**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB**





(Mark
      One)





þ
            Annual
                report under Section 13 or 15(d) of the Securities Exchange Act of
                1934




For
      the
      fiscal year ended **December
      31, 2007**





o
            Transition
                report under Section 13 or 15(d) of the Exchange
                Act





Commission
      file number: **1-9043**





**B.H.I.T.
      Inc.**





(Name
      of
      small business issuer in its charter)




**Delaware**
            
            **36-3361229**(State
                of incorporation)
            
            (I.R.S.
                Employer Identification No.)





**7005
                Stadium Drive, Suite 100, Brecksville, Ohio
                44141**(Address
                of principal executive offices)





**212-895-3526**(Issuer’s
                telephone number)





Securities
      registered under Section 12(b) of the Exchange Act: **None**





Securities
      registered under Section 12(g) of the Exchange Act: **Common
      stock, $0.01 par value per share**





Check
      whether the issuer is not required to file reports pursuant to Section 13 or
      15(d) of the Exchange Act.  ̈





Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days.  Yes þ No  ̈





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant’s knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this form 10-KSB þ





Indicate
      by checkmark whether the registrant is a shell company (as defined in Rule
      12b-2
      of the Exchange Act). Yes þ No  ̈





State
      issuer’s revenues for its most recent fiscal year. **$80,890**





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold, or the average bid and asked price of such common equity, as of a
      specified date within the past 60 days. (See definition of affiliate in Rule
      12b-2 of the Exchange Act.) **$
      2,903,088 as of March 20, 2008.**





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: **24,988,051
      shares of common stock, $0.01 par value per share, as of March 20,
      2008**





Transitional
      Small Business Disclosure Format (check one):  Yes  ̈ No þ










**TABLE
      OF CONTENTS**





PART
                I
            
            1Item
                1.
            Description
                of Business.
            1Our
                History
            1Employees
            1Forward
                Looking Statements
            1How
                to Learn More About Us
            2Item
                2.
            Description
                of Property.
            2Item
                3.
            Legal
                Proceedings.
            2Item
                4.
            Submission
                of Matters to a Vote of Security Holders.
            2PART
                II
            
            3Item
                5.
            Market
                For Common Equity and Related Stockholder Matters.
            3Item
                6.
            Management’s
                Discussion and Analysis or Plan of Operation.
            3Results
                of Operations
            3Financial
                Condition and Liquidity
            4Off-Balance
                Sheet Arrangements
            4Critical
                Accounting Policies
            4Item
                7.
            Financial
                Statements.
            4Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure.
            4Item
                8A(T).
            Controls
                and Procedures.
            4Item
                8B.
            Other
                Information
            5PART
                III
            
            5Item
                9.
            Directors,
                Executive Officers, Promoters, Control Persons and Corporate Governance;
                Compliance with Section 16(a) of the Exchange Act.
            5Committees
                of the Board
            6Code
                of Ethics
            6Compliance
                with § 16(a) of the Exchange Act
            6Equity
                Compensation Plan Information
            9Item
                10.
            Executive
                Compensation.
            7Director
                Compensation
            7Item
                11.
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters.
            8Item
                12.
            Certain
                Relationships and Related Transactions, and Director
                Independence.
            9Item
                13.
            Exhibits.
            9Item
                14.
            Principal
                Accountant Fees and Services.
            10SIGNATURES
            11




i


**PART
      I**




**Item
      1.**  **Description
      of Business.**




B.H.I.T.
      Inc. is a shell company without significant operations or sources of revenues
      other than its investments. Our existing operations relate primarily to
      servicing our cash investment portfolio and maximizing existing capital with
      stable interest generating instruments. However, our new management team is
      aggressively investigating potential operating companies to acquire and
      additional sources of financing. In June 2007, we sold 10.0 million of our
      common shares in a private placement for $0.10 a share for a total of $1.0
      million. Currently we are focusing our efforts on railroad track repair and
      maintenance businesses, but we cannot guarantee we will complete an acquisition
      in this industry. Accordingly, we may explore potential acquisitions in other
      industries as well.





**Our
      History**




The
      company was originally organized under the laws of the State of Massachusetts
      in
      1985, under the name VMS Hotel Investment Trust, for the purpose of investing
      in
      mortgage loans, principally to entities affiliated with VMS Realty Partners.
      These loans were collateralized by hotel and resort properties. The company
      was
      subsequently reorganized as a Delaware corporation in 1987 and changed its
      name
      to B.H.I.T. Inc. in 1998.





As
      the
      result of a public offering in 1986, the company received gross proceeds of
      $98,482,751. From 1989 to 1992 we experienced severe losses due primarily to
      a
      decline in real estate property values and the resulting default on mortgage
      loans held by us. The company has recorded losses every year since 1989
      resulting in the accumulated deficit totaling $87,240,805 on December 31,
      2007.





In
      September 2000, Summa Holdings, Inc. (“Summa”), formerly known as Arrowhead
      Holdings Corporation, purchased 5,870,563 shares of our stock, or 39.2% of
      the
      outstanding shares. Subsequent purchases of our shares resulted in Summa owning
      a total of 6,243,563 shares, or 41.7% of the outstanding shares on December
      31,
      2006.





On
      January 24, 2007, a group of private investors purchased all of the BHIT shares
      held by Summa. As a result of the transaction, James Benenson, Jr. and John
      V.
      Curci each resigned as directors and officers of the company and Paul S. Dennis,
      Gary O. Marino, Harvey J. Polly and Andrew H. Scott were appointed to fill
      vacancies in the board. To learn more about our current management team, please
      turn to Item 9 on page 5 .





