UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
 

(Mark One)
             [ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1997

                                       OR

                [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
                  15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________to_________________

                        Commission file number 000-19636 

                        HEALTHCARE IMAGING SERVICES, INC.
             (Exact name of registrant as specified in its charter)

        Delaware                               22-3119929

(State or other jurisdiction of             (I.R.S. Employer
incorporation or organization)              Identification No.)

200 Schulz Drive, Red Bank, New Jersey                      07701
(Address of principal executive offices)                  (Zip Code)

                                 (732) 224-9292
              (Registrant's telephone number, including area code)

        Indicate by 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  X   No     

        Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
        Class                               Outstanding at August 14, 1997

        Common Stock, $.01 par value       6,526,474 shares



<PAGE>

               HEALTHCARE IMAGING SERVICES, INC. AND SUBSIDIARIES

                                      INDEX
 

PART I.  FINANCIAL INFORMATION:                            PAGE
-------  ----------------------                            ----

Item 1.        Financial Statements:

  Consolidated Balance Sheets -
        June 30, 1997 and December 31, 1996                   3

  Consolidated Statements of Operations  -
        Three and six months ended June 30, 1997 and 1996     4

  Consolidated Statements of Changes in Stockholders
        Equity - For the six months ended June 30, 1997       5

  Consolidated Statements of Cash Flows -
        Six months ended June 30, 1997 and 1996               6

  Notes to Consolidated Financial Statements                  8
 
Item 2.    Management's Discussion and Analysis of
           Financial Condition and Results of Operations     10

PART II.       OTHER INFORMATION
--------       -----------------

Item 6.        Exhibits and Reports on Form 8-K              16

SIGNATURES                                                   17
----------                                                   















                                                     2
<PAGE>

                      HEALTHCARE IMAGING SERVICES, INC. AND SUBSIDIARIES
                                  Consolidated Balance Sheets


 
                                             June 30,              December 31,
ASSETS                                         1997                     1996    
------                                         ----                     ----    
Current assets:
   Cash and cash equivalents                  $ 449,015            $   173,879
   Marketable securities                              -                625,000
   Accounts receivable - net                  4,654,698              4,328,553
   Prepaid expenses and other                   194,107                160,021
                                                -------                -------
        Total current assets                  5,297,820              5,287,453
                                              ---------              ---------
Property, plant and equipment - net           5,364,145              4,347,745
                                              ---------              ---------
Other assets:
   Advances to licensee                         267,130                351,401
   Goodwill - net                               129,552                138,806
  Due from officer                              176,049                176,049
  Other non-current assets                      386,592                265,278
                                                -------                -------
                                                959,323                931,534
                                                -------                -------
Total assets                                $11,621,288            $10,566,732
                                            ===========            ===========
                                            

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Revolving line of credit                   $  300,000             $        -
   Accounts payable and accrued expenses        892,663              1,083,223
   Current portion of capital lease
     obligations and long-term debt           1,619,322              1,102,559
  Reserve for restructuring costs                     -                150,054
  Income taxes payable                            6,305                  8,304
                                                  -----                  -----
        Total current liabilities             2,818,290              2,344,140
                                              ---------              ---------
Non-current liabilities:
   Capital lease obligations and long-term
     debt                                     2,718,226              2,141,627
   Reserve for restructuring costs              391,014                575,589
                                                -------                -------
                                              3,109,240              2,717,216
                                              ---------              ---------

Minority interests                              456,182                500,569
                                                -------                -------
 
Stockholders' equity:
  Convertible preferred stock, $.10 par value;
   1,000,000 shares authorized, 448,000 shares
   and 660,000 shares outstanding at June 30,
   1997 and December 31, 1996, respectively      44,800                 66,000
  Common stock, $.01 par value;
   50,000,000 shares authorized, 6,445,974 and
   4,961,974 shares outstanding at June 30,
   1997 and December 31, 1996, respectively      64,460                 49,620
  Additional paid-in capital                 11,883,038             11,876,678
  Accumulated deficit                        (6,637,187)            (6,588,845)
  Unearned compensation                        (117,535)              (398,646)
                                               --------               -------- 
                                              5,237,576              5,004,807
                                              ---------              ---------
Total liabilities and stockholders' equity  $11,621,288            $10,566,732
                                            ===========            ===========
                                            




                    See accompanying notes to consolidated financial statements.


