U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                 ---------------

                                   FORM 10-QSB

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2002
                           Commission File No. 1-11182


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


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


826 Newtown-Yardley Road, Newtown, Pennsylvania                       18940-1721
--------------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                                 (267) 757-1360
                                 --------------
                           (Issuer's Telephone Number,
                              Including Area Code)


     Check  whether  the Issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports),  and (2) has been subject to such filing  requirements for the past 90
days.

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


     State the number of shares  outstanding of each of the Issuer's  classes of
common stock, as of March 31, 2002:

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

Common Stock, $0.00025 par value                                    8,308,810

           Transitional Small Business Disclosure Format (check one):

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


<PAGE>

                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------


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

                                                                          Page
                                                                          ----

PART I. FINANCIAL INFORMATION.

     Item 1. Financial Statements.......................................   1

          CONSOLIDATED BALANCE SHEETS
          as of March 31, 2002 and
          December 31, 2001 (unaudited).................................   2

          CONSOLIDATED STATEMENTS OF INCOME
          For the Three Months Ended March 31, 2002 and 2001
          (unaudited)...................................................   3

          CONSOLIDATED STATEMENTS OF CASH FLOWS
          For the Three Months Ended March 31, 2002 and 2001
          (unaudited)...................................................   4

          NOTES TO CONSOLIDATED FINANCIAL
          STATEMENTS (unaudited)........................................   5

     Item 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations........................  13

          Results of Operations.........................................  16

          Liquidity and Capital Resources...............................  19

          Critical Accounting Policies, Estimates and Risks.............  22

PART II. OTHER INFORMATION.

     Item 4. Submission of Matters to a Vote of Security Holders........  24

     Item 6. Exhibits and Reports on Form 8-K...........................  26

SIGNATURES..............................................................  27



                                      -i-
<PAGE>

                         PART I. FINANCIAL INFORMATION.
                         ------------------------------

ITEM 1. FINANCIAL STATEMENTS.

     Certain  information  and footnote  disclosures  required  under  generally
accepted accounting principles have been condensed or omitted from the following
consolidated  financial  statements pursuant to the rules and regulations of the
Securities and Exchange Commission, although Bio-Imaging Technologies, Inc. (the
"Company")  believes that such  financial  disclosures  are adequate so that the
information  presented is not misleading in any material respect.  The following
consolidated  financial  statements  should  be read  in  conjunction  with  the
year-end  consolidated  financial  statements and notes thereto  included in the
Company's  Annual Report on Form 10-KSB for the fiscal year ended  September 30,
2001.

     On November 6, 2001, the Company's Board of Directors  approved a change in
the Company's  annual reporting period from a fiscal year ending September 30 to
December 31. Accordingly,  the 2002 fiscal year commenced on January 1, 2002 and
will end on December 31,  2002,  and the fiscal  quarters  will end on March 31,
2002, June 30, 2002, September 30, 2002 and December 31, 2002.

     The results of operations for the interim periods  presented herein are not
necessarily indicative of the results to be expected for the entire fiscal year.





                                      -1-
<PAGE>

                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                        March 31,           December 31,
                                                                          2002                 2001
                                                                     --------------      ---------------

                                                   ASSETS
Current assets:
<S>                                                               <C>                   <C>
   Cash and cash equivalents................................      $         433,503     $        499,710
   Accounts receivable, net.................................              3,423,483            3,447,155
   Prepaid expenses and other current assets................                393,259              274,313
   Deferred income taxes....................................                417,000              417,000
                                                                     --------------       --------------
     Total current assets...................................              4,667,245            4,638,178

Property and equipment, net.................................              2,290,903            2,111,360

Other assets ...............................................                297,800              225,524
                                                                     --------------       --------------

     Total assets...........................................      $       7,255,948      $     6,975,062
                                                                     ==============      ===============

                                    LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable.........................................       $        621,230     $        605,057
   Accrued expenses and other current liabilities...........                553,960              445,134
   Deferred revenue.........................................              1,583,535            1,711,972
   Current maturities of long-term debt and other current
    liabilities.............................................                335,093              343,201
                                                                     --------------       --------------

     Total current liabilities..............................              3,093,818            3,105,364
Long-term debt and other liabilities........................              1,484,170            1,508,705
                                                                     --------------       --------------
     Total liabilities......................................              4,577,988            4,614,069
                                                                     --------------       --------------

Commitments and contingencies

Stockholders' equity:
   Common stock - $.00025 par value; authorized
    18,000,000 shares, issued and outstanding
    8,308,810 shares at March 31, 2002
    and 8,278,141 shares at December 31, 2001...............                  2,083                2,070

   Additional paid-in capital...............................              9,307,055            9,286,871
   Accumulated deficit......................................             (6,631,178)          (6,927,948)
                                                                     --------------       --------------
     Stockholders' equity...................................              2,677,960            2,360,993
                                                                     --------------       --------------

     Total liabilities and stockholders' equity.............       $      7,255,948     $      6,975,062
                                                                     ==============       ==============
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -2-
<PAGE>

                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                        CONSOLIDATED STATEMENTS OF INCOME
                        ---------------------------------
                                   (unaudited)


                                                      For the Three Months Ended
                                                               March 31,
                                                      --------------------------
                                                      2002                  2001
                                                      ----                  ----


Service revenues.................................   $ 3,872,845     $  2,132,694

Reimbursement revenues...........................       870,262          413,645
                                                     ----------      -----------

Total revenues...................................     4,743,107        2,546,339
                                                     ----------      -----------
Cost and expenses:

    Cost of revenues.............................     3,397,071        1,467,828

    General and administrative expenses..........       592,130          445,279

    Sales and marketing expenses.................       416,032          413,044
                                                     ----------       ----------

         Total cost and expenses.................     4,405,233        2,326,151
                                                     ----------       ----------

         Income from operations..................       337,874          220,188

Interest expense - net...........................       (18,633)         (1,006)
                                                     -----------      ----------

         Income before income tax provision......       319,241          219,182

Income tax provision.............................        22,471               --
                                                     ----------       ----------

         Net income applicable to common stock...   $   296,770       $  219,182
                                                     ==========       ==========

Basic earnings per common share..................   $      0.04       $     0.03
                                                     ==========       ==========

Weighted average number of common shares.........     8,292,565        8,190,545
                                                     ==========       ==========

Diluted earnings per common share.................  $      0.03       $     0.03
                                                     ==========       ==========

Weighted average number of common
  shares and dilutive common equivalent shares....    9,904,006        8,307,506
                                                     ==========       ==========


