| California                           |   | 94-3035367                           |
|--------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of      |   | (I.R.S. Employer Identification No.) |
|  incorporation or organization) |   |                                 |

| Large accelerated filer | o      |                                          |   | Accelerated filer               | o      |
|-------------------------|--------|-----------------------------------------------|--------|---------------------------------|--------|
|                    |   |                                          |   |                            |   |
| Non-Accelerated filer   | o      | (Do not check if a smaller reporting company) |   |  Smaller reporting company | x      |

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| PART I.        | FINANCIAL INFORMATION                                                                                              | Page     |
|----------------|--------------------------------------------------------------------------------------------------------------------|----------|
|  Item 1.  | Financial Statements (unaudited)                                                                                   | 1   |
|           |                                                                                                               |     |
|           | Condensed Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009                                    | 2   |
|           |  Condensed Consolidated Statements of Operations for the Three and Six Months ended June 30, 2010 and 2009.   | 3   |
|           |                                                                                                               |     |
|           | Condensed Consolidated Statements of Comprehensive Loss for the Three and Six Months ended June 30, 2010 and 2009. | 4        |
|           |  Condensed Consolidated Statements of Cash Flows for the Six Months ended June 30, 2010 and 2009              | 5   |
|           |                                                                                                               |     |
|           | Notes to Condensed Consolidated Financial Statements                                                               | 6   |
|  Item 2.  | Management's Discussion and Analysis of Financial Condition and Results of Operations                              | 11  |
|  Item 4T. | Controls and Procedures                                                                                            | 19  |
|  PART II. | OTHER INFORMATION                                                                                                  | 20  |
| Item 6.        | Exhibits                                                                                                           | 20       |

----

PART I.      FINANCIAL INFORMATION

| ITEM 1. |   | FINANCIAL STATEMENTS |
|--------------|--------|----------------------|

----

| Ophthalmic Imaging SystemsCondensed Consolidated Balance Sheets(Unaudited)                                                                                                                                                                                   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                         |   |   |   |   |   |   |
| Assets                                                                                                                                                                                                                                                       |   | June 30, 2010 |   |   | December 31, 2009 |   |
| Current assets:                                                                                                                                                                                                                                              |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                                                                    |   | $ | 6,173,124 |   |   | $ | 5,406,239 |   |
| Accounts receivable, net                                                                                                                                                                                                                                     |   |   | 3,192,328 |   |   |   | 2,710,987 |   |
| Inventories, net                                                                                                                                                                                                                                             |   |   | 1,345,782 |   |   |   | 991,325 |   |
| Prepaid expenses and other current assets                                                                                                                                                                                                                    |   |   | 431,990 |   |   |   | 179,451 |   |
| Total current assets                                                                                                                                                                                                                                         |   |   | 11,143,224 |   |   |   | 9,288,002 |   |
|                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Restricted cash                                                                                                                                                                                                                                              |   |   | 158,221 |   |   |   | 158,213 |   |
| Furniture and equipment, net of accumulated depreciation of $1,159,042 and $1,076,084 respectively                                                                                                                                                      |   |   |  456,449 |   |   |   | 481,394 |   |
| Capitalized imaging software, net of accumulated amortization of $252,354 and $168,236, respectively                                                                                                                                                    |   |   | 252,357 |   |   |   | 336,475 |   |
| Capitalized software development, net of accumulated amortization of $575,418 and $383,612, respectively                                                                                                                                                |   |   | 575,413 |   |   |   | 767,220 |   |
| AcerMed asset purchase, net of accumulated amortization of $285,036 and $190,024, respectively                                                                                                                                                          |   |   | 285,041 |   |   |   | 380,053 |   |
| Goodwill                                                                                                                                                                                                                                                     |   |   | 807,000 |   |   |   | 807,000 |   |
| Customer relationship intangible assets and other intangible assets, net of accumulated amortization                  of $44,041 and $11,636, respectively    |   |   | 647,959 |   |   |   | 680,364 |   |
| Prepaid financing                                                                                                                                                                                                                                            |   |   | - |   |   |   | 22,195 |   |
| Licensing rights intangible asset, net of accumulated amortization  of $16,519 and $0, respectively                                                                                                                                           |   |   |  82,593 |   |   |   | 99,112 |   |
| Other assets                                                                                                                                                                                                                                                 |   |   | 9,634 |   |   |   | 17,349 |   |
| Total assets                                                                                                                                                                                                                                                 |   | $ | 14,417,891 |   |   | $ | 13,037,377 |   |
|                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Accounts payable                                                                                                                                                                                                                                             |   | $ | 1,377,928 |   |   | $ | 867,672 |   |
| Accounts payable – related party                                                                                                                                                                                                                       |   |   | - |   |   |   | 41,847 |   |
| Accrued liabilities                                                                                                                                                                                                                                          |   |   | 1,499,868 |   |   |   | 1,115,902 |   |
| Deferred extended warranty revenue-current portion                                                                                                                                                                                                           |   |   | 1,425,479 |   |   |   | 1,632,491 |   |
| Customer deposits                                                                                                                                                                                                                                            |   |   | 471,024 |   |   |   | 561,245 |   |
| Notes payable- current portion                                                                                                                                                                                                                               |   |   | 1,168,800 |   |   |   | 34,048 |   |
| Total current liabilities                                                                                                                                                                                                                                    |   |   | 5,943,099 |   |   |   | 4,253,205 |   |
|                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Deferred extended warranty revenue, less current portion                                                                                                                                                                                                     |   |   | 262,081 |   |   |   | 247,231 |   |
| Line of credit                                                                                                                                                                                                                                               |   |   | 150,000 |   |   |   | 150,000 |   |
| Notes payable, less current portion                                                                                                                                                                                                                          |   |   | 1,660,337 |   |   |   | 2,946,179 |   |
| Total liabilities                                                                                                                                                                                                                                            |   |   | 8,015,517 |   |   |   | 7,596,615 |   |
|                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Commitments and contingencies                                                                                                                                                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Equity                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |   |
| Ophthalmic Imaging Systems’ stockholders' equity:                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Common stock, no par value, 100,000,000 shares authorized;30,300,928 and 26,500,059 issued and outstanding at June 30, 2010 and December 31, 2009, respectively                                                                                              |   |   | 21,717,047 |   |   |   | 20,089,592 |   |
|                Additional paid-in-capital                                                                                                                                              |   |   | 1,203,300 |   |   |   | 420,610 |   |
|                Accumulated deficit                                                                                                                                                |   |   | (16,870,231 | ) |   |   | (15,536,170 | ) |
|                Cumulative translation adjustment                                                                                                                                  |   |   | (98,657 | ) |   |   | 2,241 |   |
|                Total Ophthalmic Imaging Systems’ stockholders’ equity                                                                                                 |   |   | 5,951,459 |   |   |   | 4,976,273 |   |
|                Noncontrolling interest                                                                                                                                            |   |   | 450,915 |   |   |   | 464,489 |   |
|                                    Total equity                               |   |   | 6,402,374 |   |   |   | 5,440,762 |   |
|                                    Total liabilities and stockholders' equity |   | $ | 14,417,891 |   |   | $ | 13,037,377 |   |
|                                                                                                                                                                                                                                                         |   |
| The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.                                                                                                                                                  |   |

