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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC 20549

                                   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)

               DELAWARE                               04-3181524
    (STATE OR OTHER JURISDICTION                   (I.R.S. EMPLOYER
  OF INCORPORATION OR ORGANIZATION)               IDENTIFICATION NO.)

  100 JEFFREY AVENUE, HOLLISTON, MA                      01746
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)

     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
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is an affiliate) on March 20, 2000, was approximately $2,492,357 based on the
last sale price as reported by NASDAQ.

As of March 20, 2000, 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

The following documents (or parts thereof) are incorporated by reference into
the following parts of this Form 10-K: Certain information required in Part III
of this Annual Report on Form 10-K is incorporated from the registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held on June 22, 2001.

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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

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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.

     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

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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.

  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.

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  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, 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

                                       6
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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>
                     Name of PC                            Nominee Shareholder         NO. OF 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                                              John Cress, OD                     4 persons
 Providers..........................................
</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.

     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),

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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

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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.

     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

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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 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

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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.

     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.

                                       11
<PAGE>

     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.

     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.

                                       12
<PAGE>

      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

                                       13
<PAGE>

relating to professional services provided by affiliated practices may be
asserted against us in the future.

     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-

                                       14
<PAGE>

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 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.

                                       15
<PAGE>

     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 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

                                       16
<PAGE>

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.

<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.

                                       17
<PAGE>

     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.

                                       18
<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.

                                       19
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER
                                                    ---------------------------------------------------------------
<S>                                                 <C>        <C>          <C>        <C>            <C>
                                                        2000    1999 (1,2)   1998 (3)   1997 (4,5,6)   1996 (6,7)
                                                    --------    ----------   --------   ------------   ----------
                                                               (In thousands, except per share amounts)
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.

                                       20
<PAGE>

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.

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

                                       21
<PAGE>

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 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

                                       22
<PAGE>

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 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,

                                       23
<PAGE>

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

                                       24
<PAGE>

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, 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

                                       25
<PAGE>

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.

<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

                                       26
<PAGE>

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 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,

                                       27
<PAGE>

(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.

                                       28
<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

                                       29
<PAGE>

<TABLE>
<CAPTION>
                          SIGHT RESOURCE CORPORATION

                          CONSOLIDATED BALANCE SHEETS

                                                                           Dec. 30           Dec. 25
                                                                             2000             1999
                                                                           -------           -------
                                                                             (in thousands except
                                                                              for share amounts)
                    ASSETS
<S>                                                                         <C>             <C>
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.

                                       30
<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.

                                       31
<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
                            ------   -----      -------    -------      --------     --------       --------       ------
<S>                        <C>      <C>       <C>         <C>          <C>          <C>            <C>          <C>
                                                                             (IN THOUSANDS)

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

                                       32
<PAGE>

                          SIGHT RESOURCE CORPORATION

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
<S>                                                                                <C>            <C>            <C>
                                                                                           2000           1999           1998
                                                                                        -------        -------        -------
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.

                                       33
<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

                                       34
<PAGE>

                           SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

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 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

                                       35
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

$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:

<TABLE>
<CAPTION>
<S>     <C>

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
</TABLE>

     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.

<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

                                       36
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

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.

     (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.

                                       37
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

     (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.

                                       38
<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.

(4)  PROPERTY AND EQUIPMENT

     Property and equipment consists of the following:

                                       39
<PAGE>

                           SIGHT RESOURCE CORPORATION

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

<TABLE>
<CAPTION>
                                                    Years Ended December
                                                    --------------------

                                                       (in thousands)


                                             2000           1999         ESTIMATED
                                          -------        -------         ---------
                                                                        USEFUL LIFE
                                                                        -----------
<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
                                                --------------------

                                                   (in thousands)

                                             2000           1999       ESTIMATED
                                          -------        -------       ---------
                                                                      USEFUL LIFE
                                                                      -----------
<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:

                                       40
<PAGE>

                           SIGHT RESOURCE CORPORATION

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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

<TABLE>
<CAPTION>
(7)   DEBT                                                                 YEARS ENDED DECEMBER
                                                                              (in thousands)
                                                                             ----------------
                                                                          2000               1999
                                                                         ------             ------
<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, 1999
 (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

                                       41
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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 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).

                                       42
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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>

     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

                                       43
<PAGE>

                          SIGHT RESOURCE CORPORATION
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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.

  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.

                                       44
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

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.

     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

                                       45
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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>
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>

                                                           NUMBER OF        WEIGHTED
                                                           --------         --------
                                                            SHARES          AVERAGE
                                                            ------          -------
                                               SHARES       UNDER           PRICE 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.

                                       46
<PAGE>

                           SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

     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.

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

<TABLE>
<CAPTION>
                                 OPTIONS OUTSTANDING                           OPTIONS EXERCISABLE
                                 -------------------                           -------------------
                                      WEIGHTED
                                      --------
                                       AVERAGE            WEIGHTED       NUMBER
                                      -------            --------       ------
   RANGE OF             NUMBER        REMAINING          AVERAGE      EXERCISABLE       WEIGHTED
   ---------           -------        ---------          -------      -----------       --------
    EXERCISE         OUTSTANDING      CONTRACTUAL        EXERCISE         AT             AVERAGE
   ---------        ------------      -----------        --------         --             -------
     PRICES         AT 12/30/2000         LIFE             PRICE       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:

                                       47
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

<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>

     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.