**Employees**




We
      do not
      have any full or part-time employees. We plan to add additional personnel as
      our
      operations infrastructure dictates.





**Forward
      Looking Statements**




Some
      of
      the statements that we make in this report, including statements about our
      confidence in BHIT’s prospects and strategies, are forward-looking statements
      within the meaning of § 21E of the Securities Exchange Act. Some of these
      forward-looking statements can be identified by words like “believe,” “expect,”
“will,” “should,” “intend,” “plan,” or similar terms; others can be determined
      by context. Statements contained in this report that are not historical facts
      are forward-looking statements. These statements are necessarily estimates
      reflecting our best judgment based upon current information, and involve a
      number of risks and uncertainties. Many factors could affect the accuracy of
      these forward-looking statements, causing our actual results to differ
      significantly from those anticipated in these statements. While it is impossible
      to identify all applicable risks and uncertainties, they include our ability
      to:


1




·
            execute
                our business plan by identifying and acquiring an operating
                company;




·
            obtain
                appropriate financing to complete potential
                acquisitions;




·
            effectively
                invest our existing funds and raise additional capital to fund our
                operations; and




·
            comply
                with SEC regulations and filing requirements applicable to us as
                a public
                company.





You
      should not place undue reliance on our forward-looking statements, which reflect
      our analysis only as of the date of this report. The risks and uncertainties
      listed above and elsewhere in this report and other documents that we file
      with
      the Securities and Exchange Commission, including our annual report on Form
      10-KSB, quarterly reports on Form 10-QSB, and any current reports on Form 8-K,
      must be carefully considered by any investor or potential investor in
      BHIT.





**How
      to Learn More About Us**




We
      file
      annual, quarterly and special reports and other information with the SEC. Our
      SEC filings are available to the public on the internet at the SEC’s web site at
      SEC.gov. To learn more about BHIT you can also contact our CEO, Andrew Scott,
      at
      212-895-3526.




**Item
      2.**  **Description
      of Property.**




We
      do not
      own any real property.




**Item
      3.**  **Legal
      Proceedings.**




We
      are
      not aware of any pending legal proceedings involving BHIT as of March 20, 2008,
      nor were any proceedings terminated in 2007.




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




Not
      applicable.


2


**PART
      II**







**Item
          5.** **Market
          For Common Equity and Related Stockholder
          Matters.**




Shares
      of
      our common stock are traded over-the-counter and sales are reported on the
      OTC
      Bulletin Board ® under
      the symbol “BHIT.OB.” The last reported sale price on March 20, 2008 was $0.16
      per share. The following table lists the high and low closing sale prices of
      our
      stock during 2007 and 2006 as reported on OTCBB. These sale prices reflect
      inter-dealer prices, without retail mark-up, mark-down or commission, and may
      not represent actual transactions.





**2007**
            
            **2006****High**
            
            **Low**
            
            **High**
            
            **Low**Fourth
                Quarter
            
            $
            0.51
            
            $
            0.30
            
            $
            0.19
            
            $
            0.10Third
                Quarter
            
            $
            0.50
            
            $
            0.20
            
            $
            0.16
            
            $
            0.08Second
                Quarter
            
            $
            0.25
            
            $
            0.17
            
            $
            0.15
            
            $
            0.08First
                Quarter
            
            $
            0.27
            
            $
            0.13
            
            $
            0.12
            
            $
            0.09





There
      were approximately 2,210 stockholders of record of BHIT’s common stock as of
      March 20, 2008. There are additional stockholders who own stock in their
      accounts at brokerage firms and other financial institutions.





We
      intend
      to reinvest our earnings, if any, in the business, and have never declared
      or
      paid, and do not intend to declare or pay, any cash dividends on our
      stock.





On
      October 23, 2007, BHIT granted non-qualified stock options to purchase 250,000
      shares of the company’s stock for $0.35 a share to each of its four directors as
      compensation for serving on the board in 2008. The options were fully vested
      on
      the date of grant and expire on October 23, 2010. The options were not
      registered under the Securities Act of 1933 in reliance on the private offering
      exemption from registration provided by § 4(2) of the act and related Rule 506
      of Regulation D.




**Item
      6.**  **Management’s
      Discussion and Analysis or Plan of Operation.**




BHIT
      is
      currently a shell company without significant operations or sources of revenues
      other than its investments. However, we are aggressively investigating potential
      acquisition candidates and additional sources of financing.





**Results
      of Operations**




Our
      total
      revenue for 2007 was $80,890, compared to $72,289 in 2006, an increase of
      $8,601, or 11.9%. Revenues improved as the result of higher interest earned
      on
      increased invested funds, offset in part by lower interest rates. In June 2007
      we sold 10.0 million of our common shares for a total of $1.0 million,
      significantly increasing invested funds.





Our
      expenses for 2007 increased $570,594, or 472.3%, to $691,410, compared to
      $120,816 in 2006. The increase in expenses in 2007 resulted primarily from
      non-cash stock-based compensation charges of $430,000 for the issuance of
      options to our directors for serving on the board. General and administrative
      expenses also increased due to expenditures related to evaluating potential
      acquisition candidates, primarily in the fourth quarter of
      2007.


3





Accordingly,
      our net loss for 2007 was $610,520 ($0.030 per share), compared to $48,527
      ($0.003 per share), in 2006, an increase of $561,993.





