UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark one)

      [X]  Quarterly  report  pursuant to Section 13 or 15(d) of the  Securities
      Exchange Act of 1934 for the quarterly period ended September 30, 2000

                                       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: 1-14128

                              EMERGING VISION, INC.

             (Exact name of Registrant as specified in its Charter)
                   (formerly known as Sterling Vision, Inc.)

              New York                                  11-3096941
            ------------                              --------------
      (State of Incorporation)              (IRS Employer Identification No.)

                     1065 Avenue of the Americas, 31st Floor
                            New York, New York 10018
           -----------------------------------------------------------
           (Address of Principal Executive Offices, including Zip Code)

                                 (646) 452-2500
              (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
                   -----             -----


                      APPLICABLE ONLY TO CORPORATE ISSUERS:

      There were 25,454,231 shares outstanding of the Registrant's Common Stock,
par value $.01 per share, as of November 7, 2000.


<PAGE>

Item 1.  Financial Statements

      EMERGING VISION, INC. (f/k/a STERLING VISION, INC.) AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                             (Dollars In Thousands)


<TABLE>
<CAPTION>

                                                                                   September 30,    December 31,
                                                                                        2000            1999
                                                                                  --------------    -------------
ASSETS                                                                              (Unaudited)
<S>                                                                                  <C>               <C>
Current Assets:
     Cash and cash equivalents                                                       $  8,315          $    108
     Receivables                                                                           36                 -
     Prepaid expenses and other current assets                                          4,743                 -
     Net assets of discontinued operations                                              4,564                69
                                                                                     --------          --------
         Total Current Assets                                                          17,658               177

Property and equipment, net                                                               902                 -
Other assets                                                                            2,176             1,000
Net assets of discontinued operations                                                  16,273            19,506
                                                                                     --------          --------
         Total Assets                                                                $ 37,009          $ 20,683
                                                                                     ========          ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
     Accounts payable and accrued liabilities                                        $ 10,246          $      -
     Current portion of long-term debt                                                  1,065             5,824
                                                                                     --------          --------
         Total Current Liabilities                                                     11,311             5,824
                                                                                     --------          --------

Long-term debt                                                                              -               698
                                                                                     --------          --------
         Total Liabilities                                                             11,311             6,522
                                                                                     --------          --------

Contingencies (Note 4)

Shareholders' Equity:
     Preferred stock, $.01 par value per share; authorized 5,000,000 shares:
         Senior Convertible Preferred Stock, $100,000 liquidation preference
             per share; 3 and 21 shares issued and outstanding, at
             September 30, 2000 and December 31, 1999, respectively                       287             2,417
         Series B Convertible Preferred Stock, $7.00 liquidation preference
             per share; no shares issued or outstanding                                     -                 -
     Common stock, $.01 par value; authorized 50,000,000 shares;
             25,559,231 and 16,676,630 shares issued and outstanding, at
             September 30, 2000 and December 31, 1999, respectively                       256               167
     Additional paid-in capital                                                       119,406            55,023
     Accumulated deficit                                                              (94,251)          (43,446)
                                                                                     --------          --------
         Total Shareholders' Equity                                                    25,698            14,161
                                                                                     --------          --------
         Total Liabilities and Shareholders' Equity                                  $ 37,009          $ 20,683
                                                                                     ========          ========


                      See accompanying notes to Consolidated Condensed Financial Statements.

                                                           2
</TABLE>
<PAGE>



      EMERGING VISION, INC. (f/k/a STERLING VISION, INC.) AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (In Thousands, Except Per Share Data)

<TABLE>
<CAPTION>

                                                                For the Three Months           For the Nine Months
                                                                 Ended September 30,            Ended September 30,
                                                                 2000            1999           2000          1999
                                                               --------        --------       --------      --------
<S>                                                            <C>             <C>            <C>           <C>
  Revenues:
       Net revenues                                            $      -        $      -       $    108      $      -
                                                               --------        --------       --------      --------
  Total revenues                                                      -               -            108             -
                                                               --------        --------       --------      --------

  Costs and Expenses:
       Cost of sales                                                  -               -            100             -
       General and administrative expenses                        1,308               -          2,307             -
       Web site development costs                                   423               -          4,422             -
       Interest income                                             (157)              -           (189)            -
                                                               --------        --------       --------      --------
  Total costs and expenses                                        1,574               -          6,640             -
                                                               --------        --------       --------      --------
  Loss before provision for income taxes                         (1,574)              -         (6,532)            -
  Provision for income taxes                                          -               -              -             -
                                                               --------        --------       --------      --------
  Loss from continuing operations                                (1,574)              -         (6,532)            -

  (Loss) Income from discontinued operations                     (4,171)            112        (10,823)          872
                                                               --------        --------       --------      --------
  Net (loss) income                                            $ (5,745)       $    112       $(17,355)     $    872
                                                               ========        ========       ========      ========

  Per Share Information (Note 3):
       Basic:
           Loss from continuing operations                     $   (.06)       $      -       $  (1.73)     $   (.02)
           (Loss) Income from discontinued operations              (.16)            .01          (0.47)          .06
                                                               --------        --------       --------      --------
           Net (loss) income                                   $   (.22)       $    .01       $  (2.20)     $    .04
                                                               ========        ========       ========      ========
     Diluted:
           Loss from continuing operations                     $   (.06)       $   (.09)      $  (1.73)     $   (.11)
           (Loss) Income from discontinued operations              (.16)            .01          (0.47)          .05
                                                               --------        --------       --------      --------
           Net (loss) income                                   $   (.22)       $   (.08)      $  (2.20)     $   (.06)
                                                               ========        ========       ========      ========
  Shares used in computing per share information:

           Basic                                                 25,559          15,174         23,068        15,118
                                                               ========        ========       ========      ========
           Diluted                                               25,559          16,124         23,068        16,068
                                                               ========        ========       ========      ========



                      See accompanying notes to Consolidated Condensed Financial Statements.

