SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                              --------------------
                                  FORM 10-KSB

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the fiscal year ended September 30, 1999
                           Commission File No. 1-11182

                         BIO-IMAGING TECHNOLOGIES, INC.
              ----------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)

          Delaware                                        11-2872047
-----------------------------               ------------------------------------
(State or Other Jurisdiction                (I.R.S. Employer Identification No.)
of Incorporation or Organization)


830 Bear Tavern Road, West Trenton, New Jersey                     08628-1020
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                            (Zip Code)

                                 (609) 883-2000
                         -------------------------------
                         (Registrant's Telephone Number,
                              Including Area Code)

           Securities registered pursuant to Section 12(b) of the Act:

    Title of each class                Name of each exchange on which registered
    -------------------                -----------------------------------------

Common Stock, $.00025 par              Boston Stock Exchange
value per share


         Securities registered under Section 12(g) of the Exchange Act:

                                      None

<PAGE>

        Check whether the Registrant: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Securities  Exchange Act during the past 12 months
(or for such  shorter  period  that the  Registrant  was  required  to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

                    Yes:                         No: X
                         ----                       ----


     Check if there is no disclosure  of  delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained,  to the  best of  Registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

     State  Registrant's  revenues  for fiscal year ended  September  30,  1999:
$4,349,079

     State the aggregate market value of the voting stock held by non-affiliates
of the Registrant:  $1,565,328 at November 30, 1999 based on the average bid and
asked prices on that date.


     Indicate  the  number of  shares  outstanding  of each of the  Registrant's
classes of common stock, as of November 30, 1999:

Class                                                        Number of Shares
-----                                                        ----------------

Common Stock, $.00025 par value                                  7,773,878


     Transitional Small Business Disclosure Format

                    Yes:                         No: X
                         ----                       ----


     The  following  documents  are  incorporated  by reference  into the Annual
Report on Form 10-KSB:  Portions of the Registrant's  definitive Proxy Statement
for its 2000 Annual Meeting of Stockholders  are  incorporated by reference into
Part III of this Report.



<PAGE>

                                TABLE OF CONTENTS
                                -----------------

          Item                                                            Page
          ----                                                            ----

PART I    1.   Business.....................................................1

          2.   Properties...................................................9

          3.   Legal Proceedings............................................9

          4.   Submission of Matters to a Vote of Security Holders..........9

PART II   5.   Market for the Company's Common Equity and Related
               Stockholder Matters.........................................10

          6.   Management's Discussion and Analysis of Financial
               Condition and Results of Operations.........................12

          7.   Financial Statements........................................19

          8.   Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure.........................19

PART III  9.   Directors, Executive Officers, Promoters and Control
               Persons; Compliance with Section 16 (a) of the
               Exchange Act................................................20

          10.  Executive Compensation......................................20

          11.  Security Ownership of Certain Beneficial Owners
               and Management..............................................20

          12.  Certain Relationships and Related Transactions..............20

          13.  Exhibits, List and Reports on Form 8-K......................20

SIGNATURES.................................................................21

EXHIBIT INDEX..............................................................23

FINANCIAL STATEMENTS......................................................F-1





                                       -i-
<PAGE>

                                     PART I


ITEM 1.   BUSINESS.

GENERAL


     Bio-Imaging  Technologies,  Inc.  ("Bio-Imaging"  or  "the  Company")  is a
pharmaceutical  contract service  organization,  providing services that support
the product development process of the pharmaceutical, biotechnology and medical
device  industries.  The Company  specializes  in  assisting  its clients in the
design and management of the  medical-imaging  component of clinical  trials for
all  modalities  which  consist  of  computerized  tomography  ("CT"),  magnetic
resonance imaging ("MRI"),  x-rays, dual energy x-ray  absorptiometry  ("DEXA"),
position  emission  tomography  single photon emission  computerized  tomography
("PET SPECT") and ultrasound.  The Company  provides  services which include the
processing  and analysis of medical  images and the  data-basing  and regulatory
submission of medical images, quantitative data and text.

     The Company  utilizes  proprietary  processes and software  applications in
providing its services to pharmaceutical  companies  conducting clinical studies
in which medical imaging modalities are used to evaluate the efficacy and safety
of  pharmaceuticals,  biologics or medical devices.  The Company's digital image
processing  and computer  analysis  techniques  enable it to make highly precise
measurements and  biostatistical  inferences  about drug or device effects.  The
resulting  data enable the Company's  clients,  and their  regulatory  reviewers
(primarily  the U.S.  Food and  Drug  Administration,  the  "FDA"  and  European
Agencies) to evaluate product efficacy and safety. In addition,  the Company has
developed  specialized  computer services and software  applications that enable
independent  radiologists  and other  medical  specialists  involved in clinical
trials to review medical image data in an entirely digital format.

     The  Company  continues  to believe  that it is at an early stage of market
penetration  and is directing  its  marketing  and sales  efforts  towards those
clinical development areas that heavily depend upon medical imaging. These areas
include therapeutic and diagnostic anti-inflammatory,  oncology, central nervous
system, osteoporosis and cardiovascular.

     In February  1997, the Company  opened a European  facility in Leiden,  the
Netherlands  to provide  centralized  image  processing  services  for  European
clients.  The Company  manages its services for European based  clinical  trials
from this facility. The Company's European facility has the same capabilities as
the Company's U.S. headquarters.

     In May 1999, the Company  acquired the operations of Bona Fide, Ltd. ("Bona
Fide").  Bona Fide provides DEXA quality assurance and quality control ("QA/QC")
to the  pharmaceutical  and medical device  industry for studies  requiring bone
densitometry and body composition measurements.

     The  Company  was  incorporated  in  Delaware  in 1987  under the name Wise
Ventures, Inc. The Company's name was changed to Bio-Imaging Technologies,  Inc.
in 1991. The address of the Company's  principal  executive  offices is 830 Bear
Tavern Road,  West  Trenton,  New Jersey,  08628,  and its  telephone  number is
609-883-2000.


                                      -1-
<PAGE>

BUSINESS SERVICES

     Core Laboratory Services

     Bio-Imaging is a leading  provider of medical imaging  management  services
for  clinical  development  purposes.  The  Company's  imaging  core  laboratory
facilities in the U.S.A. and Europe provide  centralized  image data collection,
processing,  analysis  and  archival  services  for  clinical  trials  conducted
worldwide.  The facilities are designed for high-volume  efficient processing of
analog (film) and digital image data in a secure  environment that complies with
regulatory guidelines for clinical data management.

     Medical  image data are received by  Bio-Imaging  facilities  from clinical
trial  sites,  typically  academic  or  community  hospitals.  The  Company  has
developed  procedures for data tracking and quality  control that it believes to
be of  significant  value  to its  clients.  The  Company's  facilities  contain
specialized  hardware and software for the digitization of films and translation
of digital data, enabling data to be standardized, regardless of its source. The
Company  believes its ability to handle most  commercially  available image file
formats is a valuable technical asset and an important  competitive advantage in
gaining new business for large global multi-center clinical trials.

     The  Company  performs  image  analyses  on client  data  using  internally
developed or specially configured software.  The Company measures key indicators
of drug efficacy in different organs and disease states.  The results from image
analysis derived in Bio-Imaging facilities are transferred to databases that can
be transmitted  electronically to the Company's clients,  or integrated directly
into the Company's  Bio/ImageBase(R)  package for  regulatory  submission on the
client's behalf.

     Information Management Services

     Bio-Imaging's   information   management   services   focus  on   providing
specialized solutions for improving the quality,  speed and flexibility of image
data  management for clinical  trials.  The Company's  Computer  Assisted Masked
Reading   ("CAMR(TM)")  systems  offer  numerous  advantages  over  conventional
film-based medical image reading scenarios,  including  increased reading speed,
greater  standardization  of image reading,  and reduced error in the capture of
reader interpretations.

     Using the Company's CAMR(TM) systems,  independent  medical specialists can
review medical image data from clinical trials in a digital format. The CAMR(TM)
systems can display all  modalities of medical image data,  regardless of source
equipment.  In addition,  the systems can display either translated digital data
or digitized films. Such image reviews are often required during clinical trials
to evaluate patients'  responses to therapy, or to determine if patients qualify
for  studies.  By using the CAMR(TM)  systems to read and  evaluate  image data,
medical  specialists  can achieve  greater  reading  speed than is possible with
film, and can perform evaluations in a more objective, reproducible manner.



                                      -2-
<PAGE>

     The Company has also developed remote CAMR(TM)  ("rCAMR(TM)") systems which
are  located on the  premises  of the  individual  medical  specialists  who are
engaged by the sponsor to perform the analysis of the medical  image data.  More
recently,  clients are requesting  Bio-Imaging to provide  "real-time" reads for
inclusion/exclusion  criteria,  or safety reads.  The Company  believes that the
rCAMR(TM)  system is the  optimal  tool for this type of work  because it allows
Bio-Imaging,  at the client's discretion,  to provide the images to an expert in
the field to  facilitate  the review of the images from the  expert's  office or
home.

     The  Company  has  developed  a   proprietary   image   database   software
application,  Bio/ImageBase(R),  that  enables the  Company's  clients to submit
their medical images and related  clinical data to the FDA in a digital  format.
Using data stored on CD-ROM disks, Bio/ImageBase(R) allows clients and their FDA
medical  reviewers  to review  medical  images and related  clinical  data.  The
Company believes that  Bio/ImageBase(R)  offers the potential to decrease review
time,  resulting in faster regulatory  approvals and reduced  time-to-market for
new drugs, biologics and medical devices.

     The Company's  Bio/ImageBase(R) software has been installed at client sites
and on certain  computer  systems  at the FDA.  The  Company  has been using its
Bio/ImageBase(R)  software to submit  medical images and related data to the FDA
since  mid-1993.  In March  1996,  Bio/ImageBase(R)  was cited in the FDA's 1996
Computer-Assisted  Product License Application  Guidance Manual as an acceptable
database for submission of imaging data.

     Other Services

     The Company  provides  technical  consulting in the evaluation of the sites
that may participate in clinical trials.  The Company also consults with clients
regarding  regulatory  issues  involved in the design,  execution,  analysis and
submission of medical image data in clinical trials.

TARGET MARKETS

     The  Company's  primary  target  market  is  comprised  of  pharmaceutical,
biotechnology and medical device companies whose clinical development  pipelines
include  drugs,  biologics  or devices that are  typically  evaluated by medical
imaging   methods.   This   target   market   includes   leading   international
pharmaceutical  companies and biotechnology companies with products currently in
the clinical development pipeline.

     Bio-Imaging  focuses  its  marketing  on the  following  stages of clinical
development:

     Phase II Clinical Trials

     Phase II clinical  trials are  generally  conducted  over six months to two
years and involve basic efficacy (effectiveness),  safety and dose-range testing
in  approximately  50 to 400  patients  suffering  from the disease or condition
under study.  Such trials help determine the best effective  dose,  confirm that
the drug works as expected and provide initial safety data.



                                      -3-
<PAGE>

     Phase III Clinical Trials

     Phase III clinical  trials are generally  conducted  over one to four years
and involve  efficacy and safety  studies in broader  populations of hundreds or
thousands of patients and many  investigational  sites  (hospitals and clinics).
These are  sometimes  referred  to as  pivotal  studies  for  submission  to the
regulatory  agencies.  Generally,  Phase III  studies  are  intended  to provide
additional  information  on drug  safety  and  efficacy,  an  evaluation  of the
risk-benefit  of the drug  and  information  for the  adequate  labeling  of the
product.

