8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported):  March 13, 2009

OPHTHALMIC IMAGING SYSTEMS

(Exact Name of Registrant as Specified in its Charter)

CALIFORNIA	1-11140	94-3035367
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

221 Lathrop Way, Suite I Sacramento, California	95815
(Address of Principal Executive)	(Zip Code)

(Registrant’s telephone number, including area code): (916) 646-2020

                                                             Not Applicable                                                            

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01Entry into a Material Definitive Agreement

As previously reported, on March 25, 2008 Ophthalmic Imaging Systems, a California corporation (“OIS” or the “Company”), MV Acquisitions Ltd., an Israeli company and a wholly-owned subsidiary of OIS and MediVision Medical Imaging Ltd., an Israeli company (“MediVision”), entered into an Agreement and Plan of Merger (the “Merger Agreement”).

On March 16, 2009, the Company and MediVision, entered into an Agreement to Terminate Merger Agreement (the “Termination Agreement”) pursuant to Section 8.01 of the Merger Agreement. Section 8.01 of the Merger Agreement provides that the Merger Agreement may be terminated and the merger transaction contemplated therein may be abandoned at any time prior to the Effective Time (as defined in the Merger Agreement), by mutual written consent of the Company and MediVision as authorized by their respective boards of directors. The Company and MediVision entered into the Termination Agreement because of the exorbitant costs the companies and associated stockholders would incur as a result of regulatory requirements that need to be fulfilled to consummate the merger.

The foregoing description of the Termination Agreement is only a summary and is qualified in its entirety by reference to the full text of the Termination Agreement a copy of which is filed herewith as Exhibit 10.1.

Item 1.02 Termination of a Material Definitive Agreement

Information set forth in Item 1.01 is incorporated herein by reference.

Item 5.02Departure of Directors or Principal Officers; Election of Directors; Appointment of  Principal Officers.

On March 13, 2009, Yigal Berman notified the Company of his resignation from the Company’s board of directors (the “Board”) as a result of health issues, effective immediately. As of such date, Mr. Berman was the Chairman of the Board and Chairman of its Audit, Compensation, Option, and Nominations Committees of the Board. Mr. Berman’s resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations or policies.

Also on March 13, 2009, the Board elected Uri Ram as an independent member of the Board, effective immediately. The Board has the power to fill the vacancy of the Board pursuant to Article II, Section 4 of the Amended and Restated Bylaws of the Company. On March 18, 2009, the Board appointed Mr. Ram as its Chairman as well as Chairman of the Audit Committee and as a member of the Compensation, Option and Nominations Committees. Mr. Ram was not selected as a director pursuant to any arrangement or understanding between Mr. Ram and any other person. There are no transactions in which either Mr. Ram has an interest requiring disclosure under Item 404(a) of Regulation S-K. The press release associated with these appointments has been attached to this Current Report as Exhibit 99.1 and is incorporated by reference herein.

Pursuant to a letter agreement dated March 13, 2009 with Mr. Ram, the Company agreed to pay Mr. Ram in four equal quarterly installments, an annual retainer in the aggregate amount of $24,000 for his attendance at up to five Board or Committee meetings per quarter and $100 per hour, not to exceed $500 per day, for attendance at Board meetings in excess of five Board meetings per quarter.

Uri Ram, 60, has served as an observer on OIS’ Board of Directors since May 2008. Currently, he serves as the Sr. Vice President and Chief Financial Officer of Gefen Inc. and is the CEO/Owner of Juram Ltd. and Irams Inc., management consulting companies that also invest in new startups. Since 1990, Mr Ram has served as the President of Del-Ta Engineering & Equipment Ltd., a holding company with $30 million in sales; and as the Senior VP of Inter-Gamma Investment Ltd. Inter-Gamma Investment Ltd. is a major shareholder of MediVision Medical Imaging Ltd., our parent company. Mr. Ram has a Master of

Arts degree from Israel National Defense College, and a Bachelor of Economics and Political sciences from Bar Ilan University and participated in an EMBA program at the Tel Aviv University. Mr. Ram is a retired Brigadier General of the Israeli Air Force.

Item 7.01 Regulation FD Disclosure.

On March 19, 2009, the Company issued the press release attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number Description

10.1 Termination Agreement

99.1 Press release of the Company dated March 19, 2009.

SIGNATURES

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

Date:	March 19, 2009	OPHTHALMIC IMAGING SYSTEMS
		By:	/s/ Ariel Shenhar
		Name:	Ariel Shenhar
		Title:	Chief Financial Officer

EX-10.1

Exhibit 10.1

AGREEMENT TO TERMINATE MERGER AGREEMENT

This AGREEMENT TO TERMINATE MERGER AGREEMENT (this “Agreement”) is made as of March 16, 2009 by and among Ophthalmic Imaging Systems, a California corporation (“OIS”), and MediVision Medical Imaging Ltd., an Israeli company (“MediVision” and together with OIS, individually, a “Party” and collectively, the “Parties”).

