##### 



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 September 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
  (267) 757-3000
  þ o
  o o þ
  o þ
  Class
    
    Number of SharesCommon Stock, $0.00025 par value
    
    11,696,108




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATION.Item 1. Consolidated Financial Statements (unaudited)
    
    
    1BALANCE SHEETS
as of September 30, 2007 and
December 31, 2006
    
    
    2STATEMENTS OF OPERATIONS
For the Three Months Ended September 30, 2007 and 2006
    
    
    3STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30, 2007 and 2006
    
    
    4STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2007 and 2006
    
    
    5NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of FinancialCondition and Results of Operations
    
    
    15Results of Operations
    
    
    19Business Segments
    
    
    24Liquidity and Capital Resources
    
    
    25Changes to Critical Accounting Policies and Estimates
    
    
    27Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4T. Controls and Procedures
    
    
    28PART II. OTHER INFORMATION.Item 1. Legal Proceedings
    
    
    30Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    39Item 3. Defaults Upon Senior Securities
    
    
    39Item 4. Submission of Matters to a Vote of Security Holders
    
    
    39Item 5. Other Information
    
    
    39Item 6. Exhibits
    
    
    39SIGNATURES
    
    
    40
 - 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
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    14,702,980
    
    
    $
    16,166,264Accounts receivable, net
    
    
    7,359,179
    
    
    
    5,564,748Prepaid expenses and other current assets
    
    
    1,120,860
    
    
    
    1,237,405Deferred income taxes
    
    
    3,188,475
    
    
    
    2,210,800Total current assets
    
    
    26,371,494
    
    
    
    25,179,217Property and equipment, net
    
    
    7,624,611
    
    
    
    5,908,281Intangibles
    
    
    497,941
    
    
    
    354,972Goodwill
    
    
    6,093,466
    
    
    
    1,872,466Deferred income taxes
    
    
    
    
    
    
    272,954Other assets
    
    
    557,220
    
    
    
    519,821Total assets
    
    $
    41,144,732
    
    
    $
    34,107,711LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    1,756,609
    
    
    $
    1,720,481Accrued expenses and other current liabilities
    
    
    4,792,745
    
    
    
    3,334,554Deferred revenue
    
    
    11,689,858
    
    
    
    9,451,219Current maturities of capital lease obligations
    
    
    173,573
    
    
    
    454,458Total current liabilities
    
    
    18,412,785
    
    
    
    14,960,712Long-term capital lease obligations
    
    
    
    
    
    
    97,036Deferred income taxes
    
    
    579,605
    
    
    
    Other liability
    
    
    593,028
    
    
    
    208,208Total liabilities
    
    
    19,585,418
    
    
    
    15,265,956Commitments and Contingencies
    
    
    
    
    
    
    Stockholders equity:Preferred stock- $.00025 par value; authorized
3,000,000 shares, 0 issued and outstanding at
September 30, 2007 and at December 31, 2006
    
    
    
    
    
    
    Common stock  $.00025 par value; authorized
18,000,000 shares, issued and outstanding
11,674,113 shares at September 30, 2007 and
11,309,550 shares at December 31, 2006
    
    
    2,920
    
    
    
    2,827Additional paid-in capital
    
    
    24,053,074
    
    
    
    22,864,390Accumulated deficit
    
    
    (2,506,975
    )
    
    
    (4,042,619
    )Accumulated other comprehensive gain
    
    
    10,295
    
    
    
    17,157Stockholders equity
    
    
    21,559,314
    
    
    
    18,841,755Total liabilities and stockholders equity
    
    $
    41,144,732
    
    
    $
    34,107,711
  -2-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 For the Three Months EndedSeptember 30,2007
    
    
    2006Service revenues
    
    $
    9,563,241
    
    
    $
    8,094,141Reimbursement revenues
    
    
    2,893,342
    
    
    
    2,211,783Total revenues
    
    
    12,456,583
    
    
    
    10,305,924Cost and expenses:Cost of service revenues
    
    
    5,392,924
    
    
    
    4,903,640Cost of reimbursement revenues
    
    
    2,893,342
    
    
    
    2,211,783Sales and marketing expenses
    
    
    1,724,134
    
    
    
    1,358,641General and administrative expenses
    
    
    1,558,060
    
    
    
    1,401,852Total cost and expenses
    
    
    11,568,460
    
    
    
    9,875,916Income from operations
    
    
    888,123
    
    
    
    430,008Interest income
    
    
    168,295
    
    
    
    146,904Interest expense
    
    
    (1,144
    )
    
