SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuan to Section 13 or 15(d) of the Securities Exchange
      Exchange Act of 1934. For the quarterly period ended March 31, 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.)



             112249 Science Drive, Suite 160, Orlando, Florida 32826
             -------------------------------------------------------
               (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
May 14, 1998 is 12,712,712.



                                      
<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 - Risk Factors and Uncertainties"
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 March 31,
                           1998 and December 31, 1997                       

                           Condensed  Consolidated Statements of  Operations for
                           the Three Month Periods Ended March 31, 1998 and 1997
                                                                     

                           Condensed Consolidated  Statements of Cash  Flows for
                           the Three Month Periods Ended March 31, 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>
                                                                                       March 31,        December 31,
                                                                                         1998              1997
                                                                                     ----------------   --------------
CURRENT ASSETS                                            ASSETS                       (Unaudited)
<S>                                                                                       <C>              <C>       
   Cash and cash equivalents                                                              $3,129,036       $3,858,400
   Marketable equity securities                                                            5,941,294        7,475,000
   Accounts receivable - trade, net                                                        4,026,974        2,649,202
   Notes receivable - current portion, net                                                 4,701,227        3,762,341
   Inventories                                                                             4,561,882        4,348,235
   Deferred tax assets                                                                       512,813          571,009
   Other current assets                                                                      259,328          219,723
                                                                                     ----------------   --------------
                                                     TOTAL CURRENT ASSETS                 23,132,554       22,883,910

Restricted cash                                                                              194,000          200,000
Notes receivable, less current portion, net                                                2,120,824        2,380,193
Property and equipment, net                                                                1,401,539        1,354,168
Goodwill, net                                                                              6,946,334        7,077,491
Patents, net                                                                               4,871,082       11,275,289
Pre-market approval application, net                                                       2,431,408        2,571,682
Other assets, net                                                                          2,406,919        2,718,340
                                                                                     ----------------   --------------
                                                                                         $43,504,660      $50,461,073
                                                                                     ================  ===============
                                        LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                                                       $1,608,170       $2,142,979
   Note payable, less discount                                                             1,890,152        1,758,333
   Accrued expenses                                                                        2,411,573        2,782,521
   Accrued commissions                                                                     1,401,413        1,230,474
   Income taxes payable                                                                      465,644        1,255,491
   Deferred royalty revenue                                                                  400,000                -
   Other current liabilities                                                                 870,583          984,412
                                                                                     ----------------   --------------
                                                  TOTAL CURRENT LIABILITIES                9,047,535       10,154,210

Refundable deposits                                                                          194,000          200,000
Accrued expenses, less current portion                                                       516,582          518,730
Deferred royalty revenue, less current portion                                               733,333                -
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 10,000,000 shares; 584 and 1,295 issued and outstanding
  at March 31, 1998 and December 31, 1997, respectively                                    5,169,584       11,477,184

Stockholders' equity:
 Common  stock - par  value  $.001  per  share;  authorized  40,000,000  shares;
   12,219,332 and 10,149,872 shares issued and outstanding at March 31,
   1998 and December 31, 1997, respectively                                                   12,220           10,150
 Additional paid-in capital                                                               41,921,869       40,045,564
 Stock subscription receivable                                                            (1,140,000)      (1,140,000)
 Accumulated deficit                                                                     (13,829,421)    (11,865,914)
 Accumulated other comprehensive income - unrealized gain                                    480,505          604,500
 Less treasury stock, at cost;  165,200 shares                                              (614,360)        (614,360)
                                                                                     -----------------  ---------------
                                                                                          26,830,813       27,039,940
                                                                                     -----------------  ---------------
                                                                                         $43,504,660      $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
                   THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                   (Unaudited)
<CAPTION>

                                                                       1998                 1997
                                                                 -----------------     ---------------

                 REVENUE:
<S>                                                                    <C>                 <C>       
                       PRODUCTS                                        $4,044,683          $3,553,844
                       SERVICES                                           198,536           2,964,298
                                                                 -----------------     ---------------
                                                                        4,243,219           6,518,142
                 COST OF REVENUE:
                       PRODUCT COST                                     1,176,320           1,043,798
                       COST OF SERVICES                                    87,356           2,174,387
                                                                 -----------------     ---------------

                 GROSS PROFIT                                           2,979,543           3,299,957

                 RESEARCH, DEVELOPMENT AND REGULATORY EXPENSES
                                                                          817,556             362,204

                 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
                                                                        3,747,049           3,573,496
                                                                 -----------------
                                                                                       ---------------

                 LOSS FROM OPERATIONS                                  (1,585,062)           (635,743)

                 OTHER INCOME AND EXPENSES
                   Interest and dividend income                           114,856              97,364
                   Interest expense                                      (396,521)            (59,643)
                   Realized gain on sale of investments                   214,376                   -
                   Other                                                        -             (50,000)
                                                                 -----------------     ----------------

                 LOSS BEFORE INCOME TAXES                              (1,652,351)           (648,022)

                 INCOME TAX PROVISION                                    (311,156)                  -
                                                                 ------------------    ---------------

                 NET LOSS                                              (1,963,507)           (648,022)

                 CONVERSION DISCOUNT ON PREFERRED STOCK                   (25,372)                  -

                 PREFERRED STOCK ACCRETION AND DIVIDEND
                   REQUIREMENTS                                        (1,098,121)              (9,863)
                                                                 ------------------    ---------------
                 LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS
                                                                     $ (3,087,000)         $ (657,885)
                                                                 ==================    ================

                 LOSS PER COMMON SHARE
                   Basic:                                                  $(0.30)             $(0.07)
                                                                 ==================    ================
                   Diluted:                                                $(0.30)             $(0.07)
                                                                 ==================    ================

                 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
                   Basic:                                              10,318,000           8,821,000
                                                                 =================     ===============
                   Diluted:                                            10,318,000           8,821,000
                                                                 =================     ===============

