CONFORMED COPY
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                              --------------------
                                   FORM 10-QSB

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

                  For the quarterly period ended June 30, 1997
                           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)

830 Bear Tavern Road, West Trenton, New Jersey                             08628
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                              (Zip Code)

                                 (609) 883-2000
                           ---------------------------
                           (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 June 30, 1997:

 Class                                                       Number of Shares
 -----                                                       ----------------
Common Stock, $.00025 par value                                  6,843,825

     Transitional Small Business Disclosure Format (check one):

               Yes:                                    No: X
                   ---                                    ---

<PAGE>

                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES

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

<TABLE>
<CAPTION>

                                                                            Page
                                                                            ----

<S>                                                                         <C>
PART I    FINANCIAL INFORMATION

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

               CONSOLIDATED BALANCE SHEETS
               as of June 30, 1997 (unaudited)
               and September 30, 1996 ........................................2

               CONSOLIDATED  STATEMENTS OF OPERATIONS
               For the Nine Months Ended
               June 30, 1997 and 1996
               (unaudited) ...................................................3

               CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended
               June 30, 1997 and 1996
               (unaudited) ...................................................4

               CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the Nine Months Ended
               June 30, 1997 and 1996
               (unaudited) ...................................................5

               NOTES TO CONDENSED CONSOLIDATED FINANCIAL
               STATEMENTS (unaudited) ........................................6

     Item 2.   Management's Discussion and Analysis of
               Financial Condition and Results of Operations .................8

               Liquidity and Capital Resources ...............................8

               Results of Operations .........................................8

PART II   OTHER INFORMATION

     Item 5.   Other Information ............................................15

     Item 6.   Exhibits and Reports on Form 8-K .............................16

SIGNATURES ..................................................................17
</TABLE>


                                      - 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
"Issuer" or the "Company")  believes that the disclosures are adequate to assure
that the information  presented is not misleading in any material respect. It is
suggested  that  the  following  consolidated  financial  statements  be read in
conjunction  with the  year-end  consolidated  financial  statements  and  notes
thereto included in the Issuer's Annual Report on Form 10-KSB for the year ended
September 30, 1996.

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

<TABLE>
<CAPTION>
                                                       June 30,    September 30,
                                                         1997           1996
                                                     -----------   -------------
                                                     (unaudited)
<S>                                                  <C>            <C>
                                    ASSETS
Current assets:
   Cash and cash equivalents ......................  $ 2,158,091    $ 1,377,633
   Restricted cash ................................       60,000         60,000
   Accounts receivable, net .......................      768,574        879,183
   Prepaid expenses and other current assets ......      110,833         12,460
                                                     -----------    -----------
     Total current assets .........................    3,097,498      2,329,276
Property and equipment, net .......................    1,556,143      1,198,943
Other assets ......................................       48,488          5,852
                                                     -----------    -----------
     Total assets .................................  $ 4,702,129    $ 3,534,071
                                                     ===========    ===========
                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Deferred revenue ...............................  $   436,500    $   635,562
   Accounts payable ...............................      160,286         74,180
   Accrued expenses and other current liabilities .      280,877        268,000
   Current maturities of long-term debt ...........       95,081         91,382
                                                     -----------    -----------
     Total current liabilities ....................      972,744      1,069,124
Long-term debt ....................................       28,502         99,878
                                                     -----------    -----------
     Total liabilities ............................    1,001,246      1,169,002
                                                     -----------    -----------
Stockholders' equity:
   Preferred stock - $.00025 par  value,
    authorized 3,000,000 shares; 416,667 shares
    issued and outstanding ($500,000 liquidation
    preference) ...................................          104            104
   Common stock - $.00025 par value,
    authorized 18,000,000 shares; 6,843,825
    shares issued and outstanding at June 30, 1997
    and 5,968,550 issued and outstanding at
    September 30, 1996 ............................        1,711          1,493
   Additional paid-in capital .....................    8,622,630      7,739,688
   Accumulated deficit ............................   (4,923,562)    (5,376,216)
                                                     -----------    -----------
     Stockholders' equity .........................    3,700,883      2,365,069
                                                     -----------    -----------
     Total liabilities and stockholders' equity ...  $ 4,702,129    $ 3,534,071
                                                     ===========    ===========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements

                                     - 2 -
<PAGE>

                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
                                   (unaudited)
<TABLE>
<CAPTION>

                                                      For the Nine Months Ended
                                                               June 30,
                                                     ---------------------------
                                                        1997             1996
                                                     ----------       ----------
<S>                                                  <C>              <C>
Project revenue ..................................   $3,935,789       $2,552,462

Project costs ....................................    1,427,218          897,351
                                                     ----------       ----------
Gross profit .....................................    2,508,571        1,655,111

General and administrative expenses ..............    1,870,912        1,372,898

Research and development expenses ................      170,695           89,169
                                                     ----------       ----------
Income from operations ...........................      466,964          193,044

Interest income - net ............................       26,912           14,496
                                                     ----------       ----------
Net income .......................................      493,876          207,540

Dividends on preferred stock .....................       30,000               --
                                                     ----------       ----------
Net income applicable to common stock ............   $  463,876          207,540
                                                     ==========       ==========
Net income per common share ......................   $     0.06       $     0.03
                                                     ==========       ==========

Weighted average number of common and common
equivalent shares outstanding.....................    7,433,680        6,051,580
                                                     ==========       ==========
</TABLE>


            See Notes to Condensed Consolidated Financial Statements


                                     - 3 -
<PAGE>

                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
                                   (unaudited)

<TABLE>
<CAPTION>
                                                      For the Three Months Ended
                                                                June 30,
                                                     ---------------------------
                                                        1997             1996
                                                     ----------       ----------
<S>                                                  <C>              <C>
Project revenue.................................     $1,309,388       $  903,248

Project costs...................................        472,231          330,476
                                                     ----------       ----------
Gross profit....................................        837,157          572,772

General and administrative expenses.............        643,645          499,560

Research and development expenses...............         76,512           13,438
                                                     ----------       ----------
Income from operations..........................        117,000           59,774

Interest income - net...........................          7,635            8,345
                                                     ----------       ----------
Net income......................................        124,635           68,119

Dividends on preferred stock....................         10,000               --
                                                     ----------       ----------
Net income applicable to common stock...........     $  114,635       $   68,119
                                                     ==========       ==========
Net income per common share.....................     $     0.02       $     0.01
                                                     ==========       ==========
Weighted average number of common and common
equivalent shares outstanding...................      7,451,151        6,377,822
                                                     ==========       ==========
</TABLE>


            See Notes to Condensed Consolidated Financial Statements


                                     - 4 -
<PAGE>

                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      -------------------------------------
                                   (unaudited)
<TABLE>
<CAPTION>

                                                       For the Nine Months Ended
                                                                June 30,
                                                       -------------------------
                                                           1997          1996
                                                       ----------    -----------
<S>                                                    <C>           <C>
Cash flows from operating activities:
 Net income ........................................   $  493,876    $  207,540
 Adjustments to reconcile net income to net cash
  provided by operating activities:
    Depreciation and amortization ..................      508,717       389,155
    Provision for losses on accounts receivable ....           --        35,000
    Changes in operating assets and liabilities:
     Decrease in accounts receivable ...............      110,609        12,252
     Increase in prepaid expenses and other
      current assets ...............................      (98,373)      (21,545)
     (Increase) decrease in other assets ...........      (42,636)        1,153
     Decrease in deferred revenue ..................     (199,062)     (137,964)
     Increase (decrease) in accounts payable .......       86,106       (60,025)
     Increase in accrued expenses and other
      current liabilities ..........................       12,877       133,662
                                                       ----------    ----------
    Net cash provided by operating activities ......      872,114       559,228
                                                       ----------    ----------
Cash flows from investing activities:
 Purchases of property and equipment ...............     (865,917)     (307,689)
 Decrease in restricted cash .......................           --        60,000
                                                       ----------    ----------
    Net cash used in investing activities ..........     (865,917)     (247,689)
                                                       ----------    ----------
Cash flows from financing activities:
 Net repayment of loan payable .....................           --       (89,600)
 Payments under equipment lease obligations ........      (67,677)      (76,330)
 Dividends paid on preferred stock .................      (41,222)           --
 Net proceeds from exercise of options to purchase
  common stock .....................................      283,160        14,450

