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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number
    000-25311
   AMICAS, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware(State or other jurisdiction
    of
    incorporation or organization)

59-2248411(I.R.S. Employer
    Identification No.)   20 Guest Street, Suite 400, Boston, Massachusetts 02135
 (Address of principal executive
    offices, including zip code)
  Registrants telephone number, including area code:
 (617) 779-7878
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of each class

Name of each exchange on which registeredCommon Stock, par value $0.001

The NASDAQ Stock Market LLCRights to purchase Series B Preferred Stock

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-12 o þ
      Documents
    Incorporated by Reference







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##### 



AMICAS,
    INC.
  Form 10-K
  Table of
    Contents
   
 PagePART IItem 1.


Business


2Item 1A.


Risk Factors


19Item 1B.


Unresolved Staff Comments


32Item 2.


Properties


32Item 3.


Legal Proceedings


32Item 4.


Removed and Reserved


33PART IIItem 5.


Market for the Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


34Item 6.


Selected Consolidated Financial Data


36Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


37Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


53Item 8.


Financial Statements and Supplementary Data


53Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


54Item 9A.


Controls and Procedures


54Item 9B.


Other Information


56PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


56Item 11.


Executive Compensation


56Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


56Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


58Item 14.


Principal Accounting Fees and Services


58PART IVItem 15.


Exhibits, Financial Statement Schedules


58SignaturesEX-10.40 2008 NON-EMPLOYEE DIRECTOR COMPENSATION PLANEX-23.1 CONSENT OF BDO SEIDMAN, LLPEX-31.1 SECTION 302 CERTIFICATION OF CHIEF EXECUTIVE OFFICEREX-31.2 SECTION 302 CERTIFICATION OF CHIEF FINANCIAL OFFICEREX-32.1 SECTION 906 CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER    AMICAS, AMICAS One Suite, AMICAS PACS, AMICAS RIS, AMICAS
    Financials, AMICAS VERICIS,
 AMICAS Hemodynamics, AMICAS ECM, AMICAS Documents, AMICAS
    Dashboards, AMICAS Watch,
 AMICAS Reach, AMICAS RadStream, RealTime Worklist, Halo
    Viewer, and Cashfinder Worklist are
 trademarks, service marks or registered trademarks and
    service marks of AMICAS, Inc. All other
 trademarks and company names mentioned are the property of
    their respective owners.
 1




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PART I  Item 1.
    Business.  end-to-end
         2




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Industry
    Background
  1
  hard-to-transport
        1
 3




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Trends
    in Imaging
         4




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sub-specialty and/or
  Image
    and Information Management Solutions
    2010


2011


2012


2013Greenfield ContractsAcademic/research


10



11



0



0Large Community Hospitals


235



121



79



0Small Community Hospitals


348



340



379



275Ambulatory (affiliated with hospitals/IDNs)


268



322



326



120Ambulatory (independent)


174



210



222



110Total


1035



1,004



1,006



510Replacement ContractsAcademic/research


207



235



262



55Large Community Hospitals


450



649



731



215Small Community Hospitals


270



430



526



350Ambulatory (affiliated with hospitals/IDNs)


259



348



432



230Ambulatory (independent)


111



170



278



195Total


1297



1832



2229



1040Greenfield Value ($M)Academic/research

$
9


$
9


$
0


$
0Large Community Hospitals

$
189


$
86


$
54


$
0Small Community Hospitals

$
154


$
143


$
161


$
134Ambulatory (affiliated with hospitals/IDNs)

$
148


$
168


$
164


$
74Ambulatory (independent)

$
54


$
63


$
66


$
37Total

$
794


$
723


$
695


$
399 5




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2010


2011


2012


2013Replacement Value ($M)Academic/research

$
363


$
395


$
416


$
163Large Community Hospitals

$
568


$
739


$
784


$
424Small Community Hospitals

$
133


$
198


$
222


$
170Ambulatory (affiliated with hospitals/IDNs)

$
133


$
173


$
209


$
142Ambulatory (independent)

$
34


$
48


$
72


$
66Total

$
993


$
1,299


$
1,452


$
813Market Value ($M)Academic/research

$
372


$
405


$
416


$
163Large Community Hospitals

$
758


$
825


$
839


$
424Small Community Hospitals

$
288


$
341


$
383


$
304Ambulatory (affiliated with hospitals/IDNs)

$
282


$
341


$
373


$
217Ambulatory (independent)

$
88


$
110


$
137


$
103Total

$
1,787


$
2,021


$
2,147


$
1,212       Business
    Strategy
  go-to-market
  
    Ambulatory Imaging Businesses.  This segment
    consists primarily of radiology groups, teleradiology
    businesses, imaging centers, multi-specialty groups and billing
    services.
    Acute Care Facilities & Integrated Delivery
    Networks.  This segment consists primarily of
    hospitals and integrated delivery networks (IDNs)
    IDNs are provider entities that include either a group of
    hospitals or a group of hospitals in combination with outpatient
    locations.  Ambulatory
    Imaging Businesses
  tm
   6




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end-to-end
  sub-segment
  Acute
    Care Facilities
    end-to-end
     7




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go-to-market
  AMICAS
    Solutions
      
    AMICAS PACS.  AMICAS PACS is our Web-based
    picture archiving and communications system designed to capture,
    store, manipulate, and distribute diagnostic images for
    radiologists, specialists, referring physicians, patients, and
    the healthcare enterprise. This system can scale from a single
    radiologist staffed imaging center, to teleradiology operations,
    and to the largest acute care settings, managing hundreds of
    thousands of annual exams. The system includes a rich clinical
    tool set as well as a real-time workflow engine, RealTime
    Worklisttm,

    which allows for workflow customization and personalization for
    diverse clinical environments.
    AMICAS RIS.  AMICAS RIS is our Web-based
    radiology information system designed to address the
    administrative functions for capturing radiology orders,
    detailing the patient demographic information, scheduling
    appointments and resources, processing transcriptions and
    generating reports, as well as coding and preparing billing and
    reimbursement data.
    AMICAS RadStream.  AMICAS RadStream is designed
    to improve and document the communication of critical results
    and to improve radiologist productivity by reducing
    interruptions. The software was initially designed and developed
    by the Radiology Informatics Research Core at Cincinnati
    Childrens Hospital Medical Center in collaboration with
    researchers at the University of Cincinnati College of Business.
    In April of 2006, acquired the exclusive licensing and worldwide
    distribution rights to RadStream. AMICAS RadStream became
    generally available to AMICAS customers in 2008.
    AMICAS VERICIS.  AMICAS VERICIS is a cardiology
    information management platform that tightly integrates data
    across the continuum of cardiovascular care. From office visits
    to hospital services, VERICIS is the solution for single-point
    access to the patients digital integrated cardiovascular
    record. VERICIS integrates data from different sites and
    different sources to create a comprehensive digital record on
    the patient. At any time and from anywhere, physicians and other
    healthcare professionals can have instant access to the
    patients complete,
    up-to-date
    cardiac file.
    AMICAS Hemodynamics.  AMICAS Hemodynamics
    offers a comprehensive knowledge tool for the cath
    lab  that integrates complete functionality for data
    collection, waveform analysis, inventory control, patient
    charges, image review, and procedural reporting into a single,
    easy-to-use system. AMICAS Hemodynamics has been deployed at
    many of the major cardiac institutions throughout the country.
    AMICAS ECM.  AMICAS ECM is a vendor-neutral
    archive that integrates data from departmental image management
    solutions, such as cardiology PACS and radiology PACS. ECM
    provides excellent interoperability with other PACS solutions
    via strict adherence to industry standards and helps satisfy
    short term interoperability requirements which, ultimately,
    provide long term sustainability of medical images and related
    content. AMICAS ECM also includes an embedded Web-based medical
    image viewing solution for cardiology, radiology, and other
    ologies that serve as the imaging component of an
    overall EMR strategy. 8




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
    AMICAS Documents.  AMICAS Documents is a module
    of our solution designed to capture, digitize and associate
    paper records with other digital information. Todays
    diagnostic imaging environment involves existing and
    newly-generated paper-based information that must be integrated
    with the digital practice via an automated and workflow based
    system. This module, which we license from a third party and
    incorporate into our solutions, enables our customers to move to
    paperless, as well as filmless, operations.
    AMICAS Financials.  AMICAS Financials offers
    patient accounting and revenue cycle management capabilities
    that facilitate expedient and compliant claims submission, payer
    follow-up
    and other billing and accounts receivable management activities.
    AMICAS Financials is a next generation radiology practice
    management and billing software system that is designed to meet
    the challenges of todays complex radiology billing
    environment.
    AMICAS Reach.  AMICAS Reach is our powerful
    zero-client Web-based tool designed specifically for the needs
    of the referring physician. AMICAS Reach uses the latest
    Web-based technologies to integrate a radiology report with key
    images in order to create a single multi-media
    report for referring physicians. AMICAS Reach uses common email
    to alert end-users (typically referring physicians) that their
    patients results are available. The end-user may then
    authenticate into AMICAS Reach to gain access to their results,
    in the form of reports and key images.
    AMICAS Dashboards.  AMICAS Dashboards is our
    Web-based business intelligence system providing key performance
    indicators presented in an easy to understand graphical format.
    AMICAS Dashboards offers the analytics necessary for our
    customers to navigate through the continually changing
    competitive landscape and regulatory environment.
    AMICAS Payer and Patient Services.  Our revenue
    cycle management solutions offer transaction-based functions,
    including patient billing and insurance claims submission and
    remittance. The use of payer and patient services can improve a
    healthcare practices cash flow by enabling more accurate
    and rapid submission of claims to third-party payers and more
    rapid receipt of corresponding reimbursements.    
    automated patient statement and collection letter processing
    services;
    automated electronic submission of insurance claims and claims
    editing to include electronic remittance of insurance payments
    and automatic posting of explanation of benefits data; and
    automated electronic access to insurance and managed care plans
    to determine a patients eligibility and covered benefits.  Innovative
    New Products
      
    additional mammography workflow capabilities;
    federated architecture for high availability;
    more robust data / storage management and integration
    capabilities; and
    more robust teleradiology capabilities. 9




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
    expanding content management to cover medical documents beyond
    Digital Imaging and Communications in Medicine
    (DICOM) data;
    non-radiology imaging capabilities, including pathology,
    endoscopy, etc.;
    remote hosting solutions  including the possibility
    of software-as-a-service;
    extended 3D visualization including advanced clinical
    applications; and
    more complete integration of related clinical tools.  AMICAS
    Professional Services
    Technical
    Support
  Software Support.
  Hardware Support. on-site
  Research
    and Development
        Sales and
    Marketing
   10




