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 March 31, 2008
 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. 001-11182
 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(Address of Principal
Executive Offices)
    
    (Zip Code)
 
  þ o
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ  o þ
  Class
    
    Number of SharesCommon Stock, $0.00025 par value
    
    
    14,252,425




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
 PagePART I.
    
    FINANCIAL INFORMATION.Item 1.
    
    Consolidated Financial Statements (unaudited)BALANCE SHEETSas of March 31, 2008 and December 31, 2007
    
    
    2STATEMENTS OF OPERATIONSFor the Three Months Ended March 31, 2008 and 2007
    
    
    3STATEMENTS OF CASH FLOWSFor the Three Months Ended March 31, 2008 and 2007
    
    
    4NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
    
    
    6Item 2.
    
    Managements Discussion and
Analysis of Financial Condition and Results of Operations
    
    
    15Results of Operations
    
    
    19Business Segments
    
    
    22Liquidity and Capital Resources
    
    
    22Changes to Critical Accounting Policies and Estimates
    
    
    24Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4T.
    
    Controls and Procedures
    
    
    25PART II.
    
    OTHER INFORMATION.Item 1.
    
    Legal Proceedings
    
    
    27Item 1A.
    
    Risk Factors
    
    
    27Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 3.
    
    Defaults Upon Senior Securities
    
    
    35Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    35Item 5.
    
    Other Information
    
    
    35Item 6.
    
    Exhibits
    
    
    35SIGNATURES
    
    
    36
 -i-




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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
 March 31,
    
    
    December 31,(in thousands)
    
    2008
    
    
    2007ASSETSCurrent assets:Cash and cash equivalents
    
    $
    11,109
    
    
    $
    17,915Accounts receivable, net
    
    
    11,807
    
    
    
    5,881Prepaid expenses and other current assets
    
    
    1,600
    
    
    
    1,235Deferred income taxes
    
    
    3,033
    
    
    
    2,930Total current assets
    
    
    27,549
    
    
    
    27,961Property and equipment, net
    
    
    9,067
    
    
    
    7,980Intangibles, net
    
    
    2,525
    
    
    
    450Goodwill
    
    
    27,840
    
    
    
    6,025Deferred income taxes
    
    
    108
    
    
    
    Other assets
    
    
    657
    
    
    
    641Total assets
    
    $
    67,746
    
    
    $
    43,057LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    2,836
    
    
    $
    1,864Accrued expenses and other current liabilities
    
    
    5,051
    
    
    
    4,616Deferred revenue
    
    
    17,038
    
    
    
    11,663Current maturities of capital lease obligations
    
    
    114
    
    
    
    97Total current liabilities
    
    
    25,039
    
    
    
    18,240Long-term capital lease obligations
    
    
    101
    
    
    
    Deferred income tax  non-current
    
    
    1,270
    
    
    
    691Other liability
    
    
    617
    
    
    
    597Total liabilities
    
    
    27,027
    
    
    
    19,528Commitments and Contingencies
    
    
    
    
    
    
    Stockholders equity:Preferred stock- $.00025 par value; authorized
3,000,000 shares, 0 issued and outstanding at
March 31, 2008 and at December 31, 2007
    
    
    
    
    
    
    Common stock  $.00025 par value; authorized
18,000,000 shares, issued and outstanding
14,238,300 shares at March 31, 2008 and
11,765,483 shares at December 31, 2007
    
    
    4
    
    
    
    3Additional paid-in capital
    
    
    41,348
    
    
    
    25,084Accumulated deficit
    
    
    (886
    )
    
    
    (1,709
    )Accumulated other comprehensive income
    
    
    253
    
    
    
    151Stockholders equity
    
    
    40,719
    
    
    
    23,529Total liabilities and stockholders equity
    
    $
    67,746
    
    
    $
    43,057
  -2-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 For the Three Months Ended(in thousands, except per share data)
    
    March 31,2008
    
    
    2007Service revenues
    
    $
    11,161
    
    
    $
    8,810Reimbursement revenues
    
    
    3,078
    
    
    
