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, 2001

                                       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)


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

                             1500 Hempstead Turnpike
                           East Meadow, New York 11554
           ----------------------------------------------------------
          (Address of Principal Executive Offices, including Zip Code)

                                 (516) 390-2100
               --------------------------------------------------
              (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:

     As of November 13, 2001,  there were 27,004,972  shares  outstanding of the
Registrant's Common Stock, par value $.01 per share.




<PAGE>



Item 1.  FINANCIAL STATEMENTS

                     EMERGING VISION, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (In Thousands, Except Share Data)

<TABLE>
<CAPTION>

                                                                                                      September 30,  December 31,
                                                                                                          2001          2000
                                                                                                      -----------    -----------
                                                                                                      (Unaudited)
ASSETS
<S>                                                                                                   <C>            <C>
Current assets:
         Cash and cash equivalents ................................................................   $     974      $   5,215
         Franchise receivables, net of allowance of $2,431 and $3,521, respectively ...............       1,814          1,493
         Other receivables, net of allowance of $425 and $323, respectively .......................         960          1,997
         Current portion of notes receivable from franchisees .....................................       1,398          2,622
         Inventories ..............................................................................         817          1,033
         Prepaid expenses and other current assets ................................................         419            475
                                                                                                      ---------      ---------
                     Total current assets .........................................................       6,382         12,835
                                                                                                      ---------      ---------

Property and equipment, net .......................................................................       2,021          2,995
Franchise notes and other receivables, net of allowance of $3,487 and $3,019, respectively ........       2,885          3,926
Intangible assets, net ............................................................................       1,368          1,534
Other assets ......................................................................................         284            401
Net assets of discontinued operations .............................................................         718            840
                                                                                                      ---------      ---------
                                Total assets ......................................................   $  13,658      $  22,531
                                                                                                      =========      =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
         Current portion of long-term debt ........................................................   $     197      $     221
         Accounts payable and accrued liabilities .................................................       7,109         13,227
         Net liabilities of discontinued operations ...............................................       1,671          3,006
                                                                                                      ---------      ---------
                     Total current liabilities ....................................................       8,977         16,454
                                                                                                      ---------      ---------

Long-term debt ....................................................................................         409            533
Excess of fair value of assets acquired over cost .................................................          85            317
Franchise deposits and other liabilities ..........................................................         996          1,322
                                                                                                      ---------      ---------
                                Total liabilities..................................................   $  10,467      $  18,626
                                                                                                      ---------      ---------

Commitments and contingencies

Shareholders' equity:
     Preferred stock, $.01 par value per share; 5,000,000 shares authorized:
         Senior Convertible Preferred Stock, $100,000 liquidation preference per
         share;
         3 shares issued and outstanding ..........................................................         287            287
     Common stock, $.01 par value per share; 50,000,000 shares authorized; 27,187,309 and
         25,559,231 shares issued, respectively; 27,004,972 and 25,382,230 shares
         outstanding, respectively ................................................................         272            256
     Treasury stock, at cost, 182,337 and 177,001 shares, respectively ............................        (204)          (203)
     Additional paid-in capital ...................................................................     119,926        119,453
     Accumulated deficit ..........................................................................    (117,090)      (115,888)
                                                                                                      ---------      ---------
                                  Total shareholders' equity ......................................       3,191          3,905
                                                                                                      ---------      ---------
                                  Total liabilities and shareholders' equity ......................   $  13,658      $  22,531
                                                                                                      =========      =========

          The  accompanying  notes are an  integral  part of these  consolidated balance sheets.
</TABLE>

                                        2
<PAGE>

                     EMERGING VISION, INC. AND SUBSIDIARIES
                CONSOLIDATED 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,
                                                                       2001        2000        2001        2000
                                                                   ----------    --------    --------    --------
Revenues:
<S>                                                                  <C>         <C>         <C>         <C>
     Net sales ...................................................   $  2,855    $  2,646    $  8,595    $  9,362
     Franchise royalties .........................................      1,938       2,381       6,268       7,047
     Net gains and fees from the conveyance of franchise
          and Company-owned store assets .........................         10          73         132         120
     Interest on franchise notes receivable ......................        203         308         758         934
                                                                     --------    --------    --------    --------
          Total revenues .........................................      5,006       5,408      15,753      17,463
                                                                     --------    --------    --------    --------

Costs and expenses:

     Cost of sales ...............................................        767         900       1,973       2,695
     Selling, general and administrative expenses ................      6,084       4,341      15,476      15,354
     Loss from franchised stores operated under
          management agreements ..................................         97         143         344         398
                                                                     --------    --------    --------    --------
          Total costs and expenses ...............................      6,948       5,384      17,793      18,447
                                                                     --------    --------    --------    --------

     Income (loss) from continuing operations before provision for
          income taxes ...........................................     (1,942)         24      (2,040)       (984)
     Provision for income taxes ..................................          -           -           -           -
                                                                     --------    --------    --------    --------
          Income (loss) from continuing operations ...............     (1,942)         24      (2,040)       (984)
                                                                     --------    --------    --------    --------

Discontinued operations: (Note 2)
     Income (loss) from discontinued operations ..................       (657)     (2,009)        838      (7,107)
                                                                     --------    --------    --------    --------
          Net loss ...............................................   $ (2,599)   $ (1,985)   $ (1,202)   $ (8,091)
                                                                     ========    ========    ========    ========

Per share information (Note 3):
  Basic:
     Income (loss) from continuing operations ....................   $  (0.08)   $      -    $  (0.08)   $  (1.49)
     Income (loss) from discontinued operations ..................      (0.02)      (0.08)       0.03       (0.31)
                                                                     --------    --------    --------    --------
          Net loss per share .....................................   $  (0.10)   $  (0.08)   $  (0.05)   $  (1.80)
                                                                     ========    ========    ========    ========
  Diluted:
     Loss from continuing operations .............................   $  (0.08)   $  (0.03)   $  (0.08)   $  (1.56)
     Income (loss) from discontinued operations ..................      (0.02)      (0.08)       0.03       (0.31)
                                                                     --------    --------    --------    --------
          Net loss per share .....................................   $  (0.10)   $  (0.11)   $  (0.05)   $  (1.87)
                                                                     ========    ========    ========    ========

