SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

|X|   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

              For the quarterly period ended September 30, 2007 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 shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|

As of November 20, 2007, there were 15,238,778 shares of the registrant's common
stock outstanding.
<PAGE>

                      IMAGE TECHNOLOGY LABORATORIES, INC.

                                      INDEX

                                                                        PAGE NO.
PART I - FINANCIAL INFORMATION                                              2
Item 1 - Financial Statements                                               2
Condensed Balance Sheets                                                    3
Condensed Statements of Operations                                          4
Condensed Statement of Changes in Stockholders' Deficiency                  5
Condensed Statements of Cash Flows                                          6
Notes to Condensed Financial Statements                                     7
Item 2 - Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                         10
Item 3 - Controls and Procedures                                           16
PART II - OTHER INFORMATION                                                17
Item 1 - Legal Proceedings                                                 17
Item 2 - Changes in Securities                                             17
Item 3 - Defaults Upon Senior Securities                                   17
Item 4 - Submission of Matters to a Vote of Security Holders               17
Item 5 - Other Information                                                 17
Item 6 - Exhibits and Reports on Form 8-K                                  18
SIGNATURES                                                                 19
EXHIBIT 31.1 - CERTIFICATION                                               20
EXHIBIT 32.1 - ADDITIONAL CERTIFICATION                                    21


                                       2
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                            SEPTEMBER 30, 2007     DECEMBER 31, 2006
                                                                                (UNAUDITED)
<S>                                                                         <C>                   <C>
ASSETS

CURRENT ASSETS:
 Cash and cash equivalents                                                             404,420                 3,264
 Accounts receivable                                                                   110,833               194,839
 Prepaid expenses and other current assets                                               8,637                10,602
                                                                            ------------------    ------------------
   TOTAL CURRENT ASSETS                                                                523,890               208,705
 Equipment and improvements, net                                                       155,561               118,267
 Rent - deposit                                                                          1,496                 1,496
                                                                            ------------------    ------------------
   TOTAL ASSETS                                                                        680,947               328,468
                                                                            ==================    ==================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
 Loan payable to stockholder                                                $                0    $           50,000
 Loan: Bank line of credit                                                              68,316                66,895
 Current portion of long-term debt                                                     109,180                     0
 Accounts payable and accrued expenses                                                 196,796               217,402
 Accrued compensation payable to stockholders                                          113,597               121,723
                                                                            ------------------    ------------------
   TOTAL CURRENT LIABILITIES                                                           487,889               456,020

Long-term debt, less current portion                                                   515,101                     0
Notes payable to stockholders, less current portion                                      3,684                     0
                                                                            ------------------    ------------------
   TOTAL LIABILITIES                                                                 1,006,674               456,020
                                                                            ------------------    ------------------
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
   1,037 and 1, 000 shares issued and outstanding, Cumulative Convertible
   Series B                                                                             15,994                    10
 Common stock, par value $.01 per share; 50,000,000 shares authorized;
   15,238,778 shares authorized and outstanding                                        152,388               152,388

 Additional paid-in capital                                                          3,703,463             3,630,015
 Accumulated deficit                                                                (4,212,571)           (3,924,965)
                                                                            ------------------    ------------------
   TOTAL STOCKHOLDERS' DEFICIENCY                                                     (325,727)             (127,552)
                                                                            ------------------    ------------------
   TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                           $          680,947    $          328,468
                                                                            ==================    ==================
</TABLE>

The accompanying notes are an integral part of the financial statements.