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

                                       4
<PAGE>

<TABLE>

                                     LASERSIGHT INCORPORATED AND SUBSIDIARIES

                                  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                    THREE MONTHS ENDED MARCH 31, 1998 AND 1997
                                                    (Unaudited)
<CAPTION>

                                                                                  1998                   1997
                                                                            ------------------     ------------------
CASH FLOW FROM OPERATING ACTIVITIES
<S>                                                                               <C>                     <C>       
  Net loss                                                                        $(1,963,507)            $(648,022)
  Adjustments to reconcile net loss to net cash used in operating
    activities:
  Depreciation and amortization                                                       975,289               338,243
  Realized gain on sale of investments                                               (214,376)                    -
  Decrease (increase) in accounts and notes receivable                             (2,057,289)              572,068
  Decrease (increase) in inventories                                                 (213,647)              139,509
  Increase (decrease) in accounts payable                                            (534,809)               79,945
  Decrease in accrued liabilities                                                    (419,383)             (248,163)
  Increase in deferred royalties                                                    1,133,334                     -
  Income taxes                                                                       (789,847)              165,499
  Other                                                                               (54,539)             (425,184)
                                                                            -------------------    ------------------

NET CASH USED IN OPERATING ACTIVITIES                                              (4,138,774)              (26,105)

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of furniture and equipment, net                                           (138,674)             (191,780)
  Proceeds from sale of investments                                                 1,548,084                     -
  Net proceeds from exclusive license of patents                                    6,200,000                     -
  Transfer to restricted cash account                                              (4,200,000)                    -
  Proceeds from restricted cash account                                             4,212,000                     -
                                                                            ------------------     ------------------

NET CASH PROVIDED BY PROVIDED BY (USED IN) INVESTING ACTIVITIES
                                                                                    7,621,410              (191,780)

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from exercise of stock options and warrants                                      -                25,988
  Repayments of capital lease obligation                                                    -               (49,174)
  Repurchase of preferred stock                                                    (4,212,000)                    -
                                                                            -------------------    ------------------

NET CASH USED IN FINANCING ACTIVITIES                                              (4,212,000)              (23,186)
                                                                            -------------------    ------------------

DECREASE IN CASH AND CASH EQUIVALENTS                                                (729,364)             (241,071)
                                                                                    
CASH AND CASH EQUIVALENTS,
  BEGINNING OF PERIOD                                                               3,858,400              2,003,501
                                                                            ------------------     ------------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                           $3,129,036             $1,762,430
                                                                            ==================     ==================


   See accompanying notes to the condensed consolidated financial statements.

</TABLE>











                                       5
<PAGE>


                    LASERSIGHT INCORPORATED AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                Three Month Periods Ended March 31, 1998 and 1997


NOTE 1   BASIS OF PRESENTATION

         The accompanying unaudited, condensed consolidated financial statements
         of LaserSight  Incorporated and subsidiaries  (the Company) as of March
         31, 1998,  and for the three month periods March 31, 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 three month  period ended March 31,
         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.



































                                       6
<PAGE>

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.  The Company has restated
         information  for all prior  periods  reported  below to conform to this
         standard.

<TABLE>
<CAPTION>

                                                            Three Months Ended March 31,
                                                        -------------------------------------
                                                               1998                 1997
                                                        -----------------     ---------------

<S>                                                       <C>                   <C>       
         Net loss                                         $(1,963,507)          $(648,022)

         Other comprehensive loss:
            Reclassification adjustment 
            for gains included in net 
            loss (net of tax of $75,997)                     (123,995)                  --
                                                        -----------------     ---------------
         Comprehensive loss                               $(2,087,502)          $(648,022)
                                                        =================     ===============
</TABLE>

NOTE 4   INVENTORIES

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

                                           March 31, 1998      December 31, 1997
                                           --------------      -----------------

         Raw materials                       $3,350,827            $2,958,782
         Work-in-process                        435,318               263,353
         Finished goods                         603,944               862,775
         Test equipment-clinical trials         171,793               263,325
                                           --------------      -----------------
                                             $4,561,882            $4,348,235
                                           ==============      =================

NOTE 5   MARKETABLE EQUITY SECURITIES

         In March 1998,  the Company  received  net  proceeds of  $1,548,084  in
         exchange  for 168,270  shares of Vision  Twenty-One,  Inc.  (Vision 21)
         common stock.  This represented  approximately  20% of 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 $214,376.  At March
         31,  1998,  the  market  value of the  remaining  Vision 21 shares  was
         approximately $5,941,000.












                                       7
<PAGE>


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
         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
         May 14, 1998.

NOTE 8   STOCKHOLDERS' EQUITY

         Series B Preferred Stock Redemption
         -----------------------------------

         On February 4, 1998,  in exchange for the consent of the holders of its
         Series B Preferred  Stock to the sale of  international  patent  rights
         (see Note 6), the Company  agreed to deposit  $4.2  million of the sale
         transaction  proceeds into a restricted  cash account for the exclusive
         benefit of the preferred holders.

         The preferred  holders  received an option to sell to the Company up to
         351 shares of Series B Preferred Stock  (representing an aggregate face
         amount of $3,510,000) at any time during the 150-day period ending July
         10, 1998. As of March 31, 1998 all 351 shares had been repurchased with
         funds from the restricted cash account at a 20% premium.

         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 three months ended March
         31, 1998.

         Other
         -----

         As of March 31, 1998, the Series B Preferred Stockholders had converted
         360 shares of Series B Preferred Stock into 2,069,460  shares of Common
         Stock.













