U.S. SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

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

                                   FORM 10-QSB

                   QUARTERLY REPORT UNDER SECTION 13 OR 15(D)

                   OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2000

Commission File Number:    1-11140

                           OPHTHALMIC IMAGING SYSTEMS

             (Exact name of registrant as specified in its charter)

           CALIFORNIA                                      94-3035367
   (State of Incorporation)                    (IRS Employer Identification No.)


                 221 LATHROP WAY, SUITE I, SACRAMENTO, CA 95815
                    (Address of principal executive offices)


                                 (916) 646-2020
                (Issuer's telephone number, including area code)

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

         Yes      XX                No
              -------------             -------------

As of January 16,  2001,  8,138,305  shares of common stock,  at no par value,
were outstanding.

Transitional Small Business Disclosure Format:

         Yes                        No      XX
              -------------             -------------


<PAGE>


                           OPHTHALMIC IMAGING SYSTEMS

                                   FORM 10-QSB

                     FOR THE QUARTER ENDED NOVEMBER 30, 2000
<TABLE>
<CAPTION>

PART I.  FINANCIAL INFORMATION                                                             PAGE
                                                                                           ----

<S>               <C>
Item 1.           Financial Statements

                  Condensed Balance Sheet as of November 30, 2000                            2

                  Condensed Statements of Operations for the Three Months
                  ended November 30, 2000 and November 30, 1999                              3

                  Condensed Statements of Cash Flows for the Three Months
                  ended November 30, 2000 and November 30, 1999                              4

                  Notes to Financial Statements                                              5

Item 2.           Management's Discussion and Analysis of Financial Condition and
                  Results of Operations                                                     10


PART II. OTHER INFORMATION

Item 1.           Legal Proceedings                                                         18

Item 2.           Changes in Securities and Use of Proceeds                                 18

Item 3.           Defaults upon Senior Securities                                           18

Item 4.           Submission of Matters  to a Vote of Security Holders                      18

Item 5.           Other Information                                                         18

Item 6.           Exhibits and Reports on Form 8-K                                          18
</TABLE>

<PAGE>

                          PART I FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           Ophthalmic Imaging Systems

                             Condensed Balance Sheet

                                November 30, 2000

                                   (Unaudited)
<TABLE>
<CAPTION>

ASSETS
------
Current assets:
<S>                                                                           <C>
      Cash and equivalents                                                    $         95,284
      Accounts receivable, net                                                         146,229
      Inventories, net                                                                 651,347
      Prepaid expenses and other current assets                                         43,254
                                                                           --------------------
Total current assets                                                                   936,114
Furniture and equipment, net of accumulated
      depreciation and amortization of $1,127,469                                      210,668
Other assets                                                                            10,335
                                                                           --------------------
                                                                              $      1,157,117
                                                                           ====================

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
      Accounts payable                                                        $        577,775
      Accrued liabilities                                                              905,865
      Accrued warrant appreciation right                                               226,823
      Deferred extended warranty revenue                                               133,620
      Customer deposits                                                                480,009
      Notes payable to related party                                                   289,468
      Capitalized lease obligation and other notes payable                               8,939
                                                                           --------------------
Total current liabilities                                                            2,622,499

Capitalized lease obligation, less current portion                                      10,994
Notes payable to related party, less current portion                                 1,178,146
Commitments

Stockholders' deficit:
      Preferred stock, without par value, 20,000,000 shares authorized;
          none issued or outstanding                                                        --
      Common stock, no par value, 20,000,000 shares authorized;
          8,138,305 issued and outstanding                                          12,630,604
      Deferred compensation                                                             (6,098)
      Accumulated deficit                                                          (15,279,028)
                                                                           --------------------
Total stockholders' deficit                                                         (2,654,522)
                                                                           --------------------
                                                                              $      1,157,117
                                                                           ====================
</TABLE>

See accompanying notes.
                                       2
<PAGE>

                           Ophthalmic Imaging Systems

                       Condensed Statements of Operations

                                   (Unaudited)
<TABLE>
<CAPTION>

                                           Three months ended November 30,
                                              2000                 1999
                                        ------------------   -----------------
<S>                                       <C>                 <C>
Net revenues                              $       734,189     $     1,010,168
Cost of sales                                     641,421             746,346
                                        ------------------   -----------------
Gross Profit                                       92,768             263,822
Operating expenses:
     Sales and marketing                          509,855             548,647
     General and administrative                   308,092             247,348
     Research and development                      98,359             122,420
                                        ------------------   -----------------
         Total operating expenses                 916,306             918,415
                                        ------------------   -----------------
Loss from operations                             (823,538)           (654,593)
Other expense, net                                (36,116)            (37,771)
                                        ------------------   -----------------
Net loss                                  $      (859,654)    $      (692,364)
                                        ==================   =================

Shares used in the calculation of basic
     net loss per share                         8,138,305           4,221,362
                                        ==================   =================
Basic net loss per share                  $         (0.11)    $         (0.16)
                                        ==================   =================

