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          November 30, 1995
                                     -------------------------------------


   / / 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
incorporation or organization)                 (IRS Employer Identification No.)


    100 West Clarendon Avenue, Suite 2300          Phoenix, Arizona  85013
--------------------------------------------------------------------------------
                    (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 January 13,
1995 was 4,075,420.

TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT
(Check One)   / / Yes  /X/ No

<PAGE>


                          PART I FINANCIAL INFORMATION

Item 1    Financial Statements
                               AVESIS INCORPORATED
                                  BALANCE SHEET
                                NOVEMBER 30, 1995

                                     ASSETS

Current assets:
    Cash and cash equivalents                                        $  660,192
    Receivables, net                                                    304,682
    Prepaid expenses and other                                          261,566
                                                                    -----------
         Total current assets                                         1,226,440
    Property and equipment, net                                         344,266
    Deferred debenture issuance costs, net                                3,748
    Deposits                                                            212,815
                                                                    -----------
                                                                    $ 1,787,269
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Accounts payable                                                $   298,263
    Accrued expenses-
       Compensation                                                      83,181
       Other                                                             25,016
    Deferred income                                                      38,151
                                                                    -----------
           Total current liabilities                                    444,611

Convertible subordinated debentures                                     189,000
    Less unamortized debenture discount                                  (3,971)
Accrued rent                                                             94,975
Notes payable to stockholders                                           160,000
                                                                    -----------
           Total liabilities                                            884,615
                                                                    -----------

Stockholders' equity
    Preferred stock $.01 par value, authorized
      12,000,000 shares:
        $100 Class A, nonvoting cumulative convertible preferred
          stock, Series 1, $.01 par value; authorized 1,000,000
          shares; none issued and outstanding (liquidation
          preference of $100 per share)                                      --
        $10 Class A, nonvoting cumulative convertible preferred
          stock, Series 2, $.01 par value; authorized 1,000,000
          shares; 388,180 shares issued and outstanding
          (liquidation preference of $10 per share)                       3,882
        Class A, voting cumulative convertible preferred stock,
          Series 3, $.01 par value; authorized 100,000 shares;
          none issued and outstanding (liquidation preference of
          $100 per share)                                                    --

    Common stock of $.01 par value, authorized
      12,000,000 shares; 4,075,420 shares issued and outstanding         40,754
    Additional paid-in capital                                        9,824,408
    Accumulated deficit                                              (8,966,390)
                                                                   ------------
           Net stockholders' equity                                     902,654
                                                                    -----------
                                                                    $ 1,787,269
                                                                    ===========

        The accompanying notes are an integral part of these statements.

<PAGE>

<TABLE>


                               AVESIS INCORPORATED
                            STATEMENTS OF OPERATIONS
         FOR THE QUARTER AND SIX MONTHS ENDED NOVEMBER 30, 1995 AND 1994
                                   (Unaudited)
<CAPTION>

                                            Quarters Ended                Six Months Ended
                                      November 30    November 30    November 30    November 30
                                      -----------    -----------    -----------    -----------
                                            1995           1994           1995           1994
                                      -----------    -----------    -----------    -----------

<S>                                   <C>            <C>            <C>            <C>
Service revenues:
    Administration fees               $ 1,001,168    $ 1,135,070    $ 2,114,909    $ 1,952,828
    Buying group sales                    371,533        375,064        733,687        776,046
    Provider fees                          51,402         63,455        109,122        142,669
    Other                                  23,614         18,776         51,960         53,027
                                      -----------    -----------    -----------    -----------

     Total service revenues             1,447,717      1,592,365      3,009,678      2,924,570

Cost of services                          962,876        859,610      1,926,272      1,699,373
                                      -----------    -----------    -----------    -----------

       Income from services               484,841        732,755      1,083,406      1,225,197

General and administrative expenses       296,747        266,641        591,082        532,556

Selling and marketing expenses            228,966        249,111        461,383        448,282
                                      -----------    -----------    -----------    -----------

     Income (loss) from operations        (40,872)       217,003         30,941        244,359
                                      -----------    -----------    -----------    -----------

Non-operating income (expense):
    Other income (expense)                   (246)            --         15,171             --
    Interest income                         5,357          1,434         12,019          2,808
    Interest expense                       (6,805)        (9,198)       (15,043)       (18,422)
                                      -----------    -----------    -----------    -----------

     Net non-operating income
     (expense)                             (1,694)        (7,764)        12,147        (15,614)
                                      -----------    -----------    -----------    -----------

     Net income (loss)                $   (42,566)   $   209,239    $    43,088    $   228,745
                                      ===========    ===========    ===========    ===========

Net income (loss) per common
share                                 $      (.03)   $       .03    $      (.03)   $       .03
                                      ===========    ===========    ===========    ===========

Weighted average common
shares and equivalents
outstanding                             4,075,420      6,598,840      4,075,420      6,688,460
                                      ===========    ===========    ===========    ===========



        The accompanying notes are an integral part of these statements.