A.        Reference is made to the Agreement and Plan of Merger (the “Merger Agreement”) dated March 25, 2008 by and among the Parties and MV Acquisitions Ltd., an Israeli company and a wholly-owned subsidiary of OIS (“Merger Sub”). Capitalized terms used but not defined herein have the respective meanings assigned to them in the Merger Agreement.

B.        Section 8.01 of the Merger Agreement provides that the Merger Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the approval by shareholders or stockholders of MediVision and OIS, respectively, referred to in Section 7.01(a) of the Merger Agreement, by mutual written consent of MediVision and OIS by action of their respective boards of directors.

C.        Each board of directors of OIS and MediVision has resolved to terminate the Merger Agreement and to abandon the Merger.

NOW THEREFORE, in consideration of the premises and intending to be legally bound by this Agreement, the Parties hereby agree as follows:

1.         Termination. The Merger Agreement is hereby cancelled and terminated and shall be of no further force or effect, and none of the parties thereto shall have any further liability or obligation thereunder to the other.

2.         Further Assurances. The Parties agree to cooperate to cause to be done, executed, acknowledged and delivered each and every such further act or document reasonably required in order to accomplish the purpose of this Agreement.

3.         Governing Laws. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State of New York, without regard to principles of conflict of laws.

4.         Counterparts. This Agreement may be executed by the Parties in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts together constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement (including any delivery effected by facsimile or electronic transmission) shall be effective as delivery of a manually executed counterpart.

5.         Benefit and Binding Effect. This Agreement will benefit and bind the Parties and will be binding upon the respective successors and assigns of the Parties and will inure to the benefit of the respective successors and assigns of the Parties, whether so expressed or not.

6.         Entire Agreement. This is the entire agreement among the Parties concerning the subject matter set out in this Agreement and supersedes any and all prior understandings and agreements.

In witness whereof, the Parties hereto have executed this Agreement as of the date first written above.

OPHTHALMIC IMAGING SYSTEMS
By:	/s/ Gil Allon
Name:	Gil Allon
Title:	Chief Executive Officer

MEDIVISION MEDICAL IMAGING LTD.
By:	/s/ Noam Allon
Name:	Noam Allon
Title:	Chief Executive Officer

-2-

EX-99.1

Exhibit 99.1

OPHTHALMIC IMAGING SYSTEMS	CONTACTS: GIL ALLON, CEO
221 LATHROP WAY, SUITE I	ARIEL SHENHAR, CFO
SACRAMENTO, CA 95815	(916) 646-2020
	INVESTOR RELATIONS TODD FROMER / GARTH RUSSELL KCSA Strategic Communications 212-896-1215 / 212-896-1250

OPHTHALMIC IMAGING SYSTEMS ANNOUNCES CORPORATE DEVELOPMENTS AND FOURTH QUARTER AND YEAR END 2008 RESULTS

- - -

Appoints Uri Ram as Non-Executive Chairman

- - -

Terminates Merger Agreement with MediVision

SACRAMENTO, CALIF., MARCH 19, 2009 – Ophthalmic Imaging Systems, a leading digital imaging company (OIS) (OTC BB: OISI) today reported its financial results for the quarter and year ended December 31, 2008 and announces recent corporate developments.

For the year ended December 31, 2008, OIS reported net revenues of $12.5 million, compared with net revenues of $14.5 million for the same period in 2007. Net loss for the year ended 2008 was $(1.0) million, or $(0.06) per basic and diluted share, compared with net income of $1.6 million, or $0.09 per basic and diluted share, for the year ended December 31, 2007. The total net loss for the 2008 period includes $(0.8) million attributable to the Company’s subsidiary, Abraxas Medical Solutions. Abraxas launched EMR/PM solutions in the fourth quarter of 2008 and expects to ramp up sales in 2009.

For the three months ended December 31, 2008, OIS reported net revenues of $3.0 million, compared with net revenues of $3.6 million for the same period in 2007. Net loss for the quarter ended December 31, 2008 was $(0.2) million, or $(0.01) per basic and diluted share, compared with net income of $0.1 million, or $0.01 per basic and diluted share, respectively, for the same period in 2007.

As of December 31, 2008, the Company reported $2.2 million in cash and cash equivalents and $9.0 million in total shareholders’ equity.