Shares used in the calculation of diluted
     net loss per share                         8,138,305           4,221,362
                                        ==================   =================
Diluted net loss per share                $         (0.11)    $         (0.16)
                                        ==================   =================
</TABLE>

See accompanying notes.
                                       3
<PAGE>

                           Ophthalmic Imaging Systems

                       Condensed Statements of Cash Flows

                   Increase (Decrease) in Cash and Equivalents

                                   (Unaudited)
<TABLE>
<CAPTION>

                                                                Three months ended November 30,
                                                                  2000                  1999
                                                           --------------------  --------------------

OPERATING ACTIVITIES:
<S>                                                            <C>                   <C>
Net loss                                                       $      (859,654)      $      (692,364)
Adjustments to reconcile net loss to net cash
     used in operating activities:
         Depreciation and amortization                                  26,536                31,359
         Stock option compensation expense                               9,147                19,722
         Net decrease in current assets other than
              cash and equivalents                                      44,612               138,786
         Net increase in current liabilities other than
              short-term borrowings                                     90,108               509,243
                                                           --------------------  --------------------
Net cash (used in) provided by operating activities                   (689,251)                6,746
INVESTING ACTIVITIES:

Purchases of furniture and equipment                                   (46,676)              (13,994)
Net increase in other assets                                              (150)               (5,001)
                                                           --------------------  --------------------
Net cash used in investing activities                                  (46,826)              (18,995)
FINANCING ACTIVITIES:

Net  proceeds from (repayments of) borrowings under
     notes payable to and unsecured advances from
     significant shareholders                                          575,401                (3,750)
Net proceeds from line-of-credit borrowings                                 --                24,844
Net proceeds from sale of common stock                                      --                56,250
Net proceeds from sale of preferred stock                                   --                 3,750
                                                           --------------------  --------------------
Net cash provided by financing activities                              575,401                81,094
                                                           --------------------  --------------------
Net (decrease) increase in cash and equivalents                       (160,676)               68,845
Cash and equivalents at beginning of period                            255,960               178,007
                                                           --------------------  --------------------
Cash and equivalents at end of period                          $        95,284       $       246,852
                                                           ====================  ====================

SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING ACTIVITIES:
Reduction of borrowings under note payable to and
     unsecured advances from significant shareholder
     in exchange for inventory, net                            $            --       $       143,213
                                                           ====================  ====================
</TABLE>

See accompanying notes.

                                       4
<PAGE>
                           Ophthalmic Imaging Systems

                     Notes to Condensed Financial Statements

              Three Month Periods ended November 30, 2000 and 1999

                                   (Unaudited)

Note 1.         Basis of Presentation

                The  accompanying   unaudited  condensed  balance  sheet  as  of
                November 30, 2000,  condensed  statements of operations  for the
                three month  periods  ended  November  30, 2000 and 1999 and the
                condensed  statements  of cash flows for the three month periods
                ended   November  30,  2000  and  1999  have  been  prepared  in
                accordance  with generally  accepted  accounting  principles for
                interim financial  information and with the instructions to Form
                10-QSB and Item 310(b) of Regulation S-B.  Accordingly,  they do
                not  include all of the  information  and  footnote  disclosures
                required  by  generally  accepted   accounting   principles  for
                complete  financial  statements.  It  is  suggested  that  these
                condensed  financial  statements be read in conjunction with the
                audited  financial  statements and notes thereto included in the
                registrant's  (the Company's)  Annual Report for the Fiscal Year
                Ended  August  31,  2000  on  Form  10-KSB.  In the  opinion  of
                management,  the  accompanying  condensed  financial  statements
                include all  adjustments,  consisting  only of normal  recurring
                adjustments,  necessary for a fair presentation of the Company's
                financial  position  and results of  operations  for the periods
                presented.  The  results  of  operations  for the  period  ended
                November  30,  2000  are  not  necessarily   indicative  of  the
                operating results for the full year.

                Certain  amounts in the fiscal 2000  financial  statements  have
                been reclassified to conform with the presentation in the fiscal
                2001 financial statements.

Note 2.         Net Income (Loss) Per Share

                Basic  earnings   (loss)  per  share  ("EPS"),   which  excludes
                dilution,  is computed by dividing  income  (loss)  available to
                common  shareholders  by the  weighted-average  number of common
                shares  outstanding  for the period.  Diluted EPS  reflects  the
                potential  dilution  that  could  occur if  securities  or other
                contracts to issue common stock,  such as stock options,  result
                in the  issuance of common stock which shares in the earnings of
                the Company.  The treasury  stock method is applied to determine
                the dilutive  effect of stock options in computing  diluted EPS.
                However,  diluted EPS are not  presented  when a net loss occurs
                because   the   conversion   of   potential   common   stock  is
                antidilutive.


