SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  FORM 10-Q/A     
(Mark One)
[ X ]  Quarterly  Report  Pursuant  to  Section  13 or  15(d) of the  Securities
       Exchange Act of 1934. For the quarterly period ended September 30, 1997.

                                                         or

[   ]  Transition  Report  Pursuant   to  Section 13 or 15(d) of the  Securities
       Exchange    Act   of   1934.    For    the    Transition    period   from
                                      to                                   .
       ------------------------------    ----------------------------------


Commission File Number:  0-19671

                             LASERSIGHT INCORPORATED
                             -----------------------
             (Exact name of registrant as specified in its charter)


        Delaware                                           65-0273162
  --------------------                          ------------------------------
(State of Incorporation)                       (IRS Employer Identification No.)



                 12161 Lackland Road, St. Louis, Missouri 63146
               (Address of principal executive offices) (Zip Code)

                                 (314) 469-3220
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


Yes   X            No
    -----             -----

         The Number of shares of the registrant's Common Stock outstanding as of
November 13, 1997 is 9,984,672.


<PAGE>
   
                                EXPLANATORY NOTE

This filing amends certain  previously-filed  information  contained in Part I.,
Items 1 and 2 and Part II., Item 1.  No other items have been amended.
    

                    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 Exchange Act) that involve  risks and  uncertainties.  The Company'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 - Uncertainties and Other Issues"
in this  report  and in the Company's Annual  Report on Form 10-K/A for the year
ended December 31, 1996.
    

                                      INDEX
                                                                            
PART I.   FINANCIAL INFORMATION

          Item 1. Condensed Consolidated Financial Statements

                  Condensed Consolidated Balance Sheets as of September 30, 1997
                  and December 31, 1996            

                  Condensed  Consolidated Statements of Operations for the Three
                  Month Periods and Nine Month  Periods Ended September 30, 1997
                  and 1996                   

                  Condensed  Consolidated  Statements of Cash Flows for the Nine
                  Month Periods Ended September 30, 1997 and 1996
                                                           

                  Notes to Condensed Consolidated Financial Statements

          Item 2. Management's Discussion and Analysis of FinancialCondition and
                  Results of Operations              

PART II.  OTHER INFORMATION

          Item 1. Legal Proceedings                

          Item 2. Changes in Securities             

          Item 3. Defaults Upon Senior Securities  

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

          Item 5. Other Information               

          Item 6. Exhibits and Reports on Form 8-K 



<PAGE>
<TABLE>
                                           PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
                                      LASERSIGHT INCORPORATED AND SUBSIDIARIES
                                       CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                                                      September 30,      December 31,
                                                                                          1997              1996
                                                                                     ----------------   --------------
<S>                                                                                    <C>                 <C>
CURRENT ASSETS                                            ASSETS                       (Unaudited)
  Cash and cash equivalents                                                               $1,164,158       $2,003,501
  Accounts receivable - trade, net                                                         3,840,332        5,458,153
  Notes receivable - current portion, net                                                  3,711,675        3,159,575
  Inventories                                                                              3,991,541        3,328,903
  Deferred tax assets                                                                        570,296          667,998
  Income taxes recoverable                                                                    22,404          803,154
  Other current assets                                                                       577,019          221,922
                                                                                     ----------------   --------------
                                                     TOTAL CURRENT ASSETS                 13,877,425       15,643,206

Restricted cash                                                                            3,200,000                -
Notes receivable, less current portion, net                                                3,538,268        2,620,375
Property and equipment, net                                                                2,214,293        1,936,220
Deferred financing costs, net                                                                392,043                -
Goodwill, net                                                                             14,783,566       12,099,032
Patents, net                                                                              11,462,339           94,946
Pre-market approval application, net                                                       2,666,708                -
License agreement, net                                                                       800,000                -
Other assets, net                                                                          1,860,807        1,856,434
                                                                                     ----------------   --------------
                                                                                         $54,795,449      $34,250,213
                                                                                     ================  ===============
                                        LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                                                        $2,525,677       $2,216,792
  Note payable, less discount of $322,222                                                  3,677,778                -
  Note payable - related party                                                                     -        1,000,000
  Current portion of capital lease obligation                                                224,549          206,139
  Accrued expenses                                                                         1,748,266          764,084
  Accrued commissions                                                                      1,110,529        1,214,235
  Dividends payable                                                                                -           39,000
  Other current liabilities                                                                   63,998          182,155
                                                                                     ----------------   --------------
                                                  TOTAL CURRENT LIABILITIES                9,350,797        5,622,405
                                                                
Refundable deposits                                                                          203,000          240,000
Accrued expenses, less current portion                                                       590,369          309,656
Deferred income taxes                                                                        570,296          667,998

Long-term obligations                                                                        971,018          641,623

Commitments and contingencies

Redeemable convertible preferred stock:
  Series B - par value $.001 per share; authorized 10,000,000 shares;
  1,600 and 0   issued at September 30, 1997 and December 31, 1996                        14,374,027                -

Stockholders' equity:
 Convertible preferred stock,  Series A - par value $.001 per share;  authorized
   10,000,000 shares; 0 and 8 shares issued and outstanding at
   September 30, 1997 and December 31, 1996, respectively                                          -                -
 Common stock - par value $.001 per share; authorized 20,000,000 shares;
   10,149,872 and 8,454,266 shares issued at September 30, 1997 and
   December 31, 1996, respectively                                                            10,150            8,454
 Additional paid-in capital                                                               40,018,241       30,080,560
 Paid-in capital - warrants                                                                  592,500                -
 Obligation to issue common stock                                                                  -        3,065,056
 Stock subscription receivable                                                            (1,140,000)      (1,140,000)
 Accumulated deficit                                                                     (10,112,240)      (4,612,830)
 Less treasury stock, at cost;  170,200 shares                                              (632,709)
                                                                                                             (632,709)
                                                                                     -----------------  ---------------
                                                                                          28,735.942       26,768,531
                                                                                     -----------------   --------------
                                                                                         $54,795,449      $34,250,213
                                                                                     =================  ===============
 See accompanying notes to the condensed consolidated financial statements.
</TABLE>


<TABLE>


                    LASERSIGHT INCORPORATED AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<CAPTION>


                                                   Three Months Ended                         Nine Months Ended
                                                     September 30,                              September 30,
                                          -------------------------------------      ------------------------------------
                                                1997                 1996                 1997                1996
                                          -----------------     ---------------      ---------------     ----------------
                                                                                                             (Restated)     
<S>                                             <C>                 <C>                 <C>                  <C>        
REVENUES, Net                                   $6,156,359          $4,494,232          $18,083,073          $15,070,482

COST OF SALES                                    1,068,498             794,982            2,934,001            2,259,527
PROVIDER PAYMENTS                                1,630,616           1,069,184            4,450,855            2,998,680
                                          -----------------     ---------------      ---------------     ----------------

GROSS PROFIT                                     3,457,245           2,630,066           10,698,217            9,812,275

RESEARCH, DEVELOPMENT AND REGULATORY
  EXPENSES                                         816,522             325,925            1,729,153            1,373,547

SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES                                       4,660,208           4,504,162           13,568,380           12,598,430
                                          -----------------     ---------------      ---------------     ----------------

LOSS FROM OPERATIONS                            (2,019,485)         (2,200,021)          (4,599,316)          (4,159,702)

OTHER INCOME AND EXPENSES
  Interest and dividend income                      94,401              42,195              292,272              132,109
  Interest expense                                (483,794)            (54,480)            (911,966)            (102,068)
  Other                                                -              (300,107)            (280,400)            (300,107)
                                           ------------------    ---------------      ----------------    ----------------

NET LOSS BEFORE INCOME TAXES                    (2,408,878)         (2,512,413)          (5,499,410)          (4,429,768)

INCOME TAX BENEFIT                                       -            (458,727)                   -           (1,119,378)
                                          ------------------    ---------------      ----------------    ----------------

NET LOSS                                        (2,408,878)         (2,053,686)          (5,499,410)          (3,310,390)
   
CONVERSION DISCOUNT ON PREFERRED STOCK             (41,573)                  -              (41,573)          (1,010,557)

PREFERRED STOCK DIVIDEND REQUIREMENTS                    -             (77,674)             (13,350)            (345,694)
                                          -----------------     ---------------      ---------------     ----------------

LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS       $(2,450,451)        $(2,131,360)         $(5,554,333)         $(4,666,641)
                                          =================     ===============      ===============     ================


LOSS PER COMMON SHARE
  Primary:                                          $(0.25)             $(0.28)             $(0.59)              $(0.64)
                                          =================     ===============      ===============     ================
  Assuming full dilution:                           $(0.25)             $(0.27)             $(0.59)              $(0.59)
                                          =================     ===============      ===============     ================
    
WEIGHTED AVERAGE NUMBER OF SHARES
  OUTSTANDING
  Primary:                                       9,812,000           7,639,000            9,342,000            7,238,000
                                          =================     ===============      ===============     ================
  Assuming full dilution:                        9,812,000           8,017,000            9,390,000            7,848,000
                                          =================     ===============      ===============     ================

      See accompanying notes to condensed consolidated financial statements
</TABLE>
<PAGE>

<TABLE>

                    LASERSIGHT INCORPORATED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                  NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
                                   (Unaudited)
<CAPTION>

                                                                                   1997                   1996
                                                                            ------------------     ------------------
<S>                                                                               <C>                   <C>
CASH FLOW FROM OPERATING ACTIVITIES
  Net loss                                                                        $(5,499,410)          $(3,310,390)
  Adjustments to reconcile net loss to net cash used in operating
    activities:
  Depreciation and amortization                                                     1,814,587                711,528
  Decrease in accounts and notes receivable                                           292,828              1,714,377
  Increase in inventories                                                            (879,348)            (1,430,642)
  Increase (decrease) in accounts payable                                             308,885               (300,472)
  Increase (decrease) in accrued liabilities                                          724,447                (36,682)
  Decrease (increase) in income taxes                                                 780,750             (1,404,967)
  Other                                                                              (498,467)               440,532
                                                                            -------------------    ------------------

NET CASH USED IN OPERATING ACTIVITIES                                              (2,955,728)            (3,616,716)

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of furniture and equipment, net                                           (517,206)              (250,862)
  Acquisition of other intangible assets                                          (15,379,988)                     -
  Proceeds from exclusive license of patents                                        4,000,000                      -
  Transfer to restricted cash account                                              (3,200,000)                     -
  Purchase of managed care contract                                                  (150,000)                     -
  Purchase of businesses, net of cash acquired                                              -               (179,607)
  Proceeds from sale and leaseback transaction                                              -                957,180
                                                                            ------------------     ------------------

NET CASH PROVIDED BY (USED IN) INVESTING
  ACTIVITIES                                                                      (15,247,194)               526,711

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from issuance of note payable, net                                       3,414,142                      -
  Proceeds from exercise of stock options and warrants                                 98,363                260,289
  Repayments of capital lease obligation                                             (152,195)               (61,735)
  Repayments of notes payable - acquisition related                                (1,000,000)            (1,139,100)
  Repayments of notes payable - officer                                                     -               (465,000)
  Proceeds from issuance of preferred stock, net                                   15,003,269              5,342,151
                                                                            ------------------     ------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                          17,363,579              3,936,605
                                                                            ------------------     ------------------

INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                                                        (839,343)               846,600

CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD                                                               2,003,501              1,598,339
                                                                            ------------------     ------------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                           $1,164,158             $2,444,939
                                                                            ==================     ==================

   See accompanying notes to the condensed consolidated financial statements.
</TABLE>

<PAGE>


                    LASERSIGHT INCORPORATED AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              Nine Month Periods Ended September 30, 1997 and 1996


NOTE 1   BASIS OF PRESENTATION

   
         The accompanying unaudited, condensed consolidated financial statements
         of  LaserSight  Incorporated  and  subsidiaries  (the  Company)  as  of
         September  30,  1997,  and for the three  month  periods and nine month
         periods  ended  September  30,  1997 and 1996  have  been  prepared  in
         accordance with generally  accepted  accounting  principles for interim
         financial  information and with the  instructions to Form 10-Q and Rule
         10-01 of Regulation  S-X.  Accordingly,  they do not include all of the
         information  and  note  disclosures   required  by  generally  accepted
         accounting   principles  for  complete  financial   statements.   These
         condensed   consolidated   financial   statements  should  be  read  in
         conjunction  with  the  consolidated  financial  statements  and  notes
         thereto included in the  Company's annual report on Form 10-K/A for the
         year  ended  December  31,  1996.  In the  opinion of  management,  the
         condensed  consolidated  financial  statements  include all adjustments
         necessary for a fair  presentation of consolidated  financial  position
         and the results of operations and cash flows for the periods presented.
         The results of  operations  for the three and nine month  periods ended
         September  30, 1997 are not  necessarily  indicative  of the  operating
         results for the full year.
    

NOTE 2   PER SHARE INFORMATION

         Net loss per common share is computed using the weighted average number
         of common shares and common share equivalents  outstanding  during each
         period.  Common  share  equivalents  include  options  and  warrants to
         purchase  Common  Stock and are included in the  computation  using the
         treasury  stock  method if they  would have a  dilutive  effect.  Fully
         diluted  loss per  share for the three  and nine  month  periods  ended
         September 30, 1997 were  anti-dilutive  and  therefore,  except for the
         impact of Preferred  Stock converted to Common Stock during the period,
         are the same as primary loss per share.

