IMAGE TECHNOLOGY LABORATORIES, INC.


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)
|x|   QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
        ACT OF 1934

                  For the quarterly period ended March 31, 2008 or

| |   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
       ACT OF 1934


For the transition period from _______________ to ____________________

Commission File Number: 34-00031307


                       IMAGE TECHNOLOGY LABORATORIES, INC.
            --------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

                               Delaware 22-3531373
              --------------------------------- ------------------
                   (State or Other Jurisdiction (IRS Employer
              of Incorporation or Organization) Identification No.)

                              602 Enterprise Drive
                            Kingston, New York 12401
                        ---------------------------------
                    (Address of Principal Executive Offices)

                                 (845) 338-3366
                                ----------------
                         (Registrant's Telephone Number)

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 by check mark whether the registrant is a large accelerated filer, a
non-accelerated filer, or a smaller reporting company. See the definitions of
"large accelerated filer", "accelerated filer" and "smaller reporting company"
in Rule 12b-2 of the Exchange Act.

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


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



As of March 31, 2008, there were 15,238,778 shares of the registrant's common
stock outstanding.
<PAGE>


                                      INDEX


                                                                        PAGE NO.

PART I - FINANCIAL INFORMATION                                                2
Item 1 - Financial Statements                                                 2
Balance Sheets                                                                3
Statements of Operations                                                      4
Statement of Changes in Stockholders' Deficiency                              5
Statements of Cash Flows                                                      6
Notes to Financial Statements                                                 7
Item 2 - Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                 11
Item 3 - Quantitative and Qualitative Disclosures About Market Risk          16
Item 4 - Controls and Procedures                                             16
PART II - OTHER INFORMATION                                                  17
Item 1 - Legal Proceedings                                                   17
Item 1A - Risk Factors                                                       17
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds         17
Item 3 - Defaults Upon Senior Securities                                     17
Item 4 - Submission of Matters to a Vote of Security Holders                 17
Item 5 - Other Information                                                   18
Item 6 - Exhibits and Reports on Form 8-K                                    18
SIGNATURES                                                                   19
EXHIBIT 31.1 - CERTIFICATION                                                 20
EXHIBIT 32.1 - ADDITIONAL CERTIFICATION                                      21
<PAGE>




                         PART I - FINANCIAL INFORMATION


ITEM 1 - FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

                      IMAGE TECHNOLOGY LABORATORIES, INC.

                                 Balance Sheets

                                                        MARCH 31, 2008    DECEMBER 31, 2007
                                                         (UNAUDITED)
 ASSETS

CURRENT ASSETS:

<S>                                                      <C>            <C>
 Cash and cash equivalents                               $   247,398    $   295,495
 Accounts receivable                                         213,744        171,492

  Prepaid expenses and other current assets                   22,820          8,637

                                                         -----------    -----------

    TOTAL CURRENT ASSETS                                     483,962        475,624

 Equipment and improvements, net                             119,074        136,217
 Rent - deposit                                                6,000          6,000
                                                         -----------    -----------


   TOTAL ASSETS                                          $   609,036    $   617,841
                                                         ===========    ===========

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
  Bank line of credit                                         67,424         73,467
 Current portion of long-term debt                           114,470        111,794
 Accounts payable and accrued expenses                       140,297        171,933
 Deferred Revenue                                                  0         25,000
 Accrued compensation payable to stockholders                 47,596         47,596
                                                         -----------    -----------

    TOTAL LIABILITIES, ALL CURRENT                           369,787        429,790

   Long-term debt, less current portion                      456,512        486,153
   Notes payable to stockholders, less current portion         3,684          3,684
                                                         -----------    -----------


   TOTAL LIABILITIES                                         829,983        919,627


STOCKHOLDERS' DEFICIENCY:
 Preferred stock, par value $.01 per share;
   5,000,000 shares authorized;
   1,500,000 shares issued and outstanding, Series A          15,000         15,000
   1,062 shares issued and outstanding,
   Cumulative Convertible Series B                                10             10


 Common stock, par value $.01 per share;
   50,000,000 shares authorized;
   15,238,778 shares issued and outstanding                  152,388        152,388


 Additional paid-in capital                                3,752,428      3,727,945
  Accumulated deficit                                     (4,140,773)    (4,197,129)
                                                         -----------    -----------

    TOTAL STOCKHOLDERS' DEFICIENCY                          (220,947)      (301,786)
                                                         -----------    -----------

   TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY        $   609,036    $   617,841
                                                         ===========    ===========

The accompanying notes are an integral part of the financial statements.
</TABLE>

                                      -3-
<PAGE>

<TABLE>
<CAPTION>

                      IMAGE TECHNOLOGY LABORATORIES, INC.