                                       8
<PAGE>

NOTE 9   SUBSEQUENT EVENT

         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.



















































                                       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 related products and services and health care services for
the three month periods ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                        For the Three-Month                   For the Three-Month
                                           Period Ended                          Period Ended
                                          March 31, 1998                        March 31, 1997
                                          --------------                        --------------
                                     Revenue       % of Total               Revenue          % of Total
                                  -----------     ------------            ------------       ----------

<S>                               <C>                   <C>               <C>                   <C> 
Technology related                $ 4,044,683           95 %              $ 3,553,844           55 %
Health care services                  198,536            5 %                2,964,298           45 %
                                  -----------     -----------             -------------       --------

Total revenue                      $4,243,219          100 %              $ 6,518,142           100 %
                                  ===========     ===========             =============       ========
</TABLE>

Revenue in the first quarter of 1998 were $4,243,219 compared to $6,518,142 (for
a decrease of  $2,274,923)  over 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  $2,732,419 in revenues
during the first  quarter  ended March 1997.  All of the  Company's  health care
services  revenue for the first quarter of 1998 was provided by The Farris Group
(TFG).  Net revenue for TFG in the first quarter of 1998 were $198,536  compared
to  $231,878  (for a decrease of  $33,342)  over the same  period in 1997.  This
decrease was accompanied by a $146,079 reduction in expenses.

The increase in  technology  related  revenue was  attributable  to (i) a slight
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; (ii) an increase in revenues  generated from the
sale of service  contracts;  and (iii) revenues  generated from royalty payments
received on intellectual  property agreements.  Fourteen laser systems were sold
in the first  quarter of 1998  compared  to fifteen  systems  sold over the same
period in 1997. No system  returns were  recognized  during the first quarter of
1998 or 1997.


























                                       10
<PAGE>


Cost of Revenue;  Gross  Profits.  The  following  tables  present a comparative
analysis of cost of revenue, gross profit and gross profit margins for the three
month periods ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                      For the Three-Month                               For the Three-Month
                                         Period Ended                                      Period Ended
                                        March 31, 1998              % Change              March 31, 1997
                                        --------------             ---------              --------------

<S>                                        <C>                       <C>                     <C>          
Product cost                               $  1,176,320              13 %                 $   1,043,798
Cost of services                                 87,356             (96 %)                    2,174,387
Gross profit                                  2,979,543                                       3,299,957
Gross profit percentage                              70 %                                            51 %

Products only                                 2,868,363                                       2,510,046
                                                     71 %                                            71 %
</TABLE>

Gross profit margins were 70% of net sales in the first quarter of 1998 compared
to 51% for the same  period  in 1997.  The  gross  profit  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 of 24% during the first  quarter  ended
1997.

Research,  Development and Regulatory  Expense.  The following  tables present a
comparative  analysis of research,  development and regulatory  expenses for the
three month periods ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                        For the Three-Month                             For the Three-Month
                                           Period Ended                                    Period Ended
                                          March 31, 1998              % Change            March 31, 1997
                                          --------------             ---------            --------------

<S>                                           <C>                       <C>                  <C>    
Research, development
 and regulatory                               $ 817,556                 126 %                $ 362,204

As a percent of technology
 net sales                                           20 %                                           10 %
</TABLE>

Research,  development and regulatory  expenses for the three month period ended
March  31,  1998 were  $817,556,  an  increase  of  $455,352,  or 126% from such
expenditures  during the same period in 1997.  This  increase  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  quarter  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






                                       11
<PAGE>

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.

Selling,  General and  Administrative  Expenses.  The following tables present a
comparative  analysis of selling,  general and  administrative  expenses for the
three month periods ended March 31, 1998 and 1997.
<TABLE>
<CAPTION>

                                   For the Three-Month                                      For the Three-Month
                                      Period Ended                                             Period Ended
                                     March 31, 1998                   % Change                March 31, 1997
                                     --------------                  ---------                --------------

<S>                                    <C>                               <C>                     <C>
Selling, general and
 administrative                        $ 3,747,049                       5 %                     $ 3,573,496

 As a percent of net sales                      88 %                                                      55 %
</TABLE>

Selling, general and administrative expenses increased by $173,553 for the first
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  ($524,000),  royalty fees
($167,000) and a higher level of commissions and warranties incurred on the sale
of its laser  systems  ($233,000).  The  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   ($386,000)  and  a  reduction  in  the  selling,   general,   and
administrative expenses of TFG ($126,000) and corporate offices ($274,000).  The
Company  expects to incur one time costs in the second  quarter of 1998 relating
to the relocation of its Orlando offices.

Loss From  Operations.  There was an operating  loss of  $1,585,062 in the first
quarter of 1998 compared to an operating loss of $635,743 for the same period in
1997,  including  TFG's  losses of  $206,303  and  $319,040,  respectively.  The
decrease in operating results can be attributed to the sale of the Company's MEC
and LSIA subsidiaries  which generated income from operations of $277,634 during
the first quarter ended 1997, and increases in research, development, regulatory
and  selling,   general  and  administrative  expenses.  These  reductions  were
partially offset by an increase in technology revenues generated.

Other Income and Expense. Interest and dividend income was $114,856 in the first
quarter of 1998  compared to $97,364 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 $396,521 in the first  quarter of 1998 compared to $59,643
for the same  period in 1997.  Interest  expense  incurred by the Company in the
first quarter of 1998 related primarily to the credit facility  established with
Foothill  Capital  Corporation  (Foothill)  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.  Interest  expenses  incurred by the Company in the first  quarter of
1997 related  primarily  to the notes  payable to the former owner of TFG and to
the former owners of MEC. The Company  incurred a gain on investment of $214,376
resulting from the sale of marketable equity  securities.  Additionally,  during
the first quarter of 1997,  the Company  incurred a one-time  charge to earnings
amounting to $50,000 related to the settlement of litigation.











                                       12
<PAGE>


Income Taxes.  For the three months ended March 31, 1998,  the Company  recorded
income tax expense of $311,156  compared to no income tax benefit or expense for
the same  period in 1997.  The tax is  primarily  the  result of  $1,200,000  in
royalties received for the non-exclusive  license of certain patents, the income
from which is deferred for accounting purposes.