Weighted-average number of common shares outstanding:
     Basic .......................................................     26,951      25,559      25,492      23,068
                                                                     ========    ========    ========    ========
     Diluted .....................................................     27,334      25,942      25,875      23,451
                                                                     ========    ========    ========    ========


                             The accompanying notes are an integral part of these consolidated statements.
</TABLE>

                                        3
<PAGE>




                     EMERGING VISION, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
                                 (In Thousands)
<TABLE>
<CAPTION>

                                                                                               For the Nine Months Ended
                                                                                                     September  30,
                                                                                                    2001        2000
                                                                                                 ----------  ----------

Cash flows from operating activities:
<S>                                                                                              <C>         <C>
     Net loss from continuing operations .....................................................   $ (2,040)   $   (984)
         Adjustments to reconcile net loss from continuing operations to net
          cash provided by (used in) operating activities:
            Depreciation and amortization ....................................................        865         983
            Provision for doubtful accounts ..................................................         60         679
            Provision for inventory ..........................................................        100           -
            Non-cash compensation charges related to stock-based compensation ................        165          47
            Loss on disposal of fixed assets .................................................        372          44
        Changes in operating assets and liabilities:
            Franchise receivables ............................................................       (213)       (902)
            Inventories ......................................................................       (105)        306
            Prepaid expenses and other current assets ........................................         56          49
            Accrual for store closures ......................................................         435           -
            Other assets .....................................................................         68          53
            Accounts payable and accrued liabilities .........................................       (528)     (3,117)
                                                                                                 --------    --------
Net cash used in operating activities ........................................................       (765)     (2,842)
                                                                                                 --------    --------

Cash flows from investing activities:
     Franchise notes receivable issued .......................................................       (328)       (376)
     Proceeds from franchise and other notes receivable ......................................      1,543       1,453
     Purchases of property and equipment .....................................................       (344)       (387)
                                                                                                 --------    --------
Net cash provided by investing activities ....................................................        871         690
                                                                                                 --------    --------

Cash flows from financing activities:
     Proceeds from the exercise of stock options and warrants ................................          -       7,692
     Net proceeds from the issuance of Series B Convertible Preferred Stock ..................          -      10,618
     Proceeds from long-term debt ............................................................          -         500
     Payments on long-term debt ..............................................................       (148)     (5,230)
     Acquisition of treasury shares ..........................................................         (1)          -
                                                                                                 --------    --------
Net cash (used in) provided by financing activities ..........................................       (149)     13,580
                                                                                                 --------    --------
Net cash (used in) provided by continuing operations .........................................        (43)     11,428
                                                                                                 --------    --------
Net cash (used in) discontinued operations ...................................................     (4,198)     (3,221)
                                                                                                 --------    --------
Net (decrease) increase in cash and cash equivalents .........................................     (4,241)      8,207
Cash and cash equivalents - beginning of period ..............................................      5,215         108
                                                                                                 --------    --------
Cash and cash equivalents - end of period ....................................................   $    974    $  8,315
                                                                                                 ========    ========

Supplemental disclosures of cash flow information:

    Cash paid during the period for:
         Interest ............................................................................   $     60    $    372
                                                                                                 ========    ========
         Taxes ...............................................................................   $     63    $     54
                                                                                                 ========    ========

     Non-cash investing and financing activities:
         Net assets of franchise stores reacquired through exchange of receivables ...........   $    372    $      -
         Issuance of common shares for consulting services and other .........................        165       9,808
         Issuance of common shares to settle vendor payable related to discontinued operations        325           -
         Extinguishment of related party debt ................................................          -         727


                             The accompanying notes are an integral part of these consolidated statements.
</TABLE>

                                        4
<PAGE>

                     EMERGING VISION, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
                       (In Thousands, Except Share Data)
<TABLE>
<CAPTION>


                                                                            Treasury
                                    Senior Convertible                       Stock,           Additional                   Total
                                     Preferred Stock        Common Stock     at cost           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, 2000              3   $  287   25,559,231   $   256   177,001  $(203)   $119,453    $(115,888)    $  3,905
                                    ------   ------   ----------   --------  -------  -----    --------    ---------     --------
Issuance of shares for
  consulting services (Note 4)           -        -    1,628,078        16         -      -         473            -          489
Acquisition of treasury shares           -        -            -         -     5,336     (1)          -            -           (1)
Net income                               -        -            -         -         -      -           -       (1,202)      (1,202)
                                    ------   ------   ----------   --------  -------  -----    --------    ---------     --------
BALANCE - SEPTEMBER 30, 2001             3   $  287   27,187,309   $   272   182,337  $(204)   $119,926    $(117,090)    $  3,191
                                    ======   ======   ==========   ========  =======  =====    ========    =========     ========


                        The accompanying notes are an integral part of this consolidated statement.
</TABLE>

                                        5
<PAGE>


                     EMERGING VISION, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


NOTE 1 - BASIS OF PRESENTATION:

     The accompanying Consolidated Financial Statements of Emerging Vision, Inc.
(the  "Registrant")  and  subsidiaries  (collectively,  the "Company") have been
prepared in accordance with generally accepted accounting principles for interim
financial statement presentation 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 Company's  financial
position and results of operations 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, 2000, as  supplemented by its Annual Report
on Form  10-K/A  for such  year.  There  have  been no  changes  in  significant
accounting policies since December 31, 2000.

     Certain  reclassifications  have been made to prior year amounts to conform
to the current year presentation.