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Intellectual
    Property
        and/or
     11




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Competition
  start-up
  
    product features and functionality;
    ongoing product enhancements;
    price;
    technology architecture and design;
    customer service, support, and satisfaction;
    distribution coverage and quality;
    customer satisfaction and customer reference sites; and
    vendor reputation, including real and perceived financial
    stability and wherewithal to deliver results and both clinical
    and business value.  end-to-end
  end-to-end and/or
   12




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start-ups,
        Privacy
    Issues
    
    security that requires both user identification and passwords to
    access our systems locally or remotely, with the potential of
    requiring digital certificates for remote, Internet-based
    access, should such measures be required;
    support for encryption of data transmitted over the Internet;
    use of a mechanism for preventing unauthorized access to private
    data resources on our internal network, commonly referred to as
    a firewall; and
    audit logging and reporting capabilities. 13




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
    using individual network user IDs and regularly updated
    passwords for each employee handling electronic data within our
    internal network; and
    requiring each employee to sign an agreement to comply with all
    Company policies, including our policy regarding the handling of
    confidential information.    Government
    Regulation
  United
    States Food and Drug Regulation
          
    the QSRs, which require manufacturers to follow design, testing,
    control, documentation and other quality assurance and
    recordkeeping requirements during the manufacturing process,
    storage and distribution of each product;
    regulations which prohibit the promotion of products for
    unapproved or off-label uses and impose other
    restrictions on labeling; and 14




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
    reporting regulations, which require that manufacturers report
    to the FDA certain adverse events that may be attributed to the
    medical device.    follow-up
    Other
    Government Regulation
    Health
    Insurance Portability and Accountability Act of 1996
    (HIPAA)
    
    Electronic transactions involving healthcare information;
    The privacy of individually identifiable patient information,
    called protected health information, or
    PHI; and
    The security of PHI.       15




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HIPAA
    Amendments under the HITECH Act
            Health
    Canada.
   16




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Compliance
    with Fraud and Abuse Laws
    Anti-Kickback
    Statute
    
    the referral of an individual for a service or product for which
    payment may be made by Medicare, Medicaid or other
    government-sponsored healthcare program; or
    purchasing, ordering, arranging for, or recommending the
    ordering of, any service or product for which payment may be
    made by a government-sponsored healthcare program.      and/or
  Physician
    Self-Referral Laws
   17




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Other
    Fraud and Abuse Laws
  111-21).
      Third-Party
    Reimbursement
    Access to
    Our Filings with the Securities and Exchange
    Commission
  www.amicas.com Form 10-K. Form 10-K, Form 10-Q,
 18




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Form 8-K,
  Employees
    Item 1A.
    Risk
    Factors  Warning
    About Forward-Looking Statements and Risk Factors That May
    Affect Future Results
  Form 10-K
    Form 10-Q Form 8-K.
  Our
    operating results will vary from period to period. In addition,
    we have experienced losses in the past and may never achieve
    consistent profitability.
    and/or
  
    release of new products, product upgrades and services, and the
    rate of adoption of these products and services by new and
    existing customers;
    timing, cost and success or failure of our new product and
    service introductions and upgrade releases;
    length of sales and delivery cycles; 19




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
    size and timing of orders for our products and services;
    changes in the mix of products
    and/or
    services sold;
    availability of specified computer hardware for resale;
    deferral
    and/or
    realization of deferred software license and system revenues
    according to contract terms;
    interpretations of accounting regulations, principles or
    concepts that are or may be considered relevant to our business
    arrangements and practices;
    changes in customer purchasing patterns;
    changing economic, political and regulatory conditions,
    particularly with respect to the information technology-spending
    environment;
    competition, including alternative product and service
    offerings, and price pressure;
    rates and timing of customer attrition;
    timing of, charges or costs associated with, and the
    distractions to management and impediments to customer sales
    activities caused by mergers, acquisitions or other strategic
    events or transactions, completed or not completed;
    timing, cost and level of advertising and promotional programs;
    changes of accounting estimates and assumptions used to prepare
    the prior periods financial statements and accompanying
    notes, and managements discussion and analysis of
    financial condition and results of operations (e.g., our
    valuation of assets and estimation of liabilities); and
    uncertainties concerning threatened, pending and new litigation
    against us, including related professional services
    fees; and
    timing of revenue recognition can be delayed due to structured
    term deals, which can impact cash flow, operating margins and
    net income.  and/or period-to-period
  Failure
    to complete the pending tender offer and merger with Merge could
    materially and adversely affect our results of operations and
    our stock price.
   20




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and/or out-of-pocket
    
    the attention of our management and our employees may be
    diverted from
    day-to-day
    operations as they focus on the tender offer and the merger;
    our customers may seek to modify or terminate existing
    agreements, or prospective customers may delay entering into new
    agreements or purchasing our services as a result of the
    announcement of the tender offer and the merger, which could
    cause our revenues to materially decline or any anticipated
    increases in revenue to be lower than expected;
    our ability to attract new employees and retain our existing
    employees may be harmed by uncertainties associated with the
    tender offer and the merger, and we may be required to incur
    substantial costs to recruit replacements for lost personnel or
    consultants; and
    stockholder lawsuits could be filed against us challenging the
    tender offer and the merger. If this occurs, even if the
    lawsuits are groundless and we ultimately prevail, we may incur
    substantial legal fees and expenses defending these lawsuits,
    and the tender offer and the merger could be prevented or
    delayed.    If our
    new and existing products, including product upgrades, and
    services do not achieve and maintain sufficient market
    acceptance, our business, financial condition, cash flows,
    revenues, and operating results will suffer.
    
    existing products and services, such as our AMICAS One Suite
    products, and related product and service offerings;
    new products and services, such as AMICAS Dashboards, AMICAS
    Financials and RadStream; and
    enhancements to our existing products, support and services,
    including AMICAS RIS, AMICAS ECM, AMICAS VERICIS, and AMICAS
    PACS.   21




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and/or
  Our
    ability to realize the anticipated benefits of our acquisitions
    will depend on successfully integrating the acquired
    businesses.
    
    difficulty in transitioning and integrating the operations and
    personnel of the acquired businesses;
    potential disruption of our ongoing business and distraction of
    management;
    potential difficulty in successfully implementing, upgrading and
    deploying in a timely and effective manner new operational
    information systems and upgrades of our finance, accounting and
    product distribution systems;
    difficulty in incorporating acquired technology and rights into
    our products and technology;
    unanticipated expenses and delays in completing acquired
    development projects and technology integration;
    impairment of relationships with partners and customers;
    assumption of unknown material liabilities of acquired companies;
    customers delaying purchases of our products pending resolution
    of product integration between our existing and our newly
    acquired products;
    entering markets or types of businesses in which we have limited
    experience;
    difficulties in maintaining compliance with quality and
    regulatory requirements, and difficulties in integrating
    multiple quality systems while maintaining compliance with
    evolving FDA requirements across the combined enterprise; and
    potential loss of key employees of the acquired business.    Our
    business, financial condition and operating results could be
    adversely affected as a result of legal, business and economic
    risks specific to international operations.
    
    general political, social and economic instability; 22




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
    trade restrictions;
    the imposition of governmental controls;
    exposure to different legal standards, particularly with respect
    to intellectual property;
    burdens of complying with a variety of foreign laws;
    import and export license requirements and restrictions of the
    United States and any other country in which we operate;
    unexpected changes in regulatory requirements;
    foreign technical standards;
    changes in tariffs;
    difficulties in staffing and managing international operations;
    difficulties in securing and servicing international customers;
    difficulties in collecting receivables from foreign entities;
    fluctuations in currency exchange rates and any imposition of
    currency exchange controls; and
    potentially adverse tax consequences.    National
    and regional competitors could cause us to lower our prices or
    to lose customers.
    
    product features and functionality;
    customer service, support and satisfaction;
    price;
    ongoing product enhancements; and
    vendor reputation and stability.   23




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We
    rely on some of our existing customers to serve as reference
    sites for us in developing and expanding relationships with
    other customers and potential customers, and if the customers
    who serve as reference sites become unwilling to do so, our
    ability to obtain new customers or to expand customer
    relationships could be materially harmed.
  true-to-life
  The
    U.S. government is considering healthcare reform legislation,
    which may have a negative impact on our business. Among other
    things, reductions in Medicare and Medicaid reimbursement rates
    for imaging procedures and professional services could
    negatively affect revenues of our hospital and imaging clinic
    customers, which could reduce our customers ability to
    purchase our software and services.
  4-year
 24




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If the
    marketplace demands subscription pricing, application service
    provider, or ASP delivered offerings or software as a service or
    SAAS delivered offerings, our revenues may be adversely
    impacted.
  and/or and/or and/or
  Our
    business could suffer if our products and services contain
    errors, experience failures, result in loss of our
    customers data or do not meet customer
    expectations.
  and/or and/or
  Our
    competitive position could be significantly harmed if we fail to
    protect our intellectual property rights from third-party
    challenges.
     25




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Intellectual
    property infringement claims against us could be costly to
    defend and could divert our managements attention away
    from our business.
    We may
    undertake additional acquisitions, which may involve significant
    uncertainties and may increase costs and divert management
    resources from our core business activities, or we may fail to
    realize anticipated benefits of such acquisitions.
  and/or
  
    our ability to cross-sell products and services to customers
    with whom we have established relationships and those with whom
    the acquired business had established relationships;
    diversion of our managements attention from our existing
    business;
    potential conflicts in customer and supplier relationships;
    our ability to coordinate organizations that are geographically
    diverse and may have different business cultures;
    dilution to existing stockholders if we issue equity securities
    in connection with acquisitions;
    assumption of liabilities or other obligations in connection
    with the acquisition; and
    compliance with regulatory requirements.  and/or
 26




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Technology
    solutions may change faster than we are able to update our
    technologies, which could cause a loss of customers and have a
    negative impact on our revenues.
    
    develop new or enhance existing products and services to meet
    the changing needs of our customers and the marketplace in a
    timely and cost-effective way; and
    respond effectively to technological changes, new product
    offerings, product enhancements and new services of our
    competitors.  and/or
  Our
    customers and potential customers may not be able to obtain
    financing, which could impact their purchasing decisions with
    respect to our products.
  and/or
  Our
    inability to renew, or make material modifications to,
    agreements with our third-party product and service providers
    could lead to a loss of customers and have a negative impact on
    our revenues.
    The
    nature of our products and services exposes us to product
    liability claims that may not be adequately covered by insurance
    or contractual indemnification.
     27




