                              ===========         ===========
     Basic earnings per share before cumulative effect
       of change in accounting principle                      $      0.04         $      0.09
                                                              ===========         ===========
     Basic EPS - weighted average shares outstanding            7,448,275           7,356,297
     Effect of dilutive securities:
       Stock Purchase Options - common stock                      520,323               4,694
       Convertible preferred stock                              2,724,584           3,026,573
                                                              -----------         -----------
     Dilutive EPS - weighted average shares outstanding        10,693,182          10,387,564
     Income before cumulative effect of change in
       accounting principle                                   $   351,554         $   729,549
                                                              -----------         -----------
     Diluted earnings per share before cumulative effect
       of change in accounting principle                      $      0.03         $      0.07
                                                              ===========         ===========
</TABLE>

NOTE 3. USE OF ESTIMATES

     Management  of the  Company  has made  certain  estimates  and  assumptions
relating to the  reporting  of assets,  liabilities,  revenues  and  expenses to
prepare  the  financial   statements  in  conformity  with  generally   accepted
accounting principles. Actual results could differ from those estimates.

NOTE 4. ACCOUNTING FOR SOUTHERN STATES EYE CARE, LLC ASSET ACQUISITION

     On March 24, 2000, the Company purchased substantially all of the assets of
Southern  States Eye Care,  LLC for an  aggregate  purchase  price of  $549,342,
including transaction related costs of $36,842. The total purchase price for the
acquisition comprised $250,000 cash and the issuance of 350,000 shares of common
stock valued at $0.75 per share.  The  acquisition  was  accounted for under the
purchase  method.  Results of  operations  are being  recorded  from the date of
acquisition.  The Company recorded preliminary  purchase accounting  adjustments
based on the  relative  fair value of the  assets  acquired.  Goodwill  is being
amortized over eight years on a straight-line basis.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS FOR THE SIX
        MONTHS ENDED JUNE 30, 2000 AND 1999

     The  statements   contained  in  this  discussion  and  analysis  regarding
management's anticipation of adequacy of cash reserves for operations,  adequacy
of reserves for claims,  anticipated level of operating  expenses related to new
Members,  viability of the Company,  cash flows and marketability of the Company
constitute  "forward-looking"  statements  within  the  meaning  of the  Private
Securities  Litigation  Reform Act of 1995.  Such  statements  involve risks and
uncertainties,  which could cause actual results to differ  materially  from the
forward-looking statements.  Management's anticipation is based upon assumptions
regarding the market in which the Company  operates,  the level of  competition,
the level of demand for  services,  the  stability  of costs,  the  retention of
Sponsors and Members enrolled in the Company's benefit  programs,  the relevance
of the Company's  historical  performance  and the  stability of the  regulatory
environment.  Any of these  assumptions  could prove  inaccurate,  and therefore
there can be no assurance that the forward-looking  information will prove to be
accurate.

     Avesis   Incorporated,   a   Delaware   corporation   (together   with  its
subsidiaries, the "Company"), incorporated in June 1978, markets and administers
vision,  dental,  chiropractic  and hearing  managed care and discount  programs
("Programs")  nationally.  The  Programs  are  designed  to enable  participants
("Members"),  who are enrolled through various sponsoring  organizations such as
insurance   carriers,   HMOs,   Blue  Cross  and  Blue   Shield   organizations,
corporations,  unions and various associations ("Sponsors"),  to realize savings
on  purchases of services and  products  through  networks of providers  such as
ophthalmologists,  optometrists,  opticians, dentists, chiropractors and hearing
specialists ("Providers").

                                       -6-
<PAGE>
     The Company derives its  administration  fee revenue from plan Sponsors who
customarily  pay a set fee per Member per month.  Administration  fee revenue is
recognized  on the accrual basis during the month that the Member is entitled to
use the benefit.  Certain Sponsors pay for services rendered by the Company on a
fee for  service  basis.  Based upon the type of program  (e.g.,  managed  care,
discount,  third party administration) the Provider's claim for service provided
to  Members  is paid  either by the  Company,  Sponsor,  Member  or  combination
thereof.  Buying  Group  revenues  are  recorded at the total  amount  billed to
participating  Providers  and  recognized  in the month the  product is shipped.
Vision  Provider  fee revenue is based upon a percentage  of  materials  sold by
certain participating providers under certain plans.

