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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

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

                                  FORM 10-K/A
                        (Amendment No. 1 to Form 10-K)

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

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

                 For the fiscal year ended December 30, 2000,

                                      OR

     [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934

                For the transition period from        to

                        Commission File Number: 0-21068

                          SIGHT RESOURCE CORPORATION
            (Exact name of registrant as specified in its charter)

                                                     04-3181524
               Delaware                 (I.R.S. Employer Identification No.)
    (State or other jurisdiction of
    incorporation or organization)



                                                        01746
   100 Jeffrey Avenue, Holliston, MA                 (Zip Code)
    (Address of principal executive
               offices)

      Registrant's telephone number, including area code: (508) 429-6916

       Securities registered pursuant to Section 12(b) of the Act: None.

         Securities registered pursuant to Section 12(g) of the Act:

                    Common stock, $.01 par value per share
                               (Title of class)

                        Preferred Share Purchase Rights
                               (Title of Class)

  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes [X]    No [_]

  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K 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-K or any
amendment to this Form 10-K.[ ]

  The aggregate market value of the registrant's voting stock held by non-
affiliates of the registrant (without admitting that any person whose shares
are not included in such calculation is an affiliate) on March 20, 2001, was
approximately $2,492,357 based on the last sale price as reported by NASDAQ.

  As of March 20, 2001, the registrant had 9,230,952 shares of common stock
outstanding, which does not include 30,600 shares held as treasury stock.

                      DOCUMENTS INCORPORATED BY REFERENCE

  None.

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                                EXPLANATORY NOTE

This Amendment No. 1 to the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 30, 2000, as filed on March 30, 2001, is filed for
the purpose of amending the following items as set forth in the pages attached
hereto:

   1. Part III. Item 10. Directors and Executive Officers of the Registrant.

   2. Part III. Item 11. Executive Compensation.

   3. Part III. Item 12. Security Ownership of Certain Beneficial Owners and
      Management.
   4. Part III. Item 13. Certain Relationships and Related Transactions.

                                       2
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                                    PART I

Item 1. Business

General

  Sight Resource Corporation (the "Company") manufactures, distributes and
sells eyewear and related products and services. As of December 30, 2000, the
Company's operations consisted of 122 eye care centers, with two regional
optical laboratories and three distribution centers, making it one of the
fifteen largest providers in the United States' primary eye care industry
based upon sales. The Company's eye care centers operate primarily under the
brand names Cambridge Eye Doctors, E.B. Brown Opticians, Eyeglass Emporium,
Vision Plaza, Vision World, Shawnee Optical and Kent Optical. The Company also
provides or, where necessary to comply with applicable law, administers the
business functions of optometrists, ophthalmologists and professional
corporations that provide vision related professional services.

Acquisition History and Strategy

  Effective January 1, 1995, the Company acquired the assets of Cambridge Eye
Associates, Inc. ("Cambridge Eye"), an optometric practice which, at December
30, 2000 operated 22 primary eye care centers, principally in Massachusetts.
The assets and liabilities of Cambridge Eye were acquired from a Company by
the same name (Cambridge Eye Associates, Inc.) owned by Elliot S. Weinstock,
O.D. as the sole stockholder. Following the acquisition, Cambridge Eye entered
into a management services contract with Optometric Providers, Inc.
("Optometric Providers"), a corporation established to employ the optometrists
previously employed by the acquired company.

  Effective July 1, 1995, the Company acquired the assets of Douglas Vision
World, Inc. ("Vision World"), a company which, at December 30, 2000, operated
seven primary eye care centers in Rhode Island. The assets and liabilities of
Vision World were acquired from a company by the same name (Douglas Vision
World, Inc.) owned by Kathleen Haronian, Lynn Haronian and Shirley Santoro.
Following the acquisition, Vision World entered into a management services
contract with Optometric Care, Inc. ("Optometric Care"), a professional
corporation established to employ the optometrists previously affiliated with
the acquired company.

  Effective July 1, 1996, the Company acquired the assets and liabilities of
three companies, the E.B. Brown Optical Company, Brown Optical Laboratories,
Inc. and E.B. Brown Opticians, Inc. (collectively, "E.B. Brown"), all owned by
Gordon and Evelyn Safran. At December 30, 2000, E. B. Brown operated 35 eye
care centers in Ohio and western Pennsylvania. Independent optometrists are
associated with most of E.B. Brown eye care centers; therefore, the Company
does not record revenue from the provision of vision related medical services
at these locations. During FY 2000, E.B. Brown entered into a management
services contract with Ohio Optometric Providers, Inc., a corporation
established to employ optometrists. The Company records revenue from the
provision of vision related medical services by optometrists employed by Ohio
Optometric Providers, Inc.

  Effective July 1, 1997, the Company acquired all of the outstanding shares
of stock of Vision Holdings, Ltd. (formerly known as Dr. Greenberg, An
Optometry Corporation d/b/a Vision Plaza) ("Vision Plaza"). At December 30,
2000, Vision Plaza operated 14 primary eye care centers and two specialty
eyewear centers in Louisiana and Mississippi. Following the acquisition,
Vision Plaza entered into a management services contract with Dr. John
Musselman, a Professional Corporation ("Musselman"), a corporation established
to employ the optometrists previously employed by the acquired company.

  Effective April 1, 1998, the Company acquired all of the outstanding shares
of stock of Eye Glass Emporium, Inc. ("Eyeglass Emporium"). At December 30,
2000 Eyeglass Emporium operated eight primary eye care centers in northwest
Indiana. Independent optometrists are associated with all Eyeglass Emporium
eye care centers, therefore, the Company does not record revenue from the
provision of vision related medical services at these locations.

                                       3
<PAGE>

  Effective January 1, 1999, the Company acquired all of the outstanding
shares of stock of Shawnee Optical, Inc. ("Shawnee"). At December 30, 2000,
Shawnee operated 11 primary eye care centers in western Pennsylvania and
central Ohio. Independent optometrists are associated with all Shawnee eye
care centers, therefore, the Company does not record revenue from the
provision of vision related medical services at these locations.

  Effective April 1, 1999, the Company acquired all of the outstanding shares
of Kent Optical, Inc. and its associated companies (collectively, "Kent"). At
December 30, 2000, Kent operated 23 eye care centers in Michigan. Kent leases
optometrists from a subcontractor and records revenue from the provision of
vision related medical services by these optometrists.

  The Company has an acquisition strategy to acquire and integrate the assets
of multi-site eye care centers and the practices of eye care professionals and
to employ or enter into management services contracts with these
professionals. This strategy includes both expanding existing regional markets
and entering new regional markets. The Company will also target acquisitions
in strategic markets that will serve as platforms from which the Company can
consolidate a given service area by making and integrating additional "in-
market" acquisitions.

  In assessing potential acquisition candidates, the Company evaluates
qualitative issues such as the reputation of the eye care professional in the
local and national marketplace, the training and education of the eye care
professional, licensure and experience, Medicare and Medicaid compliance,
billing practices and operating history. Prior to entering any market, the
Company considers such factors as the local level of eye care competition,
networking and consolidation activity, the regulatory environment, customer-
provider ratios and the economic condition of the local market. The Company
from time to time also considers acquisitions of, or affiliations with,
ambulatory surgical centers, specialty eye hospitals and other complementary
practices and services that are consistent with its objective of being a
leading integrated provider of eye care products and services in select,
regional markets.

Current Operations

 Eye Care Centers

  The Company's 122 eye care centers are located in major shopping malls,
strip shopping centers, urban locations and free-standing buildings and
generally are clustered within discrete market areas so as to maximize the
benefit of advertising strategies and to minimize the cost of supervising
operations. The Company's centers in Massachusetts, Rhode Island, Ohio and
Louisiana are leading providers of prescription and non-prescription eye care
products and services in those markets. In addition, the Company's eye care
centers in Indiana, New Hampshire, Pennsylvania, Mississippi and Michigan are
leading providers in their local markets.

  The eye care centers are substantially similar in appearance within each
region and are operated under certain uniform standards and operating
procedures. Each eye care center carries a selection of eyeglass frames,
ranging in price from value models to designer collections. Lens and frame
selections include a variety of materials and styles. The Company continually
analyzes sales of its frames to keep its eye care centers stocked with a wide
selection of the latest in eyewear fashion and a proper assortment of styles,
colors, and sizes. In addition to prescription eyewear, each eye care center
also carries fashion sunglasses and eyewear accessories. E.B. Brown's eye care
centers also offer hearing aids and audiology goods and services which are
provided by audiologists who service many of E.B. Brown's centers on a
rotating schedule.

  Each eye care center in Massachusetts, New Hampshire, Rhode Island, Indiana,
Louisiana, Mississippi, Pennsylvania and Michigan is staffed by one or more
licensed optometrists, a manager and a number of trained eye care technicians
and/or licensed opticians. The Company intends to continue to add optometrists
to several of its eye care centers in Ohio and Pennsylvania.

                                       4
<PAGE>

 Centralized Optical Laboratories and Distribution Centers

  To meet the volume needs of the eye care centers for certain prescription
eyeglass lenses and the delivery needs of each center's customers, the Company
operates two regional optical laboratories and three distribution centers. The
regional optical laboratories provide complete laboratory services to the
Company's eye care centers, including polishing, cutting and edging,
tempering, tinting and coating of ophthalmic lenses. The distribution centers
provide and maintain an inventory of all accessories and supplies necessary to
operate the primary eye care centers in their regions, as well as "ready made"
eye care products, including contact lenses and related supplies. The
inventory of eyeglass lenses, frames, contact lenses, accessories and supplies
is acquired through a number of sources, domestic and foreign. The Company is
not dependent on any one supplier. Management believes that the regional
optical laboratories and distribution centers have the capacity to accommodate
additional multi-site eye care centers.

 Management Information and Financial Systems

  In 1998, the Company completed the first stage of testing and installation
of software associated with a new point of sale system and perpetual inventory
system for its primary eye care centers, regional optical laboratories and
distribution centers. The Company completed the installation of the new point
of sale system in its New England eye care chains in the fall of 1998. In
1999, the Company completed the installation of the system in all other chains
except Shawnee and Kent and anticipates the installation of the system to be
completed in Shawnee and Kent during 2001 subject to cash availability. The
Company believes that the new system will facilitate the processing of
customer sales information and replenishment of inventory by passing such
information, including customer specific orders, to the Company's home office,
and its regional optical laboratories and distribution centers for further
processing. When the Company acquires additional eye care chains, it intends
to integrate those chains into the new system or a similar compatible system.

 Managed Primary Eye Care

  The Company implemented its SightCare program to address the expanding
enrollment of patients in managed primary eye care programs and the resulting
customer flow to designated providers of these managed primary eye care
services. SightCare is responsible for developing programs for third party
payors, securing new contracts for providing managed primary eye care
services, and ensuring the consistency and quality of managed primary eye care
products and services delivered by the Company.

  As of December 30, 2000, the Company provided managed primary eye care
benefits to more than 50 organizations in the markets served by its chains,
including private companies, unions and leading health maintenance
organizations. The Company believes that its buying power, regional
laboratories, in-center optometrists, and broad outreach within its markets,
enable it to deliver consistent, quality eyewear and primary eye care at
competitive prices, thereby positioning the Company to achieve a leadership
position in managed primary eye care in its markets.

 Management Agreements

  Many states have laws which prohibit or restrict the practice of optometry
by non-licensed persons or entities. See "Government Regulation." In states
which allow the Company to employ optometrists and ophthalmologists, the
Company plans on providing professional services directly. Otherwise, the
Company will enter into management agreements with optometrists,
ophthalmologists and/or professional corporations which will provide the
professional eye care services. The Company's wholly owned subsidiaries,
Cambridge Eye, Vision World, Vision Plaza and E.B. Brown each entered into a
management agreement with Optometric Providers, Optometric Care, Musselman and
Ohio Optometric Providers, (collectively the "PCs"), respectively.
Accordingly, Cambridge Eye operates as the management service organization
("MSO") for Optometric Providers, Vision World operates as the MSO for
Optometric Care, Vision Plaza operates as the MSO for Musselman and E.B. Brown
operates as the MSO for Ohio Optometric Providers. Cambridge Eye, Vision
World,

                                       5
<PAGE>

Vision Plaza and E.B. Brown, as MSOs, have exclusive decision making authority
for the ongoing major operations of the PCs, with the exception of the
provision of professional eye care services.

  Pursuant to these management agreements, the Company, among other things,
(i) acts as the exclusive financial manager, business manager and
administrator of all business and administrative functions and services
associated with the provision of the professional services, (ii) orders and
purchases all professional and office inventory and supplies and arranges for
the availability of the same, (iii) maintains files and records, (iv) provides
or arranges for the provision of technical and ancillary service and support
personnel, (v) establishes, operates and maintains bookkeeping, payroll,
accounting, billing and collection systems, (vi) renders advice concerning the
marketing of services, (vii) develops and administers benefit plans for the
professionals and (viii) renders such other business and financial management,
consultation and advice as may reasonably be needed from time to time by the
practice in connection with its provision of professional services. As a
result, the Company is involved in the daily on-site financial and
administrative management of these optometric practices. The Company's goals
in providing such services are to (i) improve the performance of these
optometric practices in these non-professional activities, (ii) allow the
optometrists employed by or associated with these practices to more fully
dedicate their time and efforts toward their professional practice activities,
and (iii) afford the Company expanded service capabilities, and, for itself
and on behalf of the optometric practices, capitalize on opportunities for
contracting with third party payors and their intermediaries, including
managed care providers. The management fees payable to the Company by the
affiliated practices under the management agreements vary based on the cost,
nature and amount of services provided, and may be adjustable or subject to
renegotiation from time to time. Management fees payable under existing and
future contracts are subject to the requirements of applicable laws, rules and
regulations and negotiations with individual professional practices.

  Under the management agreements, the affiliated practices retain the
responsibility for, among other things, (i) hiring and compensating
professionals, (ii) ensuring that professionals have the required licenses,
credentials, approvals and other certifications needed to perform their duties
and (iii) complying with applicable federal and state laws, rules and
regulations. In addition, the affiliated practices exclusively control all
aspects of professional practice and the delivery of professional services.

 Stock Restrictions and Pledge Agreements

  The outstanding voting capital stock of each of the PCs is 100% owned by a
licensed optometrist (the "nominee shareholder") who has, in turn, executed a
Stock Restrictions and Pledge Agreement (a "Pledge Agreement") in favor of the
respective MSO. Set forth below is a chart identifying each PC, the nominee
shareholder for each PC and the total number of employees for each PC as of
the end of fiscal 2000:

<TABLE>
<CAPTION>
                                                                      No. of
                 Name of PC                    Nominee Shareholder  Employees
                 ----------                   --------------------- ----------
<S>                                           <C>                   <C>
Optometric Providers, Inc.................... Alerino Iacobbo, O.D. 30 persons
Optometric Care, Inc......................... Alerino Iacobbo, O.D. 11 persons
Dr. John Musselman, a Professional
 Corporation.................................  John Musselman, O.D. 19 persons
Ohio Optometric Providers....................        John Cress, OD  4 persons
</TABLE>

  Through each Pledge Agreement, the nominee has pledged all of the
outstanding voting capital stock of his PC to the respective MSO. The Company
requires that a nominee shareholder execute a Pledge Agreement in order to
provide security for the prompt payment, performance and observance by the PC
of all of its obligations, debts and covenants under its management agreement
with the MSO. The Pledge Agreement also contains restrictions on the nominee
shareholder's ability to transfer the stock of the PC, in order to provide
that the stockholder will at all times be a person eligible to hold such stock
pursuant to the provisions of applicable law, the PC's Articles of
Organization and the PC's By-Laws. The Pledge Agreement may be terminated only
upon the written agreement of the parties thereto or upon the termination of
the management agreement and satisfaction in full of all of the PC's
obligations thereunder; a nominee shareholder may not unilaterally terminate a
Pledge Agreement.

                                       6
<PAGE>

  In order to provide for the orderly continuation of the PC's business and
affairs, each Pledge Agreement also enumerates several events or circumstances
that require or permit the MSO to effect a change of the nominee shareholder.
Upon the occurrence of any of the following events (each of which is
enumerated in the Company's form of Pledge Agreement), an MSO may require the
nominee stockholder to sell and transfer the stock of the PC to another person
eligible to serve as a new nominee shareholder: (i) the death or disability of
the nominee shareholder; (ii) the nominee shareholder's disqualification to
practice optometry in the relevant jurisdiction or any other event or
circumstance the effect of which is to cause the nominee shareholder to cease
being eligible to serve as the shareholder of the PC; (iii) the transfer, by
operation of law or otherwise, of the nominee shareholder's shares of stock in
the PC to a person who is not eligible to serve as the shareholder of the PC;
(iv) the termination of the nominee shareholder's employment by the PC or by
the Company (including its subsidiaries); (v) the occurrence of any other
event or the existence of any other condition which, in the reasonable opinion
of the MSO (in its capacity as exclusive business manager and administrator of
the professional corporation), impairs or renders less-than-optimal the
Company's business management and administration of all of the business and
administrative functions and services of the PC; or (vi) the occurrence of any
other event or the existence of any other condition which might require or
otherwise result in the sale or transfer by the nominee shareholder (or his
estate or personal representative) of the nominee shareholder's shares of
stock in the PC. The purchase price for a sale of the PC's stock is equal to
the aggregate book value of the PC. The Company believes that such book value
will always be a nominal cost because each PC operates and expects to continue
to operate at an almost break-even level generating a nominal profit, if any
at all, and each PC does not own or hold or plan to own or hold any
significant assets of any nature.

  The Company believes that the events or circumstances identified in clauses
items (iv) and (v) are entirely within the Company's control. For example, as
there are no employment agreements between the Company and any nominee
shareholder, each nominee shareholder is an "at-will" employee of the MSO,
whose employment can be terminated at any time, with or without cause. Either
of these events are entirely within the Company's control and, therefore,
these provisions provide the Company with the ability at all times to cause a
change in the nominee shareholder and for an unlimited number of times, at
nominal cost. These provisions meet the criteria described in footnote 1 to
EITF 97-2, so that (i) the Company can at all times establish or effect a
change in the nominee shareholder, (ii) the Company can cause a change in the
nominee shareholder an unlimited number of times, that is, changing the
nominee shareholder one or more times does not affect the Company's ability to
change the nominee shareholder again and again, (iii) the Company has the sole
discretion without cause to establish or change the nominee shareholder, (iv)
the Company can name any qualified optometrist as a new nominee shareholder
(that is, the Company's choice of an eligible nominee is not materially
limited), (v) the Company and the nominally owned entity incur no more than a
nominal cost to cause a change in the nominee shareholder and (vi) neither the
Company nor the nominally owned entity is subject to any significant adverse
impact upon a change in the nominee shareholder. The Company effected the
change of the nominee shareholder for Optometric Providers in August of 1998,
without an adverse impact on the Company or the PC. The Company does not
believe that any future change in any nominee shareholder would have a
significant adverse impact on it or any PC. To date, the Company's experience
with the nominee shareholders has been satisfactory.

 Laser Vision Correction Services

  The Company entered into a refractive laser access agreement with Laser
Vision Centers, Inc. ("LVCI") in October, 1999 in order to provide refractive
laser services to its patients. The agreement calls for LVCI to provide
Company patients with refractive laser services in conjunction with affiliated
LVCI ophthalmologists in the Company's selected markets. The Company will
provide patient pretest screening and post procedural treatment and care.

  By affiliating with the Company, LVCI benefits from the Company's ability to
acquire, counsel, and refer customers for laser vision correction ("LVC")
services through its primary eye care centers. The Company benefits from its
affiliation with LVCI by having a convenient way of participating in LVC
without incurring substantial capital expenditures.

                                       7
<PAGE>

  The Company's obligations pursuant to the agreement includes: screening
patients, pre-procedural selection and workup, post procedural treatment and
diagnostic and recuperative care. LVCI's responsibilities pursuant to the
agreement include furnishing the laser system to be used for the delivery of
LVC, maintenance, repair and upgrade of the laser system and certain training
and oversight of medical, technical, and administrative personnel involved in
delivery of the services at the center. The Company and LVCI will jointly
participate in the selection of qualified ophthalmologists and certain
marketing activities.

Marketing and Merchandising

  The Company's marketing and merchandising strategy focuses on the following
key concepts: (i) selling quality, brand name and private-label eyewear at
competitive prices, (ii) offering a wide selection of eyewear products, (iii)
offering convenient locations and hours, and in-house optometric examinations
by licensed optometrists, (iv) using a variety of media, such as radio,
newspaper, direct mail, television and yellow pages advertising, to
differentiate it from competitors and to create general consumer awareness and
traffic in its eye care centers and (v) providing knowledgeable and
personalized customer service. The Company makes use of various tools to
market its products and services:

    Advertising. The Company uses newspaper, magazine, television, radio,
  direct mail and other advertising to reach prospective, as well as
  existing, customers. Advertisements emphasize the Company's benefits to the
  eyewear public, such as value pricing, product promotions, convenience of
  location, customer service and knowledgeable salespersons. In-house
  optometric examinations by licensed optometrists are also emphasized in
  advertising, subject to regulatory requirements.

