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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
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                                   FORM 10-K

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<C>         <S>                                                           <C>
   [X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR
            ENDED APRIL 30, 2000
</TABLE>

                                    1-10629
                             COMMISSION FILE NUMBER

                           LASER VISION CENTERS, INC.
                (Name of Registrant as Specified in its Charter)

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<S>                                                <C>
                  DELAWARE                                          43-1530063
         (State of jurisdiction of                               (I.R.S. Employer
       incorporation or organization)                         Identification Number)
</TABLE>

                     540 MARYVILLE CENTRE DRIVE, SUITE 200
                           ST. LOUIS, MISSOURI 63141
                    (Address of Principal Executive Offices)

                                 (314) 434-6900
                (Issuer's Telephone Number, Including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:

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<CAPTION>
                                            NAME OF EACH EXCHANGE
       TITLE OF EACH CLASS                   ON WHICH REGISTERED
       -------------------                  ---------------------
<S>                                   <C>
          Common Stock,
          $.01 Par Value                    NASDAQ National Market
</TABLE>

         Securities registered under Section 12(g) of the Exchange Act:

                          Common Stock, $.01 par value
                                (Title of Class)

     Check whether the Company: (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 report(s), and (2)
has been subject to such filing requirements for past 90 days.     Yes [X]  No [
]

     The aggregate market value of the voting stock of the Company held by
non-affiliates as of July 11, 2000 was approximately $139,500,000.

            CLASSES OF COMMON EQUITY OUTSTANDING AS OF JULY 11, 2000

<TABLE>
<S>                                                           <C>
Common Stock, $.01 par value, net of 1,489,194 treasury
  shares....................................................  23,841,797
Non-Qualified Warrants......................................   3,972,810
Other Warrants..............................................   1,160,000
Incentive Stock Options.....................................     956,376
Non-Qualified Options.......................................     382,835
</TABLE>

                      DOCUMENTS INCORPORATED BY REFERENCE

     LaserVision incorporates by reference various exhibits from its 1991
Registration Statement, file No. 33-33843, the November 1993 Registration
Statements, file Numbers 33-67328 and 33-58618, the September 1994 Registration
Statement, file No. 33-94050, the March 1997 Registration Statement, file No.
333-22609, the May 1999 Registration Statement, file No. 333-72941 and periodic
reports filed under the Exchange Act.
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ITEM 1

                            DESCRIPTION OF BUSINESS

     Laser Vision Centers, Inc. (LaserVision) provides excimer lasers and other
equipment to eye surgeons for the treatment of nearsightedness, farsightedness,
astigmatism and cataracts and related support services. We are one of the
largest providers of access to such equipment and services in the U.S. Much of
our equipment is mobile, and we routinely move it from location to location in
response to customer demand. We also provide our equipment at fixed locations.
Our flexible delivery system enlarges the pool of potential locations, eye
surgeons and patients that we can serve, and allows us to effectively respond to
changing market demands.

     Eye surgeons pay us a fee for each procedure they perform using our
equipment. We typically provide each piece of equipment to many different eye
surgeons, which allows us to more efficiently use the equipment and offer it at
an affordable price. We refer to our practice of providing equipment to multiple
eye surgeons as "shared access".

     Eye surgeons take advantage of our shared access and flexible delivery
system for a variety of reasons including the ability to:

     -- avoid a large capital investment

     -- eliminate the risks associated with buying high-technology equipment
        that may rapidly become obsolete

     -- use the equipment without responsibility of maintenance or repair

     -- cost effectively serve small to medium-sized markets and remote
        locations

     -- serve satellite locations even in large markets

     We provide a broad range of value-added services to the eye surgeons who
use our equipment, including initial training, technical support and equipment
maintenance, marketing, clinical advisory service, patient financing,
partnership opportunities, and practice satelliting. Eye surgeons who are
developing their practices, or who perform limited numbers of procedures, find
our support services particularly attractive. We continue to look for ways to
expand our support services, so that we can offer value to those surgeons who
perform enough procedures to otherwise justify the purchase of their own
equipment.

     We provide mobile cataract equipment and services through our Midwest
Surgical Services, Inc. (MSS) subsidiary which focuses on developing
relationships between local hospitals, referring optometrists and eye surgeons
in small to medium sized markets. In this way, we expand the demand for "close
to home" cataract surgery which we make economically feasible through our
shared-access approach and mobile systems.

     Our excimer laser and cataract businesses are operated relatively
separately at this time. We entered the cataract business with our purchase of
MSS in December 1998. At the time of that purchase, approximately 80% of the eye
surgeons using MSS services were not performing excimer laser surgery. We expect
over time to cross market both our excimer laser and cataract services to the
eye surgeons we serve.

     During the year ended April 30, 2000, there has been a decline in the fee
paid by the patient for PRK and LASIK procedures, as well as a decline in the
royalty fees paid to laser manufacturers. The following are some of the events
that led to the changes in the market:

     In July 1999, a competing laser centers company announced that it was
introducing a "low priced" model at their Baltimore, Maryland facility. This
pricing change was in response to another laser company which lured a surgeon
away from the first company.

     In December 1999, Visx, Inc., (Visx), a laser manufacturer, announced that
it had experienced the first quarterly decline in procedure case volume. Around
this same time, an administrative law judge of the International Trade
Commission ruled against Visx in a suit versus Nidek, another laser
manufacturer.

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     In January 2000, a Canadian discounter announced that it was expanding into
the U.S. This expanded speculation of further price erosion at the patient fee
level.

     In February 2000, Visx announced that it was reducing the per case royalty
to $100 from $250. In addition, Visx changed its policy with respect to
enhancements from being free of charge to being an equivalent royalty fee of
$100, increased the price we paid for lasers, and increased the price we paid
for service and parts. These Visx changes resulted in our recording $2.0 million
of vendor program change expense during the year ended April 30, 2000. See Note
2 to the accompanying consolidated financial statements for further discussion.

     Furthermore, we have made adjustments in our business strategy, which
position us in a better environment to capitalize on these changes.

MARKET TRENDS

THE REFRACTIVE MARKET

     An industry source estimates that over 160 million Americans currently
require eyeglasses or contact lenses. Approximately 100 million Americans
purchased eye wear in 1997. Consumers in the U.S. spent approximately $15.4
billion on eyeglasses, contact lenses and other corrective lenses in 1997
according to industry sources.

     Industry sources estimate that in 1999, 960,000 excimer laser correction
procedures were performed in the U.S., an increase of 100% from the 480,000
procedures performed in 1998. Industry sources project excimer laser correction
procedures will expand to 1,550,000 procedures in 2000, a 61% increase over 1999
procedures. In November 1998 the Visx excimer laser was approved for the
treatment of farsightedness. During the year ended April 30, 2000 the Bausch &
Lomb Technolas, the Nidek, the Autonomous, and Laser Sight lasers were approved
for the treatment of nearsightedness. These recent approvals broaden the laser
choices LaserVision makes available to our eye surgeon customers.

THE CATARACT MARKET

     In the U.S., cataract surgery currently is the most common therapeutic
surgical procedure performed on Americans age 65 and older. Medicare pays $3.4
billion a year for 1.0 million of the 1.3 million cataract procedures performed
annually. There are currently 34 million Americans who are age 65 and older.
This segment of the population is growing at an annual rate of 1.2%.

     According to the American Academy of Ophthalmology, individuals between the
ages of 52 and 64 have a 50% chance of having a cataract. By age 75, almost
everyone has a cataract. Fifty percent of the people between the ages of 75 and
85 with cataracts have lost some vision as a result. According to the National
Eye Institute, cataracts account for approximately 42% of all blindness even
though an effective surgical treatment is available.

BUSINESS STRATEGY

     Our strategy is to provide eye surgeons cost-effective access to surgical
equipment used for excimer laser and cataract procedures.

     Our business strategy includes the following elements:

     -- Offering a Flexible Delivery System.  Our focus on a flexible delivery
        system of mobile and fixed locations is unique. Our mobile system
        incorporates patented technology and provides us with advantages over
        our competitors. We are able to address growing markets and meet the
        needs of customers who do not initially and may never have the procedure
        volume to warrant the fixed investment of purchasing an excimer laser.
        In addition, our flexible delivery system allows us to provide our
        customers with options to address changes in demand. For eye surgeons
        with increased procedure volumes, we provide fixed site lasers. This
        allows surgeons to continue to take advantage of

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       our support services while avoiding the risks associated with purchasing
       their own equipment, primarily changes in technology. We call this our
       basic access service.

     -- Market Development.  Under our market development model LaserVision
        provides excimer lasers, marketing support, patient financing and an
        in-practice refractive coordinator. In exchange, LaserVision receives
        the majority of the patient fee, and a contractual commitment of three
        to five years. The market development program focuses on small- to
        mid-sized cities with populations between 25,000 and 250,000.

     -- Joint Ventures.  Under our joint venture model LaserVision and the
        ophthalmic practice partner in providing the excimer laser,
        microkeratome, marketing, patient financing and staff to support the
        LASIK procedure. LaserVision owns a majority interest in the joint
        ventures. The agreements include payment of a management fee to
        LaserVision as the managing partner based on revenue. These agreements
        range from two to seven years and include a commitment from the eye
        surgeon to perform LASIK on the jointly owned laser. Because LaserVision
        provides more service under the joint venture model, the average sales
        price per procedure paid to the partnership is usually higher than that
        paid for our basic access service.

     -- Increasing Penetration in New and Existing Markets.  We intend to
        increase our market penetration in existing markets and to expand into
        new markets. We primarily target eye surgeons in smaller or middle sized
        markets that would not otherwise be able to support the substantial
        investment required to purchase and maintain a laser. These underserved
        markets typically have less competition. For any new market, our mobile
        lasers allow us to enter with lower initial procedure volume because we
        can spread our investment over multiple locations. It also allows us to
        enter a new market with less risk because we do not have to make a large
        fixed investment, and can easily discontinue service to a location if
        procedure volumes do not increase sufficiently. We provide access to our
        excimer lasers to eye surgeons or practice groups who intend to perform
        as few as five procedures. We seek to increase the number of eye
        surgeons and locations we serve. We continue to expand our geographic
        coverage by adding mobile and fixed excimer lasers. We anticipate adding
        ten mobile lasers and sixteen fixed site lasers in fiscal year 2001.

     -- Maximizing the Use of Our Equipment.  We attempt to maximize the use of
        each of our lasers and cataract equipment. For our mobile systems, we
        try to reduce the size of the geographic region served by each mobile
        system and to increase the number of eye surgeons and locations served
        within a region. We also strive to optimize the routing schedules of our
        equipment. For eye surgeons at both mobile and fixed sites our support
        services help identify ways to increase case volume. In addition, all of
        our certified engineers are trained by the laser manufacturer and
        LaserVision to service, repair and maintain the laser, which helps us
        reduce the set-up and down time of our equipment.

     -- Providing Value-Added Services to Eye Surgeons.  Our value-added support
        services help surgeons to adopt excimer laser surgical procedures and
        enhance their practices and procedure growth. These services include
        training, technical support and equipment, maintenance, marketing,
        clinical advisory service, patient financing and clinical practice
        satelliting.

     -- Expanding Our Products and Services.  Our eye surgeon customers need
        many types of equipment and services to perform various surgeries. We
        intend to explore expansion of our equipment and services to help us
        provide additional value to our current customers as well as attract new
        ones. We seek to internally develop or acquire these products and
        services. Our acquisition of MSS and Refractive Surgical Resources, Inc.
        (RSR) in 1998 are two examples. The RSR acquisition allows us to provide
        equipment complementary to our existing laser surgery business. The MSS
        acquisition has allowed us to expand into the cataract market which we
        did not previously serve.

EXCIMER LASER BUSINESS

     Eye surgeons use the excimer laser to reshape the curvature of the cornea
in order to correct nearsightedness, farsightedness and astigmatism. Most of the
laser procedures performed by eye surgeons

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using our equipment also involve a microkeratome. Our excimer laser and
microkeratome services are provided through our flexible delivery system
including both mobile systems and fixed site locations.

MOBILE SYSTEMS

     Our mobile laser systems are typically used by eye surgeons who perform
fewer than 30 procedures per month. One of our certified laser engineers
accompanies each of our mobile excimer lasers. If an eye surgeon uses our
microkeratomes, we generally supply two microkeratomes and a second LaserVision
employee, who is trained by the microkeratome manufacturer and us as a surgical
technician. Our mobile laser equipment is provided in two ways: the
"Roll-On/Roll-Off" and the "MobilExcimer" laser systems.

ROLL-ON/ROLL-OFF LASER SYSTEM

     The Roll-On/Roll-Off laser system consists of an excimer laser mounted on a
motorized air suspension platform. This system allows an excimer laser to be
moved upon reaching its destination. We transport the Roll-On/Roll-Off laser
system between locations in a specially modified truck. We have patented certain
aspects of this transport system. Due to the design of the Roll-On/Roll-Off
system, our lasers usually require only minor adjustments and minimal set-up
time at each destination. Eye surgeons use our Roll-On/Roll-Off system in their
offices and at hospitals and ambulatory surgical centers. As of April 30, 2000,
we had 38 Roll-On/Roll-Off systems in operation, all but two of which were
located in the U.S.

MOBILEXCIMER

     The MobilExcimer is a self-contained mobile suite with all the equipment
necessary to perform laser procedures. We have patented certain aspects of this
system. This system is most appropriate for serving eye surgeons, hospitals and
ambulatory surgical centers that cannot accommodate a Roll-On/Roll-Off system.
We have two MobilExcimer systems in operation in the U.S.

FIXED SITE LASERS

     Our fixed site lasers are dedicated to single locations where eye surgeons
perform at least 75 procedures per month. As of April 30, 2000 we had forty-two
U.S. sites and two European sites. We independently own two of these fixed
sites, our joint ventures with ophthalmic practices own five of these sites and
the remainder are owned by third parties. Some fixed sites exclusively serve
single practice groups and others are located in ambulatory surgery centers
where they can be used by any qualified eye surgeon. We anticipate that fixed
site lasers in the U.S. will make up an increasing percentage of our overall
business.

MICROKERATOMES

     Since the acquisition of RSR in September 1998, we have provided increased
microkeratome access for excimer laser procedures. We now own 105 microkeratomes
which allows us to offer microkeratome access to both our excimer laser
customers and our non-excimer laser customers. Microkeratomes are used in
approximately 97% of the procedures performed with our excimer lasers. In April
2000 we provided 53% of the microkeratomes for these procedures.

PROCEDURE VOLUME

     Approximately 97% of the procedures performed on our excimer lasers in the
U.S. for the twelve month period ended April 30, 2000 were LASIK surgeries.
During the same period, approximately 2% of those procedures were PRK surgeries.
A small number constituting approximately 1% of procedures on our lasers, were
phototherapeutic keratectomy procedures, which is a non-refractive procedure
used to treat certain disorders such as corneal scars, and in some cases, is an
alternative to a corneal transplant.

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CATARACT BUSINESS

     We believe that our MSS subsidiary is the world's largest provider of
mobile equipment and services necessary to convert a certified surgical center
into a cataract surgical suite. One of our certified surgical technicians
transports this equipment from one surgery location to the next and prepares the
equipment at each stop so that the operating room is ready for cataract surgery.
Through this mobile approach, local optometrists are able to refer their
patients, the majority of which are elderly, to eye surgeons who offer the
convenience of "close to home" sophisticated cataract surgical services. As of
April 30, 2000 we operated 29 mobile cataract systems.

VALUE-ADDED SUPPORT SERVICES

     We offer eye surgeons value-added support services that distinguish us from
our competitors, enhance our ability to compete for business and enable us to
grow with our customers by offering them various service and support
arrangements. The following value-added services help our eye surgeon customers
to expand their practices thereby increasing the use of our equipment and
services:

     -- Training.  We conduct regular training sessions throughout the U.S. in
        conjunction with laser and microkeratome manufacturers. These sessions
        are designed to certify new eye surgeons in the use of excimer lasers
        and microkeratomes. We also provide ongoing clinical training for all of
        our engineers and technicians.

     -- Technical Support and Equipment Maintenance.  As of April 30, 2000 we
        employed 55 certified laser engineers, 35 microkeratome technicians and
        30 cataract equipment technicians. Our laser engineers perform most of
        our laser maintenance. Having our own certified laser engineers helps
        ensure rapid response to most repair or maintenance needs for our
        excimer lasers.

     -- Marketing.  We offer a comprehensive marketing program that includes
        print and broadcast advertising, Internet web pages, direct mail and
        other media based programs. We assist our customers in directing their
        marketing efforts. Strategies include direct mailings with information
        related to excimer laser surgery, collateral and point of purchase
        materials to reach patients during office visits, and videotape
        presentations which can be used to educate patients about laser surgery.
        In addition, we work to form relationships between eye surgeons and
        optometrists. These optometric networks are valuable in referring
        patients to eye surgeons who use our equipment and services. We help to
        form these referral networks by training optometrists, who are then able
        to provide pre-operative screenings as well as post-surgical follow-up
        to their patients. We also provide our eye surgeon customers with
        marketing materials designed to foster these referrals and generate new
        patients.

     -- Clinical Advisory Service.  We maintain a Clinical Advisory Board which
        conducts regular conference calls with our eye surgeon customers. These
        conference calls are chaired by our clinical advisors, who are eye
        surgeons with extensive clinical experience. In addition, we conduct
        clinical advisory meetings at the two major ophthalmic conferences each
        year. Our clinical advisors also make themselves available to consult
        with our eye surgeon customers outside of regularly scheduled conference
        calls and meetings.

     -- Patient Financing.  We offer our eye surgeon customers a comprehensive
        patient financing program. Under this program, offered through a third
        party consumer finance company, our eye surgeon customers may offer
        their patients the ability to finance their excimer laser surgery. Under
        the program utilized through April 30, 2000 eye surgeons paid us a
        one-time fee for each patient who took advantage of this program. We
        guaranteed the repayment of amounts financed under this program.
        Effective March 1, 2000 we began utilizing a new third party finance
        company. Under this program the surgeons and LaserVision pay the third
        party a fee for the service. LaserVision provides no guarantees under
        this new arrangement.

     -- Practice Satelliting.  We assist eye surgeons with high-volume practices
        who desire to serve smaller markets through satellite surgical
        locations. This program allows our eye surgeon customers to leverage
        their time performing eye surgery.
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     -- Refractive Coordinators.  We assist eye surgeons in hiring and training
        refractive coordinators. A refractive coordinator works in the surgeon's
        practice educating patients, scheduling surgery, hosting seminars,
        developing referral programs, and performing other tasks to develop the
        surgeon's refractive practice.

SALES AND MARKETING

REFRACTIVE SURGERY

     Our refractive surgery sales force consists of seven regional managers,
four account executives, and eleven practice development members. Our regional
managers and account executives develop sales leads which come from sources such
as customer contact through trade shows and professional organizations. After
identifying a prospective eye surgeon customer, the regional manager guides the
eye surgeon through the contract process. Our practice development group then
arranges the necessary training and marketing assistance required by each
individual customer. Once an eye surgeon is prepared to initiate surgeries using
our services and equipment, our operations department assumes primary
responsibility for the ongoing relationship. In response to our anticipated
growth, we intend to hire two additional account executives and two practice
development managers.

CATARACT SURGERY

     Our MSS sales staff focuses on identifying small to medium sized markets
which do not have convenient access to the services of a cataract eye surgeon.
After identifying such a market, our sales staff will contact the local hospital
and local optometrists to develop interest in "close to home" cataract surgery
services. When there is sufficient interest, our sales staff brings the hospital
and optometrists in contact with an eye surgeon who is willing to provide
services to that local market. By bringing these various parties into contact,
we increase demand for our mobile cataract services.

PROVISION OF CREDIT

     Our eye surgeon customers are responsible for collecting payment from their
patients. We collect our procedure fees directly from each eye surgeon.
Procedure fee invoices are generated weekly or monthly depending on the billing
terms established by contract between LaserVision and the eye surgeon. We
require each eye surgeon customer to pay all procedure fees within 15 days of
receipt of our invoice. Our collection experience with eye surgeons has been
very good. We have reserved for anticipated uncollectable amounts.

     We also offer a financing program for patients as a value-added service to
our eye surgeon customers. This program enables patients to finance the
procedure fee through a third-party consumer finance company. Under the program
utilized until April 30, 2000, LaserVision guaranteed the repayment of credit
extended pursuant to this program in exchange for a fee paid by the eye surgeon.
Total fees received by LaserVision for providing the guarantee have historically
not been significant and were less than $250,000 in the fiscal year ended April
30, 2000 and 1999. As of April 30, 2000, the loan portfolio balance for the
financing program was $4,048,000. Bad debts have constituted less than 5% of the
total amounts financed and management provides an allowance for all anticipated
uncollectable amounts.

SUPPLIERS

     As of April 30, 2000, we had 86 excimer lasers worldwide. The majority of
these lasers are Visx lasers. Non-Visx lasers are those manufactured by the
various other approved manufacturers. The current retail cost of lasers ranges
from $300,000 to $500,000 but discounts are available. The purchase price
generally includes a one-year warranty on all parts except the optics (mirror
and glass components), which carry a 30-day warranty. Until February 22, 2000 we
were required to pay a royalty fee of $250 to Visx for each procedure performed
on its systems. Effective February 22, 2000 the royalty fee was reduced to $100
for each procedure performed on its systems. We pay comparable per procedure
royalty fees on the non-Visx systems.

