| ANNUAL      REPORT PURSUANT TO SECTION 13 OR15(d) |
|---------------------------------------------------|

| OF      THE SECURITIES EXCHANGE ACT OF1934 |
|--------------------------------------------|

| For      the fiscal year ended: December 31,      2008 |
|--------------------------------------------------------|

| Commission      file number: 1-14128 |
|--------------------------------------|

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

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

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

|            Large accelerated      filer                                                                                                                                                     | Accelerated      filer           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------|
|                                          Non-accelerated filer | Smaller      reporting company X |

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

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|                                                                                                                                                                                                                                                                                                                                      |   |   |   | December      31, |              |   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|-------------------|-------------------|--------|--------|
| I.      COMPANY-OWNED STORES:                                                                                                                                                                                                                                                                                                             |   |   | 2008   | *                 |              |   | 2007   |   |
|                                                                                                                                                                                                                                                                                                                                      |   |   |   |              |              |   |   |   |
| Company-owned      stores                                                                                                                                                                                                                                                                                                                 |   |   | 5      |              |              |   |   | 11 |   |
| Company-owned      stores managed by franchisee                                                                                                                                                                                                                                                                                           |   |   | 1      |              |              |   |   | 1 |   |
| Total                                                                                                                                                                                                                                                                                                                                     |   |   | 6      |              |              |   |   | 12 |   |
|                                                                                                                                                                                                                                                                                                                                      |   |   |   |              |              |   |   |   |   |
| (*)      Existing store locations: Maryland (1), New York (4) and Pennsylvania      (1).                                                                                                                                                                                                                                             |   |
|                                                                                                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                                                                                      |   |   |   |              | December      31, |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                      |   | 2008   | *      |              |              | 2007   |   |
| II.      FRANCHISED STORES:                                                                                                                                                                                                                                                                                                               |   |   | 133    |              |              |   |   | 146 |   |
|                                                                                                                                                                                                                                                                                                                                      |   |   |   |              |              |   |   |   |   |
| (*)      Existing store locations: California (41), Delaware (3), Florida (2),      Illinois (1), Kentucky (2), Louisiana (2), Maryland (10), New Jersey (7),      New York (37), North Dakota (3), Pennsylvania (8), Virginia (6),      Washington D.C. (1), West Virginia (1), Wisconsin (7), and the U.S. Virgin      Islands (2) |   |
|                                                                                                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                                                                                      |   |

| a.   | Term. Generally, the      term of each Franchise Agreement is ten years and, subject to certain      conditions, is renewable at the option of the  franchisee. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Initial Fees.      Generally, franchisees (except for any franchisees converting their      existing retail optical store to a Sterling Store (a “Converted Store”),      franchisees opening a location that has limited public access (a “Limited      Access Facility”), and those entering into agreements for more than one      location) must pay the Company a non-recurring, initial franchise fee of      $20,000.  For each franchisee entering into agreements for more      than one location, the Company charges a non-recurring, initial franchise      fee of $15,000 for the second location, and $10,000 for each location in      excess of two.  The Company charges each franchisee of a      Converted Store or Limited Access Facility a non-recurring, initial      franchise fee of $10,000 perlocation. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| c.   | Ongoing      Royalties.  Franchisees are obligated to pay the Company      ongoing royalties in an amount equal to a percentage (generally 8%) of the      gross revenues generated by their Sterling Store. Franchisees of Converted      Stores, however, pay ongoing royalties, on their store's historical      average base sales, at reduced rates increasing (in most cases) from 2% to      6% for the first three years of the term of the Franchise      Agreement.  Royalties on the gross revenues generated in excess      of those base sales will be calculated at 8%.  Additionally,      Franchisees of Limited Access Facilities pay ongoing royalties at reduced      rates increasing from 1% to 4% in year 3 and each year      thereafter.  The Franchise Agreement provides for the payment of      ongoing royalties on a weekly basis, based upon the gross revenues for the      preceding week. Gross revenues generally include all revenues generated      from the operation of the Sterling Store in question, excluding refunds to      customers, sales taxes, a limited amount of bad debts and, to the extent      required by state law, fees charged by independent      optometrists. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Advertising Fund      Contributions. Most franchisees must make ongoing contributions, on      a weekly basis, to an advertising fund (the “Advertising Fund”) generally      equal to 6% of their store's gross revenues for the preceding week.      Franchisees of Limited Access Facilities, however, must make ongoing      contributions equal to 4% of their store's gross revenues for the      preceding week.  Generally, 50% of these funds are expended at      the direction of each individual franchisee (for the particular Sterling      Store in question), with the balance being expended on joint advertising      campaigns for all franchisees located within specific geographic      areas. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | Termination. Franchise      Agreements may be terminated if a franchisee has defaulted on its payment      of monies due to the Company, or in its performance of the other terms and      conditions of the Franchise Agreement. During 2008, the assets of (as well      as possession of) two franchised stores were reacquired by the      Company.  Substantially all of the assets located in such stores      were voluntarily surrendered and transferred back to the Company in      connection with the termination of the related Franchise Agreements. In      certain instances, the Company will re-convey the assets of such a store      to a new franchisee, requiring the new franchisee to enter into the      Company’s then current form of Franchise Agreement.  However,      the Company reviews each stores historical performance to consider if the      Company will continue to operate such store (as a Company-owned location)      without re-conveying the assets of such store to a new      franchisee. |
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| ·   | The      current U.S. and global economic conditions have affected and will      continue to affect the Company’s results of operations and financial      position.  The current economic conditions have resulted in      decreased revenues, retail store count, operating income and cash      flow.  This downturn might also lead to a reduction of certain      overhead expenses as well as stronger restrictions on customer      credit.  These uncertainties about future economic conditions      make it difficult for the Company to forecast future operating results and      cash flows from operations. |
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| ·   | The      Company’s common stock is trading on the Over-The-Counter Bulletin Board      (“OTCBB”). The OTCBB is generally considered a less efficient market that      is does not have national exposure to prospective      shareholders.  As such, shareholders are likely to find it more      difficult to trade the Company’s common stock on the  OTCBB. |
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| ·   | The      application of the "penny stock rules" could reduce the liquidity      and, therefore, the market price of the Company’s common      stock. On March 30, 2009, the last reported sales price of the      Company’s common stock was $0.19.  Because the trading      price of the Company’s common stock is less than $5.00 per share and no      longer trades on NASDAQ, the Company’s common stock comes within the      definition of a "penny stock."  The “penny stock rules”      impose additional sales practice requirements on broker-dealers who      sell the Company’s securities to persons other than established      customers and accredited investors, generally those with assets      in excess of $1,000,000 or annual income exceeding $200,000, or      $300,000 together with their spouse.  Before a      broker-dealer can sell a penny stock, the Securities and Exchange      Commission (the “SEC”) rules require the firm to first approve the      customer for the transaction in question and receive from the      customer a written agreement to such transaction.  The      firm must furnish the customer a document describing the risks of      investing in penny stocks.  The broker-dealer must also      advise the customer of the current market quotation, if any, for the      penny stock and the compensation the firm and its broker will receive      for the trade.  Finally, the firm must send monthly      account statements showing the market value of each penny stock held      in the customer’s account.  These additional burdens      imposed on broker-dealers may restrict the ability of broker-dealers      to sell the Company’s securities and may affect your ability      to resell the Company’s commonstock. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Dr.      Alan Cohen, the Company’s Chairman of its Board of Directors, and, one of      the Company’s significant shareholders, owns, operates, manages and/or is      otherwise involved with other companies in the retail optical industry,      which are in competition with the Company’s Sterling Stores and/or Combine      Members, and may result in potential conflicts.   Dr. Cohen      is also a principal shareholder and executive officer and director of Real      Optical, LLC.  Real Optical operates and franchises retail      optical stores similar to Sterling Stores and Combine Members in the      States of Connecticut, Florida, New Hampshire, Massachusetts, New Jersey      and New York and may, in the future, operate in other states as      well.  In the future, Real Optical may open or franchise      additional stores that are located in the same areas as Sterling Stores      and/or Combine Member locations.  These competing businesses      could reduce the revenues generated at the Company’s competing Sterling      Stores and/or from Combine Members. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company significantly depends on the ability and experience of certain      members of its management, and their departure may prevent or delay the      successful execution of the Company’s business plan.  The      Company relies on the skills of certain members of its      senior management team to guide its operations including, but      not limited to, Mr.  Christopher G. Payan, the Company’s Chief      Executive Officer, the loss of whom could have an adverse effect on the      Company’s operations.  The Company currently has an employment      agreement with Mr. Payan through November 2009; however, only one other      member of senior management has an employment      agreement.  Accordingly, the loss of their services could      prevent or delay the successful execution of its business plan and      attainment of profitability. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company does not control the management of most of the Sterling Stores      that operate under its name, nor does it control any of the Combine or TOG      Members, and these stores may be managed by unsuccessful franchisees,      Combine Members and/or TOG Members, which would reduce the Company’s      revenues from these stores.  The Company relies, in substantial      part, on franchisees, Combine Members and TOG Members for      revenues.  Since the Company does not control the management of      these locations, it is possible that a franchisee/owner may not have the      business acumen or financial resources to successfully operate his or her      franchised Sterling Store, Combine Member location and/or TOG Member      location.  The Company, together with a substantial number of      franchisees, has recently experienced a significant decrease in sales,      mainly due to current economic conditions, generated from the operation of      Sterling Stores, and cannot predict what will happen with the economy in      the future.  If a substantial number of franchisees, Combine      Members and/or TOG Members experience a future decline in their sales      and/or are ultimately not successful; revenues from franchisees, Combine      Members and/or TOG Members would decrease.  Some of the factors      that could lead to future decline in sales, include, among      others:  decreased spending by consumers, continuing current      economic climate, increased competition by large discount eyewear chains,      which increases the need for franchisees, Combine Members and/or TOG      Members to provide more aggressive promotional sales, thus decreasing      their profit margins; and the limitations of vision care benefits      available under medical and third party benefit  plans. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Better      financed competitors that provide greater levels of advertising obtain      favorable discounts from suppliers and offer customers aggressive discount      pricing.   The Company competes with many types of eyewear      providers, which may prevent it from increasing or maintaining market      share.  The retail optical business is highly competitive and      includes chains of retail optical stores, superstores, individual retail      outlets and a large number of individual opticians, optometrists and      ophthalmologists that provide professional services and dispense      prescription eyewear.  These competitors may take advantage of      prompt      payment  discount  plans,  aggressive  discounting  and      price-cutting  for  customers,  and  increased  advertising.   As      retailers of prescription eyewear, the Company and its franchisees      generally service local markets and, therefore, competition varies      substantially from one location or geographic area to      another.  If the Company is not successful in dealing with      competition, the Company will not be able to increase or maintain its      customer base or market share. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company often offers incentives to its customers, which lower profit      margins.  At times when major competitors offer significantly      lower prices for their products, it then becomes in the Company’s best      interest to do the same. Certain of the major competitors offer      promotional incentives to their customers including free eye exams, "50%      Off" on designer frames and "Buy One, Get One Free" eye care      promotions.  In response to these promotions, the Company has      offered the same or similar incentives to its customers.  This      practice has resulted in lower profit margins and these competitive      promotional incentives may further reduce revenues, gross margins and cash      flows.  Although the Company believes that Sterling Stores      provide quality service and products at competitive prices, several of the      large retail optical chains have greater financial resources. Therefore,      the Company may not be able to continue to deliver cost efficient products      in the event of aggressive pricing by competitors, which would reduce the      Company’s profit margins, net income and cash  flow. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Laser      surgery could eliminate the need for certain eyeglasses and contact      lenses.  As refractive laser surgery gains market acceptance,      the Company may lose revenue from traditional eyewear      customers. As traditional eyewear users undergo laser vision      correction procedures or other vision correction techniques, the      demand for certain contact lenses and eyeglasses will      decrease.  Due to the fact that the marketing and sale      of eyeglasses and contact lenses is a significant part of the      Company’s business, a decrease in customer demand for these products could      have a material adverse effect on sales of prescription eyewear, as      well as those of the Company’sfranchisees. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company is subject to a variety of federal, state and local laws, rules      and regulations that affect the health care industry, which may      affect its ability to generate revenues or subject the Company to      additional expenses. The regulatory requirements that the Company and      its franchisees must satisfy to conduct its businesses, varies from      state to state. For example, some states have enacted laws governing      the ability of ophthalmologists and optometrists to enter into      contracts with business corporations or lay persons, and some states      prohibit companies from computing their royalty fees based upon a      percentage of the gross revenues generated by optometrists from exam      fees. Various federal and state regulations also limit the financial      and non-financial terms of agreements with health care providers and,      therefore, potential revenues may differ depending upon the nature of      the Company’s various health care provider    affiliations. |
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| ·   | The      Company and its franchisees are also subject to the requirements of the      Health Insurance Portability and Accountability Act of 1996 (“HIPAA”),      which governs participation in managed care programs.  The      Company also must comply with the privacy regulations under      HIPAA.  In addition, all states have passed laws that govern or      affect arrangements with the optometrists who practice in vision      centers.  Additionally, the Company and its franchisees are also      subject to regulations regarding franchise business and in-store      laboratory operations, as well as the operation, in California, of      VCC, which is regulated by the State of California Department of      Managed Health Care.  As a franchisor, the Company is subject      to various registrations and disclosure requirements imposed by the      Federal Trade Commission and by many of the states in which the      Company conducts franchising operations.  The Federal      Occupational Safety and Health Act regulates the Company’s in-store      laboratory operations.  Although the Company believes that it is      in material compliance with all applicable laws and/or regulations,      the Company may not be able to sustain compliance if these laws      and/or regulations change in the future and, in that event, the      Company may have to incur significant expenses to maintain      compliance. |
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| ·   | If      the Company’s subsidiary, VCC, is no longer permitted to      employ optometrists, then the revenue generated from its California      Sterling Stores would, in all likelihood, decrease materially,      thereby decreasing net income and cash  flow. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company may be exposed to significant risk from liability claims if it is      unable to obtain insurance, at acceptable costs, to protect the Company      against potential liability claims. The provision of      professional eye care services entails an inherent risk      of professional malpractice and other similar claims.  The      Company does not influence or control the practice of optometry by      the optometrists that it employs or affiliates with, nor does it have      responsibility for their compliance with certain regulatory and other      requirements directly applicable to these      individual professionals.  As a result of the relationship      between the Company and its employed or affiliated optometrists, the      Company may become subject to professional malpractice actions or      claims under various theories relating to the professional services      provided by these individuals.  The Company may not be able      to continue to obtain adequate liability insurance at reasonable      rates, in which event; its insurance may not be adequate to cover      claims asserted against the Company, thus, potentially decreasing the      Company’s future cash position and potentially jeopardizing the      Company’s ability to continueoperations. |
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| ·   | The      Company’s operations and success are highly dependent upon health care      providers, and the Company may be unable to enter into favorable      arrangements with these providers. Certain states prohibit the      Company from employing optometrists to render professional      services.  Accordingly, the success of the Company’s      operations as full-service eye care providers depends upon its      ability to enter into agreements with these health care providers to      render professional services at Sterling Stores, Combine Member and/or TOG      Member locations.  Due to the increased competition, among      large discounters of retail eyewear, to enter into agreements with      health care providers and the finite number of available health care      providers, the costs of compensating these health care providers      has increased materially.  The Company, its franchisees,      Combine Members and/or TOG Members may not be able to enter      into agreements with these health care providers on satisfactory      terms, or these agreements may not be profitable, which would reduce      the revenues the Company, its franchisees, Combine Members and/or TOG      Members could generate from theiroperations. |
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| ·   | Certain      events could result in a dilution of your ownership of the Company’s      common stock.  As of December 31, 2008, the Company had      23,218,311 shares that were reserved for issuance under outstanding      warrants, options and senior convertible preferred      stock.  The exercise and conversion prices, as the case may      be, of common stock equivalents range from $0.05 to $8.06 per      share.  If converted or exercised, these securities will      result in a dilution of your percentage ownership of the Company’s common      stock.  In addition, if the Company acquires new companies through      the issuance of common or preferred stock, your percentage of      ownership will be further diluted. |
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| ·   | The      Company’s potential limitation on the use of its net operating loss      carry-forwards in accordance with Section 382 of the Internal Revenue Code      of 1986, as amended, due to certain changes in ownership that have      occurred or could occur in the future. Furthermore, in order to limit the      potential that future transactions could have a similar effect on the      Company’s tax attributes, the Company amended its by-laws to provide the      Board of Directors with the ability to void certain transactions in      Company securities that may impair or limit the future utilization of its      tax attributes, including its net operating loss      carry-forwards.  However, there can be no assurance that the      Company has been, or will in the future be, successful in preventing an      event which could materially impair or limit the Company’s utilization of      its net operating loss carry-forwards and other tax      attributes. |
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| ·   | Combine      Members operate retail optical stores similar to Sterling Stores in the      states of California, Delaware, Florida, Illinois, Kentucky, Louisiana,      Maryland, New Jersey, New York, North Dakota, Pennsylvania, Virginia, West      Virginia, Wisconsin, and in the District of Columbia and the Virgin      Islands.  As of the date hereof, many Combine Member locations      are in the same shopping center or mall as, or in close proximity to,      certain Sterling Stores; and in the future, the Company may open Sterling      Stores that are located in the same areas as Combine      Members.  These competing businesses could reduce the revenues      generated at, both, the Company’s Sterling Stores and Combine Member      locations, or could cause Combine Members to leave Combine because they      view Combine as the competition. |
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| ·   | Combine      and TOG operations and success are highly dependent upon the purchases of      eye care products by independent optical retailers (Combine/TOG      Members).  If Combine/TOG Member’s decide to purchase their eye      care products through a competing optical purchasing group business or      purchase direct from a vendor, then revenues generated from Combine and/or      TOG would decrease. A decrease in the number of Combine/TOG Members      could reduce Combine and/or TOG profit margins, net income and cash      flow. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Combine      and TOG utilize certain key vendors to provide its members with a broad      spectrum of product purchasing options.  If one of these key      vendors ceases to do business with Combine and/or TOG, or ceases to exist,      Combine and/or TOG could see a decrease in the amount of product purchased      by its members, thus decreasing its revenues and net    income. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The      Company relies heavily on computer systems in managing financial      results.  The Company is subject to damage and interruption from      power outages, computer and telecommunications failures, computer viruses,      security breaches, catastrophic events and usage by      employees.  This includes any damage to the systems that allow      for electronic payments from the Company’s franchisees and credit card      payments from its Sterling Store customers.  Any repairs      necessary to replace and/or fix these systems could result in a      significant expense to the Company.  Additionally, certain of      the Company’s financial reporting processes are not part of an integrated      financial reporting system, which requires additional hours and      administrative costs to operate manage and control these      systems.  The Company is working to transition most of the      processes to an integrated financial reporting system.  The      conversion of these systems and processes to become SOX compliant could      result in a significant expense to the Company and may pose greater risks      associated with maintaining internal controls as the systems are      integrated. |
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| ·   | The      Company’s leasing space for a majority of its Sterling Stores could expose      it to possible liabilities and losses.  The Company’s leases are      generally for 10 years.  Many of the leases provide for annual      increases over the term of the lease in addition to the costs associated      with insurance, taxes, repairs, maintenance and utilities.  If      an existing Sterling Store becomes non-profitable and the Company decides      to close the location, the Company may still be required to pay the base      rent, taxes and other rental charges for the balance of the      lease. |
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| ·   | The      Company may be unable to service its debt obligations.  In      connection with the purchases of Combine and TOG, along with other debt      obligations, the Company has approximately $6,077,000 of outstanding debt      as of December 31, 2008.  If the Company is unable to generate      sufficient cash flows from operations in the future, it may be unable to      make principal or interest payments on such borrowings when they become      due and may need to refinance all or a portion of the existing debt, or      obtain additional financing. |
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| ·   | The      Company is Plaintiff in a pending civil action (the “Action”) against For      Eyes Optical Company (“For Eyes” or “Defendant”) in which the Company      claims, among other things, , that (i) there is no likelihood of confusion      between the Company’s and Defendant’s mark, and that the Company has not      infringed, and is not infringing, Defendant’s mark; (ii) the Company is      not bound by that certain settlement agreement, executed in 1981 by a      prior owner of the Site For Sore Eyes trademark; and (iii) Defendant’s      mark is generic and must be cancelled.  For Eyes, in its Answer,      asserted defenses to the Company’s claims, and asserted counterclaims      against the Company, including, among others, that (i) the Company has      infringed For Eyes’ mark; (ii) the Company wrongfully obtained a trademark      registration for its mark and that said registration should be cancelled;      and (iii) the acts of the Company constitute a breach of the      aforementioned settlement agreement.  For Eyes seeks injunctive      relief, cancellation of the Company’s trademark registration, trebled      monetary damages, payment of any profits made by the Company in respect of      the use of such trade name, and costs and attorney fees.  While      the Company believes that it will be successful in prosecuting its claims      against the Defendant, and in defending against the counterclaims made by      Defendant, there can be no assurance of such success.  In the      event that the Company is not successful, it is possible that, under      certain circumstances, the Company may be limited in, or precluded from      continuing, its use of the Site for Sore Eyes trade  name. |
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| ·   | The      Company is exposed to foreign currency risk associated with TOG operations      as the financial position and operating results of TOG, which operations      are being calculated in Canadian Dollars and then translated into U.S.      Dollars for consolidation.  The Company has not implemented a      hedging strategy to potentially reduce foreign currency    risk. |
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|              |   | 2008   |   |   | 2007   |   |
|-------------------|--------|--------|--------|--------|--------|--------|
| Quarter Ended:    |   | High   |   |   | Low    |   |   | High |   |   | Low |   |
|              |   |   |   |   |   |   |   |   |   |   |   |   |
| March      31     |   | $      | 0.25   |   |   | $      | 0.17 |   |   | $ | 0.21 |   |   | $ | 0.15 |   |
| June      30      |   | $      | 0.21   |   |   | $      | 0.16 |   |   | $ | 0.47 |   |   | $ | 0.17 |   |
| September      30 |   | $      | 0.20   |   |   | $      | 0.12 |   |   | $ | 0.38 |   |   | $ | 0.22 |   |
| December      31  |   | $      | 0.19   |   |   | $      | 0.06 |   |   | $ | 0.33 |   |   | $ | 0.18 |   |