    In-center Marketing. The Company prepares and revises point-of-purchase
  displays which convey promotional messages to customers upon arriving at
  its centers. Visual merchandising techniques, educational videotapes, and
  take-home brochures are employed to draw attention to products displayed in
  the eye care centers.

    Quarterly Catalogs. The Company mails a quarterly catalog to customers
  who are in its marketing database. This database consists of individuals
  who have utilized the services of the Company and its affiliated
  professionals over the last several years. The catalog includes
  educational, promotional and marketing information about the Company's
  products and services, including LVC.

  The Company markets its comprehensive and competitively priced primary eye
care programs to leading HMOs, insurance companies and other third party
payors in the Company's regional markets. The Company's marketing strategy
towards these organizations stresses its regional coverage, its complete range
of eye care products and services and its commitment to quality and service.
Through its SightCare programs the Company has upgraded and simplified its
frame collection available to managed care organizations in order to allow it
to compete more effectively for managed care contracts. Eventually, the
Company intends to offer its SightCare programs in all of its markets.

Competition

  The Company experiences competition regarding the acquisition of the assets
of, and the provision of management services to, eye care centers and
practices. Several companies, both publicly and privately held, that have
established operating histories and greater resources than the Company are
pursuing the acquisition of the assets of general and specialty practices and
the management of such practices.

  Eye care practices affiliated with the Company will compete with other local
eye care practices as well as managed care organizations. The Company believes
that changes in governmental and private reimbursement policies and other
factors have resulted in increased competition for consumers of eye care
services. The Company believes that cost, accessibility and quality of
services are the principal factors that affect competition.

  The optical industry is highly competitive and includes chains of retail
optical stores, multi-site eye care centers, and a large number of individual
opticians, optometrists, and ophthalmologists who provide professional

                                       8
<PAGE>

services and/or dispense prescription eyewear. Optical retailers generally
serve individual, local or regional markets, and, as a result, competition is
fragmented and varies substantially among locations and geographic areas. The
Company believes that the principal competitive factors affecting retailers of
prescription eyewear are location and convenience, quality and consistency of
product and service, price, product warranties, and a broad selection of
merchandise, and that it competes favorably in each of these respects.

  The Company and its affiliated practices compete with other providers for
managed primary eye care contracts. The Company believes that trends toward
managed primary eye care have resulted in increased competition for such
contracts.

  Competition in providing LVC comes from entities similar to the Company and
from hospitals, hospital-affiliated group entities, physician group practices
and private ophthalmologists that, in order to offer LVC to existing patients,
purchase refractive lasers. Suppliers of conventional vision correction
alternatives (eyeglasses and contact lenses), such as optometric chains, may
also compete with the Company by purchasing laser systems and training
personnel to offer LVC to their customers. In certain markets, competition to
provide LVC has reduced and may continue to reduce prices for LVC, as has
happened in some countries where the treatment has been available for several
years.

Government Regulation

  The Company and its operations are subject to extensive federal, state and
local laws, rules and regulations affecting the healthcare industry and the
delivery of healthcare, including laws and regulations prohibiting the
practice of medicine and optometry by persons not licensed to practice
medicine or optometry, prohibiting control over optometrists or physicians in
the practice of optometry by parties not licensed to practice optometry or
medicine, prohibiting the unlawful rebate or unlawful division of fees and
limiting the manner in which prospective patients may be solicited. The
Company attempts to structure all of its operations so as to comply with the
relevant state statutes and regulations. The Company believes that its
operations and planned activities do not violate any applicable medical
practice, optometry practice, fee-splitting or other laws identified above.
Laws and regulations relating to the practice of medicine, the practice of
optometry, fee-splitting or similar laws vary widely from state to state and
seldom are interpreted by courts or regulatory agencies in a manner that
provides guidance with respect to business operations such as those of the
Company. There can be no assurance that courts or governmental officials with
the power to interpret or enforce these laws and regulations will not assert
that the Company or certain transactions in which it is involved are in
violation of such laws and regulations. In addition, there can be no assurance
that future interpretations of such laws and regulations will not require
structural and organizational modifications of the Company's business.

  Services that are reimbursed by third party payors may be subject to
provisions of the Social Security Act (sometimes referred to as the "anti-
kickback" statute) and similar state laws that impose criminal and civil
sanctions on persons who solicit, offer, receive, or pay any remuneration,
whether directly or indirectly, in return for inducing the referral of a
patient for treatment or the ordering or purchasing of items or services that
are paid for in whole or in part by Medicare, Medicaid or other specified
federal or state programs, or, in some states, private payors. The federal
government has promulgated regulations that create exceptions or "safe
harbors" for certain business transactions. Transactions that are structured
in accordance with such safe harbors will not be subject to prosecution under
federal law. In order to obtain safe harbor protection, the business
arrangement must satisfy each of and every requirement of the applicable safe
harbor(s). Business relationships that do not satisfy each element of a safe
harbor do not necessarily violate the anti-kickback statute but may be subject
to greater scrutiny by enforcement agencies. Many state anti-kickback statutes
do not include safe harbors and some state anti-kickback statutes apply to all
third party payors. The Company is concerned about federal and state anti-
kickback statutes only to the extent that it provides healthcare services that
are reimbursed by federal, state and in some states, private third party
payors. The Company believes its business relationships and operations are in
material compliance with applicable laws. Nevertheless, there can be no
assurance that the Company will not be required to change its practices or
experience a material adverse effect as a result of a challenge by federal or
state enforcement authorities under the foregoing statutes.

                                       9
<PAGE>

  Significant prohibitions against physician referrals have been enacted by
Congress. These prohibitions, commonly known as "Stark II," amended prior
physician self-referral legislation known as "Stark I" by dramatically
enlarging the field of physician-owned or physician-interested entities to
which the referral prohibitions apply. Effective December 31, 1994, Stark II
prohibits a physician from referring Medicare or Medicaid patients to an
entity providing "designated health services" in which the physician has an
ownership or investment interest, or with which the physician has entered into
a compensation arrangement. The designated health services include prosthetic
devices, which under applicable regulations and interpretations include one
pair of eyeglasses or contact lenses furnished after cataract surgery and
intra-ocular lenses provided at ambulatory surgery centers. The penalties for
violating Stark II include a prohibition on payment by these government
programs and civil penalties of as much as $15,000 for each violative referral
and $100,000 for participation in a "circumvention scheme." The Company's
current business is not governed by Stark I or II. To the extent the Company
or any affiliated practice is deemed to be subject to the prohibitions
contained in Stark II for services, the Company believes its activities fall
within the permissible activities defined in Stark II, including, but not
limited to, the provision of in-office ancillary services.

  The FDA and other federal, state or local governmental agencies may amend
current, or adopt new, rules and regulations that could affect the use of
ophthalmic excimer lasers for LVC and therefore adversely affect the business
of the Company.

Environmental Regulation

  The Company's business activities are not significantly affected by
environmental regulations and no material expenditures are anticipated in
order for the Company to comply with environmental regulations. However, the
Company is subject to certain regulations promulgated under the Federal
Environmental Protection Act with respect to grinding, tinting, edging and
disposing of ophthalmic lenses and solutions.

Proprietary Property

  The Company has no licenses, patents or registered copyrights. The Company
does have various registered trademarks in the U.S., including "Sight
Resource," "Cambridge Eye Doctors," "E.B. Brown Opticians," "Eyeglass
Emporium," "Kidspecs," "Shawnee Optical," "Kent Optical," "SightCare" and
"Vision Plaza."

Employees

  As of December 30, 2000, the Company had 726 employees. The Company intends
to hire additional key personnel it believes will be required for advancement
of the Company's activities.

  The success of the Company's future operations depends in large part on the
Company's ability to recruit and retain qualified personnel over time. There
can be no assurance, however, that the Company will be successful in retaining
or recruiting key personnel.

Business Risks and Cautionary Statements

  Statements in this Annual Report on Form 10-K under the captions "Business"
and "Management's Discussion and Analysis of Financial Condition and Results
of Operations," as well as oral statements that may be made by the Company or
by officers, directors or employees of the Company acting on the Company's
behalf, that are not historical fact constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors that could cause the actual results of the Company to be
materially different from the historical results or from any results expressed
or implied by such forward-looking statements. Such factors include, but are
not limited to, the risk factors set forth below.

                                      10
<PAGE>

  The Company does not intend to publicly release the result of any revisions
which may be made to any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence
of anticipated or unanticipated events.

Risks Related to our Business

  We had an accumulated deficit of $26.1 million as of December 30, 2000,
expect to continue to incur continued losses and may never achieve or maintain
profitability.

  We have experienced losses in each year of operation since inception in
November 1992 and may continue to incur significant operating losses for the
foreseeable future. For the fiscal year ended December 30, 2000, we incurred a
net loss of $5.0 million bringing our accumulated deficit to $26.1 million at
December 30, 2000. We commenced operations of multi-site eye care centers in
1995, and expanded operations with the acquisitions of Cambridge Eye
Associates, Inc., Douglas Vision World, Inc., E.B. Brown Opticians Inc.,
Eyeglass Emporium, Inc., Shawnee Optical, Inc. and Kent Optical, Inc. In view
of our limited experience operating multi-site eye care centers, managing the
practices of eye care professionals and marketing LVC services in the United
States, we may never be able to achieve profitability.

  The primary eye care market and LVC market are highly competitive. Our
current and potential competitors include many larger companies with
substantially greater financial, operating, marketing and support resources.

  We experience competition regarding the acquisition of the assets of, and
the provisions of management services to, eye care centers and practices.
Several companies, both publicly and privately held, that have established
operating histories and greater resources than we do are pursuing the
acquisition of the assets of general and specialty practices and the
management of such practices. We may not be able to compete effectively in
this regard with such competitors. Also, additional competitors may enter the
market and such competitors may make it more difficult to acquire the assets
of, and provide management services to, eye care practices on terms favorable
to us.

  The optical industry is highly competitive and includes chains of retail
optical stores, multi-site eye care centers, and a large number of individual
opticians, optometrist, and ophthalmologist who provide professional services
and/or dispense prescription eyewear. Because retailers of prescription
eyewear generally service local markets, competition varies substantially from
one location or geographic area to another. We believe that the principal
competitive factors affecting retailers of prescription eyewear are location
and convenience, quality and consistency of product and service, price,
product warranties, and a broad selection of merchandise, and that we compete
favorably in each of these respects. In our current regional markets, we face
competition from national and regional retail optical chains which, in many
cases, have greater financial resources than we do.

  LVC competes with or supplements other surgical and non-surgical treatments
for refractive disorders. Other competitive factors which may affect revenues
include performance, pricing, convenience, ease of use, success relative to
alternative treatments and patient and general market acceptance.

  We may be exposed to significant risk from liability claims if we are unable
to obtain insurance at acceptable costs or otherwise to protect us against
potential product liability claims.

  The provision of professional eye care services entails an inherent risk of
professional malpractice and other similar claims. We do not influence or
control the practice of medicine or optometry by professionals or have
responsibility for compliance with certain regulatory and other requirements
directly applicable to individual professionals and professional groups. As a
result of the relationship between our affiliated practices and us, we may
become subject to some professional malpractice actions under various
theories. Claims, suits or complaints relating to professional services
provided by affiliated practices may be asserted against us in the future.

                                      11
<PAGE>

  We may not be able to retain adequate liability insurance at reasonable
rates and our insurance may not be adequate to cover claims asserted against
us, in which event our business may be materially adversely affected.

  Our operations and success are dependent upon health care providers.

  Certain states prohibit us from practicing medicine, employing physicians to
practice medicine on our behalf or employing optometrists to render optometric
services on our behalf. Accordingly, the success of our operations as a full-
service eye care provider depends upon our ability to enter into agreements
with health care providers, including institutions, independent physicians and
optometrists, to render surgical and other professional services at facilities
owned or managed by us. We may not be able to enter into agreements with other
health care providers on satisfactory terms or such agreements may not be
profitable to us.

  We may not be able to acquire new managed primary eye care contracts and
existing contracts may not be expanded in any meaningful way.

  As an increasing percentage of optometric and ophthalmologic patients are
coming under the control of managed care entities, we believe that our success
will, in part, be dependent upon our ability to negotiate, on behalf of
existing and prospective affiliated practices, contracts with HMOs, employer
groups and other private third party payors pursuant to which services will be
provided on a risk-sharing or capitated basis by some or all affiliated
practices. The proliferation of contracts that pass much of the risk of
providing care from the payor to the provider in markets we serve may result
in greater predictability of revenues, but greater unpredictability of
expenses. We may not be able to negotiate, on behalf of the affiliated
practices, satisfactory arrangements on a risk-sharing or capitated basis. In
addition, to the extent that patients or enrollees covered by such contracts
require more frequent or extensive care than anticipated, operating margins
may be reduced or, in the worst case, the revenues derived from such contracts
may be insufficient to cover the costs of the services provided. As a result,
affiliated practices may incur additional costs, which would reduce or
eliminate anticipated earnings under such contracts. Any such reduction or
elimination of earnings would have a material adverse affect on our results of
operations.

  We are subject to extensive federal, state and local regulation, which could
materially affect our operations.

  The health care industry is highly regulated by federal, state and local
law. The regulatory environment in which we operate may change significantly
in the future. We expect to modify our agreements and operations from time to
time as the business and regulatory environment changes. Although we believe
that our operations comply with applicable law, we may not be able to address
changes in the regulatory environment successfully.

  Our common stock was delisted from the Nasdaq Stock Market, which makes it
more difficult for stockholders to sell shares of our common stock.

  On September 11, 2000, the Nasdaq National Market ("Nasdaq") terminated our
listing on Nasdaq. On September 11, 2000, our common stock began trading on
the Over-the-Counter Bulletin Board (the "OTC"). The OTC is generally
considered a less efficient market than Nasdaq. Stockholders are likely to
find it more difficult to trade our common stock on the OTC than on Nasdaq. In
order for our common stock to resume trading on Nasdaq, we must satisfy all of
Nasdaq's requirements for initial listing, apply for listing and be accepted
for listing by Nasdaq. We do not currently satisfy Nasdaq's initial listing
requirements and we are unable to determine whether we will ever be able to
satisfy Nasdaq's initial listing requirements.

  The application of the "Penny Stock Rules" could adversely affect the market
price of our common stock.

  On March 15, 2001, the last sales price of our common stock was $0.297.
Because the trading price of our common stock is less than $5.00 per share and
our common stock no longer trades on the Nasdaq National

                                      12
<PAGE>

Market, our common stock comes within the definition of a "penny stock". The
"penny stock rules" impose additional sales practice requirements on broker-
dealers who sell our securities to persons other than established customers
and accredited investors (generally those with assets in excess of $1,000,000
or annual income exceeding $200,000 or $300,000 together with their spouse).
For transactions covered by these rules, broker-dealers must satisfy certain
additional administrative criteria in order to effectuate sales of our common
stock. These additional burdens imposed on broker-dealers may restrict the
ability of broker-dealers to sell our securities and may affect your ability
to resell our common stock.

  We are dependent upon certain key management personnel and may not be able
to attract and retain additional personnel.

  Our future success is dependent in part on our ability to retain certain key
personnel. The success of future operations depends in large part on our
ability to recruit and retain qualified personnel over time. We may not be
able to retain our existing personnel or attract additional qualified
employees in the future.

Risks Related to Financing

  We may not be able to find attractive acquisition candidates and the
financing necessary for any such acquisitions may not be available.

  Our business plans include further acquisitions of entities that we believe
would strengthen our business, including, with respect to growth and
expansion, the assets of multi-site eye care centers and the practices of eye
care professionals (optometrists and ophthalmologists). The success of our
acquisition strategy is dependent, in part, on our ability to integrate and
manage acquired operations and to acquire, integrate and manage additional
operations. Although we believe that there are opportunities to acquire the
assets of small to mid-sized regional multi-site eye care centers and
professional eye care practices, such opportunities may not continue to exist.
Additionally, we may not be able to identify suitable acquisition candidates,
to finance any such acquisitions or to consummate any acquisitions on terms
favorable to us. The failure to consummate acquisitions on favorable terms
could have a material adverse effect on us. If we are able to acquire
additional operations, we may not be able to integrate and manage such
additional operations successfully. In addition, our acquisition strategy will
depend upon, among other factors, our ability to effect economies of scale and
realize other efficiencies.

  We have incurred significant expenses to date and will require additional
financing, which may be difficult to obtain and may dilute any ownership
interest in us. Our independent auditors have expressed substantial doubt
about our ability to continue as a going concern.

  We have incurred, and anticipate that we will incur, substantial
acquisition, capital and operating expenses and that we will be required to
make substantial cash disbursements, including expenses and disbursements
related to acquisitions, marketing, additional personnel and business
development. We expect these expenses to result in significant operating
losses for at least the foreseeable future and until such time, if ever, that
we are able to attain adequate revenue levels. Even if we are able to generate
a positive cash flow from operations, we may require substantial capital to
establish additional eye care centers or to otherwise fund operations. Such
additional capital may not be available when needed or on terms acceptable to
us. We may need to seek additional capital through public or private sales of
securities, including equity securities. Insufficient funds may require us to
delay, scale back or eliminate certain or all of our operations and
development activities. In addition, in their report on our consolidated
financial statements, our independent auditors have expressed substantial
doubt about our ability to continue as a going concern.

  We have previously breached certain loan covenants for which waivers of such
breaches have been granted, but we may not be able to obtain waivers of any
future breaches of loan covenants that may occur, which could result in a
default under our loan agreements.

  At December 30, 2000, we were in default for non-compliance with certain
negative covenants contained in an agreement that modified a 1999 Credit Line
Agreement between a bank and us. Under the credit line, we may

                                      13
<PAGE>

borrow up to $10 million, of which $7 million is on a term loan basis and $3
million is on a revolving line of credit. The defaulted covenants relate to
minimum net worth, minimum debt service coverage, maximum funded debt service
coverage and minimum net profit. On March 26, 2001, we entered into a Third
Modification Agreement with the bank to waive our default, to adjust or delete
certain covenants to which we were subject, to change the repayment terms and
to extend the maturity date of the loans to December 31, 2002. Although we
have obtained waivers from our bank for all breaches of loan covenants to
date, we have not received waivers for any future breaches that may occur. Any
breach that is not waived may result in the bank declaring the breach to be a
default under the loan agreement, which would require immediate repayment of
all outstanding principal and accrued interest at a time when we may not be
able to repay the bank. Accordingly, the declaration of default under the loan
agreement could materially and adversely affect our business and financial
condition.

Corporate Liability and Insurance

  The provision of professional eye care services entails an inherent risk of
professional malpractice and other similar claims. The Company does not
influence or control the practice of medicine or optometry by professionals or
have responsibility for compliance with certain regulatory and other
requirements directly applicable to individual professionals and professional
groups. As a result of the relationship between the Company and its affiliated
practices, the Company may become subject to some professional malpractice
actions under various theories. There can be no assurance that claims, suits
or complaints relating to professional services provided by affiliated
practices will not be asserted against the Company in the future. The Company
believes that the providers with which the Company enters into LVC center
agreements or other strategic affiliation agreements are covered by such
providers' professional malpractice or liability insurance. The Company may
not be able to purchase professional malpractice insurance, and may not be
able to purchase other insurance at reasonable rates, which would protect it
against claims arising from the professional practice conducted by providers.
Similarly, the use of laser systems in the Company's LVC centers may give rise
to claims against the Company by persons alleging injury as a result of the
use of such laser systems. The Company believes that claims alleging defects
in the laser systems it purchases from its suppliers are covered by such
suppliers' product liability insurance and that the Company could take
advantage of such insurance by adding such suppliers to lawsuits against the
Company. There can be no assurance that the Company's laser suppliers will
continue to carry product liability insurance or that any such insurance will
be adequate to protect the Company.

  The Company maintains insurance coverage that it believes will be adequate
both as to risks and amounts. The Company believes that such insurance will
extend to professional liability claims that may be asserted against employees
of the Company that work on site at affiliated practice locations. In
addition, pursuant to the management agreements, the affiliated practices are
required to maintain professional liability and comprehensive general
liability insurance. The availability and cost of such insurance has been
affected by various factors, many of which are beyond the control of the
Company and its affiliated practices.

  There can be no assurance that the Company will be able to retain adequate
liability insurance at reasonable rates, or that the insurance will be
adequate to cover claims asserted against the Company, in which event the
Company's business may be materially adversely affected.

Item 2. Description of Properties

  At December 30, 2000, the Company leased space for 123 of the Company's
operating eye care centers (which range in size from approximately 600 to
6,200 square feet), closed centers, and other office space under operating
leases, which expire as follows, exclusive of renewal options.

