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, 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 August 11, 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>

                                                                                                        June 30,   December 31,
                                                                                                          2001        2000
                                                                                                      -----------  -----------
                                                                                                      (Unaudited)
ASSETS
<S>                                                                                                   <C>          <C>
Current assets:
         Cash and cash equivalents ................................................................   $   1,927    $   5,215
         Franchise receivables, net of allowance of $2,400 and $3,521, respectively ...............       1,813        1,493
         Other receivables, net of allowance of $250 and $323, respectively .......................       1,063        1,997
         Current portion of notes receivable from franchisees .....................................       2,504        2,622
         Inventories ..............................................................................       1,052        1,033
         Prepaid expenses and other current assets ................................................         374          475
                                                                                                      ---------    ---------
                     Total current assets .........................................................       8,733       12,835
                                                                                                      ---------    ---------

Property and equipment, net .......................................................................       2,797        2,995
Franchise notes and other receivables, net of allowance of $3,500 and $3,019, respectively ........       2,241        3,926
Intangible assets, net ............................................................................       1,439        1,534
Other assets ......................................................................................         278          401
Net assets of discontinued operations .............................................................         793          840
                                                                                                      ---------    ---------
                                Total assets ......................................................   $  16,281    $  22,531
                                                                                                      =========    =========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
         Current portion of long-term debt ........................................................   $     193    $     221
         Accounts payable and accrued liabilities .................................................       7,380       13,227
         Net liabilities of discontinued operations ...............................................       1,599        3,006
                                                                                                      ---------    ---------
                     Total current liabilities ....................................................       9,172       16,454
                                                                                                      ---------    ---------

Long-term debt ....................................................................................         443          533
                                                                                                      ---------    ---------
Excess of fair value of assets acquired over cost .................................................         143          317
                                                                                                      ---------    ---------
Franchise deposits and other liabilities ..........................................................       1,057        1,322
                                                                                                      ---------    ---------

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; 26,187,309 and
         25,559,231 shares issued, respectively; 26,004,972 and 25,382,230 shares
         outstanding, respectively ................................................................         262          256
     Treasury stock, at cost, 182,337 and 177,001 shares, respectively ............................        (204)        (203)
     Additional paid-in capital ...................................................................     119,612      119,453
     Accumulated deficit ..........................................................................    (114,491)    (115,888)
                                                                                                      ---------    ---------
                                  Total shareholders' equity ......................................       5,466        3,905
                                                                                                      ---------    ---------
                                  Total liabilities and shareholders' equity ......................   $  16,281    $  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 Six Months
                                                                       Ended June 30,            Ended June 30,
                                                                       2001        2000        2001        2000
                                                                   ----------    --------    --------    --------
Revenues:
<S>                                                                  <C>         <C>         <C>         <C>
     Net sales ...................................................   $  2,900    $  2,962    $  5,740    $  6,716
     Franchise royalties .........................................      2,098       2,289       4,330       4,666
     Net gains and fees from the conveyance of franchise
          and Company-owned store assets .........................         34          33         122          47
     Interest on franchise notes receivable ......................        256         299         555         626
                                                                     --------    --------    --------    --------
          Total revenues .........................................      5,288       5,583      10,747      12,055
                                                                     --------    --------    --------    --------

Costs and expenses:

     Cost of sales ...............................................        652         753       1,206       1,795
     Selling, general and administrative expenses ................      4,559       4,998       9,392      11,013
     Loss from franchised stores operated under
          management agreements ..................................        134         144         247         255
                                                                     --------    --------    --------    --------
          Total costs and expenses ...............................      5,345       5,895      10,845      13,063
                                                                     --------    --------    --------    --------

     Loss from continuing operations before provision for
          income taxes ...........................................        (57)       (312)        (98)     (1,008)
     Provision for income taxes ..................................          -           -           -           -
                                                                     --------    --------    --------    --------
          Loss from continuing operations ........................        (57)       (312)        (98)     (1,008)
                                                                     --------    --------    --------    --------