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     The retail cost of a Bausch & Lomb microkeratome is approximately $55,000.
We currently purchase over 95% of our microkeratomes and microkeratome blades
from Bausch & Lomb.

SIGNIFICANT CUSTOMERS

     Fees collected from Minnesota Eye Consultants, P.A. constituted 2%, 3% and
21% of our total revenues in fiscal 2000, 1999, and 1998, respectively. These
fees were generated at multiple locations from the use of both mobile and fixed
site lasers. The loss of this customer would have a material adverse effect on
LaserVision. Minnesota Eye Consultants is an eye surgeon practice group whose
president is Richard L. Lindstrom, M.D. Dr. Lindstrom is a member of our board
of directors and is our medical director. Minnesota Eye Consultants is also
limited partner in a limited liability partnership established by LaserVision to
own and operate one mobile laser in Minnesota.

COMPETITION

REFRACTIVE SURGERY

     The market for providing access to excimer lasers is highly competitive. We
compete with laser centers operated by eye surgeons who have purchased their own
laser. We also compete with several other companies in providing access to
excimer lasers in the U.S. Other companies are currently in the process of
gaining FDA approval for their lasers, and these companies may elect to enter
the laser center business. Other non-manufacturing companies which operate laser
centers in the U.S. are Aris Vision Institute, Clear Vision Laser Centers, Inc.,
Icon Vision, LCA Vision, Inc., Lasik Vision, NovaMed Eyecare Management, LLC,
TLC The Laser Center, Inc., Vision America and Vision Twenty-One, Inc. Several
of these companies pursue a mobile laser strategy. We will monitor any such
efforts closely and will enforce the exclusivity of our patents and other
intellectual property.

     The services and equipment we offer also compete with other forms of
treatment for refractive disorders, including eyeglasses, contact lenses, radial
keratotomy, corneal rings and other technologies currently under development. We
expect that companies may attempt to develop new products directly competitive
with our excimer lasers. Other companies could introduce new or enhanced
products with features which render our equipment obsolete or less marketable.
Our success will depend in large part on our ability to adapt to technological
changes and advances in the treatment of refractive vision disorders.

CATARACT SURGERY

     Our MSS subsidiary competes with several other companies that provide
mobile cataract services including Vantage Technology, Inc. and American Eye
Instruments, Inc. MSS also competes with local hospitals and surgery centers
which offer cataract surgery. In June 2000, we acquired Southeast Medical, Inc.,
a mobile cataract service provider in Louisiana and Mississippi.

PATENTS AND TRADEMARKS

     LASERVISION(R), LASERVISION CENTERS AND DESIGN(R), LASERVISION CENTERS(R),
LASERVISION CENTER(R), LVC(R), LVCI(R), and MOBILEXCIMER(R) are registered U.S.
servicemarks of LaserVision. In addition, we own servicemark registrations in a
number of foreign countries. We have also secured patents for the MobilExcimer
mounting system, and for certain aspects of our Roll-On/Roll-Off system. We
believe our intellectual property, including servicemarks, patents and other
proprietary technology give us a competitive advantage in the marketplace and
are important to our success.

GOVERNMENT REGULATION

     Excimer lasers used in the U.S. are regulated by the Food and Drug
Administration (FDA) and cannot be sold in the U.S. until the FDA grants
approval for the device. In the U.S., VISX, Bausch & Lomb, Summit, Autonomous,
LaserSight and Nidek are the only excimer laser manufacturers with FDA approval
to market their lasers. In addition, we have obtained, as a manufacturer, FDA
approval of the MobilExcimer.

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Excimer laser manufacturers that obtain FDA approval for use of their excimer
lasers are subject to continuing regulation by the FDA, including periodic
inspections to determine compliance with regulations. Although the FDA has not
sought to regulate surgeons' use of approved and unmodified excimer lasers, it
enforces numerous regulations including regulations prohibiting the sale and
promotion of lasers for non-indicated uses.

     While most excimer lasers are not specifically approved by the FDA for
LASIK, surgeons in the U.S., including those affiliated with us and our
competitors, have performed LASIK using their discretion as a practice of
medicine matter. The FDA may continue to approve, or challenge, this practice in
the future.

     The following is a more detailed description of certain laws and
regulations that affect our operations.

RESTRICTIONS ON MEDICAL DEVICES

     In the U.S., the FDA regulates the manufacturing, labeling, distribution
and marketing of medical devices, including excimer lasers, microkeratomes and
certain equipment we provide for use in cataract surgery. The excimer lasers and
other major equipment that we use have been authorized by the FDA for certain
uses, as has the MobilExcimer.

     Once FDA approval is obtained, however, medical device manufacturers are
subject to continuing FDA obligations. For example, the FDA requires that
medical devices be manufactured in accordance with its Quality System
Regulations. In essence, this means that medical devices must be manufactured
and records must be maintained in a prescribed manner with respect to
production, testing and control activities. In addition, the FDA sometimes
imposes restrictions and requirements regarding the labeling and promotion of
medical devices, with which users (such as LaserVision) as well as manufacturers
must comply. Non-compliance with FDA requirements could subject manufacturers
and LaserVision to enforcement action, including:

     -- product seizures

     -- recalls

     -- withdrawal of approvals

     -- civil and criminal penalties

Any such enforcement action could have a material adverse effect on our
business, financial condition and results of operations.

     To authorize new uses of medical devices, manufacturers are required to
obtain a supplemental FDA authorization. Obtaining these authorizations is time
consuming and expensive, and we cannot be sure that manufacturers of the devices
we use will be able to obtain any such additional FDA authorizations. Further,
later discovery of problems with the medical devices we use or the manufacture
or failure to comply with manufacturing or labeling requirements may result in
restrictions on use of the devices or enforcement action against the
manufacturers, including withdrawal of devices from the market. Changes in
legislation or regulation could affect whether and how we can use the devices.
These and other regulatory actions could limit the supply of devices we use or
our ability to use them, which could have a material adverse effect on our
business, financial condition and results of operations.

ANTI-KICKBACK STATUTES

     In the U.S., the federal anti-kickback statute prohibits the knowing and
willful solicitation, receipt, offer or payment of any kickback in connection
with:

     -- the referral of patients

     -- the ordering or purchasing of items or services payable in whole or in
        part under Medicare, Medicaid or other federal health care programs

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     Some courts have interpreted the federal anti-kickback statute broadly to
prohibit payments intended to induce the referral of Medicare or Medicaid
business, regardless of any other legitimate motives. Sanctions for violations
of the anti-kickback statute include:

     -- criminal penalties

     -- civil penalties of up to $50,000 per violation

     -- exclusion from Medicare, Medicaid and other federal programs

     According to the U.S. Office of the Inspector General, eye surgeons and
optometrists who engage in agreements to refer business may be violating the
anti-kickback statute. Further, violations may occur even with respect to
non-Medicare or Medicaid services if the arrangement has an impact on the
referral pattern for Medicare or Medicaid services.

     Some states have enacted statutes similar to the federal anti-kickback
statute which are applicable to all referrals of patients. Although we have
endeavored to structure our contractual relationships in compliance with these
laws, authorities could determine that our business practices are in violation
of such laws. This could have a material adverse effect on our business,
financial condition and results of operations.

FEE-SPLITTING

     Many states prohibit professionals (including eye surgeons and
optometrists) from paying a portion of a professional fee to another individual
unless that individual is an employee or partner in the same professional
practice. Violation of a state's fee-splitting prohibition may result in civil
or criminal fines, as well as loss of licensing privileges. Many states offer no
clear guidance on what relationships constitute fee-splitting, particularly in
the context of providing management services for doctors. Although we have
endeavored to structure our contractual relationships in material compliance
with these laws, state authorities could find that fee-splitting prohibitions
apply to our business practices. This could have a material adverse effect on
our business, financial condition and results of operations.

CORPORATE PRACTICE OF MEDICINE AND OPTOMETRY

     The laws of many states prohibit business corporations, such as
LaserVision, from practicing medicine and employing or engaging physicians to
practice medicine. Some states prohibit business corporations from practicing
optometry or employing or engaging optometrists to practice optometry. Such laws
preclude companies that are not owned entirely by eye care professionals from:

     -- employing eye care professionals

     -- controlling clinical decision making

     -- engaging in other activities that are deemed to constitute the practice
        of optometry or ophthalmology

     This prohibition is generally referred to as the prohibition against the
corporate practice of medicine or optometry. Violation of this prohibition may
result in civil or criminal fines, as well as sanctions imposed against the
professional through licensing proceedings. Although we have endeavored to
structure our contractual relationships in compliance with these laws, if any
aspect of our operations were found to violate state corporate practice of
medicine or optometry prohibitions, this could have a material adverse effect on
our business, financial condition and results of operations.

SELF-REFERRAL LAWS

     The U.S. federal self-referral law (the "Stark Law") prohibits physicians
(including optometrists) from referring their Medicare or Medicaid patients for
certain health services to any provider with which they (or their immediate
family members) have a financial relationship. Certain referrals, however, fit
within specific exceptions in the statute or regulations. The penalties for
violating the Stark Law include:

     -- denial of payment for the health services performed

                                       10
<PAGE>   11

     -- civil fines of up to $15,000 for each service provided pursuant to a
        prohibited referral

     -- a fine of up to $100,000 for participation in a circumvention scheme

     -- possible exclusion from Medicare and Medicaid programs

     At this time it is unclear how eye doctors are affected under the law.
While we believe that our present business practices will not be affected, there
can be no assurance that we fully comply with the Stark Law or similar state
laws. This could have a material adverse effect on our business, financial
condition and results of operations.

OTHER ANTI-FRAUD PROVISIONS

     Certain federal and state laws impose penalties on health care providers
and those who provide services to such providers (including businesses such as
LaserVision) that fraudulently or wrongfully bill government or other
third-party payors for health care services. Such penalties include substantial
civil and criminal fines and imprisonment. In addition, the federal law
prohibiting false Medicare/Medicaid billings allows a private person to bring a
civil action in the name of the U.S. government for violations of its
provisions. Such private individuals can obtain a portion of the false claims
recovery if the action is successful. We believe that we operate in material
compliance with these laws. We do not know whether any of our activities will be
challenged or reviewed by governmental authorities or private parties asserting
false claims. Any such actions could have a material adverse effect on our
business, financial condition and results of operations.

FACILITY LICENSURE AND CERTIFICATE OF NEED

     State Departments of Health may require us to obtain licenses in the
various states in which we initiate or acquire business operations. We believe
that we have obtained the necessary licensure in states where licensure is
required and that we are not required to obtain licenses in other states.
However, some of the regulations governing the need for licensure are unclear
and there is little guidance available regarding certain interpretative issues.
Therefore, it is possible that a state regulatory authority could determine that
we are improperly conducting business operations without a license. This could
subject us to significant fines or penalties, result in our being required to
cease operations in that state and could otherwise have a material adverse
effect on our business, financial condition and results of operations. We have
no reason to believe that we will be unable to obtain necessary licenses without
unreasonable expense or delay, but there can be no assurance that we will be
able to obtain any required license.

     Some states require permission by the State Department of Health in the
form of a Certificate of Need (CON) prior to the construction or modification of
an ambulatory care facility or the purchase of certain medical equipment in
excess of a certain amount. We believe that we have obtained the necessary CONs
in states where a CON is required. However, some of the regulations governing
the need for CONs are unclear and there is little guidance to cover certain
interpretive issues. Therefore, it is possible that a state regulatory authority
could determine that we are improperly conducting business operations without a
CON. This could have a material adverse effect on our business, financial
condition and results of operations. There can be no assurance that we will be
able to acquire a CON in all states where it is required.

HEALTH CARE REFORM

     Health care reform is considered by many in the U.S. to be a national
priority. Several states are also currently considering health care proposals.
We cannot predict what additional action, if any, the federal government or any
state may ultimately take with respect to health care reform or when any such
action will be taken. Health care reform may bring radical changes in the
financing and regulation of the health care industry, which could have a
material adverse effect on our business, financial condition and results of
operations.

                                       11
<PAGE>   12

EMPLOYEES

     As of April 30, 2000, we had 270 employees. None of our employees is
subject to a collective bargaining arrangement. We consider our relations with
our employees to be good. As we expand, we expect to hire additional employees
in technical, marketing, administrative and management positions.

ITEM 2

                            DESCRIPTION OF PROPERTY

     We lease 15,500 square feet of space in St. Louis County, Missouri for our
corporate headquarters. In August 2000, we will lease an additional 5,000 square
feet in this location. The original lease which was to expire in 2001 has been
extended to 2006. We also utilize 2,700 square feet of space in St. Louis
County, Missouri for our St. Louis LaserVision Center which expires in 2001. We
also lease 3,700 square feet in San Jose, California through a joint venture.

     MSS occupies 7,000 square feet of office/warehouse space in Bloomington,
Minnesota under a lease expiring in July 2001.

     LaserVision Europe Limited, our wholly-owned European subsidiary, leases
3,000 square feet of space on Harley Street in London, England, which houses the
Harley Street LaserVision Centre.

     All other lasers operated by LaserVision are used in centers owned or
leased by other parties. We do not have any material lease obligations
associated with such centers.

ITEM 3

LEGAL PROCEEDINGS

     In April, 2000, LaserVision was served with an administrative complaint
issued by the Center For Devices and Radiological Health of the U.S. FDA. The
administrative complaint and notice of opportunity for hearing relates to a
subpoena served on and disclosed by LaserVision in March, 1998 regarding
LaserVision's prior use of so-called "international cards", software that
enabled its excimer lasers to be used to perform laser eye surgeries for higher
myopia cases (greater than -6.0 diopters) than what was initially approved by
the FDA. The FDA ultimately approved the use of an excimer laser for higher
myopia cases in January 1998. LaserVision supplied all of the information
requested under the subpoena and had had no contact from the FDA after May,
1998. Many ophthalmologists have taken the position that FDA restrictions on
physicians' use of laser equipment through software control -- rather than the
traditional means of labeling -- deny physicians the flexibility to treat
individual patients as the physician deems medically necessary, and represent an
unwarranted intrusion upon physicians' rights to practice medicine according to
their best medical judgment. Currently, ophthalmologists routinely treat
patients with high myopia (greater than -10.0 diopters) and the FDA now allows
eye surgeons to elect to exceed its approved parameters as a practice of
medicine decision. It is estimated that more than 900,000 laser eye surgeries
were performed in the U.S. in 1999. The complaint seeks civil penalties from
LaserVision and four of its executives in amounts not to exceed $1 million each.
LaserVision does not know if any other companies or individuals have been served
with similar complaints.

     On March 12, 1999, we filed suit in U.S. District Court for the Eastern
District of Missouri against Nidek, Custom Trailerwerks, Inc. and a former
employee of LaserVision. This lawsuit was settled recently, with no payments
being made by or to any party.

     We are currently involved in other, routine, business-related litigation.
We do not expect that any outstanding or pending legal proceedings, individually
or in the aggregate, will have a material adverse effect upon our future results
of operations, liquidity or financial condition.

                                       12
<PAGE>   13

ITEM 4

              SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

                                    PART II

ITEM 5

            MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

     The common stock of LaserVision is traded on the over-the-counter market
through NASDAQ. Furthermore, the following dealers are listed on NASDAQ
summaries as market makers in LaserVision stock as of June 2000:

<TABLE>
<S>                                      <C>
A. G. Edwards & Sons, Inc.               Schneider Securities Inc.
Prudential Securities, Inc.              Schwab Capital Markets
Warburg Dillon Read, LLC                 Herzog, Heine, Geduld Inc.
Salomon Smith Barney, Inc.               Knight Securities, L.P.
Weeden and Co. Inc.                      Spear, Leeds & Kellogg
Sherwood Securities Corp.                B-Trade Services LLC
Island System Corporation                The Brass Utility, LLC
Instinet Corporation                     Archipelago, LLC
M.H. Meyerson & Co.                      Neidiger, Tucker, Bruner
Leerink Swann & Co.                      Mesirow & Co., Inc.
Pacific Growth Equities                  Allen C. Ewing & Co.
Advest, Inc.                             First of Michigan Corporation
</TABLE>

     There were approximately 469 holders of record of LaserVision's common
stock on July 11, 2000. This figure does not consider the individual holders of
securities that are held in the "street name" of a securities dealer. Based upon
information received from securities dealers, the total number of individual
holders of LaserVision's common stock exceeds 28,000.

     There have been and are expected to be no dividends declared on the common
stock.

                TABLE OF HIGH/LOW SALES PRICES FOR EACH QUARTER

<TABLE>
<CAPTION>
                                                              COMMON
                                                         ----------------
                                                          HIGH      LOW
QUARTER ENDED                                             LVCI      LVCI
-------------                                            ------    ------
<S>                                                      <C>       <C>
July 98..............................................    $ 8.44    $ 5.06
October 98...........................................      6.56      4.25
January 99...........................................     14.75      5.38
April 99.............................................     26.25     12.63
July 99..............................................     37.81     21.00
October 99...........................................     33.75      8.50
January 00...........................................     16.75      7.81
April 00.............................................     12.00      3.88
</TABLE>

                                       13
<PAGE>   14

ITEM 6

                            SELECTED FINANCIAL DATA

     The consolidated statement of operations data set forth below for the years
ended April 30, 2000, 1999, and 1998 and the balance sheet data at April 30,
2000 and 1999 are derived from the respective audited consolidated financial
statements of LaserVision which are included elsewhere herein. The statement of
operations data set forth below with respect to the years ended April 30, 1997
and 1996 and the balance sheet data at April 30, 1998, 1997 and 1996 are derived
from the audited financial statements of LaserVision which are not included in
this Form 10-K.

     The data set forth below should be read in conjunction with the
consolidated financial statements and related notes and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" included
elsewhere herein.

<TABLE>
<CAPTION>
                                                               YEAR ENDED APRIL 30,
                                                 -------------------------------------------------
                                                   2000      1999      1998       1997      1996
                                                 --------   -------   -------   --------   -------
                                                       (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                              <C>        <C>       <C>       <C>        <C>
STATEMENT OF OPERATIONS DATA:
Revenues.......................................  $ 88,055   $52,359   $23,469   $  8,238   $ 3,918
Gross profit (loss)............................    28,555    17,691     6,719        648      (332)
Selling, general and administrative............    17,702    11,809     9,592      9,719     5,831
Vendor program change expense..................     2,043        --        --         --        --
Fixed asset impairment provision...............        --        --        --      2,772     3,063
Income (loss) from operations..................     8,810     5,882    (2,873)   (11,843)   (9,216)
Net income (loss) before taxes.................    10,464     5,051    (3,496)   (12,069)   (8,803)
Income tax benefit.............................     3,394     1,489        --         --        --
Net income (loss)..............................    13,858     6,540    (3,496)   (12,069)   (8,803)
Deemed preferred dividends.....................      (209)     (171)   (1,930)      (126)     (439)
Net income (loss) applicable to common
  stockholders.................................  $ 13,649   $ 6,369   $(5,426)  $(12,195)  $(9,242)
Net income (loss) per share -- basic...........  $    .55   $   .31   $  (.30)  $   (.72)  $  (.88)
Net income (loss) per share -- diluted.........  $    .49   $   .27   $  (.30)  $   (.72)  $  (.88)
Weighted average number of common shares
  outstanding -- basic.........................    24,884    20,290    18,356     16,842    10,556
Weighted average number of common shares
  outstanding -- diluted.......................    28,460    23,930    18,356     16,842    10,556
</TABLE>

<TABLE>
<CAPTION>
                                                                     APRIL 30,
                                                 -------------------------------------------------
                                                   2000      1999      1998       1997      1996
                                                 --------   -------   -------   --------   -------
<S>                                              <C>        <C>       <C>       <C>        <C>
BALANCE SHEET DATA:
Cash and cash equivalents......................  $ 17,702   $ 8,173   $ 8,430   $  3,794   $12,672
Short-term investments.........................    31,440
Working capital................................    44,141     7,105     5,554      1,654    10,002
Total assets...................................   123,267    53,189    30,829     22,870    28,913
Total debt, excluding current portion..........     5,878     7,784     6,585      6,133     1,375
Convertible preferred stock with mandatory
  redemption provision.........................     2,295     2,086     1,915         --    14,539
Stockholders' equity...........................  $ 89,619   $26,661   $13,578   $ 10,276   $ 7,453
</TABLE>

     There were no cash dividends during this five year period.

                                       14
<PAGE>   15

FIXED ASSET IMPAIRMENT PROVISION

     In connection with LaserVision's continuing evaluation of the
recoverability of its assets, an asset impairment charge of $2,772,000 and
$3,063,000 were recorded for the years ended April 30, 1997 and 1996,
respectively. These impairment charges related to domestic and international
lasers, as well as goodwill.

SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

     The following tables present selected items from our quarterly financial
results (in thousands except per share data).