                                                  3
<PAGE>

                             HEALTHCARE IMAGING SERVICES, INC. AND SUBSIDIARIES
                                    Consolidated Statements of Operations
<TABLE>
<CAPTION>
 
                                             Three Months Ended                     Six Months Ended
                                                   June 30,                              June 30,   
                                                   --------                              --------   
                                           1997              1996                 1997             1996
  <S>                                        <C>                <C>                 <C>              <C> 
Revenues:                                 $2,425,181         $2,283,056         $5,105,631        $4,637,948
                                          ----------         ----------         ----------        ----------

Operating Expenses:
 Salaries                                    652,981            629,580          1,355,684         1,295,649
 Other operating
  expenses                                   869,630            618,306          1,731,973         1,203,859
 Films and supplies                          109,252            114,261            251,570           250,073
 Equipment mainte-
   nance and repairs                         144,170            168,220            317,665           344,269
 Professional fees                           156,935            135,694            219,536           255,703
 Depreciation and
  amortization                               363,772            385,470            688,625           766,945
 Interest                                    117,938            119,251            225,077           240,924
 Gain on sale of
  property, plant and
  equipment                                 (105,000)                 -           (105,000)                -
                                            --------          ---------           --------           -------
                                                            

                                           2,309,678          2,170,782          4,685,130         4,357,422
                                           ---------          ---------          ---------         ---------

Income before non-cash
  compensation charge,
  minority interests in
  joint ventures and
  income taxes                               115,503            112,274            420,501           280,526
 
Non-cash compensation
  charge                                     (89,265)          (368,994)          (281,111)         (706,431)

Minority interests in
  joint ventures                             (66,642)           (99,551)          (163,801)         (184,990)
                                             -------            -------           --------          -------- 

Operating loss before
  income taxes                               (40,404)          (356,271)           (24,411)         (610,895)

Income tax provision                          10,750             15,989             23,931            27,689
                                              ------             ------             ------            ------

Net loss                                    $(51,154)         $(372,260)          $(48,342)       $(638,584)
                                            ========          =========           ========        ========= 
                                           

Weighted average common
 shares outstanding                        5,344,589          4,711,974          5,030,029        4,711,974
                                           =========          =========          =========        =========
                                          

Net loss per common share                  $(.01)             $(.08)              $(.01)            $(.14)
                                           =====              =====               =====             ===== 

</TABLE>




                  See accompanying notes to consolidated financial statements.
                                           4
<PAGE>

                                                     
                         HEALTHCARE IMAGING SERVICES, INC. AND SUBSIDIARIES
                      Consolidated Statement of Changes in Stockholders' Equity
                                Six Months Ended June 30, 1997
                                            

<TABLE>
<CAPTION>


                                                                                  Additional                                Total
                                                                                  ----------                                -----
                                       Preferred Stock          Common Stock       Paid-in   Accumulated    Unearned   Stockholders'
                                       ---------------          ------------       -------   -----------    --------   -------------
                                     Shares      Amount      Shares      Amount    Capital     Deficit    Compensation    Equity
                                     ------      ------      ------      ------    -------     -------    ------------    ------
     <S>                                 <C>       <C>        <C>        <C>         <C>         <C>          <C>          <C>
BALANCE, JANUARY 1, 1997               660,000  $66,000   4,961,974    $49,620  $11,876,678  $(6,588,845) $(398,646)    $5,004,807

       
  Conversion of Series C Convertible
    Preferred Stock                   (212,000) (21,200)  1,484,000     14,840        6,360
  Amortization of unearned
   compensation for stock options
   and restricted stock grants                                                                              281,111       281,111
  Net loss for the six months ended
   June 30, 1997                                                                                 (48,342)                 (48,342)

                                   ------------------------------------------------------------------------------------------------
  BALANCE, JUNE 30, 1997               448,000  $44,800   6,445,974    $64,460  $11,883,038  $(6,637,187) $(117,535)    $5,237,576
                                   ================================================================================================































                 See accompanying notes to consolidated financial statements.


