UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-K
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
Commission File No. 001-11182
 BIO-IMAGING TECHNOLOGIES, INC.
  Delaware
    
    11-2872047(State or other jurisdiction ofincorporation or organization)
    
    (I.R.S. Employer Identification No.)826 Newtown-Yardley Road, Newtown, Pennsylvania
    
    18940-1721(Address of principal executive offices)
    
    (Zip Code)
 (Registrants telephone number,
   Title of each class
    
    Name of each exchange on which registeredCommon Stock, $0.00025 par value per share
    
    NASDAQ Global Market
 
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
   Class
    
    Number of SharesCommon Stock, $.00025 par value
    
    14,341,403




---



##### 



TABLE OF CONTENTS
 Item
    
    
    
    PagePART I
    
    1. Business
    
    
    11A. Risk Factors
    
    
    81B. Unresolved Staff Comments
    
    
    172. Properties
    
    
    173. Legal Proceedings
    
    
    174. Submission of Matters to a Vote of Security Holders
    
    
    17PART II
    
    5. Market for Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
    
    
    186. Selected Financial Data
    
    
    217. Managements Discussion and Analysis of FinancialCondition and Results of Operations
    
    
    227A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    368. Financial Statements and Supplementary Data
    
    
    389. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
    
    
    679A(T). Controls and Procedures
    
    
    679B. Other Information
    
    
    68PART III
    
    10. Directors, Executive Officers and Corporate Governance
    
    
    6911. Executive Compensation
    
    
    6912. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    6913. Certain Relationships and Related Transactions, and
Director Independence
    
    
    7014. Principal Accounting Fees and Services
    
    
    70PART IV
    
    15. Exhibits, Financial Statement Schedules
    
    
    70i




---



##### 



PART I
 
 Item 1. Business.
 Overview
        1




---



##### 



http://www.sec.gov
 Business Services
 Medical Image Management Services
    Ô
 Ô Ô Ô
 2




---



##### 



Ô Ô Ô
  eClinical Services
    Target Markets
   Phase I   Clinical Trials
  3




---



##### 



Phase II  Clinical Trials
  Phase III  Clinical Trials
  Phase IV  Post Approval Studies
   Cancer Therapeutics
   Musculoskeletal Therapeutics
   4




---



##### 



Central Nervous System and Neurovascular Therapeutics
  Cardiovascular Therapeutics
  Diagnostic Imaging Agents
  Intellectual Property
 Ô Ô
 Government Regulation
  5




---



##### 



6




---



##### 



Competition
  Marketing and Sales
   Significant Clients
  7




---



##### 



Business Segments and Geographic Information
   Employees
   
 Item 1A. Risk Factors.
  Risks Related to Our Company and Business
 We may incur financial losses because contracts may be delayed or terminated or reduced in scope
for reasons beyond our control.
  
    
    unexpected or undesired clinical results;
    
    the clients decision to terminate the development of a particular product or to end a
particular study;
    
    insufficient patient enrollment in a study;
    
    insufficient investigator recruitment;
    
    failure to perform our obligations under the contract; or
    
    the failure of products to satisfy safety requirements.
 8




---



##### 



The current economic downturn may adversely impact our ability to raise capital.
  We depend on a small number of industries and clients for all of our business, and the loss of one
such significant client could cause revenues to drop quickly and unexpectedly.
  
    
    our clients businesses experience financial problems or are affected by a general
economic downturn;
    
    consolidation in the pharmaceutical, biotechnology or medical device industries leads to
a smaller client base for us; or
    
    clients reduce their research and development expenditures.
  Our contracted/committed backlog may not be indicative of future results.
  
    
    the variable size and duration of the projects (some are performed over several years);
 9




---



##### 




    
    the loss or delay of projects;
    
    the change in the scope of work during the course of a project; and
    
    the cancellation of such contracts by our clients.
  We recently acquired Phoenix Data Systems, Inc. and may engage in future acquisitions, which may be
expensive and time consuming, and from which we may not realize anticipated benefits.
  Loss of key personnel, or failure to attract and retain additional personnel, may cause the success
and growth of our business to suffer.
  Our revenues, earnings and operating costs are exposed to exchange rate fluctuations.
  Our investments may be exposed to credit risk.
 10




---



##### 



We may be required to record additional significant charges to earnings if our goodwill becomes
impaired.
  Risks Related to Our Industry
 Our failure to compete effectively in our industry could cause our revenues to decline.
  
    
    consultative and clinical trials design capabilities;
    
    reputation for on-time quality performance;
    
    expertise and experience in specific therapeutic areas;
    
    the scope of service offerings;
    
    strength in various geographic markets;
    
    the price of services;
    
    ability to acquire, process, analyze and report data in a time-saving and accurate
manner;
    
    ability to manage large-scale clinical trials both domestically and internationally;
    
    our size; and
    
    the service and product offerings of our competitors.
   11




---



##### 



Changes in outsourcing trends in the pharmaceutical and biotechnology industries could adversely
affect our operating results and growth rate.
   Consolidation among our customers could cause us to lose customers, decrease the market for our
products and result in a reduction of our revenues.
  The current economic downturn coupled with the current regulatory environment could have a negative
impact on the pharmaceutical, biotechnology and medical device industries.
  Failure to comply with existing regulations could result in increased costs to complete clinical
trials.
  
 12




---



##### 



Changes in governmental regulation could decrease the need for the services we provide, which would
negatively affect our future business opportunities.
     If governmental agencies do not accept the data and analyses generated by our services, the need
for our services would be eliminated or substantially reduced.
  We may be exposed to liability claims as a result of our involvement in clinical trials.
 13




---



##### 



Risks Related to Our Common Stock
 Your percentage ownership and voting power and the price of our common stock may decrease as a
result of events that increase the number of our outstanding shares.
  Common stock outstanding
    
    
    14,341Common stock issuable upon:Exercise of options which are outstanding
    
    
    1,718Exercise of options which have not been granted
    
    
    1,133Total common stock outstanding assuming exercise or conversion of
all of the above
    
    
    17,192
  Shares of our common stock eligible for public sale may have a negative impact on its market price.
   14




---



##### 



There are a limited number of stockholders who have significant control over our common stock,
allowing them to have significant influence over the outcome of all matters submitted to our
stockholders for approval, which may conflict with our interests and the interests of our other
stockholders.
  Because we do not intend to pay dividends, stockholders will benefit from an investment in our
common stock only if it appreciates in value.
  Trading in our common stock may be volatile, which may result in substantial declines in its market
price.
  
    
    operating results;
    
    analysts reports;
    
    market conditions in the industry;
    
    changes in governmental regulations; and
    
    changes in general conditions in the economy or the financial markets.
   Certain provisions of our charter and Delaware law could make a takeover difficult and may prevent
or frustrate attempts by our stockholders to replace or remove our management team.
 15




---



##### 



16




---



##### 



Item 1B Unresolved Staff Comments.
  
 Item 2. Properties.
  
 Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  17




---



##### 



PART II
 
 Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
   CommonQuarter
    
    StockEnded
    
    High
    
    LowMarch 31, 2007
    
    
    9.40
    
    
    
    5.84June 30, 2007
    
    
    7.45
    
    
    
    5.75September 30, 2007
    
    
    8.00
    
    
    
    6.03December 31, 2007
    
    
    9.95
    
    
    
    6.83March 31, 2008
    
    
    8.98
    
    
    
    6.57June 30, 2008
    
    
    8.20
    
    
    
    6.18September 30, 2008
    
    
    8.00
    
    
    
    6.48December 31, 2008
    
    
    7.58
    
    
    
    2.15
   18




---



##### 



Number of
    
    WeightedSecurities to be
    
    Average Exercise
    
    Number of SecuritiesIssued Upon
    
    Price of
    
    Available for Future IssuanceExercise of
    
    Outstanding
    
    Under Equity CompensationPlan Category
    
    Outstanding Options
    
    Options
    
    PlansEquity compensation
plans that have
been approved by
security holders
    
    
    1,718,000
    
    
    $
    4.58
    
    
    
    1,133,000Equity compensation
plans not approved
by security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,718,000
    
    
    $
    4.58
    
    
    
    1,133,000
 19




---



##### 



STOCK PRICE PERFORMANCE GRAPH
  
 Dec. 31,
    
    Dec. 31,
    
    Dec. 31,
    
    Dec. 31,
    
    Dec. 31,
    
    Dec. 31,2003
    
    2004
    
    2005
    
    2006
    
    2007
    
    2008Bio-Imaging Technologies Inc
    
    
    100.00
    
    
    
    87.96
    
    
    
    51.85
    
    
    
    129.37
    
    
    
    129.70
    
    
    
    58.75NASDAQ U.S. Stock Index
    
    
    100.00
    
    
    