     Bio-Imaging  focuses its marketing  efforts  further on clinical trials for
the following classes of drugs:

     Anti-Inflammatory Therapeutics

     Anti-inflammatory  clinical  trials,  such as those  focused on  arthritis,
include  radiologic  evaluation  of the  bones  and  joints  to  determine  drug
efficacy.  The  Company  believes  that  demand  among drug  developers  for its
services will increase as new classes of  biotechnology-derived  drugs enter and
progress through the clinical development pipeline.

     Cancer Therapeutics

     Many  pharmaceutical  companies are currently  developing new therapies for
the treatment of cancer. For solid tumor studies, medical imaging modalities are
used to determine  the response of treated and untreated  tumors.  These medical
images are  evaluated  by  medical  specialists  during  the course of  oncology
clinical  trials to  determine  the extent of disease  and changes in tumor size
over time.

     The  FDA's  guidelines  aimed at  accelerating  access to new drugs for the
review and approval of new cancer  therapies place greater emphasis on shrinkage
of tumors as an early  indicator of anti-tumor  efficacy.  Bio-Imaging  believes
that  these  FDA  guidelines  may have a  favorable  impact on its  business  as
pharmaceutical  and  biotechnology  companies  may  have an  increased  need for
regulatory compliant medical imaging services to conduct their oncology clinical
trials.

     Central Nervous System Therapeutics

     Various  pharmaceutical   companies  are  currently  developing  drugs  for
treatment of diseases and  conditions  of the central  nervous  system,  most of
which are evaluated with the aid of medical imaging.  Most later-stage  clinical
trials for these serious and costly conditions involve the evaluation of medical
image data. The Company believes that its central nervous system clinical trials
business may increase as more therapies progress through the research pipeline.



                                      -4-
<PAGE>

     Osteoporosis

     Osteoporosis is the disease of "thinning bones" which leads to fractures in
the  elderly.  The FDA  guidance  document for  developing  treatments  for this
disease  recognized DEXA as one of the primary  efficacy and safety  measurement
tools available.  Furthermore,  all data needs to go through a quality assurance
laboratory.  This is now standard practice in all studies using DEXA instruments
whether for osteoporosis oncology or antiobesity or muscle wasting asssessment.

     Diagnostic Imaging Agents

     Bio-Imaging provides its services to clients developing  diagnostic imaging
agents  which are  designed  to diagnose  disease  conditions  more  quickly and
accurately in their development in order to facilitate earlier and more accurate
treatment.

     Cardiovascular Therapeutics

     Various  pharmaceutical  companies are currently  developing  drugs for the
diagnosis  and treatment of  cardiovascular  diseases and  conditions  which are
evaluated with the aid of medical imaging.  The Company provides its services to
clients  developing  diagnostic  agents for the detection and treatment of these
conditions.

MARKET TRENDS

     The Company  believes that demand for its services should grow because of a
variety of favorable regulatory, technological and market trends:

     o     The FDA  initiatives  to streamline  the  regulatory  submission  and
           review process which are being  implemented  should have a beneficial
           impact  on the  Company.  The  FDA is  investing  in new  information
           technology and has begun the process of formulating and disseminating
           guidelines  for  standardizing  the  submission of  electronic  data,
           including  medical images.  The Company  expects  submission of image
           data to be a requirement in key therapeutic and diagnostic  areas for
           evaluating the effectiveness of a drug or imaging agent.

     o     Consolidation,  restructuring  and  downsizing in the  pharmaceutical
           industry in response to downward  pressure on certain  pharmaceutical
           and  biotechnology  companies'  drug prices has resulted in increased
           outsourcing   of  certain   research  and   development   activities.
           Currently,  over $4 billion in research  services are  outsourced  to
           contract clinical research  organizations.  Industry  estimates place
           growth of  outsourcing  between  20% to 30% per year for at least the
           next three years.

     o     Growth in pharmaceutical  and biotechnology  research and development
           spending is fairly  non-cyclical.  As a result,  the Company believes
           that outsourcing of development  activities should continue to remain
           steady.



                                      -5-
<PAGE>

     o     New classes of drugs to treat conditions  traditionally  evaluated by
           imaging are entering or progressing through the clinical  development
           pipeline,  leading to  increased  demand for medical  imaging-related
           services. In addition,  digital technologies for data acquisition and
           management are rapidly penetrating the radiology community.

     o     As pharmaceutical and biotechnology companies increasingly attempt to
           expand  the market for new drugs by  conducting  clinical  trials and
           pursuing  regulatory  approval in multiple countries  simultaneously,
           contract service  organizations  with an  international  presence and
           expertise  will  continue  to  benefit.  The  Company  believes it is
           well-positioned to take advantage of these trends due to its U.S. and
           European operations.

     o     The Company also believes that, because its development  services are
           specialized, it is often able to perform these services with a higher
           level of expertise  or  specialization  more quickly and  efficiently
           than  a  pharmaceutical   or  biotechnology   company  could  perform
           internally.

INTELLECTUAL PROPERTY

     Proprietary  protection  for  the  Company's   computer-imaging   programs,
processes and know-how is important to its business.  Bio-Imaging  has developed
certain technically  derived procedures and computer software  applications that
are  intended to increase the  effectiveness  and quality of its  services.  The
Company  relies  upon  trademarks,   copyrights,  trade  secrets,  know-how  and
continuing  technological  innovation  to develop and maintain  its  competitive
position.  The Company has  obtained  registered  trademark  protection  for the
Bio/ImageBase(R)  and has claimed  trademark  protection  for the  CAMR(TM)  and
rCAMR(TM).  The Company also has applied for patent  protection for the two DEXA
phantoms  it  sells  to  trial  sites.  Furthermore,  Bio-Imaging  requires  all
employees,  consultants  and  contractors  to  execute  confidential  disclosure
agreements as a condition of employment or engagement by the Company.  There can
be no assurance,  however,  that the Company can limit  unauthorized or wrongful
disclosures of trade secret information.  In addition, to the extent the Company
relies on trade secrets and know-how to maintain its  competitive  technological
position,  there can be no assurance  that others may not develop  independently
the same or similar  techniques.  Although the Company's  intellectual  property
rights are important to the results of its operations, the Company believes that
other factors such as independence,  process knowledge,  technical expertise and
experience  are  more  important,   and  that,   overall,   these  technological
capabilities offer significant benefits to its clients.

GOVERNMENT REGULATION

     The  research  and  development,  manufacture  and  marketing  of drugs and
medical  devices are subject to  stringent  regulation  by the FDA in the United
States  and  by  comparable   authorities  in  other  countries.   In  addition,
regulations  imposed  by other  federal  agencies,  as well as state  and  local
authorities,  may  impact  such  research  and  development,  manufacturing  and
marketing.



                                      -6-
<PAGE>

     The FDA has  established  mandatory  procedures and safety  standards which
apply to the clinical testing,  manufacturing and marketing of drugs and medical
devices.  These procedures and safety standards include, among other things, the
completion of adequate and  well-controlled  human clinical  trials to establish
the safety and efficacy of the drug or device for its recommended  conditions or
use. The Company  advises its clients in the  execution  of clinical  trials and
other drug and device developmental tasks. The Company does not administer drugs
to or utilize medical devices on patients.

     The success of the  Company's  business  is  dependent  upon the  continued
acceptance by the FDA and other regulatory authorities which review the data and
analyses generated by the Company's services in the evaluation of the safety and
efficacy of new drugs and devices. The FDA has formal guidelines which encourage
the use of "surrogate  measures,"  through submission of digital image data, for
evaluation of drugs to treat life-threatening or debilitating conditions.  There
can be no assurance,  however, that the FDA or other regulatory authorities will
accept the data or analyses  generated  by the  Company in the future and,  even
assuming acceptance,  there can be no assurance that the FDA or other regulatory
authorities  will require the  application  of imaging  techniques to numbers of
patients  and over time  periods  substantially  similar  to those  required  of
traditional safety and efficacy techniques.

     Changes in the FDA's  policy for the  evaluation  of  therapeutic  oncology
agents  may have a positive  impact on the time to market of such  therapeutics.
According  to the  guidelines  announced in March 1996,  approval  times for new
cancer  therapies can be shortened if evidence of tumor  shrinkage is verifiable
and  demonstrable  through the use of objective  measurement  techniques.  These
guidelines  place much  greater  reliance  on the use of  medical  image data to
demonstrate  objective  tumor  shrinkage.  In addition,  in March 1997,  the FDA
announced  new  guidelines  aimed at  accelerating  all  therapeutic  categories
through the use of  surrogate  markers  such as imaging  endpoints.  The Company
believes the FDA's  initiatives  to streamline and accelerate the submission and
review  process  of  therapeutic  agents  may  have a  favorable  impact  on the
Company's business.

     In October 1998, the FDA released a draft guidance for industry relating to
how medical imaging should be defined, handled and evaluated in clinical trials.
The Company believes that the guidance  document comports with the methodologies
and  processes  utilized  by  the  Company  in  providing  medical   information
management services for its clients.

     The Company believes that its ability to achieve  continued and sustainable
growth will be materially  dependent  upon,  among other factors,  the continued
stringent  enforcement  of the  comprehensive  regulatory  framework  by various
government agencies. Any significant change in these regulatory  requirements or
the enforcement  thereof,  especially  relaxation of standards,  could adversely
affect the Company's prospects.

     The current  European  market  regulation  is more  fragmented  than in the
U.S.A.,  therefore,  such  European  agencies  have a  tendency  to  follow  FDA
guidelines.



                                      -7-
<PAGE>

COMPETITION

     As a sign of growth in the clinical trials-related medical imaging services
business,  the Company  continues to experience an increase in competition  from
commercial  competitors and academic research centers.  Over the past two years,
several  conventional  contract  research  organizations  have either started or
acquired  divisions  to address  the need for  medical  imaging  services  as it
relates to clinical trials. As competition  increases,  Bio-Imaging will look to
provide  value-added  services and  undertake  marketing  and sales  programs to
differentiate  its services  based on its expertise  and  experience in specific
therapeutic and diagnostic areas, its technological expertise and regulatory and
clinical development  experience,  its quality performance and its international
capabilities.  Competition in the Company's  industry has resulted in additional
pressure  being  placed on price,  service  and  quality.  Although  the Company
believes  that  it is  well  positioned  against  its  competitors  due  to  its
experience  in  clinical  trials  and  regulatory   compliance  along  with  its
international presence, there can be no assurance that the Company's competitors
or clients  will not  provide or develop  services  similar or superior to those
provided by the  Company.  Any such  competition  could have a material  adverse
impact on the Company. The Company's  competitive position also depends upon its
ability to attract and retain  qualified  personnel  and  develop  and  preserve
proprietary technology, processes and know-how.

MARKETING AND SALES

     Bio-Imaging  provides  and markets its services on an  international  basis
primarily to pharmaceutical and biotechnology companies. The Company's sales and
marketing activities are performed by a Vice President,  Business Development, a
Director  of  Client  Technical  Services,  three  Regional  Managers  of Client
Technical Services, a Director of Clinical Services-Europe,  a Manager, Business
Development and a Business Development Associate.