                                                      3
</TABLE>

<PAGE>



      EMERGING VISION, INC. (f/k/a STERLING VISION, INC.) AND SUBSIDIARIES

                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In Thousands)

<TABLE>
<CAPTION>

                                                                                   For the Nine Months Ended
                                                                                          September 30,
                                                                                      2000             1999
                                                                                   ---------        ---------
Cash flows from operating activities:
<S>                                                                                <C>              <C>
     Net loss from continuing operations                                           $ (6,532)        $      -
     Adjustments to reconcile net loss from continuing operations to
       net cash used in operating activities:
             Depreciation and amortization                                               30                -
             Non-cash compensation                                                       47                -
         Changes in assets and liabilities:
                  Other receivables                                                     (36)               -
                  Prepaid expenses and other current assets                           3,157                -
                  Other assets                                                          674                -
                  Accounts payable and accrued liabilities                            1,053                -
                                                                                   --------         --------
Net cash used in operating activities                                                (1,607)               -
                                                                                   --------         --------

Cash flows from investing activities:
     Purchases of property and equipment                                               (932)               -
                                                                                   --------         --------
Net cash used in investing activities                                                  (932)               -
                                                                                   --------         --------

Cash flows from financing activities:
     Proceeds from the exercise of stock options and warrants                         7,692                -
     Payment of price protection guarantee                                                -             (386)
     Payments on long-term debt                                                      (4,730)          (1,825)
     Net proceeds from the issuance of Series B Convertible Preferred Stock          10,618                -
                                                                                   --------         --------
Net cash provided (used) by financing activities of continuing operations            13,580           (2,211)
                                                                                   --------         --------
Net cash provided (used) by continuing operations                                    11,041           (2,211)
                                                                                   --------         --------
Net cash (used in) provided by discontinued operations                               (2,834)           2,978
                                                                                   --------         --------
Net increase in cash and cash equivalents                                             8,207              767
Cash and cash equivalents - beginning of period                                         108              828
                                                                                   --------         --------
Cash and cash equivalents - end of period                                          $  8,315         $  1,595
                                                                                   ========         ========


                      See accompanying notes to Consolidated Condensed Financial Statements.

                                                   4
</TABLE>
<PAGE>



      EMERGING VISION, INC. (f/k/a STERLING VISION, INC.) AND SUBSIDIARIES
            CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
                                   (Unaudited)
                     (In Thousands, Except Number of Shares)

<TABLE>
<CAPTION>

                                    Series B Convertible  Senior Convertible                    Additional                 Total
                                     Preferred Stock      Preferred Stock      Common Stock     Paid-In    Accumulated Shareholders'
                                     Shares      Amount   Shares     Amount    Shares    Amount Capital    Deficit         Equity
                                    ----------- --------- ------    -------- ----------  ------ ---------- ----------- -------------

<S>                                 <C>         <C>       <C>       <C>      <C>         <C>    <C>        <C>         <C>
Balance - December 31, 1999                -    $      -    21      $ 2,417  16,676,630   $167   $ 55,023   $(43,446)     $  14,161

Issuance of Common Stock  upon
 conversion of Senior Convertible
  Preferred Stock                          -           -   (18)      (2,130)  2,468,334     25     23,812    (21,707)            -
Exercise of stock options and warrants     -           -     -            -   2,048,460     20      7,672          -          7,692
Issuance of Common Stock for
 consulting services                       -           -     -            -   1,010,000     10      9,798          -          9,808
Issuance of Series B Convertible
 Preferred Stock                     1,677,570         -     -            -           -      -      6,239          -          6,239
Issuance of warrants in connection
 with Series B Convertible
  Preferred Stock                          -           -     -            -           -      -      4,379          -          4,379
Accretion of dividends on Series B
 Convertible Preferred Stock               -      11,473     -            -           -      -          -    (11,743)             -
Issuance of Common Stock  upon
 conversion of Series B Convertible
 Preferred Stock                    (1,677,570)  (11,743)    -            -   3,355,140     34     11,709          -              -
Issuance of Common Stock  to
 franchisees                               -           -     -            -         667      -          -          -              -
Stock-based compensation                   -           -     -            -           -      -         47          -             47
Extinguishment of related party debt       -           -     -            -           -      -        727          -            727
Net loss                                   -           -     -            -           -      -          -    (17,355)       (17,355)
                                    ----------- --------- ------    -------- ----------  ------ ---------- ----------- -------------
Balance - September 30, 2000               -    $      -     3      $   287  25,559,231   $256   $119,406   $(94,251)     $  25,698
                                    =========== ========= ======    ======== ==========  ====== ========== =========== =============


                                See accompanying notes to Consolidated Condensed Financial Statement.