                                       3
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

                       CONDENSED STATEMENTS OF OPERATIONS
             THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            THREE MONTHS                    NINE MONTHS
                                                         ENDED SEPTEMBER 30,            ENDING SEPTEMBER 30,
                                                        2007            2006            2007            2006
                                                        ----            ----            ----            ----
<S>                                                 <C>             <C>             <C>             <C>
REVENUE:
   Systems/ software: license fees and sales        $    131,114    $     98,786    $    338,478    $    515,249
   Dividend Income                                         5,087               0           5,087               0
   Service Income                                                          2,000             256           9,500
                                                    ------------    ------------    ------------    ------------

            TOTAL REVENUE                                136,201         100,786         343,821         524,749

COST OF REVENUE:                                           4,209           1,067           5,150           2,017
                                                    ------------    ------------    ------------    ------------

            GROSS PROFIT                                 131,992          99,719         338,671         522,732
                                                    ------------    ------------    ------------    ------------

COSTS AND EXPENSES:
   Research and development                              103,853          93,196         285,002         276,421
   Sales and marketing                                     4,154           3,788          11,518          13,278
   General and administrative (includes interest
      expense of $24,018 and $26,388 for the nine
      months ending September 30, 2007 and 2006,
      respectively; $17,314 and $8,990 for the
      three months ending September 30,2007 and
      2006 respectively )                                114,828          34,240         240,325         236,885
   Stock based compensation                               24,483          24,483          73,448          73,448
                                                    ------------    ------------    ------------    ------------
            TOTAL COSTS AND EXPENSES                     247,318         155,707         610,293         600,032
                                                    ------------    ------------    ------------    ------------
NET INCOME (LOSS)                                   $   (115,326)   $    (55,988)   $   (271,622)   $    (77,300)
                                                    ============    ============    ============    ============
NET (LOSS) PER COMMON SHARE:
   Basic and diluted                                $      (0.01)   $      (0.00)   $      (0.02)   $      (0.00)

AVERAGE NUMBER OF SHARES USED IN COMPUTATION:
   Basic and diluted                                  16,739,778      16,739,778      16,739,778      16,739,778
                                                    ============    ============    ============    ============
</TABLE>

The accompanying notes are an integral part of the financial statements.


                                        4
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

           CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
                      NINE MONTHS ENDED SEPTEMBER 30, 2007
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                           PREFERRED STOCK,
                                              ALL SERIES              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, 2007                 1,501,000    $15,010   15,238,778      $152,388    $3,630,015   $(3,924,965)    $(127,553)
 Stock based  compensation                                                                      73,448                      73,448
 Cumulative Convertible
 Preferred Series B, dividend
 Accumulation                                   37     15,984                                                (15,984)
                                         ---------    -------   ----------      --------    ----------   -----------     ---------
Net loss                                                                                                    (271,622)     (271,622)
                                         ---------    -------   ----------      --------    ----------   -----------     ---------
Balance, September 30, 2007              1,501,037    $30,994   15,238,778     $ 152,388    $3,678,980   $(4,212,571)    $(325,727)
                                         =========    =======   ==========      ========    ==========   ===========     =========
</TABLE>

The accompanying notes are an integral part of the financial statements.


                                       5
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

                       CONDENSED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      NINE MONTHS
                                                                                  ENDED SEPTEMBER 30,
                                                                                  -------------------
                                                                                  2007          2006
<S>                                                                            <C>           <C>
OPERATING ACTIVITIES:
    Net loss                                                                   $ (271,622)   $  (77,300)
    Adjustments to reconcile net loss to net cash
      Provided (used) in operating activities:
         Depreciation and amortization of equipment
            and improvements                                                       42,408        43,355
         Stock based compensation                                                  73,448        73,448
         Changes in operating assets and liabilities:
            Accounts receivable                                                    84,005       (83,245)
            Prepaid expenses and other current assets                               1,966        (3,081)
            Accounts payable and accrued expenses                                 (20,606)     (145,724)
            Accrued compensation payable to stockholders                           (8,126)       41,241
                                                                               ----------    ----------
              NET CASH PROVIDED (USED) IN OPERATING ACTIVITIES                    (98,527)     (151,306)
                                                                               ----------    ----------
INVESTING ACTIVITIES - purchase of equipment and improvements                     (79,702)       (3,826)
                                                                               ----------    ----------
FINANCING ACTIVITIES:
    Proceeds from (repayment of) bank line of credit                                1,421        11,004
    Proceeds from private placement of common stock                                     0       230,958
    Redemption of common stock                                                          0      (230,958)
    Proceeds from notes payable and long- term debt                               624,281
    Proceeds from loans from stockholders                                           3,684       230,148
    Repayments of notes payable and long-term debt                                (50,000)     (114,613)
                                                                               ----------    ----------
              NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                    579,386       126,539
                                                                               ----------    ----------
              NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                401,157       (28,593)

