LASER VISION CENTERS INC, S-3, 1996-06-05

LASER VISION CENTERS INC
S-3, 1996-06-05
ADVERTISING AGENCIES

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON June 5, 1996
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM S-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

LASER VISION CENTERS, INC.
(Exact name of registrant in its charter)

DELAWARE 43-1530063
(State of jurisdiction of (I.R.S. Employer
incorporation or organization) identification number)

540 MARYVILLE CENTRE DRIVE, SUITE 200
ST. LOUIS, MISSOURI 63141
(314)434-6900

(Address and telephone number of principal executive offices and
intended principal place of business.)
____________________
ROBERT W. MAY, ESQ.
540 MARYVILLE CENTRE DRIVE, SUITE 200
ST. LOUIS, MISSOURI 63141
(314)434-6900
(Name, address and telephone number of agent for service)
___________________
With copies to:

<TABLE>
<S> <C>
JAMES R. DANKENBRING, ESQ. CRAIG E. DAUCHY, ESQ.
DANKENBRING, GREIMAN, OSTERHOLT & HOFFMANN, P.C. COOLEY GODWARD CASTRO HUDDLESON & TATUM
7733 FORSYTH BOULEVARD, SUITE 810 3000 SAND HILL ROAD, BUILDING 3
ST. LOUIS, MISSOURI 63105 SUITE 230
(314) 863-7733 MENLO PARK, CALIFORNIA 94025
(415) 843-5000

</TABLE>

Approximate date of commencement of proposed sale to the public:

As soon as possible following the effectiveness of this Registration
Statement

If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plan, check the following box. / /

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /

<PAGE> 2

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
Title of each
class of Proposed maximum Proposed maximum
securities to be Amount to be offering price per aggregate offering Amount of
registered registered(1) share(2) price registration fee
---------------- ------------ ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock, 2,875,000 $ 10.875 $ 31,265,625 $ 10,781.25
$.01 par value
</TABLE>

(1) Includes 375,000 shares that the Underwriters have an option to purchase
to cover over-allotments, if any.

(2) Estimated solely for the purpose of calculation of the registration fee
pursuant to Rules 457(c) and 457(g) and based upon the average of the reported
high and low sales prices of the common stock as quoted by the Nasdaq
over-the-counter market on May 31, 1996.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

<PAGE> 3

SUBJECT TO COMPLETION, DATED June 5, 1996

2,500,000 SHARES

LASER VISION CENTERS, INC.

COMMON STOCK

The 2,500,000 shares of common stock, par value $0.01 per share (the "Common
Stock"), offered hereby (this "Offering") are being offered by Laser Vision
Centers, Inc. (the "Company"). The Common Stock is traded on the
over-the-counter market through Nasdaq under the symbol "LVCI," and is traded
on the Boston Stock Exchange under the symbol "LVS." On June 4, 1996, the last
reported sale price of the Common Stock by Nasdaq was $13.00 per share. See
"Price Range of Common Stock and Dividend Policy."

FOR A DISCUSSION OF CERTAIN RISKS OF AN INVESTMENT IN THE SHARES OF COMMON
STOCK OFFERED HEREBY, SEE "RISK FACTORS" ON PAGES 7 TO 14.
______________________________

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________________________
<TABLE>
<CAPTION>
Underwriting
Price to Discounts and Proceeds to
Public Commissions* Company+
<S> <C> <C> <C>
Per Share. . . . . . . . . . . . . $ $ $
Total++ . . . . . . . . . . . . . $ $ $
- ----------------------
</TABLE>
* The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."

+ Before deducting expenses of this Offering payable by the Company estimated
to be $320,000.

++ The Company has granted the Underwriters a 30-day option to purchase up to
375,000 additional shares of Common Stock on the same terms per share solely
to cover over-allotments, if any. If such option is exercised in full, the
total price to public will be ____________________, the total underwriting
discounts and commission will be ____________________ and the total proceeds
to Company will be __________________________. See "Underwriting."
_____________________________

The Common Stock is being offered by the Underwriters as set forth under
"Underwriting" herein. It is expected that the delivery of certificates
therefor will be made at the offices of Dillon, Read & Co. Inc., New York, New
York, on or about _______________________, 1996.
The Underwriters include:

DILLON, READ & CO. INC. A.G. EDWARDS & SONS, INC.
The date of this Prospectus is __________________, 1996
<PAGE> 4
[Map showing current and proposed Laser Vision Center]

[Photo of MobilExcimer(R)]

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OF THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

LASERVISION(R), LASERVISION CENTERS AND DESIGN(R), LASERVISION CENTERS(R)
LASERVISION CENTER(R), MobilExcimer(R) and the LaserVision Center logo are
registered service marks of the Company. This prospectus also includes
trademarks of companies other than the Company.

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<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more
detailed information, including "Risk Factors," the consolidated financial
statements appearing elsewhere in this Prospectus and the documents
incorporated by reference herein. Unless otherwise indicated, all information
in this Prospectus assumes no exercise of the Underwriters' over-allotment
option. See "Underwriting".

The Company

Laser Vision Centers, Inc. is the world's largest provider of access
to excimer lasers and related services for the treatment of refractive vision
disorders and has more than 30 lasers currently in use in the United States,
Canada and Europe. The Company is also the world's only operator of mobile
excimer laser systems. The excimer laser can be used to treat refractive
vision disorders such as nearsightedness and astigmatism to eliminate or
reduce the need for corrective lenses. LaserVision Centers(R) operate on a
shared-access model, giving individual or group ophthalmic practices use of
excimer laser technology without investment risk or maintenance requirements,
thereby allowing optimal use of the excimer laser equipment. In addition, the
Company provides a broad range of professional services, including physician
and staff training, technical support services and maintenance and, through its
MarketVision and MedSource divisions, advertising and marketing programs and
services.

The Company has operated excimer laser centers in Canada and Europe
since 1991 and 1993, respectively. Following the recent approval of the
excimer laser technology by the United States Food and Drug Administration
("FDA") to treat certain refractive vision disorders, the Company began
developing centers in the United States and currently operates 17 centers in
the United States, with plans to open additional centers. The Company
currently provides excimer lasers and related services to fixed-site centers in
the United States, Canada, the United Kingdom, Finland, Greece, Sweden and
Ireland and operates the MobilExcimer(R) in Canada and the United Kingdom. In
the United States, fixed-site laser centers are operated in conjunction with
Columbia Healthcare Corporation formerly Columbia/HCA ("Columbia Healthcare")
or by the Company independently or through joint ventures.

Photorefractive keratectomy ("PRK") involves the use of an excimer
laser to reshape the cornea, thereby adjusting its refractive power, which in
turn eliminates or reduces the need for corrective lenses. The excimer laser
can also be used to treat a number of pathological superficial corneal
disorders in a procedure called phototherapeutic keratectomy ("PTK"). Two
manufacturers, VISX, Incorporated ("VISX") and Summit Technology, Inc.
("Summit"), recently received FDA approval for use of their excimer lasers to
perform PRK procedures for low to moderate myopia and PTK procedures. In
addition to such procedures, excimer lasers can also be used to perform a
procedure known as laser in situ keratomileusis ("LASIK"), which may be more
predictable in treating high myopia, but which has not been specifically
approved in the United States by the FDA.

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<PAGE> 6

23 million people in the United States suffer from astigmatism but do not
experience nearsightedness. According to industry sources, consumers in the
United States spent approximately $13 billion on eyeglasses, contact lenses and
other corrective lenses in 1994. The Company believes that excimer laser
surgery will make it possible for many of these people to eliminate or reduce
their reliance on corrective lenses. In particular, the Company believes that
many of the approximately 26 million contact lens users in the United States
will be particularly receptive to laser surgery as they have already chosen to
use an alternative to eyeglasses for vision correction.

In anticipation of the FDA's approval of the excimer laser to perform
PRK procedures, the Company developed a relationship with Columbia Healthcare
whereby the Company would become the primary provider of excimer lasers to
Columbia Healthcare ambulatory surgery centers. Since 1992, the Company has
had an option to provide excimer laser surgery equipment, training and services
to Columbia Healthcare once the excimer laser technology was approved by the
FDA. In December 1994, this mutually exclusive agreement was revised to expand
the number of potential sites to include all of the approximately 135 Columbia
Healthcare ambulatory surgery centers in 27 states nationwide. To date, the
Company is operating 14 centers pursuant to this agreement.

In addition to operating fixed-site centers, the Company has developed
a proprietary MobilExcimer system which is a self-contained mobile refractive
laser surgery center duplicating all the equipment and services typically found
in a fixed-site location. The Company has entered into a mutually exclusive
agreement with Calumet Coach Company, the world's leading manufacturer of mobile
medical systems, to build the MobilExcimer. This proprietary system gives the
Company flexibility that the Company believes is not currently available to its
competitors and is intended to help the Company achieve broader penetration of
both domestic and international markets. The Company plans to use the
MobilExcimer to provide laser access and related services to communities where
the Company's potential patient base is insufficient to sustain a fixed-site
center, thereby enhancing the Company's ability to expand quickly into multiple
markets. The MobilExcimer system has not yet been approved for use in the
United States by the FDA. The Company has recently entered into an agreement
with VISX with respect to certain information included in VISX's FDA filings
which the Company believes may expedite the approval process.

The Company's growth strategy includes: (i) increasing market
penetration through a combination of fixed-site laser centers operated by the
Company or as joint ventures and expanding the use of its MobilExcimer system;
(ii) targeting efforts toward specific markets and key demographic groups
within those markets; (iii) promoting development of physician alliances with
the goal of maximizing laser usage; (iv) expanding its presence worldwide
through complementary acquisitions of other laser providers as well as
acquisitions of related and ancillary businesses; and (v) solidifying and
expanding its existing strategic alliances with health care providers,
equipment manufacturers, major employers and managed care providers and other
third party payors.

Risk factors which should be considered carefully in evaluating an
investment in the Common Stock include the absence of profitable operations,
the uncertainty of market acceptance of excimer laser surgery, competition, the
Company's dependence on limited sources of excimer lasers, government
regulation, the uncertainty of FDA approval of the MobilExcimer, the lack of
long-term follow-up data on the effect of excimer laser surgery, undetermined
medical risks, product liability and professional liability, the

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<PAGE> 7

Company's ability to manage its growth and its dependence on current management,
the possible need for additional financing and the volatility of the price of
the Company's Common Stock.

Except for the historical information contained herein, the discussion
in this Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed here. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in the sections entitled "Risk
Factors" and "Business-- Government Regulation," as well as those discussed
elsewhere in this Prospectus and any documents incorporated herein by
reference.

5
<PAGE> 8

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered by the Company . . . . . . . . . . .. 2,500,000 shares
Common Stock Outstanding after this Offering . . . . . . 11,265,984 shares (1) (2)
Use of Proceeds . . . . . . . . . . . . . . . . . For purchases of equipment, opening of new centers,
expansion of marketing activities, working capital,
business acquisitions and other general corporate
purposes. See "Use of Proceeds."
Nasdaq Symbol . . . . . . . . . . . . . . . . . . LVCI
Boston Stock Exchange Symbol . . . . . . . . . . LVS
</TABLE>

Summary Financial Information
(in thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months
Ended
Year Ended April 30, January 31,
----------------------------------------------------- ----------------------
1991 1992 1993 1994 1995 1995 1996
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues . . . . . . . . . . . . . . . $ 1,274 $ 936 $ 1,180 $ 2,106 $ 3,311 $ 2,492 $ 2,584
Cost of revenues . . . . . . . . . . . 893 600 868 1,768 3,375 2,274 3,021
Operating expenses . . . . . . . . . . 580 930 1,495 2,238 3,144 2,246 3,924
Loss from operations . . . . . . . . . (198) (594) (1,183) (1,900) (3,208) (2,028) (4,361)
Net loss . . . . . . . . . . . . . . . (198) (559) (1,235) (2,210) (3,297) (2,110) (4,124)

Net loss per share . . . . . . . . . . $ (0.14) $ (0.25) $ (0.48) $ (0.66) $ (0.82) $ (0.54) $ (0.84)

Weighted average number of shares of
Common Stock outstanding . . . . . . 1,440 2,270 2,567 3,356 4,001 3,907 4,935
</TABLE>

<TABLE>
<CAPTION>
January 31, 1996
-------------------
As
Actual Adjusted
(1)
------- ----------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,474 $ 44,623
Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,574 40,723
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,357 59,506
Non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,327 1,327
Convertible preferred stock with
mandatory redemption provision in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,100 --
Accumulated deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,763) (11,763)
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,060 53,309

- --------------------------------------------
</TABLE>

(1) As adjusted to reflect (a) the sale by the Company of 2,500,000
shares of Common Stock offered hereby and the application of the estimated net
proceeds therefrom and (b) the conversion of the 141,000 issued and outstanding
shares of Convertible Preferred Stock into 2,349,991 shares of Common Stock
upon consummation of this Offering.

(2) Does not include 39,150 shares of Common Stock issuable upon
exercise of the Company's Class C and D Warrants, 24,500 shares reserved for
issuance upon exercise of the Company's Class E Warrants, 434,485 shares
reserved for issuance upon exercise of outstanding stock options under the
Company's Incentive and Non-Qualified Stock Option Plans, 46,888 shares
reserved for issuance upon exercise of warrants issued to the placement agent
in the Company's 1993 Offering of Common Stock, 840,250 shares reserved for
issuance upon exercise of Outstanding Non-Qualified Warrants and 496,000 shares
issuable upon exercise of other unregistered warrants outstanding as of April
30, 1996. See Note 10 of Notes to Consolidated Financial Statements.

6
<PAGE> 9

RISK FACTORS

In addition to the other information contained in this Prospectus, the
following factors should be considered carefully in evaluating an investment in
the Common Stock.

ABSENCE OF PROFITABLE OPERATIONS

The Company commenced operations in 1989 and has recorded net losses
from its LaserVision Centers division in every year since inception. The
accumulated deficit as of January 31, 1996 was approximately $11.8 million.
The Company anticipates continued losses from operations due to expenditures
required to support its U.S. expansion. There can be no assurance that the
Company will be able to achieve profitability, or that, if achieved,
profitability will be sustained. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

UNCERTAINTY OF MARKET ACCEPTANCE

The Company believes that its profitability and growth will depend
upon broad acceptance of PRK in the United States and key international markets
targeted by the Company. There can be no assurance that PRK will be accepted
by either the ophthalmic community or the general population as an alternative
to existing methods of treating refractive vision disorders. Currently,
patients are charged approximately $1,500 to $2,200 per eye for the procedure.
The acceptance of PRK may be affected adversely by its cost, concerns relating
to its safety and efficacy, general resistance to surgery, the effectiveness of
alternative methods of correcting refractive vision disorders, the lack of
long-term follow-up data, the possibility of unknown side effects, and the lack
of third-party reimbursement for the procedure. Many consumers may choose not
to have PRK procedures performed due to the availability of nonsurgical methods
for vision correction. Any future reported adverse events or other unfavorable
publicity involving patient outcomes from use of PRK systems could also
adversely affect acceptance of the procedure. Market acceptance could also be
affected by the ability of the Company and other participants in the PRK market
to train a broad population of ophthalmologists in the procedure. Promotional
efforts by suppliers of products or procedures which are alternatives to PRK
procedures, including eyeglasses and contact lenses, may also adversely affect
the market acceptance of PRK. The failure of PRK to achieve broad market
acceptance would have a material adverse effect on the Company's business,
financial condition and results of operations.

COMPETITION

The market for providing access to excimer lasers is subject to
increasingly intense competition. The Company competes with several other
companies, including at least one manufacturer of laser equipment, in providing
access to excimer lasers in the United States and internationally. Summit, a
major supplier of laser equipment to the Company, has indicated it will open
approximately 20 laser centers in the United States during 1996. Other
companies are currently in the process of gaining FDA approval for their lasers
and these companies may elect to enter the laser center business. Other
non-manufacturing companies which have indicated they intend to operate or
already operate laser centers in the United States are: Beacon Laser Centers,
Inc., Global Vision, Inc., LCA Vision, Inc., Sight Resources, Inc., Sterling
Vision, Inc., The Laser Centre (TLC) and 20/20 Laser Centers, Inc. The Company
will also compete with laser centers operated by local operators in certain
markets. There can be no assurance that any reduction in per procedure fees
that may result from increased competition will be compensated for by an
increase in procedure volume.

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<PAGE> 10

The procedures offered by the Company's LaserVision Centers also
compete with other present forms of treatment for refractive disorders,
including eyeglasses, contact lenses, refractive surgery, corneal transplants,
and other technologies currently under development. The Company expects that
companies which have developed or are developing new technologies or products,
as well as other companies (including established and newly formed companies)
may attempt to develop new products directly competitive with the excimer
lasers that are to be utilized by the Company or could introduce new or
enhanced products with features which render the equipment to be used by the
Company obsolete or less marketable. The ability of the Company to compete
successfully will depend in large part on its ability to adapt to technological
changes and advances in the treatment of refractive vision disorders. There
can be no assurance that, as the market for excimer laser surgery and other
treatments of eye disorders develops, the Company's equipment will not become
obsolete, and if this occurs, that the Company will be able to secure new
equipment to allow it to compete effectively.

The advertising and marketing businesses in which the Company's
MarketVision and MedSource divisions are engaged are highly competitive.
Clients have the freedom to move from one advertising agency to another with
comparative ease since the relationships normally can be terminated on short
notice. The MarketVision and MedSource divisions compete with several national
and regional ophthalmic specialty marketing companies, as well as national and
local advertising agencies which may handle diverse client activities.
MarketVision and MedSource may be hampered by their affiliation with
LaserVision Centers in that some customers may consider them competitors which
could adversely affect the ability of these divisions to continue to attract
outside business.

DEPENDENCE ON LIMITED SOURCES OF LASERS

The Company is dependent on VISX and Summit to provide the excimer
lasers it needs for operations. VISX and Summit are currently the only
manufacturers of excimer lasers that have FDA approval to sell such lasers for
use in performing PRK and PTK procedures. Neither company has experience
manufacturing its laser in large-scale, commercial quantities. There can be no
assurance that VISX and Summit will supply lasers in the amounts or at the
times needed by the Company now or in the future or that other disruptions in
supply will not occur. See "Business--Operation of Laser Centers--Suppliers."

GOVERNMENT REGULATION

The manufacturing, labeling, distribution and marketing of medical
devices such as the excimer lasers to which the Company provides access are
subject to extensive and rigorous government regulation in the United States by
the FDA. The excimer lasers to which the Company provides access have been
approved by FDA. However, certain FDA officials have advised the Company that
they believe that these lasers are not approved for use in the MobilExcimer, and
that such approval would be required before the Company could operate the
MobilExcimer in the United States.

The process of obtaining FDA approval of medical devices is time
consuming and expensive, and there can be no assurance that any approval sought
by the Company will be granted or that FDA review will not involve delays
adversely affecting the ability of the Company to operate MobilExcimers.
Failure to obtain any required FDA approval or failure to obtain timely
approval could have a material adverse effect on the Company's business,
financial condition and results of operations.

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<PAGE> 11

Once FDA approval is obtained, manufacturers are subject to continuing
FDA obligations. Medical devices are required to be manufactured in accordance
with regulations setting forth current Good Manufacturing Practices, which
require that devices be manufactured and records be maintained in a prescribed
manner with respect to manufacturing, testing and control activities. In
addition, among other requirements, manufacturers, and, in the FDA's view, with
respect to excimer lasers, users, must comply with FDA requirements for labeling
and promotion of the device. Failure to comply with applicable FDA requirements
could subject the Company to enforcement action, including product seizures,
recalls, withdrawal of approvals, and civil and criminal penalties, any one or
more of which could have a material adverse effect on the Company's business,
financial condition and results of operations.

Medical device laws and regulations are also in effect in many of the
countries in which the Company currently conducts or may in the future conduct
business outside the U.S. These range from comprehensive device approval
requirements to requests for product data or certifications. The number and
scope of these requirements are increasing. International regulatory
requirements vary by country and there can be no assurance that the
manufacturers of the excimer lasers to which the Company provides access will
receive additional international regulatory approvals. Failure to receive such
approvals in, or meet the requirements of, any country could prevent the
Company from operating in that country, which could have a material adverse
effect on the Company's business, financial condition and results of
operations. Medical device laws and regulations are also in effect in some
states in which the Company currently conducts or may in the future conduct
business. State and foreign medical device laws and regulations could have a
material adverse effect on the Company's business, financial condition and
results of operation.

There are currently two manufacturers, VISX and Summit, that have
received FDA approval to market excimer lasers for PTK and PRK for low to
moderate myopia (nearsightedness). Lack of timely FDA approval for use of PRK
for other indications, such as astigmatism and hyperopia (farsightedness),
could have a material adverse effect on the Company's planned expansion in the
United States market. Even after regulatory clearance is obtained, approval of
medical devices is subject to review. Later discovery of previously unknown
problems, violations of the Radiation Control for Health and Safety Act or
future legislative or administrative action in the United States or elsewhere
may adversely affect the manufacturers' ability to retain regulatory approval
of any such equipment. Furthermore, the failure of these and any other
manufacturers that supply excimer lasers to the Company to comply with
applicable federal, state, or foreign regulatory requirements, or any adverse
regulatory action against such manufacturers, could limit the supply of lasers
or limit the ability of the Company to use the lasers. The inability of the
Company to obtain lasers for sale or use in the United States or elsewhere due
to lack of regulatory approval, or otherwise, could prevent the Company from
establishing or maintaining LaserVision Centers and MobilExcimers, which would
have a material adverse effect on the Company's business, financial condition
and results of operations. See "Business - Government Regulation."

UNCERTAINTY OF FDA APPROVAL OF MOBILEXCIMER

The MobilExcimer system has not yet been approved for use in the
United States by the FDA. In June 1996, the Company filed a Premarket Approval
("PMA") application with the FDA for the use of the excimer laser for treatment
of low to moderate myopia, which will allow the Company to seek approval for
the MobilExcimer. Pursuant to an agreement entered into in May 1996 with VISX,
this PMA application incorporates the information contained in the PMA
applications filed with and approved by the FDA for use of VISX excimer lasers
for PRK and PTK. The Company will subsequently supplement this PMA application
to obtain FDA approval for use of the excimer laser on the MobilExcimer. The
process of obtaining a PMA can be lengthy, expensive and uncertain. It is
uncertain when, if ever, the FDA will approve excimer lasers for mobile use.