    108.83
    
    
    
    111.14
    
    
    
    122.11
    
    
    
    132.43
    
    
    
    63.87Nasdaq Health Services Index
    
    
    100.00
    
    
    
    126.03
    
    
    
    173.21
    
    
    
    172.96
    
    
    
    226.07
    
    
    
    165.11
  20




---



##### 



Item 6. Selected Financial Data.
  For the years ended,  (in thousands, except per share data and number of employees)
 Dec. 31,
    
    Dec. 31,
    
    Dec. 31,
    
    Dec. 31,
    
    Dec. 31,2008
    
    2007
    
    2006
    
    2005
    
    2004CONTINUING OPERATIONSService revenue
    
    $
    56,181
    
    
    $
    37,543
    
    
    $
    31,853
    
    
    $
    23,734
    
    
    $
    24,958Total revenue
    
    
    69,116
    
    
    
    47,254
    
    
    
    40,257
    
    
    
    30,126
    
    
    
    29,580Income (loss) from continuing operations
before interest and taxes
    
    
    8,480
    
    
    
    4,848
    
    
    
    2,670
    
    
    
    (3,226
    )
    
    
    2,433Income from continuing operations, net of taxes
    
    
    5,791
    
    
    
    3,343
    
    
    
    1,968
    
    
    
    (1,881
    )
    
    
    1,439Basic earnings (loss) per share:Income (loss) from continuing operations
    
    
    0.42
    
    
    
    0.29
    
    
    
    0.18
    
    
    
    (0.17
    )
    
    
    0.13Diluted earnings (loss) per share:Income (loss) from continuing operations
    
    
    0.40
    
    
    
    0.26
    
    
    
    0.16
    
    
    
    (0.17
    )
    
    
    0.12Weighted average shares used to calculate
earnings (loss) per share:Basic
    
    
    13,752
    
    
    
    11,616
    
    
    
    11,219
    
    
    
    11,114
    
    
    
    10,812Diluted
    
    
    14,469
    
    
    
    12,745
    
    
    
    12,364
    
    
    
    11,114
    
    
    
    12,229FINANCIAL POSITIONCash, cash equivalents
    
    $
    14,265
    
    
    $
    17,915
    
    
    $
    16,166
    
    
    $
    10,554
    
    
    $
    9,650Working capital
    
    
    7,918
    
    
    
    9,721
    
    
    
    10,219
    
    
    
    8,055
    
    
    
    13,121Total assets
    
    
    69,208
    
    
    
    43,057
    
    
    
    34,108
    
    
    
    28,791
    
    
    
    28,374Long-term debt
    
    
    65
    
    
    
    
    
    
    
    97
    
    
    
    551
    
    
    
    907Stockholders equity
    
    
    43,412
    
    
    
    23,529
    
    
    
    18,842
    
    
    
    17,197
    
    
    
    19,518OTHER DATAPurchases of property and equipment
    
    $
    2,916
    
    
    $
    3,928
    
    
    $
    2,232
    
    
    $
    1,871
    
    
    $
    1,849Depreciation and amortization
    
    
    2,266
    
    
    
    2,335
    
    
    
    2,035
    
    
    
    2,312
    
    
    
    1,760Number of employees
    
    
    474
    
    
    
    337
    
    
    
    283
    
    
    
    264
    
    
    
    269
 21




---



##### 



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 Overview
        22




---



##### 



CapMed Division
  Forward Looking Statements
  23




---



##### 



Critical Accounting Policies, Estimates and Risks
    Revenue
   Property and Equipment, Net.
 24




---



##### 



Goodwill and Other Intangible Assets, Net.
 Capitalized Software Development.
 Income Taxes
 Stock-based compensation costs
 Foreign Currency Risks
 25




---



##### 



26




---



##### 



Results of Operations
 Year Ended December 31, 2008 Compared with Year Ended December 31, 2007.
 % of
    
    
    
    
    
    
    % ofTotal
    
    
    
    
    
    
    Total(in thousands)
    
    2008
    
    
    Revenue
    
    
    2007
    
    
    Revenue
    
    
    $ Change
    
    
    % ChangeService revenues
    
    $
    56,181
    
    
    
    81.3
    %
    
    $
    37,543
    
    
    
    79.4
    %
    
    $
    18,638
    
    
    
    49.6
    %Reimbursement revenues
    
    
    12,935
    
    
    
    18.7
    %
    
    
    9,711
    
    
    
    20.6
    %
    
    
    3,224
    
    
    
    33.2
    %Total revenues
    
    
    69,116
    
    
    
    100.0
    %
    
    
    47,254
    
    
    
    100.0
    %
    
    
    21,862
    
    
    
    46.3
    %Cost and expenses:Cost of service
revenues
    
    
    32,446
    
    
    
    46.9
    %
    
    
    21,900
    
    
    
    46.3
    %
    
    
    10,546
    
    
    
    48.2
    %Cost of
reimbursement
revenues
    
    
    12,935
    
    
    
    18.7
    %
    
    
    9,711
    
    
    
    20.6
    %
    
    
    3,224
    
    
    
    33.2
    %Sales and marketing
expenses
    
    
    7,860
    
    
    
    11.4
    %
    
    
    5,005
    
    
    
    10.6
    %
    
    
    2,855
    
    
    
    57.0
    %General and
administrative
expenses
    
    
    7,015
    
    
    
    10.1
    %
    
    
    5,734
    
    
    
    12.1
    %
    
    
    1,281
    
    
    
    22.3
    %Amortization of
intangible assets
related to
acquisitions
    
    
    380
    
    
    
    0.6
    %
    
    
    56
    
    
    
    0.1
    %
    
    
    324
    
    
    
    578.6
    %Total cost and expenses
    
    
    60,636
    
    
    
    87.7
    %
    
    
    42,406
    
    
    
    89.7
    %
    
    
    18,230
    
    
    
    43.0
    %Income from continuing
operations before
interest and taxes
    
    
    8,480
    
    
    
    12.3
    %
    
    
    4,848
    
    
    
    10.3
    %
    
    
    3,632
    
    
    
    74.9
    %Interest income
    
    
    429
    
    
    
    0.6
    %
    
    
    655
    
    
    
    1.4
    %
    
    
    (226
    )
    
    
    (34.5
    )%Interest expense
    
    
    (7
    )
    
    
    0.0
    %
    
    
    (11
    )
    
    
    0.0
    %
    
    
    4
    
    
    
    (36.4
    )%Income tax provision
    
    
    (3,111
    )
    
    
    (4.5
    )%
    
    
    (2,148
    )
    
    
    (4.6
    )%
    
    
    (963
    )
    
    
    44.8
    %Income from continuing
operations, net of
taxes
    
    $
    5,791
    
    
    
    8.4
    %
    
    $
    3,344
    
    
    
    7.1
    %
    
    $
    2,447
    
    
    
    73.2
    %Loss from discontinued
operations, net of
taxes
    
    
    (3,001
    )
    
    
    (4.3
    )%
    
    
    (1,011
    )
    
    
    (2.1
    )%
    
    
    (1,990
    )
    
    
    196.8
    %Net income
    
    $
    2,790
    
    
    
    4.1
    %
    
    $
    2,333
    
    
    
    5.0
    %
    
    $
    457
    
    
    
    19.6
    %
   27




---



##### 



28




---



##### 



29




---



##### 



Results of Operations
 Year Ended December 31, 2007 Compared with Year Ended December 31, 2006.
 % of
    
    
    
    
    
    
    % ofTotal
    
    
    
    
    
    
    Total(in thousands)
    
    2007
    
    
    Revenue
    
    
    2006
    
    
    Revenue
    
    
    $ Change
    
    
    % ChangeService revenues
    
    $
    37,543
    
    
    
    79.4
    %
    
    $
    31,853
    
    
    
    79.1
    %
    
    $
    5,690
    
    
    
    17.9
    %Reimbursement
revenues
    
    
    9,711
    
    
    
    20.6
    %
    
    
    8,404
    
    
    
    20.9
    %
    
    
    1,307
    
    
    
    15.6
    %Total revenues
    
    
    47,254
    
    
    
    100.0
    %
    
    
    40,257
    
    
    
    100.0
    %
    
    
    6,997
    
    
    
    17.4
    %Cost and expenses:Cost of service
revenues
    
    
    21,900
    
    
    
    46.3
    %
    
    
    19,629
    
    
    
    48.9
    %
    
    
    2,271
    
    
    
    11.6
    %Cost of
reimbursement
revenues
    
    
    9,711
    
    
    
    20.6
    %
    
    
    8,404
    
    
    
    20.9
    %
    
    
    1,307
    
    
    