                                       5
<PAGE>

Note 2.         Net Income (Loss) Per Share (continued)

                The  following  table  sets forth the  computation  of basic and
                diluted income (loss) per share:
<TABLE>
<CAPTION>

                                                              Unaudited
                                                          Three Months Ended
                                                             November 30,
                                                         2000            1999
                                                    ------------- ---------------
                 Numerator for basic and diluted
<S>                                                  <C>           <C>
                 net income (loss) per share         $ (859,654)   $ (692,364)
                                                    ============= ===============

                 Denominator for basic net income
                 (loss) per share:

                    Weighted average shares           8,138,305     4,221,362

                 Effect of dilutive securities:
                    Employee/director stock                  --            --
                    options
                    Warrants and other                       --            --
                                                    ------------- ---------------
                 Dilutive potential common shares            --            --

                                                    ------------- ---------------
                 Denominator for diluted net
                 income (loss) per share              8,138,305     4,221,362
                                                    ============= ===============

                 Basic net income (loss) per share     $ (0.11)      $ (0.16)
                                                    ============= ===============

                 Diluted net income (loss) per
                 share                                 $ (0.11)      $ (0.16)
                                                    ============= ===============
</TABLE>

Note 3.         Notes Payable to Related Parties

                In  July  2000,  the  Company,   Premier  Laser  Systems,   Inc.
                ("Premier"), a California corporation and the Company's majority
                shareholder, and MediVision Medical Imaging Ltd. ("MediVision"),
                an  Israeli  corporation,  entered  into a series of  definitive
                agreements  relating  to the  transfer  of  Premier's  ownership
                interests in the Company to MediVision,  including,  among other
                things, converting in favor of Premier the Company's entire debt
                owed to Premier, calculated at an approximate book value of $2.1
                million, into shares of the Company's common stock at conversion
                price  of $0.55  per  share.  This  occurred  in  August 2000 in
                connection with the closing of the transactions  contemplated by
                the definitive  agreements (the "Closing").  In addition, at the
                Closing,  Premier and the Company  executed a mutual  waiver and
                release of claims, thereby releasing each other from any and all
                claims, whether known or unknown between them.

                Also in connection with the definitive agreements, in July 2000,
                the Company  executed a promissory  note in favor of  MediVision
                (the  "Short-Term  Note").  The Company has borrowed the maximum
                principal  amount of  $260,000  available  under the  Short-Term
                Note, which principal amount outstanding,  together with any and
                all accrued interest,  was payable the earlier of the closing or
                termination of the  transactions  contemplated by the definitive
                agreements,  October 13, 2000 or as otherwise  stipulated in the
                Short-Term  Note.  Under  the  terms  of  the  Short-Term  Note,
                borrowings  bear  interest at the rate of 9.3% per

                                       6
<PAGE>


                annum and are  secured by certain of the  Company's  assets.  At
                November  30,  2000,  the  Company  had  recorded  approximately
                $269,000  in  principal  and  interest   outstanding  under  the
                Short-Term  Note.  MediVision and the Company are in discussions
                with regard to reclassifying  amounts  currently owing under the
                Short-Term  Note to amounts owing under the Working Capital Note
                discussed in further detail below.

                In  further  connection  with the  Closing in August  2000,  the
                Company executed a second promissory note in favor of MediVision
                (the  "Working  Capital  Note").  The maximum  principal  amount
                available under the Working Capital Note is $1.5 million,  which
                principal amount outstanding,  together with any and all accrued
                interest,  is  payable  by  August  31,  2003  or  as  otherwise
                stipulated in the Working  Capital Note,  except that MediVision
                may, at its option,  at any time convert any amount of principal
                and accrued but unpaid interest then  outstanding into shares of
                the  Company's  common stock at a  conversion  price of $.80 per
                share,  which price is subject to adjustment upon the occurrence
                of certain events set forth in the Working  Capital Note.  Under
                the terms of the Working Capital Note,  borrowings bear interest
                at the  rate of 9.3% per  annum  and are  secured  by all of the
                Company's assets. At November 30, 2000, the Company had recorded
                approximately  $1,199,000 in principal and interest  outstanding
                under the Working Capital Note.

Note 4          MediVision and Premier Transactions

                In February 1998,  the Company and Premier  entered into a Stock
                Purchase  Agreement (the "Stock  Purchase  Agreement"),  whereby
                Premier would offer to by those shares of the  Company's  common
                stock not already owned by it. In August 1998, however,  Premier
                notified the Company that, due to a variety of factors,  Premier
                would not be able to close the transactions  contemplated  under
                the  Stock   Purchase   Agreement  and  the  Company   thereupon
                terminated the Stock Purchase Agreement.

                In  October  1999,  the  Company  and  Premier  entered  into an
                Agreement and Plan of Reorganization  (the "Merger  Agreement"),
                whereby, upon requisite shareholder approval,  the Company would
                have become a wholly-owned subsidiary of Premier.

                Also in October 1999,  the Company and Premier  entered into two
                stock purchase agreements with respect to the Company's Series B
                Preferred Stock whereby,  among other things,  Premier purchased
                150 shares of the Company's  Series B Preferred  Stock with each
                share carrying the voting power of 1,000 shares of the Company's
                common  stock,  at a per  share  price  of $25 in  exchange  for
                Premier's  cancellation  of certain of the Company's debt in the
                aggregate amount of $3,750.