                                      14
<PAGE>

<TABLE>
<CAPTION>
                                                             At 12/30/2000
   Year                                                Number of Leases Expiring
   ----                                                -------------------------
   <S>                                                 <C>
   2001...............................................             25
   2002...............................................             21
   2003...............................................             21
   2004...............................................             23
   2005...............................................             16
   2006 and thereafter................................             17
</TABLE>

  In addition, the Company is currently in lease negotiations or is an at will
tenant for three eye care centers.

  The Company's corporate headquarters, and distribution center occupy
approximately 22,000 square feet of space leased in an industrial complex in
Holliston, Massachusetts pursuant to a lease which expires in 2004. The
Company believes that its facilities are adequate for its present needs and
that suitable space will be available to the Company upon commercially
reasonable terms to accommodate future needs.

Item 3. Legal Proceedings

  From time to time the Company's subsidiaries may be defendants in certain
lawsuits alleging various claims incurred in the ordinary course of business.
These claims are generally covered by various insurance policies, subject to
certain deductible amounts and maximum policy limits. In the opinion of
management, the resolution of existing claims should not have a material
adverse effect, individually or in the aggregate, upon the Company's business
or financial condition.

  There can be no assurance that future claims against the Company or any of
its subsidiaries will not have a material adverse effect on the Company, its
operations or financial condition.

Item 4. Submission of Matters to a Vote of Security Holders

  No matters were submitted to a vote of security holders during the quarter
ended December 30, 2000.

                                      15
<PAGE>

                                    PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Market for Company's Common Equity

  The Company's Common Stock traded on the NASDAQ National Market ("Nasdaq")
under the symbol "VISN" from August 25, 1994 until September 10, 2000, at
which time Nasdaq terminated the Company's listing on Nasdaq. On September 11,
2000, the Company's Common Stock began trading on the Over-the-Counter
Bulletin Board under the symbol "VISN". The following table sets forth the
high and low sales prices for the Common Stock as reported by Nasdaq for the
period from January 3, 1999 until September 10, 2000, and the high and low bid
prices for the Common Stock as reported on the Over-the-Counter Bulletin Board
("OTC") for the period from September 11, 2000 until December 30, 2000. Over-
the-counter market quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not necessarily represent actual
transactions.

<TABLE>
<CAPTION>
                                                                   Common Stock
                                                                   ------------
                                                                   High   Low
                                                                   ----- ------
   <S>                                                             <C>   <C>
   2000:
     First Quarter................................................ $2.75 $ 1.00
     Second Quarter...............................................  1.50   .688
     Third Quarter (on Nasdaq through September 10, 2000).........  1.00   .313
     Third Quarter (on the OTC commencing September 11, 2000).....   .50   .375
     Fourth Quarter...............................................  .375   .063
   1999:
     First Quarter................................................ $3.25 $ 2.00
     Second Quarter............................................... 4.938   2.50
     Third Quarter................................................ 4.875   2.50
     Fourth Quarter............................................... 3.375  1.875
</TABLE>

  The Company has not paid dividends to its common stockholders since its
inception and does not plan to pay cash dividends in the foreseeable future.
The Company's bank agreement prohibits payment of dividends. The Company
currently intends to retain earnings, if any, to finance the growth of the
Company. As of March 20, 2000, there were 208 holders of record of the
Company's Common Stock. There are approximately 3,000 beneficial owners of the
Company's Common Stock.

                                      16
<PAGE>

Item 6. Selected Financial Data

<TABLE>
<CAPTION>
                                             Year Ended December
                               -------------------------------------------------
                                2000    1999(1,2) 1998(3)  1997(4,5,6) 1996(6,7)
                               -------  --------- -------  ----------- ---------
                                  (In thousands, except per share amounts)
<S>                            <C>      <C>       <C>      <C>         <C>
Statement of Operations Data:
  Net revenues...............  $64,219   $67,034  $54,971    $44,576    $29,987
  Net loss...................   (5,004)   (2,854)    (985)    (2,004)    (5,850)
  Net loss per common share..    (0.55)    (0.30)   (0.11)     (0.46)     (0.78)
  Weighted average number of
   common shares
   outstanding...............    9,228     9,181    8,867      8,669      7,523
Balance Sheet Data:
  Working capital (deficit)..  $(6,276)  $ 1,088  $ 3,176    $ 4,243    $ 7,774
  Total assets...............   35,139    40,754   32,145     34,507     31,430
  Non-current liabilities....    6,326     6,989      348        101      1,876
  Stockholders' equity.......   12,299    17,349   18,959     19,446     22,766
</TABLE>
--------
1.  Effective April 1, 1999, the Company acquired all of the outstanding
    shares of stock of Kent Optical, Inc. and its associated companies
    (collectively, "Kent"). The purchase price paid in connection with this
    acquisition was $5,209 in cash, $1,000 in notes payable over three years
    and 160,000 shares of common stock. With respect to the shares issued, the
    Company agreed to issue additional consideration if the per share market
    price of the Company's common stock did not exceed a specified threshold
    during an agreed upon time frame. The Company anticipates issuing shares
    of its common stock as additional consideration in connection with such
    contingent obligations incurred in the acquisition. At December 30, 2000,
    Kent operated 23 eye care centers in Michigan.
2.  Effective January 1, 1999, the Company acquired all of the outstanding
    shares of stock of Shawnee Optical, Inc. ("Shawnee"). The purchase price
    paid in connection with this acquisition was $1,750 in cash, $300 in notes
    payable over three years and 70,000 shares of common stock. With respect
    to the shares issued, the Company agreed to issue additional consideration
    if the per share market price of the Company's common stock did not exceed
    a specified threshold during an agreed upon time frame. On March 20, 2001,
    the Company entered into a Settlement Agreement and Mutual Release with
    the Shawnee stockholders in which the Company agreed to issue 238,000
    shares of its common stock as additional consideration in connection with
    such contingent obligations incurred in the acquisition. At December 30,
    2000, Shawnee operated 11 eye care centers in Pennsylvania and Ohio.
3.  Effective April 1, 1998, the Company acquired all of the outstanding
    shares of stock of Eye Glass Emporium, Inc. ("Eyeglass Emporium"). The
    purchase price paid in connection with this acquisition was $2,309 in
    cash, $350 in notes payable in twelve equal quarterly installments
    commencing June 30, 1998 and 87,940 shares of common stock. At December
    30, 2000, Eyeglass Emporium operated eight eye care centers in Indiana.
4.  Effective July 1, 1997, the Company acquired all of the outstanding shares
    of stock of Vision Holdings, Ltd. (formerly known as Dr. Greenberg, An
    Optometry Corporation d/b/a/ Vision Plaza) ("Vision Plaza"). At December
    30, 2000, Vision Plaza operated 14 primary eye care centers and two
    specialty eyewear centers in Louisiana and Mississippi. Following the
    acquisition, Vision Plaza entered into a management services contract with
    Dr. John Musselman, a Professional Corporation ("Musselman"), a
    corporation established to employ the optometrists previously employed by
    the acquired company.
5.  The net loss per share in 1997 includes a $1,953 dividend to the preferred
    stockholders as discussed in Note 9 of the Notes To Consolidated Financial
    Statements.
6.  Includes a $110 provision for store closings and $400 write off of
    software development costs in 1997 and a $2,622 provision for impairment
    of ophthalmic equipment in 1996.
7.  Effective July 1, 1996, the Company purchased certain assets and assumed
    certain liabilities of The E.B. Brown Optical Company and Brown Optical
    Laboratories, Inc. and acquired by merger E.B. Brown Opticians, Inc.
    (collectively, "E.B. Brown"). At December 30, 2000, E.B. Brown operated 35
    eye care centers located throughout Ohio and western Pennsylvania.

                                      17
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation

Overview

  Sight Resource Corporation (the "Company") manufactures, distributes and
sells eyewear and related products and services. As of December 30, 2000, the
Company's operations consisted of 122 eye care centers, two regional optical
laboratories and three distribution centers, making it one of the fifteen
largest providers in the United States primary eye care industry based upon
sales. The Company's eye care centers operate primarily under the brand names
Cambridge Eye Doctors, E.B. Brown Opticians, Eyeglass Emporium, Vision Plaza,
Vision World, Shawnee Optical, and Kent Optical. The Company also provides, or
where necessary to comply with applicable law administers the business
functions of optometrists, ophthalmologists and professional corporations that
provide, vision related professional services.

  The Company operates two regional optical laboratories and three
distribution centers. The regional optical laboratories provide complete
laboratory services to the Company's eye care centers, including polishing,
cutting and edging, tempering, tinting and coating of ophthalmic lenses. The
distribution centers provide and maintain an inventory of all accessories and
supplies necessary to operate the primary eye care centers in their regions,
as well as "ready made" eye care products, including contact lenses and
related supplies. The inventory of eyeglass lenses, frames, contact lenses,
accessories and supplies is acquired through a number of sources, domestic and
foreign. Management believes that the regional optical laboratories and
distribution centers have the capacity to accommodate additional multi-site
eye care centers.

  The Company's results of operation include the accounts of the Company, its
wholly-owned subsidiaries and four professional corporation's ("PCs") in which
the Company's subsidiaries assume the financial risks and rewards of such
entities. The Company has no direct equity ownership in the PCs since the
outstanding voting capital stock of each of the PCs is 100% owned by a
licensed optometrist (the "nominee shareholder") who has, in turn, executed a
Stock Restrictions and Pledge Agreement (a "Pledge Agreement") in favor of a
subsidiary of the Company. Each Pledge Agreement contains provisions that
provide the Company with the ability at all times to cause a change in the
nominee shareholder and for an unlimited number of times, at nominal cost. For
example, if (i) the employment of the nominee shareholder is terminated by the
PC or by the Company (including its subsidiaries) or (ii) the Company
determines that the nominee shareholder is impairing or rendering less-than-
optimal the Company's business management and administration of the PC, then
the Company has the right to require the existing nominee shareholder to sell
all of the outstanding stock of the PC to another person eligible to serve as
a new nominee shareholder. The purchase price for a sale of the PC's stock is
equal to the aggregate book value of the PC, which will always be a nominal
cost because each PC operates and expects to continue to operate at an almost
break-even level generating a nominal profit, if any at all. See "Business--
Stock Restrictions and Pledge Agreements."

Results of Operations 2000 as compared with 1999

  Net Revenue. The Company generated net revenue of approximately $64.2
million during the year ended December 30, 2000 from the operation of its 122
eye care centers and laser vision correction affiliation as compared to net
revenue of approximately $67.0 million from the operation of its 130 eye care
centers and two laser vision correction centers in the United States for the
same period in 1999. The $2.8 million or 4.2% decrease in total net revenue
for the year ended December 30, 2000 relates primarily to lower average net
sales per store, lower laser vision revenues and the closing of eight stores
net of store additions. The decrease was partially offset by the fifty-three
week fiscal period ended December 30, 2000 as compared to the fifty-two week
fiscal period ended December 25, 1999 and also offset somewhat by the
additional 37 eye care centers acquired since April 1, 1999. The financial
impact of the extra week in the current year was approximately an additional
$1.2 million of net revenue.

  Cost of Revenue. Cost of revenue decreased to approximately $20.9 million
for the year ended December 30, 2000 as compared to $22.8 million for the year
ended December 25, 1999. Cost of revenue

                                      18
<PAGE>

decreased as a percentage of net revenue to 32.6% for the year ended December
30, 2000 from 34% for the year ended December 25, 1999. The improvement as a
percentage of net revenue primarily reflects the realization of purchase
economies, consolidation of optical laboratory operations, less sales price
discounting, and, to a lesser extent, small retail price increases.

  Selling, General and Administrative Expense. Selling, general and
administrative expenses were approximately $46.2 million and $46.1 million for
the years ended December 30, 2000 and December 25, 1999, respectively. The
increase relates primarily to inflationary pressures that increased payroll
and occupancy costs, facility costs incurred in operating additional eye care
centers acquired since April 1, 1999, and the fifty-three week fiscal period
in 2000 as compared to the prior year fifty-two week fiscal period, offset
almost entirely by reductions in bad debts, lower marketing expenditures and
reduced staffing levels.

  Other Income and Expense. Interest income decreased to approximately $52,000
from $82,000 for the years ended December 30, 2000 and December 25, 1999,
respectively. This decrease resulted from the investment of a lower average
cash and cash equivalents balance during 2000 as compared to 1999. Interest
expense increased to approximately $1.2 million from $641,000 for the years
ended December 30, 2000 and December 25, 1999, respectively. The increase is
associated with a higher average balance of debt outstanding, higher average
interest rates and higher debt fees during 2000 as compared to 1999. Net
disposition of assets in the year 2000 resulted in a loss of $105,000 as
compared to a gain of $16,000 in 1999. The non-cash write off of deferred
financing costs in 2000 of approximately $60,000 as required by generally
accepted accounting principles were related to the execution of a loan
modification agreement with Fleet National Bank dated March 31, 2000. The non-
cash write off of deferred financing costs in 1999 of approximately $323,000
was related to the execution of a new credit facility with Fleet National Bank
in April of 1999. The reserve for notes receivable of $714,000 in the year
2000 resulted from the Company providing a reserve for the amount of a note
due from a former employee and current member of the Board of Directors.

  Net Loss. The Company realized a net loss of approximately $5.1 million
($0.55 per share) and $2.9 million ($0.30 per share) for the years ended
December 30, 2000 and December 25, 1999, respectively.

Results of Operations 1999 as compared with 1998

  Net Revenue. The Company generated net revenue of approximately $67.0
million during the year ended December 25, 1999 from the operation of its 130
eye care centers and two laser vision correction centers in the United States
as compared to net revenue of approximately $55.0 million from the operation
of its 93 eye care centers and two laser vision correction centers in the
United States for the same period in 1998. Of the $12.0 million (or 21.8%)
increase in net revenue for the year ended December 25, 1999 as compared to
the year ended December 31, 1998, $4.2 million (or 7.6%) relates to the
additional nine eye care centers acquired effective January 1, 1999. The
remaining increase of $7.8 million (or 14.2%) relates primarily to the
additional 29 Kent Optical Eye Care Centers acquired effective April 1, 1999.
Sales in eye care centers, excluding acquisitions, were essentially flat
compared to the prior year.

  Cost of Revenue. Cost of revenue increased to approximately $22.8 million
for the year ended December 25, 1999, as compared to $19.0 million for the
year ended December 31, 1998. Cost of revenue decreased as a percentage of net
revenue from 34.5% for the year ended December 31, 1998, to 34% for the year
ended December 25, 1999. The improvement as a percentage of net revenue
primarily reflects the realization of purchase economies, less sales price
discounting, and, to a lesser extent, some small retail price increases
partially offset by promotional discounts. Cost of revenue for the years ended
December 25, 1999 and December 31, 1998 principally consisted of (i) the cost
of manufacturing, purchasing and distributing optical products to its
customers and (ii) the cost of delivering LVC, including depreciation and
maintenance on excimer lasers.

  In December 1999, the Company discontinued the operations of an optical
laboratory operated by Cambridge Eye Doctors in Holliston, Massachusetts and
an optical laboratory operated by Vision Plaza in

                                      19
<PAGE>

Metairie, Louisiana and consolidated those operations with Cleveland, Ohio and
Muskegon, Michigan in order to reduce the cost of revenue.

  Selling, General and Administrative Expense. Selling, general and
administrative expenses were approximately $46.1 million and $37.0 million for
the years ended December 25, 1999 and December 31, 1998, respectively. The
increase primarily relates to payroll and facility costs incurred in operating
additional eye care centers acquired effective January 1, 1999 and April 1,
1999. Selling, general and administrative expense, as a percentage of net
revenue, increased to 68.8% for the year ended December 25, 1999, as compared
to 67.3% for the year ended December 31, 1998. This increase is primarily a
result of our Vision Plaza and E.B. Brown operations, and a charge for
allowance of doubtful accounts of $1.23 million primarily for older
receivables taken during the year as compared to the prior year allowance for
doubtful accounts of $0.458 million.

  Other Income and Expense. Interest income decreased to approximately $82,000
from $184,000 for the years ended December 25, 1999 and December 31, 1998,
respectively. This decrease resulted from the investment of a lower average
cash and cash equivalents balance during 1999 as compared to 1998. Interest
expense increased to approximately $641,000 from $201,000 for the years ended
December 25, 1999 and 1998, respectively. The increase is associated with a
higher average balance of debt outstanding during 1999 as compared to 1998.
The sale of certain ophthalmic equipment during 1998 generated a gain of
approximately $158,000. Disposal of equipment during 1999 generated a gain of
$16,000. The Company sold one excimer laser system in 1999 and sold two
excimer laser systems in 1998. At December 25, 1999, the Company owned one
laser system and no longer operated any laser vision correction centers,
having closed its last two remaining centers in August and December, 1999. At
December 31, 1998, the Company owned two laser systems and operated two laser
vision correction centers. In 1999, the Company incurred a $323,000 non-cash
write-off of deferred financing costs associated with the Company's prior
credit facility.

  Net Loss. The Company realized a net loss of approximately $2.9 million
($0.30 per share) and $1.0 million ($0.11 per share) for the years ended
December 25, 1999 and December 31, 1998, respectively.

Liquidity and Capital Resources

  At December 30, 2000, the Company had approximately $0.5 million in cash and
cash equivalents and a working capital deficit of approximately $(6.3) million
in comparison to approximately $0.2 million in cash and cash equivalents and
working capital of approximately $1.0 million as of December 25, 1999. The
decrease in working capital is primarily due to the bank debt of $5.9 million
which was classified on December 30, 2000 as current with a maturity date of
March 31, 2001, but which has since been extended to December 31, 2002
pursuant to the terms of the Third Modification Agreement discussed below. The
Company will need to raise substantial additional funds in the near term and
may seek to raise those fund through additional financings, including public
or private equity offerings. There can be no assurance that funds will be
available on terms acceptable to the Company, if at all. If adequate funds are
not available, the Company may be required to limit its operations, which
would have a material and adverse affect on the Company. In addition, in its
report on our consolidated financial statements, the Company's independent
auditors have expressed substantial doubt about the Company's ability to
continue as a going concern.

  On March 26, 2001, we entered into a Third Modification Agreement (as
defined below) with Sovereign Bank of New England that, among other things,
extends the maturity date of the loans to December 31, 2002. The Third
Modification Agreement requires that the Company obtain equity financing in
the amount of $1.0 million on or before May 31, 2001.

  Effective January 1, 1999, the Company acquired all of the outstanding
shares of capital stock of Shawnee Optical, Inc. ("Shawnee"). The purchase
price paid in connection with this acquisition was $1.75 million in cash, $0.3
million in notes payable over three years and 70,000 shares of common stock.
In addition, the Company agreed to issue additional consideration to the
Shawnee stockholders if the market price of the Company's common stock did not
equal or exceed $5.00 per share at any time during the period from January 22,

                                      20
<PAGE>

2000 to January 22, 2001. The market price of the Company's common stock did
not equal or exceed $5.00 during such period. The amount of additional
consideration due to the Shawnee stockholders for each share of common stock
issued in the acquisition and held by them on January 22, 2001 is equal to the
difference between $5.00 and the greater of (a) the Market Price on January
22, 2001 or (b) $2.45. As of January 22, 2001, the aggregate additional
consideration estimated to be payable to the Shawnee sellers was $178,500. At
the Company's option, the additional consideration may be paid to the Shawnee
stockholders in cash or in additional shares of the Company's common stock
valued at its market price on the date that the additional consideration
becomes payable to the Shawnee stockholders. As a result of the Company's
obligation to issue additional consideration to the Shawnee stockholders, on
March 20, 2001, the Company entered into a Settlement Agreement and Mutual
Release with the Shawnee stockholders in which the Company agreed to issue
238,000 shares of its common stock to the Shawnee stockholders. At the time of
the acquisition, the Company included the value of this additional
consideration in its determination of the purchase price.

  Effective April 1, 1999, the Company acquired all of the outstanding shares
of capital stock of Kent Optical Company and its associated companies
(collectively, "Kent"). The purchase price paid in connection with this
acquisition was $5.209 million in cash, $1.0 million in notes payable over
three years and 160,000 shares of common stock. In addition, the Company
offered to issue additional consideration to the Kent shareholders if the
market price of the Company's common stock did not equal or exceed $5.00 per
share at any time during the period from April 23, 2000 to April 23, 2001. The
market price of the Company's common stock has not equaled or exceeded $5.00
per share since April 23, 2000. The amount of additional consideration due to
the Kent stockholders for each share of common stock issued in the acquisition
and held by them on April 23, 2001 is equal to the difference between $5.00
and the greater of (a) the market price of the common stock on April 23, 2001
or (b) $2.73. The Company anticipates that the aggregate additional
consideration estimated to be payable to the Kent sellers on April 23, 2001
will be $363,200. At the Company's option, the additional consideration may be
paid to the Kent stockholders in cash or in additional shares of the Company's
common stock valued at the its market price on the date that the additional
consideration becomes payable to the Kent stockholders. At the time of
acquisition, the Company included the value of this additional consideration
in its determination of the purchase price.