     The  Company's  selling  efforts are  focused on North  America and Western
Europe.  Sales efforts are directed from both of the Company's  headquarters  in
New Jersey and Leiden,  the  Netherlands.  The  Company's  marketing  activities
include  exhibiting at major trade shows,  advertising in trade journals and the
sponsoring  of  industry   associations.   The  Company  continues  to  evaluate
appropriate  co-marketing activities and strategic alliances, in particular with
contract  research  organizations,  to  augment  its  own  business  development
efforts.

SIGNIFICANT CLIENTS

     During fiscal 1999, three clients,  including two  European-based  clients,
accounted  for  approximately  39%  of the  Company's  project  revenues.  These
contracts  are  terminable  by the  Company's  clients  at any  time and for any
reason.  Subsequent  to fiscal  1999,  the  Company  completed  its work on such
projects for the two European  based clients.  Loss of the one U.S.  client or a
reduction  in services  provided to that  client  would have a material  adverse
effect on the Company's business, financial condition and results of operations.




                                      -8-
<PAGE>

EMPLOYEES

     As of September 30, 1999,  the Company had 44 employees,  three of whom are
officers of the Company.

     Of the Company's  employees as of September 30, 1999, eight were engaged in
sales and marketing,  31 were engaged in client  related  projects and five were
engaged in administration and management.  A significant number of the Company's
management  and   professional   employees   have  prior  industry   experience.
Bio-Imaging  believes  that it has been  successful  in  attracting  skilled and
experienced personnel,  however, competition for such personnel is intensifying.
All  of  the   Company's   employees   are   covered  by   confidentiality   and
non-competition  agreements.  The Company  cannot  provide  assurances as to the
enforceability  of such  agreements.  Bio-Imaging has entered into an employment
contract  with one of its  officers.  See  "Item  10.  Executive  Compensation."
Bio-Imaging considers relations with its employees to be good.

ITEM 2.   PROPERTIES.

     On September 22, 1999, the Company executed a lease agreement for
approximately   17,000   square  feet  of  office  space   located  in  Newtown,
Pennsylvania.  The lease is for an initial term of five years and two months and
provides for a fixed base rent of approximately $26,000 per month with an annual
inflation  increase.  The lease for the Company's  current  office space in West
Trenton,  New Jersey  expired on  November  30,  1999 and was not renewed by the
Company.  The Company will occupy it's current office through December 1999. The
Company also leases  approximately  4,000 square feet of office space in Leiden,
the  Netherlands.  This  lease,  denominated  in  Netherland  guilders,  expires
February 14, 2003 and provides for a base rent of approximately $7,200 per month
with an annual  inflation  increase.  The Company believes that these facilities
will be adequate for its needs for the foreseeable future.

ITEM 3.   LEGAL PROCEEDINGS.

     The Company is not a party to any material legal proceedings.

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

     None.



                                      -9-
<PAGE>

                                     PART II


ITEM 5.   MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER
          MATTERS.

     From June 18, 1992  through  March 4, 1999,  the  Company's  common  stock,
$0.00025 par value,  (the "Common Stock") had been traded on the Nasdaq SmallCap
Market  under the symbol  BITI.  On March 4, 1999,  the  Company's  Common Stock
ceased to be listed on the Nasdaq  SmallCap Market and became listed on the NASD
OTC Bulletin Board under the symbol BITI.

     The following  table sets forth the high ask and low bid quotations for the
Common Stock as reported on the Nasdaq  SmallCap Market for each of the quarters
ended  December 31, 1997 through  December 31, 1998 and the high ask and low bid
quotations  as reported on the NASD OTC Bulletin  Board for each of the quarters
ended March 31,  1999  through  September  30,  1999.  Such  quotations  reflect
interdealer prices, without retail mark-up,  mark-down or commission and may not
represent actual transactions.

               Quarter                           Common
                Ended                             Stock
                -----                             -----
                                           High           Low
                                           ----           ---

          December 31, 1997                1.844          0.50
          March 31, 1998                   0.781          0.531
          June 30, 1998                    1.938          0.50
          September 30, 1998               1.00           0.438
          December 31, 1998                0.9375         0.2813
          March 31, 1999                   0.6563         0.3125
          June 30, 1999                    0.6875         0.3125
          September 30, 1999               0.5938         0.2813




                                      -10-
<PAGE>

     Since June 18,  1992,  the Common  Stock also has been listed on the Boston
Stock Exchange ("BSE") under the symbol BIT.

     The following  table sets forth the high ask and low bid quotations for the
Common  Stock as reported on the BSE for each of the  quarters  from the quarter
ended December 31, 1997 through September 30, 1999.


               Quarter                           Common
                Ended                             Stock
                -----                             -----
                                            High           Low
                                            ----           ---

          December 31, 1997                 1.719          0.3125
          March 31, 1998                    0.75           0.375
          June 30, 1998                     1.625          0.375
          September 30, 1998                1.00           0.375
          December 31, 1998                 0.875          0.4375
          March 31, 1999                    0.625          0.4688
          June 30, 1999                     0.875          0.5625
          September 30, 1999                0.781          0.4375


     As of November 30, 1999, the approximate number of holders of record of the
Common Stock was 112 and the  approximate  number of  beneficial  holders of the
Common Stock was 1389.

     The Company has 416,667 shares of Series A Preferred  Stock (the "Preferred
Stock")  outstanding.  The Preferred  Stock provides for (i) voting rights on an
as-converted to Common Stock basis, with standard protective provisions;  (ii) a
liquidation  preference of $1.20 per share; (iii)  anti-dilution  protection and
price protection  provisions;  (iv) cumulative dividends of $0.096 per share per
annum,  payable out of funds legally  available for the payment of dividends and
only upon declaration of dividends by the Board of Directors of the Company; and
(v) registration rights with respect to the shares of Common Stock issuable upon
conversion  of the  Preferred  Stock.  Dividends  are  payable in cash or in the
Company's Common Stock at the Company's discretion.

     The Company has neither  paid nor  declared  dividends  on its Common Stock
since its  inception  and does not plan to pay  dividends on its Common Stock in
the foreseeable  future. The Company expects that any earnings which the Company
may realize and which are not paid as dividends  to holders of  Preferred  Stock
will be retained to finance the growth of the Company.


                                      -11-
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

OVERVIEW

     Bio-Imaging is a pharmaceutical  contract service  organization,  providing
services  that support the product  development  process of the  pharmaceutical,
biotechnology  and  medical  device  industries.   The  Company  specializes  in
assisting  its  clients  in the  design and  management  of the  medical-imaging
component  of  clinical  trials for all  modalities  which  consist of CT,  MRI,
x-rays,  DEXA, PET SPECT and  ultrasound.  The Company  provides  services which
include the processing and analysis of medical  images and the  data-basing  and
regulatory submission of medical images, quantitative data and text.

     The Company's sales cycle (the period from the  presentation by the Company
to a  potential  client to the  engagement  of the  Company  by such  client) is
generally twelve months.  In addition,  the contracts under which the Company is
engaged to perform services  typically cover a period of 12 to 36 months and the
volume and type of services  performed by the Company  generally vary during the
course of a project.  In an effort to expand its client base,  obtain additional
contracts and generate additional revenues,  the Company increased its sales and
marketing  efforts  during  the fiscal  year ended  September  30,  1998.  As of
September  30, 1999,  the Company  believes  that these efforts are beginning to
yield  positive  results.  No assurance can be made that the  Company's  project
revenues will increase to levels required to achieve profitability. Although the
Company experienced a loss for 1999, the Company's project revenues increased as
compared to 1998.  Project revenues were generated from 34 clients  encompassing
67  projects  for 1999 as compared to 25 clients  encompassing  46 projects  for
1998. Three clients represented  approximately 16%, 13% and 11% of the Company's
project revenues for 1999. Two clients represented  approximately 26% and 24% of
the Company's project revenues for 1998.

     The Company  believes  that demand for its services and  technologies  will
grow  during  the  longer  term  as the use of  digital  technologies  for  data
acquisition  and  management  increases in the  radiology  and drug  development
communities.  The  Company  also  believes  that there is a growing  recognition
within  the  bio-pharmaceutical  industry  regarding  the use of an  independent
centralized core laboratory for analysis of medical imaging data that is derived
from clinical trials and the rigorous  regulatory  requirements  relating to the
submission  of this  data.  In  addition,  the FDA is  gaining  experience  with
electronic  submissions and is continuing to develop guidelines for computerized
submission of data, including medical images. Furthermore,  the increased use of
digital medical images in clinical trials, especially for important drug classes
such as anti-inflammatory,  neurologic and oncologic therapeutics and diagnostic
image agents, generate large amounts of image data that will require processing,
analysis,  data  management and  submission  services.  Due to several  factors,
including,  without  limitation,  an  increase in  competition,  there can be no
assurance  that demand for the Company's  services and  technologies  will grow,
sustain growth,  or that additional  revenue  generating  opportunities  will be
realized by the Company.



                                      -12-
<PAGE>

     Certain  matters  discussed  in  this  Form  10-KSB  are   "forward-looking
statements" intended to qualify for the safe harbors from liability  established
by the Private  Securities  Litigation  Reform Act of 1995. In  particular,  the
Company's  statements  regarding  the  demand  for the  Company's  services  and
technologies,  growing  recognition for the use of independent  centralized core
laboratories,  trends  toward the  outsourcing  of imaging  services in clinical
trials,  realized return from the Company's  marketing efforts and increased use
of  digital   medical   images  in   clinical   trials  are   examples  of  such
forward-looking  statements.  The  forward-looking  statements include risks and
uncertainties,  including, but not limited to, the timing of revenues due to the
variability in size, scope and duration of projects, regulatory delays, clinical
study results which lead to reductions or cancellations  of projects,  and other
factors, including general economic conditions and regulatory developments,  not
within the Company's  control.  The factors  discussed herein and expressed from
time  to  time  in the  Company's  filings  with  the  Securities  and  Exchange
Commission  could  cause  actual  results  and  developments  to  be  materially
different  from  those  expressed  in  or  implied  by  such   statements.   The
forward-looking  statements  are made only as of the date of this filing and the
Company  undertakes  no  obligation  to  publicly  update  such  forward-looking
statements to reflect subsequent events or circumstances.

RESULTS OF OPERATIONS

     Fiscal Years Ended September 30, 1999 and 1998
     ----------------------------------------------

     Project  revenues  for 1999  and 1998  were  approximately  $4,349,000  and
$3,599,000,  respectively,  an increase of approximately $750,000, or 20.8%. The
increase in project revenues is primarily a result of the increase in the number
of clients and projects  for which the Company was engaged to perform  services.
This increase  resulted  primarily from the increase in the Company's  sales and
marketing  efforts  over  the past  year.  The  Company's  scope of work in both
periods  included  medical  imaging core  laboratory  services  and  image-based
information   management  services.  In  May  1999,  the  Company  acquired  the
operations  of Bona  Fide  in a  transaction  accounted  for as a  purchase.  In
addition to the amount paid at closing of $2,535,  additional  payments  for the
acquisition  may be made  based  on  certain  revenues  being  achieved  for the
twelve-month  period ending on the first  anniversary of the closing date.  Such
amount may not exceed $50,000. The acquisition was not material to the Company's
consolidated  financial  position or results of operations.  The  acquisition of
Bona Fide in May 1999 subsequently contributed approximately $143,000 in project
revenues in 1999.

     Cost of revenues for 1999 and 1998 were comprised of professional  salaries
and  benefits  and  allocated  overhead.  Cost of  revenues  were  approximately
$2,661,000  for 1999 and  approximately  $2,026,000  for 1998,  an  increase  of
approximately  $635,000, or 31.3%. This increase is primarily attributable to an
increase in staffing  levels  required  for  project  related  tasks for 1999 as
compared to 1998.

