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

                                   FORM 10-QSB

             (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1999

                                       OR

            ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

             For the transition period from __________ to __________


                        Commission file number: 000-28520


             -------------------------------------------------------
                                 n-Vision, Inc.
             (Exact name of registrant as specified in its charter)
             -------------------------------------------------------

                Delaware                                      54-1741313
     (State or other jurisdiction of                       (I.R.S. Employer
      incorporation or organization)                      Identification No.)



                            7680 Old Springhouse Road
                          Madison Building, First Floor
                             McLean, Virginia 22102
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (703) 506-8808


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or Section 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 outstanding shares of the registrant's  Common Stock, par
value $.01 per share, was 2,651,523 on August 6, 1999.

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<PAGE>


                                   FORM 10-QSB
                                      INDEX

                                                                          PAGE
                                                                         ------
PART I               FINANCIAL INFORMATION

         Item 1.     Financial Statements

                     Balance  Sheets  as of June 30,  1999
                     and December 31, 1998..........................          3

                     Statements  of  Operations   for  the
                     three  months  and six  months  ended
                     June 30, 1999 and June 30, 1998................          4

                     Statements of Cash Flows for the six
                     months ended June 30, 1999 and June
                     30, 1998.......................................          5

                     Notes to Financial Statements..................          6

         Item 2.     Management's Discussion and Analysis
                     of Financial Condition and Results of
                     Operations.....................................          7

PART II              OTHER INFORMATION

         Item 1      Legal Proceedings..............................         11

         Item 4      Submission of Matters to a Vote of
                     Security Holders...............................         11

         Item 6      Exhibits and Reports on Form 8-K...............         11

                     SIGNATURES.....................................         13

Exhibit  10.2        Consulting Agreement with Christopher..........         14
                     J. Lewis

Exhibit  27          Financial Data Schedule........................         17



                                       2
<PAGE>

PART I   FINANCIAL INFORMATION

Item 1   Financial Statements

                                 n-VISION, INC.
                                 BALANCE SHEETS


<TABLE>
<CAPTION>

                                                                          June 30,          December 31,
                                                                            1999                1998
                                                                        -------------- --------------------
                                                                         (Unaudited)          (Audited)
<S>                                                                <C>                 <C>
                                     ASSETS
CURRENT ASSETS
     Cash and cash equivalents                                     $        1,009,085  $        1,669,302
     Accounts Receivable                                                      245,600             236,454
     Inventories                                                              859,643             974,099
     Prepaid Expenses                                                          90,086              53,580
                                                                   ------------------- ------------------

TOTAL CURRENT ASSETS                                                        2,204,414           2,933,435

PROPERTY AND EQUIPMENT                                                        352,940             420,049
     (Net of Accumulated Depreciation)

OTHER ASSETS                                                                    7,105              13,801
                                                                   ------------------- ------------------

                                                                   $        2,564,459  $        3,367,285
                                                                   =================== ==================

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
     Current Maturities-Long Term Note Due ATS                     $           120,000  $          120,000
     Current Portion of Capital Lease Obligation                                     0               2,225
     Accounts Payable                                                          106,159             359,561
     Accrued Salaries and Benefits                                              64,235              64,280
     Deferred Revenue and Accrued Warranty Costs                                63,150             102,432
                                                                   ------------------- ------------------

TOTAL CURRENT LIABILITIES                                                      353,544             648,498


LONG TERM LIABILITIES
     Note Payable-ATS                                                          180,000             240,000

STOCKHOLDERS' EQUITY
     Common Stock, $.01 par value, 2,651,523 shares issued and                  26,515              26,515
     outstanding
     Paid in Capital                                                        10,473,679          10,473,679
     Accumulated Deficit                                                    (8,469,279)         (8,021,407)
                                                                   ------------------- ------------------

TOTAL STOCKHOLDERS' EQUITY                                                   2,030,915           2,478,787
                                                                   ------------------- ------------------
                                                                   $         2,564,459  $        3,367,285
                                                                   =================== ==================
</TABLE>

 The  accompanying  notes are an integral part of these statements.