Discontinued operations: (Note 2)
     Income (loss) from discontinued operations ..................      1,064      (3,819)      1,495      (5,098)
                                                                     --------    --------    --------    --------
          Net income (loss) ......................................   $  1,007    $ (4,131)   $  1,397    $ (6,106)
                                                                     ========    ========    ========    ========

Per share information - basic and diluted: (Note 3)

     Loss from continuing operations .............................   $   0.00    $  (0.18)   $   0.00    $  (1.58)
     Income (loss) from discontinued operations ..................       0.04       (0.16)       0.06       (0.23)
                                                                     --------    --------    --------    --------
          Net income (loss) per share ............................   $   0.04    $  (0.34)   $   0.06    $  (1.81)
                                                                     ========    ========    ========    ========

Weighted-average number of common shares
     outstanding - basic and diluted .............................     25,556      24,784      25,469      21,794
                                                                     ========    ========    ========    ========



                             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 Six Months Ended
                                                                                                       June  30,
                                                                                                    2001        2000
                                                                                                 ----------  ----------

Cash flows from operating activities:
<S>                                                                                              <C>         <C>
     Net loss from continuing operations .....................................................   $    (98)   $ (1,008)
         Adjustments to reconcile net loss from continuing operations
          to net cash provided by (used  in) operating activities:
            Depreciation and amortization ....................................................        669         513
            Provision for doubtful accounts ..................................................          7         454
            Non-cash compensation charges related to stock-based compensation ................        165          47
            Loss on disposal of fixed assets .................................................         21          52
        Changes in operating assets and liabilities:
            Franchise receivables ............................................................       (558)        363
            Inventories ......................................................................        (90)         91
            Prepaid expenses and other current assets ........................................        101          69
            Other assets .....................................................................         75          52
            Accounts payable and accrued liabilities .........................................       (179)     (3,172)
                                                                                                 --------    --------
Net cash provided by (used in) operating activities ..........................................        113      (2,539)
                                                                                                 --------    --------

Cash flows from investing activities:
     Franchise notes receivable issued .......................................................       (231)       (215)
     Proceeds from franchise and other notes receivable ......................................      1,018         981
     Purchases of property and equipment .....................................................       (229)       (297)
                                                                                                 --------    --------
Net cash provided by investing activities ....................................................        558         469
                                                                                                 --------    --------

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 ..............................................................       (118)     (3,575)
     Acquisition of treasury shares ..........................................................         (1)          -
                                                                                                 --------    --------
Net cash (used in) provided by financing activities ..........................................       (119)     15,235
                                                                                                 --------    --------
Net cash provided by continuing operations ...................................................        552      13,165
                                                                                                 --------    --------
Net cash used in discontinued operations .....................................................     (3,840)     (1,445)
                                                                                                 --------    --------
Net (decrease) increase in cash and cash equivalents .........................................     (3,288)     11,720
Cash and cash equivalents - beginning of period ..............................................      5,215         108
                                                                                                 --------    --------
Cash and cash equivalents - end of period ....................................................   $  1,927    $ 11,828
                                                                                                 ========    ========

Supplemental disclosures of cash flow information:

    Cash paid during the period for:
         Interest ............................................................................   $     45    $    315
                                                                                                 ========    ========
         Taxes ...............................................................................   $     50    $     44
                                                                                                 ========    ========

     Non-cash investing and financing activities:
         Net assets of franchise stores reacquired through exchange of receivables ...........   $    349    $      -
         Issuance of common shares for consulting services and other .........................        165       9,808
         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 SIX MONTHS ENDED JUNE 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)           -        -      628,078         6         -      -         159            -          165
Acquisition of treasury shares           -        -            -         -     5,336     (1)          -            -           (1)
Net income                               -        -            -         -         -      -           -        1,397        1,397
                                    ------   ------   ----------   --------  -------  -----    --------    ---------     --------
BALANCE - JUNE 30, 2001                  3   $  287   26,187,309   $   262   182,337  $(204)   $119,612    $(114,491)    $  5,466
                                    ======   ======   ==========   ========  =======  =====    ========    =========     ========


                        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").  As of  June  30,  2001,  the  Company  had  successfully
completed the  discontinuance of the activities of its Internet  Division,  with
only a limited  amount of  accrued  liabilities  (associated  with the  Internet
Division)  remaining.  Additionally,  in June 2000,  the Company  announced  its
intention to sell its assets  situated in the ambulatory  surgery center located
in Garden City, New York (the "Ambulatory Center"), as well as the assets of its
66.5%-owned subsidiary, Insight Laser Centers, Inc. ("Insight Laser").