                                                                        5
</TABLE>

<PAGE>
      EMERGING VISION, INC. (f/k/a STERLING VISION, INC.) AND SUBSIDIARIES
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

NOTE 1

      The accompanying  Consolidated  Condensed Financial Statements of Emerging
Vision,  Inc.  (formerly  known  as  Sterling  Vision,  Inc.;  hereinafter,  the
"Registrant") and subsidiaries (collectively,  the "Company") have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information and in accordance with the  instructions to Form 10-Q and
Article  10 of  Regulation  S-X.  Accordingly,  they do not  include  all of the
information and footnotes required by generally accepted  accounting  principles
for complete financial statement presentation. In the opinion of management, all
adjustments  for a fair  statement of the results of  operations  and  financial
position  for the  interim  periods  presented  have  been  included.  All  such
adjustments are of a normal recurring nature. This financial  information should
be read in  conjunction  with the  Consolidated  Financial  Statements and Notes
thereto  included in the  Registrant's  Annual  Report on Form 10-K for the Year
Ended December 31, 1999.  There have been no changes in  significant  accounting
policies since December 31, 1999.

NOTE 2 - DISCONTINUED OPERATIONS

      The Company  previously  announced its  intentions to evolve from a retail
eye wear and vision services  operation to an Internet-based  portal supplying a
comprehensive   supply-chain   solution  for  manufacturers,   distributors  and
retailers in the optical industry.

     As a result of the foregoing,  on June 26, 2000, the Registrant's  Board of
Directors  approved  a plan  to  sell  the  Company's  Sterling  Optical  retail
division,  its majority-owned  subsidiary,  Insight Laser Centers, Inc., and the
assets  comprising  its  ambulatory  surgery  center  business and  subsequently
engaged an  investment  banking firm to assist in the sale of such  segements of
the  Company's  business.  The net assets,  operating  results and cash flows of
these  divisions are presented as  discontinued  operations in the  accompanying
Consolidated Condensed Financial Statements for all periods presented.

      In  connection  therewith,  the Company has made an initial  provision  of
approximately  $9,670,000  for  the  discontinued  operations.   This  provision
included  future  operating  losses,  expenses  associated  with the sale of its
divisions  and an estimate of loss upon  disposition.  As of September 30, 2000,
$9,265,000 of this  provision  remains  accrued as part of accounts  payable and
accrued liabilities on the accompanying Consolidated Condensed Balance Sheet.


                                       6

<PAGE>

      Summarized financial  information for these discontinued  operations is as
follows (in thousands):


FOR THE NINE MONTHS ENDED SEPTEMBER 30:

                                 Retail         Insight    Ambulatory
                                 Optical         Laser      Surgery      Total
                                ---------       --------   ----------  ---------
2000

Sales                           $  9,623        $ 2,225      $ 559     $ 12,407
Franchise-related revenues         8,292              2          -        8,294
                                --------        -------      -----     --------
Total revenues                    17,915          2,227        559       20,701
                                --------        -------      -----     --------
Loss before taxes                (10,248)          (541)       (34)     (10,823)
Income taxes                           -              -          -            -
                                --------        -------      -----     --------
Net loss                        $(10,248)       $  (541)     $ (34)    $(10,823)
                                ========        =======      =====     ========

1999

Sales                           $ 13,702        $ 3,621      $ 598     $ 17,921
Franchise-related revenues         8,858              -          -        8,858
                                --------        -------      -----     --------
Total revenues                    22,560          3,621        598       26,779
                                --------        -------      -----     --------
Income before taxes                  234            545         93          872
Income taxes                           -              -          -            -
                                --------        -------      -----     --------
Net income                      $    234        $   545      $  93     $    872
                                ========        =======      =====     ========



FOR THE THREE MONTHS ENDED SEPTEMBER 30:

                                 Retail         Insight    Ambulatory
                                 Optical         Laser      Surgery      Total
                                ---------       --------   ----------  ---------
2000

Sales                           $  2,907        $   635      $ 188     $  3,730
Franchise-related revenues         2,751              -          -        2,751
                                --------        -------      -----     --------
Total revenues                     5,658            635        188        6,481
                                --------        -------      -----     --------
(Loss) income before taxes        (3,943)          (239)        11       (4,171)
Income taxes                           -              -          -            -
                                --------        -------      -----     --------
Net (loss) income               $ (3,943)       $  (239)     $  11     $ (4,171)
                                ========        =======      =====     ========


1999

Sales                           $  4,092        $ 1,404      $ 193     $  5,689
Franchise-related revenues         2,851              -          -        2,851
                                --------        -------      -----     --------
Total revenues                     6,943          1,404        193        8,540
                                --------        -------      -----     --------
(Loss) income before taxes          (177)           266         23          112
Income taxes                           -              -          -            -
                                --------        -------      -----     --------
Net (loss) income               $   (177)       $   266      $  23     $    112
                                ========        =======      =====     ========


                                       7
<PAGE>

NOTE 3 - PER SHARE INFORMATION

      The following  table sets forth the  computation  of basic and diluted per
share information:
<TABLE>
<CAPTION>

                                                          For the Three Months Ended      For the Nine Months Ended
                                                                 September 30,                    September 30,
                                                              2000            1999            2000               1999
                                                          -----------    ------------     ------------       ------------
Numerator:
<S>                                                       <C>            <C>              <C>                <C>
     Loss from continuing operations                      $(1,574,000)   $         -      $ (6,532,000)    $         -

