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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM 10QSB

|                                                              |                                                                                           
|------------------------------------------------------------- | ------------------------------------------------------------------------------------------
|(Mark   One)                                                 
|x                                                             | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE   SECURITIES EXCHANGE ACT OF 1934 
|                                                              |                                                                                           
|                                                              | For the quarter ended March 31,   2006                                                    
|                                                              |                                                                                           
|o                                                             | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE   SECURITIES EXCHANGE ACT OF 1934
|                                                              |                                                                                           
|Commission file number 019671                               
|                                                              |                                                                                           
|LASERSIGHT   INCORPORATED                                    
|                                                             
|(Name of Small Business Issuer as specified in its   charter)

|Delaware                                                          |  | 650273162                                 
|----------------------------------------------------------------- |  | -------------------------------------------
|                                                                  |  |                                            
|(State or other jurisdiction ofincorporation or organization)     |  | (I.R.S. EmployerIdentification No.)        
|                                                                  |  |                                            
|6848 Stapoint Court, Winter Park,   Florida                       |  | 32792                                      
|                                                                  |  |                                            
|(Address of principal executive offices)                          |  | (Zip Code)                                 
|                                                                  |  |                                            
|Issuers telephone number,   including area code:  (407) 678-9900
|                                                                 
|Securities Registered Pursuant to   Section 12(b) of the Act:    
|                                                                  |  |                                            
|Title of Each Class                                               |  | Name of Each Exchange on Which   Registered
|                                                                  |  |                                            
|None                                                              |  | N/A                                        

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

Common Stock, par value $.001

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. 
o

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

|Yes
x | No
o
|----- | ----

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation SB contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10QSB or any amendment to this Form 10QSB. 
o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

|Yes
o | No
x
|----- | ----

The issuers revenues for its most recent fiscal year were $6,321,814.

The aggregate market value of the voting and non-voting equity held by nonaffiliates of the issuer based on the closing sale price on May 11, 2006, was approximately $107,970.  Shares of common stock held by each officer and director and by each person who has voting power of 10% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates.  This determination of affiliate status is not necessarily a conclusive determination for other purposes.

Check whether the issuer has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.

|Yes
x | No
o
|----- | ----

Number of shares of common stock outstanding as of April 30, 2006: 9,997,993

Transitional Small Business Disclosure Format (Check one):

|Yes
o | No
x
|----- | ----

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LASERSIGHT INCORPORATED AND SUBSIDIARIES

Except for the historical information contained herein, the discussion in this report contains forward-looking statements (within the meaning of Section 21E of the Securities Exchange Act of 1934) that involve risks and uncertainties.   LaserSights actual results could differ materially from those discussed here.  Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections entitled Managements Discussion and Analysis of Financial Condition and Results of Operations  Risk Factors and Uncertainties in this report and in LaserSights Annual Report on Form 10-KSB for the year ended December 31, 2005.  LaserSight undertakes no obligation to update any such factors or to publicly announce the results of any revisions to any of the forward-looking statements contained herein to reflect any future events or developments.

INDEX

|         | PAGE                 
|-------- | ---------------------
|         |                      
|PART I.  | FINANCIAL INFORMATION
|         |                      
|         | Item 1.              
|         |                      
|         |                      
|         |                      
|         |                      
|         |                      
|         |                      
|         |                      
|         |                      
|         |                      
|         | Item 2.              
|         |                      
|         | Item 3.              
|         |                      
|PART II. | OTHER INFORMATION    
|         |                      
|         | Item 1.              
|         |                      
|         | Item 2.              
|         |                      
|         | Item 3.              
|         |                      
|         | Item 4.              
|         |                      
|         | Item 5.              
|         |                      
|         | Item 6.              

Page 2

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PART 1 - FINANCIAL INFORMATION

LASERSIGHT INCORPORATED AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEET (unaudited)

|                                                                                                                               |  | March 31,    2006 |             
|------------------------------------------------------------------------------------------------------------------------------ |  | ----------------- | ------------
|                                                                                                                               |  |                   |             
|ASSETS                                                                                                                         |  |                   |             
|Current assets:                                                                                                                |  |                   |             
|Cash   and cash equivalents                                                                                                    |  | $                 | 199,751     
|Accounts   receivable  trade, net (including receivables from related parties of $993,651)                                    |  |                   | 1,042,814   
|Notes   receivable - current portion, net                                                                                      |  |                   | 5,821       
|Inventories,   net                                                                                                             |  |                   | 1,523,457   
|Prepaid   expenses                                                                                                             |  |                   | 28,244      
|                                                                                                                               |  |                   |             
|Total   Current Assets                                                                                                         |  |                   | 2,800,087   
|Property and equipment, net                                                                                                    |  |                   | 84,576      
|Patents, net                                                                                                                   |  |                   | 408,017     
|Deposits with suppliers                                                                                                        |  |                   | 162,133     
|Deferred financing costs,   net                                                                                                |  |                   | 139,171     
|                                                                                                                               |  |                   |             
|Total   Assets                                                                                                                 |  | $                 | 3,593,984   
|                                                                                                                               |  |                   |             
|LIABILITIES   AND STOCKHOLDERS DEFICIT                                                                                        |  |                   |             
|Current liabilities:                                                                                                           |  |                   |             
|Notes   Payable                                                                                                                |  | $                 | 595,635     
|Accounts   payable                                                                                                             |  |                   | 91,024      
|Accrued   expenses                                                                                                             |  |                   | 340,378     
|Accrued   license fees                                                                                                         |  |                   | 143,359     
|Accrued   Warranty                                                                                                             |  |                   | 218,886     
|Deferred   revenue                                                                                                             |  |                   | 776,364     
|                                                                                                                               |  |                   |             
|Total   Current Liabilities                                                                                                    |  |                   | 2,165,646   
|Note Payable Related party-   convertible                                                                                      |  |                   | 1,030,000   
|Note Payable long term   portion                                                                                               |  |                   | 63,626      
|Deferred royalty revenue                                                                                                       |  |                   | 3,677,309   
|Commitments and   contingencies                                                                                                |  |                   |             
|Stockholders deficit:                                                                                                         |  |                   |             
|Convertible preferred   stock, par value $.001 per share; authorized 10,000,000 shares; none issued                            |  |                   |            
|Common stock  par value   $.001 per share; authorized 100,000,000 shares; 9,997,195 shares issued   and 9,997,193 outstanding |  |                   | 9,997       
|Additional paid-in capital                                                                                                     |  |                   | 104,738,681 
|Unearned Stock Based   Compensation                                                                                            |  |                   | (79,042     
|Accumulated deficit                                                                                                            |  |                   | (108,012,233
|Less treasury stock, at   cost; 2 common shares                                                                                |  |                   |            
|                                                                                                                               |  |                   |             
|Total   Stockholders Deficit                                                                                                  |  |                   | (3,342,597  
|                                                                                                                               |  |                   |             
|Total   Liabilities and Stockholders Deficit                                                                                  |  | $                 | 3,593,984   
|                                                                                                                               |  |                   |             