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|                                                     |   | For      the Year Ended December 31 (in thousands): |   |
|----------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                     |   | 2008                                                |   |   | 2007 |   |   | $      Change |   |   | %      Change |   |
| Net      Revenues:                                       |   |                                                |   |   |   |   |   |   |   |   |   |   |
| Optical      purchasing group sales                      |   | $                                                   | 57,914 |   |   | $ | 33,848 |   |   | $ | 24,066 |   |   |   | 71.1 | % |
| Cost      of optical purchasing group sales              |   |                                                | 55,152 |   |   |   | 32,105 |   |   |   | 23,047 |   |   |   | 71.8 | % |
| Gross      margin                                        |   |                                                | 2,762  |   |   |   | 1,743 |   |   |   | 1,019 |   |   |   | 58.5 | % |
|  Selling,      General and Administrative Expenses: |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and related benefits                       |   |                                                | 455    |   |   |   | 326 |   |   |   | 129 |   |   |   | 39.6 | % |
| Depreciation      and amortization                       |   |                                                | 303    |   |   |   | 203 |   |   |   | 100 |   |   |   | 49.3 | % |
| Credit      card and bank fees                           |   |                                                | 277    |   |   |   | 152 |   |   |   | 125 |   |   |   | 82.2 | % |
| Rent      and related overhead                           |   |                                                | 260    |   |   |   | 190 |   |   |   | 70 |   |   |   | 36.8 | % |
| Bad      debt expense                                    |   |                                                | 112    |   |   |   | 20 |   |   |   | 92 |   |   |   | 460.0 | % |
| Other      general and administrative costs              |   |                                                | 116    |   |   |   | 63 |   |   |   | 53 |   |   |   | 84.1 | % |
| Total      selling, general and administrative expenses  |   |                                                | 1,523  |   |   |   | 954 |   |   |   | 569 |   |   |   | 59.6 | % |
| Operating      Income                                    |   |                                                | 1,239  |   |   |   | 789 |   |   |   | 450 |   |   |   | 57.0 | % |

| Other      Income (Expense):                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Interest      expense, net                                   |   |   | (260   | )      |   |   | (213   | )      |   |   | (47    | )      |   |   | (22.1 | %) |
| Total      other expense                                     |   |   | (260   | )      |   |   | (213   | )      |   |   | (47    | )      |   |   | (22.1 | %) |
| Income      before provision for (benefit from) income taxes |   | $      | 979    |   |   | $      | 576    |   |   | $      | 403    |   |   |   | 70.0 | % |

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|                                                     |   | For      the Year Ended December 31 (in thousands): |   |
|----------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                     |   | 2008                                                |   |   | 2007 |   |   | $      Change |   |   | %      Change |   |
| Net      Revenues:                                       |   |                                                |   |   |   |   |   |   |   |   |   |   |
| Royalties                                                |   | $                                                   | 6,211  |   |   | $ | 6,626 |   |   | $ | (415 | ) |   |   | (6.3 | %) |
| Franchise      and other related fees                    |   |                                                | 299    |   |   |   | 241 |   |   |   | 58 |   |   |   | 24.1 | % |
| Net      revenues                                        |   |                                                | 6,510  |   |   |   | 6,867 |   |   |   | (357 | ) |   |   | (5.2 | %) |
|  Selling,      General and Administrative Expenses: |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and related benefits                       |   |                                                | 1,070  |   |   |   | 1,210 |   |   |   | (140 | ) |   |   | (11.6 | %) |
| Professional      fees                                   |   |                                                | 513    |   |   |   | 641 |   |   |   | (128 | ) |   |   | (20.0 | %) |
| Convention      related expenses                         |   |                                                | 389    |   |   |   | 384 |   |   |   | 5 |   |   |   | 1.3 | % |
| Rent      and related overhead                           |   |                                                | 351    |   |   |   | 415 |   |   |   | (64 | ) |   |   | (15.4 | %) |
| Bad      debt                                            |   |                                                | 247    |   |   |   | 139 |   |   |   | 108 |   |   |   | 77.7 | % |
| Depreciation      and amortization                       |   |                                                | 127    |   |   |   | 93 |   |   |   | 34 |   |   |   | 36.6 | % |
| Other      general and administrative costs              |   |                                                | 195    |   |   |   | 157 |   |   |   | 38 |   |   |   | 24.2 | % |
| Total      selling, general and administrative expenses  |   |                                                | 2,892  |   |   |   | 3,039 |   |   |   | (147 | ) |   |   | (4.8 | %) |
| Operating      Income                                    |   |                                                | 3,618  |   |   |   | 3,828 |   |   |   | (210 | ) |   |   | (5.5 | %) |

| Other      Income (Expense):                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Interest      on franchise notes receivable                  |   |   | 24     |   |   |   | 35     |   |   |   | (11    | )      |   |   | (31.4 | %) |
| Other      income                                            |   |   | 27     |   |   |   | 46     |   |   |   | (19    | )      |   |   | (41.3 | %) |
| Gain      on settlement of litigation                        |   |   | -      |   |   |   | 1,012  |   |   |   | (1,012 | )      |   |   | - |   |
| Interest      expense, net                                   |   |   | (45    | )      |   |   | (24    | )      |   |   | (21    | )      |   |   | (87.5 | %) |
| Total      operating income                                  |   |   | 6      |   |   |   | 1,069  |   |   |   | (1,063 | )      |   |   | (99.4 | %) |
| Income      before provision for (benefit from) income taxes |   | $      | 3,624  |   |   | $      | 4,897  |   |   | $      | (1,273 | )      |   |   | (26.0 | %) |

|                                                     |   | For      the Year Ended December 31 (in thousands): |   |
|----------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                     |   | 2008                                                |   |   | 2007 |   |   | $      Change |   |   | %      Change |   |
| Net      Revenues:                                       |   |                                                |   |   |   |   |   |   |   |   |   |   |
| Retail      sales                                        |   | $                                                   | 3,715  |   |   | $ | 5,393 |   |   | $ | (1,678 | ) |   |   | (31.1 | %) |
| Cost      of retail sales                                |   |                                                | 932    |   |   |   | 1,469 |   |   |   | (537 | ) |   |   | 36.6 | % |
| Gross      margin                                        |   |                                                | 2,783  |   |   |   | 3,924 |   |   |   | (1,141 | ) |   |   | (29.1 | %) |
|  Selling,      General and Administrative Expenses: |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and related benefits                       |   |                                                | 1,667  |   |   |   | 2,471 |   |   |   | (804 | ) |   |   | (32.5 | %) |
| Rent      and related overhead                           |   |                                                | 1,076  |   |   |   | 1,454 |   |   |   | (378 | ) |   |   | (26.0 | %) |
| Advertising                                              |   |                                                | 267    |   |   |   | 733 |   |   |   | (466 | ) |   |   | (63.6 | %) |
| Other      general and administrative costs              |   |                                                | 200    |   |   |   | 295 |   |   |   | (95 | ) |   |   | (32.2 | %) |
| Total      selling, general and administrative expenses  |   |                                                | 3,210  |   |   |   | 4,953 |   |   |   | (1,743 | ) |   |   | (35.2 | %) |
| Operating      Loss                                      |   | $                                                   | (427   | ) |   | $ | (1,029 | ) |   | $ | 602 |   |   |   | 58.5 | % |

|                                                     |   | For      the Year Ended December 31 (in thousands): |   |
|----------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                     |   | 2008                                                |   |   | 2007 |   |   | $      Change |   |   | %      Change |   |
| Net      Revenues:                                       |   |                                                |   |   |   |   |   |   |   |   |   |   |
| Membership      fees                                     |   | $                                                   | 3,551  |   |   | $ | 3,513 |   |   | $ | 38 |   |   |   | 1.1 | % |
|  Selling,      General and Administrative Expenses: |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and related benefits                       |   |                                                | 3,189  |   |   |   | 3,199 |   |   |   | (10 | ) |   |   | (0.3 | %) |
| Rent      and related overhead                           |   |                                                | 154    |   |   |   | 152 |   |   |   | 2 |   |   |   | 1.3 | % |
| Other      general and administrative costs              |   |                                                | 172    |   |   |   | 153 |   |   |   | 19 |   |   |   | 12.4 | % |
| Total      selling, general and administrative expenses  |   |                                                | 3,515  |   |   |   | 3,504 |   |   |   | 11 |   |   |   | 0.3 | % |
| Operating      Income                                    |   |                                                | 36     |   |   |   | 9 |   |   |   | 27 |   |   |   | 300.0 | % |

