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 June 30, 2003

                                       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.)

                         100 Quentin Roosevelt Boulevard
                           Garden City, New York 11530
          (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
                                                 -----            -----

     Indicate by check mark whether the Registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act).

                                            Yes               No    X
                                                 -----            -----

     As of August 11,  2003,  there  were  79,890,620  outstanding  share of the
Registrant's Common Stock, par value $0.01 per share.


<PAGE>

Item 1.  Financial Statements

                     EMERGING VISION, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (In Thousands, Except Share Data)
<TABLE>
<CAPTION>
                                                                                                June 30,        December 31,
                                                                                                  2003              2002
                                                                                              (Unaudited)
                                                                                             -------------     --------------

                                              ASSETS
<S>                                                                                            <C>                <C>
Current assets:
         Cash and cash equivalents                                                             $   1,208          $    664
         Franchise receivables, net of allowance of $1,023 and $1,063, respectively                1,348             1,133
         Other receivables, net of allowance of $125 and $101, respectively                          378               447
         Current portion of franchise notes receivable, net of allowance of $453 and $442,
              respectively                                                                           541               612
         Inventories, net                                                                            379               456
         Prepaid expenses and other current assets                                                   265               321
                                                                                               ----------         ---------
                     Total current assets                                                          4,119             3,633
                                                                                               ----------         ---------

Property and equipment, net                                                                          569               693
Franchise notes and other receivables, net of allowance of $972 and $1,486, respectively             686               781
Goodwill                                                                                           1,266             1,266
Other assets                                                                                         241               277
                                                                                               ----------         ---------
                                Total assets                                                   $   6,881          $  6,650
                                                                                               ==========         =========

                               LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
         Current portion of long-term debt                                                     $     194          $    626
         Accounts payable and accrued liabilities                                                  5,507             5,945
         Accrual for store closings                                                                  498             1,109
         Related party borrowings                                                                     31               377
         Net liabilities of discontinued operations                                                  187               208
                                                                                               ----------         ---------
                     Total current liabilities                                                     6,417             8,265
                                                                                               ----------         ---------

Long-term debt                                                                                       105               260
                                                                                               ----------         ---------
Related party borrowings                                                                             156               231
                                                                                               ----------         ---------
Franchise deposits and other liabilities                                                           1,275             1,709
                                                                                               ----------         ---------

Commitments and Contingencies (Note 10)

Shareholders' deficit:
     Preferred stock, $0.01 par value per share; 5,000,000 shares authorized:
         Senior Convertible Preferred Stock, $100,000 liquidation preference per share;
           1 share issued and outstanding                                                             74                74
         Common stock, $0.01 par value per share; 150,000,000 shares authorized; 80,072,957
           and 29,422,957 shares issued, respectively, and 79,890,620 and 29,740,620 shares
           outstanding, respectively                                                                 801               299
     Treasury stock, at cost, 182,337 shares                                                        (204)             (204)
     Additional paid-in capital                                                                  121,714           120,345
     Accumulated deficit                                                                        (123,457)         (124,329)
                                                                                               ----------        ----------
                                  Total shareholders' deficit                                     (1,072)           (3,815)
                                                                                               ----------        ----------
                                  Total liabilities and shareholders' deficit                  $   6,881         $   6,650
                                                                                               ==========        ==========

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


                                       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 Six Months
                                                                      Ended June 30,               Ended June 30,
                                                                   2003           2002           2003           2002
                                                               ---------------------------    --------------------------
<S>                                                              <C>            <C>            <C>           <C>
  Revenues:
       Net sales                                                 $ 1,692        $ 2,084        $ 3,609       $ 5,074
       Franchise royalties                                         1,596          1,690          3,197         3,387
       Other franchise related fees                                   25              7            206             7
       Interest on franchise notes receivable                         44             89             93           174
       Other income                                                   32             66             36            96
                                                                 --------       --------       --------      --------
        Total revenues                                             3,389          3,936          7,141         8,738
                                                                 --------       --------       --------      --------

  Costs and expenses:
       Cost of sales                                                 145            626            468         1,402
       Selling, general and administrative expenses                2,637          3,648          5,424         8,168
       Interest expense                                               96             59            157            98
                                                                 --------       --------       --------      --------
            Total costs and expenses                               2,878          4,333          6,049         9,668
                                                                 --------       --------       --------      --------

      Income (loss) from continuing operations before
         provision for income taxes                                  511           (397)         1,092          (930)

      Provision for income taxes                                       -              -              -             -
                                                                 --------       --------       --------      --------
      Income (loss) from continuing operations                       511           (397)         1,092          (930)
                                                                 --------       --------       --------      --------

  Discontinued operations (Note 3):
       Income (loss) from discontinued operations                      2           (120)          (220)         (120)
                                                                 --------       --------       --------      --------
         Net income (loss)                                       $   513        $  (517)       $   872       $(1,050)
                                                                 ========       ========       ========      ========

  Per share information - basic and diluted (Note 5):
       Income (loss) from continuing operations                  $  0.01        $ (0.02)       $  0.02       $ (0.04)
       Income (loss) from discontinued operations                   0.00           0.00           0.00          0.00
                                                                 --------       --------       --------      --------
           Net income (loss)                                     $  0.01        $ (0.02)       $  0.02       $ (0.04)
                                                                 ========       ========       ========      ========

  Weighted-average number of common shares    outstanding -
         Basic                                                    72,668         28,396         51,238        27,700
                                                                 ========       ========       ========      ========
         Diluted                                                  79,161         28,396         56,141        27,700
                                                                 ========       ========       ========      ========

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


                                       3

<PAGE>

                     EMERGING VISION, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                                                     (Unaudited)
                                                                                             For the Six Months Ended
                                                                                                      June 30,
                                                                                         ---------------------------------
                                                                                               2003             2002
                                                                                         ----------------- ---------------
<S>                                                                                          <C>              <C>
Cash flows from operating activities:
     Income (loss) from continuing operations                                                $  1,092         $   (930)
        Adjustments to reconcile income (loss) from continuing operations
         to net cash used in operating activities:
            Depreciation and amortization                                                         155              246
            Provision for doubtful accounts                                                        35              106
            Amortization of debt discount                                                         103               41
            Charges related to long-lived assets                                                    -               36
        Changes in operating assets and liabilities:
                     Franchise and other receivables                                             (189)             195
                     Inventories                                                                   77              154
                     Prepaid expenses and other current assets                                     56             (129)
                     Other assets                                                                  36               53
                     Accounts payable and accrued liabilities                                    (663)            (595)
                     Franchise deposits and other liabilities                                    (434)              82
                     Accrual for store closings                                                  (611)            (492)
                                                                                             ---------       ----------
Net cash used in operating activities                                                            (343)          (1,233)
                                                                                             ---------       ----------

Cash flows from investing activities:
     Franchise notes receivable issued                                                            (10)             (31)
     Proceeds from franchise and other notes receivable                                           184              948
     Purchases of property and equipment                                                          (31)            (118)
                                                                                             ---------       ----------
Net cash provided by investing activities                                                         143              799
                                                                                             ---------       ----------

