**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
 
 **FORM
        10-Q**
 
 (Mark
        One)
 
 þ
              Quarterly
                  report pursuant to Section 13 or 15(d) of the Securities Exchange
                  Act of
                  1934
 For
        the
        quarterly period ended **March 31, 2008**
 
 o
              Transition
                  report pursuant to Section 13 or 15(d) of the Securities Exchange
                  Act of
                  1934
 
 Commission
        file number: **1-9043**
 
 **B.H.I.T.
        Inc.**
 (Exact
        name of registrant as specified 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)
 
 **440-746-8600**
 (Registrant’s
        telephone number)
 
 Indicate
        by a check mark whether the registrant: (1) has filed all reports required
        to be
        filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
        the
        preceding 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  ̈
 
 Indicate
        by a check mark whether the registrant is a large accelerated filer, an
        accelerated filer, a non-accelerated filer, or a smaller reporting
        company.
 
 Large
        Accelerated Filer  ̈  Accelerated
        Filer  ̈  Non-Accelerated
        Filer  ̈
 Smaller
        Reporting Company þ
 
 Indicate
        by check mark whether the registrant is a shell company (as defined in Rule
        12b-2 of the Exchange Act). Yes þ No  ̈
 
 Indicate
        the number of shares outstanding of each of the issuer’s classes of common
        stock, as of the latest practicable date: **24,988,051
        shares of common stock, $0.01 par value per share, as of May 5,
        2008.**
  
 **Table
        of Contents**
 
 Part
                  I — Financial Information
              1Item
                  1.
              Financial
                  Statements
              1Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              1Our
                  History
              1Forward
                  Looking Statements
              2Results
                  of Operations
              2Financial
                  Condition and Liquidity
              2Off-Balance
                  Sheet Arrangements
              3How
                  to Learn More About BHIT
              3Item
                  4.
              Controls
                  and Procedures
              3Part
                  II — Other Information
              3Item
                  1.
              Legal
                  Proceedings
              3Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              3Item
                  3.
              Defaults
                  Upon Senior Securities
              3Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              3Item
                  5.
              Other
                  Information
              4Item
                  6.
              Exhibits
              4Signatures
              5
  
  **Part
        I — Financial Information**
  **Item
        1.**  **Financial
        Statements**
 
 Our
        March
        31, 2008 unaudited consolidated financial statements follow this quarterly
        report beginning on page F-1.
 **Item
        2.**  **Management’s
        Discussion and Analysis** **of Financial Condition and Results of Operations**





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 $87,319,630 on March 31,
      2008.





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. In April 2008 Mr. Scott resigned from the board to
      pursue other business interests.


1


**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:




·
            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.





**Results
      of Operations**




Our
      total
      revenues for the quarter ended March 31, 2008 were $17,749, compared to $13,810
      for the same period in 2007, an increase of $3,939, or 28.5%. Revenues increased
      as the result of additional interest earned on invested funds which were
      increased by the proceeds from our June 2007 private placement.





Our
      total
      expenses for the first quarter of 2008 decreased $132,293, or 66.5%, to $66,534,
      compared to $198,827 for the first quarter of 2007. The decrease was caused
      by
      $180,000 in stock based compensation expense recognized in 2007 arising from
      the
      issuance of stock options to members of the board of directors, partially offset
      by higher general and administrative expenses in 2008 as a result of
      professional fees associated with exploring potential acquisition
      candidates.





Accordingly,
      our net loss for the first quarter of 2008 was $48,785 ($0.002 per share),
      compared to a net loss of $185,017 ($0.012 per share) in 2007, a decrease of
      $136,232.





**Financial
      Condition and Liquidity**




Cash
      and
      cash equivalents consist of cash and short-term investments. Our cash and cash
      equivalents balance at March 31, 2008 was $2,183,950, a decrease of $85,104
      from
      $2,269,054 at December 31, 2007. Cash and cash equivalents decreased in the
      first quarter primarily as the result of our net loss for the
      period.