**Financial
      Condition and Liquidity**




Cash
      and
      cash equivalents consist of cash and short-term investments. Our cash and cash
      equivalents balance at December 31, 2007 was $2,269,054, an increase of
      $848,741, or 59.8%, from $1,420,313 at December 31, 2006. Cash and cash
      equivalents increased in 2007 as the result of our receipt of the proceeds
      from
      the sale of 10.0 million shares of our common stock in June 2007.





We
      are
      exploring various acquisition opportunities and have incurred due diligence,
      legal and accounting costs in connection with evaluating these opportunities.
      At
      this time, we have no other material commitments for capital expenditures.
      We
      believe our cash is sufficient to meet our needs for anticipated operating
      expenses as a shell company for 2008. However, we are exploring additional
      sources of financing to fund the possible acquisition of an operating company.
      We cannot guaranty we will be able to obtain adequate financing on acceptable
      terms.





**Off-Balance
      Sheet Arrangements**




We
      do not
      have any material off-balance sheet arrangements.





**Critical
      Accounting Policies**




For
      a
      discussion of significant accounting policies that impact our financial
      reporting, please turn to Note 1 of our financial statements beginning on page
      F-7.




**Item
      7.**  **Financial
      Statements.**




Our
      2007
      and 2006 consolidated financial statements audited by Grant Thornton LLP follow
      this annual report beginning on page F-1.




**Item
          8.** **Changes
          in and Disagreements with Accountants on Accounting and Financial
          Disclosure.**




Not
      applicable.




**Item
      8A(T).**  **Controls
      and Procedures.**




Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting, as such term is defined in Exchange Act Rules
      13a-15(f) and 15d-15(f). Our internal control over financial reporting includes
      policies and procedures that provide reasonable assurance regarding the
      reliability of financial reporting and the preparation of financial statements
      for external reporting purposes in accordance with U.S. generally accepted
      accounting principles.


4





Under
      the
      direction of our interim chief executive and chief financial officers, we have
      evaluated our disclosure controls and procedures and internal control over
      financial reporting. In making this assessment, management used the criteria
      set
      forth in *Internal Control Over Financial Reporting — Guidance for Smaller Public
      Companies (2006)* issued
      by
      the Committee of Sponsoring Organization of the Treadway Commission, or COSO.
      Based on these criteria, management concluded that our disclosure controls
      and
      procedures and internal control over financial reporting were effective as
      of
      December 31, 2007. In addition, no change in internal control over financial
      reporting occurred during the quarter ended December 31, 2007 that has
      materially affected, or is reasonably likely to materially affect, our internal
      control over financial reporting.





This
      annual report does not include an attestation report of our registered public
      accounting firm regarding internal control over financial reporting.
      Management’s report was not subject to attestation by our registered public
      accounting firm pursuant to temporary rules of the SEC that permit us to provide
      only management’s report in this annual report.





**Item
      8B.**  **Other
      Information**




Not
      applicable.





**PART
      III**




**Item 9.**
            **Directors,
                Executive Officers****,
                Promoters, Control Persons and Corporate Governance; Compliance with
                Section 16(a) of the Exchange
                Act.**




Our
      current directors and executive officers are:





**Gary
      O. Marino** ,
      age 63,
      joined our board in January 2007 and was appointed chairman in January 2008.
      Mr.
      Marino serves as chairman, president and CEO of Patriot Rail Corp., an owner
      and
      operator of short line and regional railroads, and formerly held the same
      positions at RailAmerica, Inc. (NYSE:RRA), a company he founded in 1985, until
      his retirement in 2004. From 1984 until 1993, Mr. Marino served as chairman,
      president and CEO of Boca Raton Capital Corporation, a publicly owned venture
      capital investment company. Prior to that he spent more than fifteen years
      in
      commercial banking in New York as a senior loan officer and was also president
      and CEO of two small business investment companies (SBIC’s), as well as
      president of a Florida-based commercial bank. Mr. Marino received his B.A.
      degree from Colgate University and his M.B.A. from Fordham University. From
      1966
      to 1969, he served as an officer of the United States Army Ordnance Corps.
      He
      has also served on the board of directors of the American Association of
      Railroads.





**Andrew
      H. Scott** ,
      age 40,
      joined our board and was appointed interim chief executive officer in January
      2007. Mr. Scott is currently a managing director of Maxim Group, LLC
      specializing in structured finance focusing on the healthcare, financial
      services and technology industries. Mr. Scott has over fifteen years of
      experience in the financial services industry. He is a graduate of Pace
      University with a B.B.A. in accounting and a minor in
      mathematics.


5





**Paul
      S. Dennis** ,
      age 70,
      joined the board in January 2007 and was appointed interim chief financial
      officer in February 2007. Mr. Dennis has served as president and CEO of
      Associated Health Care Management Company, Inc. since 1977. Health Care
      Management is a Cleveland, Ohio based company that managed eight nursing care
      facilities and four congregate living facilities. The company has sold all
      but
      one of its facilities. Mr. Dennis has also been a director and officer with
      various companies and business ventures in the hardware distribution,
      pharmaceuticals distribution and steel fabrication industries and a real estate
      developer, general contractor, owner and investor.





**Harvey
      J. Polly** ,
      age 79,
      joined our board in January 2007 and served as chairman until January 2008.
      Mr.
      Polly previously served as our CEO from 1995 to 2000 before selling his interest
      in the company to Summa. He has been a principal shareholder, director and
      COO
      of various short line railroads and The Hanover Bank of Florida, and a principal
      and the president of Helena Rubinstein, an international cosmetics company. Mr.
      Polly is a graduate of Keystone College and Columbia University’s Graduate
      School of Business.