| Other      Income (Expense):                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Other      income                                            |   |   | 8      |   |   |   | 29     |   |   |   | (21    | )      |   |   | (72.4 | %) |
| Total      other income (expense)                            |   |   | 8      |   |   |   | 29     |   |   |   | (21    | )      |   |   | (72.4 | %) |
| Income      before provision for (benefit from) income taxes |   | $      | 44     |   |   | $      | 38     |   |   | $      | 6      |   |   |   | 15.8 | % |

|                                                    |   | For      the Year Ended December 31 (in thousands): |   |
|---------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                    |   | 2008                                                |   |   | 2007 |   |   | $      Change |   |   | %      Change |   |
| Selling,      General and Administrative Expenses:      |   |                                                |   |   |   |   |   |   |   |   |   |   |
| Salaries      and related benefits                      |   | $                                                   | 2,119  |   |   | $ | 2,164 |   |   | $ | (45 | ) |   |   | (2.1 | %) |
| Professional      fees                                  |   |                                                | 609    |   |   |   | 489 |   |   |   | 120 |   |   |   | 24.5 | % |
| Insurance                                               |   |                                                | 276    |   |   |   | 247 |   |   |   | 29 |   |   |   | 11.7 | % |
| Rent      and related overhead                          |   |                                                | 192    |   |   |   | 607 |   |   |   | (415 | ) |   |   | (68.4 | %) |
| Travel      and related expenses                        |   |                                                | 173    |   |   |   | 228 |   |   |   | (55 | ) |   |   | (24.1 | %) |
| Compensation      expense                               |   |                                                | 88     |   |   |   | 113 |   |   |   | (25 | ) |   |   | (22.1 | %) |
| Bad      debt expense                                   |   |                                                | 30     |   |   |   | 140 |   |   |   | (110 | ) |   |   | (78.6 | %) |
| Other      general and administrative costs             |   |                                                | 159    |   |   |   | 102 |   |   |   | 57 |   |   |   | 55.9 | % |
| Total      selling, general and administrative expenses |   |                                                | 3,646  |   |   |   | 4,090 |   |   |   | (444 | ) |   |   | (10.9 | %) |
| Operating      (Loss) Income                            |   | $                                                   | (3,646 | ) |   | $ | (4,090 | ) |   | $ | 444 |   |   |   | 10.9 | % |

|                                                     |   | For      the Year Ended December 31 (in thousands): |   |
|----------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                     |   | 2008                                                |   |   | 2007 |   |   | $      Change |   |   | %      Change |   |
| Net      Revenues:                                       |   |                                                |   |   |   |   |   |   |   |   |   |   |
| Commissions                                              |   | $                                                   | 96     |   |   | $ | - |   |   | $ | 96 |   |   |   | - |   |
| Other                                                    |   |                                                | 23     |   |   |   | - |   |   |   | 23 |   |   |   | - |   |
| Net      revenues                                        |   |                                                | 119    |   |   |   | - |   |   |   | 119 |   |   |   | - |   |
|  Selling,      General and Administrative Expenses: |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Advertising                                              |   |                                                | 95     |   |   |   | 126 |   |   |   | (31 | ) |   |   | (24.6 | %) |
| Salaries      and related benefits                       |   |                                                | 30     |   |   |   | 2 |   |   |   | 28 |   |   |   | 1400.0 | % |
| Convention      related expenses                         |   |                                                | -      |   |   |   | 37 |   |   |   | (37 | ) |   |   | - |   |
| Other      general and administrative costs              |   |                                                | 65     |   |   |   | 52 |   |   |   | 13 |   |   |   | 25.0 | % |
| Total      selling, general and administrative expenses  |   |                                                | 190    |   |   |   | 217 |   |   |   | (27 | ) |   |   | (12.4 | %) |
| Operating      Loss                                      |   | $                                                   | (71    | ) |   | $ | (217 | ) |   | $ | 146 |   |   |   | 67.3 | % |

----

|                                           |   | For      the Year Ended December 31 (in thousands): |   |
|------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                           |   | 2008                                                |   |   | 2007 |   |   | $      Change |   |   | %      Change |   |
| EBITDA      Reconciliation:                    |   |                                                |   |   |   |   |   |   |   |   |   |   |
| Net      (loss) income                         |   | $                                                   | (88    | ) |   | $ | 426 |   |   | $ | (514 | ) |   |   | (120.7 | %) |
| Interest                                       |   |                                                | 346    |   |   |   | 289 |   |   |   | 57 |   |   |   | 19.7 | % |
| Provision      for (benefit from) income taxes |   |                                                | 591    |   |   |   | (251 | ) |   |   | 842 |   |   |   | (335.5 | %) |
| Depreciation      and amortization             |   |                                                | 654    |   |   |   | 523 |   |   |   | 131 |   |   |   | 25.0 | % |
| EBITDA                                         |   | $                                                   | 1,503  |   |   | $ | 987 |   |   | $ | 516 |   |   |   | 52.3 | % |

----

|                                                                                                                                                                   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                   |   | For      the Year Ended December 31, 2008 |   |
|                                                                                                                                                                   |   | Original |   |   | EBITDA |   |   | Difference |   |
| Cash      flows from operating activities:                                                                                                                             |   |   |   |   |   |   |   |   |   |
| Net      loss                                                                                                                                                          |   | $ | (88 | ) |   | $ | 1,503 |   |   | $ | 1,591 |   |
| Adjustments      to reconcile net loss to net cash (used in) provided by operating      activities:                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                                                                                                     |   |   | 654 |   |   |   | - |   |   |   | (654 | ) |
| Provision      for doubtful accounts                                                                                                                                   |   |   | 462 |   |   |   | 462 |   |   |   | - |   |
| Deferred      tax assets                                                                                                                                               |   |   | 520 |   |   |   | - |   |   |   | (520 | ) |
| Disposal      of property and equipment                                                                                                                                |   |   | 250 |   |   |   | 250 |   |   |   | - |   |
| Non-cash      compensation charges related to options and warrants                                                                                                     |   |   | 88 |   |   |   | 88 |   |   |   | - |   |
|         Changes      in operating assets and liabilities:                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
|                     Franchise      and other receivables           |   |   | (513 | ) |   |   | (513 | ) |   |   | - |   |
|                     Optical      purchasing group receivables      |   |   | 619 |   |   |   | 619 |   |   |   | - |   |
|                     Inventories                                    |   |   | 144 |   |   |   | 144 |   |   |   | - |   |
|                     Prepaid      expenses and other current assets |   |   | (96 | ) |   |   | (96 | ) |   |   | - |   |
|                     Other      assets                              |   |   | 37 |   |   |   | 37 |   |   |   | - |   |
|                     Accounts      payable and accrued liabilities  |   |   | (1,271 | ) |   |   | (1,342 | ) |   |   | (71 | ) |
| Optical      purchasing group payables                                                                                                                                 |   |   | (751 | ) |   |   | (751 | ) |   |   | - |   |
| Accrual      for store closings                                                                                                                                        |   |   | (154 | ) |   |   | (154 | ) |   |   | - |   |
|                     Franchise      deposits and other liabilities  |   |   | (132 | ) |   |   | (132 | ) |   |   | - |   |
| Net      cash (used in) provided by operating activities                                                                                                               |   |   | (231 | ) |   |   | 115 |   |   |   | 346 |   |
|                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Franchise      notes receivable issued                                                                                                                                 |   |   | (117 | ) |   |   | (117 | ) |   |   | - |   |
| Proceeds      from franchise and other notes receivable                                                                                                                |   |   | 216 |   |   |   | 216 |   |   |   | - |   |
| Purchases      of property and equipment                                                                                                                               |   |   | (344 | ) |   |   | (344 | ) |   |   | - |   |
| Costs      associated with defending trademark value                                                                                                                   |   |   | (601 | ) |   |   | (601 | ) |   |   | - |   |
| Net      cash used in investing activities                                                                                                                             |   |   | (846 | ) |   |   | (846 | ) |   |   | - |   |
|                                                                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Borrowings      under credit facility                                                                                                                                  |   |   | 950 |   |   |   | 950 |   |   |   | - |   |
| Payments      on related party obligations and other debt                                                                                                              |   |   | (438 | ) |   |   | (784 | ) |   |   | (346 | ) |
| Net      cash provided by used in financing activities                                                                                                                 |   |   | 512 |   |   |   | 166 |   |   |   | (346 | ) |
| Net      decrease in cash before effect of foreign exchange rate      changes                                                                                          |   |   | (565 | ) |   |   | (565 | ) |   |   | - |   |
| Effect      of foreign exchange rate changes                                                                                                                           |   |   | (191 | ) |   |   | (191 | ) |   |   | - |   |
| Net      decrease increase in cash and cash equivalents                                                                                                                |   |   | (756 | ) |   |   | (756 | ) |   |   | - |   |
| Cash      and cash equivalents – beginning of year                                                                                                               |   |   | 2,846 |   |   |   | 2,846 |   |   |   | - |   |
| Cash      and cash equivalents – end of year                                                                                                                     |   | $ | 2,090 |   |   | $ | 2,090 |   |   | $ | - |   |

----

| TABLE      OF CONTENTS                                                                        |   |
|-----------------------------------------------------------------------------------------------|--------|
|                                                                                          |   |
|                                                                                          |   |
|                                                                                          | PAGE   |
|                                                                                          |   |
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING      FIRM                                  | 26-27  |
|                                                                                          |   |
| CONSOLIDATED FINANCIAL STATEMENTS                                                             |   |
|                                                                                          |   |
| Consolidated      Balance Sheets as of December 31, 2008 and 2007                             | 28     |
|                                                                                          |   |
| Consolidated      Statements of Operations and Comprehensive (Loss) Income for the      Years | 29     |
| Ended December      31, 2008 and 2007                                                         |   |
|                                                                                          |   |
| Consolidated      Statements of Shareholders' Equity for the Years                            | 30     |
| Ended December      31, 2008 and 2007                                                         |   |
|                                                                                          |   |
| Consolidated      Statements of Cash Flows for the Years Ended                                | 31-32  |
| December 31,      2008 and 2007                                                               |   |
|                                                                                          |   |
| Notes to      Consolidated Financial Statements                                               | 33-57  |

----

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTINGFIRM

| EMERGING VISION, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(In      Thousands, Except Share Data)                                                                                                                   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| ASSETS                                                                                                                                                                                                                    |   | December      31, |   |
|                                                                                                                                                                                                                      |   | 2008 |   |   | 2007 |   |
| Current      assets:                                                                                                                                                                                                      |   |   |   |   |   |   |
| Cash      and cash equivalents                                                                                                                                                                                            |   | $ | 2,090 |   |   | $ | 2,846 |   |
| Franchise      receivables, net of allowance of $140 and $147,    respectively                                                                                                                                            |   |   | 1,744 |   |   |   | 1,842 |   |
| Optical      purchasing group receivables, net of allowance of $172 and $60,      respectively                                                                                                                            |   |   | 4,221 |   |   |   | 4,840 |   |
| Other      receivables, net of allowance of $7 and $5, respectively                                                                                                                                                       |   |   | 322 |   |   |   | 369 |   |
| Current      portion of franchise notes receivable, net of allowance of $29 and $38,      respectively                                                                                                                    |   |   | 107 |   |   |   | 191 |   |
| Inventories                                                                                                                                                                                                               |   |   | 322 |   |   |   | 466 |   |
| Prepaid      expenses and other current assets                                                                                                                                                                            |   |   | 543 |   |   |   | 447 |   |
| Deferred      tax asset                                                                                                                                                                                                   |   |   | 351 |   |   |   | 600 |   |
| Total      current assets                                                                                                                                                                                                 |   |   | 9,700 |   |   |   | 11,601 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Property      and equipment, net                                                                                                                                                                                          |   |   | 1,191 |   |   |   | 1,493 |   |
| Franchise      notes receivable, net                                                                                                                                                                                      |   |   | 302 |   |   |   | 121 |   |
| Deferred      tax asset, net of current portion                                                                                                                                                                           |   |   | 803 |   |   |   | 1,074 |   |
| Goodwill                                                                                                                                                                                                                  |   |   | 4,127 |   |   |   | 4,127 |   |
| Intangible      assets, net                                                                                                                                                                                               |   |   | 3,218 |   |   |   | 2,819 |   |
| Other      assets                                                                                                                                                                                                         |   |   | 296 |   |   |   | 389 |   |
| Total      assets                                                                                                                                                                                                         |   | $ | 19,637 |   |   | $ | 21,624 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS'      EQUITY                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Current      liabilities:                                                                                                                                                                                                 |   |   |   |   |   |   |   |   |
| Accounts      payable and accrued liabilities                                                                                                                                                                             |   | $ | 4,362 |   |   | $ | 5,633 |   |
| Optical      purchasing group payables                                                                                                                                                                                    |   |   | 3,709 |   |   |   | 4,460 |   |
| Accrual      for store closings                                                                                                                                                                                           |   |   | 146 |   |   |   | 300 |   |
| Short-term      debt                                                                                                                                                                                                      |   |   | 14 |   |   |   | 32 |   |
| Related      party obligations                                                                                                                                                                                            |   |   | 353 |   |   |   | 404 |   |
| Total      current liabilities                                                                                                                                                                                            |   |   | 8,584 |   |   |   | 10,829 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Long-term      debt                                                                                                                                                                                                       |   |   | 5,358 |   |   |   | 4,424 |   |
| Related      party obligations, net of current portion                                                                                                                                                                    |   |   | 417 |   |   |   | 770 |   |
| Franchise      deposits and other liabilities                                                                                                                                                                             |   |   | 310 |   |   |   | 442 |   |
| Total      liabilities                                                                                                                                                                                                    |   |   | 14,669 |   |   |   | 16,465 |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Commitments      and contingencies                                                                                                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Shareholders'      equity:                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
| Preferred      stock, $0.01 par value per share; 5,000,000 shares      authorized:  Senior Convertible Preferred Stock, $100,000      liquidation preference per share; 0.74 shares issued and      outstanding |   |   |   74 |   |   |   |   74 |   |
| Common      stock, $0.01 par value per share; 150,000,000 shares authorized;      125,475,143 shares issued and 125,292,806 shares    outstanding                                                                         |   |   | 1,254 |   |   |   | 1,254 |   |
| Treasury      stock, at cost, 182,337 shares                                                                                                                                                                              |   |   | (204 | ) |   |   | (204 | ) |
| Additional      paid-in capital                                                                                                                                                                                           |   |   | 128,059 |   |   |   | 127,971 |   |
| Accumulated      comprehensive loss                                                                                                                                                                                       |   |   | (267 | ) |   |   | (76 | ) |
| Accumulated      deficit                                                                                                                                                                                                  |   |   | (123,948 | ) |   |   | (123,860 | ) |
| Total      shareholders' equity                                                                                                                                                                                           |   |   | 4,968 |   |   |   | 5,159 |   |
| Total      liabilities and shareholders' equity                                                                                                                                                                           |   | $ | 19,637 |   |   | $ | 21,624 |   |