     The difference  between project revenues and cost of revenues may fluctuate
as a percentage to project  revenues  based on the  utilization of staff and the
mix of services  provided by the  Company to its clients  during the  comparable
periods.  The decrease in this  difference in 1999 from 1998 resulted  primarily
from an increase in staffing  levels in 1999 to support the



                                      -13-
<PAGE>

Company's  existing  contracts and in anticipation of future business along with
the mix of services provided by the Company in 1999 as compared to 1998.

     General and administrative  expenses for 1999 and 1998 consisted  primarily
of  professional   salaries  and  benefits,   depreciation   and   amortization,
professional  and  consulting  services,  office rent and  corporate  insurance.
General and administrative  expenses were approximately  $1,199,000 for 1999 and
approximately  $1,531,000  for 1998.  The  decrease for 1999,  of  approximately
$332,000,  or 21.7%,  from 1998,  resulted  primarily  from the  elimination  of
expenditures in support of the former Marketing  Information  Services  Division
(the "MISD") and Data Management and Information  Systems Division (the "DMISD")
and personnel costs  associated with former  executive  officers who resigned in
December 1997. Such personnel costs were  independent of the  expenditures  that
supported  the former MISD and DMISD  divisions.  This  decrease was offset,  in
part, by personnel costs  associated with the appointment of a new President and
Chief Executive Officer in December 1997.

     Sales and  marketing  expenses  for 1999 and 1998 were  comprised of direct
sales and  marketing  costs,  professional  salaries and benefits and  allocated
overhead.  Sales and marketing expenses were approximately $974,000 for 1999 and
approximately  $1,004,000  for 1998.  The  decrease for 1999,  of  approximately
$30,000,  or 3.0%, from 1998,  resulted primarily from the decrease in personnel
costs  incurred in the three months ended December 30, 1997 which was associated
with the  promotion of the Senior Vice  President of Sales and  Marketing to the
position of President and Chief  Executive  Officer,  which occurred in December
1997. These personnel costs are reflected in general and administrative expenses
in 1999.

     Research  and   development   expenses  for  1999  and  1998  consisted  of
professional  salaries  and  benefits  and  overhead  charged  to  research  and
development  projects.  Research and  development  expenses  were  approximately
$229,000 during 1999 and  approximately  $255,000 for 1998. The decrease in 1999
of  approximately  $26,000,  or 10.2%,  from  1998,  resulted  primarily  from a
decrease in resources dedicated to research and development  projects.  Research
and development  expenses in 1999 and 1998 primarily focused on the formulation,
design and testing of product and process alternatives.

     In 1998,  the  Company  recorded  non-recurring  charges  of  approximately
$597,000  consisting of (i) costs of  approximately  $320,000  associated with a
proxy  contest and  related  litigation  and (ii)  restructuring  and  severance
expenses of $277,000 related to the elimination of two former business divisions
and the resignation in December 1997 of a former executive officer.

     In February  1998,  the Company and a shareholder  group engaged in a proxy
contest in an effort to,  among other  things,  elect  members of the  Company's
Board of Directors at the Annual  Meeting of  Stockholders  held on February 27,
1998. In  connection  with such proxy  contest and the related  litigation,  the
Company expended approximately $320,000 in 1998.

     In 1998,  the Company  recorded  restructuring  and  severance  expenses of
$277,000.  This amount  consisted  of  restructuring  expenses  of $105,000  and
severance expenses of $172,000.


                                      -14-
<PAGE>

     In December 1997, the Company terminated two business  divisions,  the MISD
and the DMISD,  which were  established in October 1996. These divisions did not
meet the Company's expectations and the Company believed that its resources were
better  focused  on its core  clinical  trials  service  business.  The  Company
incurred  restructuring charges of approximately $105,000 which consisted of (i)
$38,000 of severance  costs paid to the former Senior Vice President and General
Manager  of the MISD and (ii)  $67,000  related to the  write-off  of assets and
costs  associated  with the  termination  of the MISD and  DMISD.  Each of these
charges has been reflected in non-recurring charges for 1998.

     In a separate  matter,  two executive  officers of the Company  resigned in
December  1997.  The Company  entered into a separation  agreement with one such
former  executive  officer.  The  Company  agreed to pay such  former  executive
officer  $127,000 in connection  with the separation  agreement.  As a result of
these  resignations,  the Company recorded  severance  expenses of approximately
$172,000. Such expenses have been reflected in non-recurring charges for 1998.

     Total costs and expenses  during 1999 and 1998 consisted  primarily of cost
of revenues,  general and administrative  expenses, sales and marketing expenses
and research and  development  expenses.  The  Company's  cost and expenses were
approximately $5,063,000 in 1999 and $4,816,000 (excluding non-recurring charges
of $597,000) in 1998.  Such  increase of  approximately  $247,000,  or 5.1%,  is
primarily  attributable  to an increase in staffing  levels for project  related
tasks offset by the  elimination of  expenditures  in support of the former MISD
and DMISD  divisions  and  personnel  costs  associated  with  former  executive
officers who resigned in December 1997. Such personnel costs were independent of
the expenditures that supported the former MISD and DMISD divisions.

     Net interest  income of  approximately  $9,000  during 1999  resulted  from
interest earned on cash balances offset in part by interest  expense incurred in
conjunction  with equipment  lease  obligations  and notes payable.  The Company
earned  less  interest  income in 1999 than in 1998 due to lower  cash  balances
maintained during 1999. Net interest income was approximately $88,000 in 1998.

     The  Company's  net  loss for 1999 was  approximately  $705,000  while  the
Company had net loss of  approximately  $1,726,000  for 1998.  The Company's net
loss for 1999 was  attributable  primarily to  insufficient  project  revenue to
support the infrastructure of the Company.

LIQUIDITY AND CAPITAL RESOURCES

     At  September  30,  1999,  the  Company  had cash and cash  equivalents  of
approximately $413,000.  Working capital at September 30, 1999 was approximately
$788,000.

     Net cash used in operating activities for 1999 was approximately  $981,000.
Such use of cash  reflects  the net loss for 1999 and  changes in certain of the
Company's  operating assets and liabilities.  Accounts  receivable  increased by
approximately  $611,000  during  1999  primarily  as a result of an  increase in
unbilled  receivables during such period.  Unbilled  receivables are recorded as
revenue  recognized  to date that has not been billed.  Certain  amounts  become
billable upon the achievement of milestones or in accordance with  predetermined
payment schedules.


                                      -15-
<PAGE>

     For the year ended September 30, 1999, the Company  invested  approximately
$166,000  in  capital  and  leasehold   improvements.   The  Company   currently
anticipates that capital  expenditures for the next fiscal year will approximate
$200,000.  These  expenditures  represent  additional  upgrades in the Company's
networking,  data storage and core  laboratory  capabilities  along with similar
capital requirements for its European operations.

     In December 1998, the Company paid to the holders of its Preferred Stock an
aggregate  amount  of  $20,000,  which  amount  represented  accrued  cumulative
dividends  for the period from July 1, 1998 through and  including  December 31,
1998. In June 1999,  the Company paid to the holders of its  Preferred  Stock an
aggregate  amount  of  $20,000,  which  amount  represented  accrued  cumulative
dividends  for the period from  January 1, 1999 through and  including  June 30,
1999.

     In 1999, the Company  received  aggregate  financing of $145,924 secured by
certain equipment. The loans are payable in 36 monthly installments,  commencing
April 1999 and July 1999, including interest of 10.24% and 10.61%, respectively.

     In August 1999,  the Company  entered  into an agreement  with a bank for a
revolving line of credit of up to $500,000 collaterized by the Company's assets.
Interest  is  payable  at 1.50% over the  bank's  prime  rate of  interest.  The
agreement  requires the Company,  among other things, to maintain minimum levels
of tangible net worth and certain  minimum  financial  ratios.  At September 30,
1999,  the  Company  had no  borrowings  under  the  line of  credit  and was in
compliance  with the  covenants  of the  agreement.  In October  1999,  the bank
notified the Company that it would not make any advances under the existing line
of credit until the Company  provides  sufficient  evidence  satisfactory to the
bank of an  improvement  in the  Company's  operating,  financial  and liquidity
position.  At such  time,  the bank may  consider  permitting  further  advances
pursuant to the loan  agreement.  In December 1999, the Company  entered into an
accounts receivable purchase agreement with the same bank, whereby,  the Company
may assign up to $500,000 of eligible accounts receivable to the bank. The bank,
in turn, would advance the Company up to 80% of the assigned accounts receivable
amount.  Upon  collection  by the bank,  the  balance of the  assigned  accounts
receivable  would be remitted to the Company net of the bank's  finance  charges
and administration fees.

     Also,  in  December  1999,  the Company  entered  into an  equipment  lease
obligation consisting of monthly installments of $4,961, which includes interest
at a rate of 10.53%,  through November 2002. The debt is  collateralized  by the
related equipment.

     The Company  anticipates that its cash and cash equivalents as at September
30, 1999, together with anticipated cash from operations,  will be sufficient to
fund current  working  capital needs and capital  requirements  for at least the
next twelve  months.  There can be no  assurance,  however,  that the  Company's
operating  results  will  achieve  profitability  on an annual basis in the near
future.  The continuation of operating losses, the Company's ability to gain new
client  contracts,  the  variability  of the  timing of  milestone  payments  on
existing client  contracts and other changes in the Company's  operating  assets
and  liabilities  may have a material  adverse  affect on the  Company's  future
liquidity.  In connection  therewith,  the Company may need to raise  additional
capital  in the  foreseeable  future  from  equity or debt  sources  in order to

                                      -16-
<PAGE>

implement  its  business,   sales  or  marketing   plans,   take   advantage  of
unanticipated  opportunities  (such as more  rapid  expansion,  acquisitions  of
complementary  businesses  or the  development  of new  services),  to  react to
unforeseen  difficulties  (such as the decrease in the demand for the  Company's
services  or the  timing of  revenues  due to a variety  of  factors  previously
discussed) or to otherwise respond to unanticipated competitive pressures. There
can be no assurance that additional  financing will be available,  if at all, on
terms acceptable to the Company.

     The Company's 2000 operating plan contains  assumptions  regarding  revenue
and  expenses.  The  achievement  of the operating  plan depends  heavily on the
timing of work performed by the Company on existing  projects and the ability of
the Company to gain and perform  work on new  projects.  Delays in the timing of
work  performed  by the Company on existing  projects  or the  inability  of the
Company to gain and perform work on new projects could have an adverse impact on
the Company's  ability to execute its operating plan and maintain  adequate cash
flow.  In the event actual  results do not meet the operating  plan,  management
believes it could execute contingency plans to mitigate such effects. Such plans
include  additional  financing,  to the extent available,  through the revolving
line of credit agreement and accounts  receivable  purchase agreement  discussed
above.  In addition,  in December 1999, the members of the Board of Directors of
the Company, in their individual capacities, committed up to an aggregate amount
totaling $100,000 in the form of a short-term loan,  through October 1, 2000, if
needed by the Company. Considering the cash on hand and based on the achievement
of the  operating  plan and  management's  actions  taken  to  date,  management
believes it has the ability to continue to generate  sufficient  cash to satisfy
its  operating  requirements  in the  normal  course of  business.  However,  no
assurance can be given that sufficient  cash will be generated from  operations.
As of November 30, 1999, the Company's cash balance was approximately $357,000.