    2,265Total revenues
    
    
    14,239
    
    
    
    11,075Cost and expenses:Cost of service revenues
    
    
    6,324
    
    
    
    5,276Cost of reimbursement revenues
    
    
    3,078
    
    
    
    2,265Sales and marketing expenses
    
    
    2,011
    
    
    
    1,561General and administrative expenses
    
    
    1,673
    
    
    
    1,472Total cost and expenses
    
    
    13,086
    
    
    
    10,574Income from operations
    
    
    1,153
    
    
    
    501Interest income, net
    
    
    153
    
    
    
    157Income before income tax provision
    
    
    1,306
    
    
    
    658Income tax provision
    
    
    483
    
    
    
    263Net income
    
    $
    823
    
    
    $
    395Basic income per common share
    
    $
    0.07
    
    
    $
    0.03Weighted average number of common shares
    
    
    12,021
    
    
    
    11,467Diluted income per common share
    
    $
    0.06
    
    
    $
    0.03Weighted average number of dilutive common
equivalent shares
    
    
    12,964
    
    
    
    12,657
  -3-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Three Months Ended(in thousands)
    
    March 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    823
    
    
    $
    395Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    843
    
    
    
    534Provision for deferred income taxes
    
    
    242
    
    
    
    240Bad debt provision
    
    
    (17
    )
    
    
    Stock based compensation expense
    
    
    145
    
    
    
    75Gain on foreign currency options
    
    
    
    
    
    
    (10
    )Changes in operating assets and liabilities, net of acquisitions:Increase in accounts receivable
    
    
    (795
    )
    
    
    (249
    )(Increase) decrease in prepaid expenses and other current assets
    
    
    (129
    )
    
    
    6Decrease (increase) in other assets
    
    
    15
    
    
    
    (108
    )Decrease (increase) in accounts payable
    
    
    526
    
    
    
    (85
    )Decrease in accrued expenses and other current liabilities
    
    
    (308
    )
    
    
    (385
    )Increase in deferred revenue
    
    
    1,065
    
    
    
    1,760(Decrease) increase in other liabilities
    
    
    (9
    )
    
    
    5Net cash provided by operating activities
    
    
    2,401
    
    
    
    2,178Cash flows from investing activities:Purchases of property and equipment
    
    
    (1,205
    )
    
    
    (902
    )Net cash paid for acquisition
    
    
    (8,257
    )
    
    
    (3,507
    )Net cash used in investing activities
    
    
    (9,462
    )
    
    
    (4,409
    )Cash flows from financing activities:Payments under equipment lease obligations
    
    
    (56
    )
    
    
    (140
    )Excess tax benefit related to stock options
    
    
    63
    
    
    
    Proceeds from exercise of stock options
    
    
    39
    
    
    
    106Net cash provided by (used in) financing activities
    
    
    46
    
    
    
    (34
    )Effect of exchange rate changes on cash
    
    
    209
    
    
    
    6Net decrease in cash and cash equivalents
    
    
    (6,806
    )
    
    
    (2,259
    )Cash and cash equivalents at beginning of period
    
    
    17,915
    
    
    
    16,166Cash and cash equivalents at end of period
    
    $
    11,109
    
    
    $
    13,907Supplemental disclosure of cash flow information:Cash paid during the period for interest
    
    $
    1
    
    
    $
    8Cash paid during the period for income taxes
    
    $
    1,034
    
    
    $
    185
  -4-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Three Months EndedMarch 31,2008
    
    2007Supplemental cash flow disclosure(in thousands)Schedule of non cash investing and financing activities:Increase in property, plant and equipment acquisitions in
accounts payable
    
    $
    64
    
    
    $
    244
 For the Three Months EndedMarch 31,2008
    
    2007Acquired business(in thousands)Accounts receivable
    
    $
    4,926
    
    
    $
    228Prepaid and other current assets
    
    
    258Property and equipment
    
    
    701
    
    
    
