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United States
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
  þ
    
    Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2007
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission File No. 1-11182
 BIO-IMAGING TECHNOLOGIES, INC.
  Delaware
    
    11-2872047(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)
 826 Newtown-Yardley Road, Newtown, Pennsylvania
    
    18940-1721
   (Registrants
Telephone Number,
   Yes: þ
    
    No: o
  o o þ
  Yes: o
    
    No: þ
  Class
    
    Number of SharesCommon Stock, $0.00025 par value
    
    11,656,922




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
 PagePART I.
    
    FINANCIAL INFORMATION.Item 1.
    
    Financial Statements
    
    
    1CONSOLIDATED BALANCE SHEETS as of June 30, 2007 (unaudited) and December 31, 2006
    
    
    2CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months Ended June 30, 2007 and 2006 (unaudited)
    
    
    3CONSOLIDATED STATEMENTS OF OPERATIONS For the Six Months Ended June 30, 2007 and 2006 (unaudited)
    
    
    4CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended June 30, 2007 and 2006 (unaudited)
    
    
    5NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Results of Operations
    
    
    17Business Segments
    
    
    22Liquidity and Capital Resources
    
    
    23Changes to Critical Accounting Policies and Estimates
    
    
    25Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    26Item 4T.
    
    Controls and Procedures
    
    
    26PART II.
    
    OTHER INFORMATION.Item 1
    
    Legal Proceedings
    
    
    27Item 1A.
    
    Risk Factors
    
    
    27Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    36Item 3
    
    Defaults Upon Senior Securities
    
    
    36Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    36Item 5.
    
    Other Information
    
    
    38Item 6.
    
    Exhibits
    
    
    38SIGNATURES
    
    
    39CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER SECION 302CERTIFICATION OF SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER -- SECTION 302CERTIFICATION OF PRESIDENT AND CHIEF EXECUTIVE OFFICER -- SECTION 906CERTIFICATION OF SENIOR VICE PRESIDENT AND CHIEF FINANCIAL OFFICER  --  SECTION 906




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PART I. FINANCIAL INFORMATION .
 
 Item 1. Financial Statements.
    1




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 June 30,
    
    
    December 31,2007
    
    
    2006(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    14,482,754
    
    
    $
    16,166,264Accounts receivable, net
    
    
    6,280,987
    
    
    
    5,564,748Prepaid expenses and other current assets
    
    
    1,143,510
    
    
    
    1,237,405Deferred income taxes
    
    
    3,002,291
    
    
    
    2,210,800Total current assets
    
    
    24,909,542
    
    
    
    25,179,217Property and equipment, net
    
    
    7,115,639
    
    
    
    5,908,281Intangibles and goodwill
    
    
    6,622,959
    
    
    
    2,227,438Deferred income taxes
    
    
    
    
    
    
    272,954Other assets
    
    
    647,034
    
    
    
    519,821Total assets
    
    $
    39,295,174
    
    
    $
    34,107,711LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,543,163
    
    
    $
    1,720,481Accrued expenses and other current liabilities
    
    
    4,325,174
    
    
    
    3,334,554Deferred revenue
    
    
    11,756,544
    
    
    
    9,451,219Current maturities of capital lease obligations
    
    
    272,451
    
    
    
    454,458Total current liabilities
    
    
    17,897,332
    
    
    
    14,960,712Long-term capital lease obligations
    
    
    5,532
    
    
    
    97,036Other liability
    
    
    579,467
    
    
    
    208,208Total liabilities
    
    
    18,482,331
    
    
    
    15,265,956Commitments and ContingenciesStockholders equity:Preferred stock- $.00025 par value; authorized
3,000,000 shares, 0 issued and outstanding at
June 30, 2007 and at December 31, 2006
    
    
    
    
    
    
    Common stock  $.00025 par value; authorized
18,000,000 shares, issued and outstanding
11,620,867 shares at June 30, 2007 and
11,309,550 shares at December 31, 2006
    
    
    2,907
    
    
    
    2,827Additional paid-in capital
    
    
    23,968,599
    
    
    
    22,864,390Accumulated deficit
    
    
    (3,153,837
    )
    
    
    (4,042,619
    )Accumulated other comprehensive (loss) gain
    
    
    (4,826
    )
    
    
    17,157Stockholders equity
    
    
    20,812,843
    
    
    
    18,841,755Total liabilities and stockholders equity
    
    $
    39,295,174
    
    
    $
    34,107,711
  -2-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 For the Three Months EndedJune 30,2007
    
