U.S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                  FORM 10 - KSB



         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001

                         Commission File Number 0-27561

                                EYECITY.COM, INC.
                 (Name of Small Business Issuer in Its Charter)

                   DELAWARE                                     11-3327465
(State or Other Jurisdiction of Incorporation                (I.R.S. Employer
               or Organization)                              Identification No.)

                  199 Lafayette Drive, Syosset, New York 11791
                    (Address of Principal Executive Offices)
                                 (516) 496-6070
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:  None
Securities registered under Section 12(g) of the Exchange Act:

  Common Stock $.001 par value per share

         Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes   X     No
             -----  -----

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-B is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]

Issuer's revenues for the fiscal year ended December 31, 2000: $190,000.

The approximate aggregate market value of shares of Common Stock held by
non-affiliates of the registrant was approximately $2,450,000 as of March 26,
2002.

The number of shares of Common Stock outstanding was 80,227,714 as of March 26,
2002.

Transitional Small Business Disclosure Format.       Yes [  ]     No [x]


<PAGE>

PART I


--------------------------------------------------------------------------------
This report contains certain forward looking statements, which may involve known
and unknown material risks, uncertainties and other factors not under EyeCity's
control including without limitation its ability to operate as a going concern,
the need for additional financing, the impact of competition, the management of
growth, compliance with applicable regulatory requirements, EyeCity's ability to
implement its long term business plan for acquiring complementary businesses and
EyeCity's ability to enter into agreements with marketing or distribution
partners, which may cause actual results, performance and achievements of
EyeCity to be materially different from EyeCity's expectations.
--------------------------------------------------------------------------------

ITEM 1.  DESCRIPTION OF BUSINESS


General

         EyeCity.com, Inc. ("EyeCity") in January 2001 refocused its business
strategy and is currently engaged in the marketing, distribution and retail sale
over the Internet of its EyeTools(R) computer glasses intended to relax the eyes
and ameliorate visual discomfort, focus difficulties, headaches and other
related problems associated with Computer Vision Syndrome (CVS) and Foggles(R)
optical products for the aviation, hunting and shooting industries through
distributors, catalogues, direct advertising, retail stores and the Internet.

         In addition, EyeCity previously announced that it intends to establish
a turnkey business-to-business ("B2B") and business -to-professional ("B2P")
electronic exchange providing end-to-end B2B and B2P e-commerce solutions to the
eyecare professional. In this regard, EyeCity expects to offer a suite of
services, including, e-commerce store design and fulfillment services to
professional eyecare providers including ophthalmologists, optometrists, and
opticians who want to create their own customized online stores, providing full
e-commerce capabilities for their patients and customers. Subject to obtaining
appropriate financing, EyeCity plans to provide the tools and systems necessary
for eyecare providers to function in e-commerce markets, including merchandise
selection and sourcing, storefront creation, hosting, advertising, customer
service, credit card processing and fulfillment services.

         EyeCity's B2B and B2P e-commerce model is also intended to help such
eye care providers retain customer relationships and increase sales. Unlike
traditional affiliate programs that refer customers to other web sites to shop,
EyeCity's B2B and B2P program is intended to enable eyecare providers to drive
traffic to their own stores, thereby building loyalty and repeat sales. With
EyeCity's planned suite of e-commerce service, such eye care providers will be
able to customize their online store to the unique interests of their audience.
Products offered for sale would be available through EyeCity's extensive
database, with transaction processing that creates a single unified shopping
experience that is seamless to the customer. See "Investment Considerations."

         EyeCity markets its patented EyeTools computer eyeglasses, which were
developed to relieve Computer Vision Syndrome ("CVS"), a potentially
debilitating condition that results in headaches, blurred vision and eyestrain
often associated with CVS under the website ergovision.com. EyeTools computer
eyeglasses feature a patented lens technology that enables the computer user to
focus more clearly by minimizing glare and equalizing all sources of ambient
lighting, such as from windows and overhead sources.


                                       1


<PAGE>

         From EyeCity's inception through December 1998, EyeCity's business
strategy was to become a leading producer, distributor and marketer of ergonomic
computer eyewear products designed to alleviate health-related problems
associated with CVS.

         EyeCity was incorporated in May 1996 in New York under the name
Ergovision, Inc., and reincorporated in Delaware in April 1997 under the name
Ergovision, Inc. In May 1999, Ergovision, Inc. changed its name to EyeCity.com,
Inc. EyeCity's principal executive offices are located at 199 Lafayette Drive,
Syosset, New York 11791, and its telephone number is 516-496-6070.


Industry Overview

         During the 1980's and 1990's, there has been an unparalleled growth in
the computer industry. The installed base of PCs currently exceeds 80 million in
the U.S. and 200 million worldwide according to the January 1995 issue of
Spectrum Magazine. Information Week magazine reports that 82 million personal
computers were shipped worldwide in 1997 alone. According to IDC/LINK Research
and Data Quest, 44%-47% of the 80 million American homes have computers.

         As the demand for computers has significantly increased so has the rate
of health problems believed to be related to the use of computers. "In fact
nearly all surveys (NIOSH, CAL/OSHA, AMA) of computer workers show that vision
related problems are the most frequently reported health concern by VDT
operators [3 out of 4]," according to a report by VDT Solution entitled
"Ergonomic Insights & Innovations for the Computer Workplace." Moreover, a news
release from the American Optometric Association (1997) stated that Computer
Vision Syndrome is an epidemic that costs American companies and employees $1.9
billion per year to diagnose and treat.


         Anyone using a computer regularly for two hours or more a day is at
risk, according to James Sheedy, OD, Ph.D., Chief of the VDT Eye Clinic at the
University of California at Berkeley. According to the World Health
Organization, while it appears that VDT's do not lead to permanent damage to the
eyes, visual discomfort is so widespread among operators that it must be
regarded as a health problem.

         Work at a VDT causes visual discomfort from the glare reflected from
the VDT as well as reflections off of the keyboard and all other surfaces or
other sources of light directed at the eyes that are in the vicinity of the VDT.
A variety of approaches have been used to create a less distracting and less
stressful visual environment. Overhead luminares have been shielded or utilized
with dimmers or diffusers. Windows have been covered with venetian blinds and
the general level of overhead lighting has been lowered. In some instances,
polarization filters, micromesh filters or color filters have been positioned in
front of the viewing screen to minimize glare. However, such approaches have had
less than a desirable result. For example, while the use of anti-glare screens
has had an impact on relieving CVS, they simply filter light reflected off the
monitor glass. Therefore, the effect of ambient lighting from multiple sources
is not addressed by this technique. Whenever the eye's gaze is changed from an
object of one luminance level to an object of a different luminance level, a
period of time is required for adaptation to the second level. The greater the
difference in these luminance levels, the longer the eye requires to effect this


                                       2


<PAGE>

adaptation. The sensitivity of the eye to detect and follow detail from a VDT is
maximized when the eye is properly adapted to the luminance level at which it is
looking and the eye is in a relaxed state.


Business Strategy

The Company's short-term objective is to establish a strong brand name and
corporate identity through retail distribution, internet alliances and sales,
and direct mail. The Company's long-term business objective is to become a
leading provider of ergonomic and computer accessory products that improve the
health and safety of workers in the workplace and at home. When possible, the
Company intends to introduce proprietary products, but may also market products
produced by others. While the Company intends to emphasize the sale of products
under its own branded label to foster name recognition and build brand loyalty,
it may also sell products under private label to other companies with existing
distribution systems.

         Management has formulated a multifaceted marketing strategy for its
EyeTools computer eyeglasses and EyeTools eyedrops products. The Company intends
to:


         o  Gain brand name recognition and distribution into computer retailers
            by developing relationships with national computer distributors and
            manufacturers representatives. The Company will support its retail
            sales effort through co-op and market development funds, along with
            advertising, in-store product demonstrations, sales materials,
            public relations, bundling with other successful products, and other
            means to help achieve push-through. The promotional efforts will be
            spearheaded by a large strategic sales company.


         o  Gain direct sales to computer retailers and bookstores by developing
            response-oriented trade advertising and public relations campaigns.


                                       3


<PAGE>



         o  Gain direct sales to consumers by developing an Internet presence
            via advertising, listing opportunities on government and other
            sites, developing promotional relationships with other Internet
            companies, and by providing valuable information on the benefits of
            ergonomically designed computer products.

         o  Develop a consumer public relations campaign, a school educational
            campaign and a print advertising campaign for magazines and computer
            catalogs.

         o  Gain direct sales to corporations seeking to improve worker
            conditions and productivity by using mailings, a direct sales force
            and educational and testing programs.

         o  Market a second generation product to retail optical chains and
            optometrists and to file for patent protection where applicable on
            the second generation product.


Products

         EyeCity currently operates the following websites, offering the
following products:

                Websites                               Products
             ------------------------------- -----------------------------
             Ergovision.com                  Computer Glasses and eyedrops
             ------------------------------- -----------------------------
             Foggles.com                   Sports and lifestyle glasses
            ------------------------------- -----------------------------


         EyeCity's principal merchandising strategy is to distinguish its
websites by offering proprietary optical products. EyeCity currently carries the
following merchandise lines:

o                 EyeTools Computer Eyewear Products. EyeCity offers three
                  different styles of its patented EyeTools computer glasses.
                  EyeTools are intended to relax the eyes and ameliorate visual
                  discomfort, focus difficulties, headaches and other related
                  problems associated with CVS. EyeCity also offers EyeTools
                  computer eyedrops which are designed to treat dry eye syndrome
                  caused by prolonged computer use.

o                 Foggles Sports And Lifestyle Glasses. EyeCity offers Foggles
                  patented optical products for the aviation, hunting and
                  shooting industries through distributors, catalogues, direct
                  advertising, retail stores and the Internet.

o                 Accessories. EyeCity sells cords, cleaning cloths, eyeglass
                  cases and other related optical accessories. EyeCity intends
                  to increase its optical accessory sales by devoting additional
                  resources to improve the quality, breadth and visual
                  presentation of such merchandise.


Marketing and Promotion - see above "Business Strategy"


Distribution, Fulfillment and Inventory

         Currently, EyeCity's websites operate as independent entities and
orders are accumulated and processed. Under the present system, once an order is
received, EyeCity checks the order against its inventory. Orders are shipped
through one of several channels, as selected by the customer, including regular


                                       4


<PAGE>

U.S. mail, United Parcel Service, second-day air or overnight courier, with
shipping charges varying by the carrier selected. Orders are shipped the same
day that they are placed if the product is in stock. If the customer desires to
order the currently out-of-stock product, it is back-ordered and is shipped to
the customer as soon as it is available.

         EyeCity's success depends, in part, on its ability to provide prompt,
accurate and complete service to its customers on a competitive basis, and its
ability to purchase and promote products, manage inventory, ship products,
manage sales and marketing activities and maintain efficient operations. A
significant disruption in EyeCity's management or websites could adversely
affect EyeCity's relations with its customers and its ability to manage its
operations and would have a material adverse effect on EyeCity's business,
financial condition and results of operations. EyeCity's ability to compete
effectively and to manage future growth, if any, will require EyeCity to
continue to improve its financial and management controls and to expand, train
and manage its employee base. EyeCity's failure or inability to accomplish any
of these goals could have a material adverse effect on its business, financial
condition and results of operations.

         EyeCity fulfills orders for prescription eyeglasses through eyeglass
grinding laboratories in the United States with whom EyeCity has non-contractual
arrangements. When an order is placed with EyeCity, EyeCity provides the
laboratory with the prescription information provided by the customer and the
frames that have been selected by the customer. Lenses are usually manufactured
by the laboratory within two to three business days if the necessary materials
are in stock; otherwise, orders are processed as soon as possible after the
materials become available.

         EyeCity's success depends, in part, on its ability to provide prompt,
accurate and complete service to its customers on a competitive basis, and its
ability to purchase and promote products, manage inventory, ship products,
manage sales and marketing activities and maintain efficient operations. A
significant disruption in EyeCity's management or websites could adversely
affect EyeCity's relations with its customers and its ability to manage its
operations and would have a material adverse effect on EyeCity's business,
financial condition and results of operations. EyeCity" ability to compete
effectively and to manage future growth, if any, will require EyeCity to
continue to improve its financial and management controls and to expand, train
and manage its employee base. EyeCity's failure or inability to accomplish any
of these goals could have a material adverse effect on its business, financial
condition and results of operations.


Competition

         While the Company is not aware of any other company selling computer
eyeglasses designed to both facilitate the eye's adjustment to variations in
ambient light and to reduce glare from VDTs, there are a number of companies
which produce tinted computer eyeglasses and sunglasses which are marketed as
products that help reduce glare from VDTs. The Company believes that sunglasses
are not effective in the VDT environment because they block out too much light.
EyeTools will also compete with several other existing products designed to
reduce glare from VDTs, such as polarization filters, micromesh filters, color
filters and hoods, as well as anti-reflection coatings applied to glare screens
and prescription eyeglasses. These products are produced and sold to the
consumer by several VDT original equipment manufacturers and by manufacturers of
computer enhancement products, ranging from large corporations with significant
resources to small privately-owned niche companies. Entry into the


                                       5


<PAGE>

non-prescription eyewear market is not capital intensive and the Company could
face competition from large lens and eyeglass manufacturers should they choose
to do so, as well as from others.

         The Company's EyeTools computer eyedrops will compete with large and
well financed manufacturers of ophthalmic eyedrops, which are marketed as
solutions which relieve eye discomfort or produce artificial tears to moisten
dry eyes. These manufacturers, which include Alcon Laboratories, Inc., Allergan,
Inc., Bausch & Lomb and Pfizer, Inc., account for the vast majority of
over-the-counter eye drop sales in the United States under such brands as Clear
Eyes, Murine Plus and Visine (which are designed to relieve eye discomfort) and
Hypotears, Refresh and Tears Naturale (which are designed to relieve dry eyes).
While these products have not been specifically marketed to computer users in
the past, Bausch & Lomb has recently introduced eyedrops expressly designed for
the computer user market. All of such manufacturers have significantly more
resources than the Company. The Company will seek to compete with Bausch & Lomb
and others who may enter this market by entering into arrangements with computer
manufacturers and computer retailers for inclusion of EyeTools computer eyedrops
(with its EyeTools computer eyeglasses product) in the computer packaging and by
packaging EyeTools computer eyedrops with its EyeTools computer eyeglasses (when
EyeTools is otherwise sold) to develop name recognition.