----

| Ophthalmic Imaging Systems                      |   |
|-------------------------------------------------|--------|
| Condensed Consolidated Statements of Operations |   |
| (Unaudited)                                     |   |

|                                                                                                         |   | Three months ended June 30, |       |   | Six months ended June 30, |   |
|--------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|--------|---------------------------|--------|
|                                                                                                         |   | 2010                        |       |   | 2009                      |   |   | 2010 |   |   | 2009 |   |
| Sales - products                                                                                             |   | $                           | 3,750,391  |   |                      | $      | 1,695,603 |   |   | $ | 6,869,516 |   |   | $ | 3,020,626 |   |
|      Cost of sales - products                                                       |   |                        | 1,221,225  |   |                      |   | 779,565 |   |   |   | 2,357,134 |   |   |   | 1,469,895 |   |
|      Cost of sales – amortization                                             |   |                        | 185,468    |   |                      |   | 185,468 |   |   |   | 370,936 |   |   |   | 370,936 |   |
|                                                                                                         |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|      Gross profit - products                                                        |   |                        | 2,343,698  |   |                      |   | 730,570 |   |   |   | 4,141,446 |   |   |   | 1,179,795 |   |
|                                                                                                         |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Sales – products to related     parties                                       |   |                        | -          |   |                      |   | 122,125 |   |   |   | - |   |   |   | 241,205 |   |
|      Cost of sales – products to     related parties |   |                        | -          |   |                      |   | 77,087 |   |   |   | - |   |   |   | 142,569 |   |
|      Gross profit – products to     related parties  |   |                        | -          |   |                      |   | 45,038 |   |   |   | - |   |   |   | 98,636 |   |
|                                                                                                         |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Sales - service                                                                                              |   |                        | 1,009,737  |   |                      |   | 1,080,888 |   |   |   | 2,023,927 |   |   |   | 2,046,316 |   |
|      Cost of sales - service                                                        |   |                        | 507,255    |   |                      |   | 371,090 |   |   |   | 1,052,631 |   |   |   | 700,274 |   |
|        Gross profit - service                                             |   |                        | 502,482    |   |                      |   | 709,798 |   |   |   | 971,296 |   |   |   | 1,346,042 |   |
|                                                                                                         |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Total net sales                                                                                              |   |                        | 4,760,128  |   |                      |   | 2,898,616 |   |   |   | 8,893,443 |   |   |   | 5,308,147 |   |
| Cost of sales                                                                                                |   |                        | 1,913,948  |   |                      |   | 1,413,210 |   |   |   | 3,780,701 |   |   |   | 2,683,674 |   |
| Gross profit                                                                                                 |   |                        | 2,846,180  |   |                      |   | 1,485,406 |   |   |   | 5,112,742 |   |   |   | 2,624,473 |   |
| Operating expenses:                                                                                          |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Sales and marketing                                                                                          |   |                        | 1,776,435  |   |                      |   | 868,080 |   |   |   | 3,321,029 |   |   |   | 1,772,236 |   |
| General and administrative                                                                                   |   |                        | 585,023    |   |                      |   | 659,884 |   |   |   | 1,101,902 |   |   |   | 1,170,907 |   |
| Impairment related to the debt of MediVision                                                                 |   |                        | -          |   |                      |   | 4,436,187 |   |   |   | - |   |   |   | 4,436,187 |   |
| Research and development                                                                                     |   |                        | 862,499    |   |                      |   | 596,442 |   |   |   | 1,706,697 |   |   |   | 1,121,318 |   |
| Research and development – related parties                                                             |   |                        | -          |   |                      |   | 33,116 |   |   |   | - |   |   |   | 294,014 |   |
| Total operating expenses                                                                                     |   |                        | 3,223,957  |   |                      |   | 6,593,709 |   |   |   | 6,129,628 |   |   |   | 8,794,662 |   |
| Loss from operations                                                                                         |   |                        | (377,777   | )      |                      |   | (5,108,303 | ) |   |   | (1,016,886 | ) |   |   | (6,170,189 | ) |
| Other income – settlement                                                                              |   |                        | -          |   |                      |   | 1,200,000 |   |   |   | - |   |   |   | 1,200,000 |   |
| Interest and other expense, net                                                                              |   |                        | (91,302    | )      |                      |   | (95,741 | ) |   |   | (322,224 | ) |   |   | (139,651 | ) |
| Loss from continuing operations before taxes                                                                 |   |                        | (469,079   | )      |                      |   | (4,004,044 | ) |   |   | (1,339,110 | ) |   |   | (5,109,840 | ) |
| Income taxes                                                                                                 |   |                        | (21,409    | )      |                      |   | (500 | ) |   |   | (8,533 | ) |   |   | (2,653 | ) |
|                                                                                                         |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net loss                                                                                                     |   |                        | (490,488   | )      |                      |   | (4,004,544 | ) |   |   | (1,347,643 | ) |   |   | (5,112,493 | ) |
| Less: noncontrolling interest’s share                                                                  |   |                        | 2,351      |   |                      |   | - |   |   |   | 13,575 |   |   |   | - |   |
| Net loss attributable to Ophthalmic Imaging Systems                                                          |   | $                           | (488,137   | )      |                      | $      | (4,004,544 | ) |   | $ | (1,334,068 | ) |   | $ | (5,112,493 | ) |
| Shares used in the calculation of basic and diluted net loss per share                                       |   |                        | 28,097,181 |   |                      |   | 17,501,989 |   |   |   | 27,307,900 |   |   |   | 17,184,410 |   |
|                                                                                                         |   |                        |       |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted net loss per share (1)                                                                     |   | $                           | (0.02      | )      |                      | $      | (0.23 | ) |   | $ | (0.05 | ) |   | $ | (0.30 | ) |

| (1) The amount of anti-dilutive shares for the three months ended June 30, 2010 and 2009 were 1,965,459 and 503,318, respectively.  The amount of anti-dilutive shares for the six months ended June 30, 2010 and 2009 were 1,815,585 and 392,421, respectively. |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                       |   |
| The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.                                                                                                                                                                |   |
|                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                       |   |   |   |   |

----

| Ophthalmic Imaging Systems                              |
|---------------------------------------------------------|
| Condensed Consolidated Statements of Comprehensive Loss |

|                                                                                                    |   | (Unaudited)Three months ended June 30, |     |   | (Unaudited)Six months ended June 30, |   |
|---------------------------------------------------------------------------------------------------------|--------|----------------------------------------|----------|--------|--------------------------------------|--------|
|                                                                                                    |   | 2010                                   |     |   | 2009                                 |   |   | 2010 |   |   | 2009 |   |
| Net loss attributable to Ophthalmic Imaging  Systems       |   | $                                      | (488,137 | )      |                                 | $      | (4,004,544 | ) |   | $ | (1,334,060 | ) |   | $ | (5,112,493 | ) |
| Other comprehensive loss                                                                                |   |                                   |     |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|        Foreign currency translation                             |   |                                   | (78,868  | )      |                                 |   | - |   |   |   | (98,657 | ) |   |   | - |   |
| Comprehensive net loss                                                                                  |   | $                                      | (567,005 | )      |                                 | $      | (4,004,544 | ) |   | $ | (1,432,717 | ) |   | $ | (5,112,493 | ) |