  In connection with the exercise of stock options to purchase 138,332 shares
(the "Option Shares") of the Company's common stock during fiscal 1997,
Stephen M. Blinn, a former executive officer and current Director of the
Company, executed a promissory note (the "Note") in favor of the Company for
the aggregate exercise price of $594,111. The Note is due on the earlier of
September 2, 2007 or the date upon which Mr. Blinn receives the proceeds of
the sale of not less than 20,000 of the Option Shares (the "Maturity Date").
Interest accrues at the rate of 6.55%, compounding annually, and is payable on
the earlier of the Maturity Date of the Note or upon certain Events of Default
as defined in the Note. The principal balance of the Note, together with
accrued and unpaid interest, was approximately $714,000 as of December 30,
2000. During the third quarter of fiscal 2000, Mr. Blinn has informed the
Company that he understood that the terms of the Note permitted Mr. Blinn to
satisfy in full his obligations under the Note by either (a) returning the
Option Shares to the Company or (b) turning over to the Company any cash
proceeds received by Mr. Blinn upon a sale of the Option Shares. The Company
has informed Mr. Blinn that the Note is a full recourse promissory note, and
that Mr. Blinn remains personally liable for all unpaid principal and interest
under the Note. Due to Mr. Blinn's position regarding the Note and his failure
to provide the Company or the Company's accountants with a copy of his
personal financial statements or any other evidence of his ability to pay the
amounts due under the Note, the Company has established a $714,000 reserve for
notes receivable and, subsequent to the establishment of the reserve, the
Company no longer recognizes as interest income accrued interest related to
the Note.

  As of December 30, 2000, the Company had warrants outstanding which provide
it with potential sources of financing as outlined below. However, because of
the current market value of the Company's common stock, it is unlikely that
any subsequent proceeds may be realized by the Company.

                                      21
<PAGE>

<TABLE>
<CAPTION>
                                                                     Potential
                          Securities                         Number   Proceeds
                          ----------                         ------- ----------
   <S>                                                       <C>     <C>
   Class II Warrants........................................ 290,424 $2,613,816
   Bank Austria AG, f/k/a Creditanstalt, Warrants........... 150,000    693,750
   Representative Warrants.................................. 170,000  1,436,500
   Sovereign Warrants.......................................  50,000     25,500
   Sovereign Warrants.......................................  50,000      7,810
                                                             ------- ----------
                                                                     $4,777,376
                                                                     ==========
</TABLE>

  The Company also has outstanding 284,291 Class I Warrants. The Class I
Warrants entitle the holder to purchase an amount of shares of the Company's
common stock equal to an aggregate of up to 19.9% of the shares of common
stock purchasable under the Company's outstanding warrants and options on the
same terms and conditions of existing warrant and option holders. The
purchaser is obligated to exercise these warrants at the same time the options
and warrants of existing holders are exercised, subject to certain
limitations. The amount of proceeds from the exercise of these Class I
Warrants cannot be estimated at this time; however, for reasons stated above,
it is unlikely that any proceeds would be realized by the Company.

  On February 20, 1997, the Company entered into a Credit Agreement (the "1997
Agreement") with a bank pursuant to which the Company could borrow up to $5.0
million on a term loan basis and up to $5.0 million on a revolving credit
basis subject to certain performance criteria. As part of the Agreement, the
Company issued to the bank warrants to purchase 150,000 shares of the
Company's common stock at a purchase price of $4.625 per share. The warrants
expire on December 31, 2003. As noted in the following paragraph, the Company
has entered into a new credit facility and retired the 1997 Agreement.

  On April 15, 1999, the Company entered into a credit agreement (the "1999
Agreement") with Fleet National Bank ("Fleet") pursuant to which the Company
could borrow $10.0 million on an acquisition line of credit, of which $7.0
million is on a term loan basis and $3.0 million is on a revolving line of
credit basis, subject to certain performance criteria and an asset-related
borrowing base for the revolver. The performance criteria include, among
others, financial condition covenants such as net worth requirements,
indebtedness to net worth ratios, debt service coverage ratios, funded debt
coverage ratios, and pretax profit, net profit and EBITDA requirements. The
acquisition line facility bore interest at either Fleet's prime rate, or LIBOR
plus 2.25%, or at a comparable interest swap rate at the Company's election.
The term loan facility bore interest at LIBOR plus 2.25% or at a comparable
interest swap rate at the Company's election. The revolving credit facility
bore interest at Fleet's prime rate or LIBOR plus 2.0% at the Company's
election. As of December 30, 2000, $5.9 million was borrowed on the term loan
and $2.5 million was borrowed on the revolving credit facility.

  At December 25, 1999, the Company was not in compliance with the following
financial covenants of the 1999 Agreement: minimum net worth, minimum debt
service coverage, maximum funded debt service coverage and minimum net profit.
However, on March 31, 2000, the Company and Fleet entered into a modification
agreement (the "Original Modification Agreement") that amended the 1999
Agreement in order to, among other things, waive the Company's default, adjust
certain covenants to which the Company is subject and terminate the
acquisition line of credit. In addition, the Original Modification Agreement
limited the revolving line note to $2.5 million and the term loan to $6.75
million and established the maturity date for each of these credit lines as
March 31, 2001. Also, the Original Modification Agreement established the
following interest rates for both the revolving line note and term loan: (i)
from March 31, 2000 through August 31, 2000--prime rate plus 1.0%; (ii) from
September 1, 2000 through October 31, 2000--prime rate plus 2.0%; and (iii)
from November 1, 2000 through March 31, 2001--prime rate plus 3.0%. The
scheduled monthly principal payments for the term loan have been adjusted to
$83,333.33 from April, 2000 through July, 2000, $100,000.00 from August, 2000
through December, 2000 and $125,000.00 from January, 2001 through March, 2001.
As part of the Original Modification Agreement, the Company issued to Fleet
warrants to purchase 50,000 shares of the Company's common stock at an
exercise price of $0.51 which was equal to the average closing price of the
common stock for the last five trading days for the month of August of 2000,
and warrants to purchase 50,000 shares of the Company's common

                                      22
<PAGE>

stock at an exercise price of $0.156 which was equal to the average closing
price of the Company's common stock for the last five trading days for the
month of December of 2000. In August 2000, as a result of a bank merger,
Sovereign Bank of New England ("Sovereign") became the successor party to
Fleet in the Original Modification Agreement.

  In November of 2000, the Company and Sovereign entered into a second
modification agreement (the "Second Modification Agreement") that amended the
terms of the Original Modification Agreement in order to, among other things,
defer certain payments required under the term note and amend certain terms
and conditions of the 1999 Agreement. Sovereign deferred the required
principal payments due on December 1, 2000 in the amount of $100,000 and on
January 1, 2001 in the amount of $125,000 until March 1, 2001 and March 22,
2001, respectively. At December 30, 2000, the Company was in default for non-
compliance with certain negative covenants contained in the Second
Modification Agreement relating to minimum net worth, minimum debt service
coverage, maximum funded debt service coverage and minimum net profit.

  On March 26, 2001, the Company and Sovereign entered into the Third
Modification Agreement (the "Third Modification Agreement") that amended the
terms of the Original Modification Agreement and the Second Modification
Agreement in order to, among other things, waive the Company's default, adjust
or delete certain covenants to which the Company was subject, change the
repayment terms and extend the maturity date of the loans to December 31,
2002. In addition, the Third Modification Agreement requires that the Company
close an equity financing of at least $1.0 million with third party investors
on or before May 31, 2001. The Third Modification Agreement establishes the
following annual interest rates for both the revolving line and term loans:
(i) from February 1, 2001 through September 30, 2001--six (6%) percent, (ii)
from October 1, 2001 through December 31, 2001--seven (7%) percent, (iii) from
January 1, 2002 through December 31, 2002--prime rate subject to a minimum
rate of eight (8%) percent and a maximum rate of eleven (11%) percent. The
scheduled monthly principal payments do not begin until July 1, 2000 and are
$30,000 from July 1, 2001 through December 31, 2001, and $100,000 from January
1, 2002 through December 31, 2002.

  The Company has an acquisition strategy to acquire and integrate the assets
of multi-site eye care centers and the practices of eye care professionals and
to employ or enter into management services contracts with these
professionals. This strategy includes both expanding existing regional markets
and entering new regional markets. The Company will also target acquisitions
in strategic markets that will serve as platforms from which the Company can
consolidate a given service area by making and integrating additional "in-
market" acquisitions. The Company from time to time will evaluate potential
acquisition candidates. Without additional funding, the Company's rate of
acquisition and size of acquisition will be limited.

Recent Accounting Pronouncements

  In June, 1998, the Financial Accounting Standards Board issued SFAS 133
("Accounting for Derivative Instruments and Hedging Activities,") which
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments, embedded in other contracts
(collectively referred to as derivatives), and for hedging activities, and
required adoption in periods beginning after June 15, 1999. SFAS 133 was
subsequently amended by Statement of Financial Accounting Standards No. 137
("Accounting for Derivative Instruments and Hedging Activities"). SFAS 137
will now be effective for fiscal years beginning after June 15, 2000. SFAS
137, which becomes effective for the Company in its year ending December 29,
2001 is not expected to have a material impact on the Consolidated Financial
Statements of the Company.

Item 7A. Qualitative and Quantitative Disclosures About Market Risk

  The Company has not entered into any transactions using derivative financial
instruments or derivative commodity instruments and believes that its exposure
to market risk associated with other financial instruments (such as
investments) are not material.

                                      23
<PAGE>

Item 8. Financial Statements And Supplementary Data

                         INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders
Sight Resource Corporation:

  We have audited the accompanying consolidated balance sheets of Sight
Resource Corporation and its subsidiaries as of December 30, 2000 and December
25, 1999, and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years in the three-year period ended
December 30, 2000. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

  We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

  In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Sight
Resource Corporation and its subsidiaries at December 30, 2000 and December
25, 1999, and the results of their operations and their cash flows for each of
the years in the three-year period ended December 30, 2000 in conformity with
accounting principles generally accepted in the United States of America.

  The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in
note 3 to the consolidated financial statements, the Company's recurring
losses and resultant defaults under the Company's debt agreement raise
substantial doubt about its ability to continue as a going concern.
Management's plan in regard to this matter is also described in note 3. The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

                                          /s/ KPMG LLP

                                          KPMG LLP

Boston, Massachusetts
March 16, 2001, except as to Note 3 and Note 17,
which are as of March 30, 2001

                                      24
<PAGE>

                           SIGHT RESOURCE CORPORATION

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                      Dec. 30 2000 Dec. 25 1999
                                                      ------------ ------------
                                                        (in thousands except
                                                         for share amounts)
<S>                                                   <C>          <C>
                       ASSETS
Current assets:
  Cash and cash equivalents..........................   $    532     $    166
  Accounts receivable, net of allowance of $1,897 and
   $1,881 respectively...............................      2,587        3,583
  Inventories........................................      5,977        6,875
  Prepaid expenses and other current assets..........        457          344
                                                        --------     --------
    Total current assets.............................      9,553       10,968
                                                        --------     --------
Property and equipment, net (note 4).................      3,984        5,734
                                                        --------     --------
Other assets:
  Intangible assets (note 5).........................     21,444       23,131
  Other assets.......................................        158          921
                                                        --------     --------
    Total other assets...............................     21,602       24,052
                                                        --------     --------
                                                        $ 35,139     $ 40,754
                                                        ========     ========
        LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Revolver notes payable (note 7)....................   $  2,500     $    975
  Current portion of long term debt (note 7).........      6,540        1,682
  Current portion of capital leases (note 8).........         10           28
  Accounts payable...................................      4,721        4,606
  Accrued expenses (note 6)..........................      2,007        2,673
  Dividends payable..................................         51            0
                                                        --------     --------
    Total current liabilities........................     15,829        9,964
                                                        --------     --------
Non-current liabilities:
  Long term debt, less current maturities (note 7)...        451        6,882
  Capital leases (note 8)............................         25            2
  Other liabilities..................................          0           22
                                                        --------     --------
    Total non-current liabilities....................        476        6,906
                                                        --------     --------
  Series B redeemable convertible preferred stock
   1,452,119 shares issued (note 9)..................      6,535        6,535
                                                        --------     --------
Stockholders' equity (note 10):
  Preferred Stock, $.01 par value. Authorized
   5,000,000 shares; no shares of Series A issued and
   outstanding.......................................        --           --
  Common stock, $.01 par value. Authorized 20,000,000
   shares; issued 9,261,552 and 9,256,552 shares in
   2000 and 1999, respectively.......................         93           93
  Additional paid-in capital.........................     38,452       38,500
  Treasury stock at cost (30,600 shares in 2000 and
   1999).............................................       (137)        (137)
  Unearned compensation..............................          0           (2)
  Accumulated deficit................................    (26,109)     (21,105)
    Total stockholders' equity.......................     12,299       17,349
                                                        --------     --------
                                                        $ 35,139     $ 40,754
                                                        ========     ========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                       25
<PAGE>

                           SIGHT RESOURCE CORPORATION

                     CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                             Years Ended December
                                 ----------------------------------------------
                                      2000            1999            1998
                                 --------------  --------------  --------------
                                 (in thousands except for per share amounts)
<S>                              <C>             <C>             <C>
Net revenue....................  $       64,219  $       67,034  $       54,971
Cost of revenue................          20,929          22,823          18,991
                                 --------------  --------------  --------------
    Gross margin...............          43,290          44,211          35,980
Selling, general and
 administrative expense........          46,155          46,122          37,036
                                 --------------  --------------  --------------
    Loss from operations.......          (2,865)         (1,911)         (1,056)
                                 --------------  --------------  --------------
Other income (expense):
  Interest income..............              52              82             184
  Interest expense.............          (1,232)           (641)           (201)
  Gain (loss) on disposal of
   assets......................            (105)             16             158
  Write-off of deferred
   financing cost..............             (60)           (323)            --
  Reserve for note receivable..            (714)            --              --
                                 --------------  --------------  --------------
    Total other income
     (expense).................          (2,059)           (866)            141
                                 --------------  --------------  --------------
    Loss before income tax
     expense...................          (4,924)         (2,777)           (915)
Income tax expense.............              80              77              70
                                 --------------  --------------  --------------
    Net loss...................  $       (5,004) $       (2,854) $         (985)
                                 ==============  ==============  ==============
(Dividends on) adjustment to
 cost of redeemable convertible
 preferred
 stock (note 9)................             (51)            142             --
                                 --------------  --------------  --------------
Net loss attributable to common
 shareholders..................  $       (5,055) $       (2,712) $         (985)
                                 ==============  ==============  ==============
Basic and Diluted loss per
 common share (note 2).........  $        (0.55) $        (0.30) $        (0.11)
                                 ==============  ==============  ==============
Weighted average number of
 common shares outstanding.....           9,228           9,181           8,867
                                 ==============  ==============  ==============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       26
<PAGE>

                           SIGHT RESOURCE CORPORATION

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                           Years Ended December 30, 2000, December 25, 1999 and December 31, 1998
                          --------------------------------------------------------------------------
                          Common Stock
                          ------------ Additional            Common                        Total
                                  Par   Paid-in    Accum.    Stock   Treasury Unearned Stockholder's
                          Shares Value  Capital   Deficit   Issuable  Stock    Comp.      Equity
                          ------ ----- ---------- --------  -------- -------- -------- -------------
                                                             (In Thousands)
<S>                       <C>    <C>   <C>        <C>       <C>      <C>      <C>      <C>
Balance, December 31,
 1997...................  8,787   $88   $36,329   $(17,266)  $ 432    $(137)    $--       $19,446
Exercise of stock
 options
 (notes 10 & 13)........     20   --          9        --      --       --       --             9
Issuance of Common Stock
 for acquisitions.......     88     1       349        --      --       --       --           350
Issuance of Common
 Stock..................     41     1       160        --      --       --       (40)         121
Amortization of unearned
 compensation...........    --    --        --         --      --       --        18           18
Net loss................    --    --        --        (985)    --       --       --          (985)
                          -----   ---   -------   --------   -----    -----     ----      -------
Balance, December 31,
 1998...................  8,936   $90   $36,847   $(18,251)    432    $(137)    $(22)     $18,959
Exercise of stock
 options
 (notes 10 & 13)........      5   --          2        --      --       --       --             2
Issuance of Common Stock
 for acquisitions.......    316     3     1,509        --     (432)     --       --         1,080
Adjustment to cost of
 preferred stock
 issuance...............    --    --        142        --      --       --       --           142
Amortization of unearned
 compensation...........    --    --        --         --      --       --        20           20
Net loss................    --    --        --      (2,854)    --       --       --        (2,854)
                          -----   ---   -------   --------   -----    -----     ----      -------
Balance, December 25,
 1999...................  9,257   $93   $38,500   $(21,105)  $   0    $(137)    $ (2)     $17,349
Exercise of stock
 options
 (notes 10 & 13)........      5   --          3        --      --       --       --             3
Dividends...............    --    --        (51)       --      --       --       --           (51)
Amortization of unearned
 compensation...........    --    --        --         --      --       --         2            2
Net loss................    --    --        --      (5,004)    --       --       --        (5,004)
                          -----   ---   -------   --------   -----    -----     ----      -------
Balance, December 30,
 2000...................  9,262   $93   $38,452   $(26,109)  $   0    $(137)    $ (0)     $12,299
                          =====   ===   =======   ========   =====    =====     ====      =======
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       27
<PAGE>

                           SIGHT RESOURCE CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                     2000     1999     1998
                                                    -------  -------  -------
<S>                                                 <C>      <C>      <C>
Operating activities:
Net loss........................................... $(5,004) $(2,854) $  (985)
Adjustments to reconcile net loss to net cash used
 in operating activities:
  Depreciation and amortization....................   3,844    3,828    2,596
  Amortization and write off of deferred financing
   costs...........................................     297      353      --
  Amortization of unearned compensation............       2       20       18
  (Gain)/loss on disposal of assets................     105      (16)    (158)
  Reserve for note receivable......................     714      --       --
Changes in operating assets and liabilities:
  Accounts receivable..............................     996      448     (746)
  Inventories......................................     898   (1,012)     289
  Prepaid expenses and other current assets........    (113)      65       47
  Accounts payable and accrued expenses............    (551)  (1,204)    (829)
                                                    -------  -------  -------
    Net cash provided by (used in) operating
     activities....................................   1,188     (372)     232
                                                    -------  -------  -------
Investing activities:
  Purchases of property and equipment..............    (681)  (1,513)  (1,612)
  Payments for acquisitions, net of cash acquired..     --    (6,419)  (2,201)
  Proceeds from sale of assets.....................     169      115      235
  Other assets.....................................    (248)     362       88
                                                    -------  -------  -------
    Net cash used in investing activities..........    (760)  (7,455)  (3,490)
                                                    -------  -------  -------
Financing activities:
  Principal payments on debt.......................  (1,568)  (2,961)  (1,087)
  Proceeds from issuance of stock..................     --       --       129
  Proceeds from exercise of warrants and stock
   options.........................................       3        2      --
  Proceeds from bank loans.........................   1,525    9,234      --
  Payment of other liabilities.....................     (22)    (142)     --
                                                    -------  -------  -------
    Net cash provided by (used in) financing
     activities....................................     (62)   6,133     (958)
                                                    -------  -------  -------
Net increase (decrease) in cash and cash
 equivalents.......................................     366   (1,694)  (4,216)
Cash and cash equivalents, beginning of period.....     166    1,860    6,076
                                                    -------  -------  -------
Cash and cash equivalents, end of period........... $   532  $   166  $ 1,860
                                                    =======  =======  =======
</TABLE>


              See note 13 for supplementary cash flow information.
          See accompanying notes to consolidated financial statements.

                                       28
<PAGE>

                          SIGHT RESOURCE CORPORATION

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          December 30, 2000, December 25, 1999 and December 31, 1998

(1) The Company

 (a) Nature of Business

  Sight Resource Corporation (the "Company") manufactures, distributes and
sells eyewear and related products and services.

 (b) Acquisitions

  During 1995, the Company acquired two primary eye care chains, effective
January 1, 1995 and July 1, 1995, respectively. The aggregate purchase price
paid in connection with the acquisitions consisted of (i) $2,660,000 in cash,
(ii) 555,525 shares of common stock, (iii) the assumption of approximately
$1,600,000 of net liabilities, and (iv) $660,000 paid over a 3 year period and
$250,000 paid over 18 months. The transactions were accounted for using the
purchase method of accounting.

  Effective July 1, 1996, the Company purchased certain assets and assumed
certain liabilities of The E.B. Brown Optical Company and Brown Optical
Laboratories, Inc. as well as entered into a merger with E.B. Brown Opticians,
Inc. (collectively, "E.B. Brown") for approximately $7,733,000, consisting of:
$4,000,000 in cash, 521,997 shares of common stock issued, 71,181 shares of
common stock issued within 3 years and $1,400,000 in notes paid over an 18
month period. When the common stock was issued, the $432,000 of common stock
issuable was reclassed into common stock and additional paid-in capital. As of
July 1, 1996, E.B. Brown operated 42 eye care centers located throughout Ohio
and Western Pennsylvania which provide optometric and audiology goods and
services to persons with vision and hearing disorders. The transaction was
accounted for using the purchase method of accounting.