    15.6
    %Sales and
marketing
expenses
    
    
    5,005
    
    
    
    10.6
    %
    
    
    4,286
    
    
    
    10.6
    %
    
    
    719
    
    
    
    16.8
    %General and
administrative
expenses
    
    
    5,734
    
    
    
    12.1
    %
    
    
    5,131
    
    
    
    12.7
    %
    
    
    603
    
    
    
    11.8
    %Amortization of
intangible
assets related
to acquisitions
    
    
    56
    
    
    
    0.1
    %
    
    
    137
    
    
    
    0.3
    %
    
    
    (81
    )
    
    
    (59.1
    )%Total cost and
expenses
    
    
    42,406
    
    
    
    89.7
    %
    
    
    37,587
    
    
    
    93.4
    %
    
    
    4,819
    
    
    
    12.8
    %Income from
continuing
operations before
interest and taxes
    
    
    4,848
    
    
    
    10.3
    %
    
    
    2,670
    
    
    
    6.6
    %
    
    
    2,178
    
    
    
    81.6
    %Interest income
    
    
    655
    
    
    
    1.4
    %
    
    
    560
    
    
    
    1.4
    %
    
    
    95
    
    
    
    17.0
    %Interest expense
    
    
    (11
    )
    
    
    0.0
    %
    
    
    (56
    )
    
    
    (0.1
    )%
    
    
    45
    
    
    
    (80.4
    )%Income tax provision
    
    
    (2,148
    )
    
    
    (4.6
    )%
    
    
    (1,206
    )
    
    
    (3.0
    )%
    
    
    (942
    )
    
    
    78.1
    %Income from
continuing
operations, net of
taxes
    
    
    3,344
    
    
    
    7.1
    %
    
    
    1,968
    
    
    
    4.9
    %
    
    
    1,376
    
    
    
    69.9
    %Loss from
discontinued
operations, net of
taxes
    
    
    (1,011
    )
    
    
    (2.1
    )%
    
    
    (964
    )
    
    
    (2.4
    )%
    
    
    (47
    )
    
    
    4.9
    %Net income
    
    $
    2,333
    
    
    
    5.0
    %
    
    $
    1,004
    
    
    
    2.5
    %
    
    $
    1,329
    
    
    
    132.4
    %
  30




---



##### 



31




---



##### 



Quarterly Results
  Quarter EndedDec. 31,
    
    Sept. 30,
    
    June 30,
    
    Mar. 31,
    
    Dec. 31,
    
    Sept. 30,
    
    June 30,
    
    Mar. 31,(in thousands except per share data)
    
    2008
    
    2008
    
    2008
    
    2008
    
    2007
    
    2007
    
    2007
    
    2007Service revenues
    
    
    14,956
    
    
    
    15,093
    
    
    
    15,109
    
    
    
    11,023
    
    
    $
    10,109
    
    
    $
    9,500
    
    
    $
    9,257
    
    
    $
    8,677Reimbursement revenues
    
    
    2,737
    
    
    
    3,048
    
    
    
    4,073
    
    
    
    3,077
    
    
    
    2,323
    
    
    
    2,893
    
    
    
    2,230
    
    
    
    2,265Total revenues
    
    
    17,693
    
    
    
    18,141
    
    
    
    19,182
    
    
    
    14,100
    
    
    
    12,432
    
    
    
    12,393
    
    
    
    11,487
    
    
    
    10,942Cost and expenses:Cost of service revenues
    
    
    8,995
    
    
    
    8,513
    
    
    
    8,595
    
    
    
    6,343
    
    
    
    5,794
    
    
    
    5,380
    
    
    
    5,463
    
    
    
    5,263Cost of reimbursement revenues
    
    
    2,737
    
    
    
    3,048
    
    
    
    4,073
    
    
    
    3,077
    
    
    
    2,323
    
    
    
    2,893
    
    
    
    2,230
    
    
    
    2,265Sales and marketing expenses
    
    
    2,043
    
    
    
    2,120
    
    
    
    2,229
    
    
    
    1,468
    
    
    
    1,397
    
    
    
    1,160
    
    
    
    1,270
    
    
    
    1,178General and administrative expenses
    
    
    1,614
    
    
    
    1,962
    
    
    
    1,900
    
    
    
    1,539
    
    
    
    1,495
    
    
    
    1,415
    
    
    
    1,448
    
    
    
    1,376Amortization of intangibleassets related to acquisitions
    
    
    11
    
    
    
    212
    
    
    
    133
    
    
    
    24
    
    
    
    11
    
    
    
    15
    
    
    
    15
    
    
    
    15Total cost and expenses
    
    
    15,400
    
    
    
    15,855
    
    
    
    16,930
    
    
    
    12,451
    
    
    
    11,020
    
    
    
    10,863
    
    
    
    10,426
    
    
    
    10,097Income from continuing operations
before interest and taxes
    
    
    2,293
    
    
    
    2,286
    
    
    
    2,252
    
    
    
    1,649
    
    
    
    1,412
    
    
    
    1,530
    
    
    
    1,061
    
    
    
    845Interest income
    
    
    77
    
    
    
    98
    
    
    
    101
    
    
    
    153
    
    
    
    170
    
    
    
    168
    
    
    
    156
    
    
    
    160Interest expense
    
    
    (3
    )
    
    
    (1
    )
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    (1
    )
    
    
    (6
    )
    
    
    (4
    )Income tax provision
    
    
    (702
    )
    
    
    (856
    )
    
    
    (887
    )
    
    
    (666
    )
    
    
    (611
    )
    
    
    (659
    )
    
    
    (481
    )
    
    
    (397
    )Income from continuing operations,
net of taxes
    
    
    1,665
    
    
    
    1,527
    
    
    
    1,463
    
    
    
    1,136
    
    
    
    971
    
    
    
    1,038
    
    
    
    730
    
    
    
    604Loss from discontinued operations
    
    
    (1,836
    )
    
    
    (451
    )
    
    
    (402
    )
    
    
    (312
    )
    
    
    (174
    )
    
    
    (391
    )
    
    
    (236
    )
    
    
    (210
    )Net income
    
    
    (171
    )
    
    
    1,076
    
    
    
    1,061
    
    
    
    824
    
    
    $
    797
    
    
    $
    647
    
    
    $
    494
    
    
    $
    394Basic earnings per share:Income from continuing operations
    
    
    0.12
    
    
    
    0.11
    
    
    
    0.10
    
    
    
    0.09
    
    
    $
    0.09
    
    
    $
    0.09
    
    
    $
    0.06
    
    
    $
    0.05Discontinued operations
    
    
    (0.13
    )
    
    
    (0.03
    )
    
    
    (0.03
    )
    
    
    (0.03
    )
    
    
    (0.02
    )
    
    
    (0.03
    )
    
    
    (0.02
    )
    
    
    (0.02
    )Net Income
    
    
    (0.01
    )
    
    
    0.08
    
    
    
    0.07
    
    
    
    0.06
    
    
    
    0.07
    
    
    
    0.06
    
    
    
    0.04
    
    
    
    0.03Diluted earnings per share:Income from continuing operations
    
    
    0.11
    
    
    
    0.10
    
    
    
    0.10
    
    
    
    0.09
    
    
    $
    0.07
    
    
    $
    0.08
    
    
    $
    0.06
    
    
    $
    0.05Discontinued operations
    
    
    (0.12
    )
    
    
    (0.03
    )
    
    
    (0.03
    )
    
    
    (0.03
    )
    
    
    (0.01
    )
    
    
    (0.03
    )
    
    
    (0.02
    )
    
    
    (0.02
    )Net Income
    
    
    (0.01
    )
    
    
    0.07
    
    
    
    0.07
    
    
    
    0.06
    
    
    
    0.06
    
    
    
    0.05
    
    
    
    0.04
    
    
    
    0.03Weighted average shares used to
calculate earnings per share:Basic
    
    
    14,341
    
    
    
    14,279
    
    
    
    14,279
    
    
    
    12,021
    
    
    
    11,725
    
    
    
    11,658
    
    
    
    11,602
    
    
    
    11,467Diluted
    
    
    14,764
    
    
    
    15,168
    
    
    
    15,168
    
    
    
    12,964
    
    
    
    12,856
    
    
    
    12,678
    
    
    
    12,654
    
    
    
    12,657
 32




---



##### 



Liquidity and Capital Resources
 Our principal liquidity requirements have been and we expect will be, for working capital and
general corporate purposes, including capital expenditures.
 Statement of Cash Flow for the year ended December 31, 2008 compared to December 31, 2007
 (in thousands)
    
    2008
    
    
    2007Net cash provided by activities from continuing operations
    
    $
    9,768
    
    
    $
    9,985Net cash
used in investing activities from continuing operations
    
    $
    (10,605
    )
    