     As  previously  reported on a Form 8-K filed on April 7, 2000, on March 24,
2000 the Company  purchased  substantially  all of the assets of Southern States
Eye Care, LLC ("SSEC"),  including but not limited to the name "Southern  States
Eye Care",  service marks, trade marks,  trade names,  current client contracts,
provider contracts and managed care contracts.  The aggregate purchase price for
the acquisition  was $250,000 and 350,000 shares of the Company's  Common Stock.
The Company used its existing cash to finance the purchase.  The  acquisition of
SSEC  broadens the Company's  client base and  increases  the  Company's  vision
provider  network in Georgia,  Alabama and North Carolina.  The Company is using
the acquired  assets to continue  SSEC's  current  lines of business,  which the
Company is operating out of its corporate headquarters in Phoenix, Arizona.

RESULTS OF OPERATIONS:

     The  following  tables  detail the  Company's  major  revenue  and  expense
categories for the quarters and six months ended June 30, 2000 and 1999:

<TABLE>
<CAPTION>
                                  Quarter Ended               Quarter Ended
                                  June 30, 2000               June 30, 1999          Increase/(Decrease)
                           ---------------------------  ---------------------------  --------------------
                                         % of Total                   % of Total                     %
                                       Service Revenue              Service Revenue                Change
                                       ---------------              ---------------                ------
<S>                        <C>              <C>         <C>              <C>         <C>            <C>
REVENUE:
Total Service Revenue      $2,194,944       100%        $2,559,036       100%        $(364,092)     (14%)
Vision & Hearing Program    1,610,948        73%         1,884,501        74%         (273,553)     (15%)
Vision Provider Fee            24,689         1%            40,111         2%          (15,422)     (38%)
Dental Program                179,065         8%           204,827         8%          (25,762)     (13%)
Buying Group Program          378,174        17%           428,251        17%          (50,077)     (12%)

EXPENSES:
Cost of Services            1,525,398        69%         1,681,779        66%         (156,381)      (9%)
General & Administrative      354,787        16%           286,690        11%           68,097       24%
Selling & Marketing           209,666        10%           283,143        11%          (73,477)     (26%)
Income from Operations        105,093         5%           307,424        12%         (202,331)     (66%)
Net Income                    138,782         6%           825,450        32%         (686,668)     (83%)
</TABLE>

                                       -7-
<PAGE>
<TABLE>
<CAPTION>
                                Six Months Ended             Six Months Ended
                                 June 30, 2000                 June 30, 1999         Increase/(Decrease)
                           ---------------------------  ---------------------------  --------------------
                                         % of Total                   % of Total                     %
                                       Service Revenue              Service Revenue                Change
                                       ---------------              ---------------                ------
<S>                        <C>              <C>         <C>              <C>         <C>            <C>
REVENUE:
Total Service Revenue      $4,164,258       100%        $5,183,549       100%        $(1,019,291)   (20%)
Vision & Hearing Program    2,948,979        71%         3,794,705        73%           (845,726)   (22%)
Vision Provider Fee            50,046         1%            72,441         1%            (22,395)   (31%)
Dental Program                348,053         8%           440,190         8%            (92,137)   (21%)
Buying Group Program          812,623        20%           871,192        17%            (58,569)    (7%)

EXPENSES:
Cost of Services            2,727,052        65%         3,437,976        66%           (710,924)   (21%)
General & Administrative      698,373        17%           563.924        11%            134,449     24%
Selling & Marketing           432,093        10%           569,916        11%           (137,823)   (24%)
Income from Operations        306,740         7%           611,733        12%           (304,993)   (50%)
Net Income                    351,554         8%         1,199,549        23%           (847,995)   (71%)
</TABLE>

     Past and future  revenues in all lines of business are directly  related to
the number of Cardholders  enrolled in the Company's benefit programs.  However,
there may be significant  pricing  differences to Sponsors  depending on whether
the benefit  offered is funded in part or whole by the plan  Sponsor.  Two major
Sponsors  accounted for 28% and 14% of total service  revenues in the six months
ended June 30, 2000, and two major  Sponsors  accounted for 48% and 14% of total
service  revenues  in the six  months  ended  June  30,  1999.  The  Company  is
substantially  dependent on a limited  number of Sponsors and may be  materially
adversely affected by termination of its agreements with those Sponsors.

