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 December 31, 1998
                           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                08628-1020
   ------------------------------------------------------------------------
                    (Address of Principal Executive Offices)


                                 (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 December 31, 1998:

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

Common Stock, $.00025 par value                          7,773,878

      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 December 31, 1998 (unaudited) and
           September 30, 1998.....................................  2

           CONSOLIDATED STATEMENTS OF OPERATIONS
           For the Three Months Ended December 31, 1998 and 1997
           (unaudited)............................................  3

           CONSOLIDATED STATEMENTS OF CASH FLOWS
           For the Three Months Ended December 31, 1998 and 1997
           (unaudited)............................................  4

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

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

           Results of Operations..................................  9

           Liquidity and Capital Resources........................ 12

PART II    OTHER INFORMATION

      Item 5.  Other Information.................................. 14

      Item 6.  Exhibits and Reports on Form 8-K................... 15

SIGNATURES     ................................................... 16


                                     - 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 to assure 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,
1998.

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


                                                 December 31,    September 30,
                                                     1998             1998
                                               ---------------  --------------
                                                 (unaudited)
                                  ASSETS
Current assets:
  Cash and cash equivalents..................   $ 1,049,376      $ 1,527,330
  Accounts receivable, net...................       823,703          626,376
  Prepaid expenses and other current assets..       102,331           84,747
                                                 ----------       ----------
   Total current assets......................     1,975,410        2,238,453

Property and equipment, net..................     1,426,831        1,543,434

Other assets ................................        31,305           32,235
                                                 ----------       ----------

   Total assets..............................   $ 3,433,546      $ 3,814,122
                                                 ==========       ==========

                   LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Deferred revenue...........................   $   381,776      $   522,605
  Accounts payable...........................       153,830          142,071
  Accrued expenses and other current
   liabilities...............................       379,750          261,063
  Current maturities of long-term debt.......        45,442           49,956
                                                 ----------       ----------
   Total current liabilities.................       960,798          975,695
Long-term debt...............................        16,953           26,808
                                                 ----------       ----------
   Total liabilities.........................       977,751        1,002,503
                                                 ----------       ----------

Stockholders' equity:
  Preferred stock - $.00025 par value;
   authorized 3,000,000 shares, 416,667
   issued and outstanding ($500,000
   liquidation preference)...................           104              104
  Common stock - $.00025 par value;
   authorized 18,000,000 shares, 
   7,773,878 shares issued and outstanding
   at December 31, 1998 and 
   September 30, 1998........................         1,944            1,944
  Additional paid-in capital.................     9,231,497        9,231,497
  Accumulated deficit........................    (6,777,750)      (6,421,926)
                                                 ----------       ----------
   Stockholders' equity......................     2,455,795        2,811,619
                                                 ----------       ----------

   Total liabilities and stockholders'
   equity....................................   $ 3,433,546      $ 3,814,122
                                                 ==========       ==========




                 See Notes to Consolidated Financial Statements


                                     - 2 -
<PAGE>
                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      -------------------------------------
                                   (unaudited)


                                                 For the Three Months Ended
                                                        December 31,
                                                ----------------------------
                                                    1998             1997
                                                    ----             ----

Project revenues.........................      $    824,292      $ 1,118,096
                                                 ----------       ----------
Cost and expenses:

    Cost of revenues.....................           560,761          504,503

    General and administrative expenses..           317,399          468,759

    Sales and marketing expenses.........           241,317          276,934

    Research and development expenses....            59,568           72,656

    Non-recurring charges................                 -          150,000
                                                 ----------       ----------

Total cost and expenses..................         1,179,045        1,472,852
                                                 ----------       ----------

Loss from operations.....................          (354,753)        (354,756)

Interest income - net....................             8,929           26,698
                                                 ----------       ----------

Net loss.................................          (345,824)        (328,058)

Dividends on preferred stock.............            10,000           10,000
                                                 ----------       ----------

Net loss applicable to common stock......      $   (355,824)     $  (338,058)
                                                ===========       ==========

Basic loss per common share..............      $      (0.05)     $     (0.04)
                                                ===========       ==========

Weighted average number of common
  shares.................................         7,773,878        7,767,285
                                                ===========       ==========

Diluted loss per common share............      $      (0.05)     $     (0.04)
                                                ===========       ==========

Weighted average number of common and
dilutive common equivalent shares........         7,773,878        7,767,285
                                                ===========       ==========


                 See Notes to Consolidated Financial Statements


                                     - 3 -
<PAGE>
                 BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
                 -----------------------------------------------