Government Regulation

         General. EyeCity is not currently subject to direct federal, state or
local regulation or laws or regulations applicable to access to or commerce on
the Internet, other than as discussed below and other than regulations
applicable to businesses generally. However, due to the increasing popularity
and use of the Internet and other online services, it is possible that a number
of laws and regulations may be adopted with respect to the Internet or other
online services covering issues such as user privacy, freedom of expression,
pricing, content, quality of products and services, taxation, advertising,
intellectual property rights and information security. The adoption of any such
laws or regulations might decrease the rate of growth of Internet use, which in
turn could decrease the demand for EyeCity's products or increase its cost of
doing business or in some other manner have a material adverse effect on
EyeCity's business, results of operations and financial condition. In addition,
applicability to the Internet of existing laws governing issues such as
regulatory licensing or permit requirements, property ownership, copyrights and
other intellectual property issues, taxation, libel, obscenity and personal
privacy is uncertain. The vast majority of such laws were adopted prior to the
advent of the Internet and related technologies and, as a result, do not
contemplate or address the unique issues of the Internet and related
technologies.

         At present, EyeCity does not collect sales or other similar taxes in
connection with the sale of its products to consumers located outside the state
of New York. From time to time, various states have sought to impose state sales
tax collection obligations on out-of-state direct marketing or internet-based
companies such as EyeCity. A successful assertion by one or more states that
EyeCity should have collected or should be collecting sales taxes on the sale of
its products could result in additional costs and administrative expenses to
EyeCity and corresponding price increases to its customers, which could
adversely affect EyeCity's business, financial condition and results of
operations.


                                       6


<PAGE>

         Several states have also proposed legislation that would limit the uses
of personal user information gathered online or require online services to
establish privacy polices. The Federal Trade Commission has also initiated
action against at least one online service regarding the manner in which
personal information is collected from users and provided to third parties.
Changes to existing laws or the passage of new laws intended to address these
issues, including some recently proposed changes, could create uncertainty in
the marketplace that could reduce demand for EyeCity's products or increase the
cost of doing business as a result of litigation costs or increased costs, or
could in some other manner have a material adverse effect on EyeCity's business,
results of operations and financial condition.

         Federal Regulation of Prescription Eyewear. Contact lenses and
eyeglasses are separately regulated by the Federal government. Contact lenses
are regulated by the Food and Drug Administration as "medical devices." The Food
and Drug Administration classifies medical devices as Class I, Class II or Class
III and regulates them to varying degrees, with Class I medical devices subject
to the least amount of regulation and Class III medical devices subject to the
most stringent regulations. Generally, contact lenses are classified as Class II
medical devices if intended only for daily wear and as Class III medical devices
if intended for extended wear. These regulations generally apply only to
manufacturers of contact lenses, and therefore do not directly impact EyeCity.
Federal regulations also require the labels on "medical devices" to contain
adequate instructions for their safe and proper use. However, there is an
exemption from this requirement for medical devices the use of which is not safe
except under the supervision of a practitioner licensed by law to direct the use
of such device. Devices which fall in this exception must contain as part of
their labeling the statement "Caution: Federal law restricts this device to sale
by or on the order of ," the blank to be filled in with the word physician or
other practitioner authorized by the law of the state in which the practitioner
practices to use or order the use of the device. EyeCity believes that this
exception is often misconstrued as being a federal requirement that the device
be sold only pursuant to a prescription. The Food and Drug Administration
considers contact lenses to qualify for this labeling exemption; however, there
is no federal law that requires that contact lenses be sold only pursuant to a
prescription.

         Federal law requires that all dress eyewear (i.e., sunglasses or
prescription eyeglasses) be tested for impact resistance. This testing is
generally conducted by the lens manufacturer, but eyewear must be retested if a
protective or other coating is applied after initial manufacture. So long as a
retailer or optician does not manufacture or coat the eyewear, the retailer or
optician is entitled to rely on representations from the manufacturer or
laboratory, as applicable, as to the completion of all necessary impact
resistance tests on any given piece of eyewear. EyeCity's operating practice has
been to rely on these types of representations from manufacturers or
laboratories, as applicable.

         State Regulation of Prescription Eyewear. Because there is no
applicable federal law that regulates the distribution of prescription eyewear,
the sale and delivery of prescription eyewear to the consumer is subject to
state laws and regulations. EyeCity intends to sell prescription eyewear to
customers in all 50 states and each sale may be subject to the laws of the state
where the customer is located. The laws and regulations governing the sale and
delivery of prescription eyewear vary from state to state, but generally can be
classified in four categories: (i) laws that require prescription eyewear only
be dispensed pursuant to a prescription; (ii) laws that require the dispenser to
be licensed by the state as an optician, optometrist, ophthalmologist or other



                                       7


<PAGE>

professional authorized to dispense prescription eyewear; (iii) laws that
require prescription eyewear be dispensed only in a face-to-face transaction and
(iv) laws with requirements that are unclear or do not specifically address the
sale and delivery of prescription eyewear. Many of the states requiring that
prescription eyewear be dispensed in face-to-face meetings or by a person
licensed by such state to dispense prescription eyewear also require that
prescription eyewear only be dispensed pursuant to a valid prescription.

         The laws and regulations in a significant number of states require that
prescription eyewear only be sold to a consumer pursuant to a valid
prescription. In some states, satisfying this prescription requirement obligates
the dispenser only to verify the customer's prescription with the customer's
prescriber, while other states specifically require that a written prescription
(which, in some states, must be an original) be obtained before providing the
prescription eyewear to the customer or that the prescription must have been
written within a specified period (e.g., two years) prior to fulfillment.
EyeCity's operating practice will be to attempt to obtain a valid prescription
from each of its customers or his/her eyecare practitioner. If the customer does
not have a copy of his/her prescription, EyeCity will attempt to contact the
customer's doctor to obtain a copy of, or verify the customer's prescription.
With respect to contact lenses, if EyeCity is unable to obtain a copy of or
verify the customer's prescription, EyeCity intends to complete the sale and
ship the lenses to the customer based on the prescription information provided
by the customer. EyeCity intends to retain copies of the written prescriptions
that it will receive and maintain records of its communications with the
customer's prescriber.

         EyeCity expects that its ability to comply with state laws and
regulations requiring a valid prescription will be hampered because EyeCity's
customers will often be unable to get a copy of their prescription. EyeCity
believes that optometrists, ophthalmologists and other contact lens prescribers
have historically refused to release copies of a patient's contact lens
prescription to the patient. In addition, such providers have refused to release
or verify prescriptions at the request of mail order companies. Federal law
requires prescribers to release prescriptions for eyeglasses to a patient, but
the issue of whether or not a prescriber must release a contact lens
prescription to the patient, or at the patients request, is currently governed
by state law. There are approximately 22 states that require contact lens
prescribers to release the prescriptions for contact lenses to the patient.
However, even in states with a mandatory release law, EyeCity believes that many
prescribers will continue to refuse to release prescriptions to their patients
or to online or mail order contact lens distributors, including EyeCity.

         In addition to requiring a valid prescription, a substantial number of
states also require that prescription eyewear only be dispensed by a person
licensed to do so under that state's laws. A dispenser may be required to be
licensed as an optometrist, ophthalmologist, optician, ophthalmic dispenser or
prescription eyewear dispenser, depending on the state in which the customer is
located. Also, certain states require that prescriptions only be filled in
facilities registered with such states. EyeCity formerly employed an optician at
its Duluth, Minnesota facility; however, neither EyeCity nor any of its
employees is a licensed or registered dispenser of contact lenses in any of the
other states in which EyeCity expects to do business nor are any of EyeCity's
facilities registered with any state in connection with the dispensing of
prescription eyewear. EyeCity has not initiated the application or registration
process in any jurisdiction, but it intends to do so where appropriate. The laws
in a number of states effectively prohibit the sale of prescription eyewear
through the mail by requiring that a person licensed under that state's law to
dispense prescription eyewear be in personal attendance at the place of sale.


                                       8


<PAGE>

Lastly, there are several states in which the laws and regulations do not
specifically address the issue of who may dispense prescription eyewear or are
unclear with respect to the requirements for dispensing prescription eyewear.
For many of the laws described in this paragraph, it is not clear whether some
or all of these laws would be applicable to EyeCity or whether the states that
have enacted these laws would have jurisdiction over EyeCity.

         Any action brought against EyeCity based on its failure to comply with
applicable state laws and regulations could result in significant fines or
criminal penalties to EyeCity, EyeCity being prohibited from making sales in a
particular state and/or EyeCity being required to comply with such laws. Such
required compliance could result in: (i) increased costs to EyeCity; (ii) the
loss of a substantial portion of customers for whom EyeCity is unable to obtain
or verify their prescription; and (iii) the inability to sell to customers at
all in a particular state if EyeCity cannot comply with such state's laws. The
occurrence of any of the above results could have a material adverse effect on
EyeCity's ability to sell prescription eyewear and continue to operate
profitably. Furthermore, there can be no assurance that states will not enact or
impose laws or regulations that prohibit mail order or online dispensing of
prescription eyewear or otherwise impair EyeCity's ability to sell prescription
eyewear and continue to operate profitably. EyeCity has not obtained an opinion
of counsel with regard to its compliance with applicable state laws and
regulations, and information contained herein regarding EyeCity's compliance
with applicable state laws and regulations should not be construed as being
based on an opinion of counsel.

         EyeCity has received a marketing clearance (as a device substantially
equivalent to an existing category of ophthalmic device) for its EyeTools(R)
line of computer glasses from the Federal Food and Drug Administration following
a "Section 510(k) Submission."


Intellectual Property

         EyeCity holds rights, title and interest to six U.S. patents for
various specialized eyeglasses, as set forth in Table I below.

         EyeCity holds rights, title and interest in the United States to three
registered trademarks (Beamblockers and Design #1,196,550, filed October 13,
1998; Foggles #1,210,355 filed September 18, 1982 and EyeTools # 2,350,708 filed
July 29, 1998), and to certain trademark applications pending in the U.S. Patent
and Trademark Office, used or intended to be used in connection with its
products and services, or for which it has obtained rights at common-law, based
on use in interstate commerce, (see Table II below). EyeCity believes that such
marks represent significant value and goodwill to the company in marketing its
products and services. EyeCity has entered into confidentiality and invention
assignment agreements with its employees and contractors, and nondisclosure
agreements with parties with whom it conducts business, in order to limit access
to and disclosure of its proprietary information. However, there can be no
assurance that these contractual arrangements or the other steps taken by
EyeCity will prove sufficient to prevent misappropriation of EyeCity's
technology or to deter independent third-party development of similar
technologies.

         EyeCity has rights in various domain names, certain of which it
presently uses to market its services, as set forth below in Table III. EyeCity
believes that such domain names represent significant value and goodwill to the
company in marketing its products and services. If third parties obtain rights
to use similar domain names, these third parties may confuse EyeCity's customers


                                       9


<PAGE>

and cause its customers to inadvertently place orders with these third parties,
which could result in lost sales for EyeCity and could damage its brand. Due to
the unique nature of domain names, EyeCity may have only limited proprietary
rights in its domain names, except to the extent greater protection is granted
under trademark or tradename law. As a result, EyeCity cannot assure you that it
will be able to retain the use of certain of its domain names, which could have
a material adverse affect on EyeCity's business.


         The following tables set forth a list of EyeCity's material
intellectual properties:

<TABLE>
<CAPTION>
                                                           TABLE I
                                                           -------

                                                           PATENTS
                                                           -------
                 Title                            Issued                   Expiration                  Patent Number
<S>                                              <C>                        <C>                          <C>
Eyewear With Translucent Superior                9/11/84                    1/11/02                      4,470,673
field of view

Eyewear With Translucent Superior                9/24/85                    9/24/02                      4,542,964
Field of View

Visual Occlusion Apparatus For Pilot             10/6/87                    10/6/04                      4,698,022
Training

Eyewear Having Translucent Superior              7/11/95                    1/10/14                      5,432,568
And Inferior Fields of View

Night Driving Glasses                            6/27/95                    6/27/12                      5,428,409

Translucent Eyewear Lenses and Method            12/12/00                   11/18/18                     6,159,397
Of Manufacture Therefor
</TABLE>


                                    TABLE II
                     PENDING MATERIAL TRADEMARK APPLICATIONS

Mark Name                    App #                       App. Date
---------                    -----                       ---------

ABEAM                        75/777533                  August 16, 1999
EYECITY                      75/673817                  April 05, 1999
EYECITY.COM                  75/673816                  April 05, 1999
EYETOOLS                     75/459288                  March 30, 1998
ICITY                        75/673815                  April 05, 1999
ICITY.COM                    75/673814                  April 05, 1999
OPTICALSITE                  75/721891                  June 4, 1999
SUNGLASSSITE                 75/777534                  August 16, 1999



                                       10


<PAGE>

                                    TABLE III

                           DOMAIN NAMES PRESENTLY USED

foggles.com
Ergovision.com
eyecity.com



Employees

         As of March 23, 2002, EyeCity employed 0 full-time employees. None of
EyeCity's employees are covered by collective bargaining agreements and EyeCity
believes that its relations with its employees are good. EyeCity is dependent to
a large degree on the services of its management team, Mark H. Levin, its
President and Chief Executive Officer. The loss of EyeCity's key executive could
have a material adverse effect on EyeCity. EyeCity does not maintain key man
insurance coverage on any of its employees.

Investment Considerations Relating To Our Business

         In analyzing an investment in the Company, one should carefully
consider the investment considerations described below. If any of the matters
contemplated by the following investment considerations occur, our business,
financial condition or results of operations could be materially adversely
affected.

We may not be able to continue operating as a "going concern" without additional
capital through public or private offerings.

Investment Considerations Relating To Our Business

As of December 31, 2001, EyeCity had negative working capital of approximately
$1,716,000.