----

| EMERGING VISION, INC. AND SUBSIDIARIESCONSOLIDATED      STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME(In      Thousands, Except Per Share Data)  |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                             |   | For      the Year Ended December 31, |   |
|                                                                                                                                                             |   | 2008 |   |   | 2007 |   |
|                                                                                                                                                             |   |   |   |   |   |   |
| Revenue:                                                                                                                                                         |   |   |   |   |   |   |
| Optical      purchasing group sales                                                                                                                              |   | $ | 57,914 |   |   | $ | 33,848 |   |
| Franchise      royalties                                                                                                                                         |   |   | 6,211 |   |   |   | 6,626 |   |
| Retail      sales – Company-owned stores                                                                                                                   |   |   | 3,715 |   |   |   | 5,393 |   |
| Membership      fees – VisionCare of California                                                                                                            |   |   | 3,551 |   |   |   | 3,513 |   |
| Franchise      related fees and other revenues                                                                                                                   |   |   | 418 |   |   |   | 241 |   |
| Total      revenue                                                                                                                                               |   |   | 71,809 |   |   |   | 49,621 |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Costs      and operating expenses:                                                                                                                               |   |   |   |   |   |   |   |   |
| Cost      of optical purchasing group sales                                                                                                                      |   |   | 55,152 |   |   |   | 32,105 |   |
| Cost      of retail sales – Company-owned stores                                                                                                           |   |   | 932 |   |   |   | 1,469 |   |
| Selling,      general and administrative expenses                                                                                                                |   |   | 14,976 |   |   |   | 16,494 |   |
| Provision      for store closings                                                                                                                                |   |   | - |   |   |   | 263 |   |
| Total      costs and operating expenses                                                                                                                          |   |   | 71,060 |   |   |   | 50,331 |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Operating      income (loss)                                                                                                                                     |   |   | 749 |   |   |   | (710 | ) |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Other      income (expense):                                                                                                                                     |   |   |   |   |   |   |   |   |
| Interest      on franchise notes receivable                                                                                                                      |   |   | 24 |   |   |   | 35 |   |
| Other      income                                                                                                                                                |   |   | 49 |   |   |   | 70 |   |
| Gain      on settlement of litigation                                                                                                                            |   |   | - |   |   |   | 1,012 |   |
| Interest      expense, net of interest income of $26 and $57,    respectively                                                                                    |   |   | (319 | ) |   |   | (232 | ) |
| Total      other (expense) income                                                                                                                                |   |   | (246 | ) |   |   | 885 |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Income      before provision for (benefit from) income taxes                                                                                                     |   |   | 503 |   |   |   | 175 |   |
| Provision      for (benefit from) income taxes                                                                                                                   |   |   | 591 |   |   |   | (251 | ) |
| Net      (loss) income                                                                                                                                           |   |   | (88 | ) |   |   | 426 |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Comprehensive      (loss) income:                                                                                                                                |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustments                                                                                                                    |   |   | (191 | ) |   |   | (76 | ) |
| Comprehensive      (loss) income                                                                                                                                 |   | $ | (279 | ) |   | $ | 350 |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Net      (loss) income per share:                                                                                                                                |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                            |   | $ | (0.00 | ) |   | $ | 0.01 |   |
| Diluted                                                                                                                                                          |   | $ | (0.00 | ) |   | $ | 0.00 |   |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Weighted-average number of      common shares outstanding –                                                                                                |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                                            |   |   | 125,293 |   |   |   | 84,489 |   |
| Diluted                                                                                                                                                          |   |   | 125,293 |   |   |   | 93,131 |   |

----

| EMERGING VISION, INC. AND SUBSIDIARIESCONSOLIDATED      STATEMENTS OF SHAREHOLDERS’ EQUITYFOR      THE YEARS ENDED DECEMBER 31, 2008 AND 2007(In      Thousands, Except Share Data) |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                      |   | Senior      Convertible Preferred      Stock |   |   | Common Stock |   |   | Treasury      Stock,at cost |   |   | Additional      Paid-In |   |   | Accumulated      Other Comprehensive |   |   | Accumulated |   |   | Total      Shareholders’ |   |
|                                                                                                                                                                                      |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Capital |   |   | Loss |   |   | Deficit |   |   | Equity |   |
| Balance      – December 31, 2006                                                                                                                                                    |   |   | 1 |   |   | $ | 74 |   |   |   | 70,506,035 |   |   | $ | 705 |   |   |   | 182,337 |   |   | $ | (204 | ) |   | $ | 127,062 |   |   | $ | - |   |   | $ | (124,286 | ) |   | $ | 3,351 |   |
| Exercise      of stock options and warrants                                                                                                                                               |   |   | - |   |   |   | - |   |   |   | 54,848,264 |   |   |   | 548 |   |   |   | - |   |   |   | - |   |   |   | 797 |   |   |   | - |   |   |   | - |   |   |   | 1,345 |   |
| Issuance      of restricted stock for services rendered in connection with investor      relations                                                                                        |   |   | - |   |   |   | - |   |   |   | 120,844 |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | 112 |   |   |   | - |   |   |   | - |   |   |   | 113 |   |
| Effects      of foreign currency translation adjustments                                                                                                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (76 | ) |   |   | - |   |   |   | (76 | ) |
| Net      income                                                                                                                                                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 426 |   |   |   | 426 |   |
| Balance      – December 31, 2007                                                                                                                                                    |   |   | 1 |   |   | $ | 74 |   |   |   | 125,475,143 |   |   | $ | 1,254 |   |   |   | 182,337 |   |   | $ | (204 | ) |   | $ | 127,971 |   |   | $ | (76 | ) |   | $ | (123,860 | ) |   | $ | 5,159 |   |
| Issuance      of stock options                                                                                                                                                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 88 |   |   |   | - |   |   |   | - |   |   |   | 88 |   |
| Effects      of foreign currency translation adjustments                                                                                                                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (191 | ) |   |   | - |   |   |   | (191 | ) |
| Net      loss                                                                                                                                                                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (88 | ) |   |   | (88 | ) |
| Balance      – December 31, 2008                                                                                                                                                    |   |   | 1 |   |   | $ | 74 |   |   |   | 125,475,143 |   |   | $ | 1,254 |   |   |   | 182,337 |   |   | $ | (204 | ) |   | $ | 128,059 |   |   | $ | (267 | ) |   | $ | (123,948 | ) |   | $ | 4,968 |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| EMERGING VISION, INC. AND SUBSIDIARIESCONSOLIDATED      STATEMENTS OF CASH FLOWS(Dollars      in Thousands)                                                       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                   |   | For      the Year Ended December 31, |   |
|                                                                                                                                                                   |   | 2008 |   |   | 2007 |   |
| Cash      flows from operating activities:                                                                                                                             |   |   |   |   |   |   |
| Net      (loss) income                                                                                                                                                 |   | $ | (88 | ) |   | $ | 426 |   |
| Adjustments      to reconcile net (loss) income to net cash (used in) provided by operating      activities:                                                           |   |   |   |   |   |   |   |   |
| Depreciation      and amortization                                                                                                                                     |   |   | 654 |   |   |   | 523 |   |
| Provision      for doubtful accounts                                                                                                                                   |   |   | 462 |   |   |   | 319 |   |
| Deferred      tax assets                                                                                                                                               |   |   | 520 |   |   |   | (274 | ) |
| Provision      for store closings                                                                                                                                      |   |   | - |   |   |   | 263 |   |
| Non-cash      compensation charges related to options and warrants                                                                                                     |   |   | 88 |   |   |   | 112 |   |
| Disposal      of property and equipment                                                                                                                                |   |   | 250 |   |   |   | (13 | ) |
|         Changes      in operating assets and liabilities:                                                                      |   |   |   |   |   |   |   |   |
|                     Franchise      and other receivables           |   |   | (513 | ) |   |   | (455 | ) |
|                     Optical      purchasing group receivables      |   |   | 619 |   |   |   | 688 |   |
|                     Inventories                                    |   |   | 144 |   |   |   | (35 | ) |
|                     Prepaid      expenses and other current assets |   |   | (96 | ) |   |   | 60 |   |
|                     Other      assets                              |   |   | 37 |   |   |   | (34 | ) |
|                     Accounts      payable and accrued liabilities  |   |   | (1,271 | ) |   |   | 1,013 |   |
| Optical      purchasing group payables                                                                                                                                 |   |   | (751 | ) |   |   | (950 | ) |
| Accrual      for store closings                                                                                                                                        |   |   | (154 | ) |   |   | - |   |
|                     Franchise      deposits and other liabilities  |   |   | (132 | ) |   |   | (45 | ) |
| Net      cash (used in) provided by operating activities                                                                                                               |   |   | (231 | ) |   |   | 1,598 |   |
|                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Cash      flows from investing activities:                                                                                                                             |   |   |   |   |   |   |   |   |
| Franchise      notes receivable issued                                                                                                                                 |   |   | (117 | ) |   |   | (252 | ) |
| Proceeds      from franchise and other notes receivable                                                                                                                |   |   | 216 |   |   |   | 293 |   |
| Proceeds      from the sale of property and equipment                                                                                                                  |   |   | - |   |   |   | 33 |   |
| Purchases      of property and equipment                                                                                                                               |   |   | (344 | ) |   |   | (918 | ) |
| Costs      associated with defending trademark value                                                                                                                   |   |   | (601 | ) |   |   | (310 | ) |
| Acquisition      of 1725758 Ontario Inc.                                                                                                                               |   |   | - |   |   |   | (3,609 | ) |
| Net      cash used in investing activities                                                                                                                             |   |   | (846 | ) |   |   | (4,763 | ) |
|                                                                                                                                                                   |   |   |   |   |   |   |   |   |
| Cash      flows from financing activities:                                                                                                                             |   |   |   |   |   |   |   |   |
| Proceeds      from the issuance of common stock uponthe      exercise of stock options and warrants                                                                    |   |   | - |   |   |   | 1,345 |   |
| Return      of restricted cash                                                                                                                                         |   |   | - |   |   |   | 250 |   |
| Proceeds      from equipment financing                                                                                                                                 |   |   | - |   |   |   | 79 |   |
| Borrowings      under credit facility                                                                                                                                  |   |   | 950 |   |   |   | 4,299 |   |
| Payments      on related party obligations and other debt                                                                                                              |   |   | (438 | ) |   |   | (1,175 | ) |
| Net      cash provided by financing activities                                                                                                                         |   |   | 512 |   |   |   | 4,798 |   |
| Net      (decrease) increase in cash before effect of foreign exchange rate      changes                                                                               |   |   | (565 | ) |   |   | 1,633 |   |
| Effect      of foreign exchange rate changes                                                                                                                           |   |   | (191 | ) |   |   | (76 | ) |
| Net      (decrease) increase in cash and cash equivalents                                                                                                              |   |   | (756 | ) |   |   | 1,557 |   |
| Cash      and cash equivalents – beginning of year                                                                                                               |   |   | 2,846 |   |   |   | 1,289 |   |
| Cash      and cash equivalents – end of year                                                                                                                     |   | $ | 2,090 |   |   | $ | 2,846 |   |

----

|                                                                                                                                         |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Supplemental      disclosures of cash flow information:                                                                                      |   |   |   |   |   |   |
| Cash      paid during the year for:                                                                                                          |   |   |   |   |   |   |
| Interest                                                                                                                                     |   | $      | 294    |   |   | $      | 59 |   |
| Taxes                                                                                                                                        |   | $      | 33     |   |   | $      | 36 |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |
| Non-cash      investing and financing activities:                                                                                            |   |   |   |   |   |   |   |   |
| Notes      receivable in connection with the sale of three Company-owned stores      (inclusive of all inventory and property and equipment) |   | $      | 151    |   |   | $      | - |   |
|                                                                                                                                         |   |   |   |   |   |   |   |   |
| Notes      receivable in connection with franchisee settlement (inclusive of all      franchise related receivables)                         |   | $      | 130    |   |   | $      | - |   |

----

EMERGINGVISION, INC. AND SUBSIDIARIES

----

|          |   | December      31, |   |
|---------------|--------|-------------------|--------|
|          |   | 2008              |   |   | 2007 |   |
|          |   |              |   |   |   |   |
| Vendor      A |   |              | 20.4   | % |   |   | 32.5 | % |
| Vendor      B |   |              | 15.2   | % |   |   | 12.0 | % |
| Vendor      C |   |              | 5.4    | % |   |   | 5.0 | % |
|          |   |              | 41.0   | % |   |   | 49.5 | % |

| Purchase      Price         |   |   |       |   | $      | 3,609,000 |      |
|-----------------------------|--------|--------|------------|--------|--------|-----------|-----------|
| Working      Capital        |   |   | 1,000      |   |   |      |      |   |
| Accounts      receivable    |   |   | 3,817,000  |   |   |      |      |   |
| Property      and equipment |   |   | 41,000     |   |   |      |      |   |
| Intangible      assets      |   |   | 1,844,000  |   |   |      |      |   |
| Accounts      payable       |   |   | (3,676,000 | )      |   |      | 2,027,000 |   |
| Goodwill                    |   |   |       |   |   | $         | 1,582,000 |   |
|                        |   |   |       |   |   |      |      |   |

|                                                                         |   | (In      thousands) |   |
|------------------------------------------------------------------------------|--------|---------------------|--------|
|                                                                         |   | 2007                |   |
| Business      Segment Net Revenues:                                          |   |                |   |
|      Retail      Optical Stores                     |   | $                   | 15,773 |   |
|      Optical      Purchasing Group Business         |   |                | 57,390 |   |
| Net      revenues                                                            |   | $                   | 73,163 |   |
|                                                                         |   |                |   |   |
| Business      Segment (Loss) Income before Benefit from Income Taxes:        |   |                |   |   |
|      Retail      Optical Stores                     |   | $                   | (401   | ) |
|      Optical      Purchasing Group Business         |   |                | 1,116  |   |
| Income      before benefit from income taxes                                 |   | $                   | 715    |   |
|                                                                         |   |                |   |   |
| Business      Segment Net (Loss) Income:                                     |   |                |   |   |
|      Retail      Optical Stores                     |   | $                   | (150   | ) |
|      Optical      Purchasing Group Business         |   |                | 1,116  |   |
| Net      income                                                              |   | $                   | 966    |   |
|                                                                         |   |                |   |   |
| Business      Segment Net (Loss) Income Per Share – Basic and Diluted: |   |                |   |   |
|      Retail      Optical Stores                     |   | $                   | (0.00  | ) |
|      Optical      Purchasing Group Business         |   |                | 0.01   |   |
| Net      income per share – Basic and Diluted                          |   | $                   | 0.01   |   |
|                                                                         |   |                |   |   |

----

|                                                               |   | (In      thousands) |    |
|--------------------------------------------------------------------|--------|---------------------|---------|
|                                                               |   | 2008                |    |   | 2007 |   |
| Numerator:                                                         |   |                |    |   |   |   |
|      Net      (loss) income               |   | $                   | (88     | ) |   | $ | 426 |   |
|                                                               |   |                |    |   |   |   |   |   |
| Denominator:                                                       |   |                |    |   |   |   |   |   |
| Weighted      average common shares outstanding                    |   |                | 125,293 |   |   |   | 84,489 |   |
| Dilutive      effect of stock options and warrants                 |   |                | -       |   |   |   | 8,642 |   |
| Weighted      average common shares outstanding, assuming dilution |   |                | 125,293 |   |   |   | 93,131 |   |
|                                                               |   |                |    |   |   |   |   |   |
| Per Share Information:                                             |   |                |    |   |   |   |   |   |
| Basic                                                              |   | $                   | (0.00   | ) |   | $ | 0.01 |   |
| Diluted                                                            |   | $                   | (0.00   | ) |   | $ | 0.00 |   |

| 2009                                       |   | $      | 136 |   |
|--------------------------------------------|--------|--------|-----|--------|
| 2010                                       |   |   | 111 |   |
| 2011                                       |   |   | 67  |   |
| 2012                                       |   |   | 39  |   |
| 2013                                       |   |   | 79  |   |
| Thereafter                                 |   |   | 6   |   |
|                                       |   |   | 438 |   |
| Less:      allowance for doubtful accounts |   |   | (29 | )      |
|                                       |   | $      | 409 |   |