                                       3
<PAGE>


                                 n-VISION, INC.
                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>

                                             Three months ended                         Six months ended
                                                   June 30                                  June 30
                                        ------------------------------            -----------------------------
                                            1999             1998                     1999            1998
                                        -------------     ------------            -------------    ------------
                                                 (Unaudited)                              (Unaudited)
<S>                                  <C>               <C>                     <C>              <C>
Sales                                $      339,869    $     870,027           $       647,469  $    1,969,899
Cost of Sales                               184,764          422,633                   310,282         997,509
                                     --------------    -------------            --------------  --------------
     Gross Margin                           155,105          447,394                   337,187         972,390

Operating Expenses
     General and Administrative             224,177          222,699                   453,868         518,993
     Product Development                     90,869           95,683                   140,654         181,640
     Marketing and Sales                     99,301          122,948                   200,989         263,225
                                     --------------    -------------            --------------  --------------
Income (Loss) from operations              (259,242)           6,064                  (458,324)          8,532

Non-Operating Income
     (Expense)
Interest Income                              12,124           21,104                    24,877          45,286
Interest Expense                             (7,200)         (10,236)                  (14,425)        (20,672)
                                     --------------    -------------            --------------  --------------
Loss before income taxes                   (254,318)          16,932                  (447,872)         33,146

     Income Tax expense                           -                -                         -               -
                                     --------------    -------------            --------------  --------------
Net Income (Loss)                    $     (254,318)   $      16,932           $      (447,872) $       33,146
                                     ==============    =============           ===============  ==============

Weighted average shares outstanding       2,651,523        2,646,836                 2,651,523       2,646,836
                                     ==============    =============           ===============  ==============

Income (Loss) per Share              $         (.10)   $         .01           $          (.17) $          .01
                                     ==============    =============           ===============  ==============

Weighted average shares                   2,651,523        2,687,897                2,651,523        2,688,083
Outstanding - Diluted
                                     ==============    =============           ===============  ==============

Income (Loss) per Share -
Diluted                                        (.10)             .01                      (.17)            .01
                                     ==============    =============           ===============  ==============

</TABLE>

 The  accompanying  notes are an integral part of these statements.

                                       4


<PAGE>


                                n-VISION, INC.
                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                Six months ended
                                                                                    June 30,
                                                                        ----------------------------------
                                                                            1999               1998
                                                                        -------------- -- ----------------
                                                                         (Unaudited)        (Unaudited)
<S>                                                                  <C>               <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH FLOWS FROM OPERATING ACTIVITIES
   Net Income (Loss)                                                 $      (447,872)  $          33,146
                                                                     ---------------   -----------------

   Adjustments to reconcile Net Income (Loss) to net cash used
   in operating activities
     Depreciation and amortization                                           132,432             127,531
     Loss on Disposal of Fixed Assets                                          4,897               1,404
     Changes in assets and liabilities
        (Increase) Decrease in accounts receivable                            (9,546)          (469,258)
        (Increase) Decrease in inventories                                   114,455             156,183
        (Increase) Decrease in prepaid expenses                              (36,506)              6,331
        (Increase) Decrease in Other Receivable                                  400             (36,448)
        (Decrease) Increase in accounts payable                             (253,401)           (191,048)
        (Decrease) Increase in accrued salaries and benefits                     (45)            (42,694)
        (Decrease) Increase in Deferred Revenue and Warranty                 (39,282)             53,018
          Reserve
                                                                     ---------------   -----------------
Total Adjustments                                                            (86,596)           (394,981)
                                                                     ---------------   -----------------
NET CASH USED IN OPERATING ACTIVITIES                                       (534,468)           (361,835)
                                                                     ---------------   -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                                        (64,265)            (15,452)
   Proceeds from sale of fixed assets                                            741                  -
                                                                     ---------------   -----------------

NET CASH USED IN INVESTING ACTIVITIES                                        (63,524)            (15,452)
                                                                     ---------------   -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Payments of Long Term Note - ATS                                          (60,000)            (60,000)
   Payments of Capital Lease Obligations                                      (2,225)            (12,025)
                                                                     ---------------   -----------------

NET CASH USED IN FINANCING ACTIVITIES                                        (62,225)            (72,025)
                                                                     ---------------   -----------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                        (660,217)           (449,312)

CASH AND CASH EQUIVALENTS AT JANUARY 1                                     1,669,302             876,805

                                                                     ===============   =================
CASH AND CASH EQUIVALENTS AT JUNE 30                                 $     1,009,085   $         427,493
                                                                     ===============   =================
</TABLE>

 The  accompanying  notes are an integral part of these statements.