 Net proceeds from private placement of
  preferred stock ..................................           --       433,333

 Net proceeds from exercise of warrants to
  purchase common stock ............................      600,000            --
                                                       ----------    ----------
     Net cash provided by financing activities .....      774,261       281,853
                                                       ----------    ----------
Net increase in cash and cash equivalents ..........      780,458       593,392

Cash and cash equivalents at beginning of period ...    1,377,633       704,684
                                                       ----------    ----------
Cash and cash equivalents at end of period .........   $2,158,091    $1,298,076
                                                       ==========    ==========

Supplemental disclosures of cash flow information:
   Cash paid during the period for interest ........   $    3,428    $   18,603
                                                       ==========    ==========
   Equipment purchased under capital
    lease obligations .. ...........................   $       --    $   59,381
                                                       ==========    ==========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements


                                     - 5 -
<PAGE>

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

              NOTES TO CONDENSED 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 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, 1996.

     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 to present fairly its
financial  position as of June 30, 1997,  the results of its  operations for the
three-month  and  nine-month  periods  ended June 30, 1997 and 1996 and its cash
flows for the nine-month periods ended June 30, 1997 and 1996.

     Net income per common share is calculated  based upon the weighted  average
number  of  shares  of  Common  Stock  and  dilutive  common  equivalent  shares
outstanding during the period.

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

Note 2 - Stockholders' Equity:

     The Company is  required to pay  semiannual  dividends  on its  outstanding
shares of Series A Convertible  Voting Preferred  Stock,  $.00025 par value (the
"Preferred  Stock")  at the rate of  $0.096  per share  per  annum,  as and when
declared  by the Board of  Directors.  Dividends  are  payable in cash or in the
Company's Common Stock. The Board of Directors,  in November 1996,  declared and
paid a cash  dividend in the  aggregate  amount of  $21,222.24 to the holders of
Preferred Stock,  representing the accrued  cumulative  dividends for the period
from December 21, 1995 through and including June 30, 1996. In January 1997, the
Board of Directors  declared and paid a cash dividend in the aggregate amount of
$20,000.02  to  the  holders  of  Preferred  Stock,   representing  the  accrued
cumulative  dividends  for the period from July 1, 1996  through  and  including
December 31, 1996.

     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. Any earnings which the Company may realize and which are
not paid as dividends to holders of Preferred  Stock will be retained to finance
the growth of the Company.


                                     - 6 -
<PAGE>

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

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


     On April 18, 1997, the Company  registered an aggregate of 1,600,000 shares
of Common Stock,  $.00025 par value,  consisting of 699,999 shares issuable upon
exercise of the  underwriter's  purchase options ("UPOs") held by GKN Securities
Corp.  ("GKN"),  its  affiliates  and  transferees,  and an aggregate of 900,001
shares  issuable  upon the exercise of Class A, B and C Warrants,  each of which
are held by  Investment  Partners of America,  L.P. The Company will not receive
any of the proceeds from the sales, if any, of such registered  shares of Common
Stock.

     On June 18,  1997,  GKN and  certain  of its  designees  exercised  UPOs to
purchase 630,000 shares of Common Stock at an exercise price of $1.00 per share,
after giving effect to certain anti-dilution provisions of the UPOs. The Company
received  aggregate  gross  proceeds of $630,000 as a result of such exercise of
the UPOs.



                                     - 7 -
<PAGE>

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

Liquidity and Capital Resources

     At  June  30,  1997,   the  Company  had  cash  and  cash   equivalents  of
approximately  $2,218,000,  including $60,000 of cash restricted pursuant to the
terms of collateral pledge agreements described below. On June 18, 1997, GKN and
certain of its designees  exercised  UPOs to purchase  630,000  shares of Common
Stock at an exercise  price of $1.00 per share,  after giving  effect to certain
anti-dilution  provisions  of the UPOs.  The Company  received  aggregate  gross
proceeds of $630,000 as a result of such exercise of the UPOs.

     Working capital at June 30, 1997 was approximately $2,125,000.