                                       11


<PAGE>

         The Company has incurred significant losses from operations for the
years ended December 31, 1998, 1999, 2000 and 2001 ($1,410,324, $4,130,832,
$5,488,329 and $1,168,293, respectively), and there can be no assurance the
Company will not continue to incur such losses or will ever generate revenues at
levels sufficient to support profitable operations. The Company's working
capital deficit was approximately $166,000, $2,092,000, $1,973,000 and
$1,716,000 as of December 31, 1998, 1999, 2000 and 2001, respectively.

         As of December 31, 2000, EyeCity had negative working capital of
approximately $1,973,000. We believe that our currently available funds will be
sufficient to meet our anticipated working capital needs through the end of
April 2001. Thereafter, we need to raise additional funds. If we raise
additional funds through the issuance of equity or convertible debt securities,
the percentage ownership of our current stockholders will be reduced, our
stockholders may experience additional dilution and such securities may have
rights, preferences and privileges senior to those of our Common Stock. There
can be no assurance that additional financing will be available on terms
favorable to us or at all. If adequate funds are not available or are not
available on acceptable terms, we may not be able to continue to implement our
business plan. This inability could have a material adverse effect on our
business, results of operations and financial condition.

Losses.

         The Company has incurred significant losses from operations for the
years ended December 31, 1998, 1999 and 2000 ($1,410,324, $4,130,832 and
$5,488,329, respectively), and there can be no assurance the Company will not
continue to incur such losses or will ever generate revenues at levels
sufficient to support profitable operations. The Company's working capital
deficit was approximately $166,000, $2,092,000 and $1,973,000 as of December 31,
1998, 1999 and 2000, respectively.

Our sales growth will not continue at historical rates.

         Since our formation in May 1996, and especially since our acquisitions
effected in the second quarter of 1999, we have experienced net sales growth
increasing from approximately $26,000 in 1997 to approximately $96,000 in 1998
and approximately $2,633,000 in 1999. Net sales were approximately $2,544,000 in
2000. However, with the disposition in January 2001 of substantially all of its
business-to-consumer websites, sales will materially decrease.

         There is no assurance that our prior or future acquisitions will have a
positive effect on our business, or that we will not experience future
unforeseen difficulties in connection with these acquisitions.

         If appropriate opportunities present themselves from time to time, we
intend to acquire businesses, technologies, services or products that we believe
are strategic to our business. There can be no assurance that we will be able to
identify, negotiate or finance future acquisitions successfully, or to integrate
the acquisitions with our current business. The process of integrating an
acquired business, technology, service or product into EyeCity may result in
unforeseen operating difficulties and expenditures and may absorb significant
management attention that would otherwise be available for ongoing development
of our business. Moreover, there can be no assurance that the anticipated
benefits of any acquisition will be realized. Future acquisitions could involve
our issuance of additional equity securities which could have a dilutive effect
on current stockholders, the incurrence of debt, contingent liabilities and/or


                                       12


<PAGE>

amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect our business, results of operations and
financial condition. Any future acquisitions of other businesses, technologies,
services or products might require us to obtain additional equity or debt
financing, which might not be available on terms favorable to us, or at all, and
such financing, if available, might dilute those shares of common stock
currently held by our stockholders.

A portion of our sales may not comply with applicable state laws and regulations
governing the delivery and sale of prescription eyewear.

         The sale and delivery of contact lenses and prescription eyewear are
generally governed by state laws and regulations. We sell to customers in all 50
states and each sale may be impacted by the laws of the state where the customer
is located. The laws and regulations relating to the delivery and sale of
contact lenses and prescription eyewear vary from state to state, but can
generally be classified into five categories:

         laws that require contact lenses and prescription eyewear to be
dispensed only pursuant to a valid prescription;

         laws that require the dispenser to be licensed by the state as an
optometrist, ophthalmologist or other professional authorized to dispense
lenses;

         laws that require contact lenses and prescription eyewear be dispensed
only in a face-to-face transaction;

         laws with requirements that are unclear or do not specifically address
the sale and delivery of contact lenses or prescription eyewear; and

         laws that we believe place no restrictions on the dispensing of contact
lenses or prescription eyewear.

         Many of the states requiring that contact lenses and prescription
eyewear be dispensed in face-to-face meetings or by a person licensed by such
state to dispense contact lenses and prescription eyewear also require that such
products only be dispensed pursuant to a valid prescription.

         Our operating practice is to attempt to obtain a valid prescription
from each customer or his/her eyecare practitioner. If we are unable to obtain a
copy of or verify the customer's prescription, it is our practice to ship the
product to the customer based on the information that the customer has provided.

         Any action brought against us based on our failure to comply with
applicable state laws and regulations could result in us being subject to
significant fines, being prohibited from making sales in a particular state
and/or being required to comply with such laws. Such required compliance could
result in:

         increased costs to us;

         the loss of a substantial portion of our customers for whom we are
unable to obtain or verify their prescription; and

         the inability to sell to customers at all in a particular state if we
cannot comply with such state's laws.


                                       13


<PAGE>

         The occurrence of any of the above results could have a material
adverse effect on our ability to sell contact lenses and prescription eyewear
and to operate profitably. Furthermore, we cannot assure you that states will
not enact or impose laws or regulations that prohibit online dispensing of
contact lenses and prescription eyewear or otherwise impair our ability to sell
contact lenses and prescription eyewear and continue to operate profitably. We
have not obtained an opinion of counsel with regard to our compliance with
applicable state laws and regulations, and information contained herein
regarding our compliance with applicable state laws and regulations should not
be construed as being based on an opinion of counsel.

We cannot assure you that third parties will not infringe on our intellectual
property rights or that third parties will not claim we infringe on their
intellectual property rights.

         We regard the protection of our intellectual property rights as
critical to our future success and we rely on a combination of copyright,
trademark, service mark and trade secret laws and contractual restrictions to
establish and protect our intellectual property rights in products and services.
We have entered into confidentiality and invention assignment agreements with
our employees and contractors, and nondisclosure agreements with parties with
whom we conduct business in order to limit access to and disclosure of our
proprietary information. There can be no assurance that these contractual
arrangements or the other steps taken by us will prove sufficient to prevent
misappropriation of our technology or to deter independent third-party
development of similar technologies.

         Third parties have commenced legal proceedings alleging that certain of
our tradenames and URL's infringe on the proprietary rights of third parties.
See "Legal Proceedings."

We are dependent to a large degree on the services of our management team.

         We are dependent to a large degree on the services of our management
team, particularly Mark H. Levin, our President and Chief Executive officer, and
Mark R. Suroff, our Chief Operating Officer, Executive Vice President, Secretary
and Treasurer. In July 1998, Messrs. Levin and Suroff each entered into
employment agreements with us which were amended in July 2000. The loss of any
of our key executives could have a material adverse effect on us. Our ability to
manage our anticipated growth will depend on our ability to identify, hire and
retain highly skilled management and technical personnel. Competition for such
personnel is intense. As a result, we cannot assure you that we will be
successful in attracting and retaining such personnel, and the failure to
attract and retain such personnel could have a material adverse effect on our
business, financial condition and results of operations.

Our executive officers and directors have the ability to effectively control
substantially all actions taken by our stockholders.

         As of December 31, 2001, Messrs. Mark H. Levin, Nikos P. Mouyiaris and
Ms. Barbara Novick (each directors of the Company) own, in the aggregate,
14,191,000 shares of our common stock and control approximately 17.68% of the
aggregate voting power of all outstanding shares. Acting together, these
stockholders can effectively control substantially all actions taken by our
stockholders, including the election of directors. Such concentration of
ownership could also have the effect of delaying, deterring or preventing a
change in control of EyeCity that might otherwise be beneficial to stockholders
and may also discourage acquisition bids for EyeCity and limit the amount
certain investors may be willing to pay for shares of Common Stock.


                                       14


<PAGE>

We conduct our operations through off site facilities.

         The Company presently has substantially all of our inventory stored and
shipped from distribution centers controlled by third parties. We depend in
large part on the orderly operation of the receiving and distribution process,
which depends, in turn, on adherence to shipping schedules and effective
management of the distribution centers by third parties. We cannot assure you
that we have anticipated all of the changing demands that our operations will
impose on these receiving and distribution systems or that events beyond our
control, such as disruptions in operations due to labor disagreements, shipping
problems, fires or natural disasters, will not result in a material adverse
effect on our business, results of operations and financial condition.

Increases in the cost of shipping, postage or credit card processing could
adversely affect our business.

         Orders are shipped through one of several channels, as selected by the
customer, including regular U.S. mail, United Parcel Service, second-day air or
overnight courier, with shipping charges varying by the carrier selected. We
generally invoice the costs of delivery and parcel shipments directly to
customers as separate shipping and handling charges. In addition, we receive a
majority of our payments from customers using credit cards. Any increases in
shipping, postal or credit card processing rates could have an adverse effect on
our operating results as we may not be able to effectively pass such increases
on to our customers. Similarly, strikes or other service interruptions by these
shippers could adversely affect our ability to market or deliver our products on
a timely basis.

Our business could be adversely affected if we are required to collect state
sales tax on the sale of products.

         At present, we do not collect sales or other similar taxes in
connection with the sale of our products to consumers located outside the state
of New York. From time to time, various states have sought to impose state sales
tax collection obligations on out-of-state companies such as ours conducting
direct marketing activities. A successful assertion by one or more states that
we should have collected or should be collecting sales taxes on the sale of our
products could result in additional costs and administrative expenses to us and
corresponding price increases to our customers, which could adversely affect our
business, financial condition and results of operations.

         Legislation limiting the ability of the states to impose taxes on
Internet-based transactions recently has been enacted by the United States
Congress. However, this legislation, known as the Internet Tax Freedom Act,
imposes only a three-year moratorium, which commenced October 1, 1998 and ends
on October 21, 2001, on state and local taxes on (1) e-commerce where such taxes
are discriminatory and (2) Internet access unless such taxes were generally
imposed and actually enforced prior to October 1, 1998. It is possible that the
tax moratorium could fail to be renewed prior to October 21, 2001. Failure to
renew this legislation would allow various states to impose taxes on
Internet-based commerce. The imposition of such taxes could adversely affect our
ability to become profitable.

We face an inherent risk of exposure to product liability claims in the event
that the use of the products we sell results in personal injury.

         We face an inherent risk of exposure to product liability claims in the
event that the use of the products we sell results in personal injury. Although


                                       15


<PAGE>

we have not experienced any losses due to product liability claims, we cannot
assure you that we will not experience such losses in the future. A successful
claim brought against us, or any claim that results in significant adverse
publicity against us, could have a material adverse effect on our business,
financial condition and results of operations.

Our results of operations may be subject to seasonal fluctuations

         We believe that our results of operations are somewhat seasonal in
nature. Our limited operating history, however, makes it difficult to fully
assess the impact of these seasonal factors or whether or not our business is
susceptible to cyclical fluctuations in the U.S. economy. There can be no
assurance that seasonal or cyclical variations in our operations will not become
more pronounced over time or that they will not materially adversely affect our
results of operations in the future.

         We intend to expense all advertising costs, including all direct-mail
advertising costs, when the advertising first takes place. As a result,
quarter-to-quarter comparisons will be impacted by the timing of advertisements
and related expenses within and between quarters. Our operating results for any
particular quarter may not be indicative of future operating results. You should
not rely on quarter-to-quarter comparisons of our results of operations as an
indication of our future performance.


Investment Considerations Relating To The Internet

Our success is dependent, in part, on continued growth in use of the Internet.

         The Internet is new and rapidly evolving. A decrease in the growth of
Internet usage would adversely affect our business, results of operations and
financial condition. The following factors may inhibit growth in Internet usage,
limit visits to our Internet addresses or limit orders placed through our
website:

          inadequate Internet infrastructure;

          security and privacy concerns;

          inconsistent quality of service; and

          unavailability of low cost, high-speed service.

         Our success is dependent, in part, upon the ability of the Internet
infrastructure to support increased use. The performance and reliability of the
Internet may decline as the number of users increases or the bandwidth
requirements of users increase, or if "viruses" and other attacks on the
integrity of the Internet infrastructure continue to cause widespread
interruptions in service. The Internet has experienced a variety of outages due
to damage to portions of its infrastructure. If outages or delays occur
frequently in the future, Internet usage, including usage of our website, could
grow slowly or decline. Even if the necessary infrastructure or technologies are
developed, we may have to spend considerable amounts to adapt our solutions
accordingly.

We do not have any property rights in the Internet addresses that we use.

         We have obtained the rights to various Internet addresses, including,
but not limited to, www.eyecity.com, www.foggles.com, and www.ergovision.com. If
third parties obtain rights to use similar addresses, these third parties may


                                       16


<PAGE>

confuse our customers and cause our customers to inadvertently place orders with
these third parties, which could result in lost sales for us and could damage
our brand. As with telephone numbers, we do not have and cannot acquire any
property rights in Internet addresses. As a result, we cannot assure you that we
will be able to retain the use of our addresses. The loss of our ability to use
our Internet addresses could have a material adverse effect on our business,
financial condition and results of operations.

Government regulation and legal uncertainties relating to the Internet and
online commerce could negatively impact our business operations.

         Online commerce is new and rapidly changing, and federal and state
regulation relating to the Internet and online commerce is evolving. Currently,
there are few laws or regulations directly applicable to the Internet or online
commerce on the Internet, and the laws governing the Internet that exist remain
largely unsettled. Due to the increasing popularity of the Internet, it is
possible that additional laws and regulations may be enacted with respect to the
Internet, covering issues such as user privacy, pricing, taxation, content,
copyrights, distribution, antitrust and quality of products and services. The
adoption or modification of laws or regulations applicable to the Internet could
adversely affect our business operations.

         In addition, several telecommunications carriers have requested the
Federal Communications Commission to regulate telecommunications over the
Internet. Due to the increasing use of the Internet and the burden it has placed
on the current telecommunications infrastructure, telephone carriers have
requested the FCC to regulate Internet service providers and impose access fees
on those providers. If the FCC imposes access fees, the costs of using the
Internet could increase dramatically. This could result in the reduced use of
the Internet as a medium for commerce, which could adversely affect our business
operations.