                 See Notes to Consolidated Financial Statements


                                      -3-
<PAGE>

                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                    For the Three Months Ended
                                                                                            March 31,
                                                                                    --------------------------
                                                                                     2002                 2001
                                                                                     ----                 ----
<S>                                                                              <C>                <C>
Cash flows from operating activities:
   Net income..........................................................          $ 296,770          $  219,182
   Adjustments to reconcile net income to net cash provided by
     (used in) operating activities:
     Depreciation and amortization.....................................            203,627             131,113
     Changes in operating assets and liabilities:
       Decrease (increase) in accounts receivable......................             23,672            (484,338)
       (Increase) decrease in prepaid expenses and other current
       assets..........................................................           (118,946)             24,210
       (Increase) decrease in other assets.............................            (80,058)              5,120
       Increase in accounts payable....................................             16,173                  61
       Increase in accrued expenses and other
          current liabilities..........................................            108,826             148,879
       Decrease in deferred revenue....................................           (128,437)            (50,204)
                                                                                -----------           ---------
       Net cash provided by (used in) operating activities.............            321,627              (5,977)
                                                                                -----------           ---------
Cash flows from investing activities:
   Purchases of property and equipment.................................           (314,660)            (56,748)
                                                                                -----------          ----------
       Net cash used in investing activities...........................           (314,660)            (56,748)
                                                                                -----------          ----------
Cash flows from financing activities:
   Payments under equipment lease obligations..........................            (51,704)            (37,176)
   Payments under promissory note......................................            (41,667)                 --
   Proceeds from exercise of stock options.............................             20,197                  --
                                                                                -----------           ---------
       Net cash used in financing activities...........................            (73,174)            (37,176)
                                                                                -----------           ---------

Net decrease in cash and cash equivalents..............................            (66,207)            (99,901)
Cash and cash equivalents at beginning of period.......................            499,710             661,155
                                                                                -----------           ---------

Cash and cash equivalents at end of period.............................          $ 433,503          $   561,254
                                                                                ===========           =========

Supplemental schedule of noncash investing and financing
activities:
  Equipment purchased under capital lease obligations..................         $   60,728          $        --
                                                                                ===========           =========
</TABLE>

                 See Notes to Consolidated Financial Statements


                                      -4-
<PAGE>
                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

Note 1 - Basis of Presentation:

     The financial statements included herein have been prepared by the Company,
without  audit,  pursuant to the rules and  regulations  of the  Securities  and
Exchange  Commission.  Certain  information  and footnote  disclosures  normally
included in financial  statements prepared in accordance with generally accepted
accounting  principles  in the United  States of America have been  condensed or
omitted pursuant to such rules and  regulations.  These  consolidated  financial
statements  should  be read  in  conjunction  with  the  consolidated  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-KSB for the year ended September 30, 2001.

     On November 6, 2001, the Company's Board of Directors  approved a change in
the Company's  annual reporting period from a fiscal year ending September 30 to
December 31. Accordingly,  the 2002 fiscal year commenced on January 1, 2002 and
will end on December 31,  2002,  and the fiscal  quarters  will end on March 31,
2002, June 30, 2002, September 30, 2002 and December 31, 2002.

     In the  opinion of the  Company's  management  the  accompanying  unaudited
consolidated financial statements contain all adjustments,  consisting solely of
those which are of a normal recurring nature,  necessary for a fair presentation
of its  financial  position as of March 31, 2002 and  December  31, 2001 and the
results of its  operations  and its cash flows for the three  months ended March
31, 2002 and 2001.

     Certain  reclassifications  have been made to the  prior  period  financial
statements in order to conform to the current period financial statements.

     Interim  results  are not  necessarily  indicative  of results for the full
fiscal year.

     Service  revenues are recognized over the contractual term of the Company's
customer  contracts  using the  percentage-of-completion  method  based on costs
incurred as a percentage of total estimated  costs.  Service  revenues are first
recognized when the Company has a signed contract from the customer,  with fixed
or determinable  fees and for which  collectability is reasonably  assured.  Any
change to recognized service revenue as a result of revisions to estimated total
costs are recognized in the period the estimate changes.  Direct and incremental
costs  incurred at the outset of an arrangement  that are directly  related to a
customer  contract  are  deferred,  so long as their  recoverability  from  that
contract is probable.  Deferred  costs are expensed upon  recognition of revenue
associated with the contract.

     In addition,  the Emerging  Issues Task Force  recently  issued  accounting
pronouncement  EITF 01-14,  which states that fees  reimbursed by customers on a
pass-through basis, should be recorded as revenue. Historically, the Company had
offset  such  reimbursements  against  the related  expenses.  The  consolidated
statement  of  income  for the  three  months  ended  March  31,


                                      -5-
<PAGE>
                BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

2001 has been  reclassified to conform to the current year's  presentation.  For
the three months ended March 31, 2002 and 2001,  the Company  recorded  $870,262
and $413,645 of reimbursed revenues, respectively.

     In June 2001, the Financial Accounting Standards Board issued Statements of
Financial  Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible
Assets," which establishes accounting and reporting standards governing goodwill
and intangible assets. SFAS No. 142 states that goodwill is no longer subject to
amortization over its estimated useful life. Rather, goodwill will be subject to
at least an annual  assessment  for  impairment  by applying a fair-value  based
test.  Under the new rules,  an acquired  intangible  asset should be separately
recognized and amortized over its useful life (unless an indefinite life) if the
benefit of the intangible asset is obtained  through  contractual or other legal
rights, or if the intangible asset can be sold, transferred, licensed, rented or
exchanged regardless of the acquirer's intent to do so. The Company adopted this
standard on January 1, 2002,  at which time the Company  ceased to amortize  its
existing  goodwill and intangible  assets.  The adoption of SFAS No. 142 did not
have a material  effect on the Company's  consolidated  results of operations or
financial position.

     In August 2001, the Financial  Accounting  Standards  Board issued SFAS No.
144, "Accounting for the Impairment or Disposal of Long-Lived Assets",  which is
effective  for fiscal years  beginning  after  December 15, 2001,  and addresses
financial  accounting and reporting for the impairment or disposal of long-lived
assets. This statement supersedes SFAS No. 121 "Accounting for the Impairment of
Long-Lived  Assets  and  for  Long-Lived  Assets  to Be  Disposed  Of,"  and the
accounting and reporting  provisions of Accounting  Principles Board Opinion No.
30,  "Reporting the Results of Operations - Reporting the Effects of Disposal of
a Segment of a Business,  and Extraordinary,  Unusual and Infrequently Occurring
Events and  Transactions,"  for the  disposal  of a segment of a  business.  The
Company  adopted this standard on January 1, 2002.  The adoption of SFAS No. 144
did  not  have a  material  effect  on the  Company's  consolidated  results  of
operations or financial position.

Note 2 - Earnings Per Share:

     Basic  earnings  per common share for the three months ended March 31, 2002
and  2001  was  calculated  based  upon  the  net  income  available  to  common
stockholders  divided by the weighted  average number of shares of common stock,
$0.00025 par value (the "Common Stock"),  outstanding during the period. Diluted
earnings  per share  for the  three  months  ended  March 31,  2002 and 2001 was
calculated based upon net income available to common stockholders divided by the
weighted average number of shares of Common Stock outstanding during the period,
adjusted for dilutive securities using the treasury method.