     Senior Convertible Preferred Stock dividends                   -              -                 -         (83,000)
     Effect of the induced conversion of Senior
        Conertible Preferred Stock                                  -              -       (21,707,000)       (153,000)
     Accretion of dividends on Series B Convertible
        Preferred Stock                                             -              -       (11,743,000)              -
                                                          -----------    -----------      ------------     -----------
     Numerator for basic loss per share - loss
        attributable to common shareholders                (1,574,000)             -       (39,982,000)       (236,000)

         Effect of dilutive securities:
             Senior Convertible Preferred Stock
               dividends                                            -              -                 -              (*)
         Effect of the assumed conversion of Senior
             Convertible Preferred Stock                           (*)    (1,402,000)               (*)     (1,568,000)
                                                          -----------    -----------      ------------     -----------
     Numerator for diluted loss per share - loss
        attributable to common shareholders                (1,574,000)    (1,402,000)      (39,982,000)     (1,804,000)
                                                          -----------    -----------      ------------     -----------

Basic:
     Loss attributable to common shareholders              (1,574,000)             -       (39,982,000)       (236,000)
     (Loss) Income from discontinued operations            (4,171,000)       112,000       (10,823,000)        872,000
                                                          -----------    -----------      ------------     -----------
     Net (loss) income (attributable) available to
       common shareholders                                $(5,745,000)   $   112,000      $(50,805,000)    $   636,000
                                                          ===========    ===========      ============     ===========

Diluted:
     Loss attributable to common shareholders              (1,574,000)    (1,402,000)      (39,982,000)     (1,804,000)
     (Loss) Income from discontinued operations            (4,171,000)       112,000       (10,823,000)        872,000
                                                          -----------    -----------      ------------     -----------
     Net (loss) income (attributable) available to
       common shareholders                                $(5,745,000)   $(1,290,000)     $(50,805,000)    $  (932,000)
                                                          ===========    ===========      ============     ===========

-------------------------------
(*) Excluded from calculation as the effect would have been anti-dilutive.

</TABLE>




                                       8
<PAGE>
<TABLE>
<CAPTION>

                                                          For the Three Months Ended      For the Nine Months Ended
                                                                 September 30,                    September 30,
                                                              2000            1999            2000               1999
                                                          ------------   ------------     ------------       ------------
Denominator:

<S>                                                        <C>            <C>              <C>                <C>
     Denominator for basic per share information -
        weighted-average shares outstanding                25,559,000     15,174,000       23,068,000         15,118,000
                                                           ----------     ----------       ----------         ----------
         Effect of dilutive securities:
             Options and warrants                                  (*)            (*)              (*)                (*)
             Effect of assumed conversion of Senior
                 Convertible Preferred Stock                       (*)       950,000               (*)           950,000
                                                           ----------     ----------       ----------         ----------
         Dilutive potential common shares                           -        950,000                -            950,000

                                                           ----------     ----------       ----------         ----------
     Denominator for diluted per share information -
        adjusted weighted-average shares outstanding       25,559,000     16,124,000       23,068,000         16,068,000
                                                           ==========     ==========       ==========         ==========


Basic:
     Loss from continuing operations                       $     (.06)    $        -       $    (1.73)        $     (.02)
     (Loss) Income from discontinued operations                  (.16)           .01            (0.47)               .06
                                                           ----------     ----------       ----------         ----------
     Net (loss) income                                     $     (.22)    $      .01       $    (2.20)        $      .04
                                                           ==========     ==========       ==========         ==========

Diluted:
     Loss from continuing operations                       $     (.06)    $     (.09)      $    (1.73)        $     (.11)
     (Loss) Income from discontinued operations                  (.16)           .01            (0.47)               .05
                                                           ----------     ----------       ----------         ----------
     Net (loss) income                                     $     (.22)    $     (.08)      $    (2.20)        $     (.06)
                                                           ==========     ==========       ==========         ==========
</TABLE>

------------------------------------
(*) Excluded from the calculation as the effect would have been anti-dilutive.


NOTE 4 - CONTINGENCIES

      The Company is, from time to time,  a party to  litigation  arising in the
ordinary  course  of  business.  In the  opinion  of  management,  there  are no
significant claims outstanding that are likely to have a material adverse effect
upon the consolidated financial condition of the Company.

NOTE 5 - RELATED PARTY TRANSACTION

     During the first quarter of 2000, Broadway Partners (a partnership owned by
certain of the  children  of certain of the  Company's  principal  shareholders)
accepted  from the Company its  $550,000  offer to purchase a certain  debenture
(previously  issued  by the  Company  in  connection  with  its  acquisition  of
substantially  all of the assets of Benson  Optical Co., Inc. and affiliates and
subsequently  purchased  by  Broadway  Partners)  and  having a then  discounted
present value of  approximately  $1,277,000.  The resulting  gain of $727,000 is
reflected as a capital contribution in the accompanying  Consolidated  Condensed
Statement of Shareholders' Equity.