NOTE 2 - DISCONTINUED OPERATIONS:

     On March 28,  2001,  the Company  announced  its  decision  to  discontinue
further  development of its e-commerce division (the "Internet  Division"),  and
focus its efforts and resources on its  franchise/retail  optical store business
("Sterling Optical").  The Company has successfully completed the discontinuance
of the  activities of its Internet  Division.  Additionally,  in June 2000,  the
Company  announced its intention to discontinue  the operations of, and sell its
assets  situated in the  ambulatory  surgery  center located in Garden City, New
York (the  "Ambulatory  Center"),  as well as to sell the business and assets of
its 66.5%-owned subsidiary, Insight Laser Centers, Inc. ("Insight Laser").

     In connection with the foregoing,  as of December 31, 2000, the Company had
accrued  for  $6,285,000  of  costs   associated  with  all  such   discontinued
operations.  These accruals included the anticipated  future operating losses of
these divisions,  the expenses associated with the disposal of the net assets of
these divisions, and an estimate of loss upon disposition.  In addition,  during
the three months ended  September  30, 2001,  the Company  accrued an additional
$380,000 related to the  discontinuance  of the operations of Insight Laser. The
Company was  unsuccessful  in its  attempts to sell the  business  and assets of
Insight  Laser,  and  therefore  has made a decision to cease all such  entity's
operations,  effective as of November 30, 2001, and attempt to settle all of its
liabilities  in  connection   therewith  (such   liabilities  to  include  lease
termination  costs  and  employee  related  severance  costs),  as  well  as  to
thereafter  liquidate the assets  thereof,  which  liquidation is anticipated to
take place on or before December 31, 2001. As of September 30, 2001, a provision
for  discontinued  operations  of  $465,000  remains  accrued and is included in
accounts  payable  and  accrued  liabilities  on the  accompanying  Consolidated
Balance Sheet.

     As a result of the foregoing,  the net assets,  operating  results and cash
flows of the  aforementioned  segments of the Company's business (other than its
Sterling Optical division) have been presented as discontinued operations in the
accompanying  Consolidated Financial Statements for all periods presented. As of
September  30, 2001 and December  31,  2000,  net  liabilities  of  discontinued
operations of $953,000 and $2,166,000, respectively, have been segregated on the
accompanying Consolidated Balance Sheets.

     On May 31,  2001,  the Company  successfully  disposed of the assets of the
Ambulatory Center, resulting in a loss from disposition that was lower than that
originally  accrued.  Additionally,  the Company  successfully  settled  certain
claims  related to its Internet  Division  for less than the amounts  originally
accrued.  As a result of the foregoing,  the Company had  reevaluated  its total
accrual related to such discontinued operations and, accordingly, during the six
months ended June 30, 2001,  reversed  approximately  $1,497,000 of such accrual
into earnings.  This amount, offset by the aforementioned  additional accrual of
approximately $380,000 for Insight Laser during the three months ended September
30, 2001 (resulting from the Company's decision to close,  rather than sell, the
business and assets of Insight Laser),  is reflected in income from discontinued
operations on the  accompanying  Consolidated  Statements of Operations  for the
three and nine month periods ended September 30, 2001.

                                       6
<PAGE>

     During the nine months  ended  September  30,  2001,  the Company  utilized
$4,703,000   of  its  accrual  for   discontinued   operations.   This  included
approximately  $805,000 in severance payments to all of the Internet  Division's
personnel located in the Dallas,  Texas office, and approximately  $1,298,000 of
operating costs for the Internet Division through  September 30, 2001.  Included
in the severance payments were payments of $277,000 and $205,000,  respectively,
to Mr. Gregory Cook, the Company's former President and Chief Executive Officer,
and Mr. James Ewer, the Company's former Senior Vice-President of Operations.

     On April 24, 2001, the Company and Ms. Sara V. Traberman,  the former Chief
Financial  Officer of the  Company,  settled  her claim for  severance  benefits
(which,  in  accordance  with the  terms of her  Employment  Agreement  with the
Company,  called for a cash settlement in the approximate  amount of $1,300,000,
and the immediate vesting of the 400,000 stock options previously granted to her
under the  Agreement,  all as a result of the failure of the Company to sell its
non-Internet  related  assets  by  March 1,  2001)  for a lump  sum  payment  of
$750,000,  plus the issuance of fully-vested  stock options to purchase  125,000
shares of the Company's  Common Stock at an exercise price of $0.29,  their fair
market value on the date of grant.

     On May 31,  2001,  the Company  and the  owner/licensee  of the  Ambulatory
Center reached an agreement  whereby the Company sold and transferred its assets
then located in the Ambulatory  Center to a limited  liability company owned, in
principal part, by the owner/licensee thereof. In consideration of such sale and
transfer,  the purchaser assumed the Ambulatory Center's liabilities (subject to
certain limitations),  released the Company from its obligations under the lease
for the premises of the  Ambulatory  Center  (except in limited  circumstances),
agreed  to  the  termination  of  the  Administrative  Services  and  Consulting
Agreement  whereby  the Company  rendered  services  to such  owner/licensee  in
connection  with the  operation  of the  Ambulatory  Center,  and  agreed to the
termination  of the Purchase  Agreement  whereby an affiliate of the Company had
agreed to  purchase  the New York State  License  (Certificate  of Need) for the
Ambulatory  Center. As a result, the Company reversed $887,000 of the previously
accrued $1,145,000 of liabilities related to the Ambulatory Center.

     On July 5, 2001,  the Company and each of Rare Medium Group,  Inc. and Rare
Medium,  Inc.  (collectively,  "Rare")  entered into a Settlement  Agreement and
Mutual  Release  whereby  the  Company's   dispute  with  Rare  regarding  their
respective   obligations  under  the  Company's  various  agreements  with  Rare
(pertaining to the development and implementation of the e-commerce business and
strategies of the Company's previously abandoned Internet Division) was settled,
and each of the parties was released from  substantially  all of its  respective
obligations under the various agreements between the parties (including, but not
limited to, the $3.00 price protection  guarantee  afforded Rare with respect to
the 1,000,000  shares of the Company's  Common Stock  previously  issued to Rare
under the agreements (the "Existing Shares"),  all in exchange for the Company's
payment to Rare of $375,000,  the  Company's  issuance to Rare of an  additional
1,000,000  shares of its Common  Stock (which the Company is required to attempt
to  register  for resale  under the  Securities  Act of 1933,  as  amended  (the
"Act")),  and the Company's  agreement not to impede Rare's  ability to sell the
Existing Shares, all of which were previously registered under the Act.