   
         Accounting Change - Loss Per Share

         Pursuant to Emerging  issues Task Force (EITF)  Announcement  No. D-60,
         the  value of the  conversion  discount  on the  Series  A  Convertible
         Preferred  Stock  has  been  reflected  as  an  increase  to  the  loss
         attributable to common shareholders for the nine months ended September
         30, 1996.  The value of the  conversion  discount,  approximately  $1.0
         million,  and per share  effect,  ($0.13)  primary  and  ($0.12)  fully
         diluted, has been reflected in the condensed  consolidated statement of
         operations. Primary loss per share and fully diluted loss per share, as
         originally reported in the Company's quarterly report, were ($0.51) and
         ($0.47),  respectively,  for the nine month period ended  September 30,
         1996.  This  change did not affect any of the  reported  amounts in the
         condensed  consolidated  balance  sheet as of September 30, 1996 or the
         net loss for the nine month period ended September 30, 1996.
    

         In February 1997,  Statement of Financial  Accounting  Standards (SFAS)
         No. 128,  "Earnings Per Share," was issued  establishing  new standards
         for  computing  and  presenting  earnings  per  share.  The  historical
         measures of earnings per share (primary and fully diluted) are replaced
         with two new  computations  of earnings per share (basic and  diluted).
         The  Company  will adopt SFAS 128 as of  December  31,  1997.  Loss per
         share, on a pro forma basis, for the three and nine month periods ended
         September  30, 1997 and 1996,  computed  pursuant to the  provisions of
         SFAS 128, would have been as follows:

                                   Three Months Ended      Nine Months Ended
                                      September 30,          September 30,
                                      -------------          -------------
                                    1997       1996         1997        1996
                                    ----       ----         ----        ----
   
                                                                     (Restated)
         Basic loss per share     $(0.25)    $(0.26)       $(0.59)     $(0.61)

         Diluted loss per share   $(0.25)    ($0.25)       $(0.59)     $(0.53)
    

NOTE 3   INVENTORIES

         Inventories,  which  consist  primarily  of laser  systems,  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 September 30, 1997 and December 31, 1996 are summarized
         as follows:

                                         September 30, 1997    December 31, 1996
                                         ------------------    -----------------

         Raw materials                        $2,772,585           $2,008,610
         Work-in-process                         107,110              448,906
         Finished goods                          821,447              664,646
         Test equipment-clinical trials          290,399              206,741
                                         ------------------    -----------------
                                                             
                                              $3,991,541           $3,328,903
                                         ==================    =================

NOTE 4   BUSINESS COMBINATIONS

         LaserSight Centers Incorporated (Centers)
         -----------------------------------------

         In March 1997, the Company amended the purchase and royalty  agreements
         related  to the 1993  acquisition  of  Centers.  The  amended  purchase
         agreement provided for the Company to issue 625,000 unregistered common
         shares  (valued  at   $3,320,321)   with  600,000   additional   shares
         contingently   issuable  based  upon  future  operating  profits.  This
         replaces the  provision  calling for  1,265,333  contingently  issuable
         shares  based on  cumulative  revenues or other  future  events and the
         uncertainties  associated  therewith.  The  amended  royalty  agreement
         reduces the royalty from $86 to $43 per refractive procedure and delays
         the obligation to pay such royalties  until the sooner of five years or
         the issuance of all contingently issuable shares as described above.

NOTE 5   COMMITMENTS AND CONTINGENCIES

         Shareholder vote

         Shareholder  approval  is  required  in  connection  with  the  private
         placement  of  1,600  shares  of  Series  B  Convertible  Participating
         Preferred  Stock  (Series B  Preferred  Stock) (see Note 6). If for any
         reason the Company's shareholders do not approve, by December 26, 1997,
         the possible  issuance of an  indefinite  number of shares  issued upon
         conversion,  the Company  may be  obligated  to redeem,  at the Special
         Redemption Price (as defined below),  a sufficient  number of shares of
         Series B Preferred  Stock which will permit  conversion  of 200% of the
         remaining  shares of Series B Preferred  Stock  without  breaching  any
         obligation of the Company under the Company's  listing  agreement  with
         the Nasdaq National Market. The "Special Redemption Price" means a cash
         payment  equal to the  greater  of (i) the  liquidation  preference  of
         $10,000  multiplied  by 125% or (ii) the  current  value of the  Common
         Stock,  using the price per share of Common Stock, which the holders of
         such shares of Series B Preferred  Stock would otherwise be entitled to
         receive upon conversion.  Such redemption must be completed within five
         business days of the event which required such redemption. Any delay in
         payment  will cause such  redemption  amount to accrue  interest at the
         rate of 1% per  month  during  the first 30 days,  pro rated  daily (2%
         monthly, pro rated daily, thereafter).

         FDA approval

         In conjunction with acquisitions  from Photomed,  Inc. (as described in
         Note 7), several  contingent  payments  included in the transaction are
         subject to FDA  approval.  If the FDA approves the acquired  Pre-Market
         Approval  (PMA)  application  by July 29,  1998,  the  Company  will be
         obligated  to pay $1.75  million.  If the FDA  approves  the use of any
         Company  laser for the  treatment  of  hyperopia,  the Company  will be
         obligated to pay unregistered Common Stock valued at $1 million. If the
         Company's  scanning laser is approved by the FDA for commercial sale in
         the U.S. on or before  April 1, 1998,  the Company will be obligated to
         pay  $1   million.   Approval   after  such  date  will   result  in  a
         correspondingly  smaller  obligation  until  January 1,  1999,  when no
         payment will be required.

NOTE 6   FINANCING

         Foothill Capital Corporation

         On April 1,  1997,  the  Company  entered  into a loan  agreement  with
         Foothill Capital Corporation (FCC) for a loan,  currently consisting of
         a term loan in the  amount of $4  million  and a  revolving  loan in an
         amount of 80% of the eligible  receivables of LaserSight  Technologies,
         but not in excess of $3.2 million.  The term loan bears  interest at an
         annual rate of 12.50% and  requires  repayment  of principal in monthly
         installments  of $1.33 million  beginning on May 1, 1998. The revolving
         loan bears  interest at a variable  annual rate of 1.50% above the base
         rate of Norwest Bank Minnesota.  The $3.2 million maximum amount of the
         revolving loan declines by $1.33 million per month  beginning on August
         1, 1998. In connection  with the loan,  the Company paid an origination
         fee of  $150,000  and issued  warrants to  purchase  500,000  shares of
         Common Stock.  The warrants are  exercisable  at any time from April 1,
         1998 through  April 1, 2002 at an exercise  price per share of $6.0667.
         Subject to certain  conditions  based on the market price of the Common
         Stock,  up to half of the warrants are eligible for  repurchase  by the
         Company.  Any warrants that remain outstanding and unexercised on April
         1, 2002 are  subject  to  mandatory  repurchase  by the  Company  at an
         original  price  of  $1.50  per  warrant.  The  warrants  have  certain
         anti-dilution   features   which  provide  for   approximately   50,000
         additional  shares  pursuant to the  issuance of the Series B Preferred
         Stock and a corresponding  reduction in the exercise price to $5.52 per
         share and  repurchase  price to $1.36 per warrant.  The  warrants  were
         valued at $500,000  and are  classified  as  long-term  obligations  at
         September 30, 1997. The recorded  amount of the obligation  will change
         with the  value of the  warrants.  The loan is  secured  by a pledge of
         substantially  all of  the  Company's  accounts  receivable  and  other
         assets.  The  terms  of  the  financing   agreement  contain  financial
         covenants  with respect to, among other things,  current  ratio,  laser
         system sales, revenue,  earnings before interest,  taxes,  depreciation
         and  amortization  (EBITDA),  and  capital  expenditures.  Due  to  the
         operating results of the quarter ended June 30, 1997, certain financial
         covenants  were waived by FCC for the three months ended June 30, 1997.
         The  Company  revised  the  covenants  effective  July 1,  1997.  These
         covenants were met for the three months ended September 30, 1997.

         The Company  used a portion of the net proceeds of the term loan to pay
         in full the  balance  due  under its note to the  former  owners of MEC
         Health Care, Inc., a wholly owned subsidiary of the Company acquired in
         October 1995.

         Private Placement

         On August 29, 1997, the Company  completed a private placement of 1,600
         shares of Series B Preferred Stock, yielding net proceeds after related
         costs of approximately $15 million.  The proceeds were used to purchase
         certain patents from International  Business Machines Corporation (IBM)
         (see Note 7). The Company also issued to the  investors  and  placement
         agent warrants to purchase 790,000 shares of the Company's Common Stock
         at a price of $5.91 per share at any time  during the next five  years.
         The Series B Preferred  Stock is  convertible  into Common Stock at any
         time at a conversion price equal to the lower of $6.68 per share or the
         average  of  the  three  lowest  closing  bid  prices  during  a 20- or
         30-trading  day  period   preceding  the  conversion   date.  Prior  to
         shareholder  approval of the  transaction,  the number of shares issued
         upon  conversion  will be limited by Nasdaq rule and contract terms and
         contract terms to approximately 1,995,500. Any Series B Preferred Stock
         remaining  unconverted  on the third  anniversary  of the closing  will
         automatically  be converted  into Common  Stock on that date.  Up to 70
         percent of the Series B Preferred Stock is redeemable by the Company at
         a premium over its face amount.  All of the Series B Preferred Stock is
         redeemable  at a 25 percent  premium over its face amount at the option
         of the  holders but only in certain  events of default by the  Company,
         including if the Company does not receive  shareholder  approval of the
         transaction  within 120 days (see Note 5). At September 30, 1997, 1,600
         shares of Series B  Preferred  Stock  were  outstanding.  However,  the
         Company  redeemed 305 shares of Series B Preferred Stock on October 28,
         1997 (see Note 8).  The Series B  Preferred  Stock is  recorded  at the
         amount of gross  proceeds  less the costs of the financing and the fair
         value of the warrants and classified as mezzanine  financing  above the
         stockholders'  equity  section on the balance sheet. A redemption is at
         the option of the holder upon the occurrence of an event of redemption,
         some of which are outside the Company's  control.  The financing  costs
         and warrants  will be accreted  against APIC - common stock if an event
         of  redemption  is assessed as  probable at a balance  sheet date.  The
         calculated  conversion  price on August 29, 1997,  the first  available
         conversion date, was approximately $4.98. In accordance with EITF Topic
         D-60, the difference between this conversion price and the market price
         of $5.00 is reflected as incremental yield to preferred stockholders on
         the  Company's  loss  per  share  calculation  for  the  quarter  ended
         September 30, 1997.

NOTE 7   ACQUISITIONS

         Photomed, Inc.

   
         In July 1997,  the  Company  acquired  the rights to a PMA  application
         filed  with  the  Food and  Drug  Administration  (FDA)  for a laser to
         perform  Laser In-Situ  Keratomileusis  (LASIK),  a refractive  surgery
         alternative to surface Photorefractive Keratectomy (PRK) from Photomed,
         Inc. In addition, the Company purchased from a shareholder of Photomed,
         Inc.  U.S.  patent  number  5,586,980  for a keratome,  the  instrument
         necessary  to create the  corneal  "flap" in the LASIK  procedure.  The
         Company issued a combination of 535,515  unregistered  shares of Common
         Stock (valued at $3,416,700) and $333,300 as consideration  for the PMA
         application and the keratome patent.  Of the total  consideration  paid
         including  acquisition-related  costs,  $2,758,375 was allocated to the
         PMA and  $1,047,097  to the  patent.  The  seller  will also  receive a
         percentage  of any  licensing  fees or  sale  proceeds  related  to the
         patent.  Such  licensing  fees will be expensed as incurred.  The total
         value was capitalized as the cost of PMA application and patents and is
         being  amortized  over  5 and  15  years,  respectively,  based  on the
         estimated  useful  life  of the  equipment  covered  by the PMA and the
         remaining  life of the  patent.  If the FDA  approves  the PMA so as to
         allow the  Company to  commercialize  a laser to  perform  LASIK in the
         U.S., the Company will pay an additional  $1.75 million to the sellers.
         If such FDA approval is not obtained by July 29, 1998,  the Company has
         the option to unwind the PMA  transaction  and receive from the sellers
         of Photomed,  Inc. 274,285 shares of the Company's Common Stock. If the
         transaction  is unwound,  the Company's  investment  will be reduced by
         that portion of the PMA value applicable to the proportionate  ratio of
         shares returned. The remaining unamortized portion of the PMA value, or
         approximately  16%  of the  original  value,  will  be  assessed  as to
         impairment,  which could result in a write down of the remaining value.
         Additionally,  if  the  FDA  approves  the  use of the  laser  for  the
         treatment   of  hyperopia   (farsightedness),   the  Company  will  pay
         unregistered  Common Stock valued at $1 million to the sellers.  If the
         Company's  scanning laser is approved by the FDA for commercial sale in
         the United  States on or before  April 1, 1998,  the  Company  will pay
         $1,000,000  to the  sellers.  Approval  after such date will  result in
         lesser  payments  until  January  1,  1999,  when  no  payment  will be
         required.   Additional  consideration  paid  based  on  the  contingent
         obligations  described  above will be recorded as  additional  purchase
         price and amortized  over the remaining  useful life of the PMA.  Costs
         incurred during the approval process will be expensed as incurred.
    