                In February  2000,  Premier  notified  the  Company  that it was
                considering  seeking  protection under the U.S.  Bankruptcy Code
                and the Company thereupon  terminated the Merger  Agreement.  In
                March 2000,  Premier filed a voluntary  petition for  protection
                and reorganization under Chapter 11 of the U.S. Bankruptcy Code.

                                       7
<PAGE>

                As a result of the  foregoing  transactions,  at the time of its
                bankruptcy   filing,   Premier  owned  49.5%  of  the  Company's
                outstanding  common  stock and all 150  shares of the  Company's
                Series B Preferred Stock, thereby giving Premier majority voting
                control.

                In July 2000, the Company, Premier and MediVision entered into a
                series of  definitive  agreements  relating  to the  transfer of
                Premier's  ownership interests in the Company to MediVision (see
                Note  3).  At  the  Closing,  among  other  things,   MediVision
                purchased  all of the stock of the Company then held by Premier,
                including 150 shares of the Company's  Series B Preferred  Stock
                which were converted by their terms into shares of common stock,
                and  3,832,727  shares of common  stock  issued  pursuant to the
                conversion of the Premier debt.

                As a result of the foregoing transactions,  MediVision currently
                owns  approximately  73% of  the  Company's  outstanding  common
                stock.

Note 5.         Ability to Continue as a Going Concern

                The  Company  has  an  accumulated  deficit  of  $15,279,028  at
                November  30,  2000.  In addition,  current  liabilities  exceed
                current  assets by  $1,686,385 as of that date.  These  factors,
                among  others,  may indicate  that the Company will be unable to
                continue as a going concern for a reasonable period of time.

                Notwithstanding the foregoing,  recent transactions  between the
                Company  and   MediVision   (see  Notes  3  and  4),  will,   in
                Management's   opinion,   significantly  improve  the  Company's
                financial condition and enhance  Management's ability to achieve
                profitable operations.

                The relationship with MediVision will provide the Company access
                to  resources  in addition to the working  capital  described in
                Note 3. As a direct consequence of the MediVision  transactions,
                the Company has  undertaken  certain  gross  margin  enhancement
                efforts,   including   improved   production  cost  control  and
                sustaining  engineering programs.  In addition,  the Company and
                MediVision  have begun  collaborative  efforts  with  respect to
                design  and   implementation  of  certain  product   development
                programs.  The relationship  with MediVision will further assist
                the Company in  reducing  selling,  general  and  administrative
                expenses,  particularly  in  connection  with  co-marketing  and
                co-selling  arrangements  currently contemplated with respect to
                certain international markets.

                Management anticipates that additional sources of capital beyond
                those  currently  available  to the Company  will be required to
                continue  operations  and procure  inventory  necessary  to meet
                current and anticipated demand for the Company's products.

                In that  regard,  the Company and  MediVision  are  currently in
                discussions with

                                       8
<PAGE>

                respect to increasing  available working capital beyond the $1.5
                million under the Working  Capital Note.  Concurrent  with these
                discussions,  management  will continue to evaluate  alternative
                sources  of  capital  to meet its cash  requirements,  including
                other asset or debt  financing,  issuing  equity  securities and
                entering  into  other  financing  arrangements.  There can be no
                assurance,  however,  that  any  of the  contemplated  financing
                arrangements   described   herein  will  be  available  and,  if
                available, can be obtained on terms favorable to the Company.


                                       9
<PAGE>



ITEM 2.  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

This  report  contains  forward-looking  statements  within  the  meaning of the
federal securities laws. The Company intends such forward-looking  statements to
be  covered  by the safe  harbor  provisions  contained  in  Section  27A of the
Securities  Act of 1933,  as amended,  and in Section 21E of the Exchange Act of
1934,  as  amended.  Forward-looking  statements,  which  are  based on  certain
assumptions  and describe  future  plans,  strategies  and  expectations  of the
Company,  are generally  identifiable by use of the words  "believe,"  "expect,"
"intend,"  "anticipate,"  "estimate,"  "project,"  or similar  expressions.  The
Company's  ability to predict  results or the actual  effect of future  plans or
strategies is inherently uncertain.  Factors which could have a material adverse
effect on its operations and future prospects  include,  but are not limited to,
changes in: economic  conditions  generally and the medical  instruments  market
specifically, legislative or regulatory changes affecting OIS, including changes
in healthcare regulation,  the availability of working capital, the introduction
of competing products,  and other risk factors described herein. These risks and
uncertainties,  together  with the other  risks  described  from time to time in
reports  and  documents  filed by OIS  with  the SEC  should  be  considered  in
evaluating  forward-looking  statements, and undue reliance should not be placed
on such statements.  Indeed, it is likely that some of the Company's assumptions
will prove to be incorrect.  The Company's actual results and financial position
will vary from those projected or implied in the forward-looking statements, and
the variances may be material.

Overview
--------

To  date,  the  Company  has  designed,  developed,  manufactured  and  marketed
ophthalmic  digital  imaging  systems and has derived  substantially  all of its
revenues  from the sale of such  products.  The  primary  target  market for the
Company's  digital  angiography  systems,  including  the  WinStation  1400  and
WinStation 3000 systems introduced at the recently concluded 2000 Annual Meeting
of the American  Academy of  Ophthalmology  (the "2000 AAO Meeting") held during
the first quarter of fiscal 2001 in Dallas, Texas, has been retinal specialists.

