SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q
(Mark One)
[ X ] Quarterly  Report Pursuant to Section 13 or 15(d) of the Securities
      Exchange Act of 1934. For the quarterly period ended June 30, 1998.

                                       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.)



              3300 University Blvd., Winter Park, Florida 32792
              -------------------------------------------------
              (Address of principal executive offices) Zip Code)

                                  (407)382-2700
                                  -------------
              (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
August __, 1997 is ____________.



                                       1
<PAGE>



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 for the year
ended December 31, 1997.

                                      INDEX
                                                                                
PART I.  FINANCIAL INFORMATION

         Item 1.  Condensed Consolidated Financial Statements

                  Condensed  Consolidated Balance Sheets as of June 30, 1998 and
                  December 31, 1997

                  Condensed Consolidated  Statements of Operations for the Three
                  Month  Periods and Six Month  Periods  Ended June 30, 1998 and
                  1997 

                  Condensed  Consolidated  Statements  of Cash Flows for the Six
                  Month Periods Ended June 30, 1998 and 1997 

                  Notes to Condensed Consolidated Financial Statements 


         Item 2.  Management's  Discussion  and  Analysis of Financial Condition
                  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




                                       2
<PAGE>


<TABLE>




                         PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
                    LASERSIGHT INCORPORATED AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<CAPTION>

                                                                                        June 30,        December 31,
                                                                                          1998              1997
                                                                                     ---------------    --------------
CURRENT ASSETS                                               ASSETS                    (Unaudited)
<S>                                                                                     <C>                <C>               
  Cash and cash equivalents                                                             $12,444,856        $3,858,400
  Marketable equity securities                                                                   --         7,475,000
  Accounts receivable - trade, net                                                        6,149,872         2,649,202
  Notes receivable - current portion, net                                                 4,788,872         3,762,341
  Inventories                                                                             5,965,282         4,348,235
  Deferred tax assets                                                                       512,813           571,009
  Income taxes recoverable                                                                   65,000                --
  Other current assets                                                                      216,108           219,723
                                                                                     ---------------    --------------
                                                       TOTAL CURRENT ASSETS              30,142,803        22,883,910

Restructured cash                                                                           194,000           200,000
Notes receivable, less current portion, net                                               2,197,076         2,380,193
Property and equipment, net                                                               1,463,042         1,354,168
Patents, net                                                                              4,745,424        11,275,289
Pre-market approval application, net                                                      2,291,134         2,571,682
Goodwill, net                                                                             6,815,177         7,077,491
Other assets, net                                                                         2,123,763         2,718,340
                                                                                     ---------------    --------------
                                                                                        $49,972,419       $50,461,073
                                                                                     ===============    ==============

                                        LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                                                       $1,714,398        $2,142,979
  Note payable, less discount                                                                    --         1,758,333
  Accrued expenses                                                                        2,744,825         2,782,521
  Accrued commissions                                                                     1,358,914         1,230,474
  Income tax payable                                                                             --         1,255,491
  Deferred royalty revenue                                                                  400,000                 -
  Other current liabilities                                                                 993,756           984,412
                                                                                     ---------------    --------------
                                                  TOTAL CURRENT LIABILITIES               7,211,893        10,154,210

Refundable deposits                                                                         194,000           200,000
Accrued expenses, less current portion                                                      526,316           518,730
Preferred royalty revenue, less current portion                                             633,334                 -
Deferred income taxes                                                                       512,813           571,009
Long-term obligations                                                                       500,000           500,000
Commitments and contingencies

Redeemable convertible preferred stock:
 Series B - par value $.001 per share; authorized 1,600 shares: 0 and 1,295
   Issued and outstanding at June 30, 1998 and December 31, 1997,                                 -        11,477,184
respectively.

Stockholders' equity:
Convertible Preferred Stock:
 Series C - par value $.001 per share; authorized 2,000,000 shares;
2,000,000 issued and                                                                          2,000                 -
   outstanding at June 30, 1998.
 Series D - par value $.001 per share; authorized 2,000,000 shares;
2,000,000 issued and                                                                          2,000                 -
   outstanding at June 30, 1998.
Additional paid-in capital -- preferred stock                                            15,815,555                 -
Common stock - par value $.001 per share; authorized 40,000,000 shares;
   12,785,372 and 10,149,872 shares issued at June 30,1998 and December                      12,786            10,150
   31, 1997, respectively
Additional paid-in capital - common stock                                                42,057,824        40,045,564
Stock subscription receivable                                                           (1,140,000)       (1,140,000)
Accumulated deficit                                                                    (15,779,218)      (11,865,914)
Accumulated other comprehensive income - unrealized gain                                          -           604,500
Less treasury stock, at cost;  160,200 and 165,200 common shares at June 30,
 1998 and December 31, 1997, respectively                                                 (576,884)         (614,360)
                                                                                     ---------------    --------------
                                                                                         40,394,063        27,039,940
                                                                                     ---------------    --------------
                                                                                        $49,272,419       $50,461,073
                                                                                     ===============    ==============


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

                                       3
<PAGE>


<TABLE>


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

<CAPTION>

                                                   Three Months Ended                        Six Months Ended
                                                        June 30,                                 June 30,
                                          -------------------------------------     ------------------------------------
                                               1998                 1997                 1998                1997
                                          ---------------      ----------------     ----------------    ----------------

REVENUES:
<S>                                           <C>                   <C>                  <C>                 <C>   
    PRODUCTS                                  $4,924,236            $2,130,698           $8,968,919          $5,684,543
    SERVICES                                     167,661             3,277,874              366,197           6,242,171
                                          ---------------      ----------------     ----------------    ----------------
                                               5,091,897             5,408,572            9,335,116          11,926,714
COST OF REVENUE:
    PRODUCT COST                               1,794,551               821,705            2,970,871           1,865,503
    COST OF SERVICES                              73,771             2,129,318              161,127           4,303,705
                                          ---------------      ----------------     ----------------    ----------------

GROSS PROFIT                                   3,223,575             2,457,549            6,203,118           5,757,506

RESEARCH, DEVELOPMENT AND REGULATORY
  EXPENSES                                       743,788               550,427            1,561,344             912,631

SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES                                     4,185,434             3,851,210            7,932,483           7,424,706
                                          ---------------      ----------------     ----------------
                                                                                                        ----------------

LOSS FROM OPERATIONS                         (1,705,647)           (1,944,088)          (3,290,709)         (2,579,831)

OTHER INCOME AND EXPENSES
  Interest and dividend income                   111,442               100,507              226,298             197,871
  Interest expense                             (324,020)             (368,529)            (720,541)           (428,172)
  Realized gain on sale of investments         (186,924)             (230,400)               27,452           (280,400)
                                          ---------------      ----------------     ----------------    ----------------

NET LOSS BEFORE INCOME TAXES                 (2,105,149)           (2,442,510)          (3,757,500)         (3,090,532)

INCOME TAX BENEFIT (PROVISION)                   155,352                    --            (155,804)                  --
                                          ---------------      ----------------     ----------------    ----------------

NET LOSS                                     (1,949,797)          ($2,442,510)         ($3,913,304)         (3,090,532)

CONVERSION DISCOUNT ON
    PREFERRED STOCK                                                         --                                       --

PREFERRED STOCK ACCRETION
  AND DIVIDEND REQUIREMENTS                                            (3,487)                                 (13,350)
                                          ---------------      ----------------     ----------------    ----------------

LOSS ATTRIBUTABLE TO COMMON
   SHAREHOLDERS                           $                        (2,445,997)                              (3,103,882)
                                          ===============      ================     ================    ================

LOSS PER COMMON SHARE
  Basic:                                                               ($0.26)                                  ($0.34)
                                          ===============      ================     ================    ================
  Diluted:                                                             ($0.26)                                  ($0.34)
                                          ===============      ================     ================    ================

WEIGHTED AVERAGE NUMBER OF SHARES
  OUTSTANDING
  Basic:                                                             9,381,000                                9,103,000
                                          ===============      ================     ================    ================
  Diluted:                                                           9,424,000                                9,176,000
                                          ===============      ================     ================    ================

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





                                       4
<PAGE>



<TABLE>


                    LASERSIGHT INCORPORATED AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                     SIX MONTHS ENDED JUNE 30, 1998 AND 1997
                                   (Unaudited)
<CAPTION>

                                                                                    1998                 1997
                                                                                -----------------    ------------------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                              <C>                   <C>   
  Net loss                                                                       $ (3,913,304)         $ (3,090,532)
  Adjustments to reconcile net loss to net cash used in operating
    activities:
  Depreciation and amortization                                                      1,881,290               966,793
  Realized gain on sale of investments                                                (27,452)                    --
  Decrease (increase) in accounts and notes receivable                             (4,198,124)               683,501
  Increase in inventories                                                            (390,366)             (448,155)
  Increase (decrease) in accounts payable                                            (494,155)               288,911
  Increase (decrease) in accrued expenses                                            (201,462)               418,779
  Income taxes                                                                       (949,991)               742,036
  Deferred royalties                                                                 1,033,334                    --
  Other                                                                                 71,521             (336,414)
                                                                              -----------------    ------------------

NET CASH USED IN OPERATING ACTIVITIES                                              (7,188,709)             (775,081)

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchases of property and equipment, net                                           (289,442)             (350,593)
  Net proceeds from exclusive and non-exclusive license of
patents                                                                              6,170,000                    --
  Proceeds from sale of investments                                                  6,527,452                    --
  Transfer to restricted cash account                                              (4,200,000)                    --
  Proceeds from restricted cash account                                              4,228,000                    --
  Purchase of managed care contract                                                         --             (150,000)
                                                                              -----------------    ------------------

NET CASH PROVIDED BY (USED) IN INVESTING    ACTIVITIES
                                                                                    12,436,010             (500,593)

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from exercise of stock options                                               31,600                49,088
  Repurchase of preferred stock                                                   (10,512,000)                    --
  Proceeds from issuance of notes payable, net                                              --             3,414,142
  Repayments of notes payable                                                      (2,000,000)           (1,000,000)
  Repayments of capital lease obligation                                                    --              (99,888)
  Proceeds from issuance of preferred stock, net                                    15,819,555                    --
                                                                              -----------------    ------------------

NET CASH PROVIDED BY FINANCING ACTIVITIES                                            3,339,515             2,363,342
                                                                              -----------------    ------------------

INCREASE IN CASH AND CASH EQUIVALENTS                                                8,586,456             1,087,668

CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD                                                                3,858,400             2,003,501
                                                                              -----------------    ------------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                          $ 12,444,856           $ 3,091,169
                                                                              =================    ==================

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

                                       5
<PAGE>



                    LASERSIGHT INCORPORATED AND SUBSIDIARIES

                    NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 
                 Six Month Periods Ended June 30, 1998 and 1997


NOTE 1   BASIS OF PRESENTATION

         The accompanying unaudited, condensed consolidated financial statements
         of LaserSight  Incorporated and  subsidiaries  (the Company) as of June
         30,  1998,  and for the six month  periods  June 30, 1998 and 1997 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 for
         the year ended  December 31, 1997.  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 six month period ended June 30, 1998
         are not  necessarily  indicative of the operating  results for the full
         year.