                                      -6-
<PAGE>
                BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

     The computation of basic earnings per common share and diluted earnings per
common share were as follows:

                                                           Three Months Ended
                                                                 March 31,
                                                          ----------------------
                                                            2002          2001
                                                          --------       -------

      Net income applicable
         to common stock - basic....................    $  296,770     $ 219,182
                                                        ----------     ---------

      Interest expense on convertible note..........        19,602            --
                                                        ----------     ---------

      Net income applicable
         to common stock - diluted..................    $  316,372     $ 219,182
                                                        ----------     ---------
      Denominator-Basic:

      Weighted average number of common
        shares......................................     8,292,565     8,190,545

        Basic earnings per common share.............   $      0.04    $     0.03
                                                       ===========     =========

        Denominator-Diluted:

        Weighted average number of
           common shares............................     8,292,565     8,190,545

        Common share equivalents of
           outstanding stock options and
           warrants.................................       551,300       116,961

        Common share equivalents related to the
           convertible promissory note..............     1,060,141            --
                                                       -----------     ---------

        Weighted average number of common
           shares and dilutive common equivalent
           shares...................................     9,904,006     8,307,506
                                                       -----------     ---------

        Diluted earnings per common share...........  $       0.03    $     0.03
                                                       ===========     =========

     As of March 31,  2002 and 2001,  332,000  and  955,250  stock  options  and
warrants,  respectively,  have been  excluded  from the  calculation  of diluted
earnings per common share as they are antidilutive.


                                      -7-
<PAGE>

                BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

Note 3 - Long-term Debt:

     On April 30, 2002,  the Company  entered into an  agreement  with  Wachovia
Bank,  National  Association  ("Wachovia")  for a committed line of credit up to
$1,000,000  collateralized  by the  Company's  assets.  Interest  is  payable at
Wachovia's Prime Rate plus 0.5%. The agreement requires the Company, among other
things,  to maintain a debt service  coverage  ratio of not less than 1.25 to 1,
measured annually.  The committed line of credit matures May 31, 2003 and may be
renewed on an annual basis.

     In December 1999, the Company entered into an accounts receivable financing
agreement with Silicon Valley Bank ("Silicon Valley Bank"),  whereby the Company
may assign up to $500,000  of eligible  accounts  receivable  to Silicon  Valley
Bank.  In March  2000,  Silicon  Valley Bank  increased  the  eligible  accounts
receivable to $1,000,000.  Under the agreement,  Silicon Valley Bank may advance
the Company up to 80% of the assigned accounts  receivable amount.  Although the
agreement is  contractually  renewable  each year,  it is  cancelable by Silicon
Valley  Bank at any time.  During the three  months  ended March 31,  2002,  the
Company did not assign any accounts  receivable to Silicon Valley Bank. At March
31, 2002, the Company had no borrowings under the accounts receivable  financing
agreement. This accounts receivable financing agreement with Silicon Valley Bank
was terminated by the Company on May 13, 2002.

Note 4 - Recent Acquisition:

     On  October  1,  2001,  the  Company  acquired  effective  control  of  the
Intelligent  Imaging(TM)  business  unit  ("Intelligent  Imaging") of Quintiles,
Inc., a North Carolina corporation ("Quintiles"),  and a wholly-owned subsidiary
of Quintiles Transnational  Corporation (the "Intelligent Imaging Acquisition").
The Intelligent  Imaging Acquisition closed on October 25, 2001. All Intelligent
Imaging personnel (approximately 47) have become employed by the Company and all
of the clinical  projects,  which were handled by Intelligent  Imaging,  are now
being managed by the combined Company.

     Intelligent  Imaging  specializes  in  providing  digital  medical  imaging
services for clinical  trials and the health care  industry,  a line of business
the Company intends to continue.  In the Intelligent  Imaging  Acquisition,  the
Company  acquired  substantially  all of the assets of  Intelligent  Imaging and
assumed certain liabilities of Intelligent Imaging.

     The assets  acquired  primarily  included  Intelligent  Imaging's  accounts
receivable and equipment. In consideration for the assets purchased, the Company
issued an  unsecured,  subordinated  convertible  promissory  note,  dated as of
October 25, 2001, in the principal  amount of $1,000,000 (the "Note").  The Note
bears  interest at the rate in effect on the business day  immediately  prior to
the date on which  payments  are due  under  the Note  equal to the  Three-Month
London Interbank Offering Rate (the "LIBOR Rate") as published from time to time
in the Wall Street Journal plus 3%, compounded annually based on a 365-day year.

                                      -8-
<PAGE>

                BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

     The Company is obligated to pay quarterly  payments of principal of $41,667
under the Note, plus accrued interest  thereon,  and one payment of principal of
$500,000 on November 1, 2004,  unless the Note is previously  converted into the
Company's  Common  Stock.  The  Company  has  recorded  $166,667  as  a  current
liability,  representing the May 1, 2002,  August 1, 2002,  November 1, 2002 and
February 1, 2003 quarterly installments of principal.

     The number of shares of Common  Stock into which the Note may be  converted
is calculated by dividing the  outstanding  principal  balance of the Note, plus
all  accrued  and unpaid  interest  thereon,  by the  greater of: (i) 75% of the
average  closing  price of the Company's  Common Stock over the ten  consecutive
trading days ending prior to the date of  conversion;  or (ii) $0.906 per share.
At March 31,  2002,  the Note would  have been  convertible  into  approximately
1,064,937 shares of the Company's Common Stock.  This was calculated by dividing
the unpaid  principal  balance  ($958,333  as of March 31,  2002)  plus  accrued
interest (approximately $6,500 as of March 31, 2002) of $964,833 by $0.906.

     The Company may pay additional  consideration if certain  financial results
are  achieved  (the  maximum  number of shares  that may be issued to  Quintiles
pursuant to such provision is 646,247 shares of Common Stock which is to be paid
out no later than  February  15,  2003).  The Company  has  recorded a long-term
liability  of  $585,499  (based  on the  price  per  share  of  $0.906)  for the
contingent   consideration  under  the  provisions  of  Statement  of  Financial
Accounting  Standards No. 141, "Business  Combinations." SFAS No. 141 requires a
liability  to be  recognized  in an amount  equal to the  lesser of the  maximum
amount of the  contingent  consideration  or the excess of net  tangible  assets
acquired over the purchase price when fair value of net assets acquired  exceeds
the cost.  When the contingency is resolved and the  consideration  is issued or
becomes issuable,  any excess of the fair value of the contingent  consideration
issued or issuable over the amount that was  recognized as if it was a liability
will be recognized as an additional cost of the Intelligent Imaging Acquisition.
If the amount initially  recognized as a liability exceeds the fair value of the
consideration  issued or  issuable,  that excess will be allocated as a pro rata
reduction of noncurrent  assets or property,  plant and  equipment.  The maximum
amount of contingent  consideration from the Intelligent  Imaging Acquisition of
approximately $585,000 is classified in the Consolidated Balance Sheets at March
31, 2002 and  December  31, 2001 as long-term  debt and other  liabilities.  The
payment to Quintiles of any additional  consideration is to be paid out no later
than  February 15, 2003 and must be paid in the form of shares of the  Company's
Common Stock.


                                      -9-
<PAGE>

                BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

     The total purchase price of the  Intelligent  Imaging  Acquisition has been
allocated to the assets and liabilities  based on management's best estimates of
fair value.  The excess of the net tangible  assets  acquired  over the purchase
price resulted in the reduction of property, plant and equipment.