2


At
      this
      time, we have no material commitments for capital expenditures, although we
      are
      exploring various acquisition opportunities. 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.





**Off-Balance
      Sheet Arrangements**




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





**How
      to Learn More About** **BHIT**




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, Paul S. Dennis,
      at 440-746-8600.




**Item
      4.**  **Controls
      and Procedures**





Under
      the
      direction of our interim chief executive and chief financial officer management
      evaluated our disclosure controls and procedures (as defined in Exchange Act
      Rule 13a-15(e)) and internal control over financial reporting (as defined in
      Exchange Act Rule 13a-15(f)) and concluded that our disclosure controls and
      procedures were effective as of March 31, 2008, and no change in our internal
      control over financial reporting occurred during the quarter ended March 31,
      2008 that has materially affected, or is reasonably likely to materially affect,
      our internal control over financial reporting.





**Part
      II — Other Information**




**Item
      1.**  **Legal
      Proceedings**





We
      are
      not aware of any pending legal proceedings involving BHIT as of May 5, 2008,
      nor
      were any proceedings terminated in the first quarter of 2008.




**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds**





Not
      applicable.




**Item
      3.**  **Defaults
      Upon Senior Securities**





Not
      applicable.




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





Not
      applicable.


3


**Item
      5.** **Other
      Information**





On
      April
      9, 2008, Andrew H. Scott resigned as our interim chief executive officer and
      as
      a director to pursue other business interests and Paul S. Dennis was immediately
      appointed to replace Mr. Scott as interim chief executive officer.




**Item
      6.**  **Exhibits**





31
            Rule
                13a-14(a)/15d-14(a) Certification of Principal Executive and Financial
                Officer Pursuant to § 302 of the Sarbanes-Oxley Act of
                200232
            Rule
                13a-14(b)/15d-14(b) Certification Pursuant to § 906 of the Sarbanes-Oxley
                Act of 2002


4


**Signatures**





In
      accordance with the requirements of the Securities Exchange Act of 1934,
      B.H.I.T. Inc. has duly caused this report to be signed on its behalf by the
      undersigned thereunto duly authorized.





B.H.I.T.
                Inc.Date:
                May 14, 2008
            /s/
                Paul S. DennisBy
                Paul S. DennisInterim
                Chief Executive and Financial
                Officer




5


**B.H.I.T.
        Inc.**
 
 **Balance
        Sheets**
 **As
        of March 31, 2008 and December 31, 2007**
 
 **March 31, 2008**
              
              **December 31, 2007**(Unaudited)**ASSETS****Current
                  Assets**Cash
                  and cash equivalents
              
              $
              2,183,950
              
              $
              2,269,054Interest
                  receivable on cash and cash equivalents
              
              
              1,018
              
              
              1,897Prepaid
                  insurance
              
              
              9,191
              
              
              13,786Total
                  Current Assets
              
              $
              2,194,159
              
              $
              2,284,737**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****Current
                  Liabilities**Accounts
                  payable and other accrued expenses
              
              $
              31,131
              
              $
              72,924**Stockholders'
                  Equity**Shares
                  of Common Stock, $0.01 par value, 75,000,000 shares authorized
                  and
                  25,020,808 shares issued at March 31, 2008 and at December 31,
                  2007
              
              
              89,490,847
              
              
              89,490,847Accumulated
                  deficit
              
              
              (87,319,630
              )
              
              (87,270,845
              )Treasury
                  stock, at cost, for 32,757 shares of Common Stock
              
              
              (8,189
              )
              
              (8,189
              )Total
                  Stockholders' Equity
              
              
              2,163,028
              
              
              2,211,813Total
                  Liabilities and Stockholders' Equity
              
              $
              2,194,159
              
              $
              2,284,737
 
 *See
        accompanying notes to the Financial Statements.*
 
 F-1
  **B.H.I.T.
        Inc.**
  **Statements
        of Operations**
 **For
        the Three Months Ended March 31, 2008 and 2007**
 (Unaudited)
 