Investment Considerations Related To Ownership Of EyeCity's Common Stock

The price of our Common Stock has been volatile and could continue to fluctuate
in the future.

         The market price for shares of our Common Stock has been volatile and
could fluctuate substantially based on a number of factors, including
quarter-to-quarter variations in our results of operations, news announcements,
changes in general market conditions for optical products, regulatory actions,
adverse publicity regarding us or the industry in general, changes in financial
estimates by securities analysts and other factors. In addition, broad market
fluctuations and general economic and political conditions may adversely affect
the market price of the Common Stock, regardless of our actual performance.

Privately held shares of our Common Stock will be available for sale in the
public markets in the future and may dilute the value of publicly traded shares.

         Sales of substantial amounts of our Common Stock (including shares
issued upon the exercise of outstanding options) in the public market in the
future could adversely affect the market price of our Common Stock. These sales
also might make it more difficult for us to sell equity or equity-related
securities in the future at a time and price that we think appropriate. As of
March 23, 2002, there were 80,227,714 shares of Common Stock outstanding, of
which 75,728,484 were restricted securities under the Securities Act of 1933, as
amended (the "Securities Act"). As of March 23, 2002, 60,072,181 restricted
securities were eligible for sale in the public market. The remaining restricted
securities will be eligible for sale from time to time thereafter upon
expiration of applicable holding periods under Rule 144 under the Securities


                                       17


<PAGE>

Act. Further, holders of 3,621,000 of these restricted shares have so-called
"piggy-back" registration rights which require these shares of Common Stock to
be registered for sale in our future registrations, subject to certain
restrictions. In addition, as of March 23, 2001, there were outstanding options
to purchase 2,958,000 shares of our Common Stock. Substantially, all of the
shares issuable upon exercise of such options will be restricted securities
under the Securities Act and not eligible for sale in the public markets until
the underlying securities are registered on a Form S-8.

You should be aware that we do not anticipate paying cash dividends on our
Common Stock.

         We intend to retain all future earnings for use in our business and,
therefore, do not anticipate paying any cash dividends on the Common Stock in
the foreseeable future.

Certain provisions in our charter documents could delay or prevent a change in
control.

         Certain provisions of our certificate of incorporation and our Bylaws
may inhibit changes in control of us not approved by our board of directors.
These provisions include the authority of the board of directors to issue
without stockholder approval preferred stock with such terms as the board of
directors may determine. We are also afforded the protections of Section 203 of
the Delaware General Corporation Law, which could have similar effects.

Certain provisions of our charter documents provide for limited personal
liability of members of our board of directors.

         Our certificate of incorporation and Bylaws contain provisions which
reduce the potential liability of members of our board of directors for certain
monetary damages and provide for indemnity of directors and other persons. We
are unaware of any pending or threatened litigation against us or our directors
that would result in any liability for which any of our directors would seek
indemnification or similar protection.

Exercise of Warrants.

         The price which the Company may receive for the Common Stock issued
upon exercise of any outstanding warrants may be less than the market price of
the Common Stock at the time such warrants are exercised. For the life of such
warrants, the holders thereof are given, at little or no cost, the opportunity
to profit from a rise in the market price of the Common Stock, if any, without
assuming the risk of ownership. So long as such warrants remain unexercised, the
terms under which the Company could obtain additional equity financing may be
adversely affected. Moreover, the holders of such warrants may be expected to
exercise them at a time when the Company would, in all likelihood, be able to
obtain any needed capital by a new offering of securities on terms more
favorable than those provided by such warrants. To the extent of any exercise of
the warrants, the interests of the Company's shareholders will be diluted
proportionately.

ITEM 2.  DESCRIPTION OF PROPERTY

         EyeCity maintains its corporate headquarters in approximately 1,200
square feet of commercial office space at 199 Lafayette Drive in Syosset, New
York, pursuant to a month to month verbal lease providing for rent at a rate
(including common charges) of $1,500 per month.


                                       18


<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

Eyecity is party to various legal claims from vendors and suppliers in which the
Company is attempting to settle for stock and cash.


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

No matters were submitted to a vote of security holders.

                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED OTHER STOCKHOLDER MATTERS

         EyeCity's common stock is listed by NASDAQ on the Over The Counter
Bulletin Board under the trading symbol ICTY. Trading of EyeCity's common stock
on the Over The Counter Bulletin Board market commenced in March 1998. The
following table reflects the high and low bid prices for EyeCity's common stock
for each quarterly period ended commencing in January 1999 and ending on
December 31, 2000. These quotations are based on information supplied by market
makers of EyeCity's common stock. These quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual
transactions.

<TABLE>
<CAPTION>
                                            2001                                         2000
                                         Price Range                                  Price Range
                                         -----------                                  -----------
                                 Low                   High                   Low                   High
                                 ---                   ----                   ---                   ----

<S>                             <C>                   <C>                    <C>                    <C>
1st Quarter                     $0.050                $0.160                 $2.000                 5.375
2nd Quarter                      0.050                 0.060                  0.688                 2.828
3rd Quarter                      0.040                 0.050                  0.469                 1.344
4th Quarter                      0.020                 0.040                  0.094                 0.875
</TABLE>

         As of March 23, 2002, there are 202 holders of record of EyeCity's
common stock.

         EyeCity has never declared any dividends and is not likely to do so in
the near future.

RECENT SALES OF UNREGISTERED SECURITIES

         Under its 1997, 1998, 1999 and 2000 Stock Option Plans, EyeCity has
granted an aggregate of 3,843,000 options to various consultants and employees
to purchase shares of EyeCity's common stock at exercise prices ranging from
$1.00 to $7.75 including options issued through March 23, 2001. No commissions
were paid in connection with those grants. EyeCity relied on exemptions from
registration under Section 4(2) of the Securities Act of 1933.

         2000

         During the year ended December 31, 2000 EyeCity privately sold an
aggregate of 2,475,000 shares of its common stock to 63 investors in unrelated
transactions of which 1,745,000 shares were sold for $1 per share, 50,000 shares
were sold for $0.75 per share and 680,000 shares were sold for $0.50 per share


                                       19


<PAGE>

generating gross proceeds of $2,122,500. The investors who purchased 680,000
shares of common stock at $.50 per share also received three year warrants to
purchase 680,000 shares of common stock at an exercise price of $1.00 per share.
In connection with the sale of $1,465,000 of these shares, EyeCity paid to James
J. Armenakis a commission equal to $232,000, issued 180,500 shares of EyeCity
common stock and issued warrants to purchase 68,000 shares of EyeCity common
stock at an exercise price of $1.00 per share. EyeCity relied on exemptions from
registration under Section 4 (2) of the Securities Act of 1933 (the "Securities
Act"). Each of these investors represented that he or she was an accredited
investor as defined by the rules promulgated under the Securities Act.

         During the year December 31, 2000, EyeCity issued 642,283 shares of its
common stock with a value of $409,400 in exchange for legal, accounting,
consulting and marketing services. EyeCity relied on exemptions from
registration under Section 4(2) of the Securities Act of 1933.

         During the year ended December 31, 2000, holders converted $275,000 of
subordinated convertible promissory notes into 400,000 shares of EyeCity common
stock. Of the notes which were converted, $150,000 in principal was converted in
connection with an incentive offered to the holder to convert these shares. In
connection with the incentive, the holder received an aggregate of 300,000
shares of common stock and three year warrants to purchase 150,000 shares of
common stock at an exercise price of $1.00 per share. The fair value of these
additional equity securities issued is $96,000 and has been recorded as interest
expense in the third quarter. EyeCity relied on exemptions from registration
under Section 4(2) of the Securities Act of 1933.

         During the year ended December 31, 2000, EyeCity issued 10,000 shares
of its common stock with a value of $10,000 in exchange for furniture and
fixtures. EyeCity relied on exemptions from registration under Section 4(2) of
the Securities Act of 1933.

         During the year ended December 31, 2000, EyeCity issued 30,000 shares
of its common stock with a value of $15,000 in consideration for the holder of a
promissory note agreeing to extend the maturity date of such promissory note.
EyeCity relied on exemptions from registration under Section 4(2) of the
Securities Act of 1933.

         During the year ended December 31, 2000, EyeCity issued 216,400 shares
of its common stock with a value of $118,128 to an investment advisor in
connection with financing transactions. EyeCity relied on exemptions from
registration under Section 4(2) of the Securities Act of 1933.

         During the year ended December 31, 2000, EyeCity issued 13,600 shares
of its common stock with a value of $10,200 for salary and expenses owed to an
employee. EyeCity relied on exemptions from registration under Section 4(2) of
the Securities Act of 1933.

         In August 2000, EyeCity completed a private placement "bridge" offering
("Unit Offering") pursuant to which it has sold, to certain accredited
investors, sixteen and one -quarter units (each a "Unit") for gross proceeds of
$1,625,000, each Unit consisting of a $100,000 10% Secured Convertible Debenture
due 2003 ("Debentures") and warrants ("Warrants") to purchase 400,000 shares of
EyeCity's common stock. The Debentures are secured by EyeCity's assets, subject
to certain exceptions, and are subordinate to certain other obligations of
EyeCity. The Debentures are convertible into common stock at a rate of $.50 per
share and the Warrants are exercisable for common stock at $1.00 per share, in
each case, subject to standard anti-dilution protection. EyeCity can require


                                       20


<PAGE>

conversion of the Debentures under certain circumstances, and the Debentures are
redeemable at EyeCity's option. The Warrants are, under certain circumstances,
redeemable by EyeCity for $.05 per warrant. EyeCity intends to use the proceeds
of the offering for working capital purposes. The securities in the Unit
Offering have not been registered under the Securities Act of 1933 (although
EyeCity has an obligation to effect registration of the shares of common stock
issuable upon conversion of the Debentures and exercise of the Warrants) and may
not be offered or sold in the United States absent such registration or an
applicable exemption. In connection with the sale of the Debentures EyeCity
issued placement agent Warrants to purchase 406,250 shares of EyeCity common
stock at an exercise price of $.50 per share. EyeCity relied on exceptions from
registration under Section 4 (2) of the Securities Act. Each of these investors
represented that he or she was an accredited investor as defined by the rules
promulgated under the Securities Act.

         In November 2000, EyeCity completed a private placement offering
pursuant to which it has sold, to certain accredited investors, one and one
-fifteenth units (each a "Unit") for gross proceeds of $115,000, each Unit
consisting of a $100,000 10% Secured Convertible Debenture due 2003
("Debentures") and warrants ("Warrants") to purchase 200,000 shares of EyeCity's
common stock. The Debentures are secured by EyeCity's assets, subject to certain
exceptions, and are subordinate to certain other obligations of EyeCity. The
Debentures are convertible into common stock at a rate of $.50 per share and the
Warrants are exercisable for common stock at $1.00 per share, in each case,
subject to standard anti-dilution protection. EyeCity can require conversion of
the Debentures under certain circumstances, and the Debentures are redeemable at
EyeCity's option. The Warrants are, under certain circumstances, redeemable by
EyeCity for $.05 per warrant. EyeCity intends to use the proceeds of the
offering for working capital purposes. The securities have not been registered
under the Securities Act of 1933 (although EyeCity has an obligation to effect
registration of the shares of common stock issuable upon conversion of the
Debentures and exercise of the Warrants) and may not be offered or sold in the
United States absent such registration or an applicable exemption. In connection
with the sale of the Debentures EyeCity issued placement agent Warrants to
purchase 28,751 shares of EyeCity common stock at an exercise price of $.50 per
share. EyeCity relied on exceptions from registration under Section 4 (2) of the
Securities Act. Each of these investors represented that he or she was an
accredited investor as defined by the rules promulgated under the Securities
Act.

         In the case of the transactions referred to above as relying on the
Section 4(2) exemption, EyeCity did not engage in any general solicitation or
advertising; the investors were either accredited investors or experienced and
sophisticated investors or sellers in sale of business transactions or service
providers, there were a small number of investors overall, and the investors
were known to EyeCity or its advisors.

         2001

         EyeCity has converted all outstanding debentures, interest and warrants
in exchange for Common Stock of the Company. Eyecity issued 34,500,000 shares of
Common Stock in 2001 for the conversion of $1,725,000 of convertible debentures
sold in 2000.

         Eyecity sold 13,325,000 shares of Common Stock to three investors for
total consideration of $25,000.


                                       21


<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION


Overview

         From EyeCity's inception through December 1998, its business strategy
primarily focused on becoming a leading producer, distributor and marketer of
EyeTools(R) ergonomic computer eyewear products designed to alleviate health
related problems associated with Computer Vision Syndrome and, on becoming a
leading producer, distributor and marketer of Foggles(R) branded optical
products designed for the aviation, hunting and shooting industries.

         In January 2001 the Company divested itself of substantially all of its
business-to-consumer ("B2C") acquired websites, including Binoculars.com,
Peepers.com, and EyeGlassPlace.com, which generated substantially all of the
Company's sales in 1999 and 2000 as well as its centralized Minnesota
distribution facility that was used to coordinate and process order fulfillment
and customer service for all of its websites. The Company is outsourcing the
websites OpticalSite.com, SunglassSite.com and Abeam.com until they are disposed
of. At the same time, EyeCity refocused its business strategy and is currently
engaged in the marketing, distribution and retail sale over the Internet of its
EyeTools computer glasses intended to relax the eyes and ameliorate visual
discomfort, focus difficulties, headaches and other related problems associated
with Computer Vision Syndrome (CVS) and Foggles optical products for the
aviation, hunting and shooting industries through distributors, catalogues,
direct advertising, retail stores and the Internet.

         EyeCity has incurred substantial losses and has had significant
negative cash flow since its inception. Although EyeCity has obtained financing
in the past, EyeCity will require additional funding to cover current
operations, repay indebtedness and enable it to fund its business plan. EyeCity
is currently seeking from potential investors additional financing, but there is
no assurance that such financing will be sufficient or available, or if
available, will be available on acceptable terms.


Results of Operations

Fiscal Year Ended December 31, 2001 Compared to Fiscal Year Ended December 31,
2000

MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Results of Operations

Fiscal Year Ended December 31, 2001 Compared to Fiscal Year Ended December 31,
2000.