Gil Allon, Chief Executive Officer of OIS, stated, “Over the past several quarters we have experienced major shifts in our business results that are partially due to personnel changes in our sales and marketing departments and, more recently, due to the changes in the global economy. While we have little control over the global economy, we have been actively managing our operations by monitoring costs, identifying changes in the ophthalmology market and positioning our business to capitalize on opportunities in the electronic medical records (EMR) and practice management (PM) markets.

Ophthalmic Imaging Systems
Press Release
March 19, 2009

Mr. Allon continued, “In the fourth quarter, we launched OIS branded EMR and PM solutions based on the Abraxas platform, along with five new software solutions for our Symphony Image Management system. We are excited about our Ophthalmology EMR and PM solution, which is specifically designed for the ophthalmologists, as it allows us to quickly tap into our existing base of digital imaging customers. This solution joins Abraxas’ EMR and PM solutions for the OB/GYN, Orthopedic and Primary Care markets.”

“Although we have taken significant steps in targeting additional markets and developing new technologies, this progress is not reflected in our financial results for 2008. We anticipate the benefits from these activities to make a meaningful impact on our financial results in the second half of 2009 as sales and marketing programs for our OIS EMR and PM solutions will have been fully implemented for several months. In addition, we anticipate sales for our EMR solutions to benefit from the U.S. government’s Stimulus Package, which offers incentives to users for utilizing a certified EHR solution,” concluded Mr. Allon.

Change in Chairman of the Board of Directors

OIS’s Board of Directors has appointed Mr. Uri Ram as its Non-Executive Chairman of the Board, effective immediately. Mr. Ram’s appointment follows the resignation of Mr. Yigal Berman as Chairman and as a board member due to health issues. Following these events, OIS’s Board of Directors has a total of 6 members, including 4 independent members.

Mr. Berman said, “Since I joined its Board of Directors in January 2005, OIS has become the leading provider of digital imaging equipment for ophthalmologists and is strongly positioned to take advantage of the burgeoning electronic medical records and practice management markets. While I am excited about the current direction of the company, I believe it is better for me to step down as chairman of the board so that I can dedicate more time to my health and family.”

Mr. Ram said, “We wish Yigal and his family the best as he pursues his course of treatment and thank him for his contributions to OIS. With his guidance, the company has established its place in the Ophthalmology industry. I am honored to have the chance to guide OIS forward as it markets Abraxas’ new electronic medical records and practice management solutions.”

Uri Ram, 60, has served as an observer on OIS’s Board of Directors since May 2008. Currently, he serves as the Senior Vice President and Chief Financial Officer of Gefen Inc. and is the CEO/Owner of Juram Ltd. and Irams Inc., management consulting companies that also invests in new startups. Since 1990, Mr. Ram has served as the President of Del-Ta Engineering & Equipment Ltd., a holding company with $30 million in sales; and as the Senior VP of Inter-Gamma Investment Ltd.

Mr. Ram has a Master of Arts degree from Israel National Defense College, a Bachelor of Economics and Political sciences from Bar Ilan University and participated in an EMBA program at the Tel Aviv University. Mr. Ram is a retired Brigadier General (“BG”) of the Israeli Air Force.

OIS WWW.OISI.COM

221 LATHROP WAY, SUITE I MAIN 800.338.8436

SACRAMENTO, CA 95815 FAX 916.646.0207

USA

Ophthalmic Imaging Systems
Press Release
March 19, 2009

Termination of Merger Agreement

OIS and MediVision have mutually agreed to terminate their merger agreement. The termination of the agreement is due to exorbitant costs the companies and associated stockholders would incur as a result of regulatory requirements. The companies initially announced the merger agreement in March 2008.

“While we have terminated the merger, we are currently considering alternatives to consolidate our operations with MediVision,” stated Gil Allon, Chief Executive Officer of OIS.

About Ophthalmic Imaging Systems

Ophthalmic Imaging Systems (www.oisi.com), a majority-owned subsidiary of MediVision, is the leading provider of ophthalmic digital imaging systems. The Company designs, develops, manufactures and markets digital imaging systems and informatics solutions for the eye care market. With over twenty years in the ophthalmic imaging business, the Company has consistently introduced new, innovative technology. The Company, together with MediVision, co-markets and supports their products through an extensive network of dealers, distributors, and direct representatives.

OIS is a registered member Company listed on www.OTCVillage.com.

Statements in this press release which are not historical data are forward-looking statements which involve known and unknown risks, uncertainties, or other factors not under the Company’s control, which may cause actual results, performance, or achievements of the Company to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those detailed in the Company’s periodic filings with the Securities and Exchange Commission.