See accompanying notes to the condensed consolidated financial statements.

Page 3

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LASERSIGHT INCORPORATED AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

|                                                                                      |  | Three   MonthsEndedMarch 31,2006 |           | Three   MonthsEndedMarch 31,2005 |  
|------------------------------------------------------------------------------------- |  | -------------------------------- | --------- | -------------------------------- | -
|                                                                                      |  |                                  |           |                                  |  
|Revenues:                                                                             |  |                                  |           |                                  |  
|Products                                                                              |  | $                                | 422,002   |                                  | $
|(including   revenues from related parties of $183,060, and $1,879,712, respectively) |  |                                  |           |                                  |  
|Royalties                                                                             |  |                                  | 194,091   |                                  |  
|                                                                                      |  |                                  |           |                                  |  
|                                                                                      |  |                                  | 616,093   |                                  |  
|Cost of revenues:                                                                     |  |                                  |           |                                  |  
|Product   cost                                                                        |  |                                  | 236,512   |                                  |  
|                                                                                      |  |                                  |           |                                  |  
|Gross profit                                                                          |  |                                  | 379,581   |                                  |  
|                                                                                      |  |                                  |           |                                  |  
|Research and development   and regulatory expenses                                    |  |                                  | 32,001    |                                  |  
|                                                                                      |  |                                  |           |                                  |  
|Other general and   administrative expenses                                           |  |                                  | 554,329   |                                  |  
|Selling-related expenses                                                              |  |                                  | 32,643    |                                  |  
|Amortization of intangibles                                                           |  |                                  | 8,379     |                                  |  
|                                                                                      |  |                                  |           |                                  |  
|                                                                                      |  |                                  | 595,351   |                                  |  
|                                                                                      |  |                                  |           |                                  |  
|Income (loss) from   operations                                                       |  |                                  | (247,771  | )                                |  
|Other income and expenses:                                                            |  |                                  |           |                                  |  
|Interest   and other income                                                           |  |                                  | 6,362     |                                  |  
|Interest   expense                                                                    |  |                                  | (69,504   | )                                |  
|                                                                                      |  |                                  |           |                                  |  
|Income (loss) before income   tax (expense) benefit                                   |  |                                  | (310,913  | )                                |  
|Income tax   (expense)/benefit                                                        |  |                                  |          |                                  |  
|                                                                                      |  |                                  |           |                                  |  
|Net Income (loss)                                                                     |  | $                                | (310,913  | )                                | $
|                                                                                      |  |                                  |           |                                  |  
|Income (loss) per common   share                                                      |  |                                  |           |                                  |  
|Basic and diluted                                                                     |  | $                                | (0.03     | )                                | $
|                                                                                      |  |                                  |           |                                  |  
|Weighted average number of   shares outstanding                                       |  |                                  |           |                                  |  
|Basic and diluted                                                                     |  |                                  | 9,997,000 |                                  |  
|                                                                                      |  |                                  |           |                                  |  

See accompanying  notes to the condensed consolidated financial statements.

Page 4

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LASERSIGHT INCORPORATED AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS THREE MONTHS ENDED MARCH 31, 2006 and 2005 (unaudited)

|                                                                                    |  | March 31,    2006 |          | March 31,    2005 |  
|----------------------------------------------------------------------------------- |  | ----------------- | -------- | ----------------- | -
|                                                                                    |  |                   |          |                   |  
|Cash   flows from operating activities                                              |  |                   |          |                   |  
|Net   income                                                                        |  | $                 | (310,913 | )                 | $
|Adjustments   to reconcile net income to net cash provided by operating activities: |  |                   |          |                   |  
|Depreciation   and amortization                                                     |  |                   | 12,577   |                   |  
|Amortization   of discount on note payable and deferred financing costs             |  |                   | 28,158   |                   |  
|Amortization   of stock based compensation                                          |  |                   | 11,030   |                   |  
|Changes in assets and liabilities:                                                  |  |                   |          |                   |  
|Accounts and notes receivable, net                                                  |  |                   | 398,024  |                   |  
|Inventories                                                                         |  |                   | 62,636   |                   |  
|Accounts payable                                                                    |  |                   | (6,820   | )                 |  
|Accrued expenses                                                                    |  |                   | 44,652   |                   |  
|Deferred revenue                                                                    |  |                   | (194,091 | )                 |  
|Other                                                                               |  |                   | 31,844   |                   |  
|                                                                                    |  |                   |          |                   |  
|Net   cash provided by operating activities                                         |  |                   | 77,097   |                   |  
|                                                                                    |  |                   |          |                   |  
|Cash   flows from financing activities                                              |  |                   |          |                   |  
|Borrowings on debt financing                                                        |  |                   | 30,000   |                   |  
|Payments on debt financing                                                          |  |                   | (243,824 | )                 |  
|                                                                                    |  |                   |          |                   |  
|Net   cash used in financing activities                                             |  |                   | (213,824 | )                 |  
|                                                                                    |  |                   |          |                   |  
|Change   in cash and cash equivalents                                               |  |                   | (136,727 | )                 |  
|                                                                                    |  |                   |          |                   |  
|Cash   and cash equivalents, beginning of period                                    |  |                   | 336,478  |                   |  
|                                                                                    |  |                   |          |                   |  
|Cash   and cash equivalents, end of period                                          |  | $                 | 199,751  |                   | $
|                                                                                    |  |                   |          |                   |  

See accompanying notes to the condensed consolidated financial statements.