Cash flows from financing activities:
     Proceeds from issuance of common stock upon exercise of options                               12               20
     Proceeds from borrowings                                                                     249            1,300
     Payments on borrowings                                                                    (1,360)          (1,061)
        Net proceeds from Rights Offering                                                       1,859                -
                                                                                             ---------       ----------
Net cash provided by financing activities                                                         760              259
                                                                                             ---------       ----------
Net cash provided by (used in) continuing operations                                              560             (175)
                                                                                             ---------       ----------
Net cash used in discontinued operations                                                          (16)            (135)
                                                                                             ---------       ----------
Net increase (decrease) in cash and cash equivalents                                              544             (310)
Cash and cash equivalents - beginning of period                                                   664            1,053
                                                                                             ---------       ----------
Cash and cash equivalents - end of period                                                    $  1,208        $     743
                                                                                             =========       ==========

Supplemental disclosures of cash flow information:
Cash paid during the period for:
        Interest                                                                             $     54        $      61
                                                                                             =========       ==========
        Taxes                                                                                $     61        $      47
                                                                                             =========       ==========

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


                                       4
<PAGE>

                     EMERGING VISION, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' DEFICIT
                     FOR THE SIX MONTHS ENDED JUNE 30, 2003
                        (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       Deficit
                                    ------    ------  ----------   --------  ------   ------  ----------  -----------  ------------


<S>                                 <C>      <C>      <C>          <C>       <C>      <C>      <C>         <C>           <C>
BALANCE - DECEMBER 31, 2002              1   $   74   29,922,957   $   299   182,337  $(204)   $120,345    $(124,329)    $ (3,815)
                                    ------   ------   ----------   --------  -------  -----    --------    ---------     ---------
Exercise of stock options                -        -      150,000         2         -      -          10            -           12
Issuance of common shares in
  connection with Rights
  Offering (Note 7)                      -        -   50,000,000       500         -      -         838            -        1,338
Issuance of warrants in connection
  with Rights Offering (Note 7)          -        -            -         -         -      -         521            -          521
Net income                               -        -            -         -         -      -           -          872          872
                                    ------   ------   ----------   --------  -------  -----    --------    ---------     --------
BALANCE - JUNE 30, 2003 (Unaudited)      1   $   74   80,072,957   $   801   182,337  $(204)   $121,714    $(123,457)    $ (1,072)
                                    ======   ======   ==========   ========  =======  =====    ========    =========     ========


</TABLE>

     The accompanying notes are an integral part of this consolidated statement.


                                       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.
and subsidiaries (collectively,  the "Company") have been prepared in accordance
with accounting  principles  generally accepted 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  accounting  principles  generally  accepted 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 Company's Annual Report on Form 10-K for the year ended December
31, 2002.  There have been no changes in significant  accounting  policies since
December 31, 2002.


NOTE 2 - MANAGEMENT'S LIQUIDITY PLANS:

     As  of  June  30,  2003  (exclusive  of  net  liabilities  of  discontinued
operations),   the  Company  had  reduced  its  negative  working  capital  from
$4,632,000  (as of December  31,  2002) to  $2,298,000,  and had cash on hand of
$1,208,000. During the six months ended June 30, 2003, the Company used $343,000
of cash in its  operating  activities.  This usage was a result of a decrease in
the accrual for store  closings of $611,000  (Note 6), a decrease of $434,000 in
franchise  deposits  and other  liabilities,  a decrease of $663,000 in accounts
payable and accrued liabilities, and a net increase of $189,000 in franchise and
other  receivables,  offset,  in part, by income from  continuing  operations of
$1,092,000.  Management  anticipates  that it will continue to make  significant
payments   against   existing   liabilities   associated  with  the  closure  of
non-profitable Company-owned stores.

     Management  plans to  continue  to improve  its cash flows  during  2003 by
improving store  profitability  through  increased  monitoring of store-by-store
operations,  continuing  to  implement  reductions  of  administrative  overhead
expenses where necessary and feasible,  actively supporting development programs
for  franchisees,  and  continuing  to add new  franchise  stores to the system.
Management  believes that with the  successful  execution of the  aforementioned
plans  to  improve  cash  flows,  its  existing  cash,  and  the  collection  of
outstanding  receivables,  there will be sufficient  liquidity available for the
Company to continue in  operation  through the third  quarter of 2004.  However,
there can be no assurance that management  will be able to successfully  execute
the aforementioned plans.


NOTE 3 - DISCONTINUED OPERATIONS:

     As  of  June  30,  2003,  there  was  approximately  $359,000  of  expenses
associated  with  the  Company's  discontinued  operations  accrued  as  part of
accounts  payable  and  accrued  liabilities  on the  accompanying  Consolidated
Balance  Sheet.  The majority of this amount (of which $225,000 was provided for
during the six months ended June 30, 2003) relates to certain  potential ongoing
liabilities  that the Company agreed to guarantee in connection with its sale of
Insight Laser Centers N.Y.I., Inc. (the "Ambulatory Center") (Note 7).


NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES:

Stock-Based Compensation

     In December 2002, the Financial Accounting Standards Board issued Statement
of Financial  Accounting Standards ("SFAS") No. 148, "Accounting for Stock-Based
Compensation  - Transition  and Disclosure - an amendment of SFAS No. 123." This
Statement  amends SFAS No. 123,  "Accounting for Stock-Based  Compensation",  to
provide  alternative  methods of transition  for a voluntary  change to the fair
value based method of accounting for stock-based


                                       6
<PAGE>


     employee  compensation.  In addition,  this Statement amends the disclosure
requirements of SFAS No. 123 to require prominent disclosures in both annual and
interim  financial  statements  about the method of accounting  for  stock-based
employee compensation and the effect of the method used on reported results. The
Company has adopted the provisions of SFAS No. 148 prospectively from January 1,
2003.

     Prior to 2003, the Company accounted for stock-based employee  compensation
under the recognition and measurement  provisions of Accounting Principles Board
Opinion  No.  25,  "Accounting  for Stock  Issued  to  Employees,"  and  related
Interpretations.  No stock-based  compensation cost is reflected in the 2002 net
loss,  as all options  granted to employees  had an exercise  price equal to the
market value of the  underlying  common stock on the date of grant.  Stock-based
compensation cost of approximately $1,000 is reflected in the 2003 net income as
a result of the grant, on May 30, 2003, of an aggregate of 700,000 stock options
to  each  of the  Company's  directors  and  Co-Chief  Operating  Officers.  The
following  table  illustrates  the  effect on net  income  (loss) and net income
(loss) per share as if the fair value-method had been applied to all outstanding
and unvested awards in each period:
<TABLE>
<CAPTION>
                                                            Three Months Ended                Six Months Ended
                                                                 June 30,                         June 30,
                                                              (In thousands)                   (In thousands)
                                                      --------------------------------
                                                      ---------------- --------------- --------------- ----------------
                                                           2003             2002            2003            2002
                                                           ----             ----            ----            ----
<S>                                                      <C>              <C>              <C>           <C>
     Net income (loss) - as reported                     $   513          $  (517)         $   872       $ (1,050)
    Deduct: Total stock-based employee compensation
       expense determined under
       fair value method for all awards                      (61)          (1,081)            (855)        (2,162)
                                                         --------         --------         --------      ---------
    Pro forma net income (loss)                          $   452          $(1,598)         $    17       $ (3,212)
                                                         ========         ========         ========      =========

    Earnings per share:
           Basis and diluted - as reported               $  0.01          $ (0.02)         $  0.02       $  (0.04)
                                                         =======          ========         ========      =========
           Basis and diluted - pro forma                 $  0.01          $ (0.06)         $  0.00       $  (0.12)
                                                         =======          ========         ========      =========
</TABLE>

Revenue Recognition

     The Company  charges  franchisees a  nonrefundable  initial  franchise fee.
Initial franchise fees are recognized at the time all material services required
to be provided  by the Company  have been  substantially  performed.  Continuing
franchise  royalty  fees are  based  upon a  percentage  of the  gross  revenues
generated by each  franchised  location  and are recorded as earned,  subject to
meeting all of the requirements of SAB 101 described below.