**Committees
      of the Board**




We
      are
      still in the early stages of our business plan and our new board has only four
      members. Because of the small size of our board, our directors have not yet
      designated audit, nominating or other committees. Instead, these
      responsibilities are handled by the entire board. Without an audit committee,
      we
      have not designated a director as an “audit committee financial expert” as
      defined by SEC rules. Although we are pleased with the diverse skills and level
      of expertise that our directors possess, we intend to add additional directors
      when we acquire an operating company. Our board plans to form appropriate
      committees at that time.





**Code
      of Ethics**




In
      the
      wake of the recent corporate scandals, the SEC has adopted rules encouraging
      companies to adopt written ethical guidelines for their officers and employees.
      We believe strongly in the importance of ethical conduct in our business
      endeavors, and in March 2004, our board of directors unanimously adopted a
      code
      of conduct and ethics that applies to all of our officers, directors and
      employees, including our principal executive officer and principal financial
      and
      principal accounting officer. We will provide a copy of our code without charge
      upon written request to Paul S. Dennis, 7005 Stadium Drive, Suite 100,
      Brecksville, Ohio 44141.





**Compliance
      with 16(a) of the Exchange Act**




Section
      16(a) of the Securities Exchange Act of 1934 requires our directors and
      executive officers, and persons who own more than 10% of our common stock,
      to
      make filings with the SEC reporting their ownership of our common stock and
      to
      furnish us with copies of these filings. Based solely on our review of copies
      of
      reports furnished to us, we believe that all § 16(a) filing requirements
      were met in 2007. Copies of these filings are available on the SEC’s website at
      www.sec.gov.


6


Item
      10.Executive
      Compensation.




**Summary
      Compensation Table**




We
      did
      not pay our interim chief executive or financial officers any salary, bonus
      or
      other cash compensation in 2007, although they did receive stock options for
      serving on our board. We had no other executive officers in 2007. We did not
      pay
      our CEO or CFO in 2006, nor did we pay any other officer $100,000 or more in
      2006. The following table summarizes the compensation paid by us to our interim
      chief executive and financial officers.





**Name
                and**
              **Principal
                Position**
            
            **Year**
            
            **Salary**
            
            **Bonus**
            
            **Option
                Awards**
            
            **All
                Other Compensation**
            
            **Total**Andrew
                H. Scott, Interim Chief Executive Officer
            
            
            2007
            
            
            —
            
            
            —
            
            $
            107,500*
            
            
            —
            
            $
            107,500Paul
                S. Dennis, Interim Chief Financial Officer
            
            
            2007
            
            
            —
            
            
            —
            
            $
            107,500*
            
            
            —
            
            $
            107,500





*
            The
                fair value of stock options is based on the FAS 123(R) compensation
                expense recognized as of the date of grant. We use the Black-Scholes
                option pricing model to estimate compensation cost for stock option
                awards. Please see the table regarding the assumptions used in this
                calculation in Note 1: “Summary of Business and Significant Accounting
                Policies — Stock-Based Compensation” to our consolidated financial
                statements included in this Form
                10-KSB.





**Outstanding
      Equity Awards at December 31, 2007**




The
      following table summarizes information with respect to the stock options held
      by
      our executive officers as of December 31, 2007.




**Name**
              
              **Number
                  of Underlying Unexercised**
                **Options**
                **Exercisable**
              
              **Number
                  of Underlying Unexercised Options
                  Unexercisable**
              
              **Option Exercise
                  Price**
              
              **Option Expiration
                  Date**Andrew
                  H. Scott
              
              
              250,000
              
              
              —
              
              $
              0.35
              
              
              10/23/2010
              (1)250,000
              
              
              —
              
              $
              0.15
              
              
              3/02/2010
              (2)Paul
                  S. Dennis
              
              
              250,000
              
              
              —
              
              $
              0.35
              
              
              10/23/2010
              (1)250,000
              
              
              —
              
              $
              0.15
              
              
              3/02/2010
              (2)





(1)
            Options
                vested on October 23, 2007, the date of
                grant.


(2)
            Options
                vested on March 2, 2007, the date of
                grant.





**Director
      Compensation**




In
      March
      2007, BHIT issued options to purchase 250,000 shares of the company’s stock for
      $0.15 a share to each of its four directors as compensation for serving on
      the
      board in 2007. In October 2007, BHIT issued options to purchase an additional
      250,000 shares for $0.35 a share to each of the directors for serving on the
      board in 2008. Our directors did not receive any cash compensation. The
      following table summarizes information with respect to the compensation paid
      to
      our directors during the fiscal year ended December 31, 2007.


7




**Name**
              
              **Fees Earned or**
                **Paid in Cash**
              
              **Option**
                **Awards**
              
              **All Other
                  Compensation**
              
              **Total**Andrew
                  H. Scott
              
              
              —
              
              $
              107,500*
              
              
              —
              
              $
              107,500*Paul
                  S. Dennis
              
              
              —
              
              $
              107,500*
              
              
              —
              
              $
              107,500*Gary
                  O. Marino
              
              
              —
              
              $
              107,500*
              
              
              —
              
              $
              107,500*Harvey
                  J. Polly
              
              
              —
              
              $
              107,500*
              
              
              —
              
              $
              107,500*




*
            The
                fair value of stock options is based on the FAS 123(R) compensation
                expense recognized as of the date of grant. We use the Black-Scholes
                option pricing model to estimate compensation cost for stock option
                awards. Please see the table regarding the assumptions used in this
                calculation in Note 1: “Summary of Business and Significant Accounting
                Policies — Stock-Based Compensation” to our consolidated financial
                statements included in this Form
                10-KSB.