     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
June 30, 2001 and December 31, 2000, net liabilities of discontinued  operations
of  $806,000  and  $2,166,000,   respectively,   have  been  segregated  on  the
accompanying Consolidated Balance Sheets.

     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.

     On May 31,  2001,  the Company  successfully  disposed of the assets of the
Ambulatory  Center at a price that resulted in a loss from  disposition that was
lower than  originally  accrued.  Additionally,  the  Company  has  successfully
settled  certain  claims  related  to its  Internet  Division  for less than the
amounts  originally  accrued.  As a result of the  foregoing,  the  Company  has
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 the accrual into  earnings.  This reversal is reflected in income
from  discontinued  operations on the  accompanying  Consolidated  Statements of
Operations  for 2001. As of June 30, 2001,  $880,000 of this  provision  remains
accrued  and is included in  accounts  payable  and accrued  liabilities  on the
accompanying  Consolidated  Balance  Sheet.  At the present time, the Company is
evaluating an offer for the purchase of the assets of Insight Laser.

     During the six months ended June 30, 2001, the Company utilized  $3,908,000
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

                                       6
<PAGE>

Dallas,  Texas office,  and approximately  $1,203,000 of operating costs for the
Internet Division through June 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 - the 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.  In  consideration  of the  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 the  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  has  reversed  $887,000  of the
previously accrued $1,145,000 of liabilities  relating to the Ambulatory Center.
For the six months  ended June 30,  2001,  the  Ambulatory  Center  incurred net
operating  losses of $258,000.  These losses were charged against the previously
established  accrual  for  discontinued  operations  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 (Note 6).


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.


                                       7
<PAGE>



     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 Six Months
                                                                    Ended June 30,         Ended June 30,
                                                                   2001        2000       2001         2000
                                                                ---------   ---------   ---------   ---------
Numerator:

<S>                                                             <C>         <C>         <C>         <C>
Loss from continuing operations .............................   $    (57)   $   (312)   $    (98)   $ (1,008)
Induced conversion of Senior Convertible Preferred Stock ....          -           -           -     (21,707)
Accretion of dividends on Series B Convertible
      Preferred Stock .......................................          -      (4,248)          -     (11,743)
                                                                --------    --------    --------    --------
Numerator for basic and diluted per share
      information - loss attributable to common
      shareholders ..........................................        (57)     (4,560)        (98)    (34,458)
                                                                --------    --------    --------    --------

Basic and Diluted:

Loss attributable to common shareholders ....................        (57)     (4,560)        (98)    (34,458)
Income (loss) from discontinued operations ..................      1,064      (3,819)      1,495      (5,098)
                                                                --------    --------    --------    --------
      Net income (loss) available (attributable) to
      common shareholders ...................................   $  1,007    $ (8,379)   $  1,397    $(39,556)
                                                                ========    ========    ========    ========

Denominator:

Denominator for basic and diluted per share
      information - weighted-average number of
      common shares outstanding .............................     25,556      24,784      25,469      21,794
                                                                ========    ========    ========    ========

Basic and Diluted Per Share Information:

Loss attributable to common shareholders ....................   $   0.00    $  (0.18)   $   0.00    $  (1.58)
Income (loss) from discontinued operations ..................       0.04       (0.16)       0.06       (0.23)
                                                                --------    --------    --------    --------
      Net income (loss) available (attributable) to
      common shareholders ...................................   $   0.04    $  (0.34)   $   0.06    $  (1.81)
                                                                ========    ========    ========    ========

</TABLE>


NOTE 4 - SHAREHOLDER'S EQUITY:

Issuance of Warrants 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.  In connection with the foregoing,  Michael C. McGeeney was
initially  appointed Chief Executive  Officer of the Company's  Sterling Optical
division and,  subsequently,  on March 28, 2001, replaced Gregory T. Cook as the
Company's  President and Chief Executive Officer.  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.