</TABLE>
<PAGE>


                               AVESIS INCORPORATED
                            STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTHS ENDED NOVEMBER 30, 1995 AND 1994
                                   (Unaudited)



                                                            1995         1994
                                                         ---------    ---------
Cash flows from operating activities:
    Net income                                           $  43,088    $ 228,745
                                                         ---------    ---------
    Adjustments to reconcile net income to net
      cash provided (used) in operating activities:
      Depreciation and amortization                         57,600       36,107
      Gain on fixed asset disposal                          (8,004)          --
      Gain on retirement of debentures                      (7,067)          --
      Provision for losses on accounts receivable           (6,619)      (3,899)
      Changes in assets and liabilities:
        Decrease (increase) in receivables                  41,563     (250,158)
        Increase in prepaid expenses                      (174,226)     (79,616)
        Decrease (increase) in other assets                 23,907      (23,861)
        Increase (decrease) in accounts payable             (3,525)      25,755
        Increase (decrease) in accrued expenses            (19,123)      31,863
        Decrease in deferred income                        (13,566)        (504)
        Increase (decrease) in accrued rent                  8,484      (27,789)
                                                         ---------    ---------
             Total adjustments                            (100,576)    (292,102)
                                                         ---------    ---------

             Net cash used by operating activities         (57,488)     (63,357)
                                                         ---------    ---------

Cash flows from financing activities:
    Repurchase of debentures                               (59,743)          --
    Disposition of fixed assets                              8,250           --
    Purchases of fixed assets                              (46,394)      (6,183)
                                                         ---------    ---------

             Net cash used by financing activities         (97,887)      (6,183)
                                                         ---------    ---------

             Net decrease in cash and cash equivalents    (155,375)     (69,540)

Cash and cash equivalents at beginning of period           815,567      347,681
                                                         ---------    ---------

Cash and cash equivalents at end of period               $ 660,192    $ 278,141
                                                         =========    =========


Supplemental information:

(a) Interest paid during the period - Debentures             8,978           --
    Notes payable to stockholders                            4,839        4,839


        The accompanying notes are an integral part of these statements.

<PAGE>


                               AVESIS INCORPORATED
                          NOTES TO FINANCIAL STATEMENTS
                           NOVEMBER 30, 1995 AND 1994
                                   (Unaudited)

1.  The condensed financial statements included herein have been prepared by the
    Company  without  audit  pursuant  to  the  rules  and  regulations  of  the
    Securities and Exchange Commission.

    Certain information and footnote  disclosures normally included in financial
    statements  prepared at the fiscal year end have been  condensed  or omitted
    pursuant to such rules and  regulations,  although the Company believes that
    the  disclosures  are  adequate  to  make  the  information   presented  not
    misleading.

    In the opinion of Management,  the adjustments  included in the accompanying
    interim  financial  statements  are all of a  normal  recurring  nature  and
    present  fairly  the  Company's   financial  position  and  the  results  of
    operations and cash flows for the periods indicated.

    The results of operations  for the period ended  November 30, 1995,  are not
    necessarily indicative of the results to be expected for the complete fiscal
    year.

2.  For the quarter and six months  ended  November  30,  1995,  loss per common
    share is computed by dividing net loss, after giving  appropriate  effect to
    undeclared  preferred stock dividends  payable and accrued during the period
    ($87,342 and $174,684 for the quarter and six months,  respectively)  by the
    weighted average number of common shares outstanding during the period.

    For the quarter and six months ended  November 30, 1994,  earnings per share
    is  calculated  as  follows.   Note  that  the  inclusion  of  common  stock
    equivalents (Series 2 Preferred stock, options and warrants) and potentially
    dilutive  convertible debt has an immaterial  dilutive effect.  Accordingly,
    only one  earnings  per  share  figure  is  reported  in the  Statements  of
    Operations for each quarter and six month period.