<TABLE>
<CAPTION>
FISCAL 2000 QUARTERLY                              JULY 1999   OCTOBER 1999   JANUARY 2000   APRIL 2000
---------------------                              ---------   ------------   ------------   ----------
<S>                                                <C>         <C>            <C>            <C>
Revenues........................................    $20,999      $20,835        $22,510       $23,711
Vendor program change expense (benefit).........                                  2,433          (390)
Gross profit....................................      7,203        6,742          7,190         7,420
Net income......................................      4,133        3,935          1,537         4,253
Deemed preferred dividends......................         50           52             52            55
Basic income per share..........................    $   .17      $   .15        $   .06       $   .17
Diluted income per share........................    $   .14      $   .14        $   .05       $   .16
Weighted average number of common shares
  outstanding -- basic..........................     24,177       25,118         25,239        25,007
Weighted average number of common shares
  outstanding -- diluted........................     28,578       28,859         28,297        27,249
</TABLE>

<TABLE>
<CAPTION>
FISCAL 1999 QUARTERLY                              JULY 1998   OCTOBER 1998   JANUARY 1999   APRIL 1999
---------------------                              ---------   ------------   ------------   ----------
<S>                                                <C>         <C>            <C>            <C>
Revenues........................................    $ 9,110      $10,402        $14,062       $18,785
Gross profit....................................      2,866        3,655          4,707         6,463
Net income......................................        333          958          2,262         2,987
Deemed preferred dividends......................         40           41             41            49
Basic income per share..........................    $   .02      $   .05        $   .11       $   .14
Diluted income per share........................    $   .02      $   .05        $   .09       $   .11
Weighted average number of common shares
  outstanding -- basic..........................     19,482       19,584         20,588        21,266
Weighted average number of common shares
  outstanding -- diluted........................     21,700       21,416         24,626        26,306
</TABLE>

VENDOR PROGRAM CHANGE EXPENSE

     On February 22, 2000, Visx, the manufacturer of most of the lasers owned by
LaserVision, announced a new program for its customers, including LaserVision,
that included a change in the royalty fee charged by Visx from $250 per
procedure to $100 per procedure. Along with this pricing change Visx announced
that it will no longer provide procedure cards for enhancements at no charge,
nor will they provide credits for procedure cards used for past enhancements or
ambassadors. (An enhancement is a procedure subsequent to the initial treatment
that is performed to improve the surgical result. An ambassador is a patient who
is treated at no charge and is frequently a celebrity or a member of the
surgeon's practice.) In addition, Visx would not exchange the inventory of
procedure cards held by LaserVision at a cost of $250 per procedure card for
procedure cards at the reduced cost of $100. Accordingly, LaserVision recorded a
charge of approximately $2.4 million in the quarter ended January 31, 2000 for
actual and estimated expenses related to enhancements and ambassadors, and
reductions in inventory value, which will not be reimbursed by Visx and which
LaserVision does not expect to collect from its customers without legal
assistance. In the quarter ended April 30, 2000, LaserVision reversed $0.4
million of the vendor program change expense based upon actual and estimated
expenses related to the enhancements, ambassadors, and reductions in inventory
value.

                                       15
<PAGE>   16

ITEM 7

                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     Except for historical information, statements relating to LaserVision's
plan, objectives and future performance are forward looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
statements are based on management's current expectations. Because of various
risks and uncertainties discussed below, actual strategies and results in future
periods may differ materially from those currently expected.

     The discussion set forth below analyzes certain factors and trends related
to the financial results for each of the three years ended April 30, 2000, 1999
and 1998. This discussion should be read in conjunction with the accompanying
consolidated financial statements and notes to the consolidated financial
statements.

RESULTS OF OPERATIONS

     The following table breaks out revenue by source. This table also includes
"net revenue contribution." Net revenue contribution is revenue less license
fees paid to laser manufacturers and amounts paid to eye surgeons and
optometrists for professional medical services rendered at our fixed laser
sites. Management believes that net revenue contribution provides relevant and
useful information to investors because it reflects the dollars available to
cover LaserVision's fixed and variable costs after excluding variable costs
which LaserVision pays to third parties. Net revenue contribution should not be
considered as an alternative to gross profit, operating income and net income as
a measure of profitability. Finally, the table includes certain profitability
amounts as a percentage of total revenue and net revenue contribution.

<TABLE>
<CAPTION>
                                                               FISCAL YEAR ENDED APRIL 30,
                                                             --------------------------------
                                                               2000        1999        1998
                                                             --------    --------    --------
                                                                      (IN THOUSANDS)
<S>                                                          <C>         <C>         <C>
Revenue
  North American refractive..............................    $ 73,456    $ 46,568    $ 21,557
  Other refractive.......................................       3,065       1,976       1,912
  Cataract...............................................      11,534       3,815           0
Total Revenue............................................      88,055      52,359      23,469
  Royalty fees and professional medical services.........      29,349      17,677       8,030
Revenue less royalty fees and professional medical
  services,
  "net revenue contribution".............................      58,706      34,682      15,439
Gross profit.............................................      28,555      17,691       6,719
  % of total revenue.....................................         32%         34%         29%
  % of net revenue contribution..........................         49%         51%         44%
Income (loss) from operations............................       8,810       5,882      (2,873)
  % of total revenue.....................................         10%         11%        (12%)
  % of net revenue contribution..........................         15%         17%        (19%)
Net income (loss) before taxes...........................    $ 10,464    $  5,051    $ (3,496)
  % of total revenue.....................................         12%         10%        (15%)
  % of net revenue contribution..........................         18%         15%        (23%)
</TABLE>

     On May 14, 1999, LaserVision completed an underwritten public stock
offering selling 2,000,000 shares of common stock for $46.5 million ($43.6
million net of offering costs). Selling stockholders sold an additional
1,956,000 shares of which 927,000 shares were sold pursuant to the exercise of
options and warrants. 516,000 of the shares sold by selling stockholders were
sold pursuant to the Underwriter's exercise of their overallotment option. The
exercise of these warrants and options resulted in additional proceeds to
LaserVision of $3.6 million.

                                       16
<PAGE>   17

     On February 22, 2000, Visx, the manufacturer of most of the lasers owned by
LaserVision, announced a new program for its customers, including LaserVision,
that included a change in the royalty fee charged by Visx from $250 per
procedure to $100 per procedure. Most other laser manufacturers, except for
Nidek, have similar royalties. Along with this pricing change Visx announced
that it will no longer provide procedure cards for enhancements at no charge,
nor will they provide credits for procedure cards used for past enhancements or
ambassadors. (An enhancement is a procedure subsequent to the initial treatment
that is performed to improve the surgical result. An ambassador is a patient who
is treated at no charge and is frequently a celebrity or a member of a surgeon's
practice.) In addition, Visx will not exchange the inventory of procedure cards
held by LaserVision at a cost of $250 per procedure card for procedure cards at
the reduced cost of $100. Accordingly, LaserVision has recorded a one-time
charge of approximately $2.0 million in the year ended April 30, 2000 for actual
and estimated expenses related to enhancements and ambassadors and reductions in
inventory value, which will not be reimbursed by Visx and which LaserVision does
not expect to collect from its customers without legal assistance.

     Approximately 80% of this $2.0 million expense was related to enhancement
and ambassador procedures which were performed before Visx reduced its royalty.
Visx has refused to credit LaserVision for the prepaid royalty and card costs
associated with these procedures. Documentation for enhancements was accumulated
each month in order for credits to be processed more efficiently in bulk rather
than individually as enhancements were performed. Because of the logistics
involved with collecting the documentation required by Visx for each enhancement
from more than 650 surgeons performing procedures on more than 70 lasers at more
than 275 locations, there could be a lag time of about five months between the
time an enhancement procedure was performed and the time credit was received
from Visx. The balance of this expense relates to several inventory issues
associated with procedure cards and spare parts.

     Future Revenue and Gross Profit -- After March 2000, the Visx program
change will reduce LaserVision's domestic refractive revenue per procedure and
the royalty cost of revenue per procedure. Other aspects of this new program
reduce volume-related incentives to LaserVision and will increase cost of
revenue, other than royalty fees, above the levels recorded in calendar 1999, as
described in following sections. Although the net effect of this program change
upon gross profit per procedure is expected to be unfavorable, any global fee
decreases for patients are expected to have a favorable effect upon volume due
to price elasticity. The effect upon total gross profit in future periods will
be dependent upon, among other things: (1) volume changes, (2) the mix between
mobile and fixed sites, and (3) the number and type of new contractual
relationships with ophthalmic surgeons.

     Future Operating Expenses -- Future contractual relationships with
ophthalmic surgeons are expected to increase LaserVision's portion of both the
global fee paid by patients and the total operating costs associated with
providing the procedure. After a start-up period of up to four months,
management expects the additional benefits to exceed the additional expenses.

     RSR revenues for September 1998 through April 2000 are included in North
American refractive revenues. MSS revenues for December 1998 through April 2000
are shown as cataract revenues.

FISCAL YEAR ENDED APRIL 30, 2000 COMPARED TO FISCAL YEAR ENDED APRIL 30, 1999

     LaserVision has continued to provide excimer laser access to additional
sites throughout the U.S. We are focused on establishing long-term relationships
with our customers and providing value-added services through our partnership
and market development models.

     The acquisition of RSR on September 1, 1998 has enabled us to provide
microkeratome access and the acquisition of MSS on December 4, 1998 has allowed
us to provide mobile cataract services.

     Revenue.  Total revenue increased by 68% or $35.7 million to $88.1 million
for the year ended April 30, 2000 from $52.4 million for the year ended April
30, 1999. Total laser procedures increased by 73% to 104,674 for the year ended
April 30, 2000 from 60,947 for the year ended April 30, 1999.

     The increase in revenue was attributable to a $26.9 million increase in
North American refractive revenue, a $1.1 million increase in other refractive
revenue and $7.7 million in cataract revenue. The increase
                                       17
<PAGE>   18

in North American revenue was attributable to an increase both in the number of
U.S. lasers in operation and the number of procedures performed by our eye
surgeon customers in the U.S. The increase in cataract revenue was attributable
to having an entire year of revenue in the year ended April 30, 2000 compared to
five months of revenue in the year ended April 30, 1999 as well as an increase
of more than 1,450 procedures performed during the five months ended April 30,
2000 compared to the five months ended April 30, 1999. These procedures were
performed on five incremental mobile cataract units during the year ended April
30, 2000.

     Costs of Revenue/Gross Profit.  Costs of revenue increased by 72% or $24.8
million to $59.5 million for the year ended April 30, 2000 from $34.7 million
for the year ended April 30, 1999. This was primarily due to an increase of $9.3
million in total domestic royalties, an increase of $3.8 million in mobile laser
engineer salaries and travel costs, an increase of $2.7 million in professional
medical services costs, an increase of $2.7 million in depreciation, an increase
of $0.9 million in gases, medical supplies and maintenance, and $5.0 million of
costs related to the cataract business for which a full year of results are
reflected in fiscal 2000 versus only five months in fiscal 1999. The increases
in royalty expenses, salaries and travel, professional medical services,
depreciation and gasses, medical supplies and maintenance are primarily due to
increased refractive procedure volume utilizing an increased number of lasers.

     Total gross profit increased by 61% or $10.9 million to $28.6 million for
the year ended April 30, 2000 from $17.7 million for the year ended April 30,
1999. The variable gross profit, excluding depreciation, increased by 62% or
$14.4 million to $37.8 million for the year ended April 30, 2000 from $23.4
million for the year ended April 30, 1999. This was primarily due to higher
volumes of procedures performed with our equipment at an increased number of
sites. As a percentage of total revenue, total gross profit decreased to 32%
from 34% for the years ended April 30, 2000 and 1999, respectively. This decline
is primarily due to lower average sales prices of about $80 per procedure for
the year ended April 30, 2000 compared to the year ended April 30, 1999.

     Operating Expenses.  Selling, general and administrative expenses increased
by 50% or $5.9 million to $17.7 million for the year ended April 30, 2000 from
$11.8 million for the year ended April 30, 1999. The increase was attributed to
increased operating expenses of $1.1 million related to a full year of activity
for the cataract business, an increase in salaries and related expenses of $1.5
million, increased general and administrative expenses of $1.7 million, and
increased selling and marketing expenses of $1.4 million. The $1.5 million
increase in salaries and related expenses was attributed to more employees,
annual raises and variable compensation based on operating results. The $1.7
million increase in general and administrative expenses was attributed to
increased professional fees of $0.8 million, and increased office expenses of
$0.4 million and increased travel and related costs of $0.4 million. The $1.4
million increase in selling and marketing expenses was attributed to supporting
more eye surgeons in their marketing programs.

     Vendor Program Change Expense.  As previously described, a $2.0 million
vendor program change expense was recorded during the year ended April 30, 2000.

     Income from Operations.  The income from operations increased by $2.9
million to $8.8 million for the year ended April 30, 2000 from $5.9 million
during the year ended April 30, 1999, which reflects the factors discussed
above.

     Other Income (Expense).  Higher minority interest in net income of
subsidiaries offset by higher interest income caused a $2.5 million increase to
a net $1.7 million in other income during the year ended April 30, 2000 from a
net $831,000 in other expense during the year ended April 30, 1999. This was
primarily due to interest income on the proceeds from the secondary stock
offering in May 1999 which were invested in commercial paper and short term
government debt instruments during fiscal year 2000.

     Income Taxes.  Income tax benefit increased by $1.9 million to $3.4 million
for the year ended April 30, 2000 from $1.5 million for the year ended April 30,
1999. This increase is attributable to releasing the majority of the valuation
allowance related to the deferred tax assets generated from operations. In the
future we expect income tax expense to be approximately 38% of net income before
taxes.

                                       18
<PAGE>   19

     Net Income.  Net income increased by 112% or $7.4 million to $13.9 million
for the year ended April 30, 2000 from $6.5 million for the year ended April 30,
1999 which reflects the factors discussed above. Earnings per share -- basic
increased by $0.24 per share to $0.55 per share for the year ended April 30,
2000 from $0.31 per share for the year ended April 30, 1999. Earnings per share
-- diluted increased by $0.22 per share to $0.49 per share for the year ended
April 30, 2000 from $0.27 per share for the year ended April 30, 1999.

FISCAL YEAR ENDED APRIL 30, 1999 COMPARED TO FISCAL YEAR ENDED APRIL 30, 1998

     Revenue.  Total revenue increased by 123% or $28.9 million to $52.4 million
for the year ended April 30, 1999 from $23.5 million for the year ended April
30, 1998. Total laser procedures increased by 107% to 60,947 for the year ended
April 30, 1999 from 29,408 for the year ended April 30, 1998.

     The increase in revenue was attributable to a $24.7 million increase in
domestic refractive revenue, a $0.3 million increase in marketing and training
revenue and $3.8 million in cataract revenue. The increase in North American
revenue was attributable to an increase both in the number of U.S. lasers in
operation and the number of procedures performed by our eye surgeon customers on
each laser in the U.S.

     Costs of Revenue/Gross Profit.  Costs of revenue increased by 107% or $17.9
million to $34.7 million for the year ended April 30, 1999 from $16.8 million
for the year ended April 30, 1998. This was primarily due to an increase of $7.6
million in total domestic royalties, an increase of $3.1 million in mobile laser
engineer salaries and travel costs, an increase of $2.1 million in professional
medical services costs, an increase of $2.1 million in gasses, medical supplies
and maintenance, and $2.3 million of costs related to the cataract business. The
increases in royalty expenses, salaries and travel, professional medical
services, and gasses, medical supplies and maintenance are primarily due to
increased refractive procedure volume. The increase in costs related to the
cataract business was attributed to the acquisition of MSS in December 1998.

     Total gross profit increased by 163% or $11.0 million to $17.7 million for
the year ended April 30, 1999 from $6.7 million for the year ended April 30,
1998. The variable gross profit, excluding depreciation, increased by 109% or
$12.2 million to $23.4 million for the year ended April 30, 1999 from $11.2
million for the year ended April 30, 1998. This was primarily due to higher
volumes of procedures performed with our equipment at an increased number of
sites. As a percentage of total revenue, total gross profit increased to 34%
from 29% for the years ended April 30, 1999 and 1998, respectively. This
improvement is due to performing more procedures per laser, thus improving
utilization of our fixed assets.

     Operating Expenses.  Selling, general and administrative expenses increased
by 23% or $2.2 million to $11.8 million for the year ended April 30, 1999 from
$9.6 million for the year ended April 30, 1998. New operating expenses related
to the cataract business of $1.0 million along with increases in salaries and
related expenses of $1.3 million were partially offset by decreases in general
and administrative expenses of $0.2 million. The $1.3 million increase in
salaries and related expenses was attributed to more employees, annual raises
and variable compensation based on operating results. The $0.2 million decrease
in general and administrative expenses was attributed to decreased insurance of
$193,000 and decreased professional fees of $56,000.

     Income (Loss) from Operations.  The income (loss) from operations increased
by $8.8 million to $5.9 million for the year ended April 30, 1999 from a loss of
$2.8 million during the year ended April 30, 1998, which reflects the factors
discussed above.

     Other Income (Expense).  Higher interest expense and minority interest in
net income of subsidiary partially offset by higher interest income caused a 33%
or $208,000 increase to a net $831,000 in other expense during the year ended
April 30, 1999 from a net $623,000 in other expense during the year ended April
30, 1998. This was primarily due to interest expense from the RSR and MSS
acquisitions.

     Income Taxes.  A $1.5 million income tax benefit was recorded for the first
time during the year ended April 30, 1999. This benefit was attributable to
releasing a portion of the valuation allowance related to the deferred tax
assets generated from operations.

                                       19
<PAGE>   20

     Net Income (Loss).  Net income for the year ended April 30, 1999 was $6.5
million compared to a net loss of $3.5 million for the year ended April 30, 1998
which reflects the factors discussed above. Earnings per share -- basic
increased by $0.61 per share to $0.31 per share for the year ended April 30,
1999 from a loss of $0.30 per share for the year ended April 30, 1998. Earnings
per share -- diluted increased by $0.57 per share to $0.27 per share for the
year ended April 30, 1999 from a loss of $0.30 per share for the year ended
April 30, 1998.

INFLATION

     LaserVision's operations have not been, nor are they expected to be,
materially affected by inflation.

LIQUIDITY AND CAPITAL RESOURCES

     LaserVision's primary sources of liquidity for the next year are expected
to consist of cash generated by operations, vendor financing, proceeds from the
exercise of options and warrants, and proceeds from the secondary stock offering
completed on May 11, 1999. We believe this will be sufficient to fund our
expected cash needs as described below for the forseeable future, exclusive of
any acquisitions.

     We have generated positive cash flow from operations for every quarter
since the quarter ended April 30, 1998. We expect that normal ongoing liquidity
needs, other than investment spending, will continue to be covered substantially
from the operations of the business.

     LaserVision has access to vendor financing on one brand of laser. We expect
to continue to have access to this financing option for at least the next nine
months. Other equipment vendors do not provide equipment financing.

     LaserVision expects that option and warrant holders will exercise options
and warrants prior to their expiration, but we cannot predict when such
exercises will occur.

     Our principal cash needs include normal operating expenses, the purchase of
additional equipment, the payments of contingent consideration for MSS, and any
cash needs for any future acquisitions.

     During the fourth quarter of fiscal 2000, LaserVision repurchased 5% (or
1.2 million shares) of the outstanding common stock for approximately $7.8
million. In May 2000, the Board authorized the repurchase of an additional 4.9%
of the common stock. Treasury stock, which is carried at cost, has been
repurchased to meet LaserVision's obligations under its stock option plans and
other stock-based plans, while minimizing dilution to shareholders.

     Our normal operating expenses include procedure royalty fees, salaries,
travel and lodging, medical supplies, equipment maintenance, professional fees,
rent and utilities.

     We expect to purchase about $12 million of new equipment in fiscal year
2001. As noted above, we have available vendor financing for the purchase price
of one brand of excimer laser. Lasers purchased from other manufacturers will be
paid in cash or financed through third parties. We believe we would be able to
obtain third party financing for excimer lasers, although we do not know the
specific terms on which such financing may be available. Market considerations
will dictate the actual levels of our equipment purchases.

     The MSS acquisition requires additional consideration for meeting certain
operating income targets. For the twelve-month period ending April 30, 2000, MSS
met the operating income targets and LaserVision has recorded additional
goodwill and accrued $5.4 million for contingent consideration to be paid July,
2000. Additional consideration of up to $1.0 million is contingent upon
operating results for the quarter ending July 31, 2000. Up to 50% of the
contingent consideration may be paid in LaserVision common stock valued at the
market rate, with the balance to be paid in cash. The amount of contingent
consideration paid in common stock is at the sole discretion of LaserVision.
LaserVision intends to pay the $5.4 million earned in the period ended April 30,
2000 in cash.

     Until April 2000 LaserVision offered a program for patient financing, the
funds for which are provided primarily by a third party lender. We guarantee
these notes payable to the third party lender. The amount of

                                       20
<PAGE>   21

such financing currently is $4.0 million. Since March 2000 LaserVision has
provided our eye surgeon customers with a patient financing program that
required no guarantee of the patients' notes payable.

     In June 2000 LaserVision acquired Southeast Medical, Inc. (Southeast
Medical) of Mandeville, Louisiana for $1.5 million of cash and future contingent
consideration which is dependent upon achieving certain levels of revenue.
Southeast Medical is a provider of mobile cataract services in Louisiana and
Mississippi.