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                      3,263        40,698
                                                                               ----------    ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD                                       $  404,420    $   12,105
                                                                               ==========    ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
    Interest paid                                                              $   24,018    $   32,372
                                                                               ==========    ==========
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
     Conversion of notes payable to stockholders to Preferred Stock Series B   $        0    $  374,548
                                                                               ==========    ==========
</TABLE>

The accompanying notes are an integral part of the financial statements.


                                       6
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION:

In the opinion of management, the accompanying unaudited condensed 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 September 30, 2007, its results of
operations for the three and nine months ended September 30, 2007 and 2006,
changes in stockholders' deficiency for the nine months ended September 30, 2007
and cash flows for the nine months ended September 30, 2007 and 2006. Certain
terms used herein are defined in the audited financial statements of the Company
as of December 31, 2006 and for the years ended December 31, 2006 and 2005 (the
"Audited Financial Statements") included in the Company's 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 condensed in or omitted from these financial statements unless
significant changes have taken place since the end of the most recent fiscal
year. Accordingly, the accompanying unaudited condensed financial statements
should be read in conjunction with the Audited Financial Statements and the
other information included in the Form 10-KSB.

The results of operations for the three and nine months ended September 30, 2007
are not necessarily indicative of the results of operations to be expected for
the full year ending December 31, 2007.

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, 2006, contained an explanatory paragraph regarding
the Company's ability to continue as a going concern.

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 are 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 1,501,000 Preferred Series A shares and the 1,037
Cumulative Convertible Preferred Series B 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, 2006 in accordance with the "two class"
method of computing earnings (loss) per share set forth in SFAS 128.

The Company had a net loss for the three months ended September 30, 2007 and net
losses for the nine months ended September 30, 2007 and 2006, and a net gain for
the three months ended September 30, 2006. The assumed effects of the exercise
of vested options to purchase 1,850,000 and 1,400,000 common shares at September
30, 2007 and 2006, respectively, and warrants to purchase 230,000 common shares
outstanding at September 30, 2007 would be anti-dilutive or insignificant and,
therefore, they have not been considered in the calculations of diluted per
share amounts in the accompanying condensed statements of operations for those
periods.


                                       7
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

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 principal stockholder, Dr. David Ryon. At September 30, 2007,
there was $68,316 outstanding under this agreement.

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 September 30, 2007,
there was $624,281 outstanding under this agreement. Fixed fees payable to
PowerLease 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 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.

In September 2005, the Company received a total of $50,000 in cash as part of a
Bridge Loan Agreement that included the issuance of warrants to purchase 50,000
shares of Common Stock of the Company. All $50,000 of these funds came from a
member of the Company's Board of Directors. The five-year warrants have an
exercise price of $0.33 per share. The Bridge Loan has an annual interest rate
of 14%, a maturity of 12 months and can be prepaid upon certain events such as
receipt of a certain level of funds from the InMed Services agreement and gross
proceeds of equity financing above $500,000. The principal of $50,000 and part
of the accrued interest was repaid in July 2007 and the remaining accrued
interest of $5,000 associated with this loan is still outstanding.


                                       8
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

NOTE 5 - STOCK OPTIONS

The Company did not grant any options under the Company's option plan during the
quarter ended September 30, 2007.

Prior to January 1, 2006 the Company measured compensation cost related to stock
options issued to employees using the intrinsic value method of accounting
prescribed by Accounting Principles Board Opinion No. 25 ("APB 25"), "Accounting
For Stock Issued To Employees". The Company has adopted the provisions of
Statement of Financial Accounting Standards No. 123R ("SFAS 123R"), "Accounting
For Stock-Based Compensation." As a result of SFAS 123R, the Company began
expensing the fair value of employee stock options over the vesting period
beginning with its fiscal quarter ending March 31, 2006. For the quarter ending
September 30, 2007, the Company expensed $24,483 due to stock options.