**Item
      11.**  **Security
      Ownership of Certain Beneficial Owners and Management and Related Stockholder
      Matters.**




The
      following table lists the stock ownership of our directors and executive
      officers as of March 20, 2008.





**Significant
                Stockholders**
            
            **Shares**
            
            **Options**
            
            **Total**
            
            **Percentage****(1)****Gary
                O. Marino**
              Patriot
                Equity, LLC
              2255
                Glades Road, Suite 342-W
              Boca
                Raton, Florida 33431
            
            
            1,195,417
            (2)
            
            500,000
            
            
            1,695,417
            
            
            6.7
            %**Andrew
                H. Scott**
              Maxim
                Group, LLC
              405
                Lexington Ave.
              New
                York, New York 10174
            
            
            940,833
            
            
            500,000
            
            
            1,440,833
            
            
            5.7
            %**Paul
                S. Dennis**
              Associated
                Health Care Management
              7005
                Stadium Drive, Suite 100
              Brecksville,
                Ohio 44141
            
            
            2,221,250
            
            
            500,000
            
            
            2,721,250
            
            
            10.7
            %**Harvey
                J. Polly**
              2901
                South Ocean Blvd.,
              Penthouse
                5
              Highland
                Beach, Florida 33487
            
            
            2,486,250
            (3)
            
            500,000
            
            
            2,986,250
            
            
            11.7
            %**Total**
            
            
            6,843,750
            
            
            2,000,000
            
            
            8,843,750
            
            
            32.8
            %




(1)
            There
                were 24,988,051 shares outstanding on March 20, 2008. Assumes the
                exercise
                of options held by that director, but no
                others.




8




(2)
            Shares
                held by Patriot Equity, LLC, a limited liability company of which
                Mr.
                Marino is the sole member.




(3)
            Includes
                100,000 shares beneficially owned by Mr. Polly’s
                wife.




**Equity
      Compensation Plan Information**




During
      2007, our directors each received a total of 500,000 options as compensation
      for
      serving on our board for 2007 and 2008. The Company has not issued any other
      options, warrants or rights. Our equity plans are summarized in the following
      table.




**Plan
                  category**
              
              **Number
                  of**
                **securities**
                **to be issued upon**
                **exercise
                  of outstanding options**
              
              **Weighted-average**
                **exercise
                  price of**
                **outstanding options**
              
              **Number
                  of**
                **securities**
                **remaining
                  available**
                **for
                  future issuance**
                **under
                  equity**
                **compensation
                  plans (excluding securities reflected**
                **in
                  the first column)**Equity
                  compensation plans approved by security holders
              
              
              —
              
              
              —
              
              
              —Equity
                  compensation plans not approved by security holders
              
              
              2,000,000
              
              $
              0.25
              
              
              —Total
              
              
              2,000,000
              
              $
              0.25
              
              
              —





**Item
      12.**  **Certain
      Relationships and Related Transactions, and Director
      Independence.**




We
      did
      not engage in any related party transactions in 2007.





None
      of
      our directors are independent, nor are we required to have independent directors
      as shares of our common stock are not listed on any exchange but are traded
      over-the-counter.




**Item
      13.**  **Exhibits.**




14
            Code
                of Ethics (filed as Exhibit 14 to BHIT’s Annual Report on Form 10-K for
                the fiscal year ended December 31, 2006 filed with the SEC on April
                16,
                2007 and incorporated herein by reference)31.1
            Rule
                13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                Pursuant
                to Section 302 of the Sarbanes-Oxley Act of 200231.2
            Rule
                13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                Pursuant
                to Section 302 of the Sarbanes-Oxley Act of 200232
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002


9


**Item
      14.**  **Principal
      Accountant Fees and Services.**





Grant
      Thornton LLP has served as BHIT’s certified public accountants since 2000. Grant
      Thornton billed us $34,155 in 2007 and $26,496 in 2006 for audit fees. Grant
      Thornton did not render any other services to BHIT during 2007 or 2006.





Because
      of the small size of our board, the directors have not designated an audit
      committee. Instead, these responsibilities are handled by the entire board,
      which considers and pre-approves any audit or non-audit services to be performed
      by Grant Thornton. Our board believes the services provided by Grant Thornton
      are compatible with maintaining our auditor’s independence.


10


**SIGNATURES**




In
      accordance with Section 13 or 15(d) of the Exchange Act, B.H.I.T. Inc. caused
      this report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




B.H.I.T.
                Inc.Date:
                March 31, 2008
            /s/
                Andrew H. ScottBy
                Andrew H. Scott,Interim
                Chief Executive Officer/s/
                Paul S. DennisBy
                Paul S. Dennis, Interim Chief Financial
                Officer








In
      accordance with the Exchange Act, this report has been signed below by the
      following persons on behalf of B.H.I.T. Inc. and in the capacities and on the
      dates indicated.