                                       7

<PAGE>

NOTE 3 - PER SHARE INFORMATION:

     The Company  follows the  provisions  of Statement of Financial  Accounting
Standards  ("SFAS") No. 128,  "Earnings Per Share".  Basic net income (loss) per
common  share  ("Basic  EPS") is  computed  by  dividing  the net income  (loss)
available  (attributable) to common shareholders by the weighted-average  number
of common  shares  outstanding.  Diluted  net income  (loss)  per  common  share
("Diluted  EPS")  is  computed  by  dividing  the net  income  (loss)  available
(attributable) to common shareholders by the  weighted-average  number of common
shares and dilutive common share  equivalents  and  convertible  securities then
outstanding.  SFAS No. 128 requires that the  presentation of both Basic EPS and
Diluted  EPS  appear on the face of the  Company's  Consolidated  Statements  of
Operations.  Common stock equivalents were excluded from the computation for all
periods presented as their impact would have been anti-dilutive.

     The  following  table sets forth the  computation  of basic and diluted per
share information (in thousands, except per share data):

<TABLE>
<CAPTION>

                                                                For the Three Months     For the Nine Months
                                                                 Ended September 30,     Ended September 30,
                                                                   2001        2000       2001         2000
                                                                ---------   ---------   ---------   ---------
Numerator:

<S>                                                             <C>         <C>         <C>         <C>
Income (loss) from continuing operations ....................   $ (1,942)   $     24   $  (2,040)   $   (984)
Induced conversion of Senior Convertible Preferred Stock ....          -           -           -     (21,707)
Accretion of dividends on Series B Convertible
      Preferred Stock .......................................          -           -           -     (11,743)
                                                                --------    --------    --------    --------
Numerator for basic per share information -
      Income (loss) available (attributable) to common
      shareholders ..........................................     (1,942)         24      (2,040)    (34,434)
                                                                --------    --------    --------    --------
Effect of assumed conversion of Senior Convertible
      Preferred Stock .......................................       (117)       (773)       (122)     (2,196)

Numerator for diluted per share information -
      Loss attributable to common shareholders .. ...........     (2,059)       (749)     (2,162)    (36,630)
                                                                --------    --------    --------    --------

Basic:

Income (loss) available (attributable) to common shareholders     (1,942)         24      (2,040)    (34,434)
Income (loss) from discontinued operations ..................       (657)     (2,009)        838      (7,107)
                                                                --------    --------    --------    --------
      Net loss attributable to common shareholders ..........   $ (2,599)   $ (1,985)   $ (1,202)   $(41,541)
                                                                ========    ========    ========    ========
Diluted:

Loss attributable to common shareholders ....................     (2,059)       (749)     (2,162)    (36,630)
Income (loss) from discontinued operations ..................       (657)     (2,009)        838      (7,017)
                                                                --------    --------    --------    --------
      Net loss attributable to common shareholders ..........   $ (2,716)   $ (2,758)   $ (1,324)   $(43,737)
                                                                ========    ========    ========    ========

Denominator:

Denominator for basic per share information -
      weighted-average number of common shares outstanding ..     26,951      25,559      25,492      23,068
                                                                ========    ========    ========    ========
Effect of assumed conversion of Senior Convertible
      Preferred Stock .......................................        383         383         383         383

Denominator for diluted per share information -
      weighted-average number of common shares outstanding ..     27,334      25,942      25,875      23,451
                                                                ========    ========    ========    ========

Basic Per Share Information:

Income (loss) available (attributable) to common shareholders   $  (0.08)   $      -    $  (0.08)   $  (1.49)
Income (loss) from discontinued operations ..................      (0.02)      (0.08)       0.03       (0.31)
                                                                --------    --------    --------    --------
      Net loss attributable to common shareholders ..........   $  (0.10)   $  (0.08)   $  (0.05)   $  (1.80)
                                                                ========    ========    ========    ========

Diluted Per Share Information:

Loss attributable to common shareholders ....................   $  (0.08)   $  (0.03)   $  (0.08)   $  (1.56)
Income (loss) from discontinued operations ..................      (0.02)      (0.08)       0.03       (0.31)
                                                                --------    --------    --------    --------
      Net loss attributable to common shareholders ..........   $  (0.10)   $  (0.11)   $  (0.05)   $  (1.87)
                                                                ========    ========    ========    ========

</TABLE>

                                       8
<PAGE>

NOTE 4 - SHAREHOLDER'S EQUITY:

ISSUANCE OF SECURITIES FOR CONSULTING SERVICES

     On January 16, 2001,  the Company  entered into an  agreement,  as amended,
with Goldin  Associates,  L.L.C.  ("Goldin")  whereby  Goldin  agreed to provide
interim  management  services to the Company,  for an initial  six-month period,
with  respect to its  Sterling  Optical,  Insight  Laser and  Ambulatory  Center
divisions (collectively,  the "Divisions"), all at the direction of the Board of
Directors  of the  Company  or its  Chairman  or  other  officers,  pursuant  to
delegated  authority.  The fee for such services was $50,000 per month,  plus an
additional  fee  comprised  of   unregistered   shares  totaling  1.65%  of  the
outstanding  Common Stock of the Company as of January 22, 2001, and warrants to
purchase up to an  aggregate  of 3.35% of the  outstanding  Common  Stock of the
Company.  As a result,  the Company  issued 418,719  unregistered  shares of its
Common  Stock (the fair value of which was  approximately  $108,000)  to Goldin,
along with  warrants to purchase up to an  additional  850,126  shares of Common
Stock,  all at an  exercise  price of $0.01,  subject to the  Company  achieving
certain  earnings  targets (the "Incentive  Fee"). In connection with the shares
issued, Goldin was granted certain limited piggy-back registration rights.