                                       5



<PAGE>

                                 n-VISION, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE A   INTERIM FINANCIAL STATEMENTS

         The condensed  financial  statements  for the three month and six month
periods  ended June 30,  1999 and June 30,  1998 are  unaudited  and reflect all
adjustments  (consisting only of normal recurring adjustments) which are, in the
opinion  of  management,  necessary  for a fair  presentation  of the  financial
position and operating results for the interim period.  The condensed  financial
statements should be read in conjunction with the audited  financial  statements
and notes  thereto,  together  with  management's  discussion  and  analysis  of
financial condition and results of operations, contained in the Company's Annual
Report to  Shareholders  for the year ended  December 31,  1998.  The results of
operations  for the  three  months  ended  June  30,  1999  are not  necessarily
indicative of the results for the entire fiscal year ending December 31, 1999.
         In preparing financial statements in conformity with generally accepted
accounting  principles  management is required to make estimates and assumptions
that affect the reported  amounts of assets and  liabilities  at the date of the
financial  statements  and revenue and  expenses  during the  reporting  period.
Actual results could differ from those estimates.

NOTE B   EARNINGS PER SHARE

         In 1997,  the Financial  Accounting  Standards  Board issued  Financial
Accounting  Standards No. 128 - "Earnings per Share." Statement 128 replaces the
presentation of primary and fully diluted earnings per share ("EPS") pursuant to
Accounting  Principles  Board Opinion No. 15 with the  presentation of basic and
diluted EPS. Basic EPS excludes  dilution and is computed by dividing net income
available to common  shareholders by the weighted  number of shares  outstanding
for the period.  Diluted EPS reflects the potential dilution that could occur if
securities or other contracts to issue common shares were exercised or converted
into common  shares and then  shared in the  earnings  of the  Company.  Options
granted to employees are accounted  for in  accordance  with APB 25,  whereby if
options  are priced at fair market  value or above at the date of the grant,  no
compensation expense is recognized.
         The  following  table sets forth the  reconciliation  between basic and
diluted EPS.

<TABLE>
<CAPTION>


Six Months Ended June 30,                                                    1999               1998
---------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                   <C>
NUMERATOR
   Net Income (Loss) available for common shareholders - Basic               (447,872)             33,146
      Income Adjustments                                                            -                   -
                                                                        ---------------     --------------
   Net Income (Loss) available for common shareholders - Diluted             (447,872)             33,146

DENOMINATOR
   Denominator for Basic EPS-weighted average shares                        2,651,523           2,646,836
   Effect for Dilutive Securities
     Employee Stock Options                                                         -              41,247
                                                                        ---------------     --------------
   Denominator for diluted EPS                                              2,651,523           2,688,083

---------------------------------------------------------------------------------------------------------
</TABLE>

                                       6
<PAGE>


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


Some   statements  in  this   Management's   Discussion  and  Analysis   contain
forward-looking  information  that involve a number of risks and  uncertainties,
the possible  realization  of which could have material  adverse  effects on the
Company's  operating  results.  Factors that may cause actual  results to differ
materially include:  development of new products, and rapid change in technology
that may displace products sold by the Company; the highly competitive market in
which the Company  operates;  dependence  upon a limited number of suppliers for
product components, fluctuation in the Company's quarterly results of operations
due to the timing of orders from customers; and other risk factors listed in the
Company's  SEC  filings  including  but not  limited  to Form SB-2  Registration
Statement dated April 2, 1996 and any amendments  thereto, as well as the Annual
Report to Shareholders for the year ended December 31, 1998.