</TABLE>

<PAGE>

                          HEALTHCARE IMAGING SERVICES, INC. AND SUBSIDIARIES
                                 Consolidated Statements of Cash Flows

                                                      Six Months Ended
                                                           June 30,    
                                                           --------    
                                                    1997            1996
                                                    ----            ----
Cash flows from operating activities:
  Net loss                                     $(48,342)             $(638,584)
  Adjustments to reconcile net loss
      to net cash provided by
      operating activities:
      Depreciation and amortization             688,625                766,945
        Gain on sale of property, plant and
          equipment                            (105,000)                     -
        Amortization of non-cash compensation   281,111                706,431
      Minority interests in joint ventures      163,801                184,990
      Allowance for doubtful accounts           278,000                 25,000
Changes in assets and liabilities:
   Accounts receivable                         (604,145)               (72,938)
   Prepaid expenses and other                   (34,086)              (104,464)
   Advances to licensee                          84,271                      -
   Accounts payable and accrued expenses       (190,560)                 1,784
   Income taxes payable                          (1,999)                 7,651
   Other non-current assets                    (130,798)               (12,983)
                                               --------                ------- 
  Net cash provided by operating activities     380,878                863,832
                                                -------                -------

Cash flows from investing activities:
  Proceeds from sale of marketable securities   625,000                      -
  Purchases of property, plant and equipment   (129,230)               (73,484)
                                               --------                ------- 
  Net cash provided by (used in) investing
   activities                                   495,770                (73,484)
                                                -------                ------- 

Cash flows from financing activities:
  Net proceeds received from the sale of
   Series C Preferred Stock                           -              1,198,254
  Borrowings under the revolving line of
   credit                                       300,000                      -
  Proceeds from sale of property, plant
   and equipment related to restructured
   operations                                   105,000                      -
  Distributions to limited partners of
   joint ventures                              (208,188)              (180,339)
  Payments on note payable                            -                (38,979)
  Payments on capital lease obligations        (616,297)              (462,503)
   Proceeds from subleases related to
    restructured operations                      97,843                200,423
  Payments against obligations related to
   restructured operations                     (279,870)              (595,403)
                                               --------               -------- 
  Net cash (used in) provided by financing
   activities                                  (601,512)               121,453
                                                --------               -------
  Increase in cash and cash equivalents         275,136                911,801
Cash and cash equivalents at beginning
   of period                                    173,879                281,416
                                                -------                -------
Cash and cash equivalents at end
   of period                                   $449,015             $1,193,217
                                               ========             ==========

                                                   6
<PAGE>


                           HEALTHCARE IMAGING SERVICES INC. AND SUBSIDIARIES
                           Consolidated Statements of Cash Flows (Continued)



                                                   Six Months Ended
                                                        June 30,    
                                                        --------    
                                                 1997             1996
                                                 ----             ----

 
Supplemental Cash Flow Information:

Interest paid during the period                $218,121             $245,225
                                               ========             ========
                                               

Income taxes paid during the period            $ 25,931             $ 32,750
                                               ========             ========

Supplemental Schedule of Noncash Investing
  and Financing Activities:

Capital leases principally
  for medical equipment                      $1,135,084             $250,029
                                             ==========             ========


Reinstatement of mobile MRI unit
  related to previously recorded
  restructured operations                      $421,973             $      -
                                               ========              ======= 


Reinstatement of capital lease
  obligation related to previously
  recorded restructured operations             $574,575             $      -
                                               ========              ======= 


























                   See accompanying notes to consolidated financial statements.

                                                   7
<PAGE>


                      HEALTHCARE IMAGING SERVICES, INC. AND SUBSIDIARIES
                          Notes to Consolidated Financial Statements
                                Six Months Ended June 30, 1997

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

        In the opinion of management, the accompanying unaudited
consolidated financial statements contain all adjustments necessary
to present fairly the Company's financial position as of June 30,
1997 and the related statements of operations and cash flows for
the periods ended June 30, 1997 and 1996.  Certain information and
footnote disclosures normally included in annual financial
statements have been omitted from the accompanying interim
consolidated financial statements.

        The results of operations for the six months ended June 30,
1997 are not necessarily indicative of the results of operations
expected for the year ending December 31, 1997 or any other period.
The consolidated financial statements included herein should be
read in conjunction with the consolidated financial statements and
notes thereto contained in the Company's Annual Report on Form 10-K
for the year ended December 31, 1996, as amended by the Company's
Form 10-K/A No. 1, which are on file at the Securities and Exchange
Commission.