     If cash generated from our operations is significantly less than
anticipated, we have several strategies to deal with it. First, we can use the
maximum amount of financing available for the purchase of new equipment. Second,
we can slow down the purchase of new equipment. Third, we can choose the option
of funding 50% of the contingent consideration for the MSS acquisition with
common stock. Fourth, we can delay any potential acquisitions, or attempt to
fund such acquisitions with stock or cash raised from third party sources.
Finally, LaserVision believes it would be able to raise additional money through
the borrowing of funds or the sale of debt or additional equity securities.

WORKING CAPITAL

     Cash and cash equivalents increased by 116% or $9.5 million to $17.7
million at April 30, 2000 from $8.2 million at April 30, 1999. At April 30,
2000, working capital had increased by 521% or $37.0 million to $44.1 million
from $7.1 million at April 30, 1999. The ratio of current assets to current
liabilities at April 30, 2000 was 2.83 to one, compared to 1.44 to one at April
30, 1999.

     Short-term investments increased $31.4 million to $31.4 million at April
30, 2000 from $0 at April 30, 1999. The short-term investments have been
purchased with cash generated from the underwritten public stock offering
completed on May 14, 1999. Accounts receivable increased $2.5 million from April
30, 1999 to April 30, 2000 and $5.0 million from April 30, 1998 to April 30,
1999 primarily due to increased procedures performed in the U.S., an increased
number of customers being invoiced monthly instead of weekly, and the
acquisitions of MSS and RSR.

CASH FLOWS -- OPERATING ACTIVITIES

     Net cash provided by operating activities increased by $15.4 million to
$23.2 million for the year ended April 30, 2000 from $7.8 million for the year
ended April 30, 1999. The cash flows provided by operating activities during the
year ended April 30, 2000 primarily represent the net income in the period plus
depreciation and amortization and a net increase in current liabilities, plus
decreases in prepaid expenses and other assets less increases in accounts
receivable, deferred taxes and inventory. The cash flows provided by operating
activities during the year ended April 30, 1999 primarily represent the net
income in the period plus depreciation and amortization and a net increase in
current liabilities, less increases in accounts receivable, inventory, deferred
taxes, and prepaid expenses and other current assets. The increases in accounts
receivable and inventory are a result of increased procedure volumes. The
increase in accrued liabilities is primarily due to the accrual for contingent
consideration of $5.4 million for the MSS purchase.

     Net cash provided by operating activities increased $6.8 million to $7.8
million for fiscal 1999 from $1.0 million for fiscal 1998. The cash flows
provided by operating activities during fiscal 1998 primarily represent the net
loss incurred in this period plus depreciation and amortization and an increase
in current liabilities, offset by an increase in accounts receivable and
inventory, and reflect the continuity of the business

CASH FLOWS -- INVESTING ACTIVITIES

     Net cash used for investing activities increased by 518% or $42.2 million
to $50.3 million for the year ended April 30, 2000 from $8.1 million for the
year ended April 30, 1999. Cash used for investing during the year ended April
30, 2000 was primarily used to acquire short-term investments with proceeds of
the May 1999 secondary stock offering, equipment for the expanding U.S. market,
to pay contingent consideration for the acquisition of MSS, and to invest in
refractive partnerships with eye surgeons and ophthalmic practices.

                                       21
<PAGE>   22

Cash used for investing during the year ended April 30, 1999 was primarily used
to acquire equipment for the expanding U.S. market and for the acquisitions of
MSS and RSR.

     Net cash used in investing activities increased by 96% or $4.0 million to
$8.1 million for the year ended April 30, 1999 from $4.1 million for the year
ended April 30, 1998. These changes were primarily due to the acquisition of
equipment and the acquisition of MSS and RSR.

CASH FLOWS -- FINANCING ACTIVITIES

     Net cash provided by financing activities increased $36.5 million to $36.6
million for the year ended April 30, 2000 from $0.1 million for the year ended
April 30, 1999. Net cash provided by financing activities during the year ended
April 30, 2000 was primarily due to the proceeds from the underwritten public
stock offering of $44.2 million, proceeds from the exercise of stock options of
$8.6 million, and the return of restricted cash of $1.1 million partially offset
by the purchase of treasury stock of $7.8 million and by the repayment of
certain notes payable and capitalized lease obligations of $9.0 million. Net
cash provided by financing during fiscal 1999 was primarily provided by the
exercise of stock options and warrants of $6.3 million, offset by the repayment
of capital lease obligations and notes payable of $6.4 million.

     Net cash provided by financing activities decreased by $7.7 million to $0.1
million during fiscal 1999 from cash provided of $7.8 million during fiscal
1998. Net cash provided by financing for fiscal 1998 was primarily due to
proceeds from a private offering of preferred stock of $5.5 million, notes
payable of $1.9 million and exercise of stock options and warrants of $2.2
million offset by the repayment of notes payable and capitalized lease payments
of $2.0 million.

     The Series B convertible preferred stock has a beneficial conversion and
mandatory redemption features. Under some circumstances, as defined in the
preferred stock agreement, the holders of the Series B shares may be able to
require us to redeem their shares for cash. These circumstances include the
delisting of the common stock by Nasdaq, bankruptcy or change of control of
LaserVision, and the decline in the price of the common stock to less than
approximately $1.00 per share. While there can be no assurance that these
circumstances will not arise, LaserVision believes the likelihood of redemption
occurring is remote. Accordingly, the redemption features of the Series B shares
are not expected to adversely impact our cash flows or liquidity. At April 30,
2000, this preferred stock was convertible into approximately 923,000 shares of
common stock.

INCOME TAXES

     At April 30, 2000, LaserVision had aggregate net operating loss (NOL)
carryforwards of approximately $63.0 million for income tax purposes available
to offset future regular federal taxable income which expire in various amounts
through 2020. During the year ended April 30, 2000, the Company utilized
approximately $10.6 million in NOL carryforwards to offset taxable income.

     The "Valuation allowance, provision for income taxes" reflects the tax
benefit which will be reflected in the statement of operations upon release.
Management has determined that based on expected future operating plans, the net
deferred tax assets generated by operations at April 30, 2000 will more likely
than not be utilized to offset future taxes. Therefore, no valuation allowance
related to such deferred tax assets has been recorded at April 30, 2000.
However, as NOLs may not all be utilized to offset taxable income in all states
where LaserVision operates, a valuation allowance has been recorded to reflect
the potential non-realization of state NOL carryforwards.

     The "Valuation allowance, equity" reflects the tax benefit that will be
reflected directly to stockholders' equity upon release. This tax benefit
relates to certain equity transactions that did not impact operating results,
such as those arising from the exercise of non-qualified stock options and
warrants. The deferred tax asset generated by the employees' exercise of
non-qualified options and warrants will serve to reduce future taxes to be paid
by LaserVision. During the year ended April 30, 2000, the tax benefit generated
by the exercise of non-qualified options and warrants of approximately $4.8
million was recorded as an increase in stockholders' equity. As management is
uncertain that total tax benefits generated by the exercise of non-qualified
options

                                       22
<PAGE>   23

and warrants will be utilized to offset future taxes, a valuation allowance of
$14.7 million has been recorded at April 30, 2000.

     Management will continue to review and assess the realizability of the
deferred tax assets on a quarterly basis. If LaserVision's profitability
continues, additional reductions in the valuation allowance, equity may be
recognized which will be recorded directly to equity and not affect net income.

     Regardless of when the reduction in the valuation allowance, equity is
released, the utilization of the remaining NOL's will substantially reduce
LaserVision's cash obligations for the payment of any income taxes otherwise due
over the next few years.

RISK FACTORS

     Risk factors associated with the successful implementation of our business
strategy include (i) the loss of or changes in key personnel, management or
directors; (ii) our inability to close on market development and partnership
agreements in the number and/or time frames projected; (iii) changes in state
and/or federal governmental regulations which could materially affect our
ability to operate; (iv) any adverse governmental or regulatory changes or
actions, including any healthcare regulations and related enforcement actions;
(v) competition from new and existing centers which use lasers to correct vision
and/or manufacturers; (vi) changes in commercial prices for our services due to
new developments in our markets; (vii) incorrect assumptions about the number of
procedures which doctors will perform on our lasers; (viii) new methods of
vision correction which could make our services less competitive or obsolete;
(ix) litigation claims that may arise; (x) unanticipated changes in vendor
relationships; and (xi) other factors including those identified in our filings
from time-to-time with the SEC.

YEAR 2000

YEAR 2000 COMPLIANCE

     We have experienced no adverse impact related to the onset of the year
2000. Our services, operations, customers, suppliers and service providers have
all continued to operate as usual. We do not anticipate any future problems with
respect to the onset of the year 2000.

NEW ACCOUNTING STANDARD

     In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards No. 137, "Accounting for Derivative
Instruments and Hedging Activities -- Deferral of the Effective Date of FASB
Statement No. 133" (SFAS 137). Statement on Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133)
provides standards on accounting and disclosure for derivative instruments, and
requires that all derivatives be measured at fair value and reported as either
assets or liabilities in LaserVision's Consolidated Balance Sheet. In accordance
with issuance of SFAS No. 137, LaserVision will be required to adopt the
provisions of SFAS 133 no later than the beginning of fiscal year 2001. Based
upon preliminary reviews of the provisions of this standard, LaserVision
believes that it will not have a significant impact on its financial position or
results of operations or have a material effect on its financial reporting.

     On December 3, 1999, the staff of the Securities and Exchange Commission
(SEC) issued Staff Accounting Bulletin No. 101 (SAB 101) "Revenue Recognition in
Financial Statements." This Bulletin provides specific guidance on the
recognition, presentation, and disclosure of revenue and related accounting
policies in financial statements. The provisions of SAB 101 must be applied by
LaserVision beginning in the fourth quarter of fiscal 2001. Based upon
preliminary reviews of the four criteria of revenue recognition specified within
SAB No. 101, we believe that our revenue recognition policies comply with the
bulletin.

MARKET RISK

     In the ordinary course of business, LaserVision is exposed to interest rate
risks and foreign currency risks, which we do not currently consider to be
material. These exposures primarily relate to having short-term
                                       23
<PAGE>   24

investments earning short-term interest rates and to having fixed rate debt.
LaserVision views its investment in foreign subsidiaries as a long-term
commitment, and does not hedge any translation exposures.

MARKETABLE EQUITY SECURITY PRICES

     Marketable equity securities at April 30, 2000 which were recorded at a
fair value of $2,325,000 have exposure to price risk. Market risk is estimated
as the potential loss in fair value resulting from a hypothetical 10% adverse
change in the security's quoted market price, and amounted to $232,500 at April
30, 2000.

                                       24
<PAGE>   25

ITEM 8

                  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                                                PAGE
                                                                ----
<S>                                                             <C>
Report of Independent Accountants...........................     F-1
Consolidated Balance Sheet at April 30, 2000 and 1999.......     F-2
Consolidated Statement of Operations for each of the three
  years in the period ended April 30, 2000..................     F-3
Consolidated Statement of Changes in Stockholders' Equity
  for each of the three years in the period ended April 30,
  2000......................................................     F-4
Consolidated Statement of Cash Flows for each of the three
  years in the period ended April 30, 2000..................     F-5
Notes to Consolidated Financial Statements..................     F-7
Financial Statement Schedules:
  VIII -- Valuation and Qualifying Accounts.................    F-27
</TABLE>

     All other schedules were omitted because they are not applicable or the
required information is shown in the Consolidated Financial Statements or notes
thereto.

ITEM 9

                       CHANGES IN AND DISAGREEMENTS WITH
               ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

                                       25
<PAGE>   26

                                    PART III

ITEM 10

                        DIRECTORS AND EXECUTIVE OFFICERS

     The directors, executive officers and key personnel of LaserVision, their
positions with LaserVision, and their ages are as follows:

<TABLE>
<CAPTION>
NAME                                            AGE   POSITION
----                                            ---   --------
<S>                                             <C>   <C>
John J. Klobnak..............................   49    Chairman of the Board, Chief Executive Officer
                                                      and member of Executive and Compensation
                                                        Committees
James C. Wachtman............................   39    President and Chief Operating Officer
Robert W. May................................   53    Vice-Chairman of the Board, General Counsel,
                                                        Secretary and member of Executive Committee
B. Charles Bono III..........................   52    Executive Vice President, Chief Financial
                                                      Officer and Treasurer
James B. Tiffany.............................   43    Vice President of Sales
James M. Garvey..............................   53    Director and member of Executive and Audit
                                                        Committees
Richard Lindstrom, M.D.......................   53    Director and member of Compensation Committee
Steven C. Straus.............................   44    Director and member of Audit Committee
</TABLE>

     John J. Klobnak.  Mr. Klobnak has served as Chairman of the Board and Chief
Executive Officer of LaserVision since July 1993. From 1990 to 1993, Mr. Klobnak
served as LaserVision's Chairman, President and Chief Executive Officer. From
1986 to 1990, he served as Chief Operating Officer and subsequently President of
MarketVision, a partnership acquired by LaserVision upon its inception in 1990.
Prior to 1986, Mr. Klobnak was engaged in marketing and consulting.

     James C. Wachtman.  Mr. Wachtman joined LaserVision as Chief Operating
Officer of North America operations effective June 1996 and became President in
August 1998. From 1983 until he joined LaserVision, Mr. Wachtman was employed in
various positions by McGaw, Inc., a manufacturer of medical disposables. Most
recently, he served as Vice President of Operations of CAPS, a hospital pharmacy
division of McGaw.

     Robert W. May.  Mr. May joined LaserVision as its Vice-Chairman and General
Counsel in September 1993. Prior to joining LaserVision as a full-time employee,
Mr. May served as Corporate Secretary, General Corporate Counsel and a director
of LaserVision. He was engaged in private legal practice in St. Louis, Missouri
from 1985 until 1993.

     B. Charles Bono III.  Mr. Bono joined LaserVision as Executive Vice
President, Chief Financial Officer and Treasurer in October 1992. From 1980 to
1992, Mr. Bono was employed by Storz Instrument Company (a global marketer of
ophthalmic devices and pharmaceutical products that is now a part of Bausch and
Lomb Surgical) serving as Vice President of Finance from 1987 to 1992.

     James B. Tiffany.  Mr. Tiffany joined LaserVision in December 1998 as Vice
President of Sales. For the prior thirteen years, Mr. Tiffany held a number of
positions with Storz Instrument Company and Bausch and Lomb Surgical. While with
Storz, Mr. Tiffany served as Director of Marketing and Vice President of Sales
and Marketing. From January 1998, he served as Vice President for Commercial
Operations for the U.S., Canada and Latin America for Bausch and Lomb Surgical.

     James M. Garvey.  Mr. Garvey has served as a director of LaserVision since
November 1995. Mr. Garvey serves as Chief Executive Officer and Managing Partner
of Schroder Ventures Life Sciences Advisors, a venture capital advisory company
which he joined in May 1995. From 1989 to 1995, Mr. Garvey was Director of
Allstate Venture Capital, the venture capital division of Allstate Corp. after
initially directing

                                       26
<PAGE>   27

Allstate Venture Capital's health care investment activity. Mr. Garvey is
currently a director of JCN Healthcare, Medcareers, Inc., Medcentral, Inc.,
Mednova Ltd., Orthovita, Inc. and has served as director and Chairman of several
public and private healthcare companies.

     Richard L. Lindstrom, M.D.  Dr. Lindstrom has served as a director of
LaserVision since November 1995. Since 1979, Dr. Lindstrom has been engaged in
the private practice of ophthalmology and has been the President of Minnesota
Eye Consultants P.A. or its predecessor since 1989. In 1989, Dr. Lindstrom
founded the Phillips Eye Institute Center for Teaching & Research, an ophthalmic
research and surgical skill education facility, and he currently serves as the
Center's Medical Director. Dr. Lindstrom has served as an Associate Director of
the Minnesota Lions Eye Bank since 1987. He is a medical advisor for several
medical device and pharmaceutical manufacturers and is on the Board of Directors
of Vision 21, Incorporated. From 1980 to 1989, he served as a Professor of
Ophthalmology at the University of Minnesota. Dr. Lindstrom received his M.D.,
B.A. and B.S. degrees from the University of Minnesota.

     Steven C. Straus.  Mr. Straus has served as a director of LaserVision since
January 1996. He currently serves as President and Chief Operating Officer of
the Jordan Industries, Inc. Healthcare Products Group. Prior to 1998, Mr. Straus
was Senior Vice President of the Ambulatory Surgery Division of Columbia/HCA and
was employed in a similar capacity with Medical Care America, Inc. from 1993
until Medical Care America was merged into Columbia/HCA in 1994. From 1986 to
1993, Mr. Straus held various positions with Baxter Healthcare Corporation.

     There are no family relationships between any of the directors or executive
officers of LaserVision.

                CERTAIN RELATIONSHIPS OF OFFICERS AND DIRECTORS

     In January 1999, we entered into a limited partnership agreement with
Minnesota Eye Consultants, P.A. for the operation of one of our roll-on/roll-off
mobile systems. Dr. Richard Lindstrom, a director and medical director of
LaserVision, is president of Minnesota Eye Consultants. LaserVision is the
general partner and owns 60% of the partnership. Minnesota Eye Consultants, P.A.
is a limited partner and owns 40% of the partnership. LaserVision contributed
equipment valued at $650,000 to the partnership and received $260,000 from
Minnesota Eye Consultants. LaserVision receives a revenue-based management fee
from the partnership. Dr. Lindstrom also owned 12.1% of MSS and receives 12.1%
of the contingent consideration earned by MSS during the earnout periods which
end on April 30 and July 31, 2000.

     Dr. Lindstrom receives compensation from LaserVision in his capacity as
medical director for both LaserVision and its mobile cataract subsidiary, MSS.

               COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

     As required by the Securities and Exchange Commission rules under Section
16 of the Securities Exchange Act of 1934, as amended, we note that during the
fiscal year ended April 30, 2000, all reports regarding transactions in
LaserVision's common stock were filed timely.

                                       27
<PAGE>   28

ITEM 11

                             EXECUTIVE COMPENSATION

     The following table sets forth the compensation paid to five officers
earning total compensation at annual rates in excess of $100,000 during the
fiscal year ended April 30, 2000:

<TABLE>
<CAPTION>
                                                                                          WARRANTS
NAME AND PRINCIPAL POSITION         FISCAL YEAR    SALARY(A)     BONUS(B)    OTHER(C)    AND OPTIONS
---------------------------         -----------    ---------     --------    --------    -----------
<S>                                 <C>            <C>           <C>         <C>         <C>
John J. Klobnak...................  April 2000     $270,000      $124,564     $5,000       450,000(d)
  Chief Executive Officer           April 1999     $228,025      $208,189     $5,000       100,000(f)
                                    April 1998     $202,700      $144,999     $4,750       150,000(h)
James C. Wachtman.................  April 2000     $250,000      $113,199     $5,000       450,000(d)
  President and Chief Operating
     Officer                        April 1999     $200,000      $150,714     $5,000        80,000(f)
                                    April 1998     $160,000      $ 96,746     $4,750       110,000(h)
Robert W. May.....................  April 2000     $220,000      $ 78,859     $5,000       270,000(d)
  Secretary and General Counsel     April 1999     $186,975      $114,354     $5,000        60,000(f)
                                    April 1998     $166,200      $ 85,185     $4,750       100,000(h)
B. Charles Bono...................  April 2000     $200,000      $ 73,305     $5,000       270,000(d)
  Exec. VP, CFO and Treasurer       April 1999     $171,800      $106,279     $5,000        60,000(f)
                                    April 1998     $152,700      $ 79,743     $4,750       100,000(h)
James B. Tiffany..................  April 2000     $163,000      $ 40,000     $5,000        35,000(e)
  Vice President-Sales              April 1999     $155,000(a1)  $ 10,000     $    0        40,000(g)
</TABLE>

---------------

(a)  Annual compensation rate during the fiscal year ended April 30th.

(a1) Effective January 18, 1999.

(b)  Earned during fiscal year but paid in the following fiscal year.

(c)  LaserVision matching contribution to 401(k) plan.

(d)  Two thirds with exercise price of $27.53 per share, one third with exercise
     price of $8.875 per share.

(e)  Warrants with exercise price of $8.875 per share.

(f)  Warrants and options with exercise price of $4.50 per share.

(g)  Warrants and options with exercise price of $9.00 per share.

(h)  Warrants and options with exercise price of $3.72 per share.