     The Company had, as of June 30, 1997, invested approximately  $3,740,000 in
capital equipment and leasehold  improvements,  of which approximately  $565,000
had  been  funded  through  capital  leases.   Pursuant  to  collateral   pledge
agreements,   the   Company's   obligations   under  such  capital   leases  are
collateralized  by a certificate  of deposit in the face amount of $60,000.  The
Company  currently  anticipates  that  capital  expenditures  for the balance of
fiscal 1997 will approximate $200,000.  These expenditures  represent additional
upgrades  in  the  Company's  networking,   data  storage  and  core  laboratory
capabilities   along  with  similar  capital   requirements   for  its  European
operations.

     In November 1996, the Board of Directors  declared and paid a cash dividend
in the  aggregate  amount of  $21,222.24  to the  holders  of  Preferred  Stock,
representing the accrued  cumulative  dividends for the period from December 21,
1995 through and including  June 30, 1996.  In January 1997,  Board of Directors
declared and paid a cash dividend in the  aggregate  amount of $20,000.02 to the
holders of Preferred Stock,  representing the accrued  cumulative  dividends for
the period from July 1, 1996 through and including December 31, 1996. For future
dividend  obligations  see "Note 2 - Notes to Condensed  Consolidated  Financial
Statements."

     The Company  anticipates  that its cash and cash equivalents as at June 30,
1997, together with cash flow expected to be generated from operations,  will be
sufficient to fund working capital needs and capital equipment  requirements for
at least the next twelve months.

Results of Operations

     The Company was profitable for the quarter ended June 30, 1997 primarily as
a result of an increase in project revenue. The Company believes that demand for
its  services  and  technologies  will  continue  to grow as the use of  digital
technologies for data acquisition and management  increases in the radiology and
drug  development  communities.  In  addition,  the United  States Food and Drug
Administration  is  gaining  experience  with  electronic   submissions  and  is
continuing to develop guidelines for computerized submissions of data, including
medical  images.  Furthermore,  the increased use of digital  medical  images in
clinical  trials,  especially  for important drug classes such as neurologic and
oncologic  therapeutics  and  diagnostic  image


                                     - 8 -
<PAGE>

agents,   should  generate  large  amounts  of  image  data  that  will  require
processing,  analysis, data management and submission services.  There can be no
assurance, however, that demand for the Company's services and technologies will
experience continued or sustainable growth or that additional revenue generating
opportunities  will  be  realized  by the  Company.  In  addition,  the  Company
continues  to  experience  an  increase  in  competition  from  its  traditional
competitors,   academic  research  centers  and  commercial  competitors.   This
competition has resulted in additional pressure being placed on price,  service,
quality,  professional  reputation  and  technology.  As  part  of  its  overall
strategy, the Company continues to monitor competitive developments and evaluate
appropriate defensive mechanisms.

     In early October 1996, the Company  established two new business units, the
Marketing Information Services Division (the "MISD") and the Data Management and
Information Systems Division (the "DMISD").  The MISD focuses on development and
sales of medical  imaging-oriented,  laptop  computer-based  sales and marketing
support  presentation  software  and  databases.   The  DMISD,  currently  under
development,  will focus on providing clinical database  management services and
products.  As of June 30,  1997,  the  operations  of the MISD and DMISD had not
realized any revenue.

     In addition,  in late February 1997, the Company opened its European office
and core  laboratory  in Leiden,  The  Netherlands.  The Company will manage its
services for  European-based  clinical trials from such  laboratory.  The Leiden
core laboratory is linked via the Company's intranet to the Company's New Jersey
laboratory so that workload may be shared to optimize  capacity  utilization  in
either  office.  The  anticipated  information  services  to be  provided by the
European  operations  will  encompass  the full  array of medical  imaging  core
laboratory  and digital  management  services  currently  being  provided by the
Company's laboratory at its headquarters.  Presently,  the Company is generating
revenue  from  one  European-based  client.  The  contract  with the  client  is
terminable at anytime upon written notice.

     Certain  statements   included  in  the  Form  10-QSB,   including  without
limitation,  statements  regarding the anticipated growth in the markets for the
Company's  services,  the  continuation  of the trends  favoring  outsourcing of
biomedical  information  technology services by pharmaceutical and biotechnology
companies and trends  favoring the use of such  information  technologies by the
United  States  Food and Drug  Administration,  the  anticipated  growth  of the
Company's  business,  the timing of the  development and  implementation  of the
Company's  new service  offerings  and the  utilization  of such services by the
Company's   clients,   and   trends  in  future   operating   performance,   are
forward-looking  statements  within the meaning of Section 21E of the Securities
Exchange Act of 1934,  as amended.  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.