   Net tangible assets acquired..............................      $  2,130,684

--------------------------------------------------------------------------------
    Less - purchase price:
     Convertible promissory note.............................        (1,000,000)
     Contingent liability....................................          (585,499)
     Transaction costs.......................................           (98,000)

--------------------------------------------------------------------------------
         Total purchase price................................        (1,683,499)

--------------------------------------------------------------------------------
    Excess of net tangible assets over purchase price........           447,185
    Less - write-down of property, plant and equipment.......          (447,185)

--------------------------------------------------------------------------------
         Remaining excess of net tangible assets over
         purchase price......................................      $         --

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

     The Company assumed effective control of Intelligent  Imaging on October 1,
2001, therefore,  transactions occurring subsequent to October 1, 2001 have been
included in the Company's historical operating results.


                                      -10-
<PAGE>

                BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

     The  following  unaudited  consolidated  pro  forma  information  has  been
prepared assuming  Intelligent  Imaging was acquired as of January 1, 2001, with
pro forma  adjustments  for  interest  expense and income  taxes.  The pro forma
information is presented for  informational  purposes only and is not indicative
of what would have occurred if the Intelligent Imaging Acquisition had been made
on January 1, 2001. In addition,  this pro forma  information is not intended to
be a projection of future operating results.


                                                    Three Months Ended
                                                      March 31, 2001
                                                      --------------

        Revenues.............................         $   3,880,844
                                                       ------------

        Net income...........................         $     183,800
                                                       ------------

        Basic earnings per common share......         $         .02
                                                       ------------

        Diluted earnings per common share....         $         .02
                                                       ------------

Note 5 - Recently Issued Accounting Standards:

     In August 2001, the Financial  Accounting  Standards  Board issued SFAS No.
143,  "Accounting  for Asset  Retirement  Obligations".  SFAS No. 143  addresses
financial accounting and reporting obligations associated with the retirement of
tangible  long-lived  assets and the associated asset retirement costs. SFAS No.
143 is effective  for fiscal years  beginning  after June 14, 2002.  The Company
does not expect that the adoption of SFAS No. 143,  which is  effective  for the
Company as of January 1, 2003, will have a material  effect on its  consolidated
results of operations or financial position.

Note 6 - Income Tax Provision:

     The Company's  income tax provision of $22,471  relates to estimated  state
income taxes.  The Company has no remaining net operating loss carry forwards in
the Commonwealth of Pennsylvania.  During the three months ended March 31, 2002,
the federal income tax provision has been offset by a reduction in the Company's
valuation allowance of approximately $74,000.  Management has determined that it
is more likely than not that a portion of the  Company's  Federal net  operating
loss  carryforwards  will be realized in the future. The determination took into
account that the Company has been profitable for the last seven quarters and the
Company's 2002 budget.  The Company has approximately  $5,200,000 of Federal net
operating  loss  carryforwards  as of March 31, 2002.  The deferred tax asset of
approximately  $417,000 at March 31, 2002 has been  recorded  net of a valuation
allowance of approximately $1,900,000.


                                      -11-
<PAGE>

                BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                   ------------------------------------------
                                   (unaudited)

     The Company accounts for income taxes under the provisions of SFAS No. 109,
"Accounting  for Income  Taxes." SFAS No. 109 requires the use of the  liability
method where  deferred taxes are  determined  based on the estimated  future tax
effects of differences  between the financial  statement and tax basis of assets
and liabilities at currently  enacted tax laws and rates.  The Company records a
valuation allowance to reduce its deferred tax assets to the amount that is more
likely than not to be received.


                                      -12-
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

OVERVIEW

     Bio-Imaging Technologies, Inc. (the "Company") is a pharmaceutical contract
service  organization,  providing services that support the product  development
process of the pharmaceutical,  biotechnology and medical device industries. The
Company specializes in assisting its clients in the design and management of the
medical-imaging  component  of  clinical  trials  for all  modalities  including
computerized  tomography,  magnetic resonance imaging, x-rays, dual energy x-ray
absorptiometry, position emission tomography single photon emission computerized
tomography  and  ultrasound.  The Company  provides  services  which include the
processing  and analysis of medical  images and the  data-basing  and regulatory
submission of medical images, quantitative data and text. In September 2000, the
Company  offered a new service  called,  Bio-Imaging  ETC(SM).  Bio-Imaging  ETC
focuses on education,  training and certification for medical imaging equipment,
facilities and staff.

     On  October  1,  2001,  the  Company  acquired  effective  control  of  the
Intelligent  Imaging(TM)  business  unit  ("Intelligent  Imaging") of Quintiles,
Inc., a North Carolina corporation ("Quintiles"),  and a wholly-owned subsidiary
of Quintiles Transnational  Corporation (the "Intelligent Imaging Acquisition").
The Intelligent  Imaging Acquisition closed on October 25, 2001. All Intelligent
Imaging personnel (approximately 47) have become employed by the Company and all
of the clinical  projects,  which were handled by Intelligent  Imaging,  are now
being managed by the combined Company.

     Intelligent  Imaging  specializes  in  providing  digital  medical  imaging
services for clinical  trials and the health care  industry,  a line of business
the Company intends to continue.  In the Intelligent  Imaging  Acquisition,  the
Company  acquired  substantially  all of the assets of  Intelligent  Imaging and
assumed certain liabilities of Intelligent Imaging.

     The assets  acquired  primarily  included  Intelligent  Imaging's  accounts
receivable and equipment. In consideration for the assets purchased, the Company
issued an  unsecured,  subordinated  convertible  promissory  note,  dated as of
October 25, 2001, in the principal  amount of $1,000,000 (the "Note").  The Note
bears  interest at the rate in effect on the business day  immediately  prior to
the date on which  payments  are due  under  the Note  equal to the  Three-Month
London Interbank Offering Rate (the "LIBOR Rate") as published from time to time
in the Wall Street Journal plus 3%, compounded annually based on a 365-day year.

     The Company is obligated to pay quarterly  payments of principal of $41,667
under the Note, plus accrued interest  thereon,  and one payment of principal of
$500,000 on November 1, 2004,  unless the Note is previously  converted into the
Company's  Common  Stock.  The  Company  has  recorded  $166,667  as  a  current
liability,  representing the May 1, 2002,  August 1, 2002,  November 1, 2002 and
February 1, 2003 quarterly installments of principal.


                                      -13-
<PAGE>

     The number of shares of Common  Stock into which the Note may be  converted
is calculated by dividing the  outstanding  principal  balance of the Note, plus
all  accrued  and unpaid  interest  thereon,  by the  greater of: (i) 75% of the
average  closing  price of the Company's  Common Stock over the ten  consecutive
trading days ending prior to the date of  conversion;  or (ii) $0.906 per share.
At March 31,  2002,  the Note would  have been  convertible  into  approximately
1,064,937 shares of the Company's Common Stock.  This was calculated by dividing
the unpaid  principal  balance  ($958,333  as of March 31,  2002)  plus  accrued
interest (approximately $6,500 as of March 31, 2002) of $964,833 by $0.906.