                                     Primary                 Fully Diluted
                               Quarter    Six Months     Quarter      Six Months


Net Income                    $ 209,239   $ 228,745     $ 209,239     $ 228,745
Add:  interest expense on
  convertible debentures 
  that are not CSEs based
  on the interest rate 
  test                                                      9,198        18,422
Net income applicable to
  common shares                 209,239     228,745       218,437       247,167

Shares:
Weighted average common
  shares outstanding          4,075,420   4,075,420     4,075,420     4,075,420
Add common stock 
  equivalents:
  Convertible preferred 
    stock                       970,450     970,450       970,450       970,450
  Incremental shares from
    outstanding options and
    warrants                  1,552,970   1,642,590     2,729,418     2,729,418
Add convertible debentures
  (potentially dilutive
  securities which are not
  CSEs)                                                    51,800        51,800
Adjusted shares outstanding   6,598,840   6,688,460     7,827,088     7,827,088

Earnings per share                  .03         .03           .03           .03


<PAGE>

Item 2    Management's Discussion and Analysis or Plan of Operations
          For the Quarter and Six Months Ended November 30, 1995

Results of Operations:
---------------------

Service  revenues  totaled  $1,447,717  and  $3,009,678  for the quarter and six
months ended  November 30, 1995,  compared to $1,592,365  and $2,924,570 for the
same periods in fiscal 1995,  representing  a decrease of $144,648  (9%) for the
current quarter  compared to the quarter ended November 30, 1994 and an increase
of $85,108 (3%) for the six months ended  November 30, 1995 compared to the same
period last year.  The  Company's  vision and  hearing  programs  accounted  for
$627,195 (43%) and $1,284,131 (43%) of total service revenues during the quarter
and six months ended November 30, 1995 compared to $612,464 (38%)and  $1,096,168
(37%) for the same periods last year. The increase in vision and hearing revenue
during  the  current  fiscal  year was the  result  of the  increase  in  vision
cardholders  attributable to one existing sponsor who added insured  cardholders
in the latter part of the quarter and six months ended November 1994.  Beginning
toward  the end of fiscal  1995 and  continuing  through  the six  months  ended
November  30,  1995,  one  sponsor,  whose  cardholders  are  covered  under the
Company's  vision,  hearing and dental  plans,  has reduced its total  number of
uninsured  cardholders by approximately 20,000. At November 30, 1995, there were
approximately  386,000 vision  cardholders  in force  compared to  approximately
397,000  cardholders at November 30, 1994.  Vision provider fee revenue declined
by $12,053  (19%) and $33,547  (23%)  during the  quarter  and six months  ended
November 30, 1995, as compared to the same periods in fiscal 1995 due in part to
a modification  of the Company's  agreements with its providers that for certain
new  sponsors,  the providers are not required to pay a fee based on gross sales
to that sponsor's members.

The Company's dental program  accounted for $448,164 (31%) and $913,567 (30%) of
total service  revenues  during the current  quarter and six months  compared to
$486,652  (31%) and  $802,399  (27%) for the same  periods in fiscal  1995.  The
decline in this line of business was primarily due to the loss of  approximately
20,000  uninsured  cardholders  as discussed  above.  Subsequent to November 30,
1995,  the  Company  received  a letter of  intent  from a new  sponsor  whereby
approximately  60,000 uninsured  cardholders will be covered under the Company's
dental plan beginning January and February 1996. There were approximately 77,000
dental  cardholders at November 30, 1995,  compared to approximately  114,000 at
November 30, 1994.

On December 30, 1992,  the Company  completed  the sale of its pharmacy  line of
business to Med Net  (formerly  Medi-Mail,  Inc.) for 298,333  unregistered  and
35,000  registered  shares of Medi-Mail Common Stock. The Company  contracted to
provide  certain  administrative  services  with respect to the pharmacy line of
business  until  December  31,  1993.  However,  due to  delays  encountered  by
Medi-Mail  during the conversion of the claims  processing,  the Company entered
into a month to month agreement to continue to provide  administrative  services
to Medi-Mail.  Medi-Mail terminated the agreement in August 1995; therefore, the
Company did not generate any revenues related to the pharmaceutical  program for
the quarter  ended  November 30, 1995  compared to $118,171 (7%) for the quarter
ended November 30, 1994.  Pharmaceutical  revenues  constituted  $78,281 (3%) of
total service  revenues during the six months ended November 30, 1995,  compared
to $249,957 (9%) during fiscal 1994.