  Effective July 1, 1997, the Company acquired all of the outstanding shares
of stock of Vision Holdings, Ltd. (formerly known as Dr. Greenberg, An
Optometry Corporation, d/b/a Vision Plaza ("Vision Plaza")). The purchase
price paid in connection with this acquisition was $2,000,000 in cash and the
assumption and payment of notes payable outstanding as of July 1, 1997 of
approximately $800,000. Vision Plaza operated 17 eye care centers in Southeast
Louisiana and Mississippi. The acquisition was accounted for using the
purchase method of accounting.

  Effective April 1, 1998, the Company acquired all of the outstanding shares
of stock of Eye Glass Emporium, Inc. ("Eyeglass Emporium"). The purchase price
paid in connection with this acquisition was $2,309,000 in cash, the
assumption and payment of notes payable outstanding as of April 1, 1998 of
approximately $350,000 and 87,940 shares of common stock. Eyeglass Emporium
operated nine eye care centers in northwest Indiana. The acquisition was
accounted for using the purchase method of accounting.

  Effective January 1, 1999, the Company acquired all of the outstanding
shares of stock of Shawnee Optical, Inc. ("Shawnee"). The purchase price paid
in connection with this acquisition was $1,750,000 in cash, $300,000 in notes
payable over three years and 70,000 shares of common stock. Shawnee operated
nine eye care centers in Pennsylvania and Ohio. The acquisition was accounted
for using the purchase method of accounting.

  Effective April 1, 1999, the Company acquired all of the outstanding shares
of stock of Kent Optical, Inc. and its associated companies (collectively
"Kent"). The purchase price paid in connection with this acquisition was
$5,209,000 in cash, $1,000,000 in notes payable over three years and 160,000
shares of common stock. Kent operated 28 eye care enters in Michigan. The
acquisition was accounted for using the purchase method of accounting. In
connection with the acquisition, the Company recorded purchase accounting
adjustments to

                                      29
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

increase liabilities and establish reserves for the closing of facilities and
related restructuring costs, including lease commitments and severance costs.
Total preliminary acquisition reserves at December 25, 1999 were $91,500.
During 2000, the Company charged $46,000 against the reserve for costs to
sever store personnel. At December 30, 2000, the purchase reserve balance is
$45,500.

  With respect to the shares of common stock issued in the acquisition of
Shawnee, the Company agreed to issue additional consideration to the sellers
if the market price of the Company's common stock did not equal or exceed
$5.00 per share at any time during the period from January 22, 2000 to January
22, 2001. The market price of the common stock did not equal or exceed $5.00
during such period. On March 20, 2001, the Company entered into a Settlement
Agreement and Mutual Release with the Shawnee Stockholders in which the
Company agreed to issue 238,000 shares of its common stock as additional
consideration in connection with obligations incurred in the acquisition.

  With respect to the shares of common stock issued in the acquisition of
Kent, the Company agreed to issue additional consideration to the sellers if
the market price of the Company's common stock does not equal or exceed $5.00
per share at any time during the period from April 23, 2000 to April 23, 2001.
From April 23, 2000 to date, the market price of the Company's common stock
has not equaled or exceeded $5.00 per share. At the time of these
acquisitions, the Company included the value of this additional consideration
in its determination of the purchase price.

  The results of operations of the seven acquisitions have been included in
the consolidated financial statements from their respective dates of
acquisition. The excess of the purchase price and expenses associated with
each acquisition over the estimated fair value of the net assets acquired has
been recorded as goodwill.

  As a result of the acquisitions, the Company has also recorded adjustments
to increase liabilities and establish reserves for the closing of stores and
related restructuring costs, including lease commitments and severance costs.

  In early 1999, the Company provided a purchase accounting reserve of
$400,000 for the closing of two stores and one laboratory in Erie for Shawnee
and a reserve of $50,000 to sever administrative, store laboratory personnel.
During 1999, the Company revised the plan and determined no stores or
laboratories would be closed. At December 25, 1999, the Company finalized its
plan and also determined that no employees would be severed. The entire
$450,000 acquisition reserve was reversed against goodwill and no reserves for
Shawnee exist December 25, 1999. No amounts were charged against acquisition
reserves.

  In 1999, the Company recorded a purchase accounting reserve of $91,500 to
sever administrative or store personnel in Michigan for Kent. During 2000, the
Company charged $46,000 against the Kent reserve for costs to sever store
personnel. At December 30, 2000, the purchase reserve balance was $45,500.

  The following unaudited pro forma financial information gives effect to the
acquisitions as if:

  i) the acquisition of Eyeglass Emporium was effective January 1, 1997

  ii) the acquisition of Shawnee was effective January 1, 1998

  iii) the acquisition of Kent was effective January 1, 1998

  These pro forma results have been prepared for comparative purposes only and
do not purport to be indicative of the results of operations which actually
would have resulted had the acquisitions occurred on the date indicated, or
which may result in the future.

                                      30
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


<TABLE>
<CAPTION>
                                                               1999     1998
                                                              -------  -------
                                                               (in thousands
                                                              except for per
                                                                share data)
<S>                                                           <C>      <C>
Revenue...................................................... $69,589  $70,350
                                                              =======  =======
Net loss..................................................... $(3,227) $(1,718)
                                                              =======  =======
Basic and Diluted loss per share............................. $ (0.37) $ (0.19)
                                                              =======  =======
Weighted average number of common shares outstanding.........   9,341    9,119
                                                              =======  =======
</TABLE>

  The above unaudited pro forma financial information reflects certain
adjustments, including amortization of goodwill, and an increase in the
weighted average shares outstanding. This pro forma information does not
necessarily reflect the results of operations that would have occurred had the
acquisitions taken place at the beginning of 1998 and 1999 and is not
necessarily indicative of results that may be obtained in the future.

(2) Summary of Significant Accounting Policies

 (a) Principles of Consolidation

  The Company's results of operation include the accounts of the Company, its
wholly-owned subsidiaries and four professional corporations ("PCs") in which
the Company's subsidiaries assume the financial risks and rewards of such
entities. The Company has no direct equity ownership in the PCs since the
outstanding voting capital stock of each of the PCs is 100% owned by a
licensed optometrist (the "nominee shareholder") who has, in turn, executed a
Stock Restrictions and Pledge Agreement ("Pledge Agreement") in favor of a
subsidiary of the Company. Each Pledge Agreement contains provisions that
provide the Company with the ability at all times to cause a change in the
nominee shareholder and for an unlimited number of times, at nominal cost. The
purchase price for a sale of the PC's stock is equal to the aggregate book
value of the PC, which will always be a nominal cost because each PC operates
at an almost break-even level generating a nominal profit, if any at all. All
significant intercompany balances and transactions have been eliminated.

  In preparation of these consolidated financial statements in conformity with
generally accepted accounting principles, management of the Company has made
estimates and assumptions that affect the reported amounts of assets and
liabilities, such as accounts receivable, inventory, impairment of property
and equipment and intangibles. Actual results could differ from those
estimates.

 (b) Statement of Cash Flows

  Cash and cash equivalents consist of cash in banks and short-term
investments with original maturities of three months or less.

 (c) Financial Instruments

  The carrying amount of cash and cash equivalents, accounts receivable,
accounts payable and accrued expenses approximate fair value because of the
short maturity of these items. The carrying amount of other long-term
maturities approximates fair value. The carrying amount of the Company's
revolving line of credit and bank term loan approximates fair value because
the borrowing rate changes with market interest rates and the short maturity
of these items.

                                      31
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


 (d) Revenue Recognition

  Revenue and the related costs from the sale of eyewear are recognized at the
time an order is complete. Revenue from eye care services is recognized when
the service is performed. The Company has fee for service arrangements with
most of its third party payors. Revenue is reported net of contractual
allowances.

  Under revenue sharing arrangements for refractive surgery where the Company
is not responsible for patient billing, the Company receives a specified
payment from the hospital or center for each refractive surgical procedure
performed. Accordingly, the Company recognizes revenue on a per procedure
basis at the time procedures are performed. Under revenue-sharing arrangements
for refractive surgery where the Company is responsible for the collection
from the patient and payment to the ophthalmologist and other operating costs,
the total patient charge is recorded as revenue with the corresponding
expenses recorded in cost of revenue.

 (e) Inventories

  Inventories primarily consist of the costs of eyeglass frames, contact
lenses, ophthalmic lenses, sunglasses and other optical products and are
valued at the lower of cost (using the first-in, first-out method) or market.

 (f) Property, Equipment and Long-Lived Assets

  Property, equipment and long-lived assets are stated at cost. The Company
provides for depreciation at the time the property, equipment and long-lived
assets are placed in service. The straight-line method is used over the
estimated useful life of the assets. The Company accounts for long-lived
assets in accordance with the provisions of SFAS No. 121. This Statement
requires that long-lived assets be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to anticipated profits and
future undiscounted cash flows expected to be generated by the asset. In
performing this analysis, management considers such factors as current
results, trends, and future prospects, in addition to other economic factors.
If such assets are considered to be impaired, the impairment to be recognized
is measured by the amount by which the carrying amount of the assets exceeds
the fair value of the assets. Assets to be disposed of are reported at the
lower of the carrying amount or fair value less costs to sell.

 (g) Advertising

  Advertising costs are expensed when incurred.

 (h) Intangible Assets

  Intangible assets resulting from the business acquisitions consist of
customer lists, trademarks, non-compete agreements, workforce in place,
database/records and the excess cost of the acquisition over the fair value of
the net assets acquired (goodwill). Certain values assigned are based upon
independent appraisals and are amortized on a straight line basis over a
period of 5 to 25 years. The Company assesses the recoverability of
unamortized intangible assets on an ongoing basis by comparing anticipated
operating profits and future, undiscounted cash flows to net book value. In
performing this analysis, management considers such factors as current
results, trends, and future prospects, in addition to other economic factors.

 (i) Income Taxes

  The Company follows the asset and liability method of accounting for income
taxes and records deferred tax assets and liabilities based on temporary
differences between the tax bases of assets and liabilities and their carrying
amounts for financial statement purposes.

                                      32
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


 (j) Deferred Revenue

  The Company offers a contact lens purchasing program in which, for a set
fee, customers may purchase contacts at discounted rates for a 12 month
period. The Company recognizes revenue from the sales of its contact lens
purchasing program on a monthly basis over the life of the program.

 (k) Net Loss Per Share

  Earnings per share are computed based on Statement of Financial Accounting
Standards No. 128 "Earnings per Share" ("SFAS 128"). SFAS 128 requires
presentation of basic earnings per share ("Basic EPS") and diluted earnings
per share ("Diluted EPS") by all entities that have publicly traded common
stock or potential common stock (options, warrants, convertible securities or
contingent stock arrangements). Basic EPS is computed by dividing income
attributable to common stockholders by the weighted average number of common
shares outstanding during the period. The computation of Diluted EPS does not
assume conversion, exercise or contingent exercise of securities that would
have an antidilutive effect on earnings.

  The options, warrants and convertible preferred stock discussed in Notes 9
and 10 were not included in the computation of diluted Earnings Per Share
because the effect would be antidilutive.

(3) Liquidity

  As a result of recurring losses from operations, the Company has violated
certain covenants included in the 1999 Agreement. This situation has triggered
conditions included in the debt agreement whereby the borrowing capacity has
been reduced and the maturity accelerated to March 31, 2001. The Company and
Sovereign Bank of New England ("Sovereign"), the successor party to Fleet
National Bank ("Fleet"), agreed to enter into the Third Modification Agreement
on March 26, 2001 (the "Third Modification Agreement"). The Third Modification
Agreement amends the Original and the Second Modification Agreements between
the Company and Sovereign to, among other things, waive the Company's default,
adjust or delete certain covenants to which the Company was subject, change
the repayment terms and extend the maturity date of the loans to December 31,
2002. In addition, the Third Modification Agreement requires the Company to
close an equity financing of at least $1.0 million on or before May 31, 2001.
Failure to consummate an equity financing shall constitute an event of default
under the Third Modification Agreement which raises substantial doubt about
the Company's ability to continue as a going concern. Members of the Company's
management have taken actions in an attempt to satisfy this requirement.

                                      33
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


(4) Property and Equipment

  Property and equipment consists of the following:

<TABLE>
<CAPTION>
                                                        Years Ended December
                                                    ----------------------------
                                                                     Estimated
                                                     2000    1999   Useful Life
                                                    ------- ------ -------------
                                                           (in thousands)
<S>                                                 <C>     <C>    <C>
Land and building.................................. $    87 $  118 40 years
Equipment..........................................   3,032  4,016 3-5 years
Computer equipment.................................   1,385  1,082 3 years
Furniture and fixtures.............................   1,836  1,889 3 years
Leasehold improvements.............................   4,704  4,967 Life of lease
Construction-in-progress...........................       0    324
                                                    ------- ------
                                                     11,044 12,396
Less accumulated depreciation......................   7,060  6,662
                                                    ------- ------
Property and equipment, net........................ $ 3,984 $5,734
                                                    ======= ======
</TABLE>

(5) Intangible Assets

  Intangible assets consists of the following:

<TABLE>
<CAPTION>
                                                       Years Ended December
                                                    ---------------------------
                                                                     Estimated
                                                     2000    1999   Useful Life
                                                    ------- ------- -----------
                                                          (in thousands)
<S>                                                 <C>     <C>     <C>
Goodwill........................................... $16,537 $16,537    20-25
Customer lists.....................................   5,932   5,932    11-15
Workforce in place.................................   1,970   1,970    6-8
Trademarks.........................................   1,773   1,773    15-20
Non-compete........................................     380     380    5-10
Database/records...................................     310     310    12
                                                    ------- -------
                                                     26,902  26,902
Accumulated amortization...........................   5,458   3,771
                                                    ------- -------
  Total............................................ $21,444 $23,131
                                                    ======= =======
</TABLE>

  The useful lives of the above intangible assets are estimated based upon,
among other things, independent appraisals, history of operations acquired,
terms of agreements and industry standards.

(6) Accrued Expenses

  Accrued expenses consists of the following:

<TABLE>
<CAPTION>
                                                          Years Ended December
                                                          ---------------------
                                                             2000       1999
                                                          ---------- ----------
                                                             (in thousands)
<S>                                                       <C>        <C>
Payroll and related cost................................. $    1,066 $    1,393
Other....................................................        941      1,280
                                                          ---------- ----------
                                                          $    2,007 $    2,673
                                                          ========== ==========
</TABLE>

                                      34
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


(7) Debt

<TABLE>
<CAPTION>
                                                           Years Ended December
                                                           ---------------------
                                                              2000       1999
                                                           ---------- ----------
                                                              (in thousands)
<S>                                                        <C>        <C>
Short-term borrowings consist of the following:
Bank revolver loan payable, variable interest rate (12.5%
 at 12/30/00), interest due monthly (see Note 17)........  $    2,500 $      975
                                                           ========== ==========
Long-term debt consists of the following:
Bank term loan payment, variable interest rate (12.5% at
 12/30/00), principal and interest due monthly beginning
 October, 199911:25 am (see note 17).....................       5,850      6,833
Unsecured notes payable, 7.5% interest rate, principal
 due annually and interest due quarterly until April,
 2002....................................................         667      1,000
Unsecured notes payable, 7.5% interest rate, principal
 due annually and interest due quarterly until January,
 2002....................................................         200        300
Unsecured notes payable, with interest rates of between 8
 and 9%, principal and interest due monthly until June,
 2010....................................................         209        219
Unsecured note payable, 7% interest rate, principal and
 interest due quarterly until March 31, 2001.............          58        175
Unsecured note payable, 12% interest rate, principal and
 interest due monthly until January, 2001................           7         37
                                                           ---------- ----------
                                                           $    6,991 $    8,564
Less current maturities..................................       6,540      1,682
                                                           ---------- ----------
Long term debt, less current maturities..................  $      451 $    6,882
                                                           ========== ==========
</TABLE>

  On April 15, 1999, the Company entered into a Credit Agreement (the "1999
Agreement") with a bank pursuant to which the Company can borrow $10.0 million
on an acquisition line of credit, $7.0 million on a term loan basis and $3.0
million on a revolving line of credit basis, subject to certain performance
criteria and an asset-related borrowing base for the revolver. The performance
criteria include, among others, financial condition covenants such as net
worth requirements, indebtedness to net work ratios, debt service coverage
ratios, funded debt coverage ratios, and pretax profit, net profit and EBITDA
requirements. The acquisition line facility bears interest at either the
bank's prime rate, or LIBOR plus 2.25%, or at a comparable interest swap rate
at the Company's election.

  The term loan facility bears interest at LIBOR plus 2.25% or at a comparable
interest swap rate at the Company's election. The revolving credit facility
bears interest at the bank's prime rate or LIBOR plus 2.0% at the Company's
election. Amounts borrowed under the 1999 Agreement were used to finance
acquisitions, retire existing bank debt, provide ongoing working capital
and/or for other general corporate purposes.

  On March 31, 2000, the Company and Fleet entered into a modification
agreement (the "Original Modification Agreement") that amended the 1999
Agreement in order to, among other things, waive the Company's default, adjust
certain covenants to which the Company is subject and terminate the
acquisition line of credit. In addition, the Original Modification Agreement
limits the revolving line note to $2.5 million and the term loan to $6.75
million and established the maturity date for each of these credit lines as
March 31, 2001. Also, the Original Modification Agreement established the
following interest rates for both the revolving line note and term loan: (i)
from March 31, 2000 through August 31, 2000--prime rate plus 1.0%; (ii) from
September 1, 2000 through October 31, 2000--prime rate plus 2.0%; and (iii)
from November 1, 2000 through March 31, 2001--prime rate plus 3.0%. The
scheduled monthly principal payments for the term loan were

                                      35
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

adjusted to $83,333.33 from April, 2000 through July, 2000, $100,000.00 from
August, 2000 through December, 2000 and $125,000.00 from January, 2001 through
March, 2001. As part of the Original Modification Agreement, the Company
issued to Fleet warrants to purchase 50,000 shares of the Company's common
stock at an exercise price of $0.51 which was equal to the closing price of
the common stock for the last five trading days in the month of August 2000
and warrants to purchase 50,000 shares of the common stock at an exercise
price of $0.156 which was equal to the closing price of the common stock for
the last five trading days in the month of December of 2000. In August 2000,
as a result of a bank merger, Sovereign Bank of New England ("Sovereign")
became the successor party to Fleet in the Original Modification Agreement.

  In November of 2000, the Company and Sovereign entered into the Second
Modification Agreement that amended the Original Modification Agreement in
order to, among other things, defer certain payments required under the term
note and amend certain terms and conditions of the 1999 Agreement. Sovereign
deferred the required principal payments due on December 1, 2000 in the amount
of $100,000 and on January 1, 2001 in the amount of $125,000 until March 1,
2001 and March 22, 2001, respectively.

  As of December 30, 2000, $5.85 million was borrowed on the term loan and
$2.5 million was borrowed on the revolving credit facility. At December 30,
2000, the Company was in default for non-compliance with certain negative
covenants contained in the Second Modification Agreement relating to minimum
net worth, minimum debt service coverage, maximum funded debt service coverage
and minimum net profit. The Company and Sovereign have entered into a Third
Modification Agreement, which includes a waiver of defaults relating to these
covenants and to a revised credit agreement with Sovereign. (see Note 17).

(8) Lease Obligations

  The Company has operating leases primarily for its primary eye care centers,
distribution center, corporate offices and certain equipment. The leases are
generally for periods of up to 10 years with renewal options at fixed rentals.
Certain of the leases provide for additional rentals based on sales exceeding
specified amounts. Capitalized leases consists of various office and
optometric equipment at multiple locations.

  Future minimum annual lease commitments for facilities and equipment for the
five years subsequent to December 30, 2000 and in the aggregate are as
follows:

<TABLE>
<CAPTION>
                                                              Capital Operating
                                                              Leases   Leases
                                                              ------- ---------
                                                               (In thousands)
<S>                                                           <C>     <C>
2001.........................................................    14    $ 5,571
2002.........................................................    11      4,554
2003.........................................................    11      3,694
2004.........................................................     8      2,638
2005.........................................................   --       1,791
Thereafter...................................................   --       3,044
                                                                ---    -------
Total minimum lease obligations..............................    44    $21,292
                                                                       =======
Less amount representing interest............................     9
                                                                ---
Present value of net minimum capital lease obligations.......    35
Less current maturities......................................    10
                                                                ---
                                                                $25
                                                                ===
</TABLE>

                                      36
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  Rental expenses charged to operations, including real estate taxes, common
area maintenance and other expenses related to the leased facilities and
equipment, were $6,409,000, $6,296,000 and $5,335,000 for fiscal years 2000,
1999 and 1998 respectively.