Net revenues for the fiscal year ended December 31, 2001 were approximately
$190,000 as compared to net revenues in 2000 of approximately $2,544,000.

Cost of revenues for 2001 were approximately $91,000 as compared to
approximately $1,785,000 in 2000.

Gross profit amounted to approximately $99,000 in 2001 (52.2% of net revenues)
as compared to approximately $760,000 in 2000 (29.9% of net revenues).


                                       22


<PAGE>

General and administrative expenses were approximately $614,000 in 2001 as
compared to approximately $3,400,000 in 2000. The overall decrease is
principally attributable to the divestment of the business-to-consumer websites.

Depreciation and amortization expenses were approximately $372,000 in 2001 as
compared to approximately $1,823,000 in 2000. The decrease is principally
attributable to the divestment of the business-to-consumer websites.

Technology and development expenses were approximately $3,000 in 2001 as
compared to approximately $236,000 in 2000. This expense is associated with the
development of the eyecity.com supersite.

Interest expense was approximately $269,000 in 2001 as compared to approximately
$401,000 in 2000.

Liquidity and Capital Resources

During 1998, EyeCity issued $362,500 of subordinated convertible promissory
notes. The notes bear interest at a rate of 10% per annum, payable quarterly,
commencing January 1, 1999. The notes are convertible into EyeCity's common
stock at a price of $1.25 per share at the option of the holder at any time
after October 1, 1999 (the "Conversion Date"). EyeCity has the right to call,
redeem and prepay the notes if the market price of EyeCity's common stock equals
or exceeds $2.50 per share for ten consecutive trading days at any time after
the Conversion Date. The notes are repayable in twelve quarterly principal
payments commencing on October 1, 2000. EyeCity repaid $25,000 of such notes in
March 1999 and, between October 1999 and April 2000, $137,500 of such notes were
converted into 110,000 shares of EyeCity common stock. On August 3, 2000,
$150,000 of the notes were converted into 300,000 shares of EyeCity common stock
resulting in an additional charge of $90,000 and 150,000 three-year warrants
exercisable at $1.00 per share valued at $6,000. The value of these additional
equity securities of $96,000 has been recorded as interest expense. On July 18,
2001 the remaining $50,000 of the note plus interst were converted into
1,000,000 shares of EyeCity common stock.

A portion of the consideration paid by EyeCity in connection with its
acquisitions of Peeper's and SunSource was in the form of promissory notes in
the amounts of $875,000 and $212,500, respectively. On May 23, 2000 the maturity
date of the secured $875,000 note was extended to May 23, 2002 with principal
payments of $25,000 due on July 15, 2000, $150,000 due on August 31, 2001 and 5%
of the first $2,000,000 of gross proceeds, and 10% of all gross proceeds above
$2,000,000 raised by EyeCity in a financing transaction or series of financing
transactions, in each case, payable within 7 days of closing. In January 2001,
EyeCity entered into an agreement with Mr. Thralow which cancelled the
indebtedness in the amount of $812,467, which was comprised of $724,750 for the
secured promissory note, interest in the amount of $34,633, and the balance of
due under the consultant agreement of $45,162 and the employment agreement of
$7,923. As consideration for the cancellation of the indebtedness, the Company
conveyed to Mr. Thralow the websites it had acquired from him in 1999, certain
inventory and equipment as well as 125,000 shares of common stock of EyeCity. On
June 30, 2000, EyeCity and the holder of the $212,500 note amended it to provide
that $3,000 of principal will be due and payable on each of July 15, 2000,
August 15, 2000, September 15, 2000, October 15, 2000, and November 15, 2000,
and $197,500 will be due and payable on December 31, 2000, provided that if
EyeCity consummates a public or private offering of debt or equity securities,
four percent of the net proceeds in excess of $2,000,000 of such offering shall
be paid on account of the then outstanding principal balance of such note. In
addition, the amended $212,500 note has accrued interest from July 1, 2000 at
Chase Bank's prime rate. On January 5, 2001 the agreement was amended for


                                       23


<PAGE>

payment of the balance of the note of $197,500 to April 1, 2001. Wilson has
orally agreed to extend the terms. The note continues to accrue interest at
Chase Bank's prime rate. There can be no assurance that EyeCity will have
available funds to satisfy these notes at maturity, in which event the holders
of these notes could claim that EyeCity is in breach of its obligations. Such
holders could commence proceedings against EyeCity, including seeking to
foreclose on the note collateral (including the domain names, toll-free phone
numbers, contract rights, website content and certain intellectual properties
formerly owned by Peeper's and acquired by EyeCity in the Peeper's acquisition),
which would have a material adverse affect on EyeCity's operations.

For the year ended December 31, 2001, EyeCity used approximately $1,739,000 in
connection with its operating activities, principally to fund its net loss
before non-cash charges of approximately $1,168,000, as well as decreases in
operating liabilities such as accrued payroll and related taxes. The use of cash
was offset in part by increases in accounts payable and accrued expenses as well
as decreases in inventories and prepaid expenses and other current assets.
EyeCity used $3,035,000 in cash to fund operations in 2000.

For the year ended December 31, 2001, net cash provided by investing activities
approximated $2,421,000. This is primarily attributable to the disposal of
intangibles EyeCity used $206,000 in cash for investing activities in 2000.

For the year ended December 31, 2001, net cash used in financing activities
approximated $728,000, primarily from the repayment of debt.

As of December 31, 2001, EyeCity had approximately $9,000 of cash and cash
equivalents. As of December 31, 2001, EyeCity's principal commitments consisted
of:

o  accounts payable of approximately $1,071,889;
o  Interest bearing promissory notes issued to sellers in connection with prior
   acquisitions by EyeCity in the aggregate amount of $197,500;
o  Notes payable to vendors of approximately $20,000;
o  $265,000 of 10% subordinated convertible debentures, due between August 14,
   2003 and November 22, 2003;
o  $242,000 of deferred salary for officers.;
o  obligations outstanding under operating leases; and
o  obligations outstanding under capital leases.

As of December 31, 2001, EyeCity had a working capital deficiency of
approximately $1,716,000. EyeCity will need to raise additional funds in order
to satisfy EyeCity's current obligations and to fund its business plan. If
EyeCity raises additional funds through the issuance of equity or convertible
debt securities, the percentage ownership of its current stockholders will be
reduced, its stockholders may experience additional dilution and such securities
may have rights, preferences and privileges senior to those of its common stock.
There can be no assurance that additional financing will be available on terms
favorable to EyeCity or at all. If adequate funds are not available or are not
available on acceptable terms, EyeCity may not be able to meet its financial
obligations or to continue to implement its business plan. This inability could
have a material adverse effect on EyeCity's business, results of operations and
financial condition.

Seasonality

EyeCity's limited operating history makes it difficult to fully assess the
impact of seasonality or whether or not EyeCity's business is susceptible to
cyclical fluctuations in the U.S. economy. In addition, EyeCity believes that
its rapid growth may have overshadowed whatever seasonal or cyclical factors
might have influenced its business to date. EyeCity intends to expense all
advertising costs, including all direct-mail advertising costs, when the
advertising first takes place. As a result, quarter-to-quarter comparisons will


                                       24


<PAGE>

be impacted by the timing of advertisements and related expenses within and
between quarters. There can be no assurance that seasonal or cyclical variations
in EyeCity's operations will not become more pronounced over time or that they
will not materially adversely affect its results of operations in the future.

FINANCIAL STATEMENTS

The 2000 unaudited and the 2001 unaudited Financial Statements and the notes
thereto are contained in a separate section of this report beginning with the
page following the signature page.

ITEM 7.  FINANCIAL STATEMENTS

The 2000 unaudited and the 2001 unaudited Financial Statements and the notes
thereto are contained in a separate section of this report beginning with the
page following the signature page.



ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

         None.


                                    PART III

ITEM 9   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The directors and executive officers of the Company are as follows:

Name                            Position
----                            --------

Lorenzo DeLuca                Chairman of the Board
Mark H. Levin                 Chief Executive Officer and Director
Neil Glachman                 President and Director
Nikos P. Mouyiaris            Director
Barbara Novick                Director


Lorenzo De Luca, 52, has been the Chief Executive Officer and a Managing Member
of Vista Acquisition LLC since its inception in November, 2000. Mr. De Luca has
been CEO of Paxton Ventures since 1987, a venture investment company which
concentrates its efforts on small business, emerging growth and private and
publicly traded companies. Mr. De Luca, a practicing attorney in the State of
New York specializing in representation of small business concerns, was general
counsel to a 100-store eyecare and managed care company called General Vision
from 1992 through 1996. Mr. De Luca has served as an officer and director of
several businesses, including General Vision Services, Inc., Action Industries,
Bio-Reference Laboratories, Alfin, Inc., Pratt Paper Products and Hathaway
Automotive. Mr. De Luca currently sits on the board of directors of New Cycle
Therapy, a subsidiary of Inter Health Technologies and on the board of advisors
for Inabata Technology Ventures. As a result of the purchase of Instant by a
subsidiary of Eyecity, we and Mr. De Luca own common stock of Eyecity,
regardless of whether the Merger becomes effective.


                                      -26-

<PAGE>


Neil Glachman, 49, has been the Chief Operating Officer and a Managing Member of
Vista Acquisition LLC since its inception. Mr. Glachman has been CEO and
President of Combine since 1989, an optical buying group with over $16 million
in annual revenues and a network of 2,000 independent eyecare professionals,
including ophthalmologists, opticians and optometrists. Mr. Glachman has over 20
years of optical management experience. Combine concentrates the purchasing
power of its network of professionals, offering lower costs of goods without
volume purchasing commitments and a single monthly reconciliation statement. Mr.
Glachman is a managing member and a principal of VAL. As a result of the
purchase of Instant by a subsidiary of Eyecity, we and Mr. De Luca own common
stock of Eyecity, regardless of whether the Merger becomes effective. Mark H.
Levin, 30, serves as EyeCity's Chief Executive Officer and as a member of
EyeCity's Board of Directors. Mr. Levin has served as EyeCity's President since
its formation in May 1996. He also served as Chief Executive Officer of EyeCity
from inception until July 1998 at which time he became Chief Operating Officer.
In December 1998, Mr. Levin was re-elected as Chief Executive Officer. Mr. Levin
received his BBA and MBA in marketing from Hofstra University. From May 1993
until May 1996 Mr. Levin was President of F.M.B. Associates, Inc., a marketing
consulting firm specializing in market analysis, competitive analysis, market
research, marketing plans and management consulting. Mr. Levin has worked with
manufacturers, healthcare providers,, participants in the entertainment industry
and others in a variety of service related industries.

Nikos P. Mouyiaris, 56, has served as a director of EyeCity since May 1999. Mr.
Mouyiaris has been President of Mana Products, Inc., a manufacturer of cosmetic
products, since 1972.

Barbara Novick, 63, has served as a director of EyeCity since May 1999. Ms.
Novick has been Executive Vice President of Mana Products, Inc., a manufacturer
of cosmetic products, since 1980.

Directors serve until the next Annual Meeting of the Stockholders of the Company
following their election and until their respective successors are elected and
qualified.

Each executive officer is scheduled to hold office until the Annual Meeting of
Directors which is scheduled to be held after each Annual Meeting of
Stockholders. Any executive officer may be removed by the Board of Directors
either with or without cause.

Except as set forth in Item 12, there are no understandings between any director
or executive officer and any other person pursuant to which any director or
executive officer was elected as such.


SECTION 16 (a)  BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16 (a) of the Securities Exchange Act requires the Company's
executive officers and directors, and persons who beneficially own more than 10%
of the Company's Common Stock, to file initial reports of ownership, and reports
of changes of ownership, of the Company's equity securities with the Securities
and Exchange Commission and furnish copies of those reports to the Company.
Based solely on a review of copies of the reports furnished to the Company, or
written representation that no reports were required, the Company believes that
all reports required to be filed by such persons with respect to the Company's
year ended December 31, 2000 were timely filed.

ITEM 10.          EXECUTIVE COMPENSATION

         The following table summarizes all plan and non-plan compensation
awarded to, earned by or paid to EyeCity's chief executive officer and each of
the other executive officers in excess of $100,000 for the fiscal years ended
December 31, 2000, 1999 and 1998. No bonuses or long term payouts were awarded
in the periods presented. There were no long-term incentive plans in effect at
the end of the last fiscal year.

<TABLE>
<CAPTION>
                                                                                             Long Term
                                                                                           Compensation
                                                                                               Awards
                                                                                               ------

                                                                       Annual                Securities
                                                                    Compensation             Underlying
              Name and Principal Position          Year                Salary                 Options
              ---------------------------          ----                ------                 -------

<S>                                                <C>               <C>                      <C>
Mark H. Levin                                      2000              $125,000(1)              336,500
President and Chief Executive Officer              1999              $100,000(2)              200,000
                                                   1998                82,500(3)              100,000
</TABLE>


(1)  Base salary for January through June 30, 2000 was $100,000 and base salary
     for July 1 through December 31, 2000 was $150,000.
(2)  To date, of the salary indicated $32,692.31 has been paid and $67,307.69
     has been accrued.
(3)  To date, of the salary indicated $57,921.16 has been paid and $24,578.84
     has been accrued for each.


                                       26


<PAGE>

OPTION GRANTS IN LAST FISCAL YEAR

         The following table contains information concerning options to purchase
shares of the Company's capital stock granted by the Company during the year
ended December 31, 2000 to the executive officers named in the summary
Compensation Table. No stock appreciation rights have been granted by the
Company.


<TABLE>
<CAPTION>
                                         Individual
                                         Options Percent
                                         of total Options
                      Number of Shares   Granted To
                      Underlying         Employees In        Exercise Price
Name                  Options Granted    Fiscal Year         Per Share          Expiration Date
--------------------- ------------------ ------------------- ------------------ -------------------
<S>                           <C>                <C>                 <C>        <C>   <C>
Mark Levin                    325,000            29.02%              $1.00      12/31/05
--------------------- ------------------ ------------------- ------------------ -------------------
                               11,500             1.03%              $1.00      12/31/05
--------------------- ------------------ ------------------- ------------------ -------------------
</TABLE>

OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END VALUES

         No options to purchase shares of the Company' capital stock were
exercised during 2000 by the executive officers named in the Summary
Compensation Table. The following table contains information concerning the
number of shares of Common Stock underlying unexercised options held at December
31, 2000 by the executive officers named in the Summary Compensation Table.