    
    (10,154
    )Income before income tax provision
    
    
    1,055,274
    
    
    
    566,758Income tax provision
    
    
    408,412
    
    
    
    200,082Net income
    
    $
    646,862
    
    
    $
    366,676Basic income per common share
    
    $
    0.06
    
    
    $
    0.03Weighted average number of common shares
    
    
    11,658,035
    
    
    
    11,213,887Diluted income per common share
    
    $
    0.05
    
    
    $
    0.03Weighted average number of dilutive common
equivalent shares
    
    
    12,677,704
    
    
    
    12,125,613
  -3-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 For the Nine Months EndedSeptember 30,2007
    
    
    2006Service revenues
    
    $
    27,829,986
    
    
    $
    23,452,033Reimbursement revenues
    
    
    7,388,256
    
    
    
    6,378,383Total revenues
    
    
    35,218,242
    
    
    
    29,830,416Cost and expenses:Cost of service revenues
    
    
    16,145,845
    
    
    
    14,785,346Cost of reimbursement revenues
    
    
    7,388,256
    
    
    
    6,378,383Sales and marketing expenses
    
    
    5,023,149
    
    
    
    4,247,477General and administrative expenses
    
    
    4,597,481
    
    
    
    4,164,914Total cost and expenses
    
    
    33,154,731
    
    
    
    29,576,120Income from operations
    
    
    2,063,511
    
    
    
    254,296Interest income
    
    
    484,343
    
    
    
    393,349Interest expense
    
    
    (11,276
    )
    
    
    (41,030
    )Income before income tax provision
    
    
    2,536,578
    
    
    
    606,615Income tax provision
    
    
    1,000,934
    
    
    
    215,472Net income
    
    $
    1,535,644
    
    
    $
    391,143Basic income per common share
    
    $
    0.13
    
    
    $
    0.03Weighted average number of common shares
    
    
    11,576,638
    
    
    
    11,197,985Diluted income per common share
    
    $
    0.12
    
    
    $
    0.03Weighted average number of dilutive common
equivalent shares
    
    
    12,669,302
    
    
    
    12,121,454
  -4-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Nine Months EndedSeptember 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    1,535,644
    
    
    $
    391,143Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    1,721,584
    
    
    
    1,535,422Benefit for deferred income taxes
    
    
    (125,116
    )
    
    
    (274,874
    )Bad debt benefit
    
    
    
    
    
    
    1,245Non-cash stock based compensation expense
    
    
    365,398
    
    
    
    200,630(Gain) loss on foreign currency options
    
    
    (10,398
    )
    
    
    51,656Changes in operating assets and liabilities, net of acquisitions:(Increase) decrease in accounts receivable
    
    
    (1,597,389
    )
    
    
    884,520Decrease (increase) in prepaid expenses and other current assets
    
    
    81,018
    
    
    
    (81,104
    )Decrease (increase) in other assets
    
    
    44,801
    
    
    
    (68,943
    )Decrease in accounts payable
    
    
    (135,399
    )
    
    
    (665,486
    )Increase in accrued expenses and other current liabilities
    
    
    1,224,114
    
    
    
    837,025Increase in deferred revenue
    
    
    2,096,872
    
    
    
    2,613,393Increase in other liabilities
    
    
    18,881
    
    
    
    5,214Net cash provided by operating activities
    
    
    5,220,010
    
    
    
    5,429,841Cash flows from investing activities:Purchases of property and equipment
    
    
    (2,959,666
    )
    
    
    (1,627,672
    )Cash paid for acquisition, net of cash acquired
    
    
    (3,565,725
    )
    
    
    Net cash used in investing activities
    
    
    (6,525,391
    )
    
    
    (1,627,672
    )Cash flows from financing activities:Payments under equipment lease obligations
    
    
    (377,921
    )
    
    
    (694,648
    )Premium paid for foreign currency options
    
    
    
    
    
    
    (14,077
    )Proceeds from exercise of stock options
    
    
    220,018
    
    
    
    62,279Net cash used in financing activities
    
    
    (157,903
    )
    
    
    (646,446
    )Net (decrease) increase in cash and cash equivalents
    
    
    (1,463,284
    )
    
    
    3,155,723Cash and cash equivalents at beginning of period
    
    
    16,166,264
    
    
    
    10,553,668Cash and cash equivalents at end of period
    
    $
    14,702,980
    
    
    $
    13,709,391
  -5-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Supplemental cash flow disclosure
  For the Nine Months EndedSeptember 30,2007
    