                                       48
<PAGE>

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

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

<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.

(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

                                       49
<PAGE>

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

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (CONTINUED)

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.

(15) OPERATING SEGMENT AND RELATED INFORMATION

The following table presents certain operating segment information.
<TABLE>
<CAPTION>

                                                                  2000
                                                                 -------
                                                             (in thousands)

                                                             Laser Vision
                                       Eye Care Centers       Correction     All Other    Consolidated Totals
                                      ------------------      ----------     ----------   -------------------
<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>

                                       50
<PAGE>

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
<TABLE>
<CAPTION>

                                                                              1999
                                                                              ----
                                                                          (in thousands)


                                                                Laser Vision
                                                                ------------
                                         Eye Care Centers       Correction            All Other       Consolidated Totals
                                         ----------------       ----------            ---------       -------------------
<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
</TABLE>

<TABLE>
<CAPTION>
                                                                                          1998
                                                                                          ----
                                                                                     (in thousands)

                                                                         Laser Vision
                                                                         ------------
                                                   Eye Care Centers       Correction          All Other       Consolidated Totals
                                                   ----------------       ----------          ---------       -------------------
<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>

     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.

                                       51
<PAGE>

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

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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>
2000                                                   FIRST         SECOND          THIRD         FOURTH          YEAR
----                                                  ------         ------          -----         ------          ----
<S>                                              <C>           <C>            <C>            <C>            <C>
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)


1999                                                   FIRST         SECOND          THIRD         FOURTH          YEAR
----                                                   -----         ------          -----        -------          ----
<S>                                              <C>           <C>            <C>            <C>            <C>
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            0.02           0.03           0.00          (0.34)        (0.30)
 share
</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

                                       52
<PAGE>

1999 Agreement and the Original and Second Modification Agreements (see Note 7),
including the following:

                          SIGHT RESOURCE CORPORATION

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

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

b)   Interest rates on the revolving note and term loan are as follows:
<TABLE>
<CAPTION>
<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.

                                       53
<PAGE>

                                   PART III

Item 10. DIRECTORS AND OFFICERS OF THE REGISTRANT

     The response to this item is incorporated by reference from the discussion
responsive thereto under the captions "Management" and "Compliance with Section
16(a) of the Securities Exchange Act of 1934" in the Company's Proxy Statement
for the 2001 Annual Meeting of Stockholders.


ITEM 11. EXECUTIVE COMPENSATION

     The response to this item is incorporated by reference from the discussion
responsive thereto under the caption "Executive Compensation" in the Company's
Proxy Statement for the 2001 Annual Meeting of Stockholders.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The response to this item is incorporated by reference from the discussion
responsive thereto under the caption "Share Ownership" in the Company's Proxy
Statement for the 2001 Annual Meeting of Stockholders.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The response to this item is incorporated by reference from the discussion
responsive thereto under the caption "Certain Transactions" in the Company's
Proxy Statement for the 2001 Annual Meeting of Shareholders.

                                    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

                                       54
<PAGE>

  --  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

                                       55
<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

                                       56
<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                           Balance at
                                                             -------------  -------------                           ----------
                                                               Beginning      Costs and                               End of
                                                             -------------    ---------                               ------
       Description                                              of Year       Expenses          Other Net             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
</TABLE>


                 FOR THE TWELVE MONTHS ENDED DECEMBER 25, 1999

<TABLE>
<CAPTION>                                                                       ADDITIONS (DEDUCTIONS)
                                                                                ----------------------
                                                                               CHARGED
                                                                               -------
                                                              BALANCE AT     (CREDITED)
                                                             -------------    --------
                                                               BEGINNING      COSTS AND                         BALANCE AT
                                                             -------------    ---------                         ----------
                        DESCRIPTION                             OF YEAR       EXPENSES         OTHER 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.
</TABLE>

                                       57
<PAGE>

                 FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1998

<TABLE>
<CAPTION>
                                                                                  ADDITIONS (DEDUCTIONS)
                                                                                  ----------------------
                                                                              CHARGED
                                                                              -------
                                                               BALANCE AT    (CREDITED) TO
                                                               ----------    -------------
                                                               BEGINNING      COSTS AND        OTHER NET         BALANCE AT
                                                               ---------      ---------        ---------         ----------
                        DESCRIPTION                             OF YEAR        EXPENSES        OTHER 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
(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.
</TABLE>

Item 14(a)(3) EXHIBITS

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

                                       58
<PAGE>

                                 EXHIBIT INDEX

   Exhibit
   -------                                DESCRIPTION
   NUMBER                                 -----------
   ------
    (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)


                                       59
<PAGE>

    (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)


   (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)


                                       60
<PAGE>

   (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 13, 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)


   (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.)



                                       61
<PAGE>

   (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)


                                       62
<PAGE>

   (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)


   (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)

--------------
*             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).

                                       63
<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 executive             March 29, 2001
                                         officer), Chief Executive
                                         Officer and Director
____________________________
WILLIAM T. SULLIVAN




/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
                                         (principal financial and
                                         accounting officer)
____________________________
JAMES W. NORTON
</TABLE>


                                       64