(9) Redeemable Convertible Preferred Stock

  On November 25, 1997, the Company issued 1,452,119 shares of Series B
Convertible Preferred Stock (the "Series B"), Class I and Class II Warrants to
an outside investor (the"Purchaser") for a net purchase price of $4,582,000.
The Series B was purchased with a conversion price into common stock that was
lower than the market value of the common stock, and as a result, the
difference of $1,953,000 was reflected as a dividend to the preferred
stockholders to reflect the preferred stock at its fair value. Each share of
Series B is convertible into one share of Common Stock at $3.50 per share,
subject to adjustment, at the Purchaser's option at any time and at the
Company's option if the price per share of common stock during any period of
thirty consecutive trading days equals or exceeds $7.00 at any time during the
first three years or $9.00 at any time thereafter. The holders of the Series B
have the right to appoint two directors to the Company's Board of Directors.

  The Class I (Mirror) Warrants entitle the Purchaser to purchase an amount of
shares of the Company's common stock equal to an aggregate of up to 19.9% of
the shares of common stock purchasable under the Company's outstanding
warrants and options on the same terms and conditions of existing warrant and
option holders. The Purchaser is obligated to exercise these warrants at the
same time the options and warrants of existing holders are exercised, subject
to certain limitations.

  The Class II Warrants entitle the Purchaser to purchase an aggregate of
290,424 shares of the Company's common stock at an exercise price of $7.00 per
share for a term of five years.

  The Purchaser is entitled to "shelf" registration rights and "piggyback"
registration rights with respect to the shares of common stock underlying the
Series B, the Class I Warrants and the Class II Warrants.

  Upon a change of control of the Company, defined as (i) a change in any
person or group obtaining a majority of the securities ordinarily having the
right to vote in an election of Directors; (ii) during any two year period,
the individuals who at the beginning of the period constituted the Company's
Board of Directors no longer constitute a majority of the Board of Directors;
(iii) any merger, consolidation, recapitalization, reorganization, dissolution
or liquidation of the Company which results in the current stockholders no
longer owning more than 50% of the voting securities or the Company; (iv) any
sale, lease, exchange or other transfer of all, or substantially all, of the
assets of the Company; or (v) the adoption of a plan leading to the
liquidation or dissolution of the Company, at the option of the Purchaser, the
Company would have to redeem the Series B at a price of 105% of the offering
price, subject to certain adjustments, plus accrued and unpaid dividends. The
redemption value at December 30, 2000 and December 25, 1999 was $5,337,000.

(10) Stockholders' Equity

 Preferred Stock

  As of December 30, 2000 and December 25, 1999, the Company has authorized
5,000,000 shares of preferred stock at $.01 par value of which 1,452,119
shares of Series B are issued and outstanding (see Note 9), and 200,000 shares
have been designated Series A Junior Participating Preferred Stock pursuant to
a certificate of designation filed with the State of Delaware on May 12, 1997,
of which no shares are issued and outstanding. The terms and conditions of any
other series of preferred stock, including any preferences and dividends, will
not be established until such time, if ever, as such shares are in fact issued
by the Company.

                                      37
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


 Common Stock

  As of December 30, 2000 and December 25, 1999, the Company has authorized
20,000,000 shares of common stock at $.01 par value. Common stock is entitled
to dividends if declared by the Board of Directors, and each share carries one
vote.

 Warrants

  In connection with the Company's third public offering in 1996, the Company
sold to its underwriter warrants to purchase an aggregate of 170,000 shares of
the Company's common stock at $8.45 per share. No underwriter warrants have
been exercised and the warrants expire on 6/25/01.

  In connection with the Company issuing 1,452,119 shares of Series B
Convertible Preferred Stock, Class I and Class II Warrants were issued to an
outside investor (the "Purchaser"). The Class I (Mirror) Warrants entitle the
Purchaser to purchase an amount of shares of the Company's common stock equal
to an aggregate of up to 19.9% of the shares of common stock purchasable under
the Company's outstanding warrants and options on the same terms and
conditions of existing warrant and option holders. The Purchaser is obligated
to exercise these warrants at the same time the options and warrants of
existing holders are exercised, subject to certain limitations. The Class II
Warrants entitle the Purchaser to purchase an aggregate of 290,424 shares of
the Company's Common Stock at an exercise price of $7.00 per share for a term
of five years. No Class I or Class II Warrants have been exercised.

 Treasury Stock

  From time to time, the Company's Board of Directors has authorized the
repurchase of shares of the Company's common stock in the open market. There
were no repurchases of shares of common stock during the years ended December
30, 2000, December 25, 1999 and December 31, 1998.

 Stock Option Plan

  On November 30, 1992, the Company's Board of Directors and the stockholders
approved the Company's 1992 Employee, Director and Consultant Stock Option
Plan (the "Plan"). On April 26, 1994, the Board of Directors and the
stockholders approved an increase in shares of common stock reserved for
issuance under the Plan to an aggregate of 1,000,000 shares. In March, 1996,
the Board recommended and the stockholders subsequently approved, that an
additional 500,000 shares of common stock be reserved for issuance under the
Plan. In December, 1998, the Board recommended, and the stockholders
subsequently approved, that an additional 350,000 shares of common stock be
reserved for issuance under the Plan.

  Under the Plan, incentive stock options may be granted to employees of the
Company. Non-qualified stock options may be granted to consultants, directors,
employees or officers of the Company. Most options vest after two or three
years from date of grant with a maximum term of ten years.

                                      38
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The Company applies APB Opinion No. 25 and related interpretations in
accounting for the Plan and as a result no compensation expense has been
recorded for granted options. Had compensation costs been determined
consistent with FASB Statement No. 123, the Company's net loss and loss per
share would have been as follows:

<TABLE>
<CAPTION>
                                       2000           1999           1998
                                   -------------  -------------  -------------
                                   (in thousands except for per share data)
<S>                    <C>         <C>            <C>            <C>
Net loss.............. as reported $      (5,004) $      (2,854) $        (985)
                                   =============  =============  =============
                       pro forma   $      (5,019) $      (3,370) $      (1,863)
                                   =============  =============  =============
Net loss per share.... as reported $       (0.55) $       (0.30) $       (0.11)
                                   =============  =============  =============
                       pro forma   $       (0.55) $       (0.36) $       (0.21)
                                   =============  =============  =============
</TABLE>

  The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model with the following weighted average
assumptions used for grants as follows:

<TABLE>
<CAPTION>
                                                   2000       1999       1998
                                                ---------- ---------- ----------
<S>                                             <C>        <C>        <C>
Dividend Yield.................................      0.00%      0.00%      0.00%
Volatility.....................................     115.7%      90.4%      91.1%
Interest Rate..................................      4.88%      6.60%      5.50%
Expected Life.................................. 5.03 years 6.49 years 8.12 years
</TABLE>

  A summary of the stock option transactions follows:

<TABLE>
<CAPTION>
                                                                        Weighted
                                                                        Average
                                                            Number of    Price
                                                 Shares    Shares Under   per
                                                Available     Option     Share
                                                ---------  ------------ --------
<S>                                             <C>        <C>          <C>
Balance, December 31, 1997.....................  510,172      828,696     5.11
Canceled.......................................  218,966     (218,966)    5.08
Granted........................................ (613,999)     613,999     3.43
Exercised......................................      --       (20,000)    0.43
                                                --------    ---------    -----
Balance, December 25, 1998.....................  115,139    1,203,729     4.16
Increase to the plan...........................  350,000          --       --
Canceled.......................................   97,667      (97,667)    5.04
Granted........................................ (289,000)     289,000     2.25
Exercised......................................      --        (5,000)    0.43
                                                --------    ---------    -----
Balance, December 25, 1999.....................  273,806    1,390,062    $3.71
Canceled.......................................  346,464     (346,464)    3.76
Granted........................................  (20,000)      20,000      .91
Exercised......................................      --        (5,000)     .43
                                                --------    ---------    -----
Balance, December 30, 2000.....................  600,270    1,058,598    $3.66
                                                ========    =========    =====
</TABLE>

  There were 841,281 and 737,371 shares exercisable under the Plan at December
30, 2000 and December 25, 1999, respectively.

  The weighted average fair value of options granted under the Plan was $0.75
and $1.79 for the years ended December 30, 2000 and December 25, 1999,
respectively.

                                      39
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The following table summarizes information about options outstanding as of
December 30, 2000:

<TABLE>
<CAPTION>
                Options Outstanding Weighted           Options Exercisable
          ---------------------------------------- ----------------------------
                          Average
Range Of     Number      Remaining     Weighted       Number        Weighted
Exercise   Outstanding  Contractual    Average      Exercisable     Average
 Prices   at 12/30/2000    Life     Exercise Price at 12/30/2000 Exercise Price
--------  ------------- ----------- -------------- ------------- --------------
<S>       <C>           <C>         <C>            <C>           <C>
$0.00 -
  $0.95        25,000       7.9         $0.81           5,000        $0.43
$1.90 -
  $2.85       251,669       8.3         $2.03         109,851        $2.04
$2.85 -
  $3.80       124,333       7.4         $3.04          80,334        $3.06
$3.80 -
  $4.75       517,596       5.3         $4.09         506,096        $4.09
$4.75 -
  $5.70        47,100       4.1         $5.00          47,100        $5.00
$5.70 -
  $6.65        67,900       3.5         $6.49          67,900        $6.49
$6.65 -
  $7.60        22,000       4.7         $6.81          22,000        $6.81
$7.60 -
  $8.55         3,000       4.9         $7.81           3,000        $7.81
            ---------                                 -------
            1,058,598                                 841,281
            =========                                 =======
</TABLE>

(11) Employee Benefit Plans

  The Company maintains a 401 (k) Retirement Savings Plan. The Company matches
50% of every dollar contributed by employees, limited to the first 5% of
salary. Contributions made by the Company in 2000, 1999 and 1998 were
$231,000, $247,000 and $191,000, respectively.

(12) Income Taxes

  Income tax benefit attributable to loss from operations differed from the
amounts computed by applying the U.S. federal income tax rate of 34 percent as
a result of the following:

<TABLE>
<CAPTION>
                                                       Years Ended December
                                                       -----------------------
                                                        2000     1999    1998
                                                       -------  -------  -----
                                                          (in thousands)
<S>                                                    <C>      <C>      <C>
Computed "expected" tax benefit....................... $ 1,674  $   954  $ 305
Increase in tax benefit resulting from:
  State net operating loss and State tax deductions...     213      142    137
Decrease in tax benefit resulting from:
  Other...............................................    (203)    (158)  (104)
  Increase in valuation allowance for deferred tax
   assets allocated to Income Tax Expense.............  (1,764)  (1,015)  (408)
                                                       -------  -------  -----
                                                       $   (80) $   (77) $ (70)
                                                       =======  =======  =====
</TABLE>

                                      40
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  The tax effects of temporary differences that give rise to significant
portions of the net deferred tax asset are presented below:

<TABLE>
<CAPTION>
                                                         Years Ended December
                                                         ----------------------
                                                            2000        1999
                                                         ----------  ----------
                                                            (in thousands)
<S>                                                      <C>         <C>
Deferred tax assets:
  Net operating loss carryforwards...................... $    9,576  $    8,110
  Plant and equipment...................................        639         639
  Vacation accrual......................................         41          41
  Bad debt reserve......................................        687         680
  Other reserves........................................        237         184
                                                         ----------  ----------
    Gross deferred tax assets...........................     11,180       9,654
  Valuation allowance under SFAS 109....................     (8,879)     (7,115)
                                                         ----------  ----------
    Deferred tax assets.................................      2,301       2,539
                                                         ==========  ==========
Deferred tax liabilities:
  Intangible assets.....................................     (2,301)     (2,539)
                                                         ----------  ----------
    Net deferred tax assets............................. $        0  $        0
                                                         ==========  ==========
</TABLE>

  A valuation allowance in the amount of $8,879,000 and $7,115,000 was
established at December 30, 2000 and December 25, 1999, respectively. The
valuation allowance was reduced in 1999 due to acquisitions that resulted in
the recognition of net deferred tax liabilities of approximately $2,800,000.
This allowance has been established due to the uncertainty of the Company to
benefit from the federal and state operating loss carryforwards.

  Subsequently recognized tax benefit relating to the valuation allowance for
deferred tax assets will be allocated as follows:

<TABLE>
<CAPTION>
                                                                  Years Ended
                                                                   December
                                                                 -------------
                                                                  2000   1999
                                                                 ------ ------
                                                                      (in
                                                                  thousands)
<S>                                                              <C>    <C>
Income tax benefit that would be reported in the statement of
 operations..................................................... $8,408 $6,644
Charge to goodwill for recognition of acquired tax assets.......    471    471
                                                                 ------ ------
                                                                 $8,879 $7,115
                                                                 ====== ======
</TABLE>

  The net operating loss carryforwards ("NOLs") for federal and state tax
purposes at December 30, 2000 are approximately $25,010,000 and $13,410,000,
respectively and expire through 2020 and 2005, respectively.

                                      41
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


(13) Supplementary Cash Flow Information

  The following represents supplementary cash flow information:

<TABLE>
<CAPTION>
                                                         Years Ended December
                                                         ----------------------
                                                         2000   1999     1998
                                                         ----- -------  -------
                                                            (in thousands)
<S>                                                      <C>   <C>      <C>
Interest paid........................................... $ 952 $   538  $   222
Income taxes paid.......................................    72      98       53
Non-cash financing activities:
Acquisitions:
  Assets acquired.......................................   --   12,632    3,907
  Net liabilities assumed...............................   --   (4,371)  (1,247)
  Notes payable.........................................   --   (1,300)    (350)
  Common stock issued...................................   --       (2)      (1)
                                                         ----- -------  -------
  Cash paid.............................................   --    6,959    2,309
  Less cash acquired....................................   --     (540)    (108)
                                                         ----- -------  -------
  Net cash paid for acquisition.........................       $ 6,419  $ 2,201
                                                         ===== =======  =======
</TABLE>

(14) RELATED PARTY TRANSACTIONS

  In connection with the exercise of stock options to purchase 138,332 shares
(the "Option Shares") of the Company's common stock during fiscal 1997,
Stephen M. Blinn, a former executive officer and current Director of the
Company, executed a promissory note (the "Note") in favor of the Company for
the aggregate exercise price of $594,111. The Note is due on the earlier of
September 2, 2007 or the date upon which Mr. Blinn receives the proceeds of
the sale of not less than 20,000 of the Option Shares (the "Maturity Date").
Interest accrues at the rate of 6.55%, compounding annually, and is payable on
the earlier of the Maturity Date of the Note or upon certain Events of Default
as defined in the Note. The principal balance of the Note, together with the
accrued and unpaid interest, was approximately $714,000 as of December 30,
2000. During the third quarter of fiscal 2000, Mr. Blinn has informed the
Company that he understood that the terms of the Note permitted Mr. Blinn to
satisfy in full his obligations under the Note by either (a) returning the
Option Shares to the Company or (b) turning over to the Company any cash
proceeds received by Mr. Blinn upon a sale of the Option Shares. The Company
has informed Mr. Blinn that the Note is a full recourse promissory note, and
that Mr. Blinn remains personally liable for all unpaid principal and interest
under the Note. Due to Mr. Blinn's position regarding the Note and his failure
to provide the Company or the Company's accountants with a copy of his
personal financial statements or any other evidence of his ability to pay the
amounts due under the Note, the Company has established a $714,000 reserve for
notes receivable in respect of the Note and subsequent to the establishment of
the reserve, the Company no longer recognizes as interest income accrued
interest related to this note.

                                      42
<PAGE>

                           SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


(15) Operating Segment and Related Information

  The following table presents certain operating segment information.

<TABLE>
<CAPTION>
                                                       2000
                                    --------------------------------------------
                                      Eye
                                     Care    Laser Vision           Consolidated
                                    Centers   Correction  All Other    Totals
                                    -------  ------------ --------- ------------
                                                  (in thousands)
<S>                                 <C>      <C>          <C>       <C>
Revenues:
  External customers............... $63,608      $611      $   --     $64,219
Interest:
  Interest revenue.................     --        --            52         52
  Interest expense.................     (26)      --        (1,206)    (1,232)
                                    -------      ----      -------    -------
  Net interest revenue (expense)...     (26)      --        (1,154)    (1,180)
Depreciation and amortization......   3,643         7          194      3,844
Profit (loss) from operations......   1,544        52       (4,461)    (2,865)
Identifiable assets................  34,044        27        1,068     35,139
Capital expenditures...............     606         2           73        681
</TABLE>

<TABLE>
<CAPTION>
                                                      1999
                                   --------------------------------------------
                                     Eye
                                    Care    Laser Vision           Consolidated
                                   Centers   Correction  All Other    Totals
                                   -------  ------------ --------- ------------
                                                 (in thousands)
<S>                                <C>      <C>          <C>       <C>
Revenues:
  External customers.............. $64,964     $2,070     $  --      $67,034
Interest:
  Interest revenue................       1        --          81          82
  Interest expense................     (39)        (5)      (597)       (641)
                                   -------     ------     ------     -------
Net interest revenue (expense)....     (38)        (5)      (516)       (559)
Depreciation and amortization.....   3,549        125        154       3,828
Profit (loss) from operations.....   2,021        773     (4,705)     (1,911)
Identifiable assets...............  29,875        231     10,648      40,754
Capital expenditures..............   1,282          2        229       1,513

<CAPTION>
                                                      1998
                                   --------------------------------------------
                                     Eye
                                    Care    Laser Vision           Consolidated
                                   Centers   Correction  All Other    Totals
                                   -------  ------------ --------- ------------
                                                 (in thousands)
<S>                                <C>      <C>          <C>       <C>
Revenues:
  External customers.............. $53,100     $1,871     $  --      $54,971
Interest:
  Interest revenue................       1        --         183         184
  Interest expense................     (98)       (34)       (69)       (201)
                                   -------     ------     ------     -------
Net interest revenue (expense)....     (97)       (34)       114         (17)
Depreciation and amortization.....   2,426        113         57       2,596
Profit (loss) from operations.....   1,423        253     (2,732)     (1,056)
Identifiable assets...............  28,644        587      2,914      32,145
Capital expenditures..............   1,316        296        --        1,612
</TABLE>

                                       43
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


  Each operating segment is individually managed and has separate financial
results that are reviewed by the Company's chief operating decision-makers.
Each segment contains closely related products that are unique to the
particular segment.

  The principal products of the Company's eye care centers are eyeglasses,
frames, ophthalmic lenses and contact lenses.

  Profit from operations is net sales less cost of sales and selling, general
and administrative expenses, but is not affected by non-operating
charges/income or by income taxes.

  Non-operating charges/income consists principally of net interest expense.

  In calculating profit from operations for individual operating segments,
certain administrative expenses incurred at the operating level that are
common to more than one segment are not allocated on a net sales basis.

  All intercompany transactions have been eliminated, and intersegment
revenues are not significant.

(16) Supplementary Financial Information

                     Quarterly Financial Data (Unaudited)
                       (In thousands, except per share)

<TABLE>
<CAPTION>
                                    First   Second    Third   Fourth    Year
                                   -------  -------  -------  -------  -------
<S>                                <C>      <C>      <C>      <C>      <C>
2000
Net Sales........................  $17,519  $16,483  $16,885  $13,332  $64,219
Gross Profit.....................   12,117   11,363   11,311    8,499   43,290
Loss from operations.............      (51)    (334)     (76)  (2,404)  (2,865)
Net loss.........................     (287)    (695)  (1,246)  (2,776)  (5,004)
Basic and diluted loss per common
 share...........................    (0.03)   (0.08)   (0.14)   (0.31)   (0.55)
<CAPTION>
                                    First   Second    Third   Fourth    Year
                                   -------  -------  -------  -------  -------
<S>                                <C>      <C>      <C>      <C>      <C>
1999
Net Sales........................  $15,764  $17,582  $18,160  $15,528  $67,034
Gross Profit.....................   10,751   11,755   12,289    9,416   44,211
Income/(loss) from operations....      557      455      153   (3,076)  (1,911)
Net income (loss)................      173      288        3   (3,318)  (2,854)
Basic and diluted earnings (loss)
 per common share................     0.02     0.03     0.00    (0.34)   (0.30)
</TABLE>

(17) Subsequent Event

  On March 26, 2001, the Company and its primary lender agreed to enter into
the Third Modification Agreement, which includes a revised financing
agreement. The Third Modification Agreement includes provisions and financial
covenants which supercede the provisions in the 1999 Agreement and the
Original and Second Modification Agreements (see Note 7), including the
following:

    a) The maturity dates on each of the revolving line note and the term
  loan note are extended to December 31, 2002.

                                      44
<PAGE>

                           SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    b) Interest rates on the revolving note and term loan are as follows:

<TABLE>
     <S>                                               <C>
     February 1, 2001 through September 30, 2001...... 6%
     October 1, 2001 through December 31, 2001........ 7%
     January 1, 2002 through December 31, 2002........ Prime rate with minimum
                                                       of 8% and maximum of 11%
</TABLE>

    c) Scheduled monthly principal payments are as follows:

<TABLE>
     <S>                                                               <C>
     January 1, 2001 to June 30, 2001................................. $      0
     July 1, 2001 to December 31, 2001................................ $ 30,000
     January 1, 2002 to December 31, 2002............................. $100,000
</TABLE>

    d) Failure to complete an equity infusion in the amount of $1,000,000 by
  May 31, 2001 shall constitute an event of default. As a result of this
  covenant, the related debt has been classified as a current liability.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

  None.