GENERAL

n-Vision,  Inc.  ("Company"),   a  Delaware  corporation,   designs,   develops,
manufactures,  and markets  state-of-the-art  3D  immersive  displays for use in
advanced  visualization  applications,  products,  and  systems for a variety of
commercial,  industrial,  and military applications.  The Company's products and
systems are marketed  worldwide,  but principally to customers in North America,
Europe, and the Pacific Rim. The Company's customers include BMW, Boeing,  Johns
Hopkins University,  Lockheed Martin, NASA, Raytheon, U.S. Air Force, U.S. Navy,
Volvo, and a subsidiary of The Walt Disney Company, among others.


FINANCIAL CONDITION

SIX MONTHS PERIOD ENDED JUNE 30, 1999
For the six months  ended June 30,  1999,  the  Company  reported  cash and cash
equivalents  of  $1,009,085,  a 39%  decrease  from  December  31, 1998 when the
Company reported cash and cash  equivalents of $1,669,302.  This decrease is due
to the lower level of revenue and  increase in losses in the first six months of
the year.  Accounts  receivable at June 30, 1999 was 245,600,  an increase of 4%
from the December 31, 1998 balance of $236,454.  Inventories decreased by 12% to
$859,643  from $974,099 at December 31, 1998.  Net Property  Plant and Equipment
decreased  by 16% from  $420,049  at  December  31, 1998 to $352,940 at June 30,
1999. This decrease is the result of current year  depreciation  rates.  Current
liabilities  decreased  by 45% to  $353,544  on June 30,  1999 from  $648,948 on
December 31, 1998. Accounts payable decreased by 70% to 106,159 on June 30, 1999
from $359,561 on December 31, 1998.  This decrease is  attributable to inventory
purchases  made at the end of 1998 that were paid in the first  quarter of 1999.
Accrued salaries and vacation remained  relatively  unchanged.  Deferred revenue
and accrued warranty costs decreased by 38% to $63,150 from $102,432 at December
31, 1998.  The long-term  portion of the unsecured note payable to ATS decreased
by 25% during the past six months to $180,000.  The outstanding  balance of this
loan now stands at $300,000 with interest due on principal outstanding of 8% per
annum.  Principal  payments of $60,000  are payable  twice each year in June and
December.  Annual  maturities  of this note for each of the next three years are
$120,000, after which the note will be paid in full.


RESULTS OF OPERATIONS

QUARTER ENDED JUNE 30, 1999 COMPARED TO QUARTER ENDED JUNE 30, 1998
For the three  months  ended

                                       7
<PAGE>

June 30, 1999, the Company reported revenue of $339,869 from the sale of 8 units
of its immersive  display products and systems,  a 61% decrease  compared to the
same period  ended June 30, 1998 when the Company  reported  revenue of $870,027
from the sale of 59 units.  The  Company's  1998 level of revenue was  primarily
attributable  to the  delivery of display  systems to a  subsidiary  of The Walt
Disney Company, which was completed in 1998. The Company's gross margin on sales
was 46% in the second  quarter of 1999 compared to 52% in the second  quarter of
1998. As of June 30, 1999 the Company had a backlog of delivered and undelivered
products and services of approximately $204,147.

Operating  expenses  for the three  months  ended  June 30,  1999  decreased  to
$414,347  when  compared to the same three month period in 1998 where  operating
expenses  where  $441,330.  The decrease in operating  expenses was the combined
result of lower product development and marketing and sales costs. Management is
continuing  to evaluate the cost  structure of the Company so as to determine if
additional  savings  can be made.  No  assurances  can be made that costs can be
decreased or maintained at the current rate of growth of the Company.

For the quarter ended June 30, 1999, the Company reported a loss from operations
of $259,242  compared to income from operations of $6,064 for the same period in
1998. The decrease is primarily  attributable to decreased revenues. The Company
intends to  continue  to  aggressively  market its  current  products as well as
introduce new products so as to improve  revenue  growth.  No assurances  can be
made,  however,  that revenue will  increase and that margins can be improved or
sustained at the current levels.

Non-operating  income  for the three  months  ended  June 30,  1999 was  $12,124
compared  to $21,104  for the same  three  month  period in 1998.  Non-operating
expenses  were $7,200 for the second  quarter in 1999 compared to $10,236 in the
second  quarter in 1998,  resulting in a positive net interest  margin of $4,924
for the second  quarter in 1999  compared to a positive net  interest  margin of
$16,932 for the second  quarter in 1998.  The  decrease  in interest  margin was
primarily attributable to lower cash on hand.