NEW ACCOUNTING REQUIREMENTS

     In  March  1998,  the  Accounting   Standards  Executive  Committee  issued
Statement of Position (SOP 98-1), "Accounting for the Costs of Computer Software
Developed  or  Obtained  for  Internal  Use." SOP 98-1  requires  that  computer
software costs that are incurred in the preliminary project stage be expensed as
incurred and that criteria be met before  capitalization  of costs to develop or
obtain computer  software for internal use. Adoption of SOP 98-1 is required for
fiscal years  beginning  after  December 15, 1998.  The Company does not believe
that the new standard will have a material impact on the Company's  consolidated
financial  statements.   In  April  1998,  the  Accounting  Standards  Executive
Committee issued SOP 98-5,  "Reporting on the Costs of Start-Up Activities." SOP
98-5  requires all costs  incurred as start-up  costs or  organization  costs be
expensed  as  incurred.  Adoption  of SOP  98-5 is  required  for  fiscal  years
beginning  after  December 15,  1998.  The Company does not believe that the new
standard  will have a material  impact on the Company's  consolidated  financial
statements.

EXISTING CONTRACTS

     During  fiscal 1999,  the Company  signed  approximately  $6,564,000 in new
project  contracts.  As of  September  30,  1999,  the Company had entered  into
agreements  with 24 companies  to provide  services in the  aggregate  amount of
approximately  $11,853,000  through  December 2004, of which services  valued at
approximately  $7,054,000 remain to be completed.



                                      -17-
<PAGE>

Such  contracts are subject to  termination by the Company or its clients at any
time or for any reason. In addition,  client's clinical trials or other projects
are subject to timing and scope changes.  Therefore, future revenue generated by
the Company may not equal initial contract values.

EUROPEAN MONETARY UNION

     On January 1, 1999,  eleven of the fifteen member countries of the European
Union set fixed  conversion  rates between their existing legacy  currencies and
the euro. As such, these  participating  countries have agreed to adopt the euro
as their common legal currency.  The eleven  participating  countries will issue
sovereign debt exclusively in euro and will redenominate  outstanding  sovereign
debt.  The legal  currencies  will  continue to be used as legal tender  through
January 1, 2002, at which point the legacy  currencies will be canceled and euro
bills  and  coins  will be  used  for  cash  transactions  in the  participating
countries.  There can be no assurance,  however,  that such euro conversion will
not adversely affect the Company's  business,  financial  condition,  results of
operations or cash flows.

YEAR 2000 COMPLIANCE

     The "Year 2000"  issue  concerns  the  potential  exposures  related to the
automated generation of business and financial misinformation resulting from the
application  of  computer  programs  which have been  written  using two digits,
rather than four, to define the applicable  year of business  transactions.  The
Company has completed its review of the potential impact of Year 2000 issues and
does not anticipate any significant costs, problems or uncertainties  associated
with potential issues relating to Year 2000 compliance.

     The Company's  management  information  systems department has reviewed and
tested the Company's internal business systems,  including operating systems and
internal software, for Year 2000 compliance. The Company believes that, based on
the results of such review and testing, the Company's internal business systems,
including its computer systems, are Year 2000 compliant.

     The supplier of the Company's current financial and accounting software has
informed the Company that such  software is Year 2000  compliant.  Further,  the
Company relies upon various vendors, financial institutions,  utility companies,
telecommunications  service  companies,  delivery  service  companies  and other
service  providers who are outside of the Company's  control.  While the Company
has surveyed all of its major  vendors,  and all of the Company's  major vendors
represented  that they are Year 2000 compliant,  there is no assurance that such
parties  will not suffer a Year 2000  business  disruption,  which  could have a
material  adverse  effect on the  Company's  financial  condition and results of
operations.

     To  date,  the  Company  has not  incurred  any  material  expenditures  in
connection with identifying or evaluating Year 2000 compliance  issues.  Most of
its expenses have related to the opportunity  cost of time spent by employees of
the Company evaluating its systems and Year 2000 compliance matters generally.


                                      -18-
<PAGE>

     The Company has not  developed a Year  2000-specific  contingency  plan. If
Year 2000 compliance  issues are discovered,  the Company then will evaluate the
need for contingency plans relating to such issues.

     The  Year  2000   disclosures   discussed   above  are  based  on  numerous
expectations  which are subject to  uncertainties.  Certain risk  factors  which
could have a material adverse effect on the Company's  results of operations and
financial condition include but are not limited to: failure to identify critical
systems  which will  experience  failures,  errors in the  remediation  efforts,
inability to obtain new  replacements  for  non-compliant  systems or equipment,
general  economic  downturn  relating to Year 2000  failures in the U.S.  and in
other  countries,  failures in global banking  systems and capital  markets,  or
extended  failures by public and private  utility  companies or common  carriers
supplying services to the Company.

ITEM 7.   FINANCIAL STATEMENTS.

     The financial  statements  required to be filed pursuant to this Item 7 are
included  in  this  Annual  Report  on  Form  10-KSB.  A list  of the  financial
statements filed herewith is found at "Item 13.  Exhibits,  List, and Reports on
Form 8-K."

ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE.

     On January 12, 1998,  the Company  selected  Arthur  Andersen LLP to act as
independent  accountants  for the  Company  and  informed  the  prior  auditors,
Goldstein,  Golub, Kessler & Compnay,  P.C., of its decision. In connection with
its audits for each of the two years in the period ended  September 30, 1997 and
thereafter,  there were no disagreements  with the prior auditors on any matters
of accounting  principles  or  practices,  financial  statement  disclosure,  or
auditing  scope or  procedures.  The prior  auditor's  report  on the  Company's
financial statements for each of the two years in the period ended September 30,
1997 contained no adverse  opinion or disclaimer of opinion and was not modified
or qualified as to  uncertainty,  audit scope,  or  accounting  principles.  The
decision to change  accountants  was  approved by the Board of  Directors of the
Company.  The prior auditors have furnished the Company with a letter  addressed
to the Securities and Exchange Commission stating their agreement with the above
statements.





                                      -19-
<PAGE>

                                    PART III


ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

     The information relating to the Company's directors,  nominees for election
as directors and executive  officers under the headings  "Election of Directors"
and "Executive  Officers" in the Company's  definitive  proxy  statement for the
2000 Annual Meeting of Stockholders is incorporated  herein by reference to such
proxy statement.

ITEM 10.  EXECUTIVE COMPENSATION.

     The discussion under the heading "Executive  Compensation" in the Company's
definitive  proxy  statement  for the 2000  Annual  Meeting of  Stockholders  is
incorporated herein by reference to such proxy statement.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The discussion under the heading "Security  Ownership of Certain Beneficial
Owners and Management" in the Company's  definitive proxy statement for the 2000
Annual Meeting of Stockholders is incorporated herein by reference to such proxy
statement.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     The  discussion  under  the  heading  "Certain  Relationships  and  Related
Transactions"  in the Company's  definitive  proxy statement for the 2000 Annual
Meeting  of  Stockholders  is  incorporated  herein by  reference  to such proxy
statement.

ITEM 13.  EXHIBITS, LIST, AND REPORTS ON FORM 8-K.

     (a)  (1)  Financial Statements.

          Reference  is made to the Index to Financial  Statements  on Page F-1.

     (a)  (2)  Financial Statement Schedules.

          None.

     (a)  (3)  Exhibits.

          Reference is made to the Index to Exhibits on Page 23.

     (b)       Reports on Form 8-K.

          None.



                                      -20-
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its  behalf  by the  undersigned,  thereunto  duly  authorized  this 29th day of
December, 1999.

                                         BIO-IMAGING TECHNOLOGIES, INC.



                                         By: /s/Mark L. Weinstein
                                             ----------------------------------
                                         Mark L. Weinstein, President and Chief
                                         Executive Officer



                                      -21-
<PAGE>


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.


SIGNATURE                    TITLE                             DATE
---------                    -----                             ----


/s/Mark L. Weinstein         President and Chief               December 29, 1999
-------------------------
Mark L. Weinstein            Executive Officer and Director
                             (principal executive
                             officer)

/s/Robert J. Phillips        Vice President and Chief          December 29, 1999
-------------------------
Robert J. Phillips           Financial Officer
                             (principal financial and
                             accounting officer)

/s/Jeffrey H. Berg, Ph.D.    Director                          December 29, 1999
-------------------------
Jeffrey H. Berg, Ph.D.


/s/Marc Berger               Director                          December 29, 1999
-------------------------
Marc Berger


/s/David E. Nowicki, DMD     Director                          December 29, 1999
-------------------------
David E. Nowicki, DMD


/s/James A. Taylor, Ph.D.    Director                          December 29, 1999
-------------------------
James A. Taylor, Ph.D.


                                      -22-
<PAGE>

                                  EXHIBIT INDEX

Exhibit
  No.                             Description of Exhibit
-------                           ----------------------

3.1       Restated Certificate of Incorporation of the Company. (Incorporated by
          reference to Exhibit 3.1 to the  Company's  Registration  Statement on
          Form S-1 (File Number  33-47471)  which  became  effective on June 18,
          1992.)  (Amendments  incorporated  by  reference to Exhibit 3.1 to the
          Company's  Annual Report on Form 10-K for the year ended September 30,
          1993 and to  Exhibit  3.1 to the  Company's  Quarterly  Report on Form
          10-QSB for the quarter ended March 31, 1995.)

3.2       By-Laws of the Company.  (Incorporated  by reference to Exhibit 3.2 to
          the  Company's   Registration  Statement  on  Form  S-1  (File  Number
          33-47471) which became effective on June 18, 1992.)

4.1       Specimen  Common  Stock  Certificate.  (Incorporated  by  reference to
          Exhibit 4.1 to the Company's  Registration Statement on Form S-1 (File
          Number 33-47471) which became effective on June 18, 1992.)

4.2       Registration  Agreement dated October 13, 1994 between the Company and
          Corning Pharmaceuticals  Services Inc., now Covance, Inc. ("Covance").
          (Incorporated  by  reference to Exhibit 4.1 to the  Company's  Current
          Report on Form 8-K dated October 13, 1994.)

4.3       Purchase  Agreement  for  Units of  Convertible  Preferred  Stock  and
          Warrants  dated  December  8,  1995  between  Investment  Partners  of
          America,  L.P.,  as  Purchaser,  and the Company,  including  material
          exhibits (including the Certificate of Designation for the Convertible
          Preferred  Stock).  (Incorporated  by  reference to Exhibit 4.1 to the
          Company's Current Report on Form 8-K dated December 22, 1995.)

10.1      Lease between Mountain View Office Park and the Company. (Incorporated
          by  reference  to  (i)  Exhibit  10.1  to the  Company's  Registration
          Statement on Form S-1 (File Number 33-47471) which became effective on
          June 18, 1992,  (ii) Exhibit 10.1 to the  Company's  Annual  Report on
          Form 10-K for the fiscal year ended September 30, 1992,  (iii) Exhibit
          10.1 to the Company's Annual Report on Form 10-KSB for the fiscal year
          ended  September 30, 1994,  (iv) Exhibit 10.1 to the Company's  Annual
          Report on Form 10-KSB for the fiscal year ended  September  30, 1995),
          as amended effective  September 5, 1996  (Incorporated by Reference to
          Exhibit  10.1 to the  Company's  Annual  Report on Form 10-KSB for the
          fiscal year ended  September 30, 1996) (v) as amended  effective  June
          22, 1998  (Incorporated  by Reference to Exhibit 10.1 to the Company's
          Annual  Report on Form 10-KSB for the fiscal year ended  September 30,
          1998).