Note 2. - Recent Accounting Pronouncements
------------------------------------------

        In February 1997, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standard ("SFAS") No. 128,
"Earnings Per Share".  The statement is effective for periods
ending after December 15, 1997, and changes the method in which
net loss per share will be determined.  Adoption of
this statement by the Company will not have a material impact on
net loss per share.

Note 3. - Revolving Line of Credit
----------------------------------

     Effective  December 26, 1996, the Company  entered into a Loan and Security
Agreement  with DVI Business  Credit  ("DVIBC"),  an affiliate of DVI  Financial
Services,  Inc.  ("DFS"),  to provide a secured  revolving line of credit to the
Company.  The  maximum  amount  available  under such  credit  facility  is $2.0
million,  with  advances  limited  to  seventy-five  percent  (75%) of  eligible
accounts  receivable,  as  determined  by DVIBC.  Borrowings  under  the  credit
facility bear interest at three percent (3%) over the prime lending rate and are
repayable  within two years from the  execution of the  aforementioned  loan and
security  agreement.  The Company's  obligations  under the credit  facility are
secured by a first security interest in all eligible accounts receivable,  other
than those of DFS.  Borrowings  under  this  facility  will be used for  general
corporate  purposes  and  potential  acquisitions.  The line of credit  does not
constrict the Company's

                                              8
<PAGE>

borrowing ability as it relates to the acquisition of new equipment
from DFS.  As of June 30, 1997, $300,000 was outstanding under this
credit facility.




                                              9
<PAGE>


Item 2.    Management's Discussion and Analysis of Financial
-------    -------------------------------------------------
Condition and Results of Operations
-----------------------------------

This Quarterly Report contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 including, without limitation, statements regarding the
sufficiency of the Company's liquidity and sources of capital.  Any
statements contained herein which are not historical facts or which
contain the words expect, believe, estimate or anticipate shall be
deemed to be forward-looking statements.  These forward-looking
statements are subject to certain risks, uncertainties and other
factors which could cause actual results to differ materially.
Additional information regarding factors that could potentially
affect the Company or its financial results may be included in the
Company's filings with the Securities and Exchange Commission.

Six Months Ended June 30, 1997 vs. June 30, 1996
------------------------------------------------

         For the six months ended June 30, 1997, revenues were
$5,105,631 as compared to $4,637,948 for the six months ended June
30, 1996, an increase of approximately $468,000.  This increase is
primarily due to increased revenues at certain of the Company's MRI
facilities, as well as the commencement of fixed-site MRI services
in May 1997 at Meadowlands Hospital Medical Center located in
Secaucus, New Jersey.

         For the six months ended June 30, 1997, operating expenses
were $4,966,241 as compared to $5,063,853 for the six months ended
June 30, 1996, a decrease of approximately $98,000.  This decrease
was primarily a result of lower non-cash compensation charges
recorded during the six months ended June 30, 1997 (approximately
$281,000) as compared to June 30, 1996 (approximately $706,000) and
a gain (approximately $105,000) on the sale of one of the Company's
mobile MRI units to an unaffiliated third party.  The non-cash
compensation charges result from the grant of (1) stock options and
a restricted stock award to the Company's Chairman of the Board,
President and Chief Executive Officer ( the "CEO") and (2) stock
options to Biltmore Securities, Inc. ("Biltmore") pursuant to a
consulting agreement.  See "Liquidity and Capital Resources of the
Company."

         The Company's operating expenses before the non-cash
compensation charges and the gain on the sale of the mobile MRI
unit increased approximately $433,000, which is attributable to the 
start-up expenses incurred in establishing the recently formed joint 
venture at the Meadowlands Hospital Medical Center, as well as 
additional employee costs and consulting and marketing fees resulting
from the increased number of procedures being performed at the Company's 
facilities.

         During the six months ended June 30, 1997, as a corporate
general partner, the Company recorded an additional $17,724 of
losses attributable to the limited partnership interests in the

                                                        10
<PAGE>

Philadelphia, Pennsylvania joint venture (the "Philadelphia MRI
facility") in excess of the limited partners' capital accounts.