    185Other assets
    
    
    37
    
    
    
    52Intangible assets and goodwill
    
    
    23,975
    
    
    
    4,532Net current liabilities assumed
    
    
    (1,062
    )
    
    
    (377
    )Other liabilities assumed
    
    
    (4,474
    )
    
    
    (353
    )Common stock issued
    
    
    (16,104
    )
    
    
    (760
    )Cash paid for acquired business, net of cash acquired of $418
    
    $
    8,257
    
    
    $
    3,507
 For the Three Months EndedMarch 31,2008
    
    2007Statement of comprehensive income(in thousands)Net income
    
    $
    823
    
    
    $
    395Equity adjustment from foreign currency translation
    
    
    253
    
    
    
    Total comprehensive income
    
    $
    1,076
    
    
    $
    395
  -5-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1  Interim Financial Statements:
 Basis of Presentation.
      Functional Currency.
    -6-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 2  Stockholders Equity Rollforward
  Additional
    
    
    
    
    
    
    OtherCommon Stock
    
    
    Paid-in
    
    
    Accumulated
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Income
    
    
    EquityBalance at December 31,
2007
    
    
    11,765
    
    
    $
    3
    
    
    $
    25,084
    
    
    $
    (1,709
    )
    
    $
    151
    
    
    $
    23,529Stock options exercised
    
    
    169
    
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    39Restricted shares issued
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock based compensation
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    59Stock issued for
acquisitions
    
    
    2,288
    
    
    
    1
    
    
    
    16,103
    
    
    
    
    
    
    
    
    
    
    
    16,104Tax benefit on exercise
of stock options
    
    
    
    
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    63Equity adjustment from
foreign currency
translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    102Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    823
    
    
    
    
    
    
    
    823Balance at March 31,
2008
    
    
    14,238
    
    
    $
    4
    
    
    $
    41,348
    
    
    $
    (886
    )
    
    $
    253
    
    
    $
    40,719
 Note 3  Earnings Per Share:
  -7-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Three Months EndedMarch 31,(in thousands, except share data)
    
    2008
    
    
    2007Net income   basic and diluted
    
    $
    823
    
    
    $
    395Denominator  basic:Weighted average number
of common shares
    
    
    12,021
    
    
    
    11,467Basic income per common share
    
    $
    0.07
    
    
    $
    0.03Denominator  diluted:Weighted average number
of common shares
    
    
    12,021
    
    
    
    11,467Common share equivalents
of outstanding stock options
    
    
    815
    
    
    
    1,094Common share equivalents of
unrecognized compensation expense
    
    
    129
    
    
    
    97Weighted average number of
dilutive common equity shares
    
    
    12,965
    
    
    
    12,658Diluted income per
common share
    
    $
    0.06
    
    
    $
    0.03
  Note 4  Commitments and Contingencies:
  -8-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Note 5  Business Segments
  -9-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Pharmaceutical(in thousands)
    
    Contract Services
    
    CapMed Division
    
    Consolidated TotalFor the three months ended
March 31, 2008Total revenues
    
    $
    14,101
    
    
    $
    138
    
    
    $
    14,239Total cost and expenses
    
    $
    12,404
    
    
    $
    682
    
    
    $
    13,086Income (loss) from operations
    
    $
    1,697
    
    
    $
    (544
    )
    
    $
    1,153For the three months ended
March 31, 2007Total revenues
    
    $
    10,941
    
    
    $
    134
    
    
    $
    11,075Total cost and expenses
    
    $
    10,060
    
    
    $
    514
    
    
    $
    10,574Income (loss) from operations
    
    $
    881
    
    
    $
    (380
    )
    
    $
    501
  Note 6  Accounts Receivable and Allowance for Doubtful Accounts
  (in thousands)
    
    March 31, 2008
    
    
    December 31, 2007Billed trade accounts receivable
    
    $
    9,917
    
    
    $
    5,090Unbilled trade accounts receivable
    
    
    1,465
    
    
    
    746Other
    
    
    425
    
    
    