    $
    (6,082
    )Net cash provided by financing activities from continuing operations
    
    $
    523
    
    
    $
    490
       Payments Due By Period(in thousands)
    
    
    
    
    
    Less than 1
    
    
    
    
    
    
    
    
    
    More thanContractual obligations
    
    Total
    
    year
    
    1-3 years
    
    3-5 years
    
    5 yearsCapital lease obligations
    
    
    120
    
    
    
    97
    
    
    
    23
    
    
    
    
    
    
    
    Facility rent operating
leases
    
    
    16,987
    
    
    
    2,506
    
    
    
    3,709
    
    
    
    3,527
    
    
    
    7,245Employment agreements
    
    
    919
    
    
    
    835
    
    
    
    84
    
    
    
    
    
    
    
    Total contractual cash
obligations
    
    $
    18,026
    
    
    $
    3,438
    
    
    $
    3,816
    
    
    $
    3,527
    
    
    $
    7,245
  33




---



##### 




    
    our ability to gain new client contracts;
    
    project cancellations;
    
    the variability of the timing of payments on existing client contracts; and
    
    other changes in our operating assets and liabilities.
   34




---



##### 



Recently Issued Accounting Statements
       35




---



##### 



Existing Contracts
  
 Item 7a. Quantitative and Qualitative Disclosures About Market Risk.
 Interest Rate Risk
  Foreign Currency Risk
   36




---



##### 



37




---



##### 



Item 8. Financial Statements and Supplementary Data.
 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
    
    PAGEReport of Independent Registered Public Accounting Firm
    
    
    39Consolidated Balance Sheets as of December 31, 2008 and 2007
    
    
    40Consolidated Statements of Income for the year ended December 31, 2008, 2007 and 2006
    
    
    41Consolidated Statements of Stockholders Equity for the year ended
December 31, 2008, 2007 and 2006
    
    
    42Consolidated Statements of Cash Flows for the year ended December 31, 2008, 2007 and 2006
    
    
    43Notes to Consolidated Financial Statements
    
    
    45
 38




---



##### 



Report of Independent Registered Public Accounting Firm
 
 
 
 39




---



##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 December 31,(in thousands)
    
    2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    14,265
    
    
    $
    17,915Accounts receivable, net of allowance for doubtful
accounts of $11 and $29, respectively
    
    
    11,982
    
    
    
    5,881Prepaid expenses and other current assets
    
    
    2,315
    
    
    
    1,235Assets held for sale
    
    
    500
    
    
    
    2,703Deferred income taxes
    
    
    3,084
    
    
    
    2,930Total current assets
    
    
    32,146
    
    
    
    30,664Property and equipment, net
    
    
    7,022
    
    
    
    5,420Intangibles, net
    
    
    2,058
    
    
    
    307Goodwill
    
    
    27,391
    
    
    
    6,025Other assets
    
    
    591
    
    
    
    641Total Assets
    
    $
    69,208
    
    
    $
    43,057LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    3,832
    
    
    $
    1,864Accrued expenses and other current liabilities
    
    
    5,236
    
    
    
    4,616Deferred revenue
    
    
    15,106
    
    
    
    11,664Current maturities of capital lease obligations
    
    
    54
    
    
    
    97Total current liabilities
    
    
    24,228
    
    
    
    18,241Long-term capital lease obligations
    
    
    65
    
    
    
    Deferred income tax
    
    
    927
    
    
    
    691Other liability
    
    
    576
    
    
    
    597Total liabilities
    
    
    25,796
    
    
    
    19,529Commitments and ContingenciesStockholders equity:Preferred stock- $.00025 par value; authorized
3,000,000 shares, 0 issued and outstanding at
December 31, 2008 and 2007
    
    
    
    
    
    
    Common stock  $.00025 par value; authorized
18,000,000 shares, issued and outstanding 14,341,403
and 11,765,483 shares at December 31, 2008 and 2007,
respectively
    
    
    4
    
    
    
    3Additional paid-in capital
    
    
    42,270
    
    
    
    25,084Retained earnings (accumulated deficit)
    
    
    1,080
    
    
    
    (1,710
    )Accumulated other comprehensive income
    
    
    58
    
    
    
    151Stockholders equity
    
    
    43,412
    
    
    
    23,528Total liabilities and stockholders equity
    
    $
    69,208
    
    
    $
    43,057
  40




---



##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 For the year ended December 31,(in thousands except per share data)
    
    2008
    
    
    2007
    
    
    2006Service revenues
    
    $
    56,181
    
    
    $
    37,543
    
    
    $
    31,853Reimbursement revenues
    
    
    12,935
    
    
    
    9,711
    
    
    
    8,404Total revenues
    
    
    69,116
    
    
    
    47,254
    
    
    
    40,257Cost and expenses:Cost of service revenues
    
    
    32,446
    
    
    
    21,900
    
    
    
    19,629Cost of reimbursement revenues
    
    
    12,935
    
    
    
    9,711
    
    
    
    8,404Sales and marketing expenses
    
    
    7,860
    
    
    
    5,005
    
    
    
    4,286General and administrative expenses
    
    
    7,015
    
    
    
    5,734
    
    
    
    5,131Amortization of intangible assets related to acquisitions
    
    
    380
    
    
    
    56
    
    
    
    137Total cost and expenses
    
    
    60,636
    
    
    
    42,406
    
    
    
    37,587Income from continuing operations before interest and taxes
    
    
    8,480
    
    
    
    4,848
    
    
    
    2,670Interest income
    
    
    429
    
    
    
    654
    
    
    
    560Interest expense
    
    
    (7
    )
    
    
    (11
    )
    
    
    (56
    )Income tax provision
    
    
    (3,111
    )
    
    
    (2,148
    )
    
    
    (1,206
    )Income from continuing operations, net of taxes
    
    $
    5,791
    
    
    $
    3,343
    
    
    $
    1,968Loss from discontinued operations, net of taxes
    
    
    (3,001
    )
    
    
    (1,011
    )
    
    
    (964
    )Net income
    
    $
    2,790
    
    
    $
    2,332
    
    
    $
    1,004Basic earnings per share:Income from continuing operations
    
    $
    0.42
    
    
    $
    0.29
    
    
    $
    0.18Loss from discontinued operations
    
    $
    (0.22
    )
    
    $
    (0.09
    )
    
    $
    (0.09
    )Net Income
    
    $
    0.20
    
    
    $
    0.20
    
    
    $
    0.09Diluted earnings per share:Income from continuing operations
    
    $
    0.40
    
    
    $
    0.26
    
    
    $
    0.16Loss from discontinued operations
    
    $
    (0.21
    )
    
    $
    (0.08
    )
    
    $
    (0.08
    )Net Income
    
    $
    0.19
    
    
    $
    0.18
    
    
    $
    0.08Weighted average shares used to calculate earnings per share:Basic
    
    
    13,752
    
    
    
    11,616
    
    
    
    11,219Diluted
    
    
    14,469
    
    
    
    12,745
    
    
    
    12,364
  41




---



##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 OtherAccumulated
    
    
    Compre-Additional
    
    
    (Deficit)
    
    
    hensiveCommon Stock
    
    
    Paid-in
    
    
    Retained
    
    
    Gain
    
    
    Stockholders(in thousands)
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    (Loss)
    
    
    EquityBalance at December 31, 2005
    
    
    11,168
    
    
    $
    3
    
    
    $
    22,302
    
    
    $
    (5,047
    )
    
    $
    (62
    )
    
    $
    17,196Stock options exercised
    
    
    127
    
    
    
    
    
    
    
    153
    
    
    
    
    
    
    
    
    
    
    
    153Restricted shares issued
    
    
    15
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (5
    )Stock based compensation
    
    
    
    
    
    
    
    
    
    
    363
    
    
    
    
    
    
    
    
    
    
    
    363Tax benefit on exercise of
stock options
    
    
    
    
    
    
    
    
    
    
    51
    
    
    
    
    
    
    
    
    
    
    
    51Net unrealized gain on
derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    79
    
    
    
    79Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,004
    
    
    
    
    
    
    
    1,004Balance at December 31, 2006
    
    
    11,310
    
    
    $
    3
    
    
    $
    22,864
    
    
    $
    (4,043
    )
    
    $
    17
    
    
    $
    18,841Stock options exercised
    
    
    341
    
    
    
    
    
    
    
    301
    
    
    
    
    
    
    
    
    
    
    
    301Restricted shares issued
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock issued for acquisitions
    
    
    99
    
    
    
    
    
    
    
    802
    
    
    
    
    
    
    
    
    
    
    
    802Stock based compensation
    
    
    
    
    
    
    
    
    
    
    474
    
    
    