     The Company may pay additional  consideration if certain  financial results
are  achieved  (the  maximum  number of shares  that may be issued to  Quintiles
pursuant to such provision is 646,247 shares of Common Stock which is to be paid
out no later than  February  15,  2003).  The Company  has  recorded a long-term
liability  of  $585,499  (based  on the  price  per  share  of  $0.906)  for the
contingent   consideration  under  the  provisions  of  Statement  of  Financial
Accounting  Standards No. 141, "Business  Combinations." SFAS No. 141 requires a
liability  to be  recognized  in an amount  equal to the  lesser of the  maximum
amount of the  contingent  consideration  or the excess of net  tangible  assets
acquired over the purchase price when fair value of net assets acquired  exceeds
the cost.  When the contingency is resolved and the  consideration  is issued or
becomes issuable,  any excess of the fair value of the contingent  consideration
issued or issuable over the amount that was  recognized as if it was a liability
will be recognized as an additional cost of the Intelligent Imaging Acquisition.
If the amount initially  recognized as a liability exceeds the fair value of the
consideration  issued or  issuable,  that excess will be allocated as a pro rata
reduction of noncurrent  assets or property,  plant and  equipment.  The maximum
amount of contingent  consideration from the Intelligent  Imaging Acquisition of
approximately $585,000 is classified in the Consolidated Balance Sheets at March
31, 2002 and  December  31, 2001 as long-term  debt and other  liabilities.  The
payment to Quintiles of any additional  consideration is to be paid out no later
than  February 15, 2003 and must be paid in the form of shares of the  Company's
Common Stock.

     The Company's sales cycle (the period from the  presentation by the Company
to a  potential  client to the  engagement  of the  Company by such  client) has
historically been 12 months but is shortening as the awareness of these services
increases and regulatory  guidelines  become better  defined.  In addition,  the
contracts under which the Company performs services  typically cover a period of
12 to 60 months and the volume and type of  services  performed  by the  Company
generally vary during the course of a project. No assurance can be made that the
Company's  project  revenues  will  remain  at  levels  sufficient  to  maintain
profitability.  Service revenues were generated from 52 clients encompassing 104
distinct projects for the three months ended March 31, 2002. This compares to 41
clients  encompassing 75 distinct  projects for the three months ended March 31,
2001.  This represents an increase of 26.8% in clients and 38.7% in projects for
the three  months  ended March 31, 2002 as  compared to the three  months  ended
March 31,  2001.  Management  believes  that the  operations  of the Company and
Intelligent  Imaging have been fully  integrated  since the Intelligent  Imaging
Acquisition.  The  Company's   contracted/committed  backlog  was  approximately
$31,742,000 as of March 31, 2002. This


                                      -14-
<PAGE>

compares  to  approximately  $18,800,000  as of March 31,  2001,  an increase of
68.8%.  Contracted/committed  backlog  is the  amount of  service  revenue  that
remains to be earned and recognized on both signed and agreed to contracts. Such
contracts are subject to termination by the Company's clients at any time.

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

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


                                      -15-
<PAGE>

RESULTS OF OPERATIONS

     On  November 6, 2001,  the  Company  changed its fiscal year from ending on
September  30 to December 31. The Company  believes  that the three months ended
March 31, 2001 provides a meaningful  comparison to the three months ended March
31, 2002.

     Three Months Ended March 31, 2002 and 2001
     ------------------------------------------


<TABLE>
<CAPTION>

                               Three Months     % of          Three Months      % of
                                  Ended         Total            Ended          Total
                              March 31, 2002    Revenue       March 31, 2001    Revenue      $ Change       % Change
---------------------------- ----------------- ---------- -------------------- ----------- -------------- -----------
<S>                             <C>               <C>        <C>                 <C>        <C>                <C>
Service revenues                $3,872,845                   $2,132,694                     $1,740,151          81.6%
Reimbursement
revenues                          $870,262                     $413,645                       $456,617         110.4%
---------------------------- ----------------- ---------- -------------------- ----------- -------------- -----------
Total revenues                  $4,743,107                   $2,546,339
============================ ================= ========== ==================== =========== ============== ===========

Cost of revenues                $3,397,071        71.6%      $1,467,828          57.6%      $1,929,243         131.4%
---------------------------- ----------------- ---------- -------------------- ----------- -------------- -----------
General and
administrative
expenses                          $592,130        12.5%        $445,279          17.5%        $146,851          33.0%
---------------------------- ----------------- ---------- -------------------- ----------- -------------- -----------
Sales and marketing
expenses                          $416,032         8.8%        $413,044          16.2%          $2,988           0.7%
---------------------------- ----------------- ---------- -------------------- ----------- -------------- -----------
Total cost and
expenses                         $4,405,233       92.9%      $2,326,151          91.3%      $2,079,082          89.4%
============================ ================= ========== ==================== =========== ============== ===========
Interest expense-net               $18,633                       $1,006                        $17,627       1,752.2%
Income tax
provision                          $22,471                           --                        $22,471             --
---------------------------- ----------------- ---------- -------------------- ----------- -------------- -----------
Net income                        $296,770         6.3%         $219,182          8.6%         $77,588          35.4%
============================ ================= ========== ==================== =========== ============== ===========
</TABLE>

     Service  revenues  for the three  months ended March 31, 2002 and 2001 were
approximately   $3,873,000  and   $2,133,000,   respectively,   an  increase  of
approximately  $1,740,000 or 81.6%. The increase in service revenues is a result
of an  increase in the number of projects  from the  overall  market  growth for
medical  imaging related  services for clinical  trials.  Service  revenues were
generated  from 52 clients  encompassing  104  distinct  projects  for the three
months  ended  March 31,  2002.  This  compares  to 41 clients  encompassing  75
distinct  projects for the three months ended March 31, 2001.  Service  revenues
generated from the Company's client base continue to be highly concentrated. One
client encompassing 3 projects represented  approximately 22.4% of the Company's
service  revenues  for the three  months  ended  March 31,  2002,  while for the
comparable period last year, three clients  encompassing 11 projects represented
approximately  45.2% of the  Company's  service  revenues.  No  other  customers
accounted  for more than 10% of  service  revenues  in each of the  three  month
periods  ended  March 31,  2002 and 2001.  The  Company's  scope of work in both
periods  included  primarily   medical-imaging   core  laboratory  services  and
image-based information management services.


                                      -16-
<PAGE>

     Reimbursment  revenues  for the three  months ended March 31, 2002 and 2001
were  approximately  $870,000  and  $414,000,   respectively,   an  increase  of
approximately $456,000 or 110.4%. Reimbursment revenues consists of pass-through
costs reimbursed by the customer. As required,  the Company adopted the guidance
of recently issued  accounting  pronouncement  EITF 01-14,  effective January 1,
2002, and, accordingly,  has reclassified  reimbursed pass-through costs as part
of revenues. The increase in the three months ended March 31, 2002 resulted from
an increase in projects and the associated reimbursed costs.

     Cost of revenues  for the three  months  ended March 31, 2002 and 2001 were
approximately   $3,397,000  and   $1,468,000,   respectively,   an  increase  of
approximately  $1,929,000 or 131.4%. Cost of revenues for the three months ended
March  31,  2002 and  three  months  ended  March 31,  2001  were  comprised  of
professional  salaries and benefits,  allocated overhead and pass-through costs.
The increase in cost of revenues is  primarily  attributable  to  personnel  and
facilities assumed as part of the Intelligent Imaging Acquisition, along with an
increase in staffing  levels  required for project  related  tasks for the three
months  ended March 31,  2002.  The  Company  anticipates  utilizing  the excess
Intelligent  Imaging  resource  capacity  to  fulfill  current  and  anticipated
projects.