NOTE 2   PER SHARE INFORMATION

         Basic loss per common  share is  computed  using the  weighted  average
         number of common shares and contingently issuable shares (to the extent
         that all necessary  contingencies  have been  satisfied),  if dilutive.
         Diluted  loss per common share is computed  using the weighted  average
         number of common shares, contingently issuable shares, and common share
         equivalents  outstanding  during each period.  Common share equivalents
         include  options,  warrants to purchase  Common Stock,  and convertible
         Preferred Stock and are included in the computation  using the treasury
         stock method if they would have a dilutive effect.

NOTE 3   ADOPTION OF NEW ACCOUNTING STANDARD

         The Company  adopted  the  provisions  of the  Statement  of  Financial
         Accounting Standards (SFAS) No. 130 "Reporting Comprehensive Income" on
         January 1, 1998.  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.  For the six months ended
         June 30, 1998 and 1997, net loss equals comprehensive loss.




                                       6
<PAGE>



NOTE 4   INVENTORIES

         Inventories,  which  consist  primarily  of laser  systems,  erbium and
         related  parts,  and  components,  are  stated  at the lower of cost or
         market.  Cost is determined using the first-in,  first-out method.  The
         components  of  inventories  at June 30, 1998 and December 31, 1997 are
         summarized as follows:
<TABLE>

<CAPTION>
                                                               June 30, 1998           December 31, 1997
                                                               -------------           -----------------

<S>                                                              <C>                        <C>      
         Raw materials - laser system related                    $3,715,488                 3,058,782
         Raw materials - erbium related                             716,114                         -
         Work-in-process - laser system related                     160,579                   263,353
         Work-in-process - erbium related                           459,424                         -
         Finished goods - laser system related                      675,045                   862,775
         Finished goods - erbium related                             99,000                         -
         Test equipment-clinical trials                             187,497                   263,325
         Training/show units - erbium related                       273,395                         -
                                                             ----------------       ---------------------
                                                                  6,286,542                 4,448,235
         Less reserve for obsolescence                              321,260                   100,000
                                                             ================       =====================
                                                                 $5,965,282                 4,348,235
                                                             ================       =====================
</TABLE>


NOTE 5   MARKETABLE EQUITY SECURITIES

         The Company received net proceeds of $6,527,452 in exchange for 820,085
         shares of Vision  Twenty-One,  Inc.  (Vision  21)  common  stock.  This
         represents  the total shares  received in connection  with the December
         1997 sale of MEC Health  Care,  Inc.  (MEC) and LSI  Acquisition,  Inc.
         (LSIA) to Vision 21. The Company  realized a gain on the transaction of
         $27,452.


NOTE 6   SALE OF INTERNATIONAL PATENT RIGHTS

         On February 10, 1998, the Company closed a transaction  for the sale of
         certain  rights in  certain  patents  to Nidek  Co.,  Ltd.  (Nidek)  in
         exchange for $6.3  million in cash (of which  $200,000 was withheld for
         the payment of Japanese taxes).  The Company  transferred all rights in
         those patents  which have been issued in countries  outside of the U.S.
         In  addition,  the Company has granted a  non-exclusive  license to use
         those  patents  issued in the U.S.,  which  resulted in $1.2 million of
         deferred  royalties  that will be amortized to income over three years.
         The  transaction  did not result in any current gain or loss,  but will
         reduce the Company's  amortization  expense over the  remaining  useful
         life (approximately 8 years) of the remaining patents.

NOTE 7   COMMITMENTS AND CONTINGENCIES

         In  conjunction  with   acquisitions  from  Photomed,   Inc.,   several
         contingent  payments  included in the  transaction  are subject to U.S.
         Food and Drug  Administration  (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 to the sellers.  If the
         FDA  approves  the  use of any  Company  laser  for  the  treatment  of
         hyperopia,  the  Company  will be  obligated  to issue  to the  sellers
         unregistered  Common  Stock  valued  at $1  million.  If the  Company's
        

                                       7
<PAGE>

         scanning laser had been approved by the FDA for commercial  sale in the
         U.S. on or before April 1, 1998,  the Company would have been obligated
         to pay $1 million to the sellers.  Approval after such date will result
         in a correspondingly  smaller obligation until January 1, 1999, when no
         payment will be required.  No such  approvals  have been received as of
         August ___, 1998.

NOTE 8   STOCKHOLDERS' EQUITY

         TLC Private Placement

         On June  5,  1998,  the  Company  entered  into a  Securities  Purchase
         Agreement  with The Laser  Center Inc.  ("TLC"),  pursuant to which the
         Company issued to TLC 2,000,000  shares of the  newly-created  Series C
         Convertible  Preferred  Stock (the  "Series C Preferred  Stock") of the
         Company with a face value of $4.00 per share, resulting in an aggregate
         offering price of $8 million (the "TLC Private Placement").  The Series
         C Preferred Stock is convertible on a fixed, one-for-one basis (subject
         to  anti-dilution  adjustments  upon the  occurrence  of a stock split,
         stock dividend or similar event) into 2,000,000 shares of the Company's
         common  stock,  par value $.001 per share,  at the option of TLC at any
         time until June 5, 2001, on which date all shares of Series C Preferred
         Stock then outstanding  will  automatically be converted into shares of
         Common Stock.

         The net proceeds to the Company from the TLC Private  Placement,  after
         deduction of estimated  expenses,  was approximately $7.9 million.  The
         Company  used  the net  proceeds  from  the TLC  Private  Placement  to
         repurchase  all  issued  and   outstanding   shares  of  its  Series  B
         Convertible   Participating   Preferred  Stock  on  June  5,  1998  for
         approximately $6.3 million (see below).

         Pequot Private Placement

         On June 12,  1998,  the  Company  entered  into a  Securities  Purchase
         Agreement  with Pequot Private  Equity Fund,  L.P.,  Pequot Scout Fund,
         L.P., and Pequot Offshore Private Equity Fund, Inc. (collectively,  the
         "Pequot  Funds"),  whereby the  Company  issued,  collectively,  to the
         Pequot Funds 2,000,000 shares of the  newly-created  Series D Preferred
         Stock of the Company with a face value of $4.00 per share, resulting in
         an aggregate offering price of $8 million. The Series D Preferred Stock
         is convertible on a one-for-one basis into an equal number of shares of
         Common Stock, subject to certain  anti-dilution  adjustments  described
         below,  at the  option of the  Pequot  Funds at any time until June 12,
         2001,  on which  date all  shares  of  Series D  Preferred  Stock  then
         outstanding  will  automatically  be  converted  into  shares of Common
         Stock. The net proceeds to the Company was approximately $7.9 million.

         Series B Preferred Stock Redemption

         On June 5, 1998,  the Company  repurchased  the remaining 525 shares of
         Series B Preferred  Stock  (representing  an  aggregate  face amount of
         $5,250,000) with funds from the TLC Private  Placement (see above) at a
         20% premium.  In February  1998,  Series B Preferred  shareholders  had
         exercised an option to sell 351 shares of Series B Preferred Stock also
         at a 20% premium using proceeds from the sale of  international  patent
         rights (see Note 6).

                                       8
<PAGE>

         The amount of the  repurchase  price in excess of the carrying value of
         the Series B  Preferred  Stock  repurchased  and a pro rata  portion of
         Series B Preferred  Stock-related  financing  costs  increased the loss
         attributable to common  shareholders  for the six months ended June 30,
         1998.

         Other

         Prior to the  repurchase of the remaining  shares of Series B Preferred
         Stock, the Series B Preferred  Stockholders had converted 419 shares of
         Series B Preferred Stock into 2,392,220 shares of Common Stock.

NOTE 9   ACQUISITION

         On April 15, 1998, the Company and Schwartz Electro-Optics,  Inc. (SEO)
         completed an agreement whereby the Company purchased  substantially all
         of the  assets,  and  assumed  certain  liabilities,  of SEO's  medical
         products  division (the Division) in exchange for 305,820 shares of the
         Company's Common Stock. The Company is contingently  obligated to issue
         up to  223,280  additional  shares  on April  15,  1999 if its five day
         average Common Stock price is not then valued at $5.00 or greater.  The
         value of the acquisition was $1,250,000.  The Division develops, tests,
         manufacturers, assembles, and sells lasers and their related equipment,
         accessories,  parts,  and  software  for medical  and medical  research
         applications.  The Division's primary focus is erbium lasers, which are
         primarily used to perform dermatology procedures.

         The  acquisition  will be  accounted  for  using the  purchase  method.
         Accordingly,  SEO's  results  of  operations  will be  included  in the
         Company's   consolidated   financial   statements   subsequent  to  the
         acquisition  date.  The fair value of the  purchase  consideration  was
         determined at the date of acquisition and was recorded at that time. If
         and when the additional shares are issued in April 1999, the entry will
         be to record  the par value of shares  issued in Common  Stock with the
         offset to additional paid-in capital.

NOTE 10  NOTES PAYABLE

         On June 5,  1998,  the  Company  repaid its note  payable  to  Foothill
         Capital  Cororation (FCC) of $2,000,000 and also terminated the line of
         credit  arrangement  with FCC.  A  warrant  issued  by the  Company  to
         purchase  500,000  shares of Common Stock  remains  unexercised  and is
         valued at $500,000 and is recorded on the Company's  balance sheet as a
         long-term obligation as of June 30, 1998.





                                       9
<PAGE>



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

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

Revenue.  The following tables present the Company's  revenue by major operating
segments:  technology  products and  services  and health care  services for the
three and six month periods ended June 30, 1998 and 1997.

<TABLE>
<CAPTION>
                                            For the Three Month                          For the Three Month
                                                Period Ended                                 Period Ended
                                               June 30, 1998                                June 30, 1997
                                               -------------                                -------------

                                             Revenue         % of Total                    Revenue        % of Total
                                             -------         ----------                    -------        ----------

<S>                                       <C>                       <C>                 <C>                      <C>
Technology                                $4,924,236                97%                 $2,130,698               39%
Health care services                         167,661                 3%                  3,277,874               61%
                                          ----------                ---                 ----------               ---

Total revenue                             $5,091,897               100%                 $5,408,572              100%
                                          ==========               ====                 ==========              ====


                                             For the Six Month                            For the Six Month
                                                Period Ended                                 Period Ended
                                               June 30, 1998                                June 30, 1997
                                               -------------                                -------------

                                             Revenue         % of Total                    Revenue        % of Total
                                             -------         ----------                    -------        ----------

Technology                                $8,968,919                96%                 $5,684,543               48%
Health care services                         366,197                 4%                  6,242,171               52%
                                          -----------              ----                 ----------         ---------

Total revenue                             $9,335,116               100%                $11,926,714              100%
                                          ==========               ====                ===========             =====
</TABLE>

Revenue in the second  quarter of 1998 were  $5,091,897,  compared to $5,408,572
(for a decrease  of  $316,675)  over the same  period in 1997.  Revenue  for the
six-month period ended June 30, 1998, decreased by $2,591,598 to $9,335,116 from
the same  period in 1997.  The  decrease  in health  care  services  revenue was
substantially   attributable   to  the  sale  of  the  Company's  MEC  and  LSIA
subsidiaries  to Vision 21 in a  transaction  effective  as of December 1, 1997.
These two subsidiaries  contributed $2,857,684 and $5,590,103 in revenues during
the quarter and six-month period ended June 30, 1997,  respectively.  All of the
Company's  health  care  services  revenue  for the first six months of 1998 was
provided by The Farris Group (TFG). Net revenue for TFG in the second quarter of
1998 were $167,661  compared to $420,190  (for a decrease of $252,529)  over the
same period in 1997.  This decrease was  accompanied by a $224,449  reduction in
expenses over the same  three-month  period in 1997.  Net revenue for TFG during
the six-month period ended June 30, 1998, was $366,197 compared to $652,068 (for
a  decrease  of  $285,871)  over the same  period  in 1997.  This  decrease  was
accompanied by a $370,578  reduction in expenses over the same six-month  period
in 1997.