    2006Increase in property, plant and equipment acquisitions in
accounts payable
    
    $
    88,434
    
    
    $
    198,439
 Acquired business
 For the Nine Months EndedSeptember 30,2007
    
    2006Accounts receivable
    
    $
    227,767
    
    
    
    Property and equipment
    
    
    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 Nine Months EndedSeptember 30,2007
    
    2006Net income
    
    $
    1,535,644
    
    
    $
    391,143Net unrealized income on derivative instruments
    
    
    
    
    
    
    (8,191
    )Equity adjustment from foreign currency translation
    
    
    10,295
    
    
    
    Total comprehensive income
    
    $
    1,545,939
    
    
    $
    382,952
  -6-




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##### 



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




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  -8-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Nine Months Ended
    
    
    Three Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income  basic and diluted
    
    $
    1,535,644
    
    
    $
    391,143
    
    
    $
    646,862
    
    
    $
    366,676Denominator  basic:Weighted average number
of common shares
    
    
    11,576,638
    
    
    
    11,197,985
    
    
    
    11,658,035
    
    
    
    11,213,887Basic income per common share
    
    $
    0.13
    
    
    $
    0.03
    
    
    $
    0.06
    
    
    $
    0.03Denominator  diluted:Weighted average number
of common shares
    
    
    11,576,638
    
    
    
    11,197,985
    
    
    
    11,658,035
    
    
    
    11,213,887Common share equivalents
of outstanding stock options
    
    
    1,025,897
    
    
    
    923,469
    
    
    
    950,320
    
    
    
    911,726Common share equivalents of
unrecognized compensation expense
    
    
    66,767
    
    
    
    
    
    
    
    69,349
    
    
    
    Weighted average number of
dilutive common equity shares
    
    
    12,669,302
    
    
    
    12,121,454
    
    
    
    12,677,704
    
    
    
    12,125,613Diluted income per
common share
    
    $
    0.12
    
    
    $
    0.03
    
    
    $
    0.05
    
    
    $
    0.03
    -9-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    -10-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  PharmaceuticalContract
    
    
    CapMed
    
    
    ConsolidatedServices
    
    
    Division
    
    
    TotalFor the three months ended
September 30, 2007Total revenues
    
    $
    12,393,906
    
    
    $
    62,677
    
    
    $
    12,456,583Total cost and expenses
    
    $
    10,828,548
    
    
    $
    739,912
    
    
    $
    11,568,460Income (loss) from operations
    
    $
    1,565,358
    
    
    $
    (677,235
    )
    
    $
    888,123For the three months ended
September 30, 2006Total revenues
    
    $
    10,285,894
    
    
    $
    20,030
    
    
    $
    10,305,924Total cost and expenses
    
    $
    9,488,345
    
    
    $
    387,571
    
    
    $
    9,875,916Income (loss) from operations
    
    $
    797,549
    
    
    $
    (367,541
    )
    
    $
    430,008For the nine months ended
September 30, 2007Total revenues
    
    $
    34,822,411
    
    
    $
    395,831
    
    
    $
    35,218,242Total cost and expenses
    
    $
    31,321,419
    
    
    $
    1,833,312
    
    
    $
    33,154,731Income (loss) from operations
    
    $
    3,500,992
    
    
    $
    (1,437,481
    )
    
    $
    2,063,511For the nine months ended
September 30, 2006Total revenues
    
    $
    29,600,239
    
    
    $
    230,177
    
    
    $
    29,830,416Total cost and expenses
    
    $
    28,154,036
    
    
    $
    1,422,084
    
    
    $
    29,576,120Income (loss) from operations
    
    $
    1,446,203
    
    
    $
    (1,191,907
    )
    
    $
    254,296
   -11-




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  September 30, 2007
    
    
    December 31, 2006Billed trade accounts receivable
    
    $
    5,681,280
    
    
    $
    4,781,682Unbilled trade accounts receivable
    
    
    1,658,364
    
    
    
    771,818Other
    
    
    19,535
    
    
    
    11,248Total Receivables
    
    $
    7,359,179
    
    
    $
    5,564,748Allowance Rollforward:Balance at January 1, 2007
    
    $
    14,000Additions
    
    
    Write offs (net of recoveries)
    
    
    (14,000
    )Balance at September 30, 2007
    
    $
    0
    -12-




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##### 



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




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##### 



BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
      -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
   Forward Looking Statements
  -16-




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##### 



Application of Critical Accounting Policies and Estimates
    -17-




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##### 



-18-




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##### 



Results of Operations
 Three Months Ended September 30, 2007 and 2006
 ThreeThree Months
    