NOTE 6 -WEB SITE DEVELOPMENT INITIATIVES

     The Company accounts for its web site development  costs in accordance with
EITF  Issue  00-02,  "Accounting  for Web Site  Development  Costs."  This issue
provides that, under certain circumstances, the accounting for specific web site
development  costs  be based  on a model  consistent  with  AICPA  Statement  of
Position ("SOP") 98-1,  "Accounting for the Costs of Computer Software Developed


                                       9

<PAGE>

or Obtained for Internal Use." Under SOP 98-1, costs are expensed or capitalized
according to the stage and related process of web site development to which they
relate.  Amortization of capitalized  costs begins at the point in time that the
web site becomes  operational.  Accordingly,  amortization has not yet commenced
with  respect  to  any  such  costs,  as the  related  web  sites  are  not  yet
operational.

     On February 11, 2000,  the Company  issued  1,000,000  shares of its Common
Stock  to Rare  Medium,  Inc.  ("Rare"),  pursuant  to the  terms  of a  certain
Professional  Services Master Agreement (the  "Agreement")  entered into between
Rare and the  Company.  Under the  terms of this  Agreement,  Rare will  provide
professional  services  to  assist  the  Company  with  its  web-based  business
strategy,  including the development of multiple web sites,  operations planning
and other services related to building its Internet  business.  The terms of the
Agreement  afford Rare a  price-protection  guarantee on any such shares sold in
the open  market at a price of less than $3.00 per share,  and  contain  certain
"lock-up"  provisions regarding the ability to sell such shares prior to certain
dates.  Additionally,  the  Company  paid to Rare a cash  fee of  $1,000,000  in
December 1999. Of the above-mentioned  consideration  (valued, in the aggregate,
at  $10,750,000),  $4,275,000  has  been  expensed  to date  for  various  costs
associated  with the Company's  development of its web site and included as part
of web  site  development  costs  on  the  accompanying  Consolidated  Condensed
Statement  of  Operations  for  the  nine  months  ended   September  30,  2000.
Additionally,  the Company has  capitalized  $1,850,000 as web site  development
costs which is reflected  within other assets on the  accompanying  Consolidated
Condensed  Balance  Sheet as of September  30, 2000.  The  remaining  balance of
$4,625,000 has been reflected in prepaid expenses and other current assets to be
expensed  as the  Company  progresses  with the  development  of its  e-commerce
initiatives.

      In December  1999,  the  Registrant  issued to MY2000,  LLC (the "Holder")
warrants to purchase  2,500,000  shares of its Common Stock in exchange for such
Holder's oral agreement to render  advisory  services to the Company's  Board of
Directors with respect to its new Internet  business and strategies.  During the
first quarter of 2000,  1,000,000 of these  warrants were exercised at $2.00 per
share. The remaining warrants were outstanding as of September 30, 2000.

NOTE 7 - PREFERRED STOCK

1998 Debentures/Senior Convertible Preferred Stock

      In February  1998,  the Company  entered into  Convertible  Debentures and
Warrants  Subscription  Agreements with certain investors in connection with the
private  placement of units  consisting of an aggregate of $3,500,000  principal
amount of convertible  debentures  (collectively,  the "1998 Debentures") and an
aggregate of 700,000  warrants  (collectively,  the "1998  Warrants").  The 1998
Warrants initially entitled the holders thereof to purchase up to 700,000 shares
of the Company's Common Stock at a price of $5.00 per share.

      Subsequent  to the  date of the  Company's  issuance  and sale of the 1998
Debentures and 1998 Warrants, the Company and the holders thereof (collectively,
the  "Original  Holders")  determined  that  the  issuance  and sale of the 1998
Debentures  and 1998 Warrants  should be rescinded  based upon a certain  mutual
mistake of the Company and the Original Holders. Accordingly, on April 14, 1998,
the  Company  and the  Original  Holders  entered  into an  Exchange  Agreement,
effective as of February 17, 1998,  whereby the 1998  Debentures  were rescinded
and declared  null and void from  inception and were  exchanged  for  $3,500,000
stated value (approximately  $4,025,000 fair value) of a series of the Company's
Preferred  Stock,  par value $.01 per share (the "Senior  Convertible  Preferred
Stock"),  and the 1998  Warrants  were  exchanged  for new  warrants  (the  "New
Warrants") entitling the Original Holders to purchase,  until February 17, 2001,
up to 700,000 shares of Common Stock at a price of $5.00 per share.

      The Senior Convertible  Preferred Stock originally required the Company to
pay  quarterly  dividends  (in  cash  or  registered  shares  of  Common  Stock)
calculated at the rate of 10% per annum, commencing May 17, 1998.  Additionally,
the Company at its option,  from and after  February 17,  1999,  was required to
either redeem (in cash or Common Stock) all of the Senior Convertible  Preferred
Stock at 105% of the then outstanding  stated value, based on a redemption price
of $5.00, or thereafter pay dividends thereon, calculated at the rate of 24% per
annum.   Finally,   the  Senior   Convertible   Preferred   Stock   contained  a
price-protection  guarantee  provision,   whereby  the  Company,  under  certain
circumstances,  would be required to pay to the holders the  difference  between
the $5.00  conversion  price and the selling price (net of  commissions)  of any
such shares sold by the holders.

                                       10

<PAGE>

      On January 4, 1999, the Company and the Original  Holders  entered into an
amendment  to the  original  subscription  agreements  to reduce the  conversion
price, from $5.00 to $4.00, of all shares of Senior Convertible  Preferred Stock
converted  into Common Stock on or prior to February 10, 1999, and eliminate the
price-protection   guarantee  provision  originally  applicable  to  the  Senior
Convertible Preferred Stock.