     The increase in the cost of revenues as a percentage  of total  revenues in
the three months ended March 31, 2002 of 71.6% from the three months ended March
31, 2001 of 57.6% is primarily due to costs  associated  with the integration of
Intelligent  Imaging.  In addition,  the inclusion of reimbursable  pass-through
costs in  revenues  has added to this  percentage  increase  since  reimbursable
revenues  along  with  the  associated  reimbursable   pass-through  costs  have
increased  in  proportion  to the  Company's  number  of  projects  and  service
revenues.  The cost of revenues as a percentage of total  revenues may fluctuate
based  on the  utilization  of staff  and the mix of  services  provided  by the
Company.

     General and  administrative  expenses  for the three months ended March 31,
2002 and  2001  were  approximately  $592,000  and  $445,000,  respectively,  an
increase of approximately $147,000 or 33.0%. General and administrative expenses
in each of the three  months  ended March 31, 2002 and three  months ended March
31, 2001 consisted primarily of professional salaries and benefits, depreciation
and  amortization,   professional  and  consulting  services,  office  rent  and
corporate  insurance.  The increase during the three months ended March 31, 2002
from the three  months ended March 31, 2001,  is  primarily  attributable  to an
increase in  corporate  insurance  and  professional  services  associated  with
general  corporate  matters resulting from the increase in the Company's service
revenues and personnel.

     The  decrease in general and  administrative  expenses as a  percentage  of
total  revenues in the three months ended March 31, 2002 of 12.5% from the three
months ended March 31, 2001 of 17.5% is primarily due to the Company's  increase
in total revenues with a lesser increase in costs  associated with  depreciation
and  amortization,   professional  and  consulting  services,  office  rent  and
corporate insurance.

                                      -17-
<PAGE>

     Sales and marketing  expenses for the three months ended March 31, 2002 and
2001 were  approximately  $416,000 and  $413,000,  respectively,  an increase of
approximately  $3,000 or 0.7%. Sales and marketing expenses in each of the three
months ended March 31, 2002 and three months ended March 31, 2001 were comprised
of direct  sales and  marketing  costs,  professional  salaries and benefits and
allocated overhead. These expenses have not increased significantly in the three
months ended March 31, 2002 from the comparable period last year.

     The  decrease  in sales and  marketing  expenses as a  percentage  of total
revenues in the three  months ended March 31, 2002 of 8.8% from the three months
ended  March 31, 2001 of 16.2% is  primarily  due to the  Company's  increase in
total  revenues with a lesser  increase in costs  associated  with  professional
salaries and benefits.

     Total cost and  expenses for the three months ended March 31, 2002 and 2001
were  approximately  $4,405,000  and  $2,326,000,  respectively,  an increase of
approximately  $2,079,000 or 89.4%. Total cost and expenses in each of the three
months  ended March 31,  2002 and three  months  ended March 31, 2001  consisted
primarily of cost of revenues, general and administrative expenses and sales and
marketing  expenses.  This increase is due primarily to an increase in personnel
resulting from the Intelligent  Imaging  Acquisition,  along with an increase in
professional services associated with general corporate matters.

         Total cost and expenses as a percentage of total revenues for the three
months ended March 31, 2002 of 6.3% from the three months ended March 31, 2001
of 8.6% did not change significantly due to the increase in cost of revenues as
a percentage of total revenues offset by the decreases in general and
administrative and sales and marketing expenses as a percentage of total
revenues.

     Net  interest  expense for the three  months  ended March 31, 2002 and 2001
were   approximately   $19,000   and  $1,000,   respectively,   an  increase  of
approximately  $18,000 or 1752.2%.  Net  interest  expense for the three  months
ended  March 31,  2002  resulted  from  interest  expense  incurred  on both the
convertible  promissory  note and  equipment  lease  obligations.  Net  interest
expense in the three months ended March 31, 2001 resulted from interest  expense
incurred on equipment lease obligations.

     The Company's  income tax provision of $22,471  relates to estimated  state
income  taxes for the three  months  ended  March 31,  2002.  The Company has no
remaining net operating loss carry forwards in the Commonwealth of Pennsylvania.
During the three months ended March 31, 2002,  the federal  income tax provision
has  been  offset  by a  reduction  in  the  Company's  valuation  allowance  of
approximately $74,000.  Management believes that it is more likely than not that
the net  deferred  income tax  assets,  recorded as of March 31,  2002,  will be
realized in the future.


                                      -18-
<PAGE>

     The  Company's  net income for the three  months  ended  March 31, 2002 was
attributable  primarily to increased revenues associated with an increase in the
number of  projects  for which the  Company  was  engaged to  perform  services,
offset, in part, by the costs associated with the integration of the Intelligent
Imaging Acquisition.

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
                                                           Three Months        Three Months
                                                              Ended               Ended
                                                          March 31, 2002      March 31, 2001
                                                        -------------------------------------
<S>                                                       <C>                   <C>
Net cash provided by (used in) operating activities        $321,627              ($5,977)
Net cash used in investing activities                     ($314,660)            ($56,748)
Net cash used in financing activities                      ($73,174)            ($37,176)
</TABLE>

     At  March  31,  2002,  the  Company  had  cash  and  cash   equivalents  of
approximately  $434,000.  Working  capital at March 31,  2002 was  approximately
$1,573,000.

     Net cash provided by operating  activities for the three months ended March
31, 2002 includes net income of approximately  $297,000,  approximately $204,000
of  depreciation  and  amortization  and  changes in  certain  of the  Company's
operating assets and liabilities, such as, an increase of approximately $109,000
in accrued  expenses  and other  current  liabilities,  offset by an increase in
prepaid  expenses  and other  current  assets of  approximately  $118,000  and a
decrease in deferred revenue of approximately $128,000.

     Net cash used in investing  activities  represents the Company's investment
in capital and leasehold  improvements.  The Company currently  anticipates that
capital  expenditures  for the remainder of fiscal year ending December 31, 2002
will be approximately $800,000. These expenditures represent additional upgrades
in the Company's networking,  data storage and core laboratory  capabilities for
both the United States and European operations and software investment in 21 CFR
Part 11  compliance.  21 CFR Part 11 is a  regulation  published by the Food and
Drug Administration pursuant to its Electronic Records and Electronic Signatures
Rule relating to requirements for electronic records and signatures that support
regulated activities.

     Net cash used in financing  activities is primarily  due to payments  under
the Promissory Note and equipment lease obligations.



                                      -19-
<PAGE>

     The following table lists the Company's cash contractual  obligations as of
March 31, 2002:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                         Payments Due by Period
-------------------------------------------------------------------------------------------------------------------
Contractual Obligations            Total          Less than 1 year     1-3 years     4 - 5 years    After 5 years
-------------------------------------------------------------------------------------------------------------------
<S>                               <C>                <C>             <C>              <C>             <C>
Capital Lease Obligations           $275,930           $168,426        $107,504             -               -
-------------------------------------------------------------------------------------------------------------------
Promissory Note                     $958,333           $166,667        $791,666             -               -
-------------------------------------------------------------------------------------------------------------------
Facility Rent Operating           $5,386,747           $761,238      $1,840,137       $1,303,736      $1,481,636
Leases
===================================================================================================================
Total Contractual Cash            $6,621,010         $1,096,331      $2,739,307       $1,303,736      $1,481,636
Obligations
===================================================================================================================
</TABLE>

     On April 30, 2002,  the Company  entered into an  agreement  with  Wachovia
Bank,  National  Association  ("Wachovia")  for a committed line of credit up to
$1,000,000,  collateralized  by the  Company's  assets.  Interest  is payable at
Wachovia's Prime Rate plus 0.5%. The agreement requires the Company, among other
things,  to maintain a debt service  coverage  ratio of not less than 1.25 to 1,
measured annually.  The committed line of credit matures May 31, 2003 and may be
renewed on an annual basis.