Date:
                March 31, 2008
            
            /s/
                Gary O. MarinoBy
              Gary O. Marino, Chairman of the BoardDate:
                March 31, 2008
            
            /s/
                Andrew H. ScottBy
                Andrew H. Scott,Interim
                Chief Executive Officer and DirectorDate:
                March 31, 2008
            
            /s/
                Paul S. DennisBy
                Paul S. Dennis, Interim Chief Financial OfficerDate:
                March 31, 2008
            
            /s/
                Harvey J. PollyBy
                Harvey J. Polly, Director


11




**B.H.I.T.
      Inc.**





**Index
      to Financial Statements**




Balance
                Sheets as of December 31, 2007 and 2006
            
            
            F-3Statements
                of Operations for the Years Ended December 31, 2007 and
                2006
            
            
            F-4Statements
                of Stockholders’ Equity for the Years Ended December 31, 2007 and
                2006
            
            
            F-5Statements
                of Cash Flows for the Years Ended December 31, 2007 and
                2006
            
            
            F-6Note
                1. Summary of Business and Significant Accounting Policies
            
            
            F-7Basis
                of Presentation
            
            
            F-7Nature
                of Operations
            
            
            F-7Stock
                Offering
            
            
            F-7Income
                Taxes
            
            
            F-7Loss
                Per Share
            
            
            F-7Cash
                and Cash Equivalents
            
            
            F-8Revenue
                Recognition
            
            
            F-8Stock-Based
                Compensation
            
            
            F-8Use
                of Estimates
            
            
            F-8New
                Accounting Pronouncements
            
            
            F-9Note
                2. Income Taxes
            
            
            F-9




F-1


**Report
      of Independent Registered Public Accounting Firm**




The
      Stockholders


B.H.I.T.
      Inc.





We
      have
      audited the accompanying balance sheets of B.H.I.T. Inc. (a Delaware
      corporation) as of December 31, 2007 and 2006, and the related statements of
      operations, stockholders’ equity, and cash flows for the years then ended. These
      financial statements are the responsibility of the Company’s management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform an audit of its internal control over
      financial reporting. Our audit includes consideration of internal control over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion on the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit also includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements, assessing the accounting principles used and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of B.H.I.T. Inc. as of December 31,
      2007 and 2006, and the results of its operations and its cash flows for the
      years then ended in conformity with accounting principles generally accepted
      in
      the United States of America.





/s/
                Grant Thornton LLPCleveland,
                OhioMarch
                28, 2008




F-2




**B.H.I.T.
        Inc.**
 
 **Balance
        Sheets**
 **As
        of December 31, 2007 and 2006**
 
 **December
                  31,****2007**
              
              **2006****ASSETS****Current
                  Assets**Cash
                  and cash equivalents
              
              $
              2,269,054
              
              $
              1,420,313Interest
                  receivable on cash and cash equivalents
              
              
              1,897
              
              
              5,640Prepaid
                  insurance
              
              
              13,786
              
              
              14,026Total
                  Current Assets
              
              $
              2,284,737
              
              $
              1,439,979**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities**Accounts
                  payable and other accrued expenses
              
              $
              72,924
              
              $
              47,646**Stockholders'
                  Equity**Shares
                  of Common Stock, $0.01 par value, 75,000,000 shares authorized
                  and
                  25,020,808 shares issued at December 31, 2007 and 20,000,000 authorized
                  and 15,020,808 issued at December 31, 2006
              
              
              89,490,847
              
              
              88,060,847Accumulated
                  deficit
              
              
              (87,270,845
              )
              
              (86,660,325
              )Treasury
                  stock, at cost, for 32,757 shares of Common Stock
              
              
              (8,189
              )
              
              (8,189
              )Total
                  Stockholders' Equity
              
              
              2,211,813
              
              
              1,392,333Total
                  Liabilities and Stockholders' Equity
              
              $
              2,284,737
              
              $
              1,439,979
 
 *See
        accompanying notes to the Financial Statements.*
  F-3
 
 **B.H.I.T.
        Inc.**
 
 **Statements
        of Operations**
 **For
        the Years Ended December 31, 2007 and 2006**
  **December
                  31,****2007**
              
              **2006****Revenue**Interest
                  earned on cash and cash equivalents
              
              $
              80,890
              
              $
              72,289**Expenses**General
                  and Administrative
              
              
              261,410
              
              
              120,816Stock
                  based compensation
              
              
              430,000
              
              
              —Total
                  Expenses
              
              
              691,410
              
              
              120,816**Net
                  Loss**
              
              $
              (610,520
              )
              $
              (48,527
              )Weighted
                  average number of shares outstanding
              
              
              20,659,284
              
              
              14,988,051Basic
                  and diluted net loss per share of Common Stock
              
              $
              (0.030
              )
              $
              (0.003
              )
 
 *See
        accompanying notes to the Financial Statements.*
  F-4
  B.H.I.T.
        Inc.
 **Statements
        of Stockholders' Equity**
 **For
        the Years Ended December 31, 2007 and 2006**
  **Common
                  Stock**
              
              
              
              **Treasury
                  Stock****Shares
                  Issued**
              
              **Amount**
              
              **Accumulated
                  Deficit**
              
              **Shares**
              
              **Amount**
              
              **Total**Stockholders'
                  equity (deficit) December
                  31, 2005
              
              
              15,020,808
              
              $
              88,060,847
              
              $
              (86,611,798
              )
              
              32,757
              
              $
              (8,189
              )
              $
              1,440,860Net
                  loss for the year ended December 31, 2006
              
              
              —
              
              
              —
              
              $
              (48,527
              )
              
              —
              
              
              —
              
              $
              (48,527
              )Stockholders'
                  equity (deficit) December 31, 2006
              
              
              15,020,808
              
              $
              88,060,847
              
              $
              (86,660,325
              )
              
              32,757
              
              $
              (8,189
              )
              $
              1,392,333Sale
                  of common stock
              
              
              10,000,000
              
              $
              1,000,000
              
              
              
              
              
              
              
              
              
              
              $
              1,000,000Issuance
                  of stock options
              
              
              
              
              $
              430,000
              
              
              
              
              
              
              
              
              
              
              $
              430,000Net
                  loss for the year ended December 31, 2007
              
              
              —
              
              
              —
              
              $
              (610,520
              )
              