For the quarter ended June 30, 1999, the Company reported a net loss of $254,318
and loss per share of $0.10 compared to a net profit of $16,932 and earnings per
share of $0.01 for the same three month period in 1998.  The primary  cause is a
decrease in revenues.

SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO SIX MONTHS ENDED JUNE 30, 1998
For the six months ended June 30, 1999, the Company reported revenue of $647,469
from the sale of 13 units of its immersive  display products and systems,  a 67%
decrease  compared  to the same  period  ended  June 30,  1998 when the  Company
reported  revenue of $1,969,899  from the sale of 90 units.  The Company's  1998
level of revenue was primarily  attributable  to the delivery of display systems
to a subsidiary of The Walt Disney  Company,  which was  completed in 1998.  The
Company's gross margin on sales was 52% in the first six months of 1999 compared
to 49% in the first six months of 1998.

Operating  expenses for the six months ended June 30, 1999 decreased to $795,511
when compared to the same six-month period in 1998 where operating expenses were
$963,858.  The decrease in operating  expenses was the combined  result of lower
product development, general and administrative, and marketing and sales costs.

For the six  months  ended  June 30,  1999,  the  Company  reported  a loss from
operations of $458,324 compared to income from operations of $8,532 for the same
period in 1998.  The decrease is primarily  attributable  to decreased  revenues
during 1999 when  compared to the same  period in 1998.  The Company  intends to
continue to  aggressively  market its current  products as well as introduce new
products so as to improve  revenue growth.  No assurances can be made,  however,
that this will have a positive impact on revenues or margins.

Non-operating income for the six months ended June 30, 1999 was $24,877 compared
to $45,286 for the same six month period in 1998.  Non-operating  expenses  were
$14,425  for the first six months of 1999  compared  to $20,672  during the same
period in 1998,  resulting in a positive net interest  margin of $10,452 for the
first six months of 1999  compared to a positive net interest  margin of $24,614
for the same  period in 1998.  The  decrease in  interest  margin was  primarily
attributable to lower cash on hand.
                                       8

<PAGE>

For the six  months  ended June 30,  1999,  the  Company  reported a net loss of
$447,872  and loss per share of $0.17  compared  to a net profit of $33,146  and
earnings per share of $0.01 for the same six month  period in 1998.  The primary
cause is a decrease in revenues during 1999.


LIQUIDITY AND CAPITAL RESOURCES
Working  capital  totaled  $1,850,870  as of June 30, 1999 compared to a working
capital  balance of  $2,785,943  as of June 30, 1998.  The decrease is primarily
attributable to operating losses  sustained  during the past twelve months.  The
Company believes that the current level of working capital is sufficient to meet
its needs through the end of the second quarter of 2000.  However, no assurances
can be made to that effect.  Longer-term  cash  requirements,  other than normal
operating  expenses,  are  anticipated  for  the  development  of new  products,
financing of growth,  and the possibility of acquisitions of related  businesses
or technologies.

The  Company has  1,380,000  Class A warrants  for $11.00 per share  outstanding
which may be exercised  during a four-year  period  expiring  May 29, 2001.  The
warrants  are also  subject  to  redemption  at the  Company's  election  if the
Company's  common  stock  price  equals  or  exceeds  $18.00  per  share  for 20
consecutive trading days within a period of 30 days. The Company,  however,  can
make no assurances  that  investors  will elect to exercise the warrants or that
the  required  conversion  price or  redemption  price can be reached  since the
current trading price has been  approximately  in the $0.12-$0.50  range.  Until
operations improve,  and the Company obtains additional  underwriting support to
replace  its prior  underwriter,  who is no longer in  business,  the  Company's
ability  to  generate  proceeds  from  the  conversion  of the  warrants  may be
adversely affected.


INCOME TAXES
The Company is  organized  as a C  Corporation  and pays income taxes based upon
accrual based taxable income adjusted for differences in the timing of reporting
certain expenses for tax and financial statement purposes.  The Company's income
taxes  payable,  if any,  that may arise in the  future may be offset by credits
available for certain research and development expenditures incurred.