                                       28
<PAGE>   29

                   WARRANT AND OPTION GRANTS LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                              PERCENT OF
                                                                TOTAL
                                                               OPTIONS/
                                                 NUMBER OF     WARRANTS    EXERCISE
                                                OPTIONS AND   GRANTED TO     PRICE     EXPIRATION DATE/
NAME/POSITION                                    WARRANTS     EMPLOYEES    PER SHARE   GRANT DATE VALUE
-------------                                   -----------   ----------   ---------   ----------------
<S>                                             <C>           <C>          <C>         <C>
John J. Klobnak                                                                           June 2004
  Chief Executive Officer....................     300,000                   $27.531       $3,147,000
                                                                                         October 2004
                                                  150,000        23.7%      $ 8.875        $549,000
James C. Wachtman                                                                         June 2004
  President and Chief Operating Officer......     300,000                   $27.531       $3,147,000
                                                                                         October 2004
                                                  150,000        23.7%      $ 8.875        $549,000
Robert W. May                                                                             June 2004
  Secretary and General Counsel..............     180,000                   $27.531       $1,888,200
                                                                                         October 2004
                                                   90,000        14.2%      $ 8.875        $329,400
B. Charles Bono                                                                           June 2004
  Exec. V.P., CFO and Treasurer..............     180,000                   $27.531       $1,888,200
                                                                                         October 2004
                                                   90,000        14.2%      $ 8.875        $329,400
James B. Tiffany                                                                         October 2004
  V.P. -- Sales..............................      40,000         2.1%      $ 8.875        $146,400
</TABLE>

     The warrants have a five year term and vest ratably over three years
(except for the $27.531 warrants which vest over two years). The exercisability
of these warrants may accelerate in the event of a change in control of the
company. The Black-Scholes option pricing model was used to determine the value
of options and warrants issued as of the grant date using the following
assumptions, dividend yield -- none, 5% to 5.9% risk free rate of return, 56% to
60% volatility, and expected time of exercise -- thirty months. The grant date
values do not take into account risk factors such as non-transferability and
limits on exercisability. The ultimate value of a stock warrant or option will
depend on the market value of LaserVision's stock at a future date and could
vary significantly from the theoretical Black-Scholes value.

            AGGREGATED OPTION/WARRANT EXERCISES IN LAST FISCAL YEAR
                   AND FISCAL YEAR END OPTION/WARRANT VALUES

<TABLE>
<CAPTION>
                                                                      OPTIONS AND WARRANTS AT FISCAL YEAR END
                                                               -----------------------------------------------------
                                                                 NUMBER OF SECURITIES        VALUE OF UNEXERCISED
                       # OF SHARES ACQUIRED                     UNDERLYING UNEXERCISED           IN-THE-MONEY
                           ON EXERCISE        VALUE REALIZED   EXERCISABLE/UNEXERCISABLE   EXERCISABLE/UNEXERCISABLE
                       --------------------   --------------   -------------------------   -------------------------
<S>                    <C>                    <C>              <C>                         <C>
John J. Klobnak......        220,000            $4,950,618          589,000/437,500                $77,344/$25,781
James C. Wachtman....        139,000            $2,418,100          478,500/386,500                $70,679/$18,906
Robert W. May........        219,948            $4,738,651          367,452/267,500                $43,011/$17,188
B. Charles Bono......        207,708            $3,564,054          259,792/267,500                $27,500/$17,188
James B. Tiffany.....            N/A                   N/A            32,750/87,250                          $0/$0
</TABLE>

     The value of the unexercised in-the-money options and warrants was
calculated using the $4.063 closing price per share of our common stock on April
30, 2000 minus the exercise price.

                                       29
<PAGE>   30

ITEM 12

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table and notes thereto set forth certain information
regarding beneficial ownership of LaserVision's common stock as of June 29, 2000
by (i) all those known by us to be beneficial owners of more than 5% of our
common stock, (ii) all of our directors and (iii) all directors and executive
officers of LaserVision as a group.

<TABLE>
<CAPTION>
                                         TOTAL NUMBER    PERCENTAGE OF      WARRANTS      WARRANTS AND
                                          OF SHARES      COMMON SHARES    AND OPTIONS     OPTIONS NOT
DIRECTORS, EXECUTIVE OFFICERS            BENEFICIALLY    BENEFICIALLY     BENEFICIALLY     PRESENTLY
5% SHAREHOLDERS                             OWNED            OWNED           OWNED        EXERCISABLE
-----------------------------            ------------    -------------    ------------    ------------
<S>                                      <C>             <C>              <C>             <C>
John J. Klobnak........................     791,597           3.2%           589,000         437,500
James C. Wachtman......................     495,080           2.0%           478,500         386,500
Robert W. May..........................     391,633           1.6%           367,452         267,500
B. Charles Bono........................     302,531           1.2%           259,792         267,500
James B. Tiffany.......................      32,750           0.1%            32,750          87,250
James M. Garvey........................      26,882           0.1%            25,682          42,676
  One Beacon Street, Suite 4500
  Boston, MA 02108
Richard L. Lindstrom, M.D..............     250,724           1.0%           187,324         122,676
  710 East 24th Street
  Minneapolis, MN 55391
Steven C. Straus.......................      27,346           0.1%            27,346          42,676
  1751 Lake Cook Road, Suite 550
  Deerfield, IL 60015
All officers and directors as a group
  (8 persons)(1)(2)....................   2,318,543           8.9%         1,967,846       1,654,278
</TABLE>

     Pursuant to the rules of the Securities and Exchange Commission, shares of
common stock which an individual or group has a right to acquire within sixty
days pursuant to the exercise of options or warrants are deemed to be
outstanding for the purpose of computing the percentage of ownership of such
individual or group, but are not deemed to be outstanding for the purpose of
computing the percentage ownership of any other person shown in the table. Total
Number of Shares Beneficially Owned takes into account the possible exercise of
the outstanding options granted under the Incentive Stock Option Plan, the
Non-Qualified Stock Option Plan, the Non-Qualified Warrant Plan and other
warrants which are presently exercisable (Warrants and Options Beneficially
Owned) and the vested LaserVision stock in the 401(k) plan.

(1) Includes presently exercisable options and warrants to purchase an aggregate
    of 1,727,494 shares of common stock granted to five executive officers (two
    of which are also directors) of LaserVision. An additional 1,446,250 options
    and warrants to purchase shares of common stock are owned but are not
    presently exercisable by these executive officers.

(2) Includes presently exercisable options and warrants to purchase an aggregate
    of 1,196,804 shares of common stock granted to directors (two of which are
    also executive officers of LaserVision). An additional 913,028 options and
    warrants to purchase shares of common stock are owned but not presently
    exercisable by these directors.

     As required by the Securities and Exchange Commission rules under Section
16 of the Securities and Exchange Act of 1934, we note that during the fiscal
year ended April 30, 2000, all reports regarding transactions in LaserVision's
common stock were timely filed.

                                       30
<PAGE>   31

ITEM 13

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     All directors hold office until the next annual meeting of stockholders or
the election and qualification of their successors. Other than Non-Qualified
Stock Options and/or warrants, directors of LaserVision do not receive any
compensation for their services as members of the Board of Directors, except for
directors who have no affiliation with LaserVision who receive $1,500 per Board
meeting attended. Directors are entitled to reimbursement for expenses incurred
in connection with their attendance at Board of Directors meetings. Officers are
appointed by the Board of Directors and serve at the discretion of the Board.

     James M. Garvey is a member of the Board of Directors and is affiliated
with Schroder Ventures Life Sciences Advisors, Inc., formerly a beneficial owner
of 1,666,665 shares of LaserVision's common stock.

ITEM 14

                        EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
<S>      <C>
 3.0*    Company's Certificate of Incorporation and Amendment.
 3.1*    Company's Restated Certificate of Incorporation.
 3.2*    Form of Company's By-Laws, as amended.
 3.2**   Amendment to Form of Company's By-Laws.
 4.1*    Specimen Stock Certificate.
 4.2***  Stock Purchase warrant (Initial Warrant)
 4.3***  Registration Rights Agreement
 4.4***  Form of Stock Purchase Warrant (Additional Warrant)
21.0**   Subsidiaries of the Company -- Page 32
23.0**   Consent of Independent Accountants, PricewaterhouseCoopers
         LLP
</TABLE>

---------------

*   Incorporated by reference from Registration Statement No. 33-33843 effective
    on April 3, 1991.

**  Filed herewith.

*** Incorporated by reference from Form 8-K filed July 1, 1997.

REPORTS ON FORM 8-K

     The following reports on Form 8-K were filed during the last quarter of the
period covered by this report:

     On March 22, 2000, LaserVision filed a report on Form 8-K concerning the
share repurchase program.

     On April 12, 2000, LaserVision filed a report on Form 8-K concerning
forward-looking statements and risk factors.

     On April 21, 2000, LaserVision filed a report on Form 8-K concerning the
Company being served with an administrative complaint issued by the Center For
Devices and Radiological Health of the United States Food and Drug
Administration (FDA).

                                       31
<PAGE>   32

                          SUBSIDIARIES OF LASERVISION

<TABLE>
<C>  <S>
 1.  Laservision (Europe) Limited
     -- incorporated under the laws of England;
 2.  Laser Vision Centres Limited
     -- incorporated under the laws of England;
 3.  Laser Vision Limited
     -- incorporated under the laws of England;
 4.  Laservision Harley Street Limited
     -- incorporated under the laws of England
     -- doing business under the name Harley Street Laser Vision
     Centre;
 5.  LVCI Holdings, Inc.
     -- incorporated under the laws of Delaware
 6.  Midwest Surgical Services, Inc.;
     -- incorporated under the laws of Minnesota
 7.  Refractive Surgical Resources, Inc.;
     -- incorporated under the laws of Minnesota
 8.  LVCI Management (Ontario) Inc.;
     -- incorporated under the laws of the Province of Ontario,
     Canada;
     -- doing business under the name St. Catharines Laser Vision
     Center;
 9.  LVCI Management (Quebec) Inc. (inactive)
     -- incorporated under the Quebec Companies Act in the
     Province of Quebec, Canada;
10.  LVCI Management (B.C.) Inc.; (inactive)
     -- incorporated under the laws of the Province of British
     Columbia;
</TABLE>

                                       32
<PAGE>   33

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                          LASER VISION CENTERS, INC.

                                          By:      /s/ JOHN J. KLOBNAK
                                            ------------------------------------
                                                      John J. Klobnak
                                                  Chief Executive Officer

                                          By:       /s/ CHARLES BONO
                                            ------------------------------------
                                                      B. Charles Bono
                                                Principal Accounting Officer

     Date: July 28, 2000

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant in the capacities and on the
dates indicated.

<TABLE>
<CAPTION>
                  SIGNATURE                                     TITLE                        DATE
                  ---------                                     -----                        ----
<C>                                            <S>                                       <C>
             /s/ JOHN J. KLOBNAK               CEO, Chairman of Board of Directors       July 28, 2000
---------------------------------------------
               John J. Klobnak

             /s/ B. CHARLES BONO               Exec. VP, CFO and Treasurer               July 28, 2000
---------------------------------------------
               B. Charles Bono

              /s/ ROBERT W. MAY                Secretary, Director                       July 28, 2000
---------------------------------------------
                Robert W. May

             /s/ JAMES M. GARVEY               Director                                  July 28, 2000
---------------------------------------------
               James M Garvey

       /s/ RICHARD L. LINDSTROM, M.D.          Director                                  July 28, 2000
---------------------------------------------
         Richard L. Lindstrom, M.D.

            /s/ STEVEN C. STRAUS               Director                                  July 28, 2000
---------------------------------------------
              Steven C. Straus

            /s/ JAMES C. WACHTMAN              President and Chief Operating Officer     July 28, 2000
---------------------------------------------
              James C. Wachtman
</TABLE>

                                       33
<PAGE>   34

                       REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Laser Vision Centers, Inc.

     In our opinion, the consolidated financial statements in the accompanying
index present fairly, in all material respects, the financial position of Laser
Vision Centers, Inc. and its subsidiaries at April 30, 2000 and 1999, and the
results of their operations and their cash flows for each of the three years in
the period ended April 30, 2000 in conformity with accounting principles
generally accepted in the United States. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
St. Louis, Missouri

June 14, 2000

                                       F-1
<PAGE>   35

                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
                                                                        APRIL 30,
                                                              -----------------------------
                                                                  2000            1999
                                                              ------------    -------------
<S>                                                           <C>             <C>
ASSETS
Current assets:
  Cash and cash equivalents.................................  $ 17,702,000    $   8,173,000
  Short-term investments....................................    31,440,000
  Restricted cash...........................................                        507,000
  Accounts receivable, net of allowance of $589,000 and
    $450,000, respectively..................................    11,055,000        8,540,000
  Inventory.................................................     2,978,000        2,723,000
  Deferred tax asset (Note 10)..............................     3,680,000        1,755,000
  Prepaid expenses and other current assets.................     1,407,000        1,713,000
    Total current assets....................................    68,262,000       23,411,000
Property and equipment:
  Laser equipment (Notes 7 and 8)...........................    30,654,000       21,795,000
  Medical equipment (Notes 7 and 8).........................     5,901,000        3,274,000
  Mobile equipment..........................................    10,677,000        7,611,000
  Furniture and fixtures....................................     2,979,000        1,722,000
                                                                50,211,000       34,402,000
Less-accumulated depreciation...............................   (22,183,000)     (13,419,000)
    Net property and equipment..............................    28,028,000       20,983,000
Deferred tax asset (Note 10)................................     6,309,000
Other assets (Note 6).......................................    20,668,000        8,795,000
TOTAL.......................................................  $123,267,000    $  53,189,000
LIABILITIES, MINORITY INTEREST, REDEEMABLE
    PREFERRED STOCK AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of notes payable (Note 7).................  $  8,323,000    $   4,552,000
  Current portion of obligations under capital leases (Note
    8)......................................................     1,006,000        1,290,000
  Accounts payable..........................................     4,268,000        5,185,000
  Taxes payable.............................................       204,000          266,000
  Accrued compensation......................................     1,549,000        2,004,000
  Other accrued liabilities.................................     8,771,000        3,009,000
    Total current liabilities...............................    24,121,000       16,306,000
Non-current liabilities:
  Notes payable (Note 7)....................................     4,025,000        5,687,000
  Capital lease obligations (Note 8)........................     1,853,000        2,097,000
  Other.....................................................
    Total non-current liabilities...........................     5,878,000        7,784,000
Minority interests (Note 5).................................     1,354,000          352,000
Commitments and contingencies (Notes 11 and 12)
Series B Convertible Preferred Stock with Mandatory
  Redemption Provisions.....................................     2,295,000        2,086,000
Stockholders' equity (Notes 13 and 14):
  Common stock, par value $.01 per share, 100,000,000 and
    50,000,000 (pre-split) authorized, respectively;
    25,330,991 and 10,684,788 (pre-split) shares issued and
    outstanding, respectively...............................       253,000          107,000
  Warrants and options......................................       915,000        1,213,000
  Paid-in-capital and other.................................   107,875,000       50,808,000
  Treasury stock at cost....................................    (7,514,000)
  Accumulated deficit.......................................   (11,910,000)     (25,467,000)
    Total stockholders' equity..............................    89,619,000       26,661,000
TOTAL.......................................................  $123,267,000    $  53,189,000
</TABLE>

                See Notes to Consolidated Financial Statements.
                                       F-2
<PAGE>   36

                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                YEARS ENDED APRIL 30,
                                                      -----------------------------------------
                                                         2000           1999           1998
                                                      -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>
Revenues............................................  $88,055,000    $52,359,000    $23,469,000
Cost of revenue
  Royalty fees and professional medical services....   29,741,000     17,677,000      8,030,000
  Depreciation and amortization.....................    9,247,000      5,684,000      4,435,000
  Other costs (Note 2)..............................   20,512,000     11,307,000      4,285,000
     Gross profit...................................   28,555,000     17,691,000      6,719,000
Selling, general and administrative expenses........   17,702,000     11,809,000      9,592,000
Vendor program change expense (Note 2)..............    2,043,000
     Income (loss) from operations..................    8,810,000      5,882,000     (2,873,000)
Other income (expenses):
  Interest expense..................................   (1,129,000)    (1,154,000)    (1,000,000)
  Interest income and other.........................    3,108,000        415,000        377,000
  Minority interest in net income of subsidiaries
     (Note 5).......................................     (325,000)       (92,000)            --
  Net income (loss) before taxes....................   10,464,000      5,051,000     (3,496,000)
  Income tax benefit................................    3,394,000      1,489,000
  Net income (loss).................................   13,858,000      6,540,000     (3,496,000)
  Deemed preferred dividends........................     (209,000)      (171,000)    (1,930,000)
  Net income (loss) applicable to common
     stockholders...................................  $13,649,000    $ 6,369,000    $(5,426,000)
  Net income (loss) per share -- basic..............  $       .55    $       .31    $      (.30)
  Net income (loss) per share -- diluted............  $       .49    $       .27    $      (.30)
Weighted average number of common shares
  outstanding, basic................................   24,884,000     20,290,000     18,356,000
Weighted average number of common shares
  outstanding, diluted..............................   28,460,000     23,930,000     18,356,000
</TABLE>

                See Notes to Consolidated Financial Statements.
                                       F-3
<PAGE>   37

                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                    FOR THE THREE YEARS ENDED APRIL 30, 2000
<TABLE>
<CAPTION>
                                                                            ACCUMULATED
                                        COMMON STOCK                           OTHER                                    WARRANTS
                                    ---------------------     PAID-IN      COMPREHENSIVE    TREASURY     ACCUMULATED       AND
                                      SHARES      AMOUNT      CAPITAL         INCOME          STOCK        DEFICIT       OPTIONS
                                    ----------   --------   ------------   -------------   -----------   ------------   ---------
<S>                                 <C>          <C>        <C>            <C>             <C>           <C>            <C>
Balance at April 30, 1997 (split
 adjusted)........................   8,817,057   $ 88,000   $ 38,663,000     $      --     $        --   $(28,511,000)  $  36,000
Issuance of warrants and preferred
 stock with beneficial conversion
 feature..........................                             3,667,000                                                  245,000
Exercise of incentive and
 non-qualified options and
 warrants.........................     410,123      4,000      2,178,000
Deemed dividends on convertible
 preferred stock (Note 9).........                            (1,930,000)
Conversion of preferred stock
 (Note 9).........................     452,146      5,000      1,585,000
Warrants and options issued (Note
 14)..............................                                                                                        980,000
Shares issued to 401(k) plan for
 employees........................       7,997                    64,000
Net loss for the year ended April
 30, 1998.........................                                                  --              --    (3,496,000)
                                    ----------   --------   ------------     ---------     -----------   ------------   ---------
Balance at April 30, 1998 (split
 adjusted)........................   9,687,323     97,000     44,227,000            --              --   (32,007,000)   1,261,000
Exercise of incentive and
 non-qualified options and
 warrants.........................     984,896     10,000      6,552,000                                                 (221,000)
Deemed dividends on convertible
 preferred stock (Note 9).........                              (171,000)
Warrants and options issued (Note
 14)..............................                                                                                        173,000
Shares issuable to 401(k) plan for
 employees........................      12,569                   200,000
Net income for the year ended
 April 30, 1999...................                                                  --                     6,540,000
                                    ----------   --------   ------------     ---------     -----------   ------------   ---------
Balance at April 30, 1999 (split
 adjusted)........................  10,684,788    107,000     50,808,000            --              --   (25,467,000)   1,213,000
Secondary stock Offering..........   1,000,000     10,000     43,624,000
Exercise of incentive and
 non-qualified options and
 warrants.........................   1,191,697     11,000      8,938,000                                                 (332,000)
Warrants and options issued.......                                                                                         34,000
Dividends accrued on convertible
 Preferred stock with mandatory
 redemption in 2005 (Note 9)......                              (209,000)
Shares issued to 401(k) plan for
 employees........................     (31,875)                  (82,000)                      439,000
Stock issued for contract
 rights...........................      23,400                   250,000
Net operating loss carryforward
 related to stock options and
 warrants (Note 10)...............                             4,840,000
Stock split.......................  12,462,981    125,000       (125,000)                                                      --
Treasury stock purchased, net.....                                                          (7,953,000)     (301,000)
Comprehensive income:
 Net income for the year ended
   April 30, 2000.................                                                                        13,858,000
 Unrealized holding loss on
   investment.....................                                            (169,000)
Total comprehensive income........
                                    ----------   --------   ------------     ---------     -----------   ------------   ---------
Balance April 30, 2000............  25,330,991   $253,000   $108,044,000     $(169,000)    $(7,514,000)  $(11,910,000)  $ 915,000
                                    ==========   ========   ============     =========     ===========   ============   =========

<CAPTION>

                                        TOTAL
                                    STOCKHOLDERS'
                                       EQUITY
                                    -------------
<S>                                 <C>
Balance at April 30, 1997 (split
 adjusted)........................   $10,276,000
Issuance of warrants and preferred
 stock with beneficial conversion
 feature..........................     3,912,000
Exercise of incentive and
 non-qualified options and
 warrants.........................     2,182,000
Deemed dividends on convertible
 preferred stock (Note 9).........    (1,930,000)
Conversion of preferred stock
 (Note 9).........................     1,590,000
Warrants and options issued (Note
 14)..............................       980,000
Shares issued to 401(k) plan for
 employees........................        64,000
Net loss for the year ended April
 30, 1998.........................    (3,496,000)
                                     -----------
Balance at April 30, 1998 (split
 adjusted)........................    13,578,000
Exercise of incentive and
 non-qualified options and
 warrants.........................     6,341,000
Deemed dividends on convertible
 preferred stock (Note 9).........      (171,000)
Warrants and options issued (Note
 14)..............................       173,000
Shares issuable to 401(k) plan for
 employees........................       200,000
Net income for the year ended
 April 30, 1999...................     6,540,000
                                     -----------
Balance at April 30, 1999 (split
 adjusted)........................    26,661,000
Secondary stock Offering..........    43,634,000
Exercise of incentive and
 non-qualified options and
 warrants.........................     8,617,000
Warrants and options issued.......        34,000
Dividends accrued on convertible
 Preferred stock with mandatory
 redemption in 2005 (Note 9)......      (209,000)
Shares issued to 401(k) plan for
 employees........................       357,000
Stock issued for contract
 rights...........................       250,000
Net operating loss carryforward
 related to stock options and
 warrants (Note 10)...............     4,840,000
Stock split.......................
Treasury stock purchased, net.....    (8,254,000)
Comprehensive income:
 Net income for the year ended
   April 30, 2000.................
 Unrealized holding loss on
   investment.....................
Total comprehensive income........    13,689,000
                                     -----------
Balance April 30, 2000............   $89,619,000
                                     ===========
</TABLE>