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We may
    be subject to claims resulting from the activities of our
    strategic partners.
    We are
    subject to government regulation and legal uncertainties,
    compliance with which could have a material adverse effect on
    our business.
  HIPAA
    and/or
  E-Commerce
    Regulations
    FDA
   28




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follow-up
    We and
    our customers must comply with various federal and state
    anti-kickback, self-referral, false claims and similar laws, the
    breach of which could cause a material adverse effect on our
    business, financial condition and results of
    operations.
    State
    and federal laws relating to confidentiality of patient medical
    records could limit our customers ability to use our
    services and expose us to liability.
  and/or
  We
    depend on our partners and suppliers for delivery of electronic
    data interchange (e.g., insurance claims processing and invoice
    printing services), commonly referred to as EDI, hardware
    maintenance services, third-party software or software or
    hardware components of our offerings, and sales lead generation.
    Any failure, inability or unwillingness of these suppliers to
    perform these services or provide their products could
    negatively impact our customers satisfaction and our
    revenues.
  on-site and/or
 29




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Our
    systems may be vulnerable to security breaches and
    viruses.
  and/or
  Our
    growth could be limited if we are unable to attract and retain
    qualified personnel.
    We may
    be exposed to credit risks of our customers.
    Our
    future success depends on our ability to successfully develop
    new products and adapt to new technological
    change.
   30




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We are
    exposed to potential risks and we will continue to incur
    increased costs as a result of the internal control testing and
    evaluation process mandated by Section 404 of the
    Sarbanes-Oxley Act of 2002.
      The
    trading price of our common stock has been volatile and will
    likely remain volatile.
    
    our pending transaction with Merge
    variations in our operating results,
    announcements of new services, strategic alliances or
    significant agreements by us or by our competitors,
    recruitment or departure of key personnel,
    changes in the estimates of our operating results or changes in
    recommendations by any securities analysts that follow our
    common stock, and
    market conditions in our industry, the industries of our
    customers and the economy as a whole.   31




---



##### Table of Contents



If
    securities analysts do not publish research or reports about our
    business, or if they downgrade our stock, the price of our stock
    could decline.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties    Boston, Massachusetts:
  Daytona Beach, Florida:
  Hartland, Wisconsin:
  Ottawa, Ontario:
  Birmingham, Alabama:
  Winter Park, Florida:
  Madison, Wisconsin:
  Item 3.
    Legal
    Proceedings    Progress
    Associates, on behalf of itself and all others similarly
    situated v. AMICAS, Inc., et al., No. 10-0174.
 32




---



##### Table of Contents



and/or
  Lawrence
    Mannhardt, on behalf of himself and all others similarly
    situated v. AMICAS, Inc., et al. ,
  Item 4.
    Removed
    and Reserved 33




---



##### Table of Contents



PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market Information.
  2009

High


LowFirst Quarter

$
2.09


$
1.49Second Quarter

$
2.98


$
1.90Third Quarter

$
4.15


$
2.50Fourth Quarter

$
5.52


$
2.83   2008First Quarter

$
3.05


$
1.70Second Quarter

$
2.96


$
2.00Third Quarter

$
2.93


$
2.13Fourth Quarter

$
2.44


$
1.27  34




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##### Table of Contents



Stock Price Performance Graph.
  COMPARISON
    OF 5 YEAR CUMULATIVE TOTAL RETURN*
    Among AMICAS, Inc, The NASDAQ Composite Index
    And The Russell 2000 Index
  
     12/31/05


12/31/06


12/31/07


12/31/08


12/31/09AMICAS Common Stock



112.22




66.52




60.18




37.78




122.25NASDAQ Composite



112.88




126.51




138.13




80.47




105.61Russell
    2000©

    index



123.72




146.44




144.15




95.44




102.58   Stockholders.
  Dividend Policies.
  Sales of Unregistered Securities.
 35




---



##### Table of Contents



Issuer Purchases of Equity Securities. Rule 10b5-1
  Total Number ofSharesPurchased as


Approximate DollarTotal





Part of Publicly


Value of Shares thatNumber of





Announced


May Yet BeShares


Average Price


Plans or


Purchased Under thePeriod

Purchased


Paid per Share


Programs


Plans or ProgramsAs of September 30, 2009














October 1, 2009 through October 31, 2009














November 1, 2009 through November 30, 2009














December 1, 2009 through December 31, 2009














Total:






   Item 6.
    Selected
    Consolidated Financial Data  Form 10-K.
  Form 10-K
  For the Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share data)Consolidated Statements of Operations Data(a)(b)RevenuesMaintenance and services

$
72,022


$
39,886


$
38,175


$
36,258


$
36,813Software licenses and system sales


17,120



10,467



11,713



13,179



15,998Total revenues


89,142



50,353



49,888



49,437



52,811Costs and expensesCost of revenues:Maintenance and services


31,768



17,896



16,690



15,261



14,593Software licenses and system sales


11,504



4,796



4,529



5,686



4,447Amortization of software costs


2,821



2,204



1,957



1,958



1,966Selling, general and administrative


26,830



20,865



22,169



22,190



21,400Research and development


15,099



8,768



8,640



8,838



9,268Acquisition costs


2,423















Depreciation and amortization


548



403



426



427



427Restructuring, severance and impairment charges


4,429



27,490











5,677Total costs and expenses


95,422



82,422



54,411



54,360



57,778 36




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##### Table of Contents



For the Year Ended December 31,2009


2008


2007


2006


2005(In thousands, except per share data)Operating loss


(6,280
)


(32,069
)


(4,523
)


(4,923
)


(4,967
)Interest income (expense), net


732



2,187



3,870



3,753



1,765Loss on sale of investments


(9
)


(31
)










Other expense


(23
)














Loss from continuing operations, before income taxes


(5,580
)


(29,913
)


(653
)


(1,170
)


(3,202
)Provision for (benefit from) income taxes


(1,570
)


158



209



84



(1,197
)Loss from continuing operations


(4,010
)


(30,071
)


(862
)


(1,254
)


(2,005
)Gain on sale of discontinued operations, net of benefit from
    income taxes of $230 and 33,906 in 2006 and 2005, respectively














230



46,277(Loss) income from discontinued operations, net of income taxes


















(57
)Net loss

$
(4,010
)

$
(30,071
)

$
(862
)

$
(1,024
)

$
44,215(Loss) earnings per share  basicContinuing operations

$
(0.11
)

$
(0.77
)

$
(0.02
)

$
(0.03
)

$
(0.04
)Discontinued operations


0.00



0.00



0.00



0.00



1.00$
(0.11
)

$
(0.77
)

$
(0.02
)

$
(0.03
)

$
0.96(Loss) earnings per share  dilutedContinuing operations

$
(0.11
)

$
(0.77
)

$
(0.02
)

$
(0.03
)

$
(0.04
)Discontinued operations


0.00



0.00



0.00



0.00



1.00$
(0.11
)

$
(0.77
)

$
(0.02
)

$
(0.03
)

$
0.96Cash provided by (used in) operating activities

$
11,984


$
4,435


$
6,975


$
3,565


$
(7,689
)     (a)
    
    Consolidated statements of operations data include $2,038,
    $1,524, $1,878 and $1,763 of stock based compensation related to
    the guidance in FASB ASC 718 formerly SFAS 123(R),
    Share-Based Payment, for the years ended
    December 31, 2009, 2008, 2007 and 2006, respectively.(b)
    
    Includes operating activities of the Medical Division through
    the sale of the Medical Division on January 3, 2005.  December 31,2009


2008


2007


2006


2005(In thousands)Consolidated Balance Sheet DataCash and cash equivalents

$
8,785


$
7,366


$
8,536


$
7,331


$
82,214Marketable securities


38,888



47,627



67,071



64,436



Working capital


31,939



47,054



70,101



68,964



79,036Total assets


102,259



77,098



128,441



126,871



140,285Total stockholders equity


55,455



55,295



108,246



107,555



119,913   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations   37




---



##### Table of Contents



Overview
  end-to-end
  end-to-end end-to-end
         38




---



##### Table of Contents



RESULTS
    OF OPERATIONS
  Revenues
  Year Ended December 31,2009


Change


2008


Change


2007(Dollars in thousands)Maintenance and services

$
72,022



80.6
%

$
39,886



4.5
%

$
38,175Percentage of total revenues


80.8
%






79.2
%






76.5
%Software licenses and system sales

$
17,120



63.6
%

$
10,467



(10.6
)%

$
11,173Percentage of total revenues


19.2
%






20.8
%






23.5
%Total revenues

$
89,142



77.0
%

$
50,353



0.9
%

$
49,888     Maintenance
    and services revenues
      
    Software and hardware maintenance revenues increased
    approximately $29.8 million in the twelve months ended
    December 31, 2009 as compared to the twelve months ended
    December 31, 2008. The primary driver 39




---



##### Table of Contents



of the increase was $25.3 million due to the acquisition of
    Emageon. The remaining increase of $4.5 million is due to
    organic growth of the customer base. The growth in our installed
    customer base is dependent on our ability to sell software
    licenses and systems sales and to maintain our existing
    installed base through product updates and ongoing customer
    support and maintenance.  
    EDI revenues decreased approximately $0.3 million in fiscal
    year 2009 as compared to fiscal year 2008. EDI revenues
    decreased primarily due to customer attrition.
    Professional service revenues increased by approximately
    $2.7 million in the twelve months ended December 31,
    2009 as compared to the twelve months ended December 31,
    2008. Service revenues increased $3.7 million due to the
    acquisition of Emageon, offset by a $1.0 million decrease
    in service revenues as compared to the twelve months ended
    December 31, 2008. The $1.0 million decrease in
    service revenues is primarily due to delays in product
    installations and achieving installation milestones that would
    result in services revenue recognition.    
    Software and hardware maintenance revenues increased
    approximately $2.2 million in fiscal year 2008 as compared
    to fiscal year 2007. The increase was primarily a result of the
    increase in the size of our installed customer base. The growth
    in our installed customer base is dependent on our ability to
    sell software licenses and systems sales and to maintain our
    existing installed base through product upgrades and new and
    innovative features.
    EDI revenues increased approximately $0.3 million in fiscal
    year 2008 as compared to fiscal year 2007. The growth in EDI
    revenues was primarily the result of increases in our rates as
    volumes from customers for these services remained relatively
    constant.
    Service revenues decreased by approximately $0.8 million in
    fiscal year 2008 as compared to fiscal year 2007. The decrease
    in service revenues is primarily the result of an increase in
    the number of agreements with extended payment terms, resulting
    in a longer time to recognize revenue.  Software
    license and systems revenues
           40