         Patents

         On August 29, 1997,  the Company  finalized  an agreement  with IBM, in
         which the Company  acquired  certain  patents  relating to  ultraviolet
         light ophthalmic  products and procedures for ultraviolet  ablation for
         $14,900,000. Under the agreement, IBM transferred to the Company all of
         IBM's  rights  under  its  patent  license   agreements   with  certain
         licensees.  The  Company  received  all  royalties  accrued on or after
         January 1, 1997, under such patent license agreements.  The acquisition
         was financed through the private placement of Preferred Stock (see Note
         6).

         On  September  23,  1997,  the  Company  sold  an  exclusive  worldwide
         royalty-free  patent license  covering the vascular and  cardiovascular
         rights  included  in the  patents  acquired  from  IBM for $4  million,
         reducing the Company's basis in the patents  acquired.  No gain or loss
         was recognized as a result of this sale.  Approximately $3.2 million of
         these funds were placed in a restricted cash account in accordance with
         the  private  placement   agreements  and  were  subsequently  used  to
         voluntarily  redeem a portion of the Preferred  Stock issued to finance
         the purchase of the IBM patents (see Note 8).

         Keratome License

   
         In September 1997, the Company acquired worldwide  distribution  rights
         to the  Ruiz  disposable  keratome  for the  refractive  surgery  LASIK
         procedure  in  addition to entering  into a limited  exclusive  license
         agreement for intellectual  property for the keratome products known as
         Automated  Disposable  Keratomes  (ADK). In exchange,  the Company paid
         $400,000  at closing  and agreed to supply to the  sellers  one excimer
         laser.  The Company's  cost of such laser and related  accessories  was
         capitalized  as part of the cost of the license  agreement.  Six months
         after  the first  shipment  of the  disposable  keratome  product,  the
         Company  will pay an  additional  $150,000 to the sellers  with another
         installment  of $150,000 due twelve  months after the initial  shipment
         date.  The Company will also share equally the  product's  gross profit
         with the sellers with minimum quarterly royalties of $400,000 beginning
         six months  after the initial  shipment  date.  Under the  arrangement,
         gross  profit is defined as the  selling  price less  certain  costs of
         goods and costs of sales. Such royalties will be expensed in the period
         incurred.
    

NOTE 8   SUBSEQUENT EVENT

   
         On October 28, 1997, the Company voluntarily redeemed 305 shares of the
         Preferred Stock  (approximately 19 percent of the original 1,600 shares
         issued).  The  Company  paid a total  of  $3,172,000  including  a four
         percent redemption premium. The redemption premium will be reflected in
         the fourth  quarter of 1997 and  recorded  as an  increase  in the loss
         attributable  to common  shareholders  in the  computation  of earnings
         (loss) per share.
    

   
NOTE 9   NEW ACCOUNTING PRONOUNCEMENTS


         In February  1997,  the  Financial  Accounting  Standards  Baord (FASB)
         issued SFAS No. 128, "Earnings per Share." See Note 2.

         In June 1997,  the FASB issued SFAS No. 130,  "Reporting  Comprehensive
         Income" and SFAS No. 131,  "Disclosures about Segments of an Enterprise
         and Related  Information." They are effective for financial  statements
         for periods  beginning after December 15, 1997 and require  comparative
         information for earlier years to be restated.

         SFAS No. 130  requires  companies to classify  items  defined as "other
         comprehensive income" by their nature in a financial statement,  and to
         display  the  accumulated   balance  of  other   comprehensive   income
         separately from retained earnings and additional paid-in capital in the
         equity  section of the balance  sheet.  The adoption of SFAS No. 130 is
         not expected to have a material  impact on the  Company's  consolidated
         financial statements.

         SFAS No. 131 requires  companies to report  financial  and  descriptive
         information about its reportable operating segments. Operating segments
         are  components  of  an  enterprise   for  which   separate   financial
         information  is  available  that is  evaluated  regularly  by the chief
         operating  decision maker in deciding how to allocate  resources and in
         assessing  performance.   This  statement  also  requires  that  public
         companies report certain information about their products and services,
         the geographic  areas in which they operate and their major  customers.
         The Company is currently  reviewing the impact of this statement on its
         current level of disclosure.
    

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

Results of Operations

Net  Sales.  The  following  tables  present  the  Company's  net sales by major
operating  segments:  technology  products and services and health care services
for the three and nine month periods ended September 30, 1997 and 1996.
<TABLE>
<CAPTION>
                                            For the Three Month                          For the Three Month
                                                Period Ended                                 Period Ended
                                             September 30, 1997                           September 30, 1996
                                             ------------------                           ------------------

                                           Net Sales         % of Total              Net Sales        % of Total
                                           ---------         ----------              ---------        ----------

<S>                                       <C>                       <C>             <C>                      <C>
Technology                                $2,677,831                43%             $1,783,577               40%
Health care services                       3,478,528                57%              2,810,613               62%
Intercompany revenues                             --                 --               (99,958)              (2%)
                                          ----------              -----             ----------             -----
                                            

Total net sales                           $6,156,359               100%             $4,494,232              100%
                                          ==========              =====             ==========             =====


                                            For the Nine Month                           For the Nine Month
                                               Period Ended                                 Period Ended
                                            September 30, 1997                           September 30, 1996
                                            ------------------                           ------------------

                                           Net Sales         % of Total              Net Sales        % of Total
                                           ---------         ----------              ---------        ----------

Technology                                $8,362,374                46%             $7,246,984               48%
Health care services                       9,720,699                54%              8,158,263               54%
Intercompany revenues                             --                 --               (334,765)              (2%)
                                          ----------              -----             ----------             -----

Total net sales                          $18,083,073               100%            $15,070,482              100%
                                         ===========              =====            ===========             =====
</TABLE>

   
Net sales in the third quarter of 1997 were  $6,156,359,  compared to $4,494,232
(for an increase  of 37%) over the same  period in 1996.  Net sales for the nine
month period ended  September 30, 1997,  increased by $3,012,591 to  $18,083,073
from the same period in 1996.  The increase in health care  service  revenue for
the nine month period ended  September 30, 1997, was  attributable  to increased
revenues  generated by MEC Health Care,  Inc.  (MEC) and LSI  Acquisition,  Inc.
(LSIA),  offset by a  substantial  reduction  in revenues  generated by MRF Inc.
d/b/a The Farris  Group (The Farris  Group).  Net sales for The Farris Group for
the nine month period  ended  September  30, 1997  decreased  by  $1,879,931  to
$1,010,298  from the same period in 1996.  This  decrease was due primarily to a
reduction in  consulting  services  provided and was  accompanied  by an expense
reduction of $1,837,739 for the nine month period ended September 30, 1997. Such
revenue  decrease is  primarily a result of that  subsidiary's  primary  revenue
producer,  Michael R.  Farris,  being named as  president of the Company in late
1995, eliminating his day-to-day participation in the consulting business. Other
consultants  employed were unable to maintain revenues at historical levels. The
decrease in  revenues  generated  by The Farris  Group was  partially  offset by
increased revenues generated by MEC in the amount of $1,821,030. The increase in
technology  revenues  in the third  quarter of 1997 was  attributed  to a slight
increase in net sales of the  Company's  LaserScan  2000 excimer laser system in
overseas markets and improved pricing resulting from the Company's limited sales
of the LS 300 model, a lower priced  system.  Ten laser systems were sold in the
third quarter of 1997 compared to nine systems,  net of return allowances,  sold
over the same period in 1996.  Thirty-three  laser  systems were sold during the
nine month period ended September 30, 1997, compared to twenty-nine systems, net
of return allowances,  sold over the same period in 1996. The Company believes a
contributing  factor to the lower  than  expected  number of laser  sales is the
anticipation,  particularly in Europe,  of the introduction of the LaserScan LSX
announced in April 1997.  Technology revenues in 1996 included higher allowances
for  sales  returns,   reflecting  differences  between  actual  experience  and
previously estimated amounts. There were no system returns recognized during the
first three quarters of 1997.  The financial  impact of systems sold in 1995 and
returned in the nine months  ended  September  30, 1996 in excess of  previously
estimated amounts was approximately $1.0 million, as follows:  Net revenues were
decreased by $1.6 million,  offset by reductions in corresponding  cost of sales
($0.4 million) and commissions and  warranty-related  costs ($0.2 million).  The
financial  impact of systems sold in 1995 and returned in the three months ended
September 30, 1996 in excess of previously  estimated  amounts was approximately
$0.6 million, as follows: Net revenues were decreased by $1.0 million, offset by
reductions in  corresponding  cost of sales ($0.2 million) and  commissions  and
warranty-related  costs  ($0.2  million).  Based on the  expected  timing of the
commercial  introduction  of its newest laser  system,  the  LaserScan  LSX, the
Company expects laser system sales to remain below 1996 levels for the remaining
quarter of 1997, although it expects such sales to exceed the levels attained on
average in the second and third quarters of 1997.
    

Cost of Goods Sold and Gross Profits. The following tables present a comparative
analysis of cost of goods sold,  gross profit and gross profit margins for three
and nine month periods ended September 30, 1997 and 1996.
<TABLE>
<CAPTION>

                                              For the Three Month                            For the Three Month
                                                  Period Ended                                   Period Ended
                                               September 30, 1997       Percent Change        September 30, 1996
                                               ------------------       --------------        ------------------

<S>                                               <C>                          <C>                 <C>        
Cost of goods sold                                $   1,068,498                34%                 $   794,982
Provider payments                                     1,630,616                53%                   1,069,184
Gross profit                                          3,457,245                31%                   2,630,066
Gross profit percentage                                     56%                                            59%

Technology related only                               1,609,333                63%                     988,595
                                                            60%                                            55%



                                               For the Nine Month                             For the Nine Month
                                                  Period Ended                                   Period Ended
                                               September 30, 1997       Percent Change        September 30, 1996
                                               ------------------       --------------        ------------------

Cost of goods sold                                   $2,934,001                30%                  $2,259,527
Provider payments                                     4,450,855                48%                   2,998,680
Gross profit                                         10,698,217                 9%                   9,812,275
Gross profit percentage                                     59%                                            65%

Technology related only                               5,428,373                 9%                   4,987,457
                                                            65%                                            69%
</TABLE>

    
   
Gross profit margins were 56% of net sales in the third quarter of 1997 compared
to 59% for the same period in 1996.  For the nine-month  period ended  September
30, 1997 and 1996, gross profit margins were 59% and 65%, respectively.  For the
nine-month period ended September 30, 1997, the gross profit margin decrease was
attributable  to (i) the  decrease in revenues  generated  by The Farris  Group,
which has no associated  cost of sales as all expenses are reflected in selling,
general and administrative expenses, (ii) a significant increase in MEC revenues
with a corresponding  increase in provider  payments,  which  historically  have
ranged  from  approximately  68 to 72% of MEC  revenues,  and  (iii)  a  general
increase in the  operating  costs of the  Company's  Costa  Rican  manufacturing
facility,  which were spread over fewer sales during the nine month period ended
September  30, 1997.  The Farris Group  revenues are not expected to continue to
decrease  from  current  levels.  MEC's  revenues  are  expected  to continue to
increase with a corresponding  increase in provider payments.  See Uncertainties
and Other  Issues--Health  Care  Services-Related  Uncertainties--Dependence  on
Major  Customer.  Costa Rican  operating  expenses  are not expected to increase
materially without a significant increase in systems sold.
    

Research,  Development and Regulatory  Expenses.  The following tables present a
comparative  analysis of research,  development and regulatory  expenses for the
three and nine month periods ended September 30, 1997 and 1996.
<TABLE>
<CAPTION>

                                          For the Three Month                                For the Three Month
                                              Period Ended                                       Period Ended
                                           September 30, 1997          Percent Change         September 30, 1996
                                           ------------------          --------------         ------------------

<S>                                             <C>                          <C>                   <C>
Research, development
   and regulatory                               $  816,522                   151%                  $  325,925

As a percentage of technology
   net sales                                           30%                                                18%



                                           For the Nine Month                                 For the Nine Month
                                              Period Ended                                       Period Ended
                                           September 30, 1997          Percent Change         September 30, 1996
                                           ------------------          --------------         ------------------

Research, development
   and regulatory                             $  1,729,153                     26%                 $1,373,547

As a percentage of technology
   net sales                                           21%                                                19%
</TABLE>

Research, development and regulatory expenses for the third quarter of 1997 were
$816,522,  an increase of $490,597,  or 151% from such  expenditures  during the
same period in 1996. Research,  development and regulatory expenses for the nine
month period ended  September 30, 1997 increased by $355,606 from $1,373,547 for
the same  period in 1996 or 26%.  The  increase  in  research,  development  and
regulatory expenses during the third quarter of 1997 can primarily be attributed
to ongoing research and development of new refractive  laser systems,  including
development of the LaserScan LSX and added features for the LaserScan-2000,  and
continued software development for the excimer lasers.  Initial shipments of the
LaserScan  LSX are  anticipated  during the later part of the fourth  quarter of
1997.  Since the initial  announcement  of the development of the LaserScan LSX,
the Company has solicited and received input from clinical users and prospective
customers.  This has  resulted in  modifications  to the  system,  necessitating
additional  development  and testing  for  clinical  validation.  As a result of
focusing  its  efforts  on  having  the  LaserScan  LSX  available  for  limited
commercial  production  and shipment in the later part of the fourth  quarter of
1997, the Company expects research and development  expenses to remain at levels
consistent  with or  higher  than  third  quarter  1997  levels  throughout  the
remainder  of  1997.  Regulatory  expenses  for the  three  month  period  ended
September 30, 1997 have  increased in comparison to the same period in the prior
year although for the nine month period ended  September 30, 1997 there has been
a  decrease  in  comparison  to the same  period in the prior  year.  Regulatory
expenses are expected to continue to increase for the remaining  portion of 1997
and into 1998 as a result of the Company's  continuation of current FDA clinical
trials,  protocols  added  during  1997  related  to  the  potential  use of the
Company's laser systems for treatment of glaucoma,  the possible  development of
additional  future  protocols for  submission to the FDA and the PMA acquired in
July 1997 (see Note 7).