The increase in  technology  related  revenue was  attributable  to (i) a higher
level of laser system sales during  six-month  period ended June 30, 1998 (ii) a
marked increase in the average selling price of laser systems resulting from the
increased  sales of the Company's  higher-priced  LSX model and reduced sales of
the lower-priced  LS-300 model; (iii) an increase in revenues generated from the


                                       10
<PAGE>

sale of service  contracts;  and (iv) revenues  generated from royalty  payments
received on intellectual property agreements. Fifteen laser systems were sold in
the first quarter of 1998 and 1997, respectively. Twenty-nine laser systems were
sold during the six-month  period ended June 30, 1998,  compared to twenty-three
systems sold over the same period in 1997.  No system  returns  were  recognized
during the first two quarters of 1998 or 1997.

Cost of Revenue;  Gross  Profits.  The  following  tables  present a comparative
analysis of cost of revenue, gross profit and gross profit margins for three and
six-month periods ended June 30, 1998 and 1997.

<TABLE>
<CAPTION>





                                              For the Three Month                            For the Three Month
                                                  Period Ended                                   Period Ended
                                                 June 30, 1998          Percent Change          June 30, 1997
                                                 -------------          --------------          -------------
<S>                                               <C>                        <C>                   <C>    
Product cost                                      $   1,794,551               118%                 $   821,705
Cost of services                                         73,771              (97%)                   2,129,318
Gross profit                                          3,223,575                31%                   2,457,549
Gross profit percentage                                     63%                                            45%

Products only                                         3,129,685               139%                   1,308,993

                                                            64%                                            61%

                                               For the Six Month                              For the Six Month
                                                  Period Ended                                   Period Ended
                                                 June 30, 1998          Percent Change          June 30, 1997
                                                 -------------          --------------          -------------

Product cost                                         $2,970,871                50%                  $1,865,503
Cost of services                                        161,127              (94%)                   4,303,705
Gross profit                                          6,203,118              (14%)                   5,757,506
Gross profit percenetage                                    66%                                            48%

Products only                                         5,998,048                57%                   3,819,040
                                                            67%                                            67%
</TABLE>

Gross  profit  margins  were 63% of net  sales  in the  second  quarter  of 1998
compared to 45% for the same period in 1997.  For the  six-month  periods  ended
June 30, 1998 and 1997, gross profit margins were 66% and 48%, respectively. The
gross margin  increase was primarily  attributable  to the sale of the Company's
MEC and LSIA subsidiaries to Vision 21 in a transaction effective as of December
1, 1997. Those two subsidiaries operated at a gross margin for the three and six
months ended June 30, 1997 at 29% and 27%, respectively.




                                       11
<PAGE>




Research,  Development and Regulatory  Expense.  The following  tables present a
comparative  analysis of research,  development and regulatory  expenses for the
three and six-month periods ended June 30, 1998 and 1997.

<TABLE>
<CAPTION>

                                          For the Three Month                                For the Three Month
                                              Period Ended                                       Period Ended
                                             June 30, 1998             Percent Change           June 30, 1997
                                             -------------             --------------           -------------
<S>                                             <C>                           <C>                  <C>    
Research, development
   and regulatory                               $  743,789                    35%                  $  550,427

As a percentage of technology
   revenues                                            15%                                                26%


                                           For the Six Month                                  For the Six Month
                                              Period Ended                                       Period Ended
                                             June 30, 1998             Percent Change           June 30, 1997
                                             -------------             --------------           -------------

Research, development
   and regulatory                             $  1,561,344                     71%                 $  912,631

As a percentage of technology
   revenues                                            17%                                                16%

</TABLE>

Research,  development  and  regulatory  expenses for the second quarter of 1998
were $743,789, an increase of $193,362, or 35% from such expenditures during the
same period in 1997.  Research,  development  and  regulatory  expenses  for the
six-month period ended June 30, 1998 increased by $648,713 from $912,631 for the
same period in 1997 or 71%. The increase in research, development and regulatory
expenses  during  the second  quarter of 1998 can  primarily  be  attributed  to
ongoing  research and  development  of new scanning  refractive  laser  systems,
including continued development of the LSX and add-on features for the LaserScan
2000, and continued  software  development for the laser systems.  Additionally,
the Company has incurred increased costs related to the FDA regulatory  process,
both for its own scanning laser system and the LASIK laser system (for which the
Company purchased the rights to manufacture and commercialize if FDA approval is
received). Additional costs have been incurred in the clinical and manufacturing
validation  of the  Automated  Disposable  Keratome (Ao Do K). Since the initial
announcement  of the  development  of the 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 a continuation of the efforts described,
the Company expects  research,  development  and regulatory  expenses during the
remainder of 1998 to remain at levels  consistent with those incurred during the
first six months of 1998.  Regulatory  expenses  may increase 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 LASIK PMA acquired in July 1997.



                                       12
<PAGE>




Selling,  General and  Administrative  Expenses.  The following tables present a
comparative  analysis of selling,  general and  administrative  expenses for the
three and six-month periods ended June 30, 1998 and 1997.
<TABLE>
<CAPTION>


                                     For the Three Month                                     For the Three Month
                                         Period Ended                                            Period Ended
                                        June 30, 1998               Percent Change              June 30, 1997
                                        -------------               --------------              -------------
<S>                                        <C>                             <C>                    <C>   
Selling, general and
   Administrative                           $4,185,433                      9%                     $3,851,210

Percentage of revenues                             85%                                                    71%

                                      For the Six Month                                       For the Six Month
                                         Period Ended                                            Period Ended
                                        June 30, 1998               Percent Change              June 30, 1997
                                        -------------               --------------              -------------

Selling, general and
   Administrative                          $7,932,483                       7%                     $7,424,706

Percentage of revenues                            85%                                                     62%
</TABLE>

Selling,  general and  administrative  expenses  increased  by $334,223  for the
second quarter of 1998 compared to the same period in 1997. The primary  reasons
for this increase include increased  amortization  costs resulting from acquired
patents,  license  agreements and other intangibles  ($410,000) and royalty fees
($200,000).  In addition,  other  increases were necessary to fund the strategic
initiatives  of the Company and the  development  of its products and  services.
Such  strategic  efforts  include  enhancements  to  customer  service  and  the
engineering and software development  departments.  These increases in operating
costs  were  partially  offset  by  the  sale  of the  Company's  MEC  and  LSIA
subsidiaries   ($613,000)  and  a  reduction  in  the  selling,   general,   and
administrative expenses of TFG ($193,000) and corporate offices ($51,000).

Selling,  general and administrative  expenses increased by $507,777 for the six
months  ended June 30, 1998  compared  to the same  period in 1997.  The primary
reasons for this increase include  increased  amortization  costs resulting from
acquired patents,  license agreements and other intangibles ($865,000),  royalty
fees ($340,000) and a higher level of commissions and warranties incurred on the
sale  of its  laser  systems  ($189,000).  In  addition,  other  increases  were
necessary to fund the strategic  initiatives of the Company and the  development
of its products and services.  Such strategic  efforts  include  enhancements to
customer service and the engineering and software development departments. These
increases in operating costs were partially  offset by the sale of the Company's
MEC and LSIA subsidiaries  ($1,216,000) and a reduction in the selling, general,
and administrative expenses of TFG ($319,000) and corporate offices ($109,000).

Loss From  Operations.  There was an operating  loss of $1,705,647 in the second
quarter of 1998 compared to an operating  loss of $1,944,088 for the same period
in 1997.  Operating  loss  for the six  month  period  ended  June 30,  1998 was
$3,290,709  compared to an operating  loss of $2,579,831  for the same period in
1997. The decrease in operating  results for the six-month period ended June 30,
1998,  can be attributed to the sale of the Company's MEC and LSIA  subsidiaries


                                       13
<PAGE>

which  generated  income from  operations of $282,870 and increases in operating
expenses.  These  reductions were partially  offset by an increase in technology
generated revenues.

Other  Income and  Expense.  Interest  and  dividend  income was $111,442 in the
second quarter of 1998 compared to interest and dividend  income of $100,507 for
the same period in 1997.  Interest and dividend  income for the six month period
ended June 30, 1998 was $226,298  compared to interest  and  dividend  income of
$197,871 for the same period in 1997.  Interest  and dividend  income was earned
from the investment of cash and cash equivalents and the collection of long-term
receivables  related  to laser  system  sales.  Interest  expense  incurred  was
$324,020 in the second quarter of 1998 compared to interest  expense of $368,529
for the same period in 1997.  Interest  expense for the  six-month  period ended
June 30, 1998 was $720,541 compared to interest expense of $428,172 for the same
period in 1997.  Interest  expense  incurred by the Company during the first two
quarters of 1998 and 1997 related  primarily to the credit facility  established
with Foothill Capital Corporation on April 1, 1997. In addition to interest paid
on  the  outstanding  note  payable  balance,   interest  expense  includes  the
amortization of deferred  financing  costs, the accretion of the discount on the
note  payable,  and  fees  associated  with  amendments  to  the  original  loan
agreement. {Realized gain on sale of investments.}

Income Taxes.  For the three months ended June 30, 1998, the Company recorded an
income tax benefit of $155,352 compared to no income tax benefit or expense over
the same period in 1997.  For the six months  ended June 30,  1998,  the Company
recorded  income tax  expense of  $155,804  compared to no income tax benefit or
expense  over the same  period in 1997.  During the first  quarter of 1998,  the
Company recorded income tax expense of $311,156,  which resulted  primarily from
the receipt of $1,200,000 in royalties for the non-exclusive  license of certain
patents.  The lack of income tax benefit for the first two  quarters of 1998 has
been based on the lack of availability of loss carrybacks.