----

|                                                                                              | (In      thousands)     |   |
|---------------------------------------------------------------------------------------------------|-------------------------|--------|
|                                                                                              | As      of December 31, |   |
|                                                                                              |                    |   |   |   |   |   |
|                                                                                              |                    | 2008   |   |   | 2007 |   |
| Franchise      Receivables:                                                                       |                    |   |   |   |   |   |
|     Balance,      beginning of year                                           |                    | $      | 147 |   |   | $ | 110 |   |
|           Charged      to expense               |                    |   | 243 |   |   |   | 91 |   |
|           Reductions,      including write-offs |                    |   | (250 | ) |   |   | (55 | ) |
|           Additions      and transfers          |                    |   | - |   |   |   | 1 |   |
|      Balance,      end of year                                           |                    | $      | 140 |   |   | $ | 147 |   |
|                                                                                              |                    |   |   |   |   |   |   |   |
| Optical      Purchasing Group Receivables:                                                        |                    |   |   |   |   |   |   |   |
|      Balance,      beginning of year                                     |                    | $      | 60 |   |   | $ | 40 |   |
|           Charged      to expense               |                    |   | 160 |   |   |   | 41 |   |
|           Reductions,      including write-offs |                    |   | (48 | ) |   |   | (21 | ) |
|           Additions      and transfers          |                    |   | - |   |   |   | - |   |
|      Balance,      end of year                                           |                    | $      | 172 |   |   | $ | 60 |   |
|                                                                                              |                    |   |   |   |   |   |   |   |
| Franchise      Notes Receivables:                                                                 |                    |   |   |   |   |   |   |   |
|      Balance,      beginning of year                                     |                    | $      | 38 |   |   | $ | 49 |   |
|           Charged      to expense               |                    |   | - |   |   |   | 27 |   |
|           Reductions,      including write-offs |                    |   | - |   |   |   | (37 | ) |
|           Additions      and transfers          |                    |   | (9 | ) |   |   | (1 | ) |
|      Balance,      end of year                                           |                    | $      | 29 |   |   | $ | 38 |   |
|                                                                                              |                    |   |   |   |   |   |   |   |
| Other      Company Receivables:                                                                   |                    |   |   |   |   |   |   |   |
|      Balance,      beginning of year                                     |                    | $      | 5 |   |   | $ | 2 |   |
|           Charged      to expense               |                    |   | 59 |   |   |   | 160 |   |
|           Reductions,      including write-offs |                    |   | (57 | ) |   |   | (157 | ) |
|           Additions      and transfers          |                    |   | - |   |   |   | - |   |
|      Balance,      end of year                                           |                    | $      | 7 |   |   | $ | 5 |   |
|                                                                                              |                    |   |   |   |   |   |   |   |
| Accrual      for Store Closings:                                                                  |                    |   |   |   |   |   |   |   |
|      Balance,      beginning of year                                     |                    | $      | 300 |   |   | $ | 37 |   |
|           Charged      to expense               |                    |   | - |   |   |   | 236 |   |
|           Reductions,      including write-offs |                    |   | (269 | ) |   |   | - |   |
|           Additions      and transfers          |                    |   | 115 |   |   |   | 27 |   |
|      Balance,      end of year                                           |                    | $      | 146 |   |   | $ | 300 |   |

----

|                                                                                                                                               |   | (In      thousands)As      of December 31, |   | Estimated |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|-----------|
|                                                                                                                                               |   | 2008                                       |   |      | 2007 |   | Useful      Lives |
|                                                                                                                                               |   |                                       |   |      |   |   |   |
| Furniture      and fixtures                                                                                                                        |   | $                                          | 383    |      |   | $ | 379 |   | 5-7      years |
| Machinery      and equipment                                                                                                                       |   |                                       | 2,112  |      |   |   | 2,084 |   | 3-5      years |
| Software                                                                                                                                           |   |                                       | 920    |      |   |   | 846 |   | 3-5      years |
| Leasehold      improvements                                                                                                                        |   |                                       | 1,299  |      |   |   | 1,347 |   | 10      years* |
|                                                                                                                                               |   |                                       | 4,714  |      |   |   | 4,656 |   |   |
| Less:      accumulated depreciation                                                                                                                |   |                                       | (3,523 | )         |   |   | (3,163 | ) |   |
|                    Property      and equipment, net |   | $                                          | 1,191  |      |   | $ | 1,493 |   |   |
|                                                                                                                                               |   |                                       |   |      |   |   |   |   |   |

|                                                                                                                                          |   | (In      thousands)As      of December 31, |   | Estimated |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|-----------|
|                                                                                                                                          |   | 2008                                       |   |      | 2007 |   | Useful      Lives |
|                                                                                                                                          |   |                                       |   |      |   |   |   |
| Customer      lists                                                                                                                           |   | $                                          | 1,057  |      |   | $ | 1,057 |   | 10-11      years |
| Non-compete      agreement                                                                                                                    |   |                                       | 453    |      |   |   | 453 |   | 5      years |
| Trade      name                                                                                                                               |   |                                       | 2,078  |      |   |   | 1,477 |   | Indefinite |
|                                                                                                                                          |   |                                       | 3,588  |      |   |   | 2,987 |   |   |
| Less:      accumulated amortization                                                                                                           |   |                                       | (370   | )         |   |   | (168 | ) |   |
|                    Intangible      assets, net |   | $                                          | 3,218  |      |   | $ | 2,819 |   |   |
|                                                                                                                                          |   |                                       |   |      |   |   |   |   |   |

----

|                                     |   | December      31, |   |
|------------------------------------------|--------|-------------------|--------|
|                                     |   | 2008              |   |   | 2007 |   |
|                                     |   |              |   |   |   |   |
| Accounts      payable                    |   | $                 | 2,309  |   |   | $ | 2,961 |   |
| Accrued      payroll and fringe benefits |   |              | 533    |   |   |   | 536 |   |
| Accrued      professional fees           |   |              | 114    |   |   |   | 128 |   |
| Accrued      advertising                 |   |              | 871    |   |   |   | 1,310 |   |
| Accrued      rent under sublease         |   |              | 166    |   |   |   | 227 |   |
| Accrued      income and other taxes      |   |              | 129    |   |   |   | 95 |   |
| Other      accrued expenses              |   |              | 240    |   |   |   | 376 |   |
|                                     |   | $                 | 4,362  |   |   | $ | 5,633 |   |

|   Year |   | Related      PartyBorrowings(1) |   |   | Long-Term(2) |   |   | Other      Debt(3) |   |   | Total  |   |
|------------------|--------|---------------------------------|--------|--------|--------------|--------|--------|--------------------|--------|--------|--------|--------|
|             |   |                            |   |   |         |   |   |               |   |   |   |   |
| 2009             |   | $                               | 353    |   |         | $      | -      |               |   | $      | 14     |   |   | $ | 367 |   |
| 2010             |   |                            | 334    |   |         |   | 5,307  |               |   |   | 16     |   |   |   | 5,657 |   |
| 2011             |   |                            | 83     |   |         |   | -      |               |   |   | 17     |   |   |   | 100 |   |
| 2012             |   |                            | -      |   |         |   | -      |               |   |   | 18     |   |   |   | 18 |   |
|             |   | $                               | 770    |   |         | $      | 5,307  |               |   | $      | 65     |   |   | $ | 6,142 |   |

| 1)   | In      connection with the acquisition of all of the net tangible assets of      Combine Optical Management Corporation (“COMC”), the Company entered into      two promissory notes with COMC.  The first note provides for      four annual installments, which commenced October 1, 2007, totaling      $1,273,000 (which is non-interest bearing with an imputed annual interest      rate of 8.1%).  The second note, which commenced October 1,      2006, provides for sixty monthly installments totaling $500,000 at 7%      interest per annum.  In order to secure repayment, the Company      entered into Security Agreements with COMC granting COMC a security      interest in substantially all of the assets of  Combine. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | The      Company had outstanding borrowings of $5,306,854 under its Credit Facility      with M&T Bank (“M&T”), which borrowings are payable (interest      only) monthly and bear interest at a rate of LIBOR plus      2.75%.  As of December 31, 2008, the interest rate was      4.18%.  The principal and any accrued interest are due and      payable in April 2010.  In order to secure repayment, the      Company entered into Security Agreements with M&T granting M&T a      security interest in substantially all of the assets of the Company, other      than the assets described above securing  Combine. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3)   | In      connection with the remodeling of one of the Company-owned stores, the      Company obtained $78,000 of equipment financing from De Lage Landen      Financial Services, Inc. in November 2007, which borrowings provide for      sixty monthly installments and bear interest at a rate of      10.2%. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                              |   | 2008   |    |   | 2007   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Deferred      tax assets:                         |   |   |    |   |   |   |
| Reserves      and allowances                      |   | $      | 143     |   |   | $      | 1,150 |   |
| Net      operating loss and credits carryforwards |   |   | 15,725  |   |   |   | 16,003 |   |
| Stock      compensation expense                   |   |   | 294     |   |   |   | 258 |   |
| Accrued      expenses                             |   |   | 46      |   |   |   | - |   |
| Total      deferred tax assets                    |   |   | 16,208  |   |   |   | 17,411 |   |
|                                              |   |   |    |   |   |   |   |   |
| Deferred      tax liabilities:                    |   |   |    |   |   |   |   |   |
| Depreciation      and amortization                |   |   | (420    | )      |   |   | (109 | ) |
| Total      deferred tax liabilities               |   |   | (420    | )      |   |   | (109 | ) |
|                                              |   |   | 15,788  |   |   |   | 17,302 |   |
| Less:      Valuation allowance                    |   |   | (14,634 | )      |   |   | (15,628 | ) |
| Net      deferred tax asset                       |   | $      | 1,154   |   |   | $      | 1,674 |   |

----

|                                           |   | 2008   |   |   | 2007   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Current:                                       |   |   |   |   |   |   |
| U.S.      Federal                              |   | $      | 3      |   |   | $      | 3 |   |
| U.S.      State and local                      |   |   | 1      |   |   |   | 10 |   |
| Foreign      – Canada                    |   |   | 67     |   |   |   | 10 |   |
| Total      current                             |   |   | 71     |   |   |   | 23 |   |
|                                           |   |   |   |   |   |   |   |   |
| Deferred:                                      |   |   |   |   |   |   |   |   |
| U.S.      Federal                              |   |   | 442    |   |   |   | (233 | ) |
| U.S.      State and local                      |   |   | 78     |   |   |   | (41 | ) |
| Foreign      – Canada                    |   |   | -      |   |   |   | - |   |
| Total      deferred                            |   |   | 520    |   |   |   | (274 | ) |
| Provision      for (benefit from) income taxes |   | $      | 591    |   |   | $      | (251 | ) |

|   |   | Net      Operating Loss |   |   | AMT      Operating Loss |   |
|--------|--------|-------------------------|--------|--------|-------------------------|--------|
|   |   |                    |   |   |                    |   |
| 2011   |   | $                       | 1,518  |   |                    | $      | 1,083 |   |
| 2012   |   |                    | 3,845  |   |                    |   | 3,845 |   |
| 2018   |   |                    | 10,810 |   |                    |   | 10,810 |   |
| 2019   |   |                    | 1,358  |   |                    |   | 1,358 |   |
| 2020   |   |                    | 20,269 |   |                    |   | 20,269 |   |
| 2021   |   |                    | 2,369  |   |                    |   | 1,808 |   |
| 2022   |   |                    | 4,375  |   |                    |   | 4,310 |   |
| 2023   |   |                    | 166    |   |                    |   | 166 |   |
| 2024   |   |                    | 25     |   |                    |   | 25 |   |
| 2025   |   |                    | 21     |   |                    |   | 21 |   |
| 2026   |   |                    | 24     |   |                    |   | 24 |   |
| 2027   |   |                    | 314    |   |                    |   | 314 |   |
|   |   | $                       | 45,094 |   |                    | $      | 44,033 |   |

|                                                          |   | 2008   |   |   | 2007   |   |
|---------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                          |   |   |   |   |   |   |
| Federal      statutory rate                                   |   |   | 34.0   | %      |   |   | 34.0 | % |
| State      and local income taxes, net of federal tax benefit |   |   | 0.1    | %      |   |   | 2.2 | % |
| Permanent      differences                                    |   |   | 25.4   | %      |   |   | 3.0 | % |
| Net      operating loss carry forward adjustments             |   |   | 1.5    | %      |   |   | 12.4 | % |
| Change      to valuation allowance                            |   |   | 56.5   | %      |   |   | (195.0 | %) |
| Effective      tax rate                                       |   |   | 117.5  | %      |   |   | (143.4 | %) |

----

|                                                                 |   | As      of December 31, |   |
|----------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                 |   | 2008                    |   |   | 2007 |   |
| Total      Assets:                                                   |   |                    |   |   |   |   |
|      Optical      Purchasing Group Business |   | $                       | 12,246 |   |   | $ | 13,115 |   |
|      Franchise                              |   |                    | 5,386  |   |   |   | 5,423 |   |
|      Company      Store                     |   |                    | 547    |   |   |   | 1,209 |   |
|      VisionCare      of California          |   |                    | 632    |   |   |   | 568 |   |
|      Corporate      Overhead                |   |                    | 814    |   |   |   | 1,264 |   |
|      Other                                  |   |                    | 12     |   |   |   | 45 |   |
| Total      assets                                                    |   | $                       | 19,637 |   |   | $ | 21,624 |   |

----

|                                                                 |   | As      of December 31, |   |
|----------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                 |   | 2008                    |   |   | 2007 |   |
| Capital      Expenditures:                                           |   |                    |   |   |   |   |
|      Optical      Purchasing Group Business |   | $                       | 42     |   |   | $ | 119 |   |
|      Franchise                              |   |                    | 40     |   |   |   | - |   |
|      Company      Store                     |   |                    | 139    |   |   |   | 372 |   |
|      VisionCare      of California          |   |                    | 2      |   |   |   | 45 |   |
|      Corporate      Overhead                |   |                    | 121    |   |   |   | 382 |   |
|      Other                                  |   |                    | -      |   |   |   | - |   |
| Total      capital expenditures                                      |   | $                       | 344    |   |   | $ | 918 |   |

| Total      Goodwill:                                                 |   |   |   |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|      Optical      Purchasing Group Business |   | $      | 2,861  |   |   | $      | 2,861 |   |
|      Franchise                              |   |   | 1,266  |   |   |   | 1,266 |   |
|      Company      Store                     |   |   | -      |   |   |   | - |   |
|      VisionCare      of California          |   |   | -      |   |   |   | - |   |
|      Corporate      Overhead                |   |   | -      |   |   |   | - |   |
|      Other                                  |   |   | -      |   |   |   | - |   |
| Total      goodwill                                                  |   | $      | 4,127  |   |   | $      | 4,127 |   |

| Total      Intangible Assets:                                        |   |   |   |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|      Optical      Purchasing Group Business |   | $      | 2,307  |   |   | $      | 2,509 |   |
|      Franchise                              |   |   | 911    |   |   |   | 310 |   |
|      Company      Store                     |   |   | -      |   |   |   | - |   |
|      VisionCare      of California          |   |   | -      |   |   |   | - |   |
|      Corporate      Overhead                |   |   | -      |   |   |   | - |   |
|      Other                                  |   |   | -      |   |   |   | - |   |
| Total      intangible assets                                         |   | $      | 3,218  |   |   | $      | 2,819 |   |

| Total      Goodwill Additions:                                       |   |   |   |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|      Optical      Purchasing Group Business |   | $      | -      |   |   | $      | 1,583 |   |
|      Franchise                              |   |   | -      |   |   |   | - |   |
|      Company      Store                     |   |   | -      |   |   |   | - |   |
|      VisionCare      of California          |   |   | -      |   |   |   | - |   |
|      Corporate      Overhead                |   |   | -      |   |   |   | - |   |
|      Other                                  |   |   | -      |   |   |   | - |   |
| Total      goodwill additions                                        |   | $      | -      |   |   | $      | 1,583 |   |

| Total      Intangible Asset Additions:                               |   |   |   |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|      Optical      Purchasing Group Business |   | $      | -      |   |   | $      | 1,844 |   |
|      Franchise                              |   |   | 601    |   |   |   | 310 |   |
|      Company      Store                     |   |   | -      |   |   |   | - |   |
|      VisionCare      of California          |   |   | -      |   |   |   | - |   |
|      Corporate      Overhead                |   |   | -      |   |   |   | - |   |
|      Other                                  |   |   | -      |   |   |   | - |   |
| Total      intangible asset additions                                |   | $      | 601    |   |   | $      | 2,154 |   |