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<PAGE> 12

The Company believes that the FDA's authority to require a PMA for
the use of an excimer laser on a mobile unit is uncertain. If such approval is
required, the lack of such approval could have a material adverse effect on the
Company's business, financial condition and results of operations. If the
Company determines to operate MobilExcimer units in the United States without
first receiving a PMA, and the FDA subsequently takes enforcement action
against the Company, such action could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business--Government Regulation."

LACK OF LONG-TERM FOLLOW-UP DATA; UNDETERMINED MEDICAL RISKS

Concerns with respect to the safety and efficacy of PRK include
predictability and stability of results. Potential complications and side
effects include: post-operative discomfort; corneal haze during healing (an
increase in the light scattering properties of the cornea); glare/halos
(undesirable visual sensations produced by bright lights); decreases in
contrast sensitivity; temporary increases in intraocular pressure in reaction
to procedure medication; modest fluctuations in refractive capabilities during
healing; modest decreases in best corrected vision (i.e., with corrective
lenses); unintended over- or under-corrections; regression of effect; disorders
of corneal healing; corneal scars; corneal ulcers and induced astigmatism. The
procedure involves the removal of "Bowman's layer," an intermediate layer
between the epithelium (outer corneal layer) and the stroma (middle corneal
layer). Although clinical studies conducted to date have demonstrated no
significant adverse reactions to excimer laser removal of Bowman's layer, it is
unclear what effect this will ultimately have on the patient. There can be no
assurance that long-term follow-up data will not reveal additional
complications that may have a material adverse effect on acceptance of PRK
which in turn would have a material adverse effect on the Company's business,
financial conditions and results of operations. Concern over the safety of PRK
or other procedures could in turn adversely affect market acceptance of PRK or
result in adverse regulatory action, including product recalls, any of which
could have a material adverse effect on the Company's business, financial
condition and results of operations.

PRODUCT LIABILITY AND PROFESSIONAL LIABILITY

Inherent in the testing and use of human health care devices is the
potentially significant risk of physical injury to patients which could result
in product liability or other claims based upon injuries or alleged injuries
associated with a defect in the product's performance, which may not become
evident for a number of years. Therefore, the operation of any LaserVision
Center and the use of refractive laser equipment may result in substantial
claims against the Company by patients who allege they were injured as a result
of surgical procedures using the refractive laser equipment. The Company has
"umbrella" product and professional liability insurance in the amounts of $1.0
million (aggregate and occurrence), but primarily relies and intends to
continue to rely on physicians' professional liability insurance policies and
manufacturers' insurance policies for product liability coverage. The Company
requires its center operators to maintain certain levels of professional
liability insurance and the agreements between the Company and its center
operators contain certain cross indemnification provisions. There can be no
assurance, however, that physician users will carry sufficient insurance and a
partially or completely uninsured successful claim against the Company could
have a material adverse effect on the Company's business, financial condition
and results of operations.

MANAGEMENT OF GROWTH

The Company's net revenues have increased in each of the last four
fiscal years. While the Company has increased its expense levels to support
its recent growth, including the hiring of

10
<PAGE> 13

additional personnel, there can be no assurance that the Company's revenue
growth can be sustained. To accommodate its recent growth, the Company will
need to implement a variety of new or expanded business and financial systems,
procedures and controls, including the improvement of its accounting, marketing
and other internal management systems. There can be no assurance that the
implementation of such systems, procedures and controls can be completed
successfully, or without disruption of the Company's operations. Continued
expansion of the Company could significantly strain the Company's management,
financial and other resources. In addition, the Company has hired and will be
required to hire in the future substantial numbers of new employees,
particularly personnel to support its MobilExcimer operations. There can be no
assurance that the Company's systems, procedures, controls and staffing will be
adequate to support the Company's operations. Failure to manage the Company's
growth effectively could have a material adverse effect on the Company's
business, financial condition and results of operations.

DEPENDENCE UPON MANAGEMENT

The future success of the Company is dependent in part on its ability
to recruit and retain certain key personnel including John J. Klobnak, Chief
Executive Officer and Chairman of the Board. The loss of the services of
certain members of management, or other key personnel, could have a material
adverse effect on the Company. The Company is the beneficiary of key-man life
insurance policies ranging from $500,000 to $1.0 million on certain members of
management but there can be no assurance that the benefits under these policies
will be sufficient to compensate the Company for the loss of the services of
any of such persons.

POSSIBLE NEED FOR ADDITIONAL FINANCING

Although the Company anticipates that the net proceeds of this
Offering and its cash flow from its joint ventures and operations will be
sufficient to fund the Company's operations, including its proposed expansion,
during the next 24 months, there can be no assurance that the Company will not
require additional financing prior to the end of such period. In any event,
the Company expects to require additional financing after such period. The
Company's future liquidity and capital requirements will depend on numerous
factors, many of which are outside the control of the Company. Future
financings may result in the issuance of senior securities or in dilution to
the holders of the Common Stock. Any such financing, if required, may not be
available on satisfactory terms or at all. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

VOLATILITY OF STOCK PRICE

The market price of the Common Stock has historically been subject to
substantial price volatility. Such volatility may recur in the future due to
overall market conditions or business specific factors such as the Company's
ability to effectively penetrate the market, new technological innovations and
products, changes in government regulations, developments with respect to
patent or proprietary rights, public concerns with regard to safety and
efficacy of various medical procedures, the issuance of new or changed stock
market analyst reports and recommendations, the Company's ability to meet
analysts' projections and fluctuations in the Company's financial results. In
addition, the Common Stock could experience extreme fluctuations in market
price which are wholly unrelated to the operating performance of the Company.

11
<PAGE> 14

QUARTERLY FLUCTUATIONS IN OPERATING RESULTS

Results of operations have varied and may continue to fluctuate
significantly from quarter to quarter and will depend upon numerous factors,
including (i) the opening and closing of centers; (ii) the purchase of
additional lasers and other equipment; (iii) competition; and (iv) seasonal
factors. Historically, the Company's third quarter results have reflected
fewer procedures due to holiday schedules and less available disposable income
to pay for elective surgery such as PRK. Due to such past and future quarterly
fluctuations in operating results, quarter-to-quarter comparisons of the
Company's operating results are not necessarily meaningful and should not be
relied upon as indications of likely future performance or annual operating
results.

SHARES ELIGIBLE FOR FUTURE SALE

As of April 30, 1996, options issued pursuant to the Company's
Incentive and Non-Qualified Stock Option Plans to purchase up to 434,485 shares
of Common Stock exercisable over the next several years were outstanding at
prices ranging from $3.00 to $16.625. The shares of Common Stock issuable upon
exercise of these options have been registered and will be freely tradeable
upon exercise. As of April 30, 1996, non-qualified warrants issued to
employees and consultants to purchase up to 840,250 shares of Common Stock
exercisable over the next several years at prices ranging from $5.00 to $7.75
were outstanding. The shares of Common Stock issuable upon exercise of these
warrants have been registered and will be freely tradeable upon exercise. As
of April 30, 1996, Class C, D and E warrants and certain warrants issued to
underwriters in connection with the Company's 1993 public offering to purchase
an aggregate of 110,538 shares of Common Stock exercisable over the next
several years at prices ranging from $5.00 to $7.25 were outstanding. The
shares of Common Stock issuable upon exercise of these warrants have been
registered and will be freely tradeable upon exercise.

As of April 30, 1996, additional warrants to purchase 496,000 shares
of Common Stock issued to employees, directors and consultants of the Company
and exercisable over the next several years at prices ranging from $5.25 to
$12.125 were outstanding. The shares of Common Stock issuable upon exercise of
these warrants are not registered and may be sold only if registered under the
Securities Act or sold in accordance with an applicable exemption from
registration, such as Rule 144 or Rule 701. Upon consummation of this
Offering, 2,349,991 shares of Common Stock will be issued upon conversion of
all outstanding shares of Convertible Preferred Stock. The shares of Common
Stock issuable upon conversion of the Convertible Preferred Stock have not been
registered; however, holders of Convertible Preferred Stock have the right
to require such shares to be registered within 180 days of the date of this
Offering.

As of April 30, 1996, there were 1,881,273 shares of Common Stock
reserved for such warrants and options. Upon consummation of this Offering,
there will be 11,265,984 shares of Common Stock outstanding, assuming no
exercise of warrants or options after April 30, 1996. Of these outstanding
shares, 10,770,740 will be freely tradeable without restriction under the
Securities Act unless held by affiliates.

12
<PAGE> 15

EFFECT OF CERTAIN CHARTER AND BYLAW PROVISIONS; PREFERRED STOCK

The Company's Amended Certificate of Incorporation authorizes the
issuance of "blank check" preferred stock with such designations, rights and
preferences as may be determined from time to time by the Board of Directors.
Accordingly, the Board of Directors is empowered, without stockholder approval,
to issue preferred stock with dividend, liquidation, conversion, voting or
other rights which could adversely affect the voting power or other rights of
the holders of the Company's common stock; thus making it difficult for a third
party to obtain voting control of the Company. In the event of issuance, the
preferred stock could be utilized, under certain circumstances, as a method of
discouraging, delaying or preventing a change in control of the Company.

The Company currently has authorized 180,000 shares of its Convertible
Preferred Stock. On October 11, 1995, the Company completed a private
placement of 141,000 of these shares for an aggregate consideration of $14.1
million. These shares have dividend and liquidation preferences. The approval
of the holders of at least two-thirds of the outstanding shares of such stock
is required prior to carrying out certain corporate activities. These shares
currently may be converted to Common Stock of the Company at a price of $6.00
per share. Upon consummation of this Offering, all outstanding shares of
Convertible Preferred Stock will be converted into 2,349,991 shares of Common
Stock. Although the Company has no current plan in place to issue the
remaining shares of Convertible Preferred Stock, there can be no assurance
that the Company will not issue more shares of its preferred stock in the
future.

The Company's Amended Certificate of Incorporation includes certain
anti-takeover provisions designed to make the Company a less attractive target
for an acquisition of control by an outsider that does not have the support of
the Company's Board of Directors. These provisions include requirements that
certain business combinations involving persons owning beneficially at least
10% of the Company's shares be approved by both an 80% vote of all outstanding
shares and also a majority vote of all outstanding shares not owned
beneficially by persons involved in such business combinations. These
provisions may discourage a third party from attempting to acquire control of
the Company and may lower the price that an investor may be willing to pay for
shares of the Company's Common Stock.

ABSENCE OF DIVIDENDS

The Company has never declared or paid any cash dividends and
anticipates that for the foreseeable future it will follow a policy of not
declaring dividends and retaining earnings, if any, for use in its business.

INTELLECTUAL PROPERTY/PROPRIETARY TECHNOLOGY

13
<PAGE> 16

Company's service mark registrations and patent will significantly protect the
Company's intellectual property. The defense and prosecution of intellectual
property proceedings is costly and involves substantial commitments of
management time. Failure to successfully defend the Company's rights with
respect to its intellectual property could have a material adverse effect on
the Company's business, financial condition and results of operations. See
"Business - Legal Proceedings."

FOREIGN EXCHANGE RATES AND CURRENCY CONTROLS

The Company expects that a declining percentage of its revenues will
be earned outside of the United States and will be in currencies other than the
U.S. dollar during at least the next few years. Fluctuations in the exchange
rate between the U.S. dollar and foreign currencies, especially the U.K. pound,
Canadian dollar and Swedish Kroner, could adversely affect the operations of
the Company in the short term. In addition, the U.S. or foreign governments
could impose currency controls which would limit, or prohibit, the Company's
access to funds remitted outside the United States.

THE COMPANY

The Company is incorporated in Delaware. The Company's principal
executive offices are located at 540 Maryville Centre Drive, Suite 200, St.
Louis, Missouri 63141, and its telephone number is (314) 434-6900. The Company
maintains an Internet home page at www.laser-vision.com. All references to
the Company refer to the Company and its subsidiaries unless the context
otherwise indicates.

USE OF PROCEEDS

The net proceeds to the Company from the sale of 2,500,000 shares of
Common Stock offered hereby, after deduction of underwriting discounts and
commissions and offering expenses, are estimated to be $30.1 million (or $34.7
million if the Underwriters' over-allotment option is exercised in full).

The Company expects to use the net proceeds of this Offering for
purchases of equipment, opening of new centers, expansion of marketing
activities, working capital, business acquisitions and other general corporate
purposes. Although the Company may use a portion of the net proceeds to
acquire complementary businesses, products or technologies, the Company has no
current agreements or understandings with respect to any such transactions.
Pending such uses, the Company intends to invest such net proceeds in
short-term, investment-grade, interest-bearing securities.

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

Since April 3, 1991, the Common Stock has been traded on the
over-the-counter market through the Nasdaq Small Capital Market under the
symbol "LVCI" and on the Boston Stock Exchange under the symbol "LVS."

14
<PAGE> 17

The following table sets forth, for the periods indicated, the high
and low bid prices of the Common Stock as reported by the Nasdaq
over-the-counter market.

<TABLE>
<CAPTION>
Price Range of Common
Stock

High Low
<S> <C> <C>
FISCAL YEAR ENDED APRIL 30, 1994
1st Quarter . . . . . . . . . . . . . . . . . . . . . . $ 5.75 $ 4.75

2nd Quarter . . . . . . . . . . . . . . . . . . . . . . 5.88 4.00

3rd Quarter . . . . . . . . . . . . . . . . . . . . . . 5.75 4.00

4th Quarter . . . . . . . . . . . . . . . . . . . . . . 6.88 5.63

FISCAL YEAR ENDED APRIL 30, 1995

1st Quarter . . . . . . . . . . . . . . . . . . . . . . $ 6.00 $5.38

2nd Quarter . . . . . . . . . . . . . . . . . . . . . . 8.00 5.25

3rd Quarter . . . . . . . . . . . . . . . . . . . . . . 8.00 7.63

4th Quarter . . . . . . . . . . . . . . . . . . . . . . 8.50 7.00

FISCAL YEAR ENDED APRIL 30, 1996

1st Quarter . . . . . . . . . . . . . . . . . . . . . . $ 8.50 $ 7.88

2nd Quarter . . . . . . . . . . . . . . . . . . . . . . 15.88 8.50

3rd Quarter . . . . . . . . . . . . . . . . . . . . . . 16.63 11.38

4th Quarter . . . . . . . . . . . . . . . . . . . . . . 15.25 12.38

FISCAL YEAR ENDED APRIL 30, 1997

1st Quarter (through June 4, 1996) . . . . . . . . . . $14.13 $10.75
</TABLE>

On June 4, 1996, the last reported sale price of the Common Stock
on the over-the-counter market through the Nasdaq Small Capital Market
was $13.00 per share. As of such date, there were approximately 400 holders of
record of the Common Stock.

The Company has never declared or paid any cash dividends on its
Common Stock. The Company presently intends to retain any future earnings for
use in its business and does not anticipate paying any cash dividends on its
Common Stock in the foreseeable future.

15
<PAGE> 18

CAPITALIZATION

The following table sets forth the capitalization of the Company as of
January 31, 1996, and as adjusted to reflect the sale of the 2,500,000 shares
of Common Stock offered by the Company hereby (at an assumed public
offering price of $13.00 per share) and the receipt of the estimated net
proceeds therefrom by the Company after deducting the estimated underwriting
discounts and commissions and offering expenses. The table set forth below
should be read in conjunction with the consolidated financial statements,
related notes and other financial information included elsewhere in this
Prospectus. See "Use of Proceeds."

<TABLE>
<CAPTION>
January 31, 1996
----------------
($ in thousands, except per share data)
--------------------------------------

ACTUAL AS ADJUSTED (1)
------ ===============
<S> <C>
Notes payable and current portion of capitalized lease obligation . . $ 2,257 $ 2,257
========= ========

Non-current capitalized lease obligation . . . . . . . . . . . . . . $ 783 $ 783
--------- --------
Convertible Preferred Stock with Mandatory
Redemption Provision in 2005, 141,000 shares authorized,
issued and outstanding at
$100 par value (none outstanding, as adjusted). . . . . . . $ 14,100 $ --
--------- --------
Stockholders' equity:

Common Stock par value $.01 per share: $ 59 $ 107
50,000,000 shares authorized, 5,863,835
(10,713,826, as adjusted)
issued and outstanding (2) . . . . . . . . . . . . .

Paid-in-capital . . . . . . . . . . . . . . . . . . . . . . 20,764 64,965

Accumulated deficit . . . . . . . . . . . . . . . . . . . . (11,763) (11,763)
--------- --------
Total stockholders' equity . . . . . . . . . . . . . . . . . $ 9,060 $ 53,309
--------- --------
Total capitalization . . . . . . . . . . . . . . . . . . . . $ 23,943 $ 54,092
========= ========
</TABLE>

(1) As adjusted to reflect (a) the sale by the Company of 2,500,000 shares of
Common Stock offered hereby and the application of the estimated net proceeds
therefrom and (b) the conversion of the 141,000 issued and outstanding shares
of Convertible Preferred Stock into 2,349,991 shares of Common Stock upon
consummation of this Offering.

(2) Does not include 40,150 shares of Common Stock issuable upon exercise of
the Company's Class C and D Warrants, 24,500 shares reserved for issuance upon
exercise of the Company's Class E Warrants, 454,485 shares reserved for
issuance upon exercise of outstanding stock options under the Company's
Incentive and Non-Qualified Stock Option Plans, 109,512 shares reserved for
issuance upon exercise of warrants issued to the placement agent in the
Company's 1993 offering of Common Stock, 840,250 shares reserved for issuance
upon exercise of the Company's Non-Qualified Warrants and 435,000
shares issuable upon exercise of other unregistered warrants outstanding as of
January 31, 1996. In addition, does not include 411,484 publicly traded Class B
and F Warrants and 26,500 underwriter warrants outstanding as of January 31,
1996. See Note 10 of Notes to Consolidated Financial Statements.

16
<PAGE> 19

SELECTED CONSOLIDATED FINANCIAL DATA

The statement of operations data set forth below for the years ended
April 30, 1994 and 1995 and the balance sheet data at April 30, 1994 and 1995
are derived from the respective consolidated financial statements of the
Company audited by Price Waterhouse LLP, independent public accountants, which
are included elsewhere in this Prospectus. The statement of operations data
set forth for the year ended April 30, 1993 is derived from the consolidated
financial statements of the Company audited by Lovelace Roby & Company, P.A.,
independent public accountants, which are included elsewhere in this
Prospectus. The statement of operations data set forth below with respect to
the years ended April 30, 1991 and 1992 and the balance sheet data at April 30,
1991, 1992, and 1993 are derived from audited financial statements of the
Company which are not included in this Prospectus. The statement of operations
data for the nine months ended January 31, 1995 and 1996 and the balance sheet
data at January 31, 1996 have been derived from the unaudited financial
statements of the Company which are included elsewhere in this Prospectus.
Unaudited financial statements include all adjustments (consisting only of
normal recurring adjustments) that the Company considers necessary for a fair
presentation of the financial information set forth therein, in accordance with
generally accepted accounting principles. The results of operations for the
nine months ended January 31, 1996 are not necessarily indicative of the
results to be expected for the entire fiscal year. The data set forth below
should be read in conjunction with the consolidated financial statements and
related notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included elsewhere in this Prospectus.

17
<PAGE> 20

<TABLE>
<CAPTION>
Nine Months
Ended
January 31,
Year Ended April 30, (unaudited)
----------------------------------------------------- ---------------
1991 1992 1993 1994 1995 1995 1996
---- ---- ---- ---- ---- ---- ----
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues . . . . . . . . . . . . . . . . $1,274 $ 936 $1,180 $2,106 $3,311 $ 2,492 $2,584

Cost of revenues . . . . . . . . . . . . 893 600 868 1,768 3,375 2,274 3,021
------ ------- ------ ------ ------ ------- ------
Gross profit (loss) . . . . . . . . . . . 381 336 312 338 (64) 218 (437)
------ ------- ------ ------ ------ ------- ------
Operating expenses:
General and administrative . . . . . 466 489 605 695 1,002 726 1,420

Salaries and related expenses . . . (1) 347 514 902 1,285 992 1,588
Depreciation and amortization . . . . . . 7 69 122 250 283 161 165
Selling and marketing expenses . . . . . 105 25 254 391 574 367 751
------ ------- ------ ------ ------ ------- ------
Total operating expenses . . . . . . . . 578 930 1,495 2,238 3,144 2,246 3,924
------ ------- ------ ------ ------ ------- ------
Loss from operations . . . . . . . . . . (197) (594) (1,183) (1,900) (3,208) (2,028) (4,361)
------ ------- ------ ------ ------ ------- ------
Other income (expense):

Interest and other income . . . . . . . . 8 84 35 21 37 40 255
Interest expense . . . . . . . . . . . . (9) (49) (87) (156) (242) (189) (150)
Minority interest in net loss of
subsidiaries . . . . . . . . . . . . . . 116 67 132
Provision for loss on advance . . . . . . (175)
------ ------- ------ ------ ------ ------- ------

Other income (expense) net: (1) 35 (52) (310) (89) (82) 237
Net loss . . . . . . . . . . . . . . . . ------ ------- ------ ------ ------ ------- ------
($198) ($559) ($1,235) ($2,210) ($3,297) ($2,110) ($4,124)
====== ======= ====== ====== ====== ======= ======

Net loss per share . . . . . . . . . . . ($0.14) ($0.25) ($0.48) ($0.66) ($0.82) ($0.54) ($0.84)
====== ======= ====== ====== ====== ======= ======
Weighted average number of shares of
Common Stock outstanding . . . . . . 1,440 2,270 2,567 3,356 4,001 3,907 4,935
====== ======= ====== ====== ====== ======= ======
</TABLE>

Year Ended April 30,
----------------------------------------------------
January 31,
1996
1991 1992 1993 1994 1995 (unaudited)
----- ------ ----- ------ ----- ---------------

(in thousands)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents . . . . . . . $2,561 $719 $787 $706 $2,126 $14,474
Working capital (deficit) . . . . . . . 2,429 643 673 (244) (1,301) 10,574
Total assets . . . . . . . . . . . . . 2,834 4,442 4,356 9,135 11,318 29,357
Non-current liabilities . . . . . . . . 603 736 2,900 791 1,327
Convertible preferred stock with
mandatory redemption provision in 2005
14,100
Accumulated deficit. . . . . . . . . . (338) (897) (2,132) (4,342) (7,639) (11,763)

Stockholders' equity. . . . . . . . . . 2,548 2,964 2,829 4,594 6,349 9,060
</TABLE>

(1) Salaries and related expenses included in general and administrative
expenses.