Net Loss. Net loss for the second  quarter of 1998 was $1,949,797  compared to a
net loss of $2,442,510  for the same period in 1997.  Net loss for the six-month
period ended June 30, 1998, was $3,913,304  compared to a net loss of $3,090,532
for the same period in 1997.  The  decrease  in net loss for the second  quarter
ended  1998 can be  attributed  to an  increase  in  revenues  generated  at the
technologies  division,  partially  offset by the sale of the  Company's MEC and
LSIA subsidiaries.  The increase in net loss for the six month period ended June
30, 1998, can be attributed the sale of the Company's MEC and LSIA subsidiaries,
increases in research,  development,  regulatory and general and  administrative
expenses,  and income tax expense.  These reductions were partially offset by an
increase in revenues generated at the technologies division.

Loss  Attributable  to Common  Shareholders.  [Need share  numbers.] For the six
months  ended  June  30,  1998,  the  Company's  loss   attributable  to  common
shareholders was impacted by the premium paid on the redemption of 351 shares of
Series B Preferred  Stock  ($702,000)  and the accretion of the financing  costs
related to such 351 shares ($396,121) resulting from the agreement providing the
holders of Series B Preferred Stock the right to redeem such shares. The Company
is negotiating terms of a potential financing that, if completed,  would be used
in part to redeem the  remaining  Series B Preferred  Stock at a 20% premium and
would  result  in an  impact  of  $1,050,000  on the loss  applicable  to common
shareholders in the second quarter of 1998.

Loss Per Share. [Need share numbers.] Loss per basic and diluted share increased
to ($0.30)  for the  second  quarter of 1998  compared  to ($0.07)  for the same
period in 1997.  Loss per basic and diluted  share  increased to ($0.30) for the
six-month period ended June 30, 1998, compared to ($0.07) for the same period in
1997.  The  increase  is  attributable  to the  increase in the net loss for the
quarter  ended  June  30,  1998,  accretion  and  dividend  requirements  on the
redemption  of the  Company's  Series  B  Preferred  Stock,  and  the  value  of


                                       14
<PAGE>

conversion  discount on the Series B Preferred  Stock offset by the increases in
weighted average shares  outstanding.  The weighted  average shares  outstanding
increased primarily due to the conversion of Series B Preferred Stock.

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

Working capital  increased  $10,201,210 from $12,729,700 at December 31, 1997 to
$22,930,910  as of June 30,  1998.  This  increase in working  capital  resulted
primarily  from  the  private  placements  of  Series C and D  Preferred  Stock.
Operating  activities used net cash of $7,188,709 during the first six months of
1998, compared to $775,081 of net cash used during the same period in 1997. This
increase is primarily  attributable  to a six month 1998 net loss of  $3,913,304
compared to a net loss of  $3,090,532  over the same period in 1997, an increase
in accounts  receivable  and notes  receivable  (primarily  the result of slower
collections of outstanding receivable and increased payments due at installation
versus upon shipment on first and second quarter sales),  significant  decreases
in accounts payable,  accrued liabilities,  and income taxes payable,  partially
offset  by  an  increase  in  deferred  royalty  revenue  and  amortization  and
depreciation  costs. Net cash provided by investing  activities during the first
six months of 1998 was  $12,436,010  compared  to  $500,593  in net cash used in
investing  activities  over  the same  period  in 1997.  Net  cash  provided  by
investing  activities  during  the  first six  months  of 1998 can be  primarily
attributed to proceeds  generated  from the  exclusive  licensing of patents and
from the sale of  investments,  partially  offset by the purchase of  furniture,
equipment  and  leasehold   improvements.   Net  cash  provided  from  financing
activities  was  $3,339,155  during  the first six  months of 1998  compared  to
$2,363,342  over the same  period  in 1997.  Net cash  provided  from  financing
activities  during the first six months of 1997 can be primarily  attributed  to
net proceeds resulting from preferred stock financings, offset by the repurchase
of Series B Preferred Stock and the repayment of a note payable to Foothill. Net
cash  provided  by  financing  activities  during  the first six  months of 1997
consisted  of net  proceeds  from the  credit  facility  with  Foothill  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.

The Company believes that its balances of cash and cash  equivalents  along with
operating cash flows, 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  could  have a  material  adverse  effect on the
Company's  liquidity.  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 expects to increase the level of  manufacturing  and distribution of
its  laser  systems  and 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 U.S. will be the most significant  technology related
expenses in the foreseeable future.

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. The Company has no present commitments
for joint  venture  relationships,  and no assurance  can be given that any such
relationships will be secured on terms satisfactory to the Company.

Risk Factors and Uncertainties

The business,  results or operations and financial  condition of the Company and
the market price of the Common  Stock may be adversely  affected by a variety of
factors,  including  the  ones  listed  under  the  caption  "Risk  Factors  and
Uncertainties"  in the  Company's  1997  Annual  Report  on  Form  10-K  and the
additional or updated factors listed below:

                                       15
<PAGE>

Shares Eligible For Future Sale. Except as provided below,  substantially all of
the Company's  outstanding  Common Stock (12,815,510 shares as of July 16, 1998)
{update?} is freely tradeable without restriction or further  registration under
the Securities  Act,  unless such shares are held by "affiliates" of the Company
as that term is  defined  in Rule 144 under the  Securities  Act.  The shares of
Common Stock listed below are "restricted securities." Restricted securities may
be sold in the  public  market  only if they  have  been  registered  under  the
Securities  Act or if their  sales  qualify  for Rule 144 or  another  available
exemption from the registration requirements of the Securities Act.

   o  Any of the Shares offered for sale by this Prospectus are freely tradeable
      if sold pursuant to this Prospectus.

   o  A warrant to  purchase  40,673  shares of Common  Stock  (with an exercise
      price of $5.81) has been issued to Shoreline Pacific Institutional Finance
      in connection  with the  placement of the  Company's  Series B Convertible
      Participating  Preferred  Stock  ("Series B  Preferred  Stock") and shares
      issuable  under  such  warrant  (the  "Shoreline  Shares")  will be freely
      saleable  following such exercise,  subject only to the  satisfaction of a
      prospectus delivery requirement.

   o  A warrant to  purchase  762,616  shares of Common  Stock (with an exercise
      price of $2.71 per  share) has been  issued to the  former  holders of the
      Series B  Preferred  Stock and shares  issuable  under such  warrant  (the
      "Series  B  Shares")  will be freely  saleable  following  such  exercise,
      subject only to the satisfaction of a prospective delivery requirement.

   o  The 535,515 shares in an unregistered acquisition transaction in July 1997
      (the "Photomed  Shares") have become freely  tradeable,  subject only to a
      prospectus delivery requirement.

   o  The 581,825 shares of Common Stock (the "Foothill  Shares")  issuable upon
      the  exercise  of the  warrants  issued to  Foothill  Capital  Corporation
      ("Foothill") are the subject of certain demand and piggy-back registration
      rights.

   o  The 581,825 shares of Common Stock (the "Foothill  Shares")  issuable upon
      the  exercise  of the  warrants  issued to  Foothill  Capital  Corporation
      ("Foothill")   are  the   subject   of  certain   demand  and   piggy-back
      registration.

   o  The 102,798  unregistered  shares of Common  Stock (the "NNJEI  Additional
      Shares")  issued in connection with the acquisition of the assets of NNJEI
      by LSIA in July 1996 are the  subject  of certain  demand  and  piggy-back
      registration rights.

   o  Other shares of Common Stock (the "Other Shares") which the Company may be
      required to issue in the future may become eligible for resale pursuant to
      Rule 144, the exercise of registration rights, or otherwise. See "Possible
      Dilutive  Issuance of common  Stock--Lasersight  Centers and Florida Laser
      Partners;  --TFG; --Foothill Warrant; --Series D Preferred Stock; --Series
      B Warrant' -Shoreline Warrant." 

   o  Other shares of Common Stock (the "Other Shares") which the Company may be
      required to issue in the future may become eligible for resale pursuant to
      Rule 144, the exercise of registration rights, or otherwise. See "Possible
      Dilutive Issuance of Common  Stock--LaserSight  Centers and Florida Lasers
      Partners; -- TFG; --Foothill Warrant; --Series D Preferred Stock; --Series
      B Warrant' -Shoreline Warrant."

Sales,  or the  possibility  of sales,  of the  Series B Shares,  the  Shoreline
Shares,  Photomed Shares,  Foothill Shares,  NNJEI Additional  Shares,  or Other
Shares, whether pursuant to a prospectus,  Rule 144 or otherwise,  could depress
the market price of the Common Stock.

Past and Expected  Future Losses and Operating Cash Flow Deficits;  No Assurance
of Future Profits or Positive  Operating Cash Flows. The Company incurred losses
of $3.9 million for the six months ended June 30, 1998 and $7.3 million and $4.1
million during 1997 and 1996, respectively. During such periods, the Company had
a deficit in cash flow from operations of $7.2 million,  $4.4 million,  and $4.2


                                       16
<PAGE>

million,  respectively.  Although the Company achieved profitability during 1995
and 1994, it had a deficit in cash flow from  operations of $1.9 million  during
1995. In addition,  the Company incurred losses in 1991 through 1993. As of June
30, 1998, the Company had an accumulated  deficit of $15.8 million.  As a result
of the Company's sale of MEC and LSIA in December 1997, the Company's losses and
deficits in cash flow from  operations in future  periods may be greater than if
the  Company  had not sold MEC and  LSIA.  There  can be no  assurance  that the
Company can regain or sustain profitability or positive operating cash flow.

     Uncollectible  Receivables  Could Exceed  Reserves.  At June 30, 1998, the 
Company's  trade  accounts  and  notes   receivable   aggregated   approximately
$13,135,820 net of allowances for collection losses and returns of approximately
$2,162,000.  Accrued commissions,  the payment of which generally depends on the
collection  of  such  net  trade  accounts  and  notes  receivable,   aggregated
approximately  $1,735,230  at June 30, 1998.  Exposure to  collection  losses on
receivables  is  principally  dependent  on  the  Company's  customer's  ongoing
financial  condition and their  ability to generate  revenues from the Company's
laser systems. In addition, approximately 98% and 90% of net receivables at June
30, 1998 and December 31, 1997, respectively, related to international accounts.
The Company's ability to evaluate the financial condition and revenue generating
ability of its  prospective  customers  located  outside  of the  United  States
("U.S.")  is  generally  more  limited  than for  customers  located in the U.S.
Although the Company  monitors  the status of its  receivables  and  maintains a
reserve for  estimated  losses,  there can be no  assurance  that the  Company's
reserves for estimated  losses  ($1,962,000 at June 30, 1998) 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.

     Restructuring   of  Receivables.   At  June  30,  1998,  the  Company  had
restructured  laser customer  accounts in the aggregate  amount of approximately
$860,450  (5.6% of the gross  receivables  as of such  date),  resulting  in the
extension of the original payment terms by periods ranging from 12 to 60 months.
The Company's  liquidity and operating  cash flow will be adversely  affected if
additional  extensions  become necessary in the future.  In addition,  it may be
more  difficult to collect  laser  system  receivables  if the payment  schedule
extends beyond the expected economic life of the laser system.