     The  decrease in total  service  revenues in the six months  ended June 30,
2000 is  principally  due to a vision  plan  Sponsor  that is not  renewing  the
benefit for their  Members upon their annual  renewal but instead is providing a
lesser benefit  internally.  As of June 30, 2000, the Company had  approximately
79,000 Members from this Sponsor,  as compared to approximately  192,000 Members
as of December 31, 1999 and  approximately  229,000 Members as of June 30, 1999.
The  Company  expects  to lose a  significant  portion of the  remaining  79,000
Members from this Sponsor as they renew their benefits during the upcoming year.
The Company's vision and hearing revenue received from this Sponsor decreased by
approximately  $1,300,000  during the six months ended June 30, 2000 as compared
to the six months ended June 30, 1999.

     The Company had  approximately  1,770,000 vision and 12,300 hearing Members
as of June 30, 2000, compared to approximately  699,000 vision and 7,500 hearing
Members as of June 30, 1999.  The vision Member count for June 30, 2000 includes
approximately  1,174,000 Members received through the transaction with SSEC. The
vision and hearing revenue  derived from the Sponsors from the SSEC  transaction
accounted for 15% of the Company's total service  revenues for the quarter ended
June 30, 2000, and 9% of the Company's total service revenues for the six months
ended June 30,  2000.  The revenue and profit  expected to be derived per Member
under SSEC's vision benefit  program,  in general,  is less than the revenue and
profit  derived from the Sponsor that  decreased  its  Membership,  as described
above,  due to the  provision of a different  level of benefit.  The decrease in
vision and hearing revenue during the current quarter and six months was largely
the result of the vision plan  Sponsor  mentioned  above.  Other  changes in the
number of vision and hearing  cardholders  occurred due to Sponsors' employee or
Member  fluctuations  in the normal course of business.  The vision provider fee
revenue decreased in the quarter and six month period ended June 30, 2000 due to
reduced claims  experience in the benefit  programs under which  Providers pay a
marketing fee.

                                       -8-
<PAGE>
     The Company had approximately 73,000 dental Members as of June 30, 2000 and
153,000 dental Members as of June 30, 1999. The decline of the Company's  dental
program revenue and membership resulted from two Sponsors'  discontinuation of a
benefit  program that  resulted in a loss of  approximately  55,000  Members who
participated in the Company's dental program. There also have been reductions in
Members from various Sponsors in the normal course of business.

     To minimize  the  Company's  risk  related to its  dependence  on a limited
number of  Sponsors,  the  Company has  developed  the Avesis  Advantage  Vision
Program and the Avesis  Advantage  Dental Program.  These insured products allow
the Company to market and contract  directly  with  employers,  unions and other
groups  either  through  the  Company's  internal  sales  staff  or  the  broker
community.  The Company  derived its first  revenues  from its Avesis  Advantage
Vision Program in December 1999, and had approximately  1,100 Members as of June
30,  2000.  The  Company  expects to derive its first  revenues  from the Avesis
Advantage Dental Program in the fourth quarter of calendar 2000.

     The Company makes available to its vision  Providers a buying group program
that enables the Provider to order  eyeglass  frames from the  manufacturers  at
discounts from wholesale costs. These discounted prices are generally lower than
a Provider could negotiate individually, due to the large volume of purchases of
the buying group.

     Costs of Services  primarily relate to servicing  Members,  Providers,  and
Sponsors under the Company's vision, hearing and dental benefit programs as well
as the cost of frames that are sold through the  Company's  buying group program
as discussed  above.  The increase in Cost of Services as a percentage  of total
service  revenues in the  current  quarter as compared to the same period in the
prior year  resulted  from an increase in claims  experience  as a percentage of
revenue from the newly acquired accounts from SSEC, as mentioned above.