Page 5

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LASERSIGHT INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Three-Month Periods Ended March 31, 2006 and 2005

|NOTE 1 |  | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |  | The accompanying unaudited, condensed consolidated   financial statements of LaserSight Incorporated and subsidiaries   (LaserSight or the Company) as of March 31, 2006, and for the three-month   periods ended March 31, 2006 and 2005, have been prepared in accordance with   the requirements for interim financial information and with the instructions   to Form 10-QSB.  Accordingly, they do   not include all of the information and note disclosures required by   accounting principles generally accepted in the United States of America for   complete financial statements.  These   condensed consolidated financial statements should be read in conjunction   with the consolidated financial statements and notes thereto included in   LaserSights annual report on Form 10-KSB for the year ended December 31,   2005.  In the opinion of management,   the condensed consolidated financial statements include all adjustments   necessary,
consisting only of normal, recurring adjustments, for a fair   presentation of consolidated financial position and the results of operations   and cash flows for the periods presented.    There are no other components of comprehensive income other than the   Companys consolidated financial position and the results of operations and   cash flows for the periods presented.    There are no other components of comprehensive income other than the   Companys consolidated net income for the three-month periods ended March 31,   2006 and 2005.  The results of   operations for the three-month periods ended March 31, 2006 and 2005 are not   necessarily indicative of the operating results for the full year.
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |  | The Companys business is subject to various risks   and uncertainties, which contemplates the realization of assets and the   discharge of liabilities in the normal course of business for the foreseeable   future.  The Company has suffered   recurring losses from operations and has a significant accumulated deficit   that raises substantial doubt about its ability to continue as a going   concern.  Managements plans in regard   to these matters are described below, see Note 8.  The condensed consolidated financial statements do not include   any adjustments that might result from the outcome of this uncertainty.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |  | Accounts receivable due from Shenzhen New Industries   Medical Development Co., Ltd. (NIMD), a related party (see note 6), as of   March 31, 2006 totaled $993,651, which was virtually all of the accounts   receivable balance at March 31, 2006. $810,591 of NIMDs balance is over   ninety days past due. As of May 12, 2006, $460,651 of NIMDs accounts   receivable balance remains uncollected.    While we have verbal promises from the NIMD to pay the accounts   receivable balance, we have no guarantee that payment will be made.   Management continues to believe that it will fully realize the balance due,   but the ultimate realization thereof cannot be assured. The loss of NIMD as a   customer or the non-payment or slow payment of monies owed to the Company   would have a significant adverse effect on the Companys ability to continue   as a going concern.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|NOTE 2 |  | CRITICAL ACCOUNTING   POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       |  | The Companys condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America. Preparation of these statements requires management to
make judgments and estimates that affect the amounts and disclosures in the
financial statements.  Actual results could differ from these estimates.
Some accounting policies have a significant impact on amounts reported in these
financial statements. A summary of significant accounting policies and a
description of accounting policies that are considered critical may be
found in our Annual Report on Form 10-KSB, for the year ended December 31, 2005,
in the Critical Accounting Policies and Estimates section of Item 7. -
Managements Discussion and Analysis or Plan of Operation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

Page 6

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|NOTE 3 |  | PER SHARE INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |  | Basic   income per common share is computed using the weighted average number of   common shares and contingently issuable shares (to the extent that all   necessary contingencies have been satisfied).  Diluted income per common share is computed using the weighted   average number of common shares, contingently issuable shares (to the extent   that all necessary contingencies have been satisfied), and common share   equivalents outstanding during each period. Common share equivalents,   including options and warrants to purchase Common Stock, are included in the   computation using the treasury stock method. The dilutive effect of   convertible securities is computed using the if-converted method. The   computation of dilutive earnings per share excludes the effect of the assumed   conversion or exercise or contingent issuance of securities that would have   an antidilutuve effect on earnings per share. For the period ended March 31,   2006, 585,000
shares attributable to outstanding stock options and warrants   were excluded from the calculation of diluted earnings per share because the   exercise prices of the stock options and warrants were greater than or equal   to the average price of common shares during the period, and therefore   inclusion would have been antidilutive.
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|NOTE 4 |  | INVENTORIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|       |  | Inventories, which consist primarily of excimer and   erbium laser systems and related parts and components, are stated at the lower   of cost or market.  Cost is determined   using the first-in first-out method.    The components of inventories at March 31, 2006 are summarized as   follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

|                  |  | March 31,    2006 |          
|----------------- |  | ----------------- | ---------
|                  |  |                   |          
|Raw   material    |  | $                 | 893,530  
|Work   in Process |  |                   | 566,776  
|Finished   Goods  |  |                   | 163,151  
|Reserve           |  |                   | (100,000 
|                  |  |                   |          
|                  |  | $                 | 1,523,457
|                  |  |                   |          

|NOTE 5 |  | AMENDED LOAN AGREEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |  | The Company signed a three-year note with
Heller Healthcare Finance, Inc (Heller) and GE Healthcare Financial
Services, Inc., as successor-in-interest to Heller (collectively GE)
on August 30, 2004. The note expires on June 30, 2007.  The note bears
interest of 9%.  The note is secured by all Company assets.  The note
contains certain covenants, which require the Company to maintain a minimum
inventory balance of $1,500,000, minimum quarterly revenues of $1,000,000 and an
annual net income provision.  For the year ended December 31, 2005 and any
subsequent trailing twelve month periods, as measured on the last day of each
calendar quarter, the Companys earnings before interest, taxes,
depreciation and amortization cannot fall below $550,000.    As
of May 12, 2006, we are not in compliance with all covenants of our loan
agreement. Discussions are underway with GE to request a waiver. The Company has
not met minimum quarterly revenue targets of $1,000,000, a rolling twelve-month
$550,000 of EBIDTA and has not presented a budget for 2006.