---



##### Table of Contents



end-to-end
    Cost
    of Revenues
  Year Ended December 31,2009


Change


2008


Change


2007(Dollars in thousands)Maintenance and services

$
31,768



77.5
%

$
17,896



7.2
%

$
16,690Percentage of maintenance and services revenues


44.1
%






44.9
%






43.7
%Software licenses and system sales


11,504



139.9
%


4,796



5.9
%


4,529Percentage of software licenses and system sales


67.2
%






45.8
%






38.7
%Amortization of software


2,821



28.0
%


2,204



12.6
%


1,957Percentage of software license and system sales


16.5
%






21.1
%






16.7
%Total cost of revenues

$
46,093



85.1
%

$
24,896



7.4
%

$
23,176   Cost
    of maintenance and services revenues
      
    Cost of software and hardware maintenance and services increased
    by approximately $11.1 million. The increase in cost of
    software and hardware maintenance and services is due primarily
    to the acquisition of Emageon, and increases in internal and
    third party support costs related to the organic growth of
    support revenues.
    Cost of services revenues increased by $2.9 million. The
    increase in cost of services revenues is directly related to the
    revenue increases from the acquisition of Emageon.
    Cost of EDI revenues decreased by approximately
    $0.1 million. The decrease in EDI costs is due primarily to
    lower revenues and related costs.    
    Cost of software and hardware maintenance and services increased
    by approximately $0.5 million. The increase in cost of
    software and hardware maintenance and services is due primarily
    to an increase in salaries and benefits of approximately
    $0.5 million. 41




---



##### Table of Contents




    Cost of EDI revenues increased by approximately
    $0.7 million. The increase in EDI costs is due primarily to
    a reduced cost in fiscal year 2007, as the Company recorded an
    approximately $0.7 million reduction in cost of maintenance
    and services revenues for unearned discounts which were
    recognized in 2007 as a result of the termination of the
    agreement with Cerner.
    As a percentage of revenue, costs of maintenance and services
    revenues decreased slightly from 44.9% in fiscal year 2008 to
    44.1% in fiscal year 2009. Excluding the impact of the unearned
    discounts, the cost of maintenance and services as a percent of
    maintenance and services revenue decreased slightly in fiscal
    year 2008 versus fiscal year 2007.  Cost
    of software license and system sales
               42




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##### Table of Contents



Operating
    Expenses
  Year Ended December 31,2009


Change


2008


Change


2007(Dollars in thousands)Selling, general and administrative

$
26,830



28.6
%

$
20,865



(5.9
)%

$
22,169Percentage of total revenues


30.0
%






41.4
%






44.4
%Research and development

$
15,099



72.2
%

$
8,769



1.5
%

$
8,640Percentage of total revenues


16.9
%






17.4
%






17.3
%Amortization of intangibles

$
548



36.3
%

$
402



(5.9
)%

$
426Percentage of total revenues


0.6
%






0.7
%






0.9
%Acquisition costs

$
3,028



100
%

$




0
%

$
Percentage of total revenues


3.4
%






0
%






0
%Restructuring costs

$
3,824



100
%

$




0
%

$
Percentage of total revenues


4.3
%






0
%






0
%Impairment charges

$




(100
)%

$
27,490



100
%

$
Percentage of total revenues


0
%






17.4
%






0
%   Selling,
    general and administrative
             43




---



##### Table of Contents



Research
    and development
        Acquisition
    costs
    Restructuring
    costs
    Amortization
    of intangibles
        Impairment
     44




---



##### Table of Contents



Interest
    Income (Expense)
  Year Ended December 31,2009


Change


2008


Change


2007(Dollars in thousands)Interest income

$
769



(64.9
)%

$
2,187



(43.5
)%

$
3,870Interest expense


37



100
%










(Benefit from) provision for income tax


(1,570
)


(1,093.7
)%


158



(24.4
)%


209         Income
    Taxes
        LIQUIDITY
    AND CAPITAL RESOURCES
     45




---



##### Table of Contents



Contractual
    Obligations
    Fiscal Year Ended2010


2011


2012


2012


Thereafter


Totals(In thousands)Operating leases(a)

$
2,051


$
1,838


$
1,570


$
231


$



$
5,690Capital lease obligation


9



















9Other commitments(b)


2,261



















2,261Total

$
4,321


$
1,838


$
1,570


$
231


$



$
7,960     (a)
    
    In October 2007, we signed a lease to remain in our Boston,
    Massachusetts corporate headquarters until January 2013. The
    base rent is $65,446 per month and increases by $1.00 per square
    foot annually over the lease term. In February 2009, we extended
    the lease in our Daytona Beach, Florida facility from May 2009
    to April 2012. The base rent of $25,500 began in May 2009 and
    increases by $1,000 per month in the second year and an
    additional $500 per month in the third year.(b)
    
    Included in other commitments are the following:  
    We are committed to paying approximately $24,000 per month
    through April 2010 for certain EDI services.
    In connection with our employee savings plans, we have
    committed, for the 2010 plan year, to contribute to the plans.
    Our matching contribution for 2010 is estimated to be
    approximately $0.9 million in cash. Our 46




---



##### Table of Contents



matching contribution for 2009 was approximately
    $0.7 million of which $0.4 million was paid in 2009
    and $0.3 million was paid in February 2010.            Critical
    Accounting Policies
      Revenue Recognition. Revenue Recognition 97-2, SOP 98-9, SOP 97-2 SOP 81-1 EITF 01-14, (off-the-shelf and/or
 47




---



##### Table of Contents



and/or
      percentage-of-completion
    Cash Equivalents and Marketable Debt
    Securities.
  held-to-maturity, Held-to-maturity available-for-sale
 48




---



##### Table of Contents



held-to-maturity available-for-sale
  Accounts Receivable.
  Inventories. first-in,
  Long-lived Assets. Property Plant and Equipment
  Goodwill.
       49




---



##### Table of Contents



Intangibles  Goodwill and
    Other
      Software Development Costs.
   50




---



##### Table of Contents



Income Taxes. Income Taxes
  Accounting for Share-Based Payment. Compensation
  Fair Value. Fair Value
    Measurements and Disclosures and/or
  Business Combinations.
  Loss Contingencies.
 51




---



##### Table of Contents



Recent
    Accounting Pronouncements
  Adopted
    Accounting Pronouncements
    820-10-65, 320-10-65, other-than-temporary-impairment 825-10-65,
  855-10.
  350-30-35, and/or
  non-amortizable 820-10,
   52




---



##### Table of Contents



New
    Accounting Pronouncement
  No. 2009-13, 2009-13). 605-25, No. 00-21, (EITF 00-21). 2009-13
  Off-Balance
    Sheet Arrangements
    Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk      
  Item 8.
    Financial
    Statements and Supplementary Data  page F-1.
 53




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
  
    pertain to the maintenance of records that, in reasonable
    detail, accurately and fairly reflect the transactions and
    dispositions of the assets of the Company;
    provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with GAAP, and that the receipts and expenditures of
    the Company are being made only in accordance with
    authorizations of its management and directors; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Companys assets that could have a material effect on its
    financial statements.    Internal Control-Integrated
    Framework
  Changes
    in Internal Controls
   54




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      Internal Control 
    Integrated Framework
            
    55




---



##### Table of Contents



Item 9B.
    Other
    Information   PART III  Form 10-K.
  Item 10.
    Directors,
    Executive Officers and Corporate Governance  www.amicas.com/investor Form 8-K 02135-2040.
    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters   56




---



##### Table of Contents



Equity
    Compensation Plan Information
    (a)


(b)


(c)Number of Securities RemainingNumber of Securities to


Weighted-Average


Available for Future Issuancebe Issued Upon Exercise


Exercise Price of


Under Equity Compensationof Outstanding Options,


Outstanding Options,


Plans (Excluding SecuritiesPlan Category

Warrants and Rights


Warrants and Rights


Reflected in Column (a))Equity compensation plans approved by security holders(1)


5,106,726


$
2.39



2,428,340
(2)Equity compensation plans not approved by security holders(3)


2,785,092


$
2.89



Total


7,891,818


$
2.57



2,428,340     (1)
    
    Consists of our:  
    2006 Stock Incentive Plan;
    2007 Employee Stock Purchase Plan;
    1996 Stock Option Plan;
    Length-of-Service
    Nonqualified Stock Option (LOSSO) Plan; and
    Directors Stock Option Plan.    (2)
    
    Consists of 3,719,544 shares issuable under our 2006 Stock
    Incentive Plan. Directors and employees are eligible to receive
    grants under the 2006 Stock Incentive Plan, which is
    administered by our Compensation Committee. The Compensation
    Committee approves options, rights or stock grants under the
    2006 Stock Incentive Plan, including (i) the number of
    shares of common stock covered by such options, rights or stock
    grants, (ii) the dates upon which such options, rights or
    stock grants become exercisable (which is typically over a three
    to four year period), (iii) the exercise price of such
    options, rights or stock grants (which may not be less than the
    fair market value of a share of stock on the date the option or
    right is granted), and (iv) the duration of the options,
    rights or stock grants (which may not exceed ten years). The
    Compensation Committee has delegated to our Chief Executive
    Officer the authority to grant a limited number of options under
    the 2006 Stock Incentive Plan to new and current employees,
    other than executive officers and certain other officers. As of
    December 31, 2009, our Chief Executive Officer had the
    authority to grant options for up to 382,252 shares of our
    common stock.(3)
    
    Consists of our 2000 Broad-Based Stock Plan (the 2000
    Plan), for which stockholder approval was neither sought
    nor obtained, and which was adopted by the Board of Directors
    effective June 13, 2000. The 2006 Stock Incentive Plan
    replaced the 2000 Plan. Options outstanding under the 2000 Plan
    continue to have force and effect in accordance with the
    provisions of the instruments evidencing such options. However,
    no further options will be granted under the 2000 Plan, and no
    shares remain reserved for issuance under this plan. 57




---



##### 



Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  Item 15(a)(1)
    and (2)  Financial Statements.
  page F-1
  Financial
    Statements and Supplementary Data
   
  PageFinancial Statements:Report of Independent Registered Public
    Accounting Firm


F-1Consolidated Balance Sheets as of
    December 31, 2009 and 2008


F-3Consolidated Statements of Operations for the
    years ended December 31, 2009, 2008 and 2007


F-4Consolidated Statements of Stockholders
    Equity and Comprehensive Income (Loss) for the years ended
    December 31, 2009, 2008 and 2007


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2009, 2008, and 2007


F-6Notes to Consolidated Financial Statements


F-7    Item 15(a)(3)
    Exhibits.  Form 10-K:
  ExhibitNo.