                                       8
<PAGE>

     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.


NOTE 5 - FAIR VALUE OF FINANCIAL INSTRUMENTS:

     The carrying amounts of cash and cash  equivalents,  franchise  receivables
(net of allowances), other current assets, accounts payable and amounts included
in accruals  meeting the definition of financial  instruments  approximate  fair
value.


NOTE 6 - SUBSEQUENT EVENTS:

     The Nasdaq Stock Market, Inc. ("Nasdaq") requires,  among other items, as a
condition to the continued  listing of the Company's  Common Stock on the Nasdaq
National Market System ("Nasdaq-NMS"),  a minimum bid price for its Common Stock
of $1.00 per share.  Nasdaq also requires that the Company maintain a minimum of
$4,000,000 of net tangible assets to maintain such listing.

     On April 9, 2001,  the Company was  notified by Nasdaq that it did not meet
the  minimum bid price  requirement  of $1.00 for the  continued  listing of its
shares on the  Nasdaq-NMS  and that the Company had until July 5, 2001 to comply
with this requirement in order to avoid delisting.  On July 6, 2001, the Company
received an additional  notice from Nasdaq of its decision that its Common Stock
would be delisted on July 16, 2001 as a result of the Company's  failure to meet
the minimum bid price requirement.  The Company has appealed this decision based
upon its Board of Directors'  authorization,  subject to shareholder approval at
the Company's  2001 Annual Meeting of  Shareholders  to be held on September 12,
2001, of an amendment to the  Company's  Charter to effect a reverse stock split
of its issued and outstanding shares of Common Stock at a ratio of between 1 for
2 and 1 for 10,  if at all,  as may be  determined  by the  Board,  in its  sole
discretion.  The  Company  has been  advised by Nasdaq  that a hearing  has been
scheduled  for August 23, 2001,  at which time Nasdaq will review the  Company's
plan to meet the  continued  listing  requirements.  There can be no  assurance,
however, that the Company's plan will be satisfactory to Nasdaq.

                                       9
<PAGE>

     The  Company's  net  tangible  assets as of June 30, 2001 were  $4,027,000.
Management  anticipates that unless the Company's  profitability improves during
the third quarter of 2001 and the Company is  successful in completing  its plan
of  disposing  of the  assets of  Insight  Laser,  it will be  required  to seek
alternative  equity  financing to comply with the Nasdaq-NMS net tangible assets
requirement.  There can be no assurance,  however, that the Company will be able
to improve  profitability  and  dispose of such  assets  within the time  period
required by Nasdaq,  or that equity  financing  will be available to the Company
when necessary, or on terms that will be acceptable to the Company.

     Effective  June 29, 2001,  Nasdaq  changed the current net tangible  assets
listing standard to an equity listing  standard.  This change requires an equity
maintenance  standard of $10,000,000.  Companies listed on Nasdaq as of June 29,
2001 have until November 1, 2002 to achieve  compliance  with the applicable new
standard.  During that period,  listed companies that do not meet the new equity
listing  standard can continue to qualify under the net tangible  assets listing
standard. There can be no assurance that the Company will be able to achieve the
minimum equity standard by November 1, 2002.

     If the Company's  Common Stock were delisted,  the delisting  could have an
adverse  effect on the trading  prices of the  Company's  Common Stock and could
adversely  affect  the  liquidity  of the  shares  of Common  Stock  held by the
Company's shareholders.

     As discussed in Note 2, on July 5, 2001,  the Company and 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
Company's  previously abandoned e-commerce business and strategies) 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  will be 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.

     Effective  July 2, 2001,  Mr. Robert Hillman was appointed as the Company's
President and Chief Executive  Officer,  and Chairman of the Board of Directors.
In connection therewith,  the Company and Mr. Hillman entered into an Employment
Agreement having a term of three years.