     The Company derives its revenues from the following four principal sources:

     Net sales - Represents sales from eye care products and related services;

     Franchise  royalties - Represents  continuing  franchise royalty fees based
upon a percentage of the gross revenues generated by each franchised location;

     Other  franchise  related fees - Represents  certain fees  collected by the
Company under the terms of franchise agreements (including,  but not limited to,
initial franchise fees, transfer fees and renewal fees).

     Interest on franchise  notes - Represents  interest  charged to franchisees
pursuant  to  promissory   notes  issued  in  connection   with  a  franchisee's
acquisition  of  the  assets  of  a  store  or  a  qualified  refinancing  of  a
franchisee's obligations to the Company.

     The Company  recognizes  revenues in accordance  with SEC Staff  Accounting
Bulletin No. 101,  "Revenue  Recognition in Financial  Statements"  ("SAB 101").
Accordingly,  revenues are recorded when  persuasive  evidence of an arrangement
exists,  delivery has occurred or services  have been  rendered,  the  Company's
price to the buyer is fixed or determinable,  and  collectibility  is reasonably


                                       7
<PAGE>

assured.  To the extent that  collectibility  of  royalties  and/or  interest on
franchise notes is not reasonably  assured,  the Company recognizes such revenue
when the cash is received.

     In addition,  the Company  accounts for  discounts,  coupons and promotions
(that are offered to its customers) as a direct reduction of sales.


NOTE 5 - PER SHARE INFORMATION:

     In accordance  with SFAS No. 128,  "Earnings  Per Share",  basic net income
(loss) per common share  ("Basic EPS") is computed by dividing net income (loss)
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) by the weighted-average number of common shares and dilutive common share
equivalents and convertible  securities then outstanding.  SFAS No. 128 requires
the  presentation of both Basic EPS and Diluted EPS on the face of the Company's
Consolidated  Statements  of  Operations.   Common  stock  equivalents  totaling
9,894,656 were excluded from the  computation for the three and six months ended
June 30,  2002,  as their  impact  would have been  anti-dilutive.  Common stock
equivalents totaling 9,069,324 (of an aggregate of 59,769,324 and 59,069,324 for
the six and three months ended June 30, 2003,  respectively)  were excluded from
the  computation  for the three and six  months  ended June 30,  2003,  as their
impact would have been anti-dilutive.

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

                                                         For the Three Months Ended        For the Six Months Ended
                                                                  June 30,                         June 30,
                                                               (In thousands)                   (In thousands)
                                                     ---------------- ---------------- --------------- ----------------
                                                           2003             2002             2003            2002
                                                           ----             ----             ----            ----
<S>                                                     <C>              <C>              <C>            <C>
Numerator:

     Income (loss) from continuing operations           $    511         $   (397)        $   1,092      $   (930)
     Income (loss) from discontinued operations                2             (120)             (220)         (120)
                                                        --------         ---------        ---------      ---------
         Net income (loss)                              $    513         $   (517)        $     872      $ (1,050)
                                                        ========         =========        =========      =========

Denominator:

     Weighted average common shares outstanding           72,668           28,396            51,238        27,700
     Dilutive effect of:
       Stock options                                          36                -                28             -
       Warrants issued in connection with Rights
          Offering                                         6,457                -             4,875             -
                                                        --------         ---------        ---------      ---------
    Weighted average common shares
       outstanding, assuming dilution                     79,161           28,396            56,141        27,700
                                                        ========         =========        =========      =========

Basic and Diluted Per Share Information:

     Income (loss) from continuing operations           $   0.01         $  (0.02)        $    0.02      $  (0.02)
     Income (loss) from discontinued operations             0.00             0.00              0.00          0.00
                                                        --------         ---------        ---------      ---------
         Net income (loss)                              $   0.01         $  (0.02)        $    0.02      $  (0.02)
                                                        ========         =========        =========      =========
</TABLE>

NOTE 6 - RELATED PARTY TRANSACTION:

     On April 4, 2003,  the Board of Directors  authorized the Company to borrow
$100,000  from one of its principal  shareholders  and  directors.  The loan was
payable immediately after the closing of the Company's Rights Offering (Note 7),
together with interest in an amount equal to 1% of the principal  amount of such
loan. The Company  repaid this loan, in full, on April 22, 2003,  with a portion
of the proceeds from the Rights Offering.


                                       8
<PAGE>

NOTE 7 - SHAREHOLDER RIGHTS OFFERING:

     On February  12,  2003, a  registration  statement  filed by the Company in
connection  with its  shareholder  rights  offering (the "Rights  Offering") was
declared  effective  by the  Securities  and  Exchange  Commission.  The  Rights
Offering  consisted of 50,000,000  units, with each unit consisting of one share
of the Company's  Common Stock,  and a warrant,  having a term of 12 months,  to
purchase one  additional  share of Common  Stock at an exercise  price of $0.05,
which was  determined  based on certain  closing  price and volume  requirements
during the subscription period.

     The terms of the Rights Offering provided that each shareholder was granted
1.67  non-transferable  rights for every  share of Common  Stock owned as of the
record date,  February 25, 2003.  Each right was  exercisable  for one unit at a
price of $0.04,  the  proceeds  of which  were to be used to repay  the  amounts
outstanding  under the Company's  existing credit facility and secured term note
(Note 11), to fund the  completion  of its store  closure plan (Note 9), and for
general corporate and working capital purposes.

     On April 14, 2003, the subscription  period ended and the Company completed
the Rights Offering.  Approximately  92,700,000 units were subscribed for in the
Rights  Offering,  and, as a result,  50,000,000 new shares of Common Stock, and
warrants to purchase 50,000,000  additional shares of Common Stock, were issued,
resulting in gross proceeds of $2,000,000.  The issuance costs  associated  with
the Rights Offering were  approximately  $141,000.  The net proceeds received in
the Rights  Offering  (approximately  $1,859,000)  were  allocated  based on the
relative  fair  values  of the  Common  Stock  and  the  warrants.  Accordingly,
approximately  $1,338,000  was  allocated to the Common Stock and  approximately
$521,000 was allocated to the warrants.


NOTE 8 - OFFER TO ACQUIRE OUTSTANDING CAPITAL STOCK:

     On June 6, 2003, the Company received an unsolicited  offer,  from Horizons
Investors Corp.  ("Horizons"),  Drs.  Robert and Alan Cohen,  and certain of the
Cohen family members (the "Offering  Group"),  to acquire all of the outstanding
capital stock of the Company.

     The offer  provides  that the  Offering  Group  would  purchase  all of the
outstanding  Common  Stock of the  Company  for a price per share of $0.07  (the
"Offered  Price"),  payable in cash, and that holders of vested employee options
and  warrants  would be entitled  to  receive,  in cash,  the  difference,  if a
positive  number,  between  the  Offered  Price and the  exercise  price of such
options and warrants.