     The  terms of the  Incentive  Fee  provide  that the  warrants  may only be
exercised according to the following schedule:  (1) warrants to purchase 279,146
shares of the Company's Common Stock  immediately  following a year in which the
Divisions  shall realize  earnings  before  interest,  taxes,  depreciation  and
amortization  ("EBITDA")  of at least  $1,000,000;  (2)  warrants to purchase an
additional 279,146 shares of the Company's Common Stock immediately  following a
year in which the Divisions shall realize EBITDA of at least $2,000,000; and (3)
warrants to purchase an additional  291,834 shares of the Company's Common Stock
immediately  following a year in which the Divisions  shall realize EBITDA of at
least  $3,000,000.  These  warrants  become  exercisable  only if the applicable
EBITDA   targets  are  achieved  prior  to  December  31,  2004.  Due  to  these
contingencies,  the future valuation of these warrants,  if and when they become
exercisable,  will result in charges to the  Company's  results of operations in
future periods. Any warrants that vest shall expire on January 22, 2008.

     On April 26, 2001, the Company's  Board of Directors  approved the terms of
an  agreement,  as  amended,  whereby  it agreed to issue to  Balfour  Investors
Incorporated ("Balfour"),  in exchange for certain advisory services rendered to
the Company's  Board of  Directors,  209,359  unregistered  shares of its Common
Stock  (the  fair  value of which  was  approximately  $57,000),  together  with
warrants to purchase up to 425,063  shares of Common Stock at an exercise  price
of $0.01.  In connection  with the shares  issued,  Balfour was granted  certain
limited  piggy-back  registration  rights.  The warrants will become exercisable
according to the following schedule:  (1) warrants to purchase 139,573 shares of
the Company's Common Stock  immediately  following a year in which the Divisions
shall  realize  EBITDA of at least  $1,000,000;  (2)  warrants  to  purchase  an
additional 139,573 shares of the Company's Common Stock immediately  following a
year in which the Divisions shall realize EBITDA of at least $2,000,000; and (3)
warrants to purchase an additional  145,917 shares of the Company's Common Stock
immediately  following a year in which the Divisions  shall realize EBITDA of at
least  $3,000,000.  Further,  these  warrants  become  exercisable  only  if the
applicable  EBITDA targets are achieved prior to December 31, 2004. Due to these
contingencies,  the future valuation of these warrants,  if and when they become
exercisable,  will result in charges to the  Company's  results of operations in
future periods. Any warrants that vest shall expire on April 26, 2008.

     On July 5, 2001, the Company issued  1,000,000  unregistered  shares of its
Common  Stock (the fair value of which was  approximately  $325,000)  to Rare as
part of a settlement  whereby the Company's  dispute with Rare,  regarding their
respective  obligations  under the Company's  various  agreements with Rare, was
settled (Note 2).

DELISTING OF COMMON STOCK

     On August 23, 2001,  the Company  notified The Nasdaq  Stock  Market,  Inc.
("Nasdaq")  of its Board of  Directors'  intention  not to  effect,  in the near
future,  the previously  announced reverse stock split of its outstanding shares
of Common  Stock.  In  response to this  decision,  on August 24,  2001,  Nasdaq
delisted the  Company's  Common  Stock from the Nasdaq  National  Market  System
("Nasdaq-NMS"),  pursuant  to  Marketplace  Rule No.  4310(c)(8)(B),  due to its
failure  to comply  with the  minimum  bid  price  ($1.00)  requirement  for the
continued listing of its shares of Common Stock on the Nasdaq-NMS, all set forth
in Nasdaq's  Marketplace Rule No. 4450(a)(5).  As a result, the Company's Common
Stock now trades on the OTC Bulletin Board under the symbol ISEE.OB.


NOTE 5 - SUBSEQUENT EVENT:

     On November 14, 2001 the Company received a commitment for financing in the
form of a $1.1  million term loan for a two-year  period and a revolving  credit
facility for $1.0 million to be used at the Company's  discretion  over the same
two-year  period of the term loan. The Company and the lender are in the process
of finalizing the terms of such financing arrangements.

                                       9
<PAGE>

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

     Certain information contained in this Management's  Discussion and Analysis
of Financial  Condition and Results of Operations  for the three and nine months
ended  September  30,  2001,  as  compared  to the three and nine  months  ended
September 30, 2000, are forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange  Act  of  1934,  as  amended.  The  words  "anticipates,"   "believes,"
"estimates,"  "expects,"  "intends,"  "plans," "seeks," variations of such words
and similar expressions,  are intended to identify  forward-looking  statements.
Management  has  based  these   forward-looking   statements  on  their  current
expectations,  estimates  and  projections  about  the  Company's  business  and
industry,  their beliefs and certain  assumptions made by management.  Investors
are cautioned that matters subject to  forward-looking  statements involve risks
and uncertainties, including economic, competitive, governmental,  technological
and other factors that may affect the Company's  business and  prospects.  These
statements are not guarantees of future  performance  and are subject to certain
risks,  uncertainties and assumptions that are difficult to predict. In order to
obtain  the   benefits  of  these  "safe   harbor"   provisions   for  any  such
forward-looking  statements,   management  cautions  investors  and  prospective
investors about the following significant factors, which, among others, have, in
some cases,  affected the Company's  actual  results and may, in the future,  be
likely to affect its actual  results,  which could cause such actual  results to
differ materially from those expressed in any such  forward-looking  statements.
These factors include declines in same store (Company-operated) sales, financial
and operational difficulties of franchisees,  inability of the Company to obtain
additional  capital,  dependence on certain executive officers and key employees
and substantial fluctuations in annual and quarterly results of operations.


RESULTS OF OPERATIONS

     The Company's historical financial  information has been restated to report
the net  assets,  operating  results  and cash flows of the  Internet  Division,
Insight Laser and the  Ambulatory  Center  segments (of the Company's  business)
through September 30, 2001 as discontinued operations for all periods presented.
The following discussion and analysis focuses on continuing  operations,  unless
otherwise noted.