As of December  31,  1998,  the Company had a net  operating  loss  carryforward
available  to  offset  future   taxable   income   generated   through  2018  of
approximately $3,800,000.  The deferred tax asset associated with these benefits
has been fully  reserved in the Company's  financial  statements  because of the
uncertainty  surrounding  future  profitability.  In the  event of a  change  in
control of the Company, use of such a carryforward could be reduced.


YEAR 2000 ISSUES
The  Company  is aware of the issues  associated  with the  programming  code in
existing  computer systems as the Year 2000 approaches.  The "Year 2000 Problem"
is pervasive and complex as virtually every computer  operation will be affected
in some way by the  rollover  of the  two-digit  year  value to 00. The issue is
whether computer systems will properly recognize date sensitive information when
the year changes to 2000. If this  situation  occurs,  the potential  exists for
computer system failures or miscalculations  by computer  programs,  which could
disrupt operations.

The Company has  conducted a review of its internal  computer and other  systems
deemed to be date sensitive to assess its exposure to the Year 2000 problem. The
Company has already  modified or replaced  certain internal systems that are not
Year 2000 compliant.  Based upon the review,  management  believes that the Year
2000 problem will not have a material adverse effect on the internal  operations
of the Company.

                                       9
<PAGE>

Additionally,  the Company is communicating with its major vendors and suppliers
to determine their state of readiness  relative to the Year 2000 problem and the
Company's  exposure to third party Year 2000  issues.  To date,  the Company has
received  responses from most major vendors and suppliers,  indicating that they
will be Year 2000 ready. However,  there can be no guarantee that the systems of
other companies,  on which the Company's  business relies will be converted in a
timely manner, or that representations made to the Company by third parties will
be  accurate.  As a  result,  the  failure  of a major  vendor  or  supplier  to
adequately  address their Year 2000 problem could have a material adverse effect
on the operations of the Company.

The Company's Year 2000 conversion  efforts have not been budgeted or tracked as
separate projects, but have been occurring in conjunction with normal sustaining
activities.  All costs  related to the  Company's  Year 2000  problem  are being
expensed  as  incurred,  while the cost of new  hardware  or  software  is being
capitalized  or amortized over its expected  useful life.  The costs  associated
with Year 2000  compliance  have not been and are not anticipated to be material
to the Company's financial condition or results of operations.  Specifically, as
of June 30,  1998,  the  Company  has spent less than  $60,000  and  anticipates
spending less than $5,000  thereafter.  These costs are based upon  management's
best estimates.  However, there can be no guarantee that these estimates will be
achieved  and actual  results  could  differ  from these  plans.  The  Company's
contingency plan relative to the Year 2000 problem includes  readiness to switch
to Year 2000  compliant  vendors  or  stockpiling  raw  materials  in the fourth
quarter of 1999.

The Company's products make no internal calculations regarding dates. Therefore,
the Company's  products do not pose a Year 2000 compliance  issue.  Although the
Company  has no reason to  conclude  that any  specific  supplier  represents  a
material  risk, the most likely risk would entail  production  disruption due to
inability  of  suppliers,  some of whom  represent  the sole source of component
parts for certain items, to deliver such critical  parts.  The Company is unable
to  quantify  such a  scenario,  but it could  potentially  result in a material
adverse effect on results of operations, liquidity or financial condition of the
Company.

The  preceding  Year 2000  issue  discussion  contains  various  forward-looking
statements,  which  represent the  Company's  belief or  expectations  regarding
future  events.  When used in the Year 2000  discussion,  the words  "believes,"
"expects,"   "estimates"  and  similar  expressions  are  intended  to  identify
forward-looking   statements.   Forward-looking   statements  include,   without
limitation,  the  Company's  expectations  as  to  when  it  will  complete  the
renovation  and testing phases of its Year 2000 program as well as its Year 2000
contingency plans; its estimated cost of achieving Year 2000 readiness;  and the
Company's  belief that its  internal  systems  will be Year 2000  compliant in a
timely  manner.  All  forward-looking  statements  involve a number of risks and
uncertainties  that could cause the actual results to differ materially from the
projected results. Factors that may cause these differences include, but are not
limited  to, the  availability  of  qualified  personnel  and other  information
technology  resources;  the ability to identify and renovate all date  sensitive
lines of computer code or to replace embedded computer chips in affected systems
and  equipment;  and the actions of  government  agencies or other third parties
with respect to Year 2000 problems.