18
<PAGE> 21

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION

Except for the historical information contained herein, the discussion
in this Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed here. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in the sections entitled "Risk
Factors" and "Business-- Government Regulation" as well as those discussed
elsewhere in this Prospectus and any documents incorporated herein by
reference.

BACKGROUND

The Company was incorporated in Delaware in 1988 and initially
provided medical advertising and marketing services in the United States,
primarily to ophthalmologists. By 1991, the Company had shifted its strategic
emphasis to the emerging ophthalmic technology based on the use of excimer
lasers for PRK and acquired an excimer laser for use in a clinical center as
part of clinical trials with respect to the safety and efficacy of PRK.

Subsequent to the purchase of its first laser, the Company determined
that FDA approval for PRK in the United States would require a lengthier
process than was originally anticipated. As a result, the Company decided to
enter the international market for excimer laser surgery where regulatory
restrictions were much less prohibitive. Between late 1991 and mid 1992, the
Company acquired three commercial excimer laser centers in Canada and began
developing the first MobilExcimer unit. In July 1993, the Company opened a
fourth Canadian center and purchased six excimer lasers installed in Europe.
In April 1994, the Company acquired eight additional lasers installed in
Europe. The first PRK procedure on a MobilExcimer system was performed in
Ontario, Canada in September 1994.

In anticipation of the FDA's approval of the excimer laser to perform
PRK procedures, in December 1994 the Company restated its agreement with
Columbia Healthcare pursuant to which the Company became the primary provider
of excimer lasers to Columbia Healthcare ambulatory surgery centers. In
addition, by the fall of 1995, the Company extended testing of its MobilExcimer
system to England, opened two European centers (including a Company-owned
center with an improved excimer laser system), acquired an additional
MobilExcimer unit and selected Dr. Richard Lindstrom as the Company's Medical
Director.

In October 1995 and March 1996, the FDA approved the use of the
excimer lasers manufactured by Summit and VISX, respectively, for performing
PRK procedures for low to moderate myopia, making it possible for the Company
to begin providing ophthalmologists access to lasers in the United States. In
the nine months ended January 31, 1996, the Company opened three LaserVision
Centers in the United States. During the quarter ended April 30, 1996, the
Company purchased assets from a former competitor for approximately $300,000 in
cash to expand its European operations and used its MobilExcimer to service
(and consolidate) a number of European locations which had previously been
fixed sites. In addition, in 1995 the Company acquired Vision Correction,
Inc., an excimer laser access provider, for Common Stock with a value of
approximately $650,000, and in early 1996 acquired MedSource, a marketing
services company to complement its existing marketing operations, for cash and
Common Stock with a combined value of approximately $300,000.

19
<PAGE> 22

NEW ACCOUNTING STANDARD

In March 1995, the Financial Accounting Standards Board issued
Statement of Accounting Standards No. 121. "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" (SFAS 121),
adoption of which is required by the Company for its fiscal year ended April
30, 1997. SFAS 121 establishes standards of accounting for the impairment of
long-lived assets, certain identifiable intangibles and goodwill related to
those assets to be held and used and those assets to be disposed of. The
Company will adopt the provisions of SFAS 121 effective in its fourth quarter
ended April 30, 1996. The Company believes that certain of its international
fixed-site excimer lasers are subject to SFAS 121 impairment considerations.
Due to recent improvements in excimer laser technology, international market
conditions and the resulting operational considerations, the Company believes
that the recorded carrying value of these assets may exceed their estimated
fair values. Accordingly, the Company expects to record an estimated
impairment charge of approximately $3.1 million in the fourth quarter of fiscal
1996.

CENTERS IN OPERATION

The following table shows the number of centers which the Company
operated as of the dates indicated.

<TABLE>
<CAPTION>
Centers with Lasers APR 30 APR 30 APR 30 APR 30 APR 30 APR 30 JUNE 1
1991 1992 1993 1994 1995 1996 1996
------------------- ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
International,
Fixed 1 1 3 18 20 15 14

International,
Mobile 1 1 2 2

Domestic,
Fixed 1 1 1 1 6 17

Total Centers 1 2 4 20 22 23 33
</TABLE>

RESULTS OF OPERATIONS

Nine months ended January 31, 1996 compared to nine months ended January 31,
1995

Revenues. Total revenues increased to $2,584,000 for the nine months
ended January 31, 1996 from $2,492,000 for the nine months ended January 31,
1995. This increase was attributable to increased revenues from the
MarketVision Division and increased revenues from the Canadian and U.S.
centers. European revenues decreased as a result of the reduced number of
centers operating in Europe, partially offsetting these North American
increases.

Costs of Revenues/Gross Profit (Loss). Cost of revenues increased to
$3,021,00 for the nine months ended January 31, 1996 from $2,274,000 for the
nine months ended January 31, 1995. This increase was primarily due to an
increase in depreciation to $1,400,000 from $1,169,000 in these respective
periods due to the increased number of lasers and other medical equipment.
Other costs of revenues, primarily media costs for the MarketVision

20
<PAGE> 23

Division and laser maintenance/optics for the LaserVision Division, increased
to $1,621,000 from $1,119,000. As a result of these changes, gross profit
decreased from $218,000 to a loss of $437,000.

Operating Expenses. General and administrative expenses increased to
$1,420,000 for the nine months ended January 31, 1996 from $726,000 for the
nine months ended January 31, 1995 primarily due to higher legal and
professional fees, new insurance coverage, higher provisions for bad debt, the
costs associated with a new center in Europe, and other increased general and
administrative expenses. Salaries and related expenses increased by $596,000
as a result of salary adjustments, an increased number of employees, the
executive incentive compensation program and the related payroll taxes and
fringe benefits. The increase in selling and marketing expenses was due to the
increased cost of European advertising programs, promotion of the MobilExcimer
and the development of the U.S. market.

Other Income (Expense). Other income (expense) increased to a net
$237,000 during the nine months ended January 31, 1996 from a net $82,000
during the nine months ended January 31, 1995. This favorable variance was
primarily due to an increase in the minority interest in the net loss of a
subsidiary, lower interest expense and higher interest income.

Fiscal Year ended April 30, 1995 Compared to Fiscal Year Ended April 30, 1994

The Company's operating results for the years ended April 30, 1995 and
April 30, 1994 are not readily comparable due to significant expansion. The
LaserVision Centers Division's operating results for the year ended April 30,
1995 included Montreal for twelve months, 13 European installations for a full
year and three European centers for an average of nine months. The LaserVision
Centers Division operating results for the year ended April 30, 1994 included
Montreal for 9.5 months, six European installations for an average of nine
months, and eight European installations for one month. Both fiscal years
included the operations for the St. Catharines and Vancouver centers for a full
year. Two international centers which were open throughout fiscal 1994 were
closed during most of fiscal 1995. During fiscal 1995, three European centers
were acquired and testing of a larger MobilExcimer trailer was successfully
begun with Calumet Coach Company. Since April 30, 1995, the Columbia
Healthcare relationship in the U.S. has expanded, MobilExcimer system testing
was extended into a second international market with an even larger trailer,
two European centers were opened including a Company owned center with an
improved excimer laser system and three acquisitions were completed (one mobile
laser service related, one expanding European operations and one expanding U.S.
marketing capabilities).

Revenues. Total revenues increased to $3,311,000 for the year ended
April 30, 1995 from $2,106,000 for the year ended April 30, 1994, or an
increase of 57%.

Revenues for LaserVision Centers Division increased to $2,478,000 for
the year ended April 30, 1995 from $1,517,000 for the year ended April 30,
1994, or an increase of 63%. The $961,000 increase in revenues can be
attributed primarily to a $113,000 increase in Canadian revenues and $856,000
of increased European revenues. The increase in Canadian revenues for the
LaserVision Centers Division can be attributed primarily to an increased number
of procedures at both the Company's Vancouver and Montreal centers. The
increased European revenues related to a full year of revenue from thirteen
centers acquired during fiscal 1994 and the three centers opened during fiscal
1995. The relocation of one European center partially offset this increase.

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<PAGE> 24

Revenues for the MarketVision Division increased to $833,000 for the
year ended April 30, 1995 from $589,000 for the year ended April 30, 1994, or
an increase of 41%. The $244,000 increase reflects the addition of several
domestic ophthalmic advertising clients which have implemented cataract and/or
refractive marketing awareness programs.

During the most recent year, revenues from the LaserVision Centers
Division represented 75% of total revenues versus 72% for the year ended April
30, 1994. Revenues from the MarketVision Division represented 25% of total
revenues during the most recent year versus 28% for the year ended April 30,
1994.

Cost of Revenues/Gross Profit. Cost of revenues increased to
$3,375,000 for the year ended April 30, 1995 from $1,768,000 for the year ended
April 30, 1994. This increase included a $620,000 increase in excimer laser
and medical equipment depreciation, to $1,589,000 during the last year, from
$969,000 during the prior year. This non-cash expense reflects the increase in
the number of European excimer lasers operated for the full year ended April
30, 1995 and the purchase of additional medical equipment.

Excluding laser and medical equipment depreciation, all other costs of
revenues increased by $987,000. This increase, when combined with the revenue
increase, resulted in these other costs of revenues increasing from 38% of
total revenues for the year ended April 30, 1994 to 54% of total revenues for
the year ended April 30, 1995. This $987,000 increase was primarily due to
higher medical professional fees for Company-owned laser centers, the increase
in total costs of excimer laser maintenance, gasses and optics on higher
volumes of PRK procedures and new centers, and the higher levels of
MarketVision costs associated with the increase in MarketVision revenues.

Total gross profit decreased to a loss of $64,000 for the year ended
April 30, 1995 from $338,000 for the year ended April 30, 1994. The variable
gross profit, excluding depreciation and a $175,000 non-cash provision for loss
relating to an advance of funds in 1991 to an Italian company, increased to
$1,525,000 from $1,307,000, primarily because medical professional fees and
MarketVision costs of revenue are variable costs of revenue.

Operating Expenses. Operating expenses increased to $3,144,000 for
the year ended April 30, 1995 from $2,238,000 for the year ended April 30,
1994. General and administrative expenses increased by $307,000 primarily due
to higher European and U.S. professional fees (primarily for new centers and
tradename protection), new insurance coverage, laser relocation costs, and
higher travel and lodging costs associated with the Columbia Healthcare
agreement.

Salaries and related expenses increased by $383,000 as a result of the
hiring of new employees in St. Louis, Canada and England, the executive
incentive compensation program tied to the Company's stock price, salary
increases, and higher commissions on increased MarketVision revenues.

Depreciation and amortization increased by $33,000 due to the
amortization of previously deferred franchise costs, the amortization of
certain trademark costs, depreciation on new mobile equipment, and depreciation
on European furniture and leasehold improvements; and was partially offset by
lower depreciation on the clinical laser.

Selling and marketing expenses increased by $183,000 primarily due to
the increased radio and newspaper advertising for the European centers,
increased European travel and

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<PAGE> 25

lodging costs, and the initial promotion of the new MobilExcimer system. Lower
radio and newspaper advertising in western Canada partially offset these
increases.

Loss from Operations. The LaserVision Centers Division's loss from
operations increased to $3,242,000 for the year ended April 30, 1995 from
$1,870,000 for the year ended April 30, 1994, primarily due to a $655,000
increase in total depreciation and amortization expenses, higher variable costs
of revenue, and increased operating costs which were partially offset by
revenue increases. The MarketVision Division went to a $34,000 operating
profit for the year ended April 30, 1995 from a $30,000 operating loss for the
year ended April 30, 1994, primarily because of lower bad debt expenses and the
gross profit on increased revenues.

Other Income (Expense). Other income (expense) decreased to ($89,000)
for the year ended April 30, 1995 from ($310,000) for the year ended April 30,
1994. Interest expense increased to ($242,000) for the year ended April 30,
1995 from ($156,000) for the year ended April 30, 1994. This increase was
primarily due to a $196,000 increase in imputed (non-cash) interest expense on
European laser purchases and was partially offset by a $110,000 decrease in
European and other interest expense. The $116,000 income from minority
interest in net loss of subsidiary for the year ended April 30, 1995 relates to
one of the Company's new European operations. The $175,000 non-cash provision
for loss on advance for the year ended April 30, 1994 relates to an advance of
funds in 1991 to an Italian company.

Fiscal Year Ended April 30, 1994 Compared to Fiscal Year Ended April 30, 1993

The Company's operating results for the years ended April 30, 1994 and
April 30, 1993 are not readily comparable. The LaserVision Centers Division
operating results for the year ended April 30, 1994 included the St. Catharines
excimer laser center for twelve months, Montreal for 9.5 months, four European
installations for 9.5 months, two European installations for 8.5 months, and
eight European installations for one month. For the year ended April 30, 1993,
operating results only included one of the previous 16 centers--St. Catharines
for eight months. Both fiscal years included the operations for the Calgary
and Vancouver centers for a full year.

The change in the revenue mix increased the fixed costs included in
the cost of revenues, such as depreciation and maintenance contracts, and
decreased variable costs as a percentage of revenues. The hiring of additional
management personnel increased salaries and related expenses but prevented the
cost of the outside professional fees included in the administrative and
general expenses from increasing at a higher rate.

Revenues. Total revenues increased to $2,106,000 for the year ended
April 30, 1994 as compared to revenues of $1,180,000 for year ended April 30,
1993, or an increase of 78%.

Revenues for the LaserVision Centers Division increased to $1,517,000
for the year ended April 30, 1994 from $408,000 for the year ended April 30,
1993, or an increase of 272%. The $1,109,000 increase in revenues consisted
primarily of a $407,000 increase in Canadian revenues and $689,000 of new
European revenues. The increase in Canadian revenues for the LaserVision
Centers Division can be attributed to an increased number of

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<PAGE> 26

procedures at both the Company's Vancouver and Calgary centers, the new
Montreal center and a full year of operations for the St. Catharines center in
the Niagara area of Ontario. The new European revenues relate to the six
centers acquired in July, 1993 and the eight centers acquired in April, 1994.

Revenues for the MarketVision Division decreased to $589,000 for the
year ended April 30, 1994 from $772,000 for the year ended April 30, 1993, or a
decrease of 24%. The $183,000 decrease reflects the loss of several domestic
medical/ophthalmic advertising clients which had implemented marketing
awareness programs during the first half of fiscal 1993. The Company believes
that the decrease in the reimbursement rate to ophthalmologists for the
cataract surgical procedure, and a general concern by ophthalmologists about
proposed health care cost containment efforts, caused a significant portion of
this decrease in revenues for MarketVision Division. The Company also believes
that domestic MarketVision revenues have stabilized.

Revenues from the LaserVision Centers Division represented 72% of
total revenues for the year ended April 30, 1994 versus 35% for the year ended
April 30, 1993. Revenues from the MarketVision Division represented 29% of
total revenues for the year ended April 30, 1994 versus 65% for the year ended
April 30, 1993.

During the last quarter of the fiscal year ended April 30, 1994, 79%
of the Company's revenues were from the Laser Vision Centers Division and 21%
were from the MarketVision Division.

Cost of Revenues/Gross Profit. Costs of revenues increased to
$1,768,000 for the year ended April 30, 1994 from $868,000 for the year ended
April 30, 1993. This $900,000 increase in cost of revenues (to 84% for the
year ended April 30, 1994 from 74% of revenues for the year ended April 30,
1993) included a $732,000 increase in excimer laser and medical equipment
depreciation, to $969,000 for the year ended April 30, 1994, from $237,000 for
the year ended April 30, 1993. This non-cash expense reflects the increase in
the number of European and Canadian excimer lasers, the purchase of other
medical equipment for the Montreal and European centers, and the November 1,
1992 change in depreciable lives from ten years to five years. If the five
year depreciable life for existing lasers had been used throughout fiscal
1993, Canadian excimer laser depreciation would have been $27,000 higher and
gross profit would have been $27,000 (2%) lower for the year ended April 30,
1993.

Excluding laser and medical equipment depreciation, all other costs of
revenues increased by $168,000. This increase to 38% of total revenues for the
year ended April 30, 1994, when combined with the sales increase, resulted in
these other costs of revenues decreasing from 54% of total revenues for the
year ended April 30, 1993. This $168,000 increase was primarily due to the
increase in total costs of excimer laser maintenance, gasses and optics on
higher volumes of PRK's and new centers, and was partially offset by the lower
levels of MarketVision costs associated with the lower MarketVision revenues.

Total gross profit decreased to 16% for the year ended April 30, 1994
from 26% for the year ended April 30, 1993. The variable gross profit
(excluding depreciation) improved to 62% from 46%.

Operating Expenses. Operating expenses increased to $2,238,000 for
the year ended April 30, 1994 from $1,495,000 for the year ended April 30,
1993. General and

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<PAGE> 27

administrative expenses increased by $90,000 primarily due to a higher
provision for doubtful LaserVision Division accounts receivable, European
professional fees and European and Montreal office and telephone expenses.

Salaries and related expenses increased by $338,000 as a result of the
hiring of two new officers in St. Louis, a European general manager and two
employees for the Montreal center, salary increases and a decrease in the
amount reimbursed to the Company for services performed by a Company employee
for a third party. Lower compensation levels for the MarketVision Division,
reflecting the lower sales, partially offset this increase.

Depreciation and amortization increased by $128,000 due to the change
to a shorter depreciable life for the excimer laser used in a domestic/clinical
center ($30,000), the amortization of certain start up costs, a full year's
depreciation on the mobile equipment, St. Louis computer and office improvement
depreciation and depreciation for the new Montreal office.

Selling and marketing expenses increased by $137,000 primarily because
of the increased radio and newspaper advertising for the Canadian centers and
the initial newspaper advertising in Europe.

Loss from Operations. The LaserVision Centers Division's loss from
operations increased by $736,000 to $1,870,000 for the year ended April 30, 1994
from $1,134,000 for the year ended April 30, 1993, primarily due to the $862,000
increase in total depreciation and amortization expenses which were partially
offset by a revenue increase greater than the other operating expense increases.
Numerous assumptions were necessary to allocate the corporate office expenses by
region as reflected in the business segment information in Note 11 of Notes to
Consolidated Financial Statements. The MarketVision Division went from a
$49,000 operating loss for the year ended April 30, 1993 to a $30,000 operating
loss for the year ended April 30, 1994, primarily because of a 2% improvement in
the gross profits percentage and lower operating expenses.

Other Income (Expense). Other income (expense) increased to
($310,000) for the year ended April 30, 1994 from ($52,000) for the year ended
April 30, 1993. The $14,000 decrease in interest income reflects the
investment of interest bearing assets into lasers and other equipment, and
lower interest rates. The $69,000 increase in interest expense was primarily
due to the European laser installation purchases and to the capital leases on
the St. Catharines excimer laser and mobile equipment, and was partially offset
by decreased interest expense for the St. Louis and Vancouver lasers. The
$175,000 non-cash provision for loss on advance for year ended April 30, 1994
relates to an advance of funds in 1991 to an Italian company.

LIQUIDITY AND CAPITAL RESOURCES

Since the completion of the initial public offering in April 1991,
the Company's primary sources of liquidity have consisted of financing from the
sale of Common Stock and Convertible Preferred Stock, revenues from marketing
and laser access services provided to ophthalmic physicians and leases. At
January 31, 1996, the Company had $14,474,000 of cash and cash equivalents
compared with $2,126,000 at April 30, 1995 and approximately $12,500,000 at
April 30, 1996. At January 31, 1996, the Company had working capital of
$10,574,000 compared with $(1,301,000) at April 30, 1995. The ratio of current
assets to

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<PAGE> 28

current liabilities at January 31, 1996 was 3.17 to one, compared to 0.69 to
one at April 30, 1995.

Cash Flows from Operating Activities. Net cash used for operating
activities was $1,406,000 in the first nine months of fiscal 1996 and was
$1,017,000 and $899,000 for the years ended April 30, 1995 and 1994,
respectively. The cash flows used for operating activities in the first nine
months of fiscal 1996 primarily represent the net loss incurred in this period
less depreciation and amortization and accruals for two lasers. The cash flows
used for operating activities in fiscal 1995 and 1994 primarily represent the
net loss incurred in these periods less depreciation and amortization.

Cash Flows from Investing Activities. Net cash used for investing
activities was $4,438,000 in the first nine months of fiscal 1996 and
$1,227,000 and $2,468,000 for the years ended April 30, 1995 and 1994,
respectively, and was primarily due to the acquisition of equipment. The
increase in acquisitions of equipment in fiscal 1996 is primarily due to
expansion into the U.S. market and continued growth in the European market.

Cash Flows from Financing Activities. Net cash provided by financing
activities in the first nine months of fiscal 1996 was $18,192,000 and was
primarily due to proceeds received from a private placement of Convertible
Preferred Stock with a provision for mandatory redemption in 2005. Net cash
provided by financing activities for the year ended April 30, 1995 was
$3,664,000 and was primarily due to proceeds from the exercise of warrants and
private stock offerings offset by the repayment of certain notes payable and
capitalized lease obligations. For the year ended April 30, 1994 net cash
provided by financing activities was $3,286,000 and was primarily due to
proceeds received from the exercise of warrants and private stock offerings.

The Company anticipates that its current cash and cash equivalents,
together with the proceeds of this Offering, will be sufficient to fund
operating expenses for the next 24 months, including any capital expenditures
not financed by leasing. The Company expects to continue to fund future
operations and mobile development costs from existing cash and cash
equivalents, revenues received from providing laser access and market services
and future financing as required. There can be no assurance that capital will
be available when needed or, if available, that the terms for obtaining such
funds will be favorable to the Company.

BUSINESS

The Company is the world's largest provider of access to excimer lasers
and related services for the treatment of refractive vision disorders and has
more than 30 lasers currently in use in the United States, Canada and Europe.
The Company is also the world's only operator of mobile excimer laser systems.
The excimer laser can be used to treat refractive vision disorders such as
nearsightedness and astigmatism to eliminate or reduce the need for corrective
lenses. LaserVision Centers operate on a shared-access model, giving individual
or group ophthalmic practices use of excimer laser technology without investment
risk or maintenance requirements, thereby allowing optimal use of the excimer
laser equipment. In addition, the Company provides a broad range of
professional services, including physician and staff training, technical support
services and maintenance and, through its MarketVision and MedSource divisions,
advertising and marketing programs and services.