Description2
.1



Agreement and Plan of Distribution, dated as of February 21,
    2001, by and between InfoCure Corporation and PracticeWorks,
    Inc. (incorporated by reference to Exhibit 2.1 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on March 20, 2001).2
.2



Agreement and Plan of Merger, dated as of November 25, 2003, by
    and among VitalWorks Inc., PACS Acquisition Corp., AMICAS, Inc.,
    and the Stockholders Representative (incorporated by
    reference to Exhibit 2.1 to the Registrants Current Report
    on Form 8-K, filed with the Commission on December 10,
    2003).2
.3



First Amendment to Agreement and Plan of Merger dated as of
    December 9, 2004 by and among VitalWorks Inc., AMICAS, Inc., and
    Seth Rudnick, Hamid Tabatabaie and Alexander Spiro solely in
    their representative capacity as Committee Members
    constituting the Stockholders Representative (incorporated
    by reference to Exhibit 2.1 to the Registrants Current
    Report on Form 8-K, filed with the Commission on December 10,
    2004).2
.4



Agreement and Plan of Merger, dated as of February 23, 2009, by
    and among AMICAS, Inc., Emageon Inc. and AMICAS Acquisition
    Corp. (incorporated by reference to Exhibit 2.1 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on February 24, 2009). 58




---



##### Table of Contents



ExhibitNo.



Description2
.5



Agreement and Plan of Merger, dated as of December 24, 2009, by
    among AMICAS, Inc., Project Alta Merger Corp. and Project Alta
    Holdings Corp. (incorporated by reference to Exhibit 2.1 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on December 28, 2009).2
.6



Agreement and Plan of Merger, dated as of February 28, 2010, by
    and among AMICAS, Inc., Merge Healthcare Incorporated and
    Project Ready Corp. (incorporated by reference to Exhibit 2.1 to
    the Registrants Current Report on Form 8-K, filed with the
    Commission on March 9, 2010)3
.1



Certificate of Incorporation of InfoCure Corporation, as amended
    (incorporated by reference to Exhibit 3.1 to the
    Registrants Annual Report on Form 10-K, filed with the
    Commission on March 30, 2000).3
.2



Third Amended and Restated Bylaws of AMICAS, Inc. (incorporated
    by reference to Exhibit 3.1 to the Registrants Current
    Report on Form 8-K, filed with the Commission on December 13,
    2007).3
.3



Amendment to By-Laws of AMICAS, Inc. adopted May 12, 2009
    (incorporated by reference to Exhibit 3.2 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on May 15, 2009).4
.1



Specimen Certificate for shares of common stock (incorporated by
    reference to Exhibit 4.2 to the Registrants Annual Report
    on Form 10-K, filed with the Commission March 30, 2005).4
.2



Rights Agreement, including all exhibits, dated as of December
    5, 2002, between VitalWorks Inc. and StockTrans, Inc., as Rights
    Agent (incorporated by reference to Exhibit 4 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on December 9, 2002).4
.3



Amended and Restated Warrant, originally issued to Crescent
    International Ltd. on September 28, 1998, as amended and
    restated on March 6, 2001 (incorporated by reference to Exhibit
    10.44 to the Registrants Annual Report on Form 10-K, filed
    with the Commission on April 2, 2001).4
.4



Amendment to Rights Agreement by and between AMICAS, Inc. and
    StockTrans, Inc., dated December 24, 2009 (incorporated by
    reference to Exhibit 4.1 to the Registrants Current Report
    on Form 8-K, filed with the Commission on December 28, 2009).4
.5



Amendment to Rights Agreement by and between AMICAS, Inc. and
    StockTrans, Inc., dated March 5, 2010 (incorporated by reference
    to Exhibit 4.1 to the Registrants Current Report on Form
    8-K, filed with the Commission on March 9, 2010).10
.1



InfoCure Corporation 1996 Stock Option Plan (incorporated by
    reference to Exhibit 10.1 to InfoCures Registration
    Statement on Form SB-2, filed with the Commission on December
    27, 1996).10
.2



Form of Incentive Stock Option Agreement of InfoCure Corporation
    (incorporated by reference to Exhibit 10.2 to InfoCures
    Registration Statement on Form SB-2, filed with the Commission
    on December 27, 1996).10
.3



InfoCure Corporation 1997 Directors Stock Option Plan
    (incorporated by reference to Exhibit 10.48 to InfoCures
    Annual Report on Form 10-KSB, filed with the Commission on April
    1, 1998).10
.4



InfoCure Corporation Length-of-Service Nonqualified Stock Option
    Plan (incorporated by reference to Exhibit 10.49 to
    InfoCures Annual Report on Form 10-KSB, filed with the
    Commission on April 1, 1998).10
.5



Amendment to InfoCure Corporation 1996 Stock Option Plan
    (incorporated by reference to Exhibit 10.15 to the
    Registrants Annual Report on Form 10-K for the year ended
    December 31, 1999).10
.6



Amendment to InfoCure Corporation Length-of-Service Nonqualified
    Stock Option Plan (incorporated by reference to Exhibit 10.16 to
    the Registrants Annual Report on Form 10-K, filed with the
    Commission on March 30, 2000).10
.7



Tax Disaffiliation Agreement, dated as of March 5, 2001, by and
    between InfoCure Corporation and PracticeWorks, Inc.
    (incorporated by reference to Exhibit 10.1 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on March 20, 2001).10
.8



Employee Benefits and Compensation Allocation Agreement, dated
    as of March 5, 2001, by and between InfoCure Corporation and
    PracticeWorks, Inc. (incorporated by reference to Exhibit 10.4
    to the Registrants Current Report on Form 8-K, filed with
    the Commission on March 20, 2001).10
.9



Intellectual Property License Agreement, dated as of March 5,
    2001, by and between InfoCure Corporation and PracticeWorks
    Systems, LLC (incorporated by reference to Exhibit 10.5(a) to
    the Registrants Current Report on Form 8-K, filed with the
    Commission on March 20, 2001). 59




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##### Table of Contents



ExhibitNo.



Description10
.10



Intellectual Property License Agreement, dated as of March 5,
    2001, by and between InfoCure Corporation and PracticeWorks
    Systems, LLC (incorporated by reference to Exhibit 10.5(b) to
    the Registrants Current Report on Form 8-K, filed with the
    Commission on March 20, 2001).10
.11



Assignment of Copyrights, dated as of March 5, 2001, by and
    between InfoCure Corporation and PracticeWorks Systems, LLC
    (incorporated by reference to Exhibit 10.5(c) to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on March 20, 2001).10
.12



Assignment of Trademarks, dated as of March 5, 2001, by and
    between InfoCure Corporation and PracticeWorks Systems, LLC
    (incorporated by reference to Exhibit 10.5(d) to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on March 20, 2001).10
.13



InfoCure Corporation 2000 Broad-Based Stock Plan (incorporated
    by reference to Exhibit 10.1 to the Registrants Quarterly
    Report on Form 10-Q, filed with the Commission on November 14,
    2000).10
.14



Lease Agreement, dated March 13, 2001, by and between InfoCure
    Corporation and Joseph V. Fisher, LLC (incorporated by reference
    to Exhibit 10.3 to the Registrants Quarterly Report on
    Form 10-Q, filed with the Commission on May 16, 2001).10
.15



Form of Letter to Stockholders (incorporated by reference to
    Exhibit 20 to the Registrants Current Report on Form 8-K,
    filed with the Commission on December 9, 2002).10
.16



Form of Employment Agreement, dated April 26, 2004, by and
    between VitalWorks Inc. and our Named Executive Officers
    (incorporated by reference to Exhibit 10 to the
    Registrants Quarterly Report on Form 10-Q, filed with the
    Commission on May 10, 2004).10
.17



Amended Employment Agreement, dated July 26, 2004, by and
    between VitalWorks Inc. and Stephen N. Kahane (incorporated by
    reference to Exhibit 10.1 to the Registrants Quarterly
    Report on
    Form 10-Q,
    filed with the Commission on November 9, 2004).10
.18



Asset Purchase Agreement, dated as of November 15, 2004, by and
    between VitalWorks Inc. and Cerner Corporation (incorporated by
    reference to Exhibit 10.1 to the Registrants Current
    Report on Form 8-K, filed with the Commission on November 18,
    2004).10
.19



Agreement of Sublease, dated February 15, 2005, by and among
    AMICAS, Inc. and Patientkeeper, Inc. (incorporated by reference
    to 10.1 to the Registrants Quarterly Report on Form 10-Q,
    filed with the Commission on May 10, 2005).10
.20



Amended and Restated Sublease, dated March 8, 2005, by and among
    AMICAS, Inc. and Chordiant Software, Inc. (incorporated by
    reference to 10.2 to the Registrants Quarterly Report on
    Form 10-Q, filed with the Commission on May 10, 2005).10
.21



AMICAS, Inc. 401(k) Retirement Savings Plan effective December
    1, 2005 (incorporated by reference to Exhibit 10.34 to the
    Registrants Annual Report on Form 10-K, filed with the
    Commission on March 31, 2007).10
.22



2007 Stock Incentive Plan (incorporated by reference to Exhibit
    99.1 to the Registrants Registration Statement on Form
    S-8, filed with the Commission on July 24, 2007).10
.23



Form of Incentive Stock Option Agreement under 2007 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.2 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on July 25, 2007).10
.24



Form of Nonqualified Stock Option Agreement under 2007 Stock
    Incentive Plan (incorporated by reference to Exhibit 10.3 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on July 25, 2007).10
.25



Form of Restricted Stock Agreement for Employees under 2007
    Stock Incentive Plan (incorporated by reference to Exhibit 10.4
    to the Registrants Current Report on Form 8-K, filed with
    the Commission on July 25, 2007).10
.26



Form of Restricted Stock Agreement for Non-Employee Directors
    under 2007 Stock Incentive Plan (incorporated by reference to
    Exhibit 10.5 to the Registrants Current Report on Form
    8-K, filed with the Commission on July 25, 2007).10
.27



2007 Employee Stock Purchase Plan (incorporated by reference as
    Exhibit A to the Registrants Definitive Proxy Statement on
    Schedule 14A for its 2007 Annual Meeting of Stockholders, filed
    with Commission on April 30, 2007).10
.28



Amended and Restated Directors Stock Option Plan (incorporated
    by reference to Exhibit 10.1 to the Registrants Current
    Report on Form 8-K, filed with the Commission on July 10, 2007). 60




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##### Table of Contents



ExhibitNo.