                            STATEMENTS OF OPERATIONS

                                                               (UNAUDITED)
                                                              THREE MONTHS
                                                             ENDED MARCH 31,

                                                        2008            2007
                                                     ------------   ------------


REVENUE:

<S>                                                  <C>            <C>
   Systems / software: license fees and sales        $    275,750   $    104,700
   Service Income                                           2,221            256
                                                     ------------   ------------

             TOTAL REVENUE                                277,971        104,956

COST OF REVENUE:                                           26,826             56
                                                     ------------   ------------


            GROSS PROFIT                                  251,145        104,900
                                                     ------------   ------------

COSTS AND EXPENSES:
    Research and development                               93,252         80,750
   Sales and marketing                                      4,037          3,283
    General and administrative (includes interest
       expense of $15,468 and $8,125 for the three
       months ending March 31, 2008 and 2007)              73,017         71,632
    Stock based compensation                               24,483         24,483
                                                     ------------   ------------

            TOTAL COSTS AND EXPENSES                      194,789        180,148
                                                     ------------   ------------

NET PROFIT (LOSS)                                    $     56,356   $    (75,248)
                                                     ============   ============


NET PROFIT (LOSS) PER COMMON SHARE:
   Basic                                             $       0.00   $      (0.00)
   Diluted                                                   0.00          (0.00)

AVERAGE NUMBER OF SHARES USED IN COMPUTATION:
   Basic                                               16,738,778     16,739,790
   Diluted                                             22,936,178     16,739,790
                                                     ============   ============





The accompanying notes are an integral part of the financial statements.
</TABLE>


                                      -4-
<PAGE>

<TABLE>
<CAPTION>
                      IMAGE TECHNOLOGY LABORATORIES, INC.


                STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                        THREE MONTHS ENDED MARCH 31, 2008
                                   (UNAUDITED)

                                       PREFERRED STOCK
                                        SERIES A AND B              COMMON STOCK
                                 --------------------------------------------------------    ADDI-                         TOTAL
                                      NUMBER                      NUMBER                     TIONAL         ACCUMU-        STOCK-
                                        OF                          OF                       PAID-IN         LATED        HOLDERS'
                                      SHARES         AMOUNT       SHARES        AMOUNT       CAPITAL        DEFICIT      DEFICIENCY
                                    -----------------------------------------------------------------------------------------------

<S>                                      <C>         <C>            <C>          <C>           <C>           <C>            <C>
Balance, January 1, 2008             1,501,050   $    15,010    15,238,778   $   152,388   $ 3,727,945   $(4,197,129)   $  (301,786)

 Amortization of stock option
 compensation                                                                                   24,483                       24,483

 Dividends on Preferred Series B            12             0                                                       0

Net profit                                                                                                    56,356         56,356
                                     -----------  ----------    ----------   ----------   -------------  -----------    -----------


Balance, March 31, 2008              1,501,062   $    15,010    15,238,778   $   152,388   $ 3,752,428   $(4,140,773)   $  (220,947)
                                     =========== ===========    ==========   ===========   ===========   ===========    ===========








The accompanying notes are an integral part of the financial statements.
</TABLE>


                                      -5-
<PAGE>

<TABLE>
<CAPTION>

                      IMAGE TECHNOLOGY LABORATORIES, INC.

                            STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)

                                                                           THREE MONTHS
                                                                          ENDED MARCH 31

                                                                        2008          2007
                                                                      ---------    ---------
OPERATING ACTIVITIES:
<S>                                                                   <C>          <C>
    Net profit (loss)                                                 $  56,356    $ (75,248)
    Adjustments to reconcile net profit (loss) to net cash provided
      (used) in operating activities:
      Depreciation and amortization of equipment
          and improvements                                               17,144       13,510
         Stock based compensation                                        24,483       24,483
         Changes in operating assets and liabilities:
             Accounts receivable                                        (42,252)      65,398
             Prepaid expenses and other current assets                  (14,184)     (10,351)
             Accounts payable and accrued expenses                      (31,636)     (13,332)
            Accrued compensation payable to stockholders                      0        8,488
            Deferred Revenue                                            (25,000)           0
                                                                      ---------    ---------
             NET CASH PROVIDED (USED) IN OPERATING ACTIVITIES           (15,089)      12,948