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<PAGE> 29

The Company has operated excimer laser centers in Canada and Europe
since 1991 and 1993, respectively. Following the recent approval of the
excimer laser technology by the FDA to treat certain refractive vision
disorders, the Company began developing centers in the United States and
currently operates 17 centers in the United States, with plans to open
additional centers. The Company currently provides excimer lasers and related
services to fixed-site centers in the United States, Canada, the United
Kingdom, Finland, Greece, Sweden and Ireland and operates the MobilExcimer in
Canada and the United Kingdom. In the United States, fixed-site laser centers
are operated in conjunction with Columbia Healthcare or by the Company
independently or through joint ventures.

In addition to operating fixed-site centers, the Company has developed
a proprietary MobilExcimer system which is a self-contained mobile refractive
laser surgery center duplicating all the equipment and services typically found
in a fixed-site location. The Company has entered into a mutually exclusive
agreement with Calumet Coach Company, the world's leading manufacturer of mobile
medical systems, to build the MobilExcimer. This proprietary system gives the
Company flexibility which the Company believes is not currently available to its
competitors and is intended to help the Company achieve broader penetration of
both domestic and international markets. The Company plans to use the
MobilExcimer to provide laser access and related services to communities where
the Company's potential patient base is insufficient to sustain a fixed-site
center, thereby enhancing the Company's ability to expand quickly into multiple
markets. The MobilExcimer system has not yet been approved for use in the
United States by the FDA. The Company has recently entered into an agreement
with VISX with respect to certain information included in VISX's FDA filings
which the Company believes may expedite the approval process.

Currently, the Company provides access to 31 fixed-site lasers -- 12
in Europe, 2 in Canada and 17 in the United States. The Company also has two
mobile systems in operation, one in Europe and one in Canada. The Company
continues to explore opportunities to expand both its domestic and
international operations.

VISION DISORDERS

The human eye is approximately 25 millimeters in diameter and
functions much like a camera, incorporating a lens system which focuses light
(the cornea and the lens), a variable aperture system which regulates the
amount of light passing through the eye (the iris) and film which records the
image (the retina). Light from a distant object passes through the cornea,
iris, and lens, which focus the light on the retina. The retina contains light
sensitive receptors which transmit the image through the optic nerve to the
brain. Seventy-five percent of the focusing power of the eye is provided by
the curvature of the corneal surface.

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<PAGE> 30

Two major categories of vision disorders are refractive and
pathological disorders. Refractive disorders result from an inability of the
optic system to properly focus images on the retina. Nearsightedness (myopia),
farsightedness (hyperopia) and astigmatism are the most common refractive
disorders. The amount of refraction is dependent on the shape (specifically,
the curvature) of the cornea. If the curvature is not correct, the cornea
cannot properly focus the light passing through it onto the retina, and the
individual will perceive a blurred image.

Currently eyeglasses or contact lenses are most often used to treat
refractive disorders. They may also be treated by several surgical techniques
such as radial keratotomy ("RK"). RK is a surgical procedure used to correct
myopia in which an ophthalmologist uses a scalpel to make a series of cuts
approximately 400 to 450 microns deep in a radial configuration around the
periphery of the cornea. The healing of the incisions causes a flattening of
the cornea and corrects small to moderate amounts of myopia. Other techniques
in use are keratomileusis, which involves freezing the cornea and reshaping it,
and automated lamellar keratoplasty (ALK), which involves using a microkeratone
to remove microscopic amounts of corneal tissue.

Another major category of vision problems is pathological disorders.
Traumatic, congenital and pathological sources cause defects in the cornea
which result in restricted vision. A typical medical alternative for treatment
of these conditions is a corneal transplant which involves major surgery and is
dependent on the availability of a suitable donor cornea and on the individual
surgeon's skill and experience. Corneal transplants frequently produce
irregular corneal surfaces which compromise the patient's vision. Another
major concern regarding corneal transplantation involves the possibility of
transmission of viruses that could infect the patient.

Industry sources estimated that in 1993 over 100 million people in the
United States used eyeglasses or contact lenses to correct refractive vision
disorders. Of these individuals, approximately 60 million are estimated to
suffer from nearsightedness, with approximately 90% of nearsighted persons
having low myopia. The Company estimates that approximately one-fourth of all
sufferers of nearsightedness also experience astigmatism and an additional 23
million people in the United States suffer from astigmatism but do not
experience nearsightedness. Consumers in the United States spent approximately
$13 billion on eyeglasses, contact lenses and other corrective lenses in 1994
according to industry sources. The Company believes that excimer laser surgery
will make it possible for many of these people to eliminate or reduce their
reliance on corrective lenses. In particular, the Company believes that many
of the approximately 26 million contact lenses users in the United States will
be particularly receptive to laser surgery as they have already chosen to use
an alternative to eyeglasses for vision correction.

Industry sources estimate that between 250,000 and 300,000 RK
procedures have been performed annually in the United States. Because RK is a
manual procedure and is not performed with a computer-controlled device, it is
highly dependent on the surgical skill of the ophthalmologist performing the
procedure. In addition, because RK involves incisions into the corneal tissue,
it weakens the structure of the cornea which can have adverse consequences as
patients age. Furthermore, RK has never undergone a controlled clinical study
under an FDA protocol because no medical devices, other than a scalpel, are
used in the procedure. The Company believes, based on currently available
follow-up data and market trends in countries where laser surgery is
commercially available, that more people will seek vision correction through
laser surgery than through RK because PRK involves

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reduced surgical risk, does not weaken the corneal tissue, is less invasive and
is less dependent on the ophthalmologist's skill.

EXCIMER LASER SURGERY

An excimer laser emits energy in an extremely short pulse lasting only
several billionths of a second. High energy ultraviolet photons produced by
the excimer laser create a "non-thermal" process known as ablation which does
not heat adjacent tissue. The excimer laser can be used to treat refractive
vision disorders such as nearsightedness and astigmatism in the PRK procedure.
PRK involves using the excimer laser to resculpt the cornea. This adjusts the
amount of refraction which in turn eliminates or reduces the need for
corrective lenses. The excimer laser can also be used to treat a number of
pathological superficial corneal disorders in a procedure called PTK. Excimer
lasers manufactured by VISX and Summit have been approved for treatment of low
to moderate myopia, and VISX is currently in the process of pursuing FDA
approval for use of its laser for the treatment of astigmatism. Excimer lasers
can also be used to perform a procedure known as LASIK in which an
ophthalmologist uses a microkeratone to open a flap on the surface of the
cornea. Laser energy is then used to ablate corneal cells on the exposed
surface to improve the person's visual acuity, and the flap is then folded back
into place. LASIK may be more predictable in treating high levels of myopia,
but has not been specifically approved in the United States by the FDA.

Excimer lasers are designed to reshape or sculpt the cornea to correct
common visual problems such as nearsightedness and astigmatism by changing the
curvature of the cornea, and therefore, the focusing power of the eye. The
laser's functions are controlled by a computer based work station. The
physician enters the patient data into the system's computer, which makes the
calculations necessary for a precise corneal correction. After a verification
procedure, the physician cleans and aligns the eye, initiates the treatment and
visually monitors the eye during surgery. The procedure lasts approximately 15
or 20 minutes and generally requires less than 40 seconds of laser time. The
natural protective cover of the cornea, called the epithelium, typically
regrows in 24 to 72 hours to recreate a smooth optical surface over the laser
modified curvature of the cornea.

Some potential medical risks have been identified in connection with
the use of PRK surgery and there may be other risks which will not be known
until the procedure has been widely used and monitored. Potential
complications and side effects include: post-operative discomfort; corneal haze
during healing (an increase in the light scattering properties of the cornea);
glare/halos (undesirable visual sensations produced by bright lights);
decreases in contrast sensitivity; temporary increases in intraocular pressure
in reaction to procedure medication; modest fluctuations in refractive
capabilities during healing; modest decreases in best corrected vision (i.e.,
with corrective lenses); unintended over- or under-corrections; regression of
effect; disorders of corneal healing; corneal scars; corneal ulcers and induced
astigmatism.

BUSINESS STRATEGY

The Company's goal is to retain its leadership position as the world's
largest provider of access to excimer lasers and related services for
ophthalmic surgery. In order to achieve this goal, the Company will expand its
relationships with eyecare practitioners through its shared-access model, which
allows individual or group ophthalmic practices use of excimer

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laser technology without investment risk or maintenance requirements. Shared
access also allows optimal use of the excimer laser systems, thereby maximizing
Company revenues.

The Company's growth strategy combines the following important
elements:

- Increase Market Penetration. The Company intends to increase
its market penetration by using a combination of fixed-site laser centers
operated by the Company or as joint ventures, including through its agreement
with the Ambulatory Surgery Division of Columbia Healthcare, and expanded use of
the MobilExcimer system.

- Columbia Healthcare. The Company intends to
capitalize upon its agreement with the Ambulatory
Surgery Division of Columbia Healthcare, the world's
largest for-profit health care provider with
approximately 135 ambulatory surgery centers in 27
states, by establishing additional LaserVision
Centers at Columbia Healthcare facilities and
maximizing the number of patients treated at each
operating LaserVision Center. The Company's access
to the Columbia Healthcare network positions the
Company to establish additional LaserVision Centers
more quickly than would be possible through the
establishment of independent centers. The Company
plans to open more than 20 LaserVision Centers in
Columbia Healthcare facilities by early 1997, and
intends to continue its evaluation of the remaining
Columbia Healthcare facilities to determine which of
these facilities would be appropriate for the
establishment of additional LaserVision Centers or
which of these centers could be more effectively
served by the Company's MobilExcimers. In addition
to providing access to a large number of ambulatory
surgery centers, Columbia Healthcare has over 1,500
affiliated ophthalmologists and is the single largest
provider of ophthalmic procedures in the United
States, performing more than 130,000 procedures
annually (approximately 10% of all eye surgeries in
the United States in 1995). Columbia Healthcare's
affiliated ophthalmologists can provide the Company
with a large potential patient base to which the
Company can market its laser surgery services.

- MobilExcimer System. The Company believes that it
is currently the only company that has developed and
is operating a mobile system for the excimer laser.
The Company has entered into a mutually exclusive
agreement with Calumet Coach Company, the world's
leading manufacturer of mobile medical systems, to
build the MobilExcimer. This proprietary system gives
the Company flexibility that the Company believes is
not currently available to its competitors and is
intended to help the Company achieve broader
penetration of both domestic and international
markets. The Company plans to use the MobilExcimer to
provide laser access and related services to
communities where the Company's potential patient base
is insufficient to sustain a fixed-site center,
thereby enhancing the Company's ability to expand
quickly into multiple markets. The Company expects
that the MobilExcimer will help meet the expected
demand for the procedure, while giving both doctors
and patients accessibility to laser surgery without
the need for extended travel. The Company currently
operates two mobile units, one each in Europe and

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Canada. The Company anticipates that the consolidation
of excimer laser surgery centers taking place in
Europe and Canada will present further opportunities
for its MobilExcimer.

The MobilExcimer system has not yet been approved for
use in the United States by the FDA. In June 1996,
the Company filed a PMA application with the FDA for
the use of the excimer laser for treatment of low to
moderate myopia, which will allow the Company to seek
approval for the MobilExcimer. Pursuant to an
agreement entered into in May 1996 with VISX, this PMA
application incorporates the information contained
in the PMA applications filed with and approved by the
FDA for use of VISX excimer lasers for PRK and PTK.
The Company will subsequently supplement this PMA
application to request FDA approval for use of the
excimer laser on the MobilExcimer.

- Other Laser Centers. The Company intends to
establish additional fixed-site LaserVision Centers
in areas not served by Columbia Healthcare. These
centers may be Company owned and operated, such as
the Company's center in St. Louis, or owned and
operated by a joint venture or partnership with a
health care facility provider, such as the Company's
center at Phillips Eye Institute in Minneapolis.

- Utilize Targeted Marketing. The Company intends to use the
knowledge gained through operating LaserVision Centers in Canada and Europe and
the marketing expertise of MarketVision and MedSource to identify and market to
selected geographic areas. While the international division continues to offer
considerable growth opportunities for the Company, management believes the
greatest growth market for PRK lies in the United States. Utilizing its
marketing expertise, the Company intends to identify demographic groups within
selected geographic areas which represent the most likely candidates for
excimer laser surgery. After identifying candidates for excimer laser surgery,
the Company will continue to provide "value added" services to ophthalmologists
and other health care providers by referring and helping to process prospective
patients from the initial point of inquiry through surgery.

- Promote Alliances With Physicians. A key element of the
Company's shared-access model is the promotion of alliances with physicians
within a community to maximize laser usage and resulting revenues. Through
these alliances, the Company attracts ophthalmologists who are not able or
willing to purchase, finance and maintain a laser. The Company continues to
work with the physicians after a center is opened by providing technical
support and training as well as sales and marketing expertise. By providing
these services, the Company goes beyond providing laser access and actively
works with the physicians to increase the number of consumer inquiries and to
turn such inquiries into procedures performed.

- Grow Through Acquisitions. The Company seeks to expand its
presence worldwide through complementary acquisitions of other laser operators,
including direct competitors, as well as acquisitions of businesses that
provide related equipment or services. The Company expects to take advantage
of ongoing market consolidation in Europe through strategic acquisitions of
competitors. In addition, the Company believes that the emerging market for
the Company's services in the United States will initially be fragmented, as it
was in Europe, and may subsequently offer consolidation opportunities.

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<PAGE> 34

- Expand Strategic Relationships. The Company intends to
solidify and expand its existing strategic alliances with health care
providers, equipment manufacturers, major employers, managed care providers and
other third party payors in order to provide the Company access to a larger
patient base.

OPERATION OF LASER CENTERS

LaserVision Centers provides access to excimer lasers and related
services for ophthalmological surgery, collecting a fee for each procedure
performed by independent ophthalmologists. Currently, patients are charged
approximately $1,500 to $2,200 per eye for the procedure. The Company's fee
ranges from approximately $400 to $1,000 per procedure, depending on the
services provided by the Company. The Company provides access to excimer
lasers and related services through fixed-site laser centers and its
MobilExcimer system. The Company currently provides excimer lasers and related
services to fixed-site centers in the United States, Canada, the United
Kingdom, Finland, Greece, Sweden and Ireland and operates the MobilExcimer in
Canada and the United Kingdom. In the United States, fixed-site laser centers
are operated in conjunction with Columbia Healthcare or by the Company
independently or through joint ventures.

Columbia Healthcare

The majority of the Company's currently operating or planned U.S.
laser centers will operate in selected Columbia Healthcare ambulatory surgery
centers. The Company's agreement with Columbia Healthcare provides the Company
with the exclusive right to provide excimer laser equipment and related
services (marketing, technical support and service) to Columbia Healthcare
ambulatory surgery centers. The Company and Columbia Healthcare jointly
determine which surgery centers and physician users will be served with excimer
lasers (fixed-site or mobile) through a comprehensive business planning
process. This process takes into account such factors as market demographics,
the number of potential physician users, projected case volume and competition.

Under the agreement with Columbia Healthcare, the Company provides
either the VISX or Summit excimer laser, as specified by the physician users.
In some cases, the Company may also provide other equipment such as a corneal
topographer. In addition, the Company provides physician and staff training,
technical support services and maintenance of the laser, as well as marketing
support. Marketing support includes advertising and promotional materials for
the center as well as for physician users who elect to participate in a
center-level marketing plan. Columbia Healthcare provides space in its
facility to accommodate the laser in an appropriate setting, staff to handle
inquiries, surgical and support staff and surgical disposables. Typically, the
facility and equipment portions of the surgical fee are collected by the
Columbia Healthcare center on the date of treatment and the Company is paid
monthly for treatments performed during the previous month. The Company and
Columbia Healthcare each receive a fixed fee for the equipment and services
provided, with the Company receiving a net fee of $450 to $850 per procedure
depending on the services provided.

Currently, the Company provides lasers and related services to 14
Columbia Healthcare facilities located in 10 states. By mid-1997, the Company
plans to open approximately 10 additional LaserVision Centers at Columbia
Healthcare facilities, although there can be no assurance that such number of
centers will be opened. The Company will

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<PAGE> 35

continue to evaluate the remaining Columbia Healthcare facilities to determine
which would be appropriate for fixed-site lasers or the use of the
MobilExcimer.

MobilExcimer

The MobilExcimer is a self-contained mobile refractive laser surgery
center, containing a laser and other equipment identical to that typically
found in a fixed-site location. The mobile unit is designed to offer excimer
laser access to ophthalmologists practicing in communities where the Company's
potential patient base is insufficient to support a fixed-site laser surgery
facility. Depending on such factors as case volume and distances between
sites, a MobilExcimer unit can serve up to five sites per week. The Company
intends to implement logistical and routing systems to coordinate use of the
MobilExcimer units in a manner that will maximize utilization of capacity and
service to patients. Because the Company will provide more services and
convenient access and location, it is anticipated that procedures performed
with the MobilExcimer will typically generate higher fees per procedure than
those performed at fixed-site LaserVision Centers. Currently, these fees are
expected to range from approximately $800 to $1,000 per procedure.

The Company has entered into a mutually exclusive agreement with
Calumet Coach Company, the world's leading manufacturer of mobile medical
systems, which provides that Calumet will produce and the Company will purchase
a minimum of four MobilExcimers units per year (up to an aggregate of 13) from
the date of FDA approval of the MobilExcimer through mid-1999. So long as
minimum orders are maintained, Calumet has agreed not to produce mobile laser
surgery vehicles for entities other than the Company. This agreement provides
the Company with a reliable source of supply from Calumet, which currently
manufactures more than 60 percent of the mobile medical systems being used in
the United States.

The mobile units are larger than many fixed laser surgery sites, with
a movable exterior wall allowing the MobilExcimer to expand in size upon
reaching its destination. The unit has electrical systems that are adaptable
for use in the U.S., Canada and Europe. The MobilExcimer can operate with port
electrical hookups or an internal generator, either of which are supported by
an uninterruptible power supply. The units utilize the Company's patented
MobilExcimer mounting system which allows the delicate internal systems of the
excimer laser to withstand the rigors associated with mobile operation.

The first PRK procedure in a MobilExcimer was performed in September
1994 by a Canadian ophthalmologist under the supervision of Dr. Stephen Trokel,
the developer of the excimer laser PRK procedure. The Company currently
operates two mobile units, one serving more than ten sites in Europe and the
other serving five sites in Canada. The MobilExcimer system has not yet been
approved for use in the United States by the FDA. In June 1996, the Company
filed a PMA application with the FDA for the use of the excimer laser for
treatment of low to moderate myopia, which will allow the Company to seek
approval for the MobilExcimer. Pursuant to an agreement entered into in May
1996 with VISX, this PMA application incorporates the information contained in
the PMA applications filed with and approved by the FDA for use of VISX excimer
lasers for PRK and PTK procedures. The Company will subsequently supplement
this PMA application to obtain FDA approval for use of the excimer laser on the
MobilExcimer.

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<PAGE> 36

The Company believes that the MobilExcimer will provide logistical
flexibility in the developing market for PRK. The MobilExcimer will allow the
Company to service locations that will not currently support the installation
of a fixed-site laser. Over time, the volumes at such locations may grow to be
sufficient to support a fixed-site center. Conversely, the volumes at an
existing fixed-site center may fall. Due to the flexibility of its
MobilExcimer, the Company will be in a position to move a laser from a
fixed-site center to a more attractive location while continuing service to the
existing location with the MobilExcimer.

Other Laser Centers

U.S. Centers. In addition to its affiliation with Columbia
Healthcare, the Company intends to open additional fixed-site centers in areas
which are not served by Columbia Healthcare's ambulatory surgery centers. The
Company currently has two U.S. centers that are not associated with Columbia
Healthcare: the Company's LaserVision Center in St. Louis, which is wholly
owned and operated by the Company, and the center at the Phillips Eye Institute
in Minneapolis, which is owned and operated by a joint venture between the
Company and the facility provider. The Company intends to open three
additional independent fixed-site centers in the United States by the end of
1996. These additional centers will be owned and operated either by the
Company or by a joint venture or partnership with other entities. The services
the Company provides to these centers are virtually identical to those provided
to centers located at Columbia Healthcare facilities. Sites are selected based
on a number of criteria, such as the number of physicians who indicate a
substantial interest in using the center, the historical surgical volumes of
these physicians, demographic factors, the results of market research and local
media costs. The Company receives $450 to $850 per PRK procedure performed at
these centers, depending on the services provided by the Company.

Canadian Centers. The Company currently owns and operates a
LaserVision Center located in Montreal, Quebec. Another Canadian center is
located in St. Catharines, Ontario and is owned and operated as a joint
venture. The Company complements these fixed sites by employing its Canadian
MobilExcimer unit to serve five additional locations which the Company believes
are not suitable for the investment required for a fixed site. The Company
receives a fee of $500 to $950 (U.S.) per procedure performed at Canadian
centers, depending on the services provided by the Company.

European Centers. The Company provides access to 12 fixed-site
excimer lasers in Europe. The Company operates one center through a joint
venture. The remaining lasers and related services are provided to other
entities pursuant to leases and associated contracts. The Company has
continued to consolidate operations in Europe and has redeployed the lasers
from several fixed-site centers which were not cost effective to operate as
fixed-site centers. The MobilExcimer system has enabled the Company to
continue to serve the markets formerly served by the centers which were closed,
while simultaneously reducing the fixed operating costs attributable to these
markets. The Company has also recently acquired two fixed-site centers
formerly operated by New Image Laser Centers, along with a database with the
names of 17,000 potential patients for the two new centers. The Company
receives $400 - $550 (U.S.) per European laser surgery procedure, depending on
the services provided by the Company.

Suppliers

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<PAGE> 37

The current cost of an excimer laser ranges from $475,000 to $525,000,
plus sales tax, as well as $250 per U.S. PRK procedure to be paid to a
partnership between VISX and Summit which owns certain patent rights with
respect to the excimer laser. In addition, the Company will be required to pay
an annual royalty fee of approximately $44,000 to VISX with respect to any
additional lasers operated in Canada. The purchase price includes a one or two
year warranty on all parts except the optics (mirror and glass components)
which carry a 30-day warranty. Annual maintenance and service fees are paid by
the Company and are estimated at $40,000 to $60,000 per year, but will vary
with usage.