----

| Ophthalmic Imaging Systems                                                                 |   |
|--------------------------------------------------------------------------------------------|--------|
| Condensed Consolidated Statements of Cash Flows                                            |   |
| (Unaudited)                                                                                |   |
|                                                                                       |   | Six months ended June 30, |   |
|                                                                                       |   | 2010 |   |   | 2009 |   |
| Operating activities:                                                                      |   |   |   |   |   |   |
| Net loss                                                                                   |   | $ | (1,347,643 | ) |   | $ | (5,112,493 | ) |
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                              |   |   | 147,555 |   |   |   | 105,933 |   |
| Loss on disposal of equipment                                                              |   |   | 1,541 |   |   |   | 16,369 |   |
| Stock based compensation expense                                                           |   |   | 19,127 |   |   |   | 16,711 |   |
| Amortization of AcerMed software license                                                   |   |   | 95,012 |   |   |   | 95,012 |   |
| Amortization of  imaging software                                                |   |   | 84,118 |   |   |   | 84,118 |   |
| Amortization of R&D                                                                    |   |   | 191,807 |   |   |   | 191,806 |   |
| Amortization of licensing rights intangible asset                                          |   |   | 16,519 |   |   |   | - |   |
| Amortization of prepaid financing related to note payable                                  |   |   | 22,195 |   |   |   | 33,292 |   |
| Discount related to note payable                                                           |   |   | 142,405 |   |   |   | 57,835 |   |
| Amortization of customer relationship intangibles                                          |   |   | 32,405 |   |   |   | - |   |
| Impairment of debt from MediVision                                                         |   |   | - |   |   |   | 3,152,042 |   |
| Net (increase) decrease in accounts receivable, net                                        |   |   | (506,476 | )  |   |   | 674,645 |   |
| Provision for bad debt                                                                     |   |   | 16,764 |   |   |   | 54,271 |   |
| Net (increase) decrease in inventories                                                     |   |   | (374,336 | ) |   |   | 560,000 |   |
| Net (increase) decrease in prepaid and other assets                                        |   |   | (252,539 | ) |   |   | 405,491 |   |
| Net decrease in other assets                                                               |   |   | 3,247 |   |   |   | 60,742 |   |
| Net (decrease) increase in accounts payable – related parties                        |   |   | (41,847 | ) |   |   | 13,144 |   |
| Net increase (decrease) in other liabilities other than short-term borrowings              |   |   | 605,740 |   |   |   | (331,389 | ) |
| Net cash (used in) provided by operating activities                                        |   |   | (1,144,406 | ) |   |   | 77,529 |   |
| Investing activities:                                                                      |   |   |   |   |   |   |   |   |
| Acquisition of furniture and equipment                                                     |   |   | (124,151 | ) |   |   | (41,151 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |
| Financing activities:                                                                      |   |   |   |   |   |   |   |   |
| Principal payments on notes and leases payable                                             |   |   | (13,590 | ) |   |   | (714,434 | ) |
| Lease payable                                                                              |   |   | 26,410 |   |   |   | - |   |
| Notes payable - Abraxas                                                                    |   |   | 109,759 |   |   |   | - |   |
| Payments for financing fees                                                                |   |   | (10,960 | ) |   |   | (40,000 | ) |
| Proceeds from equity investment                                                            |   |   | 1,999,967 |   |   |   | 3,999,972 |   |
| Net cash provided by financing activities                                                  |   |   | 2,111,586 |   |   |   | 3,245,538 |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Effect of exchange rate changes on cash and cash equivalents                               |   |   | (76,144 | ) |   |   | - |   |
|                                                                                       |   |   |   |   |   |   |   |   |
| Net increase in cash and equivalents                                                       |   |   | 766,885 |   |   |   | 3,281,916 |   |
| Cash and equivalents, beginning of the period                                              |   |   | 5,406,239 |   |   |   | 2,224,625 |   |
| Cash and equivalents, end of  the period                                         |   | $ | 6,173,124 |   |   | $ | 5,506,541 |   |
|                                                                                       |   |
| Non-cash financing for the six months ended June 30, 2010:                                 |   |
| - $250,000 of our convertible notes payable was converted into shares of our common stock. |   |