In an effort to expand its role in the  ophthalmic  imaging  field by developing
products  and   applications   targeted  at  the  broader   markets  of  general
ophthalmology and optometry,  the Company has applied  significant  resources in
recent  years to the  development  of two ocular  imaging  devices,  the Digital
Fundus Imager (the "DFI") and the Digital Slit Lamp Imager (the "DSLI").

At the 1998 Annual Meeting of the American Academy of  Ophthalmology  (the "1998
AAO  Meeting")  held during the first  quarter of fiscal 1999,  the DFI received
considerable   interest  and  the  Company  has  received  significant  purchase
commitments for that product.

The Company,  however,  had limited financial and operational  resources to meet
the demand  resulting  from the  introduction  of this product.  In that regard,
during  the  third  quarter  of  fiscal  1999,  the  Company  entered  into  the
Manufacturing  Agreement  with  Premier  Laser  Systems,  Inc.  ("Premier"),   a
California  corporation  and the  Company's

                                       10
<PAGE>

majority   shareholder  at  the  time,  whereby  Premier  began  assembling  and
manufacturing the Company's products, including the DFI and DSLI.

In addition, the Company agreed with Premier on certain co-marketing and selling
arrangements  and the two  companies  began selling  their  ophthalmic  products
through a jointly  managed  EyeSys  Vision  Group,  which  made its debut at the
American Society of Cataract and Refractive Surgery meeting in April 1999.

The  Company  entered  into these  arrangements  in  anticipation  of the Merger
Agreement,   discussed  in  further  detail  below,   and  consummation  of  the
transactions contemplated thereby.

In February  2000,  however,  Premier  informed the Company of its  inability to
pursue  acquisition of the Company under the Merger Agreement and its intentions
to seek voluntary bankruptcy  protection under Chapter 11 of the U.S. Bankruptcy
Code. The Company responded by terminating the Merger Agreement.

As a consequence of the termination of the Merger Agreement in February 2000 and
Premier's  filing for protection  under the U.S.  Bankruptcy Code in March 2000,
the  co-marketing  and  selling   arrangements   between  the  companies  became
non-effective and Premier  discontinued  producing the Company's  products under
the Manufacturing Agreement. The Company resumed manufacture and assembly of its
products in its  facilities in Sacramento,  California  commencing in the second
quarter of fiscal 2000 but incurred  increased costs and  significant  delays in
production and product deliveries as a result of these failed arrangements.

The  Company  also noted a reduction  in its new order  bookings  following  the
termination  of  the  Merger  Agreement  and  Premier's  subsequent  filing  for
bankruptcy  protection.  In addition,  certain of the Company's sales, marketing
and executive  management  personnel resigned their positions during 2000, which
adversely  impacted the Company's  ability to generate new order bookings during
the latter half of fiscal 2000 and the first quarter of fiscal 2001.

In July 2000,  the  Company,  Premier and  MediVision  entered  into a series of
agreements,  discussed in further  detail below,  the closing of which in August
2000 resulted in, among other things, transfer of majority voting control of the
Company from Premier to  MediVision,  conversion  of the debt owed to Premier to
shares of the Company's  common stock and capital  commitments to the Company by
MediVision of $1,500,000.

The  Company  has  experienced  operating  losses for each fiscal year since its
initial  public  offering in 1992.  At  November  30,  2000,  the Company had an
accumulated  deficit  in  excess  of  $15,000,000  and its  current  liabilities
exceeded its current assets by approximately  $1,686,000.  The Company continues
to experience  cash flow deficits and there can be no assurance that the Company
will be able to achieve or sustain significant positive cash flows,  revenues or
profitability in the future.

                                       11
<PAGE>

MediVision and Premier Transactions
-----------------------------------

On February 25,  1998,  the Company and Premier  entered  into a Stock  Purchase
Agreement (the "Stock Purchase  Agreement"),  whereby Premier would offer to buy
those shares of the  Company's  common stock not already  owned by it. In August
1998, however,  Premier notified that Company that, due to a variety of factors,
Premier would not be able to close the transactions contemplated under the Stock
Purchase  Agreement  and the Company  thereupon  terminated  the Stock  Purchase
Agreement.  As a result of such termination,  the Company made demand to Premier
for payment of a $500,000  termination fee (the  "Termination  Fee") as provided
for in the Stock  Purchase  Agreement.  The demand  was not  pursued at the time
because of a revival of plans for merger of the companies.

On October 21, 1999, the Company and Premier  entered into an Agreement and Plan
of Reorganization (the "Merger Agreement") whereby,  upon requisite  shareholder
approval, the Company would have become a wholly-owned subsidiary of Premier.