     In December 1999, the Company entered into an accounts receivable financing
agreement with Silicon Valley Bank ("Silicon Valley Bank"),  whereby the Company
may assign up to $500,000  of eligible  accounts  receivable  to Silicon  Valley
Bank.  In March  2000,  Silicon  Valley Bank  increased  the  eligible  accounts
receivable to $1,000,000.  Under the agreement,  Silicon Valley Bank may advance
the  Company  up to  80%  of  the  assigned  accounts  receivable  amount.  Upon
collection  by  Silicon  Valley  Bank,  the  balance  of the  assigned  accounts
receivable would be remitted to the Company net of Silicon Valley Bank's finance
charges and administration  fees. A 1.00%  administrative fee of the face amount
of the assigned  receivable  may be charged by Silicon  Valley Bank along with a
1.75% finance charge per month of the average daily account balance outstanding.
Although the agreement is contractually renewable each year, it is cancelable by
Silicon  Valley Bank at any time.  During the three months ended March 31, 2002,
the Company did not assign any accounts  receivable  to Silicon  Valley Bank. At
March 31, 2002,  the Company had repaid its borrowings and had a $0 balance with
Silicon Valley Bank. This accounts  receivable  financing agreement with Silicon
Valley Bank was terminated by the Company on May 13, 2002.

     In connection with the Intelligent Imaging Acquisition,  beginning February
1, 2002,  the Company is  obligated  to pay  quarterly  payments of principal of
$41,667  under the Note,  plus  accrued  interest  thereon,  and one  payment of
principal of $500,000 on November 1, 2004, unless

                                      -20-
<PAGE>

the Note is previously converted into the Company's Common Stock. The Note bears
interest at the rate in effect on the business day immediately prior to the date
on which  payments  are due under the Note equal to the LIBOR Rate as  published
from time to time in the Wall Street Journal plus 3%, compounded  annually based
on a 365-day  year.  During the three months  ended March 31, 2002,  the Company
paid $41,667 in principal  under the Note and $13,102 in interest up to February
1, 2002.

     The Company has neither  paid nor  declared  dividends  on its Common Stock
since its  inception  and does not plan to pay  dividends on its Common Stock in
the foreseeable future.

     The Company  anticipates that its cash and cash equivalents as of March 31,
2002, together with anticipated cash from operations, will be sufficient to fund
current  working  capital needs and capital  requirements  for at least the next
twelve months. There can be no assurance,  however, that the Company's operating
results will  continue to achieve  profitability  on an annual basis in the near
future. The Company's past history of operating losses,  together with the risks
associated  with: (i) the  integration of Intelligent  Imaging into the Company;
(ii) the Company's ability to gain new client  contracts;  (iii) the variability
of the timing of payments on existing  client  contracts and; (iv) other changes
in the Company's  operating assets and liabilities,  may have a material adverse
affect on the Company's future liquidity.  In connection therewith,  the Company
may need to raise  additional  capital in the foreseeable  future from equity or
debt sources in order to; (i) implement its business,  sales or marketing plans;
(ii)  take  advantage  of  unanticipated   opportunities  (such  as  more  rapid
expansion,  acquisitions of  complementary  businesses or the development of new
services);  (iii) to react to unforeseen  difficulties  (such as the decrease in
the demand for the Company's services or the timing of revenues due to a variety
of factors previously  discussed) or; (iv) to otherwise respond to unanticipated
competitive pressures.  There can be no assurance that additional financing will
be available, if at all, on terms acceptable to the Company.

     The Company's 2002 operating plan contains  assumptions  regarding  revenue
and  expenses.  The  achievement  of the operating  plan depends  heavily on the
timing of work performed by the Company on existing  projects and the ability of
the Company to gain and perform work on new projects.  Project cancellation,  or
delays in the timing of work  performed  by the Company on existing  projects or
the inability of the Company to gain and perform work on new projects could have
an adverse  impact on the Company's  ability to execute its  operating  plan and
maintain  adequate  cash  flow.  In the  event  actual  results  do not meet the
operating plan, the Company's  management  believes it could execute contingency
plans to mitigate such effects. Such plans include additional financing,  to the
extent  available,  through the line of credit discussed above.  Considering the
cash on hand and based on the achievement of the operating plan and management's
actions  taken to date,  management  believes  it has the ability to continue to
generate  sufficient  cash to satisfy its operating  requirements  in the normal
course of business. However, no assurance can be given that sufficient cash will
be generated from operations.


                                      -21-
<PAGE>

CRITICAL ACCOUNTING POLICIES, ESTIMATES AND RISKS

     Financial  Reporting  Release No. 60,  which was  recently  released by the
Securities  and  Exchange  Commission,  requires  all  companies  to  include  a
discussion of critical accounting policies or methods used in the preparation of
financial  statements.  The  Notes  to  the  Consolidated  Financial  Statements
includes a summary of  significant  accounting  policies and methods used in the
preparation of the Company's Consolidated Financial Statements. The following is
a brief discussion of the more significant  accounting policies and methods used
by the Company.

     In addition,  Financial  Reporting  Release No. 61 was recently released by
the SEC to require all companies to include a discussion to address, among other
things, liquidity,  off-balance sheet arrangements,  contractual obligations and
commercial commitments.

     The  Company's  discussion  and  analysis of its  financial  condition  and
results of  operations  are based upon its  consolidated  financial  statements,
which have been  prepared in accordance  with  accounting  principles  generally
accepted in the United  States.  The  preparation  of  financial  statements  in
accordance with generally  accepted  accounting  principles in the Unites States
requires  management to make estimates and assumptions  that affect the reported
amounts of assets and liabilities,  including the recoverability of tangible and
intangible  assets,  disclosure of contingent  assets and  liabilities as of the
date of the  financial  statements,  and the  reported  amounts of revenues  and
expenses during the reported period.

     On an  on-going  basis,  the  Company  evaluates  its  estimates.  The most
significant  estimates relate to the recognition of revenue and profits based on
the percentage of completion  method of accounting for fixed service  contracts,
allowance for doubtful accounts and income taxes.

     The Company believes the following critical  accounting policies affect its
more  significant  judgments  and  estimates  used  in  the  preparation  of its
consolidated financial statements:

     Revenue  Recognition.  Service revenues are recognized over the contractual
term of the  Company's  customer  contracts  using the  percentage-of-completion
method based on costs incurred as a percentage of total estimated costs. Service
revenues are first  recognized  when the Company has a signed  contract from the
customer,  with  fixed or  determinable  fees and for  which  collectability  is
reasonably  assured.  Any change to  recognized  service  revenue as a result of
revisions to  estimated  total costs are  recognized  in the period the estimate
changes.  Direct and incremental  costs incurred at the outset of an arrangement
that  are  directly  related  to a  customer  contract  are  deferred,  if their
recoverability from that contract is probable.  Deferred costs are expensed upon
recognition of revenue associated with the contract.