Page 7

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|       |  | GE was issued a warrant to purchase 100,000 shares of common stock at $0.25 per share, or $0.40 per share if the New Industries Investment Group (the China Group see Note 6), converts its DIP loan to equity.  The warrant expires June 30, 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|NOTE 6 |  | CHINA BACKGROUND                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |  | Shenzhen New Industries Medical Development Co.,   Ltd. (NIMD) was founded and incorporated by the Medical Investment   Department in 1995 by its parent company, New Industries Investment Group   (NII) of the Peoples Republic of China. It specializes in marketing and   distribution of LASIK surgery devices and equipment, as well as in investment   and operation of LASIK clinical centers in Chinese market.                                                                                                                                                                                                                                                                                                                                                                              
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |  | In the past decade, NIMD invested and operated   PRK/LASIK excimer laser refractive surgery centers in joint venture with   hospitals and medical institutes in China. New Industries Investment   Consultants (H.K.) Ltd (NIIC) specializes in hi-tech business investment   and consulting services. It is registered in Hong Kong. It was incorporated   in 1994 by its principal investor Mr. Xianding Weng (a major shareholder of   NII, NIIs CEO and the Companys Chairman of the Board of Directors). NIIC,   NII and NIMD are collectively referred to herein as the China Group.                                                                                                                                                                                                           
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |  | In 2003 and 2004, the China Group provided $2   million of debtor-in-possession (DIP) financing to the Company.  On June 30, 2004, $1 million of the DIP financing   was converted into 6,850,000 shares of common stock. As of March 31, 2006,   the China Group controlled approximately 72% of the Companys common   stock.  Company revenues from the   China Group were approximately $183,000 and $1.9 million in the three months   ended March 31, 2006 and 2005, respectively.    Accounts receivable due from the China Group as of March 31, 2006 was   $993,651, virtually all of the accounts receivable balance at March 31, 2006.   $810,591 of the China Groups balance is over ninety days past due. As of May   12, 2006, $460,651 of the accounts receivable balance remains unpaid.
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|NOTE 7 |  | STOCK BASED COMPENSATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |  | The Company accounts for share based payments made   to employees in accordance with SFAS 123 (R) Share-based Payments which   requires all share-based payments to employees, including grants of employee   stock options, to be recognized in the income statement based on their fair   values. The fair value is typically recorded as unearned stock based   compensation and then amortized to expense over the vesting period.                                                                                                                                                                                                                                                                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|       |  | The per share weighted-average fair value of stock options granted during the
year ended December 31, 2005, was approximately $0.21, on the dates of grant
using the Black Scholes option-pricing model with the following weighted-average
assumptions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

|                        |  | 2005 |                  
|----------------------- |  | ---- | -----------------
|                        |  |      |                  
|Expected dividend yield |  |      | 0%               
|Volatility              |  |      | 1,383%   - 1,503%
|Risk-free interest rate |  |      | 4.47   -  4.67%  
|Expected life (years)   |  |      | 10               

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|       |  | In May 2005 and December 2005, the Board of   Directors approved the issuance of options to purchase 498,000 shares and   69,813 shares, respectively, of the Companys Common Stock with an estimated   fair value of approximately $119,000.    The options were issued to employees and Directors and have various   vesting schedules, but all are exercisable for ten years. Amortization of   unearned stock-based compensation for the three months ended March 31, 2006   and 2005 was $11,030 and $0, respectively. During 2006 the Company has not   issued any employee stock options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|NOTE 8 |  | CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  | Liquidity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  | The Company incurred a net loss and had negative   cash flows during the three-months ended March 31, 2006 and had an   accumulated deficit of $108 million at March 31, 2006.  Additionally, the Companys revenues   declined and are significantly dependant upon NIMD.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  | Accordingly, the Companys ability to continue as a   going concern is uncertain and dependent upon continuing to achieve improved   operating results and cash flows or obtaining additional equity capital   and/or debt financing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  | Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  | Italian Distributor.  In February 2003, an Italian court issued an order restraining   LaserSight Technologies from marketing our AstraPro software at a trade show   in Italy.  This restraining order was   issued in favor of LIGI Tecnologie Medicali S.p.a. (LIGI), a distributor of   our products, and alleged that our AstraPro software product infringes   certain European patents owned by LIGI.    We had retained Italian legal counsel to defend us in this litigation,   and we were informed that the Italian court had revoked the restraining order   and ruled that LIGI must pay our attorneys fees in connection with our   defense of the restraining order.  In   addition, our Italian legal counsel informed us that LIGI had filed a motion   for a permanent injunction. We believe that our AstraPro software does not   infringe the European patents owned by LIGI, but due to limited cash flow the   Company has not defended its position. 
Management believes that the outcome of this litigation will not have   a material adverse impact on LaserSights business, financial condition or   results from operations.
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  | Routine Matters.    In addition, we are involved from time to time in routine litigation   and other legal proceedings incidental to our business.  Although no assurance can be given as to   the outcome or expense associated with any of these proceedings, we believe   that none of such proceedings, either individually or in the aggregate, will   have a material adverse effect on the financial condition of LaserSight.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|NOTE 9 |  | SEGMENT INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  | The Companys operations principally include   refractive products.  Refractive   product operations primarily involve the development, manufacture and sale of   ophthalmic lasers and related devices for use in vision correction   procedures.  Patent services involve   the revenues and expenses generated from the ownership of certain refractive   laser patents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|       |  | Operating profit is total revenue less operating expenses.  In determining operating profit for   operating segments, the following items have not been considered:  general corporate expenses, non-operating   income and expense and income tax expense. Identifiable assets by operating   segment are those that are used by or applicable to each operating   segment.  General corporate assets   consist primarily of deferred financing costs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

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| |  | The table below summarizes information about   reported segments as of and for the three months ended March 31, 2006 and   2005:
| |  | --------------------------------------------------------------------------------------------------------------------------------