----

Notes to Condensed Consolidated Financial Statements

| Note 1.   | Basis of Presentation |
|----------------|-----------------------|

|   | The accompanying unaudited condensed consolidated balance sheet as of June 30, 2010 , condensed consolidated statements of operations for the three and six months ended June 30, 2010 and 2009, and the comprehensive loss, and cash flows for the six months ended June 30, 2010 and 2009 have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete financial statements. It is suggested that these condensed financial statements be read in conjunction with the audited financial statements and notes thereto included in the Annual Report of Ophthalmic Imaging Systems’ (the “Company”) for the year ended December 31, 2009 on Form 10-K. In the opinion of management, the accompanying condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of our financial position and results of operations for the periods presented. The results of operations for the period ended June 30, 2010 are not necessarily indicative of the operating results expected for the full year.  Certain reclassifications have been made to prior period amounts to conform to classifications adopted in the current period. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 2. | Inventories                                                                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    | Inventories, which consist primarily of purchased system parts, subassemblies and assembled systems, are stated at the lower of cost (determined using the first-in, first-out method) or market. Inventories consist of the following: |

|                  |   | As ofJune 30, 2010 |      |   | As ofDecember 31, 2009 |   |
|-----------------------|--------|--------------------|-----------|--------|-----------------------------|--------|
|  Raw materials   |   | $                  | 355,641   |   |                        | $      | 240,953 |   |
|  Work-in-process |   |               | 475,311   |   |                        |   | 392,440 |   |
|  Finished goods  |   |               | 514,830   |   |                        |   | 357,932 |   |
|                  |   |               |      |   |                        |   |
|                  |   | $                  | 1,345,782 |   |                        | $      | 991,325 |   |
|                  |   |               |      |   |                        |   |   |   |

| Note 3. | Loss Per Share |
|---------|----------------|

|   | Basic loss per share which excludes dilution, is computed by dividing loss available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other agreements to issue common stock, such as stock options, warrants or convertible debt, result in the issuance of common stock, which shares in the earnings of the Company. The treasury stock method is applied to determine the dilutive effect of convertible or exercisable securities in computing diluted earnings per share. The Company currently is in a loss position and does not calculate diluted earnings per share. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Note 4.   | Related Party Transactions |
|----------------|----------------------------|

|   | U.M. AccelMed, Limited Partnership As of June 30, 2010, U.M. AccelMed, Limited Partnership, an Israeli limited partnership (“AccelMed”) is our largest shareholder with 13,338,603 shares of our common stock or 44%.  On June 24, 2009 AccelMed acquired 9,633,228 shares and a warrant to purchase up to 3,211,076 shares of our common stock for an aggregate purchase price of $3,999,972.  This 1st installment warrant has an exercise price of $1.00 per share and expires on June 23, 2012. On May 26, 2010 the 2nd and final installment was completed, under which we issued to AccelMed 3,581,089 shares and a warrant to purchase up to 1,193,696 shares for an aggregate purchase price of $1,999,967. The 2nd installment warrant has an exercise price of $1.00 per share and expires on June 23, 2012.  The remaining 124,286 shares of common stock were purchased from MediVision Medical Imaging Ltd. on January 6, 2010 at a purchase price of $0.70 per share. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | MediVision Medical Imaging Ltd.As of June 30, 2010, MediVision Medical Imaging Ltd., an Israeli corporation (“MediVision”), is our second largest shareholder with 9,112,446 shares of our common stock, or 30.1%.On October 21, 2009 we purchased substantially all the assets of MediVision (the “MediVision Asset Purchase”). At June 30, 2010, the carrying value of the assets acquired from MediVision were as follows: intangible assets related to customer relationships were $448,959, intangible assets related to the Electro-optical Unit were $199,000, and goodwill was $807,000. During the three and six months ended June 30, 2010, the Company recognized revenue of $304,583 and $587,408 and net losses of $85,402 and $171,412, related to the business operations purchased in connection with the MediVision Asset Purchase. At June 30, 2010 the noncontrolling interest related to the business operations purchased from MediVision was $450,915.  |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Escrow Agreement  Pursuant to the terms of the MediVision Asset Purchase Agreement (the “APA”) an Escrow Agreement (the “Escrow Agreement”) between us, MediVision and Stephen L. Davis, Esq. dated June 24, 2009, MediVision deposited 3,793,452 shares (the “Escrow Shares”) of our common stock into escrow.  If MediVision failed to make certain payments under the APA, the Escrow Shares would have been distributed to us or sold and the proceeds thereof distributed to us.  The agreement will terminate upon the later of (i) October 21, 2011 or (ii) the satisfaction and discharge of the $1,800,000 claim made by the Office of the Chief Scientist of the Israeli Ministry of Industry, Trade & Labor to MediVision. As of June 30, 2010 MediVision has satisfied the $1,800,000 claim made by the Office of Chief Scientist of the Israeli Ministry of Industry, Trade & Labor. |
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|   | RelationshipsGil Allon (our Chief Executive Officer), together with Noam Allon, President and Chief Executive Officer of MediVision, Gil Allon’s brother and a former director of OIS own 20.31% of MediVision’s ordinary shares. Ariel Shenhar (our Chief Financial Officer), together with Yuval Shenhar, his brother, own 1.06% of MediVision’s ordinary shares. |
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|   | CCS Pawlowski GmbH CCS Pawlowski GmbH, a German corporation (“CCS”), was formerly a subsidiary of MediVision which owned 63% of CCS’ ownership interests.  We acquired this ownership interest in connection with the MediVision Asset Purchase. After completion of the MediVision Asset Purchase all inter-company sales were eliminated upon consolidation. |
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|   | MediStrategy, Ltd. Effective January 1, 2010, OIS Global entered an agreement with MediStrategy Ltd., an Israeli company owned by Noam Allon ("MS"), for Mr. Allon's consulting services.  Under the agreement, MS will be compensated approximately $18,000 monthly effective January 1, 2010 through December 31, 2010. |
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| Note 5. | Share-based Compensation At June 30, 2010, we have four active stock-based compensation plans (the “Plans”).  Options granted under these plans generally have a term of ten years from the date of grant unless otherwise specified in the option agreement.  The plans generally expire ten years from the inception of the plans.  The majority of options granted under these agreements have a vesting period of three to four years.  Incentive stock options under these plans are granted at fair market value on the date of grant and non-qualified stock options granted can not be less than 85% of the fair market value on the date of grant. A summary of the changes in stock options outstanding under our equity-based compensation plans during the three months ended June 30, 2010 is presented below: |
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|   |                           |   |     Shares |      |  Weighted Average Exercise Price |     | Weighted Average Remaining Contractual Term (Years) |   |   Aggregate Intrinsic Value |       |
|--------|--------------------------------|--------|--------------------------------|-----------|---------------------------------------|----------|-----------------------------------------------------|--------|---------------------------------------|------------|
|   | Outstanding at January 1, 2010 |   |                           | 3,584,926 |                                  | $0.60    |                                                | 6.65   |                                  | $537,739   |   |
|   | Granted                        |   |                           | 208,964   |                                  | $0.91    |                                                | 9.54   |                                  | $18,807    |   |
|   | Exercised                      |   |                           | --        |                                  |  -- |                                                | --     |                                  |  --   |   |
|   | Forfeited/Expired              |   |                           | --        |                                  |  -- |                                                | --     |                                  |  --   |   |
|   | Outstanding at June 30, 2010   |   |                           | 3,793,890 |                                  | $0.62    |                                                | 6.86   |                                  | $1,441,678 |   |
|   | Exercisable at June 30, 2010   |   |                           | 2,727,460 |                                  | $0.56    |                                                | 4.07   |                                  | $1,200,082 |   |