    
    
    
    
    
    
    
    
    474Tax benefit on exercise of
stock options
    
    
    
    
    
    
    
    
    
    
    643
    
    
    
    
    
    
    
    
    
    
    
    643Net unrealized loss on
derivative instruments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    (17
    )Equity adjustment from
foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    151
    
    
    
    151Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,333
    
    
    
    
    
    
    
    2,333Balance at December 31, 2007
    
    
    11,765
    
    
    $
    3
    
    
    $
    25,084
    
    
    $
    (1,710
    )
    
    $
    151
    
    
    $
    23,528Stock options exercised
    
    
    290
    
    
    
    
    
    
    
    387
    
    
    
    
    
    
    
    
    
    
    
    387Restricted shares issued
    
    
    21
    
    
    
    
    
    
    
    (86
    )
    
    
    
    
    
    
    
    
    
    
    (86
    )Stock issued for acquisitions
    
    
    2,265
    
    
    
    1
    
    
    
    15,946
    
    
    
    
    
    
    
    
    
    
    
    15,947Stock based compensation
    
    
    
    
    
    
    
    
    
    
    649
    
    
    
    
    
    
    
    
    
    
    
    649Tax benefit on exercise of
stock options
    
    
    
    
    
    
    
    
    
    
    290
    
    
    
    
    
    
    
    
    
    
    
    290Equity adjustment from
foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (93
    )
    
    
    (93
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,790
    
    
    
    
    
    
    
    2,790Balance at December 31, 2008
    
    
    14,341
    
    
    $
    4
    
    
    $
    42,270
    
    
    $
    1,080
    
    
    $
    58
    
    
    $
    43,412
 Statement of comprehensive income
 For the year ended December 31,(in thousands)
    
    2008
    
    
    2007
    
    
    2006Net income
    
    $
    2,790
    
    
    $
    2,333
    
    
    $
    1,004Net unrealized income (loss) on derivative instruments
    
    
    
    
    
    
    (17
    )
    
    
    79Equity adjustment from foreign currency translation
    
    
    (93
    )
    
    
    151
    
    
    
    Total comprehensive income
    
    $
    2,697
    
    
    $
    2,467
    
    
    $
    1,083
  42




---



##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the year ended December 31,(in thousands)
    
    2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    2,790
    
    
    $
    2,332
    
    
    $
    1,004Adjustments to reconcile net income to net cash provided by
Operating activities, net of acquisition:Depreciation and amortization
    
    
    2,266
    
    
    
    2,335
    
    
    
    2,035Provision for deferred income taxes
    
    
    (311
    )
    
    
    286
    
    
    
    24Sales leaseback deferred gains
    
    
    
    
    
    
    
    
    
    
    Bad debt provision
    
    
    (6
    )
    
    
    15
    
    
    
    16Stock based compensation expense
    
    
    563
    
    
    
    474
    
    
    
    358(Gain) Loss on foreign currency options
    
    
    
    
    
    
    (10
    )
    
    
    82Loss from discontinued operations
    
    
    3,001
    
    
    
    1,011
    
    
    
    964Changes in operating assets and liabilities, net of acquisitions:(Increase) decrease in accounts receivable
    
    
    (1,339
    )
    
    
    (145
    )
    
    
    1,051Increase in prepaid expenses and other current assets
    
    
    (830
    )
    
    
    (77
    )
    
    
    (234
    )Decrease (increase) in other assets
    
    
    93
    
    
    
    (53
    )
    
    
    (93
    )Increase (decrease) in accounts payable
    
    
    1,599
    
    
    
    78
    
    
    
    (271
    )Increase in accrued expenses and other current liabilities
    
    
    353
    
    
    
    1,334
    
    
    
    1,359(Decrease) increase in deferred revenue
    
    
    (850
    )
    
    
    2,073
    
    
    
    3,196(Decrease) increase in other liabilities
    
    
    (3
    )
    
    
    23
    
    
    
    2Decrease in net assets held for sale
    
    
    2,442
    
    
    
    309
    
    
    
    257Cash provided by activities from continuing operations
    
    
    9,768
    
    
    
    9,985
    
    
    
    9,750Cash used by discontinued operations
    
    
    (2,974
    )
    
    
    (1,319
    )
    
    
    (1,221
    )Net cash provided by operating activities
    
    
    6,794
    
    
    
    8,666
    
    
    
    8,529Cash flows used in investing activities:Purchases of property and equipment
    
    
    (2,677
    )
    
    
    (2,575
    )
    
    
    (1,310
    )Net cash paid for acquisition
    
    
    (7,928
    )
    
    
    (3,507
    )
    
    
    Net cash used in investing activities from continuing operations
    
    
    (10,605
    )
    
    
    (6,082
    )
    
    
    (1,310
    )Purchase of plant, property and equipment for discontinued operations
    
    
    (239
    )
    
    
    (1,353
    )
    
    
    (922
    )Net cash used in investing activities
    
    
    (10,844
    )
    
    
    (7,435
    )
    
    
    (2,232
    )Cash flows from financing activities:Payments under equipment lease obligations
    
    
    (153
    )
    
    
    (454
    )
    
    
    (875
    )Premiums paid for foreign currency options
    
    
    
    
    
    
    
    
    
    
    (14
    )Proceeds from exercise of stock options
    
    
    386
    
    
    
    301
    
    
    
    153Excess tax benefit related to stock options
    
    
    290
    
    
    
    643
    
    
    
    51Net cash provided by (used in) financing activities from continuing
operations
    
    
    523
    
    
    
    490
    
    
    
    (685
    )Effect of exchange rate changes on cash
    
    
    (123
    )
    
    
    28
    
    
    
    Net (decrease) increase in cash and cash equivalents
    
    
    (3,650
    )
    
    
    1,749
    
    
    
    5,612Cash and cash equivalents at beginning of period
    
    
    17,915
    
    
    
    16,166
    
    
    
    10,554Cash and cash equivalents at end of period
    
    $
    14,265
    
    
    $
    17,915
    
    
    $
    16,166Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    11
    
    
    $
    12
    
    
    $
    56Cash paid during the period for income taxes
    
    $
    1,970
    
    
    $
    604
    
    
    $
    98
  43




---



##### 



Supplemental cash flow disclosure
  For the year ended December 31,(in thousands)
    
    2008
    
    2007
    
    2006Increase in property, plant
and equipment acquisitions
in accounts payable
    
    $
    7
    
    
    $
    11
    
    
    $
    311
 Acquired business
 For the year ended December 31,(in thousands)
    
    2008
    
    2007
    
    2006Accounts receivable
    
    $
    4,926
    
    
    $
    228
    
    
    
    Property and equipment
    
    
    721
    
    
    
    185
    
    
    
    Other assets
    
    
    295
    
    
    
    53
    
    
    
    Intangible assets and goodwill
    
    
    23,874
    
    
    
    4,590
    
    
    
    Current liabilities assumed
    
    
    (1,061
    )
    
    
    (377
    )
    
    
    Other liabilities assumed
    
    
    (4,880
    )
    
    
    (412
    )
    
    
    Common stock issued
    
    
    (15,947
    )
    
    
    (760
    )
    
    
    Cash paid for acquired
business, net of cash
acquired of $418,000 and
$201,000, respectively
    
    $
    7,928
    
    
    $
    3,507
    
    
    
    
  44




---



##### 



1. Organization and Summary of Significant Accounting Policies
 Description of Business
       45




---



##### 



Principles of Consolidation
  Basis of Presentation
  Foreign Currency Translation
  Functional Currency
     Use of Estimates
  Fair Value of Financial Instruments
  46




---



##### 



Cash and Cash Equivalents
   Revenue Recognition
     47




---



##### 



Allowance For Doubtful Accounts
  December 31,(in thousands)
    
    2008
    
    
    2007Billed trade accounts receivable
    
    $
    10,091
    
    
    $
    5,090Unbilled trade accounts receivable
    
    
    1,863
    
    
    
    746Other
    
    
    28
    
    
    
    45Total receivables
    
    $
    11,982
    
    
    $
    5,881
 Allowance Rollforward:Balance at December 31, 2006
    
    $
    14Additions
    
    
    29Write offs (net of recoveries)
    
    
    (14
    )Balance at December 31, 2007
    
    $
    29Additions
    
    
    6Write offs (net of recoveries)
    
    
    (24
    )Balance at December 31, 2008
    
    $
    11
 Property and Equipment
   Capitalized Software Development
  48




---



##### 



Goodwill and Other Intangible Assets
  Income Taxes
  Earnings Per Share
   For the year ended December 31,(in thousands except per share data)
    