Also on October  21,  1999,  the  Company  and  Premier  entered  into two stock
purchase  agreements  with  respect to the  Company's  Series B Preferred  Stock
whereby,  among other  things,  Premier  purchased  150 shares of the  Company's
Series B  Preferred  Stock with each share  carrying  the voting  power of 1,000
shares of the Company's  common  stock,  at a per share price of $25 in exchange
for Premier's  cancellation  of certain of the  Company's  debt in the aggregate
amount of $3,750.

In February 2000,  Premier notified the Company that it was considering  seeking
protection under the U.S.  Bankruptcy Code and the Company thereupon  terminated
the Merger  Agreement  on February  17,  2000.  In March 2000,  Premier  filed a
voluntary  petition for  protection and  reorganization  under Chapter 11 of the
U.S. Bankruptcy Code.

As a result of the foregoing transactions, at the time of its bankruptcy filing,
Premier  owned  49.5% of the  Company's  outstanding  common  stock  and all 150
outstanding  shares of the Company's  Series B Preferred  Stock,  thereby giving
Premier majority voting control.

On July 13, 2000, the Company,  Premier and MediVision  entered into a series of
definitive  agreements relating to the transfer of Premier's ownership interests
in the Company to  MediVision  in exchange  for cash and stock (the  "MediVision
Investments").  In separate  but  related  transactions,  MediVision  loaned the
Company  $260,000 as short-term  funding for continued  operations and, upon the
closing of the  transactions  contemplated  under the  agreements in August 2000
(the  "Closing"),  MediVision  has  committed  to loan up to  $1,500,000  to the
Company,  which  is  convertible  at  MediVision's  option  into  shares  of the
Company's  common stock.  Pursuant to the agreements  relating to the MediVision
Investments,  among other things: (i) the Company's entire debt owed to Premier,
calculated at an  approximate  book value of  $2,100,000,  was converted per the
agreements  in favor of Premier into shares of the  Company's  common stock at a
conversion  price of $0.55 per share;  and (ii) MediVision  purchased all of the
stock of the Company then held by Premier, including 150 shares of the Company's
Series B  Preferred  Stock  which were  converted  by their terms into shares of
common  stock,  and  3,832,727  shares of common  stock  issued  pursuant to the
conversion of the Premier debt.

In addition,  at the Closing,  Premier and the Company  executed a mutual waiver
and  release of claims,  thereby  releasing  each other from any and all claims,
whether known or

                                       12
<PAGE>

unknown  between  them,  including the $500,000  Termination  Fee claimed by the
Company against Premier.

As  a  result  of  the  foregoing   transactions,   MediVision   currently  owns
approximately 73% of the Company's outstanding common stock.

The  following  discussion  should  be read in  conjunction  with the  unaudited
interim financial statements and the notes thereto which are set forth elsewhere
in this Report on Form  10-QSB.  In the  opinion of  management,  the  unaudited
interim period financial statements include all adjustments, all of which are of
a normal  recurring  nature,  that are necessary for a fair  presentation of the
results of the periods.

Results of Operations
---------------------

Revenues

The  Company's  revenues  for the first  quarter  of fiscal  2001 were  $734,189
representing a decrease of approximately 27% from revenues of $1,010,168 for the
first  quarter of fiscal 2000.  The reduced  revenue  levels  during fiscal 2001
reflect the impact of a number of factors as noted  above,  including  continued
delays  in  delivery  of  certain  of the  Company's  products  associated  with
resumption  of  manufacture  and  assembly  efforts  in  Sacramento,  California
following termination during 2000 of the Manufacturing Agreement with Premier. A
number of products  targeted  for  delivery  during the first  quarter of fiscal
2001were  shipped during the second  quarter of fiscal 2001. As also  previously
noted,  another  contributing  factor to the reduced  revenue  levels during the
first  quarter  of  fiscal  2000  was the  continued  diversion  of  significant
resources and management efforts to the negotiation of the failed Stock Purchase
and Merger  Agreements  with Premier as well as subsequent  acquisition  matters
over the past two years.  A reduction in its new order  bookings  following  the
termination  of  the  Merger  Agreement  and  Premier's  subsequent  filing  for
bankruptcy  protection  further adversely impacted revenues for the first fiscal
quarter of 2001.  Lastly,  the resignation  during fiscal 2000 of certain of the
Company's sales, marketing and executive management personnel adversely effected
the Company's ability to market its products.

Gross Margins

Gross margins were approximately 13% during the first quarter ended November 30,
2000  versus  approximately  26%  for  the  comparable  quarter  of  2000.  As a
consequence of both higher support costs and fixed expense levels representing a
higher percentage of revenues during the first quarter of fiscal 2001 versus the
comparable  period of fiscal 2000, the lower gross margin  percentage during the
first  quarter  of 2001 is due in large  measure  to the  significantly  reduced
revenue levels.