              —
              
              
              —
              
              $
              (610,520
              )Stockholders'
                  equity (deficit) December 31, 2007
              
              
              25,020,808
              
              $
              89,490,847
              
              $
              (87,270,845
              )
              
              32,757
              
              $
              (8,189
              )
              $
              2,211,813
 
 *See
        accompanying notes to the Financial Statements.*
  F-5
  **B.H.I.T.
        Inc.**
 
 **Statements
        of Cash Flows**
 **For
        the Years Ended December 31, 2007 and 2006**
  **December
                  31,****2007**
              
              **2006****Operating
                  Activities**Net
                  Loss
              
              $
              (610,520
              )
              $
              (48,527
              )****Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Stock
                  based compensation
              
              
              430,000
              
              
              —Changes
                  in assets and liabilities:****Interest
                  receivable on cash and cash equivalents
              
              
              3,743
              
              
              (25
              )Prepaid
                  insurance and miscellaneous expenses
              
              
              240
              
              $
              (14,026
              )Accounts
                  payable and accrued expenses
              
              
              25,278
              
              
              16,538Net
                  cash used in operations
              
              
              (151,259
              )
              
              (46,040
              )**Financing
                  Activities**Proceeds
                  from sale of common stock
              
              
              1,000,000
              
              
              —Net
                  cash from financing
              
              
              1,000,000
              
              
              —Net
                  increase (decrease) in cash
              
              $
              848,741
              
              $
              (46,040
              )Cash
                  and cash equivalents at beginning of period
              
              $
              1,420,313
              
              $
              1,466,353Cash
                  and cash equivalents at end of period
              
              $
              2,269,054
              
              $
              1,420,313
 
 *See
        accompanying notes to the Financial Statements.*
  F-6




**B.H.I.T.
        Inc.**
  **Notes
        to Financial Statements**
 **Years
        Ended December 31, 2007 and 2006**




**Note
      1. Summary of Business and Significant Accounting Policies**




**Basis
      of Presentation**


B.H.I.T.
      Inc. (“BHIT,” “we,” “our” or the “company”) was originally organized under the
      laws of the State of Massachusetts in 1985, under the name VMS Hotel Investment
      Trust, for the purpose of investing in mortgage loans, principally to entities
      affiliated with VMS Realty Partners. The company was subsequently reorganized
      as
      a Delaware corporation in 1987. We changed our name from Banyan Hotel Investment
      Fund to B.H.I.T. Inc. in 1998.





On
      January 24, 2007, a group of private investors purchased all of the BHIT shares
      held by Summa Holdings, Inc., then the company’s largest stockholder. As a
      result of the transaction, James Benenson, Jr. and John V. Curci each resigned
      as directors and officers of the company and Paul S. Dennis, Gary O. Marino,
      Harvey J. Polly and Andrew H. Scott were appointed to fill vacancies in the
      board. Our new management team is aggressively investigating potential operating
      companies to acquire and additional sources of financing. Currently we are
      focusing our efforts on railroad track repair and maintenance businesses, but
      we
      cannot guarantee we will complete an acquisition in this industry. Accordingly,
      we may explore potential acquisitions in other industries as well.





Our
      business is not seasonal and we have no foreign or export business. We do not
      segregate revenue or assets by geographical region because this presentation
      would not be material to an understanding of our business taken as a
      whole.




**Nature
      of Operations**


Currently
      BHIT is a shell company without significant operations or sources of revenues
      other than its investments. Our existing operations relate primarily to
      servicing our cash investment portfolio and maximizing existing capital with
      stable interest generating instruments.




**Stock
      Offering** ****


On
      June
      8, 2007, the Company sold an aggregate of 10.0 million shares of its common
      stock in a private placement to a total of thirty-six accredited investors,
      primarily existing stockholders of the Company. The shares were sold at a price
      of $0.10 a share for a total of $1.0 million.




**Income
      Taxes**


BHIT
      utilizes the asset and liability method of accounting for income taxes. Under
      this method, deferred tax assets and liabilities are recognized by applying
      enacted statutory tax rates, applicable to future years to temporary differences
      between the tax bases and financial statement carrying values of the company’s
      assets and liabilities. A valuation allowance is provided where it is more
      likely than not that deferred tax assets will not be realized.




**Loss
      Per Share**


Basic
      and
      diluted loss per share was calculated in 2007 using 20,659,284 shares and in
      2006 using 14,988,051 shares, the number of weighted average shares outstanding
      each year. The impact of outstanding stock options was not included in dilutive
      earnings per share as their inclusion would be anti-dilutive.


F-7




**B.H.I.T.
          Inc.**
  **Notes
          to Financial Statements**
 **Years
          Ended December 31, 2007 and 2006**




**Cash
      and Cash Equivalents**


We
      consider all highly liquid instruments purchased with maturities of three months
      or less to be cash and cash equivalents.




**Revenue
      Recognition**


We
      record
      interest income from cash and cash equivalents on an accrual basis.




**Stock-Based
      Compensation**


The
      company has stock option agreements with its directors that provide for the
      issuance of a total of 2.0 million shares of common stock. We entered into
      stock
      option agreements for the purchase of a total of 1.0 million shares with our
      directors on March 2, 2007, with an exercise price of $0.15 a share, as
      compensation for serving on the board in 2007. We entered into stock option
      agreements for the purchase of an additional 1.0 million shares on October
      23,
      2007, with an exercise price of $0.35 a share, as compensation for serving
      on
      the board in 2008. The number of options issued and the grant dates were
      determined at the discretion of the company’s board. Grantees vested in the
      options immediately. Options granted under the plan are exercisable for a period
      not to exceed three years. No options were exercised during 2007.