                                       10
<PAGE>

FOR THE THREE AND NINE MONTHS ENDED  SEPTEMBER 30, 2001 AS COMPARED TO
SEPTEMBER 30, 2000

     Net sales for Company-owned  stores,  excluding  revenues  generated by the
Company's   wholly-owned   subsidiary,   VisionCare  of  California  ("VCC"),  a
specialized  health care  maintenance  organization  licensed by the  California
Department of Corporations, decreased by approximately $1,000 and $1,056,000, or
0.0% and  14.6%,  to  $2,090,000  and  $6,180,000  for the three and nine  month
periods ended  September 30, 2001, as compared to $2,091,000  and $7,236,000 for
the  comparable  periods in 2000.  Net sales for VCC  increased  by $210,000 and
$289,000, or 37.8% and 13.6%, to $764,000 and $2,415,000, for the three and nine
month periods ended  September 30, 2001, as compared to $555,000 and  $2,126,000
for the comparable  periods in 2000. The decreases in sales of  Company-operated
stores were  principally  due to a lower  average  number of stores in operation
during the three and nine-month periods ended September 30, 2001, as compared to
the comparable  periods in 2000. On a same store basis (for stores that operated
as a  Company-operated  store  during  both of the three and nine month  periods
ended  September  30,  2001  and  2000),  comparative  net  sales  decreased  by
approximately  $236,000  and  $302,000,  or 12.9% and 5.4%,  to  $1,593,000  and
$5,296,000  for the three and nine month  periods  ended  September 30, 2001, as
compared to $1,829,000 and $5,598,000 for the comparable  periods in 2000. As of
September 30, 2001,  there were 210 Sterling Stores in operation,  consisting of
38  Company-operated  stores (including 7 Company-owned  stores being managed by
franchisees)  and 172  franchised  stores  (including 2 franchised  stores being
managed  by the  Company  on  behalf of the  franchisees),  as  compared  to 238
Sterling  Stores  in  operation  as of  September  30,  2000,  consisting  of 32
Company-operated  stores  (including  12  Company-owned  stores being managed by
franchisees)  and 202  franchised  stores  (including 3 franchised  stores being
managed by the Company on behalf of the franchisees).

     Franchise  royalties decreased by approximately  $443,000 and $779,000,  or
18.6% and 11.1%,  to  $1,938,000  and  $6,268,000  for the three and  nine-month
periods ended  September 30, 2001, as compared to $2,381,000  and $7,047,000 for
the comparable  periods in 2000.  These  decreases were due to the lower average
number of franchised stores in operation during the three and nine-month periods
ended  September  30,  2001,  as  compared  to the  comparable  periods in 2000.
Additionally,  there was a decrease  in the sales  generated  by the  franchised
stores in operation  throughout the three and nine-month periods ended September
30, 2001, as compared to the same periods in 2000.

     Net gains and fees from the  conveyance  of  franchised  and  Company-owned
store assets,  including renewal fees and the fees charged as a condition to the
transfer  of  ownership  of the  assets  and  franchise  for a  store  from  one
franchisee  to another,  decreased  by  approximately  $63,000 and  increased by
$12,000,  or 86.3% and 10.0%,  to $10,000  and  $132,000  for the three and nine
month periods ended  September 30, 2001, as compared to $73,000 and $120,000 for
the comparable periods in 2000. These increases were principally due to transfer
fees collected on the conveyance of the assets of 8 franchised stores during the
nine month period ended September 30, 2001, as compared to the conveyance of the
assets of 2 franchised stores for the comparable period in 2000.

     Interest on franchise notes receivable decreased by approximately  $105,000
and  $176,000,  or 34.1% and 18.8%,  to $203,000  and $758,000 for the three and
nine-month  periods  ended  September  30,  2001,  as compared  to $308,000  and
$934,000 for the comparable  periods in 2000.  These decreases were  principally
due to reductions of the principal  balances of franchisee  notes receivable and
fewer  notes  being  generated  during the three and  nine-month  periods  ended
September 30, 2001, as compared to the comparable periods in 2000.

     The Company's gross profit margin from Company-operated stores increased by
6.3% and 5.3%,  to 63.3% and 68.1% for the three and nine  month  periods  ended
September 30, 2001, as compared to 57.0% and 62.8% for the comparable periods in
2000.  These increases were due to a change in the mix of products being sold in
Company-operated  stores and improved inventory  management during the three and
nine-month  periods  ended  September  30, 2001,  as compared to the  comparable
periods in 2000. In the future,  the Company's gross profit margin may fluctuate
depending  upon  the  extent  and  timing  of  changes  in  the  product  mix in
Company-owned stores, competition and promotional incentives.

                                       11
<PAGE>

     Selling,  general and  administrative  expenses increased by $1,743,000 and
$122,000,  or 40.2% and 1.0%, to $6,084,000  and  $15,476,000  for the three and
nine-month  periods ended  September  30, 2001,  as compared to  $4,341,000  and
$15,354,000  for the  comparable  periods in 2000.  Such  increase for the three
month period ended  September 30, 2001, as compared to the comparable  period in
2000,  is primarily  due to the  following:  (1) an increase in payroll and rent
expense of  approximately  $625,000 due to a greater number of  Company-operated
stores in operation  during the three month period ended  September 30, 2001, as
compared to the three month period  ended  September  30, 2000;  (2) a provision
related to the anticipated closure of 12 Company-operated  stores, for which the
Company  recorded a charge of  approximately  $800,000,  related to  anticipated
lease  termination  costs and  write-offs  of assets;  (3) general  increases of
employee  related  administrative  costs  of  $180,000;  and  (4)  approximately
$165,000  related to the estimated legal fees and costs related to the Company's
ongoing litigation.  During the nine month period ended September 30, 2001, such
increase of $122,000 was  primarily a result of the items  previously  discussed
above and the following  additional items: (1) a decrease in bad debt expense of
approximately  $620,000;  period ended  September  30,  2001;  (2) a decrease in
interest expense of approximately  $175,000,  due to a substantial  repayment of
debt in December  2000;  (3) the  exclusion  of  $154,000  of non-cash  expenses
related to the issuance of warrants during fiscal year 2000; and (4) a reduction
of corporate overhead and salaries, of approximately $250,000.