----

|                                                                       |   | For      the Year Ended December 31, |   |
|----------------------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                                       |   | 2008                                 |   |   | 2007 |   |
| Net      Revenues:                                                         |   |                                 |   |   |   |   |
|      Optical      Purchasing Group Business       |   | $                                    | 57,914 |   |   | $ | 33,848 |   |
|      Franchise                                    |   |                                 | 6,510  |   |   |   | 6,867 |   |
|      Company      Store                           |   |                                 | 3,715  |   |   |   | 5,393 |   |
|      VisionCare      of California                |   |                                 | 3,551  |   |   |   | 3,513 |   |
|      Corporate      Overhead                      |   |                                 | -      |   |   |   | - |   |
|      Other                                        |   |                                 | 119    |   |   |   | - |   |
| Net      revenues                                                          |   | $                                    | 71,809 |   |   | $ | 49,621 |   |
|  Income      (Loss) before Provision for (Benefit from) Income Taxes: |   |                                 |   |   |   |   |   |   |
|      Optical      Purchasing Group Business       |   | $                                    | 979    |   |   | $ | 576 |   |
|      Franchise                                    |   |                                 | 3,624  |   |   |   | 4,897 |   |
|      Company      Store                           |   |                                 | (427   | ) |   |   | (1,029 | ) |
|      VisionCare      of California                |   |                                 | 44     |   |   |   | 38 |   |
|      Corporate      Overhead                      |   |                                 | (3,646 | ) |   |   | (4,090 | ) |
|      Other                                        |   |                                 | (71    | ) |   |   | (217 | ) |
| Income      before provision for (benefit from) income taxes               |   | $                                    | 503    |   |   | $ | 175 |   |
|                                                                       |   |                                 |   |   |   |   |   |   |
| Depreciation      and Amortization:                                        |   |                                 |   |   |   |   |   |   |
|      Optical      Purchasing Group Business       |   | $                                    | 303    |   |   | $ | 203 |   |
|      Franchise                                    |   |                                 | 127    |   |   |   | 93 |   |
|      Company      Store                           |   |                                 | 69     |   |   |   | 113 |   |
|      VisionCare      of California                |   |                                 | 22     |   |   |   | 19 |   |
|      Corporate      Overhead                      |   |                                 | 127    |   |   |   | 93 |   |
|      Other                                        |   |                                 | 6      |   |   |   | 2 |   |
| Total      depreciation and amortization                                   |   | $                                    | 654    |   |   | $ | 523 |   |
|                                                                       |   |                                 |   |   |   |   |   |   |
| Interest      Expense:                                                     |   |                                 |   |   |   |   |   |   |
|      Optical      Purchasing Group Business       |   | $                                    | 294    |   |   | $ | 230 |   |
|      Franchise                                    |   |                                 | 52     |   |   |   | 59 |   |
|      Company      Store                           |   |                                 | -      |   |   |   | - |   |
|      VisionCare      of California                |   |                                 | -      |   |   |   | - |   |
|      Corporate      Overhead                      |   |                                 | -      |   |   |   | - |   |
|      Other                                        |   |                                 | -      |   |   |   | - |   |
| Total      interest expense                                                |   | $                                    | 346    |   |   | $ | 289 |   |

----

|                                                                       |   | For      the Year Ended December 31, |   |
|----------------------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                                       |   | 2008                                 |   |   | 2007 |   |
|                                                                       |   |                                 |   |   | (unaudited) |   |
| Net      Revenues:                                                         |   |                                 |   |   |   |   |
|      Optical      Purchasing Group Business       |   | $                                    | 57,914 |   |   | $ | 57,390 |   |
|      Franchise                                    |   |                                 | 6,510  |   |   |   | 6,867 |   |
|      Company      Store                           |   |                                 | 3,715  |   |   |   | 5,393 |   |
|      VisionCare      of California                |   |                                 | 3,551  |   |   |   | 3,513 |   |
|      Corporate      Overhead                      |   |                                 | -      |   |   |   | - |   |
|      Other                                        |   |                                 | 119    |   |   |   | - |   |
| Net      revenues                                                          |   | $                                    | 71,809 |   |   | $ | 73,163 |   |
|  Income      (Loss) before Provision for (Benefit from) Income Taxes: |   |                                 |   |   |   |   |   |   |
|      Optical      Purchasing Group Business       |   | $                                    | 979    |   |   | $ | 1,116 |   |
|      Franchise                                    |   |                                 | 3,624  |   |   |   | 4,897 |   |
|      Company      Store                           |   |                                 | (427   | ) |   |   | (1,029 | ) |
|      VisionCare      of California                |   |                                 | 44     |   |   |   | 38 |   |
|      Corporate      Overhead                      |   |                                 | (3,646 | ) |   |   | (4,090 | ) |
|      Other                                        |   |                                 | (71    | ) |   |   | (217 | ) |
| Income      before provision for (benefit from) income taxes               |   | $                                    | 503    |   |   | $ | 715 |   |
|                                                                       |   |                                 |   |   |   |   |   |   |
| Depreciation      and Amortization:                                        |   |                                 |   |   |   |   |   |   |
|      Optical      Purchasing Group Business       |   | $                                    | 303    |   |   | $ | 216 |   |
|      Franchise                                    |   |                                 | 127    |   |   |   | 93 |   |
|      Company      Store                           |   |                                 | 69     |   |   |   | 113 |   |
|      VisionCare      of California                |   |                                 | 22     |   |   |   | 19 |   |
|      Corporate      Overhead                      |   |                                 | 127    |   |   |   | 93 |   |
|      Other                                        |   |                                 | 6      |   |   |   | 2 |   |
| Total      depreciation and amortization                                   |   | $                                    | 654    |   |   | $ | 536 |   |
|                                                                       |   |                                 |   |   |   |   |   |   |
| Interest      Expense:                                                     |   |                                 |   |   |   |   |   |   |
|      Optical      Purchasing Group Business       |   | $                                    | 294    |   |   | $ | 357 |   |
|      Franchise                                    |   |                                 | 52     |   |   |   | 59 |   |
|      Company      Store                           |   |                                 | -      |   |   |   | - |   |
|      VisionCare      of California                |   |                                 | -      |   |   |   | - |   |
|      Corporate      Overhead                      |   |                                 | -      |   |   |   | - |   |
|      Other                                        |   |                                 | -      |   |   |   | - |   |
| Total      interest expense                                                |   | $                                    | 346    |   |   | $ | 416 |   |

----

|                                                          |   | For      the Year Ended December 31, |   |
|---------------------------------------------------------------|--------|--------------------------------------|--------|
|                                                          |   | 2008                                 |   |   | 2007 |   |
| Net      Revenues:                                            |   |                                 |   |   |   |   |
|      United      States              |   | $                                    | 30,124 |   |   | $ | 32,664 |   |
|      Canada                          |   |                                 | 41,685 |   |   |   | 16,957 |   |
| Net      revenues                                             |   | $                                    | 71,809 |   |   | $ | 49,621 |   |
|                                                          |   |                                 |   |   |   |   |   |   |
| Income      before Provision for (Benefit from) Income Taxes: |   |                                 |   |   |   |   |   |   |
|      United      States              |   | $                                    | 350    |   |   | $ | 117 |   |
|      Canada                          |   |                                 | 153    |   |   |   | 58 |   |
| Income      before provision for (benefit from) income taxes  |   | $                                    | 503    |   |   | $ | 175 |   |
|                                                          |   |                                 |   |   |   |   |   |   |

|                               |   | United      States |   |   | Canada |   |   | Total  |   |
|------------------------------------|--------|--------------------|--------|--------|--------|--------|--------|--------|--------|
|                               |   |               |   |   |   |   |   |   |   |
| Total      Assets                  |   | $                  | 16,678 |   |   | $      | 2,959  |   |   | $ | 19,637 |   |
| Property      and Equipment        |   |               | 1,156  |   |   |   | 35     |   |   |   | 1,191 |   |
| Depreciation      and Amortization |   |               | 645    |   |   |   | 9      |   |   |   | 654 |   |
| Capital      Expenditures          |   |               | 344    |   |   |   | -      |   |   |   | 344 |   |
| Goodwill                           |   |               | 4,127  |   |   |   | -      |   |   |   | 4,127 |   |
| Intangible      Assets             |   |               | 3,218  |   |   |   | -      |   |   |   | 3,218 |   |
| Intangible      Asset Additions    |   |               | 601    |   |   |   | -      |   |   |   | 601 |   |
| Interest      Expense              |   |               | 346    |   |   |   | -      |   |   |   | 346 |   |

|                               |   | United      States |   |   | Canada |   |   | Total  |   |
|------------------------------------|--------|--------------------|--------|--------|--------|--------|--------|--------|--------|
|                               |   |               |   |   |   |   |   |   |   |
| Total      Assets                  |   | $                  | 18,690 |   |   | $      | 2,934  |   |   | $ | 21,624 |   |
| Property      and Equipment        |   |               | 1,453  |   |   |   | 40     |   |   |   | 1,493 |   |
| Depreciation      and Amortization |   |               | 520    |   |   |   | 3      |   |   |   | 523 |   |
| Capital      Expenditures          |   |               | 918    |   |   |   | -      |   |   |   | 918 |   |
| Goodwill                           |   |               | 4,127  |   |   |   | -      |   |   |   | 4,127 |   |
| Intangible      Assets             |   |               | 2,819  |   |   |   | -      |   |   |   | 2,819 |   |
| Goodwill      Additions            |   |               | 1,583  |   |   |   | -      |   |   |   | 1,583 |   |
| Intangible      Asset Additions    |   |               | 2,154  |   |   |   | -      |   |   |   | 2,154 |   |
| Interest      Expense              |   |               | 289    |   |   |   | -      |   |   |   | 289 |   |

|       |   | Total      Lease Obligations |   |   | SubleaseRentals |   |   | Net      Company Obligations |   |
|------------|--------|------------------------------|--------|--------|-----------------|--------|--------|------------------------------|--------|
|       |   |                         |   |   |            |   |   |                         |   |
| 2009       |   | $                            | 3,910  |   |            | $      | 3,394  |                         |   | $ | 516 |   |
| 2010       |   |                         | 1,206  |   |            |   | 1,124  |                         |   |   | 82 |   |
| 2011       |   |                         | 993    |   |            |   | 931    |                         |   |   | 62 |   |
| 2012       |   |                         | 925    |   |            |   | 925    |                         |   |   | - |   |
| 2013       |   |                         | 808    |   |            |   | 808    |                         |   |   | - |   |
| Thereafter |   |                         | 2,915  |   |            |   | 2,915  |                         |   |   | - |   |
|       |   | $                            | 10,757 |   |            | $      | 10,097 |                         |   | $ | 660 |   |

----

----

|                                                              |   | 2008   |       |   | 2007     |   |
|-------------------------------------------------------------------|--------|--------|------------|--------|----------|--------|
|                                                              |   |   |       |   | Weighted |   |   |   |   |   | Weighted |   |
|                                                              |   |   |       |   | Average  |   |   |   |   |   | Average |   |
|                                                              |   |   |       |   | Exercise |   |   |   |   |   | Exercise |   |
|                                                              |   | Shares |       |   | Price    |   |   | Shares |   |   | Price |   |
|                                                              |   |   |       |   |     |   |   |   |   |   |   |   |
| Options      outstanding, beginning of period                     |   |   | 20,567,907 |   |     | $      | 0.41 |   |   |   | 20,132,240 |   |   | $ | 0.44 |   |
|      Granted                             |   |   | 625,000    |   |     | $      | 0.21 |   |   |   | 575,000 |   |   | $ | 0.38 |   |
|      Exercised                           |   |   | -          |   |     | $      | - |   |   |   | (6,000 | ) |   | $ | 0.14 |   |
|      Canceled,      forfeited or expired |   |   | (154,000   | )      |     | $      | 7.21 |   |   |   | (133,333 | ) |   | $ | 5.12 |   |
|                                                              |   |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Options      outstanding, end of period                           |   |   | 21,038,907 |   |     | $      | 0.35 |   |   |   | 20,567,907 |   |   | $ | 0.41 |   |
|                                                              |   |   |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Options      exercisable, end of period                           |   |   | 21,038,907 |   |     | $      | 0.35 |   |   |   | 20,467,907 |   |   | $ | 0.41 |   |

|                 |               |   | Options      Outstanding |   |       | Options      Exercisable |   |
|----------------------|--------------------|--------|--------------------------|--------|------------|--------------------------|--------|
|                 |               |   |                     |   |       | Weighted-                |   |   | Weighted- |   |   |   |   |   | Weighted- |   |
|                 |               |   |                     |   |       | Average                  |   |   | Average |   |   |   |   |   | Average |   |
| Range      of        |               |   |                     |   |       | Remaining                |   |   | Exercise |   |   |   |   |   | Exercise |   |
| Exercise      Prices |               |   | Outstanding              |   |       | Contractual      Life    |   |   | Price |   |   | Exercisable |   |   | Price |   |
|                 |               |   |                     |   |       |                     |   |   |   |   |   |   |   |   |   |   |
| $                    | 0.05      to $0.08 |   |                     |   | 400,000    |                     |   |   | 4.41 |   |   | $ | 0.05 |   |   |   | 400,000 |   |   | $ | 0.05 |   |
| $                    | 0.09      to $0.14 |   |                     |   | 13,578,114 |                     |   |   | 6.19 |   |   | $ | 0.14 |   |   |   | 13,578,114 |   |   | $ | 0.14 |   |
| $                    | 0.15      to $0.23 |   |                     |   | 5,435,625  |                     |   |   | 7.44 |   |   | $ | 0.16 |   |   |   | 5,435,625 |   |   | $ | 0.16 |   |
| $                    | 0.24      to $0.36 |   |                     |   | 618,500    |                     |   |   | 2.34 |   |   | $ | 0.31 |   |   |   | 618,500 |   |   | $ | 0.31 |   |
| $                    | 0.37      to $0.54 |   |                     |   | 375,000    |                     |   |   | 8.45 |   |   | $ | 0.47 |   |   |   | 375,000 |   |   | $ | 0.47 |   |
| $                    | 1.32      to $1.98 |   |                     |   | 5,000      |                     |   |   | 0.83 |   |   | $ | 1.88 |   |   |   | 5,000 |   |   | $ | 1.88 |   |
| $                    | 3.00      to $4.50 |   |                     |   | 85,000     |                     |   |   | 0.54 |   |   | $ | 3.41 |   |   |   | 85,000 |   |   | $ | 3.41 |   |
| $                    | 4.51      to $6.77 |   |                     |   | 208,334    |                     |   |   | 1.20 |   |   | $ | 5.89 |   |   |   | 208,334 |   |   | $ | 5.89 |   |
| $                    | 6.78      to $8.25 |   |                     |   | 333,334    |                     |   |   | 1.15 |   |   | $ | 8.06 |   |   |   | 333,334 |   |   | $ | 8.06 |   |
|                 |               |   |                     |   | 21,038,907 |                     |   |   |   |   |   |   |   |   |   |   | 21,038,907 |   |   |   |   |   |