Selling,  General and  Administrative  Expenses.  The following tables present a
comparative  analysis of selling,  general and  administrative  expenses for the
three and nine month periods ended September 30, 1997 and 1996.
<TABLE>
<CAPTION>

                                     For the Three Month                                     For the Three Month
                                         Period Ended                                            Period Ended
                                      September 30, 1997            Percent Change            September 30, 1996
                                      ------------------            --------------            ------------------

<S>                                         <C>                             <C>                    <C>
Selling, general and
   administrative                           $4,660,208                      3%                     $4,504,162

Percentage of net sales                            76%                                                   100%


                                      For the Nine Month                                      For the Nine Month
                                         Period Ended                                            Period Ended
                                      September 30, 1997            Percent Change            September 30, 1996
                                      ------------------            --------------            ------------------

Selling, general and
   administrative                         $13,568,380                       8%                    $12,598,430

Percentage of net sales                           75%                                                     84%
</TABLE>

   
Selling,  general and administrative expenses increased by $156,046 and $969,950
for the third  quarter of 1997 and the first nine months of 1997,  respectively,
over comparable periods in 1996. The primary reasons for these increases for the
nine months  ended  September  30,  1997  include  the  continued  growth of MEC
($136,381),  increased  amortization  costs  resulting  from  acquired  patents,
license agreements and other intangibles  ($492,985),  and a general increase in
personnel and costs  necessary to fund the strategic  initiatives of the Company
and the  development  of its products and services  ($511,474).  Such  strategic
efforts  include the pursuit  during 1997 of vision  managed care contracts with
HMOs, insurers and employer groups, the IBM patents and the automated disposable
keratome license.  Technology  expenses  increased $308,669 generally related to
costs  that  correlate  with  increased  revenues.   Additionally,   LSIA  began
operations in July 1996.  Only three months of its  operations  were included in
the  Company's  operations  during the nine  months  ended  September  30,  1996
compared to nine months in 1997,  representing increased expenses of $1,297,243.
These  increases in operating  costs were  partially  offset by the  substantial
reduction in the operating  costs of The Farris Group as  previously  described.
Legal and accounting expenditures continue to be incurred as a result of ongoing
regulatory filings, general corporate issues, litigation and patent issues.
    

Loss From  Operations.  There was an operating  loss of  $2,019,485 in the third
quarter of 1997 compared to an operating  loss of $2,200,021 for the same period
in 1996. The operating  loss for the nine month period ended  September 30, 1997
was  $4,599,316  compared to an operating loss of $4,159,702 for the same period
in 1996.  The  improved  operating  results  during  the third  quarter  of 1997
compared to 1996 resulted from  increased  revenues and gross profit,  partially
offset by increases primarily in research,  development and regulatory expenses.
The decline in operating  results for the nine month period ended  September 30,
1997  compared to the same  period in 1996 can be  attributed  primarily  to the
combination of improved overall  revenues and gross profit,  offset by increases
in operating expenses.

Other Income and Expenses. Interest and dividend income was $94,401 in the third
quarter of 1997  compared to $42,195 for the same period in 1996.  Interest  and
dividend  income for the nine month period ended September 30, 1997 was $292,272
compared to $132,109 for the same period in 1996.  Interest and dividend  income
was earned from the Company's cash deposits and short-term  investments  and the
collection  of long-term  receivables  related to laser system  sales.  Interest
expense  incurred was $483,794 in the third quarter of 1997 compared to interest
expense of $54,480  for the same period in 1996.  Interest  expense for the nine
month period ended September 30, 1997 was $911,966  compared to interest expense
of  $102,068  for the same  period in 1996.  Interest  expense  incurred  by the
Company  during the second and third  quarters of 1997 related  primarily to the
credit facility  established  with FCC on April 1, 1997. In addition to interest
paid on the outstanding  note payable  balance,  included in interest expense is
the  amortization of deferred  financing costs, the accretion of the discount on
the note  payable  and,  in the third  quarter  of 1997,  fees  associated  with
amendments to the original loan agreement. Included in other expense in 1997 and
1996 are  costs  related  to  settling  patent  and other  filed and  threatened
litigation.

Income  Taxes.  For the three and nine months  ended  September  30,  1997,  the
Company  recorded  no income tax  benefit or expense  compared  to an income tax
benefit of $1,119,378  for the nine month period ended  September 30, 1996.  The
lack of income tax benefit  for the first three  quarters of 1997 has been based
on the lack of availability of loss carrybacks.

Net Loss.  Net loss for the third quarter of 1997 was  $2,408,878  compared to a
net loss of $2,053,686  for the same period in 1996. Net loss for the nine month
period  ended  September  30,  1997  was  $5,499,410  compared  to a net loss of
$3,310,390  for the same period in 1996. The loss is attributed to a combination
of  increased  revenues  from  technology  products  and  MEC  services,  losses
generated  from The Farris  Group and higher  operating  expenses as  previously
described for the first three quarters of 1997.

   
Loss Per Common Share.  Loss per primary and fully  diluted  share  decreased to
$0.25  during  the  third   quarter  of  1997   compared  to  $0.28  and  $0.27,
respectively,  for the same period in 1996.  Loss per primary and fully  diluted
share were $0.59 for the nine month period ended  September 30, 1997 compared to
$0.64 and $0.59,  respectively,  for the same period in 1996.  Weighted  average
shares  outstanding  increased in 1997 as a result of the conversion into Common
Stock of 18 shares of Series A  Preferred  Stock  issued in  January  1996,  the
exercise of options and warrants,  the 1997 amendment to the purchase  agreement
related  to  LaserSight  Centers,  the  issuance  of shares  under  the  earnout
provisions  of the 1994  acquisition  of The Farris  Group and the  issuance  of
shares in conjunction  with the 1997 acquisition of rights to a PMA and keratome
patent.  In 1996,  the lower  number of shares  was offset by  dividends  on the
Series A Preferred Stock and the value of the conversion  discount on the Series
A Preferred Stock for the nine month period ended September 30, 1996.
    

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

Working capital  decreased  $5,494,173 from  $10,020,801 at December 31, 1996 to
$4,526,628 as of September 30, 1997. This decrease in working  capital  resulted
primarily  from the net loss  previously  mentioned,  purchases of furniture and
equipment and investments in PMA rights, a keratome patent and license agreement
and a vision managed care contract.

Operating activities used net cash of $2,955,728 during the first nine months of
1997,  compared to  $3,616,716  of net cash used during the same period in 1996.
This decrease in cash used is primarily  attributable to a substantial  decrease
in income  tax  assets  during  the first  nine  months of 1997.  Other  factors
resulting in this decrease  include an increase in amortization and depreciation
costs,  a decrease  in net  receivables  and an  increase  in accrued  expenses,
partially  offset by an  increase  in the net loss for the first nine  months of
1997.  The Company used  $15,247,194  in cash  related to  investing  activities
during the first nine months of 1997 compared to $526,711 of cash being provided
by investing activities over the same period in 1996. Net cash used in investing
activities  during the first three quarters of 1997 can be primarily  attributed
to the  acquisition  of certain  patents  and  license  agreements  from IBM and
others,  the  purchase of office and computer  equipment,  and the purchase of a
vision  managed  care  contract,  partially  offset  by the  proceeds  from  the
exclusive licensure of such patents.  Net cash provided by financing  activities
during  the first  nine  months of 1997 was  $17,363,579  and  consisted  of net
proceeds from the issuance of Preferred  Stock to finance the acquisition of the
IBM patents,  the credit  facility  with FCC and the exercise of stock  options,
offset by the  repayment  of a note  payable  to  former  owners of MEC and cost
related to the  repayment of a capital lease  obligation.  That compares to cash
provided by financing activities in the first nine months of 1996 of $3,936,605,
consisting of net proceeds from the sale of common and preferred  stock totaling
$5,602,440  net of a repayment of  $1,665,835 in notes payable and capital lease
obligations.

   
The Company  experienced  a  significant  increase  in  negative  cash flow from
operations in the third  quarter of 1997,  largely  resulting  from the level of
laser  system sales and the increase in  research,  development  and  regulatory
expenses  resulting from the  development of the LaserScan LSX and other efforts
as previously  described.  The Company expects cash flow from operations to show
improvement  in the fourth quarter of 1997 and first quarter of 1998 as a result
of the expected shipment of the LaserScan LSX and ADKs as previously  discussed.
However,  the  Company  expects  to incur a loss and a deficit in cash flow from
operations  for the fourth  quarter of 1997.  There can be no assurance that the
Company can regain or sustain  profitability or positive  operating cash flow in
any subsequent fiscal period.  Based on these factors, the Company believes that
its balances of cash and cash  equivalents  along with expected  operating  cash
flows and the  availability  of the FCC revolver  will be sufficient to fund its
anticipated working capital  requirements for the next twelve month period based
on modest growth and anticipated collection of receivables. A failure to collect
timely a material  portion of current  receivables  or unexpected  delays in the
shipment of the  LaserScan  LSX or ADK  products  could have a material  adverse
effect on the Company's liquidity. The Company, which implemented more stringent
sales criteria during 1996, may from time to time reassess its credit policy and
the terms it will  make  available  to  individual  customers.  As a result of a
growing  presence  in a number of  countries  and  continued  acceptance  of the
Company's  laser  systems,   the  Company   intends  to  internally   finance  a
proportionately  smaller number of sales over periods exceeding  eighteen months
than in 1996 and preceding  years.  There can be no assurance as to the terms or
amount of third-party financing, if any, that the Company's customers may obtain
in the  future.  The  Company  is  placing  greater  emphasis  on the  terms and
collection timing of future sales.
    

   
The Company  voluntarily  redeemed  305 shares of the Series B  Preferred  Stock
(approximately 19 percent of the 1,600 shares originally  issued) on October 28,
1997.  The Company  paid the  redemption  price of  $3,172,000  (including  a 4%
redemption  premium)  with  funds  held  in  blocked  account  which  serves  as
collateral for the Company's contingent  obligation to redeem Series B Preferred
Stock.     See     "Uncertainties     and     Other      Issues--Company-Related
Uncertainties--Redemption  Consequences if Stockholer  Approval is Not Obtained"
below. As required by its agreement with the preferred shareholders, the Company
had  established  the $3.2 million blocked account to hold 80% of the $4 million
the  Company  had  received  in  September  1997 as a  lump-sum  payment  for an
exclusive,  world-wide royalty-free license to a third party covering the use in
the  vascular  and  cardiovascular  fields of the laser  patents the Company had
acquired  from IBM in August  1997.  The  Company  believes  that its  continued
holding of the restricted funds in the blocked account (in lieu of redeeming the
305  preferred  shares)  would  not have  meaningfully  enhanced  the  Company's
liquidity  and would,  under the terms of the  Series B  Preferred  Stock,  have
resulted  in an increase  in the  redemption  premium (to as much as 14%) or the
expiration in January 1998 of the Company's option to redeem such 305 shares. In
addition,  the Company  believes that the  redemption of such 305 shares reduced
the potential  dilutive  effect of the Series B Preferred Stock on the Company's
common shareholders.
    

During the third  quarter of 1997,  the Company and FCC modified  the  financial
covenants related to the FCC credit facility. The Company has complied with such
covenants  for  the  quarter  ended  September  30,  1997.  Some  covenants  are
cumulative in nature and meeting them will require continuous improvement in the
Company's operating  performance.  Should such operating levels not be achieved,
the Company would be in default of its agreement and FCC would have the right to
accelerate the Company's repayment obligation.  In addition,  such default would
entitle the holders of Series B Preferred Stock to have the right to redeem at a
premium over the face amount.

The Company expects to continue a variety of research and development activities
on its excimer and solid-state  laser systems over the next twelve months and it
is anticipated that such research and development as well as regulatory  efforts
in the United States will be the most significant technology related expenses in
the foreseeable future. In addition,  the Company expects to aggressively pursue
vision managed care contracts with HMOs, insurers and employer groups during the
next 12 months.  The  Company  anticipates  that such  efforts  will be the most
significant health care services-related expenses in the foreseeable future.

   
On November 13, 1996,  the Company  announced that it had engaged the investment
banking  firm of A.G.  Edwards & Sons,  Inc.  ("A.G.  Edwards")  to explore  and
evaluate strategic business opportunities.  With the assistance of A.G. Edwards,
the  Company  solicited  and  evaluated  proposals  from third  parties for such
strategic  business  opportunities  during  late 1996 and early  1997.  Upon the
completion of this process in June 1997,  the Company  determined  not to pursue
further such opportunities for the time being.
    