* * * C O N T I N U E D* * * * *

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OIS WWW.OISI.COM

221 LATHROP WAY, SUITE I MAIN 800.338.8436

SACRAMENTO, CA 95815 USA FAX 916.646.0207

Ophthalmic Imaging Systems

Press Release

March 19, 2009

Ophthalmic Imaging Systems

Selected Financial Data

Condensed Consolidated Statements of Operations

		Three Months Ended		Twelve Months Ended
		December 31,		December 31,
		2008	2007	2008	2007
NET REVENUES		$ 3,006,732	$ 3,554,350	$ 12,491,117	$ 14,489,044
COST OF SALES		$ 1,336,415	$ 1,614,439	$ 5,768,483	$ 6,265,695
GROSS PROFIT		$ 1,670,317	$ 1,939,911	$ 6,722,634	$ 8,223,349
	SALES AND MARKETING	$ 1,115,306	$ 1,038,673	$ 4,034,816	$ 3,494,926
	RESEARCH AND DEVELOPMENT	$ 639,164	$ 461,612	$ 2,219,660	$ 1,631,220
	GENERAL AND ADMINISTRATIVE	$ 286,134	$ 379,560	$ 1,550,492	$ 1,684,751
TOTAL OPERATING EXPENSES		$ 2,040,603	$1,879,845	$ 7,804,968	$ 6,810,897
INCOME FROM OPERATIONS		$(370,286)	$ 60,066	$(1,082,334)	$ 1,412,452
INTEREST AND OTHER EXPENSE, NET		$(32,697)	$(12,523)	$(84,471)	$ 141,104
NET INCOME BEFORE INCOME TAXES		$(402,983)	$ 47,543	$(1,166,805)	$ 1,553,556
	INCOME TAXES	$204,398	$(50,600)	$203,000	$(940)
NET INCOME		$(198,585)	$ 98,143	$(963,805)	$1,552,616
	BASIC NET INCOME PER SHARE	$(0.01)	$0.01	$(0.06)	$0.09
	SHARES USED IN THE CALCULATION OF BASIC EARNINGS PER SHARE	16,866,831	16,847,627	16,866,831	16,682,773
	DILUTED NET INCOME PER SHARE	$(0.01)	$0.01	$(0.06)	$0.09
	SHARES USED IN THE CALCULATION OF DILUTED EARNINGS PER SHARE	16,878,106	17,815,988	16,935,998	18,023,500

OIS WWW.OISI.COM

221 LATHROP WAY, SUITE I MAIN 800.338.8436

SACRAMENTO, CA 95815 USA FAX 916.646.0207

Ophthalmic Imaging Systems

Press Release

March 19, 2009

Ophthalmic Imaging Systems

Condensed Balance Sheet

	AUDITED	AUDITED
	As of Dec 31,	As of Dec 31,
	2008	2007
ASSETS:
Cash and investments	2,224,625	7,630,284
Accounts receivable, net	1,698,093	2,535,843
Receivable from related parties	3,378,599	1,544,179
Inventories, net	1,206,733	746,342
Deferred tax asset	1,502,000	1,342,000
Prepaid and other current assets	233,418	507,732
TOTAL CURRENT ASSETS	10,243,468	14,306,380
Net property, plant and equipment	409,280	416,838
Restricted cash for line of credit	158,031	168,218
Licensing agreement	273,808	273,808
Prepaid products	460,000	460,000
Merge capitalization	1,047,047	527,327
Capitalized software development	1,150,831	-
Imaging software	424,244	-
AcerMed asset purchase	570,077	90,815
Other assets	436,970	443,509
TOTAL ASSETS	15,173,756	16,686,895
CURRENT LIABILITIES:
Accounts payable	831,980	726,573
Notes payable current portion	1,611,063	1,029,643
Accrued liabilities	1,072,551	1,437,313
Customer deposits	101,679	55,435
Deferred warranty revenue	1,910,824	1,604,315
TOTAL CURRENT LIABILITIES	5,528,097	4,853,279
LONG TERM DEBT:
Line of credit	150,000	150,000
Notes Payable, less current portion	500,159	1,564,226
TOTAL LONG TERM DEBT	650,159	1,714,226
STOCKHOLDERS’ EQUITY:
Capital stock – common	16,504,773	16,474,720
Additional paid in capital	966	191,104
Accumulated deficit	($7,510,239)	($6,546,434)
TOTAL STOCKHOLDERS’ EQUITY	8,995,500	10,119,390
TOTAL LIABILITIES AND EQUITY	15,173,756	16,686,895

# # #

OIS WWW.OISI.COM

221 LATHROP WAY, SUITE I MAIN 800.338.8436

SACRAMENTO, CA 95815 USA FAX 916.646.0207