|                       |   | 2008   |   |   | 2007   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|
|                       |   |   |   |   |   |   |
| Expected      life (years) |   |   | 5      |   |   |   | 1 |   |
| Interest      rate         |   |   | 2.34   | %      |   |   | 4.82      - 4.98 | % |
| Volatility                 |   |   | 74     | %      |   |   | 54      - 61 | % |
| Dividend      yield        |   |   | -      |   |   |   | - |   |

|                                                              |   | 2008   |      |   | 2007     |   |
|-------------------------------------------------------------------|--------|--------|-----------|--------|----------|--------|
|                                                              |   |   |      |   | Weighted |   |   |   |   |   | Weighted |   |
|                                                              |   |   |      |   | Average  |   |   |   |   |   | Average |   |
|                                                              |   |   |      |   | Exercise |   |   |   |   |   | Exercise |   |
|                                                              |   | Shares |      |   | Price    |   |   | Shares |   |   | Price |   |
|                                                              |   |   |      |   |     |   |   |   |   |   |   |   |
| Warrants      outstanding, beginning of period                    |   |   | 1,905,885 |   |     | $      | 0.17 |   |   |   | 60,690,913 |   |   | $ | 0.05 |   |
|      Granted                             |   |   | 175,000   |   |     | $      | 0.25 |   |   |   | 425,000 |   |   | $ | 0.26 |   |
|      Exercised                           |   |   | -         |   |     | $      | - |   |   |   | (54,848,264 | ) |   | $ | 0.05 |   |
|      Canceled,      forfeited or expired |   |   | -         |   |     | $      | - |   |   |   | (4,361,764 | ) |   | $ | 0.05 |   |
|                                                              |   |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Warrants      outstanding, end of period                          |   |   | 2,080,885 |   |     | $      | 0.18 |   |   |   | 1,905,885 |   |   | $ | 0.17 |   |
|                                                              |   |   |      |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Warrants      exercisable, end of period                          |   |   | 2,080,885 |   |     | $      | 0.18 |   |   |   | 1,905,885 |   |   | $ | 0.17 |   |

|                 |               |   | Warrants      Outstanding |   |      | Warrants      Exercisable |   |
|----------------------|--------------------|--------|---------------------------|--------|-----------|---------------------------|--------|
|                 |               |   |                      |   |      | Weighted-                 |   |   | Weighted- |   |   |   |   |   | Weighted- |   |
|                 |               |   |                      |   |      | Average                   |   |   | Average |   |   |   |   |   | Average |   |
| Range      of        |               |   |                      |   |      | Remaining                 |   |   | Exercise |   |   |   |   |   | Exercise |   |
| Exercise      Prices |               |   | Outstanding               |   |      | Contractual      Life     |   |   | Price |   |   | Exercisable |   |   | Price |   |
|                 |               |   |                      |   |      |                      |   |   |   |   |   |   |   |   |   |   |
| $                    | 0.14               |   |                      |   | 1,380,885 |                      |   |   | 6.00 |   |   | $ | 0.14 |   |   |   | 1,380,885 |   |   | $ | 0.14 |   |
| $                    | 0.15      to $0.23 |   |                      |   | 300,000   |                      |   |   | 1.35 |   |   | $ | 0.21 |   |   |   | 300,000 |   |   | $ | 0.21 |   |
| $                    | 0.24      to $0.30 |   |                      |   | 400,000   |                      |   |   | 3.48 |   |   | $ | 0.29 |   |   |   | 400,000 |   |   | $ | 0.29 |   |
|                 |               |   |                      |   | 2,080,885 |                      |   |   |   |   |   |   |   |   |   |   | 2,080,885 |   |   |   |   |   |

----

----

----

| Name                   | Age     | Director Since  | Position                                                              |
|-----------------------------|--------------|----------------------|----------------------------------------------------------------------------|
| Alan Cohen O.D.        | 57      | 1992            | Chairman of the Board of Directors                                    |
| Joel L. Gold           | 67      | 1995            | Director                                                              |
| Harvey Ross            | 69      | 2004            | Director                                                              |
| Jeffrey Rubin          | 41      | 2008            | Director                                                              |
| Seymour G. Siegel      | 66      | 2004            | Director                                                              |
| Christopher G. Payan   | 34      | 2004            | Chief Executive Officer and Director                                  |
| Samuel Z. Herskowitz   | 39      |            | Chief Marketing Officer                                               |
| Brian P. Alessi        | 33      |            | Chief Financial Officer                                               |
| Dr. Nicholas Shashati  | 49      |            | President – VisionCare of California, Inc. (“VCC”)  |
| Neil Glachman          | 55      |            | President – Combine Buying Group, Inc. (“COM”)      |
|                   |    |            |                                                                  |

----

| Name      and Principal Position                       |   Year  | Salary(1)($)     | Bonus(2)($)    | All      OtherCompensation(3)($) | Total($)         |
|--------------------------------------------------------|------------------------|------------------|----------------|----------------------------------|------------------|
|                                                   |                   |             |           |                             |             |
| Christopher      G. Payan,Chief      Executive Officer | 20082007               | $275,000$275,000 | --             | $13,000$13,000                   | $288,000$288,000 |
|                                                   |                   |             |           |                             |             |
| Neil      Glachman, President – Combine          | 20082007               | $210,000$210,000 | $50,000$60,000 | --                               | $260,000$270,000 |
|                                                   |                   |             |           |                             |             |
| Samuel      Z. Herskowitz,Chief      Marketing Officer | 20082007               | $190,000$190,000 | --             | $10,000$10,000                   | $200,000$200,000 |

| (1) (2) | Represents      annual salary paid to the executive.Represents      bonuses paid to Mr. Glachman for the years ended December 31, 2008 and      2007, respectively. |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3)     | Represents      car allowance payments and medical and dental reimbursements.                                                                                  |

----

| Name                      | Number      of Securities Underlying Unexercised Options Exercisable    (#) | OptionExercise      Price ($) | Option      Expiration Date           |
|---------------------------|-----------------------------------------------------------------------------|-------------------------------|---------------------------------------|
|                      |                                                                        |                          |                                  |
| Christopher      G. Payan | 7,208,22050,000                                                             | 0.140.26                      | 12/29/20147/16/2011                   |
|                      |                                                                        |                          |                                  |
| Neil      Glachman (1)    | 3,515,625                                                                   | 0.15                          | 9/28/2016                             |
|                      |                                                                        |                          |                                  |
| Samuel      Z. Herskowitz | 1,841,18037,50020,00010,000                                                 | 0.140.336.313.25              | 12/29/20144/26/201112/14/20094/9/2009 |

| (1) | Commencing      on September 29, 2010, and expiring September 28, 2016, 2,187,500 options      may be put back to the Company at a put price per share of      $0.32. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|    Name      |   | Fees      earned or paid in cash |   |   |  Stock      Awards |   |   | Option      Awards (2) |   |   |  All      Other Compensation |   |   |   Total |   |
|-----------------------------|--------|----------------------------------|--------|--------|-------------------------|--------|--------|------------------------|--------|--------|-----------------------------------|--------|--------|-------------------|--------|
|  Alan      Cohen, O.D. |   | $                                | 26,000 |   |                    |   | --     |                   |   | $      | 16,156                            |   |   |              | --     |   |   | $ | 26,000 |   |
| Joel      L. Gold           |   | $                                | 24,500 |   |                    |   | --     |                   |   | $      | 16,156                            |   |   |              | --     |   |   | $ | 26,000 |   |
| Harvey      Ross            |   | $                                | 26,000 |   |                    |   | --     |                   |   | $      | 16,156                            |   |   |              | --     |   |   | $ | 23,000 |   |
| Jeffrey      Rubin          |   | $                                | 19,168 |   |                    |   | --     |                   |   | $      | 16,156                            |   |   |              | --     |   |   | $ | 37,808 |   |
| Seymour      G. Siegel (1)  |   | $                                | 36,000 |   |                    |   | --     |                   |   | $      | 16,156                            |   |   |              | --     |   |   | $ | 47,808 |   |

| (1) Mr.      Siegel received an additional $10,000 during 2008 in consideration for      serving as Chairman of the Audit Committee.                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) The      amounts in this column reflect the compensation expense recognized for the      year ended December 31, 2008 in connection with the 125,000 options      granted to the non-employee directors in May  2008. |

----

| I.   |  COMMON      STOCK: |
|----------------|--------------------------|

| Name                                                                     | Beneficial      Ownership                                                  | Percent      of Class |
|--------------------------------------------------------------------------|----------------------------------------------------------------------------|-----------------------|
|  Dr.      Alan Cohen (a)                                            |  7,973,590   (1)                                       |  6.3%            |
|  Neil      Glachman (b)                                             |  3,515,625   (2)                                       |  2.7%            |
|  Joel      L. Gold (a)                                              |  561,500   (3)                                         |  *               |
|  Samuel      Z. Herskowitz (b)                                      |  2,008,680   (4)                                       |  1.6%            |
|  Horizons      Investors Corp.                                      |          50,526,543      (5)  |  40.3%           |
|  Christopher      G. Payan (a) (b)                                  |  8,470,720   (6)                                       |  6.4%            |
|  Harvey      Ross (a)                                               |  10,692,915   (7)                                      |  8.5%            |
|  Jeffrey      Rubin (a)                                             |  377,511   (8)                                         |  4.2%            |
|  Seymour      G. Siegel (a)                                         |  425,000      (9)                                                     |  *               |
|  All      current directors and named executive officers as a group |          34,025,541      (10) |  24.3%           |

| *           less      than 1% |
|--------------------------------------------------------------------------------------|
| (a) Director                                                                    |
| (b) Named      Executive Officer                                                |

| (1)  | Includes      (i) the right to acquire 475,000 shares of Common Stock upon the exercise      of presently exercisable, outstanding options, and (ii) 26,700 shares      owned by Dr. Cohen, as custodian for each of Erica and Nicole Cohen (Dr.      Cohen’s children, as to which Dr. Cohen disclaims beneficial ownership),      but excludes 16,840,528 shares, in the aggregate, held in trust for Dr.      Cohen’s minor children, Erica, Nicole, Jaclyn and Gabrielle, as      beneficiaries, in respect of which Dr. Cohen is not a trustee and has no      dispositive or investment authority, and as to which he disclaims      beneficial ownership.                                                                                                                                                                                                                            |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Includes      the right to acquire 3,515,625 shares of Common Stock upon the exercise of      presently exercisable, outstanding options.  Additionally,      commencing on September 29, 2010 and expiring September 28, 2016,      2,187,500 options may be put back to the Company at a put price per share      of $0.32.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (3)  | Includes      76,500 shares of Common Stock owned by Mr. Gold’s children and the right      to acquire 485,000 shares of Common Stock upon the exercise of presently      exercisable, outstanding options, but excludes an additional 5,000 shares      of Common Stock owned by Mr. Gold’s wife, as to which Mr. Gold disclaims      beneficial ownership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| (4)  | Includes      the right to acquire 1,908,680 shares of Common Stock upon the exercise of      presently exercisable, outstanding options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (5)  | Includes      shares of Common Stock owned by Horizons Investors Corp., a New York      corporation principally owned by Benito R. Fernandez, a former director of      the Company, and includes the right to acquire 100,000 shares of Common      Stock upon the exercise of presently exercisable, outstanding      options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (6)  | Includes      the right to acquire 7,258,220 shares of Common Stock upon the exercise of      presently exercisable, outstanding options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (7)  | Includes      the right to acquire 425,000 shares of Common Stock upon the exercise of      presently exercisable, outstanding options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| (8)  | Includes      the right to acquire 125,000 shares of Common Stock upon the exercise of      presently exercisable, outstanding options, but excludes an additional      5,023,573 shares of Common Stock owned by Mr. Rubin’s wife, as to which      Mr. Rubin disclaims beneficial ownership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| (9)  | Represents      the right to acquire 425,000 shares of Common Stock upon the exercise of      presently exercisable, outstanding options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (10) | Includes      (i) the right to acquire 14,617,525 shares of Common Stock upon the      exercise of presently exercisable, outstanding options, and (ii) 26,700      shares owned by Dr. Cohen, as custodian for each of Erica and Nicole Cohen      (as to which Dr. Cohen disclaims beneficial ownership).  In      accordance with Rule 13d-3(d)(1) under the Securities Exchange Act of      1934, as amended, the 14,617,525 shares of Common Stock for which the      Company’s directors and executive officers, as a group, hold currently      exercisable options, have been added to the total number of issued and      outstanding shares of Common Stock solely for the purpose of calculating      the percentage of such total number of issued and outstanding shares of      Common Stock beneficially owned by such directors and executive officers      as a group. |

|                                       | (A)                                                                                                 | (B)                                                                            | (C)                                                                                                                                      |
|--------------------------------------------|-----------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|
|     Plan      Category |  Number      of securities to be issued upon exercise of outstanding options and      warrants |  Weighted-average      exercise price of outstanding options and warrants | Number      of securities available for future issuance under equity compensation plan      (excludes securities reflected in column (A) |
| Authorized      by shareholders            | 21,038,907                                                                                          | $0.35                                                                          | 15,284,375                                                                                                                               |
| Not      authorized by shareholders        | 2,080,885                                                                                           | $0.18                                                                          | -                                                                                                                                        |

| II. | SENIOR CONVERTIBLE      PREFERRED STOCK: |
|-----|------------------------------------------|

| Name                                                                   |   | Beneficial      Ownership |   |   | Percent      of Class |   |
|------------------------------------------------------------------------|--------|---------------------------|--------|--------|-----------------------|--------|
| Rita      Folger1257      East 24th      StreetBrooklyn,      NY 11210 |   |                      | 0.74   | (1)    |                  |   | 100 | % |

| (1) | These      shares are convertible into an aggregate of 98,519 shares of Common Stock;      and the holder thereof will be entitled to cast that number of votes at      any meeting of shareholders. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Fee      Category       |   | 2008   |    |   | 2007   |   |
|-------------------------|--------|--------|---------|--------|--------|--------|
|                    |   |   |    |   |   |   |
| Audit      Fees (1)     |   | $      | 194,900 |   |   | $      | 169,000 |   |
| Audit-related      fees |   |   | -       |   |   |   | - |   |
| Tax      fees (2)       |   |   | -       |   |   |   | - |   |
| All      other fees     |   |   | -       |   |   |   | 19,222 |   |
| Total      fees         |   | $      | 194,900 |   |   | $      | 188,222 |   |

| (1)   | Audit      fees consist of aggregate fees billed for professional services rendered      for the audit of our annual financial statements and review of the interim      financial statements included in quarterly reports or services that are      normally provided by the independent auditors in connection with statutory      and regulatory filings or engagements for the years ended December 31,      2008 and 2007. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | The      Company uses a different accounting firm to prepare its consolidated      federal and state tax returns in connection with IRS      regulations.  For the years ended December 31, 2008 and 2007,      the fees billed to us for such services were $36,000 and $34,500,      respectively. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Policy      on Audit Committee Pre-Approval of Audit and Permissible Non-Audit      Services of Independent Auditor |
|--------|---------------------------------------------------------------------------------------------------------------------|