In October  1996,  the Company  announced an  agreement in principle  with Laser
Vision Centers,  Inc. ("Laser Vision") to create a joint venture to make excimer
laser  technology  available  to  the  participating  physicians  of  LaserSight
Centers.  Although  the Company and Laser  Vision have to date not  executed any
written  agreement  or resolved  pricing  and other  issues,  they  occasionally
discuss various possible joint ventures  involving the two companies.  There can
be no assurance that such discussions will lead to a definitive  agreement or as
to the terms of any such agreement.

On March 4,  1997,  the  Company  announced  a  tentative  agreement  to acquire
Intermountain   Managed  Eyecare,   of  Salt  Lake  City,  Utah,  a  third-party
administrator of managed vision care contracts with a business  strategy similar
to the Company's MEC Health Care subsidiary.  The Company originally anticipated
closing this  transaction  on March 15, 1997.  The Company has determined not to
proceed with this transaction at this time.

The Company is receptive to joint venture discussions with compatible  companies
for the development and operation in  international  markets of surgical centers
that will utilize the Company's products or provide synergies to the development
of managed  networks.  In addition to cash  contributions  that may be available
from joint venture partners, the Company is also seeking complementary strengths
and other synergies that may provide  strategic  advantages.  The Company has no
present  commitments  for joint venture  relationships,  and no assurance can be
given that any such  relationship  will be secured on terms  satisfactory to the
Company.

UNCERTAINTIES AND OTHER ISSUES

   
The Company's business,  results of operations and financial conditions may also
be affected by a variety of  factors,  including  the ones noted below and under
the same caption in the  Company's  Annual  Report on Form 10-K/A for the fiscal
year ended December 31, 1996.
    

Company-Related Uncertainties
-----------------------------

   
Potential  Obligation  to Redeem  Preferred  Stock if  Stockholder  Approval Not
Obtained.  If for any reason  the  Company's  shareholders  do not  approve,  by
December 26, 1997,  (or such later date as may be approved by all of the holders
of the Series B Preferred Stock) the possible  issuance of an indefinite  number
of shares of Common  Stock  upon the  conversion  of the  Company's  outstanding
Series B Preferred  Stock,  any holder of Series B Preferred  Stock may elect to
require  the  Company to redeem a portion of such  holder's  Series B  Preferred
Stock for cash in an amount  equal to the  Special  Redemption  Price.  For this
purpose,  the Special Redemption Price means a cash payment equal to the greater
of (i) the  liquidation  preference  of $10,000  multiplied  by 125% or (ii) the
current  value of the Common  Stock,  using the price per share of Common Stock,
which the holders of such shares of Series B Preferred  Stock would otherwise be
entitled to receive upon conversion. A holder could elect to require the Company
to redeem whatever portion of its Series B Preferred Stock is necessary to cause
the  aggregate  number of shares of Common  Stock that would be issuable if such
holder  were to  convert  all of its  remaining  Series B  Preferred  Stock  and
exercise  all of its 1997  Warrants  to equal no more than 50% of such  holder's
allocable portion of the 1,995,534 shares of Common Stock that a listing rule of
the NASDAQ National Market allows the Company to issue without prior shareholder
approval.  The lower the price of the  Company's  Common  Stock at the time of a
holder's  conversion of its Series B Preferred  Stock,  the greater would be the
number of shares of Common Stock that would be issuable to such holder upon such
conversion  and  thus the  greater  the  percentage  of such  holder's  Series B
Preferred  Stock that such holder  could elect to require the Company to redeem.
Accordingly, the Company has requested that each of the four holders of Series B
Preferred  Stock waive their right to require a  redemption  until  February 28,
1998.  To  avoid  such  adverse  consequences,  such a waiver  would  need to be
unanimous. There can be no assurance as to whether, when or on what terms such a
unanimous waiver can be obtained.
    

   
If all of the holders of Series B Preferred  Stock were to elect to require such
a redemption at a time when the average of three lowest daily closing bid prices
of the Common Stock during the  20-trading  day period  preceding the conversion
were to equal the  average of such  prices  computed  as of  December  10,  1997
($3.40625),  the Company  estimates that the aggregate  amount of its redemption
obligation  would  equal at least  $15,312,500,  including  a premium  of 25% or
approximately $3,062,500.  These amounts would be greater to the extent that (A)
the highest closing bid price of the Common Stock during the period beginning 10
trading days before the  redemption  event and ending five  business  days after
such event exceeds the Conversion  Price that would have been  applicable if the
preferred  shares had been  converted  instead of redeemed or to the extent that
the required  redemption  were to occur more than five  business  days after the
Company's receipt of a conversion request.  The Company does not have sufficient
cash or marketable  securities to satisfy this contingent  obligation if it were
to arise,  and there can be no assurance  that the Company will have  sufficient
cash or other resources to satisfy any such future redemption  obligation.  Such
redemption  would  result in a default in the  Company's  credit  facility  with
Foothill  Capital  Corporation  and would have a material  adverse effect on the
Company's financial position and liquidity.
    

   
Potentially  Unlimited  Number of Common  Shares  Issuable  Upon  Conversion  of
Preferred  Stock.  The  number  of shares of  Common  Stock  issuable  upon each
conversion  of the Series B  Preferred  Stock will  depend on the average of the
three  lowest  closing  bid  prices  of  the  Common  Stock  during  the  period
immediately  preceding such  conversion and will increase as the market price of
the Common Stock declines below $6.68 per share (the maximum conversion price of
the  Series B  Preferred  Stock).  There is no limit on the  number of shares of
Common Stock issuable in connection  with the  conversions of Series B Preferred
Stock, except that the issuance of more than 1,995,534 shares of Common Stock in
connection  with such  conversions  is subject to the approval of the  Company's
shareholders at a special  meeting of  shareholders  scheduled for January 1998.
The following  table  illustrates  how changes in the market price of the Common
Stock could effect the number of shares issuable upon such conversions:


         Assumed                 Number of              As % of Common Shares
       Conversion               Conversion               Assumed Outstanding
        Price(1)              Shares Issuable            After Conversion(2)

         $1.00                  12,950,000                      56.5%
         $2.00                   6,475,000                      39.3%
         $3.00                   4,316,667                      30.2%
         $3.40625 (3)            3,801,835                      27.6%
         $4.00                   3,237,500                      24.5%
         $5.00                   2,590,000                      20.6%
         $6.00                   2,158,333                      17.8%
         $6.68                   1,938,622                      16.3%
(maximum conversion price)

(1)  Such  Conversion  Price is based on the  lesser  of $6.68  per share or the
     Variable  Conversion Price. For this purpose,  "Variable  Conversion Price"
     means the average of the three  lowest  closing bid prices per share of the
     Common  during the  Lookback  Period (as  defined)  (subject  to  equitable
     adjustment  for any stock splits,  stock  dividends,  reclassifications  or
     similar  events during the Lookback  Period).  For this purpose,  "Lookback
     Period"  means  the  20   consecutive   trading  days  (or,  under  certain
     circumstances,  30  trading  days)  immediately  preceding  the  applicable
     conversion date.

(2)  Assumes  that the  aggregate  number of shares  outstanding  at the time of
     conversion  equals the  9,984,672  shares of Common  Stock  outstanding  on
     December 9, 1997 plus the number of shares issuable in connection with such
     conversion.  Also assumes that all shares of Preferred  Stock are converted
     at the conversion price indicated.

(3)  Equals the Conversion  Price that would have been  applicable if all of the
     Series B Preferred Stock had been converted as of December 10, 1997.

In addition,  in the event of a liquidation  of the Company,  the holders of the
Series  B  Preferred  Stock  would  be  entitled  to  receive  distributions  in
preference to the holders of the Common Stock.
    

Uncollectible  Receivables  Could Exceed  Reserves.  At September 30, 1997,  the
Company's  trade  accounts  and  notes   receivable   aggregated   approximately
$11,090,000  net of total  allowances  for  collection  losses  and  returns  of
approximately  $1,650,500.  Approximately  87  percent  of  net  receivables  at
September 30, 1997 relate to international  accounts.  Accrued commissions,  the
payment of which generally  depends on the collection of such net trade accounts
and notes receivable, aggregated approximately $1,551,000 at September 30, 1997.
Exposure to collection losses on  technology-related  receivables is principally
dependent on the  Company's  customers  ongoing  financial  condition  and their
ability to generate  revenues from the Company's  laser  systems.  The Company's
ability to evaluate the financial  condition and revenue  generating  ability of
prospective  customers  located  outside of the United States is generally  more
limited than for customers  located in the United States.  The Company  monitors
the status of its receivables and maintains a reserve for estimated losses.  The
Company's operating history has been relatively short. There can be no assurance
that the Company's  reserves for estimated  losses  ($1,393,000 at September 30,
1997) will be sufficient to cover actual write-offs over time. Actual write-offs
that materially  exceed amounts reserved could have a material adverse effect on
the Company's consolidated financial condition and results of operations.

   
Uncertainty  Regarding  Availability  or Terms of Capital  to  Satisfy  Possible
Additional  Needs.  The Company  may need  additional  capital including to fund
the following:

         (i) any future negative cash flow from operations,

         (ii) the amounts payable to the holders of the Series B Preferred Stock
         as a result the failure of the Company to cause the registration of the
         Conversion Shares and the Warrant Shares by November 27, 1997 (based on
         the amount of Series B Preferred  Stock  outstanding  as of the date of
         this  Prospectus,  the  aggregate  amount of such  payments is $129,500
         during  the  first  month (or  $4,317  per day) and  $259,000 per month
         ($8,633 per day) thereafter),

         (iii) the  introduction  of its laser  systems  into the United  States
         market after receiving FDA  approval (the Company believes the earliest
         these expenses might occur is the latter half of 1998), and

         (iv)  to  satisfy  certain  cash  payment  obligations  under  its  PMA
         acquisition  agreement  of July 1997.  (Such cash  payment  obligations
         under the PMA  acquisition  agreement  include $1.75 million payable in
         the  event  the FDA  approves  the PMA  before  July 29,  1998 and $1.0
         million  payable  in the  event  that the FDA  approves  the  Company's
         scanning laser for commercial sale in the U.S. before April 1, 1998.)

In  addition,  the Company may seek  alternative  sources of capital to fund its
product development activities, to consummate future strategic acquisitions, and
to accelerate its  implementation  of managed care strategies.  Except for up to
$3.2 million of additional  borrowing  available  under its credit facility with
FCC  (subject  to  the  reduction  of  such   availability   amount  in  monthly
installments  of $1.333  million  commencing in August 1998 and to the Company's
continued  compliance  with financial and other  covenants),  the Company has no
present  commitments to obtain such capital,  and no assurance can be given that
the Company will be able to obtain additional  capital on terms  satisfactory to
the Company. The $4 million outstanding principal amount of the FCC term loan is
payable in monthly  installments of $1.333 million between May and July 1998. To
the extent that future financing  requirements are satisfied through the sale of
equity securities,  holders of Common Stock may experience  significant dilution
in  earnings  per share and in net book value per share.  The FCC  financing  or
other debt financing could result in a substantial portion of the Company's cash
flow from operations being dedicated to the payment of principal and interest on
such  indebtedness  and may render the Company more  vulnerable  to  competitive
pressures and economic downturns.
    

   
Possible Dilutive Issuance of Common Stock--The Farris Group. To the extent that
an earnout provision  relating to the Company's  acquisition of The Farris Group
in 1994 is satisfied  based on certain annual  pre-tax  income  targets  through
December 31, 1998, the Company would be required to issue to the former owner of
such company (Mr. Michael R. Farris,  the President and Chief Executive  Officer
of  the  Company)  an  aggregate  of  up  to  750,000  shares  of  Common  Stock
(collectively,  the "Farris  Earnout  Shares").  To date 406,700  Farris Earnout
Shares  have been  issued  based on the  operating  results of the Farris  Group
through  December 31, 1995. As a result of the loss incurred by The Farris Group
during  1996,  no Farris  Earnout  Shares  became  issuable  for such  year.  If
additional  Farris  Earnout Shares become  issuable,  goodwill and the resulting
amortization expense will increase.  There can be no assurance that the issuance
of Farris Earnout Shares will be accompanied by an increase in the Company's per
share operating results.
    

   
Acquisition- and  Financing-Related  Contingent  Commitments to Issue Additional
Common Shares.  The Company has agreed in connection with its acquisition of the
assets of the  Northern  New  Jersey Eye  Institute  in July 1996 to issue up to
102,798 additional shares of Common Stock if the fair market value of the Common
Stock in July 1998 is less than $15 per share. The Company may from time to time
include similar provisions in future acquisitions and financings. The factors to
be  considered  by the  Company in  including  such  provisions  may include the
Company's cash resources, the trading history of the Company's common stock, the
negotiating  position of the selling party or the investors as  applicable,  and
the extent to which the Company  determines  that the expected  benefit from the
acquisition  or  financing   exceeds  the  potential   dilutive  effect  of  the
price-protection provision. Persons who are the beneficiaries of such provisions
effectively  receive limited protection from declines in the market price of the
Common  Stock,  but  other  shareholders  of the  Company  can  expect  to incur
additional dilution of their ownership interest in the event of a decline in the
price of the Common Stock.
    