    2008
    
    
    2007
    
    
    2006Net income  diluted and basic
    
    $
    2,790
    
    
    $
    2,333
    
    
    $
    1,004Denominator  basic:
 49




---



##### 



For the year ended December 31,(in thousands except per share data)
    
    2008
    
    
    2007
    
    
    2006Weighted average number of common
shares
    
    
    13,752
    
    
    
    11,616
    
    
    
    11,219Basic income per common share
    
    $
    0.20
    
    
    $
    0.20
    
    
    $
    0.09Denominator  diluted:Weighted average number of common
shares
    
    
    13,752
    
    
    
    11,616
    
    
    
    11,219Common share equivalents of
outstanding stock options
    
    
    648
    
    
    
    1,023
    
    
    
    968Common share equivalents of
unrecognized compensation expense
    
    
    69
    
    
    
    106
    
    
    
    177Weighted average number of dilutive
common equivalent shares
    
    
    14,469
    
    
    
    12,745
    
    
    
    12,364Diluted income per common share
    
    $
    0.19
    
    
    $
    0.18
    
    
    $
    0.08
  Derivatives
  Recently Issued Accounting Statements
    50




---



##### 



51




---



##### 



2. Acquisitions
     52




---



##### 



(in thousands)Net Working Capital
    
    $
    701Fixed Assets
    
    
    721Other Assets
    
    
    46Other Liabilities
    
    
    (175
    )Deferred Tax Liability
    
    
    (854
    )Software
    
    
    552Trademark
    
    
    48Customer Backlog
    
    
    730Customer Relationships
    
    
    665Non-Compete Agreements
    
    
    138Goodwill, including Workforce
    
    
    21,366Total Purchase Price
    
    $
    23,938
  Pro Forma Results.
 Twelve Months EndedDecember 31, 2008,(in thousands except per share data)
    
    2008
    
    2007
    
    2006Total revenue
    
    $
    73,566
    
    
    $
    59,324
    
    
    $
    47,424Income from continuing operations before
interest and taxes
    
    
    7,783
    
    
    
    5,523
    
    
    
    1,429Income from continuing operations, net of taxes
    
    
    5,300
    
    
    
    3,723
    
    
    
    1,368Basic earnings per share:Income from continuing operations
    
    $
    0.38
    
    
    $
    0.27
    
    
    $
    0.03Diluted earnings per share:Income from continuing operations
    
    $
    0.35
    
    
    $
    0.25
    
    
    $
    0.03
 53




---



##### 



3. Discontinued Operations and Assets Held for Sale
   (in thousands)
    
    2008
    
    
    2007
    
    
    2006Service revenues
    
    $
    321
    
    
    $
    653
    
    
    $
    262Loss from operations
    
    
    (2,323
    )
    
    
    (1,659
    )
    
    
    (1,555
    )Loss from impairment
    
    
    (2,726
    )
    
    
    
    
    
    
    Pretax loss
    
    
    (5,049
    )
    
    
    (1,659
    )
    
    
    (1,555
    )Benefit from income taxes
    
    
    2,048
    
    
    
    648
    
    
    
    591Net loss from discontinued operations
    
    
    (3,001
    )
    
    
    (1,011
    )
    
    
    (964
    )
   Current Assets
    
    
    27Fixed Assets
    
    
    1,257Net Assets and Liabilities
    
    $
    1,284
 54




---



##### 



4. Property and Equipment
  December 31,
    
    
    Estimated(in thousands)
    
    2008
    
    
    2007
    
    
    Useful LifeEquipment
    
    $
    8,692
    
    
    $
    6,963
    
    
    5 yearsEquipment under capital leases
    
    
    4,332
    
    
    
    4,332
    
    
    5 yearsFurniture and fixtures
    
    
    1,582
    
    
    
    880
    
    
    7 yearsLeasehold improvements
    
    
    1,336
    
    
    
    1,175
    
    
    5 yearsComputer software costs
    
    
    5,038
    
    
    
    4,142
    
    
    5 years20,980
    
    
    
    17,492Less: Accumulated depreciation
and amortization
    
    
    (13,958
    )
    
    
    (12,072
    )Property and equipment, net
    
    $
    7,022
    
    
    $
    5,420
  55




---



##### 



5. Intangible Assets
  December 31,
    
    
    Estimated(in thousands)
    
    2008
    
    
    2007
    
    
    Useful LifeAmortized intangible assets:Technology
    
    $
    843
    
    
    $
    291
    
    
    5 yearsTrademarks
    
    
    48
    
    
    
    
    
    
    5 yearsCustomer backlog
    
    
    1,613
    
    
    
    218
    
    
    3-7 yearsNon-competition agreement
    
    
    349
    
    
    
    211
    
    
    2-3 years2,853
    
    
    
    720Accumulated amortization
    
    
    (795
    )
    
    
    (413
    )$
    2,058
    
    
    $
    307Unamortized intangible assets:Goodwill
    
    $
    27,391
    
    
    $
    6,025
   Year Ending(in thousands)
    
    December 31, 20082009
    
    $
    4562010
    
    
    4232011
    
    
    3792012
    
    
    3242013
    
    
    227Thereafter
    
    
    249$
    2,058
  (in thousands)
    
    2008
    
    
    2007Balance at the beginning of year
    
    $
    6,025
    
    
    $
    1,874Acquisition of businesses
    
    
    21,366
    
    
    
    4,151Balance at end of year
    
    $
    27,391
    
    
    $
    6,025
 56




---



##### 



6. Accrued Expenses
  December 31,(in thousands)
    
    2008
    
    
    2007Accrued compensation
    
    $
    3,351
    
    
    $
    2,616Accrued consulting fees
    
    
    88
    
    
    
    45Accrued income taxes
    
    
    
    
    
    
    314Accrued other
    
    
    1,797
    
    
    
    1,641$
    5,236
    
    
    $
    4,616
 7. Capital Lease Obligations
      (in thousands)2009
    
    $
    612010
    
    
    292011
    
    
    282012
    
    
    262013 and thereafter
    
    
    Total minimum capital lease payments
    
    
    144Less amount representing interest
    
    
    (25
    )Total present value of minimum payment
    
    $
    119Less current portion of such obligations
    
    
    (54
    )Long-term capital lease obligations
    
    
    65
 8. Stock Based Compensation
  57




---



##### 



For the year
    
    
    For the year
    
    
    For the yearended
    
    
    ended
    
    
    endedDecember 31,
    
    
    December 31,
    
    
    December 31,(in thousands)
    
    2008
    
    
    2007
    
    
    2006Cost of revenues
    
    $
    386
    
    
    $
    335
    
    
    $
    255General and administrative
    
    
    83
    
    
    
    66
    
    
    
    50Sales and marketing
    
    
    94
    
    
    
    73
    
    
    
    52Stock-based compensation
expense before income
taxes
    
    $
    563
    
    
    $
    474
    
    
    $
    357
  2008
    
    2007
    
    2006Risk-free interest rate (range)
    
    
    2.29-2.63
    %
    
    
    4.13-4.48
    %
    
    
    4.61-4.94
    %Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
    
    
    0.00
    %Expected volatility
    
    
    55.00-56.00
    %
    
    
    56.00
    %
    
    
    58.00
    %Expected term (in years)
    
    
    4.00-5.00
    
    
    
    4.00-5.00
    
    
    
    4.00
 Expected Volatility.
 Expected Term.
 Risk-Free Interest Rate
 58




---



##### 



Dividend Yield
 Pre-Vesting Forfeitures
 Stock Options
 Fiscal 2007
 WeightedWeighted
    
    AverageAverage
    
    Remaining(in thousands)
    
    
    
    
    
    Exercise
    
    Contractual
    
    AggregateStock Options
    
    Shares
    
    Price
    
    Term
    
    Intrinsic ValueOutstanding at
December 31, 2006
    
    
    1,871
    
    
    $
    2.61
    
    
    
    4.78
    
    
    $
    10,193Granted
    
    
    148
    
    
    
    8.02
    
    
    
    6.02
    
    
    
    9Exercised
    
    
    (342
    )
    
    
    1.43
    
    
    
    
    
    
    
    489Forfeited or expired
    
    
    (49
    )
    
    
    3.89
    
    
    
    
    
    
    
    190Outstanding at
December 31 ,2007
    
    
    1,628
    
    
    
    3.31
    
    
    
    4.37
    
    
    
    7,763Unvested at
December 31, 2007
    
    
    228
    
    
    
    6.54
    
    
    
    5.82
    
    
    
    350Exercisable at
December 31, 2007
    
    
    1,400
    
    
    
    2.79
    
    
    
    4.13
    
    
    
    7,412
 Fiscal 2008
 WeightedWeighted
    
    AverageAverage
    
    Remaining(in thousands)
    
    
    
    
    