                                     - 9 -
<PAGE>

     Nine Months Ended June 30, 1997 and 1996
     ----------------------------------------

     Total  revenue  for the  nine  months  ended  June  30,  1997  and 1996 was
approximately $3,936,000 and $2,552,000, respectively, an increase of $1,384,000
or 54.2%.  Project  revenue  in the nine  months  ended  June 30,  1997 and 1996
consisted  primarily of medical image  processing and analysis and digital image
management  services,   including  computer-assisted  masked  readings  and  the
data-basing of digital medical images and related clinical data.  Revenue in the
nine months  ended June 30,  1996 also  included a one-time  recognition  by the
Company of $192,000 in revenue and earnings  resulting  from the  termination by
the Company of a  co-marketing  agreement  with  Covance,  Inc.  The increase in
project  revenue during the nine months ended June 30, 1997 was primarily due to
revenue  generated by the  Company's one  European-based  client and several new
projects that the Company was engaged to perform work.  Project  revenue for the
nine months  ended June 30, 1997 was derived from 21 clients and such revenue in
the nine months  ended June 30, 1996 was  derived  from 20 clients.  The Company
generated  $1,304,000,  or 33.1% of project  revenue,  for the nine months ended
June 30, 1997 from one European-based client.

     The Company's total operating expenses were approximately $3,469,000 in the
nine months ended June 30, 1997 and  $2,359,000 in the  corresponding  period in
fiscal 1996, an increase of $1,110,000 or 47.1%. Such increase was due primarily
to an increase in salaries and fringe  benefits  associated  with an increase in
personnel  to  accommodate  growth in project  related  services  of the Company
coupled with an increase in operating  costs related to the MISD,  the DMISD and
the Company's European clinical services laboratory. Total operating expenses in
the nine  months  ended June 30,  1997 and the nine  months  ended June 30, 1996
consisted  primarily of general and administrative  expenses,  project costs and
research and development expenses.

     General and  administrative  expenses in each of the nine months ended June
30,  1997  and the nine  months  ended  June 30,  1996  consisted  primarily  of
professional salaries and benefits, depreciation and amortization,  professional
and  consulting  services,  sales  and  marketing,  office  rent  and  corporate
insurance.  General and administrative expenses were approximately $1,871,000 in
the nine months  ended June 30, 1997 and  approximately  $1,373,000  in the nine
months ended June 30, 1996.  The increase  during the nine months ended June 30,
1997 of  approximately  $498,000 or 36.3%,  from the  corresponding  fiscal 1996
period,  resulted primarily from expenses incurred in support of the operational
growth of the  Company  and in  connection  with the  establishment  and initial
operations of the MISD, the DMISD and the Company's  European  clinical services
laboratory.

     Project costs were  approximately  $1,427,000  during the nine months ended
June 30, 1997 and were  approximately  $897,000 for the corresponding  period in
fiscal 1996. Project costs were comprised of professional  salaries and benefits
and allocated overhead.  The increase during the nine months ended June 30, 1997
of approximately  $530,000 or 59.1%, from the  corresponding  fiscal 1996 period
was due primarily to the increase in resources applied by the Company to


                                     - 10 -
<PAGE>

perform the  increased  scope of  projects  for which the Company was engaged to
perform work,  including  projects  generated by the Company's European clinical
services laboratory.

     The gross  margin  percentage  during the nine  months  ended June 30, 1997
decreased to 63.7% from 64.9% for the corresponding  1996 period.  Such decrease
is attributable primarily to the recognition of revenue in the nine months ended
June 30, 1996 which resulted from the Company's  termination of the co-marketing
agreement  referred to above.  Without such revenue and gross profit,  the gross
margin percentage was 63.7% and 62.0% in the nine months ended June 30, 1997 and
the nine months ended June 30, 1996, respectively. Such increase is attributable
primarily  to  an  increase  in  efficiency   related  to  the   performance  of
project-related  activities  and the  increased  mix of  information  management
services which yielded higher margins  partially  offset by reduced  pricing for
certain core laboratory services.