    
    2006Service revenues
    
    $
    9,403,388
    
    
    $
    7,970,354Reimbursement revenues
    
    
    2,282,816
    
    
    
    2,244,387Total revenues
    
    
    11,686,204
    
    
    
    10,214,741Cost and expenses:Cost of revenues
    
    
    7,706,325
    
    
    
    7,363,466General and administrative expenses
    
    
    1,567,145
    
    
    
    1,391,816Sales and marketing expenses
    
    
    1,738,989
    
    
    
    1,441,108Total cost and expenses
    
    
    11,012,459
    
    
    
    10,196,390Income from operations
    
    
    673,745
    
    
    
    18,351Interest income
    
    
    155,496
    
    
    
    128,912Interest expense
    
    
    (6,401
    )
    
    
    (13,693
    )Income before income tax provision
    
    
    822,840
    
    
    
    133,570Income tax provision
    
    
    329,136
    
    
    
    53,428Net income
    
    $
    493,704
    
    
    $
    80,142Basic income per common share
    
    $
    0.04
    
    
    $
    0.01Weighted average number of common shares
    
    
    11,602,176
    
    
    
    11,202,712Diluted income per common share
    
    $
    0.04
    
    
    $
    0.01Weighted average number of dilutive common equivalent shares
    
    
    12,653,589
    
    
    
    12,171,375
  -3-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 For the Six Months EndedJune 30,2007
    
    
    2006Service revenues
    
    $
    18,162,809
    
    
    $
    15,212,945Reimbursement revenues
    
    
    4,598,850
    
    
    
    4,311,547Total revenues
    
    
    22,761,659
    
    
    
    19,524,492Cost and expenses:Cost of revenues
    
    
    15,247,834
    
    
    
    14,048,306General and administrative expenses
    
    
    3,039,423
    
    
    
    2,763,062Sales and marketing expenses
    
    
    3,299,015
    
    
    
    2,888,836Total cost and expenses
    
    
    21,586,272
    
    
    
    19,700,204Income (loss) from operations
    
    
    1,175,387
    
    
    
    (175,712
    )Interest income
    
    
    316,048
    
    
    
    246,445Interest expense
    
    
    (10,131
    )
    
    
    (30,876
    )Income before income tax provision
    
    
    1,481,304
    
    
    
    39,857Income tax provision
    
    
    592,522
    
    
    
    15,943Net income
    
    $
    888,782
    
    
    $
    23,914Basic income per common share
    
    $
    0.08
    
    
    $
    0.00Weighted average number of common shares
    
    
    11,535,242
    
    
    
    11,128,185Diluted income per common share
    
    $
    0.07
    
    
    $
    0.00Weighted average number of dilutive common
equivalent shares
    
    
    12,668,110
    
    
    
    12,082,635
  -4-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Six Months EndedJune 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    888,782
    
    
    $
    23,914Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    1,073,195
    
    
    
    1,053,803Provision for deferred income taxes
    
    
    (363,949
    )
    
    
    16,113Bad debt benefit
    
    
    
    
    
    
    (3,295
    )Non-cash stock based compensation expense
    
    
    196,413
    
    
    
    148,081(Gain) loss on foreign currency options
    
    
    (10,398
    )
    
    
    40,606Changes in operating assets and liabilities:Decrease (increase) in accounts receivable
    
    
    (488,472
    )
    
    
    58,774Decrease (increase) in prepaid expenses and other current assets
    
    
    58,368
    
    
    
    (253,173
    )Increase in other assets
    
    
    (45,013
    )
    
    
    (2,752
    )Decrease in accounts payable
    
    
    (445,044
    )
    
    
    (532,549
    )(Decrease) increase in accrued expenses and other current
liabilities
    
    
    756,543
    
    
    
    (45,522
    )Increase in deferred revenue
    
    
    2,163,559
    
    
    
    3,010,208Increase in other liabilities
    
    
    5,320
    
    
    
    8,007Net cash provided by operating activities
    
    
    3,789,304
    
    
    
    3,522,215Cash flows from investing activities:Purchases of property and equipment
    
    
    (1,783,505
    )
    
    
    (1,041,262
    )Net cash paid for acquisition, net of cash acquired
    
    
    (3,565,725
    )
    
    
    Net cash used in investing activities
    
    
    (5,349,230
    )
    
    
    (1,041,262
    )Cash flows from financing activities:Payments under equipment lease obligations
    
    
    (273,511
    )
    