                                      -23-
<PAGE>

Exhibit
  No.                             Description of Exhibit
-------                           ----------------------

10.2*     1991 Stock Option Plan.  (Incorporated by reference to Exhibit 10.6 to
          the  Company's   Registration  Statement  on  Form  S-1  (File  Number
          33-47471) which became effective on June 18, 1992.)

10.3*     401(k)  Plan.  (Incorporated  by  reference  to  Exhibit  10.7  to the
          Company's  Registration  Statement on Form S-1 (File Number  33-47471)
          which became effective on June 18, 1992.)

10.4      Form of Employee's Invention Assignment,  Confidential Information and
          Non-Competition Agreement.  (Incorporated by reference to Exhibit 10.9
          to the Company's  Annual Report on Form 10-K for the fiscal year ended
          September 30, 1992.)

10.5      Stock  Purchase  Agreement  dated October 13, 1994 between the Company
          and  Covance.  (Incorporated  by  reference  to  Exhibit  10.2  to the
          Company's Current Report on Form 8-K dated October 13, 1994.)

10.6      Master Lease Agreement dated April 25, 1994 by and between the Company
          and Wasco  Funding Corp.  and schedules  thereto dated May 9, 1995 and
          August 31, 1995.  (Incorporated  by reference to Exhibit  10.24 to the
          Company's  Annual  Report on Form  10-KSB  for the  fiscal  year ended
          September 30, 1995.)

10.7*     Employment  Agreement including Invention  Assignment and Confidential
          Information Agreement dated April 15, 1998, by and between the Company
          and Mark L. Weinstein.  (Incorporated  by reference to Exhibit 10.1 to
          the  Company's  Quarterly  Report on Form 10-QSB for the quarter ended
          June 30, 1998.)

10.8      Purchase  Agreement  for  Units of  Convertible  Preferred  Stock  and
          Warrants  dated  December  8,  1995  between  Investment  Partners  of
          America,  L.P.,  as  Purchaser  and the  Company,  including  material
          exhibits.  (Incorporated  by reference to Exhibit 4.1 to the Company's
          Current Report on Form 8-K dated December 22, 1995.)

10.9      Office  Space Lease dated  September  22, 1999  between  Yardley  Road
          Associates, L.P. and the Company.

10.10     Revolving Promissory Note and Loan and Security Agreement dated August
          10, 1999 between Silicon Valley Bank and the Company.

10.11     Accounts Receivable Purchase Agreement dated December 22, 1999 between
          Silicon Valley Bank and the Company.

16        Letter  re:  Change  in  Certifying   Accountants.   (Incorporated  by
          reference to Exhibit 16 to the Company's  Annual Report on Form 10-KSB
          for the fiscal year ended September 30, 1998.)

                                      -24-
<PAGE>

Exhibit
  No.                             Description of Exhibit
-------                           ----------------------

21        List of  Subsidiaries  of  Registrant.  (Incorporated  by reference to
          Exhibit  21.1 to the  Company's  Annual  Report on Form 10-KSB for the
          fiscal year ended September 30, 1997.)

23.1      Consent of Arthur Andersen LLP.

27        Financial Data Schedule for the year ended September 30, 1999.

----------------
*       A management contract or compensatory plan or arrangement required to be
        filed as an exhibit pursuant to Item 13(a) of Form 10-KSB.

          (b)  Financial Statement Schedules

               None.


                                      -25-
<PAGE>

                                 Bio-Imaging Technologies, Inc. and Subsidiaries


                                                                       CONTENTS
--------------------------------------------------------------------------------
Report of Independent Public Accountants                                  F-2

Consolidated Financial Statements:

Balance Sheets                                                            F-3
Statements of Operations                                                  F-4
Statements of Stockholders' Equity                                        F-5
Statements of Cash Flows                                                  F-6
Notes to Consolidated Financial Statements                                F-7






                                      F-1
<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors and Stockholders of
Bio-Imaging Technologies, Inc.:


We have audited the  accompanying  consolidated  balance  sheets of  Bio-Imaging
Technologies, Inc. (a Delaware corporation) and subsidiaries as of September 30,
1999  and  1998,  and  the  related   consolidated   statements  of  operations,
stockholders'  equity and cash flows for the years then ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Bio-Imaging Technologies,  Inc.
and  subsidiaries  as of September  30, 1999 and 1998,  and the results of their
operations  and their cash flows for the years  then  ended in  conformity  with
generally accepted accounting principles.



                                      /s/Arthur Andersen LLP
                                      ARTHUR ANDERSEN LLP

Roseland, New Jersey
December 22, 1999




                                      F-2
<PAGE>

                                 Bio-Imaging Technologies, Inc. and Subsidiaries

<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
SEPTEMBER 30,                                                              1999                1998
-------------------------------------------------------------------------------------------------------

ASSETS
<S>                                                                    <C>                 <C>
Current Assets:
Cash and cash equivalents                                              $   412,903         $ 1,527,330
Accounts receivable, net of allowance for doubtful
  accounts of $65,000 in 1999 and 1998                                   1,237,746             626,376
Prepaid expenses and other current assets                                  138,127              84,747
-------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS                                                     1,788,776           2,238,453
Property and equipment, net                                              1,180,254           1,543,434
Other assets                                                               179,624              32,235
-------------------------------------------------------------------------------------------------------
TOTAL ASSETS                                                           $ 3,148,654         $ 3,814,122
=======================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable                                                       $   134,685         $   142,071
Accrued expenses and other current liabilities                             254,565             261,063
Deferred revenue                                                           541,933             522,605
Current maturities of long-term debt                                        69,800              49,956
-------------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES                                                1,000,983             975,695
Long-term debt                                                              81,511              26,808
-------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES                                                        1,082,494           1,002,503
-------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Convertible cumulative preferred stock - $.00025 par value;
  authorized 3,000,000 shares, issued and outstanding 416,667 shares
  ($500,000 liquidation preference)                                            104                 104
Common stock - $.00025 par value; authorized 18,000,000 shares,
  issued and outstanding 7,773,878 shares in 1999 and 1998                   1,944               1,944
Additional paid-in capital                                               9,231,497           9,231,497
Accumulated deficit                                                     (7,167,385)         (6,421,926)
-------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY                                                     2,066,160           2,811,619
-------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $3,148,654          $3,814,122
=======================================================================================================
</TABLE>



      The accompanying notes are an integral part of these balance sheets.



                                      F-3
<PAGE>

                                 Bio-Imaging Technologies, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,                                                   1999                1998
-------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                 <C>
Project revenues                                                       $ 4,349,079         $ 3,599,313
-------------------------------------------------------------------------------------------------------

Cost and expenses:

       Cost of revenues                                                  2,660,659           2,025,868

       General and administrative expenses                               1,199,137           1,531,380

       Sales and marketing expenses                                        974,264           1,003,523

       Research and development expenses                                   229,238             255,321

       Non-recurring charges                                                     -             597,000
-------------------------------------------------------------------------------------------------------
               Total cost and expenses                                   5,063,298           5,413,092
-------------------------------------------------------------------------------------------------------

Loss from operations                                                      (714,219)         (1,813,779)

Interest income, net                                                         8,760              88,223
-------------------------------------------------------------------------------------------------------

Net loss                                                                  (705,459)         (1,725,556)

Dividends on preferred stock                                                40,000              50,285
-------------------------------------------------------------------------------------------------------

Net loss applicable to common stock                                    $  (745,459)        $(1,775,841)
=======================================================================================================

Basic and diluted loss per common share                                $     (0.10)        $     (0.23)
=======================================================================================================

Weighted average number of common shares and dilutive
common equivalent shares                                                 7,773,878           7,772,230
=======================================================================================================
</TABLE>


        The accompanying notes are an integral part of these statements.




                                      F-4
<PAGE>


                                 Bio-Imaging Technologies, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                               ADDITIONAL
                                 PREFERRED STOCK         COMMON STOCK           PAID-IN      ACCUMULATED    STOCKHOLDERS'
                               SHARES       AMOUNT    SHARES        AMOUNT      CAPITAL        DEFICIT        EQUITY
-------------------------------------------------------------------------------------------------------------------------

<S>                           <C>           <C>      <C>           <C>        <C>            <C>             <C>
Balance at
September 30, 1997            416,667       $ 104    7,753,878     $ 1,939    $ 9,215,603    $(4,646,085)    $ 4,571,561

Stock options exercised             -           -       20,000           5         15,894              -          15,899

Dividends on preferred
stock                               -           -            -           -              -        (50,285)        (50,285)

Net loss                            -           -            -           -              -     (1,725,556)     (1,725,556)

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

Balance at
September 30, 1998            416,667         104    7,773,878       1,944      9,231,497     (6,421,926)      2,811,619

Dividends on preferred
stock                               -           -            -           -              -        (40,000)        (40,000)

Net loss                            -           -            -           -              -       (705,459)       (705,459)

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

Balance at
September 30, 1999            416,667       $ 104    7,773,878     $ 1,944    $ 9,231,497    $(7,167,385)    $ 2,066,160
=========================================================================================================================
</TABLE>



               The accompanying notes are an integral part of these statements.




                                      F-5
<PAGE>


                                 Bio-Imaging Technologies, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,                                                   1999                1998
-------------------------------------------------------------------------------------------------------
<S>                                                                    <C>                 <C>
Cash flows from operating activities:
Net loss                                                               $ (705,459)         $(1,725,556)
Adjustments to reconcile net loss to net cash
used in operating activities:
  Depreciation and amortization                                           551,038              559,301
  Provision for losses on accounts receivable                                   -               45,000
  Write-off of assets                                                           -               52,154
  Changes in operating assets and liabilities, net of assets and
   liabilities acquired in a business combination:
    (Increase) decrease in accounts receivable                           (611,370)             542,676
    Increase in prepaid expenses and other current assets                 (53,380)              (5,977)
    Decrease in other assets                                               20,611               12,435
    (Decrease) increase in accounts payable                                (7,386)              60,239
    (Decrease) increase in accrued expenses and other current
     liabilities                                                          (71,498)              11,711
    (Decrease) increase in deferred revenue                              (103,137)             108,245
-------------------------------------------------------------------------------------------------------
NET CASH USED IN OPERATING ACTIVITIES                                    (980,581)            (339,772)
-------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
  Purchases of property and equipment                                    (165,858)            (377,462)
  Cash paid for business acquisition                                       (2,535)                   -
-------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                    (168,393)            (377,462)
-------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Payments of long term debt                                              (71,377)             (98,708)
  Dividends paid to preferred stockholders                                (40,000)             (40,285)
  Proceeds from long-term debt                                            145,924                    -
  Proceeds from exercise of stock options                                       -               15,899
-------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                        34,547             (123,094)
-------------------------------------------------------------------------------------------------------

Net decrease in cash and cash equivalents                              (1,114,427)            (840,328)
Cash and cash equivalents at beginning of year                          1,527,330            2,367,658
=========================================================================================================================
Cash and cash equivalents at end of year                               $  412,903          $ 1,527,330
=========================================================================================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid during the year for interest                               $   12,412          $     3,775
=========================================================================================================================

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
  Equipment purchased under capital lease obligations                  $        -          $    75,595
=========================================================================================================================
</TABLE>

        The accompanying notes are an integral part of these statements.