      Potential Liquidity Problems. During the three months ended June 30, 1998,
the Company  experienced  a $7.2  million  deficit in cash flow from  operations
largely  resulting  from the loss  incurred  during the  period,  an increase in
accounts  receivable and a decrease in liabilities.  Of this amount, the Company
expects that any improvements in cash flow from operations will depend on, among
other  things,  the  Company's  ability to market,  produce and sell its new LSX
laser  systems and its A*D*K  product on a  commercial  basis.  Beginning in the
third  quarter  of  1998,  the  LSX  laser  system  is  expected  to make a more
significant contribution to the Company's operating results. Based on the status
of clinical  validation  and  refinement  of the  manufacturing  processes,  the
Company  does not expect  significant  commercial  shipments  of the A*D*K until
September 1998. Subject to these factors, the Company believes that its balances
of cash and cash equivalents, will be sufficient to fund its anticipated working
capital  requirements  for a 12-month period based on anticipated  collection of
receivables.  However,  if the Company  does not  collect a material  portion of
current receivables in a timely manner,  experiences  significant further delays
in the shipment of its A*D*K  product,  experiences  less market demand for such
products  than it  anticipates,  the  Company's  liquidity  could be  materially
adversely affected.  The Company's cash and cash equivalents balance at June 30,
1998 exceeded $12 million.

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

                                       17
<PAGE>

   o  Any future negative cash flow from operations.

   o  Certain cash payment obligations under the Company's LASIK PMA (Pre-Market
      Approval)  application  acquisition  agreement of July 1997 with Photomed,
      Inc. Such cash payment  obligations  include (i) $1.75 million  payable if
      the U.S.  Food and Drug  Administration  ("FDA")  approves  the  LASIK PMA
      application  for commercial  sale before July 29, 1998 and (ii) if the FDA
      approves the  Company's  scanning  laser for  commercial  sale in the U.S.
      before January 1, 1999, $3,633 for each day (or approximately $110,000 for
      each month) between the date of such approval and January 1, 1999, subject
      to a  maximum  payment  of  $607,000  (calculated  as of July  17,  1998).
      Additional  working  capital may be necessary to develop a production line
      for the  LASIK  laser  system  and to obtain  the GMP (Good  Manufacturing
      Practice)  clearance from the FDA that is required for the commercial sale
      of the LASIK laser system.

   o  Additional   working   capital   necessary   to  support  the   commercial
      introduction of its laser systems into the U.S. market after receiving FDA
      approval. (The Company believes the earliest these expenses might occur is
      the second half of 1998.)

   o  Additional  working  capital  necessary  to more fully  develop the mobile
      refractive  laser  business  plan and other  possible  business  lines and
      products.

In  addition,  the Company may seek  alternative  sources of capital to fund its
product development activities and to consummate future strategic  acquisitions.
The Company has no commitments from third parties to supply additional  capital,
and there can be no assurance  as to whether or on what terms the Company  could
obtain additional capital.

      To the extent that the Company satisfies its future financing requirements
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. Such
dilution may be more  significant  if the Company  sells Common Stock at a price
below  current  market  prices  or  sells  additional  preferred  stock  with  a
conversion  price  linked to the market price of the Common Stock at the time of
conversion.  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.  If the Company needs but cannot
obtain  additional  capital on  satisfactory  terms,  it may be required to sell
additional assets.

      Possible Dilutive Issuance of Common Stock--LaserSight Centers and Florida
Laser Partners. Based on previously-reported  agreements entered into in 1993 in
connection with the Company's  acquisition of LaserSight  Centers (the Company's
development-stage  subsidiary)  and  modified in July 1995 and March  1997,  the
Company is obligated as follows:

   o  To issue to the former  stockholders  and option  holders  (including  two
      trusts  related to the  Chairman  of the Board of the  Company and certain
      former officers and directors of the Company) of LaserSight Centers, up to
      600,000  unregistered  shares of Common  Stock  (the  "Centers  Contingent
      Shares")  based on the Company's  pre-tax  operating  income through March
      2002  from  utilizing  a fixed or mobile  excimer  laser to  perform  PRK,
      arranging  for the  delivery of PRK or  receiving  license or royalty fees
      associated with patents held by LaserSight Centers. The Centers Contingent
      Shares are  issuable at the rate of one share per $4.00 of such  operating
      income.

                                       18
<PAGE>

   o  To pay to a partnership  whose partners  include the Chairman of the Board
      of the Company and certain former  officers and directors of the Company a
      royalty  of up to $43  (payable  in cash or shares of  Common  Stock  (the
      "Royalty  Shares")),  for each eye on which PRK is performed on a fixed or
      mobile excimer laser system owned or operated by LaserSight Centers or its
      affiliates.  Royalties  do not begin to accrue  until the earlier of March
      2002 or the delivery of all of the 600,000 Centers Contingent Shares.

As of July 17, 1998, the Company had not accrued any obligation to issue Centers
Contingent Shares or Royalty Shares. There can be no assurance that any issuance
of  Centers  Contingent  Shares or  Royalty  Shares  will be  accompanied  by an
increase  in the  Company's  per share  operating  results.  The  Company is not
obligated  to pursue  strategies  that may  result in the  issuance  of  Centers
Contingent  Shares or Royalty Shares.  It may be in the interest of the Chairman
of the Board for the Company to pursue  business  strategies  that  maximize the
issuance of Centers Contingent Shares and Royalty Shares.

      Possible  Dilutive Issuance of Common  Stock--TFG.  To the extent that the
Company's The Farris Group  subsidiary  achieves  certain  pre-tax income levels
during  1998,  the  earnout  provisions  of  the  Company's  agreement  for  the
acquisition  of The Farris  Group in 1994 would  require the Company to issue to
the former owner of such company (Mr. Michael R. Farris, the President and Chief
Executive  Officer of the Company) up to approximately  343,000 shares of Common
Stock (the  "Farris  Contingent  Shares").  There can be no  assurance  that any
issuance of the Farris  Contingent  Shares will be accompanied by an increase in
the Company's per share operating results.

      Possible Dilutive Issuance of Common Stock--Photomed.  If the FDA approves
a  LaserSight-manufactured  laser  system  for  general  commercial  use  in the
treatment of hyperopia  (farsightedness)  after having  approved for  commercial
sale the LASIK PMA  application to which the Company  acquired  rights in August
1997, the Company would be required to issue  additional  shares of Common Stock
with a market value of $1.0 million  (based on the average  closing price of the
Common  Stock  during  the  preceding  10-day  period)  to the  former  Photomed
stockholders.  If such market value had been  computed as of July 17, 1998,  the
number of additional  shares  issuable  would have been  approximately  182,000.
Depending  on whether and when such FDA  approval is received  and on the market
price of the Common Stock at the time of any such approval, the actual number of
additional  shares of  Common  Stock  issuable  could be more (but not more than
permitted  under the listing rules of The NASDAQ Stock Market) or less than this
number.

      Possible  Dilutive Issuance of Common  Stock--SEO  Medical.  In connection
with the acquisition of certain assets of SEO Medical in April 1998, the Company
agreed to issue up to 223,280  additional shares of Common Stock if the five day
average  price of Common  Stock on April 15,  1999 is less than $5.00 per share.
All 223,280  shares of Common  Stock will be issuable  unless such price is more
than $2.36 per share.

      Possible Dilutive  Issuance of Common  Stock--Foothill  Warrant.  In April
1996,  the Company  issued to Foothill a warrant to purchase  500,000  shares of
Common  Stock (the  "Foothill  Warrant")  at a price of $6.067  per  share.  The
Company is  required  to make  anti-dilution  adjustments  to both the number of
warrant  shares and the warrant  exercise  price in the event the Company  sells
Common Stock or Common  Stock-equivalents  (such as  convertible  securities  or
warrants)  at a price per share that is (or could be) less that the fair  market
value of the Common Stock at the time of such sale. In connection  with its sale
of Series B Preferred  Stock in August 1997 and  subsequent  conversion  of such
preferred shares into Common Stock, the sale of the Series C Preferred Stock and
the Series D Preferred Stock such anti-dilution adjustments have resulted in (i)
an increase in the number of Foothill Warrant shares to  approximately  581,825,
and (ii) a reduction to the exercise  price of the  Foothill  Warrant  shares to


                                       19
<PAGE>

approximately  $5.21 per  share.  Additional  anti-dilution  adjustments  to the
Foothill warrant could also result from any future  below-market sales of Common
Stock by the Company.

      Possible  Dilutive  Issuance  of  Common   Stock--Series  B  Warrant.   In
connection  with its sale of the Series B Preferred  Stock in August  1997,  the
Company issued to the former holders of the Series B Preferred Stock warrants to
purchase  750,000  shares of Common Stock (the "Series B Warrant") at a price of
$5.91 per share at any time before August 29, 2002.  In connection  with a March
1998 agreement  whereby the Company obtained the option to repurchase the Series
B Preferred Stock and a lock-up on conversions, the exercise price of the Series
B Warrant  shares was  reduced to $2.753 per share.  The  Company is required to
make  anti-dilution  adjustments  to both the number of  warrant  shares and the
warrant  exercise  price in the event the Company  sells  Common Stock or Common
Stock-equivalents  (such as  convertible  securities or warrants) at a price per
share that is (or could be) less that the fair market  value of the Common Stock
at the time of such  sale.  As a result of the  Company's  sale of the  Series C
Preferred Stock and the Series D Preferred Stock such anti-dilution  adjustments
and other  agreements  among the former holders of the Series B Preferred  Stock
and the  Company  have  resulted  in (i) an  increase  in the number of Series B
Warrant shares to  approximately  762,616,  and (ii) a reduction to the exercise
price of Series B Warrant shares to  approximately  $2.71 per share.  Additional
anti-dilution  adjustments  to the Series B Warrants  could also result from any
future below-market sales of Common Stock by the Company.

      Possible  Dilutive  Issuance  of  Common   Stock--Shoreline   Warrant.  In
connection  with its sale of the Series B Preferred  Stock in August  1997,  the
Company  issued to its  placement  agent  warrants to purchase  40,000 shares of
Common Stock (the "Shoreline Warrant") at a price of $5.91 per share at any time
before  August  29,  2002.  The  Company  is  required  to  make   anti-dilution
adjustments to both the number of warrant shares and the warrant  exercise price
in the event the Company sells Common Stock or Common Stock-equivalents (such as
convertible  securities  or warrants) at a price per share that is (or could be)
less that the fair market value of the Common Stock at the time of such sale. In
connection  with the  Company's  sale of the  Series C  Preferred  Stock and the
Series D Preferred Stock such anti-dilution  adjustments have resulted in (i) an
increase in the number of Shoreline Warrant shares to approximately  40,673, and
(ii)  a  reduction  to  the  exercise  price  of  Shoreline  Warrant  shares  to
approximately  $5.81 per  share.  Additional  anti-dilution  adjustments  to the
Shoreline  Warrants  could also  result  from any future  below-market  sales of
Common Stock by the Company.