NOTE 6 - WARRANTS

As of September 30, 2007, 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, 2007 as Fixed Dividends. An
additional 13 and 12 shares were accumulated on April 1, 2007 and July 1, 2007,
respectively.


                                       9
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

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 condensed 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.
Accordingly, we are no longer in the development stage for accounting purposes,
but we continue to refine and enhance the capabilities of our WarpSpeed system.

We have had recurring losses and negative cash flows from our operating
activities since inception. We have cash of $404,420 and a working capital of
$36,001 as of September 30, 2007.


                                       10
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

  RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007
        COMPARED WITH THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2006

REVENUE:

For the three months ended September 30, 2007, our total revenue was $136,201, a
increase of $35,415 from the $100,786 in the prior year's comparable period, For
the nine months ended September 30,2007, our total revenue was $343,821, a
$180,928 decrease from the $524,749 revenue in the prior year's comparable
period, largely attributed to variations in the billed usage fees.

COST OF REVENUE:

For the three and nine months ended September 30, 2007, direct cost of revenue
for $4,209 and $5,150 was incurred. For the three and nine months ending
September 30,2006, our cost of revenue was $1,067 and $2,017

SALES AND MARKETING EXPENSES:

During the three months ended September 30, 2007, we incurred sales and
marketing expenses of $4,154, as compared with sales and marketing expenses of
$3,788 during the same period of 2006, a increase of $366. 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. During the nine months ended September 30, 2007 we
incurred sales and marketing expenses of $11,518, as compared with sales and
marketing expenses of $13,278 during the same period of 2006, a decrease of
$1,760.

NET LOSS:

We incurred a net loss of $115,326 (less than $.01 per share) for the three
months ended September 30, 2007 as compared with a loss of $55,988 for the three
months ended September 30, 2006. Net loss for the nine months ended September
30, 2007 was $271,622 as compared with a net loss of $77,300 for the same period
in 2006(less than $.02 per share). The Company continues to aggressively manage
costs while it focuses on increasing revenues from sales of systems / software.


                                       11
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

                         LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2007, our total assets were $680,947, an increase of $352,479
from total assets of $328,468 on December 31, 2006.

As of September 30, 2007, we had cash and cash equivalents and a working capital
of $404,420 and $36,001, respectively.

Net cash provided (used) in our operating activities for the 9 months ending
September 30, 2007 of ($98,527) was substantially attributable to our net loss
of $271,622. offset by $8,488 in accrued compensation payable to stockholders.
Of the net loss of $271,622, $73,448 was stock option compensation expense. The
net cash used by our financing activities was a net of $1,421 from our bank line
of credit. The net cash provided from an Accounts Receivable loan was $ 650,000.
Investing activities (purchase of equipment and improvements) for the three
months ending September 30, 2007 totaled $ 79,702.

The foregoing activities, i.e., operating, investing and financing, resulted in
our net cash increase of $401,157 for the nine months ended September 30, 2007.

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 September 30, 2007, we
have $68,315 outstanding under that loan.

In February and March 2004, we borrowed an aggregate of $264,000 from Valley
Commercial Capital, LLC ("Valley"). These loans required aggregate monthly
payments of principal and interest of $8,273 through February 2007 and $4,682 in
March 2007. In late August 2006, the remaining balance of these loans, $57,672,
was paid. This payoff was funded by a loan from our largest stockholder and was
converted to Cumulative Convertible Preferred Series B stock issued to our
largest stockholder in late September 2006.

In December 2004, we borrowed $105,000 from our former Chief Executive Officer,
and were to be repaid over 24 months, beginning in January 2007. This amount was
converted to Cumulative Convertible Preferred Series B stock issued to our
largest stockholder in late September 2006

In September 2005, the Company received a total of $50,000 in cash as part of a
Bridge Loan Agreement that included the issuance of warrants to purchase 50,000
shares of Common Stock of the Company. All $50,000 of these funds came from a
member of the Company's Board of Directors. The five-year warrants have an
exercise price of $0.33 per share. The Bridge Loan has an annual interest rate
of 14%, a maturity of 12 months and can be prepaid upon certain events such as
receipt of a certain level of funds from the InMed Services agreement and gross
proceeds of equity financing above $500,000. The principal of $50,000 and part
of the accrued interest were repaid in July 2007 and the remaining accrued
interest of $5,000 associated with this loan is still outstanding.