SEGMENT INFORMATION

Three months ended March 31,

|                     |  | OperatingRevenues |           | Operating Profit(Loss) |   | Assets   |   | Depreciation andAmortization |           | CapitalExpenditures |  
|-------------------- |  | ----------------- | --------- | ---------------------- | - | -------- | - | ---------------------------- | --------- | ------------------- | -
|                     |  |                   |           |                        |   |          |   |                              |           |                     |  
|2006                 |  |                   |           |                        |   |          |   |                              |           |                     |  
|Operating  segments: |  |                   |           |                        |   |          |   |                              |           |                     |  
|Refractive products  |  | $                 | 422,002   |                        | $ | (288,758 | ) | $                            | 3,445,535 |                     | $
|Patent services      |  |                   | 194,091   |                        |   | 194,091  |   |                              |          |                     |  
|General corporate    |  |                   |          |                        |   | (153,104 | ) |                              | 148,449   |                     |  
|                     |  |                   |           |                        |   |          |   |                              |           |                     |  
|Consolidated   total |  | $                 | 616,093   |                        | $ | (247,771 | ) | $                            | 3,593,984 |                     | $
|                     |  |                   |           |                        |   |          |   |                              |           |                     |  
|2005                 |  |                   |           |                        |   |          |   |                              |           |                     |  
|Operating  segments: |  |                   |           |                        |   |          |   |                              |           |                     |  
|Refractive products  |  | $                 | 1,907,390 |                        | $ | 187,939  |   | $                            | 5,353,325 |                     | $
|Patent services      |  |                   | 260,505   |                        |   | 260,505  |   |                              |          |                     |  
|General corporate    |  |                   |          |                        |   | (269,469 | ) |                              | 229,869   |                     |  
|                     |  |                   |           |                        |   |          |   |                              |           |                     |  
|Consolidated   total |  | $                 | 2,167,895 |                        | $ | 178,975  |   | $                            | 5,583,194 |                     | $
|                     |  |                   |           |                        |   |          |   |                              |           |                     |  

|NOTE 10 |  | REGISTRATION OF PRODUCT                                                                                                                                                                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                           
|        |  | The Company started the renewal registration process   to sell our laser products in China in early 2005. Our laser product   registration in China expired in December 2005.  Until we receive the renewal of the product registration, we   cannot sell our laser products in China.                                    
|        |  |                                                                                                                                                                                                                                                                                                                           
|        |  | After responding to requests for more information   from the State Food and Drug Administration in China and conducting tests at   a government selected laboratory, our application for renewal was accepted in   early 2006.  We expect the renewal   will be granted in the second quarter of 2006.                    
|        |  |                                                                                                                                                                                                                                                                                                                           
|        |  | Our product CE certificate expired in February this   year, and we are in the process of renewing this certificate also. We cannot   sell our products to customers where CE certificate is required before we   receive the renewed certificate. We expect to receive our CE certificate in   the second quarter of 2006.

|NOTE 11 |  | NEW BUSINESS MODEL DEVELOPMENT IN CHINA                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        |  | The Company
is currently developing and evaluating a revenue-sharing business model (Per
Procedure Fees charged to users, the PPF model) with the
Companys users in China. To capitalize on the fast growth of the procedure
volumes in Chinas market, management believes that this business model
will provide the Company with a long-term steady cash flow and better
profitability from the market. This revised business model would be implemented
on a prospective basis.

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Item 2. Managements Discussion and Analysis or Plan  of Operation.

Forward-Looking Statements and Associated Risks

THIS QUARTERLY REPORT ON FORM 10-QSB CONTAINS FORWARD-LOOKING STATEMENTS THAT HAVE BEEN MADE PURSUANT TO THE PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.  THESE FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENTS CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS, BELIEFS AND ASSUMPTIONS. WORDS SUCH AS ANTICIPATES, EXPECTS, INTENDS, PLANS, BELIEVES, SEEKS, ESTIMATES, VARIATIONS OF SUCH WORDS AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING STATEMENTS.  THESE STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND ASSUMPTIONS THAT ARE DIFFICULT TO PREDICT; THEREFORE, ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR FORECASTED IN ANY SUCH FORWARD-LOOKING STATEMENTS.  THESE RISKS AND UNCERTAINTIES INCLUDE THOSE DISCUSSED IN PART I  ITEM 1 
DESCRIPTION OF BUSINESS  RISK FACTORS AND PART II  ITEM 6  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS CONTAINED IN THE COMPANYS FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2005, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.  UNLESS REQUIRED BY LAW, THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.  INVESTORS SHOULD REVIEW THIS QUARTERLY REPORT IN COMBINATION WITH THE COMPANYS ANNUAL REPORT ON FORM 10-KSB IN ORDER TO HAVE A MORE COMPLETE UNDERSTANDING OF THE PRINCIPAL RISKS ASSOCIATED WITH AN INVESTMENT IN THE COMPANYS STOCK.

Overview

LaserSight is principally engaged in the manufacture and supply of narrow beam scanning excimer laser systems, topography-based diagnostic workstations, and other related products used to perform procedures that correct common refractive vision disorders such as nearsightedness, farsightedness and astigmatism.  Since 1994, we have marketed our laser systems commercially in over 30 countries worldwide.  We are currently focused on selling in selected international markets; primarily China.

We have significant liquidity and capital resource issues relative to the timing of our accounts receivable collection and the successful completion of new sales compared to our ongoing payment obligations and our recurring losses from operations and net capital deficiency raises substantial doubt about our ability to continue as a going concern.  We have experienced significant losses and operating cash flow deficits, and we expect that operating cash flow deficits will continue without improvement in our operating results.

**Bankruptcy**

On September 5, 2003 we filed for Chapter 11 bankruptcy protection and reorganization.  We operated in this manner from September 5, 2003 through June 10, 2004, when the re-organization was approved by the Bankruptcy Court. A final decree of bankruptcy was obtained on December 22, 2004.  As a result of the bankruptcy re-structuring, we have recorded credits for debt forgiveness of approximately $15.3 million during the three months ended June 30, 2004.  Additionally, we recognized charges of approximately $8.0 million during 2003 for patent impairment, accounts receivable and inventory write offs.  We cancelled all of its outstanding common and preferred stock, including warrants and options, and issued 9,997,195 new common shares on June 30, 2004.  We emerged from bankruptcy with approximately $0.7 million in unsecured liabilities, approximately $2.1 million in secured debt,
approximately $5.3 million in deferred revenue and approximately $1.0 million of DIP financing provided by a related party, as part of the approved bankruptcy plan.  The related party converted $1.0 million of the DIP financing for an additional 6,850,000 common shares.