     General and  Administrative  expenses  increased as a  percentage  of total
service  revenue  during the quarter and six months ended June 30, 2000 compared
to the corresponding  periods in the prior year due to increases in depreciation
and amortization related to the Company's new computer systems,  amortization of
goodwill  created  by the SSEC  transaction,  increases  in  payroll  related to
administrative  functions  and  increases  in the payments  under the  Company's
Management  Agreement and Investment  Advisor  Agreement,  both with  affiliated
entities.

     Selling and marketing expenses include marketing fees, broker  commissions,
inside sales and marketing salaries and related expenses,  travel related to the
Company's  sales  activities  and an  allocation of related  overhead  expenses.
Selling  and  marketing  expenses  declined  slightly as a  percentage  of total
service  revenue  during  the  quarter  and six months  ended  June 30,  2000 as
compared  to the  corresponding  periods in the prior year due to the absence of
sales commissions on the newly acquired SSEC accounts.  A significant  amount of
the  Company's  marketing   activities  has  been  outsourced  to  a  management
consultant, National Health Enterprises (an affiliate).

                                       -9-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

     The  Company had cash and cash  equivalents  of  $2,229,226  as of June 30,
2000,  compared to $2,483,739 as of December 31, 1999.  The decrease of $254,513
is primarily due to the Company's  cash payment of $250,000 for the  acquisition
of the assets of Southern  States Eye Care, LLC on March 25, 2000.  Current cash
on hand and cash  provided  from  operations is expected to allow the Company to
sustain operations for the foreseeable future.

     On July 18, 2000,  the Company's  Board of Directors  approved a resolution
authorizing the Company to pursue the  establishment of a new venture in HIV and
infectious disease  treatment.  The Company's Board further authorized a maximum
of $500,000 to be allocated to the initial start-up and operational  expenses of
the venture, subject to certain oversight and approval by the Board. The Company
has allocated  approximately  $200,000 for the build-out of the facility and the
purchase of medical and office  equipment,  and  approximately  $150,000 to fund
negative cash flow prior to the opening of the first center and during the first
few months of its  operation.  The  Company  expects  its first  facility  to be
operational in the fourth quarter of calendar 2000.

     The Company is party to a revolving  credit  facility  for an amount not to
exceed  $100,000.  The credit  facility  allows the Company to better manage its
cash  liquidity.  To date,  the  Company  has never  drawn  funds on the  credit
facility.

     As of June 30, 2000, the Company had $581,172 of Accounts Payable, compared
to $679,649 as of December 31, 1999.  Included in Accounts  Payable are reserves
for claims of  $332,819 as of June 30,  2000,  and  $489,814 as of December  31,
1999.  The reserves are for incurred but not reported  claim  reimbursements  to
Providers who participate in certain managed care programs. The Company believes
this reserve is adequate based upon historical results.

YEAR 2000 COMPLIANCE

     The Company so far has  experienced  no disruptions in the operation of its
internal information systems during the transition to the year 2000. The Company
is not aware  that any of its  vendors or clients  experienced  any  disruptions
during  their  transition  to the year 2000 or that there has been any year 2000
issues with its  services  provided.  The Company  will  continue to monitor the
transition  to year 2000 and will act  promptly  to resolve  any  problems  that
occur.  If  the  Company  or any  third  parties  with  which  it  has  business
relationships  experience problems related to the year 2000 transition that have
not yet been discovered, it could have a material adverse impact on the Company.

                                      -10-
<PAGE>
                            PART II OTHER INFORMATION

ITEM 2. CHANGES IN SECURITIES

(c) Conversion of Series A Preferred Stock to Common Stock

     Each  share  of  the  Company's  Series  A  Preferred  Stock  is  currently
convertible  at any time at the option of the  holders of the Series A Preferred
Stock into 10 shares of Common Stock of the  Company.  The  conversion  ratio is
subject to  adjustment  for stock  splits  and  combinations,  stock  dividends,
reclassifications,  exchanges or substitutions  relating to the Company's Common
Stock, and any  reorganization,  merger,  consolidation or sale of assets of the
Company. The following table provides  information  concerning the conversion of
Series A Preferred Stock during the quarter ended June 30, 2000,  which has been
previously  disclosed on the  Company's  Form 10-QSB for the quarter ended March
31, 2000.