    Exercise
    
    Contractual
    
    AggregateStock Options
    
    Shares
    
    Price
    
    Term
    
    Intrinsic ValueOutstanding at
December 31, 2007
    
    
    1,628
    
    
    
    3.31
    
    
    
    4.37
    
    
    
    7,763Granted
    
    
    395
    
    
    
    7.53
    
    
    
    6.37
    
    
    
    (1,529
    )Exercised
    
    
    (290
    )
    
    
    1.64
    
    
    
    
    
    
    
    473Forfeited or Expired
    
    
    (15
    )
    
    
    1.80
    
    
    
    
    
    
    
    27Outstanding at
December 31, 2008
    
    
    1,718
    
    
    
    4.58
    
    
    
    4.39
    
    
    
    (1,574
    )Unvested at
December 31, 2008
    
    
    541
    
    
    
    7.23
    
    
    
    5.94
    
    
    
    (1,934
    )Exercisable at
December 31, 2008
    
    
    1,177
    
    
    
    3.35
    
    
    
    3.67
    
    
    
    360
 59




---



##### 



Weighted AverageNumber of Shares
    
    Option Grant Date Fair(in thousands)
    
    Underlying Options
    
    ValueNon-vested at December 31, 2005
    
    
    78
    
    
    $
    2.83Granted
    
    
    198
    
    
    $
    3.53Vested
    
    
    (96
    )
    
    $
    3.04Non-vested at December 31, 2006
    
    
    180
    
    
    $
    3.49Granted
    
    
    148
    
    
    $
    6.71Vested
    
    
    (100
    )
    
    $
    3.73Non-vested at December 31, 2007
    
    
    228
    
    
    $
    5.47Granted
    
    
    395
    
    
    $
    6.70Vested
    
    
    (82
    )
    
    $
    5.66Non-vested at December 31, 2008
    
    
    541
    
    
    $
    6.34
   60




---



##### 



Options Outstanding
    
    Options ExercisableWeighted
    
    
    
    
    
    
    
    
    
    WeightedNumber
    
    Average
    
    Weighted
    
    Number
    
    Average
    
    WeightedRange of
    
    Outstanding
    
    Remaining
    
    Average
    
    Exercisable
    
    Remaining
    
    AverageExercise
    
    (in
    
    Contractual
    
    Exercise
    
    (in
    
    Contractual
    
    ExercisePrices
    
    thousands)
    
    Life
    
    Price
    
    thousands)
    
    Life
    
    Price$0.63-$0.88
    
    
    306
    
    
    1.45 years
    
    $
    0.73
    
    
    
    306
    
    
    1.45 years
    
    $
    0.73$1.00-$1.16
    
    
    144
    
    
    2.92 years
    
    $
    1.11
    
    
    
    144
    
    
    2.92 years
    
    $
    1.11$1.28-$2.80
    
    
    109
    
    
    2.95 years
    
    $
    2.20
    
    
    
    109
    
    
    2.95 years
    
    $
    2.20$3.05-$5.10
    
    
    440
    
    
    4.93 years
    
    $
    4.20
    
    
    
    383
    
    
    5.04 years
    
    $
    4.23$6.97-$8.06
    
    
    719
    
    
    5.82 years
    
    $
    7.50
    
    
    
    235
    
    
    5.13 years
    
    $
    7.25$0.63-$8.06
    
    
    1,718
    
    
    4.39 years
    
    $
    4.58
    
    
    
    1,177
    
    
    3.67 years
    
    $
    3.35
 Restricted Stock Units:
 9. Commitments
   61




---



##### 



Year Ending(in thousands)
    
    December 31, 20082009
    
    $
    2,5062010
    
    
    1,8742011
    
    
    1,8352012
    
    
    1,8732013
    
    
    1,654Thereafter
    
    
    7,245$
    16,987
   10. Employee Benefit Plan
  11. Major Customers
  12. Income Taxes
  62




---



##### 



For the year ended December 31,(in thousands)
    
    2008
    
    
    2007
    
    
    2006Current:Federal
    
    $
    2,027
    
    
    $
    546
    
    
    $
    121State and local
    
    
    136
    
    
    
    504
    
    
    
    207Foreign
    
    
    167
    
    
    
    164
    
    
    
    211$
    2,330
    
    
    $
    1,214
    
    
    $
    539Deferred:Federal
    
    
    730
    
    
    
    458
    
    
    
    269State and local
    
    
    42
    
    
    
    (172
    )
    
    
    (129
    )Foreign
    
    
    
    
    
    
    
    
    
    
    (64
    )772
    
    
    
    286
    
    
    
    76Income tax provision from
continuing operations
    
    $
    3,102
    
    
    $
    1,500
    
    
    $
    615
  For the year ended December 31,2008
    
    2007
    
    2006Tax provision at statutory rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %State and local income taxes, net of federal benefit
    
    
    2.8
    %
    
    
    5.7
    %
    
    
    4.4
    %Permanent differences
    
    
    0.4
    %
    
    
    0.6
    %
    
    
    1.6
    %Foreign rate difference
    
    
    (0.5
    )%
    
    
    (1.0
    )%
    
    
    (1.1
    )%Other
    
    
    (1.9
    )%
    
    
    (0.2
    )%
    
    
    (1.6
    )%Effective income tax rate from continuing
operations
    
    
    34.8
    %
    
    
    39.1
    %
    
    
    37.3
    %
  For the year ended December 31,(in thousands)
    
    2008
    
    
    2007
    
    
    2006Domestic income before income tax
    
    $
    8,290
    
    
    $
    4,891
    
    
    $
    2,743Foreign income before income tax
    
    
    612
    
    
    
    600
    
    
    
    431Total income before income tax
from continuing operations
    
    $
    8,902
    
    
    $
    5,491
    
    
    $
    3,174
  For the year ended December 31,(in thousands)
    
    2008
    
    
    2007Deferred tax assets:Accrued expenses
    
    $
    47
    
    
    $
    33Allowance for doubtful accounts
    
    
    4
    
    
    
    12Deferred revenue
    
    
    3,212
    
    
    
    2,996Net operating loss carryforwards
    
    
    580
    
    
    
    375
 63




---



##### 



For the year ended December 31,(in thousands)
    
    2008
    
    
    2007Restricted stock
    
    
    183
    
    
    
    130Stock options
    
    
    254
    
    
    
    130Amortization of acquisition costs
    
    
    
    
    
    
    17Impairment of assets
    
    
    723
    
    
    
    Total deferred tax assets
    
    
    5,003
    
    
    
    3,693Deferred tax liabilities:Excess of tax over book depreciation
    
    
    (1,653
    )
    
    
    (676
    )Amortization of acquisition costs
    
    
    (479
    )
    
    
    Prepaid expenses
    
    
    (340
    )
    
    
    (370
    )Total deferred tax liabilities
    
    
    (2,472
    )
    
    
    (1,046
    )Valuation allowance
    
    
    (374
    )
    
    
    (408
    )Net deferred tax assets
    
    $
    2,157
    
    
    $
    2,239
    64




---



##### 



13. Derivatives
    65




---



##### 



14. Foreign Operations
   15. Related Party Transactions
  66




---



##### 



Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
  
 Item 9A(T). Controls and Procedures.
 Evaluation of Disclosure Controls and Procedures.
 Managements Report on Internal Control Over Financial Reporting.
 
    
    Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of our management and directors; and
    
    Provide reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the companys assets that could have a material effect
on the financial statements.
   67




---



##### 



Internal Control-Integrated Framework.
   Changes in internal control over financial reporting
 
 Item 9B. Other Information.
  68




---



##### 



PART III
  Item 10. Directors, Executive Officers and Corporate Governance.
     Item 11. Executive Compensation.
    Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters.
  69




---



##### 



Item 13. Certain Relationships and Related Transactions, and Director Independence.
  
 Item 14. Principal Accounting Fees and Services.
  
 Item 15. Exhibits, Financial Statement Schedules.
 Financial Statements
 Financial Statement Schedules
 Exhibits.
 70




---



##### 



SIGNATURES
 th
 BIO-IMAGING TECHNOLOGIES, INC.By:
    /s/ Mark L. WeinsteinMark L. Weinstein, President and Chief ExecutiveOfficer 71




---



##### 



Signature
    
    Title
    
    Date/s/ Mark L. Weinstein

Mark L. Weinstein
    
    President and Chief
Executive Officer and Director
(principal executive officer)
    
    March 5, 2009/s/ Ted I. Kaminer

Ted I. Kaminer
    
    Executive Vice President of Finance
and
Administration and Chief Financial Officer

(principal financial and
accounting officer)
    
    March 5,
2009/s/ Jeffrey H. Berg, Ph.D.

Jeffrey H. Berg, Ph.D.
    