Net Loss.  Net loss for the first quarter of 1998 was  $1,963,507  compared to a
net loss of $648,022  for the same period in 1997.  The increase in net loss can
be  attributed  to the sale of the  Company's  MEC and LSIA  subsidiaries  which
generated  income of $278,904  during the first  quarter of 1997,  increases  in
research,  development,  regulatory and general and administrative expenses, and
income tax expense.  These reductions were partially offset by a slight increase
in revenues generated at the technologies division.

Loss Attributable to Common  Shareholders.  For the three months ended March 31,
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.  Loss per basic and diluted  share  increased to ($0.30) for the
first  three  months of 1998  compared  to  ($0.07)  in 1997.  The  increase  is
attributable  to the  increase in the net loss for the  quarter  ended March 31,
1998,  accretion and dividend  requirements  on the  redemption of the Company's
Series B Preferred Stock,  and the value of 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  $1,355,319 from  $12,729,700 at December 31, 1997 to
$14,085,019  as of March 31, 1998.  This  increase in working  capital  resulted
primarily  from an increase in trade  accounts  and notes  receivable  offset by
accrued   commissions,   accretion  of  notes   payable   discount  and  capital
expenditures.

Operating  activities used net cash of $4,138,774  during the first three months
of 1998,  compared  to $26,105 of net cash used  during the same period in 1997.
This  increase is  primarily  attributable  to a first  quarter 1998 net loss of
$1,963,507  compared to a net loss of $648,022  for the same period in 1997,  an
increase  in  accounts  and notes  receivable  (primarily  the  result of slower
collections  of   outstanding   receivables   and  increased   payments  due  at
installation  versus upon  shipment  on first  quarter  sales) and  inventories,
significant decreases in accounts payable, accrued liabilities, and income taxes
payable,  partially offset by an increase in deferred royalty revenue.  Net cash
provided by investing activities was $7,621,410 during the first quarter of 1998
compared  to  $191,780 in net cash used in  investing  activities  over the same
period in 1997.  Net cash  provided  by  investing  activities  during the first
quarter 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  and  equipment.  Net cash used in financing
activities  during the first quarter of 1998 was  $4,212,000,  consisting of the
repurchase of Series B Preferred Stock.  That compares to cash used in financing













                                       13
<PAGE>


activities  in the first  three  months of 1997 of  $23,186,  consisting  of net
proceeds  from the  exercise of stock  options  offset by repayment of a capital
lease obligation.

The Company believes that its balances of cash and cash  equivalents  along with
operating cash flows,  the  anticipated  liquidation of Vision 21 shares and the
availability of the Foothill revolver until June 15, 1998, will be sufficient to
fund its  anticipated  working  capital  requirements  for the next twelve month
period based on modest  growth and  anticipated  collection  of  receivables.  A
failure to collect timely a material portion of current receivables or liquidate
Vision  21  shares  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  is engaged  in  discussions  regarding  potential  equity  private
financings.  The Company  anticipates  that the net proceeds of such  financings
would be used to exercise the Company's  option to redeem the Series B Preferred
Stock at a 20%  premium  through  June  12,  1998  and to  repay  the  Company's
obligations  to Foothill on or before June 15, 1998 if sufficient  proceeds from
the  liquidation  of Vision 21 shares are not available  for this  purpose.  Any
remaining funds would be used for general corporate purposes,  including funding
possible   future   deficits  in  operating   cash  flow,   and  to   facilitate
technology-related  joint  ventures  and/or  acquisitions.  Such  financings may
involve sales of Common Stock at a price below market  prices  prevailing at the
time of sale. There can be no assurance as to whether, when or on what terms the
Company will be able to complete such potential financings.

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:

Potentially Unlimited Number of Series B Conversion Shares Issuable. There is no
limit on the number of shares of Common Stock potentially issuable in connection
with conversions of Series B Preferred Stock. As illustrated in the table below,
the number of shares of Common Stock issuable upon such conversions (the "Series
B  Conversion  Shares")  depends on the market  price of the Common Stock at the
time of conversions:



















                                       14
<PAGE>



     Assumed                    Number of                 As % of Common Shares
   Conversion              Series B Conversion             Assumed Outstanding
     Price (1)            Shares Issuable (2)(3)           After Conversion (4)
     -------              ----------------------           --------------------

     $0.50                      10,500,000                         45.2%
     $1.00                       5,250,000                         29.2%
     $2.00                       2,625,000                         17.1%
     $2.270833 (5)               2,311,926                         15.4%
     $3.00                       1,750,000                         12.1%
     $4.00                       1,312,500                          9.4%
     $5.00                       1,050,000                          7.6%
     $6.00                         875,000                          6.4%
     $6.68 (6)                     785,928                          5.8%

Shares Eligible For Future Sale. Except as provided below,  substantially all of
the Company's outstanding Common Stock (12,712,712 shares as of May 14, 1998) is
freely tradable without restriction or further registration 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   All Series B Conversion Shares are freely saleable, subject only to the
         satisfaction of a prospectus delivery  requirement.  If all outstanding
         Series B Preferred  Stock had been  converted as of May 14,  1998,  the
         number of such  freely-tradable  shares  would have been  approximately
         2,311,926.  (Subject to certain  exceptions  specified  in an agreement
         between the Company and its preferred shareholders, no more than 10,414
         additional  Series B  Conversion  Shares may be issued  before June 12,
         1998,  or  subject  to  certain  shareholder   approval   requirements,
         September 14, 1998. See "Recent  Developments--Agreement With Preferred
         Shareholders--Proposed Revision of Terms").

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

1 Equals the lesser of (A) $6.68 or (B) the average of the three lowest  closing
  bid  prices  of the  Common  Stock  during  the 30  trading  days  immediately
  preceding the applicable conversion date.