   
Risks  Associated  with Past and Possible Future  Acquisitions.  The Company has
made  several  significant  corporate  acquisitions  in  the  last  four  years,
including  MRF in 1994,  MEC in 1995,  the assets of NNJEI in 1996,  Photomed in
1997, and the IBM laser patents in 1997.  These prior  acquisitions,  as well as
any  future   acquisition,   may  not  achieve   adequate   levels  of  revenue,
profitability  or  productivity  or  may  not  otherwise  perform  as  expected.
Acquisitions   involve   special  risks,   including   risks   associated   with
unanticipated  liabilities and contingencies,  diversion of management attention
and possible  adverse  effects on earnings  resulting  from  increased  goodwill
amortization,  increased  interest costs, the issuance of additional  securities
and difficulties  related to the integration of the acquired business.  Although
the Company is currently focusing on its existing operations, the future ability
of the Company to achieve growth through acquisitions will depend on a number of
factors, including the availability of attractive acquisition opportunities, the
availability  of funds  needed to complete  acquisitions,  the  availability  of
working  capital  needed to fund the  operations of acquired  businesses and the
effect of existing and emerging  competition  on operations.  Should  additional
acquisitions be sought,  there can be no assurance that the Company will be able
to successfully  identify additional suitable acquisition  candidates,  complete
additional acquisitions or integrate acquired businesses into its operations.
    

Amortization of Significant  Intangible Assets. Of the Company's total assets at
September 30, 1997,  approximately  $31.1 million  (57%)  represents  intangible
assets,  of which  approximately  $14.8 million reflects goodwill which is being
amortized  using an estimated  life  ranging from 12 to 25 years,  approximately
$11.5  million  reflects the cost of patents  which are being  amortized  over a
period ranging from 8 to 17 years, and  approximately  $4.8 million reflects the
cost of licenses and technology  acquired which is being amortized over a period
ranging  from 31  months to 12  years.  Goodwill  is an  intangible  asset  that
represents the difference  between the total purchase price of the  acquisitions
and the amount of such  purchase  price  allocated  to the fair value of the net
assets acquired.  Goodwill and other  intangibles are amortized over a period of
time, with the amount amortized in a particular  period  constituting a non-cash
expense that reduces the Company's net income in that period. A reduction in net
income  resulting from the  amortization  of goodwill and other  intangibles may
have an adverse impact upon the market price of the Company's  Common Stock.  In
addition,  in the event of a sale or  liquidation  of the Company or its assets,
there can be no  assurance  that the value of such  intangible  assets  would be
recovered.

   
In  accordance  with  SFAS  121,  the  Company  reviews  intangible  assets  for
impairment  whenever events or changes in circumstances,  including a history of
operating or cash flow losses, indicate that the carrying amount of an asset may
not be recoverable.  In such cases, the carrying amount of the asset is compared
to the estimated  undiscounted future cash flows expected to result from the use
of  the  asset  and  its  eventual  disposition.  If the  sum  of  the  expected
undiscounted future cash flows is less than the carrying amount of the asset, an
impairment  loss will be computed and  recognized in  accordance  with SFAS 121.
Expected cash flows are based on factors including  historical results,  current
operating  budgets  and  projections,  industry  trends  and  expectations,  and
competition.
    

   
Year 2000  Concerns.  The Company  believes  that it has  prepared  its computer
systems and  related  applications  to  accommodate  date-sensitive  information
relating to the Year 2000. The Company expects that any additional costs related
to ensuring such systems to be Year 2000  compliant  will not be material to the
financial condition or results of operations of the Company.  Such costs will be
expensed as incurred.  In addition,  the Company is discussing  with its vendors
and customers the possibility of any interface difficulties which may affect the
Company. To date, no significant concerns have been identified.  However,  there
can be no assurance  that no Year  2000-related  operating  problems or expenses
will  arise  with  the  Company's  computer  systems  and  software  or in their
interface  with the computer  systems and software of the Company's  vendors and
customers.
    

Health Care Services-Related Uncertainties
------------------------------------------

Risks  Associated  with Managed Care Contracts.  As an increasing  percentage of
optometric and  ophthalmologic  patients are coming under the control of managed
care entities,  the Company  believes that its success will, in part,  depend on
the Company's  ability to negotiate  contracts  with HMOs,  employer  groups and
other private  third-party payors pursuant to which services will be provided on
a risk-sharing or capitated basis.  Under some of such agreements,  the eye care
provider  accepts a  predetermined  amount per month per patient in exchange for
providing  all  necessary  covered  services  to  the  enrolled  patients.  Such
contracts  pass  much of the  risk of  providing  care  from  the  payer  to the
provider.  The  proliferation of such contracts in markets served by the Company
could result in greater predictability of revenues, but greater unpredictability
of expenses.  There can, however,  be no assurance that the Company will be able
to negotiate satisfactory  arrangements on a risk-sharing or capitated basis. In
addition,  to the extent that  patients or enrollees  covered by such  contracts
require more frequent or extensive care than anticipated,  operating margins may
be reduced or, in the worst case,  the revenues  derived from such contracts may
be insufficient to cover the costs of the services  provided.  As a result,  the
Company may incur additional costs, which would reduce or eliminate  anticipated
earnings  under such  contracts and could have a material  adverse affect on the
Company's results of operations.

   
Ultimately,  the success of the  Company's MEC strategy will be dependent on its
ability to maintain  and expand its managed  care  contract  relationships  with
HMOs,  employee groups and other private third party payors.  These managed care
contract  relationships  will  depend  largely on MEC's  ability to recruit  and
retain  optometrists  and  ophthalmologists,  who  are  committed  to  providing
quality,  cost-effective care, to participate in MEC's contract provider network
as well as to market such provider network to third party payors.  The inability
to effectively  maintain MEC's provider  network and third party payor contracts
could  have a material  adverse effect on the  Company's  results of operations,
financial condition and liquidity.

Reimbursement:  Trends and Cost Containment. The Company's revenues derived from
LSIA are derived  principally  from  management fees payable to LSIA from NNJEI.
Because the amount of  management  fees payable to LSIA is generally  determined
with reference to the practice  revenues of NNJEI, any reduction in the practice
revenues generated by NNJEI could adversely effect the Company.  There can be no
assurance that NNJEI will continue to maintain a successful  practice,  that the
management agreement between LSIA and NNJEI will not be terminated,  or that the
ophthalmologists will continue to be employed by NNJEI.

A  substantial  portion of the  revenues  of NNJEI are derived  from  government
sponsored health care programs (principally, the Medicare and Medicaid programs)
or private third party payors.  The health care industry is experiencing a trend
toward cost  containment  as government and private  third-party  payors seek to
impose lower  reimbursement  and utilization rates and negotiate reduced payment
schedules with service  providers.  The Company  believes that these trends will
continue to result in a reduction from historical levels in per-patient  revenue
for   such   ophthalmic   practices.   Further   reductions   in   payments   to
ophthalmologists  or other  changes in  reimbursement  for health care  services
would have an adverse effect on the Company's  operations  unless the Company is
otherwise  able to offset  such  payment  reductions  through  cost  reductions,
increased volume, introduction of new procedures or otherwise.

Rates paid by private third-party payors are based on established physician, ASC
and hospital charges and are generally higher than Medicare reimbursement rates.
Any decrease in the  relative  number of patients  covered by private  insurance
could  have a material  adverse  effect on NNJEI's  results of  operations.  The
federal   government  has  implemented,   through  the  Medicare  program,   the
resource-based  relative value scale ("RBRVS") payment methodology for physician
services. This methodology went into effect in 1992 and was implemented during a
transition period in annual increments through December 31, 1995. RBRVS is a fee
schedule  that,  except for certain  geographical  and other  adjustments,  pays
similarly situated  physicians the same amount for the same services.  The RBRVS
is  adjusted  each  year,  and is  subject  to  increases  or  decreases  at the
discretion of Congress.  RBRVS-type of payment systems have also been adopted by
certain  private  third-party  payors  and  may  become  a  predominant  payment
methodology.  Wider-spread implementation of such programs would reduce payments
by private  third-party  payors and could reduce the NNJEI's  practice  revenues
and, in turn,  reduce the amount of management fees paid by NNJEI to LSIA. There
can be no assurance that any or all of these reduced practice  revenues could be
offset by the NNJEI through cost reductions,  increased volume,  introduction of
new procedures or otherwise.
    


Health  Care  Regulation--General.  The Company is subject to  extensive  state,
federal  and  local  regulations.  The  Company  is also  subject  to  laws  and
regulations  relating to business  corporations in general. The Company believes
its operations are in substantial compliance with applicable law. However, there
can be no assurance that review of the Company's business,  its affiliates,  and
contractual  arrangements  by courts  or  health  care,  tax,  labor,  and other
regulatory  authorities will not result in  determinations  that could adversely
affect the operations of the Company.  Also,  there can be no assurance that the
health care  regulatory  environment  will not change and restrict the Company's
existing operations or limit the expansion of the Company's business. The health
care industry is presently  experiencing  sweeping and dynamic  change.  Much of
this change has been prompted by market forces.  Numerous legislative  proposals
and laws also have prompted  other  changes in the  industry.  In recent years a
number of governmental and other public initiatives have developed to reform the
health  care  system  in  the  United  States.  If  adopted,  certain  of  these
initiatives could  substantially  alter the method of delivery and reimbursement
for  medical  care  services in this  country.  There can be no  assurance  that
current or future  legislative  initiatives or governmental  regulation will not
adversely affect the business of the Company.

More  generally,  in recent  years  there  have been  changes  in  statutes  and
regulations  regarding  the  provision  of health care  services and the Company
anticipates  that such statutes and regulations  will continue to be the subject
of future modification.  The Company cannot predict what changes may be enacted,
and what effect changes in these regulations might have upon the Company and its
prospects.  It is  possible  that  federal or state  legislation  could  contain
provisions  resulting in  governmental  price  ceilings  (even on procedures for
which  government  health insurance is not available) which may adversely affect
the ophthalmic laser market or otherwise adversely affect the Company's business
in the United States. The uncertainty  regarding additional health care statutes
or regulations,  and the enactment of reform legislation,  could have an adverse
affect on the development and growth of the company's  business and might result
in additional volatility in the market price of the Company's securities.

Health  Care  Regulation--Referrals.  The  health  care  industry  is subject to
"anti-referral" and "anti-kickback" laws governing patient referrals,  and other
laws concerning fee splitting with non-physicians. Although the Company believes
that its operations are in substantial compliance with existing applicable laws,
the  Company's  business  operations  have not been the  subject of  judicial or
regulatory  review.  There can be no assurance that the Company's  business will
not be reviewed in the future,  and if reviewed or  challenged  that the Company
would  prevail.  Any such review or challenge of the  Company's  business  could
result in  determinations  that could  adversely  affect the  operations  of the
Company.  There can be no assurance that the health care regulatory  environment
will not change so as to restrict the  Company's  existing  operations  or their
expansion.  Aspects of certain health care reforms as proposed in the past, such
as  further   reductions  in  Medicare  and  Medicaid  payments  and  additional
prohibitions on physician  ownership,  directly or indirectly,  or facilities to
which they refer patients, if adopted, could adversely affect the Company.

Corporate  Practice  of  Medicine.  The laws of many  states  prohibit  business
corporations  or other  non-professional  corporations  such as the Company from
practicing medicine and employing  physicians to practice medicine.  The Company
intends to perform only non-medical  administrative services, does not intend to
represent to the public or patients or  participating  providers  that it offers
medical services,  and does not intend to exercise influence or control over the
practice of  medicine by the  participating  providers  with whom it  affiliates
pursuant to contractual arrangements. Accordingly, the Company believes that its
intended  operations will not be in violation of applicable  state laws relating
to the  practice of medicine.  However,  the laws in most states  regarding  the
corporate  practice of medicine  have been  subjected  to limited  judicial  and
regulatory  interpretation and,  therefore,  no assurances can be given that the
Company's activities will be found to be in compliance, if challenged.  The laws
of many states also prohibit  non-professional  corporations such as the Company
and other  entities  that are not owned  entirely by physicians  from  employing
physicians,  optometrists  and other similar  professionals  having control over
clinical  decision-making,  or engaging in other  activities  that are deemed to
constitute the practice of medicine. Some states also prohibit  non-professional
corporations from owning, maintaining or operating an office or facility for the
practice of medicine.  Some states also prohibit  non-professional  corporations
from owning,  maintaining or operating an office or facility for the practice of
medicine.  These laws may be  construed to permit  arrangements  under which the
physicians are not employed by or otherwise controlled as to clinical matters by
the party  supplying such facilities and  non-professional  services but provide
services under contract with such an entity.

Professional  Liability.  Although  the Company does not intend to engage in the
practice of medicine,  there can be no assurance  that the Company will not have
liability arising from the medical services, utilization review, peer review, or
other similar activities, of the participating providers.  Under its contractual
arrangements,   the  Company  requires  all  participating  providers  to  carry
professional liability insurance and other insurance necessary to insure against
such risks,  and, where  possible,  to add the Company as an additional  insured
under  such  professional  liability  insurance  policies  and other  applicable
policies of the participating  provider.  It is unlikely that such insurers will
add the Company as an additional insured.  The Company carries general liability
and casualty  insurance,  but there can be no assurance that claims in excess of
any  insurance   coverage  will  not  be  asserted  against  the  Company.   The
availability  and cost of such  insurance  is beyond the control of the Company,
and the cost of such  insurance to the Company may have an adverse effect on the
Company's  operations.  Additionally,  successful  claims of liability  asserted
against the Company that exceed  applicable  policy limits could have a material
adverse effect on the Company's results of operations and financial condition.