FINANCING ACTIVITIES:
    Proceeds from (repayment of) Bank Line of Credit                     (6,043)       5,174
    Repayment of long-term debt                                         (26,965)           0
                                                                      ---------    ---------

              NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES          (33,008)       5,174
                                                                      ---------    ---------

              NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS      (48,097)      18,122


CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                          295,495        3,264
                                                                      ---------    ---------

CASH AND CASH EQUIVALENTS, END OF PERIOD                              $ 247,398    $  21,386
                                                                      =========    =========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Interest paid                                                     $  15,468    $   8,125
                                                                      =========    =========




The accompanying notes are an integral part of the financial statements.
</TABLE>


                                      -6-
<PAGE>

                      IMAGE TECHNOLOGY LABORATORIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1 - BASIS OF PRESENTATION:

In the opinion of management, the accompanying unaudited financial statements
reflect all adjustments, consisting of normal recurring accruals, necessary to
present fairly the financial position of Image Technology Laboratories, Inc.
(the "Company") as of March 31, 2008, its results of operations for the three
months ended March 31, 2008 and 2007, changes in stockholders' deficiency for
the three months ended March 31, 2008 and cash flows for the three months ended
March 31, 2008 and 2007. Certain terms used herein are defined in the audited
financial statements of the Company as of December 31, 2007 and for the years
ended December 31, 2007 and 2006 (the "Audited Financial Statements") included
in the Company's 2007 Annual Report on Form 10-KSB previously filed with the
Securities and Exchange Commission (the "SEC"). Pursuant to rules and
regulations of the SEC, certain information and disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted from these financial
statements unless significant changes have taken place since the end of the most
recent fiscal year. Accordingly, the accompanying unaudited financial statements
should be read in conjunction with the Audited Financial Statements and the
other information included in the 2007 Form 10-KSB.

The results of operations for the three months ended March 31, 2008 are not
necessarily indicative of the results of operations to be expected for the full
year ending December 31, 2008.

These unaudited financial statements have been prepared assuming that the
Company will continue as a going concern and, accordingly, do not include any
adjustments that might result from the outcome of this uncertainty. The
Company's independent registered public accounting firm's report on the
financial statements included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2007, contained an explanatory paragraph regarding
the Company's ability to continue as a going concern.

RECENT ACCOUNTING STANDARDS

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements"
("SFAS No. 157"). SFAS No. 157 established a common definition for fair value to
be applied to U.S. GAAP guidance requiring use of fair value, established a
framework for measuring fair value, and expanded disclosure about such fair
value measurements. SFAS No. 157 became effective for our financial assets and
liabilities on January 1, 2008. The FASB has deferred the implementation of the
provisions of SFAS No. 157 relating to certain nonfinancial assets and
liabilities until January 1, 2009. SFAS No. 157 did not materially affect how we
determine fair value.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities Including an Amendment of SFAS No.
115 " ("SFAS No. 159"). This standard permits entities to choose to measure many
financial instruments and certain warranty and insurance contracts at fair value
on a contract-by-contract basis. SFAS No. 159 became effective on January 1,
2008. We have not elected the fair value option for any of our existing
financial instruments on the effective date and have not determined whether or
not we will elect this option for any eligible financial instruments we acquire
in the future.

In December 2007, the FASB issued SFAS No. 141(R), "Business Combinations,"
("SFAS No. 141(R)") and SFAS No. 160, "Noncontrolling Interests in Consolidated
Financial Statements" ("SFAS No. 160"). Effective for the Company as of January
1, 2009, SFAS No. 141(R) requires the acquiring entity in a business combination
to recognize all (and only) the assets acquired and liabilities assumed in the
transaction; establishes the acquisition-date fair value as the measurement

                                      -7-
<PAGE>

                      IMAGE TECHNOLOGY LABORATORIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)

objective for all assets acquired and liabilities assumed; and requires the
acquirer to disclose to investors and other users all of the information they
need to evaluate and understand the nature and financial effect of the business
combination. Effective January 1, 2009, SFAS No. 160 requires all entities to
report noncontrolling (minority) interests in subsidiaries as equity in the
consolidated financial statements. Moreover, SFAS No. 160 eliminates the
diversity that currently exists in accounting for transactions between an entity
and noncontrolling interests by requiring they be treated as equity
transactions. Management is evaluating the impact of adopting SFAS No. 141(R)
and SFAS No. 160, if any, on the Company's financial statements.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative
Instruments and Hedging Activities - an Amendment of FASB Statement No. 133"
("SFAS No. 161"). SFAS No. 161 expands the disclosure requirements in SFAS No.
133, regarding an entity's derivative instruments and hedging activities. SFAS
No. 161 is effective on January 1, 2009. Management is evaluating the impact of
adopting SFAS No. 161, if any, on the Company's financial statements.