    
    
    
    
    MonthsEnded
    
    
    
    
    
    EndedSeptember 30,
    
    % of Total
    
    September 30,
    
    % of Total2007
    
    Revenue
    
    2006
    
    Revenue
    
    $ Change
    
    % ChangeService revenues
    
    $
    9,563,241
    
    
    
    76.8
    %
    
    $
    8,094,141
    
    
    
    78.5
    %
    
    $
    1,469,100
    
    
    
    18.2
    %Reimbursement
revenues
    
    
    2,893,342
    
    
    
    23.2
    %
    
    
    2,211,783
    
    
    
    21.5
    %
    
    
    681,559
    
    
    
    30.8
    %Total revenues
    
    
    12,456,583
    
    
    
    100.0
    %
    
    
    10,305,924
    
    
    
    100.0
    %
    
    
    2,150,659
    
    
    
    20.9
    %Cost and expenses:Cost of service
revenue
    
    
    5,392,924
    
    
    
    43.3
    %
    
    
    4,903,640
    
    
    
    47.6
    %
    
    
    489,284
    
    
    
    10.0
    %Cost of
reimbursement
revenue
    
    
    2,893,342
    
    
    
    23.2
    %
    
    
    2,211,783
    
    
    
    21.5
    %
    
    
    681,559
    
    
    
    30.8
    %Sales and
marketing expenses
    
    
    1,724,134
    
    
    
    13.8
    %
    
    
    1,358,641
    
    
    
    13.2
    %
    
    
    365,493
    
    
    
    26.9
    %General and
administrative
expenses
    
    
    1,558,060
    
    
    
    12.5
    %
    
    
    1,401,852
    
    
    
    13.6
    %
    
    
    156,208
    
    
    
    11.1
    %Total cost and expenses
    
    
    11,568,460
    
    
    
    92.9
    %
    
    
    9,875,916
    
    
    
    95.9
    %
    
    
    1,692,544
    
    
    
    17.1
    %Income from operations
    
    
    888,123
    
    
    
    7.1
    %
    
    
    430,008
    
    
    
    4.2
    %
    
    
    458,115
    
    
    
    106.5
    %Interest income
    
    
    168,295
    
    
    
    1.4
    %
    
    
    146,904
    
    
    
    1.4
    %
    
    
    21,391
    
    
    
    14.6
    %Interest expense
    
    
    (1,144
    )
    
    
    (0.0
    )%
    
    
    (10,154
    )
    
    
    (0.1
    )%
    
    
    9,010
    
    
    
    (88.7
    )%Income before
income tax provision
    
    
    1,055,274
    
    
    
    8.5
    %
    
    
    566,758
    
    
    
    5.5
    %
    
    
    488,516
    
    
    
    86.2
    %Income tax provision
    
    
    408,412
    
    
    
    3.3
    %
    
    
    200,082
    
    
    
    1.9
    %
    
    
    208,330
    
    
    
    104.1
    %Net income
    
    $
    646,862
    
    
    
    5.2
    %
    
    $
    366,676
    
    
    
    3.6
    %
    
    $
    280,186
    
    
    
    76.4
    %
   -19-




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##### 



-20-




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##### 



-21-




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##### 



Nine Months Ended September 30, 2007 and 2006
 Nine Months
    
    
    
    
    
    Nine MonthsEnded
    
    
    
    
    
    EndedSeptember 30,
    
    % of Total
    
    September 30,
    
    % of Total2007
    
    Revenue
    
    2006
    
    Revenue
    
    $ Change
    
    % ChangeService revenues
    
    $
    27,829,986
    
    
    
    79.0
    %
    
    $
    23,452,033
    
    
    
    78.6
    %
    
    $
    4,377,953
    
    
    
    18.7
    %Reimbursement
revenues
    
    
    7,388,256
    
    
    
    21.0
    %
    
    
    6,378,383
    
    
    
    21.4
    %
    
    
    1,009,873
    
    
    
    15.8
    %Total revenues
    
    
    35,218,242
    
    
    
    100.0
    %
    
    
    29,830,416
    
    
    
    100.0
    %
    
    
    5,387,826
    
    
    
    18.1
    %Cost and expenses:Cost of service
revenue
    
    
    16,145,845
    
    
    
    45.8
    %
    
    
    14,785,346
    
    
    
    49.6
    %
    
    
    1,360,499
    
    
    
    9.2
    %Cost of reimbursement
revenue
    
    
    7,388,256
    
    
    
    21.0
    %
    
    
    6,378,383
    
    
    