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  based  on  the  beliefs  of the  Company's
management,  as well as assumptions made by, and information currently available
to, the Company's management within the meaning of Section 21E of the Securities
Exchange  Act of  1934,  as  amended.  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,  but are not limited to:  product  demand and market
acceptance  risks;  the effect of economic  conditions;  success of transactions
with third parties;  the impact of competitive  products,  services and pricing;
product  development,  commercialization  and  technological  difficulties;  the
outcome of current and future  litigation;  delisting  of the  Company's  Common
Stock by the Nasdaq; and other risks described  elsewhere herein.  Should one or
more of these risks or  uncertainties  materialize,  or should  such  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.


                                       10
<PAGE>

     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 June 30, 2001 as discontinued operations for all periods presented.  The
following discussion and analysis focuses on continuing operations, as restated,
unless otherwise noted.

RESULTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AS COMPARED TO JUNE 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  $94,000 and $1,055,000,
or 4.3% and 20.5%,  to  $2,080,000  and  $4,089,000  for the three and six month
periods ended June 30, 2001, as compared to $2,174,000  and  $5,144,000  for the
comparable  periods in 2000. Net sales for VCC increased by $32,000 and $79,000,
or 4.1% and  5.0%,  to  $820,000  and  $1,651,000,  for the  three and six month
periods  ended June 30,  2001,  as compared to $788,000 and  $1,572,000  for the
comparable  periods in 2000.  The  decreases for the  Company-owned  stores were
principally  due to a lower  average  number of stores in  operation  during the
three and six month periods  ended June 30, 2001, as compared to the  comparable
periods  in  2000.  On a  same  store  basis  (for  stores  that  operated  as a
Company-owned  store during both of the three and six month  periods  ended June
30, 2001 and 2000),  comparative net sales decreased by  approximately  $215,000
and $448,000, or 11.8% and 11.5%, to $1,614,000 and $3,440,000 for the three and
six month periods ended June 30, 2001, as compared to $1,829,000  and $3,888,000
for the comparable periods in 2000. As of June 30, 2001, there were 218 Sterling
Stores  in  operation,  consisting  of 38  Company-owned  stores  (including  12
Company-owned  stores being managed by  franchisees)  and 180 franchised  stores
(including  2 franchised  stores  being  managed by the Company on behalf of the
franchisees), as compared to 244 Sterling Stores in operation for the comparable
period  in  2000,   consisting  of  33   Company-owned   stores   (including  12
Company-owned  stores being managed by  franchisees)  and 211 franchised  stores
(including  5 franchised  stores  being  managed by the Company on behalf of the
franchisees).

     Franchise  royalties decreased by approximately  $191,000 and $336,000,  or
8.3% and 7.2%, to $2,098,000  and $4,330,000 for the three and six month periods
ended June 30, 2001, as compared to $2,289,000 and $4,666,000 for the comparable
periods in 2000.  These decreases were primarily due to the lower average number
of franchised  stores in operation  during the three and six month periods ended
June 30,  2001,  as compared to the  comparable  periods in 2000.  Additionally,
there were lower system-wide sales for comparable franchised stores in operation
throughout  the three and six month  periods ended June 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,  increased by approximately  $1,000 and $75,000,  or 3.0%
and 159.6%,  to $34,000 and $122,000 for the three and six month  periods  ended
June 30, 2001, as compared to $33,000 and $47,000 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 six months ended June
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  $43,000
and $71,000,  or 14.4% and 11.3%, to $256,000 and $555,000 for the three and six
month  periods ended June 30, 2001, as compared to $299,000 and $626,000 for the
comparable  periods in 2000.  These decreases were principally due to reductions
of the principal  balances of franchisee  notes and fewer notes being  generated
during the three and six month  periods  ended June 30, 2001, as compared to the
comparable periods in 2000.