<TABLE>
<CAPTION>
---------------------------------- --------------------------------------------  --------------------------------------
                                   Number    of    Shares     Underlying         Value  Of  Unexercised   In-The-Money
                                   Unexercised  Options  Held At  Fiscal         Options Held At Fiscal Year-End
Name                               Year-End (Exercisable/Unexercisable)          (Exercisable/Unexercisable) (1)
---------------------------------- --------------------------------------------  --------------------------------------
<S>                                           <C>                                               <C>
Mark H. Levin                                 250,000/386,500                                   $0/$0
---------------------------------- --------------------------------------------  --------------------------------------
</TABLE>

(1)  Fair market value of securities underlying the option (based on $0.094
     public trading price on the OTC Bulletin Board on December 31, 2000) minus
     the exercise price of the options.



EMPLOYMENT AGREEMENTS

         Mark H. Levin entered into an employment agreement with EyeCity dated
as of July 1, 1998 and amended on July 1, 2000, and effective through December
31, 2004. Under this agreement, Mr. Levin is EyeCity's President and Chief
Operating Officer, as well as a director on EyeCity's board of directors (on
December 31, 1998, by unanimous consent of EyeCity's Board of Directors, Mr.
Levin was named Chief Executive Officer). Under his agreement, Mr. Levin is


                                       27


<PAGE>

entitled to receive a total base salary for July 1, 1998 through December 31,
1998; January 1, 1999 through June 30, 2000; and July 1, 2000 through December
31, 2004 (and through the end of the contract term) at an annual rate of
$82,500, $100,000, $150,000, respectively. Mr. Levin's base salary shall
automatically increase five (5%) per year commencing January 1, 2001, and he may
be eligible for bonuses, at the discretion of EyeCity's Board of Directors. Mr.
Levin is entitled to be reimbursed for costs of an automobile approved by
EyeCity. As of December 31, 2000 the accrued salary due Mr. Levin was $ 92,000.
Under the Agreement, if Mr. Levin dies or is unable to perform his duties, he or
his estate will be paid, in addition to any previously earned but unpaid salary,
three months' total base salary.

ITEM 11.  SECURITIES HOLDINGS OF CERTAIN STOCKHOLDERS AND MANAGEMENT

The following table sets forth, as of March 23, 2002, certain information
concerning the beneficial ownership of the Common Stock of EyeCity by (i) any
person (including any "group" as that term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, known to be the beneficial owner of more than
5% of such Common Stock, (ii) each director of EyeCity, (iii) each of the
executive officers named in the Executive Compensation section in this document
and (iv) all directors and executive officers of EyeCity taken as a group. Each
of the stockholders has sole voting and investment power for the shares listed
as beneficially owned by them.


<TABLE>
<CAPTION>
                                                            Amount
                                                            Beneficially                      Percent of
Name and Address of Beneficial Owner (1)                    Owned                             Class
------------------------------------                        -----                             -----

<S>                                                         <C>                                 <C>

Lorenzo DeLuca                                             163,335,440 (1) (4)                 37.5%

Neil Glachman                                              163,335,440 (1) (5)                 37.5%

Mark H. Levin                                               43,047,600 (1) (6)                  9.9%

Nikos Mouyiaris                                              7,350,000 (2)                      1.6%

Barbara Novick (7)                                              91,000 (3)                      0.002%
                                                           -----------                         -------
All Executive officers and directors                       377,197,400 (7)                     85.00%
as a group (four persons):

</TABLE>


(1)  Except as specifically set forth, addresses for all of the listed
     beneficial owners and management are care of EyeCity at its corporate
     headquarters in Syosset, New York.

(2)  Nikos P. Mouyiaris' address is c/o Mana Products, Inc., 32-02 Queens
     Boulevard, Long Island City, New York 11101

(3)  Barbara Novick's address is c/o Mana Products, Inc., 32-02 Queens Blvd.,
     Long Island City, New York 11101

(4)  These shares are owned by a Paxton Ventures Corporation, a corporation
     whose sole shareholder is a family trust of which Lorenzo De Luca is the
     sole trustee for the benefit of his children.Paxton Ventures, they include
     163,335,440 shares of common stock issuable upon conversion of shares of
     class A convertible preferred stock. A portion of the underlying shares of
     common stock are not currently authorized by the Company. The Company
     intends to amend its certificate of incorporation to increase the shares it
     has authorized to issue in order to cover these shares.

(5)  These shares are owned by a Ocular Insight, Inc. a corporation whose sole
     shareholder is Neil Glachman, they include 163,335,440 shares of common
     stock issuable upon conversion of shares of class A convertible preferred
     stock. A portion of the underlying shares of common stock are not currently
     authorized by the Company. The Company intends to amend its certificate of
     incorporation to increase the shares it has authorized to issue in order to
     cover these shares.

(6)  These shares are owned by a Mark H. Levin they include 36,297,600 shares of
     common stock issuable upon conversion of shares of class A convertible
     preferred stock. A portion of the underlying shares of common stock are not
     currently authorized by the Company. The Company intends to amend its
     certificate of incorporation to increase the shares it has authorized to
     issue in order to cover these shares.

(7)  Includes shares of Convertible Preferred stock not yet converted by
     Messr's. DeLuca, Glachman & Levin.




ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


         In March 2001, EyeCity issued 100,000 shares of Common Stock for legal
services rendered by James J. Armenakis.

         In May 2000, Mr. Thralow resigned as an officer and director of the
Company, his Employment Agreement was terminated and he became a Consultant to
EyeCity. In January 2001 EyeCity entered into an agreement with Mr. Thralow
which cancelled the indebtedness in the amount of $812,467, which was comprised
of $724,750 for the secured promissory note, interest in the amount of $34,633,
and the balances due under the consultant agreement of $45,162.24 and the
employment agreement of $7,923.12. As consideration for cancellation of the
indebtedness the Company conveyed to Mr. Thralow the websites it had acquired
from him in 1999, certain inventory and equipment as well as 125,000 shares of
the Common Stock of EyeCity.


                                       28


<PAGE>

         In July 2000, EyeCity entered into an amended Employment Agreement with
Mr. Levin extending the term until December 31, 2004 and at a base salary of
$150,000 per year from July 1, 2000 through the end of the contract term with an
automatic increase at a rate of five (5%) per year commencing January 1, 2001.

         EyeCity believes that the transactions discussed in this section were
on terms at least as favorable to EyeCity as those that could have been secured
in arm's length transactions.


Item 13. Exhibits and Reports on Form 8K

None.
                                   Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                        EYECITY.COM, INC.



March 28, 2001                            By: /s/ Mark H. Levin
                                              ----------------------------------
                                              Mark H. Levin, Chief Executive
                                              Officer (principal executive
                                              officer) and Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.





March 28, 2001                          /s/ Mark H. Levin
                                        -----------------------------------
                                        Mark H. Levin, Chief Executive
                                        Officer (principal executive officer)
                                        and Director



March 28, 2001                          /s/ Lorenzo DeLuca
                                        -----------------------------------
                                        Lorenzo DeLuca, Chairman



March 28, 2001                          /s/ Neil Glachman
                                        -----------------------------------
                                        Neil Glachman, President



March 28, 2001                          /s/ Nikos P. Mouyiaris
                                        -----------------------------------
                                        Nikos P. Mouyiaris, Director



March 28, 2001                          /s/ Barbara Novick
                                        -----------------------------------
                                        Barbara Novick, Director



                                       29


<PAGE>

                       EyeCity.com, Inc. and Subsidiaries

                              Financial Statements





                                    Contents

Consolidated Balance Sheet as of December 31, 2001 (unaudited)...............F-1

Consolidated Statements of Operations for the Years
Ended December 31, 2001 (unaudited) and 2000 (unaudited).....................F-3

Consolidated Statements of Stockholders' Equity (Deficit)
for the Years Ended December 31, 2001 (unaudited) and 2000 (unaudited).......F-4

Consolidated Statements of Cash Flows for the Years
Ended December 31, 2001 (unaudited) and 2000 (unaudited).....................F-5

Notes to Consolidated Financial Statements...................................F-6

<PAGE>

                       EyeCity.com, Inc. and Subsidiaries
                           Consolidated Balance Sheet
                                   (Unaudited)
                                December 31, 2001

<TABLE>
<CAPTION>

ASSETS

<S>                                                                <C>
Current assets:
   Cash and cash equivalents                                       $         8,659
   Accounts receivable, net of allowance
     of $1,050                                                              26,031
   Inventories                                                              76,003
   Prepaid expenses and other current assets                                   767
                                                                   ---------------
Total current assets                                                       111,460

Property and equipment, net of accumulated
   depreciation of $77,079                                                  75,372

Intangibles, net of accumulated
   amortization of $224,777                                                  7,549

Website development costs, net of accumulated
  amortization of $92,222
                                                                            73,778
Deferred financing costs, net of accumulated
   amortization of $148,397                                                191,167
                                                                    --------------
Total assets                                                         $     459,326
                                                                     =============


See accompanying notes.


                                      F-1


<PAGE>


LIABILITIES & STOCKHOLDERS' EQUITY


Current liabilities:
   Accounts payable and accrued expenses                                              $     1,071,889
   Accrued payroll and related taxes                                                            4,031
   Deferred salaries to officers                                                              241,887
   Current portion of capital lease obligations                                                49,774
   Current portion of notes payable                                                           217,500
   Current portion of convertible debenture                                                   242,011
                                                                                       --------------
Total current liabilities                                                                   1,827,092
                                                                                        -------------


Total liabilities                                                                           1,827,092
                                                                                        -------------

Stockholders' equity:
   Preferred stock - $.001 par value:  authorized,  1,000,000 shares: no shares
     issued and outstanding                                                                         -
   Common stock - $.001 par value:  100,000,000 shares  authorized,  64,626,714
     shares issued and outstanding                                                             64,627
   Additional paid-in capital                                                              11,302,157
   Accumulated deficit                                                                    (12,730,423)
   Unamortized compensation component of stock options                                         (4,127)
                                                                                    -----------------
Total stockholders' equity                                                                 (1,367,766)
                                                                                       --------------
Total liabilities and stockholders' equity                                            $       459,326
                                                                                      ===============
</TABLE>



See accompanying notes.


                                      F-2


<PAGE>



                                        EyeCity.com, Inc. and Subsidiaries
                                       Consolidated Statements of Operations


<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                                      2001               2000
                                                                      ----               ----
                                                                  (unaudited)        (unaudited)

<S>                                                              <C>                  <C>
Net revenues                                                     $    190,235        $ 2,544,402
Cost of revenues                                                       90,851          1,784,640
                                                                 ------------         ----------
Gross profit                                                           99,384            759,762
                                                                 ------------         ----------
Operating expenses:
  Marketing and sales                                                  16,879            395,102
  General and administrative                                          614,440          3,399,765
  Depreciation and amortization                                       371,730          1,822,974
  Technology and development                                            3,345            236,106
                                                                 ------------         ----------
  Total operating expenses                                          1,006,394          5,853,947
                                                                 ------------         ----------
Operating loss                                                       (907,010)        (5,094,185)
                                                                 ------------         ----------
Other income (expense):
  Interest and investment income                                        7,678              7,318
  Interest expense                                                   (268,961)          (401,462)
                                                                 ------------         ----------
Net other income (expense)                                           (261,283)          (394,144)
                                                                 ------------         ----------
Net loss                                                         $ (1,168,293)       $(5,488,329)
                                                                 ============        ===========


Basic and diluted net loss
  per common share                                                     $(.05)             $(.59)
                                                                 ============        ===========
Shares used in the calculation of  basic
  and diluted net loss per common share                            22,205,221          9,315,165
                                                                 ============        ===========

</TABLE>

See accompanying notes.


                                      F-3


<PAGE>



<TABLE>
<CAPTION>
                                        EyeCity.com, Inc. and Subsidiaries
                             Consolidated Statements of Stockholders' Equity (Deficit)
                          Years ended December 31, 2001 (Unaudited) and 2000 (Unaudited)

                                                                                                 Unamortized         Total
                                            Common Stock            Additional                   Compensation      Stockholders'
                                    ----------------------------     Paid-In       Accumulated   Component of        Equity
                                       Shares            Amount      Capital        Deficit      Stock Options      (Deficit)
                                    -----------         --------     -------        -------      -------------      ---------
<S>                                    <C>                <C>        <C>            <C>            <C>               <C>
Balance at January 1, 2000             8,992,932          8,993      8,094,967      (6,073,801)    (50,596)          1,979,563
Issuance of common stock for
  cash net of expenses of
  $334,000                             2,475,000          2,475      1,786,025              --          --             1,788,500
Issuance of common stock for
  services                               642,283            642        408,758              --          --               409,400
Issuance of common stock in
  connection with cash financing         199,000            199        106,051              --          --               106,250
Issuance of common stock in
  connection with debt financing          17,400             17         11,861              --          --                11,878
Issuance of common stock for
  purchase of equipment                   10,000             10          9,990              --          --                10,000
Issuance of common stock for
  consideration of extending note         30,000             30         14,970              --          --                15,000
Issuance of common stock for
  salary and expenses                     13,600             14         10,186              --          --                10,200
Issuance of common stock for
  conversion of debt                     400,000            400        274,600              --          --               275,000
Value of warrants for debt
financing                                     --             --        334,400              --          --               334,400
Value of warrants for conversion
of debt                                       --             --         96,000              --          --                96,000
Issuance of stock options                     --             --           (241)             --         241                    --
Amortization of compensation
  component of stock options                  --             --             --              --      46,228                46,228
Net loss for the year ended
  December 31, 1999                           --             --             --      (5,488,329)         --            (5,488,329)
Balance at December 31, 2000          12,780,215   $     12,780   $ 11,147,567    $(11,562,130)   $ (4,127)        $    (405,910)
Issuance of common stock for
  cash                                13,350,000         13,350         12,150              --          --                25,500
Issuance of common stock for
  services                             2,675,000          2,675        119,375              --          --               122,050
Issuance of common stock for
  salary and expenses                    100,000            100          9,911              --          --                10,011
Issuance of common stock for
  release of debt                      1,221,500          1,222     (1,270,711)             --          --            (1,269,489)
Issuance of common stock for
  conversion of debt                  30,500,000         30,500      1,547,042              --          --             1,577,542
Issuance of common stock
  returned in 2002                     4,000,000          4,000             --              --          --                 4,000
Settlement agreement                          --             --         (263,177)           --          --              (263,177)
Net loss for the year ended
  December 31, 1999                           --             --             --      (1,168,293)         --            (1,168,293)
Balance at December 31, 2001          64,626,715   $     64,627   $ 11,302,157    $(12,730,423)   $ (4,127)       $   (1,367,766)

===================================================================================================================================


See accompanying notes.