NOTE 2 - EARNINGS (LOSS) PER SHARE:

The Company presents "basic" earnings (loss) per common share and, if
applicable, "diluted" earnings (loss) per common share pursuant to the
provisions of Statement of Financial Accounting Standards No. 128, "Earnings per
Share" ("SFAS 128"). Basic earnings (loss) per common share is calculated by
dividing net income or loss applicable to common stock by the weighted average
number of common shares outstanding during each period. The calculation of
diluted earnings (loss) per common share is similar to that of basic earnings
(loss) per common share, except that the denominator is increased to include the
number of additional common shares that would have been outstanding if all
potentially dilutive common shares, such as those issuable upon the exercise of
stock options and warrants, were issued during the period. The rights of the
Company's preferred and common stockholders are substantially equivalent. The
Company has included the 1,500,000 Preferred Series A shares outstanding in the
weighted average number of common shares outstanding in the computation of basic
loss per share for the year ended December 31, 2007 in accordance with the "two
class" method of computing earnings (loss) per share set forth in SFAS 128.

Since the Company had a net loss for the three months ended March 31, 2007, the
assumed effects of the exercise of outstanding options, warrants or the
conversion of preferred stock into common shares at March 31, 2007 were not
considered in the computation of loss per share as they would have been
anti-dilutive.

Potential common shares outstanding as of March 31, 2008 and 2007:

------------------------------------- --------------------- --------------------
                                       March 31, 2008        March 31, 2007
------------------------------------- --------------------- --------------------
Warrants                                           230,000              230,000
------------------------------------- --------------------- --------------------
Options                                          3,100,000            3,100,000
------------------------------------- --------------------- --------------------
Conversion of Preferred Series B                 2,867,400            2,732,400
------------------------------------- --------------------- --------------------

As of March 31, 2008 and 2007, potentially dilutive shares totaled 6,197,400 and
6,062,400 respectively.


NOTE 3 - WORKING CAPITAL LOAN AGREEMENT:

During September 2002, the Company entered into a one-year working capital loan
agreement with a financial institution for borrowings of up to $75,000. The
agreement automatically renews annually unless one of the parties gives
appropriate notice for cancellation. Outstanding borrowings bear interest
payable monthly at 1% above the prime rate, and are guaranteed by the Estate of
the Company's former principal stockholder. At March 31, 2008, there was $67,424
outstanding under this agreement.

                                      -8-
<PAGE>

                     IMAGE TECHNOLOGY LABORATORIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


In June 2007, the Company entered into a five-year Accounts Receivable loan
agreement with PowerLease Solutions, LLC and NetBank to borrow $650,000 at a
9.5% annual interest rate. Monthly payments are $13,651 and the loan is
co-signed by the Company's principal stockholder. As of March 31, 2008, there
was $570,982 outstanding under this agreement. Fixed fees paid to PowerLease
during 2007 were $10,402.


NOTE 4 - NOTES PAYABLE TO STOCKHOLDERS:

During November and December 2004, Dr. David Ryon, the Company's principal
stockholder, President, and Chief Executive Officer, until his death in December
2004, loaned the Company an aggregate of $105,000. In December 2004, to
memorialize this loan, he executed, as President and Chief Executive Officer, on
behalf of the Company, a demand promissory note payable to himself and bearing
interest at 10% per annum. He also executed a security agreement, for himself on
behalf of the Company, granting to himself a security interest in all of the
Company's assets not previously encumbered as security for full payment under
the note. Prior to April 12, 2005, the Company negotiated with the Estate of Dr.
David Ryon a 24-month payment schedule, beginning in January 2006. The Company's
Board of Directors approved the revised terms of the promissory note on April
12, 2005. In December 2005, the Estate of Dr. Ryon loaned the Company an
additional $36,000 under an amendment to the December 2004 promissory note and
the payment schedule was renegotiated to begin in January 2007. Additional
amounts were loaned to the Company in March 2006 for $22,500, in August 2006 for
$57,672 and in September 2006 for $153,375. These amounts, along with other
previous loans to the Company by the largest stockholder totaling $374,548 were
converted to 1000 shares of Cumulative Convertible Preferred Stock Series B in
late September 2006, and all accrued interest was forgiven. Cumulative
Convertible Preferred Stock Series B can be converted to common stock of Image
Technology Laboratories at a ratio of one share of Cumulative Convertible
Preferred Stock Series B to 2,700 shares of common stock. Either the stockholder
or the Company may elect to force conversion after two years from issuance in
units of 100 shares of Cumulative Convertible Preferred Stock Series B. The
Company may also elect to repurchase the Cumulative Convertible Preferred Stock
Series B in units of 100 shares of Cumulative Convertible Preferred Stock Series
B at any time for $432 per share of Cumulative Convertible Preferred Stock
Series B. Fixed dividend is accumulated as 12.5 additional shares of Cumulative
Convertible Preferred Stock Series B per quarter. The underlying common stock,
should the Company or shareholder elect to convert, is unregistered. The voting
rights are set at one vote per share of Cumulative Convertible Preferred Stock
Series B. The issuance described above was made in reliance upon the exemptions
from registration set forth in Section 4(2) of the Securities Act relating to
sales by an issuer not involving any public offering. None of the foregoing
transactions involved a distribution or public offering. No underwriters were
engaged in connection with the foregoing issuances of securities, and no
underwriting commissions or discounts were paid. At March 31, 2008, 1,062 shares
of Preferred Stock Series B are outstanding. Such shares may be converted at the
option of the holder or the Company to 2,867,400 shares of Common stock
beginning in September 2008. Prior to conversion, such shares may be redeemed by
the Company at $432 per share or $458,784 at any time until forced conversion by
either party into Common stock.



In September 2005, the Company borrowed $50,000 from a member of the Company's
Board of Directors as part of a Bridge Loan Agreement that included the issuance
of warrants to purchase 50,000 shares of Common Stock of the Company. The
five-year warrants have an exercise price of $0.33 per share. The Bridge Loan
had an annual interest rate of 14%. The principal of $50,000 was repaid in July
2007; $5,000 of the accrued interest was paid in September 2007 and a final
accrued interest payment of $5,000 was made in March 2008.

                                      -9-
<PAGE>

                     IMAGE TECHNOLOGY LABORATORIES, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 5 - STOCK OPTIONS

The Company did not grant any options under the Company's option plan during the
quarter ended March 31, 2008.

In accordance with the provisions of Statement of Financial Accounting Standards
No. 123R, the Company expenses the fair value of employee stock options over the
vesting period of such options. For each of the quarters ending March 31, 2008
and 2007, the Company expensed $24,483 of amortized stock compensation.



NOTE 6 - WARRANTS

As of March 31, 2008, the Company had 230,000 warrants outstanding at an
exercise price of $0.33 per share. The warrants expire in 2010.



NOTE 7 - FIXED DIVIDENDS

The Company's largest stockholder accumulated 12 additional shares of Cumulative
Convertible Preferred Stock Series B on January 1, 2008 as Fixed Dividends.


                                      -10-
<PAGE>





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

                                    OVERVIEW

The following is a discussion of certain factors affecting Image Technology
Laboratories, Inc.'s results of operations, assets, liquidity and capital
resources. You should read the following discussion and analysis in conjunction
with Image Technology Laboratories, Inc.'s unaudited financial statements and
related notes, which are included elsewhere in this filing.

Image Technology Laboratories, Inc. ("we", "our" or the "Company") is a medical
image and information management company in the healthcare information systems
market. We were incorporated in Delaware on December 5, 1997. The Company has
developed a single database "Radiology Information System and Picture Archiving
and Communications System" known as RIS/PACS for use in the secure management of
patient information and diagnostic images. Our lead product is the WarpSpeed
system. Through its unique, modular architecture the Company has created a total
radiology business solution that is readily scaled and easily upgraded. These
features will allow the Company to provide products tailored to the size of its
customers and to keep its customers at the forefront of future technological
advances by enabling the Company to easily update existing systems.

We expect that we will derive our future revenues primarily from sales of our
WarpSpeed system and associated maintenance charges along with Application
Service Provider (ASP) usage fees. We obtained our first contract for the sale
of WarpSpeed and related hardware and maintenance services in August 2002. We
continue to refine and enhance the capabilities of our WarpSpeed system.

Prior to the quarter ending March 31, 2008, we had recurring losses and negative
cash flows from our operating activities since inception. We have cash of
$247,398 and working capital of $114,175 as of March 31, 2008.



                                      -11-
<PAGE>


         RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2008
               COMPARED WITH THE THREE MONTHS ENDED MARCH 31, 2007

REVENUE:

For the three months ended March 31, 2008, our total revenue was $277,971, an
increase of $173,015 from the $104,956 in the year's comparable period, largely
attributed additional ASP usage fees and sales of enhancements to our existing
customer base.