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

                                                     For the Three Months Ended
                                                            December 31,
                                                    ----------------------------
                                                         1998           1997
                                                         ----           ----
Cash flows from operating activities:
  Net loss ........................................ $  (345,824)   $  (328,058)
  Adjustments to reconcile net loss to net cash
   used in operating activities:
    Depreciation and amortization..................     137,908        164,914
    Changes in operating assets and liabilities:
     (Increase) decrease in accounts receivable....    (197,327)           389
     Increase in prepaid expenses and other
     current assets................................     (17,584)       (24,054)
     Decrease in other assets......................         930          9,140
     Decrease in deferred revenue..................    (140,829)       (31,810)
     Increase (decrease) in accounts payable.......      11,759        (32,169)
     Increase in accrued expenses and other
     current liabilities...........................     128,687         76,698
                                                     ----------      ---------
     Net cash used in operating activities.........    (422,280)      (164,950)
                                                     ----------      ---------

Cash flows from investing activities:
  Purchases of property and equipment..............     (21,305)       (28,591)
                                                     ----------      ---------
     Net cash used in investing activities.........     (21,305)       (28,591)
                                                     ----------      ---------

Cash flows from financing activities:
  Payments under equipment lease obligations.......     (14,369)       (31,466)
  Dividends paid on preferred stock................     (20,000)             -
  Net proceeds from exercise of options to
     purchase common stock.........................           -         15,899
                                                     ----------      ---------
     Net cash used in financing activities.........     (34,369)       (15,567)
                                                     ----------      ---------

Net decrease in cash and cash equivalents..........    (477,954)      (209,108)

Cash and cash equivalents at beginning of period...   1,527,330      2,367,658
                                                     ----------      ---------

Cash and cash equivalents at end of period......... $ 1,049,376    $ 2,158,550
                                                     ==========     ==========

Supplemental disclosures of cash flow information:
  Cash paid during the period for interest......... $     1,694    $     2,246
                                                     ==========     ==========



                 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 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, 1998.

     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 December 31, 1998 and the results of its operations and
its cash flows for the three months ended December 31, 1998 and 1997.

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

     Basic  loss  per  common  share  was  calculated  based  upon  the net loss
available  to common  stockholders  divided by the  weighted  average  number of
shares of common stock  outstanding  during the period.  Diluted loss per common
share for the three months  ended  December 31, 1998 and 1997 exclude the impact
of options and warrants as they are antidilutive.


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

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


Note 1 - Basis of Presentation: (continued)

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

                                                    Three Months Ended
                                                        December 31,
                                                --------------------------
                                                    1998          1997
                                                -----------    -----------

         Net loss..........................     $ (345,824)    $ (328,058)

         Dividends on preferred stock......         10,000         10,000
                                                ----------     ----------

         Net loss applicable
            to common stock - basic........       (355,824)      (338,058)

         Dilutive dividends on
            preferred stock................              -              -
                                                ----------     ----------

         Net loss applicable
            to common stock - diluted......     $ (355,824)    $ (338,058)
                                                ----------     ----------

         Denominator:

         Weighted average number of
            common shares..................      7,773,878      7,767,285
                                                ==========     ==========
         Basic loss per
            common share...................     $    (0.05)    $    (0.04)
                                                ==========     ==========

         Denominator:

         Weighted average number of
            common shares..................      7,773,878      7,767,285
         Common share equivalents of
            outstanding stock options
            and warrants...................              -              -
         Common share equivalents of
            dilutive outstanding
            preferred stock................              -              -
                                                ----------     ----------

         Total shares......................      7,773,878      7,767,285
                                                ==========     ==========

         Diluted loss per common share.....     $    (0.05)    $    (0.04)
                                                ==========     ==========


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

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

Note 2 - Stockholders' Equity:

     The Company has 416,667 shares of Series A Preferred  Stock (the "Preferred
Stock")  outstanding.  The Preferred  Stock provides for (i) voting rights on an
as-converted to Common Stock basis, with standard protective provisions;  (ii) a
liquidation  preference of $1.20 per share; (iii)  anti-dilution  protection and
price protection  provisions;  (iv) cumulative dividends of $0.096 per share per
annum,  payable out of funds legally  available for the payment of dividends and
only upon declaration of dividends by the Board of Directors of the Company; and
(v) registration rights with respect to the shares of Common Stock issuable upon
conversion  of the  Preferred  Stock.  Dividends  are  payable in cash or in the
Company's Common Stock at the Company's discretion.

     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 expects that 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.