Page 11

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China Transaction

In February 2004, we received a commitment from a related party purchaser to purchase at least $12.0 million worth of our products during the 12-month period ending February 2005 and to distribute our products in Mainland China, Hong Kong, Macao and Taiwan.  The purchase agreement provides for two one-year extensions. From February 2004 through September 2005, approximately $10.1 million worth of products were sold under this agreement. Product issues reduced shipments during the third and fourth quarters of 2004 and the first and second quarters of 2005.  These issues have been resolved through revisions to product crating for shipment, software modifications and revised shipper instructions. An extension has not been signed, but the parties have continued to conduct business under similar terms as set forth in the purchase agreement.

WaveLight Transaction

In March 2005 we executed a worldwide non-exclusive license agreement with WaveLight Laser Technologie AG (WaveLight) to use and reproduce the Lin Scanning Patents for products to be used in ophthalmic surgery, which became effective on March 3, 2005, and an option to acquire a license to the Companys Apple Patents. Both the non-exclusive license and the option include certain WaveLight co-enforcement rights. As consideration for the license, we had received payments totaling $900,000 by October 2005. $45,000 in broker fees were paid to an unrelated party for their assistance in closing this transaction.  The agreement terminates when the patents expire, or earlier in the event of the occurrence of certain events of default.

New Business Model

Since the beginning of this year, we have been developing a revenue-sharing
business model with our users in China, (Per Procedure Fees charged to users, or
the PPF model). We believe this business model will provide us a
long-term steady cash flow and better profitability.  It will allow us to
capitalize on the fast growth of the procedure volumes in Chinas market.
This revised business model would be implemented on a prospective basis. The
plan concept is to change less at the original purchase date, but to charge a
PPF fee over the life of the contract. To prepare for these changes in our China
market, we have developed plans, including seeking capital infusion by long-term
loan or equity, and preparing detailed plans for our operation in China. We
believe we will have some trial results of our PPF model in China in the second
quarter of this year.

Results of Operations

The following table sets forth for the periods indicated information derived from our statements of operations for those periods expressed as a percentage of net sales, and the percentage change in such items from the comparable prior year period.  Any trends illustrated in the following table are not necessarily indicative of future results.

Page 12

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|                                                    |  | As a Percentageof Net SalesThree   Months EndedMar 31, |       | Three   Months Ended    Mar 31, | 
|--------------------------------------------------- |  | ------------------------------------------------------ | ----- | ------------------------------- | 
|                                                    |  |                                                        |       |                                 | 
|                                                    |  | 2006                                                   |       | 2005                            | 
|                                                    |  |                                                        |       |                                 | 
|Statement of Operations Data:                       |  |                                                        |       |                                 | 
|Net   Revenues:                                     |  |                                                        |       |                                 | 
|Refractive products                                 |  |                                                        | 68.5  | %                               | 
|Patent services                                     |  |                                                        | 31.5  | %                               | 
|                                                    |  |                                                        |       |                                 | 
|Net Revenues                                        |  |                                                        | 100.0 | %                               | 
|Cost   of Revenue                                   |  |                                                        | 38.4  | %                               | 
|                                                    |  |                                                        |       |                                 | 
|Gross   Profit (1)                                  |  |                                                        | 61.6  | %                               | 
|Research,   development and regulatory expenses (2) |  |                                                        | 5.2   | %                               | 
|Other   general and administrative expenses         |  |                                                        | 90.0  | %                               | 
|Selling-related   expenses (3)                      |  |                                                        | 5.3   | %                               | 
|Amortization   of intangibles                       |  |                                                        | 1.4   | %                               | 
|                                                    |  |                                                        |       |                                 | 
|Net   Income from operations                        |  |                                                        | -40.2 | %                               | 

|   
|---
|(1)
|   
|(2)
|   
|(3)

Three Months Ended March 31, 2006, Compared to Three Months Ended March 31, 2005

Our consolidated
revenues totaled approximately $0.6 million for the three months ended March 31,
2006 a decrease of approximately $1.6 million or 72% compared to revenues for
the three months ended March 31, 2005 of approximately $2.2 million. The
decrease was primarily attributable to decreased sales of laser systems. Two
lasers systems were sold in the first quarter of 2006 and eight were sold in the
first quarter of 2005. For the three months ended March 31, 2006, parts revenues
were $31,000 compared to $24,000 for the three months ended March 31, 2005. This
also included a $0.1 million reduction in sales of our AstraMax ® diagnostic
workstation; no AstraMax sales were recorded in the three months ended March 31,
2006 compared to four for the comparable period in 2005. Our 2006 budget
projected laser sales at 27 for the year.  We still feel we will ship 27
lasers but the sales will occur primarily in the last six months of the year. If
we do not receive product registration renewals as planned we may not be able to
make and sell 27 lasers this year.

Page 13

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Net revenues from patent services decreased by
approximately $66,000, or 25%, from approximately $261,000 for the three months
ended March 31, 2005 to approximately $194,000 for the three months ended March
31, 2006. The reduction in royality revenues is due to a portion of the deferred
revenue becoming fully amortized. During the first quarter of 2005, the Company
licensed its Lin scanning patent for $855,000, net of expenses of $45,000. This
deferred revenue is being amortized over the remaining life of the patent,
approximately seven years.

Geographically, China has become our most
significant market with $183,000 in revenue during the three months ended March
31, 2006, as compared to approximately $1.9 million for the three months ended
March 31, 2005.

Consolidated cost of sales includes direct
material costs, manufacturing wages, inbound freight, rework, scrap and standard
cost variances.  For the three months ended March 31, 2006, consolidated
cost of sales of $237,000 was approximately 38% of net revenues of $616,000,
compared to the same period in 2005 when our cost of sales was approximately 46%
of net revenues. For the three months ended March 31, 2006, consolidated cost of
sales of $237,000 was approximately 56% of product revenues of $422,000,
compared to the same period in 2005 when our cost of sales was approximately 52%
of product revenues. The improvement of 2006 margins is primarily related to
improved margins on part sales and reclaimed inventory from returned lasers. For
the remainder of 2006, our emphasis will be on continued unit cost reductions
driven by efficient purchasing and limited re-design of our product. Our goal is
to maintain a 47% consolidated cost of sales.