                See Notes to Consolidated Financial Statements.
                                       F-4
<PAGE>   38

                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                               YEARS ENDED APRIL 30,
                                                    -------------------------------------------
                                                        2000            1999           1998
                                                    -------------    -----------    -----------
<S>                                                 <C>              <C>            <C>
Cash flows from operating expenses:
  Net income (loss)...............................  $  13,858,000    $ 6,540,000    $(3,496,000)
  Adjustments to reconcile net loss to net cash
     provided by operating activities:
     Depreciation and amortization................     10,368,000      6,385,000      4,925,000
     Deferred income taxes........................     (3,394,000)    (1,755,000)
     Compensation paid in common stock............        145,000        461,000        326,000
     Minority interest in net income of
       subsidiaries...............................        325,000         92,000
     Changes in operating assets and liabilities,
       excluding the effects of acquisitions:
       Increase in accounts receivable............     (2,515,000)    (3,697,000)    (1,784,000)
       Increase in inventory......................       (255,000)      (846,000)      (647,000)
       (Increase) decrease in prepaid expenses and
          other assets............................        306,000     (1,179,000)      (146,000)
       Increase (decrease) in accounts payable....       (917,000)     1,880,000        590,000
       Increase (decrease) in accrued
          liabilities.............................      5,245,000       (110,000)     1,257,000
Net cash provided by operating activities.........     23,166,000      7,771,000      1,025,000
Cash flows from investing activities:
  Purchase of short-term investments..............   (132,570,000)
  Sale of short-term investments..................     98,636,000
  Acquisition of equipment........................     (9,333,000)    (5,258,000)    (4,132,000)
  Proceeds from sale of minority interest.........        803,000        260,000
  Business acquisitions and partnership
     investments, net of cash acquired, and
     other........................................     (7,797,000)    (3,137,000)       (13,000)
Net cash used by investing activities.............    (50,261,000)    (8,135,000)    (4,145,000)
Cash flows from financing activities:
  Proceeds from secondary stock offering..........     44,150,000
  Stock offering costs............................       (104,000)
  Proceeds from exercise of incentive and
     nonqualified stock options and warrants......      8,617,000      6,341,000      2,182,000
  Purchase of treasury stock, net.................     (7,815,000)
  Proceeds paid to minority shareholders..........       (388,000)
  Proceeds from private offering, preferred.......                                    6,000,000
  Private placement offering costs, preferred.....                                     (513,000)
  Increase in deferred stock offering costs.......                      (168,000)
  Return of restricted cash.......................      1,132,000        313,000        255,000
  Proceeds from loan financings...................                                    1,863,000
  Principal payments under capitalized lease
     obligations and notes payable................     (8,968,000)    (6,379,000)    (2,031,000)
Net cash provided by financing activities.........     36,624,000        107,000      7,756,000
       Net increase (decrease) in cash and cash
          equivalents.............................      9,529,000       (257,000)     4,636,000
Cash and cash equivalents at beginning of year....      8,173,000      8,430,000      3,794,000
Cash and cash equivalents at end of year..........  $  17,702,000    $ 8,173,000    $ 8,430,000
</TABLE>

                 See Notes to Consolidated Financial Statements
                                       F-5
<PAGE>   39

                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
                                                                YEARS ENDED APRIL 30,
                                                       ----------------------------------------
                                                          2000          1999           1998
                                                       ----------    -----------    -----------
<S>                                                    <C>           <C>            <C>
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND
  FINANCING ACTIVITIES:
  Capital lease obligations and notes payable related
     to laser and equipment purchases................  $7,076,000    $ 3,824,000    $ 2,177,000
  Notes issued for contract rights...................   3,500,000
  Deemed preferred dividends.........................     209,000        171,000      1,930,000
  Conversion of preferred stock and value assigned to
     warrants........................................                                 2,128,000
  Accrued stock offering costs.......................    (412,000)       244,000
  Refractive Services Management Organization:
     Stock or stock options issued for contract
       rights........................................     250,000                    (1,092,000)
     Contract rights surrendered.....................                                 1,044,000
     Net equipment returned..........................                                   233,000
     Lease obligation returned.......................                                   215,000
  Warrants issued for equipment purchase and future
     services........................................                    106,000        718,000
ACQUISITIONS -- Fair value of assets acquired........                 13,286,000
  Liabilities assumed and seller financing
     obtained........................................                 10,018,000
  Common stock issued................................
  Cash paid..........................................                  3,268,000
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
  Cash paid during the period for interest...........  $1,129,000    $ 1,160,000    $ 1,010,000
  Cash paid during the year for income taxes.........      62,000
</TABLE>

                See Notes to Consolidated Financial Statements.
                                       F-6
<PAGE>   40

                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   NATURE OF ORGANIZATION

     Laser Vision Centers, Inc. (LaserVision) provides excimer lasers and other
equipment to eye surgeons for the treatment of nearsightedness, farsightedness,
astigmatism and cataracts and related support services. We are one of the
largest providers of access to such equipment and services in the U.S. Much of
our equipment is mobile, and we routinely move it from location to location in
response to customer demand. We also provide our equipment at fixed locations.
Our flexible delivery system enlarges the pool of potential locations, eye
surgeons and patients that we can serve, and allows us to effectively respond to
changing market demands.

     Excimer lasers can be used with microkeratomes to perform procedures known
as laser in situ keratomiliusis (LASIK) and photorefractive keratectomy (PRK) to
reshape the cornea, thereby adjusting its refractive power, which in turn
eliminates or reduces the need for corrective lenses.

     Eye surgeons pay us a fee for each procedure they perform using our
equipment. We typically provide each piece of equipment to many different eye
surgeons, which allows us to more efficiently use the equipment and offer it at
an affordable price. We refer to our practice of providing equipment to multiple
eye surgeons as "shared access".

     Eye surgeons take advantage of our shared access and flexible delivery
system for a variety of reasons including the ability to:

     -- avoid a large capital investment

     -- eliminate the risks associated with buying high-technology equipment
        that may rapidly become obsolete

     -- use the equipment without responsibility for maintenance or repair

     -- cost effectively serve small to medium-sized markets and remote
        locations

     -- serve satellite locations even in large markets

     -- benefit from our other clinical and marketing resources

     -- patient financing programs

     We provide a broad range of value-added services to the eye surgeons who
use our equipment, including initial training, technical support and equipment
maintenance, marketing, clinical advisory service, patient financing and
practice satelliting. Eye surgeons who are developing their practices, or who
perform limited numbers of procedures, find our support services particularly
attractive. We continue to look for ways to expand our support services, so that
we can offer value to those surgeons who perform enough procedures to otherwise
justify the purchase of their own equipment.

     We provide mobile cataract equipment and services through our Midwest
Surgical Services, Inc. (MSS) subsidiary which focuses on developing
relationships between local hospitals, referring optometrists and eye surgeons
in small to medium sized markets. In this way, we expand the demand for "close
to home" cataract surgery which we make economically feasible through our
shared-access approach and mobile systems.

     Our excimer laser and cataract businesses are operated relatively
separately at this time. We entered the cataract business with our purchase of
MSS in December 1998. At the time of that purchase, approximately 80% of the eye
surgeons using MSS services were not performing excimer laser surgery. We expect
over time to cross market both our excimer laser and cataract services to the
surgeons we serve.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the U.S. requires management to make estimates
and assumptions that affect the reported amounts of assets and

                                       F-7
<PAGE>   41
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

liabilities, disclosure of contingent assets and liabilities, as well as the
reported amounts of revenue and expenses. Actual results could differ from those
estimates.

BASIS OF CONSOLIDATION

     The consolidated financial statements include the accounts of LaserVision
and its wholly and majority-owned subsidiaries including seven majority owned
partnerships which are new during fiscal 2000. All significant intercompany
accounts and transactions have been eliminated.

CASH EQUIVALENTS

     We consider unrestricted cash, as well as short-term investments purchased
with an original maturity of three months or less, to be cash equivalents. Cash
and cash equivalents included money market funds of $1,591,000 and $4,411,000 at
April 30, 2000 and 1999, respectively.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     For purposes of financial reporting, we have determined that the fair value
of our financial instruments, including cash and cash equivalents, short-term
investments, accounts receivable, restricted cash and notes payable approximates
book value at April 30, 2000 and 1999, based on terms currently available to us
in financial markets.

CREDIT RISK

     Financial instruments which potentially subject LaserVision to
concentrations of credit risk consist principally of funds held in commercial
paper, money market accounts and trade receivables.

     As of April 30, 2000 and 1999, we have deposited $45,353,000 and
$4,411,000, respectively, in government obligations, commercial paper and money
market accounts at financial institutions. Management believes the credit risk
related to these funds is limited due to the short-term nature of the accounts.

     Minnesota Eye Consultants, P.A. (MEC) has multiple locations and accounted
for 2%, 3% and 21% of total revenues in fiscal 2000, 1999, and 1998,
respectively and 2% and 2% of accounts receivable at April 30, 2000 and 1999,
respectively. Management believes the credit risk related to its trade
receivables, and the patient notes with recourse to LaserVision (see Note 11),
is limited due to our large number of customers and because our allowance for
doubtful accounts of $589,000 and $450,000 at April 30, 2000 and 1999,
respectively, is adequate.

INVENTORIES

     Inventory is recorded at cost and includes key cards which operate the
lasers, lenses and medical supplies. Inventories are stated net of a reserve for
estimated excess and obsolete inventory of $181,000 and $44,000 at April 30,
2000 and 1999, respectively.

PROPERTY AND EQUIPMENT

     Property and equipment is stated at cost. Long-lived assets determined to
be impaired are stated at the estimated fair value at the date impairment was
determined. Expenditures for repairs and maintenance are charged to expense as
incurred. Depreciation and amortization are computed utilizing the straight-line
method. In the opinion of management, this method is adequate to allocate the
cost of equipment over its estimated useful lives which range from four to five
years. Depreciation for lasers, mobile equipment and medical equipment is
included in cost of revenues. Depreciation for leasehold improvements, furniture
and fixtures is classified as a selling, general and administrative expense.

                                       F-8
<PAGE>   42
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

IMPAIRMENT OF LONG-LIVED ASSETS

     We review for the impairment of long-lived assets when events or changes in
circumstances indicate that an asset's carrying value may not be recoverable. In
reviewing for impairment, if the carrying value of an asset is greater than the
sum of the undiscounted projected cash flows attributable to that asset, an
impairment loss is recognized. The impairment loss is based on the fair value of
the asset which is determined based on market prices, discounted cash flows or
the best information available. In instances where goodwill is identified with
assets that are subject to an impairment analysis, goodwill is allocated to the
assets being tested for recoverability on a pro rata basis using the relative
fair values of the long-lived assets and identifiable intangibles acquired at
the acquisition date. The grouping level of cash flows used in an impairment
analysis is the lowest level for which there are identifiable cash flows that
are largely independent of the cash flows of other groups of assets. This level
is generally on the individual fixed site or laser basis.

OTHER ASSETS

     Costs of goodwill, tradename, servicemark and deferred contract rights are
being amortized over 5 to 15 years. The carrying value of goodwill is assessed
for recoverability by management based on an analysis of undiscounted projected
cash flows from the underlying operations. If the carrying value of goodwill is
determined to not be recoverable, a writedown of goodwill will be recognized to
the extent expected future discounted cash flows are less than the carrying
value of goodwill.

STOCK-BASED COMPENSATION

     In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation" (SFAS 123) which defines the fair value based method of accounting
for stock options, purchase and award plans. SFAS 123 allows companies to use
the fair value method defined in the Statement or to continue use of the
intrinsic value method as outlined in Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25). LaserVision utilizes
APB 25 for accounting for employee stock options and warrants. We also use APB
25 for accounting for stock options and warrants granted to non-employees for
serving on our Board of Directors. See Note 14 for the pro forma impact on the
net income (loss) per share for the years ended April 30, 2000, 1999, and 1998.

     For all equity instruments issued to non-employees, other than those in
connection with serving on our Board of Directors, the fair value is determined
and recorded using the Black-Scholes option pricing model for options and
warrants, or the market price for common stock, at the date of grant or
issuance.

REVENUE

     Refractive and cataract revenue is recognized when the surgical procedures
are performed. Advertising revenue and revenue for conducting training sessions
for eye surgeons is recognized when completed.

COST OF REVENUE

     Cost of revenue includes royalty fees and professional medical services,
depreciation and amortization and other costs. Other costs include laser
maintenance including optics and gasses, mobile equipment travel, laser
technician salaries, and medical supplies.

VENDOR PROGRAM CHANGE EXPENSE

     On February 22, 2000, Visx, Inc. ("Visx"), the manufacturer of most of the
lasers owned by LaserVision, announced a new program for its customers,
including LaserVision, that included a change in the royalty fee charged by Visx
from $250 per procedure to $100 per procedure. Along with this pricing change
Visx announced that it will no longer provide procedure cards for enhancements
at no charge, nor will they provide credits for procedure cards used for past
enhancements or ambassadors. (An enhancement is a procedure

                                       F-9
<PAGE>   43
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

subsequent to the initial treatment that is performed to improve the surgical
result. An ambassador is a patient who is treated at no charge and is frequently
a celebrity or a member of the surgeon's practice.) In addition, Visx would not
exchange the inventory of procedure cards held by LaserVision at a cost of $250
per procedure card for procedure cards at the reduced cost of $100. Accordingly,
LaserVision recorded a one-time charge of approximately $2.0 million in the year
ended April 30, 2000 for actual and estimated expenses related to enhancements
and ambassadors, and reductions in inventory value, which will not be reimbursed
by Visx and which LaserVision does not expect to collect from its customers
without legal assistance.

INCOME TAXES

     LaserVision uses the asset and liability method of accounting for income
taxes. Deferred tax assets and liabilities are recorded based on the difference
between the income tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes. Deferred tax assets are reduced by a
valuation allowance if, based on the weight of available evidence, it is more
likely than not that some portion or all of the deferred tax assets will not be
realized. See Note 10 for further discussion of income taxes.

FOREIGN CURRENCY TRANSLATION

     The accounts of LaserVision's foreign subsidiaries are maintained in their
respective local currencies. The accompanying consolidated financial statements
have been translated and adjusted to reflect U.S. dollars on the bases presented
below.

     Assets and liabilities are translated into U.S. dollars at year-end
exchange rates. Income and expense items are translated at average rates of
exchange prevailing during the year. Foreign currency translation adjustments
and transaction gains and losses are immaterial amounts and are included in
earnings currently.

INCOME (LOSS) PER SHARE

     The net loss per share was computed using the "Weighted average number of
common shares outstanding -- basic" during each period. The "Net loss per share"
for the fiscal year ended April 30, 1998 reflects $1,930,000 of deemed preferred
dividends. The calculation for the fiscal year ended April 30, 1998 excludes the
dilutive effect of Series B Convertible Preferred Stock, stock options and
warrants since their inclusion in such calculation would have been antidilutive.

     The "Net Income per Share -- Basic" for the years ended April 30, 2000 and
1999, was computed using the "Weighted average number of common shares
outstanding -- basic" during each period and reflects $209,000 and $171,000,
respectively, of deemed dividends on the Series B Convertible preferred stock.
For the years ended April 30, 2000 and 1999, the Consolidated Statement of
Operations reflects an income tax benefit which was not applicable during the
year ended April 30, 1998.

     "Weighted average number of common shares outstanding -- diluted" for the
years ended April 30, 2000 and 1999 includes the dilutive effects of warrants
and options using the treasury stock method and the Series B Convertible
Preferred Stock. For the years ended April 30, 2000 and 1999, dilutive warrants
and options were calculated using an average market price of $15.85 and $9.93,
respectively. As of April 30, 2000 and 1999, 5.5 and 5.8 million warrants and
options, respectively, were outstanding with an average exercise price of
approximately $9.86 and $5.12, respectively.

                                      F-10
<PAGE>   44
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Diluted per share calculations are as follows:

<TABLE>
<CAPTION>
                                                                YEAR ENDED APRIL 30,
                                                      -----------------------------------------
                                                         2000           1999           1998
                                                      -----------    -----------    -----------
<S>                                                   <C>            <C>            <C>
Net income (loss)...................................  $13,858,000    $ 6,540,000    $(3,496,000)
Deemed preferred dividends..........................     (209,000)      (171,000)    (1,930,000)
                                                      -----------    -----------    -----------
  Net income (loss) applicable to common
     stockholders...................................  $13,649,000    $ 6,369,000    $(5,426,000)
Weighted average number of common shares outstanding
  -- basic..........................................   24,884,000     20,290,000     18,356,000
Dilutive securities:
  Warrants and options..............................    2,673,000      2,778,000
  Preferred stock...................................      903,000        862,000
Weighed average number of common shares outstanding
  -- diluted........................................   28,460,000     23,930,000     18,356,000
Net income (loss) per share -- diluted..............  $       .49    $       .27    $      (.30)
</TABLE>

NEW ACCOUNTING STANDARDS

     In June 1999, the Financial Accounting Standards Board (FASB) issued
Statement on Financial Accounting Standards No. 137, "Accounting for Derivative
Instruments and Hedging Activities-Deferral of the Effective Date of FASB
Statement No. 133" (SFAS 137). Statement on Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133)
provides standards on accounting and disclosure for derivative instruments, and
requires that all derivatives be measured at fair value and reported as either
assets or liabilities in the LaserVision's Consolidated Balance Sheet. In
accordance with issuance of SFAS No. 137, LaserVision will be required to adopt
the provisions of SFAS 133 no later than the beginning of fiscal year 2001.
Based upon preliminary reviews of the provisions of this standard, LaserVision
believes that it will not have a signigficant impact on its financial position
or results of operations or have a material effect on its financial reporting.

     On December 3, 1999, the staff of the Securities and Exchange Commission
(SEC) issued Staff Accounting Bulletin No. 101 (SAB 101) "Revenue Recognition in
Financial Statements." This Bulletin provides specific guidance on the
recognition, presentation, and disclosure of revenue and related accounting
policies in financial statements. The provisions of SAB 101 must be applied by
LaserVision beginning in the fourth quarter of fiscal 2001. Based upon
preliminary reviews of the four criteria of revenue recognition specified within
SAB No. 101, we believe that our revenue recognition policies comply with the
bulletin.

3.   MANAGEMENT SERVICES AGREEMENTS

     Effective January 1, 1997, LaserVision completed a management services
agreement with an ophthalmic practice whose president is on our Board of
Directors and is also our medical director. We acquired certain contract rights
and fixed assets for $288,000 of cash, the issuance of 192,800 shares of common
stock and 315,186 stock options, which had a total estimated fair value of
$908,000, and the assumption of certain lease obligations totaling $381,000. Of
the total consideration, $1,096,000 was allocated to deferred contract rights
and $481,000 was allocated to the cost of the equipment, which approximated fair
value. The deferred contract rights were to be amortized over the life of the
agreement and the equipment over its estimated useful life.

     During fiscal 1997, deferred contract rights and common stock and options
issued for contract rights were increased by $184,000 for changes in the
estimated fair value of the stock and stock options, and the deferred contract
rights were reduced by $42,000 for amortization expense.

     In April 1998, the management services agreement was terminated by mutual
agreement. In accordance with the termination agreement, the ophthalmic practice
returned the previously issuable common stock and the stock options and agreed
to pay $163,000 of cash. In addition the ophthalmic practice agreed to assume

                                      F-11
<PAGE>   45
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the capital lease obligations that were previously transferred and we returned
the related equipment. No gain or loss was recognized as a result of the
termination of the agreement. During 1998, approximately $236,000 of expense was
recognized for amortization of the deferred contract rights prior to the
termination of the agreement.

     Upon termination of the management services agreement described above, a
new five year contract was entered with the president of the ophthalmic practice
and member of the LaserVision's Board of Directors to provide ongoing service as
our medical director for $60,000 per year. LaserVision has agreed to pay another
physician in the same practice $60,000 per year for five years to provide
services as a medical director. Both of these agreements were amended effective
May 1, 1999 to $100,000 per year. 320,000 warrants with an average exercise
price of $5.27 per share, $.14 above the market price, were also issued to these
physicians in exchange for their future services. The practice has also agreed
to exchange their right to purchase an excimer laser at a discounted price in
exchange for 120,000 stock options with an exercise price of $5.13 per share,
the market price at the date of agreement. The ophthalmic practice has committed
to using this laser for a minimum number of procedures within five years. These
warrants and stock options are included in the warrants and options line in the
Stockholders' equity section of the balance sheet. The $466,000 of costs
associated with these future medical services has been deferred and are being
amortized over the related service period (vesting periods when shorter).
Amortization of these deferred costs totalled $127,000 for the year ended April
30, 2000. The $179,000 of costs associated with the equipment purchase right has
been capitalized as part of the cost of the related laser.