SEASONALITY
Based on its limited  experience to date,  the Company  believes that its future
operating results will not be subject to seasonal changes. Such effects,  should
they occur,  might become apparent in the Company's  operating  results during a
period of  expansion.  However,  the  Company  can make no  assurances  that its
business can be significantly expanded.

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<PAGE>


PART II  OTHER INFORMATION

ITEM 1. -   LEGAL PROCEEDINGS

         The Company is not involved in any pending legal proceedings other than
legal  proceedings  occurring  in the ordinary  course of  business.  Management
believes that none of these legal proceedings, individually or in the aggregate,
will have a material  adverse  impact on the results of  operations or financial
condition of the Company.

ITEM 4. -   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

On May 7, 1999, the Annual Meeting of  Shareholders  of the Company was held. At
that meeting,  (a) the  following  person was elected as director to serve until
the  expiration  of the terms  indicated and (b) the  shareholders  ratified the
appointment  of  Grant  Thornton  LLP as the  Corporation's  independent  public
accountants  for the year 1999 with 2,511,643 votes for, 3,350 votes against and
800 abstentions.

The  number of votes  cast for,  against,  as well as  abstentions  to each such
matter,  including a separate  tabulation with respect to each director  nominee
was as follows:

(a) Election of Director:

                           Expiration                Votes
Director                   of Term      Votes For    Against   Abstentions
--------                   -------      ---------    -------   -----------
Ronald C. Wilgenbusch      2002         2,485,668    30,125    0

The term of office as a director  continued  after the meeting for the following
persons (expiration of term in parenthesis):
Christopher J. Lewis (2000);  Delmar J. Lewis (2001);  and Claude H. Rumsey, Jr.
(2001).

ITEM 6. -   EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS
<TABLE>

<S>         <C>       <C>
             List of Exhibits.
             3.1**    Amended and Restated Certificate of Incorporation of the Company.
             3.2*     Amended and Restated Bylaws of the Company.
             4.1*     Specimen Copy of Common Stock Certificate.
             4.2*     Specimen Copy of Class A Warrant.
             4.3*     Form of Warrant Agreement.
             10.1*    Employment Agreement with Delmar J. Lewis, as amended.
             10.2     Consulting Agreement with Christopher J. Lewis.
             10.3*    Asset Purchase Agreement dated November 1, 1994.
             11.0     Computation of Per Share Earnings  (Incorporated  by reference to  Notes to Financial Statements included
                      herein).
             27.0     Financial Data Schedule
</TABLE>

                                       11
<PAGE>

(B)  REPORTS ON FORM 8-K
Reports on Form 8-K were filed on the following  dates during the quarter ending
June 30, 1999.

FILE DATE        ITEM REPORTED
---------        -------------
April 12, 1999   Sale of stock by n-Vision President Christopher J. Lewis.

May 28, 1999     Resignation of n-Vision President Christopher J. Lewis and
                 appointment of Claude H. Rumsey, Jr. as Acting President.

-----------------
*    Incorporated  herein by reference  into this  document from the Exhibits to
     Form  SB-2  Registration  Statement,  filed  on  April  19,  1996,  and any
     amendments thereto (Registration No. 333-3098).

**   Incorporated  herein  by  reference  into  this  document  from  the  Proxy
     Statement  for the Special  Meeting of  Stockholders  of the Company  dated
     October 19, 1998.

                                       12
<PAGE>


SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant has duly caused this report to be signed by the undersigned thereunto
duly authorized.

Dated:   August 13, 1999


                                      n-VISION, INC.
                                     (Registrant)


                                     /s/Eric A. Hall
                                     ------------------------------------------
                                     Eric A. Hall
                                     Chief Financial Officer
                                     Principal Financial and Accounting Officer)


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