     The  Company's  gross profit  margin from  Company-owned  store  operations
increased  by 3.3% and  5.4%,  to 68.7%  and  70.5%  for the three and six month
periods ended June 30, 2001,  as compared to 65.4% and 65.1% for the  comparable
periods in 2000.  These  increases  were due to a change in the mix of  products
being sold in Company-owned  stores and improved inventory management during the
three and six month periods  ended June 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  decreased  by $439,000 and
$1,621,000,  or 8.8% and 14.7%,  to $4,559,000  and $9,392,000 for the three and
six month periods ended June 30, 2001, as compared to $4,998,000 and $11,013,000
for the  comparable  periods in 2000.  These  changes  were  primarily  due to a
decrease of approximately  $287,000 and $1,156,000 related to reductions (due in
part to the  decrease  in number  of  Company-owned  stores)  in  operating  and
administrative  payroll  related costs for the three and six month periods ended
June 30, 2001,  respectively,  as compared to the comparable periods in 2000. In
addition,  there were  decreases of  approximately  $226,000 and $454,000 in the
provision for doubtful  accounts  associated with accounts and notes  receivable
due from franchisees during the three and six month periods ended June 30, 2001,
as compared to the  comparable  periods in 2000.  The decreases in the provision
were mainly a result of senior  management's  decision  to take back  franchised
stores from various problem franchisees. The Company reacquired the assets of 10
franchised  store  locations  during the six months ended June 30, 2001,  and an
additional 3 franchised stores subsequent to June 30, 2001.


LIQUIDITY AND CAPITAL RESOURCES

     For the six month  period  ended  June 30,  2001,  cash flows  provided  by
operating activities were $113,000,  as compared to cash flows used in operating
activities  of  $(2,539,000)  for the  comparable  period  in  2000.  Loss  from
continuing  operations  for the  six  month  period  ended  June  30,  2001  was
$(98,000),  as compared to a loss from continuing operations of $(1,008,000) for
the comparable period in 2000.

     For the six month  period  ended  June 30,  2001,  cash flows  provided  by
investing  activities were $558,000,  as compared to $469,000 for the comparable
period  in  2000.   This  increase  was   principally  due  to  an  increase  of
approximately $37,000, to $1,018,000, in proceeds from franchise and other notes
receivables, a decrease of approximately $(68,000) in capital expenditures,  and
an increase of approximately $16,000 in notes issued by franchisees.

     For the six month period ended June 30, 2001,  cash flows used in financing
activities  were  $(119,000),  principally due to payments on long-term debt, as
compared to  $15,235,000  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 $3,075,000.

     The  Company's  working  capital  deficit was $439,000 as of June 30, 2001.
This amount included accruals in the aggregate amount of approximately  $880,000
related to anticipated  liabilities to be incurred in connection  with potential
settlements related to the Company's discontinued operations.  These 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).  The Company  believes  that it will  improve  cash flows during 2001 by
improving store  profitability  through  increased  monitoring of store-by-store
operations;   closure  of   non-profitable   store   locations;   reduction   of
administrative overhead expenses; new marketing programs; and seeking additional
equity financing, if available.

     The Nasdaq Stock Market, Inc. ("Nasdaq") requires,  among other items, as a
condition to the continued  listing of the Company's  Common Stock on the Nasdaq
National Market System ("Nasdaq-NMS"),  a minimum bid price for its Common Stock
of $1.00 per share.  Nasdaq also requires that the Company maintain a minimum of
$4,000,000 of net tangible assets to maintain such listing.

     On April 9, 2001,  the Company was  notified by Nasdaq that it did not meet
the  minimum bid price  requirement  of $1.00 for the  continued  listing of its
shares on the  Nasdaq-NMS  and that the Company had until July 5, 2001 to comply
with this requirement in order to avoid delisting.  On July 6, 2001, the Company
received an additional  notice from Nasdaq of its decision that its Common Stock
would be delisted on July 16, 2001 as a result of the Company's  failure to meet
the minimum bid price requirement.  The Company has appealed this decision based
upon its Board of Directors'  authorization,  subject to shareholder approval at
the Company's  2001 Annual Meeting of  Shareholders  to be held on September 12,
2001, of an amendment to the  Company's  Charter to effect a reverse stock split

                                       12
<PAGE>

of its issued and outstanding shares of Common Stock at a ratio of between 1 for
2 and 1 for 10,  if at all,  as may be  determined  by the  Board,  in its  sole
discretion.  The  Company  has been  advised by Nasdaq  that a hearing  has been
scheduled  for August 23, 2001,  at which time Nasdaq will review the  Company's
plan to meet the  continued  listing  requirements.  There can be no  assurance,
however, that the Company's plan will be satisfactory to Nasdaq.