                                       13
<PAGE>

Sales, Marketing, General and Administrative Expenses

Sales and  marketing  and  general and  administrative  expenses  accounted  for
approximately  111% of total revenues during the first quarter of fiscal 2001 as
compared with  approximately  79% during the first quarter of fiscal 2000,  with
the  increased  percentage  resulting  principally  as a function of the reduced
revenue levels during the first quarter of 2001. Actual expense levels increased
slightly,  to $817,947  during the first quarter of 2001 versus  $795,995 during
the  first  quarter  of 2000.  Primary  contributing  factors  to the  increased
expenses were professional, administrative and other costs in connection with or
as a consequence of the transactions  with MediVision,  the impact of which were
substantially  offset by reduced  commissions  and other costs  associated  with
decreased  revenue levels during the first quarter of 2001 versus the comparable
period of 2000.  Subsequent to the Closing of the transactions  with MediVision,
the Company has hired, among others, a Director of Operations and has undertaken
recruitment efforts for management and other personnel in this and other areas.

Research and Development Expenses

Research and development  expenses decreased by approximately 20% to $98,359, or
approximately 13% of revenues in the first quarter of fiscal 2001 from $122,420,
or  approximately  12% of revenues in fiscal  2000.  The Company has focused its
recent  research and development  efforts on new digital image capture  products
and reducing cost  configurations  for its current products,  and the extent and
focus of future research and development  efforts will depend, in large measure,
on direction from MediVision, including potential collaborative projects between
MediVision and the Company.

Other Expense

Other expense was $36,116 during the first quarter of fiscal 2001 versus $37,771
during the same period of 2000.  These  amounts were  comprised  principally  of
interest  expense  associated with borrowings from MediVision and Premier during
fiscal  2001 and 2000,  respectively,  as well as interest  expense  during both
periods in connection with a stock  appreciation  right granted to the Company's
bank discussed in further detail below.

Net Loss

The Company  incurred a net loss of $859,654,  or $0.11 per share, for the first
quarter  of fiscal  2001 as  compared  to a net loss of  $692,364,  or $0.16 per
share, for the first quarter of fiscal 2000.

The 2001 figures reflect the adverse impact on revenues and corporate operations
attributable to diversion of substantial  Company's  resources and  management's
attention to acquisition, reorganization, integration and related matters during
the period  preceding and immediately  following the Closing of the transactions
with  MediVision.  The  results  of  operations  for the first  quarter  of 2000
reflect, in large measure, the negative impact resulting principally from delays
in delivery of the Company's  products during the period under the Manufacturing
Agreement  with  Premier,  as well as higher than normal costs and  professional
fees and expenses in  connection  the  contemplated  transactions  with Premier,

                                       14
<PAGE>

while diverting a significant amount of the Company's resources and management's
attention and selling  efforts away from the Company's  core  operations  during
this period.

The results of operations do not include any amounts with respect to a potential
contingent  liability  in  connection  with the  collection  of  taxes  from the
Company's  customers,  which amount has been  estimated on the basis of numerous
factors and assumptions  that might, in the least favorable  combination,  reach
$1.6 million.  Management believes that the probability of such an assessment is
remote  and  accordingly,   has  not  recorded  a  liability  in  its  financial
statements.  However,  there can be no  assurance  that the  amount  that  might
ultimately  be  assessed  for prior  periods  would not  materially  affect  the
Company's results of operations or cash flows in any given reporting period.

Liquidity and Capital Resources
-------------------------------

The Company's operating activities used cash of $689,251 in the first quarter of
fiscal 2001 and  generated  cash of $6,746 in the first  quarter of fiscal 2000.
The cash used in  operations  during  the  first  quarter  of 2001 was  expended
principally  to fund the net loss during the period.  This amount was  partially
offset by increases in accounts payable and accrued liability levels, as well as
increases in customer  deposits from orders generated at the recently  completed
2000 AAO Meeting. The cash generated from operations during the first quarter of
fiscal 2000 resulted principally from customer deposits from orders generated at
the 1999 Annual  Meeting of the  American  Academy of  Ophthalmology,  increased
accounts  payable  and  accrued  liability  levels and  collection  of  accounts
receivable,  which amounts essentially offset cash expended to fund the net loss
during the period.

Cash used in investing  activities  was $46,826 during the first quarter of 2001
as compared to $18,995  during the same period for 2000.  The Company's  primary
investing  activities consist of equipment and other capital asset acquisitions.
The Company  anticipates  continued certain  near-term  capital  expenditures in
connection  with  its  ongoing  efforts  to  upgrade  its  existing   management
information and corporate  communication  systems.  The Company anticipates that
related  expenditures,  if any, will be financed from borrowings  under existing
arrangements with MediVision, if available, or other financing arrangements,  if
any, available to the Company.

The Company  generated  cash from  financing  activities of $575,401  during the
first  quarter of fiscal 2001 as  compared to $81,094  during the same period of
fiscal 2000.  The cash  generated  from  financing  activities  during the first
quarter  of fiscal  2001  resulted  from  increased  borrowings  under  existing
arrangements  with  MediVision.  The cash generated  from  financing  activities
during the first  quarter of fiscal  2000  resulted  from the  exercise of stock
options by the Exercising  Directors during the period as well as an increase in
the amount of  borrowings  under the credit  facility  with  Imperial  Bank (the
"Bank")  which was  terminated  during  fiscal 2000.  In  addition,  pursuant to
certain  stock  purchase  agreements  with  respect  to the  Company's  Series B
Preferred  Stock,  Premier  purchased  150  shares  of the  Company's  Series  B
Preferred  Stock  at a  per  share  price  of  $25

                                       15
<PAGE>

in exchange for Premier's cancellation of a portion of the Company's debt in the
aggregate amount of $3,750.