COST OF REVENUE:

For the three months ended March 31, 2008 the cost of revenue was $26,826, which
includes depreciated associated with equipment used in our ASP installations.
For the three months ending March 31, 2007, our cost of revenue was $ 56.


SALES AND MARKETING EXPENSES:

During the three months ended March 31, 2008, we incurred sales and marketing
expenses of $4,037, as compared with sales and marketing expenses of $3,283
during the same period of 2007. The Company has focused its efforts on
controlling costs while identifying appropriate sales personnel and resources.
These costs are expected to grow as the company executes its business plan.


NET PROFIT (LOSS):

We realized a net profit of $56,356 (less than $.01 per share) for the three
months ended March 31, 2008 as compared with a loss of $75,248 for the three
months ended March 31, 2007. The Company continues to aggressively manage costs
while it focuses on increasing revenues from sales of systems / software.




                                      -12-
<PAGE>


                         LIQUIDITY AND CAPITAL RESOURCES


At March 31, 2008, our total assets were $609,036 , a decrease of $8,805 from
total assets of $617,841 on December 31, 2007.

As of March 31, 2008, we had cash and cash equivalents and working capital of
$247,398 and $114,175, respectively.

Net cash used in our operating activities for the three months ending March 31,
2008 of $15,089 was substantially attributable to an increase in accounts
receivable of $42,252 and a decrease in accounts payable of $31,636. The net
cash required by our financing activities included $6,043 for repayment of our
bank line of credit and $26,965 for repayment of our accounts receivable loan.

The foregoing activities, i.e., operating and financing, resulted in our net
cash decrease of $48,097 for the three months ended March 31, 2008.

In September 2002, we applied for, and received, a line of credit from M & T
Bank, renewable annually, in the amount of $75,000. As of March 31, 2008, we
have $67,424 outstanding under that loan.

In September 2005, the Company borrowed $50,000 from a member of the Company's
Board of Directors as part of a Bridge Loan Agreement that included the issuance
of warrants to purchase 50,000 shares of Common Stock of the Company. The
five-year warrants have an exercise price of $0.33 per share. The Bridge Loan
had an annual interest rate of 14%. The principal of $50,000 was repaid in July
2007; $5,000 of the accrued interest was paid in September 2007 and a final
accrued interest payment of $5,000 was made in March 2008.

In December 2005, our largest stockholder loaned the Company an additional
$36,000 under an amendment to the December 2004 promissory note. An additional
$22,500 was borrowed from our largest stockholder in March 2006. These amounts
were converted to Cumulative Convertible Preferred Series B stock issued to our
largest stockholder in late September 2006.

In September 2006, the Company entered into a settlement agreement with Dr.
Carlton Phelps, our former vice president of finance and administration, chief
financial officer, secretary and treasurer. Pursuant to the Settlement
Agreement, the Company paid Dr. Phelps a total of $153,375 consisting of
attorneys' fees awarded by the arbitrator and confirmed by the court plus
interest calculated at a rate of nine percent per annum from September 4, 2004
until September 1, 2006. The Company filed an 8-K detailing this event with the
Securities and Exchange Commission on October 4, 2006. In September 2006, the
Company's largest stockholder loaned the Company $153,375, the proceeds of which
were used to satisfy the $153,375 settlement with Dr. Phelps. This amount was
converted to Cumulative Convertible Preferred Series B stock issued to our
largest stockholder in late September 2006.

We require cash to fund our working capital needs and capital expenditures, as
well as to meet existing commitments. Such commitments include payments of
existing loans including our line of credit, and $3,000 per month pursuant to a
five-year lease commitment ending in December 2012 for our operations center in
Kingston, New York. At times, in order to help in maximizing our working
capital, our directors, officers and employees have contributed to capital or
deferred compensation due under their agreements. It is anticipated, but not
assured, that, should the need arise; such contributions or deferrals might be
available to us in the future. Additionally, we are considering outside sources
of equity funds and other types of financing in order to help support our
anticipated growth. There can be no assurance that such efforts will be
successful.