4.   ACQUISITIONS

     On December 4, 1998, LaserVision acquired all of the outstanding stock of
MSS for $3.8 million (including accrued dividends) and, based on MSS's operating
performance, up to $8.25 million of contingent consideration in cash and
LaserVision common stock. The contingent consideration is based upon MSS meeting
certain operating income targets as defined in the sales agreement for the
five-month period ended April 30, 1999, the twelve-month period ended April 30,
2000, and the three-month period ending July 31, 2000. The contingent
consideration is payable in up to $4,125,000 of common stock, at market value,
with the balance paid in cash. LaserVision may determine, in its sole
discretion, the amount of contingent consideration to be paid in common stock.
LaserVision paid $2.8 million of the purchase price during the third quarter of
fiscal year 1999 and $1 million in April 1999. Richard L. Lindstrom, M.D. held a
minority position of less than 9% in MSS. MSS provides mobile access to cataract
surgery technology.

     This acquisition allows us to provide another type of mobile service to our
ophthalmic surgeon customers. MSS has been initially operated as a separate
subsidiary while MSS's operating results will determine the amount of any
additional consideration. The acquisition was accounted for as a purchase and
the resulting goodwill of $9.1 million is being amortized over 15 years. The
results of operations of MSS are included with LaserVision's results since the
date of the acquisition. MSS met the operating income target for the five-month
period ending April 30, 1999. Accordingly, the former owners of MSS were paid
$750,000 of contingent consideration in cash. This amount was included in
accrued liabilities and goodwill at April 30, 1999. MSS also met the operating
income target for the twelve-month period ending April 30, 2000. Accordingly,
the former owners of MSS will be paid approximately $5.4 million of contingent
consideration in cash. This amount was included in accrued liabilities and
recorded as additional goodwill at April 30, 2000. All additional consideration
required to be paid will be recorded as goodwill at that time and amortized over
the remaining life of the original goodwill recorded.

     On September 1, 1998, LaserVision acquired all of the outstanding stock of
Refractive Surgical Resources, Inc. (RSR) for $468,000 in cash and $2.1 million
in notes payable (of which $1.1 million is due within one year). Richard L.
Lindstrom, M.D., one of LaserVision's outside directors, held a minority
ownership position of less than 7% in RSR. RSR provides microkeratome access and
the related disposable blades used by ophthalmologists during the LASIK
procedure. This acquisition complements our existing
                                      F-12
<PAGE>   46
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

refractive surgery business and has been integrated with our existing field
operations. The acquisition was accounted for as a purchase and the resulting
goodwill of $2.6 million will be amortized over 15 years. The results of
operations of RSR are included with LaserVision's results since the date of
acquisition.

     The unaudited pro forma LaserVision results from operations assuming both
the RSR and MSS acquisitions were consummated as of May 1, 1997 are as follows:

<TABLE>
<CAPTION>
                                                                  YEAR ENDED        YEAR ENDED
                                                                APRIL 30, 1999    APRIL 30, 1998
                                                                --------------    --------------
<S>                                                             <C>               <C>
Revenue.....................................................     $58,590,000       $31,266,000
Net income (loss)...........................................       6,523,000         3,750,000
Net income (loss) per share -- basic........................             .32              (.31)
Net income (loss) per share -- diluted......................             .27              (.31)
</TABLE>

5.   MINORITY INTEREST

     During the year ended April 30, 1999 LaserVision established a limited
liability partnership to own and operate one transportable refractive laser and
related equipment and services (the "Partnership"). LaserVision is the general
partner and owns 60% of the Partnership. LaserVision contributed equipment with
a net book value of $620,000 and an estimated fair value of $650,000 to the
partnership and received $260,000 from the minority partner for this minority
interest. LaserVision receives a management fee from the Partnership for
providing certain staff, supplies, maintenance and administrative services. The
net operating cash flow of the Partnership is distributed to the two partners as
a dividend on a quarterly basis. The Partnership's operating results are
included in the Consolidated Statement of Operations. See Note 16 for related
party disclosure.

     Seven other partnership agreements have been entered with unrelated parties
during the year ended April 30, 2000. LaserVision is the general partner of each
of these partnerships and receives a management fee from the partnerships for
providing certain staff, supplies, maintenance and administrative services.
LaserVision and the minority partners have contributed a combination of lasers,
related medical equipment, and cash to these partnerships. The minority
interests in these partnerships range from 15% to 49%. The terms of the
agreements range from two to seven years. The net operating cash flow of the
partnerships is distributed to the partners as a dividend on a quarterly basis.
These partnerships' operating results are included in the Consolidated Statement
of Operations.

                                      F-13
<PAGE>   47
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6.   OTHER ASSETS

     Other assets at April 30 consist of the following:

<TABLE>
<CAPTION>
                                                                   2000           1999
                                                                -----------    ----------
<S>                                                             <C>            <C>
Goodwill, net of $1,394,000 and $658,000 accumulated
  amortization, respectively (Note 4).......................    $17,437,000    $7,148,000
Tradename and servicemark costs, net of $107,000 and $89,000
  amortization, respectively................................         74,000        93,000
Future services obtained for issuance of stock, warrants and
  options net of $381,000 and $194,000 of accumulated
  amortization, respectively................................        608,000       451,000
Restricted cash (Notes 7 and 11)............................             --       625,000
Investment in common equity securities, net of $169,000
  unrealized holding loss...................................      2,325,000
Rent deposits and other, net................................        224,000       478,000
                                                                -----------    ----------
  Total.....................................................    $20,668,000    $8,795,000
                                                                ===========    ==========
</TABLE>

     The significant increase in goodwill from April 30, 1999 to April 30, 2000
is primarily a result of the contingent consideration paid to the former owners
of MSS and payments to two of the ophthalmic practices with whom we have newly
formed joint ventures.

     The Investment in common equity securities is carried at market value and
the unrealized holding loss of $169,000 is included in stockholder's equity.

     Restricted cash at April 30, 1999 secured our notes payable and our
guarantee of notes receivable to a third party by those patients who elected to
finance a portion of the cost of their PRK or LASIK procedure. At April 30, 2000
the requirements to release the restricted cash which secured notes payable have
been met and the guarantee of notes receivable to a third party no longer
requires a restricted cash balance.

7.   NOTES PAYABLE

     In October 1996, LaserVision entered into an agreement to borrow $4.2
million over four and one half years and bearing interest at 11%. Monthly
payments of $96,000 are due through January 2001 with a balloon payment of
$660,000 due in March 2001. This loan is secured by eight excimer lasers used in
the U.S. and $1,650,000 of restricted cash which becomes available to us in
proportion to the reduction in the principal balance and, under certain
circumstances, if financial targets are achieved. As of April 30, 1999, $350,000
of this restricted cash was classified as a current asset and $565,000 was
classified as a non-current asset. As of April 30, 2000 the cash is no longer
restricted as a result of meeting the defined financial targets.

     In March 1997 LaserVision entered into an agreement to borrow $1.7 million
over four years and bearing interest at 15%. As part of this agreement we also
issued 50,000 warrants, exercisable within five years, to the lender at the then
current market price. The $48,000 estimated fair value of these warrants is
being recognized as additional interest expense over the life of the debt.
Monthly payments of $43,000 are due through March 2001 with a balloon payment of
$168,000 due in April 2001. In October 1997 we borrowed an additional $813,000
from this same lender. Under the March 1997 debt agreement, the lender had the
right to increase the percentage funded by the original loan under similar
financial terms including the receipt of 15,000 additional stock warrants. The
$32,000 estimated fair value of these warrants is being recognized as additional
interest expense over the life of the debt. These loans are secured by seven
excimer lasers used in the U.S. Relative to this additional borrowing, monthly
payments of $21,000 are due through August 2001 with a balloon payment of
$84,000 due in September 2001.

                                      F-14
<PAGE>   48
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     In September 1997 LaserVision borrowed $1,050,000 at 11.3% per annum with a
term of four years to finance the acquisition of lasers and mobile equipment.
The debt is collateralized by the same equipment. In May 1999 the remaining
balance of this note was paid.

     In January 1998, we financed the purchase of a laser and other medical
equipment for $390,000, with interest at 9.5% for three years. Monthly payments
of $12,500 are due through December 2000. The debt is collateralized by the
equipment purchased.

     During the year ended April 30, 1998 we borrowed $535,000 at 5.8% for three
years to finance the purchase of two excimer lasers. During the year ended April
30, 1999 we borrowed $4.3 million at 5.8% for two to three years to finance the
purchase of sixteen excimer lasers. During the year ended April 30, 2000 we
borrowed $6.1 million at 5.8% for two to three years to finance the purchase of
twenty-six excimer lasers. Aggregate monthly payments range on these borrowings
from $6,000 to $13,000 for each laser. The debt is collateralized by the same
lasers.

     In conjunction with the acquisitions of MSS and RSR, notes payable for $1
million and $2.1 million, respectively, were issued. The $1 million note related
to the MSS acquisition was paid in April 1999 and did not bear interest. The RSR
notes have no stated interest rate, however, interest has been imputed utilizing
a rate of 6.5%. Payments of $600,000 each were due at July 31, 1999, July 31,
2000 and October 31, 2000. These notes were paid in advance during the year
ended April 30, 2000 in exchange for a pre-payment discount of $94,000.

     In April 2000, in conjunction with a partnership agreement (see Note 5),
LaserVision issued a note for $1.0 million in exchange for equipment and future
contract rights. The note does not bear interest, is due in January 2001, and
has not been discounted because such discount is considered immaterial.

     In April 2000, in conjunction with a partnership agreement (see Note 5),
LaserVision issued a note for $2.5 million in exchange for equipment and future
contract rights. The note bears interest at 5.5% and has principal payments due
in equal installments in April 2001 and April 2002.

     At April 30, 2000 the future maturity schedule for these notes is as
follows:

<TABLE>
<CAPTION>
YEAR ENDING APRIL 30,
---------------------
<S>                                                           <C>
2001........................................................  $ 8,323,000
2002........................................................    3,477,000
2003........................................................      548,000
                                                              -----------
                                                              $12,348,000
                                                              ===========
</TABLE>

8.   OBLIGATIONS UNDER CAPITAL LEASES

     In September 1995, we acquired two excimer lasers for use in the United
States. The lasers were financed by five year capital leases requiring principal
payments totaling $1,024,000 and bearing interest at 11% per annum. Monthly
payments of $10,000 each are due through August 2000.

     In August 1996, we financed an excimer laser purchase with a four year
capital lease requiring principal payments totaling $525,000 and bearing
interest at 15%. Monthly payments of $15,000 are due through May 2000.

     During fiscal 1997, we financed a total of nine corneal topographer
purchases for use in the U.S. with three to five year capital leases requiring
total principal payments of $139,000 and bearing interest at rates from 6% to
12% per annum. Monthly payments range from $275 to $375 and are due through
January 2002.

     During fiscal 1999, we assumed the obligations under capital leases of RSR
and MSS when we acquired those companies. The liability under the RSR leases,
which are for medical equipment, totaled $452,000 at

                                      F-15
<PAGE>   49
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the date of acquisition. The RSR leases are three year leases bearing interest
at 7% to 13%. Monthly payments on the leases range from $1,000 to $4,000 and
maturity dates range from June 2000 through May 2001.

     MSS leases medical equipment and vans under three to five year leases that
bear interest at 8% to 10%. The liability under the MSS leases totaled $2.3
million at the date of acquisition. From December 4, 1998 through April 30, 1999
MSS entered into several new leases with aggregate lease commitments of
$806,000. Monthly payments on the leases range from $300 to $28,000 and maturity
dates range from May 1999 to February 2004.

     During the year ended April 30, 2000 MSS entered into several new leases
with aggregate lease commitments of $909,000. Monthly payments on the leases
range from $300 to $4,300 and maturity dates range from June 2002 to February
2005.

     Future minimum payments under capital leases as of April 30, 2000 are as
follows:

<TABLE>
<CAPTION>
YEAR ENDING APRIL 30,
---------------------
<S>                                                           <C>
2001........................................................  $ 1,218,000
2002........................................................      757,000
2003........................................................      683,000
2004........................................................      567,000
2005........................................................      113,000
                                                              -----------
Total minimum lease payments................................    3,338,000
Less amount representing interest...........................     (479,000)
Less current portion........................................   (1,006,000)
                                                              -----------
Long-term portion of obligations under capital leases.......  $ 1,853,000
                                                              ===========
</TABLE>

     Assets under capital leases totaled $3,613,000 and $3,055,000,
respectively, at April 30, 2000 and 1999. Depreciation of leased assets was
$1,297,000, $594,000, and $136,000 for the years ended April 30, 2000, 1999 and
1998, respectively.

9.   CONVERTIBLE PREFERRED STOCK

     LaserVision's amended Articles of Incorporation authorize the Board of
Directors to issue 1,000,000 shares of preferred stock, at $.01 par value per
share, in one or more series, designated by them as to rights, preferences,
terms and limitations.

     In June 1997, we received $6,000,000, less $513,000 of offering costs, from
the issuance of 6,000 shares of restricted Series B Convertible Preferred Stock
having a stated value of $1,000 per share, together with 200,000 warrants to
purchase common stock at $4.70 per share, and the right to an additional 200,000
warrants to purchase common stock issuable on June 20, 1998, provided at least
$2,000,000 of the preferred shares remain outstanding at that date. Such
additional warrants were issued in June 1998 in accordance with the terms of the
agreement at an exercise price of $8.93 per share and were exercised during
fiscal 2000. The Series B shares bear no dividends and are convertible at any
time. The warrants are exercisable immediately upon issuance. In August 1997,
the common shares underlying the Series B shares and warrants were registered
with the Securities and Exchange Commission (SEC) pursuant to registration
rights under the Series B stock purchase agreement.

     The Series B shares are convertible into common stock at a conversion
price, which at the Issuance Date, is the lower of (a) 85% of the average of the
daily low sale price for the five consecutive trading days ending two days prior
to the conversion date, of $3.01 at the Issuance date, and (b) $4.03. The number
of common shares into which the preferred stock is convertible is determined by
dividing the stated value of the preferred stock, increased on a daily basis at
a rate of 5% per annum, by the conversion price. As the Series B shares are
automatically convertible on June 20, 2002, the most beneficial conversion ratio
was determined to include the

                                      F-16
<PAGE>   50
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

additional common shares attributable to the 5% adjustment feature for the
five-year period ending in 2002. After adjustment for this additional benefit,
the $3.01 conversion price is reduced to $2.41, the most beneficial conversion
price at the Issuance Date.

     The Series B shares are subject to mandatory redemption requirements under
certain limited circumstances as defined in the preferred stock agreement. Those
circumstances include, a change in control of the Company in which more than 50%
of the voting power of the company is disposed of, the Company's failure to
maintain its common stock listing on the NASDAQ National Market or other
designated stock exchange, or the Series B shares ceasing to be convertible as a
result of the aggregate number of common shares then issuable upon conversion
equaling 19.99% of the outstanding common stock. Should the Series B shares
become redeemable, the redemption price would be the greater of (a) 118% of the
stated value of the preferred stock, increased on a daily basis since the
Issuance Date at a rate of 5% per annum, or (b) the number of shares issuable
upon conversion multiplied by the closing price of the common stock on such
conversion date.

     In accounting for the Series B shares, LaserVision first allocated the net
proceeds of $5,487,000 to the Series B Shares and the warrants based on their
relative fair values at the Issuance Date, resulting in $5,242,000 assigned to
the Series B Shares and $245,000 assigned to the warrants. We then allocated
$3,667,000 of the Series B Shares net proceeds to paid-in-capital for the
beneficial conversion feature. The beneficial conversion feature is being
recognized as a deemed dividend to the preferred stock over the minimum period
in which the preferred shareholders can realize that return. Because the Series
B Shares were immediately convertible, a portion of the beneficial conversion
feature was realizable at the Issuance Date. Accordingly a $1,732,000 deemed
dividend as of the Issuance Date was recognized as a charge to paid-in-capital
and net loss applicable to common stockholders, and an increase in the carrying
value of preferred stock. The balance of the beneficial conversion feature
related to outstanding Series B Shares which is not realizable until subsequent
periods and is being recognized through 2002 using the interest method. As a
result, during the years ended April 30, 2000, 1999 and 1998, $209,000, $171,000
and $1,930,000, respectively, of the beneficial conversion feature was
recognized.

     During fiscal 1998, 2,750 Series B shares were converted to 904,292 shares
of common stock. The converted Series B shares had a carrying value, including
the beneficial conversion feature recognized through the date of conversion, of
$1,590,000.

     Due to the mandatory redemption features noted above, the carrying value of
the Series B shares is classified as temporary equity, outside of Stockholders'
Equity.

                                      F-17
<PAGE>   51
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. INCOME TAXES

     The income tax benefit credited to operations consists of the following:

<TABLE>
<CAPTION>
                                                                   YEAR ENDED APRIL 30,
                                                          ---------------------------------------
                                                             2000          1999          1998
                                                          -----------   -----------   -----------
<S>                                                       <C>           <C>           <C>
Current provision
  Federal...............................................  $        --   $    62,000   $        --
  State.................................................           --       204,000            --
                                                          -----------   -----------   -----------
Total current provision.................................           --       266,000            --
Deferred provision (benefit):
  Federal...............................................    4,358,000    (1,690,000)   (1,483,000)
  State.................................................      741,000      (509,000)     (279,000)
                                                          -----------   -----------   -----------
     Total deferred provision (benefit).................    5,099,000    (2,199,000)   (1,762,000)
  (Decrease) increase in valuation allowance............   (8,493,000)      444,000     1,762,000
                                                          -----------   -----------   -----------
       Total current and deferred (benefit).............  $(3,394,000)  $(1,489,000)  $         0
                                                          ===========   ===========   ===========
</TABLE>

     The (benefit) provision for income taxes differs from the amount using the
statutory federal income tax rate (34%) as follows:

<TABLE>
<CAPTION>
                                                             2000          1999          1998
                                                          -----------   -----------   -----------
<S>                                                       <C>           <C>           <C>
Statutory tax (benefit) expense.........................  $ 3,558,000   $ 1,717,000    (1,189,000)
Change in valuation allowance...........................   (8,493,000)   (3,455,000)    1,327,000
State taxes, net of federal benefit.....................      489,000       201,000      (138,000)
Other, net..............................................    1,052,000        48,000            --
                                                          -----------   -----------   -----------
Income tax benefit......................................  $(3,394,000)  $(1,489,000)  $        --
                                                          ===========   ===========   ===========
</TABLE>

     The deferred tax assets and deferred tax liabilities recorded in the
consolidated balance sheet are as follows:

<TABLE>
<S>                                                           <C>            <C>
Deferred tax assets:
Net operating loss carryforwards............................  $  4,785,000   $  9,427,000
Net operating loss carryforwards relative to stock options
  and warrants..............................................    19,423,000      4,840,000
Depreciation and property differences.......................        96,000        611,000
Other.......................................................       393,000        335,000
                                                              ------------   ------------
Gross deferred tax assets...................................    24,697,000     15,213,000
Valuation allowance, provision for income taxes.............      (125,000)    (8,618,000)
Valuation allowance, equity.................................   (14,583,000)    (4,840,000)
                                                              ------------   ------------
     Total valuation allowance..............................   (14,708,000)   (13,458,000)
                                                              ------------   ------------
  Net deferred tax asset....................................  $  9,989,000   $  1,755,000
</TABLE>

     At April 30, 2000, LaserVision had aggregate net operating loss (NOL)
carryforwards of approximately $63.0 million for income tax purposes available
to offset future regular federal taxable income which expire in various amounts
through 2020. During the year ended April 30, 2000, LaserVision utilized
approximately $10.6 million in NOL carryforwards to offset taxable income.

                                      F-18
<PAGE>   52
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The "Valuation allowance, provision for income taxes" reflects the tax
benefit which will be reflected in the statement of operations upon release.
Management has determined that based on expected future operating plans, the net
deferred tax assets generated by operations at April 30, 2000 will more likely
than not be utilized to offset future taxes. Therefore, no valuation allowance
related to such deferred tax assets has been recorded at April 30, 2000.
However, as net operating losses may not all be utilized to offset taxable
income in all states where LaserVision operates, a valuation allowance has been
recorded to reflect the potential non-realization of state net operating loss
carryforwards.

     The "Valuation allowance, equity" reflects the tax benefit that will be
reflected directly to stockholders' equity upon release. This tax benefit
relates to certain equity transactions that did not impact operating results,
such as those arising from the exercise of non-qualified stock options and
warrants. The deferred tax asset generated by the employees' exercise of
non-qualified options and warrants will serve to reduce future taxes to be paid
by LaserVision. During the year ended April 30, 2000, the tax benefit generated
by the exercise of non-qualified options and warrants of approximately $4.8
million was recorded as an increase in stockholders' equity. As management is
uncertain that total tax benefits generated by the exercise of non-qualified
options and warrants will be utilized to offset future taxes, a valuation
allowance of $14.7 million has been recorded at April 30, 2000.