    45Total Receivables
    
    $
    11,807
    
    
    $
    5,881Allowance Rollforward (in thousands):Balance at January 1, 2008
    
    $
    29Additions
    
    
    Write offs (net of recoveries)
    
    
    (17
    )Balance at March 31, 2008
    
    $
    12
 -10-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 7  Income Taxes
       -11-




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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Note 8  Acquisition
 Phoenix Data Systems, Inc. Acquisition
    -12-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Net Working Capital
    
    $
    181Fixed Assets
    
    
    590Other Assets
    
    
    164Other Liabilities
    
    
    (101
    )Software
    
    
    500Trademark
    
    
    50Customer Backlog
    
    
    600Customer Relationships
    
    
    300Non-Compete Agreements
    
    
    100Goodwill, including Workforce
    
    
    21,816Deferred Tax Liabilities
    
    
    579Total Purchase Price
    
    $
    24,779
  Pro Forma Results.
 -13-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Three Months EndedMarch 31,(in thousands)
    
    2008
    
    2007Total revenue
    
    $
    18,697
    
    
    $
    13,372Operating income
    
    
    1,348
    
    
    
    661Net income
    
    
    924
    
    
    
    484Basic net income per share
    
    $
    0.07
    
    
    $
    0.04Diluted net income per share
    
    $
    0.06
    
    
    $
    0.03
 Theralys S.A. Acquisition
  -14-




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##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations.
 Overview
 Pharmaceutical Contract Services
     -15-




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##### 



.
 CapMed Division
   -16-




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##### 



Forward Looking Statements
  Application of Critical Accounting Policies and Estimates
    -17-




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##### 



-18-




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##### 



Results of Operations
 Three Months Ended March 31, 2008 and 2007
 Three
    
    
    
    
    
    ThreeMonths
    
    
    
    
    
    MonthsEnded
    
    
    
    
    
    EndedMarch 31,
    
    % of Total
    
    March 31,
    
    % of Total(in thousands)
    
    2008
    
    Revenue
    
    2007
    
    Revenue
    
    $ Change
    
    % ChangeService revenues
    
    $
    11,161
    
    
    
    78.4
    %
    
    $
    8,810
    
    
    
    79.5
    %
    
    $
    2,351
    
    
    
    26.7
    %Reimbursement
revenues
    
    
    3,078
    
    
    
    21.6
    %
    
    
    2,265
    
    
    
    20.5
    %
    
    
    813
    
    
    
    35.9
    %Total revenues
    
    
    14,239
    
    
    
    100.0
    %
    
    
    11,075
    
    
    
    100.0
    %
    
    
    3,164
    
    
    
    28.6
    %Cost and expenses:Cost of service revenue
    
    
    6,324
    
    
    
    44.4
    %
    
    
    5,276
    
    
    
    47.6
    %
    
    
    1,048
    
    
    
    19.9
    %Cost of reimbursement
revenue
    
    
    3,078
    
    
    
    21.6
    %
    
    
    2,265
    
    
    
    20.5
    %
    
    
    813
    
    
    
    35.9
    %Sales and marketing
expenses
    
    
    2,011
    
    
    
    14.1
    %
    
    
    1,561
    
    
    
    14.1
    %
    
    
    450
    
    
    
    28.8
    %General and administrative
expenses
    
    
    1,673
    
    
    
    11.8
    %
    
    
    1,472
    
    
    
    13.3
    %
    
    
    201
    
    
    
    13.7
    %Total cost and expenses
    
    
    13,086
    
    
    
    91.9
    %
    
    
    10,574
    
    
    
    95.5
    %
    
    
    2,512
    
    
    
    23.8
    %Income from operations
    
    
    1,153
    
    
    
    8.1
    %
    
    
    501
    
    
    
    4.5
    %
    
    
    652
    
    
    
    130.1
    %Interest income
    
    
    153
    
    
    
    1.1
    %
    
    
    161
    
    
    
    1.5
    %
    
    
    (8
    )
    