As of June 1, 1996, the Company has an available base of 34 excimer
lasers worldwide, comprised of 29 VISX and 5 Summit lasers. The Company has
the flexibility to utilize either manufacturer, depending on the preference of
physician users at each center. The Company has ordered 10 additional excimer
lasers from VISX and has an agreement to purchase up to 12 additional units
from Summit. The Company also has an option to purchase 20 additional VISX
lasers.

MARKETVISION AND MEDSOURCE

MarketVision and MedSource comprise the Company's ophthalmic marketing
divisions. Both MarketVision and MedSource, which the Company acquired
effective February 1996, provide marketing services designed to increase
ophthalmic surgical volume. MarketVision operates as an advertising and
marketing agency, while MedSource provides services more directly related to
planning, training and consulting.

MarketVision and MedSource derive income from several sources.
Revenue is realized from commissions earned from placing print and broadcasting
media, retainer fees for various services and mark-ups on direct mail and
related collateral materials. While both entities enjoy their own clientele,
both are involved in administering the marketing of the Company's LaserVision
Centers.

MARKETING

The degree to which PRK, PTK and the Company's LaserVision Centers can
penetrate the potential market for vision correction will depend on a variety
of factors including, but not limited to, medical and public acceptance of
these procedures and alternative technologies. None of these factors is under
the immediate control of the Company nor is any predictable at this time.

The Company's regional managers identify potential physician users
through professional meetings and direct marketing efforts, including printed
materials and personal contact. The Company directs its patient marketing
efforts at three potential patient sources: the ophthalmologist's patient
base, other eyecare and medical professionals' patient base and consumers as a
whole.

-Ophthalmologist's Patient Base. The Company works with
ophthalmologists who have indicated an interest in using the
center to communicate with existing patients. Strategies
include direct mailings with information related to PRK,
collateral and point of purchase materials to reach patients
during office visits and video tape presentations which can be
used to educate patients about PRK.

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<PAGE> 38

-Other Eyecare and Medical Professionals' Patient Base. The
Company works to form alliances between its ophthalmic
surgeons and optometrists. These referral networks are
valuable in referring optometric patients to a LaserVision
Center. The Company helps to form these referral networks by
offering training for the optometrists, who are then able to
provide pre-operative screenings as well as post-surgical
co-management of their patients. The Company also provides
its physician users with marketing materials designed to
foster these referrals and help to generate patients.

-Consumers. The Company begins planning a center's marketing
program before the laser is shipped. Available media are
analyzed for the target demographic. The marketing program
consists of advertising and public relations. Public
relations efforts attempt to place news stories in various
media which will highlight the opening of the center and the
availability of PRK in the market. The Company utilizes
radio, print, television and direct mail to disseminate its
message to prospective patients. Prospective patients then
respond to a toll free number (888-LaserVision) and the calls
are answered by a Company telemarketing specialist who
qualifies the patient and records the name into a computer
system which can be used for subsequent mailing lists. The
telemarketing specialist makes an appointment with a local
center or surgeon to determine whether the patient is a
candidate for the surgery. Based on its experience operating
centers internationally and providing marketing services to
refractive surgeons, the Company believes that the conversion
level is higher when calls are received and processed by a
central system. Patients are routed to exams and given
educational materials about PRK. If the patient elects not to
proceed to surgery following the exam process, the patient's
name is placed on a follow-up list and additional materials
are sent to the prospect over a defined period of time.

COMPETITION

LaserVision Centers

The market for access to excimer lasers is highly competitive. The
Company competes with several other companies, including at least one
manufacturer of laser equipment, in providing access to excimer lasers in the
United States and internationally. Summit, a major supplier of laser equipment
to the Company, has indicated it will open approximately 20 laser centers in
the United States during 1996. Other companies are currently in the process of
gaining FDA approval for their lasers and these companies may elect to enter
the laser center business. Other non-manufacturing companies which have
indicated they intend to operate or already operate laser centers in the United
States are: Beacon Laser Centers, Inc., Global Vision, Inc., LCA Vision, Inc.,
Sight Resources, Inc., Sterling Vision, Inc., The Laser Centre (TLC) and 20/20
Laser Centers, Inc. The Company also competes with laser centers operated by
local operators in certain markets. There can be no assurance that any
reduction in per procedure fees that may result from increased competition will
be compensated for by an increase in procedure volume.

The treatments offered by the Company's LaserVision Centers also
compete with other present forms of treatment for refractive disorders,
including eyeglasses, contact lenses, refractive surgery, corneal transplants,
and other technologies currently under development. The Company expects that
companies which have developed or are developing new

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<PAGE> 39

technologies or products, as well as other companies (including established and
newly formed companies) may attempt to develop new products directly
competitive with the excimer lasers that are to be utilized by the Company or
could introduce new or enhanced products with features which render the
equipment to be used by the Company obsolete or less marketable. The ability
of the Company to compete successfully will depend in large part on its ability
to adapt to technological changes and advances in the treatment of refractive
vision disorders. There can be no assurance that, as the market for excimer
laser surgery and other treatments of eye disorders develops, the Company's
equipment will not become obsolete, and if this occurs, that the Company will
be able to secure new equipment to allow it to compete effectively.

MarketVision and MedSource

The advertising and marketing businesses in which the Company's
MarketVision and MedSource divisions are engaged are highly competitive.
Clients have the freedom to move from one advertising agency to another with
comparative ease since the relationships normally can be terminated on short
notice. MarketVision and MedSource compete with several national and regional
ophthalmic specialty marketing companies, as well as national and local
advertising agencies which may handle diverse client activities. MarketVision
and MedSource may be hampered by their affiliation with LaserVision Centers in
that some customers may consider them competitors which could adversely affect
the ability of these divisions to continue to attract outside business.

PATENTS AND TRADEMARKS

The names LASERVISION(R), LASERVISION CENTERS AND DESIGN(R),
LASERVISION CENTERS(R), LASERVISION CENTER(R) and MobilExcimer(R) are
registered U.S. service marks of the Company. In addition, the Company owns
service mark registrations in a number of foreign countries. The Company has
also secured a patent for the MobilExcimer mounting system. The Company's
service marks, MobilExcimer patent and other proprietary technology may offer
the Company a competitive advantage in the marketplace and could be important
to the success of the Company. There can be no assurance that one or all of
these registrations will not be challenged, invalidated or circumvented in the
future. The Company is currently involved in two legal proceedings which could
result in an adverse impact on its rights to certain of such registrations.
Litigation regarding intellectual property is common and there can be no
assurance that the Company's service mark registrations and patent will
significantly protect the Company's intellectual property. The defense and
prosecution of intellectual property proceedings is costly and involves
substantial commitments of management time. Failure to defend the Company's
rights with respect to its intellectual property would have a material adverse
effect on the Company's business, financial condition and results of
operations.

GOVERNMENT REGULATION

The manufacturing, labeling, distribution and marketing of medical
devices such as the excimer lasers to which the Company provides access
are subject to extensive and rigorous government regulation in the United
States and in certain other countries. The U.S. Food, Drug, and Cosmetic Act
requires that medical devices introduced to the U.S. market, unless exempted by
regulation, secure either an approved PMA application or a premarket
notification clearance (known as a 510(k)). Excimer lasers are required to be
the subject of an approved PMA application.

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<PAGE> 40

The manufacturers of the excimer lasers to which the Company provides
access have received approval of their PMA applications for use of their lasers
in PTK and PRK procedures for the treatment of low to moderate myopia.
However, certain FDA officials have advised the Company that they believe that
these lasers are not approved for mobile use, and therefore FDA approval is
required in order to operate the MobilExcimer in the United States. One way to
obtain approval for the MobilExcimer is for the Company to submit its own PMA
application for an FDA-approved laser, and, if such PMA application is
approved, to then submit a supplement to the PMA application to cover use of
the laser in the MobilExcimer. The Company plans to pursue this strategy. The
Company has entered into an agreement with VISX which allows the Company to
reference, in any FDA applications required for the MobilExcimer, information
previously submitted to the FDA by VISX in support of VISX's PMA applications,
and the Company expects to use this information in any application relating to
the MobilExcimer. There can be no assurance that the FDA will approve the
Company's PMA application for the VISX laser or its PMA supplement for the
MobilExcimer on a timely basis, or at all. Also, restrictions and limitations
imposed by the FDA could adversely effect the Company's ability to use or
promote the MobilExcimer. If approval of the MobilExcimer is required, delays
in receipt of or failure to receive such approval, or stringent restrictions on
the MobilExcimer, could have a material adverse effect on the Company's
business, financial condition and results of operations.

PMA holders and manufacturers and certain users of medical devices are
subject to continuing FDA obligations. Medical devices are required to be
manufactured in accordance with regulations setting forth current Good
Manufacturing Practices ("GMP"), which require that devices be manufactured and
records be maintained in a prescribed manner with respect to manufacturing,
testing and control activities. Manufacturers, and, in the FDA's view, with
respect to excimer lasers, users, are also required to comply with FDA
requirements for labeling and promotion of the MobilExcimer. The Medical Device
Reporting regulation adopted by the FDA would require that the Company provide
information to the FDA whenever there is evidence to reasonably suggest that one
of its devices may have caused or contributed to a death or serious injury, or
that there has occurred a malfunction that would be likely to cause or
contribute to a death or serious injury if the malfunction were to recur. PMA
holders and manufacturers and certain users of medical devices are subject to
periodic inspections by the FDA. Failure to comply with applicable FDA
requirements could subject the Company to enforcement action, including product
seizures, recalls, withdrawal of approvals, and civil and criminal penalties,
any one or more of which could have a material adverse effect on the Company's
business, financial condition and results of operations. In addition,
clearances or approvals could be withdrawn in appropriate circumstances. Failure
of the Company or its principal suppliers to comply with regulatory
requirements, or any adverse regulatory action, could have a material adverse
effect on the Company's business, financial condition and results of operations.

The FDA has promulgated performance standards for lasers. Unless the
FDA approves a variance from such standards, manufacturers of excimer lasers
must comply with such standards as well as with special certification,
labeling, reporting and record keeping requirements. The failure of the
Company or its principal suppliers to comply with these standards could have a
material adverse effect on the Company's business, financial condition and
results of operations.

Medical device laws and regulations are also in effect in many of the
countries in which the Company currently conducts or may in the future conduct
business outside the

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<PAGE> 41

U.S. These range from comprehensive device approval requirements to requests
for product data or certifications. The number and scope of these requirements
are increasing. Medical device laws and regulations are also in effect in some
states in which the Company currently conducts or may in the future conduct
business. The failure of the Company to obtain necessary product approvals in
a timely fashion or to comply with state or foreign medical device laws and
regulations may have a material adverse effect on the Company's business,
financial condition and results of operations.

In addition, federal, state and foreign laws and regulations regarding
the manufacture and marketing of medical devices are subject to change. For
example, the FDA is currently considering significant changes to its GMP and to
other regulations. The Company cannot predict what impact, if any, such
changes might have on its business; however, such changes could have a material
adverse impact on the Company's business, financial condition and results of
operations.

There are currently two manufacturers, VISX and Summit, that have
received FDA approval to market excimer lasers for PTK and PRK for low to
moderate myopia. Lack of timely FDA approval for use of PRK for other
indications, such as astigmatism and hyperopia (farsightedness) could have a
material adverse effect on the Company's planned expansion in the United States
market. Furthermore, the failure of these and any other manufacturers that
supply excimer lasers to the Company to comply with applicable federal, state,
or foreign regulatory requirements, or any adverse regulatory action against
such manufacturers, could restrict the supply of lasers or restrict the ability
of the Company to provide access to the lasers. The inability of the Company to
obtain lasers for sale or use in the United States or elsewhere due to lack of
regulatory approval, or otherwise, could prevent the Company from establishing
or maintaining LaserVision Centers and MobilExcimers, which would have a
material adverse effect on the Company's business, financial condition and
results of operations.

EMPLOYEES

As of April 30, 1996, the Company had 27 employees. Management
believes that the Company's relationship with its employees is satisfactory.
As the Company expands, it expects to add additional employees in technical,
marketing and management positions. The Company does not anticipate any
difficulty in hiring such personnel when needed.

DESCRIPTION OF PROPERTY

The Company currently occupies 9,970 square feet of space in St. Louis
County, Missouri for its corporate headquarters, under a five- year lease. The
Company also leases 2,700 square feet of space in St. Louis County, Missouri
for its St. Louis LaserVision Center, under a five-year lease.

LVCI Management (Quebec), Inc., a wholly-owned subsidiary of the
Company, leases approximately 2,200 square feet of space in Montreal, Quebec,
Canada, which houses the Montreal LaserVision Centre. Arnott Laser Vision
Centre Limited, a 50.002% owned subsidiary of the Company's wholly-owned
European subsidiary, leases approximately 3,000 square feet of space on Harley
Street in London, England, which houses the Harley Street Laser Vision Centre.

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All other lasers operated by the Company are located in centers owned
or leased by other parties. The Company does not have any material lease
obligations associated with such centers.

LEGAL PROCEEDINGS

The Company is a party to the following material legal proceedings:

On October 8, 1993, the Company filed suit in the Circuit Court of St.
Louis County, Missouri, against Laser Vision Centers International SpA ("SpA")
in connection with disputes between the Company and SpA arising out of a
proposed agreement between the parties. On December 17, 1993, the court
entered judgment by default in the Company's favor: (i) terminating and
rescinding any and all agreements and proposed agreements between the parties;
(ii) for money damages in the amount of $175,000 and (iii) ordering the return
of 275,000 shares of Common Stock which was issued to SpA. In June 1994, SpA
filed a Motion to Vacate the Judgment in the lawsuit. SpA's motion was denied
in April 1995, but SpA has filed an appeal which is pending.

On November 17, 1994, the Company brought suit against LaserVision
Centers West, Inc. ("LVCWI") in the United States District Court for the
Eastern District of Missouri alleging trade mark, service mark and trade name
infringements and other related violations of law. The Company seeks to have
LVCWI enjoined from any further use of these marks or names or any others which
are confusingly similar to those registered to and used by the Company. In
addition, the Company seeks damages, attorney fees and a declaratory judgment
that no agreement exists between the parties. On July 7, 1995, this action was
transferred to the United States District Court for the Central District of
California. The Company intends to vigorously pursue the prosecution of this
suit.

On March 24, 1995, the Company filed suit against 20/20 Laser Centers,
Inc. ("20/20") in the United States District Court for the Southern District of
California alleging trade mark, service mark and trade name infringements and
other related violations of law. The various counts in this suit arose from
20/20's use of the marks or names "Laser Vision" and "Laser Vision Correction."
The Company seeks to have 20/20 enjoined from any further use of these marks or
names or any others which are confusingly similar to those registered and used
by the Company. The Company also seeks damages and attorney fees in
conjunction with this action. On June 23, 1995, by stipulated agreement of the
parties, this action was transferred to the United States District Court for
the District of Maryland, Southern Division. 20/20 has counterclaimed for
cancellation of the Company's registered marks LASERVISION, LASERVISION CENTERS
AND DESIGN, LASERVISION CENTER and LASERVISION CENTERS.

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MANAGEMENT

The directors, executive officers and key personnel of the Company,
their positions with the Company, and their ages are as follows:

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
John J. Klobnak 45 Chairman of the Board and Chief Executive Officer

Alan F. Gillam 52 President, Director

Robert W. May 48 Vice-Chairman of the Board, General Counsel and Secretary

B. Charles Bono III 48 Executive Vice President, Chief Financial Officer and Treasurer

James C. Wachtman 35 Executive Vice President and Chief Operating Officer-North America

Frank Bono III 45 Vice President of Sales

Dr. Henry Simon 65 Director

James M. Garvey 48 Director

Richard Lindstrom, M.D. 49 Director

Steven C. Straus 39 Director
</TABLE>

John J. Klobnak. Mr. Klobnak has served as Chairman of the Board and
Chief Executive Officer of the Company since 1993. From 1990 to 1993, Mr.
Klobnak served as the Company's President and Chief Executive Officer. From
1986 to 1990, he served as Chief Operating Officer and subsequently President
of MarketVision, a partnership acquired by the Company upon its inception in
1990. Prior to 1986, Mr. Klobnak was a self-employed advertising and marketing
consultant.

Alan F. Gillam. Since 1993, Mr. Gillam has served as President and,
until June 1, 1996, as Chief Operating Officer of the Company. From 1991 to
1993, Mr. Gillam was the International Director of a excimer laser project for
Alcon Surgical, Inc. a division of one of the world's largest eyecare specialty
companies. Prior to 1991, Mr. Gillam was area director for Alcon in Northern
Europe and Africa.

Robert W. May, Esq. Mr. May joined the Company as its Vice-Chairman
and General Counsel in September, 1993. Prior to joining the Company as a
full-time employee, Mr. May served as Corporate Secretary and a director of the
Company and was a partner in the St. Louis, Missouri, law firm of May and
Berne, the former general corporate counsel for the Company, from 1985 until
1993.

41
<PAGE> 44

B. Charles Bono III. Mr. Bono joined the Company as Executive Vice
President, Chief Financial Officer and Treasurer in 1992. From 1980 to 1992,
Mr. Bono was employed by Storz Instrument Company, a global marketer of
ophthalmic devices and pharmaceutical products, serving as Vice President of
Finance from 1987 to 1992. He is not related to Frank J. Bono III, Vice
President of Sales for the Company.

James C. Wachtman. Mr. Wachtman joined the Company as Chief Operating
Officer-North American operations effective May 30, 1996. From 1983 until he
joined the Company, Mr. Wachtman was employed by McGaw, Inc., a manufacturer of
disposables for home infusion, in various positions. Most recently, he served
as Vice President/Operations of CAPS, a hospital pharmacy division of McGaw.

Frank J. Bono III. Mr. Bono joined LVC in 1990 as Vice President of
Operations. In 1992 he became Vice President of Sales. From 1988 to 1990, Mr.
Bono was a self-employed surgical consultant and manufacturers' representative
for surgical sales and marketing services. He is not related to B. Charles
Bono III, Executive Vice President, Chief Financial Officer and Treasurer
of the Company.

Dr. Henry Simon. Dr. Simon has served as a director of the Company
since November, 1995. Since 1996, he has served as Chairman and from 1993 to
1996 as CEO and Managing Partner of Schroder Venture International Life
Sciences Advisers, a venture capital firm. Dr. Simon has served as Chairman of
Mitel, Inc., a manufacturer of telecommunications equipment and Shire
Pharmaceutical Group plc, a British company. Dr. Simon is currently a
director of Chiroscience plc and Micromass in the U.K.

James M. Garvey. Mr. Garvey has served as director of the Company
since November, 1995. Since May, 1995, Mr. Garvey has served as Chief
Executive Officer and Managing Partner of Schroder Ventures Life Sciences
Advisors, a venture capital investment fund. From 1989 to 1995, Mr. Garvey
was Director of Allstate Venture Capital, the $600 million venture capital
division of Allstate Corp. after initially directing Allstate Venture Capital's
health care investment activity. Mr. Garvey is currently a director of
Allscrips Pharmaceutical and J&C Healthcare and has served as director and
Chairman of several public and private healthcare companies.

Richard L. Lindstrom, M.D. Dr. Lindstrom has served as a director of
the Company since November, 1995. Since 1979, Dr. Lindstrom has been engaged
in the private practice of ophthalmology and has been the President of
Lindstrom, Samuelson & Hardten Ophthalmology Associates, P.A. since 1989. In
1989, Dr. Lindstrom founded the Phillips Eye Institute Center for Teaching &
Research, a ophthalmic research and surgical skill education facility, and he
currently serves as the Center's Medical Director. Dr. Lindstrom has served as
an Associate Director of the Minnesota Lions Eye Bank since 1987. From 1980 to
1989, he served as a Professor of Ophthalmology at the University of Minnesota.
Dr. Lindstrom received his M.D. and his B.A. and B.S. degrees from the
University of Minnesota.

Steven C. Straus. Mr. Straus has served as director of the Company
since January of 1996. He currently serves as Senior Vice President of the
Ambulatory Surgery Division of Columbia Healthcare, the world's largest
for-profit health care provider. Mr. Straus was employed in a similar capacity
with Medical Care America, Inc. from 1993 until Medical Care America was merged
into Columbia Healthcare Corporation in 1994. From 1986 to 1993, Mr. Straus
held various positions with Baxter Healthcare Corporation and from 1978 to 1985
was employed by American Hospital Supply Corporation.

42
<PAGE> 45

UNDERWRITING

The names of the Underwriters of the shares of Common Stock offered
hereby and the aggregate number of shares which each has severally agreed to
purchase from the Company (subject to the terms and conditions specified in the
Underwriting Agreement) are as follows:

<TABLE>
<CAPTION>
Underwriters Number of Shares
------------ ----------------
<S> <C>
Dillon, Read & Co. Inc. . . . . . . . . . . . . . . . . . . .
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . .
--------------

Total. . . . . . . . . . . . . . . . . . . . . . . . .
===============
</TABLE>

The Managing Underwriters are Dillon, Read & Co. Inc. and A.G. Edwards
& Sons, Inc.

If any shares of Common Stock offered hereby are purchased by the
Underwriters, all such shares will be so purchased. The Underwriting Agreement
contains certain provisions whereby if any Underwriter defaults in its
obligation to purchase such shares and if the aggregate obligations of the
Underwriters so defaulting do not exceed 10% of the shares hereby, the
remaining Underwriters, or some of them, must assume such obligations.

The shares of Common Stock offered hereby are being offered severally
by the Underwriters for sale at the price set forth on the cover page hereof,
or at such price less a concession not to exceed $__________ per share on sales
to certain dealers. The Underwriters may allow, and such dealers may reallow,
a concession not to exceed $______ per share on sales to certain dealers. The
offering of the shares of Common Stock is made for delivery when, as, and if
accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the shares. After
the shares are released for sale to the public, the public offering price, the
concession and the reallowance may be changed by the Managing Underwriters.

The Company has granted to the Underwriters an option to purchase up
to an additional 375,000 shares of Common Stock on the same terms per share.
If the Underwriters exercise this option, each of the Underwriters will have
the firm commitment, subject to certain conditions, to purchase approximately
the same proportion of the aggregate shares so purchased as the number of
shares to be purchased by it shown in the above table bears to the total number
of shares in such table. The Underwriters may exercise such option on or
before the thirtieth day from the date of the public offering of the shares
offered hereby and only to cover over-allotments made of the shares in
connection with this Offering.