Competition. The Company will compete with other companies which seek to acquire
the business assets of, provide  management and other services to, and affiliate
with  existing  provider  practices.  Other  companies  are actively  engaged in
businesses  similar to that of the  Company,  some of which  have  substantially
greater financial  resources and longer operating histories than the Company and
are located in areas  where the  Company  may seek to expand in the future.  The
Company assumes that additional  companies with similar objectives may enter the
Company's  markets  and compete  with the Company and there can be no  assurance
that the  Company  will be able to  compete  effectively  with  such  companies.
Additionally,  the market for vision care is becoming increasingly  competitive.
The Company's  participating  providers  may compete with many other  providers.
Competition is based on many factors including marketing and financial strength,
public  image and the strength of  established  relationships  in the  industry.
There  can be no  assurance  that  the  Company's  participating  providers  can
successfully compete in their respective markets.

Insurance Regulation.  Federal and state laws regulate insurance companies, HMOs
and  other   managed  care   organizations.   Many  states  also   regulate  the
establishment  and  operation of networks of health care  providers.  Generally,
these laws do not apply to the hiring and  contracting  of  physicians  by other
health care  providers.  There can be no assurance that regulators in the states
in which the Company operates would not apply these laws to require licensure of
the  Company's  health  care  operations  as an HMO,  an  insurer  or a provider
network.  The Company  believes that it is in compliance  with these laws in the
states in which it presently does  business,  but there can be no assurance that
interpretations  of these laws by the regulatory  authorities in these states or
in the states in which the Company may expand its managed  care  operations,  or
that if licensing is required, that the Company could complete such licensing in
a timely  manner.  In  addition,  there can be no assurance  that the  Company's
strategy  to expand its  managed  vision  care  business  will not subject it to
regulation in other states.

Dependence  on Major  Customer.  Blue Cross and Blue Shield of Maryland  (BC/BS)
accounted  for 44.4% and 49.1% of the  revenues  of the  Company's  health  care
services  segment during the year ended 1996 and the nine months ended September
30,  1997,  respectively.  Such  revenues  represented  22.5%  and  26.4% of the
Company's consolidated revenues during such 1996 and 1997 periods, respectively.
A  termination  of or  failure  to renew the  agreements  between  BC/BS and the
Company  could  have a  material  adverse  effect on the  Company's  results  of
operations and financial condition.

Technology-Related Uncertainties
--------------------------------

   
Government  Regulation.  The  Company's  laser  products  are  subject to strict
governmental  regulations  which  materially  affect  the  Company's  ability to
manufacture and market these products and directly impact the Company's  overall
prospects.  All laser devices to be marketed in interstate  commerce are subject
to the laser regulations required by the Radiation Control for Health and Safety
Act, as administered by the U.S. Food and Drug  Administration (the "FDA"). Such
Act  imposes   design  and   performance   standards,   labeling  and  reporting
requirements,  and submission conditions in advance of marketing for all medical
laser  products.  The Company's  laser systems  produced for medical use require
pre-market approval by the FDA before they can be marketed in the United States.
Each separate  medical device requires a separate FDA  submission,  and specific
protocols  have to be  submitted to the FDA for each claim made for each medical
device.  In addition,  laser  products  marketed in foreign  countries are often
subject to local laws governing health product  development  processes which may
impose  additional  costs for overseas product  development.  The Company cannot
determine  the costs or time it will take to complete the  approval  process and
the related clinical testing for its medical laser products.  Future legislative
or administrative requirements in the United States, or elsewhere, may adversely
affect the  Company's  ability to obtain or retain  regulatory  approval for its
laser products. The failure to obtain required approvals on a timely basis could
have a material adverse effect on the Company's  business,  financial  condition
and results of operations.

The Company has completed clinical studies in Phase 2a and 2b for PRK. Such data
were  presented  to the FDA and on  September  17,  1997 the Company was granted
permission  to expand into Phase 3 Myopic PRK studies.  The Phase 3 PRK clinical
investigation  is now under way. The Company is also  conducting a Phase 2 trial
for PARK  (Photo-Astigmatic  Refractive  Keratectomy).  The FDA has informed the
Company  that  it may  combine  the  results  from  all its  studies  in its PMA
application.  That  application is being prepared for submission in late 1997 or
early 1998. The Company also has an Investigational Device Exemption approved by
the FDA for the treatment of glaucoma by laser trabeculodissection.  The Company
has recently  completed a Phase 1 study in blind eyes and will be submitting the
results  to the FDA to  request  expansion  into a small  population  of sighted
glaucoma patients.
    

   
Uncertainty Concerning Patents. Should LaserSight  Technologies' lasers be found
to infringe upon any valid and enforceable patents in international  markets, or
by Pillar  Point  Partners  (a  partnership  of which the general  partners  are
subsidiaries  of Visx and  Summit  Technologies)  in the U.S.,  then  LaserSight
Technologies may be required to license such technology from them. In connection
with its settlement of litigation with Pillar Point Partners, the Company agreed
to notify  Pillar Point  Partners  before the Company  begins  manufacturing  or
selling its laser  systems in the United  States.  Should such  licenses  not be
obtained,  LaserSight  Technologies  might be prohibited from  manufacturing  or
marketing its PRK-UV lasers in these countries where patents are in effect.  The
Company's revenues from  international  sales for 1996 and the nine months ended
September 30, 1997 were 47% and 42%, respectively, of the total revenues.
    

New  Products.  There can be no assurance  that the Company will not  experience
difficulties   that  could   delay  or  prevent  the   successful   development,
introduction  and marketing of its new LaserScan LSX excimer laser and other new
products and  enhancements,  or that its new products and  enhancements  will be
accepted in the marketplace,  including the disposable keratome product licensed
in  September  1997.  As is  typical  in the  case of new and  rapidly  evolving
industries,  demand and market acceptance for recently introduced technology and
products are subject to a high level of uncertainty. In addition,  announcements
of currently planned or other new product offerings may cause customers to defer
purchasing existing Company products.

Potential Product Liability Claims; Limited Insurance.  As a producer of medical
devices,  the Company may face liability for damages to users of such devices in
the event of product failure. The testing and use of human care products entails
an inherent risk of negligence or other action. An award of damages in excess of
the Company's  insurance  coverage  could have a material  adverse effect on the
Company's  business,  financial  condition and results of operations.  While the
Company maintains product  liability  insurance,  there can be no assurance that
any such liability of the Company will be included within its insurance coverage
or that  damages  will not  exceed  the limits of its  coverage.  The  Company's
insurance  coverage is limited to  $6,000,000,  including  up to  $5,000,000  of
coverage under an excess liability policy.


                           PART II - OTHER INFORMATION

ITEM 1   LEGAL PROCEEDINGS

         Pillar Point Partners

         On March 25, 1997,  the Company  entered into an agreement  with Pillar
         Point Partners and each co-plaintiff to resolve this litigation.  Under
         the agreement,  Pillar Point Partners and each  co-plaintiff  granted a
         release from  liability  under any of their  patents for certain of the
         Company's  ultraviolet laser corneal surgery systems and any service or
         procedure  performed with such systems before the effective date of the
         agreement.  The Company  paid a nominal fee in April 1997 and agreed to
         notify Pillar Point Partners and the  co-plaintiffs  before  LaserSight
         begins manufacturing or selling in the United States in the future. The
         action was dismissed  without  prejudice in the United States  District
         Court for the District of Delaware on March 26, 1997.

         VISX

         On May 27,  1997,  the Company  entered into a License  Agreement  with
         VISX,  Incorporated  to settle this  litigation  as well as any and all
         potential claims related to patent  infringement  prior to May 1, 1997.
         The  agreement  calls for an  aggregate of $230,400 to be paid in eight
         quarterly installments of $28,800 each.

         Euro Pacific Securities Services
   
         To collect a  $1,140,000  stock  subscription  receivable,  the Company
         initiated a lawsuit that is presently  pending before the United States
         District Court for the Middle District of  Florida-Orlando  Division in
         June 1996 against Euro Pacific  Securities  Services GMBH & Co., KG and
         Wolf Wiese (the  "defendants").  In July 1997,  after failing to timely
         file a  counterclaim,  the defendants  filed a separate  lawsuit in the
         same court against the Company and its  LaserSight  Technologies,  Inc.
         subsidiary,  without obtaining leave from the court, claiming breach of
         contract,  coercion to enter a contract,  misrepresentation,  and other
         charges and seeking an  unspecified  amount of  monetary  damages.  The
         Company  believes that the charges are without  merit and  procedurally
         flawed.  The trial  for the  lawsuit  originally  filed in June 1996 is
         presently on the docket for December 1997.
    

         Northern New Jersey Eye Institute
   
         In   October    1997,    the    Company    received   a   request   for
         mediation/arbitration  from  Northern  New Jersey Eye  Institute,  P.A.
         (NNJEI) which relates to the services  agreement between LSIA (a wholly
         owned subsidiary of the Company) and NNJEI. This services agreement was
         entered  into as part of the  Company's  July 1996  acquisition  of the
         assets of NNJEI.  The request for mediation  alleges breach of contract
         and fraud which the Company  denies and intends to  vigorously  defend.
         The mediation began in mid-November and is continuing.  Under the terms
         of the services  agreement,  it will be followed by binding arbitration
         if a  resolution  cannot  be  reached.  Based  on the  Company's  legal
         assessment of the contracts  between the parties,  the Company does not
         expect the outcome of mediation or, if necessary, arbitration to have a
         material  impact on the Company's  consolidated  financial  position or
         results of operations.
    

ITEM 2   CHANGES IN SECURITIES

         a)   As previously reported,  the Company completed a private placement
              of its Series B Preferred  Stock on August 29, 1997.  Although the
              holders of the Series B Preferred  Stock have  voting  rights only
              under the limited circumstances required by Delaware corporate law
              and are not entitled to receive any dividends unless dividends are
              concurrently  paid on the Common  Stock,  there is no limit on the
              number of shares which the holders of the Series B Preferred Stock
              would be entitled to receive upon the conversions thereof, subject
              to the approval of the Company's  shareholders  of the issuance of
              more than 1,995,532 shares of Common Stock in connection with such
              conversions.  In addition,  in the event of a  liquidation  of the
              Company,  the  holders of the Series B  Preferred  Stock  would be
              entitled to receive  distributions in preference to the holders of
              the Common  Stock.  See Note 6 of Notes to Condensed  Consolidated
              Financial Statements.

         b)   Not applicable.

         c)   During the third quarter ended September 30, 1997, the Company has
              sold or issued the following unregistered securities:

              (1) In July 1997,  the  Company  issued  535,515  shares of Common
              Stock  to  Frederic  B.  Kremer  as  partial   consideration   for
              acquisition of PMA application.  For further information, see Note
              7 of Notes to Condensed Consolidated Financial Statements.

              (2)  In  August  1997,  the  Company  granted  investors  and  the
              placement  agent  warrants  to purchase  790,000  shares of Common
              Stock. The warrants are exerciseable at a price of $5.91 per share
              at any time during the next five years.

              The issuance and sale of all such shares was intended to be exempt
              from registration and prospectus  delivery  requirements under the
              Securities  Act of 1933,  as  amended  (the  "Securities  Act") by
              virtue of Section 4(2) thereof due to, among other thing,  (i) the
              limited number of persons to whom the shares were issued, (ii) the
              distribution of disclosure  documents to all investors,  (iii) the
              fact  that each  such  person  represented  and  warranted  to the
              Company,  among other  things,  that such person was acquiring the
              shares  for  investment  only and not with a view to the resale or
              distribution   thereof,   and  (iv)  the  fact  that  certificates
              representing  the shares  were  issued with a legend to the effect
              that such shares had not been registered  under the Securities Act
              or any state  securities laws and could not be sold or transferred
              in the absence of such registration or an exemption therefrom.

ITEM 3   DEFAULTS UPON SENIOR SECURITIES

         Not applicable.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         Not applicable.

ITEM 5   OTHER INFORMATION

         Not applicable.

ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

         a) Exhibits

                                  EXHIBIT INDEX
                                  -------------

Exhibit 2 -  Plans of Acquisition, Reorganization

2.1      See Exhibits 10.1, 10.6, 10.13,  10.17,  10.20, 10.21, 10.26, 10.35 and
         10.36.

Exhibit 3 - Articles of Incorporation and Bylaws

3.1      Certificate  of  Incorporation,  as amended  (filed as Exhibit 1 to the
         Company's Form 8-A/A filed on September 29, 1997*).

3.2      Bylaws,  as amended  (filed as Exhibit 3 to the Company's Form 10-K for
         the year ended December 31, 1992*).

Exhibit 4  -  Instruments Defining the Rights of Security Holders

4.1      See Exhibits 3.1 and 3.2.

Exhibit 10 - Material Contracts

10.1     Agreement  for  Purchase  and  Sale of Stock  by and  among  LaserSight
         Centers  Incorporated,  its  stockholders  and LaserSight  Incorporated
         dated January 15, 1993 (filed as Exhibit 2 to the Company's  Form 8-K/A
         filed on January 25, 1993*).

10.2     Amendment  to  Agreement  for  Purchase  and Sale of Stock by and among
         LaserSight  Centers  Incorporated,  its  stockholders,  and  LaserSight
         Incorporated  dated April 5, 1993 (filed as Exhibit 2 to the  Company's
         Form 8-K/A filed on April 19, 1993*).