     The  Company's  net  tangible  assets as of June 30, 2001 were  $4,027,000.
Management  anticipates that unless the Company's  profitability improves during
the third quarter of 2001 and the Company is  successful in completing  its plan
of  disposing  of the  assets of  Insight  Laser,  it will be  required  to seek
alternative  equity  financing to comply with the Nasdaq-NMS net tangible assets
requirement.  There can be no assurance,  however, that the Company will be able
to improve  profitability  and  dispose of such  assets  within the time  period
required by Nasdaq,  or that equity  financing  will be available to the Company
when necessary, or on terms that will be acceptable to the Company.

     If the Company's  Common Stock were delisted,  the delisting  could have an
adverse  effect on the trading  prices of the  Company's  Common Stock and could
adversely  affect  the  liquidity  of the  shares  of Common  Stock  held by the
Company's shareholders.

     The Company  believes that, in the furtherance of its business  strategies,
the Company's  future  capital  requirements  will include:  (i)  renovating and
remodeling  Company-owned 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.

     The Company  believes  that,  based on its current  cash  position  and the
implementation  of the  plans  described  above,  sufficient  resources  will be
available for the Company to continue in operation through the end of the second
quarter of 2002.  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 financing.  However,
there can be no assurance  that such equity  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. Additionally,  as a result of the above,
the Company could incur non-cash charges to equity,  which would have a negative
impact on future per share calculations.

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


                                       13
<PAGE>



                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS


     In February  2001,  five of the  Company's  Site for Sore Eyes  franchisees
(owning an aggregate of seven franchised Site for Sore Eyes stores) commenced an
action  in the  United  States  District  Court  for the  Northern  District  of
California  seeking  $35,000,000  of  damages  as a result of (1) the  Company's
alleged  breach  of the  respective  Franchise  Agreements  whereby  each of the
franchisees  operates  its Site for Sore Eyes  Optical  store(s),  (2) fraud and
violations  of California  law, and (3) a declaratory  judgment that each of the
Franchise  Agreements had been modified to afford each plaintiff  certain rights
which are in addition to those set forth in the applicable Franchise Agreements.
At the present time,  the Company and the  plaintiffs are attempting to reach an
amicable settlement of this dispute.

     In 1999, the Company  commenced an action in the 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").  The Notes were  issued by  corporations  owned by the  defendants  in
connection  with their purchase of the assets of, and a Sterling  Optical Center
Franchise  for, an aggregate of four of the Company's  retail optical stores and
an  optical  laboratory.  The  repayment  of each of the  Notes  was  personally
guaranteed  by each of the  defendants.  In response,  the  defendants  asserted
counterclaims in excess of $13,000,000  based upon the Company's alleged failure
to comply with the terms of an oral, month-to-month consulting agreement between
Dr. Joel and the Company, as well as to purchase the assets of various companies
owned by Dr. Joel,  including Duling Optical and D & K Optical - notwithstanding
the fact that the parties  failed to agree upon the terms of any such  purchase,
the parties  failed to enter into any  written  agreement  memorializing  such a
transaction,  and the Company  subsequently  purchased  such assets from Norwest
Bank (which held a first lien on  substantially  all of the assets as collateral
for  various  loans  made to each of the  entities,  all of which  were  then in
default) in a private  foreclosure  sale. In March 2001, the Appellate  Division
granted  the  Company's  Motion  for  Summary  Judgment  on  the  issue  of  the
defendants'  liability,  as guarantors  of each of such Notes.  A hearing on the
Company's  damages  took  place in July 2001;  and,  in August  2001,  the Court
granted the Company's claim for damages in the  approximate  amount of $800,000.
In addition,  in March 2001, the Company filed an additional  Motion for Summary
Judgment seeking dismissal of all of the counterclaims;  and the defendant,  Dr.
Joel,  thereafter filed a cross-motion  seeking a determination that the Company
breached the aforementioned oral,  month-to-month  consulting agreement and that
he is, accordingly,  entitled to damages of approximately  $13,000,000,  each of
which motions were decided  entirely in favor of the Company.  Subsequently,  on
July 2, 2001, the defendants,  without counsel, filed an appeal of this decision
by the Court. This appeal has not yet been decided.