The Company has agreed that it will not, without the prior written
consent of Dillon, Read & Co. Inc., sell, grant any option to sell, transfer or
otherwise dispose of, directly or indirectly, any shares of Common Stock or
securities convertible into or exchangeable for Common Stock or warrants or
other rights to purchase Common Stock or permit the registration under the Act
of any shares of Common Stock, prior to the expiration of 90 days from the date
of the consummation of this Offering, except for (i) issuances of Common Stock
upon the exercise of outstanding options or warrants issued under the Company's
existing incentive stock option plan, non-qualified stock option plan or non-
qualified warrant plan and (ii) options or warrants granted to employees,
officers and directors of the Company under the Company's existing incentive
stock option plan, non-qualified stock option plan or non-qualified warrant
plan. Each officer and director of the Company and certain stock holders
holding, or having the right to acquire, as of April 30, 1996 an aggregate of
3,910,000 shares of Common Stock have agreed that they will not, without the
prior written consent of Dillon, Read & Co. Inc., sell, grant any option to
sell, transfer or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities convertible

43
<PAGE> 46

into or exchangeable for Common Stock or warrants or other rights to purchase
Common Stock prior to the expiration of 90 days from the date of the
consummation of this Offering.

The Company has agreed in the Underwriting Agreement to indemnify the
Underwriters against certain civil liabilities, including liabilities under the
Securities Act, or to contribute to payments that the Underwriters may be
required to make in respect thereof.

44
<PAGE> 47

LEGAL MATTERS

The validity of the Common Stock offered hereby and certain other
legal matters will be passed upon for the Company by Dankenbring, Greiman,
Osterholt & Hoffmann, P.C., St. Louis, MO. Certain legal matters in connection
with this Offering will be passed upon for the Underwriters by Cooley Godward
Castro Huddleson & Tatum, Menlo Park, CA.

EXPERTS

The consolidated balance sheets as of April 30, 1995 and 1994 and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for the years ended April 30, 1995 and 1994 included in this
Prospectus and Registration Statement have been audited by Price Waterhouse
LLP, independent accountants, as indicated in their report with respect
thereto, and are included in reliance upon such report given upon the authority
of said firm as experts in auditing and accounting. The consolidated
statements of operations, changes in stockholders' equity and cash flows for
the year ended April 30, 1993 included in this Prospectus and Registration
Statement have been audited by Lovelace Roby & Company, P.A., independent
certified public accountants, as indicated in their report with respect thereto
and are included in reliance upon such report given upon the authority of said
firm as experts in auditing and accounting.

45
<PAGE> 48

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance
therewith files reports and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company with the Commission may be inspected and copied at the
public reference facilities maintained by the Commission at 450 Fifth Street,
N.W., Room 1024, Judiciary Plaza, Washington, D.C. 20549 and at its regional
offices located at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 75 Park Place, Room 1228, New York, New York
10007. Copies of such material may also be obtained from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates.

The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act of 1933, with respect to the securities
offered by this Prospectus. This Prospectus does not contain all the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock offered hereby, reference is made to the Registration Statement
and to the exhibits. Statements contained in this Prospectus as to the
contents of any contract or other documents referred to in this Prospectus are
not necessarily complete, and, in each instance, reference is made to the copy
of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference. The Registration Statement may be inspected without charge at the
Commission's principal office and copies may be obtained upon payment of the
prescribed fee at the Public Reference Room of the Commission at 450 Fifth
Street, NW, Washington, DC 20549.

INFORMATION INCORPORATED BY REFERENCE

The following documents, heretofore filed by the Company with the
Commission pursuant to the Exchange Act, are hereby incorporated by reference:

(1) The Company's Annual Report on Form 10-KSB for the year ended
April 30, 1995.

(2) The Company's Quarterly Reports on Form 10-QSB for the
quarters ended January 31, 1996, October 31, 1995 and July 31,
1995.

(3) The Company's Current Report on Form 8-K filed with the
Commission on May 2, 1996.

(4) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission
on November 5, 1993.

All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of this Offering shall be
deemed to be incorporated by reference into this Prospectus and shall be a part
hereof from the date of filing of such reports and documents. Any statement
incorporated herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.

46
<PAGE> 49

The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any report or document described above (other than exhibits,
unless such exhibits are specifically incorporated by reference herein).
Requests for such copies should be directed to the Company at its principal
executive offices located at 540 Maryville Centre Drive, Suite 200, St. Louis,
Missouri 63141, telephone (314) 434-6900, attention, Robert W. May.

47
<PAGE> 50

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
REPORT OF PRICE WATERHOUSE LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

REPORT OF LOVELACE ROBY & COMPANY, P.A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2

FINANCIAL STATEMENTS

Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3

Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5

Consolidated Statements of Changes in Stockholders' Equity . . . . . . . . . . . . . . . . . . . . F-6

Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9
</TABLE>

48
<PAGE> 51

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Laser Vision Centers, Inc. and Subsidiaries

In our opinion, the accompanying consolidated balance sheet and related
consolidated statements of operations, changes in stockholders' equity and cash
flows present fairly, in all material respects, the financial position of Laser
Vision Centers, Inc. and its subsidiaries as of April 30, 1995 and April 30,
1994, and the results of their operations and their cash flows for the years
then ended in conformity with generally accepted accounting principles. These
financial statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for the
opinion expressed above. The consolidated financial statements of Laser Vision
Centers, Inc. and its subsidiaries for the year ended April 30, 1993 were
audited by other independent accountants whose report dated June 23, 1993,
expressed an unqualified opinion on those statements.

/s/ Price Waterhouse LLP
Price Waterhouse LLP
St. Louis, Missouri

June 16, 1995

F-1
<PAGE> 52
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Laser Vision Centers, Inc. and Subsidiaries
St. Louis, Missouri

We have audited the consolidated statements of operations, changes in
stockholders' equity, and cash flows of Laser Vision Centers, Inc. and
subsidiaries for the year ended April 30, 1993. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. 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 audit provides a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Laser Vision Centers, Inc. and subsidiaries for the year ended April 30, 1993
in conformity with generally accepted accounting principles.

/s/ Lovelace, Roby & Company, P.A.
Lovelace, Roby & Company, P.A.
Certified Public Accountants

Orlando, Florida
June 22, 1993

F-2
<PAGE> 53

LASER VISION CENTERS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
April 30, April, 30 January 31,
1994 1995 1996
(Unaudited)

<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 706,000 $ 2,126,000 $14,474,000
Accounts receivable, net of allowance
of $125,000, $157,000 and $203,000,
respectively 619,000 587,000 500,000
Prepaid expenses and other current
assets 72,000 164,000 470,000
----------- ----------- -----------
Total current assets 1,397,000 2,877,000 15,444,000

Property and equipment:
Laser equipment 8,261,000 9,941,000 12,724,000
Medical equipment 270,000 386,000 514,000
Mobile equipment 106,000 508,000 873,000
Furniture and fixtures 104,000 396,000 600,000
----------- ----------- -----------

8,741,000 11,231,000 14,711,000

Less-accumulated depreciation (1,623,000) (3,288,000) (4,803,000)
----------- ----------- -----------

7,118,000 7,943,000 9,908,000

Equipment deposits 50,000 80,000 2,720,000
----------- ----------- -----------

Net property and equipment 7,168,000 8,023,000 12,628,000

Other assets (Note 2) 570,000 418,000 1,285,000
----------- ----------- -----------

Total assets $ 9,135,000 $11,318,000 $29,357,000
=========== =========== ===========
</TABLE>

See Notes to Consolidated Financial Statements.

F-3
<PAGE> 54

LASER VISION CENTERS, INC.
AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET (CONTINUED)

<TABLE>
<CAPTION>
APRIL 30, APRIL, 30 JANUARY 31,
1994 1995 1996
(UNAUDITED)
<S> <C> <C> <C>
LIABILITIES, PREFERRED STOCK AND
STOCKHOLDERS' EQUITY

Current liabilities:
Current portion of notes payable
(Note 4) $ 976,000 $ 3,013,000 $ 2,002,000
Current portion of obligations under
capital leases (Note 5) 83,000 94,000 255,000
Accounts payable 352,000 490,000 1,693,000
Accrued liabilities 230,000 581,000 920,000
------------ ----------- -----------
Total current liabilities 1,641,000 4,178,000 4,870,000

Non-current liabilities:
Notes payable (Note 4) 2,306,000 342,000
Capital lease obligations (Note 5) 158,000 64,000 783,000
Deferred revenue 427,000 80,000 330,000
Minority interests (Notes 2 and 3) 9,000 305,000 164,000
Other accrued liabilities - - 50,000

------------ ----------- -----------
2,900,000 791,000 1,327,000
Convertible preferred stock with mandatory
redemption provision in 2005 14,100,000

Commitments and contingencies
(Notes 7 and 8)

Stockholders' equity (Notes 9 and 10):
Common stock, par value $.01 per
share, 10,000,000, 10,000,000 and 50,000,000
shares authorized, respectively;
3,589,000, 4,452,555 and 5,863,835
shares issued and outstanding,
respectively 36,000 45,000 59,000
Paid-in-capital 8,900,000 13,943,000 20,764,000
Accumulated deficit (4,342,000) (7,639,000) (11,763,000)
------------ ----------- -----------
4,594,000 6,349,000 9,060,000
------------ ----------- -----------
Total liabilities, preferred stock and
stockholders' equity $ 9,135,000 $11,318,000 $29,357,000
============ =========== ===========

</TABLE>

See Notes to Consolidated Financial Statements.

F-4
<PAGE> 55

LASER VISION CENTERS, INC.
AND SUBSIDIARIES

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS
NINE MONTHS ENDED
YEARS ENDED APRIL 30, JANUARY 31,
1993 1994 1995 1995 1996
(UNAUDITED)

<S> <C> <C> <C> <C> <C>
Revenues $ 1,180,000 $ 2,106,000 $ 3,311,000 $ 2,492,000 $ 2,584,000
Cost of revenues (includes $237,000, $969,000,
$1,589,000, $1,169,000 and $1,400,000 of
depreciation, respectively) 868,000 1,768,000 3,375,000 2,274,000 3,021,000
----------- ----------- ----------- ----------- -----------
Gross profit (loss) 312,000 338,000 (64,000) 218,000 (437,000)

Operating expense:
General and administrative 605,000 695,000 1,002,000 726,000 1,420,000
Salaries and related expenses 514,000 902,000 1,285,000 992,000 1,588,000
Depreciation and amortization 122,000 250,000 283,000 161,000 165,000
Selling and marketing expenses 254,000 391,000 574,000 367,000 751,000
----------- ----------- ----------- ----------- -----------

1,495,000 2,238,000 3,144,000 2,246,000 3,924,000
----------- ----------- ----------- ----------- -----------

Loss from operations (1,183,000) (1,900,000) (3,208,000) (2,028,000) (4,361,000)

Other income (expenses):
Interest and other income 35,000 21,000 37,000 40,000 255,000
Interest expense (87,000) (156,000) (242,000) (189,000) (150,000)
Minority interest in net loss of subsidiary
(Notes 2 and 3) 116,000 67,000 132,000
Provision for loss on advance (Note 8) - (175,000) - - -

----------- ----------- ----------- ----------- -----------
Net loss $(1,235,000) $(2,210,000) $(3,297,000) $(2,110,000) $(4,124,000)
=========== =========== =========== =========== ===========

Net loss per share $ (.48) $ (.66) $ (.82) $ (.54) $ (.84)
========== =========== =========== =========== ===========

Weighted average number of common shares
outstanding (Note 2) 2,567,000 3,356,000 4,001,000 3,907,000 4,935,000
========== =========== =========== =========== ===========

</TABLE>

See Notes to Consolidated Financial Statements.

F-5
<PAGE> 56

LASER VISION CENTERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE YEARS ENDED APRIL 30, 1995 AND THE NINE MONTHS ENDED JANUARY 31,
1996

<TABLE>
<CAPTION>
Note Total
Common Stock Paid-in Accumulated Receivable, Stockholders'
Shares Amount Capital Deficit Common Stock Equity

<S> <C> <C> <C> <C> <C> <C>
Balance at April 30, 1992 2,290,000 $ 23,000 $ 3,771,000 $ (897,000) $ - $ 2,897,000

Issuance of 548,000 shares of common
stock in private offerings (Note 9) 548,000 5,000 2,245,000 2,250,000

Issuance of 75,000 shares of common
stock (Note 8) 75,000 1,000 16,000 (1,100,000) (1,083,000)

Net loss for year ended April 30, 1993 - - - (1,235,000) - (1,235,000)
---------- ---------- ------------ ----------- ------------ ------------

Balance at April 30, 1993 2,913,000 29,000 6,032,000 (2,132,000) (1,100,000) 2,829,000

Issuance of 950,000 units of common
stock and Class F warrants in public
offering (Note 9), including over
allotment of F warrants to
underwriters 950,000 10,000 3,784,000 3,794,000

Cancellation of 275,000 shares of common
stock (Note 8) (275,000) (3,000) (922,000) 1,100,000 175,000

Exercise of Class A warrants 1,000 6,000 6,000

Net loss for year ended April 30, 1994 - - - (2,210,000) - (2,210,000)
---------- ---------- ------------ ----------- ------------ ------------

Balance at April 30, 1994 3,589,000 36,000 8,900,000 (4,342,000) 4,594,000

</TABLE>

See Notes to Consolidated Financial Statements.

F-6
<PAGE> 57

LASER VISION CENTERS, INC. AND SUBSIDIARIES

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE THREE YEARS ENDED APRIL 30, 1995 AND THE NINE MONTHS ENDED JANUARY 31, 1996
(CONTINUED)
- --------------------------------------------------------------------------------------------------------------------

COMMON STOCK PAID-IN
SHARES AMOUNT CAPITAL

<S> <C> <C> <C>
Exercise of Class A, B and F warrants 726,955 8,000 4,142,000

Issuance of common stock in private offering (Note 9) 125,000 1,000 835,000

Exercise of incentive and non-qualified stock options 11,600 66,000

Net loss for year ended April 30, 1995 - - -
------------ -------- ------------

Balance at April 30, 1995 4,452,555 45,000 13,943,000
------------ -------- -----------

Exercise of Class B and F warrants (unaudited) 755,501 8,000 4,514,000

Exercise of Class C and D warrants - cashless
(unaudited) 26,932

Issuance of restricted shares of common stock (unaudited) 242,218 2,000 1,153,000

Issuance of restricted shares of common stock for VCI
stock (unaudited) 76,181 1,000 646,000

Exercise of incentive stock options and non-qualified
options (unaudited) 64,210 1,000 250,000

Exercise of non-qualified warrants and underwriter
warrants (unaudited) 246,238 2,000 1,500,000

Costs associated with issuance of convertible preferred
stock with mandatory redemption provision (unaudited) - - (1,242,000)

Net loss for the nine month period ended
January 31, 1996 (unaudited) - - -
------------ -------- -----------

Balance at January 31, 1996 (unaudited) 5,863,835 $ 59,000 $ 20,764,000
============ ======== ============

TOTAL
ACCUMULATED STOCKHOLDERS'
DEFICIT EQUITY

<S> <C> <C>
Exercise of Class A, B and F warrants - 4,150,000

Issuance of common stock in private offering (Note 9) 836,000

Exercise of incentive and non-qualified stock options 66,000

Net loss for year ended April 30, 1995 (3,297,000) (3,297,000)
------------ -----------

Balance at April 30, 1995 (7,639,000) 6,349,000
------------ -----------

Exercise of Class B and F warrants (unaudited) 4,522,000

Exercise of Class C and D warrants - cashless
(unaudited)

Issuance of restricted shares of common stock (unaudited) 1,155,000

Issuance of restricted shares of common stock for VCI
stock (unaudited) 647,000

Exercise of incentive stock options and non-qualified
options (unaudited) 251,000

Exercise of non-qualified warrants and underwriter
warrants (unaudited) 1,502,000

Costs associated with issuance of convertible preferred
stock with mandatory redemption provision (unaudited) (1,242,000)

Net loss for the nine month period ended
January 31, 1996 (unaudited) (4,124,000) (4,124,000)
============ ===========

Balance at January 31, 1996 (unaudited) $(11,763,000) $ 9,060,000
============ ===========

</TABLE>

See Notes to Consolidated Financial Statements.

F-7
<PAGE> 58
LASER VISION CENTERS, INC.
AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED APRIL 30, JANUARY 31,
1993 1994 1995 1995 1996
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating expenses:
Net loss $(1,235,000) $(2,210,000) $(3,297,000) $(2,110,000) $ (4,124,000)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 359,000 1,219,000 1,872,000 1,330,000 1,564,000
Imputed interest 16,000 212,000 166,000 74,000
Provision for loss on advance 175,000
Provision for uncollectible accounts receivable 43,000 66,000 32,000 3,000 78,000
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (106,000) (386,000) (87,000) 9,000
(Increase) decrease in prepaid expenses
and other current assets 35,000 (69,000) (92,000) (109,000) (306,000)
Increase in other assets (76,000) (94,000) (100,000) (2,000)
Increase in accounts payable 74,000 124,000 138,000 61,000 1,203,000
Increase in accrued liabilities 26,000 166,000 328,000 239,000
Decrease in minority interest - - (116,000) (66,000) (141,000)
----------- ----------- ----------- ----------- ------------

Net cash used by operating activities (880,000) (899,000) (1,017,000) (912,000) (1,406,000)
----------- ----------- ----------- ----------- ------------
Cash flows from investing activities:
Acquisition of equipment (554,000) (2,818,000) (1,147,000) (748,000) (1,728,000)
Equipment deposits (520,000) (25,000) (80,000) (2,693,000)
Decrease in restricted cash 125,000 375,000
Proceeds from (purchase of) of short-term
investments, net 100,000 (751,000)
Other (3,000) - - - (17,000)
----------- ----------- ----------- ----------- ------------
Net cash used by investing activities (852,000) (2,468,000) (1,227,000) (1,499,000) (4,438,000)
----------- ----------- ----------- ----------- ------------

Cash flows from financing activites:
Proceeds from private preferred stock offering $ - $ - $ - $ - $ 14,100,000
Private preferred stock offering costs (1,092,000)
Proceeds from private/public stock offerings 2,740,000 4,750,000 903,000 1,219,000
Private/public placement offering costs (463,000) (956,000) (67,000) (64,000)
Proceeds from exercise of Class A, B and F Warrants 6,000 4,362,000 3,470,000 4,534,000
Proceeds from exercise of other warrants 1,502,000
Warrant solicitation costs (212,000) (166,000) (12,000)
Proceeds from exercise of incentive and
nonqualified stock options 66,000 62,000 251,000
Payment on notes payable (625,000) (375,000) (1,305,000) (1,138,000) (2,176,000)
Proceeds from issuance of notes payable 500,000
Principal payments under capital lease
obligations (252,000) (139,000) (83,000) (75,000) (70,000)
Deferred offering costs - - - (27,000) -
----------- ----------- ----------- ----------- ------------
Net cash provided by financing activities 1,900,000 3,286,000 3,664,000 2,126,000 18,192,000
----------- ----------- ----------- ----------- ------------
Net increase (decrease) in cash and cash equivalents 168,000 (81,000) 1,420,000 (285,000) 12,348,000
Cash and cash equivalents at beginning of period 619,000 787,000 706,000 706,000 2,126,000
----------- ----------- ----------- ----------- ------------
Cash and cash equivalents at end of period $ 787,000 $ 706,000 $ 2,126,000 $ 421,000 $ 14,474,000
=========== =========== =========== =========== ============
</TABLE>

See Notes to Consolidated Financial Statements.

F-8
<PAGE> 59
LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
- --------------------------------------------------------------------------------

1. NATURE OF ORGANIZATION

Laser Vision Centers, Inc. (the Company), a Delaware corporation, has two
operating divisions; the LaserVision Centers division and the MarketVision
division.

The LaserVision Centers division arranges with ophthalmologists and
medical institutions for the use of refractive laser equipment to
surgically correct refractive vision disorders through several types of
business arrangements. The LaserVision Centers division currently has
excimer laser centers in Canada and Europe and a clinical excimer laser
center in St. Louis, Missouri. The LaserVision Centers division is
"technology neutral" and willing to provide access to any approved
refractive equipment requested by an ophthalmic surgeon or other business
partner. When the photorefractive keratectomy (PRK) procedure is approved
for use in the United States (see Note 14), the domestic
ophthalmologists and medical institutions will pay the Company a standard
amount per procedure performed with the laser system. The Company will
provide some combination of geographic territory, technical assistance in
the installation and maintenance of the laser system, marketing assistance
and training in the use of the laser system and related matters. The plan
of establishing these centers in the United States is subject to all of
the risks and uncertainties of any new business venture, including but not
limited to, obtaining the approval from the United States Food and Drug
Administration (FDA) for use of certain laser equipment for fixed state
and/or transportable modalities; obtaining additional financing for
start-up costs and to purchase refractive laser and mobile equipment;
obtaining adequate products and professional liability insurance at
reasonable rates; the availability of refractive laser equipment from
third party manufacturers in adequate quantities and at reasonable prices;
and competition from other national, regional or local organizations or
alternative forms of treatment for refractive disorders. The recent
approval by the FDA of one manufacturer's excimer laser to perform the
phototherapeutic keratectomy (PTK) procedure will allow the Company to
begin providing access to excimer lasers in the United States on a fee per
procedure basis. Many of these PTK centers will be in facilities owned by
Medical Care America, Inc., a subsidiary of Columbia/HCA Healthcare
Corporation. Since the majority of the Company's revenues originate
outside the United States and the Company also has net operating assets
outside the United States, the Company is subject to normal foreign
exchange risk.

The MarketVision division is a marketing/advertising operation which
provides marketing programs and services to the medical services industry,
including doctors, hospitals, clinics, and outpatient surgi-centers. The
MarketVision division also provides marketing programs for some of the
Company's Canadian and European LaserVision Centers.

The Company currently operates its international centers through certain
wholly or majority owned Canadian and European subsidiaries. The
consolidated financial statements include the accounts of all the Company's
subsidiaries. All material intercompany transactions and balances have been
eliminated.

F-9
<PAGE> 60
LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 2
- --------------------------------------------------------------------------------

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH EQUIVALENTS
The Company considers unrestricted cash, as well as unrestricted
securities purchased with an original maturity of three months or less, to
be cash equivalents.

CREDIT RISK
Financial instruments which potentially subject the Company to
concentrations of credit risks consist principally of funds held in money
market accounts and trade receivables.