                                      F-6
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

1.  PRINCIPAL BUSINESS ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS AND FUTURE OPERATIONS
Bio-Imaging Technologies, Inc. and Subsidiaries ("Bio-Imaging" or "the Company")
is a  pharmaceutical  contract service  organization,  operating in one business
segment,  providing services that support the product development process of the
pharmaceutical,   biotechnology  and  medical  device  industries.  The  Company
specializes  in  assisting  its  clients  in the design  and  management  of the
medical-imaging component of clinical trials for all modalities which consist of
computerized tomography ("CT"), magnetic resonance imaging ("MRI"), x-rays, dual
energy x-ray absorptiometry ("DEXA"), position emission tomography single photon
emission  computerized  tomography  ("PET  SPECT") and  ultrasound.  The Company
provides  services  which include the  processing and analysis of medical images
and the  data-basing and regulatory  submission of medical images,  quantitative
data and text.

The Company's  2000 operating plan contains  assumptions  regarding  revenue and
expenses. The achievement of the operating plan depends heavily on the timing of
work  performed  by the  Company on  existing  projects  and the  ability of the
Company to gain and perform work on new  projects.  Delays in the timing of work
performed by the Company on existing projects or the inability of the Company to
gain and  perform  work on new  projects  could  have an  adverse  impact on the
Company's ability to execute its operating plan and maintain adequate cash flow.
In the event actual results do not meet the operating plan,  management believes
it could execute contingency plans to mitigate such effects.  Such plans include
additional  financing,  to the extent  available,  through the revolving line of
credit agreement and accounts  receivable purchase  agreement.  In addition,  in
December  1999,  the members of the Board of Directors of the Company,  in their
individual capacities,  committed up to an aggregate amount totaling $100,000 in
the form of a  short-term  loan,  through  October  1,  2000,  if  needed by the
Company.  Considering  the cash on hand  and  based  on the  achievement  of the
operating plan and management's  actions taken to date,  management  believes it
has the ability to continue to generate sufficient cash to satisfy its operating
requirements  in the normal  course of business.  However,  no assurance  can be
given that sufficient cash will be generated from operations. As of November 30,
1999, the Company's cash balance was approximately $357,000.

PRINCIPLES OF CONSOLIDATION
The accompanying  consolidated  financial statements include the accounts of the
Company and its wholly owned subsidiaries, Oxford Bio-Imaging Research, Inc. and
Bio-Imaging Technologies Holding B.V. All significant intercompany  transactions
and balances have been eliminated.

USE OF ESTIMATES
The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.



                                      F-7
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

CASH AND CASH EQUIVALENTS
The  Company   maintains   substantially  all  of  its  cash  in  one  financial
institution.   The  Company  has  defined  cash  equivalents  as  highly  liquid
investments with an original maturity at the time of purchase of three months or
less.

REVENUE RECOGNITION
Project  revenues are recognized  primarily  using the  percentage-of-completion
method of  accounting  for  services  rendered in  connection  with  contractual
arrangements,  which generally range from a few months to two years.  Provisions
for losses to be incurred on contracts  are  recognized in full in the period in
which  it is  determined  that  a  loss  will  result  from  performance  of the
contractual  arrangement.  Unbilled services are recorded for revenue recognized
to date that is  currently  unbillable  to the client  pursuant  to  contractual
terms.  In general,  amounts become billable upon the achievement of contractual
milestones or in  accordance  with  predetermined  payment  schedules.  Unbilled
services are  generally  billable  within one year from the  respective  balance
sheet date. Accounts receivable include  approximately  $806,000 and $493,000 of
unbilled  receivables  at September  30, 1999 and 1998,  respectively.  Deferred
revenue is recorded for cash  received  from  clients for which  revenue has not
been  recognized  at the  respective  balance  sheet  date.  Revenue  from other
activities is recognized as services are performed.

PROPERTY AND EQUIPMENT
Depreciation  of property and equipment is provided for using the  straight-line
method over the estimated useful lives of the respective assets. Amortization of
leasehold improvements is provided for over the related lease term.

CAPITALIZED SOFTWARE DEVELOPMENT
The  Company   capitalizes   software   development  costs  after  technological
feasibility  has been determined and ceases  capitalization  at such time as the
end product is available for general release to the public. The establishment of
technological  feasibility  and the  ongoing  assessment  of  recoverability  of
capitalized  software   development  costs  require  considerable   judgment  by
management with respect to certain external factors  including,  but not limited
to, anticipated future revenue,  estimated economic life and changes in software
and hardware  technologies.  At September 30, 1999,  management has estimated an
economic  useful  life  of  30  months  and  is  amortizing  these  costs  on  a
straight-line  basis  over this  period.  The  amortization  period is  reviewed
annually  by  management.  During  1999 and 1998,  the  Company  had no costs of
software development that were capitalized.

LONG LIVED  ASSETS
The  Company  continually  reviews  its long lived  assets to  evaluate  whether
changes  have  occurred  to  suggest  whether  or not long  lived  assets may be
impaired based on estimated  undiscounted  cash flows. If this review  indicates
that long lived assets are impaired,  the carrying amounts of these assets would
be reduced based on the estimated shortfall of cash flows on a discounted basis.
Management  does not  believe  that there is any such  impairment  of long lived
assets as of September 30, 1999.



                                      F-8
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

BUSINESS ACQUISITION
In May 1999,  the  Company  acquired  the  operations  of Bona Fide,  Ltd.  in a
transaction  accounted for as a purchase.  Tangible assets acquired were $10,000
and liabilities  assumed were approximately  $190,000,  resulting in goodwill of
$180,000.  The  liabilities  assumed  primarily  represent  deferred  revenue of
$122,000  which the Company  expects to recognize as project  revenues  over the
duration  of the  client  contracts  which were  assumed  by the  Company in the
acquisition.  Goodwill is being amortized using a straight-line method over five
years.  In addition to the amount paid at closing,  additional  payments for the
acquisition  may be made  based  on  certain  revenues  being  achieved  for the
twelve-month  period ending on the  anniversary of the closing date. Such amount
may not exceed  $50,000.  The  acquisition  was not  material  to the  Company's
consolidated financial position or results of operations.

FOREIGN CURRENCY TRANSLATION
The  U.S.  Dollar  is  the  functional   currency  for  the  Company's   foreign
subsidiaries.

EARNINGS PER SHARE
The Company  follows SFAS No. 128 - "Earnings per Share. " SFAS No. 128 requires
the  presentation  of basic  earnings per share and diluted  earnings per share.
Basic loss per common share was calculated  based upon the net loss available to
common  stockholders  divided by the weighted average number of shares of common
stock outstanding during the period.  Diluted loss per common share for the year
ended  September 30, 1999 and 1998 excludes the impact of options  (1,192,370 as
of September  30, 1999) and warrants  (66,667 as of September  30, 1999) as they
are antidilutive.

RECENTLY ISSUED ACCOUNTING STANDARDS
In March 1998, the Accounting  Standards Executive Committee issued Statement of
Position (SOP 98-1), "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use." SOP 98-1 requires that computer  software costs that
are incurred in the  preliminary  project stage be expensed as incurred and that
criteria  be met before  capitalization  of costs to develop or obtain  computer
software  for  internal  use.  Adoption of SOP 98-1 is required for fiscal years
beginning  after  December 15,  1998.  The Company does not believe that the new
standard  will have a material  impact on the Company's  consolidated  financial
statements.  In April 1998, the Accounting  Standards Executive Committee issued
SOP 98-5, "Reporting on the Costs of Start-Up Activities." SOP 98-5 requires all
costs incurred as start-up costs or organization  costs be expensed as incurred.
Adoption of SOP 98-5 is required for fiscal years  beginning  after December 15,
1998.  The Company does not believe  that the new standard  will have a material
impact on the Company's consolidated financial statements.



                                      F-9
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

2.  PROPERTY AND EQUIPMENT
<TABLE>
Property and equipment, at cost, consists of the following:
<CAPTION>
                                                                                Estimated
September 30,                                 1999             1998           Useful Life
------------------------------------------------------------------------------------------
<S>                                        <C>              <C>                   <C>
Equipment                                  $ 3,496,440      $ 3,340,764           5 years
Equipment under capital leases                 640,914          640,914           5 years
Furniture and fixtures                         266,554          246,371           7 years
Leasehold improvements                          84,060           84,060     Term of lease
Computer software costs                        123,436          123,436         30 months
------------------------------------------------------------------------------------------
                                             4,611,404        4,435,545
Less accumulated depreciation
and amortization                            (3,431,150)      (2,892,111)
------------------------------------------------------------------------------------------
                                           $ 1,180,254      $ 1,543,434
==========================================================================================
</TABLE>

Accumulated  depreciation  related to equipment  acquired  under capital  leases
amounted to approximately  $537,000 and $465,000 at September 30, 1999 and 1998,
respectively.

Accumulated   amortization  related  to  computer  software  costs  amounted  to
approximately   $123,000  and   $111,000  at   September   30,  1999  and  1998,
respectively.

3.  LONG-TERM DEBT

Long-term debt consists of an equipment lease obligation and notes payable.  The
equipment lease obligation and notes payable are payable in monthly installments
ranging from $1,170 to $3,562, including interest at rates ranging from 9.53% to
10.61%, through June 2002. The debt is collateralized by the related equipment.

Aggregate maturities of long-term debt at September 30, 1999 are as follows:

                 2000                                 $ 69,800
                 2001                                   50,706
                 2002                                   30,805
--------------------------------------------------------------
                                                      $151,311
==============================================================

In  August  1999,  the  Company  entered  into an  agreement  with a bank  for a
revolving line of credit of up to $500,000 collaterized by the Company's assets.
Interest  is  payable  at 1.50% over the  bank's  prime  rate of  interest.  The
agreement  requires the Company,  among other things, to maintain minimum levels
of tangible net worth and certain  minimum  financial  ratios.  At September 30,
1999 the Company had no



                                      F-10
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

borrowings  under the line of credit and was in compliance with the covenants of
the agreement.  In October 1999, the bank notified the Company that it would not
make any advances  under the existing line of credit until the Company  provides
sufficient evidence  satisfactory to the bank of an improvement in the Company's
operating, financial and liquidity position. At such time, the bank may consider
permitting  further advances  pursuant to the loan agreement.  In December 1999,
the Company entered into an accounts receivable purchase agreement with the same
bank,  whereby,  the Company  may assign up to  $500,000  of  eligible  accounts
receivable to the bank.  The bank, in turn,  would advance the Company up to 80%
of the assigned  accounts  receivable  amount.  Upon collection by the bank, the
balance of the assigned accounts receivable would be remitted to the Company net
of the bank's finance charges and administration fees.

In December  1999,  the  Company  entered  into an  equipment  lease  obligation
consisting of monthly  installments of $4,961,  which include interest at a rate
of 10.53%,  through  November  2002. The debt is  collateralized  by the related
equipment.

4.  STOCKHOLDERS' EQUITY

In  December  1991  and  June  1992,  the  Company's   Board  of  Directors  and
stockholders,   respectively,   approved   the   adoption  of  the   Bio-Imaging
Technologies,  Inc.  Stock  Option Plan.  In January 1995 and 1997,  the Company
amended  this plan to provide  for the  granting  of  options to key  employees,
directors and  consultants  to purchase an aggregate of not more than  1,800,000
and 2,400,000 shares,  respectively,  of the Company's common stock. Each option
is exercisable  into one share of common stock.  Options granted pursuant to the
plan,  to be  granted  at prices  not less than fair value at the date of grant,
consist of qualified incentive stock options, as defined in the Internal Revenue
Code, and nonqualified  options. Such stock options have terms not exceeding ten
years and  vesting  terms vary from  immediate  vesting on date of grant to five
years.