     On March 4, 1999,  effective as of February 11, 1999,  the Company and each
of the four remaining  Original Holders entered into another  amendment to their
Subscription  Agreements,  whereby the conversion  price of all then outstanding
shares of Senior  Convertible  Preferred  Stock was reduced from $5.00 to $3.00,
the date by which the Company  was  required  to redeem all  outstanding  Senior
Convertible  Preferred Stock was extended from February 17, 1999 to February 17,
2000, the requirement for the Company to pay dividends on the Senior Convertible
Preferred  Stock  from and  after  February  17,  1999 was  eliminated,  and the
exercise price of the outstanding New Warrants was reduced from $5.00 to $4.00.

      On January 13, 1999 and March 26, 1999,  certain of the  Original  Holders
exercised their right to convert an aggregate of $650,000 stated value of Senior
Convertible  Preferred Stock, into an aggregate of 175,000  registered shares of
the Company's Common Stock.

     On December 7, 1999,  the Company and each of the four  remaining  Original
Holders entered into a further amendment to the Subscription  Agreements,  which
served  to  reduce  the  conversion  price of all  outstanding  shares of Senior
Convertible Preferred Stock from $3.00 to $.75, reduce the exercise price of the
outstanding New Warrants from $4.00 to $2.00, eliminate the requirement that the
Company  redeem  the  Senior  Convertible  Preferred  Stock (at 105% of the then
stated value thereof) on February 20, 2000,  and eliminate the  price-protection
guarantee previously afforded the Original Holders with respect to any shares of
Common  Stock  sold  by any  holder  within  the 180 day  period  following  the
conversion of the Senior Convertible Preferred Stock into Common Stock.

      During the first quarter of 2000,  certain of the Original  Holders of the
Company's Senior Convertible Preferred Stock exercised their right to convert an
aggregate of $1,851,250 stated value of Senior Convertible Preferred Stock, into
an aggregate of 2,468,334  shares of the Company's Common Stock. As of September
30, 2000, there were 3 shares of Senior Convertible  Preferred Stock outstanding
with a stated value of $287,000.

Series B Convertible Preferred Stock

      During  the  first  quarter  of 2000,  the  Company  completed  a  private
placement  pursuant  to which  it sold an  aggregate  of  1,677,570  units  (the
"Units"),  each  Unit  consisting  of  one  share  of  the  Company's  Series  B
Convertible  Preferred  Stock,  par value  $.01 per  share,  with a  liquidation
preference of $7.00 per share (the "Series B Preferred Stock"),  and one warrant
(the "Series B Warrant") to purchase  one-half share of Series B Preferred Stock
at an exercise price, per one-half share, equal to $7.5875, exercisable from and
after the  expiration  of the six-month  period  following the date of the first
issuance of such Series B Warrants, for a period of 5 years thereafter.

      Each share of Series B Preferred  Stock was  automatically  converted into
two  shares  of the  Company's  Common  Stock  upon the  Company's  filing of an
amendment to its Certificate of Incorporation  (the "Amendment")  increasing its
authorized Common Stock to 50,000,000 shares, which was subject to the Company's
receipt of the  approval of a majority of its  shareholders.  Such  approval was
obtained on April 17, 2000. Each Series B Warrant was initially  exercisable for
one-half  share of  Series  B  Preferred  Stock;  however,  upon  the  automatic
conversion  of the Series B  Preferred  Stock into  Common  Stock,  the Series B
Warrants (to the extent not previously  exercised)  became  exercisable,  at the
same exercise price of $7.5875, for one share of Common Stock.

      In accordance with EITF 98-05, "Accounting for Convertible Securities with
Beneficial  Conversion Features or Contingently  Adjustable  Conversion Ratios,"
the net proceeds received in the private placement  (approximately  $10,618,000)
were allocated based on the relative fair values of the Series B Preferred Stock
and the Series B Warrants.  Accordingly,  approximately $6,239,000 was allocated
to the Series B Preferred  Stock and  $4,379,000  was  allocated to the Series B
Warrants.  The  approximately  $11,743,000  liquidation  value of the  1,677,570
shares of  Series B  Preferred  Stock  was  recorded  net of  issuance  costs of
approximately  $1,125,000,  and net of a full discount,  of which  approximately
$4,379,000 was attributable to the fair value of the Series B Warrants issued in
connection  therewith,  and  approximately  $6,239,000 was  attributable  to the
beneficial  conversion  feature embodied in the Series B Preferred  Stock.  This
discount was being accreted as preferred  dividends  through April 17, 2000, the
date on which all of the Series B Preferred Stock  automatically  converted into


                                       11


<PAGE>

shares of the Company's Common Stock, pursuant to the aforementioned increase in
authorized Common Stock, at a ratio of 1 to 2.

      In  connection  with the  private  placement,  the  Company  issued to the
placement  agents 500,000  warrants to purchase  shares of the Company's  Common
Stock at an exercise price of $7.59,  which warrants will expire on February 13,
2005.  The fair value of these  warrants  was  treated  as part of the  issuance
costs.

      The net proceeds  from such private  placement  are intended to be used by
the Company in connection with the development of its new Internet business.

NOTE 8 - RECLASSIFICATIONS

      Certain  reclassifications  have  been  made  to  prior  years'  financial
statements to conform to the current year presentation.

NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS

         Financial  instruments  that  potentially  subject  the  Company  to  a
concentration  of credit risk  consist of cash,  cash  equivalents  and accounts
receivable.  Cash and cash equivalents are deposited with high quality financial
institutions.  All highly liquid investments with an original maturity from date
of purchase of three months or less are considered to be cash  equivalents.  The
Company's  cash and cash  equivalents  are invested in various  investment-grade
money market accounts and recorded on the  accompanying  Consolidated  Condensed
Balance Sheet in the amount of $8,315,000.

NOTE 10 - DEBT

      On July 19, 2000, the Company and STI Credit  Corporation  ("STI") entered
into a further  amendment to the Loan Agreement  dated June 30, 1997, as amended
between the Company and STI, which provided that STI waive the default resulting
from the  Company's  failure,  as of December 31,  1999,  to comply with certain
financial  covenants  as  originally  contained  in the Loan  Agreement  and the
Company be required to satisfy and  discharge  its loan from STI, in full, on or
prior to December 31, 2000.

NOTE 11 - SUBSEQUENT EVENT

     On October 31,  2000,  the Company  announced a program to  repurchase,  in
accordance with the applicable  requirements  of the Securities  Exchange Act of
1934,  as amended,  up to  1,000,000  shares of its Common  Stock at  prevailing
prices  in  open  market  transactions   effected  during  the  one-year  period
commencing  November 1, 2000. The Company intends to fund such stock  repurchase
program from available  working capital.  As of November 7, 2000 the Company had
repurchased  105,000 shares of its Common Stock at an average price of $1.11 per
share.

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



      The Company  previously  announced its  intentions to evolve from a retail
eye wear and vision services  operation to an Internet-based  portal supplying a
comprehensive supply-chain solution to manufacturers, distributors and retailers
in the optical industry.

     As a result of the  foregoing,  on June 26, 2000,  the  Company's  Board of
Directors approved a plan to sell the Company's  Sterling Optical division,  its
majority-owned   subsidiary,   Insight  Laser  Centers,  Inc.,  and  the  assets
comprising its ambulatory surgery center business,  and subsequently  engaged an
investment  banking firm to assist in the sale of such segments of the Company's
business.

      The net assets,  operating  results and cash flows of these  divisions are
presented as discontinued operations in the accompanying  Consolidated Condensed
Financial Statements for all periods presented,  and consequently,  there are no
discussions related to these operations in Management's  Discussion and Analysis
of Financial Condition and Results of Operations for the periods presented.

                                       12

<PAGE>

FORWARD-LOOKING STATEMENTS

     This report  contains  certain  forward-looking  statements and information
relating to the Company that is based on the beliefs of the Company's management
as well  as  assumptions  made by and  information  currently  available  to the
Company's  management.  When  used  in  this  Report,  the  words  "anticipate",
"believe",  "estimate", "expect", and similar expressions, as they relate to the
Company or the Company's  management,  are intended to identify  forward-looking
statements. Such statements reflect the current view of the Company with respect
to future events,  are not guarantees of future  performance  and are subject to
certain  risks and  uncertainties.  These risks and  uncertainties  may include:
product  demand and market  acceptance  risks;  the  feasibility  of  developing
commercially  profitable  optical  e-commerce  services;  the effect of economic
conditions;  user acceptance;  success of transactions  with third parties;  the
impact of  competitive  products,  services  and pricing;  product  development,
commercialization  and  technological  difficulties;  the  effect of  government
regulation  of the  Internet  or optical  e-commerce  services;  the  outcome of
litigation;  and other risks  described  elsewhere  herein,  including those set
forth in  "--Management's  Discussion  and Analysis of Financial  Condition  and
Results of Operations"  below,  and in the Company's  Annual Report on Form 10-K
for the fiscal year ended  December 31, 1999.  Should one or more of these risks
or uncertainties materialize,  or should underlying assumptions prove incorrect,
actual results may vary materially  from those described  herein as anticipated,
believed,  estimated,  or expected.  The Company does not intend to update these
forward-looking statements.

RESULTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO SEPTEMBER 30,
1999

     Revenues for the three and nine month periods ended September 30, 2000 were
$0 and $108,000,  respectively,  whereas the Internet division did not exist for
the comparable  periods in 1999.  The increase for the  nine-month  period ended
September  30, 2000 is due to the Company  completing  its first  Internet  sale
during the second quarter of fiscal year 2000.

      General  and  administrative   expenses  were  $1,308,000  and  $2,258,000
respectively,  for the three and nine- month periods  ended  September 30, 2000.
These amounts were principally related to payroll,  payroll related costs, rent,
marketing and professional fees related to the Company's  e-commerce  (Internet)
development activities.

     The  Company's  gross  profit  margin  was 0% and 8% for the three and nine
month periods ended  September 30, 2000,  whereas the Internet  division did not
exist for the comparable period in 1999.

     Web site  development  costs were $423,000 and $4,471,000 for the three and
nine months  ended  September  30, 2000,  whereas the Internet  division did not
exist for the comparable  period in 1999.  This expense  related to planning and
advertising  costs of the  Company's  anticipated  web site  (see  Note 6 to the
accompanying financial statements).

LIQUIDITY AND CAPITAL RESOURCES

     The Company incurred a net loss from continuing operations of approximately
$(1,574,000)  and  $(6,532,000)  for the  three  and nine  month  periods  ended
September  30,  2000,  respectively,  and  had  cash  and  cash  equivalents  of
$8,315,000 as of September 30, 2000.