     Horizons,  Drs.  Robert  and Alan  Cohen and  certain  of the Cohen  family
members are the holders of, in the aggregate,  approximately  seventy-four (74%)
percent of the  Company's  outstanding  Common Stock,  and Drs.  Robert and Alan
Cohen, and Benito R. Fernandez,  a principal  shareholder of Horizons  Investors
Corp., are members of the Board of Directors of the Company.

     The Company is in the process of evaluating the Offering  Group's offer but
has not yet made any determinations with respect thereto.


NOTE 9 - ACCRUAL FOR STORE CLOSINGS:

     Effective  January 1, 2003, the Company  adopted the provisions of SFAS No.
146,  "Accounting for Costs Associated with Exit or Disposal  Activities," which
supercedes  Emerging  Issues Task Force Issue 94-3,  "Liability  Recognition for
Certain Employee  Termination  Benefits and Other Costs to Exit an Activity." In
accordance therewith, the Company records a liability for a cost associated with
an exit or disposal activity when the liability is incurred. Prior to January 1,
2003, a provision was recorded at the time the determination was made to close a
particular  store and was based on the  expected  net  proceeds,  if any,  to be
generated  from the  disposition  of the  store's  assets,  as  compared  to the
carrying  value  (after  consideration  of  impairment,  if any) of such store's


                                       9
<PAGE>

assets and the estimated  costs  (including  lease  termination  costs and other
expenses)  that were  anticipated  to be incurred in the closing of the store in
question.  As of December  31,  2002,  the  Company  had  accrued  approximately
$1,109,000  related to its  anticipated  closure  of 11  stores.  During the six
months ended June 30, 2003, the Company  successfully closed ten of such stores.
As of June 30, 2003,  $498,000  remained as an accrual for store closings on the
accompanying  Consolidated Balance Sheet. The Company anticipates completing its
closure plan by the end of the third quarter of 2003.  No  additional  provision
was provided during the six months ended June 30, 2003.


NOTE 10 - COMMITMENTS AND CONTINGENCIES:

Litigation

     In 1999,  Apryl  Robinson  commenced an action in Kentucky  against,  among
others,  the  Company,  seeking an  unspecified  amount of damages and  alleging
numerous claims, including fraud and misrepresentation.  The claims that are the
subject of this  action  were  subsequently  tried in an action in New York that
resulted in a judgment in favor of the Company, and against Ms. Robinson and Dr.
Larry Joel, a co-defendant  in such action.  Subsequently,  Ms. Robinson and Dr.
Joel filed for  bankruptcy in Kentucky,  and the Company is proceeding  with its
efforts to enforce its judgment against Ms. Robinson and Dr. Joel.

     In 1999, Berenter Greenhouse and Webster, the advertising agency previously
utilized by the Company,  commenced an action,  against the Company,  in the New
York State Supreme  Court,  New York County,  for amounts  alleged to be due for
advertising and related fees. The amounts claimed by the plaintiff are in excess
of $200,000.  In response to this action,  the Company  filed  counterclaims  of
approximately $500,000,  based upon estimated overpayments allegedly made by the
Company pursuant to the agreement  previously  entered into between the parties.
As of the date hereof, this action was still in the discovery stage.

     In April 2000, the Company  commenced an action in the Supreme Court of the
State of New Jersey against  Preit-Rubin,  Inc. and Cumberland Mall  Associates,
the landlord of the former  Sterling  Optical Store located in Cumberland  Mall,
Vineland,  New Jersey,  seeking damages of approximately $200,000 as a result of
the defendants  alleged wrongful eviction of the Company from this location.  In
response  thereto,  the  defendants  asserted   counterclaims  of  approximately
$100,000  plus legal fees based upon the Company's  alleged  breach of the lease
pursuant to which it occupied  such store.  Thereafter,  the  defendant  filed a
motion for summary judgment seeking a dismissal of the Company's  claims,  which
motion was decided by the Court,  in a favor of the defendant.  In May 2003, the
Company  and  Preit-Rubin  settled the action,  the terms of which  provide,  in
material part,  that the Company pay  Preit-Rubin  the aggregate sum of $187,500
and, upon the parties' full  performance of their respective  obligations  under
such settlement, the action will be dismissed with prejudice.

     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 the makers'  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 of the Company's  retail optical
stores  then  located  in  Ontario,   Canada.   In  response,   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  transactions.  The  Company  believes  that  it  has  a
meritorious  defense  to  each  counterclaim.  As  of  the  date  hereof,  these
proceedings were in the discovery stage.

     In February 2002, Kaye Scholer,  LLP, the law firm  previously  retained by
the Company as its outside  counsel,  commenced  an action in the New York State
Supreme Court seeking  unpaid legal fees of  approximately  $122,000.  As of the
date hereof,  the Company has answered the Complaint in such action. The Company
believes that it has a meritorious defense to such claim.

     In May 2002, a class action was commenced in the California Superior Court,
Los Angeles  County,  against the Company and  VisionCare  of  California,  Inc.
("VCC"),  a wholly owned  subsidiary of the Company,  by Consumer  Cause,  Inc.,
seeking a preliminary  and permanent  injunction  enjoining the defendants  from
their  continued  alleged  violation of the California  Business and Professions
Code (the "California Code"), and restitution based upon the defendants' alleged


                                       10
<PAGE>


illegal  charging  of  dilation  fees  during the four year  period  immediately
preceding  the  date of the  plaintiff's  commencement  of such  action.  In its
complaint, the plaintiff alleged that VCC's employment of licensed optometrists,
as well as its  operation  (under the name  Sterling  VisionCare)  of optometric
offices in locations which are usually situated adjacent to the Company's retail
optical stores located in the State of California,  violates certain  provisions
of the California Code and was seeking to permanently enjoin VCC from continuing
to operate in such manner. On motion of the Company, which included a claim that
VCC  is a  specialized  Health  Care  Maintenance  Organization  that  has  been
specifically licensed,  under the California Knox Keene Health Care Service Plan
Act of 1975, as amended,  to provide the  identical  services that the plaintiff
was seeking to enjoin,  the court  dismissed this action,  with  prejudice,  and
without liability to the Company. In April 2003, the plaintiff filed a Notice of
Appeal of the decision of the lower court  dismissing  this action.  The Company
intends to vigorously pursue its opposition of this appeal.

     In  August  2002,  Sterling  Advertising,  Inc.  ("SAI"),  a  wholly  owned
subsidiary  of the Company,  commenced  an action in the New York State  Supreme
Court,  Nassau  County,  against  Harvey Herman  Associates,  Inc.  ("HHA"),  an
advertising agency previously retained by SAI, seeking damages, in the estimated
amount of $150,000,  as a result of HHA's alleged  failure to provide certain of
the  services  otherwise  required  of it  pursuant  to the  terms of a  certain
Client-Agency  Agreement,  dated July 9, 2001, between SAI and HHA.  Thereafter,
HHA, on August 6, 2002, commenced an action in the New York State Supreme Court,
New York County, against the Company,  seeking damages in the approximate amount
of $90,000,  based upon one or more additional agreements allegedly entered into
between  HHA and SAI,  which,  in the  opinion of SAI,  required  HHA to perform
certain  services which were already  included  within the scope of the services
required to be performed, by HHA, under such Client-Agency  Agreement. As of the
date hereof,  the parties have agreed,  in principal,  to settle such litigation
without the payment of any additional compensation.