Possible  Dilutive  Issuance  of Common  Stock--Series  D  Preferred  Stock.  In
accordance  with  the  terms  of  the  Company's   Certificate  of  Designation,
Preferences and Rights of Series D Preferred  Stock, the holders of the Series D
Preferred Stock are entitled to certain anti-dilution adjustments if the Company
issues its Common  Stock or Common  Stock  equivalents  at a price per share (or
having a conversion or exercise price per share) less than $4.00 per share.  See
"Description of Securities--Series D Preferred Stock."

      Acquisition-  and  Financing-Related   Contingent   Commitments  to  Issue
Additional  Common  Shares.  The Company may from time to time include in future
acquisitions and financings  provisions which would require the Company to issue
additional shares of its Common Stock at a future date based on the market price
of the Common  Stock at such date.  Persons  who are the  beneficiaries  of such
provisions effectively receive some protection from declines in the market price
of the Common Stock, but other stockholders of the Company will incur additional
dilution of their  ownership  interest in the event of a decline in the price of
the Common  Stock.  Such dilution may be increased by provisions in the Foothill
Warrant,  the Series B Warrant and the  Shoreline  Warrant that may increase the
number of shares  issuable under each of such warrants and decrease the exercise
price of such warrants. The factors to be considered by the Company in including
such provisions may include the Company's cash resources, the trading history of


                                       20
<PAGE>

Common Stock, the negotiating position of the selling party or the investors, as
applicable,  and the extent to which the  Company  estimates  that the  expected
benefit from the acquisition or financing  exceeds the expected  dilutive effect
of the price-protection provision.

      Dependence  on Key  Personnel.  The Company is dependent on its  executive
officers and other key employees,  especially  Michael R. Farris,  its President
and Chief Executive  Officer,  and J. Richard  Crowley,  the President and Chief
Operating Officer of its LaserSight  Technologies  subsidiary.  A loss of one or
more such officers or key  employees,  especially of Mr. Farris or Mr.  Crowley,
could have a material adverse effect on the Company's business. The Company does
not carry "key man" insurance on Mr.  Farris,  Mr. Crowley or any other officers
or key employees.

      As the Company  continues the clinical  development  of its excimer lasers
and  other   products   and  prepares  for   regulatory   approvals   and  other
commercialization  activities,  it will need to continue to implement and expand
its operational, financial and management resources and controls. The failure of
the  Company  to  attract  and  retain  experienced  individuals  for  necessary
positions,  as well as any inability of the Company to effectively manage growth
in its  domestic  and  international  operations  could have a material  adverse
effect on the Company's business, financial condition and results of operations.

      Risks Associated with Past and Possible Future  Acquisitions.  The Company
has made several  significant  acquisitions  since 1994,  including TFG in 1994,
Photomed  in 1997,  the IBM Patents in August  1997 and its  acquisition  of SEO
Medical in April 1998. These  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
unanticipated  liabilities and contingencies,  diversion of management attention
and possible  adverse  effects on operating  results  resulting  from  increased
goodwill  amortization,  increased  interest  costs,  the issuance of additional
securities  and  difficulties   related  to  the  integration  of  the  acquired
businesses.   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 June 30,  1998,  approximately  $15.7  million  (32%) were  intangible
assets,  of which  approximately  $6.8 million reflects goodwill (which is being
amortized  using an estimated  life ranging from 12 to 20 years),  approximately
$4.7  million  reflects  the cost of patents  (which is being  amortized  over a
period ranging from approximately 8 to 17 years), and approximately $4.2 million
reflects the cost of licenses and technology  acquired (which is being amortized
over a period ranging from 31 months to 12 years).  The 12-year life of acquired
technology  was  determined  based on the Company's best judgment at the time of
the most likely life-span of a solid-state laser product and related patent. The
major factors  involved in the  Company's  ongoing  assessment  are its judgment
whether there will be a market for  solid-state  as an  improvement  to existing
excimer laser technology and that there is an industry and marketplace  interest
in such  development  that can be successfully  pursued by the Company or others
that  will  result  in  revenue  from  the  associated  patent.  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 (or
increases  the  Company's  net loss) in that  period.  A reduction in net income


                                       21
<PAGE>

resulting from the  amortization  of goodwill and other  intangibles may have an
adverse  impact upon the market price of the 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.

      The Company  continues to assess the current results and future  prospects
of its TFG  subsidiary  in view of the  substantial  reduction in its  operating
results in 1996 and 1997. If TFG is  unsuccessful  in meeting its 1998 budget or
otherwise  improving  its  financial  performance,  some or all of the  carrying
amount of goodwill  recorded  ($3,852,000 at June 30, 1998) may be subject to an
impairment adjustment.

      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
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.

      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 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 PMA by the FDA before the Company can ship its
laser  systems  for use in the U.S.  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.

      If and when the Company's  laser systems  receive PMA approval by the FDA,
the  Company  will be  required  to obtain  GMP  clearance  with  respect to its
manufacturing  facilities.  These  regulations  impose  certain  procedural  and
documentation  requirements  upon the Company with respect to its  manufacturing
and quality assurance  activities.  The Company's  facilities will be subject to
inspections  by the FDA, and if any  noncompliance  with GMP guidelines is noted
during facility  inspections,  the marketing of the Company's laser products may
be  adversely  affected.  In  addition,  if any of the  Company's  suppliers  of
significant components or sub-assemblies cannot meet the quality requirements of
the Company,  the Company could be delayed in producing  commercial  systems for
the U.S. market.

      Additionally,  product and procedure labeling and all forms of promotional
activities are subject to  examination  by the FDA, and current FDA  enforcement


                                       22
<PAGE>

policy  prohibits the marketing of approved medical devices for unapproved uses.
Noncompliance  with these  requirements  may result in warning  letters,  fines,
injunctions, recall or seizure of products, suspension of manufacturing,  denial
or withdrawal of PMAs, and criminal prosecution.

      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.  In particular,  all member countries of
the European  Economic Union ("EU") require CE Mark  certification of compliance
with the EU medical directives as the standard for regulatory  approval for sale
of laser  systems in EU member  countries.  While the Company's  LaserScan  2000
laser system has received CE Mark certification,  the Company's LSX laser system
is currently  undergoing the CE Mark  certification  process.  Until the Company
receives its CE Mark certification with the respect to its LSX laser system, the
Company is  prohibited  from  placing the LSX laser  system for use in EU member
countries.  A  lengthy  delay in CE Mark  certification  could  have a  material
adverse effect on the business,  financial condition,  and results of operations
of the Company. The Company expects to receive CE Mark certification for its LSX
laser system during 1998.

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 U.S., 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.

      Uncertainty   Concerning    Patents--International.    Should   LaserSight
Technologies'  lasers  infringe  upon  any  valid  and  enforceable  patents  in
international  markets,  then LaserSight  Technologies may be required to obtain
licenses for such  patents.  Should such  licenses  not be obtained,  LaserSight
Technologies  might be prohibited  from  manufacturing  or marketing its excimer
lasers  in  those  countries   where  patents  are  in  effect.   The  Company's
international  sales  accounted for 93% and 43%, of the Company's total revenues
during the six months ended June 30, 1998 and 1997, respectively. In the future,
the Company expects its percentage of international  sales to be more comparable
to the sales  percentages  which were reported for the six months ended June 30,
1998.

      Uncertainty  Concerning  Patents--U.S.  Two of the Company's  competitors,
Summit  Technology,  Inc.  ("Summit") and VISX,  Inc.  ("VISX")  formed a United
States  partnership,  Pillar Point Partners  ("Pillar  Point"),  in 1992 to pool
certain of their respective  patents related to corneal sculpting  technologies.
On June 9, 1998,  Summit and VISX announced  that they had reached  agreement on
the dissolution of Pillar Point to be effected as soon as possible. As a part of
this dissolution,  Summit and VISX granted each other a worldwide,  royalty free
cross-license  whereby  each party will have full rights to license all existing
patents owned by either company relating to laser vision correction for use with
their systems.

      Should  LaserSight  Technologies'  lasers  infringe  upon  any  valid  and
enforceable  patents  held  by VISX  or  Summit  in the  U.S.,  then  LaserSight
Technologies  may be  required  to obtain a  license  for such  patents  and pay
royalties and per procedure fees to VISX or Summit for all revenues generated in
the U.S. If such licenses are required but not obtained, LaserSight Technologies
might be prohibited  from  manufacturing  or marketing its excimer lasers in the
U.S. In connection  with its March 1996  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 U.S. As of this
date, the Company has not obtained a U.S. license from either of Summit or VISX,
and the actual per procedure fee and other terms of any license, if such license
is granted, have yet to be determined.

                                       23
<PAGE>

      In  addition,  there may be other U.S.  and foreign  patents for which the
Company  will  need to  negotiate  licenses  in order to sell,  lease or use the
excimer lasers in certain markets. There can be no assurance that the Company or
its customers will be successful in securing  licenses,  including any necessary
licenses from Summit or VISX, or that if the Company does obtain licenses,  such
licenses  will be on terms  acceptable  to the  Company.  The  failure to either
obtain required licenses or to obtain licenses on terms favorable to the Company
could have a material adverse effect on the business of the Company.

Competition.  The vision correction  industry is subject to intense,  increasing
competition.  The Company  competes  against both  alternative  and  traditional
medical technologies (such as eyeglasses, contact lenses and RK) and other laser
manufacturers.  Many of the Company's  competitors  have  existing  products and
distribution  systems in the marketplace and are  substantially  larger,  better
financed,  and better known. A number of lasers  manufactured by other companies
have either received,  or are much further advanced in the process of receiving,
FDA approval for specific procedures,  and,  accordingly,  may have or develop a
higher level of acceptance in some markets than the Company's lasers.  The entry
of new  competitors  into the markets  for the  Company's  products  could cause
downward  pressure on the prices of such products and a material  adverse effect
on Company's business, financial condition and results of operations.

      Technological Change.  Technological developments in the medical and laser
industries  are  expected to continue at a rapid pace.  Newer  technologies  and
surgical  techniques could be developed which may offer better  performance than
the Company's  laser systems.  The success of any competing  alternatives to PRK
and LASIK  could  have a  material  adverse  effect on the  Company's  business,
financial condition and results of operations.

      New Products.  The Company may experience  difficulties that could further
delay or prevent the successful  development,  introduction and marketing of its
recently-announced  A*D*K, and other new products and enhancements,  or that its
new products and enhancements will be accepted in the marketplace. 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 new products (whether for sale in the
near  future or at some  later  date) may cause  customers  to defer  purchasing
existing Company products.