LIQUIDITY AND CAPITAL RESOURCES

     For the nine month period ended  September 30, 2001, net cash flows used in
operating  activities  were  $(765,000),  as  compared  to  cash  flows  used in
operating  activities of  $(2,842,000)  for the comparable  period in 2000. Loss
from  continuing  operations for the nine-month  period ended September 30, 2001
was $(2,040,000), as compared to a loss from continuing operations of $(984,000)
for the comparable period in 2000.

     For the nine-month  period ended September 30, 2001, cash flows provided by
investing  activities were $871,000,  as compared to $690,000 for the comparable
period  in  2000.   This  increase  was   principally  due  to  an  increase  of
approximately $90,000, to $1,543,000, in proceeds from franchise and other notes
receivables, a decrease of approximately $43,000 in capital expenditures,  and a
decrease of approximately $48,000 in notes issued by franchisees.

     For the nine month period  ended  September  30,  2001,  cash flows used in
financing  activities were $(149,000),  principally due to payments on long-term
debt, as compared to $13,580,000 of cash provided from financing  activities for
the  comparable  period in 2000.  During the first quarter of 2000,  the Company
received proceeds from the Company's private placement, completed in March 2000,
of  approximately  $10,618,000,  and proceeds from the exercise of stock options
and warrants of approximately $7,692,000, in each case offset by net payments on
long-term debt of approximately $5,230,000.

     The Company's  working  capital  deficit was $2,595,000 as of September 30,
2001. This amount  includes  accruals in the aggregate  amount of  approximately
$465,000,  pertaining to  anticipated  liabilities  to be incurred in connection
with potential settlements related to the Company's discontinued operations, and
the net liabilities of discontinued operations of $1,671,000,  which liabilities
reflect a range of possible settlements,  which the Company will seek to resolve
for lesser amounts  (although  there can be no assurance that it will be able to
do so).  Excluding the liabilities  associated  with the Company's  discontinued
operations,  the Company's working capital deficit, as of September 30, 2001 was
$459,000,  including  accruals for the  anticipated  costs  associated  with the
closure of  Company-operated  stores of $435,000.  The Company  believes that it
will  improve cash flows during 2002 by,  among other  things:  improving  store
profitability through increased monitoring of store-by-store operations; closing
non-profitable,   Company-operated  store  locations;   reducing  administrative
overhead expenses;  implementing new marketing programs;  and seeking additional
debt or equity financing, if available.

                                       12
<PAGE>

     On November 14, 2001 the Company received a commitment for financing in the
form of a $1.1  million term loan for a two-year  period and a revolving  credit
facility for $1.0 million to be used at the Company's  discretion  over the same
two-year  period of the term loan. The Company and the lender are in the process
of finalizing the terms of such financing arrangements.

     On August 23, 2001,  the Company  notified The Nasdaq  Stock  Market,  Inc.
("Nasdaq")  of its Board of  Directors'  intention  not to  effect,  in the near
future,  the previously  announced reverse stock split of its outstanding shares
of Common  Stock.  In  response to this  decision,  on August 24,  2001,  Nasdaq
delisted the  Company's  Common  Stock from the Nasdaq  National  Market  System
("Nasdaq-NMS"),  pursuant  to  Marketplace  Rule No.  4310(c)(8)(B),  due to its
failure  to comply  with the  minimum  bid  price  ($1.00)  requirement  for the
continued  listening  of its shares of Common Stock on the  Nasdaq-NMS,  all set
forth in Nasdaq's  Marketplace Rule No.  4450(a)(5).  As a result, the Company's
Common Stock now trades on the OTC Bulletin Board under the symbol ISEE.OB.

     The Company  believes that, in the furtherance of its business  strategies,
the Company's  future  capital  requirements  will include:  (i)  renovating and
remodeling certain of its Company-operated stores; (ii) acquiring retail optical
stores,  subject  to the  availability  of  qualified  opportunities;  and (iii)
continued upgrading of management information systems for Company-owned stores.

     If successful in obtaining the  aforementioned  financing and  implementing
its business  plans  described  above,  combined with its current cash position,
management believes that sufficient  resources will be available for the Company
to  continue in  operation  through  the end of the third  quarter of 2002.  The
achievement of the Company's  business plan is critical to maintaining  adequate
liquidity.  However,  there can be no assurance that the Company will be able to
generate  positive cash flows and, even if it does, that such cash flows will be
sufficient  to  adequately  fund  its  ongoing  operations  and  future  capital
requirements.  If  the  Company  cannot  generate  sufficient  cash  flows  from
operations,  it may be required to seek  alternative  equity or debt  financing.
However,  there can be no assurance  that such equity or debt  financing will be
available to the Company when necessary,  or on terms that will be acceptable to
the Company.


Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company maintains certain equity instruments with beneficial conversion
terms  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 stock
payments  made to  equalize  any stock  price  declines  that are  indexed  to a
specific  contractual  stock  price  floor.  As a result of the  foregoing,  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
securities,  and from any future financing  arrangements.  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.

                                       13
<PAGE>

                           PART II - OTHER INFORMATION


Item 1.  LEGAL PROCEEDINGS

     In the  Company's  action in Supreme Court of the State of New York against
Dr. Larry Joel and Apryl  Robinson  for amounts  claimed due by the Company on a
series of five separate  Negotiable  Promissory  Notes (the "Notes"),  in August
2001,  the Court  granted the  Company's  claim for  damages in the  approximate
amount of $800,000, which judgment the Company is seeking to enforce. On July 2,
2001, the defendants,  without  counsel,  filed an appeal of the decision by the
Court  dismissing  their  counter-claims  and  dismissing  their claims that the
Company had breached an oral, month-to-month consulting agreement,  which appeal
has not yet been decided.