    21.4
    %
    
    
    1,009,873
    
    
    
    15.8
    %Sales and
marketing expenses
    
    
    5,023,149
    
    
    
    14.3
    %
    
    
    4,247,477
    
    
    
    14.2
    %
    
    
    775,672
    
    
    
    18.3
    %General and
administrative
expenses
    
    
    4,597,481
    
    
    
    13.1
    %
    
    
    4,164,914
    
    
    
    14.0
    %
    
    
    432,567
    
    
    
    10.4
    %Total cost and expenses
    
    
    33,154,731
    
    
    
    94.1
    %
    
    
    29,576,120
    
    
    
    99.1
    %
    
    
    3,578,611
    
    
    
    12.1
    %Income (loss) from
operations
    
    
    2,063,511
    
    
    
    5.9
    %
    
    
    254,296
    
    
    
    0.9
    %
    
    
    1,809,215
    
    
    
    711.5
    %Interest income
    
    
    484,343
    
    
    
    1.4
    %
    
    
    393,349
    
    
    
    1.3
    %
    
    
    90,994
    
    
    
    23.1
    %Interest expense
    
    
    (11,276
    )
    
    
    (0.0
    )%
    
    
    (41,030
    )
    
    
    (0.1
    )%
    
    
    29,754
    
    
    
    (72.5
    )%Income before
income tax provision
    
    
    2,536,578
    
    
    
    7.2
    %
    
    
    606,615
    
    
    
    2.0
    %
    
    
    1,929,963
    
    
    
    318.2
    %Income tax provision
    
    
    1,000,934
    
    
    
    2.8
    %
    
    
    215,472
    
    
    
    0.7
    %
    
    
    758,462
    
    
    
    364.5
    %Net income
    
    $
    1,535,644
    
    
    
    4.4
    %
    
    $
    391,143
    
    
    
    1.3
    %
    
    $
    1,144,501
    
    
    
    292.6
    %
   -22-




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##### 



-23-




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##### 



Business Segments
    -24-




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##### 



Liquidity and Capital Resources
 Nine Months
    
    Nine MonthsEnded
    
    EndedSeptember 30, 2007
    
    September 30, 2006Net cash provided by operating activities
    
    $
    5,220,010
    
    
    $
    5,429,841Net cash used in investing activities
    
    $
    (6,525,391
    )
    
    $
    (1,627,672
    )Net cash used in financing activities
    
    $
    (157,903
    )
    
    $
    (646,446
    )
     -25-




---



##### 



Payments Due By PeriodMoreLess than 1
    
    
    
    
    
    
    
    
    
    
    than 5Contractual obligations
    
    Total
    
    
    year
    
    
    1-3 years
    
    
    3-5 years
    
    
    yearsCapital lease obligations
    
    $
    173,573
    
    
    $
    173,573
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0Facility rent operating
leases
    
    $
    5,373,539
    
    
    $
    1,483,942
    
    
    $
    2,890,560
    
    
    $
    999,037
    
    
    $
    0Employment agreements
    
    $
    554,583
    
    
    $
    415,000
    
    
    $
    139,583
    
    
    $
    0
    
    
    $
    0Total contractual cash
obligations
    
    $
    6,101,695
    
    
    $
    2,072,515
    
    
    $
    3,030,143
    
    
    $
    999,037
    
    
    $
    0
       -26-




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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
  -27-




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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.
 -28-




---



##### 



Remediation of Material Weakness.
 Changes in internal control over financial reporting
 -29-




---



##### 



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.
    -30-




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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.
  -31-




---



##### 



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.
   -32-




---



##### 



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;
    
    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;
 -33-




---



##### 




    
    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.
  -34-




---



##### 



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.
  -35-




---



##### 



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
    
    
    11,674,113Common stock issuable upon:Exercise of options which are outstanding
    
    
    1,734,379Exercise of options which have not been granted
    
    
    585,344Total common stock outstanding assuming exercise
or conversion of all of the above
    
    
    13,993,836
  -36-




---



##### 



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.
  -37-




---



##### 



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.
   -38-




---



##### 



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.
  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).
 -39-




---



##### 



BIO-IMAGING TECHNOLOGIES, INC.DATE: November 14, 2007
    
    By:
    
    /s/ Mark L. WeinsteinMark L. Weinstein, President and Chief Executive
Officer (Principal Executive Officer)DATE: November 14, 2007
    
    By:
    
    /s/ Ted I. KaminerTed I. Kaminer, Senior Vice President and Chief
Financial Officer(Principal Financial and Accounting Officer)
 -40-