As of April 30, 1994 and 1995, the Company has deposited $350,000 and
$1,747,000, respectively, in money market accounts at financial
institutions. Management believes the credit risk related to these funds
is limited due to the short-term nature of the accounts.

Management believes the credit risk related to its trade receivables is
limited due to the Company's large number of customers and that its
allowance for doubtful accounts is adequate.

PROPERTY AND EQUIPMENT
Property and equipment is stated at cost. Expenditures for repairs and
maintenance are charged to expense as incurred. Depreciation and
amortization are computed utilizing the straight-line method. In the
opinion of management, this method is adequate to allocate the cost of
equipment over their estimated useful lives (five years). Depreciation for
commercial lasers and medical equipment is included in cost of revenues.
Depreciation for the clinical laser, mobile equipment and furniture and
fixtures is classified as an operating expense.

OTHER ASSETS
Other assets at April 30 consist of the following:

<TABLE>
<CAPTION>
1994 1995
<S> <C> <C>
Goodwill, net of $8,000 amortization (Note 3) $ - $ 242,000
Tradename and servicemark costs, net of $8,000
and $15,000 amortization, respectively 60,000 167,000
Notes receivable 325,000
Deferred franchise costs 175,000
Other, net 10,000 9,000
--------- ----------

$ 570,000 $ 418,000
========= ==========

</TABLE>

F-10
<PAGE> 61
LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 3
- --------------------------------------------------------------------------------

At April 30, 1994, notes receivable represented obligations due from
franchisees for franchise participation fees. The notes were
noninterest-bearing and were generally due 60 days following FDA approval
for the use for refractive lasers for PRK procedures. During fiscal 1995,
these notes were canceled and the related deferred revenue was eliminated
when the proposed franchise agreements were canceled, renegotiated or
became convertible to another form of business arrangement.

The goodwill, tradename and servicemark costs are being amortized over 15
years. Legal fees associated with the formation of the Company's proposed
franchising arrangement were capitalized as deferred franchise costs. These
costs ($175,000) were written off as an expense during the year ended April
30, 1995 when such arrangements were canceled, renegotiated or became
convertible to another form of business arrangement.

REVENUE
Laser revenues are recognized when the surgical procedures are
performed or when the required optical/software cards, used to operate many
excimer lasers, are sold to third parties. Advertising revenues are
recognized as earned, upon delivery of print media or upon broadcast of TV
or radio advertisements.

COST OF REVENUES
Cost of revenues include laser and medical equipment depreciation, laser
maintenance including optics and gasses, field personnel costs,
professional medical services and medical supplies for the
LaserVision Centers division. For the MarketVision division, cost of
revenues includes client media and production costs.

DEFERRED REVENUE
The franchise participation fees related to the Company's previously
outstanding franchise agreements were recorded as deferred franchise fees.
At April 30, 1994, the Company had $427,000 in deferred franchise revenue,
of which $325,000 was due under notes receivable to the Company (see
above). During fiscal 1995, the notes receivable were written-off against
the deferred franchise fees when the related franchise arrangements were
canceled, renegotiated or became convertible to another form of business
arrangement. At April 30, 1995, the Company had $102,000 recorded as a
liability associated with these former franchise agreements.

MINORITY INTERESTS
The minority interests on the balance sheet relate to a 49.998% interest in
a new European subsidiary (see Note 3) and 10% interest in one Canadian
subsidiary.

INCOME TAXES
The Company uses the asset and liability method of accounting for income
taxes. Deferred tax assets and liabilities are recorded based on the
difference between the income tax basis of assets and liabilities and
their carrying amounts for financial reporting purposes.

F-11
<PAGE> 62

LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 4
- --------------------------------------------------------------------------------

LOSS PER SHARE
Net loss per common share is based upon the weighted average number of
shares outstanding during the period. The calculation ignores common
stock equivalent shares when their inclusion in such calculations would
have been antidilutive.

INTERIM INFORMATION
The interim financial information at January 31, 1996 and for the
nine-month periods ended January 31, 1995 and 1996 is unaudited.
However, in the opinion of management, such information has been
prepared on the same basis as the audited financial statements and
includes all adjustments, consisting solely of normal recurring
adjustments, necessary for a fair presentation of the financial position
and results of operations for the periods presented. The interim results
are not necessarily indicative of results for any future period.

3. EUROPEAN ACQUISITION

Effective November 1, 1994, the Company's European subsidiary acquired
50.002% of Arnott Laser Vision Centre Limited (ALVCL) in London,
England for approximately $39,000. The acquisition of ALVCL was
accounted for pursuant to the purchase method of accounting. ALVCL
subsequently acquired approximately $104,000 of equipment and the
existing excimer laser surgery practice from the minority owners of
ALVCL in exchange for a non-interest bearing note of approximately
$354,000, resulting in the recording of goodwill of $250,000. In June
1995, ALVCL consolidated operations and moved to a new leased facility
on Harley Street in London where it will do business as the Harley
Street Laser Vision Centre. As specified in the acquisition agreement,
the Company agreed to purchase a new excimer laser for approximately
$500,000 to be used at the Harley Street facility in exchange for a
non-interest bearing note of ALVCL. The April 30, 1995 consolidated
financial statements include all assets and obligations of ALVCL and
reflect the equity and other obligations due the 49.998% minority owners
as a non-current obligation.

4. NOTES PAYABLE

In June 1994, the Company entered into an agreement to purchase three
new VISX excimer lasers for use in Europe from an affiliate of Alcon
Laboratories, Inc. (Alcon) for approximately $1,250,000. The purchases
were financed with non-recourse notes payable to the Alcon affiliate,
bearing no stated interest rate, and requiring periodic repayments due
through October 1996. The obligation and the related laser equipment
were recorded at the net present value of the future payments
($1,166,000), discounted at a 6% interest rate. The initial non-cash
purchase is not reflected in the consolidated statement of cash flows
but the subsequent $305,000 note payments (including imputed interest)
are reflected.

In April 1994, the Company entered into agreements to purchase certain
VISX excimer laser installations in Europe from affiliates of Alcon for
an aggregate purchase price of $3,506,000. The Company financed the
purchase with non-recourse notes payable to Alcon

F-12
<PAGE> 63

LASER VISION CENTER, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
Page 5

affiliates, bearing no stated interest rate. The notes are to be repaid during
fiscal 1995 and fiscal 1996, with $1 million (including imputed interest) paid
in fiscal 1995. The purchase agreements also state that under certain
circumstances, Alcon is entitled to up to 75% of the net proceeds of any funds
received by the Company from the issuance of additional equity in repayment of
the notes. Alcon has not elected to exercise this entitlement during fiscal
1995. The obligation and the related laser equipment have been recorded at the
net present value of the future payments ($3,265,000), discounted at a 6%
interest rate. This non-cash transaction is not reflected in the consolidated
statement of cash flows for fiscal 1994 and is reflected as a $1,000,000 note
payment (including imputed interest) in fiscal 1995.

The April 1994 and June 1994 Alcon notes are secured by related laser equipment.
Under certain circumstances, primarily related to the issuance of additional
equity, the Company may exercise a verbal option to repay the April 1994 and
June 1994 Alcon notes early and receive a discount greater than the 6% imputed
interest rate. When and if such a reduction in notes payable occurs, the
Company will record the discount as a reduction in the cost of the related laser
and medical equipment.

In May 1995, the Company paid approximately $909,000 of scheduled payments on
the Alcon notes payable.

During July 1993, the Company signed a $2,649,000 non-recourse promissory note
payable bearing interest at 3% above prime rate for the purchase of six
European excimer lasers and medical equipment. The Company repaid the note in
full with the net proceeds of the Company's second public offering which was
completed in November 1993. The repayment of the note has been reflected in
the consolidated statement of cash flows as an acquisition of equipment in
fiscal 1994.

In July 1995, the Company completed the purchase of two excimer lasers for use
in Europe for a total purchase price of $725,000, of which $675,000 was payable
over the next fifteen months pursuant to purchase agreements which bear no
interest. In September 1995, the Company acquired two excimer lasers costing a
total of $957,000 for use in the United States. The lasers were primarily
financed by five year capital leases totaling $940,000 and bearing interest at
11% per annum. In January 1996, the Company acquired two excimer lasers
costing a total of $1,063,000 for use in the United States. The liability for
such lasers is included in accounts payable in the Consolidated balance sheet
at January 31, 1996, pending the finalization of permanent financing.

F-13
<PAGE> 64

LASER VISION CENTER, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
Page 6

5. OBLIGATIONS UNDER CAPITAL LEASES

The Company leases certain equipment under capital lease arrangements. Future
minimum payments under capital leases as of April 30, 1995 are as follows:

<S> <C>

YEAR ENDING AMOUNT
APRIL 30,
1996 $108,000
1997 66,000
--------

Total minimum lease payments 174,000
Less amount representing interest (16,000)
Less current portion (94,000)
--------
Long-term portion of obligations under
capital leases at 9.6% to 12.8% $ 64,000
========

</TABLE>

Capitalized leased equipment, mobile equipment and one laser totaled $440,000
at both April 30, 1994 and 1995. Depreciation of leased equipment was
$106,000, $122,000 and $101,000 for the years ended April 30, 1993, 1994 and
1995, respectively.

6. INCOME TAXES

At April 30, 1994 and 1995, the Company has net operating loss carryforwards of
approximately $4.2 million and $7.4 million, respectively, available to offset
future taxable income, expiring 2006 through 2011. The Company has recorded a
deferred tax asset of approximately $1.7 million and $3.0 million, respectively,
with offsetting valuation allowances at April 30, 1994 and 1995. For purposes
of recording deferred tax assets, no future taxable income is assumed.

7. COMMITMENTS AND CONTINGENCIES

AGREEMENTS TO LEASE OR PURCHASE LASER EQUIPMENT
In April 1995, the Company and Medical Care America, Inc. (as guarantor) agreed
to lease two Summit Technology, Inc. excimer lasers costing a total of
approximately $957,000 for PTK procedures at U.S. clinics beginning in July
1995. The Company has also committed to assume three other capital lease
agreements for Summit Technology, Inc. lasers from another group of
ophthalmologists in North Carolina beginning in October 1995 through November
2000. Effective May 31, 1995, the Company also agreed to purchase two new
excimer lasers for use in Europe from an Alcon affiliate for a total of
$725,000 with $600,000 due during

F-14
<PAGE> 65

LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 7

the third quarter of fiscal 1996 and the balance payable during fiscal
1997. A $50,000 payment was made toward this purchase during the first
quarter of fiscal 1995.

PROBABLE ACQUISITION
The Company has finalized an agreement and plan of merger to acquire the
stock of Vision Correction, Inc. (VCI) of Minnesota for 75,432 shares of
the Company's unregistered common stock. VCI's assets primarily consist of
23 agreements with ophthalmologists in nine states to provide excimer laser
access on a mobile basis by December 31, 1997. When access is provided,
the Company would earn a $10,000 fee (currently deposited in escrow) per
location. The agreement is subject to the unanimous approval of VCI's
stockholders. While the acquisition is subject to several conditions, it
is expected to close in August 1995.

The January 31, 1996 unaudited consolidated balance sheet reflects the
completion by the Company of the VCI acquisition by the issuance of 76,181
shares of restricted common stock at the current market price at the
acquisition date of $8.50 per share (totalling approximately $650,000).

EMPLOYMENT AGREEMENTS
During fiscal 1994, the Company entered into three-year contracts with four
officers of the Company which were extended for an additional year during
fiscal 1995. The agreements provide for base salaries and the payment of
certain bonuses tied to the bid price of the Company's common stock during
the last month of the fiscal year. During fiscal 1994 and 1995, $62,000
and $208,000, respectively, was accrued for these bonuses. Six other key
employees have employment contracts for one to three year periods.

UNDERWRITER
The Company has agreed to potentially pay a five percent solicitation fee
for underwriter assistance with the exercise of certain Class B or Class F
warrants.

OPERATING LEASES
The Company has office and laser center lease agreements in St. Louis,
Montreal and London. The respective leases commenced in 1992, 1993 and
1994 and shall end in 1996, 1998 and 2000. Approximate future minimum
rental payments under the leases are $106,000, $80,000, $80,000 $48,000 and
$24,000 for the years ended April 30, 1996, 1997, 1998, 1999 and 2000,
respectively. Related rental expenses totaled $71,000 and $98,000 for the
years ended April 30, 1994 and 1995, respectively.

CLAIMS
During fiscal 1992, the Company hired an investor relations consulting firm
and agreed to issue the firm 100,000 to 150,000 warrants to purchase the
Company's common stock at $5.00 per share. Due to failure to perform and
breach of contract, the Company filed a claim against the firm during
fiscal 1993 to terminate the contract, void the warrants and recover fees
and expenses. The disputed warrants are not included in Note 10 of these

F-15
<PAGE> 66

LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 8

financial statements. Management does not expect this claim will have a
material adverse effect upon the Company.

8. RELATIONSHIP WITH ITALIAN CORPORATION

In May 1991 and March 1993, the Company agreed to pay to Laser Vision
Centers International SpA (SpA), now known as VistaVision, SpA, $175,000
and 275,000 unregistered shares of the Company's common stock in exchange
for 287,500 shares of SpA stock which was subsequently converted to a
$1,100,000 note receivable from SpA. SpA subsequently repudiated the March
1993 agreement.

In December 1993, a Missouri court entered a favorable judgment by default
on a suit filed by the Company against SpA on October 8, 1993, requesting
that all agreements with SpA be declared invalid due to fraud and
misrepresentation by SpA, requiring SpA to return the $175,000, and
canceling the 275,000 shares of the Company's stock issued to SpA. SpA's
motion to vacate the judgment was denied by the court in April 1995. SpA
has filed a notice of appeal which is pending. The fiscal 1994 financial
statements reflect the cancellation of the 275,000 shares of the Company's
stock and a $175,000 provision for loss on the funds advanced to SpA.

After the Missouri lawsuit was filed, SpA filed suit against the Company,
its counsel and its transfer agent in New York and a second suit against
the Company and an officer/director in Delaware, seeking damages, the
registration of its restricted shares of the Company's common stock and
alleging improprieties by the Company and an officer/director. The New
York court granted the Company's motion to dismiss the SpA suit in October
1994. SpA has filed a notice of appeal which is pending. A Company motion
to dismiss the Delaware lawsuit is pending. Based upon discussions with
counsel, the Company believes that SpA's allegations are without merit and
the consolidated financial position of the Company will not be materially
affected by SpA's complaints.

9. CAPITAL STOCK

In April 1992, the Company entered into an agreement for private offering
to "Accredited Investors," as defined in Regulation D under the Securities
Act of 1933, as amended. The agreement allowed for a minimum of 10 units
up to a maximum of 100 units to be offered on a "best efforts" basis. The
units consisted of 5,000 shares of the Company's common stock and were
offered at $25,000 per unit. In connection with the private offering, the
Company sold to the representative, for $.001 per warrant, five-year
warrants (Class C Warrants) to purchase an aggregate of 50,000 shares of
common stock at an exercise price of $5.00 per share. Also, the Company
has agreed to sell to the representative, at the time of each closing, for
$.001 per warrant, five-year warrants (Class D warrants) to purchase 10
percent of the total shares sold pursuant to the private offering. The
warrants shall be exercisable at a price equal to 100 percent of the
offering price of the shares sold in the private offering.

F-16
<PAGE> 67

LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 9

In November 1992, the Company entered into an agreement for an additional
private offering to "Accredited Investors," as defined in Regulation D
under the Securities Act of 1933, as amended. The underwriting agreement
allowed for a maximum of 50 units to be offered on a "best efforts" basis.
The units consisted of 5,000 shares of the Company's common stock and were
offered at $25,000 per unit. The Company has also agreed to sell to the
representative, at the time of each closing, for $.001 per warrant,
five-year warrants (Class E warrants), to purchase 10 percent of the total
shares sold pursuant to the private offering. The warrants shall be
exercisable at a price equal to 100 percent of the offering price of the
shares sold in the private offering.

In January 1993, the Company completed the final closing of its private
offerings, with an aggregate of 548,000 shares of its common stock sold at
$5.00 per share. the net proceeds of the private offerings, after
deducting all associated costs, approximated $2,250,000.

In September 1994, stockholders approved an increase in the number of
authorized common shares from 10,000,000 to 50,000,000 and an amendment to
the Company's Certificate of Incorporation requiring super majority (80%)
approval of certain business combinations.

During fiscal 1994, the expiration date for the Class A warrants was
extended to August 1994 and the expiration date for the Class B warrants
was extended to April 1995. In addition, the option price for the Class B
warrants was reduced to $6.00 per share. Prior to expiration, a total of
401,220 Class A warrants were exercised (288,780 Class A warrants expired
without being exercised) and 401,220 Class B warrants were issued. During
fiscal 1995, the expiration date for the Class B warrants and the Class F
warrants was extended to February 6, 1996.

In November 1993, the Company completed a second public offering for
950,000 units at a price to the public of $5.00 per unit. Each unit
consisted of one share of common stock and one Class F warrant which allows
the holder to purchase one share of common stock for $6.00 on or before
April 3, 1995. The underwriter subsequently exercised his over allotment
option and acquired 142,500 Class F warrants bringing the total number of
Class F warrants issued to 1,092,500. In connection with this second
public offering, the Company sold to the representative, for $.001 per
warrant, underwriter warrants to purchase up to 95,000 units at $7.25 per
unit over a five-year period.

In April 1995, the Company sold 125,000 shares of unregistered common stock
to two investors at $7.225 per share, less solicitation and offering costs.
These stockholders also received certain piggyback registration rights and
the option to (1) convert their common shares for any convertible preferred
stock subsequently issued under a private offering or (2) receive
additional common shares at no cost to bring the average price per share
down to a $.25 discount to the conversion price as dilution protection. In
May 1995, the Company sold an additional 138,500 shares of unregistered
common stock to a third investor under similar terms.

F-17
<PAGE> 68

LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 10

The Company's amended Articles of Incorporation authorize the Board of
Directors to issue 1,000,000 shares of preferred stock, at $.01 par value
per share, in one or more series, designated by them as to rights,
preferences, terms and limitations. Although no shares of preferred stock
had been issued as of April 30, 1995, the Board of Directors has authorized
the sale of up to 180,000 shares of convertible preferred stock via a
private placement at a price per share and under terms to be determined.
The Company has hired an exclusive financial advisor to help find equity
financing for a fee plus certain expenses. Although no firm agreements
have been reached, the Company has had discussions with potential
investors. The contemplated sale of the Company's preferred stock could,
when and if completed (of which there is no guaranty), represent a
significant voting interest in the Company. (See Note 12.)

10. STOCK OPTION PLANS AND WARRANTS

The Company has two plans under which stock options may be granted, one
plan under which registered warrants may be granted and also has issued
unregistered warrants.

The 1990 Incentive Stock Option Plan (the Option Plan) was approved by
stockholders of the Company on March 5, 1990 and amended by the
stockholders on April 22, 1992. Under the terms of the Option Plan, the
Company has reserved for issuance to key employees and officers of the
Company 350,000 shares of common stock. The Option Plan is administered by
the Board of Directors. The exercise price may not be less than 100
percent of the fair market value of the common stock on the date of grant
(110 percent with respect to optionees who are 10 percent or more
stockholders of the Company). Options are nonassignable and may be
exercised only by the employee while employed by the Company or within
three months after termination of employment, except that upon death, the
option may be exercised within six months after such death, and upon
disability the option may be exercised for one year thereafter. Options
are exercisable on terms which may be established by the Board of Directors
at its discretion. Options expire no later than 10 years from the date of
grant (five years with respect to optionees who are 10 percent or more
stockholders). The Company has options outstanding to executive officers
and employees pursuant to the Option Plan to purchase an aggregate of
286,695 shares of common stock, of which 119,150 shares relate to officers.
The options are exercisable in increments during the initial four years.

The 1990 Non-Qualified Stock Option Plan (the Plan) was approved by the
stockholders of the Company on March 5, 1990, and amended by the
stockholders on April 22, 1992. Under the terms of the Plan, the Company
has reserved 300,000 shares of common stock for issuance upon exercise of
options granted to qualified outside directors and consultants. The
Company has options outstanding to qualified outside directors and
consultants pursuant to the Plan to purchase an aggregate 192,000 shares of
common stock, of which 145,000 relate to an outside director. The options
are exercisable in increments during the initial two years.

F-18
<PAGE> 69

LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 11

Under the 1994 Non-Qualified Warrant Plan, the Company has reserved
1,000,000 shares of common stock for issuance upon exercise of registered
warrants granted to certain employees, directors and consultants, of which
944,500 warrants were outstanding as of April 30, 1995 (824,500 converted
from unregistered warrants, 70,000 issued to outside advisors, and 50,000
issued to officers at the current market price). The warrants vest in
increments during the initial two years and are exercisable over a
five-year period.

In January 1994, four officers, including a former outside director,
exchanged their options for warrants having the same average exercise price
per share. Most warrants vest over a 24-month period and are exercisable
over a five-year period. During the second quarter of fiscal 1995, 824,500
unregistered warrants were converted to registered warrants. Of the
355,000 unregistered warrants outstanding at April 30, 1995, 325,000 were
issued during fiscal 1995 to officers, employees and consultants at $9.00
per share (above the market price).