As  discussed  further  above and in Note 3 and Note 4 of the Notes to Condensed
Financial  Statements  included in Item 1 of this Form 10-QSB, on July 21, 2000,
the Company  executed a promissory note in favor of MediVision (the  "Short-Term
Note").  The  Company has  borrowed  the  maximum  principal  amount of $260,000
available under the Short-Term Note, and the Company is currently in discussions
with MediVision with regard to reclassifying  amounts  currently owing under the
Short-Term  Note to amounts  owing under the Working  Capital Note  discussed in
further detail below.

In addition,  in connection with the Closing in August 2000 of the  transactions
contemplated  by the  MediVision  Investments,  the  Company  executed  a second
promissory note in favor of MediVision (the "Working Capital Note"). The maximum
principal amount  available under the Working Capital Note is $1,500,000,  which
principal amount  outstanding,  together with any and all accrued  interest,  is
payable by August 31,  2003,  except that any  principal  and accrued but unpaid
interest amount  outstanding is convertible at any time at  MediVision's  option
into shares of the  Company's  common stock at a  conversion  price of $0.80 per
share. Under the terms of the Working Capital Note,  borrowings bear interest at
the rate of 9.3% per annum,  are secured by  substantially  all of the Company's
assets. On November 30, 2000, the Company had recorded approximately  $1,199,000
in principal and interest outstanding under the Working Capital Note.

On November 30, 2000,  the  Company's  cash and cash  equivalents  were $95,284.
Management anticipates that additional sources of capital beyond those currently
available  to the Company  will be required to continue  operations  and procure
inventory  necessary to meet current and  anticipated  demand for the  Company's
products.  Substantial  delays in the delivery of the Company's  products  would
result in reduced  cash flow from sales of such  products  as well as  potential
increased  costs.  Additionally,  such delays could prompt  customers to request
return  deposits  which  would  further  adversely  impact  the  Company's  cash
position. Further, demand for payment by the Bank of amounts claimed pursuant to
a stock  appreciation  right  granted  to the Bank in  connection  with a Credit
Agreement  could also  result in the  immediate  need for  additional  cash.  On
November 30, 2000, the Company had accrued approximately  $227,000 in contingent
liability under the stock appreciation right.

Recent  transactions  between the Company and MediVision  will, in  Management's
opinion,  significantly  improve the Company's  financial  condition and enhance
Management's ability to achieve profitable operations.

Its relationship with MediVision will provide the Company access to resources in
addition  to  working  capital.  As  a  direct  consequence  of  the  MediVision
transactions,  the Company  has  undertaken  certain  gross  margin  enhancement
efforts,  including improved production cost control and sustaining  engineering
programs.  In addition,  Company and MediVision have begun collaborative efforts
with  respect  to design  and  implementation  of  certain  product  development
programs.  Further, the relationship with MediVision could assist the Company in
reducing  selling,   general  and  administrative   expenses,

                                       16
<PAGE>

particularly  in  connection  with  co-marketing  and  co-selling   arrangements
currently contemplated with respect to certain international markets.

In these regards,  the Company and MediVision are currently in discussions  with
respect to, among other things,  increasing available working capital beyond the
$1,500,000  under the Working Capital Note.  Concurrent with these  discussions,
the Company will continue to evaluate alternative sources of capital to meet its
cash  requirements,  including  other asset or debt  financing,  issuing  equity
securities and entering into other financing arrangements and is hopeful that it
will be successful in this regard. There can be no assurance,  however, that any
of the contemplated  financing  arrangements  described herein will be available
and, if available, can be obtained on terms favorable to the Company.

                                       17
<PAGE>



                            PART II OTHER INFORMATION

ITEM 1.             LEGAL PROCEEDINGS
                    None.

ITEM 2.             CHANGES IN SECURITIES
                    None.

ITEM 3.             DEFAULTS UPON SENIOR SECURITIES
                    None.

ITEM 4.             SUBMISSION OF MATTERS TO A VOTE OF SECURITIES
                    None.

ITEM 5.             OTHER INFORMATION
                    None.

ITEM 6.             EXHIBITS AND REPORTS ON FORM 8-K
                    (a)      27.  Financial Data Schedule (for SEC use only).
                    (b)      None.


                                       18
<PAGE>


                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
undersigned  has duly  caused  this  report to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                                      OPHTHALMIC IMAGING SYSTEMS
                                                      (Registrant)


                                                      By:/s/ GIL ALLON
                                                         -----------------------
                                                         Gil Allon,
                                                         Chief Executive Officer



Dated:  January 16, 2001


                                       19
<PAGE>


                                INDEX TO EXHIBITS

  Exhibit                                                           Footnote
  Number                   Description of Exhibit                  Reference
  ------                   ----------------------                  ---------

    27            Financial Data Schedule (for SEC use only).        (*)

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

       *         Filed herewith.