    
    (459,576
    )Premium paid for foreign currency options
    
    
    
    
    
    
    (14,077
    )Proceeds from exercise of stock options
    
    
    149,927
    
    
    
    32,001Net cash used in financing activities
    
    
    (123,584
    )
    
    
    (441,652
    )Net (decrease) increase in cash and cash equivalents
    
    
    (1,683,510
    )
    
    
    2,039,301Cash and cash equivalents at beginning of period
    
    
    16,166,264
    
    
    
    10,553,668Cash and cash equivalents at end of period
    
    $
    14,482,754
    
    
    $
    12,592,969
  -5-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Supplemental cash flow disclosure
  For the Six Months EndedJune 30,2007
    
    2006Increase in property, plant and equipment
acquisitions in accounts payable
    
    
    184,633
    
    
    
    132,945
 Acquired business
 For the Six Months EndedJune 30,2007
    
    2006Accounts receivable
    
    
    227,767
    
    
    
    Property and equipment, net
    
    
    185,261
    
    
    
    Other assets
    
    
    53,432
    
    
    
    Intangible assets and goodwill
    
    
    4,590,000
    
    
    
    Net current liabilities assumed
    
    
    (377,131
    )
    
    
    Other liabilities assumed
    
    
    (353,263
    )
    
    
    Common stock issued
    
    
    (760,341
    )
    
    
    Cash paid for acquired business, net of cash acquired of $200,972
    
    
    3,565,725
    
    
    
    
 Statement of comprehensive income
 For the Six Months EndedJune 30,2007
    
    2006Net income
    
    
    888,782
    
    
    
    23,914Net unrealized income on derivative instruments
    
    
    
    
    
    
    15,996Foreign currency translation adjustment
    
    
    (4,826
    )
    
    
    Total comprehensive income
    
    
    883,956
    
    
    
    39,910
  -6-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Basis of Presentation.
      -7-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Six Months Ended
    
    
    Three Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income  basic and diluted
    
    $
    888,782
    
    
    $
    23,914
    
    
    $
    493,704
    
    
    $
    80,142Denominator  basic:Weighted average number
of common shares
    
    
    11,535,242
    
    
    
    11,128,185
    
    
    
    11,602,176
    
    
    
    11,202,712Basic income per common share
    
    $
    0.08
    
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    0.01Denominator  diluted:Weighted average number
of common shares
    
    
    11,535,242
    
    
    
    11,128,185
    
    
    
    11,602,176
    
    
    
    11,202,712Common share equivalents
of outstanding stock options
    
    
    1,067,952
    
    
    
    954,450
    
    
    
    987,947
    
    
    
    968,663Common share equivalents of
unrecognized compensation expense
    
    
    64,916
    
    
    
    
    
    
    
    63,466
    
    
    
    Weighted average number of
dilutive common equity shares
    
    
    12,668,110
    
    
    
    12,082,635
    
    
    
    12,653,589
    
    
    
    12,171,375Diluted income per
common share
    
    $
    0.07
    
    
    $
    0.00
    
    
    $
    0.04
    
    
    $
    0.01
    -8-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    -9-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  PharmaceuticalContract
    
    CapMed
    
    ConsolidatedServices
    
    Division
    
    TotalFor the three months ended
June 30, 2007Total revenues
    
    $
    11,487,166
    
    
    $
    199,038
    
    
    $
    11,686,204Total cost and expenses
    
    $
    10,398,199
    
    
    $
    614,260
    
    
    $
    11,012,459Income (loss) from operations
    
    $
    1,088,967
    
    
    $
    (415,222
    )
    
    $
    673,745For the three months ended
June 30, 2006Total revenues
    
    $
    10,090,609
    
    
    $
    124,132
    
    
    $
    10,214,741Total cost and expenses
    
    $
    9,733,325
    
    
    $
    463,065
    
    
    $
    10,196,390Income (loss) from operations
    
    $
    357,284
    
    
    $
    (338,933
    )
    
    $
    18,351For the six months ended
June 30, 2007Total revenues
    
    $
    22,428,505
    
    
    $
    333,154
    
    
    $
    22,761,659Total cost and expenses
    
    $
    20,457,484
    
    
    $
    1,128,788
    
    
    $
    21,586,272Income (loss) from operations
    
    $
    1,971,021
    
    
    $
    (795,634
    )
    