         The operating results for the six months ended June 30, 1996
were substantially affected by the Philadelphia MRI facility which
incurred a loss of $251,241, which loss decreased to $44,310 for
the six months ended June 30, 1997.  The Company is negotiating the
purchase of the present limited partners' interests in such joint
venture which it expects to consummate by the end of fiscal 1997.
However, there can be no assurance that these negotiations will be
successfully concluded.  In addition, the operating results for the 
six months ended June 30, 1997 were adversely effected by
decreasing margins at the Company's Brooklyn MRI facility resulting
from local competitive pressures, as well as the funding of the
expenses associated with the recently formed joint venture at the
Meadowlands Hospital Medical Center during its start-up phase.

Three Months Ended June 30, 1997 vs. June 30, 1996
--------------------------------------------------

         For the three months ended June 30, 1997, revenues were
$2,425,181 as compared to $2,283,056 for the three months ended
June 30, 1996, an increase of approximately $142,000.  This
increase is primarily due to increased revenues at certain of the
Company's MRI facilities, as well as the commencement of fixed-site
MRI services at Meadowlands Hospital Medical Center.

         For the three months ended June 30, 1997, operating expenses
were $2,398,943 as compared to $2,539,776 for the three months
ended June 30, 1996, a decrease of approximately $141,000.  This
decrease was primarily a result of lower non-cash compensation
charges recorded during the three months ended June 30, 1997
(approximately $89,000) as compared to June 30, 1996 (approximately
$369,000) and a gain (approximately $105,000) on the sale of one of
the Company's  mobile MRI units to an unaffiliated third party.
The non-cash compensation charges result from the grant of (1)
stock options and a restricted stock award to the CEO and (2) stock
options to Biltmore pursuant to a consulting agreement.  See
"Liquidity and Capital Resources of the Company."

         The Company's operating expenses before the non-cash
compensation charges and the gain on the sale of the mobile MRI
unit increased approximately $244,000, which is attributable to the 
start-up expenses incurred in establishing the recently formed joint 
venture at the Meadowlands Hospital Medical Center, as well as 
additional employee costs and consulting and marketing fees resulting
from the increased number of procedures being performed at the Company's 
facilities.

         During the three months ended June 30, 1997, as a corporate
general partner, the Company recorded an additional $12,326 of
losses attributable to the limited partnership interests in the
Philadelphia, Pennsylvania joint venture (the "Philadelphia MRI
facility") in excess of the limited partners' capital accounts.

         The operating results for the three months ended June 30, 1996

                                                        11
<PAGE>

were substantially affected by the Philadelphia MRI facility which
incurred a loss of $118,268, which loss decreased to $30,815 for
the three months ended June 30, 1997.  The Company is negotiating
the purchase of the present limited partners' interests in such
joint venture which it expects to consummate by the end of fiscal
1997.  However, there can be no assurance that these negotiations
will be successfully concluded.  In addition, the operating results
for the three months ended June 30, 1997 were adversely effected by
decreasing margins at the Company's Brooklyn MRI facility resulting
from local competitive pressures, as well as the funding of the
expenses associated with the recently formed joint venture at the
Meadowlands Hospital Medical Center during its start-up phase.



<PAGE>
Liquidity and Capital Resources of the Company
----------------------------------------------


         As of January 30, 1996, the Company entered into a one year
consulting agreement with Biltmore.  Pursuant to the consulting
agreement, Biltmore agreed to act as a consultant to the Company in
connection with, among other things, corporate finance and
evaluations of possible business partners and agreed to seek to
locate business partners suitable for the Company and assist in the
structuring, negotiating and financing of such transactions.  The
consulting agreement provided for the issuance to Biltmore upon
execution thereof of options (the "Biltmore Options") exercisable
to purchase 750,000 shares of Common Stock at a cash exercise price
of $0.75 per share and for the additional issuance to Biltmore of
750,000 shares (the "Biltmore Fee Shares") of Common Stock upon
consummation by the Company by January 30, 1997, which date was
extended to January 30, 1998, of an acquisition of a company (or
companies) with assets of at least $2,500,000 during the term of
the consulting agreement (the "Acquisition").  In connection with
the issuance of the Biltmore Options, the Company recorded a non-
cash compensation charge of $685,800 which was amortized over the
term of the consulting agreement.