                               Number of Shares of         Number of Shares
                            Series A Preferred Stock          of Common
     Date                   Converted to Common Stock        Stock Issued
     ----                   -------------------------        ------------
     April 11, 2000                  1,500                       15,000

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

(b)  The Certificate of Designation for the Company's Class A, Senior  Nonvoting
     Cumulative  Convertible Preferred Stock, Series A, places restrictions upon
     the payment of  dividends  on the  Company's  Series 2 Preferred  Stock and
     Common Stock.  Accordingly,  the Company may not pay the quarterly dividend
     otherwise scheduled for payment during July 2000  on shares of its Series 2
     Preferred  Stock.  Such  dividend  is  cumulative, and the  total  dividend
     arrearage is $34,875, or $6.98 per share, as of June 30, 2000 for all 5,000
     shares outstanding.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a)  An annual meeting of stockholders of the Company was held on July 21, 2000.

(b)  The following  nominees were elected for one-year terms as directors of the
     Company:

     William R. Cohen        William L. Richter         Gerald L. Cohen
     Brent D. Layton         Kenneth L. Blum, Sr.       Kenneth L. Blum, Jr.
     Alan S. Cohn

                                      -11-
<PAGE>
(c)  On  the  record  date  of  June  5,  2000,  7,619,297  common  shares  were
     outstanding.

     The results of voting for Proposals 1, 2 and 3 were as follows:

     1.   Election of directors                  For       Withheld    Non-Votes
          ---------------------               ---------    --------    ---------
          William R. Cohen                    6,544,990     15,500     1,058,807
          Kenneth L. Blum Sr.                 6,528,235     32,255     1,058,807
          Gerald L. Cohen                     6,526,485     34,005     1,058,807
          Brent D. Layton                     6,545,490     15,000     1,058,807
          William L. Richter                  6,545,490     15,000     1,058,807
          Alan S. Cohn                        6,545,490     15,000     1,058,807
          Kenneth L. Blum, Jr.                6,545,490     15,000     1,058,807

                                                      For      Against   Abstain
                                                      ---      -------   -------
     2.   Approve an Amendment to the Company's    6,542,195    16,900    1,395
          Certificate of Incorporation to
          increase the number of authorized
          shares of Common Stock from 20,000,000
          to 30,000,000

     3.   Approve amendments to the Company's      6,532,940    25,750    1,800
          1993 Stock Option Plan, including an
          increase in the number of shares
          available under the Plan from 600,000
          to 900,000

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  See Exhibit Index  following the  Signatures  page,  which is  incorporated
     herein by reference.

(b)  As previously  disclosed in the Company's Form 10-QSB for the quarter ended
     March 31,  2000,  a report on Form 8-K was filed on April 7, 2000 to report
     the acquisition of  substantially  all of the assets of Southern States Eye
     Care, LLC.

                                      -12-
<PAGE>
                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.


                                        AVESIS INCORPORATED
                                        ----------------------------------------
                                        (Registrant)


Date: 8/14/2000                         /s/ Neal A. Kempler
                                        ----------------------------------------
                                        Neal A. Kempler, Vice President
                                        and Secretary



Date: 8/14/2000                         /s/ Joel H. Alperstein
                                        ----------------------------------------
                                        Joel H. Alperstein, Chief Financial
                                        Officer and Treasurer

                                      -13-
<PAGE>
                               Avesis Incorporated
                                  Exhibit Index
               Form 10-QSB for the Six Months Ended June 30, 2000


Exhibit No.   Description                    Incorporated by Reference from the:
-----------   -----------                    -----------------------------------

3.1           Amended and Restated           Company's Registration Statement on
              Certificate of Incorporation   Form S-1 (File No. 33-17217) filed
              of the Company, as amended     January 12, 1988, and declared
                                             effective January 12, 1988.

3.2           Certificate of Amendment of    Filed herewith
              the Certificate of
              Incorporation of the Company

11            Statement re: Computation of   Earnings per Share Computation, see
              per Share Earnings             Note 2 to the Notes to Condensed
                                             Consolidated Financial Statements

27            Financial Data Schedule        Filed herewith