The
      fair
      values of the stock options issued during 2007 have been estimated using the
      Black-Scholes method, whereby the valuation model takes into account variables
      such as volatility, dividend yield, and the risk free interest rate. Management
      has determined that the March 2, 2007 options have a value of $0.18 per share
      and the October 23, 2007 options have a value of $0.25 per share resulting
      in
      total compensation expense for the year ended December 31, 2007 of
      $430,000.





Expected
      volatility rate was estimated using the average volatility rates of fourteen
      public companies in the financial and business services industry. The weighted
      average assumptions used in the option-pricing models during 2007 were as
      follows:





Discount
                interest rate
            
            
            4.28
            %Expected
                life (years)
            
            
            3Expected
                volatility
            
            
            69.67
            %Dividend
                yield
            
            
            0





The
      stock
      options are not considered in calculating diluted earnings per share because
      they are anti-dilutive.




**Use
      of Estimates**


The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect amounts reported in the financial
      statements and accompanying notes. Actual results could differ from these
      estimates.


F-8


**B.H.I.T.
          Inc.**
  **Notes
          to Financial Statements**
 **Years
          Ended December 31, 2007 and 2006**




**New
      Accounting Pronouncements**


In
      February 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No.
      159, “The Fair Value Option for Financial Assets and Financial
      Liabilities-including an amendment of FASB Statement No. 115.” SFAS 159 allows
      companies to choose to elect measuring eligible financial instruments and
      certain other items at fair value that are not required to be measured at fair
      value. SFAS 159 requires that unrealized gains and losses on items for which
      the
      fair value option has been elected be reported in earnings at each reporting
      date. SFAS 159 is effective for fiscal years beginning after November 15, 2007.
      We adopted SFAS 159 on January 1, 2008. Although the company will continue
      to
      evaluate the application of SFAS 159, management does not currently believe
      adoption will have a material impact on the company’s financial condition or
      operating results.





In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which
      defines fair value, provides a framework for measuring fair value, and expands
      the disclosures required for fair value measurements. SFAS 157 applies to other
      accounting pronouncements that require fair value measurements; it does not
      require any new fair value measurements. SFAS 157 was to be effective for BHIT
      on January 1, 2008. However, in February 2008, the FASB released a FASB Staff
      Position (FSP FAS 157-2 — Effective Date of FASB Statement No. 157) which
      delayed the effective date of SFAS No. 157 for BHIT to January 1, 2009. We
      are
      currently evaluating the impact of the adoption of SFAS 157 on the company’s
      financial condition and operating results.




**Note
      2. Income Taxes** ****




The
      company reported no income tax expense or benefit for 2007 and 2006 due to
      the
      net operating losses incurred during both years.





Our
      federal net operating loss (“NOL”) carryforward balance for 2007 was $3,754,529
      and in 2006 was $21,559,269. Our NOL carryforwards are scheduled to expire
      between 2008 and 2027. NOL utilization may be subject to a limitation contained
      in Internal Revenue Code Section 382. The purchase of the Summa’s shares and
      subsequent stock issuances may have substantially limited or eliminated the
      opportunity to utilize our NOL carryforwards.





The
      following deferred tax assets were offset by a valuation allowance due to the
      uncertainty of realizing the income tax benefit associated with the deferred
      tax
      assets.




**2007**
            
            **2006**Tax
                effect of net operating loss carryforward
            
            $
            1,276,540
            
            $
            7,330,151Stock
                compensation benefit
            
            
            146,200
            
            
            —Valuation
                allowance
            
            
            (1,422,740
            )
            
            (7,330,151
            )Net
                deferred tax asset
            
            $
            —
            
            $
            —


For
      2007,
      the net decrease of $6,053,611 in the tax-effected NOL carryforward and the
      valuation allowance was the result of the net loss for 2007 and the expiration
      of $17,985,259 NOL generated in 1992. In 2006, the net decrease of $17,986,489
      in the tax-effected NOL carryforward and the valuation allowance was the result
      of the net loss for 2006 and the expiration of $52,949,966 NOL generated in
      1991.




F-9


**B.H.I.T.
          Inc.**
  **Notes
          to Financial Statements**
 **Years
          Ended December 31, 2007 and 2006**




In
      June
      2006, the FASB issued FASB Interpretation No. 48 (FIN 48), “Accounting for
      Uncertainty in Income Taxes.” Previously, the Company had accounted for
      contingencies in accordance with Statement of Financial Accounting Standards
      No.
      5, “Accounting for Contingencies.” The interpretation provides guidance on
      recognition, classification and disclosure concerning uncertain tax liabilities.
      The evaluation of a tax position requires recognition of a tax benefit if it
      is
‘more-likely-than-not’ that it will be sustained upon examination. For tax
      positions meeting the ‘more-likely-than-not’ threshold, the amount recognized in
      the financial statements is the largest benefit that has a greater than 50%
      likelihood of being realized upon ultimate settlement with the relevant tax
      authority. FIN 48 is effective for fiscal years beginning after December 15,
      2006. Accordingly, the Company adopted FIN 48 effective January 1, 2007. At
      the
      adoption date, the Company applied FIN 48 to all positions for which the statute
      of limitations remained open. The Company recorded a valuation allowance for
      all
      deferred tax assets as of December 31, 2007, to be adjusted if the deferred
      tax
      assets realization is more likely than not. The Company believes that the
      adoption of FIN 48 did not have any material impact on the Company’s financial
      position.


F-10