Description10
.29



Separation Agreement, dated October 25, 2007, by and between
    AMICAS, Inc. and Peter McClennen (incorporated by reference as
    Exhibit 10.1 to the Registrants Quarterly Report on Form
    10-Q, filed with the Commission on November 11, 2007).10
.30



Lease agreement, dated October 18, 2007, by and between AMICAS,
    Inc. and Brighton Landing, LLC. (incorporated by reference to
    Exhibit 10.33 to the Registrants Annual Report on Form
    10-K, filed with the Commission on March 17, 2009)10
.31



Employment Agreement, dated April 7, 2009, by and between
    AMICAS, Inc. and Kevin C. Burns (incorporated by reference as
    Exhibit 10.1 to the Registrants Quarterly Report on Form
    10-Q, filed with the Commission on August 6, 2009).10
.32



409A Amendment to Employment Agreement of Stephen N. Kahane,
    dated December 31, 2009, by and between AMICAS, Inc. and Stephen
    N. Kahane (incorporated by reference as Exhibit 10.1 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on January 5, 2009).10
.33



409A Amendment to Employment Agreement of Kevin C. Burns, dated
    December 31, 2009, by and between AMICAS, Inc. and Kevin C.
    Burns (incorporated by reference as Exhibit 10.2 to the
    Registrants Current Report on Form 8-K, filed with the
    Commission on January 5, 2009).10
.34



Fourth Amendment to Employment Agreement of Stephen N. Kahane,
    dated February 10, 2009, by and between AMICAS, Inc. and Stephen
    N. Kahane. (incorporated by reference to Exhibit 10.35 to the
    Registrants Annual Report on Form 10-K, filed with the
    Commission on March 13, 2009)10
.35



Second Amendment to Employment Agreement of Kevin C. Burns,
    dated February 10, 2009, by and between AMICAS, Inc. and Kevin
    C. Burns. (incorporated by reference to Exhibit 10.36 to the
    Registrants Annual Report on Form 10-K, filed with the
    Commission on March 13, 2009).10
.36



Second Amendment To Lease Agreement, dated February 27, 2009, by
    and among Joseph V. Fisher, LLC and AMICAS, Inc. (incorporated
    by reference as Exhibit 10.1 to the Registrants Quarterly
    Report on Form 10-Q, filed with the Commission on May 11, 2009).10
.37



Employment Agreement, dated March 8, 2009, by and between
    AMICAS, Inc. and Craig Newfield (incorporated by reference as
    Exhibit 10.2 to the Registrants Quarterly Report on Form
    10-Q, filed with the Commission on May 11, 200910
.38



Employment Letter, dated February 3, 2009, by and between
    AMICAS, Inc. and Frank Stearns (incorporated by reference as
    Exhibit 10.3 to the Registrants Quarterly Report on Form
    10Q, filed with the Commission on May 11, 2009).10
.39



Voting Agreement, dated December 24, 2009, between AMICAS, Inc.
    and certain stockholders (incorporated by reference to Exhibit
    10.1 to the Registrants Current Report on Form 8-K, filed
    with the Commission on December 28, 2009).10
.40*



2008 Non-Employee Director Compensation Plan.10
.41



AMICAS, Inc. 2006 Stock Incentive Plan (incorporated by
    reference to Exhibit 99.1 to Registrants Registration
    Statement on Form S-8, filed with the Commission on July 24,
    2006).21
.1



Subsidiaries of the Registrant (incorporated by reference to
    Exhibit 21.1 to Registrants Annual Report on Form 10-K,
    filed with the Commission on March 30, 2005).23
.1*



Consent of BDO Seidman, LLP, an independent registered public
    accounting firm.31
.1*



Certification of Chief Executive Officer Pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.31
.2*



Certification of Chief Financial Officer Pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.32
.1*



Certifications of Chief Executive Officer and Chief Financial
    Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002.     *
    
    Filed herewith.
    
    Management contract or compensatory plan or arrangement. 61




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##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM          ,
    Internal Control  Integrated Framework
  
    F-1




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##### Table of Contents



AMICAS,
    INC. and SubsidiaryCONSOLIDATED BALANCE SHEETS
 December 31,2009


2008(In thousands, except share and per share data)ASSETSCurrent assets:Cash and cash equivalents

$
8,785


$
7,366Marketable securities


38,888



47,627Accounts receivable, net of allowances for doubtful accounts of
    $335 and $158


21,594



10,224Prepaid expenses and other current assets


5,762



2,261Inventories


1,960



Total current assets


76,989



67,478Property and equipment, less accumulated depreciation and
    amortization of $7,592 and $7,495


8,118



965Goodwill


1,213



Acquired/developed software, less accumulated amortization of
    $13,017 and $10,195


7,985



5,805Other intangible assets, less accumulated amortization of $1,191
    and $2,144


5,708



1,256Other assets


2,246



1,594Total assets

$
102,259


$
77,098LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued expenses

$
9,299


$
4,156Accrued employee compensation and benefits


3,452



1,611Leases payable, current portion


10



Deferred revenue, current portion


32,289



14,657Total current liabilities


45,050



20,424Deferred revenue and other long term liabilities


1,754



Unrecognized tax benefits






1,379Total liabilities


46,804



21,803Commitments and contingencies (see Note J)Stockholders equity:Preferred stock $.001 par value; 2,000,000 shares
    authorized; none issued






Common stock $.001 par value, 200,000,000 shares
    authorized, 52,794,106 and 51,473,965 shares issued


52



51Additional paid-in capital


235,340



230,905Accumulated deficit


(132,559
)


(128,549
)Accumulated other comprehensive income (loss)


(25
)


100Treasury stock, at cost, 16,357,854 and 16,270,088 shares


(47,353
)


(47,212
)Total stockholders equity


55,455



55,295Total liabilities and stockholders equity

$
102,259


$
77,098    F-2




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##### Table of Contents



AMICAS,
    INC. and SubsidiaryCONSOLIDATED STATEMENTS OF OPERATIONS
 Year Ended December 31,2009


2008


2007(In thousands, except share data)RevenuesMaintenance and services

$
72,022


$
39,886


$
38,175Software licenses and system sales


17,120



10,467



11,713Total revenues


89,142



50,353



49,888Costs and expensesCost of revenues:Maintenance and services


31,768



17,896



16,690Software licenses and system sales


11,504



4,796



4,529Amortization of software costs


2,821



2,204



1,957Selling, general and administrative


26,830



20,865



22,169Research and development


15,099



8,769



8,640Amortization of intangibles


548



402



427Acquisition costs


3,028







Restructuring costs


3,824







Impairment of goodwill






27,313



Impairment of other intangibles






177



95,422



82,422



54,411Operating loss


(6,280
)


(32,069
)


(4,523
)Interest income


769



2,187



3,870Interest expense


(37
)






Loss on sale of investments


(9
)


(31
)


Other income and expenses


(23
)






Loss before income taxes


(5,580
)


(29,913
)


(653
)Provision (credit) for income taxes


(1,570
)


158



209Net loss

$
(4,010
)

$
(30,071
)

$
(862
)Loss per share:Basic

$
(0.11
)

$
(0.77
)

$
(0.02
)Diluted

$
(0.11
)

$
(0.77
)

$
(0.02
)Weighted average number of shares outstanding:Basic


35,489



38,842



44,657Diluted


35,489



38,842



44,657    F-3




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##### Table of Contents



AMICAS,
    INC. and SubsidiaryCONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY AND
    COMPREHENSIVE INCOME (LOSS)
 AccumulatedShares





Additional





Other





TotalCommon


Treasury


Common


Paid-in


Accumulated


Comprehensive


Treasury


Stockholders


ComprehensiveStock


Stock


Stock


Capital


Deficit


Income (Loss)


Stock


Equity


Loss(In thousands, except share data)Balance at December 31, 2006


51,066,966



(6,523,392
)

$
51


$
226,764


$
(97,616
)

$
(4
)

$
(21,640
)

$
107,555



(1,028
)Issuance of common stock, net of related expense for:Exercise of stock options


203,872











414















414Issuance of restricted stock


25,985











71















71Repurchase of treasury stock






(300,800
)


















(803
)


(803
)Share-based payment














1,807















1,807Unrealized gain on marketable securities






















64







64



64Net loss


















(862
)










(862
)


(862
)Total comprehensive loss


































(798
)Balance at December 31, 2007


51,296,823



(6,824,192
)


51



229,056



(98,478
)


60



(22,443
)


108,246Issuance of common stock, net of related expense for:Exercise of stock options


145,342











325















325Issuance of restricted stock


31,800











89















89Repurchase of treasury stock






(9,445,896
)


















(24,769
)


(24,769
)Share-based payment














1,435















1,435Unrealized gain on marketable securities






















40







40



40Net loss


















(30,071
)










(30,071
)


(30,071
)Total comprehensive loss


































(30,031
)Balance at December 31, 2008


51,473,965



(16,270,088
)


51



230,905



(128,549
)


100



(47,212
)


55,295Issuance of common stock, net of related expense for:Exercise of stock options and issuance of shares under the
    Employee Stock Purchase Plan


1,259,451







1



2,397















2,398Issuance of restricted stock


60,690











118















118Repurchase of treasury stock






(87,766
)


















(141
)


(141
)Share-based payment














1,920















1,920Unrealized loss on marketable securities






















(131
)






(131
)


(131
)Foreign currency translation adjustment






















6







6



6Net loss


















(4,010
)










(4,010
)


(4,010
)Total comprehensive loss


































(34,166
)Balance at December 31, 2009


52,794,106



(16,357,854
)

$
52


$
235,340


$
(132,559
)

$
(25
)

$
(47,353
)

$
55,455    F-4




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##### Table of Contents



AMICAS,
    INC. and SubsidiaryCONSOLIDATED STATEMENTS OF CASH FLOWS
  Year Ended December 31,2009


2008


2007(In thousands)Operating activitiesNet loss


(4,010
)


(30,071
)