    Director
    
    March 5, 2009/s/ Richard F. Cimino

Richard F. Cimino
    
    Director
    
    March 5, 2009/s/ E. Martin Davidoff, CPA, Esq.

E. Martin Davidoff, CPA, Esq.
    
    Director
    
    March 5, 2009/s/ David E. Nowicki, D.M.D.

David E. Nowicki, D.M.D.
    
    Chairman of the Board
and Director
    
    March 5,
2009/s/ Adeoye Y. Olukotun

Adeoye Y. Olukotun, M.D., M.P.H.,
    
    Director
    
    March 5, 2009F.A.C.C., FAHA/s/ David Stack

David Stack
    
    Director
    
    March 5, 2009/s/ James A. Taylor, Ph.D.

James A. Taylor, Ph.D.
    
    Director
    
    March 5, 2009
 72




---



##### 



EXHIBIT INDEX
 ExhibitNo.
    
    Description of Exhibit2.1
    
    Asset Purchase Agreement, dated October 25, 2001, by and between
Bio-Imaging Technologies, Inc. and Quintiles, Inc. Incorporated
by reference to Exhibit 2.1 of our Current Report on Form 8-K
dated October 25, 2001.2.2
    
    Agreement and Plan of Merger, dated March 24, 2008, by and among
Bio-Imaging Technologies, Inc., Bio-Imaging Acquisition
Corporation and Phoenix Data Systems, Inc. and James G.
Fitzgerald, as Stockholders Representative. Incorporated by
reference to Exhibit 2.2 of our Current Report on Form 8-K/A,
dated March 24, 2008.2.3
    
    Asset Purchase Agreement, dated January 6, 2009, by and between
Bio-Imaging Technologies, Inc. and MBI Benefits, Inc.**3.1
    
    Restated Certificate of Incorporation of Bio-Imaging Technologies,
Inc. Incorporated by reference to Exhibit 3.1 of our 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 of our Annual Report on Form 10-K for the year
ended September 30, 1993 and to Exhibit 3.1 of our Quarterly
Report on Form 10-QSB for the quarter ended March 31, 1995.3.2
    
    Amended and Restated By-Laws of Bio-Imaging Technologies, Inc.
Incorporated by reference to Exhibit 3.1 of our Quarterly Report
on Form 10-QSB for the quarter ended June 30, 2001.4.1
    
    Specimen Common Stock Certificate. Incorporated by reference to
Exhibit 4.1 of our 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
Bio-Imaging Technologies, Inc. and Corning Pharmaceuticals
Services Inc., now Covance Inc. Incorporated by reference to
Exhibit 4.1 of our Current Report on Form 8-K, dated October 13,
1994.4.3
    
    Registration Rights Agreement, dated as of October 25, 2001, by
and between Bio-Imaging Technologies, Inc. and Quintiles, Inc.
Incorporated by reference to Exhibit 2 of our Current Report on
Form 8-K/A, dated October 25, 2001.10.1*
    
    2002 Stock Incentive Plan, adopted by the stockholders of
Bio-Imaging Technologies, Inc. on February 27, 2002, as amended
and restated on April 14, 2005. Incorporated by reference to
Exhibit 99.1 of our Registration Statement on Form S-8, dated
December 21, 2006.10.2*
    
    401(k) Plan. Incorporated by reference to Exhibit 10.7 of our
Registration Statement on Form S-1 (File Number 33-47471), which
became effective on June 18, 1992.10.3
    
    Form of Employees Invention Assignment, Confidential Information
and Non-Competition Agreement. Incorporated by reference to
Exhibit 10.9 of our Annual Report on Form 10-K for the fiscal year
ended September 30, 1992.10.4
    
    Stock Purchase Agreement, dated October 13, 1994, by and between
Bio-Imaging Technologies, Inc. and Covance Inc. Incorporated by
reference to Exhibit 10.2 of our Current Report on Form 8-K dated
October 13, 1994.10.5*
    
    Invention Assignment and Confidential Information Agreement, dated
January 20, 2000, by and between Bio-Imaging Technologies, Inc.
and Mark L. Weinstein. Incorporated by reference to Exhibit 10.1
of our Quarterly Report on Form 10-QSB for the quarter ended
December 31, 1999.
 73




---



##### 



ExhibitNo.
    
    Description of Exhibit10.6*
    
    Employment Agreement, dated March 4, 2009, by and between
Bio-Imaging Technologies, Inc. and Mark L. Weinstein.10.7
    
    Agreement of Lease by and between 826 Newtown Associates, L.P. and
Bio-Imaging Technologies, Inc., dated December 1, 2008, such lease
superseding and rendering null and void all previous leases
related to the Premises at 826 and 828 Newtown-Yardley Road,
Newtown, Pennsylvania.10.8
    
    Office Space Lease, dated September 22, 1999, by and between
Yardley Road Associates, L.P. and Bio-Imaging Technologies, Inc.
Incorporated by reference to Exhibit 10.9 of our Annual Report on
Form 10-KSB for the fiscal year ended September 30, 1999.10.9
    
    Office Space Lease, dated September 11, 2000, by and between
Angelo Investment Company and Bio-Imaging Technologies, Inc.
Incorporated by reference to Exhibit 10.11 of our Annual Report on
Form 10-KSB for the fiscal year ended September 30, 2000.10.10*
    
    Employment Agreement, dated February 6, 2003, by and between
Bio-Imaging Technologies, Inc. and Ted I. Kaminer. Incorporated
by reference to Exhibit 10.1 of our Quarterly Report on Form
10-QSB/A for the quarter ended March 31, 2003.10.11
    
    Securities Purchase Agreement, dated September 15, 2003, by and
between Bio-Imaging Technologies, Inc. and certain institutional
investors. Incorporated by reference to Exhibit 10.1 of our
Current Report on Form 8-K dated September 15, 2003.10.12
    
    Registration Rights Agreement, dated September 15, 2003, by and
between Bio-Imaging Technologies, Inc. and certain institutional
investors. Incorporated by reference to Exhibit 10.2 of our
Current Report on Form 8-K, dated September 15, 2003.10.13*
    
    Form of Amended Executive Retention Agreement by and between
Bio-Imaging Technologies, Inc. and certain executive officers.
Incorporated by reference to Exhibit 10.1 of our Quarterly Report
on Form 10-Q for the quarter ended March 31, 2006.10.14
    
    Asset Purchase Agreement, dated November 20, 2003, by and between
Bio-Imaging Technologies, Inc. and CapMed, Inc. Incorporated by
reference to Exhibit 10.16 of our Annual Report on Form 10-K for
the fiscal year ended December 31, 2005.10.15
    
    Stock Purchase Agreement, dated December 10, 2004, by and between
Bio-Imaging Technologies, Inc. and Heart Core B.V. Incorporated
by reference to Exhibit 10.17 of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2005.10.16
    
    Fourth Modification of Office Space Lease by and between 826
Newtown Associates, LP and Bio-Imaging Technologies, Inc., dated
September 29, 2004. Incorporated by reference to Exhibit 10.18 of
our Annual Report on Form 10-K for the fiscal year ended December
31, 2005.10.17
    
    Stock Purchase Agreement, dated February 6, 2007, by and between
Bio-Imaging Technologies, Inc. and Theralys, S.A. Incorporated by
reference to Exhibit 10.17 of our Annual Report on Form 10-K for
the fiscal year ended December 31, 2006.10.18
    
    Development and Supply Agreement, dated June 20, 2005 by and
between CapMed, a division of Bio-Imaging Technologies, Inc. and
Medic Alert Foundation United States, Inc. (Portions of this
exhibit have been omitted and have been filed separately pursuant
to an application for confidential treatment filed with the
Securities and Exchange Commission on August 15, 2005).
Incorporated by reference to Exhibit 10.2 of our Quarterly Report
on Form 10-Q for the quarter ended June 30, 2005.21
    
    List of Subsidiaries of Registrant. Incorporated by reference to
Exhibit 21.1 of our Annual Report on Form 10-KSB for the fiscal
year ended September 30, 1997.23.1
    
    Consent of PricewaterhouseCoopers LLP.31.1
    
    Certification of principal executive officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.
 74




---



##### 



ExhibitNo.
    
    Description of Exhibit31.2
    
    Certification of principal financial and accounting officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of principal executive officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350.32.2
    
    Certification of principal financial and accounting officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18
U.S.C. 1350.
 
 *
    
    A management contract or compensatory plan or arrangement required to be filed as an exhibit
pursuant to Item 13(a) of Form 10-K.**
    
    Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The
Company undertakes to furnish supplementally copies of any of the omitted schedules and
exhibits upon request by the Securities and Exchange Commission.
    
    Included herewith. 75