                                      F-4

<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows



                                                                                 Year Ended December 31,
                                                                                  2001              2000
                                                                                  ----              ----
                                                                              (unaudited)       (unaudited)
Cash flows from operating activities
Net loss                                                                    $(1,168,293)        $(5,488,329)
Adjustments to reconcile net loss to net cash
   used in operating activities:
   Depreciation and amortization                                                258,542           1,822,975
   Provision for doubtful accounts                                               (8,100)               --
   Amortization of discount                                                      83,400             119,561
   Amortization of compensation component of stock options                         --                46,228
   Amortization of deferred financing costs                                     113,188              35,209
   Issuance of stock for consulting and marketing services                      122,050              70,000
   Issuance of stock for consideration of extending note                           --                15,000
   Issuance of stock for salary and expenses                                     10,011              10,200
   Loss on conversion of debt                                                      --                96,000
   Issuance of stock for release of debt                                     (1,352,292)
   Issuance of stock for settlement                                            (263,177)               --
Changes in operating assets and liabilities, excluding the effect of
   acquisitions:
Accounts receivable                                                               6,975               3,876
Inventories                                                                     234,759             177,478
Prepaid expenses and other current assets                                       109,020             (18,136)
Accounts payable and accrued expenses                                           111,455             231,620
Accrued payroll and related taxes                                               (46,530)            (22,008)
Deferred salary to officers                                                      50,191            (134,842)
Net cash used in operating activities                                        (1,738,801)         (3,035,168)

Cash flows from investing activities
Capitalized website development costs
                                                                                   --              (150,000)
Disposal of intangibles
                                                                              2,187,565                --
Disposal/(Purchases) of property and equipment                                  219,947             (50,775)
Security deposits                                                                13,322              (5,063)
Net cash used in investing activities                                         2,420,834            (205,838)

Cash flows from financing activities
Repayment of notes payable                                                     (724,750)           (227,148)
Repayment of convertible subordinated notes
                                                                            -----------         -----------
Proceeds from issuance of stock, net of expenses
                                                                                 25,500           1,894,750
Proceeds from issuance of convertible debenture, net of expenses
                                                                                   --             1,477,514
Repayment of capital lease obligations                                          (28,711)            (24,678)
Net cash provided by financing activities                                      (727,961)          3,120,438

Net decrease in cash and cash equivalents                                       (45,928)           (120,568)
Cash and cash equivalents at beginning of year                                   54,587             175,155
Cash and cash equivalents at end of year                                    $     8,659         $    54,587

Supplemental disclosures
Cash paid for interest                                                      $       777         $    35,104

===================================================================================================================
</TABLE>

See accompanying notes.

                                      F-5

<PAGE>


                       EyeCity.com, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                                December 31, 2001

1.    Description of Business and Basis of Presentation

Since 1999, EyeCity.com, Inc. and its subsidiaries (collectively "EyeCity") were
engaged in one business segment: the online marketing, distribution and sale of
a broad range of optical products and accessories, including brand name
sunglasses, contact lenses, binoculars, prescription eyewear, telescopes, sports
and lifestyle eyewear and hunting glasses. In January 2001, EyeCity refocused
its business strategy and is currently engaged in the marketing, distribution
and retail sale over the Internet of its EyeTools computer glasses and Foggles
optical products for the aviation, hunting and shooting industries.

EyeCity has incurred operating losses since its inception and its working
capital is insufficient to cover continuing operating expenses. Accordingly,
EyeCity requires additional funding from financing or other sources to cover
operating expenses until sufficient revenues are generated to cover such
expenses. EyeCity believes that its currently available funds will be sufficient
to meet its anticipated working capital needs through at least April 2002.
Thereafter, EyeCity will need to raise additional funds to cover operating
expenses. There is no assurance that such funds will be available, or if
available, will be on terms satisfactory to EyeCity.

The foregoing conditions raise substantial doubt as to EyeCity's ability to
continue as a going concern. The accompanying financial statements do not
include any adjustments that might result from the outcome of this uncertainty.

2.    Summary of Significant Accounting Policies

Principles of Consolidation

The  accompanying  consolidated  financial  statements  include the  accounts of
EyeCity.com, Inc. and its wholly-owned subsidiaries,  Ergovision, Inc., Foggles,
Inc., Gilead  Enterprises,  Inc., and Peeper's,  Inc. (see Note 6). All material
intercompany balances and transactions have been eliminated in consolidation.

Cash Equivalents

EyeCity considers all highly liquid investments with a maturity of three months
or less at the date of purchase to be cash equivalents.

Revenue Recognition

Net revenues are generated by online and retail operations and primarily consist
of the selling price of merchandise, net of returns and credits, and shipping
charges. Net revenues are recognized upon shipment of the order to the
recipient. EyeCity provides an allowance for sales returns in the period of sale
based upon historical experience.


                                      F-6


<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

2.    Summary of Significant Accounting Policies (continued)

Cost of Revenues

Cost of revenues includes the cost of merchandise sold from inventory and the
associated cost of inbound freight and outbound shipping.

Concentration of Credit Risk

EyeCity sells its products to a broad range of customers throughout the United
States. A significant portion of customers pay for their products through the
use of major credit cards. The timing of the cash realization and related fees
are determined based upon agreements with such major credit card companies.
Accordingly, credit losses related to the sale of merchandise are limited.

Inventories

Inventories are stated at the lower of cost (using the weighted-average cost
method) or market.

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed by the
straight-line method over the estimated useful lives of the related assets,
ranging from 5 to 7 years.

Intangibles

Intangibles consist of: (i) goodwill - the excess of the purchase price over the
fair value of the net assets acquired, (ii) display technology, (iii) patents
and trademarks, (iv) internet domain names and (v) licenses. Amortization
expense relating to such intangibles is amortized on a straight-line basis over
three years.

                                      F-7

<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

2.    Summary of Significant Accounting Policies (continued)

Long-Lived Assets

EyeCity follows the provisions of Statement of Financial Accounting Standards
("SFAS") No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of. This standard establishes the accounting
for the impairment of long-lived assets, certain identifiable intangibles and
the excess of cost over net assets acquired, related to those assets to be held
and used in operations, whereby impairment losses are required to be recorded
when indicators of impairment are present and the undiscounted cash flows
estimated to be generated by those assets are less than the assets' carrying
amount. SFAS No. 121 also addresses the accounting for long-lived assets and
certain identifiable intangibles that are expected to be disposed of.

When impairment indicators are present, EyeCity reviews the carrying value of
its assets in determining the ultimate recoverability of their unamoritized
values using future undiscounted cash flow analysis expected to be generated by
the asset. If such assets are considered impaired, the impairment recognized is
measured by the amount by which the carrying amount of the assets exceeds the
future discounted cash flows. Assets to be disposed of are reported at the lower
of the carrying amount or fair value, less costs to sell.

EyeCity evaluates the periods of amortization continually in determining whether
later events and circumstances warrant revised estimates of useful lives. If
estimates are changed, the unamortized costs will be allocated to the increased
or reduced number of remaining periods in the revised useful life.

Website Development Costs

The Company accounts for website development costs in accordance with the AICPA
Statement of Position 98-1, Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use. Website development costs consist of
external costs incurred to purchase and implement the website software and
significant enhancements used in the Company's business. These costs are
capitalized and amortized using the straight-line method over the estimated
useful life of the asset of three years. Product development costs, preliminary
project and past implementation product costs are expensed as incurred.

Advertising Costs

EyeCity's policy is to expense advertising costs as incurred. For the years
ended December 31, 2001 and 2000, advertising expense was approximately $8,000
and $173,000, respectively.

                                      F-8

<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


2.    Summary of Significant Accounting Policies (continued)

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

Income Taxes

Income taxes are provided using the liability method. Accordingly, deferred tax
assets and liabilities are recognized for future tax consequences attributable
to differences between the carrying amount of assets and liabilities for
financial statement and income tax purposes, as determined under enacted tax
laws and rates that will be in effect when the differences are expected to
reverse.

Stock-Based Compensation

EyeCity accounts for its stock-based employee compensation agreements in
accordance with the provisions of Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees, and complies with the disclosure
provisions of SFAS No. 123, Accounting for Stock-Based Compensation.

Reclassification

Certain prior year amounts have been reclassified to conform to the current year
financial statement presentation.

3.    Property and Equipment

Property and equipment consist of the following:

                                                        December 31, 2001

                     Office equipment                       $ 123,775

                  Furniture and fixtures                     20,923
Molds                                                           7,753
                                                         ------------
                                                              152,451

             Less accumulated depreciation and
                         amortization                          77,079
                                                           ----------
                                                            $  75,372

-------------------------------------------------------------------------------


                                      F-9

<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

4.    Basic and Diluted Net Loss per Share

The following sets forth the computation of basic and diluted net loss per
share:

                                                  Year ended December 31,
                                           ------------------------------------
                                                 2001                 2000
                                           -----------------    ---------------
Numerator:
  Net loss                                    $(1,168,293)        $(5,488,329)
                                              ===========         ===========

Denominator for basic and diluted net
   loss per share--weighted average shares     22,205,221           9,315,165
                                              ===========         ===========
Basic and diluted net loss per share          $      (.05)        $      (.59)
                                              ===========         ===========

The calculation of diluted net loss per share excludes the effect of employee
stock options (see Note 9), as the effect of such exercises would be
antidilutive.

5.    Subordinated Convertible Promissory Notes

During 1998, EyeCity issued $362,500 of subordinated convertible promissory
notes. The notes bear interest at 10% per annum and interest is payable
quarterly commencing January 1, 1999. The notes may be converted into shares of
EyeCity common stock at the option of the holder at a conversion price of $1.25
per share any time after October 1, 1999 (the "Conversion Date"). EyeCity has
the right to call, redeem or prepay the notes if the market price of EyeCity
common stock equals at least $2.50 per share for ten consecutive trading days at
any time after the Conversion Date. The notes are payable in 12 quarterly
principal payments commencing on October 1, 2000. EyeCity repaid $25,000 of such
notes in March 1999 and, between October 1999 and April 2000, $137,500 of such
notes were converted into 110,000 shares of EyeCity common stock. On August 3,
2000, $150,000 of the notes were converted into 300,000 shares of EyeCity common
stock resulting in an additional charge of $90,000 and 150,000 three-year
warrants exercisable at $1.00 per share valued at $6,000. The value of these
additional equity securities of $96,000 has been recorded as interest expense.
On July 18, 2001 the remaining $50,000 of the note plus accrued interest were
converted into 1,000,000 shares of EyeCity common stock



                                      F-10

<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

6. Acquisitions

EyeCity has closed on the acquisitions described below, each of which has been
accounted for as a purchase. Accordingly, the consolidated financial statements
include the operating results of each business from the respective date of
acquisition.

On April 24, 1998, EyeCity entered into a one-year agreement whereby it licensed
the use of certain patented display technology for an initial cash payment of
$10,000 and monthly payments of $350. On April 30, 1999, EyeCity acquired such
technology for a cash payment of $10,000, the issuance of 10,000 shares of
common stock and 15 monthly payments of $1,000 beginning on June 15, 1999. In
connection with the acquisition of this technology, EyeCity recorded an
intangible asset of $35,000.

On August 5, 1998, EyeCity acquired the common stock of Foggles, Inc.
("Foggles") in exchange for 214,000 shares of EyeCity's common stock. Foggles is
a distributor of specialty eyeglasses that are used in the aviation and sporting
industry. The fair value of EyeCity's common stock issued to Foggles
shareholders was approximately $165,000. The purchase has been allocated to the
assets acquired and the liabilities assumed based on the fair values at the date
of acquisition. The excess of the purchase price over the estimated fair values
of the net assets acquired of approximately $156,000 has been recorded as
goodwill.

On September 17, 1998, EyeCity acquired all the common stock of Gilead
Enterprises, Inc. ("Gilead") in exchange for 15,000 shares of EyeCity's common
stock and options to purchase 2,500 shares of common stock at an exercise price
of $3.00 per share. (The exercise price of the options was in excess of the fair
value of the common stock on the date of grant). Gilead's assets primarily
consist of a patent and trademark relating to night driving glasses. The fair
value of EyeCity's common stock and options issued to Gilead shareholders was
approximately $8,000. Accordingly, the entire purchase price of approximately
$8,000 has been recorded as intangibles.

On March 12, 1999, EyeCity acquired all of the outstanding shares of
EyeGlassPlace.com, Inc., an Internet retailer of optical products and
accessories, for 100,000 shares of EyeCity common stock. The fair value of
EyeCity's common stock issued in connection with this acquisition was
approximately $94,000. As the acquired entity had minimal operating assets and
liabilities, the entire purchase price has been recorded as goodwill. On August
5, 1999, EyeGlassPlace.com, Inc. was merged into Peeper's, Inc.

On May 7, 1999, Peeper's Sunglasses and Accessories, Inc. ("Peeper's") merged
into Peeper's, Inc., a wholly-owned subsidiary of EyeCity, for merger
consideration consisting of a cash payment of $875,000, issuance of a
non-interest bearing secured promissory note of $875,000 (see Note 7) and the
issuance of 1,210,159 shares of common stock. Peeper's is an Internet retailer
of eyewear, optical products and accessories. The total consideration paid in
connection with this merger was approximately $3,279,000 including acquisition
costs of $35,000. The merger consideration has been allocated to the assets
acquired and the liabilities assumed based on the fair values at the date of
merger. The excess of the merger consideration over the estimated fair values of
the net assets acquired of $3,151,000 has been recorded as goodwill.