Selling-related expenses consist of those items
directly related to sales activities, including commissions on sales, royalty or
license fees, warranty expenses, and costs of shipping and installation.
Selling-related expenses for the three months ended March 31, 2006 decreased
$227,000, or 87%, to $33,000 from $259,000 during 2005. This decrease was
primarily attributable to reduced licensing fees and warranty reserves due to
lower sales and lower shipping costs.  Our 2006 operating plan projected
our selling-related expense ratio to be 11% of net revenues. For the three
months ended March 31, 2006, selling-related expenses were 5% of revenues
primarily due to the reduction in the warranty reserve and shipping costs. Our
current plan projects our selling-related expense ratio to be 9% of net revenues
for the remainder of 2006.

General and administrative expenses decreased by
$119,000, or 18%, to $554,000 in the three months ended March 31, 2006, from
$673,000 for the same period in 2005. The decrease was primarily due to lower
legal fees, and accounting fees, salaries and insurance premiums. The current
plan projects our general and administrative expenses ratio to be 28% of net
revenues. This is a higher percentage than our original budget which is caused
by general and administrative expenses remaining similar to our original
projections while revenues were lower than originally forecasted.

Research,
development and regulatory expenses decreased by $21,000 to $32,000 for the
three months ended March 31, 2006 from $53,000 for the three months ended March
31, 2005. Even though our resources are limited, we continue to offer
improvements to our product. Our operating plan for fiscal 2006 projected
business levels that would require research, development and regulatory expenses
to be similar to 2005.

In the three months
ended March 31, 2006, amortization of intangibles remained unchanged at $8,400.
In accordance with our operating plan, amortization of intangibles will be at a
rate of approximately $33,000 per year.

Other income and expense for the three months
ended March 31, 2006 consisted of the following:

| |  | We received $253 of interest income on notes   receivable.                                                                                                                                                                                                                                                                                                      
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                 
| |  | $6,108 was   received as abandoned property from various states.                                                                                                                                                                                                                                                                                                
| |   |                                                                                                                                                                                                                                                                                                                                                                 
| |  | In the three   months ended March 31, 2006, we accrued $69,000 in interest expense.  All of the accrued interest was paid except   for $22,500 of accrued interest for the DIP financing. The interest expense   includes $28,000 of amortized financing costs.  The amortization of financing costs is $8,600 per month and   will continue until June of 2007.

Page 14

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For the three months ended March 31, 2006 and
2005, we had no income tax expense due to our net operating loss
carryforwards.

Net loss for the three months ended March 31, 2006
was approximately $311,000 compared to a $91,000 profit for the same period in
2005, a decrease of approximately $402,000. This $402,000 decrease in the
current quarter was comprised approximately of:

| |  | decreased gross profit of $793,000 due to lower   revenues.                                                      
| | - | -----------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                  
| |  | decreased G&A expenses of $49,000 due to lower   insurance, lease expense and board of director fees.            
| |   |                                                                                                                  
| |  | decreased interest expense of $22,000 due to lower   loan balances.                                              
| |   |                                                                                                                  
| |  | decreased salaries of $32,000.                                                                                   
| |   |                                                                                                                  
| |  | decreased professional expenses of $61,000 for   accounting and legal fees.                                      
| |   |                                                                                                                  
| |  | decreased selling related expenses of $227,000   related to reduced warranty estimates and unit shipping charges.

Inflation and Currency Fluctuation

Inflation and currency fluctuations have not previously had a material impact upon the results of operations and are not expected to have a material impact in the near future.

Liquidity and Capital Resources

On September 5, 2003 we filed for Chapter 11 bankruptcy protection and reorganization. We operated in this manner from September 5, 2003 through June 10, 2004, when the re-organization was approved by the Bankruptcy Court, effective June 30, 2004. A final decree of bankruptcy was obtained on December 22, 2004. We cancelled all of our outstanding common and preferred stock, including warrants and options, and issued 9,997,195 new common shares on June 30, 2004.  We emerged from bankruptcy with approximately $0.7 million in unsecured liabilities, approximately $2.1 million in secured debt, approximately $5.3 million in deferred revenue and approximately $1.0 million of DIP financing provided by NIIC.  NIIC converted $1.0 million of the DIP financing for additional equity.

With the new
revenues being generated from the China Group and projected sales to other
customers, management expects that our cash and cash equivalent balances and
funds from operations (which are principally the result of sales and collection
of accounts receivable) may not be sufficient to meet our anticipated operating
cash requirements for the next several months. Our plans include the raising of
additional debt or equity. This expectation is based upon assumptions regarding
cash flows and results of operations over the next several months and is subject
to substantial uncertainty and risks beyond our control.

The Company started the renewal registration process to sell our laser products in China in early 2005. Our laser product registration in China expired in December 2005.  Until we receive the renewal of the product registration, we cannot sell our laser products in China.

After responding to requests for more information from the State Food and Drug Administration in China and conducting tests at a government selected laboratory, our application for renewal was accepted in early 2006.  We expect the renewal will be granted in the second quarter of 2006.

Page 15

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Our product CE certificate expired in February this year, and we are in the process of renewing this certificate also. We cannot sell our products to customers where CE certificate is required before we receive the renewed certificate. We expect to receive our CE certificate in the second quarter of 2006. If these assumptions prove incorrect, the duration of the time period during which we could continue operations could be materially shorter.  We continue to face liquidity and capital resource issues relative to the timing of the successful completion of new sales compared to our ongoing payment obligations.  To continue our operations, we will need to generate increased revenues, collect them and reduce our expenditures relative to our recent history.  While we are working to achieve these improved results, we cannot assure you that we will be able to generate increased revenues and
collections to offset required cash expenditures.  Our revenues from the China Group were approximately $183,000 in the three-months ended March 31, 2006. Accounts receivable due from the China Group as of March 31, 2006 totaled $993,651, which was virtually all of our accounts receivable balance at March 31, 2006. $810,591 of the China Groups balance is over ninety days past due. As of May 12, 2006, $460,651 of the accounts receivable balance remains unpaid.  While we have verbal promises from the China Group to pay the accounts receivable balance and management continues to believe that we will fully realize the balance due, the ultimate realization thereof can not be assured. The loss of the China Group as a customer or the non-payment or slow payment of monies owed to us could have a significant adverse effect on our ability to continue as a going concern.