    $
    1,175,387For the six months ended
June 30, 2006Total revenues
    
    $
    19,314,345
    
    
    $
    210,147
    
    
    $
    19,524,492Total cost and expenses
    
    $
    18,667,564
    
    
    $
    1,032,640
    
    
    $
    19,700,204Income (loss) from operations
    
    $
    646,781
    
    
    $
    (822,493
    )
    
    $
    (175,712
    )
    -10-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  June 30, 2007
    
    
    December 31, 2006Billed trade accounts receivable
    
    $
    5,183,346
    
    
    $
    4,781,682Unbilled trade accounts receivable
    
    
    1,086,069
    
    
    
    771,818Other
    
    
    11,572
    
    
    
    11,248Total Receivables
    
    $
    6,280,987
    
    
    $
    5,564,748Allowance Rollforward:Balance at January 1, 2007
    
    $
    14,000Additions
    
    
    Write offs (net of recoveries)
    
    
    (14,000
    )Balance at June 30, 2007
    
    $
    
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
       -12-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      
 -13-




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 Overview
 Pharmaceutical Contract Services
     -14-




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.
 CapMed Division
   Forward Looking Statements
  -15-




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Application of Critical Accounting Policies and Estimates
   -16-




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Results of Operations
 Three Months Ended June 30, 2007 and 2006
 ThreeThree Months
    
    
    
    
    
    MonthsEnded
    
    
    
    
    
    EndedJune 30,
    
    % of Total
    
    June 30,
    
    % of Total2007
    
    Revenue
    
    2006
    
    Revenue
    
    $ Change
    
    % ChangeService revenues
    
    $
    9,403,388
    
    
    
    80.5
    %
    
    $
    7,970,354
    
    
    
    78.0
    %
    
    $
    1,433,034
    
    
    
    18.0
    %Reimbursement
revenues
    
    
    2,282,816
    
    
    
    19.5
    %
    
    
    2,244,387
    
    
    
    22.0
    %
    
    
    38,429
    
    
    
    1.7
    %Total revenues
    
    
    11,686,204
    
    
    
    100.0
    %
    
    
    10,214,741
    
    
    
    100.0
    %
    
    
    1,471,463
    
    
    
    14.4
    %Cost and expenses:Cost of revenues
    
    
    7,706,325
    
    
    
    65.9
    %
    
    
    7,363,466
    
    
    
    72.1
    %
    
    
    342,859
    
    
    
    4.7
    %General and
administrative
expenses
    
    
    1,567,145
    
    
    
    13.4
    %
    
    
    1,391,816
    
    
    
    13.6
    %
    
    
    175,329
    
    
    
    12.6
    %Sales and marketing
expenses
    
    
    1,738,989
    
    
    
    14.9
    %
    
    
    1,441,108
    
    
    
    14.1
    %
    
    
    297,881
    
    
    
    20.7
    %Total cost and
expenses
    
    
    11,012,459
    
    
    
    94.2
    %
    
    
    10,196,390
    
    
    
    99.8
    %
    
    
    816,069
    
    
    
    8.0
    %Income from operations
    
    
    673,745
    
    
    
    5.8
    %
    
    
    18,351
    
    
    
    0.2
    %
    
    
    655,394
    
    
    
    3,571.4
    %Interest income
    
    
    155,496
    
    
    
    1.3
    %
    
    
    128,912
    
    
    
    1.3
    %
    
    
    26,584
    
    
    
    20.6
    %Interest expense
    
    
    (6,401
    )
    
    
    (0.1
    )%
    
    
    (13,693
    )
    
    
    (0.1
    )%
    
    
    7,292
    
    
    
    (53.3
    )%Income before
income tax benefit
    
    
    822,840
    
    
    
    7.0
    %
    
    
    133,570
    
    
    
    1.3
    %
    
    
    689,270
    
    
    
    516.0
    %Income tax provision
    
    
    329,136
    
    
    
    2.8
    %
    
    
    53,428
    
    
    
    0.5
    %
    
    
    275,708
    
    
    
    516.0
    %Net income
    
    $
    493,704
    
    
    
    4.2
    %
    
    $
    80,142
    
    
    
    0.8
    %
    
    $
    413,562
    
    
    
    516.0
    %
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Six Months Ended June 30, 2007 and 2006
 Six Months
    
    
    
    
    
    Six MonthsEnded
    
    
    
    
    
    EndedJune 30,
    
    % of Total
    
    June 30,
    
    % of Total2007
    
    Revenue
    
    2006
    
    Revenue
    
    $ Change
    
    % ChangeService revenues
    
    $
    18,162,809
    
    
    