         As of February 1, 1996, the Company amended its employment
agreement with its CEO.  Pursuant to such amendment, the
agreement's expiration date of October 22, 1996 was extended to
October 22, 1997 and during such extension, the CEO's annual base
compensation was reduced from $200,000 to $100,000.  In addition,
stock options that the CEO held to purchase an aggregate of 270,000
shares of Common Stock at exercise prices ranging from $1.50 to
$5.00 per share (the "CEO Old Options") were terminated and the
Company granted the CEO options, exercisable until February 1,
2001, to purchase an aggregate of 500,000 shares of Common Stock at
an exercise price of $0.75 per share (the "CEO New Options").  In
connection with the issuance of the CEO New Options, the Company
recorded a non-cash compensation charge of $562,506 which is being
amortized over the twenty-one months ending October 31, 1997.  Upon
execution of such amendment, the CEO received from the Company a
restricted stock award of 250,000 shares (the "Restricted Shares")
of Common Stock (the "CEO Award").  The restrictions related to the

                                                        12
<PAGE>

CEO Award will lapse upon consummation by the Company of an
Acquisition.  In January 1997, the Company extended the required
consummation date of the Acquisition from January 30, 1997 to
January 30, 1998 (subject to stockholder ratification and approval
of such extension, which the Company intends to solicit at its 1997
Annual Meeting of Stockholders) and the expiration date of the
CEO's employment agreement from October 22, 1997 to October 22,
1998.  In connection with the issuance of the Restricted Shares,
the Company recorded a non-cash compensation charge of $468,744
which was amortized over the initial twelve-month contingency
period ended January 30, 1997.  To the extent the Company does not
consummate an Acquisition meeting the specified standards by
January 30, 1998, the CEO Award will be forfeited and the
previously recorded non-cash compensation charge will be reversed.

         As of June 30, 1997, the Company had a cash balance of
$449,015, current assets of $5,297,820 and working capital of
$2,479,530.  Cash flows provided by operating activities were
$380,878 for the six months ended June 30, 1997, which consisted
primarily of depreciation and amortization of $688,625,
amortization of non-cash compensation of $281,111, an increase in
the allowance for doubtful accounts receivable of $278,000 and
minority interests in joint ventures of $163,801.  Other
significant components of cash flows provided by operating
activities include an increase in accounts receivable of $604,145
due to an increase in the number of procedures being performed, an
increase in other non-current assets of $130,798, primarily due to
costs incurred for potential new business arrangements and a
decrease in accounts payable and accrued expenses of $190,560.
Cash flows provided by investing activities were $495,770,
primarily due to proceeds received from the sale of marketable
securities.  Cash flows used in financing activities were $601,512,
which consisted primarily of payments on capital lease obligations
of $616,297, payments against obligations related to restructured
operations of $279,870 and distributions to limited partners of
joint ventures of $208,188, partially offset by borrowings of
$300,000 under the revolving line of credit, proceeds of $105,000
from the sale of one of the Company's mobile MRI units to an
unaffiliated third party and proceeds of $97,843 from the subleases
related to restructured operations.

         The Company's Philadelphia MRI facility, which has been
operating since November 1992, continues to operate at a loss.
However, such losses have substantially decreased during the six
months ended June 30, 1997.  In order to support the operations of
this facility, the Company has made and continues to make working
capital loans to this joint venture.  As of June 30, 1997, the
amount of such working capital loans was approximately $2,435,000
(of which approximately $322,000, inclusive of an intercompany
interest charge of approximately $108,000, was loaned in 1997).
The Company cannot at this time determine when, or if, these loans
will be repaid.  The Company is in the process of negotiating the
purchase of the present limited partners interests in this joint

                                                        13
<PAGE>

venture which it expects to consummate before year end.  However,
there can be no assurance that these negotiations will be
successfully concluded.  As noted above, the competitive
environment in which the Brooklyn MRI facility operates has adversely
affected its operating results.  In connection with the Company's
review of the viability of this facility, the Company is actively
considering the sale of this facility.  However, there can be no
assurance that such a sale will be consummated.