The Company makes available to its providers,  buying group program that enables
the  provider  to purchase  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.  Buying group revenues accounted for $371,533 (26%) and $733,687 (24%) of
total  service  revenues for the quarter and six months ended  November 30, 1995
compared to $375,014  (25%) and  $776,046  (27%) for the same  periods in fiscal
1995.

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  depending  on whether  the benefit is
insured in part or whole by the plan  sponsor.  The  Company's  cardholder  base
principally is derived from a limited number of sponsors.

<PAGE>

The cost of  services  increased  by  $103,266  (12%) and  $226,899  (13%)  from
$859,610 and  $1,699,373  during the quarter and six months  ended  November 30,
1994 compared to $962,876 and $1,926,272 during the same periods in fiscal 1996.
These costs primarily relate to servicing cardholders,  providers,  and sponsors
under the Company's vision, hearing and dental benefit programs. The increase in
cost  of  services  during  the  current  quarter  and  six  months  was  due to
incremental costs incurred related to servicing cardholders.

General and  administrative  expenses  were  $296,747  and  $591,082  during the
current  quarter and six months,  which  represents an increase of $30,106 (11%)
and $58,526  (10%)  compared  to the same  periods in fiscal  1995.  These costs
include  depreciation,  legal and professional fees,  insurance,  and consulting
fees related to National Health  Enterprises  (NHE). The increase in the current
year  was  primarily  due  to  increased   consulting  fees  to  NHE  and  other
consultants.

Selling and  marketing  expenses  were $249,111 and $448,282 for the quarter and
six months ended November 30, 1995,  representing a decrease of $20,145 (8%) and
an increase of $13,101 (2%) from the same periods in the prior year. 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  other  overhead  expenses  relating  to the
Company's sales and marketing  functions.  A significant amount of the Company's
marketing activities are performed by NHE.

Liquidity and Capital Resources
-------------------------------

The Company had cash and cash  equivalents  of  $660,192 at November  30,  1995,
compared to $278,141 at November  30,  1994.  The  increase of $382,051  was due
primarily to positive cash flows  generated from  operations as well as the sale
of Medi-Mail common stock in January 1995.

At  November  30,  1995,  the  Company  had  aggregate   outstanding   long-term
liabilities  of $440,004,  consisting  of $189,000 of  Convertible  Subordinated
Debentures,  less $3,971 of unamortized discount, $160,000 of subordinated notes
payable to stockholders, and $94,975 in accrued rent.

Although  the Company  has  realized a loss from  operations  during the current
quarter,  based on the anticipated increased levels of cardholders,  the Company
expects to generate positive cash flows and income from operations  beginning in
the latter part of fiscal 1996.

<PAGE>


                            PART II OTHER INFORMATION

Item 1. Legal Proceedings

        Information  regarding  legal  proceedings is  incorporated by reference
        from the  Company's  report on Form  10-KSB  for the year  ended May 31,
        1995.



Item 3. Defaults Upon Senior Securities

(b)     The  Company  determined  not to pay the  quarterly  dividend  otherwise
        scheduled  for  payment  in  January  1996,  on shares  of its  Series 2
        Preferred Stock. The dividend is cumulative. The arrearage is $1,106,850
        as of November 30, 1995.



Item 4. Submission of Matters to a Vote of Security Holders

(a)     An annual  meeting of  stockholders  of the Company was held on December
        10, 1995.

(c)     There was one matter voted upon at the meeting, as follows:

        The following  nominees were elected for one-year  terms as directors of
        the Company:
              William R. Cohen       William L. Richter      Gerald L. Cohen
              Samuel A. Oolie        Kenneth L. Blum, Sr.

        The results of voting for each nominee were as follows:
              Number of votes cast for:                    3,186,645
              Number of votes cast against:                    1,360
              Number of abstentions:                               0
              Number of non-votes:                                 0



Item 6. Exhibits and Reports on Form 8-K

(a)     The following exhibits are being filed with this report:

        27       Financial Data Schedule

(b)     No reports on Form 8-K were filed during the quarter ended November 30,
           1995.


<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:         1/12/96                                 /s/ Mark L. Smith
     ---------------------                        -----------------------------
                                                  Mark L. Smith, Vice President
                                                  and Chief Financial Officer
                                                  (Principal Financial Officer)