(862
)Adjustments to reconcile net loss to cash provided by operating
    activities:Depreciation and amortization


3,201



1,084



1,119Provisions for bad debts


319



115



185Loss (gain) on disposal of property and equipment


923



6



Impairment of other intangibles






177



Impairment of goodwill






27,313



Amortization of acquired/developed software


2,821



2,204



1,957Non-cash stock based payments


2,038



1,524



1,878Changes in operating assets and liabilities, net of effect of
    acquisitions:Accounts receivable


180



145



719Prepaid expenses and other current assets


1,919



330



1,100Accounts payable and accrued expenses


(3,343
)


(2,777
)


493Deferred revenue


9,315



4,282



(889
)Unrecognized tax benefits


(1,379
)


103



1,275Cash provided by operating activities


11,984



4,435



6,975Investing activitiesBusiness acquisition, net of cash acquired


(20,698
)






Purchases of property and equipment


(729
)


(645
)


(510
)Purchase of technology










(2,300
)Purchases of
    held-to-maturity
    securities


(60,534
)


(236,147
)


(94,898
)Maturities of
    held-to-maturity
    securities


126,833



237,739



100,263Purchases of
    available-for-sale
    securities


(106,335
)


(37,033
)


(45,275
)Sales of
    available-for-sale
    securities


48,641



54,925



37,340Cash provided by (used in) investing activities


(12,822
)


18,839



(5,380
)Financing activitiesRepurchase of common stock


(141
)


(24,769
)


(803
)Exercise of stock options and ESPP


2,398



325



413Cash provided by (used in) financing activities


2,257



(24,444
)


(390
)Increase (decrease) in cash and cash equivalents


1,419



(1,170
)


1,205Cash and cash equivalents at beginning of year


7,366



8,536



7,331Cash and cash equivalents at end of year

$
8,785


$
7,366


$
8,536    F-5




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##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES
    TO CONSOLIDATED FINANCIAL STATEMENTS
  A.
    Nature of
    Operations  tm end-to-end sm
  top-up
       F-6




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    B.
    Segment
    Reporting    C.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Use of
    Estimates
    Revenue
    Recognition
  Revenue Recognition 97-2, SOP 98-9, SOP 97-2 SOP 81-1 EITF 01-14, (off-the-shelf and/or
 F-7




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##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    and/or
  off-the-shelf
    Percentage-of-completion
   F-8




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Cash
    and Cash Equivalents
      Marketable
    Securities
  held-to-maturity, Held-to-maturity available-for-sale
  Concentration
    of Risk
      Accounts
    Receivable and Allowance for Doubtful Accounts
  and/or
    2009


2008


2007Balance at beginning of period

$
158


$
231


$
1,050Additions charged to costs and expenses


319



115



185Reductions(a)


(142
)


(188
)


(1,004
)Balance at end of period

$
335


$
158


$
231     (a)
    
    Write-offs, returns and discounts, net of recoveries. F-9




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##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Fair
    Value
  Fair Value Measurements and
    Disclosures and/or
                 F-10




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##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair Value Measurements Using


Assets atLevel 1


Level 2


Level 3


Fair ValueCash and cash equivalents

$
8,785


$



$



$
8,785Available for sale, marketable securities:Commercial Paper


6,495











6,495Federal agency obligations


6,375











6,375State and municipal obligations






26,018







26,018Total

$
21,655


$
26,018


$



$
47,673   Items Measured
    at Fair Value on a Nonrecurring Basis
    Fair
    Value of Financial Instruments
    Inventories
  first-in,
  December 31,


December 31,2009


2008Raw Materials

$
581


$
Work-in-process


246



Completed systems


1,133



Total inventories

$
1,960


$
   Long-lived
    Assets
  Property Plant
    and Equipment
 F-11




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
           F-12




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Intangibles  Goodwill and Other
      Software
    Development Costs
      Property
    and Equipment
   F-13




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Research
    and Development
    Foreign
    Currency Translation
    Income
    Taxes
  Income Taxes
  Income Taxes
  Advertising
    Loss
    Per Share
  (in thousands,
    except per share data):
  Year Ended December 31,2009


2008


2007Numerator  net loss:

$
(4,010
)

$
(30,071
)

$
(862
)Denominator:Basic weighted-average shares outstanding


35,489



38,842



44,657Effect of dilutive securities










Diluted weighted-average shares outstanding


35,489



38,842



44,657Loss per share  basic

$
(0.11
)

$
(0.77
)

$
(0.02
)Loss per share  diluted

$
(0.11
)

$
(0.77
)

$
(0.02
)  F-14




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Comprehensive
    Loss
    As of December 31,2009


2008Gain (loss) on marketable securities

$
(31
)

$
100Foreign currency gain (loss)


6



Accumulated other comprehensive (loss) income

$
(25
)

$
100   Share
    Based Payment
  Compensation
  Reclassifications
    D.
    Recent
    Accounting Pronouncements  Adopted
    Accounting Pronouncements
   F-15




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  820-10-65, 320-10-65, other-than-temporary-impairment 825-10-65,
  855-10.
  350-30-35, and/or
  non-amortizable 820-10,
   F-16




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  New
    Accounting Pronouncement
  No. 2009-13, 2009-13). 605-25, No. 00-21, (EITF 00-21). 2009-13
  E.
    Acquisition
    of Emageon          Identifiable Assets Acquired and Liabilities Assumed

AmountCash

$
18,345Accounts receivable


11,870Inventories


2,005Prepaid expenses and other current assets


4,214Land


800Buildings & improvements


4,260Machinery & equipment


4,930Restricted cash and other noncurrent assets


1,812Identifiable intangible assets


10,000Deferred revenue liability


(10,070
)Accounts payable


(7,963
)Accrued payroll and related costs


(2,098
)Other long term liabilities


(275
)Goodwill


1,213$
39,043  F-17




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Pro
    Forma Financial Results (unaudited)
    Year EndedDecember 31,2009


2008(In thousands)Pro forma revenue

$
106,169


$
119,681Pro forma net income (loss)


2,366



(36,360
)Pro forma net income (loss) per shareBasic:

$
0.07


$
(0.94
)Diluted:

$
0.06


$
(0.94
)Weighted average number of shares outstandingBasic


35,489



38,842Diluted


36,588



38,842     F.
    Marketable
    Securities  held-to-maturity available-for-sale Held-to-maturity available-for-sale
    December 31, 2009Unrealized


Unrealized


FairCost


Gains


Losses


ValueAvailable-for-sale:State and municipal obligations

$
26,019


$
34


$
(35
)

$
26,018Federal agency obligations


6,404



13



(42
)


6,375Commercial Paper


6,499







(4
)


6,495Total

$
38,922


$
47


$
(81
)

$
38,888  F-18




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31, 2008Unrealized


Unrealized


FairCost


Gains


Losses


ValueAvailable-for-sale:State and municipal obligations

$
23,858


$
8


$
(19
)

$
23,847Federal agency obligations


7,470



111







7,581Total

$
31,328


$
119


$
(19
)

$
31,428   December 31, 2008Amortized


Unrecognized


Unrecognized


FairCost


Gains


Losses


ValueHeld-to-maturity:Commercial paper

$
6,698


$
2


$
(5
)

$
6,695Certificates of deposit


9,500



27



(3
)


9,524Total

$
16,198


$
29


$
(8
)

$
16,219     available-for-sale
  December 31,


December 31,2009


2008Due within one year

$
14,369


$
13,332Due between one to five years


8,889



2,891Due between five to ten years


900



2,000Due after 10 years


14,730



13,205Total

$
38,888


$
31,428   G.
    Property
    and Equipment    Depreciation/Amortization


December 31,Period


2009


2008(Years)


(In thousands)Land





$
800


$
Building


30



4,260



Equipment, primarily computers, and software


3-5



8,424



4,943Equipment under capital lease obligations


3-5



563



2,627Furniture and other


3-7



1,663



89015,710



8,460Less accumulated depreciation and amortization






7,592



7,495$
8,118


$
965  F-19




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    H.
    Goodwill,
    Acquired or Developed Software and Other Intangible
    Assets    December 31,2009


2008Estimated


Gross





Net


Gross





NetEconomic


Carrying


Accumulated


Carrying


Carrying


Accumulated


CarryingLife


Amount


Amortization


Value


Amount


Amortization


Value(Years)








(In thousands)Goodwill


indefinite


$
1,213


$



$
1,213


$



$



$
Acquired software


7


$
21,002


$
(13,017
)

$
7,985


$
16,000


$
(10,195
)

$
5,805Trademarks


15


$
1,900


$
(771
)

$
1,129


$
1,900


$
(644
)

$
1,256Trade names


9



400



(38
)


362











Customer related assets


9



4,100



(342
)


3,758











Non-compete agreements


5



500



(41
)


459



1,500



(1,500
)


$
6,900


$
(1,192
)

$
5,708


$
3,400


$
(2,144
)

$
1,256              F-20




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (in thousands):
  2010


2011


2012


2013


2014


Thereafter


TotalAcquired software

$
2,837


$
1,043


$
1,043


$
1,043


$
1,043


$
976


$
7,985Trademarks


127



127



127



127



127



494



1,129Trade names


50



50



50



50



50



112



362Customer related assets


456



456



456



456



456



1,478



3,758Non-compete agreements


56



56



56



56



56



179



459Total

$
3,526


$
1,732


$
1,732


$
1,732


$
1,732


$
3,239


$
13,693     I.
    Accrued
    Expenses  in thousands
  December 31,


December 31,2009


2008Accounts payable

$
3,344


$
1,675Accrued expenses


5,258



1,661Taxes payable


697



820Total

$
9,299


$
4,156   J.
    Commitments
    and Contingencies    Boston, Massachusetts:
  Daytona Beach, Florida:
  Hartland, Wisconsin:
  Ottawa, Ontario:
  Birmingham, Alabama:
 F-21




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Winter Park, Florida:
  Madison, Wisconsin:
    Year

Operating(In thousands)2010


2,0512011


1,8382012


1,5702013


231Total

$
5,690          F-22




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Legal
    Proceedings
    Progress
    Associates, on behalf of itself and all others similarly
    situated v. AMICAS, Inc., et al., No. 10-0174. and/or
  Lawrence
    Mannhardt, on behalf of himself and all others similarly
    situated v. AMICAS, Inc., et al. ,
 F-23




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Guarantees
  Guarantees
    K.
    Restructuring
    and Related Costs    Facility
    Severance
    Other
      Exit or Disposal Cost Obligations
     F-24