2 Excludes an aggregate of 2,392,220  Series B Conversion  Shares that have been
  issued in connection with conversions through May 14, 1998.

3 Based on an  agreement  between  the  Company  and the holders of the Series B
  Preferred Stock, no more than 10,414 additional Series B Conversion Shares may
  be issued  before June 12, 1998 or,  subject to certain  shareholder  approval
  requirements,  September  14, 1998.  This  agreement  can be terminated by the
  preferred shareholders under certain circumstances.

4 Equals the 12,712,712  shares of Common Stock outstanding on May 14, 1998 plus
  the number of Series B Conversion  Shares  issuable upon the  conversion (at a
  conversion  price  indicated  in the  table)  of all 525  shares  of  Series B
  Preferred Stock outstanding as of such date.

5 Equals the conversion price in effect as of May 14, 1998.

6 Currently,  under the terms of the Series B Preferred  Stock,  the  conversion
  price cannot exceed $6.68, regardless of the market price of the Common Stock.
  If the  Company's  stockholders  approve  certain  proposals at the  Company's
  annual  meeting  scheduled  for June 12,  1998 (the  "Annual  Meeting"),  this
  maximum conversion price will be adjusted to equal the lesser of $6.68 or 110%
  of the average  closing bid prices of the Common Stock  during the  20-trading
  day period ending on September  14, 1998.  Failure to receive such approval on
  or before  June 12,  1998 will  require  the  Company to issue to the Series B
  Holders  warrants to purchase up to 750,000  shares of Common Stock at a price
  of $2.753  per  share.  See  "Recent  Developments--Agreement  with  Preferred
  Stockholders - Proposed Revision of Terms."




                                       15
<PAGE>


     o   The 790,000 shares of Common Stock issuable upon exercise of the Series
         B Warrants  (with an exercise  price of $5.91 per share) will be freely
         saleable following such exercise, subject only to the satisfaction of a
         prospectus delivery requirement.

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

     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--NNJEI;  --
         LaserSight Centers and Florida Laser Partners; -- TFG; -- SEO."

Sales, or the possibility of sales, of the Series B Conversion Shares,  Series B
Warrant  Shares,  Photomed  Shares,  Centers  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 $2.0  million for the three  months ended March 31, 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 $4.1  million,  $4.4
million,  and  $4.2  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 March 31,  1998,  the Company had an  accumulated
deficit of $13.8 million.  As a result of the Company's sale of its MEC and LSIA
subsidiaries  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.  The Company  expects to incur a loss and  deficit  cash flow
from  operations for the second quarter of 1998.  There can be no assurance that
the Company can regain or sustain profitability or positive operating cash flow.

Uncollectible  Receivables  Could  Exceed  Reserves.  At  March  31,  1998,  the
Company's  trade  accounts  and  notes   receivable   aggregated   approximately
$10,849,025 net of allowances for collection losses and returns of approximately
$2,139,000.  Accrued commissions,  the payment of which generally depends on the
collection  of  such  net  trade  accounts  and  notes  receivable,   aggregated
approximately  $1,768,000 at March 31, 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  92% and 90% of net  receivables at
March 31, 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 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  ($1,939,000  at March 31, 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 March 31, 1998, the Company had  restructured
laser customer accounts in the aggregate amount of approximately  $937,000 (7.2%
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.









                                       16
<PAGE>


Potential Liquidity Problems.  During the three months ended March 31, 1998, the
Company  experienced a $4.1 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 Ao Do K product on a commercial  basis.  As of May 14, 1998, the
LSX  laser  system  had not made a  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 Ao Do K until mid-1998.  Subject to these factors,  the Company
believes that its balances of cash and cash equivalents,  together with expected
operating cash flows, the anticipated  liquidation of the Vision 21 Shares,  and
the  availability of up to $2.0 million under its revolving credit facility with
Foothill  through  June 15, 1998,  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  timely a
material portion of current receivables,  experiences significant further delays
in the shipment of its LSX or Ao Do K,  experiences  less market demand for such
products  than  it  anticipates,   or  experiences   additional  delays  in  the
anticipated liquidation of the Vision 21 Shares the Company's liquidity could be
materially adversely affected.

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

     o   Any future  negative  cash flow from  operations or the repayment on or
         before  June 15,  1998 of any  amounts  borrowed  under  the  Company's
         revolving  credit  facility with Foothill to finance such negative cash
         flow.

     o   Certain  cash  payment   obligations  under  the  Company's  LASIK  PMA
         application acquisition agreement of July 1997 with Photomed, Inc. Such
         cash payment  obligations  include (i) $1.75 million payable if the 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 of $1.0  million.
         Additional  working capital  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.)

In addition,  the Company is seeking  alternative sources of capital to fund its
product development activities and to consummate future strategic acquisitions.

Except  for  additional  borrowing  available  (as of May 14,  1998,  up to $2.0
million) under its revolving credit facility with Foothill through June 15, 1998
and an aggregate of  approximately  $6.5  million to $7.45  million  (subject to
certain post-closing adjustments) scheduled to be received in increasing monthly
installments from February through May 1998 (approximately $1.6 million has been
received  to date in 1998) from the sale or  redemption  of the Vision 21 Shares
(see "Recent Developments--Liquidation of Vision 21 Shares"), 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.

                                  

                                    






                                       17
<PAGE>


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  (as is the case with the Series B  Preferred  Stock).  The  Foothill
financing or other debt financing  could result in a substantial  portion of the
Company's cash flow from operation  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  cannot  obtain
additional capital on satisfactory  terms, it may be required to sell additional
assets.