 **Three Months****2008**
              
              **2007****Revenue**Interest
                  earned on cash and cash equivalents
              
              $
              17,749
              
              $
              13,810**Expenses**General
                  and Administrative
              
              
              66,534
              
              
              18,827Stock
                  based compensation
              
              
              —
              
              
              180,000Total
                  Expenses
              
              
              66,534
              
              
              198,827**Net
                  Loss**
              
              $
              (48,785
              )
              $
              (185,017
              )Weighted
                  average number of shares outstanding
              
              
              24,988,051
              
              
              14,988,051Basic
                  and diluted net loss per share of Common Stock
              
              $
              (0.002
              )
              $
              (0.012
              )
 
 *See
        accompanying notes to the Financial Statements.*
 
 F-2
  **B.H.I.T.
        Inc.**
 
 **Statements
        of Cash Flows**
 **For
        the Three Months Ended March 31, 2008 and 2007**
 (Unaudited)
 
 **2008**
              
              **2007****Operating
                  Activities**Net
                  Loss
              
              $
              (48,785
              )
              $
              (185,017
              )Adjustments
                  to reconcile net loss to net cash used in operating
                  activities:Stock
                  based compensation
              
              
              —
              
              
              180,000Changes
                  in assets and liabilities:Interest
                  receivable on cash and cash equivalents
              
              
              879
              
              
              1,836Prepaid
                  insurance and miscellaneous expenses
              
              
              4,595
              
              
              3,786Accounts
                  payable and accrued expenses
              
              
              (41,793
              )
              
              (6,189
              )Net
                  cash used in operations
              
              
              (85,104
              )
              
              (5,584
              )Cash
                  and cash equivalents at beginning of period
              
              $
              2,269,054
              
              $
              1,420,313Cash
                  and cash equivalents at end of period
              
              $
              2,183,950
              
              $
              1,414,729
 
 *See
        accompanying notes to the Financial Statements.*
  F-3
  **B.H.I.T.
        Inc.**
  **Notes
        to Financial Statements**
 **Quarters
        Ended March 31, 2008 and 2007**
 (Unaudited)
  **Nature
        of Operations**
 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.
 
 Currently
        BHIT is a shell company without significant operations or sources of revenues
        other than its investments. However, our 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 and we may explore potential acquisitions in other industries
        as well.
  **Basis
        of Presentation**
 We
        have
        prepared the accompanying financial statements pursuant to the rules and
        regulations of the Securities and Exchange Commission. In the opinion of
        management, these financial statements give effect to all normal recurring
        adjustments necessary to present fairly the financial position of the company
        as
        of March 31, 2008 and December 31, 2007, and the results of operations and
        cash
        flows for the three months ended March 31, 2008 and 2007. The financial
        information for the three months ended March 31, 2008 and 2007 is
        unaudited.
 
 Although
        we believe that the disclosures included in our financial statements are
        adequate to make the information presented not misleading, certain information
        and footnote disclosures normally included in financial statements prepared
        in
        accordance with generally accepted accounting principles have been omitted.
        Accordingly, the accompanying financial statements should be read in conjunction
        with BHIT’s latest annual report on Form 10-KSB for the year ended December 31,
        2007.
 
 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.
 
 The
        results of operations for the three months ended March 31, 2008 are not
        necessarily indicative of the results to be expected for the full 2008
        year.
  **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 or during
        the
        quarter ended March 31, 2008.
  F-4
  **B.H.I.T.
        Inc.**
  **Notes
        to Financial Statements**
 **Quarters
        Ended March 31, 2008 and 2007**
 (Unaudited)
 
 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
        ($180,000 in total) and the October 23, 2007 options have a value of $0.25
        per
        share ($250,000 in total) 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.
  **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.
        The Company was not impacted by the adoption of SFAS 159.
 
 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.
  F-5