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Facilities


Severance


Total AccrualAccrued as of April 2, 2009

$
0


$
0


$
0Expensed


951



902



1,853Paid


(440
)


(606
)


(1,046
)Reversed(a)






(86
)


(86
)Accrued as of December 31, 2009

$
511


$
210


$
721     (a)
    
    Accrued restructuring costs not paid    Facilities


Severance


Total2010

$
326



210


$
5362011


80







802012


82







822013


40







40$
528


$
210



738Future accretion










(17
)Total accrued









$
721   L.
    Stockholders
    Equity  Stockholder
    Rights Plan
       F-25




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
              Employee
    Savings Plans
  and/or
  Employee
    Stock Purchase Plan
   F-26




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock
    Option Plans
            Length-of-Service
   F-27




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Share-Based
    Payment
  Stock Compensation
    2009


2008


2007(In thousands)


(In thousands)


(In thousands)Cost of revenues: maintenance and service

$
298


$
138


$
106Research and development


466



413



266Selling, general and administrative


1,274



973



1,506Total share-based compensation expense

$
2,038


$
1,524


$
1,878     Year Ended


Year Ended


Year EndedDecember 31, 2009


December 31, 2008


December 31, 2007Employee





Employee





EmployeeStock Option


Stock


Stock Option


Stock


Stock Option


StockPlan


Purchase Plan


Plan


Purchase Plan


Plan


Purchase PlanAverage risk-free interest rate


2.03
%


.28
%


2.19
%


1.88
%


4.69
%


4.47
%Expected dividend yield






















Expected stock price volatility


51.0
% - 55.5%


72.2
%


43.6
% - 51.4%


47.9
%


44.2
% - 45.1%


41.7
%Weighted-average expected life (in years)


5.3



0.5



5.9



0.5



5.4



0.5Weighted-average fair value

$
1.02


$
1.17


$
0.96


$
0.91


$
1.41


$
1.06     true-up
   F-28




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  shares in
    thousands)
  WeightedShares





Weighted


Average


AggregateAvailable





Average


Remaining


Intrinsicfor Grant


Shares


Exercise Price


Contractual Term


Value(1)(Years)Outstanding at December 31, 2006


8,519



6,681


$
3.32



5.97


$
2,427Granted






1,160



2.99Exercised






(204
)


1.03







298Forfeited






(590
)


3.69Outstanding at December 31, 2007


6,058



7,047


$
3.28



5.03


$
1,519Granted






2,410



2.06Exercised






(17
)


1.78







18Forfeited






(1,131
)


3.61Outstanding at December 31, 2008


3,720



8,309


$
2.88



5.65


$
241Granted






1,422



2.12Exercised






(1,059
)


2.08







801Forfeited






(780
)


6.09Outstanding at December 31, 2009


3,077



7,892


$
2.57



6.14


$
22,704Options exercisable at December 31, 2007






5,078


$
3.28



3.82


$
1,517Options exercisable at December 31, 2008






5,161


$
3.20



3.77


$
80Options exercisable at December 31, 2009






4,857


$
2.77



4.84


$
13,010     (1)
    
    The aggregate intrinsic value on this table was calculated based
    on the positive difference between the closing market value of
    the Companys common stock on December 31, 2009 and
    the exercise price of the underlying options.    Warrants
    Restricted
    Stock
   F-29




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Shares of


Weighted AverageRestricted


Grant Date FairStock


ValueRestricted at December 31, 2006


29,680


$
2.83Granted


25,985



3.23Unrestricted


(29,680
)


2.83Restricted at December 31, 2007


25,985



3.23Granted


36,269



2.79Unrestricted


(25,985
)


3.23Restricted at December 31, 2008


36,269



2.79Granted


60,690



2.62Unrestricted


(36,269
)


2.79Restricted at December 31, 2009


60,690


$
2.62   L.
    Income
    Taxes  Income Taxes
    December 31,


December 31,


December 31,2009


2008


2007Income tax (benefit) provisionCurrent federal

$
(362
)

$



$
15Current state


(1,208
)


158



194Total current (benefit) provision


(1,570
)


158



209Deferred federal


820



(1,907
)


489Deferred state


197



(525
)


(249
)Valuation allowance


(1,017
)


2,432



(240
)Total deferred (benefit) provision










Total provision (credit) for income taxes

$
(1,570
)

$
158


$
209  F-30




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2009


2008


2007Benefit computed at statutory rates

$
(2,013
)

$
(10,469
)

$
(228
)State taxes, net of federal benefit


226



(239
)


(36
)Permanent differences


947



374



271Goodwill impairment






8,035



Reversal of ASC 740 (FIN 48) reserves


(1,383
)






AMT refund, net of current payable


(362
)






Change in valuation allowances and other


1,014



2,457



202Total income tax expense

$
(1,570
)

$
158


$
209     December 31,2009


2008(In thousands)Deferred income tax assets:Allowance for doubtful accounts

$
285


$
63Goodwill amortization


4,789



2,174Accrued expenses


755



654Deferred revenue


489



Net operating loss and credit carry forwards


38,296



22,837Credit carry forwards


3,533



3,362Share-based payment


1,602



1,326Difference between book and tax bases of property and equipment


1,305



571Other


1,134



52,188



30,987Less valuation allowance


50,386



28,1931,802



2,794Deferred income tax liabilities:Acquired/developed software


1,364



2,297Other intangible assets


438



4971,802



2,794Net deferred income tax asset

$



$
    F-31




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Business Combinations SFAS No. 141-R,
      740-10 740-10 740-10.
     F-32




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  N.
    Quarterly
    Results of Operations (Unaudited)  Three Months Ended


Year EndedMarch 31


June 30


September 30


December 31


December 31(In thousands, except per share data)YEAR ENDED DECEMBER 31, 2009Maintenance and service revenues

$
9,962


$
19,317


$
21,174


$
21,569


$
72,022Software license and system sales


1,309



4,176



6,022



5,613



17,120Total revenues


11,271



23,493



27,196



27,182



89,142Cost of maintenance and services


4,425



9,190



9,101



9,052



31,768Cost of software license and system sales


489



3,016



4,191



3,808



11,504Amortization of software


571



750



750



750



2,821Selling, general and administrative


4,538



7,742



7,198



7,352



26,830Research and development


2,230



4,669



4,143



4,057



15,099Acquisition costs


549



1,096



806



577



3,028Restructuring costs






3,473



446



(95
)


3,824Depreciation and amortization


32



172



171



173



548Operating income (loss)


(1,563
)


(6,615
)


390



1,508



(6,280
)Interest expense






(8
)


(18
)


(11
)


(37
)Interest income


447



104



120



98



769Loss on sale of investments










(10
)


1



(9
)Other income (expense)






14



20



(57
)


(23
)Income (loss) before tax


(1,116
)


(6,505
)


502



1,539



(5,580
)Provision (credit) for income tax


53



80



(1,174
)


(529
)


(1,570
)Net income (loss)


(1,169
)


(6,585
)


1,676



2,068



(4,010
)Weighted average number of shares outstandingBasic


35,195



35,222



35,511



36,010



35,489Diluted


35,195



35,222



37,166



38,574



35,489Loss per share  basic

$
(0.03
)

$
(0.19
)

$
0.05


$
0.06


$
(0.11
)Loss per share  diluted

$
(0.03
)

$
(0.19
)

$
0.05


$
0.05


$
(0.11
)   F-33




---



##### Table of Contents



AMICAS,
    INC. and Subsidiary
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Three Months Ended


Year EndedMarch 31


June 30


September 30


December 31


December 31(In thousands, except per share data)YEAR ENDED DECEMBER 31, 2008Maintenance and service revenues

$
9,753


$
10,552


$
9,616


$
9,965


$
39,886Software license and system sales


3,035



3,023



2,682



1,727



10,467Total revenues


12,788



13,575



12,298



11,692



50,353Cost of maintenance and services


4,325



4,748



4,634



4,189



17,896Cost of software license and system sales


1,722



1,159



1,067



848



4,796Amortization of software


490



571



571



572



2,204Selling, general and administrative


5,085



5,370



4,971



5,439



20,865Research and development


2,223



2,223



2,153



2,170



8,769Depreciation and amortization


108



105



108



81



402Impairment(a)














27,490



27,490Operating loss


(1,164
)


(602
)


(1,206
)


(29,097
)


(32,069
)Interest income


789



572



420



406



2,187Loss on sale of investments


(31
)














(31
)Loss before tax


(406
)


(30
)


(786
)


(28,691
)


(29,913
)Provision for income tax


61



67



23



7



158Net loss


(467
)


(97
)


(809
)


(28,698
)


(30,071
)Weighted average number of shares outstandingBasic


43,628



40,740



36,004



35,329



38,842Diluted


43,628



40,740



36,004



35,329



38,842Earnings (loss) per share  basic

$
( 0.01
)

$
(0.00
)

$
(0.02
)

$
(0.81
)

$
(0.77
)Earnings (loss) per share  diluted

$
(0.01
)

$
(0.00
)

$
(0.02
)

$
(0.81
)

$
(0.77
)     (a)
    
    In the quarter ended December 31, 2008, the Company
    recognized a charge of $27.3 million relating to the
    impairment of goodwill. See Note C to the Consolidated
    Financial Statements.  O.
    Supplemental
    Disclosure of Cash Flow and Noncash Activities   F-34




---



##### Table of Contents



SIGNATURES      By:
    /s/  Kevin
    C. Burns   Senior Vice President and Chief Financial Officer
  By:
    /s/  Stephen
    N. Kahane   Chief Executive Officer
  Signature

Title

Date/s/  STEPHEN
    N. KAHANEStephen
    N. Kahane M.D., M.S.

Chairman of the Board and Chief Executive Officer (Principal
    Executive Officer)

March 11, 2010/s/  KEVIN
    C. BURNSKevin
    C. Burns

Senior Vice President and Chief Financial Officer (Principal
    Financial and Accounting Officer)

March 11, 2010/s/  STEPHEN
    J. DENELSKYStephen
    J. DeNelsky

Director

March 11, 2010/s/  JOSEPH
    D. HILLJoseph
    D. Hill

Director

March 11, 2010/s/  STEPHEN
    J. LIFSHATZStephen
    J. Lifshatz

Director

March 11, 2010/s/  DAVID
    B. SHEPHERDDavid
    B. Shepherd

Director

March 11, 2010/s/  JOHN
    J. SVIOKLAJohn
    J. Sviokla

Director

March 11, 2010