    
    (5.0
    )%Interest expense
    
    
    
    
    
    
    0.0
    %
    
    
    (4
    )
    
    
    0.0
    %
    
    
    4
    
    
    
    100.0
    %Income before
income tax provision
    
    
    1,306
    
    
    
    9.2
    %
    
    
    658
    
    
    
    5.9
    %
    
    
    648
    
    
    
    98.5
    %Income tax provision
    
    
    483
    
    
    
    3.4
    %
    
    
    263
    
    
    
    2.4
    %
    
    
    220
    
    
    
    83.7
    %Net income
    
    $
    823
    
    
    
    5.8
    %
    
    $
    395
    
    
    
    3.6
    %
    
    $
    428
    
    
    
    108.4
    %
    -19-




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##### 



-20-




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##### 



-21-




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##### 



Business Segments
   Liquidity and Capital Resources
 Three Months
    
    Three MonthsEnded
    
    Ended(in thousands)
    
    March 31, 2008
    
    March 31, 2007Net cash provided by operating activities
    
    $
    2,401
    
    
    $
    2,178Net cash used in investing activities
    
    $
    (9,462
    )
    
    $
    (4,409
    )Net cash provided by (used in) financing activities
    
    $
    46
    
    
    $
    (34
    )
     -22-




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##### 



Payments Due By PeriodLess than 1
    
    
    
    
    
    
    
    
    
    
    More thanContractual obligations
    
    Total
    
    
    year
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 yearsCapital lease obligations
    
    $
    215,000
    
    
    $
    151,000
    
    
    $
    47,000
    
    
    $
    17,000
    
    
    $Facility rent operating
leases
    
    $
    6,094,000
    
    
    $
    2,371,000
    
    
    $
    2,918,000
    
    
    $
    805,000
    
    
    $Employment agreements
    
    $
    564,000
    
    
    $
    564,000
    
    
    $
    
    
    
    $
    
    
    
    $Total contractual cash
obligations
    
    $
    6,873,000
    
    
    $
    3,086,000
    
    
    $
    2,965,000
    
    
    $
    822,000
    
    
    $
     
    
    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.
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Changes to Critical Accounting Policies and Estimates
    -24-




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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.
 -25-




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Changes in internal control over financial reporting
 -26-




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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.
    We depend on a small number of industries and clients for all of our business, and the loss of one
such
 -27-




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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.
  We have experienced substantial expansion in the past, and if we fail to properly manage that
expansion, our business may suffer.
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
    
    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 recently acquired PDS 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.
  -29-




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Our investments may be exposed to credit risk.
  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.
   Changes in outsourcing trends in the pharmaceutical and biotechnology industries could adversely
affect our operating results and growth rate.
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Failure to comply with existing regulations could result in increased costs to complete clinical
trials.
  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.
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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.
  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
    
    
    14,238,300Common stock issuable upon:Exercise of options which are outstanding
    
    
    1,621,229Exercise of options which have not been granted
    
    
    280,378Total common stock outstanding assuming exercise or conversion
of all of the above
    
    
    16,139,907
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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 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 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.
   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
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Item 3. Defaults Upon Senior Securities.
  Item 4. Submission of Matters to a Vote of Security Holders.
  Item 5. Other Information.
  Item 6. Exhibits.
 10.1
    
    Agreement and Plan of Merger, dated March 24,
2008, by and among the Company, Bio-Imaging Acquisition Corporation and
Phoenix Data Systems, Inc. and its Stockholders Representative.
Incorporated by reference to Exhibit 10.1 on our Current Report on Form
8-K/A dated March 24, 2008.31.1
    
    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:   May 13, 2008
    By:
    /s/ Mark L. WeinsteinMark L. Weinstein, President and 
Chief Executive Officer
(Principal Executive Officer)DATE:   May 13, 2008
    By:
    /s/ Ted I. KaminerTed I. Kaminer, Senior Vice President and 
Chief
Financial Officer
(Principal Financial and Accounting Officer) -36-