                                       45
<PAGE>

                                   PART III

Item 10. Directors and Officers of the Registrant

Directors

  The Company's Certificate of Incorporation provides for a classified Board
of Directors consisting of three classes of directors, with each class to be
as nearly equal in number as is reasonably possible. The Company has
designated two Class A directors (Mr. Blinn and Mr. Schwarz), two Class B
directors (Mr. Sullivan and Mr. Taskey) and two Class C directors (Mr.
McLendon and Mr. Callsen). The Class B directors constitute a class with a
term which expires at the upcoming annual meeting of the Company's
stockholders. The Class C and Class A directors will serve until the annual
meetings of the stockholders of the Company to be held in 2002 and 2003,
respectively, and until their respective successors are duly elected and
qualified. At each annual meeting of stockholders, directors are elected for a
full term of three years to succeed those directors whose terms are expiring.

  The following table sets forth certain information regarding the directors
of the Company as of December 30, 2000:

<TABLE>
<CAPTION>
  Name                       Age Position with the Company
  ----                       --- -------------------------
<S>                          <C> <C>
  Christian E. Callsen...... 63  Chairman of the Board of Directors
  William T. Sullivan....... 57  President, Chief Executive Officer and Director
  Stephen M. Blinn.......... 53  Director
  William G. McLendon....... 49  Director
  Ryan M. Schwarz (1)....... 34  Director
  Russell E. Taskey......... 67  Director
</TABLE>
--------
(1) On November 25, 1997, the Company closed upon the sale of an aggregate of
    1,452,119 shares of Series B Convertible Preferred Stock (the "Preferred
    Stock"), and Class I and Class II Warrants to Carlyle Venture Partners,
    L.P., C/S Venture Investors, L.P., Carlyle U.S. Venture Partners, L.P.,
    and Carlyle Venture Coinvestment, L.L.C. (collectively, the "Purchasers")
    for a net purchase price of $4,582,000. The holders of the Preferred Stock
    have the right to appoint two directors to the Company's Board of
    Directors. In May 2000, the Purchasers appointed Mr. Schwarz, a Vice
    President of Carlyle Venture Partners, L.P., as one of the Company's
    directors. Information on Mr. Schwarz is provided below.

  Christian E. Callsen has been a Director of the Company since May 1999 and
Chairman of the Board of Directors since October 2000. Mr. Callsen has served
as Chairman of Polymer Concepts, Incorporated, formerly known as Allen Medical
Systems, a private Cleveland-based medical devices manufacturer, since 1995
and as President and Chief Executive Officer from 1996 to 1998. Prior thereto
he served in the following positions at various times throughout his
professional career: President and Chief Operating Officer of Applied Medical
Technology, Inc.; President, Chief Operating Officer and Director of
Professional Veterinary Hospitals of America, Inc.; President and Chief
Operating Officer of HLS Management Company; and Chairman and Chief Executive
Officer of the Optical Group of Cole National Corporation.

  William T. Sullivan has been President, Chief Executive Officer and a
Director of the Company since January 1998. Mr. Sullivan served as President
and Chief Operating Officer of BEC Group, a company whose business includes
marketing and distributing premium sunglasses, from 1994 to 1997. Mr. Sullivan
served as President of the Consumer Optical Group at Optical Radiation
Corporation from 1987 to the time it was acquired by BEC Group in 1994. Prior
thereto, Mr. Sullivan served for eleven years in senior management positions
for Pearle Vision Center, including four years as President. Mr. Sullivan is a
past Director of Lumen Technologies.

  Stephen M. Blinn has been a Director of the Company since May 1993. Mr.
Blinn has served as President of ExoGenesis, a startup biomedical company,
whose business includes changing the surfaces of implantable medical devices.
Mr. Blinn has served as President and Chief Executive Officer of Silver
Platter Education, Inc.,

                                      46
<PAGE>

a company providing continuing education programs for medical providers, since
January 1999. Mr. Blinn served as an Executive Vice President and Chief
Operating Officer from May 1993 to January 1998, and as President of the
Company's SightCare operations from January 1998 to August 1998. Mr. Blinn
served as Executive Vice
President, Strategic Marketing Development of Summit Technology, Inc. from
1991 to May 1993. Mr. Blinn first joined Summit in 1987 and served as Vice
President, Sales and Marketing. Prior thereto he was the co-founder and
President of Source Research, Inc., a distribution company for medical lasers
and cardiac pacemakers, from 1985 to 1987.

  William G. McLendon has been a Director of the Company since its inception
in 1992 and served as President from 1992 to January 1998 and Chief Executive
Officer from April 1994 to January 1998. Mr. McLendon served as Vice President
and Chief Financial Officer of IBIS Technology Corporation, a manufacturer of
silicon-based materials for semiconductors, from 1990 to 1993. Prior thereto,
Mr. McLendon was the Vice President, Chief Financial Officer and Treasurer of
Summit Technology, Inc. from 1986 to 1990, and was Vice President and Chief
Financial Officer of Zymet, Inc. from 1983 to 1985. Mr. McLendon is a Director
of Epion Corporation, a company which develops advanced materials and new
technology for semiconductors and other applications.

  Ryan M. Schwarz has been a Director of the Company since May 2000. Mr.
Schwarz is a Vice President of the Carlyle Venture Partners, L.P. ("CVP").
Prior to joining CVP in 1997, Mr. Schwarz was a Vice President in Robertson
Stephens & Company's health care services investment banking group. Prior to
joining Robertson Stephens & Company, Mr. Schwarz was with the Mergers and
Acquisitions department of Morgan Stanley & Co. Mr. Schwarz serves on the
Boards of Directors of Heritage Health Systems, Inc. and Primary Health, Inc.

  Russell E. Taskey has been a Director of the Company since November 1992.
Mr. Taskey is currently President of R. E. Taskey, Associates, a human
resource consulting firm. Mr. Taskey served as Vice President of Human
Resources at The Analytic Sciences Corporation ("TASC") from 1973 to 1994. Mr.
Taskey was the founding President and is presently a Director of the Northeast
Human Resources Association, a 2,000-person human resource professional
association. He also serves on the advisory board of Active Control Experts
and the advisory board of Epion Corporation.

Executive Officers

  The following table sets forth certain information regarding the executive
officers of the Company as of December 30, 2000:

<TABLE>
<CAPTION>
  Name                   Age Position with the Company
  ----                   --- -------------------------
<S>                      <C> <C>
  William T. Sullivan...  57 President, Chief Executive Officer and Director
  James W. Norton (1)...  50 Executive Vice President, Finance and Chief Financial Officer
</TABLE>

--------
(1) Mr. Norton assumed the position of Executive Vice President, Finance and
    Chief Financial Officer of the Company effective August 17, 1998.
    Information on Mr. Norton is provided below.

  James W. Norton has been Executive Vice President of Finance and
Administration, Chief Financial Officer and Treasurer of the Company since
August 1998. Mr. Norton served as Vice President of Finance for the
International Division of Dunkin Donuts/Baskin Robbins, a Massachusetts-based
subsidiary of Allied Domecq, a British food and service company, from 1982 to
1998. Prior thereto, Mr. Norton served as Marketing Controller of Unitrode
Corporation, a Massachusetts based manufacturer of electrical components.

                                      47
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance.

   Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers, and persons who own more than 10% of the Common Stock
of the Company to file with the Securities and Exchange Commission (the "SEC")
initial reports of beneficial ownership and reports of changes in beneficial
ownership of the Common Stock and other equity securities of the Company.
Officers, directors and greater than 10% beneficial owners are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms they
file.

  To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 30, 2000, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than 10% beneficial owners were complied with, except that one initial
report of beneficial ownership was filed late by Ryan M. Schwarz.

Item 11. Executive Compensation

  Summary Compensation. The following Summary Compensation Table sets forth
summary information as to compensation received by the Company's Chief
Executive Officer and the other most highly compensated executive officer of
the Company who was serving as such at the end of the fiscal year ended
December 30, 2000 (the "Named Executive Officers") for services rendered to
the Company in all capacities during the last three fiscal years ended
December 30, 2000. No other executive officer of the Company received
compensation exceeding $100,000 for the fiscal year ended December 30, 2000.

                          SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                       Long Term
                                                      Compensation
                                                         Awards
                                                      ------------
                                  Annual Compensation
                                  -------------------  Securities   All Other
Name and Principal         Fiscal Salary  Bonus Other  Underlying  Compensation
Position                    Year    ($)    ($)   ($)  Options (#)     ($)(1)
------------------         ------ ------- ----- ----- ------------ ------------
<S>                        <C>    <C>     <C>   <C>   <C>          <C>
William T. Sullivan (2)...  2000  238,043     0    0          0       15,716
 President and Chief        1999  245,000     0    0     50,000       10,200
 Executive Officer          1998  216,731     0    0    325,000        9,221

James W. Norton (3).......  2000  171,500     0    0          0        4,673
 Executive Vice President,  1999  165,000     0    0     25,000       12,500
 Finance and Chief
  Financial                 1998   52,308 7,500    0    114,999       12,698
 Officer
</TABLE>
--------
(1) Represents the cost to the Company of matching contributions under the
    Company's 401(k) Plan, the dollar value of premiums paid by the Company
    with respect to term life insurance for all named executive officers, car
    allowances and relocation expenses.
(2) Mr. Sullivan assumed the position of President and Chief Executive Officer
    of the Company effective January 26, 1998.
(3) Mr. Norton assumed the position of Executive Vice President, Finance and
    Chief Financial Officer of the Company effective August 17, 1998.

Option Grants in Last Fiscal Year

  The Company did not grant options to any Named Executive Officer during the
fiscal year endedDecember 30, 2000.

                                      48
<PAGE>

Option Exercises in Last Fiscal Year and Fiscal Year-End Values

  None of the Named Executive Officers exercised stock options during the
fiscal year ended December 30, 2000. The following table includes the number
of shares covered by both exercisable and unexercisable stock options as of
December 30, 2000 and the values of "in-the-money" options, which values
represent the positive spread between the exercise price of any such option
and the fiscal year-end value of the Company's Common Stock.

              AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
                         FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
                                                              Number of
                                                        Securities Underlying       Value of Unexercised
                                                       Unexercised Options at       In-the-Money Options
                             Shares                      Fiscal Year-End (#)       at Fiscal Year-End ($)
                            Acquired        Value     ------------------------- -----------------------------
          Name           on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable (1)
          ----           --------------  ------------ ----------- ------------- ----------- -----------------
<S>                      <C>             <C>          <C>         <C>           <C>         <C>
William T. Sullivan.....       --             --        333,332      41,668           0              0
James W. Norton.........       --             --         85,000      54,999           0              0
</TABLE>
--------
(1) None of the unexercised options had exercise prices that were less than
    the closing sale price per share of the Company's Common Stock as reported
    on the Over-the-Counter Bulletin Board on December 30, 2000.

Compensation of Directors.

  The Company has implemented a stock option program under its Stock Option
Plan for non-employee directors. The Stock Option Plan provides for a grant to
each non-employee director immediately following each annual meeting of
shareholders of a non-qualified option to purchase 5,000 shares of Common
Stock of the Company, provided that on such date such director has been in the
continued and uninterrupted services of the Company as a director for a period
of at least one year. Each such option has an exercise price equal to the fair
market value of the Common Stock on the date of grant and vests in equal
annual installments over two years. The Company currently has no other
compensation arrangements for members of the Board of Directors but may elect
in the future to compensate Board members for attendance at regular meetings
of the Board of Directors and for meetings of the committees of the Board.

  The Company paid a total of $15,629 to Christian E. Callsen, the Chairman of
the Board of Directors of the Company, in exchange for consulting services
rendered to the Company and for his service as the Chairman of the Board of
Directors during the fiscal year ended December 30, 2000.

Employment Contracts and Termination of Employment and Change-in-Control
Arrangements.

  The Company has entered into employment agreements with Messrs. Sullivan,
McLendon, Blinn and Norton. Under the agreement with Mr. Sullivan, the Company
agreed to employ Mr. Sullivan as the President and Chief Executive Officer of
the Company for an initial term of three years at an annual salary of
$245,000, subject to adjustment from time to time by the Board of Directors.
The agreement provides that Mr. Sullivan's term of employment will be extended
automatically for additional two-year periods upon expiration of the initial
term and each subsequent two-year period unless the Company or Mr. Sullivan
provides notice to the other party that the term shall not be extended. Mr.
Sullivan is also eligible to receive a discretionary annual bonus not to
exceed 50% of his yearly base salary payable annually based upon profitability
of the Company. Mr. Sullivan's agreement was amended on December 4, 1998. The
amendment provides for payment of base salary and health insurance for a
period of two years in the event that Mr. Sullivan's employment is (i)
terminated without cause, (ii) not renewed by the Company, or (iii) terminated
by a breach of contract by the Company. The amendment also provides for
payment of two years salary upon certain changes of control of the Company.
Changes of control which may trigger payment are (i) a person's becoming the
beneficial owner of 25% or more of the outstanding Common Stock of the
Company, (ii) if, ten days following a tender offer or exchange offer, the

                                      49
<PAGE>

consummation of which would result in the beneficial ownership by a person of
25% or more of the outstanding Common Stock of the Company, such person has
not discontinued or rescinded the tender offer or exchange offer, (iii) if,
during any consecutive twelve month period beginning on or after the date on
which the amendment was executed individuals who at the beginning of such
period were directors of the Company cease to constitute at least a majority
of the Board of Directors of the Company, or (iv) a merger, consolidation,
liquidation or sale of substantially all of the Company's assets. The
amendment also provides for the acceleration of all unvested stock options
held by Mr. Sullivan following a Change of Control of the Company.

  Under the terms of the agreement with Mr. McLendon, he received bi-weekly
payments of $3,500 through February 25, 2000.

  Under the terms of the agreement with Mr. Blinn, he received biweekly
payments of $3,750 through April 28, 2000.

  Under the terms of the agreement with Mr. Norton, he will serve as Vice
President of Finance and Chief Financial Officer of the Company at an annual
salary of $171,500. Mr. Norton is also eligible to receive a discretionary
annual bonus not to exceed 35% of his yearly base salary payable annually
based upon profitability of the Company. The agreement for Mr. Norton also
provides for a payment of one year's salary in the event employment is
terminated upon certain changes of control of the Company. Changes of control
which may trigger a payment of one year's salary are (i) a person's becoming
the beneficial owner of 25% or more of the outstanding Common Stock of the
Company, (ii) if, ten days following a tender offer or exchange offer, the
consummation of which would result in the beneficial ownership by a person of
25% or more of the outstanding Common Stock of the Company, such person has
not discontinued or rescinded the tender offer or exchange offer, or (iii) a
merger, consolidation, liquidation or sale of substantially all of the
Company's assets. In the event that Mr. Norton's employment is terminated
without cause or in certain other circumstances, he is entitled to one year's
base salary and the cost of one year's health benefits as severance. The
amendment also provides for the acceleration of all unvested stock options
held by Mr. Norton following a Change of Control of the Company.

Item 12.  Security Ownership of Certain Beneficial Owners and Management


  The following table sets forth certain information regarding the beneficial
ownership of shares of the Company's Common Stock and shares of the Company's
Preferred Stock, in each case as of March 31, 2001 by (i) each Stockholder
known by the Company to own beneficially 5% or more of its outstanding shares
of Common Stock, (ii) each current Director of the Company, (iii) each Named
Executive Officer of the Company, and (iv) all Directors and executive
officers of the Company as a group:

<TABLE>
<CAPTION>
                                             Common Stock     Preferred Stock
                                                Shares            Shares
                                             Beneficially      Beneficially
                                               Owned (1)         Owned (1)
                                           ----------------- -----------------
Name and Address** of Beneficial Owner      Number   Percent  Number   Percent
--------------------------------------     --------- ------- --------- -------
<S>                                        <C>       <C>     <C>       <C>
Carlyle Venture Partners, L.P.(2)......... 1,742,543  18.9%  1,452,119   100%
 1001 Pennsylvania Avenue, N.W.
 Suite 220 South
 Washington, D.C. 20004
Ryan M. Schwarz (2)....................... 1,742,543  18.9%  1,452,119   100%
William G. McLendon (3)...................   393,395   4.3%          0    --
Stephen M. Blinn (4)......................   372,000   4.0%          0    --
William T. Sullivan (5)...................   476,322   5.2%          0    --
Russell E. Taskey (6).....................    47,234     *           0    --
James W. Norton (7).......................    85,000     *           0    --
Christian E. Callsen (8)..................     4,500     *           0    --
All Directors and executive officers as a
 group (7 persons) (9).................... 3,120,994  33.8%  1,452,119   100%
</TABLE>

                                      50
<PAGE>

--------
*  Represents beneficial ownership of less than 1% of the Company's Common
   Stock.
** Addresses are given for beneficial owners of more than 5% of the
   outstanding Common Stock only.

(1) The number of shares of Common Stock issued and outstanding on March 31,
    2001 was 9,230,952 and the number of shares of Preferred Stock issued and
    outstanding on March 31, 2001 was 1,452,119. The calculation of percentage
    ownership for each listed beneficial owner is based upon the number of
    shares of Common Stock and Preferred Stock issued and outstanding at March
    31, 2001 plus shares of Common Stock subject to options held by such
    person at March 31, 2001 and exercisable within 60 days thereafter and
    shares underlying redeemable common stock purchase warrants (the
    "Warrants"), warrants issued to investors (the "Investor Warrants") and
    shares of Preferred Stock held by such person. The persons and entities
    named in the table have sole voting and investment power with respect to
    all shares shown as beneficially owned by them, except as noted below.
(2) Includes 1,229,472 shares of Common Stock issuable upon conversion of
    1,024,560 shares of Preferred Stock and upon exercise of 204,912 Investor
    Warrants issued to Carlyle Venture Partners, L.P. ("CVP"), whose general
    partner is TCG Ventures, Ltd. ("Ventures Ltd."). The sole shareholder of
    Ventures Ltd. is TCG Ventures, L.L.C. ("Ventures LLC"). Mr. Ryan M.
    Schwarz is a Vice President of CVP. Mr. Schwarz may be deemed to share
    beneficial ownership of shares owned by CVP, but Mr. Schwarz disclaims any
    such beneficial ownership. Also includes an aggregate of 513,071 shares of
    Common Stock issuable upon conversion of 427,559 shares of Preferred Stock
    and upon exercise of 85,512 Investor Warrants held by affiliates of CVP:
    C/S Venture Investors, L.P. ("C/S"), whose general partner is Ventures
    Ltd.; Carlyle U.S. Venture Partners, L.P. ("CUS") and Carlyle Venture
    Coinvestment, L.L.C. ("CVC"), whose general partner and managing member,
    respectively, is Ventures LLC. Mr. Schwarz may be deemed to share
    beneficial ownership of shares owned by C/S, CUS and CVC, but Mr. Schwarz
    disclaims any such beneficial ownership.
(3) Includes 62,500 shares issuable upon exercise of stock options within 60
    days after March 31, 2001. Also includes, 23,000 shares of common stock
    held by a member of Mr. McLendon's immediate family of which Mr. McLendon
    disclaims beneficial ownership.
(4) Includes 74,168 shares issuable upon exercise of stock options within 60
    days after March 31, 2001, and 153,000 shares gifted to Mr. Blinn's
    immediate family, of which Mr. Blinn disclaims beneficial ownership.
(5) Includes 333,332 shares issuable upon exercise of stock options within 60
    days after March 31, 2001.
(6) Includes 28,334 shares issuable upon exercise of stock options within 60
    days after March 31, 2001.
(7) Includes 85,000 shares issuable upon exercise of stock options within 60
    days after March 31, 2001.
(8) Includes 2,500 shares issuable upon exercise of stock options within 60
    days after March 31, 2001.
(9) Includes 585,834 shares issuable upon exercise of stock options within 60
    days after March 31, 2001.