                                      F-11


<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

6.    Acquisitions (continued)

In May 1999, EyeCity acquired the rights to an Internet domain name in exchange
for the issuance of 2,105 shares of common stock and a cash payment of $30,000.
The total consideration paid in connection with this acquisition was
approximately $33,000 and has been recorded as intangibles.

On June 30, 1999, SunSource Technology, Inc. ("SunSource") merged into
SunglassSite, Inc., a wholly-owned subsidiary of EyeCity. Pursuant to the
agreement, all issued and outstanding shares of SunSource common stock were
converted in exchange for the following merger consideration: cash of $212,500,
a promissory note in the amount of $212,500 (see Note 7) and the issuance of
283,334 shares of common stock; for total consideration of $979,000, including
acquisition costs of $26,000. The merger consideration has been allocated to the
assets acquired and the liabilities assumed based on the fair values at the date
of merger and, accordingly, EyeCity recorded $970,000 of goodwill. On August 5,
1999, SunglassSite, Inc. was merged into Peeper's Inc.

On September 28, 1999, EyeCity entered into an agreement with Impact EyeWear,
LLC whereby it acquired the rights, title and interest in and to certain assets,
including a merchandise license agreement with Yahoo!, Inc. for $120,000 in cash
and the issuance of 166,667 shares of EyeCity common stock. The total
consideration paid in connection with this acquisition was approximately
$646,000, including acquisition costs of $26,000 and has been recorded as
intangibles. Simultaneously, the Company entered into a distributor agreement
with Sun Optics d/b/a Insight Eyeworks, Inc. ("Insight") under which Insight
will manufacture, market and distribute the Yahoo! eyewear and eyewear
accessories. In March 2001, EyeCity and Yahoo! terminated their agreement.

On January 12, 2001, EyeCity entered into an agreement with Mr. Thralow which
cancelled the indebtedness and conveyed to Mr. Thralow the websites it had
acquired from him in1999.

The following table summarizes the intangibles recorded relating to the
above-described acquisitions:

                                                          December 31,
                                                             2001
                                                    -------------------
     Foggles, Inc.                                       $  156,000
     Gilead Enterprises, Inc.                                 8,000
     Other acquisitions                                      68,000
                                                    -------------------
                                                            232,000
     Less accumulated amortization                          225,000
                                                    -------------------
                                                         $    7,000
                                                    ===================


                                      F-12

<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

7.    Debt

EyeCity's debt obligations at December 31, 2001 are as follows:

Notes payable to vendors (1)                                     $  20,000
Seller financed acquisition and merger obligations (2)             197,500
                                                                ------------
Total                                                             $217,500
                                                                ============

(1)  In  1999,  EyeCity  issued  a  note  payable  to a  vendor  in  return  for
     advertising services. The note is payable as follows:  $1,330 on October 1,
     1999 and the  remaining  $40,000 in equal monthly  installments  of $10,000
     commencing  November 1, 1999. The outstanding  balance at December 31, 2001
     is $20,000.

(2)  In  connection  with the  merger  of  SunSource  in June 1999 (see Note 6),
     EyeCity  issued a secured  promissory  note in the amount of $212,500.  The
     note is non-interest bearing and is due upon the earlier of the anniversary
     date or the  consummation of a public offering  resulting in gross proceeds
     in excess of $10,000,000. In June 2000, EyeCity amended the note to provide
     that $3,000 of principal will be due and payable on each of the 15th day of
     the month from July  through  November  2000 and  $197,500  will be due and
     payable on December 31, 2000, provided that if EyeCity consummates a public
     or private offering of debt or equity  securities,  four percent of the net
     proceeds in excess of $2,000,000 of such offering  shall be paid on account
     of the  then  outstanding  principal  balance  of such  note.  The note now
     accrues interest at Chase Bank's prime rate.



                                      F-13

<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

8.    Stockholders' Equity

EyeCity is authorized to issue 101,000,000 shares of stock, of which 100,000,000
is designated as common stock, par value $.001 per share, and 1,000,000 is
designated as preferred stock, par value $.001 per share. As of December 31,
2001, EyeCity has not issued any shares of preferred stock.

During the year ended December 31, 2000, EyeCity sold 1,745,000 shares of its
common stock to 63 investors at a price of $1.00 per share, 50,000 shares of its
common stock at a price of $.75 per share and 680,000 shares of its common stock
at a price of $.50 per share, resulting in aggregate gross proceeds of
$2,122,500. The investors who purchased 680,000 shares of common stock at $.50
per share also received three year warrants to purchase 680,000 shares of common
stock at an exercise price of $1.00 per share.

During the year ended December 31, 2000, EyeCity issued 642,283 shares of its
common stock with a value of $409,400 in exchange for legal, accounting,
consulting and marketing services.

During the year ended December 31, 2000, holders converted $275,000 of
subordinated convertible promissory notes into 400,000 shares of EyeCity common
stock. Of the notes which were converted, $150,000 in principal was converted in
connection with an incentive offered to the holder to convert these shares. In
connection with the incentive, the holder received an aggregate of 300,000
shares of common stock and three year warrants to purchase 150,000 shares of
common stock at an exercise price of $1.00 per share. The fair value of these
additional equity securities issued is $96,000 and has been recorded as interest
expense in the third quarter.

During the year ended December 31, 2000, EyeCity issued 10,000 shares of its
common stock with a value of $10,000 in exchange for furniture and fixtures.

During the year ended December 31, 2000, EyeCity issued 30,000 shares of its
common stock with a value of $15,000 in consideration for the holder of a
promissory note agreeing to extend the maturity date of such promissory note.

During the year ended December 31, 2000, EyeCity issued 216,400 shares of its
common stock with a value of $118,128 to an investment advisor in connection
with financing transactions.

During the year ended December 31, 2000, EyeCity issued 13,600 shares of its
common stock with a value of $10,200 for salary and expenses owed to an
employee.

During the year ended December 31, 2001, EyeCity issued 2,675,000 shares of its
common stock with a value of $122,050 in exchange for legal and consulting
services.


                                      F-14

<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

8.    Stockholders' Equity (continued)

During the year ended December 31, 2001, EyeCity issued 100,000 shares of its
common stock with a value of $10,000 for salary and expenses owed to an
employee.

During the year ended December 31, 2001, EyeCity issued 825,000 shares of its
common stock as part of an agreement for cancellation of debt.

During the year ended December 31, 2001, EyeCity issued 396,500 shares of its
common stock to certain vendors in exchange for cancellation of accounts
payable.

During the year ended December 31, 2001, a holder converted $50,000 of a
subordinated convertible promissory note into 1,000,000 shares of EyeCity common
stock.

During the year ended December 31, 2001, EyeCity issued special grants of
1,350,000 shares of its common stock to investors at a price of $.01 per share.

During the year ended December 31, 2001, EyeCity issued special grants of
12,000,000 shares of its common stock to investors at a price of $.001 per
share.

During the year ended December 31, 2001, 13 holders of EyeCity's convertible
debentures converted to 29,500,000 shares of common stock at a price of $.05 per
share.

During the year ended December 31, 2001, 4,000,000 shares of EyeCity common
stock was issued incorrectly and was returned in 2002.

9. Stock Options

EyeCity has four stock option plans (the "Plans")--the 1997 Stock Option Plan
and the 2000 Stock Option Plan provides for the granting of either incentive
stock options or nonstatutory stock options, and the 1998 and 1999 Stock Option
Plans provide for the granting of nonstatutory stock options. The 1997 Plan
provides for the granting of up to 500,000 options, the 1998 and 1999 Plans each
provide for the granting of 1,500,000 options and the 2000 Plan provides for the
granting of 4,000,000 options to key employees of EyeCity (including directors
and officers) and consultants (including members of EyeCity's advisory board)
for the purchase of EyeCity common stock. Stock options granted under the Plans
may vest immediately and have a term not greater than ten years from the date of
grant or five years for a holder of more than 10% of EyeCity common stock.
Incentive stock options may be granted at an exercise price not less than the
fair market value of the underlying shares at the date of grant or for the 1997
Plan, less than 110% of the fair market value for a holder of more than 10% of
EyeCity common stock at the date of grant. The per share price of nonstatutory
stock options granted to Non-Insiders (as defined) shall be determined by the
Board of Directors. All options under the above plans have been granted at
exercise prices equal to or greater than the fair market value of the underlying
common shares at the date of grant.


                                      F-15


<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

9. Stock Options (continued)

The following table summarizes activity in stock options:

<TABLE>
<CAPTION>
                                               Year ended                            Year ended
                                            December 31, 2001                     December 31, 2000
                                            -----------------                     -----------------
                                   Shares under   Weighted Average Shares under    Weighted Average
                                    Options        Exercise Price    Options        Exercise Price
                                  ----------       --------------    -------        --------------
<S>                                <C>             <C>             <C>               <C>
Balance, beginning of year         3,135,750       $   1.27        2,577,000         $   1.99
Granted                                  --              --        1,214,750         $   1.10
Forfeitures/expirations           (1,104,250)      $   1.35         (656,000)        $   3.79
Exercised                                --              --               --               --
Balance, end of year               2,031,500       $   1.22        3,135,750         $   1.27
                                   ---------                       ---------
</TABLE>

The following tables summarize information about the stock options outstanding
at December 31, 2001:


                    Exercise           Options            Options
                      Price          Outstanding        Exercisable
                ----------------- ------------------ ------------------

                     $1.00             1,518,000         1,177,750
                     $1.10               200,000           200,000
                     $1.50                56,000            56,000
                     $1.75                60,000            60,000
                     $2.38                10,000            10,000
                     $2.44                70,000            70,000
                     $3.00               107,500           107,500
                     $4.38                 5,000             5,000
                     $4.50                 5,000             5,000
                                  ------------------ ------------------
                                       2,031,500         1,691,250
                                  ================== ==================


                                      F-16

<PAGE>



 EyeCity.com, Inc. and Subsidiaries


             Notes to Consolidated Financial Statements (continued)

10.   Commitments

Employment Contracts

On July 1, 1998, December 31, 1998 and July 1, 2000, EyeCity amended and
extended its existing employment contracts with its president and executive vice
president, respectively, through December 31, 2004. The contracts provide for
each executive to receive at an annual rate $82,500 for July 1, 1998 through
December 31, 1998; $100,000 for January 1, 1999 through June 30, 2000; and
$150,000 for July 1, 2000 through December 31, 2004. The base salary shall
automatically increase five (5%) per year commencing January 1, 2001, and may be
eligible for bonuses, at the discretion of EyeCity's Board of Directors. The
agreement with the executive vice president was terminated in 2001. Officer
salaries for 2001, 1999 and 1998 in the amount of $241,887 have been accrued at
December 31, 2001.

11.   Legal Proceedings

         EyeCity is not aware of any material adverse claims regarding any of
its trademarks or domain names with the exception of its "Peeper's" mark and
peepers.com domain name. Rights in this mark and domain name have been
challenged in an action now pending entitled American Eyewear, Inc. v. Peeper's
Sunglasses and Accessories, Inc. and EyeCity.com, Inc. which was commenced in
July 1999 in the United States District Court for the Northern District of
Texas. EyeCity was dismissed from the case and Peepers Inc. has interposed
counterclaims to limit or cancel American Eyewear's rights in the mark "Peepers"
and to preserve its rights in the "Peepers" trademark and peepers.com domain
name. However, the parties are discussing settlement. It is premature to assess
the likely outcome of the proceeding. The former owner of the Peeper's mark has
agreed to assume all future legal expenses as to this matter.

         On or about June 20, 2000, Thomas Seltzer ("Seltzer"), commenced an
action in the United States District Court for the Southern District of New York
entitled Thomas Seltzer v. Eyecity.com, Inc., Mark H. Levin and Mark Suroff,
Civ. Action No. 00-4597 (NRB) (the "Action") asserting several causes of action,
including breach of contract, fraud, negligent misrepresentation, breach of the
implied covenant of good faith and fair dealing, and unjust enrichment. Seltzer
seeks unspecified monetary damages and declaratory relief. Seltzer was the
founder and president of a company known as Impact Eyewear, LLC ("Impact"),
which EyeCity acquired in September 1999. After EyeCity acquired Impact, Seltzer
entered into an employment agreement with EyeCity and was terminated by EyeCity
on February 7, 2000. Seltzer further alleges that EyeCity breached his
employment agreement when it terminated him. EyeCity answered the complaint and
asserted counterclaims on August 7, 2000. This action was settled in May 2001
without any damages awarded against EyeCity.


                                      F-17


<PAGE>



                       EyeCity.com, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

11.   Legal Proceedings (continued)

A wholly owned  subsidiary  of EyeCity,  Peeper's was named as a defendant in an
action entitled Oakley,  Inc. v. Peeper's  Sunglasses & Accessories Inc. and Son
Dad Boards Ltd. d/b/a  Freestyle of Duluth and Larry Leege,  which was commenced
in October 1999 in the Superior Court of California, Orange County. This action,
which is principally a contract claim against the third parties,  Son Dad Boards
Ltd. and Larry  Leege,  also alleges that  Peeper's,  Inc.  interfered  with the
plaintiff's contractual  relationship with these third parties when it purchased
sunglasses from them and then re-sold the  merchandise.  This action was settled
in January 2001 without any damages awarded against EyeCity.

The Company has other asserted claims arising in the normal course of business.
The Company believes the asserted claims are without merit and the Company will
vigorously defend any litigation that is brought.

12.   Subsequent Events

During January 2002, the Company issued 15,501,000 shares of its common stock.

During February 2002, the Company acquired the majority of Instant Vision Stock
by issuing 900,000 shares of preferred stock and 8,500,000 shares of Common
Stock.

During March 2002, the Company issued 100,000 shares of its common stock in lieu
of cash payments to a certain vendor.


                                      F-18