      Minimum Payments Under A*D*K License  Agreement.  In addition to the risks
relating to the  introduction of any new product (see "--New  Products")  above,
the Company's  A*D*K is subject to the risk that the Company is required to make
certain minimum  payments to the licensors under its limited  exclusive  license
agreement relating to the A*D*K.  Under that agreement,  the Company is required
to pay a total of $300,000 in two  installments  due six and 12 months after the
date of the  Company's  receipt of completed  limited  production  molds for the
A*D*K and provide an excimer  laser.  The Company  expects to receive such molds
during the third  quarter of 1998.  In addition,  commencing  seven months after
such date, the Company's royalty payments (50% of its defined gross profits from
A*D*K sales) will become  subject to a minimum of $400,000 per calendar  quarter
for a period of eight quarters.

      Uncertainty of Market Acceptance of Laser-Based Eye Treatment. The Company
believes that its  achievement of  profitability  and growth will depend in part
upon broad acceptance of PRK or LASIK in the U.S. and other countries. There can
be  no   assurance   that  PRK  or  LASIK  will  be   accepted   by  either  the
ophthalmologists or the public as an alternative to existing methods of treating
refractive  vision  disorders.  The  acceptance of PRK and LASIK may be affected
adversely  by their cost,  possible  concerns  relating to safety and  efficacy,
general  resistance to surgery,  the effectiveness and lower cost of alternative
methods  of  correcting  refractive  vision  disorders,  the  lack of  long-term
follow-up data, the possibility of unknown side effects, the lack of third-party


                                       24
<PAGE>

reimbursement for the procedures,  any future  unfavorable  publicity  involving
patient outcomes from use of PRK or LASIK systems, and the possible shortages of
ophthalmologists  trained  in the  procedures.  The  failure  of PRK or LASIK to
achieve  broad market  acceptance  could have a material  adverse  effect on the
Company's business, financial condition and results of operations.

      International  Sales.  International  sales may be limited or disrupted by
the imposition of government controls,  export license  requirements,  political
instability,  trade restrictions,  changes in tariffs,  difficulties in staffing
and coordinating  communications  among and managing  international  operations.
Additionally,  the Company's  business,  financial  condition and  international
results of  operations  may be  adversely  affected by  increases in duty rates,
difficulties  in  obtaining  export  licenses,  ability to  maintain or increase
prices,  and  competition.  To date,  all sales  made by the  Company  have been
denominated in U.S.  dollars.  Therefore,  the Company does not have exposure to
typical foreign currency fluctuation risk. Due to its export sales, however, the
Company is subject to currency  exchange rate  fluctuations in the U.S.  dollar,
which could  increase the effective  price in local  currencies of the Company's
products.  This could in turn result in reduced sales, longer payment cycles and
greater  difficulty in collection of  receivables.  See  "--Receivables"  above.
Although  the Company has not  experienced  any material  adverse  effect on its
operations as a result of such  regulatory,  political and other  factors,  such
factors may have a material  adverse  effect on the Company's  operations in the
future or require the Company to modify its business practices.

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
"claims made" product liability insurance coverage is limited to $10 million and
its general liability insurance coverage is limited to $6,000,000,  including up
to $5,000,000 of coverage under an excess liability  policy.  The Company has in
the past agreed,  and is likely to in the future  agree,  to  indemnify  certain
medical  institutions and personnel thereof  conducting and participating in the
Company's clinical studies.

      Supplier  Risks.  The  Company  contracts  with third  parties for certain
components  used in its lasers.  Certain key components are provided by a single
vendor. If any of these sole-source suppliers were to cease providing components
to the Company,  the Company would have to locate and contract with a substitute
supplier,  and there can be no assurances that such substitute supplier could be
located and qualified in a timely manner or could provide required components on
commercially  reasonable  terms. An interruption in the supply of critical laser
components  could  have a material  adverse  effect on the  Company's  business,
financial condition and results of operations.

      No  Backlog;  Concentration  of Sales at End of  Quarter.  The Company has
historically  operated  with  little or no  backlog  because  its  products  are
generally shipped as orders are received. Historically, the Company has received
and shipped a  significant  portion of its orders for a particular  quarter near
the end of the quarter.  As a result,  the Company's  operating  results for any
quarter often depend on orders  received and laser systems  shipped late in that
quarter.  Any  delay  in such  orders  or  shipments  may  cause  a  significant
fluctuation in period-to-period operating results.

      Anti-takeover  Measures;  Potential  Adverse Effect on Common Stock Price.
The  Company's  Articles  authorize  the  Company's  Board of Directors to issue
shares  of  the  Company's   Preferred   Stock  and  to  determine  the  rights,
preferences,  privileges  and  restrictions  of such shares  without any vote or


                                       25
<PAGE>

action  by  the  stockholders.  The  issuance  of  Preferred  Stock  under  such
circumstances  could  have the  effect of  delaying  or  preventing  a change in
control of the  Company.  The rights of the holders of the Common  Stock will be
subject to, and may be  adversely  affected by, the rights of the holders of any
Preferred Stock that may be created and issued in the future. One of the effects
of the  provisions  described  above may be to  discourage  a future  attempt to
acquire  control of the Company  that is not  presented  to and  approved by the
Board of Directors,  but which a substantial number, and perhaps even a majority
of the Company's stockholders, might believe to be in their best interests or in
which stockholders might receive a substantial premium for their shares over the
current market prices. As a result, stockholders who might desire to participate
in such a transaction may not have an opportunity to do so. See  "Description of
Securities--Series E Preferred Stock;--Stockholder Rights Plan."

Recent Developments

Issuance of Series C Preferred  Stock. On June 5, 1998, the Company entered into
a Securities Purchase Agreement with The Laser Center Inc. ("TLC"),  pursuant to
which the Company issued to TLC 2,000,000 shares of the  newly-created  Series C
Convertible Preferred Stock (the "Series C Preferred Stock") of the Company with
a face value of $4.00 per share,  resulting in an aggregate offering price of $8
million.  The Series C Preferred  Stock is convertible  on a fixed,  one-for-one
basis, subject to customary anti-dilution adjustments,  into 2,000,000 shares of
Common Stock, at the option of TLC at any time until June 5, 2001, on which date
all shares of Series C Preferred Stock then  outstanding  will  automatically be
converted into an equal number of shares of Common Stock.  See  "Description  of
Securities--Series C Preferred Stock." A portion of the proceeds received by the
Company in connection with the issuance of the Series C Preferred Stock was used
to  repurchase  of the  outstanding  Series B  Preferred  Stock.  The  Company's
strategic  business  relationship with TLC will allow the Company to develop its
mobile refractive laser strategy.

Issuance of Series D Preferred Stock. On June 12, 1998, the Company entered into
a Securities  Purchase  Agreement with Pequot Private Equity Fund, L.P.,  Pequot
Scout Fund, L.P., and Pequot Offshore  Private Equity Fund, Inc.  (collectively,
the "Pequot  Funds"),  whereby the Company issued,  collectively,  to the Pequot
Funds 2,000,000 shares of the newly-created Series D Convertible Preferred Stock
(the  "Series D Preferred  Stock") of the Company with a face value of $4.00 per
share,  resulting in an  aggregate  offering  price of $8 million.  The Series D
Preferred  Stock is convertible  on a one-for-one  basis into an equal number of
shares of Common Stock,  subject to certain  anti-dilution  adjustments,  at the
option of the Pequot  Funds at any time until June 12,  2001,  on which date all
shares of Series D  Preferred  Stock  then  outstanding  will  automatically  be
converted into an equal number of shares of Common Stock.  See  "Description  of
Securities--Series D Preferred Stock."





                                       26
<PAGE>




                           PART II - OTHER INFORMATION


ITEM 1   LEGAL PROCEEDINGS

         Certain legal  proceedings  against the Company are described in Item 3
         (Legal  Proceedings)  of the  Company's  Form  10-K for the year  ended
         December 31, 1997.

ITEM 2   CHANGES IN SECURITIES


         a)  As previously reported, the Company completed private placements of
             its Series C and D Preferred Stock in 1998.

             The Series C Preferred Stock is convertible on a fixed, one-for-one
             basis (subject to anti-dilution  adjustments upon the occurrence of
             a stock  split,  stock  dividend or similar  event) into  2,000,000
             shares of the  Company's  common  stock,  par value $.001 per share
             ("Common  Stock"),  at the  option of TLC at any time until June 5,
             2001,  on which  date all shares of Series C  Preferred  Stock then
             outstanding  will  automatically be converted into shares of Common
             Stock.

             The TLC Agreement  provides that so long as TLC continues to be the
             record  holder  of at least 5% of the  Company's  then  outstanding
             Common Stock or Series C Preferred Stock which is convertible  into
             at least 5% of the Company's  then  outstanding  Common Stock,  TLC
             shall  have the right to  participate  in any  below-market  equity
             financing transaction so as to maintain its percentage ownership of
             the outstanding  Common Stock  immediately  prior to the closing of
             such   financing.   The   following   issuances  of  the  Company's
             securities,  however,  do not constitute a below-market third party
             financing for purposes of this provision:  (i) the grant of options
             or warrants,  or the issuance of securities,  under any employee or
             director stock option,  stock purchase or restricted  stock plan of
             the  Company,  (ii) the  issuance of Common  Stock  pursuant to any
             contingent  obligation of the Company  existing as of June 5, 1998,
             (iii) the issuance of securities upon the exercise or conversion of
             the Company's  options,  warrants or other  convertible  securities
             outstanding  as of June 5, 1998,  (iv) the  declaration of a rights
             dividend to holders of Common Stock in connection with the adoption
             of a  stockholder  rights plan,  (v) the issuance of  securities in
             connection  with a merger,  acquisition,  joint  venture or similar
             arrangement,  or  (vi)  the  issuance  of the  Company's  Series  D
             Convertible  Participating Preferred Stock (the "Series D Preferred
             Stock").

             The TLC Agreement  also provides that TLC has the right to nominate
             one  candidate to stand for  election as a member of the  Company's
             Board of  Directors  for as long as TLC  owns at least  7.5% of the
             Company's  outstanding  Common  Stock or Series C  Preferred  Stock
             which is convertible into 7.5% of the Company's  outstanding Common
             Stock.

             The Series D Preferred Stock is convertible on a one-for-one  basis
             into an equal number of shares of Common Stock,  subject to certain
             anti-dilution  adjustments  described  below,  at the option of the
             Pequot  Funds at any time  until June 12,  2001,  on which date all
            

                                       27
<PAGE>

             shares  of  Series  D  Preferred   Stock  then   outstanding   will
             automatically be converted into shares of Common Stock.