|   | We use the Black-Scholes-Merton option valuation model to determine the fair value of stock-based compensation. The Black-Scholes-Merton model incorporates various assumptions including the expected term of awards, volatility of stock price, risk-free rates of return and dividend yield. The expected term of an award is generally no less than the option vesting period and is based on our historical experience. Expected volatility is based upon the historical volatility of our stock price. The risk-free interest rate is approximated using rates available on U.S. Treasury securities with a remaining term equal to the option’s expected life. We use a dividend yield of zero in the Black-Scholes-Merton option valuation model as we do not anticipate paying cash dividends in the foreseeable future. As of June 30, 2010, we had $41,254 of unrecognized expenses related to non-vested stock-based compensation, which is expected to be recognized through 2013.  The total fair value of options vested and the incremental expense for stock-based compensation during the three and six months ended June 30, 2010 was $ 9,836 and $18,795, respectively. The total fair value of options vested and the incremental expense for stock-based compensation during the three and six months ended June 30, 2009 was $7,651 and $16,711, respectively. |
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|   | In calculating compensation related to stock option grants for the three and six months ended June 30, 2010, the fair value of each stock option is estimated on the date of grant using the Black-Scholes-Merton option-pricing model and the following weighted average assumptions: dividend yield none; expected volatility of 47.96%, risk-free interest rate of 3.69%, and expected term of 10 years. The computation of expected volatility used in the Black-Scholes-Merton option-pricing model is based on the historical volatility of our share price. The expected term is estimated based on a review of historical and future expectations of employee exercise behavior. In connection with the 1st installment of the AccelMed private placement, we also issued to the placement agent, an option to purchase 123,500 shares of our common stock at an exercise price of $0.01 per share. This option expires on June 23, 2012. We recorded the fair value of the options using the Black-Scholes-Merton option valuation model, as a reduction to our common stock and an increase in additional paid-in-capital in the amount of $47,045. In connection with the 2nd installment of the AccelMed private placement, we issued to the placement agent, an option to purchase 36,464 shares of our common stock at an exercise price of $0.01 per share. This option expires on May 26, 2013. We recorded the fair value of the options using the Black-Scholes-Merton option valuation model, as a reduction to our common stock and an increase in additional paid-in-capital in the amount of $18,491. Abraxas Medical Solutions (“Abraxas”) As of June 30, 2010, we had $999 of unrecognized expenses related to non-vested stock-based compensation, which is expected to be recognized through 2011.  The total fair value of options vested and the incremental expense for stock-based compensation during the three and six months ended June 30, 2010 was $166 and $332, respectively.  |
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| Note 6. | Convertible Notes In 2007 and 2009, we issued to The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc. (the “Holders”) an aggregate of $2,750,000 in principal amount of our 6.5% Convertible Notes Due October 31, 2011 (the “Notes”) and warrants to purchase shares of our common stock. As of June 30, 2010 the remaining principal balance on the notes was $1,125,000 which is convertible into 1,057,132 shares of our common stock at an adjusted conversion price of $1.06 per share. The Holders also held, as of June 30, 2010, warrants to purchase an aggregate of 950,357 shares of our common stock at an exercise price of $1.21 per share and expire on October 29, 2012 and warrants to purchase aggregate of 500,000 shares of our common stock at an exercise price of $1.00 per share and expire on June 24, 2012.  Our next principal payment on the notes will be due February 28, 2011. We computed the intrinsic value of the effective conversion price based on the proceeds received for or allocated to the convertible instrument for the embedded conversion option.  Thus, we first allocated the proceeds to the convertible instrument (the notes) and any other detachable instruments included in the exchange (such as detachable warrants) on a relative fair value basis. We then calculated the effective conversion used to measure the intrinsic value, if any, of the embedded conversion option based on the Black-Scholes-Merton option valuation model.  We adjust for the changes in the Black-Scholes-Merton option valuation model at each reporting period. The impact of this adjustment to our 2010 financial statements to date is an increase to interest expense of $178,639 an increase to the discount on the Notes of $9,606 and an increase to additional paid-in-capital of $152,011. As of June 30, 2010, the following weighted average assumptions were used: dividend yield none, expected volatility of 51.96%, risk-free interest rate of 1.54%, and expected term of 2.33 years. As of June 30, 2010, there was $283,182 of additional paid-in-capital and $46,605 of discount related to the warrants. |
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| Note 7. | Warranty Obligations We generally offer a one-year warranty to our customers.  Our warranty requires us to repair or replace defective products during the warranty period. At the time product revenue is recognized, we record a liability for estimated costs that may be incurred under our warranties.  The costs are estimated based on historical experience and any specific warranty issues that have been identified.  The amount of warranty liability accrued reflects our best estimate of the expected future cost of honoring our obligations under the warranty plans.  We periodically assess the adequacy of our recorded warranty liability and adjust the balance as necessary. The following provides a reconciliation of changes in our warranty reserve: |
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|   |                                      | Three Months Ended |           | Six Months Ended |
|--------|-------------------------------------------|--------------------|----------------|------------------|
|   |                                      | June 30,           |           | June 30,         |
|   |                                      | 2010               | 2009           |             | 2010 | 2009 |
|   | Warranty balance at beginning of period   | $132,950           | $77,250        |             | $90,000 | $67,000 |
|   | Reductions for warranty services provided |  (52,350)     |  (36,925) |             |  (84,200) |  (59,425) |
|   | Changes for accruals in current period    | 82,000             | 43,100         |             | 156,800 | 75,850 |
|   | Warranty balance at end of period         | $162,600           | $83,425        |             | $162,600 | $83,425 |