Adverse  Consequences if Company Cannot Receive  Agreed-Upon Value of Its Vision
21   Shares.    As   described    in   more   detail    below   under    "Recent
Developments--Liquidation  of  Vision  21  Shares,"  Vision  21  has  agreed  to
liquidate the Vision 21 Shares in monthly  installments between February and May
1998 and pay to the Company on May 29, 1998,  an amount equal to the amount (the
"Shortfall Amount"), if any, by which the gross proceeds to the Company from the
liquidation  of Vision 21 Shares  through such date fall short of the obligation
at that date (subject to certain post-closing adjustments).  Vision 21 failed to
liquidate  the  March  and  April  installments  and  such  installments  remain
outstanding  as of May 14, 1998.  In  addition,  both the value of the Vision 21
Shares and the  ability of Vision 21 to make the  Shortfall  Payment  (if any is
required) is subject to risks,  including without limitation the risks disclosed
in Vision 21's  filings  with the SEC.  Copies of such  filings can be obtained,
upon payment of prescribed  fees, at the Public Reference Room of the SEC at 450
Fifth Street, N.W.,  Washington D.C. 20549 or from the SEC's Web site containing
information  filed  electronically  with the information  included in or omitted
from any SEC filing by Vision 21. Such filings are not part of this document and
are not incorporated by reference  herein. To the extent that the liquidation of
the Vision 21 required  Shortfall  Payment is not paid when due,  the  Company's
liquidity  and  financial  condition  may  be  materially   adversely  affected,
including  a  potential  default  on its  obligation  to repay  $2.0  million to
Foothill on June 15, 1998.

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  shareholders 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 performing PRK or other refractive laser surgical procedures.
         The Centers Contingent Shares are issuable at the rate of one share per
         $4.00 of such operating income.

     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 a laser refractive
         optical  surgical  procedure is  conducted  on an 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 March 31,  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








                                       18
<PAGE>


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  sibsidiary  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).  If such  market  value had been
computed as of May 14, 1998, the number of additional shares issuable would have
been approximately  248,000.  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 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--NNJEI.  In  connection  with the
acquisition  of the assets of NNJEI by the  Company's  LSIA  subsidiary  in July
1996,  the  Company  agreed to issue up to 102,798  additional  shares of Common
Stock if the average  closing price of the Common Stock during the 10-day period
immediately  preceding  July 15,  1998 is less than $15 per share.  All  102,798
shares will be issuable  unless such average  closing price is more than $10 per
share.  The  Company's  sale of LSIA in  December  1997  does  not  affect  this
contingent obligation.

Possible  Dilutive  Issuance  of  Common  Stock-SEO.   In  connection  with  the
acquisition  of certain assets of SEO in April 1998, the Company agreed to issue
up to 223,280 additional shares of Common Stock if the five day average price of
the Common  Stock on April 15,  1999 is less than $5.00 per share.  All  223,280
shares 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
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, the Company
reached an informal  understanding  with  Foothill (i) to increase the number of
Foothill  warrant shares to  approximately  550,000,  (ii) to reduce the warrant
exercise  price to  approximately  $5.52 per  share,  and (iii) to make  further
anti-dilution  adjustments in the event that shares of Series B Preferred  Stock
are  converted  into Common Stock at a  conversion  price per share that is less
than the market price of the Common Stock at the time of conversion. The Company
estimates  that the  conversion of 419 of the original  1,600 shares of Series B
Preferred  Stock  through May 14, 1998 has resulted in an increase in the number
of warrant  shares to 571,349 and a decrease in the  warrant  exercise  price to
$5.31. As the Company and Foothill have not yet reflected their understanding in
writing,  there can be no assurance that the anti-dilution  adjustments will not
be greater than those  estimated by the Company.  Moreover,  conversions  of the









                                       19
<PAGE>


remaining  525  shares of Series B  Preferred  Stock may  result in  significant
further increases in the number of Foothill warrant shares and reductions in the
Foothill  warrant exercise price.  Such  significant  adjustment to the Foothill
warrant could also result from any future  below-market sales of Common Stock by
the Company.

Amortization of Significant  Intangible Assets. Of the Company's total assets at
March 31, 1998,  approximately  $16.3 million (37%) were intangible  assets,  of
which  approximately  $6.9 million  reflects  goodwill (which is being amortized
using an estimated life ranging from 12 to 20 years), approximately $4.9 million
reflects the cost of patents  (which is being  amortized  over a period  ranging
from  approximately 8 to 17 years),  and approximately $4.5 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.  The Company's  intangible assets
were  decreased by  approximately  $6.0 million as a result of the February 1998
closing of the Company's patent agreement with Nidek.  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 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 ($3,914,000 at March 31, 1998) may be subject to an impairment
adjustment.

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 PRK-UV lasers in those countries
where patents are in effect. The Company's international sales accounted for 84%
and 47% of the  Company's  total  revenues  during the three month periods ended
March 31, 1998 and 1997, respectively.  The Company expected such percentages to
increase  in future  periods as a result of its sale of MEC and LSIA in December
1997.










                                       20
<PAGE>


Recent Developments

Liquidation of Vision 21 Shares. In connection with the sale of its MEC and LSIA
subsidiaries  to Vision 21 on December 30,  1998,  Vision 21 agreed to liquidate
the Vision 21 Shares by a public sale pursuant to a registration  statement or a
private placement,  or by its repurchase of the Vision 21 Shares. The Company is
entitled to receive at least  $6,500,000,  but not more than $7,475,000 from the
liquidation of the Vision 21 Shares. If the Company has not received the minimum
amount  (subject to the  post-closing  adjustments  described  below) by May 29,
1998, then on such date Vision 21 is to pay the Company the shortfall in cash.