11. COMMITMENTS AND CONTINGENCIES

EMPLOYMENT AGREEMENTS

     During fiscal 2000, LaserVision entered into three-year agreements with
four officers of LaserVision to provide for base salaries, the potential payment
of certain bonuses and severance payments equal to 36 months of base
compensation.

OPERATING LEASES

     LaserVision has office and laser center lease agreements in St. Louis,
Minneapolis, San Jose, and London. The respective leases commenced in 1994,
1996, and 2000 and shall end in 2000, 2001, 2002 and 2007. Approximate future
minimum rental payments under the leases are as follows:

<TABLE>
<CAPTION>
                                                                  MINIMUM
YEAR ENDING APRIL 30,                                         RENTAL PAYMENTS
---------------------                                         ---------------
<S>                                                           <C>
2001......................................................       $557,000
2002......................................................        170,000
2003......................................................        112,000
2004......................................................        112,000
2005......................................................        112,000
</TABLE>

     Related rental expenses totaled $516,000, $371,000, and $443,000 for the
years ended April 30, 2000, 1999 and 1998, respectively.

NOTES WITH RECOURSE

     As of April 30, 2000 and 1999, LaserVision had guaranteed notes payable
totaling $4,048,000 and $2,787,000, respectively, to a third party by certain
patients who elected to finance a portion of the cost of their refractive
surgery. As of April 30, 1999, interest bearing deposits with the third party,
classified as current and non-current restricted cash on the balance sheet,
secured $217,000 this contingent obligation.

12. LEGAL PROCEEDINGS

     In April, 2000, LaserVision was served with an administrative complaint
issued by the Center For Devices and Radiological Health of the United States
Food and Drug Administration (FDA). The administrative complaint and notice of
opportunity for hearing relates to a subpoena served on and disclosed

                                      F-19
<PAGE>   53
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

by LaserVision in March, 1998 regarding the Company's prior use of so-called
"international cards", software that enabled its excimer lasers to be used to
perform laser eye surgeries for higher myopia cases (greater than -6.0 diopters)
than what was initially approved by the FDA. The FDA ultimately approved the use
of an excimer laser for higher myopia cases in January 1998. LaserVision
supplied all of the information requested under the subpoena and had had no
contact from the FDA after May, 1998 until March 2000. Many ophthalmologists
have taken the position that FDA restrictions on physicians' use of laser
equipment through software control -- rather than the traditional means of
labeling -- deny physicians the flexibility to treat individual patients as the
physician deems medically necessary, and represent an unwarranted intrusion upon
physicians' rights to practice medicine according to their best medical
judgment. Currently, ophthalmologists routinely treat patients with high myopia
(greater than -10.0 diopters) and the FDA now allows eye surgeons to elect to
exceed its approved parameters as a practice of medicine decision. It is
estimated that more than 900,000 laser eye surgeries were performed in the U.S.
in 1999. The complaint seeks civil penalties from LaserVision and four of its
executives in amounts not to exceed $1 million each. LaserVision does not know
if any other companies or individuals have been served with similar complaints.

     On March 12, 1999, we filed suit in U.S. District Court for the Eastern
District of Missouri against Nidek, Custom Trailerwerks, Inc. and a former
employee of LaserVision. This lawsuit was settled recently, with no payments
being made by or to any party.

     We are currently involved in other, non-material litigation. We do not
expect that any outstanding or pending legal proceedings, individually or in the
aggregate, will have a material adverse effect upon our future results of
operations, liquidity or financial condition.

13. CAPITAL STOCK

     In September 1994, stockholders approved an increase in the number of
authorized common shares from 10,000,000 to 50,000,000 and an amendment to
LaserVision's Certificate of Incorporation requiring super majority (80%)
approval of certain business combinations.

     On May 14, 1999 LaserVision completed an underwritten public stock offering
selling 2,000,000 shares of common stock for $46.5 million ($43.6 million net of
offering costs). Selling stockholders sold an additional 1,956,000 shares of
which 927,000 shares were sold pursuant to the exercise of options and warrants.
516,000 of the shares sold by selling stockholders were sold pursuant to the
Underwriter's exercise of their overallotment option. The exercise of these
warrants and options resulted in additional proceeds to LaserVision of $3.6
million.

     During the fourth quarter of fiscal 2000, LaserVision repurchased 5% (or
1.2 million shares) of the outstanding common stock for approximately $7.8
million. In May 2000, the Board authorized the repurchase of an additional 4.9%
of the common stock. Treasury stock, which is carried at cost, has been
repurchased to meet LaserVision's obligations under its stock option plans and
other stock-based plans, while minimizing dilution to shareholders.

     On July 12, 1999, LaserVision's Board of Directors approved a 2-for-1 stock
split effective August 9, 1999 to stockholders of record at the close of
business on July 23, 1999 which resulted in 100,000,000 authorized common
shares. The split was effected in the form of a 100% stock dividend on August 9,
1999. The effects of this split have been reflected retroactively in the
financial statements as if it had occurred on May 1, 1997.

14. STOCK OPTIONS AND WARRANTS

     LaserVision has three plans under which registered stock options and
warrants have been granted and also has issued other warrants. These plans are
administered by the Board of Directors whose Compensation Committee recommends
option and warrant grants for officers, directors and key consultants of
LaserVision.

     The 1990 Incentive Stock Option Plan (the Option Plan) was approved by
stockholders of LaserVision on March 5, 1990 and amended by the stockholders on
April 22, 1992, January 19, 1996 and March 19, 1998.
                                      F-20
<PAGE>   54
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Under the terms of the Option Plan, we had reserved 2,000,000 shares for
issuance upon exercise of options granted to employees and officers of
LaserVision. The exercise price may not be less than the market price of the
common stock on the date of grant. Options are not assignable and may be
exercised only by the employee while employed by LaserVision, or within three
months after termination of employment unless due to death or disability.
Options are exercisable in increments over four years and expire no later than
ten years from the date of the grant. All outstanding options had an initial
expiration date of five years. No options were available for issuance under this
plan at April 30, 2000.

     The 1990 Non-Qualified Stock Option Plan (the Plan) was approved by the
stockholders of LaserVision on March 5, 1990, and amended by the stockholders on
April 22, 1992 and January 19, 1996. Under the terms of the Plan, as amended,
LaserVision has reserved 1,200,000 shares of common stock for issuance upon
exercise of options granted to outside directors and consultants. Such options
vest over various lengths of time and expire after five years. No options were
available for issuance under this plan at April 30, 2000.

     Under the 1994 Non-Qualified Warrant Plan, as amended on January 19, 1996,
March 19, 1998, and October 28, 1999, LaserVision has reserved 7,400,000 shares
of common stock for issuance upon exercise of registered warrants granted to
certain employees, directors and consultants. Such warrants generally vest
ratably over various lengths of time and expire after five or six years. A total
of 1,055,000 warrants were available for issuance under this plan at April 30,
2000.

     Information with respect to the previous plans is as follows:

<TABLE>
<CAPTION>
                                                              NON-QUALIFIED
                                            INCENTIVE STOCK       STOCK         OTHER      NON-QUALIFIED
                                              OPTION PLAN      OPTION PLAN     WARRANTS    WARRANT PLAN
                                            ---------------   -------------   ----------   -------------
<S>                                         <C>               <C>             <C>          <C>
Outstanding at April 30, 1997............        632,404          314,698      1,020,000     2,199,400
Exercised ($1.50 to $4.38)...............       (148,700)         (60,000)            --      (487,400)
Granted ($2.88 to $5.50).................        622,300          445,000        340,600       935,000
Canceled ($2.88 to $8.32)................       (139,700)         (26,086)            --            --
                                              ----------       ----------     ----------    ----------
Outstanding at April 30, 1998............        966,304          673,612      1,360,600     2,647,000
Exercised ($1.50 to $6.22)...............       (359,532)        (253,500)       (50,000)   (1,259,500)
Granted ($4.44 to $15.10)................        649,500          263,200        152,000       672,000
Forfeited ($2.75 to $4.88)...............        (38,626)         (12,612)            --            --
                                              ----------       ----------     ----------    ----------
Outstanding at April 30, 1999............      1,217,646          670,700      1,462,600     2,059,500
Exercised ($1.50 to 15.19)...............       (252,745)        (247,005)      (959,600)     (356,090)
Exchanged ($2.50 to $4.07)...............             --               --       (520,400)      520,400
Granted ($8.69 to $27.53)................        110,700           32,000         27,400       797,000
Forfeited ($3.72 to $21.56)..............       (111,100)         (72,860)       (10,000)           --
                                              ----------       ----------     ----------    ----------
Outstanding at April 30, 2000............        964,501          382,835             --     3,020,810
                                              ==========       ==========     ==========    ==========
Average price per share at April 30,
  1998...................................           3.85             3.88           4.30          3.72
  1999...................................           6.25             4.98           4.78          4.41
  2000...................................           7.03             5.62                         6.03
Exercisable at April 30,
  1998...................................        499,204          447,326        984,050     1,946,146
  1999...................................        496,096          316,366      1,098,600     1,091,750
  2000...................................        478,832          188,685             --     1,581,260
</TABLE>

     LaserVision also has 1,160,000 warrants outstanding as of April 30, 2000
with each warrant exercisable for one share of common stock; 200,000 at a price
of $4.70 per share and 960,000 at a price of $27.53 per share. These $4.70
warrants expire in June 2002, with a fair value of $1.23 on the grant date. As
discussed in

                                      F-21
<PAGE>   55
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Note 9, these warrants were issued above the market price in connection with the
issuance of the Series B Convertible Preferred Stock. The $27.53 warrants expire
in June 2004 and had a fair value on the grant date of $10.49 each. These $27.53
warrants were issued to executive officers, vest over two years and are not
registered.

     At the January 1998 Board of Directors meeting, 67,000 incentive stock
options issued in January 1996 and April 1996 to non-officer employees had the
exercise price reduced from a weighted average of $6.32 per option to $4.38 per
option, above the market price at that time.

     During fiscal 1997, LaserVision adopted SFAS 123, which addresses
accounting for stock option and warrant plans and selected the "intrinsic value
based method" for valuing stock options granted to employees. Had compensation
cost for all of LaserVision's stock option and warrant plans been determined
based upon the fair value at the grant dates consistent with the methodology
prescribed in SFAS 123, LaserVision's net income (loss) and net income (loss)
per share would have increased/decreased to the pro forma amounts indicated
below using the weighted average fair values indicated:

<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,                                           2000       1999      1998
--------------------                                          -------    ------    -------
<S>                                                           <C>        <C>       <C>
Net income (loss) as reported (thousands)...................  $13,858    $6,540    $(3,496)
Pro forma net income (loss) (thousands).....................    9,410     4,870     (4,309)
Net income (loss) per share -- basic as reported............      .55       .31       (.30)
Net income (loss) per share -- diluted as reported..........      .49       .27       (.30)
Pro forma net income (loss) per share -- basic..............      .37       .25       (.34)
Pro forma net income (loss per share -- diluted.............      .33       .22       (.34)
Weighted average fair value of grants at market.............     7.11      2.06       1.46
Weighted average fair value of grants above market..........                .64       1.14
Weighted average exercise price of grants at market.........    18.27      6.67       3.38
Weighted average exercise price of grants above market......               8.89       5.00
</TABLE>

     The fair value of each option and warrant grant is estimated on the date of
grant using the Black-Scholes option pricing model with the following
assumptions for grants in fiscal 2000, 1999, and 1998, respectively: risk-free
interest rates of 5% to 5.9%, 4.5% to 5.2%, and 5.4% to 6%., expected volatility
of 56% to 72%, 40% to 45%, and 43% to 45%, no dividends, and an expected life of
two and one half years (except for 74,500 warrants issued in fiscal 1999 with an
expected life of three years).

     Since employee stock options and warrants are not traded on a secondary
exchange, employees receive no benefit and derive no value from holding stock
options and warrants under these plans without an increase in the market price
of our stock. Such an increase would benefit all stockholders. The exercise of
non-qualified warrants and options results in taxable income to the recipient
and tax deduction to LaserVision. The related tax benefits do not get recorded
in the income statement but are credited directly to equity. See Note 11 for
related information.

                                      F-22
<PAGE>   56
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table summarizes information for stock warrants and options
outstanding at April 30, 2000:

<TABLE>
<CAPTION>
                                           WEIGHTED AVERAGE
                                 ------------------------------------              EXERCISABLE
                                  WEIGHTED                               -------------------------------
RANGE OF                           NUMBER       REMAINING    EXERCISE      NUMBER           AVERAGE
EXERCISE PRICE                   OUTSTANDING      LIFE        PRICE      OUTSTANDING     EXERCISE PRICE
--------------                   -----------    ---------    --------    -----------    ----------------
<S>                              <C>            <C>          <C>         <C>            <C>
$2.88 -- $3.81...............     1,124,893     2.3 years     $ 3.71        825,393          $ 3.71
$4.25 -- $4.50...............     1,058,661     3.4 years     $ 4.48        527,328          $ 4.47
$4.70 -- $6.78...............       944,442     2.8 years     $ 5.26        663,275          $ 5.30
$8.50 -- $9.00...............     1,226,188     4.4 years     $ 8.85        334,931          $ 8.84
$15.09 -- $21.56.............       214,050     4.0 years     $15.52         97,850          $15.48
$27.53.......................       960,000     4.1 years     $27.53        400,000          $27.53
                                  ---------                   ------      ---------
                                  5,528,234     3.4 years     $ 9.81      2,848,777          $ 8.58
                                  =========                   ======      =========
</TABLE>

     The fiscal 2000 financial statements reflect $206,000 of expense for
warrants and options issued as compensation to consultants and lenders. The
fiscal 1999 financial statements reflect $261,000 of expense for warrants and
options issued as compensation to consultants and lenders. The fiscal 1998
financial statements reflect $262,000 of expense for warrants and options issued
as compensation to consultants and lenders, $718,000 of cost for warrants issued
to acquire equipment and non-current contract rights from medical advisors and
$245,000 of cost assigned to the warrants issued or issuable as part of the
issuance of preferred stock.

15. BUSINESS SEGMENT INFORMATION

     LaserVision adopted Statement of Financial Accounting Standards No. 131,
"Disclosure about segments of an Enterprise and Related Information" ("SFAS
131") in the fiscal year ended April 30, 1999. SFAS 131 established standards
for reporting information regarding operating segments in annual financial
statements and requires selected information for those segments to be presented
in interim financial reports issued to stockholders. SFAS 131 also establishes
standards for related disclosures for products and services and geographic
areas. Operating segments are identified as components of an enterprise about
which separate discrete financial information is available for evaluation by the
chief operating decision maker, or decision making group, in making decisions
how to allocate resources and assess performance.

     LaserVision has determined its reportable segments by disaggregating its
business by service and geographic area. The segment, "North American
Refractive", includes the excimer laser business and related support functions
for North America. The segment "Other Refractive" includes the excimer laser
business and related support functions for geographic areas outside of North
America. The segment, "Cataract", includes the operations of MSS. The column
below titled, "Reconciling", includes all corporate overhead, unallocated
elements of income and expense, and unallocated corporate assets. The accounting
policies of the segments are the same as those described in Note 2.

                                      F-23
<PAGE>   57
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The table below presents information about net income(loss) and segment
assets used by the chief operating decision maker of LaserVision as of and for
the year ended April 30, 2000, 1999, and 1998:

<TABLE>
<CAPTION>
                            NORTH AMERICAN      OTHER
YEAR ENDED APRIL 30, 2000     REFRACTIVE     REFRACTIVE     CATARACT     RECONCILING      TOTAL
-------------------------   --------------   -----------   -----------   -----------   ------------
<S>                         <C>              <C>           <C>           <C>           <C>
Revenue...................   $73,456,000     $ 3,065,000   $11,534,000   $        --   $ 88,055,000
Depreciation and
  amortization............     7,592,000         660,000     1,745,000       371,000     10,368,000
Interest income...........                                                 3,033,000      3,033,000
Interest expense..........                                                 1,129,000      1,129,000
Income tax expense
  (benefit)...............                                     (12,000)    3,406,000      3,394,000
Net income................    12,959,000         222,000     1,860,000    (1,183,000)    13,858,000
Total assets..............    29,772,000       1,831,000    16,683,000    74,981,000    123,267,000
Capital expenditures......    13,625,000         201,000     1,818,000       738,000     16,382,000
YEAR ENDED APRIL 30, 1999
--------------------------
Revenue...................    46,568,000       1,976,000     3,815,000            --     52,359,000
Depreciation and
  amortization............     4,785,000         694,000       633,000       273,000      6,385,000
Interest income...........                                                   404,000        404,000
Interest expense..........                                                 1,154,000      1,154,000
Income tax benefit........                                                 1,489,000      1,489,000
Net income................     8,860,000        (198,000)      498,000    (2,620,000)     6,540,000
Total assets..............    28,351,000       2,087,000     8,957,000    13,794,000     53,189,000
Capital expenditures......     7,789,000         135,000     1,058,000       100,000      9,082,000
YEAR ENDED APRIL 30, 1998
--------------------------
Revenue...................    21,557,000       1,912,000                          --     23,469,000
Depreciation and
  amortization............     3,702,000         933,000                     290,000      4,925,000
Interest income...........                                                   377,000        377,000
Interest expense..........                                                (1,000,000)    (1,000,000)
Income tax benefit........                                                        --             --
Net income (loss).........     1,660,000        (771,000)                 (4,385,000)    (3,496,000)
Total assets..............    17,056,000       2,872,000                  10,901,000     30,829,000
Capital expenditures......   $ 5,990,000     $   179,000                 $   140,000   $  6,309,000
</TABLE>

GEOGRAPHIC DISCLOSURES

     Since LaserVision's revenues outside of the U.S. are not material, no
separate disclosure of non-U.S. revenue is provided.

16. RELATED PARTIES

     During the year ended April 30, 1999, LaserVision entered into a limited
partnership agreement with MEC for the operation of one of our Roll-On/Roll-Off
mobile systems. Dr. Richard Lindstrom, a director and medical director of
LaserVision, is president of MEC. LaserVision is the general partner and owns
60% of the partnership. MEC is a limited partner and owns 40% of the
partnership. LaserVision contributed equipment valued at $650,000 to the
partnership and received $260,000 from Minnesota Eye Consultants. LaserVision

                                      F-24
<PAGE>   58
                  LASER VISION CENTERS, INC. AND SUBSIDIARIES

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

receives a revenue based management fee from the partnership. As discussed in
Note 3, Dr. Lindstrom and LaserVision entered into a five-year contract under
which he received 160,000 warrants and earned $60,000 for the year ended April
30, 1999 from LaserVision in his capacity as medical director. During the year
ended April 30, 2000, Dr. Lindstrom was paid $100,000 for his services as
medical director. In addition, MEC and Dr. Lindstrom work with LaserVision to
provide training courses for ophthalmologists. We paid Dr. Lindstrom and MEC
$84,000 and $46,000 related to these courses during the years ended April 30,
2000 and 1999, respectively.

     Dr. Lindstrom held a minority position of less than 9% in MSS when acquired
and a minority position of less than 7% in RSR. Payments to Dr. Lindstrom during
the year ended April 30, 2000 and 1999 for the purchase of RSR and MSS,
including notes payable, contingent consideration and accrued dividends, totaled
$235,000 and $243,000, respectively. Other accrued liabilities at April 30, 2000
includes approximately $670,000 payable to Dr. Lindstrom as part of MSS's
additional consideration for the year ended April 30, 2000. Also see Note 2,
"Summary of significant accounting policies -- Credit Risk".

17. SUBSEQUENT EVENTS

     In June 2000 LaserVision acquired Southeast Medical, Inc. of Mandeville,
Louisiana for $1.5 million of cash and future contingent consideration which is
dependent upon achieving certain levels of revenue. This transaction will be
accounted for under the purchase method of accounting and was financed with
existing cash. Southeast Medical is a provider of mobile cataract services in
Louisiana and Mississippi.

                                      F-25
<PAGE>   59

       REPORT OF INDEPENDENT ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE

To the Board of Directors and Stockholders Of
Laser Vision Centers, Inc.

     Our audits of the consolidated financial statements of Laser Vision
Centers, Inc. and its subsidiaries, referred to in our report dated June 14,
2000, appearing in this Form 10-K, also included an audit of the financial
statement schedule listed on page F-27 of this Form 10-K. In our opinion, the
financial statement schedule presents fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements.

PricewaterhouseCoopers LLP
St. Louis, Missouri
June 14, 2000

                                      F-26
<PAGE>   60

SCHEDULE VIII

                 VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

<TABLE>
<CAPTION>
                                         BALANCE AT
                                         BEGINNING      EXPENSE              UNCOLLECTABLE    BALANCE AT
                                          OF YEAR      PROVISION    OTHER      ACCOUNTS       END OF YEAR
                                         ----------    ---------    -----    -------------    -----------
                                                                  (IN THOUSANDS)
<S>                                      <C>           <C>          <C>      <C>              <C>
FISCAL 2000
Doubtful accounts Receivable...........     $450         $351                    $(212)          $589
FISCAL 1999
Doubtful accounts receivable...........      395          234       43(a)         (222)           450
FISCAL 1998
Doubtful accounts receivable...........      360          153                     (118)           395
</TABLE>

---------------

(a) Allowance obtained as part of MSS and RSR acquisitions.

                                      F-27