     Research  and  development  expenses  during the nine months ended June 30,
1997 were approximately  $171,000.  Research and development expenses during the
corresponding periods in fiscal 1996 were approximately $89,000. In each period,
research  and  development  expenses  consisted  of  professional  salaries  and
benefits and overhead charged to research and development projects. The increase
during the nine months ended June 30, 1997 of approximately  $82,000,  or 92.1%,
from the corresponding fiscal 1996 period resulted primarily from an increase in
resources  dedicated to research and  development  projects,  including the MISD
business unit. Research and development expenses in fiscal 1997 and 1996 periods
focused on the design and coding of image  display and image  analysis  software
required  to  increase  the  efficiency  of  the  Company's  imaging  laboratory
operations.  In addition,  in the fiscal 1997 period,  research and  development
expenses  also  included  developmental  work on the  product  line for the MISD
business unit. There were no capitalized  computer software development costs in
the nine months ended June 30, 1997 and $85,000 of computer software development
costs were  capitalized in the nine months ended June 30, 1996.  Such costs were
capitalized  in  accordance  with  FASB  Statement  No.  86 after  technological
feasibility had been  demonstrated.  Such  capitalization  amounts are amortized
commencing  with product  introduction  on a  straight-line  basis utilizing the
estimated  economic  useful life of the  product.  The  Company  may  capitalize
certain development costs in the future, as appropriate.

     Net interest income of approximately  $27,000 in the nine months ended June
30,  1997  resulted  from  interest  earned on cash  balances  offset in part by
interest  expense   incurred  in  conjunction   with  certain   equipment  lease
obligations. The Company earned greater interest income in the nine months ended
June 30,  1997 than in the  corresponding  fiscal 1996 period due to higher cash
balances.

     The  Company's  net income  for the nine  months  ended  June 30,  1997 was
approximately  $494,000,  while the  Company  had net  income  of  approximately
$208,000 in the  corresponding  period in fiscal 1996.  The Company's net income
for the nine  months  ended June 30,  1997  resulted  primarily  from  increased
project  related revenue in the Company's  clinical  trials  services  business,
including revenue  generated from its European clinical services  laboratory and
from continued  efforts to improve  operating  efficiencies.  Net income for the
first  nine  months  of

                                     - 11 -
<PAGE>

fiscal 1996  resulted  primarily  from an increase in  project-related  services
performed by the Company and the recognition of revenue by the Company resulting
from the termination by the Company of the  co-marketing  agreement  referred to
above, coupled with a reduction in operating expenses by the Company as a result
of cost controls implemented during fiscal 1995.

     Three Months Ended June 30, 1997 and 1996
     -----------------------------------------

     Project  revenue for the quarters  ended June 30, 1997  ("Third  Quarter of
Fiscal  1997")  and 1996  ("Third  Quarter of Fiscal  1996")  was  approximately
$1,309,000 and $903,000 respectively, an increase of $406,000, or 45.0%. Project
revenue in both periods  consisted  primarily of medical  image  processing  and
analysis and digital  image  management  services,  including  computer-assisted
masked  readings  and the  data-basing  of digital  medical  images and  related
clinical  data.  The  increase in project  revenue  during the Third  Quarter of
Fiscal  1997  was  primarily  due to  revenue  generated  by the  Company's  one
European-based  client and several new projects  that the Company was engaged to
perform  work.  Project  revenue in the Third Quarter of Fiscal 1997 was derived
from 16 clients and such revenue in the Third Quarter of Fiscal 1996 was derived
from 12  clients.  The  Company  generated  $479,000,  or 36.6%,  of its project
revenue for the Third Quarter of Fiscal 1997 from one European-based client.

     The Company's total operating expenses were approximately $1,192,000 in the
Third Quarter of Fiscal 1997 and $843,000 in the corresponding  quarter of 1996,
an increase  of  $349,000,  or 41.4%.  Such  increase  was due  primarily  to an
increase  in  salaries  and  fringe  benefits  associated  with an  increase  in
personnel to accommodate the operational  growth of the Company coupled with the
increased cost related to the MISD and the Company's  European clinical services
laboratory. Expenses related to the DMISD declined during the three months ended
June 30, 1997 as the Company shifted  resources to the MISD. The DMISD continues
to be in the planning  stages of  operations.  Total  operating  expenses in the
Third  Quarter of Fiscal  1997 and the Third  Quarter of Fiscal  1996  consisted
primarily of general and administrative expenses, project costs and research and
development expenses.