The Company's  agreement with Vision 21 calls for a liquidation of the Vision 21
Shares in installments at the end of each month between February and May. Vision
21 repurchased substantially all of the February installment  (approximately 20%
of total) on March 10, 1998.  As of May 12, 1998,  Vision 21 had not  liquidated
any portion of the March and April  installments  despite the Company's repeated
requests.  On April 30, 1998, Vision 21 filed a registration  statement with the
SEC to permit the public sale of the remaining  Vision 21 Shares.  Vision 21 has
advised the Company that the registration  statement became effective on May 12,
1998.  Through May 14, 1998,  60,648 of the remaining  Vision 21 shares had been
sold.

The  Company  cannot  predict  whether,  when or at what  price  Vision  21 will
liquidate the remaining Vision 21 Shares.

The  remaining  Vision 21 Shares  represent  approximately  5.3% of Vision  21's
outstanding common stock as of March 13, 1998 (based on information  provided by
Vision 21 to the Company). Vision 21 common stock has traded on the Nasdaq Stock
Market since August 18, 1997, the date of Vision 21's initial public offering at
a price of $10.00 per  share.  The  market  price of Vision 21 common  stock has
since ranged from a low of $7.00 (on December 29, 1997) to $15.00 (on  September
25,  1997).  On May 14,  1998,  the closing  price of Vision 21 common stock was
$7.69.

Agreement With Preferred  Shareholders--Proposed Revision of Terms. On March 13,
1998,  the  Company  entered  into an  agreement  with all of the holders of its
Series B Preferred Stock as follows:

     o   Until June 12, 1998, the preferred holders will limit their conversions
         of  Series B  Preferred  Stock so that no more  than  1,000,000  common
         shares  are  issued  during  such  period.  (Immediately  prior to this
         conversion  restriction  becoming  effective,   the  preferred  holders
         submitted to the Company  notices for the  conversion  of 244 shares of
         Preferred Stock into 1,402,634 shares of Common Stock.) This conversion
         restriction  will be extended to  September  14, 1998 if the  Company's
         stockholders  approve certain proposals  described below (the "Series B
         Proposal") at the Company's Annual Meeting on June 12, 1998.

     o   The preferred  holders granted the Company an option to purchase any or
         all of the remaining  Series B Preferred  Stock at a 20% premium at any
         time  before June 12,  1998.  (Because  the  Company's  agreement  with
         Foothill  prevents any redemptions of preferred stock so long as any of
         the Foothill loans remain outstanding,  such a repurchase would require
         the Company to first obtain Foothill's approval.  It would also require
         the Company to raise the funds  necessary to finance  such  repurchase.
         There can be no  assurance  as to whether or on what terms the  Company
         could obtain such Foothill consent or additional financing.)
















                                       21
<PAGE>


     o   Subject to the approval of the Company's  common  stockholders  and the
         conversion restrictions being effective through September 14, 1998, the
         fixed  conversion  price component of the Series B Preferred Stock will
         equal  the lower of (A) $6.68  (its  current  level) or (B) 110% of the
         average  closing bid prices of the Common  Stock  during the 20 trading
         days ending on September 14, 1998.

     o   Subject to the  approval  of the  Company's  common  stockholders,  the
         exercise  price of the  warrants  issued to the  preferred  holders  in
         August 1997 (the  "Existing  Warrants")  will be reduced from $5.91 per
         share to $2.753  (115% of an  average  closing  bid price of the Common
         Stock during the five  trading  days  following  March 16,  1998).  The
         Existing  Warrants would remain  exercisable at any time through August
         29,  2002 and their  exercise  would not be  subject  to the  1,000,000
         common share limit on conversions of Preferred Stock.

     o   If for any reason the Company's common stockholders fail to approve the
         change in the fixed  conversion  price component and the exercise price
         of the Existing  Warrants on or before June 12, 1998,  the Company will
         be  required  to  issue to the  preferred  holders  750,000  additional
         warrants  (the  "Additional  Warrants")  to purchase  Common Stock at a
         price equal to $2.753 per share  (115% of an average  closing bid price
         of the Common Stock during the five  trading days  following  March 16,
         1998). The Additional Warrants would be exercisable at any time through
         August 29, 2002 and would not be subject to the 1,000,000  common share
         limit on conversions of Preferred Stock.

The  restrictions  on  conversions  and the Company's  repurchase  option may be
terminated by the preferred holders under any of the following circumstances:

     o   As of the end of any month, the Company's current ratio (current assets
         divided by current liabilities) falls below 1.1 to 1.

     o   As of the end of the first or second  quarter  of 1998,  the  Company's
         income  or loss  from  operations  for such  quarter  has not  improved
         relative to the Company's results for the prior quarter.

     o   At any time,  the Company  undergoes  or  announces a material  adverse
         change  in  its  financial   condition,   operating  results,   assets,
         liabilities,  operations or business prospects which is material to the
         Company and its  subsidiaries  taken as a whole. The agreement does not
         specify any criteria for  determining  whether such a change  qualifies
         under this "material adverse" standard.

As of April 30, 1998, the Company was in compliance  with the first two of these
tests (current ratio and operating  results),  but cannot predict whether or not
the  preferred  shareholders  may claim that the  Company has failed to meet the
third test (no material  adverse  change).  In  addition,  the  Company's  proxy
material for its 1998 annual  meeting of  shareholders  is being reviewed by the
staff of the SEC.  Such review is likely to delay the  mailing of the  Company's
proxy material. Accordingly, it is questionable whether the Company will be able
to mail such proxy material to shareholders in time for the Series B Proposal to
be approved by the June 12, 1998 deadline.

If the restrictions on conversions  described above are terminated prior to June
12, 1998 due to the occurrence of one or more of these  circumstances,  then the
Company will be required to issue the Additional Warrants.
















                                       22
<PAGE>


A*D*K  Update.  At the  American  Society of  Cataract  and  Refractive  Surgery
conference held in San Diego in April 1998, the Company offered ophthalmologists
the  opportunity  to practice  with  working  prototypes  of the  Company's  new
Automated  Disposable  Keratome  (A*D*K)  product for the use in connection with
LASIK  procedures.  As of May 14, 1998, the A*D*K continues to be in the process
of final manufacturing and clinical validation,  due to continuing  complexities
in the manufacturing validation process. The Company still expects such sales to
begin during the second quarter of 1998.