         On May 8, 1997, the Company sold one of its remaining mobile
MRI units to an unaffiliated third party for $105,000.  The sale
enabled the Company to eliminate the overhead costs associated with
the operation of this mobile MRI unit, thereby resulting in cash
savings.

         In November 1996, the Company formed a limited liability
company, of which it owns sixty (60%) percent, with Practice
Management Corporation to provide on-site MRI services to
Meadowlands Hospital Medical Center.  The site commenced operations
on May 8, 1997.  The Company expects that the initial costs to be
incurred to establish the facility will range between $450,000 and
$600,000.  These amounts will be in the form of working capital
loans by the Company to the joint venture.  The Company believes
that the start-up phase will last six to nine months, although
there can be no assurances that it will not be a longer period.
 
 
         The nature of the Company's operations require significant
capital expenditures which have historically been financed through
the issuance of debt and the execution of capital leases, proceeds
received from the Company's initial public offering in November
1991 and sale of the Series C Preferred Stock in February 1996, and
the offering and exercise of warrants.  Continued expansion, if
any, of the Company's business will require substantial cash
resources and will have an impact on the Company's liquidity.
Also, such expansions, if any, will require the purchase of
additional MRI units and financing sources to fund the purchase of
these additional units.  Historically, the Company has been able to
obtain financing for its medical equipment through a former
significant stockholder, DVI Financial Services, Inc. ("DFS").  The
Company believes it will continue to be able to obtain financing
from DFS as well as other financing sources for its future
equipment needs.

     Effective December 26, 1996, the Company entered into a Loan and
Security Agreement with DVI Business Credit ("DVIBC"), an affiliate of
DFS, to provide a secured revolving line of credit to the
Company.  The maximum amount available under such credit facility
is $2.0 million, with advances limited to seventy-five percent
(75%) of eligible accounts receivable, as determined by DVIBC.
Borrowings under the credit facility bear interest at three percent
(3%) over the prime lending rate and are repayable within two years
from the execution of the aforementioned loan and security

                                                        14
<PAGE>

agreement.  The Company's obligations under the credit facility are
secured by a first security interest in all eligible accounts
receivable, other than those of DFS.  Borrowings under this
facility will be used for general corporate purposes and potential
acquisitions.  The line of credit does not constrict the Company's
borrowing ability as it relates to the acquisition of new equipment
from DFS.  As of June 30, 1997, $300,000 was outstanding under this
credit facility.


         The Company believes that cash to be provided by operating
activities, the proceeds received from the sale of the Series C
Preferred Stock and availability under the revolving line of credit
will be sufficient to meet its anticipated cash requirements for
its present operations for the next twelve months.  If for any
reason the Company's estimates prove inaccurate, the Company is
prepared to adopt additional expense reduction measures in addition
to those already implemented, although there can be no assurance
that any such expense reduction measures will be successful.




                                                        15


<PAGE>

                                  PART II - OTHER INFORMATION
                                  ---------------------------

   Items 1 through 5 have been omitted because the related
information is either inapplicable or has been previously reported.


Item 6.        Exhibits and Reports on Form 8-K

   (a)         Exhibit 10.45 - Loan and Security Agreement, dated as of
               December 26, 1996, between HealthCare Imaging Services,
               Inc., Edgewater Imaging Associates, L.P., Wayne Imaging
               Associates, L.P., Rittenhouse Square Imaging Associates,
               L.P. and DVI Business Credit Corporation

               Exhibit 27 - Financial Data Schedule.

   (b)  The Company has not filed any reports on Form 8-K during
        the quarter ended June 30, 1997.

 

 


                                              16
<PAGE>

                                          SIGNATURES
                                          ----------

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



                                             HEALTHCARE IMAGING SERVICES, INC.
 
                                                      (Registrant)




 
                                                  /s/ ELLIOTT H. VERNON
                                                  ---------------------
DATE: August 14, 1997
---------------------
                                                  Elliott H. Vernon,
                                                  Chairman of the Board,
                                                  President and Chief
                                                  Executive Officer
                                                  (Principal Executive Officer)








DATE: August 14, 1997                             /s/ SCOTT P. MCGRORY
---------------------                             --------------------

                                                  Scott P. McGrory,
                                                  Vice President - Controller
                                                  (Principal Financial and
                                                  Accounting Officer)