----

| (a)              The      following documents are filed as a part of this Report:                                                                                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                  |
| 1.              Financial      Statements.                                                                                                                                      |
|                                                                                                                                                                                                                                                  |
| Consolidated      Balance Sheets as of December 31, 2008 and 2007                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                  |
| Consolidated      Statements of Operations and Comprehensive (Loss) Income for the Years      Ended December 31, 2008 and 2007                                                                                                                        |
|                                                                                                                                                                                                                                                  |
| Consolidated      Statements of Shareholders' Equity for the Years Ended December 31, 2008      and 2007                                                                                                                                              |
|                                                                                                                                                                                                                                                  |
| Consolidated      Statements of Cash Flows for the Years Ended December 31, 2008 an d      2007                                                                                                                                                       |
|                                                                                                                                                                                                                                                  |
| Notes to      Consolidated Financial Statements                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                  |
| 2.              Financial      Statement Schedules:                                                                                                                             |
|                                                                                                                                                                                                                                                  |
| All      financial statement schedules have been omitted because they are not      applicable, are not required, or the information required to be set forth      therein is included in the Consolidated Financial Statements or Notes      thereto. |
|                                                                                                                                                                                                                                                  |
| 3.              Exhibits                                                                                                                                                        |

| (2.1)Asset      Purchase Agreement, dated September 29, 2006, among Emerging Vision, Inc.,      COM Acquisition, Inc., Combine Optical Management Corp. and Neil Glachman      (incorporated by reference to Exhibit 2.1 to the Company’s Quarterly      Report on Form 10-Q, dated November 14, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (2.2)Promissory      Note, dated September 29, 2006, made payable by COM Acquisition, Inc. and      Emerging Vision, Inc. to the order of Combine Optical Management Corp., in      the original principal amount of $1,273,000 (incorporated by reference to      Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q, dated November      14, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| (2.3)Promissory      Note, dated September 29, 2006, made payable by COM Acquisition, Inc. and      Emerging Vision, Inc. to the order of Combine Optical Management Corp., in      the original principal amount of $500,000 (incorporated by reference to      Exhibit 2.3 to the Company’s Quarterly Report on Form 10-Q, dated November      14, 2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| (2.4)Letter      of Intent, dated as of May 23, 2007, by and among OG Acquisition, Inc.,      757979 Ontario Inc. (d/b/a The Optical Group), Corowl Optical Credit      Services, Inc. and Grant Osborne (Incorporated by reference to Exhibit 2.4      to the Company’s Current Report on Form 8-K, dated May 31,      2007)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| (3.1)Restated      Certificate of Incorporation of Sterling Vision, Inc., filed on December      20, 1995 (incorporated by reference to Exhibit 3.1 to the Company's Annual      Report on Form 10-K/A for the year ended December 31,  1995)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| (3.2)Amended      and Restated By-Laws of Sterling Vision, Inc., dated December 18, 1995      (incorporated by reference to Exhibit 3.2 to the Company's Annual Report      on Form 10-K/A for the year ended December 31, 1995)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| (3.3)Certificate      of Amendment of the Certificate of Incorporation of Sterling Vision, Inc.,      filed on January 26, 2000 (incorporated by reference to Exhibit 3.3 to the      Company’s Annual Report on Form 10-K for the year ended December 31, 2002,      Securities and Exchange Commission (“SEC”) File Number 001-14128, Film      Number 03630359)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| (3.4)Form      of Certificate of Amendment of the Certificate of Incorporation of      Sterling Vision, Inc., filed on February 8, 2000 (incorporated by      reference to Exhibit 10.94 to the Company’s Current Report on Form 8-K,      dated February 8, 2000, SEC File Number 001-14128, Film Number      03630359)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| (3.5)Form      of Certificate of Amendment of the Certificate of Incorporation of      Sterling Vision, Inc., filed on February 10, 2000 (incorporated by      reference to Exhibit 10.96 to the Company’s Current Report on Form 8-K,      dated February 8, 2000, SEC File Number 001-14128, Film Number      03630359)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| (3.6)Certificate      of Amendment of the Certificate of Incorporation of Sterling Vision, Inc.,      filed on April 17, 2000 (incorporated by reference to Exhibit 3.6 to the      Company’s Annual Report on Form 10-K for the year ended December 31, 2002,      SEC File Number 001-14128, Film Number 03630359)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (3.7)Certificate      of Amendment of the Certificate of Incorporation of Emerging Vision, Inc.,      filed on July 15, 2002 (incorporated by reference to Exhibit 3.7 to the      Company’s Annual Report on Form 10-K for the year ended December 31, 2002,      SEC File Number 001-14128, Film Number 03630359)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| (3.8)First      Amendment to Amended and Restated By-Laws of Emerging Vision Inc., dated      November 13, 2003 (incorporated by reference to Exhibit 3.8 to the      Company’s Current Report in Form 8-K, dated December 31,    2003)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| (4.1)Specimen      of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to      the Company's Registration Statement No. 33-98368)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| (4.2)Form      of Warrant issued to Subject Shareholders in connection with Settlement      Agreements (incorporated by reference to Exhibit 4.8 to the Company's      Annual Report on Form 10-K for the year ended December 31,      2003)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| (10.1)Sterling      Vision, Inc.'s 1995 Stock Incentive Plan (incorporated by reference to      Exhibit 10.2 to the Company's Registration Statement No.      33-98368)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| (10.2)Form      of Sterling Vision, Inc.'s Franchise Agreement (incorporated by reference      to Exhibit 10.3 to the Company's Registration Statement No.      33-98368)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| (10.3)Form      of Franchisee Stockholder Agreement to be entered into between Sterling      Vision, Inc. and certain of its Franchisees (incorporated by reference to      Exhibit 10.47 to the Company's Registration Statement No.      33-98368)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| (10.4)First      Amendment to Sterling Vision, Inc.’s 1995 Stock Incentive Plan      (incorporated by reference to Exhibit 10.63 to the Company's Quarterly      Report on Form 10-Q for the quarter ended June 30, 1996, File Number      000-27394, Film Number 96615244)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (10.5)Form      of Settlement Agreement and General Release, dated as of April 1, 2002,      between Emerging Vision, Inc. and each of V.C. Enterprises, Inc., Bridget      Licht, Sitescope, Inc., Eyemagination Eyeworks, Inc. and Susan Assael,      including the form of Area Representation Agreement annexed thereto as an      Exhibit (incorporated by reference to Exhibit 10.37 to the Company’s      Annual Report on Form 10-K for the year ended December 31,      2001)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (10.6)Credit      Agreement, dated August 19, 2005, between Emerging Vision, Inc. and      Manufacturers and Traders Trust Corporation (incorporated by reference to      Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year      ended December 31, 2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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| (10.7)Standard      LIBOR Grid Note, dated August 19, 2005, between Emerging Vision, Inc. and      Manufacturers and Traders Trust Corporation (incorporated by reference to      Exhibit 10.15 to the Company’s Annual Report on Form 10-K for the year      ended December 31, 2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (10.8)Security      Agreement, dated August 19, 2005, between Emerging Vision, Inc. and      Manufacturers and Traders Trust Corporation (incorporated by reference to      Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year      ended December 31, 2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (10.9)Trademark      Security Agreement, dated August 19, 2005, between Emerging Vision, Inc.      and Manufacturers and Traders Trust Corporation (incorporated by reference      to Exhibit 10.17 to the Company’s Annual Report on Form 10-K for the year      ended December 31, 2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (10.10)VisionCare      Guaranty, dated August 19, 2005, between Emerging Vision, Inc. and      Manufacturers and Traders Trust Corporation (incorporated by reference to      Exhibit 10.18 to the Company’s Annual Report on Form 10-K for the year      ended December 31, 2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           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| (10.11) Employment      Agreement, dated September 29, 2006, between Emerging Vision, Inc. and      Neil Glachman (incorporated by reference to Exhibit 10.19 to the Company’s      Annual Report on Form 10-K for the year ended December 31,      2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (10.12) Employment      Agreement, dated December 1, 2006, between Emerging Vision, Inc. and      Christopher G. Payan (incorporated by reference to Exhibit 10.20 to the      Company’s Annual Report on Form 10-K for the year ended December 31,      2006)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| (10.13)Business      Acquisition Agreement, dated June 29, 2007, by and among 1725758 Ontario      Inc. d/b/a The Optical Group, Corowl Optical Credit Services, Inc., Grant      Osborne and OG Acquisition, Inc.  (incorporated by reference to      Exhibit 10.1 the Company’s Current Report on Form 8-K, dated July 5,      2007) (10.14)Revolving      Line of Credit Note and Credit Agreement, dated as of August 7, 2007,      executed by Emerging Vision, Inc. in favor of Manufacturers and Traders      Trust Company (incorporated by reference to Exhibit 10.1 of the Company’s      Current Report on Form 8-K, dated August 14, 2007) (10.15)Absolute      Assignment of Franchise Notes and Proceeds Due, dated as of August 7,      2007, executed by Emerging Vision, Inc. in favor of Manufacturers and      Traders Trust Company (incorporated by reference to Exhibit 10.2 of the      Company’s Current Report on Form 8-K, dated August 14, 2007) (10.16)General      Security Agreement, dated as of August 7, 2007, executed by Emerging      Vision, Inc. in favor of Manufacturers and Traders Trust Company      (incorporated by reference to Exhibit 10.3 of the Company’s Current Report      on Form 8-K, dated August 14, 2007) (10.17)General      Security Agreement, dated as of August 7, 2007, executed by Combine Buying      Group, Inc. in favor of Manufacturers and Traders Trust Company      (incorporated by reference to Exhibit 10.4 of the Company’s Current Report      on Form 8-K, dated August 14, 2007) (10.18)General      Security Agreement, dated as of August 7, 2007, executed by OG      Acquisition, Inc. in favor of Manufacturers and Traders Trust Company      (incorporated by reference to Exhibit 10.5 of the Company’s Current Report      on Form 8-K, dated August 14, 2007) (10.19)General      Security Agreement, dated as of August 7, 2007, executed by 1725758      Ontario Inc. d/b/a The Optical Group in favor of Manufacturers and Traders      Trust Company (incorporated by reference to Exhibit 10.6 of the Company’s      Current Report on Form 8-K, dated August 14, 2007) (10.20)Continuing      Guaranty, dated as of August 7, 2007, executed by Combine Buying Group,      Inc. in favor of Manufacturers and Traders Trust Company (incorporated by      reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K,      dated August 14, 2007) (10.21)Continuing      Guaranty, dated as of August 7, 2007, executed by OG Acquisition, Inc. in      favor of Manufacturers and Traders Trust Company (incorporated by      reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K,      dated August 14, 2007) (10.22)Continuing      Guaranty, dated as of August 7, 2007, executed by 1725758 Ontario Inc.      d/b/a The Optical Group in favor of Manufacturers and Traders Trust      Company (incorporated by reference to Exhibit 10.9 of the Company’s      Current Report on Form 8-K, dated August 14, 2007) (10.23)Pledge      Agreement and Assignment, dated as of August 7, 2007, by and between OG      Acquisition, Inc. and Manufacturers and Traders Trust Company      (incorporated by reference to Exhibit 10.10 of the Company’s Current      Report on Form 8-K, dated August 14, 2007) (10.24)United      States Trademark Collateral Assignment and Security Agreement, executed by      Emerging Vision, Inc. in favor of Manufacturers and Traders Trust Company      (incorporated by reference to Exhibit 10.11 of the Company’s Current      Report on Form 8-K, dated August 14, 2007) (10.25)Continuing      Guaranty, dated as of August 7, 2007, executed by Combine Buying Group,      Inc. in favor of Manufacturers and Traders Trust Company (incorporated by      reference to Exhibit 10.7 of the Company’s Current Report on Form 8-K,      dated August 14, 2007) (10.26)Continuing      Guaranty, dated as of August 7, 2007, executed by OG Acquisition, Inc. in      favor of Manufacturers and Traders Trust Company (incorporated by      reference to Exhibit 10.8 of the Company’s Current Report on Form 8-K,      dated August 14, 2007) (10.27)Continuing      Guaranty, dated as of August 7, 2007, executed by 1725758 Ontario Inc.      d/b/a The Optical Group in favor of Manufacturers and Traders Trust      Company (incorporated by reference to Exhibit 10.9 of the Company’s      Current Report on Form 8-K, dated August 14, 2007) (10.28)Pledge      Agreement and Assignment, dated as of August 7, 2007, by and between OG      Acquisition, Inc. and Manufacturers and Traders Trust Company      (incorporated by reference to Exhibit 10.10 of the Company’s Current      Report on Form 8-K, dated August 14, 2007) (10.29)United      States Trademark Collateral Assignment and Security Agreement, executed by      Emerging Vision, Inc. in favor of Manufacturers and Traders Trust Company      (incorporated by reference to Exhibit 10.11 of the Company’s Current      Report on Form 8-K, dated August 14, 2007)  |
| (14.1)Corporate      Code of Ethics and Conduct of Emerging Vision, Inc., dated November 14,      2005 (incorporated by reference to Exhibit 14.1 to the Company’s Annual      Report on Form 10-K for the year ended December 31,  2005)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (21.1) *List of Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (23.1) *Auditor’s Consent - Rosen Seymour Shapss      Martin & Company, LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (23.2) *Auditor’s Consent – Miller, Ellin &      Company, LLP                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (23.3) *Valuation Expert’s Consent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (31.1) *Certification of Chief Executive Officer      pursuant to Securities Exchange Act Rules 13a-14 and      15d-14                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (31.2) *Certification of Chief Financial Officer      pursuant to Securities Exchange Act Rules 13a-14 and      15d-14                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| (32.1) *Certification of Chief Executive Officer      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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          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                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  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| *  Exhibit      being filed herewith                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              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|                          |
|-------------------------------|
| By: /s/ Christopher G.  Payan |
| Christopher      G. Payan     |
| Chief      Executive Officer  |

| Signature | Title | Date |
|-----------|-------|------|

|                      |                                              |                      |
|---------------------------|---------------------------------------------------|---------------------------|
| /s/ Christopher G. Payan  | Chief      Executive Officer and Director         | April      15, 2009  |
| Christopher      G. Payan | (Principal      Executive Officer)                |                      |
|                      |                                              |                      |
| /s/ Brian P. Alessi       | Chief      Financial Officer and Treasurer        | April      15, 2009  |
| Brian      P. Alessi      | (Principal      Financial and Accounting Officer) |                      |
|                      |                                              |                      |
| /s/ Dr. Alan Cohen        | Chairman      of the Board of Directors           | April      15, 2009  |
| Dr.      Alan Cohen       |                                              |                      |
|                      |                                              |                      |
| /s/ Joel L. Gold          | Director                                          | April      15, 2009  |
| Joel      L. Gold         |                                              |                      |
|                      |                                              |                      |
| /s/ Harvey Ross           | Director                                          | April      15, 2009  |
| Harvey      Ross          |                                              |                      |
|                      |                                              |                      |
| /s/ Seymour G. Siegel     | Director                                          | April      15, 2009  |
| Seymour      G. Siegel    |                                              |                      |
|                      |                                              |                      |
| /s/ Jeffrey      Rubin    | Director                                          | April      15, 2009  |
| Jeffrey      Rubin        |                                              |                      |

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