     General and administrative  expenses in each of the Third Quarter of Fiscal
1997 and the Third Quarter of Fiscal 1996  consisted  primarily of  professional
salaries  and  benefits,   depreciation  and   amortization,   professional  and
consulting services,  sales and marketing,  office rent and corporate insurance.
General and  administrative  expenses were  approximately  $644,000 in the Third
Quarter of Fiscal 1997 and approximately $500,000 in the Third Quarter of Fiscal
1996.  The  increase  during the Third  Quarter of Fiscal 1997 of  approximately
$144,000,  or  28.8%,  from  the  corresponding  fiscal  1996  quarter  resulted
primarily  from expenses  incurred in support of the  operational  growth of the
Company and in connection with the establishment  and initial  operations of the
MISD and the Company's European clinical services laboratory.

     Project  costs were  approximately  $472,000  during  the Third  Quarter of
Fiscal  1997 and,  as in the same  period  in fiscal  1996,  were  comprised  of
professional salaries and benefits and allocated overhead. Project costs for the
corresponding quarter in fiscal 1996 were approximately  $330,000.  The increase
in project costs during the Third Quarter of Fiscal 1997


                                     - 12 -
<PAGE>

of approximately  $142,000, or 43.0%, from the corresponding fiscal 1996 quarter
was due primarily to the increase in resources applied by the Company to perform
the  increased  scope of  projects  for which the Company was engaged to perform
work,  including  projects generated by the Company's European clinical services
laboratory.

     The gross  margin  percentage  during  the  Third  Quarter  of Fiscal  1997
increased to 63.9% from 63.4% for the corresponding  1996 period.  Such increase
is  attributable   primarily  to  an  increase  in  efficiency  related  to  the
performance of  project-related  activities and the increased mix of information
management  services which yielded higher  margins  partially  offset by reduced
pricing for certain core laboratory services.

     Research and  development  expenses during the Third Quarter of Fiscal 1997
were  approximately  $77,000.  Research  and  development  expenses  during  the
corresponding  quarter in fiscal 1996 were approximately  $13,000. In each case,
research  and  development  expenses  consisted  of  professional  salaries  and
benefits and overhead charged to research and development projects. The increase
during the Third  Quarter of Fiscal 1997 of  approximately  $64,000,  or 492.3%,
from the corresponding fiscal 1996 period resulted primarily from an increase in
resources  dedicated to research and  development  projects,  including the MISD
business unit. Research and development  projects during the quarters ended June
30,  1997 and 1996  focused on the design and coding of image  display and image
analysis  software.  In addition,  research and development  projects during the
quarter ended June 30, 1997 also included developmental work on the product line
for the  MISD  business  unit.  There  were  no  capitalized  computer  software
development  costs in the Third  Quarter of Fiscal  1997 and $25,000 of computer
software development costs were capitalized in the Third Quarter of Fiscal 1996.
Such costs were  capitalized  in  accordance  with FASB  Statement  No. 86 after
technological  feasibility had been demonstrated.  Such capitalized  amounts are
amortized   commencing  with  product  introduction  on  a  straight-line  basis
utilizing the  estimated  economic  useful life of the product.  The Company may
capitalize certain development costs in the future, as appropriate.

     Net interest income of approximately  $8,000 in the Third Quarter of Fiscal
1997  resulted  from  interest  earned  on cash  balances,  partially  offset by
interest   expense   incurred  in  connection   with  certain   equipment  lease
obligations.  The Company  earned less  interest  income in the Third Quarter of
Fiscal  1997 than in the  corresponding  fiscal  1996  quarter due to lower cash
balances resulting from the timing of a receipt of payment from a major customer
which was collected by the Company in the latter part of June 1997.