The Company signed a three-year note with Heller Healthcare Finance, Inc (Heller) and GE Healthcare Financial Services, Inc., as successor-in-interest to Heller (collectively GE) on August 30, 2004. The note expires on June 30, 2007.  The note bears interest of 9%.  Covenants require the Company to maintain a minimum inventory balance of $1,500,000, minimum quarterly revenues of $1,000,000 and an annual net income provision.  For the year ended December 31, 2005 and any subsequent trailing twelve month periods, as measured on the last day of each calendar quarter, the Companys earnings before interest, taxes, depreciation and amortization cannot fall below $550,000. As of May 12, 2006, we are not in compliance with all covenants of our loan agreement. The Company has not met minimum quarterly revenue targets of $1,000,000, a rolling twelve-month $550,000
of EBIDTA and has not presented a budget for 2006.

There can be no assurance as to the correctness of the assumptions underlying our business plan or our expectations regarding our working capital requirements or our ability to continue operations.

Our ability to continue operations is based on factors including the success of our sales efforts in China and in other foreign countries where our efforts will initially be primarily focused, increases in accounts receivable and inventory purchases when sales increase, the uncertain impact of the market introduction of our AstraMax diagnostic workstations, and the absence of unanticipated product development and marketing costs.

During the quarter ended March 31, 2006 operating cash flow was positive primarily due to collections of accounts receivable. But our change in cash was negative due to payments on notes payable.  Our expectations regarding future working capital requirements and our ability to continue operations are based on various factors and assumptions that are subject to substantial uncertainty and risks beyond our control, and no assurances can be given that these expectations will prove correct.  The occurrence of adverse developments related to these risks and uncertainties or others could result in our incurring unforeseen expenses, being unable to generate additional sales, to collect new and outstanding accounts receivable, to control expected expenses and overhead, or to negotiate payment terms with creditors, and we would likely be unable to continue operations.

Item 3. Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

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We carry out a variety of on-going procedures, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and procedures. Our Chief Executive Officer and Chief Financial Officer have concluded that such controls and procedures are currently effective at the reasonable assurance level.

PART II - OTHER INFORMATION

|Item 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Legal Proceedings.                                            
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                               
|Certain   legal proceedings against LaserSight are described in Item 3 (Legal   Proceedings) of LaserSights Form 10-KSB for the year ended December 31,   2005, and in Note 9 to the Financial Statements in Part I, Item 1 of this   report, which are incorporated herein by this reference.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Item 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Unregistered Sales of Equity   Securities and Use of Proceeds.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Not applicable.                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                               
|Item 3                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Defaults   Upon Senior Securities.                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                               
|The   Company signed a three-year note with Heller Healthcare Finance, Inc   (Heller) and GE Healthcare Financial Services, Inc., as successor-in-interest   to Heller (collectively GE) on August 30, 2004. The note expires on June   30, 2007.  The note bears interest of   9%.  Covenants require the Company to   maintain a minimum inventory balance of $1,500,000, minimum quarterly   revenues of $1,000,000 and an annual net income provision.  For the year ended December 31, 2005 and   any subsequent trailing twelve month periods, as measured on the last day of   each calendar quarter, the Companys earnings before interest, taxes,   depreciation and amortization cannot fall below $550,000. As of May 12, 2006,   we are not in compliance with all covenants of our loan agreement. The   Company has not met minimum quarterly revenue targets of $1,000,000, a   rolling
twelve-month $550,000 of EBIDTA and has not presented a budget for   2006.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|Item 4                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Submission of Matters to a Vote of   Security Holders.        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Not applicable.                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                               
|Item 5                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Other   Information.                                          
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Not applicable.                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                                               
|Item 6                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Exhibits.                                                     

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|INDEX   TO EXHIBITS
|-------------------
|                   
|Exhibit   Number   
|                   
|3.1                
|                   
|3.2                
|                   
|3.3                
|                   
|3.4                
|                   
|10.1               
|                   
|10.2               
|                   
|10.3               
|                   
|10.4               
|                   
|10.5               
|                   
|10.6               
|                   
|10.7               
|                   
|10.8               
|                   
|10.9               

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|10.10 |  | Amendment Number One to   the Third Amended and Restated Secured Term Note between the Company and GE   dated May 23, 2005 (filed as Exhibit 10.2   to the Companys Form 10-QSB filed on August 5, 2005*).
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                                                                            
|10.11 |  | Amendment Number One to   the Restated Promissory Note between the Company and New Industries   Investment Consultants (HK) Ltd. dated February 15, 2006                                                   
|      |  |                                                                                                                                                                                                            
|11    |  | Statement of Computation of Loss Per Share (Included   in Financial Statements in Item 7 hereof)                                                                                                           
|      |  |                                                                                                                                                                                                            
|31.1  |  | Certification of Chief Executive Officer Pursuant to   Rule 13a-14(a)                                                                                                                                      
|      |  |                                                                                                                                                                                                            
|31.2  |  | Certification of Chief Financial Officer Pursuant to   Rule 13a-14(a)                                                                                                                                      
|      |  |                                                                                                                                                                                                            
|32.1  |  | Certifications of CEO Pursuant to Section 1350                                                                                                                                                             
|      |  |                                                                                                                                                                                                            
|32.2  |  | Certifications of CFO Pursuant to Section 1350                                                                                                                                                             

|                                                                                                                                                  
|--------------------------------------------------------------------------------------------------------------------------------------------------
|**Incorporated herein by reference.  File No. 0-19671.*                                                                                           
|                                                                                                                                                  
|**Confidential treatment has been granted for   portions of this document.  The   redacted material has been filed separately with the commission.

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SIGNATURES

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

|                    | LaserSight   Incorporated
|------------------- | -------------------------
|                    |                          
|                    |                          
|Dated: May 15, 2006 | By:                      
|                    |                          
|                    |                          
|                    |                          
|                    |                          
|                    |                          
|Dated: May 15, 2006 | By:                      
|                    |                          
|                    |                          
|                    |                          

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