     In October 2002, an action was commenced against the Company and its wholly
owned subsidiary, Sterling Vision of Eastland, Inc. (the "Tenant"), in the North
Carolina General Court of Justice, in which Charlotte Eastland Mall, LLC, as the
Landlord of the Tenant's  former  Sterling  Optical Center located in Charlotte,
North Carolina, is seeking,  among other things, damages against the Company, in
the approximate  amount of $81,000,  under its Limited  Guaranty of the Tenant's
obligations under the Lease for such Center.  The Company believes that it has a
meritorious  defense to such action.  As of the date hereof,  these  proceedings
were in the discovery stage.

     In November 2002, ADD of North Dakota, ADD of Jamestown,  Inc., each former
franchisees  of the Company,  and Aron  Dinesen,  their  principal  shareholder,
commenced an action against the Company,  in the United States  District  Court,
District of North Dakota,  Southeastern Division,  alleging, among other things,
that  the  Company  breached  certain  of its  obligations  under  each of their
respective  Franchise  Agreements.  In response thereto,  the defendant asserted
counterclaims  based upon the  defendants  alleged breach of each such franchise
agreement and of certain of the other  agreements  executed by the defendants in
connection therewith.  The Company believes that it has a meritorious defense to
plaintiffs'  claims in such action.  The Company's  time to answer the Complaint
has not yet expired.

     In December 2002, Pyramid Champlain Company ("Pyramid") commenced an action
against the  Company,  in the Supreme  Court of the State of New York,  Onondaga
County,  in which  Pyramid,  as the landlord of the  Company's  former  Sterling
Optical Center located in Plattsburg,  New York, is seeking, among other things,
damages against the Company,  in the approximate  amount of $230,000,  under the
lease for such Center. The Company believes that it has a meritorious defense to
such action.  There was pending a motion,  by Pyramid,  to grant Pyramid partial
summary  judgment on certain of its claims  raised in said action,  which motion
was denied by the Court.  Both  Pyramid  and the  Company  have until the end of
September 2003 to complete discovery as it relates to this action.

     On or about January 15, 2003, Wells Fargo Financial Leasing, Inc. commenced
an action  against the Company,  in the United States  District  Court,  Eastern
District of New York, as the lessor of certain office equipment allegedly leased
to the Company, and is seeking therein,  among other things, damages against the
Company,  in the  approximate  amount of $100,000,  in respect of claims arising
under such lease.  In August  2003,  the  Company  and Wells  Fargo  settled the
action, the terms of which provide, in material part, that the Company pay Wells
Fargo the aggregate sum of $75,000 and,  upon the parties' full  performance  of
their respective obligations under such settlement, the action will be dismissed
with prejudice.


                                       11
<PAGE>

     On or about May 12, 2003, General Electric Capital Corporation commenced an
action  against  Sterling  Vision of  California,  Inc. and the Company,  in the
Supreme  Court of the State of New  York,  County of  Nassau,  as the  lessor of
certain  office  equipment  allegedly  leased to Sterling  Vision of California,
Inc., and is seeking therein,  among other things,  damages against the Company,
in the approximate  amount of $266,000,  in respect of claims arising under such
lease.  On June 3, 2003,  the  plaintiff's  motion  for an order of seizure  and
preliminary injunction,  which was not opposed by the defendants, was granted by
the Court. The defendants  believe that they have a meritorious  defense to such
action. As of the date hereof, these proceedings were in the discovery stage.

     On May 20, 2003,  Irondequoit  Mall,  LLC  commenced an action  against the
Company and Sterling Vision of Irondequoit,  Inc. alleging,  among other things,
that the Company had  breached its  obligations  under its guaranty of the lease
for the former  Sterling  Optical  store  located in  Rochester,  New York.  The
defendants  believe that they have a meritorious  defense to such action.  As of
the date hereof, these proceedings were in the discovery stage.

     On May 21, 2003, SMB Operating Company,  LLC, the landlord of the Company's
former Sterling Optical store located in Edina,  Minnesota,  commenced an action
against the Company and its  subsidiary,  Sterling  Vision of  Southdale,  Inc.,
alleging that the Company had breached its obligations under its guaranty of the
lease for such  store.  The  defendants  believe  that  they have a  meritorious
defense to such action.  As of the date hereof,  the defendants'  time to answer
the complaint has not yet expired.

     On or about July 1, 2003,  Eighth  Street  Tower  Corporation  commenced an
action  against the Company,  in the  District  Court of the County of Hennepin,
State of  Minnesota,  in which the  plaintiff,  as the Landlord of the Company's
former  Sterling  Optical store located in Minneapolis,  Minnesota,  is seeking,
among other things,  damages against the Company,  in the approximate  amount of
$50,000,  under the lease for such  store.  The Company  believes  that it has a
meritorious  defense to such action.  As of the date hereof,  these  proceedings
were in the discovery stage.

     In  addition  to the  foregoing,  the  Company  is a  defendant  in certain
lawsuits  alleging  various claims  incurred in the ordinary course of business,
certain of which claims are covered by various  insurance  policies,  subject to
certain  deductible  amounts  and  maximum  policy  limits.  In the  opinion  of
management,  the  resolution of these claims should not have a material  adverse
effect,  individually  or in the  aggregate,  upon  the  Company's  business  or
financial  condition.  Other than as set forth above,  management  believes that
there are no other legal proceedings  pending or threatened to which the Company
is, or may be, a party,  or to which any of its properties are or may be subject
to, which, in the opinion of management,  will have a material adverse effect on
the Company. Additionally, with respect to the landlord-tenant actions described
herein,  the Company has already  accounted  for the  estimated  possible  costs
(including  possible  judgments)  associated  with such  actions  as part of the
accrual for store closings as of June 30, 2003.


Guarantees

     In connection  with the Company's sale of the Ambulatory  Center on May 31,
2001 (Note 2), the Company agreed to guarantee  certain of the potential ongoing
liabilities of the Ambulatory  Center.  As of December 31, 2002, the Company had
accrued $159,000 for estimated  guaranteed  liabilities in 2002.  During the six
months ended June 30, 2003, the Company accrued an additional  $225,000 for such
estimated guaranteed liabilities, representing the estimated cash flow losses of
the Ambulatory  Center through June 30, 2003,  based on information  provided by
the owner.  Although the term of the Company's  guarantee (of such  liabilities)
will not expire until April 2008, the Company's  exposure  hereunder may, in the
future, be reduced,  on a pro-rata basis,  based upon the ability of the current
owner to attract  additional  investors  who agree to guarantee all or a portion
thereof.  However,  there can be no assurance that such  liabilities  will be so
reduced  and,  as a result,  the Company  could in the future  continue to incur
further  costs  associated  with such  guarantee  should the  Ambulatory  Center
continue to generate cash flow losses.

     As of June 30,  2003,  the  Company was a  guarantor  of certain  leases of
retail optical stores franchised and subleased to its franchisees.  In the event
that all of such  franchisees  defaulted  on  their  respective  subleases,  the
Company would be obligated  for aggregate  lease  obligations  of  approximately
$7,234,000.