     For the nine months ended  September 30, 2000, cash flows used in operating
activities were $(1,607,000) whereas the Internet division did not exist for the
comparable  period in 1999.  This change was  primarily  due to the  decrease in
prepaid  assets  related to  amortization  of the  capitalized  development  and
advertising costs of the Company's proposed web site and an increase in accounts
payable and accrued liabilities.

     For the nine months ended  September 30, 2000, cash flows used in investing
activities were $(932,000),  whereas the Internet division did not exist for the
comparable  period  in 1999.  This  cash  outflow  was due to the  purchases  of
property and equipment during the nine month period ended September 30, 2000.

                                       13

<PAGE>

      For the nine months  ended  September  30,  2000,  cash flows  provided by
financing  activities were  $13,580,000,  whereas the Internet  division did not
exist for the  comparable  period in 1999.  The cash flows provided by financing
activities  were  principally  due to  proceeds  received  from the  exercise of
options  and  warrants,  as well as the  proceeds  received  from the  Company's
private  placement,  completed  in March 2000,  offset by payments on  long-term
debt.

     Shareholders'  equity  increased by $11,537,000 to $25,698,000 at September
30, 2000, as compared to $14,161,000 as of December 31, 1999.  This increase was
principally due to the conversion of the Company's Senior Convertible  Preferred
Stock, the exercise of stock options and warrants, the issuance of shares of the
Company's  Common Stock in partial  consideration  of consulting  services to be
rendered to the Company,  the issuance of Series B Convertible  Preferred  Stock
and the  issuance  of  warrants  in  connection  with the  Series B  Convertible
Preferred Stock.

     On October 31,  2000,  the Company  announced a program to  repurchase,  in
accordance with the applicable  requirements  of the Securities  Exchange Act of
1934,  as amended,  up to  1,000,000  shares of its Common  Stock at  prevailing
prices  in  open  market  transactions   effected  during  the  one-year  period
commencing  November 1, 2000. The Company intends to fund such stock  repurchase
program from available  working capital.  As of November 7, 2000 the Company had
repurchased  105,000 shares of its Common Stock at an average price of $1.11 per
share.

     The Company  believes that, in the furtherance of its business  strategies,
the Company's future capital  requirements will require  substantial  additional
capital in order to  implement  its  web-based  strategies;  and there can be no
assurance that such additional  capital will become available to it and, even if
available,   that  the  terms   thereof  will  be  acceptable  to  the  Company.
Additionally,  the Company is in the process of selling its non-Internet assets,
which should generate additional cash flow.

     The Company  believes  that,  based on its current  cash  position  and the
implementation  of the  plans  described  above,  sufficient  resources  will be
available  for the Company to continue in operation  through the next 12 months.
However,  there can be no  assurance  that the Company  will be able to generate
positive cash flows and, if it does,  that such cash flows will be sufficient to
adequately  fund its ongoing  operations and future plans. If the Company cannot
generate  sufficient  cash flows from  operations,  it may be  required  to seek
alternative  debt and/or equity  financing.  However,  there can be no assurance
that such debt and/or  equity  financing  will be  available to the Company when
necessary,  or on terms that are  attractive  to the Company.  Additionally,  as
previously  announced,  the  Company  intends to sell  substantially  all of its
non-Internet related assets,  however,  there can be no assurance that such sale
will be completed,  or that any such sale will be completed on terms  reasonably
satisfactory to the Company.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

      The  Company   maintains   certain  equity   instruments  with  beneficial
conversion terms and certain  contractual  price-protection  provisions that are
indexed to the  performance  of the  Company's  Common Stock.  Accordingly,  the
Company may bear a financial  risk in the form of future cash or stock  payments
made to  equalize  any stock  price  declines  that are  indexed  to a  specific
contractual  stock  price  floor.  Additionally,  as a result of the above,  the
Company  could  incur  non-cash  charges to equity,  which would have a negative
impact on future per share calculations.

     The Company is exposed to market risks from  potential  changes in interest
rates as they relate to the Company's  investments  in highly liquid  marketable
debt  securities.  These  investments are deposited with high quality  financial
institutions.  The Company believes that the amount of risk as it relates to its
investments is not material to the Company's  financial  condition or results of
operations because the Company does not use derivative financial  instruments in
its investments.


                                       14

<PAGE>



PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

      The Company is, from time to time,  a party to  litigation  arising in the
ordinary  course  of  business.  In the  opinion  of  management,  there  are no
significant claims outstanding that are likely to have a material adverse effect
upon the consolidated financial condition of the Company.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

      Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

       Not applicable.

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

      Not applicable.

ITEM 5. OTHER INFORMATION.

      Not applicable.

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

A.    Exhibits

Exhibit Number

         27.                        Financial Data Schedule.



B.    Reports on Form 8-K

      Not applicable.









                                       15

<PAGE>




                                   SIGNATURES

       Pursuant to the  requirements of the Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.


                                 EMERGING VISION, INC.
                                 (Registrant)

                                 BY:      /s/ Gregory T. Cook
                                          Gregory T. Cook
                                          President and Chief Executive Officer

                                 BY:      /s/ Sara V. Traberman
                                          Sara V. Traberman
                                          Senior Vice President and
                                          Chief Financial Officer

                                 Dated: November 9, 2000


















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