                                      -22-
<PAGE>

     The  Company's  revenue  recognition  policy  entails a number of estimates
including  an estimate of the total costs  expected to be incurred on a project,
which is used as the basis for determining the portion of the Company's  revenue
to be recognized  each period.  The revenue  recognized may have been materially
effected if different assumptions or conditions prevailed.  If there are changes
in the total  estimated  costs,  other  than scope  changes  in a project  which
typically  result in a revision  to the  contract,  the timing of the  Company's
recognition  of revenue would change.  The Company  reviews its total  estimated
costs monthly.

     The  Company  also  incurs  costs  at  the  outset  of a  customer  service
arrangement  prior to receiving a final signed  contract and,  therefore,  defer
these costs and delay the  recording of any service  revenue.  If a customer did
not sign the  contract,  the  Company  would  have to  immediately  expense  the
deferred costs.

     Allowance  for Doubtful  Accounts.  The Company  maintains  allowances  for
doubtful  accounts for  estimated  losses  resulting  from the  inability of its
customers to make required payments. If the financial condition of the Company's
customers  were to  deteriorate,  resulting in an impairment of their ability to
make payments, additional allowances may be required.

     Income  Taxes.  The  Company  records a valuation  allowance  to reduce its
deferred  tax assets to the amount that is more likely than not to be  realized.
While the Company has considered  future taxable income and on-going prudent and
feasible  tax  planning  strategies  in  assessing  the need  for the  valuation
allowance,  in the event the Company were to determine  that it would be able to
realize  its  deferred  tax assets in the  future in excess of its net  recorded
amount,  an  adjustment to the deferred tax asset would  increase  income in the
period such determination was made. Likewise,  should the Company determine that
it would not be able to realize all or part of its net deferred tax asset in the
future,  an  adjustment  to the deferred tax asset would be charged to income in
the period such determination was made.


                                      -23-
<PAGE>

                           PART II. OTHER INFORMATION.
                           ---------------------------

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

(a)  The Annual Meeting of  Stockholders of the Company (the "Meeting") was held
     on February 27, 2002.

(b)  The  following is a list of all of the nominees for Director of the Company
     who were  elected at the Meeting and whose term of office  continued  after
     the Meeting:

               Mark L. Weinstein

               James A. Bannon, Pharm.D.

               Jeffrey H. Berg, Ph.D.

               David E. Nowicki, D.M.D.

               Allan E. Rubenstein, M.D.

               David M. Stack

               Paula B. Stafford

               James A. Taylor, Ph.D.

(c)  There were present at the Meeting, in person or by proxy,  7,927,593 shares
     of Common Stock out of a total of  8,278,141  shares of Common Stock issued
     and outstanding and entitled to vote at the Meeting.

(d)  The results of the vote of the stockholders  taken at the Meeting by ballot
     and by  proxy  as  solicited  by the  Company  on  behalf  of the  Board of
     Directors were as follows:

     (i)  The results of the vote taken at the  Meeting for the  election of the
          nominees for Board of Directors of the Company were as follows:

     Nominee                               For               Withheld
     ---------------------------       ---------            ----------

     Mark L. Weinstein                  7,895,093              32,500
     James A. Bannon, Pharm.D.          7,283,294             689,299
     Jeffrey H. Berg, Ph.D.             7,875,593              52,000
     David E. Nowicki, D.M.D.           7,895,793              31,800
     Allan E. Rubenstein, M.D.          7,109,794             817,799
     David M. Stack                     7,895,593              32,000
     Paula B. Stafford                  7,895,793              31,800
     James A. Taylor, Ph.D.             7,297,127              32,500


                                      -24-
<PAGE>

     (ii)  A vote was  taken to adopt the Company's  2002 Stock Incentive  Plan.
           The results of  the vote  taken at the  Meeting  with respect to  the
           adoption of the Company's 2002 Stock Incentive Plan were as follows:

              For         Against          Abstain          Broker Non-Votes
              ---         -------          -------          ----------------

           4,225,713      981,616           21,967             2,698,297


     (iii) A vote was taken on the proposal to ratify the appointment  of Arthur
           Andersen LLP as  independent  auditors  of the Company for the fiscal
           year ending December 31,  2002.  The results of the vote taken at the
           Meeting with respect to such appointment were as follows:

              For         Against          Abstain
              ---         -------          -------

           6,790,657      886,966          249,970




                                      -25-
<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

          (a)  Exhibits.

                4.1 Promissory Note for  $1,000,000,  dated April 30, 2002, made
                    by  the  Company  in  favor  of  Wachovia   Bank,   National
                    Association.

               10.1 2002 Stock  Incentive Plan,  adopted by the  stockholders of
                    the Company on February 27, 2002. (Incorporated by reference
                    to Exhibit  99.1 to the  Company's  Form S-8 dated  April 2,
                    2002).

               10.2 First Modification of Office Space Lease between 826 Newtown
                    Associates, LP and the Company dated January 11, 2002.

               10.3 Loan  Agreement,  dated April 30,  2002,  by and between the
                    Company and Wachovia Bank, National Association.

               10.4 Security  Agreement,  dated  April  30,  2002,  made  by the
                    Company in favor of Wachovia Bank, National Association.

               10.5 Employment Agreement, dated February 1, 2002, by and between
                    the Company and Mark L. Weinstein.*

               *    The  schedules  and exhibits to this  document are not being
                    filed  herewith   because  the  Company  believes  that  the
                    information contained therein is not material.  Upon request
                    therefor,  the Company  agrees to furnish  supplementally  a
                    copy  of any  schedule  or  exhibit  to the  Securities  and
                    Exchange Commission.


          (b)  Reports on Form 8-K.

               Report on Form 8-K/A  filed on January  8, 2002  (filing  Audited
          Financial Statements of the Intelligent Imaging division as of and for
          the fiscal  years ended  September  30, 2001 and 2000,  and  Unaudited
          Pro-Forma Combined Condensed Financial Statements of the Company).

               Report  on Form 8-K  filed  on  April  17,  2002  (reporting  the
          dismissal of Arthur Andersen LLP as the Company's independent auditors
          and the  engagement  of  PricewaterhouseCoopers  LLP as the  Company's
          independent auditors for the fiscal year ending December 31, 2002).

               Report on Form 8-K/A filed on April 26, 2002 (amending the letter
          from  Arthur  Andersen  LLP filed with the Form 8-K filed on April 17,
          2002).


                                      -26-
<PAGE>

                                   SIGNATURES



     In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                        BIO-IMAGING TECHNOLOGIES, INC.



DATE:   May 14, 2002                    By:/s/ Mark L. Weinstein
                                           ------------------------------------
                                           Mark L. Weinstein, President, Chief
                                           Executive Officer and Chief Financial
                                           Officer (Principal Executive Officer
                                           and Principal Financial Officer)


DATE:   May 14, 2002                     By:/s/ Maria T. Kraus
                                            ------------------------------------
                                            Maria T. Kraus, Controller
                                            (Principal Accounting Officer)

                                      -27-