SEO Asset  Acquisition.  Based on the Company's desire to broaden its technology
product line and offer expanded  laser  applications  in the medical  field,  on
April 15,  1998,  the Company  acquired  substantially  all of the  assets,  and
assumed  certain   liabilities,   of  SEO's  medical   products   division  (the
"Division").  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 purchase price of $1,250,000 was based on the value of the assets purchased,
reduced by liabilities assumed. The Company issued shares of Common Stock to SEO
in payment of the purchase  price;  $250,000 of the  purchase  price was paid by
issuing shares (the "Liquid  Shares") based on a five day average of bid and ask
prices for Common Stock immediately prior to the closing date and the balance of
the purchase  price was paid by issuing shares based on a $5.00 share price (the
"Remaining  Shares").  The  Company  will be  obligated  to file a  registration
statement covering the Liquid Shares and may be obligated to issue up to 223,280
additional  shares of Common Stock if the price of the Remaining  Shares is less
than $5.00 on April 15, 1999.

     Redemptions and  Conversions of Series B Preferred  Stock. A portion of the
1,600  shares  of Series B  Preferred  Stock  issued  in  August  1997 have been
redeemed, repurchased or converted as follows:
<TABLE>
<CAPTION>

       Month           Transaction                                Number        Balance
       -----           -----------                              of Shares     Outstanding
                                                                ---------     -----------
<S>                 <C>                                            <C>           <C>      
       10/97        Redemption (at a 4% premium)                   305           1,295
    2/98 & 3/98     Repurchases (at a 20% premium)                 351            944
    3/98 & 4/98     Conversions (at $1.739583 per share)           376            568
       4/98         Conversions (at $1.75 per share)                8             560
       4/98         Conversions (at $1.802083 per share)            17            543
       4/98         Conversions (at $1.979167 per share)            10            533
       4/98         Conversions (at $1.989583 per share)            8             525
</TABLE>

All such  redemptions  and  repurchases  have been funded from a blocked account
established  for the exclusive  benefit of the Series B Holders,  as required by
the agreements the Company entered into with such holders in August 1997.






















                                       23
<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) Not applicable.

         b) Not applicable.

         c) Not applicable.

ITEM 3   DEFAULTS UPON SENIOR SECURITIES

         Not applicable.

ITEM 4   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On February 27, 1998,  at the Company's  special  meeting of  shareholders,  the
following proposals were approved:

         A proposal  for the  issuance of shares of the  Company's  Common Stock
         resulting from  conversions of the Company's  Series B Preferred  Stock
         and the exercise of related stock purchase warrants.

                    Votes For                            5,776,527
                    Votes Against                          440,344
                    Votes Abstaining                        22,648

         A proposal to increase the number of authorized  shares of Common Stock
         from 20 million to 40 million.

                    Votes For                            8,356,259
                    Votes Against                          463,611
                    Votes Abstaining                        20,355

         A proposal  that would have  allowed the Company to adjourn the special
         meeting  to another  date or place if there  were not  enough  votes to
         approve the first two proposals.

                    Votes For                            8,257,201
                    Votes Against                          537,634
                    Votes Abstaining                        43,150


























                                       24
<PAGE>



ITEM 5   OTHER INFORMATION

         Not applicable.

ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

         a) Exhibits

                                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*).



















                                       25
<PAGE>


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*).

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*).















                                       26
<PAGE>


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*).

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*).
















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<PAGE>


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*).

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*).

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 January 2, 1998,  the Company  filed with the  Commission a
                  Current  Report on Form 8-K regarding the press release issued
                  by the Company dated  December 31, 1997  reporting the sale of
                  two subsidiaries to Vision 21.

                  On January 14, 1998,  the Company filed with the  Commission a
                  Current  Report on Form 8-K regarding the sale of MEC and LSIA
                  to Vision 21 in a  transaction  effective  as of  December  1,
                  1997.

                  On January 20, 1998,  the Company filed with the  Commission a
                  Current  Report on Form 8-K regarding the press release issued
                  by the Company  dated  January 20, 1997  regarding  the patent
                  agreement with Nidek.




















                                       28
<PAGE>


                  On January 22, 1998,  the Company filed with the  Commission a
                  Current   Report  on  Form  8-K/A   including   the  financial
                  information required related to the sale of MEC and LSIA.

                  On February 17, 1998,  the Company filed with the Commission a
                  Current  Report on Form 8-K regarding the press release issued
                  by the Company dated February 12, 1998 regarding completion of
                  a  patent  agreement  with  Nidek  and  an  update  of  recent
                  developments and risk factors.

                  On February 27, 1998,  the Company filed with the Commission a
                  Current  Report on Form 8-K regarding the press release issued
                  by  the  Company  dated   February  17,  1998  reporting  that
                  shareholders  passed all  proposals  at a special  shareholder
                  meeting.

                  On March 13,  1998,  the Company  filed with the  Commission a
                  Current  Report on Form 8-K regarding the press release issued
                  by the Company dated March 13, 1998  reporting  1997 financial
                  results.

                  On March 16,  1998,  the Company  filed with the  Commission a
                  Current  Report on Form 8-K  regarding  the Series B Preferred
                  Stock  Agreement dated March 13, 1998 by and among the Company
                  and the holders of Series B Preferred Stock.

                  On March 18,  1998,  the Company  filed with the  Commission a
                  Current  Report on Form 8-K regarding the press release issued
                  by the Company dated March 17, 1998  reporting an agreement to
                  limit   conversion   rights  and  provide  the  Company   with
                  redemption rights on the Company's Series B Preferred Stock.










































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



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

                                       











































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