     The  Company's  net  income  for the  Third  Quarter  of  Fiscal  1997  was
approximately  $125,000,  while the  Company  had net  income  of  approximately
$68,000 in the  corresponding  quarter of fiscal 1996.  The Company's net income
for the Third Quarter of Fiscal 1997 resulted  primarily from increased  project
revenue from the Company's  clinical trials service business,  including revenue
generated  from its European  clinical  services  laboratory  and from continued
efforts to improve operating  efficiencies.  Net income for the Third Quarter of
Fiscal  1996  was  attributable  primarily  to an  increase  in  project-related
services performed by the Company,


                                     - 13 -
<PAGE>

coupled with a reduction  in operating  expenses  resulting  from cost  controls
implemented by the Company during Fiscal 1995.




                                     - 14 -
<PAGE>

                                     PART II
                                OTHER INFORMATION

     Item 5.   Other Information.

     Richard S. Mink resigned as Senior Vice  President  and General  Manager of
the  Marketing  Information  Services  Division  (the "MISD") in April 1997.  In
addition,  in April 1997, the Company appointed Anthony P. Nowicki,  Senior Vice
President and General  Manager of the Data  Management and  Information  Systems
Division, to manage the MISD.

     On April 21, 1997, Andrew Reiter was elected to Vice President and Managing
Director of the Company's European operations.

     On June 18, 1997, GKN Securities Corp. ("GKN") and certain of its designees
(the "Exercising  Securityholders") exercised outstanding underwriter's purchase
options (the "UPOs") to purchase  630,000  shares (the "Shares") of Common Stock
of Bio-Imaging  Technologies,  Inc. The following table sets forth the number of
Shares underlying the Exercising Securityholders' UPOs:


<TABLE>
<CAPTION>
                   Name of                     Number of Shares
           Exercising Securityholder         Underlying the UPOs
           -------------------------         -------------------

           <S>                                      <C>
           GKN Securities Corp. ..........          206,500
           David Nussbaum ................          140,000
           Roger Gladstone ...............          140,000
           Robert Gladstone ..............          140,000
           Andrea Goldman ................            3,500
</TABLE>


     Pursuant to instructions from such Exercising  Securityholders,  all of the
Shares were issued to GKN. Giving effect to certain anti-dilution  provisions of
the UPOs,  the  Exercising  Securityholders  exercised  each UPO at the  current
exercise price of $1.00 per share,  representing aggregate gross proceeds to the
Company from such  exercise of  $630,000.  The UPOs were granted in June 1992 in
connection  with the Company's  public  offering of 1,000,000 units at $5.00 per
unit,  each unit consisting of one share of Common Stock and one Class G Warrant
to purchase  one share of Common  Stock.  GKN acted as the  underwriter  of such
public  offering.  The Class G Warrants  issuable  upon the exercise of the UPOs
expired unexercised in June 1996.


                                     - 15 -
<PAGE>


     The  Company  will not receive  any of the  proceeds  from any sales of the
Shares by GKN, if any. The Company has  registered  the Shares on a Registration
Statement on Form S-3 (the "Form S-3")  pursuant to the  Securities Act of 1933,
as amended,  in accordance  with its  obligations  under a  registration  rights
agreement with the Exercising  Securityholders.  The Form S-3 was filed with the
Securities and Exchange Commission on April 18, 1997.

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

     (a) Exhibits.

          Exhibit No.         Description of Exhibit
          -----------         ----------------------

             10.1             Bracco S.p.A. Contract

             27               Financial Data Schedule


     (b) Reports on Form 8-K.

               No reports on Form 8-K were filed  during the  quarter  for which
          this report on Form 10-QSB is filed. The Company did, however,  file a
          report  on Form  8-K on July  3,  1997.  Such  report  relates  to the
          exercise  by GKN  Securities  Corp.  and certain of its  designees  of
          options to purchase shares of Common Stock of the Company.




                                     - 16 -
<PAGE>

                                   SIGNATURES


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

                                        BIO-IMAGING TECHNOLOGIES, INC.




DATE:     July 24, 1997                By:  /s/ Donald W. Lohin
                                            -------------------
                                            Donald W. Lohin, Chairman, President
                                            and Chief Executive Officer
                                            (Principal Executive Officer)



DATE:     July 24, 1997                By:  /s/ Robert J. Phillips
                                            ----------------------
                                            Robert J. Phillips,
                                            Vice President and Chief
                                            Financial Officer
                                            (Principal Financial and
                                              Accounting Officer)


                                     - 17 -