                                       12
<PAGE>

Executive Compensation

     On May 30, 2003, the Compensation  Committee (the "Committee") of the Board
granted 100,000 stock options to each of the three Co-Chief  Operating  Officers
of the Company. The options have an exercise price of $0.05, a term of 10 years,
and are immediately exercisable.  One of the Co-Chief Operating Officers (who is
also the Company's  Chief  Financial  Officer) has an employment  agreement that
provides for an incentive  bonus based on the Company's  achievement  of certain
EBITDA  targets,  as defined in his agreement.  The Committee also resolved that
each of the Company's two other Co-Chief  Operating  Officers would also receive
an  incentive  bonus  based on  substantially  the same terms as provided to the
other Co-Chief Operating Officer, pursuant to his employment agreement.


NOTE 11 - FINANCING ARRANGEMENTS:

     In January 2002, the Company secured two separate financing arrangements as
follows:

     Secured Term Note

     The  Company  entered  into a  secured  term  note for  $1,000,000  with an
independent financial  institution.  This note was repayable in 24 equal monthly
installments of $41,666,  and beared interest as defined (4.95% at the inception
of the note, and subsequently  amended on April 1, 2002 to 3.95%).  The note was
fully collateralized by a $1,000,000  certificate of deposit posted by Horizons,
at the same financial institution.

     Credit Facility

     The  Company  entered  into an  agreement  with  Horizons to borrow up to a
maximum of $1,000,000.  This credit  facility  beared interest at the prime rate
plus 1% (5.5% as of the date of the loan  agreement),  provided  for an  initial
advance of $300,000,  required minimum incremental advances of $150,000,  was to
mature on January 22, 2004,  required  ratable  monthly  principal  and interest
payments of each  borrowing,  was  amortizable  through the maturity date of the
facility,  was fully  collateralized  by a pledge of  certain  of the  Company's
qualifying franchise notes, and required the payment of a facility fee of 2% per
annum, payable monthly, on the unused portion of the credit facility.

     In  consideration  for providing  access to the credit facility and posting
collateral  for the term note,  the Company  granted  Horizons an  aggregate  of
2,500,000  warrants,  the fair  value of which was  $234,000.  The net  proceeds
received  were  allocated  based on the relative fair values of the debt and the
warrants.  Accordingly,  $810,000 was  allocated  to the debt,  and $190,000 was
allocated  to the warrants as a discount to the debt to be amortized as interest
expense  over the term of the note (2 years).  For the six months ended June 30,
2003, approximately $103,000 (representing the entire remainder of the discount)
was  amortized  and   recognized  as  interest   expense  in  the   accompanying
Consolidated  Statement of Operations.  On April 22, 2003, with a portion of the
proceeds from its Rights  Offering,  the Company paid off $417,000 and $407,000,
respectively,  representing,  at that time, the remaining  principal amounts due
under the secured term note and the credit facility.









                                       13
<PAGE>


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

     This Report  contains  certain  forward-looking  statements and information
relating  to the  Company  that  are/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,
among other items:  product demand and market  acceptance  risks;  the effect of
economic conditions;  the impact of competitive products,  services and pricing;
product development,  commercialization and technological difficulties;  and the
outcome of pending and future  litigation.  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 Six Months Ended June 30, 2003, as Compared to the Comparable
Period in 2002

     Net sales for Company-owned  stores,  including  revenues  generated by the
Company's wholly-owned subsidiary, VisionCare of California, Inc., a specialized
health  care  maintenance  organization  licensed  by the  State  of  California
Department  of Managed  Health Care,  decreased by  approximately  $392,000,  or
18.8%,  to  $1,692,000  for the three months ended June 30, 2003, as compared to
$2,084,000  for the comparable  period in 2002,  and decreased by  approximately
$1,465,000,  or 28.9%,  to $3,609,000 for the six months ended June 30, 2003, as
compared to $5,074,000 for the comparable  period in 2002.  These decreases were
primarily due to the lower average number of  Company-owned  stores in operation
during the three and six months  ended June 30,  2003,  as  compared to the same
periods in 2002. This decrease was in line with management's expectations due to
the closing of non-profitable Company-owned stores.

     As of June 30, 2003,  there were 173 stores in operation,  consisting of 13
Company-owned   stores  (including  6  Company-owned  stores  being  managed  by
franchisees) and 159 franchised  stores,  as compared to 187 stores in operation
as of June  30,  2002,  consisting  of 31  Company-owned  stores  (including  10
Company-owned stores being managed by franchisees) and 156 franchised stores. On
a same store basis (for those stores that the Company  will  continue to operate
as Company-owned  stores),  comparative net sales increased by $51,000, or 6.7%,
to $814,000 for the three  months  ended June 30, 2003,  as compared to $763,000
for the  comparable  period in 2002,  and  decreased  by  $45,000,  or 2.6%,  to
$1,678,000 for the six months ended June 30, 2003, as compared to $1,723,000 for
the comparable period in 2002. Management believes that the year-to-date decline
was a direct result of the general  downturn in the economy,  offset by a slight
improvement of business late in the second quarter.

     Franchise  royalties  decreased by $94,000,  or 5.6%, to $1,596,000 for the
three months ended June 30, 2003, as compared to $1,690,000  for the  comparable
period in 2002,  and decreased by $190,000,  or 5.6%, to $3,197,000  for the six
months ended June 30, 2003, as compared to $3,387,000 for the comparable  period
in 2002.  These  decreases  were primarily a result of a lower average number of
franchised stores in operation during the three and six month periods ended June
30, 2003 as compared to 2002, offset by a slight increase in franchise sales for
the stores that were open during both of the comparable periods.

     For the three and six months  ended June 30,  2003,  there were $25,000 and
$206,000 of other franchise  related fees,  respectively.  For the three and six
month periods ended June 30, 2002, the Company  recognized  $7,000 of such fees.
These increases were directly  attributable to the Company entering into ten new
franchise agreements during the six months ended June 30, 2003.


                                       14
<PAGE>

     Interest on franchise notes receivable  decreased by $45,000,  or 50.6%, to
$44,000 for the three months ended June 30, 2003, as compared to $89,000 for the
comparable period in 2002, and decreased  $81,000,  or 46.6%, to $93,000 for the
six months  ended June 30,  2003,  as compared to  $174,000  for the  comparable
period in 2002.  These decreases were primarily due to numerous  franchise notes
maturing during the past 12 months and only one new note being generated  during
the three  and six  month  periods  ended  June 30,  2003,  as  compared  to the
comparable periods in 2002.

     Excluding  revenues  generated by the  Company's  wholly-owned  subsidiary,
VisionCare of California,  Inc., the Company's gross profit margin  increased by
14.4%, to 83.2%,  for the three months ended June 30, 2003, as compared to 68.8%
for the  comparable  period in 2002, and increased by 4.8%, to 76.7% for the six
months ended June 30, 2003,  as compared to 71.9% for the  comparable  period in
2002. These increases were mainly a result of improved inventory  management and
control,  improved  purchasing  at lower  average  product  costs,  and improved
discounts obtained in 2003 from certain of the Company's vendors.  Additionally,
during the three  months ended June 30, 2003,  the Company  settled  liabilities
with certain of its vendors at lower amounts than originally anticipated,  which
had a positive effect on its gross profit margin.  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,  competitive  pricing,  and
promotional incentives.