                                      -13-
<PAGE>



Management believes that as a result of the proceeds from financing activities,
as well as anticipated cash flow generated by sales of its WarpSpeed RIS/PACS
solution (in addition to the current cash flow resulting from our installed ASP
base), the Company will be able to continue to meet its obligations as they
become due through at least December 31, 2008. Management also believes that if
needed, the Company will be able to obtain additional capital resources from
financing through financial institutions and other unrelated sources and/or
through additional related party loans and private placements. However, there
can be no assurance that the Company will become profitable or that financing
will be available. Accordingly, the accompanying financial statements do not
include any adjustments to reflect the possible future effects on the
recoverability and classification of assets or the amount and classification of
liabilities that may result from the outcome of this uncertainty.


                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


In September 2005, the Company borrowed $50,000 from a member of the Company's
Board of Directors as part of a Bridge Loan Agreement that included the issuance
of warrants to purchase 50,000 shares of Common Stock of the Company. The
five-year warrants have an exercise price of $0.33 per share. The Bridge Loan
had an annual interest rate of 14%. The principal of $50,000 was repaid in July
2007; $5,000 of the accrued interest was paid in September 2007 and a final
accrued interest payment of $5,000 was made in March 2008.

In December 2005, the Estate of Dr. Ryon loaned the Company an additional
$36,000 under an amendment to the December 2004 promissory note. Additional
amounts were loaned to the Company in March 2006 for $22,500, in August 2006 for
$57,672 and in September 2006 for $153,375.26. These amounts, along with other
previous loans to the Company by the largest stockholder totaling $374,548 were
converted to 1000 shares of Cumulative Convertible Preferred Series B stock in
late September 2006, and all accrued interest was forgiven. Cumulative
Convertible Preferred Stock Series B can be converted to common stock of Image
Technology Laboratories at a ratio of one share of Cumulative Convertible
Preferred Stock Series B to 2,700 shares of common stock. Either the stockholder
or the Company may elect to force conversion after two years from issuance in
units of 100 shares of Cumulative Convertible Preferred Stock Series B. The
Company may also elect to repurchase the Cumulative Convertible Preferred Stock
Series B in units of 100 shares of Cumulative Convertible Preferred Stock Series
B at any time for $432 per share of Cumulative Convertible Preferred Stock
Series B. Fixed dividend is accumulated as 12.5 additional shares of Cumulative
Convertible Preferred Stock Series B per quarter. The underlying common stock,
should the Company or shareholder elect to convert, is unregistered. The voting
rights are set at one vote per share of Cumulative Convertible Preferred Stock
Series B. The issuance described above was made in reliance upon the exemptions
from registration set forth in Section 4(2) of the Securities Act relating to
sales by an issuer not involving any public offering. None of the foregoing
transactions involved a distribution or public offering. No underwriters were
engaged in connection with the foregoing issuances of securities, and no
underwriting commissions or discounts were paid. At March 31, 2008, 1,062 shares
of Preferred Stock Series B are outstanding. Such shares may be converted at the
option of the holder or the Company to 2,867,400 shares of Common stock
beginning in September 2008. Prior to conversion, such shares may be redeemed by
the Company at $432 per share or $458,784 at any time until forced conversion by
either party into Common stock.



In September 2006, the Company entered into a settlement agreement with Dr.
Carlton Phelps, our former vice president of finance and administration, chief
financial officer, secretary and treasurer. Pursuant to the Settlement
Agreement, the Company paid Dr. Phelps a total of $153,375 consisting of
attorneys' fees awarded by the arbitrator and confirmed by the court plus
interest calculated at a rate of nine percent per annum from September 4, 2004
until September 1, 2006. The Company filed an 8-K detailing this event with the
Securities and Exchange Commission on October 4, 2006.

                                      -14-
<PAGE>



In September of 2006, the Company sold 2,309,583 shares of common stock at a
price of $0.10 to a group of seven accredited investors in a private placement
under Section 4(2) of the Securities Act of 1933, as amended, and Rule 506 of
Regulation D there under. These unregistered shares of common stock were issued
with registration rights. The proceeds of this sale of common stock were used to
repurchase 2,309,583 shares of common stock at a price of $0.10 from Dr. Carlton
Phelps, our former vice president of finance, chief financial officer, secretary
and treasurer. The 2,309,583 shares of stock repurchased from Dr. Phelps by the
Company were cancelled upon their tender. An 8-K was filed with the Securities
and Exchange Commission on October 4, 2006. The net effect of the repurchase and
subsequent cancellation of 2,309,583 shares of common stock as described above
in combination with the sale of 2,309,583 shares of common stock as described
above resulted in no change to the number of shares of common stock outstanding
due to this transaction.