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.


                                       12
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

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 September 30, 2007,
there was $624,281 outstanding under this agreement. Fixed fees payable to
PowerLease were $10,402.

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 $900 per month pursuant to a
five-year lease commitment ending in October 2007 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.

Management believes that as a result of the proceeds from financing activities,
as well as anticipated cash flow generated by sales of its 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, 2007. 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 received a total of $50,000 in cash as part of a
Bridge Loan Agreement that included the issuance of warrants to purchase 50,000
shares of Common Stock of the Company. All $50,000 of these funds came from a
member of the Company's Board of Directors. The five-year warrants have an
exercise price of $0.33 per share. The Bridge Loan has an annual interest rate
of 14%, a maturity of 12 months and can be prepaid upon certain events such as
receipt of a certain level of funds from the InMed Services agreement and gross
proceeds of equity financing above $500,000 The principal of $50,000 and half of
the accrued interest were repaid in July 2007 the remaining accrued interest of
$5,000 associated with this loan is still outstanding.

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 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.


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<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

On January 17 2006, Barry C. Muradian informed the Company of his resignation as
President, Chief Executive Officer and Principal Accounting Officer, effective
January 20 2006. An 8-K was filed with the Securities and Exchange Commission on
January 20 2006. In May 2006, the Company and Mr. Muradian signed a
"Confidential Separation Agreement, Waiver and General Release". As part of this
agreement, Mr. Muradian was paid a total of approximately $22,500, which
represents all guaranteed payments due and owing to Mr. Muradian for salary and
expenses.

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 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


                                       14
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

                           FORWARD-LOOKING STATEMENTS

When used in the Quarterly Report on Form 10-QSB, 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.


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<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

ITEM 3 - CONTROLS AND PROCEDURES

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-QSB was being prepared.

CHANGES IN INTERNAL CONTROLS

There were no significant changes in our internal controls or in other factors
that could significantly affect our disclosure controls and procedures
subsequent to the Evaluation Date, nor any significant deficiencies or material
weaknesses in such disclosure controls and procedures requiring corrective
actions. As a result, no corrective actions were taken.


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<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None

ITEM 2 - CHANGES IN SECURITIES

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.

Our largest stockholder accumulated 12 additional shares of Cumulative
Convertible Preferred Stock Series B on July 1, 2007 under the terms described
above as Fixed Dividends.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

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

None

ITEM 5 - OTHER INFORMATION

In April 2007, the Company executed an amendment to its contract with Park
Avenue Associates in Radiology PC, Binghamton NY to extend the term of the
original RIS/PACS contract through December 31, 2008 and for the purchase of
additional equipment to provide internet / web access to their images and
reports by referring physicians.

The Company was notified by its independent registered accounting firm,
Berenson, LLP, that effective May 15, 2007 they were terminating their services
to the Company as a result of a combination with the Company's prior independent
registered accounting firm, J.H. Cohn, LLP. The Company subsequently filed an
8-K with the Securities and Exchange Commission on May 17, 2007. On June 22,
2005, the Board of Directors of the Company elected to discontinue its
engagement of J.H. Cohn, LLP as the Company's independent registered accounting
firm. The Company subsequently notified J.H. Cohn, LLP of its decision and filed
a Form 8-K with the Securities and Exchange Commission on June 29, 2005.


                                       17
<PAGE>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

In July 2007, the Company entered into a five year ASP contract with Bon Secours
Community Hospital in Port Jervis, NY to install and maintain our WarpSpeed RIS
/ PACS solution, including HIS connectivity, failover capability via a secondary
server and secure Web access.

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>

                       IMAGE TECHNOLOGY LABORATORIES, INC.

                                   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
                              NOVEMBER 20, 2007


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