     Selling,  general and administrative  expenses decreased by $1,011,000,  or
27.7%,  to  $2,637,000  for the three months ended June 30, 2003, as compared to
$3,648,000  for the comparable  period in 2002, and decreased by $2,744,000,  or
33.6%,  to  $5,424,000  for the six months ended June 30,  2003,  as compared to
$8,168,000 for the comparable period in 2002. These decreases were primarily due
to  management's  plan to reduce  administrative  expenses,  where necessary and
feasible,  and to close non-profitable  Company-owned stores.  Included in these
decreases  were  reductions  in salaries  and related  expenses of $270,000  and
$900,000,  facility and other overhead  charges of $621,000 and $1,686,000,  and
professional  fees of $95,000 and $150,000 for the three and  six-month  periods
ended June 30, 2003, respectively.

     Interest  expense  increased by $37,000,  to $96,000,  for the three months
ended June 30, 2003, as compared to $59,000 for the  comparable  period in 2002,
and increased by $59,000,  to $157,000,  for the six months ended June 30, 2003,
as compared to $98,000 for the comparable  period in 2002.  These increases were
primarily due to the amortization of the debt discount  associated with the full
payment of the Company's debt to Horizons and North Fork Bank.


Liquidity and Capital Resources

     As  of  June  30,  2003  (exclusive  of  net  liabilities  of  discontinued
operations),   the  Company  had  reduced  its  negative  working  capital  from
$4,632,000  (as of December  31,  2002) to  $2,298,000,  and had cash on hand of
$1,208,000. During the six months ended June 30, 2003, the Company used $343,000
of cash in its  operating  activities.  This usage was a result of a decrease in
the accrual for store  closings of $611,000  (Note 6), a decrease of $434,000 in
franchise  deposits  and other  liabilities,  a decrease of $663,000 in accounts
payable and accrued liabilities, and a net increase of $189,000 in franchise and
other  receivables,  offset,  in part, by income from  continuing  operations of
$1,092,000.  Management  anticipates  that it will continue to make  significant
payments   against   existing   liabilities   associated  with  the  closure  of
non-profitable Company-owned stores.

     For the six months  ended June 30, 2003,  cash flows  provided by investing
activities were $143,000,  as compared to $799,000 for the comparable  period in
2002.  This was  principally  due to the  maturing of numerous of the  Company's
franchise notes receivable  during the past twelve months and early repayment of
four franchise notes during the three months ended June 30, 2002.

     For the six months  ended June 30, 2003,  cash flows  provided by financing
activities  were $760,000,  principally due to the completion of the shareholder
rights  offering,  offset by the repayment of the Company's  debt  financing and
related party borrowings.

     In April 2003,  the Company  completed  its  shareholder  rights  offering,
resulting in net proceeds of  $1,859,000.  With a portion of the  proceeds,  the
Company paid off $417,000, $407,000 and $100,000, respectively, representing the
remaining principal amounts due under a secured term note, a credit facility and
a director loan.


                                       15
<PAGE>

     Management  plans to  continue  to improve  its cash flows  during  2003 by
improving store  profitability  through  increased  monitoring of store-by-store
operations,  continuing  to  implement  reductions  of  administrative  overhead
expenses where necessary and feasible,  actively supporting development programs
for  franchisees,  and  continuing  to add new  franchise  stores to the system.
Management  believes that with the  successful  execution of the  aforementioned
plans  to  improve  cash  flows,  its  existing  cash,  and  the  collection  of
outstanding  receivables,  there will be sufficient  liquidity available for the
Company to continue in  operation  through the third  quarter of 2004.  However,
there can be no assurance that management  will be able to successfully  execute
the aforementioned plans.

















                                       16
<PAGE>


Item 3.  Quantitative and Qualitative Disclosures about Market Risk

     The Company  presently has  outstanding  certain  equity  instruments  with
beneficial  conversion terms.  Accordingly,  the Company,  in the future,  could
incur non-cash charges to equity (as a result of the exercise of such beneficial
conversion  terms),  which  would  have a  negative  impact on future  per share
calculations.


Item 4.  Controls and Procedures

a)       Evaluation of Disclosure Controls and Procedures

     Based  on  their  evaluation  of  the  Company's  disclosure  controls  and
procedures as of the end of the period covered by this Quarterly  Report on Form
10-Q, the Co-Chief  Operating Officers (one of which is also the Company's Chief
Financial  Officer) have  concluded that the Company's  disclosure  controls and
procedures are effective to ensure that information  required to be disclosed by
the  Company  in  reports  that it files or submits  under the  Exchange  Act is
recorded,  processed,  summarized and reported within the time periods specified
in Securities and Exchange  Commission rules and forms, and include controls and
procedures  designed to ensure that information  required to be disclosed by the
Company  in such  reports  is  accumulated  and  communicated  to the  Company's
management,  including the Co-Chief Operating Officers,  as appropriate to allow
timely decisions regarding required disclosure.

b)       Changes in Internal Controls

     There were no changes that occurred  during the fiscal  quarter  covered by
this  Quarterly  Report  on Form  10-Q that  have  materially  affected,  or are
reasonably  likely to materially  affect,  the Company's  internal controls over
financial reporting.

















                                       17

<PAGE>



                           PART II - OTHER INFORMATION


Item 1.  Legal Proceedings

     On or about May 12, 2003, General Electric Capital Corporation commenced an
action  against  Sterling  Vision of  California,  Inc. and the Company,  in the
Supreme  Court of the State of New  York,  County of  Nassau,  as the  lessor of
certain  office  equipment  allegedly  leased to Sterling  Vision of California,
Inc., and is seeking therein,  among other things,  damages against the Company,
in the approximate  amount of $266,000,  in respect of claims arising under such
lease.  On June 3, 2003,  the  plaintiff's  motion  for an order of seizure  and
preliminary injunction,  which was not opposed by the defendants, was granted by
the Court. The defendants  believe that they have a meritorious  defense to such
action. As of the date hereof, these proceedings were in the discovery stage.

     On May 20, 2003,  Irondequoit  Mall,  LLC  commenced an action  against the
Company and Sterling Vision of Irondequoit,  Inc. alleging,  among other things,
that the Company had  breached its  obligations  under its guaranty of the lease
for the former  Sterling  Optical  store  located in  Rochester,  New York.  The
defendants  believe that they have a meritorious  defense to such action.  As of
the date hereof, these proceedings were in the discovery stage.

     On May 21, 2003, SMB Operating Company,  LLC, the landlord of the Company's
former Sterling Optical store located in Edina,  Minnesota,  commenced an action
against the Company and its  subsidiary,  Sterling  Vision of  Southdale,  Inc.,
alleging that the Company had breached its obligations under its guaranty of the
lease for such  store.  The  defendants  believe  that  they have a  meritorious
defense to such action.  As of the date hereof,  the defendants'  time to answer
the complaint has not yet expired.

     In May 2003, the Company and Preit-Rubin settled their action, the terms of
which provide,  in material part, that the Company pay Preit-Rubin the aggregate
sum of $187,500  and,  upon the parties' full  performance  of their  respective
obligations under such settlement, the action will be dismissed with prejudice.