                           FORWARD-LOOKING STATEMENTS

When used in the Quarterly Report on Form 10-Q, the words "may", "will",
"should", "expect", "believe", "anticipate", "continue", "estimate", "project",
"intend" and similar expressions are intended to identify forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act regarding events, conditions and financial trends that
may affect our future plans of operations, business strategy, results of
operations and financial condition. We wish to ensure that such statements are
accompanied by meaningful cautionary statements pursuant to the safe harbor
established in the Private Securities Litigation Reform Act of 1995. Prospective
investors are cautioned that any forward-looking statements are not guarantees
of future performance and are subject to risks and uncertainties and that actual
results may differ materially from those included within the forward-looking
statements as a result of various factors including our ability to consummate,
and the terms of, acquisitions, if any. Such forward-looking statements should,
therefore, be considered in light of various important factors, including those
set forth herein and others set forth from time to time in our reports and
registration statements filed with the Securities and Exchange Commission (the
"Commission"). We disclaim any intent or obligation to update such
forward-looking statements.


                                      -15-
<PAGE>

ITEM 3 - QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.


ITEM 4 - CONTROLS AND PROCEDURES

(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Our Chief Technology Officer who is our Principal Accounting Officer, after
evaluating the effectiveness of the Company's disclosure controls and procedures
(as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)
as of the end of the period covered by this report (the "Evaluation Date")),
have concluded that as of the Evaluation Date, our disclosure controls and
procedures were adequate and effective to ensure that material information
relating to the Company would be made known to them by others within the
Company, particularly during the period in which this quarterly report on Form
10-Q was being prepared.

(B) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the most recently completed fiscal quarter, there has been no change in
our internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, our internal control over financial
reporting. As a result, no corrective actions were taken.



                                      -16-
<PAGE>



                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS


None.



ITEM 1A - RISK FACTORS


Not applicable.


ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


The Company converted a total of $374,548 of debt owed to our largest
shareholder to 1000 shares of Image Technology Laboratories Cumulative
Convertible Preferred Stock Series B issued to same stockholder in late
September 2006. Cumulative Convertible Preferred Stock Series B can be converted
to common stock of Image Technology Laboratories at a ratio of one share of
Cumulative Convertible Preferred Stock Series B to 2,700 shares of common stock.
Either the stockholder or the Company may elect to force conversion after two
years in units of 100 shares of Cumulative Convertible Preferred Stock Series B.
The Company may also elect to repurchase the Cumulative Convertible Preferred
Stock Series B in units of 100 shares of Cumulative Convertible Preferred Stock
Series B at any time for $432 per share of Cumulative Convertible Preferred
Stock Series B. Fixed dividend is accumulated as 12.5 additional shares of
Cumulative Convertible Preferred Stock Series B per quarter. The underlying
common stock, should the Company or stockholder elect to convert, is
unregistered. The voting rights are set at one vote per share of Cumulative
Convertible Preferred Stock Series B.

The issuances described above were made in reliance upon the exemptions from
registration set forth in Section 4(2) of the Securities Act relating to sales
by an issuer not involving any public offering. None of the foregoing
transactions involved a distribution or public offering. No underwriters were
engaged in connection with the foregoing issuances of securities, and no
underwriting commissions or discounts were paid.

Our largest stockholder accumulated 12 additional shares of Cumulative
Convertible Preferred Stock Series B on January 1, 2008 under the terms
described above as Fixed Dividends.

At March 31, 2008, 1,062 shares of Preferred Stock Series B are outstanding.
Such shares may be converted at the option of the holder or the Company to
2,867,400 shares of Common stock. Prior to conversion, such shares may be
redeemed by the Company at $432 per share or $458,784 at any time until forced
conversion by either party into Common stock.


ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                                      -17-
<PAGE>


ITEM 5 - OTHER INFORMATION

None.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a)      EXHIBITS.

                  31.1     Certification of Chief Technology Officer and
                           Principal Accounting Officer pursuant to Section 302
                           of the Sarbanes-Oxley Act of 2002.

                  32.1     Certification of Chief Technology Officer and
                           Principal Accounting Officer pursuant to Section 906
                           of the Sarbanes-Oxley Act of 2002.


         (b) REPORTS ON FORM 8-K.

                  None.



                                      -18-
<PAGE>




                                   SIGNATURES

         In accordance with the requirements of the Securities Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.










/S/ LEWIS M. EDWARDS
-----------------------
LEWIS M. EDWARDS,
CHAIRMAN,
EXECUTIVE VICE-PRESIDENT,
CHIEF TECHNOLOGY OFFICER, AND PRINCIPAL
ACCOUNTING OFFICER

MAY 15, 2008




                                      -19-