    79.8
    %
    
    $
    15,212,945
    
    
    
    77.9
    %
    
    $
    2,949,864
    
    
    
    19.4
    %Reimbursement
revenues
    
    
    4,598,850
    
    
    
    20.2
    %
    
    
    4,311,547
    
    
    
    22.1
    %
    
    
    287,303
    
    
    
    6.7
    %Total revenues
    
    
    22,761,659
    
    
    
    100.0
    %
    
    
    19,524,492
    
    
    
    100.0
    %
    
    
    3,237,167
    
    
    
    16.6
    %Cost and expenses:Cost of revenues
    
    
    15,247,834
    
    
    
    67.0
    %
    
    
    14,048,306
    
    
    
    72.0
    %
    
    
    1,199,528
    
    
    
    8.5
    %General and
administrative
expenses
    
    
    3,039,423
    
    
    
    13.4
    %
    
    
    2,763,062
    
    
    
    14.2
    %
    
    
    276,361
    
    
    
    10.0
    %Sales and marketing
expenses
    
    
    3,299,015
    
    
    
    14.5
    %
    
    
    2,888,836
    
    
    
    14.8
    %
    
    
    410,179
    
    
    
    14.2
    %Total cost and
expenses
    
    
    21,586,272
    
    
    
    94.9
    %
    
    
    19,700,204
    
    
    
    100.9
    %
    
    
    1,886,068
    
    
    
    9.6
    %Income (loss) from
operations
    
    
    1,175,387
    
    
    
    5.1
    %
    
    
    (175,712
    )
    
    
    (0.9
    )%
    
    
    1,351,099
    
    
    
    (768.9
    )%Interest income
    
    
    316,048
    
    
    
    1.4
    %
    
    
    246,445
    
    
    
    1.3
    %
    
    
    69,603
    
    
    
    28.2
    %Interest expense
    
    
    (10,131
    )
    
    
    0
    %
    
    
    (30,876
    )
    
    
    (0.2
    )%
    
    
    20,745
    
    
    
    (67.2
    )%Income before
income tax benefit
    
    
    1,481,304
    
    
    
    6.5
    %
    
    
    39,857
    
    
    
    0.2
    %
    
    
    1,441,447
    
    
    
    3616.5
    %Income tax provision
    
    
    592,522
    
    
    
    2.6
    %
    
    
    15,943
    
    
    
    0.1
    %
    
    
    576,579
    
    
    
    3616.5
    %Net income
    
    $
    888,782
    
    
    
    3.9
    %
    
    $
    23,914
    
    
    
    0.1
    %
    
    $
    864,868
    
    
    
    3616.5
    %
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-21-




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Business Segments
  -22-




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Liquidity and Capital Resources
 Six Months
    
    Six MonthsEnded
    
    EndedJune 30, 2007
    
    June 30, 2006Net cash provided by operating activities
    
    $
    3,789,304
    
    
    $
    3,522,215Net cash used in investing activities
    
    $
    (5,349,230
    )
    
    $
    (1,041,262
    )Net cash used in financing activities
    
    $
    (123,584
    )
    
    $
    (441,652
    )
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Payments Due By PeriodMoreLess than 1
    
    
    
    
    
    
    
    
    
    than 5Contractual obligations
    
    Total
    
    year
    
    1-3 years
    
    3-5 years
    
    yearsCapital lease obligations
    
    $
    277,983
    
    
    $
    237,433
    
    
    $
    40,550
    
    
    $
    
    
    
    $
    Facility rent operating
leases
    
    $
    5,732,505
    
    
    $
    1,448,577
    
    
    $
    3,188,210
    
    
    $
    1,095,718
    
    
    $
    Employment agreements
    
    $
    698,333
    
    
    $
    475,000
    
    
    $
    223,333
    
    
    $
    
    
    
    $
    Total contractual cash
obligations
    
    $
    6,708,821
    
    
    $
    2,161,010
    
    
    $
    3,452,093
    
    
    $
    1,095,718
    
    
    $
    
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
    
    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.
   
 Changes to Critical Accounting Policies and Estimates
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
 Interest Rate Risk
  Foreign Currency Risk
   
 Item 4T. Controls and Procedures.
 Evaluation of disclosure controls and procedures
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Changes in internal control over financial reporting
 
 PART II. OTHER INFORMATION .
 
 Item 1. Legal Proceedings.
  
 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.
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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.
  