             The  Series C  Preferred  Stock and the  Series D  Preferred  Stock
             generally have similar rights and preferences.  However, unlike the
             holders of the Series C Preferred  Stock, the holders of the Series
             D Preferred Stock are entitled to certain anti-dilution adjustments
             if the  Company  issues  or sells any  shares  of Common  Stock (or
             Common Stock equivalents) before June 12, 2001 at a price per share
             (or having a conversion or exercise  price per share) less than the
             $4.00 per share.  In the event of such an issuance,  subject to all
             applicable listing rules of The Nasdaq Stock Market, the conversion
             price of the Series D Preferred  Stock will be adjusted in order to
             allow the Series D Preferred  Stock to convert  into that number of
             shares of Common  Stock which will  maintain the Series D Preferred
             Stock  holders'  percentage  level of  ownership  of the  Company's
             Common Stock  outstanding  (including  Series C Preferred Stock and
             Series D Preferred Stock which is convertible into Common Stock) as
             such  ownership  exists  immediately  prior  to  such  below-market
             issuance.  This  anti-dilution   adjustment  only  relates  to  the
             conversion  price of the  Series  D  Preferred  Stock  and does not
             result in  adjustments to the number of shares of Common Stock held
             by the holders of the Series D Preferred Stock. This  anti-dilution
             adjustment  will not be triggered by the issuance of the  Company's
             securities  under the following  circumstances  (collectively,  the
             "Excluded  Securities"):  (i) a public  offering  of the  Company's
             equity  securities,  (ii) the grant of options or warrants,  or the
             issuance  of  securities,  under any  employee  or  director  stock
             option,  stock  purchase or  restricted  stock plan of the Company,
             (iii) the  issuance  of Common  Stock  pursuant  to any  contingent
             obligation  of the  Company  existing  as of June  12,  1998,  (iv)
             securities  issued upon the exercise or conversion of the Company's
             options, warrants or other convertible securities outstanding as of
             June 12, 1998, (v)  declaration of a rights  dividend to holders of
             Common  Stock in  connection  with the  adoption  of a  stockholder
             rights  plan  by  the  Company,   and  (vi)  securities  issued  in
             connection  with a merger,  acquisition,  joint  venture or similar
             arrangement  which is approved by a majority of the Company's Board
             of  Directors  that  are not then  employees  of the  Company  (the
             "Outside  Directors"),  and (vii)  securities  issued in connection
             with  the  establishment  of  a  strategic  relationship  which  is
             approved by a majority of the Outside Directors.

             The  holders of the Series D Preferred  Stock have,  in addition to
             the voting  rights of the Series C Preferred  Stock,  the exclusive
             right,  voting  separately  as a single class to elect one director
             (the  "Series  D  Preferred  Director")  of the  Company,  with the
             remaining  directors  to be elected  by the other  classes of stock
             entitled to vote therefore at each meeting of stockholders held for
             the  purpose of  electing  directors.  The right of the  holders of
             Series D Preferred  Stock to vote for the election of directors may
             be exercised at any annual meeting or at any special meeting called
             for such purpose or at any adjournment  thereof,  or by the written
             consent,  delivered to the Secretary of the Company, of the holders
             of a majority of all shares of Series D Preferred Stock outstanding
             as of the record date of such written  consent.  The voting  rights
             with respect to the Series D Preferred  Director will terminate and
             thereafter  be of no force or  effect  if on any date the  Board of
             Directors  fixes the  record  date for a meeting  of the  Company's
             stockholders at which directors will be elected (the "Determination
             Date"),  that number of full shares of Common  Stock into which all
             then outstanding  shares of Series D Preferred Stock, if any, could


                                       28
<PAGE>

             be converted  pursuant to the term of the Series D Preferred  Stock
             is less than 7.5% of all then outstanding shares of Common Stock on
             the Determination Date.

             Upon  termination of the voting rights with respect to the Series D
             Preferred  Director pursuant to the terms of the Series D Preferred
             Stock,  the Series D Preferred  Director  then in office will serve
             until the date of the Company's next meeting at which directors are
             elected.  Thereafter,  so  long  as the  holders  of the  Series  D
             Preferred  Stock  own  in  the  aggregate  at  least  7.5%  of  the
             outstanding Common Stock as of any Determination Date (for purposes
             of this calculation all shares of Series D Preferred Stock shall be
             deemed to be converted  to shares of Common  Stock  pursuant to the
             terms of the  Series D  Preferred  Stock)  then the  holders of the
             Series D  Preferred  Stock  shall  have the  right to  designate  a
             nominee (who is reasonably  acceptable  to the  Company's  Board of
             Directors)  to stand for election as a director at the next meeting
             of the Company's  stockholders  at which directors will be elected.
             If such  nominee  is  elected  but does not  serve  such  nominee's
             complete term on the Company's  Board of Directors by reason of the
             resignation,  death, removal or inability to serve, then holders of
             the Series D  Preferred  Stock  shall be  entitled  to  designate a
             successor (who is reasonably  acceptable to the Company's  Board of
             Directors)  to fill such  vacancy  until the next  meeting  for the
             election of directors. If such nominee is not elected to the Board,
             the  holders of the Series D Preferred  Stock will,  in addition to
             those rights described in the following  paragraph,  be entitled to
             appoint an additional  Non-Voting  Observer (as defined below). For
             purposes of this  provision the phrase  "outstanding  Common Stock"
             shall mean the Common Stock shown as  outstanding  on the Company's
             Quarterly Report on Form 10-Q for the most recent quarter and shall
             not be determined on a dilutive basis.
                                                  
         b)  Not applicable.

         c)  During the second  quarter ended June 30, 1998,  the Company issued
             105,820 shares of Common Stock to purchase substantially all of the
             assets,  and assumed  certain  liabilities,  of a medical  products
             company. For further information,  see Note 9 of Notes to Condensed
             Consolidated Financial Statements.

             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  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


                                       29
<PAGE>

             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

         On June 30, 1998, at the Company's annual meeting of shareholders,  the
         following members were elected to the Board of Directors:

                                                 Votes For        Votes Withheld
                                                 ---------        --------------

         J. Richard Crowley                      7,628,694           110,954
         Michael R. Farris                       7,631,439           108,209
         Richard C. Lutzy                        7,635,189           104,459
         Francis E. O'Donnell, Jr., M.D.         7,635,189           104,459
         Thomas Quinn                            7,635,189           104,459
         David T. Pieroni                        7,630,639           109,009
         Terry Fuller, Ph.D.                     7,631,689           107,859

         Amendment  of  conversion  terms  of  the  Company's  former  Series  B
         Convertible  Participating  Preferred  stock and the  reduction  of the
         exercise  price  of the  warrants  issued  to the  Series  B  Preferred
         shareholders was ratified as follows:

                      Votes For                 7,357,914
                      Votes Against               276,278
                      Abstain                     105,456

         Amendment of the 1996 Equity Incentive Plan was ratified as follows:

                      Votes for                 7,268,785
                      Votes Against               386,765
                      Abstain                      84,098

         A proposal to appoint KPMG Peat Marwick LLP as auditors was ratified as
         follows:

                      Votes for                 7,613,149
                      Votes Against                73,049
                      Abstain                      53,450

ITEM 5  OTHER INFORMATION

        Not applicable.

ITEM 6  EXHIBITS AND REPORTS ON FORM 8-K

                   a)   Exhibits


                                       30
<PAGE>



                                INDEX TO EXHIBITS

Exhibit
Number                            Description
------                            -----------


2.1     See Exhibits 10.1, 10.6, 10.25 and 10.32.

3.1     Certificate of Incorporation, as amended.

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

4.1      See Exhibits 3.1 and 3.2.

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     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*).


                                       31
<PAGE>


10.9     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*).

10.10    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*).

10.11    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*).

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

10.13    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*).

10.14    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*).

10.15    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*).

10.16    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*).

10.17    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*).

10.18    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*).  

10.19    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*).

10.20    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*).


                                       32
<PAGE>

10.21    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*).

10.22    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*).

10.23    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*).

10.24    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*).

10.25    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*).

10.26    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*).

10.27    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*).

10.28    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*).

10.29    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*).

10.30    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*).

10.31    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*).




                                       33
<PAGE>
                                   
                            


10.32    Stock  Purchase  Agreement,  dated  December  30,  1997,  by and  among
         LaserSight Incorporated,  LSI Acquisition,  Inc., MEC Health Care, Inc.
         and Vision  Twenty-One,  Inc.  (filed as Exhibit 2.(i) to the Company's
         Form 8-K filed on January 14, 1998*).

10.33    Stock  Distribution  Agreement,  dated  December 30, 1997, by and among
         LaserSight Incorporated,  LSI Acquisition,  Inc., MEC Health Care, Inc.
         and Vision  Twenty-One,  Inc. (filed as Exhibit 2.(ii) to the Company's
         Form 8-K filed on January 14, 1998*).

10.34    Consent and Amendment Number Four to Loan and Security  Agreement dated
         September 10, 1997 by and between LaserSight  Incorporated and Foothill
         Capital Corporation (filed as Exhibit 2.(iii) to the Company's Form 8-K
         filed on January 14, 1998*).

10.35    Agreement dated April 1, 1992 between  International  Business Machines
         Corporation and LaserSight  Incorporated (filed as Exhibit 10.1 on Form
         10-K for the year ended December 31, 1995*).

10.36    Series B  Preferred  Stock  Agreement,  dated  March 13,  1998,  by and
         between  LaserSight  Incorporated  and CC  Investments,  LDC,  Shepherd
         Investments  International,  Ltd.,  Stark  International,  and  Societe
         Generale  (filed as Exhibit 99 to the Company's Form 8-K filed on March
         16, 1998*).

10.37    Securities  Purchase  Agreement,  dated  June 5, 1998,  by and  between
         LaserSight  Incorporated  and TLC The  Laser  Center,  Inc.  (filed  as
         Exhibit 99.1 to the Company's Form 8-K filed on June 25, 1998*).

10.38    Securities  Purchase  Agreement,  dated  June 5, 1998,  by and  between
         LaserSight  Incorporated and Pequot Funds (filed as Exhibit 99.5 to the
         Company's Form 8-K filed on June 25, 1998*).

Exhibit 11        Statement of Computation of Loss Per Share

Exhibit 27        Financial Data Schedule


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


         b) Reports on Form 8-K

         On June 8, 1998, the Company filed with the Commission a Current Report
         on Form 8-K  regarding  the press  release  issued by the Company dated
         June 8, 1998  reporting the TLC  investment  and plans to launch mobile
         excimer laser business.

         On June 16, 1998 the Company filed with the Commission a Current Report
         on Form 8-K  regarding  the press  release  issued by the Company dated
         June 16, 1998  reporting the Dawson  Samberg  Capital  Managemnt  Funds
         investment.

         On June 25, 1998 the Company filed with the Commission a Current Report
         on Form 8-K regarding  the  Securities  Purchase  Agreement and related
         documents dated June 5, 1998 by and between LaserSight Incorporated and
         TLC The laser Center,  Inc. and the Securities  Purchase  Agreement and
         related documents dated June 12, 1998 among LaserSight Incorporated and
         Pequot  Private  Equity Fund,  L.P.,  Pequot Scout Fund,  L.P.,  Pequot
         Offshore Private Equity Fund, Inc.


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<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:   August 14, 1998
      ---------------------                          By: /s/Michael R. Farris
                                                         -----------------------
                                                         Michael R. Farris,
                                                         Chief Executive Officer



Dated:    August 14, 1998                            By: /s/ Gregory L. Wilson
     ----------------------                              -----------------------
                                                         Gregory L. Wilson,
                                                         Chief Financial Officer











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