                                      F-11
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

The following table summarizes the transactions  pursuant to the Company's stock
option plan for the two-year period ended September 30, 1999:

                                             Number of      Weighted Average
                                              Options        Exercise Price
-----------------------------------------------------------------------------
Unexercised options outstanding at
September 30, 1997                            1,485,000           $ 1.40
Options granted                                 317,250             0.67
Options canceled                               (513,500)            0.93
Options exercised                               (20,000)            0.80
-----------------------------------------------------------------------------
Unexercised options outstanding at
September 30, 1998                            1,268,750             1.41
Options granted                                 267,620             0.63
Options canceled                               (344,000)            1.05
-----------------------------------------------------------------------------
Unexercised options outstanding at
September 30, 1999                            1,192,370           $ 1.34
=============================================================================

Approximately  765,000 and 882,000 options are exercisable at September 30, 1999
and 1998, respectively, at a weighted average exercise price of $1.66 and $1.62,
respectively.

The Company has elected,  in  accordance  with the  provisions  of SFAS No. 123,
Accounting for  Stock-Based  Compensation  ("SFAS 123"), to apply the accounting
rules under APB Opinion No. 25,  Accounting  for Stock Issued to Employees,  and
related  interpretations  in accounting for its stock options and,  accordingly,
has presented the  disclosure-only  information  as required by SFAS 123. If the
Company  had  elected  to  recognize  compensation  cost based on the fair value
method of SFAS 123, the  Company's  net loss  applicable to common stock and net
loss per common share for the years ended September 30, 1999 and 1998 would have
been the pro forma amounts indicated in the following table:

<TABLE>
<CAPTION>
Year ended September 30,                                          1999              1998
------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>
Net loss applicable to common stock - as reported             $ (745,459)     $(1,775,841)
Net loss applicable to common stock - pro forma               $ (842,614)     $(1,890,395)
Net loss per common share - basic and diluted - as reported   $    (0.10)     $     (0.23)
Net loss per common share - basic and diluted- pro forma      $    (0.11)     $     (0.24)
</TABLE>

At  September  30,  1999,  by range of  exercise  prices,  the  number of shares
represented by outstanding  options with their weighted  average  exercise price
and weighted  average  remaining  contractual  life, in years, and the number of
shares  represented by exercisable  options with their weighted average exercise
price are as follows:



                                      F-12
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

<TABLE>
<CAPTION>
                         Options Outstanding                                     Options Exercisable
-----------------------------------------------------------------------    -----------------------------
       Range of                      Weighted Average       Weighted                         Weighted
       Exercise         Number          Remaining           Average            Number        Average
        Prices       Outstanding     Contractual Life    Exercise Price     Exercisable   Exercise Price
-----------------------------------------------------------------------    -----------------------------
    <S>     <C>       <C>                <C>                  <C>             <C>                 <C>
    $0.63 - $1.44     1,040,370          7.72 years           $0.87           613,166             $0.93
    $4.13 - $4.69       152,000          2.67 years           $4.66           152,000             $4.60
-----------------------------------------------------------------------    -----------------------------
    $0.63 - $4.69     1,192,370          7.08 years           $1.34           765,166             $1.66
=======================================================================    =============================
</TABLE>

The weighted  average  fair value of options  granted in 1999 and 1998 was $0.38
and $0.53  respectively.  The fair value of each option  granted is estimated on
the  date of  grant  using  the  Black-Scholes  option  pricing  model  with the
following weighted average assumptions:

Grants for the year ended September 30,               1999             1998
---------------------------------------------------------------------------
Risk-free interest rate                               4.7%             4.5%
Expected dividend yield                               0.0%             0.0%
Expected volatility                                   117%             107%
Expected life in years                                6.00             6.00

On  October  13,  1994,   the  Company  and  Covance  Inc.,   formerly   Corning
Pharmaceutical  Services,  Inc., consummated the purchase by Covance Inc. of (i)
2,355,000 shares of the Company's common stock, $.00025 par value (ii) a warrant
to purchase  250,000  shares of common stock with an initial  exercise  price of
$1.25 per share and (iii) a warrant to purchase  250,000  shares of common stock
with an  initial  price of $1.50 per share  (the  "Warrants")  for an  aggregate
purchase price of $1,819,500.  The Warrants  expired on October 13, 1998 without
being exercised.

On December 14, 1995,  the Company  reserved  3,850,000  shares of the Company's
common stock for issuance upon conversion of the preferred stock and exercise of
the warrants issued to Investment Partners of America, L.P. ("IPA") (see below).

On  December  21,  1995,  IPA  purchased  (i)  416,667  shares of the  Company's
convertible  preferred  stock,  (ii) one five year  warrant to purchase  416,667
shares of the Company's  common stock at an initial  exercise price of $1.50 per
share  and  (iii)  one five  year  warrant  to  purchase  416,667  shares of the
Company's  common stock at an initial  exercise  price of $2.50 per share for an
aggregate  purchase  price of $500,000  pursuant to a purchase  agreement  dated
December 8, 1995  ("Purchase  Agreement").  The preferred stock provides for (i)
voting rights on an as-converted to common stock basis, with standard protective
provisions;   (ii)  a  liquidation   preference   of  $1.20  per  share;   (iii)
anti-dilution  protection  and  price  protection  provisions;  (iv)  cumulative
dividends of $0.096 per share per annum,  payable out of funds legally available
for the payment of dividends and only upon declaration of dividends by the Board
of  Directors of the Company;  and (v)  registration  rights with respect to the
shares of common stock issuable upon conversion of the preferred stock.



                                      F-13
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

On June 26, 1996, the Company  issued to IPA, one five-year  warrant to purchase
66,667  shares of the  Company's  common stock at an initial  exercise  price of
$1.05 per share,  the fair market value of the Company's common stock at date of
issuance.  The  exercise  price of this  warrant  issued  to IPA is  subject  to
adjustment to protect against dilution in the event of certain  transactions and
has certain  piggyback  registration  rights.  As of  September  30,  1999,  the
adjusted exercise price of the warrant is $0.63.

The 8% convertible  cumulative  preferred stock is convertible into common stock
of the Company on a  one-for-one  share basis  subject to  adjustment to protect
against dilution in the event of certain  transactions.  Conversion may occur in
whole or in part during the first  five-year  period from the date of  issuance,
December 21, 1995,  at the option of the holder.  The Company may require a full
conversion  at any time after five years from date of  issuance.  The  preferred
stock has certain piggyback registration rights.

The Company is required to pay  semiannual  dividends on preferred  stock at the
rate of  approximately  $0.096 per share per annum,  and as when declared by the
Board of  Directors.  Dividends  are payable  either in cash or in the Company's
common stock at the  discretion of the Company.  At September 30, 1999,  accrued
preferred dividends aggregated  approximately  $10,000 or $0.02 per share of the
preferred stock.

The preferred  stockholders are entitled to vote on all matters submitted to the
vote of the common  stockholders  and are  included in  determining  quorums and
voting results.

5.  COMMITMENTS

The  Company  has  entered  into  noncancelable   operating  leases  for  office
facilities which expire through January 2005.

Future minimum  aggregate  rental payments on the  noncancelable  portion of the
lease are as follows:

Year ending September 30,
          2000                                       $ 260,475
          2001                                         317,924
          2002                                         326,368
          2003                                         334,808
          2004                                         343,244
          2005                                         115,352
==============================================================
                                                   $ 1,698,171
==============================================================

Rent expense  charged to operations  for the years ended  September 30, 1999 and
1998 approximated $249,000 and $247,000, respectively.


                                      F-14
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

The Company has an employment contract with an officer which expires April 2000.
The amount due under this contract is approximately $105,000.  Additionally, the
contract  provided for the granting of options to purchase 150,000 shares of the
Company's  common stock at $0.63 which was greater than the fair market value of
the  Company's  common  stock at the  date of grant  (see  note 4).  Options  to
purchase  50,000 shares of the Company's  common stock vested  immediately,  and
25,000 on each of the first, second, third and fourth anniversary of the date of
grant.

6.  EMPLOYEE BENEFIT PLAN

On December 17, 1991, the Company  adopted the  Bio-Imaging  Technologies,  Inc.
Employees' Savings Plan (the "401(k) Plan"), a defined  contribution plan with a
cash or  deferred  arrangement.  Under the terms of the  401(k)  Plan,  eligible
employees may elect to reduce their annual compensation up to 15%, subject to an
annual limit prescribed by the Internal  Revenue  Service.  The Company may make
discretionary  matching contributions either in common stock or in cash, subject
to plan limits. The Company did not make a matching contribution to this account
for the years ended September 30, 1999 and 1998.

7.  MAJOR CUSTOMERS

Two customers  accounted for approximately 17% and 14% of accounts receivable at
September 30, 1999 and three customers  accounted for approximately 20%, 19% and
13% of accounts receivable at September 30, 1998.

Revenue from three major customers  accounted for approximately 16%, 13% and 11%
of project  revenues for the year ended  September 30, 1999 and revenue from two
major customers  accounted for approximately 26% and 24% of project revenues for
the year ended September 30, 1998.

8.  INCOME TAXES

The Company has net operating loss  carryforwards  of  approximately  $6,541,000
which expire in various years through  2018.  The deferred  income tax assets at
September  30,  1999  and  1998  of  approximately  $2,600,000  and  $2,400,000,
respectively,  represent the tax effect of the net operating loss carryforwards.
Due to the  uncertainty  regarding the ultimate amount of income tax benefits to
be derived from the net operating loss  carryforwards,  the Company has recorded
valuation  allowances against the entire deferred tax asset. The Company may not
be able to utilize the New Jersey net operating loss  carryforwards  as a result
of moving the corporate headquarters to Pennsylvania.


                                      F-15
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 Bio-Imaging Technologies, Inc. and Subsidiaries

9.  FOREIGN OPERATIONS

Foreign  customers  accounted for  approximately 32% of project revenues for the
years ended September 30, 1999 and 1998.

10. NON-RECURRING CHARGES

In February 1998, the Company  engaged in a proxy contest in an effort to, among
other  things,  elect the members of the  Company's  Board of  Directors  at the
Annual Meeting of Stockholders  held on February 27, 1998. Costs associated with
the proxy  contest  and  related  litigation  were  $320,000  for the year ended
September  30, 1998.  In  addition,  the Company  incurred  expenses of $277,000
consisting of  restructuring  costs of $105,000 and severance  costs of $172,000
during the year ended September 30, 1998.

The  restructuring  costs were  associated  with the termination of two business
divisions,  the Marketing  Information Services Division and the Data Management
and Information  Systems Division,  by the Company in December 1997. These costs
consisted of $38,000 of severance  costs and $67,000 related to the write-off of
assets and costs associated with the termination of the divisions.

In a separate matter, two executive officers of the Company resigned in December
1997.  The Company  entered  into a  separation  agreement  with one such former
executive  officer  requiring  the  Company to pay him  $127,000 of which $0 and
$30,000  remains  payable at  September  30, 1999 and 1998,  respectively.  As a
result  of these  resignations,  the  Company  recorded  severance  expenses  of
approximately $172,000 during the year ended September 30, 1998.



                                      F-16