    
    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);
    
    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.
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We have experienced substantial expansion in the past, and if we fail to properly manage that
expansion, our business may suffer.
   
    
    effectively market our services to pharmaceutical, biotechnology and medical device
companies;
    
    continue to improve operating, administrative and information systems;
    
    accurately predict future personnel and resource needs to meet client contract
commitments;
    
    successfully integrate our acquired companies and businesses;
    
    track the progress of on-going client projects; and
    
    attract and retain qualified management, sales, professional and technical operating
personnel.
  
    
    assimilate differences in foreign business practices and regulations;
    
    hire and retain qualified personnel; and
    
    overcome language and cultural barriers.
 We may engage in future acquisitions, which may be expensive and time consuming and from which we
may not realize anticipated benefits.
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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.
  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;
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
    
    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.
   Changes in outsourcing trends in the pharmaceutical and biotechnology industries could adversely
affect our operating results and growth rate.
   Failure to comply with existing regulations could result in increased costs to complete clinical
trials.
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Our CapMed division may not reach profitability.
  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.
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We may be exposed to liability claims as a result of our involvement in clinical trials.
  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
    
    
    11,620,867Common stock issuable upon:Exercise of options which are outstanding
    
    
    1,768,025Exercise of options which have not been granted
    
    
    598,944Total common stock outstanding assuming exercise
or conversion of all of the above
    
    
    13,987,836
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Shares of our common stock eligible for public sale may have a negative impact on its market price.
   There are a limited number of shareholders 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 influence 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.
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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.
  -35-
    Table of Contents    
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
 (a)
    
    Our annual meeting of stockholders was held on May 9, 2007.(b)
    
    The following is a list of all of the nominees for Director of our company
who were elected at the annual meeting and whose term of office continued after the
meeting:
 (i)
    
    Mark L. Weinstein(ii)
    
    Jeffrey H. Berg, Ph.D.(iii)
    
    Richard F. Cimino(iv)
    
    E. Martin Davidoff, CPA, Esq.(v)
    
    David E. Nowicki, D.M.D.(vi)
    
    David M. Stack(vii)
    
    Paula B. Stafford(viii)
    
    James A. Taylor, Ph.D.
 (c)
    
    There were present at the annual meeting, in person or by proxy, 10,522,112
shares of common stock out of a total of 11,582,342 shares of our common stock issued
and outstanding and entitled to vote at the annual meeting.(d)
    
    The results of the vote of the stockholders taken at the annual meeting by
ballot and by proxy as solicited by us on behalf of the board of directors were as
follows:
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(i)
    
    The results of the vote taken at the meeting for the election
of the nominees for our board of directors were as follows:
 Nominee
    
    For
    
    WithheldMark L. Weinstein
    
    
    10,416,459
    
    
    
    105,653Jeffrey H. Berg, Ph.D.
    
    
    10,416,964
    
    
    
    105,148Richard F. Cimino
    
    
    10,425,053
    
    
    
    97,059E. Martin Davidoff, CPA, Esq.
    
    
    10,421,914
    
    
    
    100,198David E. Nowicki, D.M.D.
    
    
    10,423,064
    
    
    
    99,048David M. Stack
    
    
    10,423,064
    
    
    
    99,048Paula B. Stafford
    
    
    10,426,264
    
    
    
    95,848James A. Taylor, Ph.D.
    
    
    10,416,464
    
    
    
    105,648
 (ii)
    
    A vote was taken on the proposal to ratify the appointment of
PricewaterhouseCoopers LLP as our independent registered public accounting firm
for the fiscal year ending December 31, 2007. The results of the vote taken at
the annual meeting with respect to such appointment
were as follows:
 For
    
    Against
    
    Abstain10,460,298
    
    
    60,439
    
    
    
    1,375
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Item 5. Other Information.
  
 Item 6. Exhibits.
 31.1
    
    Certification of principal executive officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed
herewith).31.2
    
    Certification of principal financial and
accounting officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (filed herewith).32.1
    
    Certification of principal executive officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C.
1350 (furnished herewith).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 (furnished herewith).
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BIO-IMAGING TECHNOLOGIES, INC.DATE: August 9, 2007
    
    By:
    
    /s/ Mark L. WeinsteinMark L. Weinstein, President and Chief ExecutiveOfficer (Principal Executive Officer)DATE: August 9, 2007
    
    By:
    
    /s/ Ted I. KaminerTed I. Kaminer, Senior Vice President and ChiefFinancial Officer(Principal Financial and Accounting Officer)
 -39-