     In the Company's  action  against  Michael  Binns and Mary Ann Binns,  (the
"Guarantors")  in the New York State Supreme Court  seeking  damages  (under the
Guarantors'  payment  guarantees  in favor of the  Company)  as a result  of the
failure of Binns Optical,  Inc.  ("BOI") to comply with its obligations  under a
series of eight  Negotiable  Promissory  Notes made by BOI in its favor, in July
2001,  the Court  awarded the Company  judgment  for damages,  in the  aggregate
approximate  amount of  $1,500,000,  which  judgment  the  Company is seeking to
enforce in the State of Missouri, where the Guarantors both reside.

     In July 2001,  the  Company  commenced  an  Arbitration  Proceeding  in the
Ontario  Superior  Court  of  Justice,  against  Eye-Site,  Inc.  and  Eye  Site
(Ontario),  Ltd.,  as the  makers  of two  promissory  notes  (in the  aggregate
original  principal  amount of  $600,000),  made by one or more of the makers in
favor of the Company,  as well as against  Mohammed Ali, as the guarantor of the
obligations  of each maker under each note.  The notes were issued by the makers
in connection  with their  acquisition of a Master  Franchise  Agreement for the
Province of Ontario,  Canada,  as well as their purchase of the assets of, and a
Sterling  Optical Center Franchise for, four (4) of the Company's retail optical
stores  located  in  Ontario,   Canada.  In  response  thereto,  the  defendants
counterclaimed for damages, in the amount of $1,500,000, based upon, among other
items,  alleged  misrepresentations  made by  representatives  of the Company in
connection  with  these  transaction.   The  Company  believes  that  it  has  a
meritorious  defense to each such  counterclaim.  As of the date  hereof,  these
proceedings were in the discovery stage.


Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

     On July 5, 2001, the Company issued  1,000,000  unregistered  shares of its
Common Stock to Rare as part of a settlement  whereby the Company's dispute with
Rare  regarding  their  respective   obligations  under  the  Company's  various
agreements  with Rare,  was  settled.  These  shares were issued  pursuant to an
exemption under Section 4(2)of the Securities Act of 1933, as amended.


Item 3. DEFAULTS UPON SENIOR SECURITIES.

       None.

                                       14
<PAGE>

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

     On September 12, 2001, the Company held its Annual Meeting of Shareholders.
The purpose of the  meeting  was to (i) elect  three  Class 2  directors  to the
Company's  Board of Directors  to hold office  until the 2003 annual  meeting of
shareholders,  (ii) ratify the selection of Arthur  Andersen LLP as the auditors
of the  Company  for the 2001  fiscal  year and (iii)  consider  and act upon an
amendment to the  Company's  Certificate  of  Incorporation  to effect a reverse
stock split of the outstanding  shares of the Company's common stock, at a ratio
between one-for-two and one-for-ten, as determined by the Board of Directors.


     The results of the shareholders' vote were as follows:

<TABLE>
<CAPTION>

                                                    Votes         Votes                         Broker
           Matter                   Votes For       Against       Withheld     Abstentions     Non Votes
--------------------------------    ----------     ----------    ---------     -----------     ---------
<S>                                 <C>            <C>           <C>           <C>             <C>
Robert Cohen                        15,459,469      1,253,617            -               -             -
Alan Cohen                          15,465,985      1,247,101            -               -             -
Joel Gold                           15,651,610      1,061,476            -               -             -

Ratification of Auditors            16,563,491        104,075            -          45,520             -

Reverse Stock Split                 15,862,582        828,645            -          21,859             -


</TABLE>


     Although the  shareholders  approved the reverse stock split,  the Board of
Directors  determined  not to effect the reverse  stock  split in the  immediate
future.


Item 5. OTHER INFORMATION.

     On August 23, 2001,  the Company  notified The Nasdaq  Stock  Market,  Inc.
("Nasdaq")  of its Board of  Directors'  intention  not to  effect,  in the near
future,  the previously  announced reverse stock split of its outstanding shares
of Common  Stock.  In  response to this  decision,  on August 24,  2001,  Nasdaq
delisted the  Company's  Common  Stock from the Nasdaq  National  Market  System
("Nasdaq-NMS"),  pursuant  to  Marketplace  Rule No.  4310(c)(8)(B),  due to its
failure  to comply  with the  minimum  bid  price  ($1.00)  requirement  for the
continued listing of its shares of Common Stock on the Nasdaq-NMS, all set forth
in Nasdaq's  Marketplace Rule No. 4450(a)(5).  As a result, the Company's Common
Stock now trades on the OTC Bulletin Board under the symbol ISEE.OB.

                                       15
<PAGE>


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

A.    Exhibits

      None.


B.    Reports on Form 8-K

1.        On July 12, 2001,  the  Registrant  filed a Current Report on Form 8-K
          with  respect to The Nasdaq  Stock  Market's  delisting  of its Common
          Stock from the Nasdaq National  Market System,  the appointment of Mr.
          Robert  Hillman  as  Chairman  of the  Company's  Board of  Directors,
          President and Chief  Executive  Officer and the  settlement of certain
          litigation with Rare Medium Group, Inc. and Rare Medium, Inc.

2.        On August 29, 2001, the Registrant  filed a Current Report on Form 8-K
          with  respect to The Nasdaq  Stock  Market's  delisting  of its Common
          Stock from the Nasdaq  National  Market System and the  appointment of
          Mr. Jerry Novack to the Company's Board of Directors.


                                       16
<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 thereunto duly authorized.


                                      EMERGING VISION, INC.

                             BY:      /s/ Robert S. Hillman
                                      -----------------------------
                                      Robert S. Hillman
                                      President and Chief Executive Officer

                             BY:      /s/ George D. Papadopoulos
                                      -----------------------------
                                      George D. Papadopoulos
                                      Senior Vice President and
                                      Chief Financial Officer

                                      Dated: November 14, 2001




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