     On or about July 1, 2003,  Eighth  Street  Tower  Corporation  commenced an
action  against the Company,  in the  District  Court of the County of Hennepin,
State of  Minnesota,  in which the  plaintiff,  as the Landlord of the Company's
former  Sterling  Optical store located in Minneapolis,  Minnesota,  is seeking,
among other things,  damages against the Company,  in the approximate  amount of
$50,000,  under the lease for such  store.  The Company  believes  that it has a
meritorious  defense to such action.  As of the date hereof,  these  proceedings
were in the discovery stage.

     In August 2003, the Company and Wells Fargo settled their action, the terms
of which  provide,  in  material  part,  that the  Company  pay Wells  Fargo the
aggregate  sum of $75,000  and,  upon the  parties'  full  performance  of their
respective obligations under such settlement,  the action will be dismissed with
prejudice.


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.



                                       18
<PAGE>


Item 5. Other Information

Not applicable.


Item 6. Exhibits and Reports on Form 8-K

A.    Exhibits

     31.1  Certification  of  Co-Chief  Operating  Officer  and Chief  Financial
Officer pursuant to Securities Exchange Act Rules 13a-14 and 15d-14

     31.2  Certification  of Co-Chief  Operating  Officer pursuant to Securities
Exchange Act Rules 13a-14 and 15d-14

     31.3  Certification  of Co-Chief  Operating  Officer pursuant to Securities
Exchange Act Rules 13a-14 and 15d-14

     32.1  Certification  of Co-Chief  Operating  Officers  and Chief  Financial
Officer  pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002


B.    Reports on Form 8-K

     On April 25, 2003,  the Company  filed a Report on Form 8-K  regarding  the
issuance of a press release,  on April 24, 2003,  regarding the  announcement of
the completion of its shareholder rights offering.

     On June 19,  2003,  the Company  filed a Report on Form 8-K  regarding  the
issuance of a press release, on June 6, 2003,  regarding the announcement of the
receipt of an unsolicited offer to acquire all of the outstanding  capital stock
of the Company.




                                       19
<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/  Christopher G. Payan
                                            -----------------------------------
                                             Christopher G. Payan
                                             Senior Vice President,
                                             Co-Chief Operating Officer and
                                             Chief Financial Officer
                                             (Co-Principal Executive Officer
                                             and Principal Financial Officer)


                                         BY: /s/ Brian P. Alessi
                                            -----------------------------------
                                             Brian P. Alessi
                                             Corporate Controller
                                             (Principal Accounting Officer)



                                         Dated: August 14, 2003















                                       20
<PAGE>

                                                                    Exhibit 31.1



I, Christopher G. Payan, certify that:

     1. I have reviewed this quarterly  report on Form 10-Q of Emerging  Vision,
Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the period presented in this report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     c) disclosed in this report any change in the registrant's internal control
over  financial  reporting  that occurred  during the  registrant's  most recent
fiscal  quarter  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most recent evaluation of internal control over financial  reporting,  to
the  registrant's  auditors  and the audit  committee of  registrant's  board of
directors (or persons performing the equivalent function):

     a) all significant  deficiencies  and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls over
financial reporting.


Date:  August 14, 2003


  /s/ Christopher G. Payan
-------------------------------
Christopher G. Payan
Co-Chief Operating Officer and
Chief Financial Officer





                                       21
<PAGE>

                                                                    Exhibit 31.2


I, Myles S. Lewis, certify that:

     1. I have reviewed this quarterly  report on Form 10-Q of Emerging  Vision,
Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the period presented in this report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     c) disclosed in this report any change in the registrant's internal control
over  financial  reporting  that occurred  during the  registrant's  most recent
fiscal  quarter  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most recent evaluation of internal control over financial  reporting,  to
the  registrant's  auditors  and the audit  committee of  registrant's  board of
directors (or persons performing the equivalent function):

     a) all significant  deficiencies  and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls over
financial reporting.



Date:  August 14, 2003


  /s/ Myles S. Lewis
---------------------------
Myles S. Lewis
Co-Chief Operating Officer






                                       22
<PAGE>

                                                                    Exhibit 31.3


I, Samuel Z. Herskowitz, certify that:

     1. I have reviewed this quarterly  report on Form 10-Q of Emerging  Vision,
Inc.;

     2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

     3. Based on my knowledge,  the financial  statements,  and other  financial
information included in this report, fairly present in all material respects the
financial  condition,  results of operations and cash flows of the registrant as
of, and for, the period presented in this report;

     4. The  registrant's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)  designed  such  disclosure  controls  and  procedures,  or caused  such
disclosure  controls and  procedures to be designed  under our  supervision,  to
ensure that  material  information  relating to the  registrant,  including  its
consolidated subsidiaries,  is made known to us by others within those entities,
particularly during the period in which this report is being prepared;

     b) evaluated the effectiveness of the registrant's  disclosure controls and
procedures and presented in this report our conclusions  about the effectiveness
of the disclosure  controls and procedures,  as of the end of the period covered
by this report based on such evaluation; and

     c) disclosed in this report any change in the registrant's internal control
over  financial  reporting  that occurred  during the  registrant's  most recent
fiscal  quarter  that  has  materially  affected,  or is  reasonably  likely  to
materially affect, the registrant's  internal control over financial  reporting;
and

     5. The registrant's other certifying  officers and I have disclosed,  based
on our most recent evaluation of internal control over financial  reporting,  to
the  registrant's  auditors  and the audit  committee of  registrant's  board of
directors (or persons performing the equivalent function):

     a) all significant  deficiencies  and material  weaknesses in the design or
operation of internal  control over  financial  reporting  which are  reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize and report financial information; and

     b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls over
financial reporting.


Date:  August 14, 2003


  /s/ Samuel Z. Herskowitz
-----------------------------
Samuel Z. Herskowitz
Co-Chief Operating Officer






                                       23
<PAGE>

                                                                    Exhibit 32.1



                              (Company Letterhead)



                   CERTIFITCATION PURSUANT TO 18 U.S.C. 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



     In  connection  with the  Quarterly  Report of Emerging  Vision,  Inc. (the
"Company")  on Form 10-Q for the period  ended  June 30,  2003 as filed with the
Securities and Exchange  Commission on the date hereof (the  "Report"),  each of
the undersigned officers of the Company,  certify, pursuant to 18 U.S.C. Section
1350,  as adopted  pursuant  to Section 906 of the  Sarbanes-Oxley  Act of 2002,
that:

     (1) The Report fully  complies  with the  requirements  of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
material  respects,  the  financial  condition  and results of operations of the
Company.


         /s/ Christopher G. Payan
------------------------------------------
Name:    Christopher G. Payan
Title:   Co-Chief Operating Officer and
         Chief Financial Officer
Date:    August 14, 2003


         /s/ Myles S. Lewis
------------------------------------------
Name:    Myles S. Lewis
Title:   Co-Chief Operating Officer
Date:    August 14, 2003


         /s/ Samuel Z. Herskowitz
------------------------------------------
Name:    Samuel Z. Herskowitz
Title:   Co-Chief Operating Officer
Date:    August 14, 2003




     This  certification  accompanies  this  Form  10-Q and  shall not be deemed
"filed" for purposes of Section 18 of the  Securities  Exchange Act of 1934,  or
otherwise subject to the liability of that Section.

     A signed  original of this  written  statement  required by Section 906 has
been provided to, and will be retained by, Emerging  Vision,  Inc. and furnished
to the Securities and Exchange Commission or its staff upon request.