10.3     Royalty Agreement by and between  LaserSight  Centers  Incorporated and
         LaserSight  Partners  dated  January 15, 1993 (filed as Exhibit 10.5 to
         the Company's Form 10-K for the year ended December 31, 1995*).

10.4     Exchange  Agreement dated January 25, 1993 between  LaserSight  Centers
         Incorporated and Laser Partners (filed as Exhibit 10.6 to the Company's
         Form 10-K for the year ended December 31, 1995*).

10.5     Stipulation  and Agreement of Compromise,  Settlement and Release dated
         April 18, 1995 among James Gossin, Francis E. O'Donnell, Jr., J.T. Lin,
         Wen S. Dai,  Emanuela  Dobrin-Charlton,  C.H. Huang, W. Douglas Hajjar,
         and  LaserSight  Incorporated  (filed as Exhibit 10.7 to the  Company's
         Form 10-K for the year ended December 31, 1995*).

10.6     Agreement for Purchase and Sale of Stock dated December 31, 1993, among
         LaserSight  Incorporated,  MRF,  Inc.,  and Michael R. Farris (filed as
         Exhibit 2 to the Company's Form 8-K filed on December 31, 1993*).

10.7     First  Amendment  to  Agreement  for  Purchase and Sale of Stock by and
         among MRF, Inc.,  Michael R. Farris and LaserSight  Incorporated  dated
         December 28, 1995 (filed as Exhibit 10.9 to the Company's Form 10-K for
         the year ended December 31, 1995*).

10.8     Technology  Transfer  Agreement dated July 25, 1995 between  LaserSight
         Technologies,  Inc.,  J.T. Lin, Ph.D. and Photon Data,  Inc.  (filed as
         Exhibit 10.4 to the Company's Form 10-Q for the quarter ended September
         30, 1995*).

10.9     LaserSight  Incorporated  1995 Stock Option Plan (filed as Exhibit 10.5
         to the Company's Form 10-Q for the quarter ended September 30, 1995*).

10.10    Modified Promissory Note between LaserSight  Incorporated,  EuroPacific
         Securities  Services,  GmbH and Co. KG and Wolf Wiese (filed as Exhibit
         10.6 to the  Company's  Form 10-Q for the quarter  ended  September 30,
         1995*).

10.11    Employment Agreement by and between LaserSight Incorporated and Michael
         R.  Farris  dated  December  28,  1995  (filed as Exhibit  10.17 to the
         Company's Form 10-K for the year ended December 31, 1995*).

10.12    Employment  Agreement  dated  December  1995 by and between  LaserSight
         Incorporated and David Pieroni (filed as Exhibit 10.18 to the Company's
         Form 10-K for the year ended December 31, 1995*).

10.13    Agreement and Plan of Merger by and among LaserSight Incorporated,  MEC
         Health Care,  Inc.,  Dr. Mark B. Gordon,  O.D. and Dr. Howard M. Levin,
         O.D.,  dated August 28, 1995 as amended as of October 5, 1995 (filed as
         Exhibit 2 to the Company's Form 8-K filed on October 19, 1995*).

10.14    Patent License Agreement dated December 21, 1995 by and between Francis
         E. O'Donnell,  Jr. and LaserSight Centers, Inc. (filed as Exhibit 10.21
         to the Company's Form 10-K for the year ended December 31, 1995*).

10.15    LaserSight  Incorporated 1996 Equity Incentive Plan (filed as Exhibit A
         to the Company's definitive proxy statement dated April 30, 1996*).

10.16    LaserSight  Incorporated  Amended and Restated  Non-Employee  Directors
         Stock Option Plan (filed as Exhibit B to the Company's definitive proxy
         statement dated May 19, 1997*).

10.17    Agreement  and Plan of Merger  dated  April 18,  1996 among  LaserSight
         Incorporated,  Eye Diagnostics & Surgery, P.A., LSI Acquisition,  Inc.,
         John W. Norris, M.D. and Bernard Spier, M.D. (filed as Exhibit 2 (i) to
         the Company's Form 8-K dated July 18, 1996*).

10.18    Amendment  to the  Agreement  and Plan of Merger  dated  June 17,  1996
         (filed as  Exhibit  2 (ii) to the  Company's  Form 8-K  dated  July 18,
         1996*).

10.19    Second Amendment to the Agreement and Plan of Merger dated July 3, 1996
         (filed as  Exhibit  2 (iii) to the  Company's  Form 8-K dated  July 18,
         1996*).

10.20    Agreement  and Plan of Merger  dated  June 17,  1996  among  LaserSight
         Incorporated,  LaserSight Acquisition, Inc., Cataract Hotline, Inc. and
         Michael R. Norris  (filed as Exhibit 2 (iv) to the  Company's  Form 8-K
         dated July 18, 1996*).

10.21    Asset  Purchase  Agreement  dated  April 18,  1996  between  LaserSight
         Incorporated  and John W. Norris,  M.D. (filed as Exhibit 2 (vi) to the
         Company's Form 8-K dated July 18, 1996*).

10.22    Amendment  to Asset  Purchase  Agreement  dated June 17, 1996 (filed as
         Exhibit 2 (vii) to the Company's Form 8-K dated July 18, 1996*).

10.23    Agreement  dated January 8, 1997 to amend  Agreement and Plan of Merger
         by and among LaserSight  Incorporated,  Mark B. Gordon, O.D. and Howard
         M. Levin,  O.D.  (filed as Exhibit 10.34 to the Company's Form 10-K for
         the year ended December 31, 1996*).

10.24    Agreement  dated  September  18,  1996  between  David T.  Pieroni  and
         LaserSight  Incorporated  (filed as Exhibit 10.35 to the Company's Form
         10-K for the year ended December 31, 1996*).

10.25    Agreement  dated December 17, 1996 between  Public Company  Publishing,
         Inc.,  Samuel S. Duffey and LaserSight  Incorporated  (filed as Exhibit
         10.36  to the  Company's  Form  10-K for the year  ended  December  31,
         1996*).

10.26    Agreement  dated  January  1,  1997,  between  International   Business
         Machines  Corporation  and  LaserSight  Incorporated  (filed as Exhibit
         10.37  to the  Company's  Form  10-K for the year  ended  December  31,
         1996*).

10.27    Addendum  dated  March  7,  1997  to  Agreement  between  International
         Business  Machines  Corporation and LaserSight  Incorporated  (filed as
         Exhibit  10.38 to the Company's  Form 10-K for the year ended  December
         31, 1996*).

10.28    Second  Amendment  to  Agreement  for Purchase and Sale of Stock by and
         among LaserSight Centers Incorporated,  its stockholders and LaserSight
         Incorporated  dated  March  14,  1997  (filed  as  Exhibit  99.1 to the
         Company's Form 8-K filed on March 27, 1997*).

10.29    Amendment  to  Royalty  Agreement  by and  between  LaserSight  Centers
         Incorporated,  Laser Partners and LaserSight  Incorporated  dated March
         14,  1997  (filed as Exhibit  99.2 to the  Company's  Form 8-K filed on
         March 27, 1997*).

10.30    Employment Agreement dated September 16, 1996 by and between LaserSight
         Incorporated  and Richard L.  Stensrud  (filed as Exhibit  10.41 to the
         Company's Form 10-Q filed on May 9, 1997*).

10.31    Loan  and  Security  Agreement  dated  March  31,  1997 by and  between
         LaserSight  Incorporated  and certain of its  subsidiaries and Foothill
         Capital  Corporation (filed as Exhibit 10.42 to the Company's Form 10-Q
         filed on August 14, 1997*).

10.32    Consent and Amendment  Number One to Loan and Security  Agreement dated
         July 28,  1997 by and  between  LaserSight  Incorporated  and  Foothill
         Capital  Corporation (filed as Exhibit 10.43 to the Company's Form 10-Q
         filed on August 14, 1997*).

10.33    Warrant to purchase 500,000 shares of Common Stock dated March 31, 1997
         by and between LaserSight Incorporated and Foothill Capital Corporation
         (filed as Exhibit 10.44 to the Company's  Form 10-Q filed on August 14,
         1997*).

10.34    License Agreement dated May 20, 1997 by and between VISX,  Incorporated
         and  LaserSight  Incorporated  (filed as Exhibit 10.45 to the Company's
         Form 10-Q filed on August 14, 1997*).

10.35    Patent Purchase Agreement dated July 15, 1997 by and between LaserSight
         Incorporated  and Frederic B. Kremer,  M.D.  (filed as Exhibit 2.(i) to
         the Company's Form 8-K filed on August 13, 1997*).

10.36    Agreement  and  Plan  of  Merger  dated  July  15,  1997  by and  among
         LaserSight  Incorporated,  Photomed Acquisition,  Inc., Photomed, Inc.,
         Frederic B. Kremer,  M.D., Linda Kremer,  Robert Sataloff,  Trustee for
         Alan Stewart Kremer and Robert  Sataloff,  Trustee for Mark Adam Kremer
         (filed as Exhibit  2.(ii) to the Company's Form 8-K filed on August 13,
         1997*).

   
10.37    Securities  Purchase  Agreement  dated  August 29,  1997 by and between
         LaserSight   Incorporated   and  purchasers  of  Series  B  Convertible
         Participating  Preferred  Stock of  LaserSight  Incorporated  (filed as
         Exhibit 10.37 to the Company's Form 10-Q filed on November 14, 1997*).

10.38    Registration  Rights  Agreement  dated  August 29,  1997 by and between
         LaserSight   Incorporated   and  purchasers  of  Series  B  Convertible
         Participating  Preferred  Stock of  LaserSight  Incorporated  (filed as
         Exhibit 10.38 to the Company's Form 10-Q filed on November 14, 1997*).

10.39    Warrant to purchase  750,000  shares of Common  Stock dated  August 29,
         1997 by and between LaserSight  Incorporated and purchasers of Series B
         Convertible  Participating  Preferred Stock of LaserSight  Incorporated
         (filed as Exhibit  10.39 to the  Company's  Form 10-Q filed on November
         14, 1997*).

10.40    Consent and Amendment  Number Two to Loan and Security  Agreement dated
         August 29, 1997 by and between  LaserSight  Incorporated  and  Foothill
         Capital  Corporation (filed as Exhibit 10.40 to the Company's Form 10-Q
         filed on November 14, 1997*).

10.41    Consent and Amendment Number Three to Loan and Security Agreement dated
         September 10, 1997 by and between LaserSight  Incorporated and Foothill
         Capital  Corporation (filed as Exhibit 10.41 to the Company's Form 10-Q
         filed on November 14, 1997*).

10.42    Independent  Contractor Agreement by and between Byron Santos, M.D. and
         LaserSight Technologies,  Inc. (filed as Exhibit 10.42 to the Company's
         Form 10-Q filed on November 14, 1997*).
    

Exhibit 11   Statement of Computation of Per Share Earnings

   
Exhibit 27   Financial Data Schedule  (filed as Exhibit 27 to the Company's Form
             10-Q filed on November 14, 1997*).
    

         b) Reports on Form 8-K

         On July 1, 1997, the Company filed with the Commission a Current Report
         on  Form  8-K  regarding  conversion  of  the  last  of  the  Series  A
         Convertible  Preferred  Stock and a press release issued by the Company
         dated  July  1,  1997,  regarding  an  update  on the  patent  purchase
         agreement with IBM.

         On July 31,  1997,  the  Company  filed with the  Commission  a Current
         Report on Form 8-K regarding  the press  release  issued by the Company
         dated  July 31,  1997,  regarding  an  update  on the  patent  purchase
         agreement with IBM.

         On August 13,  1997,  the Company  filed with the  Commission a Current
         Report  on Form  8-K  regarding  the  acquisition  of the  rights  to a
         Pre-Market  Approval  application with the Food and Drug Administration
         for a laser dedicated to perform LASIK and a keratome patent.

         On September 2, 1997,  the Company filed with the  Commission a Current
         Report on Form 8-K regarding  the press  release  issued by the Company
         dated   September  2,  1997,   announcing   completion  of  the  patent
         acquisitions from IBM.

         On September 11, 1997,  the Company filed with the Commission a Current
         Report on Form 8-K regarding  the press  release  issued by the Company
         dated September 9, 1997,  announcing that LaserSight acquired a license
         and the rights to a disposable keratome.

         On September 15, 1997,  the Company filed with the Commission a Current
         Report on Form 8-K regarding the purchase of the patent  portfolio from
         IBM on August 29, 1997.

         On September 24, 1997,  the Company filed with the Commission a Current
         Report on Form 8-K regarding  the press  release  issued by the Company
         dated  September  23,  1997,  announcing  that  LaserSight  received $4
         million  for  an   exclusive   license   covering   the   vascular  and
         cardiovascular rights included in the patents purchased from IBM.


----------------------
*Incorporated herein by reference.  File No. 0-19671.

<PAGE>


                                   SIGNATURES


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  undersigned  have duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                     LaserSight Incorporated


   

Dated:   December 11, 1997           By:  /s/ Michael R. Farris
     ------------------------            -----------------------
                                         Michael R. Farris,
                                         Chief Executive Officer



Dated:   December 11, 1997           By:  /s/ Gregory L. Wilson
     ------------------------            -----------------------
                                         Gregory L. Wilson,
                                         Chief Financial Officer