Item 13. Certain Relationships and Related Transactions

  On November 25, 1997, the Company closed upon the sale of an aggregate of
1,452,119 shares of Series B Convertible Preferred Stock (the "Preferred
Stock"), and Class I and Class II Warrants to Carlyle Venture Partners, L.P.,
C/S Venture Investors, L.P., Carlyle U.S. Venture Partners, L.P., and Carlyle
Venture Coinvestment, L.L.C. (collectively, the "Purchasers") for a net
purchase price of $4,582,000. The Preferred Stock was purchased at a price
lower than market value, and as a result, the difference of $1,953,000 was
accounted for by the Company as a dividend to the holders of the Preferred
Stock. Each share of Preferred Stock is convertible into one share of Common
Stock, subject to adjustment, at the Purchasers' option at any time and at the
Company's option if the price per share of Common Stock during any period of
thirty consecutive trading days equals or exceeds $7.00 at any time during the
first three years or $9.00 at any time thereafter. The holders of the
Preferred Stock have the right to appoint two directors to the Company's Board
of Directors. In May 2000, the Purchasers appointed Ryan M. Schwarz, a Vice
President of The Carlyle Group to the Company's Board of Directors. The Class
I (Mirror) Warrants entitle the Purchasers to purchase an amount of shares of
the Company's Common Stock equal to an aggregate of up to 19.9% of the shares
of Common Stock purchasable under the Company's outstanding warrants and
options on the same terms and conditions of existing warrant and option
holders. The Purchasers are obligated to exercise the Class I Warrants at the
same time the options

                                      51
<PAGE>

and warrants of existing holders are exercised, subject to certain
limitations. The Class II Warrants entitle the Purchasers to purchase an
aggregate of 290,424 shares of the Company's Common Stock at an exercise price
of $7.00 per share for a term of five years. The Purchasers are entitled to
"shelf" registration rights and "piggyback" registration rights with respect
to the shares of Common Stock underlying the Preferred Stock, the Class I
Warrants and the Class II Warrants. Upon a change of control of the Company,
defined as (i) a change in any person or group obtaining a majority of the
securities ordinarily having the right to vote in an election of Directors;
(ii) during any two year period, the individuals who at the beginning of the
period constituted the Company's Board of Directors no longer constitute a
majority of the Board of Directors; (iii) any merger, consolidation,
recapitalization, reorganization, dissolution or liquidation of the Company
which results in the current stockholders no longer owning more than 50% of
the voting securities of the Company; (iv) any sale, lease exchange or other
transfer of all, or substantially all, of the assets of the Company; or (v)
the adoption of a plan leading to the liquidation or dissolution of the
Company, at the option of the Purchasers, the Company would be required to
redeem the Preferred Stock at a price equal to 105% of the offering price,
subject to certain adjustments, plus accrued and unpaid dividends.

  In connection with the exercise of stock options to purchase 138,332 shares
(the "Option Shares") of the Company's common stock during fiscal 1997,
Stephen M. Blinn, a former executive officer and current Director of the
Company, executed a promissory note (the "Note") in favor of the Company for
the aggregate exercise price of $594,111. The Note is due on the earlier of
September 2, 2007 or the date upon which Mr. Blinn receives the proceeds of
the sale of not less than 20,000 of the Option Shares (the "Maturity Date").
Interest accrues at the rate of 6.55%, compounding annually, and is payable on
the earlier of the Maturity Date of the Note or upon certain Events of Default
as defined in the Note. The principal balance of the Note, together with
accrued and unpaid interest, was approximately $714,000 as of December 30,
2000. During the third quarter of fiscal 2000, Mr. Blinn informed the Company
that he understood that the terms of the Note permitted Mr. Blinn to satisfy
in full his obligations under the Note by either (a) returning the Option
Shares to the Company or (b) turning over to the Company any cash proceeds
received by Mr. Blinn upon a sale of the Option Shares. The Company has
informed Mr. Blinn that the Note is a full recourse promissory note, and that
Mr. Blinn remains personally liable for all unpaid principal and interest
under the Note.

                                    PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

Item 14(a)(1). Index to Consolidated Financial Statements Covered by Report of
Independent Auditors

  The Consolidated Financial Statements of Sight Resource Corporation are
included in Item 8:

  -- Independent Auditors' Report

  -- Consolidated Balance Sheets as of December 30, 2000 and December 25, 1999

  -- Consolidated Statements of Operations for the Years Ended December 30,
      2000, December 25, 1999 and December 31, 1998, respectively

  -- Consolidated Statements of Stockholders' Equity for the Years Ended
      December 30, 2000, December 25, 1999 and December 31, 1998, respectively

  -- Consolidated Statements of Cash Flows for the Years Ended December 30,
      2000, December 25, 1999 and December 31, 1998, respectively

  -- Notes to Consolidated Financial Statements

Item 14(a)(2). Index to Consolidated Financial Statement Schedules

                                      52
<PAGE>

                         INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders Sight Resource Corporation:

  Under dates of March 16, 2001 and March 30, 2001, we reported on the
consolidated balance sheets of Sight Resource Corporation and its subsidiaries
as of December 30, 2000 and December 25, 1999, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 30, 2000, which are included in
the annual report on Form 10-K for the year 2000. In connection with our
audits of the aforementioned consolidated financial statements, we also
audited the related consolidated financial statement schedule in the annual
report on Form 10-K. This financial statement schedule is the responsibility
of the Company's management. Our responsibility is to express an opinion on
this financial statement schedule based on our audits.

  In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.

  The audit report on the consolidated financial statements of Sight Resource
Corporation and its subsidiaries referred to above contains an explanatory
paragraph that states that the Company's recurring losses and resultant
defaults under the Company's debt agreement raise substantial doubt about the
entity's ability to continue as a going concern. The financial statement
schedule included in the annual report on Form 10-K does not include any
adjustments that might result from the outcome of this uncertainty.

                                          /s/ KPMG LLP

                                          KPMG LLP

Boston, Massachusetts
March 30, 2001

                                      53
<PAGE>

                           SIGHT RESOURCE CORPORATION

                 Schedule II--Valuation and Qualifying Accounts

                             (dollars in thousands)

                 FOR THE TWELVE MONTHS ENDED DECEMBER 30, 2000

<TABLE>
<CAPTION>
                                             Additions
                                           (Deductions)
                                       ---------------------
                                          Charged
                            Balance at (Credited) to
                            Beginning    Costs and    Other       Balance at
        Description          of Year     Expenses      Net       End of Period
        -----------         ---------- ------------- -------     -------------
<S>                         <C>        <C>           <C>         <C>
Valuation and qualifying
 accounts deducted from
 assets:
Allowances for accounts
 receivable................   $1,881      $  588     $  (572)(1)    $1,897
Valuation allowance for
 deferred tax assets.......    7,115       1,764           0         8,879
--------
(1) Represents losses charged to reserves

                 FOR THE TWELVE MONTHS ENDED DECEMBER 25, 1999

<CAPTION>
                                             Additions
                                           (Deductions)
                                       ---------------------
                                          Charged
                            Balance at (Credited) to
                            Beginning    Costs and    Other       Balance at
        Description          of Year     Expenses      Net       End of Period
        -----------         ---------- ------------- -------     -------------
<S>                         <C>        <C>           <C>         <C>
Valuation and qualifying
 accounts deducted from
 assets:
Allowances for accounts
 receivable................   $  748      $1,233     $  (100)(1)    $1,881
Valuation allowance for
 deferred tax assets.......    8,810       1,015      (2,710)(2)     7,115
--------
(1) Represents losses charged to reserves
(2) The valuation allowance was reduced due to acquisition costs that resulted
    in the recognition of deferred tax liabilities.

                 FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998

<CAPTION>
                                             Additions
                                           (Deductions)
                                       ---------------------
                                          Charged
                            Balance at (Credited) to
                            Beginning    Costs and    Other       Balance at
        Description          of Year     Expenses      Net       End of Period
        -----------         ---------- ------------- -------     -------------
<S>                         <C>        <C>           <C>         <C>
Valuation and qualifying
 accounts deducted from
 assets:
Allowances for accounts
 receivable................   $  478      $  215     $    55 (1)    $  748
Valuation allowance for
 deferred tax assets.......    8,869         408        (467)(2)     8,810
</TABLE>
--------
(1) Recoveries exceeded losses charged to reserves
(2) The valuation allowance was reduced due to acquisition costs that resulted
    in the recognition of deferred tax liabilities.

                                       54
<PAGE>

Item 14(a)(3) Exhibits

  The exhibits listed on the Exhibit Index below are filed or incorporated by
reference as part of this report.

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
  (2.1)  Stock Purchase and Sale Agreement, dated as of April 1, 1999, by and
         among Kent Optical Company, Custom Optics, Inc., Kent-N.W. Grand
         Rapids, Inc., Kent-Hackley, Inc., Source Optical Supply, Inc., the
         stockholders of such companies, Kent Acquisition Corporation and Sight
         Resource Corporation (incorporated herein by reference to Exhibit 2.1
         of the Company's Report on Form 8-K filed with the Securities and
         Exchange Commission on May 6, 1999)


  (3.1)  Certificate of Incorporation of the Company (incorporated herein by
         reference to Exhibit 3.1 of the Company's Registration Statement filed
         with the Securities and Exchange Commission on Form SB-2 File No. 33-
         56668)

  (3.2)  By-Laws of the Company, as amended (incorporated herein by reference
         to Exhibit 3.2 of the Company's Registration Statement filed with the
         Securities and Exchange Commission on Form SB-2 File No. 33-56668)

  (3.3)  Certificate of Designation for Series A Junior Participating Preferred
         Stock (incorporated herein by reference to Exhibit 1 of the Company's
         Report on Form 8-K filed with the Securities and Exchange Commission
         on May 13, 1997)

  (3.4)  Certificate of Designation, Preferences and Rights of Series B
         Convertible Preferred Stock (incorporated herein by reference to
         Exhibit 4.1 of the Company's Report on Form 8-K filed with the
         Securities and Exchange Commission on December 9, 1997)

  (4.1)  Article 4 of the Certificate of Incorporation (incorporated herein by
         reference to Exhibit 3.1 of the Company's Registration Statement filed
         with the Securities and Exchange Commission on Form SB-2 File No. 33-
         56668)

  (4.2)  Form of Common Stock Certificate (incorporated herein by reference to
         Exhibit 4.2 of the Company's Registration Statement filed with the
         Securities and Exchange Commission on Form SB-2 File No. 33-56668)

  (4.3)  Form of Class 1 (Mirror) Warrants (incorporated herein by reference to
         Exhibit 4.2 of the Company's Report on Form 8-K filed with the
         Securities and Exchange Commission on December 9, 1997)

  (4.4)  Form of Class II Warrants (incorporated herein by reference to Exhibit
         4.3 of the Company's Report on Form 8-K filed with the Securities and
         Exchange Commission on December 9, 1997)

 (10.1)* Employment Agreement, dated as of December 1, 1992, between the
         Registrant and William G. McLendon, as amended (incorporated by
         reference herein to Exhibit 10.5 of the Company's Registration
         Statement filed with the Securities and Exchange Commission on Form S-
         1 File No. 33-77030)

 (10.2)* 1992 Employee, Director and Consultant Stock Option Plan, as amended
         (incorporated by reference herein to Exhibit 10.2 of the Company's
         Form 10-K for the year ended December 25, 1999 filed with the
         Securities and Exchange Commission)

 (10.3)* Employment Agreement for Stephen M. Blinn, as amended (incorporated by
         reference herein to Exhibit 10.18 of the Company's Registration
         Statement filed with the Securities and Exchange Commission on Form S-
         1 File No. 33-77030)

</TABLE>

                                       55
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
  Number                               Description
 -------                               -----------
 <C>      <S>
 (10.4)*  Employment Agreement, dated as of February 24, 1995, between the
          Registrant and Elliot S. Weinstock, O.D. (incorporated herein by
          reference to Exhibit 10.9 of the Company's Form 10-K for the year
          ended December 31, 1994 filed with the Securities and Exchange
          Commission)

 (10.5)*  Amendment Number 1 to Employment Agreement, dated as of January 2,
          1997, between the Registrant and Elliot S. Weinstock, O.D.
          (incorporated herein by reference to Exhibit 10.1 of the Company's
          Form 10-Q filed with the Securities and Exchange Commission on May 6,
          1997)

 (10.6)*  Employment Agreement, dated as of January 26, 1998, between the
          Registrant and William T. Sullivan (incorporated herein by reference
          to Exhibit 10.6 of the Company's Form 10-K for the year ended
          December 31, 1998 filed with the Securities and Exchange Commission)

 (10.7)*  Amendment No. 1 to Employment Agreement, dated as of December 4,
          1998, between the Registrant and William T. Sullivan (incorporated
          herein by reference to Exhibit 10.7 of the Company's Form 10-K for
          the year ended December 31, 1998 filed with the Securities and
          Exchange Commission)

 (10.8)*  Letter Agreement, dated as of July 27, 1998, between the Registrant
          and William G. McLendon (incorporated herein by reference to Exhibit
          10b of the Company's Report on Form 10-Q filed with the Securities
          and Exchange Commission on November 13, 1998)

 (10.9)*  Letter Agreement, dated as of August 3, 1998, between the Registrant
          and Stephen M. Blinn (incorporated herein by reference to Exhibit 10c
          of the Company's Report on Form 10-Q filed with the Securities and
          Exchange Commission on November 13, 1998)

 (10.10)* Employment Agreement, dated as of August 17, 1998, between the
          Registrant and James W. Norton (incorporated herein by reference to
          Exhibit 10a of the Company's Report on Form 10-Q filed with the
          Securities and Exchange Commission on November 31, 1998)

 (10.11)  Form of Management Agreement between certain of the Registrant's
          subsidiaries and their related optometric professional corporations
          (incorporated herein by reference to Exhibit 10.11 of the Company's
          Form 10-K for the year ended December 31, 1998 filed with the
          Securities and Exchange Commission)

 (10.12)  Form of Stock Restrictions and Pledge Agreement between certain of
          the Registrant's subsidiaries, their related optometric professional
          corporations and the nominee shareholders (incorporated herein by
          reference to Exhibit 10.12 of the Company's Form 10-K for the year
          ended December 31, 1998 filed with the Securities and Exchange
          Commission)

 (10.13)  Asset Purchase Agreement, dated February 24, 1995 between the
          Registrant, CEA Acquisition Corporation, Cambridge Eye Associates,
          Inc. and Elliot S. Weinstock, O.D. (incorporated herein by reference
          to Exhibit 2.1 of the Company's Form 8-K filed with the Securities
          and Exchange Commission on March 8, 1995)

 (10.14)  Credit Agreement, dated February 20, 1997, between the Company and
          Creditanstalt Corporate Finance Corporation, Inc. (incorporated
          herein by reference to Exhibit 10.1 of the Company's Form 8-K filed
          with the Securities and Exchange Commission on March 7, 1997)

 (10.15)  Asset Purchase Agreement, dated August 24, 1995, between the
          Registrant, Douglas Vision World, Inc., S.J. Haronian, Kathleen
          Haronian, Lynn Haronian, Shirley Santoro and Tri-State Leasing
          Company (incorporated herein by reference to Exhibit 2.1 of the
          Company's Form 8-K filed with the Securities and Exchange Commission
          on September 8, 1995)

</TABLE>

                                       56
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
 (10.16) Asset Transfer and Merger Agreement, dated as of July 1, 1996, by and
         among Sight Resource Corporation, E.B. Acquisition Corp., The E.B.
         Brown Optical Company, Brown Optical Laboratories, Inc., E.B. Brown
         Opticians, Inc., Gordon Safran and Evelyn Safran (incorporated herein
         by reference to Exhibit 2.1 of the Company's Form 8-K filed with the
         Securities and Exchange Commission on October 3, 1996)

 (10.17) Form of Rights Agreement, dated as of May 15, 1997, between the
         Company and American Stock Transfer & Trust Company (incorporated
         herein by reference to Exhibit 1 of the Company's Form 8-K filed with
         the Securities and Exchange Commission on May 13, 1997)

 (10.18) Stock Purchase Agreement, dated as of July 1, 1997, by and among
         Marjory O. Greenberg, As Testamentary Executrix of the Succession of
         Tom I. Greenberg, Peter Brown, and Vision Plaza Corp. (incorporated
         herein by reference to Exhibit 10.1 of the Company's Form 10-Q filed
         with the Securities and Exchange Commission on November 12, 1997)

 (10.19) Promissory Note, dated as of September 2, 1997, between Sight Resource
         Corporation and Mr. Stephen Blinn (incorporated herein by reference to
         Exhibit 10.2 of the Company's Form 10-Q filed with the Securities and
         Exchange Commission on November 12, 1997)

 (10.20) Series B Convertible Preferred Stock Agreement (incorporated herein by
         reference to Exhibit 10.1 of the Company's Form 8-K filed with the
         Securities and Exchange Commission on December 9, 1997)

 (10.21) Loan Agreement, dated as of April 1, 1999, by and between Sight
         Resource Corporation and Fleet National Bank (incorporated herein by
         reference to Exhibit 99.1 of the Company's Report on Form 8-K filed
         with Securities and Exchange Commission on May 6, 1999)

 (10.22) $7,000,000 Term Loan Note, dated as of April 1, 1999, between Sight
         Resource Corporation and Fleet National Bank (incorporated herein by
         reference to Exhibit 99.2 of the Company's Report on Form 8-K filed
         with Securities and Exchange Commission on May 6, 1999)

 (10.23) $3,000,000 Secured Revolving Line Note, dated as of April 1, 1999,
         between Sight Resource Corporation and Fleet National Bank
         (incorporated herein by reference to Exhibit 99.3 of the Company's
         Report on Form 8-K filed with Securities and Exchange Commission on
         May 6, 1999)

 (10.24) $10,000,000 Secured Acquisition Term Note, dated as of April 1, 1999,
         between Sight Resource Corporation and Fleet National Bank
         (incorporated herein by reference to Exhibit 99.4 of the Company's
         Report on Form 8-K filed with Securities and Exchange Commission on
         May 6, 1999)

 (10.25) Borrower Security Agreement, dated as of April 1, 1999, by and between
         Sight Resource Corporation and Fleet National Bank (incorporated
         herein by reference to Exhibit 99.5 of the Company's Report on Form 8-
         K filed with Securities and Exchange Commission on May 6, 1999)

 (10.26) Borrower Stock Pledge Agreement, dated as of April 1, 1999, by and
         between Sight Resource Corporation and Fleet National Bank
         (incorporated herein by reference to Exhibit 99.6 of the Company's
         Report on Form 8-K filed with Securities and Exchange Commission on
         May 6, 1999)

 (10.27) Trademark Security Agreement, dated as of April 1, 1999, by and
         between Sight Resource Corporation and Fleet National Bank
         (incorporated herein by reference to Exhibit 99.7 of the Company's
         Report on Form 8-K filed with Securities and Exchange Commission on
         May 6, 1999)

 (10.28) Modification Agreement, dated March 31, 2000, between Sight Resource
         Corporation and Fleet National Bank (incorporated by reference herein
         to Exhibit 10.1 of the Company's Form 10-Q filed with the Securities
         and Exchange Commission on May 9, 2000)

</TABLE>

                                       57
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
 Number                               Description
 -------                              -----------
 <C>     <S>
 (10.29) Second Modification Agreement, dated November 30, 2000, between Sight
         Resource Corporation and Sovereign Bank of New England (incorporated
         by reference herein to Exhibit 99.1 of the Company's Form 8-K filed
         with the Securities and Exchange Commission on December 15, 2000)

 (21)    Subsidiaries of the Company (incorporated by reference to Exhibit 21
         of the Company's Form 10-K filed with the Securities and Exchange
         Commission on March 31, 2000)
</TABLE>
--------
*Management contract or compensatory plan, contract or arrangement.

Item 14(b) Reports on Form 8-k

  The Company filed one report on Form 8-K during the quarter ended December
30, 2000. On December 15, 2000, the Company filed a Form 8-K dated November 30,
2000 to report its entry into a loan modification agreement with its primary
lender (under Item 5).

                                       58
<PAGE>

                                  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, in Holliston,
Massachusetts on March 29, 2001

                                          Sight Resource Corporation

                                                  /s/ William T. Sullivan
                                          By: _________________________________
                                                    William T. Sullivan
                                               President and Chief Executive
                                                          Officer

  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 on the dates indicated.

<TABLE>
<CAPTION>
              Signature                          Title                   Date
              ---------                          -----                   ----

<S>                                    <C>                        <C>
     /s/ William T. Sullivan           President (principal         March 29, 2001
______________________________________  executive officer), Chief
         William T. Sullivan            Executive Officer and
                                        Director

     /s/ Christian E. Callsen          Chairman                     March 29, 2001
______________________________________
         Christian E. Callsen

       /s/ Stephen M. Blinn            Director                     March 29, 2001
______________________________________
           Stephen M. Blinn

         /s/ Ryan Schwarz              Director                     March 29, 2001
______________________________________
             Ryan Schwarz

     /s/ William G. McLendon           Director                     March 29, 2001
______________________________________
         William G. McLendon

      /s/ Russell E. Taskey            Director                     March 29, 2001
______________________________________
          Russell E. Taskey

       /s/ James W. Norton             Chief Financial Officer      March 29, 2001
______________________________________  March 29, 2001 (principal
           James W. Norton              financial and accounting
                                        officer)
</TABLE>

                                      59
<PAGE>

                                  SIGNATURES

  Pursuant to the requirements of Section 31 or 15(d) of the Securities
Exchange Act of 1934, the Registrant certifies that it has duly caused this
Amended Annual Report on Form 10-K/A to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, Commonwealth of
Massachusetts, on April 30, 2001.

                                           Sight Resource Corporation

                                           By: /s/ William T. Sullivan
                                           ------------------------------------

                                              William T. Sullivan
                                              President and Chief Executive
                                              Officer

                                      60