Information with respect to the plans is as follows:

<TABLE>
<CAPTION>
1990 1990
INCENTIVE NON-QUALIFIED 1994
STOCK STOCK NON-QUALIFIED
OPTION OPTION UNREGISTERED WARRANT
PLAN PLAN WARRANTS PLAN
<S> <C> <C> <C> <C>
Outstanding at April 30, 1992
($3.00 to $6.875) 251,045 268,750 - -
Granted ($6.125 to $6.625 options) 63,000 30,000
Canceled (4,000) (63,750) - -
------- ------- ------- -------

Outstanding at April 30, 1993 310,045 235,000 - -
Exchanged ($5.91 to $6.35) (217,000) (72,500) 289,500
Granted ($5.00 to $5.50 options;
$5.00 to $7.50 warrants) 92,000 67,000 565,000
Canceled (4,500) (52,500) - -
------- ------- ------- -------

Outstanding at April 30, 1994 180,545 177,000 854,500 -
Exercised ($5.00 to $5.75) (1,600) (10,000)
Exchanged ($5.00 to $7.50) (824,500) 824,500
Granted ($5.38 to $7.75 options;
$5.31 to $9.00 warrants) 109,000 25,000 325,000 120,000
Canceled (1,250) - - -
------- ------- ------- -------

Outstanding at April 30, 1995 286,695 192,000 355,000 944,500
======= ======= ======= =======
</TABLE>

F-19
<PAGE> 70

LASER VISION CENTERS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 12

<TABLE>
<S> <C> <C> <C> <C>
Average price per share at
April 30,
1993 $ 5.31 $ 5.87 $ - $ -
1994 $ 4.41 $ 5.38 $ 5.79 $ -
1995 $ 5.62 $ 5.67 $ 8.66 $ 5.89
Exercisable at April 30,
1993 165,295 182,917 - -
1994 100,545 145,750 363,151 -
1995 165,570 159,500 57,083 737,347

</TABLE>

The Company also has the following warrants outstanding as of April 30, 1995:

344,670 Class B and 822,315 Class F-Exercisable for one share of common
stock at a price of $6.00 per share, expire February 6, 1996, publicly
traded, callable by Board of Directors before expiration date

50,000 Class C and 30,300 Class D-Exercisable for one share of common stock,
at a price of $5.00 per share, expire December 24, 1997

24,500 Class E-Excisable for one share of common stock, at a price of $5.00
per share, expire January 6, 1998

60,000 Underwriter warrants-Exercisable for one share of common stock at a
price of $7.25 per share, expire April 10, 1996

95,000 Underwriter warrants-Exercisable for one share of common stock and
one Class F warrant at a price of $7.25 per unit, expire November 9, 1998

As of January 31, 1996, there was a total of 107,238 Class B warrants and
304,246 Class F warrants outstanding. During February 1996, an aggregate of
405,189 Class B and F warrants and 32,312 other outstanding warrants were
exercised. The remaining Class B and F warrants expired February 6, 1996.

F-20
<PAGE> 71

LASER VISION CENTER, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITIH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 13

11. BUSINESS SEGMENT INFORMATION

After allocating certain corporate expenses and determining the primary
geographic area for mobile equipment, business segment information for the
years ended April 30, 1995, 1994 and 1993 is as follows:

<TABLE>
<CAPTION>
LASERVISION CENTERS DIVISION MARKETVISION
DOMESTIC FOREIGN DIVISION TOTAL
CANADA EUROPE
<S> <C> <C> <C> <C> <C>
YEAR ENDED
APRIL 30, 1995

Revenues $ 12,000 $ 921,000 $ 1,545,000 $ 833,000 $ 3,311,000
============ =========== ============ ========== ============

Income (loss) from
operations $(1,707,000) $ (409,000) $(1,126,000) $ 34,000 $ (3,208,000)
============ =========== ============ ========== ============

Interest/other income $ 37,000

Minority interest in
net loss of subsidiary 116,000
Interest expense (242,000)
------------
Net loss $ (3,297,000)
============
Identifiable assets $ 2,613,000 $ 1,741,000 $ 6,767,000 $ 197,000 $ 11,318,000
============ ============ ============ ========== ============

Capital expenditures $ 371,000 $ 508,000 $ 1,627,000 $ - $ 2,506,000
============ ============ ============ ========== ============

Depreciation and
amortization $ 236,000 $ 388,000 $ 1,248,000 $ - $ 1,872,000
============ ============ ============ ========== ============

YEAR ENDED
APRIL 30, 1994

Revenues $ 20,000 $ 808,000 $ 689,000 $ 589,000 $ 2,106,000
============ ============ ============ ========== ============

Loss from operations $ (850,000) $ (610,000) $ (410,000) $ (30,000) $ (1,900,000)
============ ============ ============ ========== ============
Interest/other income $ 21,000
Interest expense (156,000)
Loss on advance (175,000)
------------

Net loss $ (2,210,000)
============
Identifiable assets $ 1,446,000 $ 1,497,000 $ 6,025,000 $ 167,000 $ 9,135,000
============ ============ ============ =========== ============

Capital expenditures $ 27,000 $ 142,000 $ 5,914,000 $ - $ 6,083,000
============ ============ ============ =========== ============

Depreciation and
amortization $ 224,000 $ 466,000 $ 527,000 $ 2,000 $ 1,219,000
============ ============ ============ =========== ============
</TABLE>

F-21
<PAGE> 72

LASER VISION CENTER, INC.
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED
JANUARY 31, 1996 IS UNAUDITED)
PAGE 14
- --------------------------------------------------------------------------------

<TABLE>
<S> <C> <C> <C> <C> <C>
YEAR ENDED
APRIL 30, 1993

Revenues $ 7,000 $ 401,000 $ - $ 772,000 $ 1,180,000
============ ============ ======== ========= =============

Income (loss) from
operations $ (491,000) $ (643,000) $ - $ (49,000) $ (1,183,000)
============ ============ ======== ========= =============

Interest/other income $ 35,000

Interest expense (87,000)
-------------
Net loss $ (1,235,000)
=============
Identifiable assets $ 2,374,000 $ 1,752,000 $ - $ 230,000 $ 4,356,000
============ ============ ========= ========= =============

Capital expenditures $ 33,000 $ 1,375,000 $ - $ - $ 1,408,000
============ ============ ========= ========= =============

Depreciation and
amortization $ 113,000 $ 242,000 $ - $ 4,000 $ 359,000
============ ============ ========= ========= =============
</TABLE>

12. CONVERTIBLE PREFERRED STOCK (UNAUDITED)

In October 1995, the Company received $14,100,000 from the sale of
141,000 shares of restricted convertible preferred stock with a mandatory
redemption provision after ten years., The related offering costs of
$1,242,000 were deducted from paid-in-capital. These restricted
preferred shares, par value $100, are convertible into 2,350,000 shares
of common stock at a conversion price of $6 per share, have a stated
dividend rate beginning after three years at 8% (after two years under
certain circumstances) and have limited piggy-back registration rights in
the event of any public offering of common stock and mandatory
registration rights after two years.

13. PROPOSED OFFERING (UNAUDITED)

In May 1996, the Company plans to file a Form S-3 Registration Statement
with the Securities and Exchange Commission, pursuant to which the
Company intends to sell 2,500,000 shares of the Company's common stock.

14. APPROVAL BY FDA (UNAUDITED)

In October 1995 and March 1996, the FDA approved the use of the excimer
lasers manufactured by Summit Technology, Inc. and VISX, respectively,
for performing PRK procedures, making it possible for the Company to
begin providing opthamologists access to lasers in the United States.

F-22
<PAGE> 73
INSIDE BACK COVER

[PHOTO OF LASERVISION CENTER]

<PAGE> 74
====================================

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN
THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE
OFFER CONTAINED HEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY SHARES OF COMMON STOCK IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE COMPANY SINCE THE DATE HEREOF.

TABLE OF CONTENTS
PAGE
----
Prospectus Summary . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . 7
The Company . . . . . . . . . . . . . . . . . . . . . 14
Use of Proceeds . . . . . . . . . . . . . . . . . . . 14
Price Range of Common Stock and Dividend Policy . . . 14
Capitalization . . . . . . . . . . . . . . . . . . . 16
Selected Consolidated Financial Data . . . . . . . 17
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . 19
Business . . . . . . . . . . . . . . . . . . . . . . 26
Management . . . . . . . . . . . . . . . . . . . . . 41
Underwriting . . . . . . . . . . . . . . . . . . . . 43
Legal Matters . . . . . . . . . . . . . . . . . . . . 45
Experts . . . . . . . . . . . . . . . . . . . . . . . 45
Available Information . . . . . . . . . . . . . . . . 46
Information Incorporated by Reference . . . . . . . 46
Index to Consolidated Financial Statements . . . . . 48

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

LASER VISION CENTERS, INC.

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

2,500,000 SHARES

COMMON STOCK

PROSPECTUS
______, 1996

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

DILLON, READ & CO. INC.
A.G. EDWARDS & SONS, INC.

========================================
<PAGE> 75

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the Company in connection
with the sale of common stock being registered hereunder:

<TABLE>
<S> <C>
Registration fees . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,781
Blue Sky fees and expense . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
Printing cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80,000
Transfer agent fees . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . . $ 75,000
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . $ 35,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53,092
NASD filing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,627
Nasdaq listing fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,500

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $320,000

</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 6 of the Company's Certificate of Incorporation provides for
indemnification of the officers and directors of the Company to the fullest
extent permitted by the laws of the State of Delaware.

Section 145 of the General Corporation Law of the State of Delaware
provides generally and in pertinent part that a Delaware corporation may
indemnify its directors and officers against expenses, judgment, fines and
settlements actually and reasonably incurred by them in connection with any
civil suit or action, except actions by or in the right of the corporation, or
in connection with any administrative or investigative proceedings if, in
connection with the matters in issue, they acted in good faith and in a manner
they reasonably believed to be in, or not opposed to, the best interests of the
company and in connection with any criminal suit or proceeding, if in
connection with the matters in issue, they had no reasonably cause to believe
their conduct was unlawful. Section 145 further permits a Delaware corporation
to grant its directors and officers additional rights of indemnification
through bylaw provisions and otherwise and to purchase indemnity insurance on
behalf of its directors and officer.

The Registrant maintains a policy of insurance under which the
directors and officers of the Registrant are insured, subject to the limits of
the policy, against certain losses arising from claims made against such
directors and officers by reason of any acts or omissions covered under such
policy in their respective capacities as directors or officers.

The Underwriting Agreement filed as Exhibit 1 to this Registration
Statement provides for indemnification by the Underwriters of the Registrant
and its officers and directors for certain liabilities arising under the
Securities Act, or otherwise.

ITEM 16. EXHIBITS

1* Underwriting Agreement

4.1*** Specimen Stock Certificate.

II-2
<PAGE> 76

5.1* Opinion of Dankenbring, Greiman, Osterholt & Hoffmann, P.C.
with respect to the shares being registered.

10.1** Licensing Agreement with VISX Incorporated dated May 8, 1996.

23.1** Consent of Price Waterhouse LLP to include their report on the
consolidated financial statements for the years ended April
30, 1994 and April 30, 1995.

23.2* Consent of Dankenbring, Greiman, Osterholt & Hoffmann, P.C. to
use its opinion letter filed herewith (contained in Opinion
Letter at Exhibit 5.1)

23.3** Consent of Lovelace Roby & Company, P.A. to include their
report on the consolidated financial statements for the year
ended April 30, 1993.

27.1** Financial Data Schedule

_______________

* To be filed by amendment.
** Filed herewith.
*** Incorporated by reference from Registration Statement No. 33-33843
effective on April 3, 1991.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.

The undersigned Registrant hereby undertakes that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of Prospectus filed as part of the
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.

For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of Prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

II-3
<PAGE> 77

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3, and authorizes this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the County of St. Louis, Missouri on the 4th day of
June, 1996.

LASER VISION CENTERS, INC.

By:___________________________________
John J. Klobnak, Chief Executive
and Chairman of the Board
of Directors

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>

/s/ John J. Klobnak Chief Executive Officer and June 4, 1996
-------------------------------------- Chairman of the Board of
John J. Klobnak Directors

/s/ Alan F. Gillam President and Director June 4, 1996
--------------------------------------
Alan F. Gillam

/s/ B. Charles Bono, III Executive Vice President, Principal June 4, 1996
-------------------------------------- Accounting Officer, Chief Financial
B. Charles Bono, III Officer and Treasurer June 4, 1996
</TABLE>

II-4
<PAGE> 78

<TABLE>
<S> <C> <C>
/s/ Robert W. May Vice-Chairman of the Board, June 4, 1996
- -------------------------------------- General Counsel and Secretary
Robert W. May

/s/ Richard L. Lindstrom, M.D. Director June 4, 1996
-------------------------------------
Richard L. Lindstrom, M.D.

/s/ Dr. Henry Simon Director June 4, 1996
-------------------------------------
Dr. Henry Simon

/s/ James M. Garvey Director June 4, 1996
-------------------------------------
James M. Garvey

/s/ Steven C. Straus Director June 4, 1996
-------------------------------------
Steven C. Straus

/s/ James C. Wachtman Executive Vice President and Chief June 4, 1996
- -------------------------------------- Operating Officer - North America
James C. Wachtman

</TABLE>

II-5

<PAGE> 1
EXHIBIT 10.1

ATTORNEY-CLIENT COMMUNICATION:
PRIVILEGED AND CONFIDENTIAL
---------------------------

LICENSING AGREEMENT

WHEREAS VISX Incorporated ("VISX") has developed and manufactures its Excimer
Laser System Models "B" and "C" ("Lasers"), and has (i) a premarket approval
application ("PMA") for phototherapeutic keratotomy ("PTK") approved by the
Food and Drug Administration ("FDA") for the Lasers, and (ii) a PMA for
photorefractive keratotomy ("PRK") for the Lasers approved by FDA (together the
"Laser PMAs");

WHEREAS LaserVision Centers, Inc. ("LaserVision") wishes to introduce in the
U.S. the MobilExcimer(R) laser system that will include VISX Lasers (the "Mobil-
Excimer(R)");

WHEREAS FDA has requested that LaserVision submit a request for marketing
authorization prior to marketing the MobilExcimer(R);

WHEREAS LaserVision has purchased Lasers for "fixed based" installations and
expects to purchase additional Lasers from VISX if FDA authorizes the
MobilExcimer(R), and therefore VISX wishes to allow LaserVision to use and
reference certain data developed by VISX as may be necessary for LaserVision to
obtain FDA approval for the MobilExcimer(R);

<PAGE> 2
NOW, THEREFORE, the Parties agree as follows:

Definitions

For the purposes of this Agreement:

1. "Confidential Information" shall mean any and all information, whether oral
or in writing or in any other medium, concerning the manufacturing of the
Lasers that is provided to LaserVision pursuant to this Agreement.
Confidential Information shall not include information which (i) at the
time of disclosure is in the public domain through no fault of
LaserVision's; (ii) after disclosure becomes part of the public domain
through no fault of LaserVision's; (iii) was in LaserVision's possession
free of any obligation of confidentiality at the time of VISX's
communication thereof to LaserVision; (iv) was rightfully communicated to
LaserVision free of any obligation of confidentiality subsequent to the
time of VISX's communication thereof to LaserVision; or (v) was developed
by employees or agents of LaserVision independently of and without
reference to any Confidential Information.

2. "LaserVision Applications" shall mean those applications necessary to
obtain FDA clearance to market the

2
<PAGE> 3
MobilExcimer(R).

VISX OBLIGATIONS

3. VISX shall authorize FDA to include in LaserVision Applications, by
reference, any and all information in the Laser PMAs. Such authorization
shall be in a form similar to Exhibit A, and may not be rescinded.

4. VISX shall provide technical assistance on a time and materials basis to
LaserVision as requested and mutually agreed to assist in obtaining FDA
clearance for the MobilExcimer(R).

5. Prior to each purchase by LaserVision of a laser from VISX for use in a
MobilExcimer(R), VISX shall provide a certification to LaserVision stating
that the laser to be purchased was manufactured in accordance with the PRK
Laser PMA and disclosing any supplement approved by FDA. To the extent that
the PRK Laser PMA has been supplemented, VISX authorizes FDA to include in
any LaserVision Application, by reference, any and all information in these
supplements.

3
<PAGE> 4
LaserVision Obligations

7. LaserVision: (i) shall hold in confidence all Confidential Information
which it shall receive from VISX; (ii) shall not, without VISX's prior
written approval, disclose Confidential Information to any third party
other than (a) FDA for the purposes herein contemplated, (b) LaserVision's
outside counsel, and (c) consultants to whom disclosure is necessary for
the purposes herein contemplated and that agree to hold such Confidential
Information in confidence; (iii) shall limit access to Confidential
Information to such of LaserVision's employees who require disclosure of
such information for purposes herein contemplated and who have entered
into a written agreement requiring them to treat such information
confidentially as required by this Agreement; and (iv) shall use
Confidential Information only with respect to the safety and effectiveness
of the Lasers in the MobilExcimer(R) and to provide FDA information
necessary for FDA's review of LaserVision Applications.

This section shall not apply to Confidential Information that is required
to be disclosed by law, provided, however, except where impracticable, that
LaserVision will provide to VISX at least 45 days prior written notice of
the legal requirement to disclose the Confidential Information and that
LaserVision will use its best efforts to secure

4
<PAGE> 5
confidential treatment of the Confidential Information.

8. LaserVision shall not allow any third party to reference any portion of the
LaserVision Applications comprised of Confidential Information or
information referenced from the Laser PMAs without the prior written
consent of VISX.

General

9. LaserVision shall be responsible for, and shall defend, indemnify and hold
VISX harmless from and against any and all losses, claims, suits,
proceedings, expenses, recoveries, damages, including reasonable legal
expenses and costs including attorney's fees, arising out of any claim or
action by any third party, including FDA, relating to the MobilExcimer(R),
or any aspect of the performance of this Agreement, to the extent such
liability results from the negligence or willful misconduct of LaserVision,
or any failure or malfunction of the MobilExcimer(R) (exclusive of the
Laser), or any failure to comply with FDA requirements; provided, however,
that VISX shall give LaserVision prompt notice of any such claim or action
and, provided further, that LaserVision shall have the right to compromise,
settle or defend such claim or action.

<PAGE> 6
VISX shall be responsible for, and shall defend, indemnify and hold
LaserVision harmless from and against any and all losses, claims, suits,
proceedings, expenses, recoveries, damages, including reasonable legal
expenses and costs including attorney's fees, arising out of any claim
or action by any third party, including FDA, relating to the
MobilExcimer(R), or any aspect of the performance of this Agreement,
to the extent such liability results from the negligence or willful
misconduct of VISX, any failure or malfunction of a VISX Excimer Laser,
or any failure to comply with FDA requirements; provided, however, that
LaserVision shall give VISX prompt notice of any such claim or action
and, provided further, that VISX shall have the right to compromise,
settle or defend such claim or action.

10. Any notice required or permitted under this Agreement shall be in
writing and shall be deemed given as of the date it is (a) delivered by
hand to the recipient, (b) received by Registered or Certified Mail,
postage prepaid, return receipt requested, or (c) received by facsimile
and addressed to the party to receive such notice at the address set
forth below, or such other address as is subsequently specified in
writing.

6
<PAGE> 7
If to LaserVision:

Robert W. May
LaserVision Centers, Inc.
540 Maryville Centre Drive, #200
St. Louis, MO 63141
T: 314-434-6900
F: 314-434-2424

If to VISX:

Katrina Church
VISX, Inc.
3400 Central Expressway
Santa Clara, CA 95051
T: 408-773-7013
F: 408-773-7200

11. This Agreement shall be binding upon and inure to the benefit of the
parties, their legal representatives, successors, and assigns. Neither
this Agreement, nor any rights granted hereunder may be assigned,
transferred, conveyed, or encumbered by either party without the prior
written consent of the other.

12. This Agreement contains the entire understanding between the parties,
superseding all prior or contemporaneous communications, agreements and
understandings between the parties.

13. Any modifications or amendments to this Agreement shall only become
effective if in writing and signed by a duly authorized representative
of each party.

7
<PAGE> 8

14. The parties may terminate this Agreement at any time by
mutual written consent. The provisions of paragraphs 3 and
9 shall survive to termination of this Agreement.

15. This Agreement shall be governed by and interpreted in
accordance with the laws of Missouri without reqard to its
conflict of law provisions.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representative.

VISX Incorporated LaserVision Centers, Inc.
By: /s/ Liz Davila 05/14/96 By: /s/ Robert W. May 05/14/96
------------------------ --------------------------
Name Date Name Date

Title:Exec.VP & COO Title:Vice Chairman/General Counsel
-------------- -----------------------------

<PAGE> 9
EXHIBIT A

[VISX INCORPORATED LETTERHEAD]

[DATE]

LaserVision Centers, Inc.
[Address]

Dear [LaserVision person responsible for submitting
application]:

This letter authorizes the Food and Drug Administration to
include, by reference, information in our PMA(s) [file #(s)] in
your PMA [or 510(k)] for Excimer Laser System Models B and C.

Sincerely yours,

[Name and title of VISX
authorized signator]

<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-3 of our report dated June 16, 1995, relating
to the consolidated financial statements of Laser Vision Centers, Inc. and
Subsidiaries, which appears in such Prospectus. We also consent to the
references to us under the headings "Experts" and "Selected Consolidated
Financial Data" in such Prospectus. However, it should be noted that Price
Waterhouse LLP has not prepared or certified such "Selected Consolidated
Financial Data."

/s/ Price Waterhouse LLP

Price Waterhouse LLP

St. Louis, Missouri
June 3, 1996

<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the reference to our Firm under the caption "Experts" and to the
use of our report dated June 22, 1993, with respect to the consolidated
statements of operations, changes in stockholders' equity and cash flows of
Laser Vision Centers, Inc. included in this Registration Statement (Form S-3)
and related Prospectus of Laser Vision Centers, Inc. for the registration of
2,875,000 shares of its common stock.

/S/ Lovelace, Roby & Company, P.A.
Lovelace, Roby & Company, P.A.
Certified Public Accountants

Orlando, Florida
June 3, 1996

<ARTICLE> 5

<S> <C> <C>
<PERIOD-TYPE> 9-MOS YEAR
<FISCAL-YEAR-END> APR-30-1996 APR-30-1995
<PERIOD-START> MAY-01-1995 MAY-01-1994
<PERIOD-END> JAN-31-1996 APR-30-1995
<CASH> 14,474,000 2,126,000
<SECURITIES> 0 0
<RECEIVABLES> 500,000 587,000
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 15,444,000 2,877,000
<PP&E> 14,711,000 11,231,000
<DEPRECIATION> 4,803,000 (3,288,000)
<TOTAL-ASSETS> 29,357,000 11,318,000
<CURRENT-LIABILITIES> 4,870,000 4,178,000
<BONDS> 783,000 406,000
<COMMON> 59,000 45,000
14,100,000 0
0 0
<OTHER-SE> 9,001,000 6,304,000
<TOTAL-LIABILITY-AND-EQUITY> 29,357,000 11,318,000
<SALES> 2,584,000 3,311,000
<TOTAL-REVENUES> 2,584,000 3,311,000
<CGS> 3,021,000 3,375,000
<TOTAL-COSTS> 3,021,000 3,375,000
<OTHER-EXPENSES> 3,924,000 3,144,000
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 150,000 242,000
<INCOME-PRETAX> (4,124,000) (3,297,000)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (4,124,000) (3,297,000)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (4,124,000) (3,297,000)
<EPS-PRIMARY> (.84) (.82)
<EPS-DILUTED> 0 0

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