     In January 2001,  the Company  commenced an action  against Binns  Optical,
Inc. ("BOI"), Michael Binns and Mary Ann Binns (collectively,  the "Guarantors")
in the United  States  District  Court for the  Eastern  District  of  Missouri,
seeking to prohibit the  defendants  from  operating the Sterling  Optical store
located in Ballwin,  Missouri,  under any name other than Sterling  Optical,  as
well as to require the defendants to return to the Company all patient  records,
customer lists, furniture, fixtures and equipment removed by the defendants from
the six  Sterling  Optical  stores  previously  franchised  to,  and  ultimately
abandoned by, BOI. In February 2001,  the defendants  entered into a Stipulation
agreeing to the entry of a preliminary  injunction whereby the defendants agreed
to substantially all of the relief requested by the Company;  and in March 2001,
the defendants  filed a counterclaim  against the Company seeking damages in the
amount of $3,000,000, plus punitive damages as a result of the Company's alleged
fraud in the inducement,  negligent misrepresentation,  breach of fiduciary duty
and claims stated in the  alternative  for breach of contract and breach of oral
agreement. The Company has denied the defendants'  counterclaims and has filed a
motion to dismiss all of the counterclaims. This motion has not yet been decided
by the Court.  In a related  matter,  in February 2001, the Company  commenced a
separate  action  against the  Guarantors in the New York State Supreme Court by
filing a Motion for  Summary  Judgment  in Lieu of  Complaint,  seeking  damages
(under the Guarantors' payment guarantee in favor of the Company) as a result of
the  failure  of BOI to  comply  with its  obligations  under a series  of eight
Negotiable Promissory Notes made by BOI in its favor; and in April 2001 and July
2001, the Court granted the Company's  motion and awarded the Company  judgments
for damages, in the aggregate  approximate amount of $1,500,000.  The Company is
seeking  to  enforce  these  judgments  in the  State  of  Missouri,  where  the
Guarantors both reside.


                                       14
<PAGE>

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.

     During  the  three  months  ended  June 30,  2001,  the  Company  issued an
aggregate of 418,719  unregistered shares of its Common Stock (the fair value of
which was approximately  $108,000) to Goldin  Associates,  L.L.C.  ("Goldin") in
exchange  for  Goldin  providing  interim  management  services  to the  Company
pursuant to a certain  agreement,  as amended.  Goldin was also granted  certain
limited "piggy-back" registration rights with respect to these shares.

     Additionally,  during the three  months  ended June 30,  2001,  the Company
issued an aggregate of 209,359 unregistered shares of its Common Stock (the fair
value of which was approximately  $57,000) to Balfour Investors Inc. ("Balfour")
in exchange for Balfour  providing  advisory  services to the Company's Board of
Directors pursuant to a certain agreement, as amended.  Balfour was also granted
certain limited "piggy-back" registration rights with respect to these shares.

     The  aforementioned  shares were issued to both Goldin and Balfour pursuant
to an exemption under Section 4(2) of the Securities Act of 1933, as amended.

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

A.    Exhibits

10.117    Warrant  Certificate  and  Agreement,  dated as of January  16,  2001,
          between Emerging Vision, Inc. and Goldin Associates, L.L.C.

10.118    Warrant Certificate and Agreement, dated as of April 26, 2001, between
          Emerging Vision, Inc. and Balfour Investors Incorporated.



B.    REPORTS ON FORM 8-K

1.        On June 13, 2001,  the  Registrant  filed a Current Report on Form 8-K
          with respect to The Nasdaq Stock  Market's  possible  delisting of its
          Common Stock from the Nasdaq National Market System.



                                       15
<PAGE>

                                   SIGNATURES


     Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this Report to be signed on its behalf
by the undersigned 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: August 14, 2001








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