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| Note 8. | Segment Reporting Our business consists of two operating segments: OIS and Abraxas, our wholly-owned subsidiary.  Our management reviews Abraxas’ results of operations separately from that of OIS. Our operating results for Abraxas exclude income taxes. The provision for income taxes is calculated on a consolidated basis, and accordingly, is not presented by segment. It is excluded from the measure of segment profitability as reviewed by our management. CCS does not meet the materiality requirements for segment reporting and accordingly, CCS’ financial information is reported as Other in the following table. We evaluate our reporting segments in accordance with FASB Accounting Standards Codification Topic 280, Segment Reporting (“Topic 280”). Our Chief Financial Officer (“CFO”) has been determined to be the Chief Operating Decision Maker as defined by Topic 280. The CFO allocates resources to Abraxas based on its business prospects, competitive factors, net sales and operating results. All significant intercompany balances and transactions have been eliminated in consolidation. The following presents our financial information by segment for the three and six months ended June 30, 2010 and 2009:  |
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|                                              |   | Three months ended |      |   | Six months ended |   |
|---------------------------------------------------|--------|--------------------|-----------|--------|------------------|--------|
|                                              |   | June 30,           |      |   | June 30,         |   |   | June 30, |   |   | June 30, |   |
| Statement of Income:                              |   | 2010               |      |   | 2009             |   |   | 2010 |   |   | 2009 |   |
| Net sales:                                        |   |               |      |   |             |   |   |   |   |   |   |   |
|        OIS     |   | $                  | 3,680,200 |   |             | $      | 2,418,331 |   |   | $ | 6,895,925 |   |   | $ | 4,699,800 |   |
|        Abraxas |   |               | 827,996   |   |             |   | 480,285 |   |   |   | 1,594,561 |   |   |   | 608,347 |   |
|        Other   |   |               | 251,932   |   |             |   | - |   |   |   | 402,957 |   |   |   | - |   |
| Total                                             |   | $                  | 4,760,128 |   |             | $      | 2,898,616 |   |   | $ | 8,893,443 |   |   | $ | 5,308,147 |   |
| Gross profit:                                     |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|        OIS     |   | $                  | 2,398,516 |   |             | $      | 1,358,684 |   |   | $ | 4,311,130 |   |   | $ | 2,637,399 |   |
|        Abraxas |   |               | 340,563   |   |             |   | 126,722 |   |   |   | 611,205 |   |   |   | (12,926 | ) |
|        Other   |   |               | 107,101   |   |             |   | - |   |   |   | 190,407 |   |   |   | - |   |
| Total                                             |   | $                  | 2,846,180 |   |             | $      | 1,485,406 |   |   | $ | 5,112,742 |   |   | $ | 2,624,473 |   |
| Operating Loss:                                   |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
|        OIS     |   | $                  | 62,123    |   |             | $      | (4,709,443 | ) |   | $ | (100,037 | ) |   | $ | (5,055,769 | ) |
|        Abraxas |   |               | (443,952  | )      |             |   | (398,860 | ) |   |   | (901,294 | ) |   |   | (1,114,420 | ) |
|        Other   |   |               | 4,052     |   |             |   | - |   |   |   | (15,555 | ) |   |   | - |   |
| Total                                             |   | $                  | (377,777  | )      |             | $      | (5,108,303 | ) |   | $ | (1,016,886 | ) |   | $ | (6,170,189 | ) |
|                                              |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net loss (consolidated):                          |   | $                  | (490,488  | )      |             | $      | (4,004,544 | ) |   | $ | (1,347,643 | ) |   | $ | (5,112,493 | ) |
|                                              |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |

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

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ITEM 4T.                      CONTROLS AND PROCEDURES

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PART II     OTHER INFORMATION

| ITEM 2. | UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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|    |  On June 2, 2010, we granted to certain employees, options to purchase an aggregate of 172,500 shares of common stock for returning to OIS as employees. The options vest in 6 equal installments, each installment includes options to purchase 28,750 shares of common stock on the following dates: December 3, 2010, June 3, 2011, December 3, 2011, June 3, 2012, December 3, 2012, and June 3, 2013.  The options are exercisable at $1.10 per share and expire on June 2, 2020. We relied upon the exemption from registration under 4(2) of the Securities Act as of 1933, as amended (the “Securities Act”) in connection with these issuances. On May 26, 2010, we issued to U.M. AccelMed, Limited Partnership 3,581,089 shares of our common stock and a warrant to purchase 1,193,696 shares of our common stock at an exercise price of $1.00 per share which expires on June 23, 2012. In connection with this issuance we relied upon the exemption from registration under Section 4(2) of the Securities Act and Rule 506 as promulgated thereunder  |
| ITEM 6. | EXHIBITS AND REPORTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |

| Exhibit No. | Description                                                            | Footnote |
|-------------|------------------------------------------------------------------------|----------|
| 31.1        | Certification Required Under Section 302 of Sarbanes-Oxley Act of 2002 | *        |
| 31.2        | Certification Required Under Section 302 of Sarbanes-Oxley Act of 2002 | *        |
| 32          | Certification Required Under Section 906 of Sarbanes-Oxley Act of 2002 | *        |

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SIGNATURES

|                             | OPHTHALMIC IMAGING SYSTEMS |                                                                                    |
|----------------------------------|----------------------------|-----------------------------------------------------------------------------------------|
| Date:  August 10, 2010 |                       |                                                                                    |
|                             |                       |                                                                                    |
|                             |                       |                                                                                    |
|                             | By:                        | /s/ Gil Allon                                                                           |
|                             | Name:Title:                | Gil Allon,Chief Executive Officer(Principal Executive Officer)                          |
|                             |                       |                                                                                    |
|                             |                       |                                                                                    |
|                             | By:                        | /s/ Ariel Shenhar                                                                       |
|                             | Name:Title:                | Ariel Shenhar,Chief Financial Officer(Principal Accounting and Financial Officer)  |
|                             |                       |                                                                                    |