                                      - 7 -
<PAGE>
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS.

OVERVIEW

     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.  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.  The  Company
experienced  a loss for the three months ended  December 31, 1998 as a result of
insufficient  project  revenues to support the  infrastructure  of the  Company.
Although  the  Company's  client base  remained at 17 clients as compared to the
same period in the prior year,  the revenues  generated from such clients remain
highly concentrated.

     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) is
generally  approximately nine months. In addition, the contracts under which the
Company is engaged to perform services  typically cover a period of 12-24 months
and the volume and type of  services  performed  by the Company  generally  vary
during the course of a project.  In an effort to expand its client base,  obtain
additional contracts and generate additional revenues, the Company increased its
sales and  marketing  efforts  during the last fiscal  year.  As of December 31,
1998,  the Company  believes that the results of these efforts have not yet been
fully  realized  given the lengthy  sales cycle and the nature and timing of the
services to be provided by the Company on current and prospective contracts.  No
assurance  can be made that the  Company's  project  revenues  will  increase to
levels required to achieve and maintain profitability.

     Despite lower project revenues for the three months ended December 31, 1998
as compared to the three months ended  December 31, 1997,  the Company  believes
that demand for its services and  technologies  will grow during the longer 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  rigorous
regulatory  requirements  relating to the  submission of this data. In addition,
the  United  States  Food and Drug  Administration  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  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,  an increase in competition,  there can be no assurance that
demand for the Company's services and technologies will grow, or sustain growth,
or that  additional  revenue  generating  opportunities  will be realized by the
Company.

                                     - 8 -
<PAGE>

     Certain  matters   discussed  in  the  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. In  particular,  the
Company's  statements  regarding  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  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
projects  due to the  variability  in size,  scope  and  duration  of  projects,
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.

RESULTS OF OPERATIONS

     Three Months Ended December 31, 1998 and 1997
     ---------------------------------------------

     Project  revenues for the quarters ended December 31, 1998 ("First  Quarter
of Fiscal 1999") and 1997 ("First  Quarter of Fiscal  1998") were  approximately
$824,000 and $1,118,000,  respectively,  a decrease of approximately $294,000 or
26.3%.  Project  revenues in each of the First Quarter of Fiscal 1999 and Fiscal
1998 were derived from 17 clients. Project revenues generated from the Company's
client  base  continue  to be  highly  concentrated.  Four  clients  represented
approximately 65.3% of the Company's project revenues for the three months ended
December 31, 1998. For the comparable period last year, two clients  represented
approximately  58.3% of the  Company's  project  revenues of which one  European
client  represented  43.6% or  $487,000  of project  revenues.  The  decrease in
project  revenues is  primarily a result of a decrease in the work  performed by
the Company on  existing  contracts,  including  work for such  European  client
during the First  Quarter of Fiscal  1999 as  compared  to the First  Quarter of
Fiscal 1998.  The  Company's  scope of work in both periods  included  primarily
medical imaging core laboratory services and image-based  information management
services.

     Cost of  revenues  in each of the First  Quarter of Fiscal  1999 and Fiscal
1998  were  comprised  of  professional  salaries  and  benefits  and  allocated
overhead.  Cost of revenues for the First Quarter of Fiscal 1999 and Fiscal 1998
were  approximately  $561,000  and  $505,000,   respectively,   an  increase  of
approximately  $56,000 or 11.1%.  This increase is primarily  attributable to an
increase in staffing levels required to support the mix of services  provided by
the Company in the First Quarter of Fiscal 1999 as compared to the First Quarter
of Fiscal 1998.

     The difference  between project revenues and cost of revenues for the First
Quarter of Fiscal 1999 decreased as a percentage to project revenues compared to
the First Quarter of 1998. This is primarily due to a higher gross profit margin
generated  from work  performed on the one


                                     - 9 -
<PAGE>

European  client,  which  represented  43.6% of  project  revenues  in the First
Quarter of Fiscal 1998,  compared to the gross profit margin generated from work
performed on the  Company's  other  clients in the First Quarter of Fiscal 1999.
The higher gross margin  during the First  Quarter of Fiscal 1998  resulted from
the mix of  services  and the fees  associated  with the work  performed  by the
Company for this European client. In addition,  the Company maintained  staffing
levels to support its existing contracts and in anticipation of future business.

     General and administrative  expenses in each of the First Quarter of Fiscal
1999 and Fiscal 1998 consisted primarily of professional  salaries and benefits,
depreciation and amortization, professional and consulting services, office rent
and corporate insurance.  General and administrative expenses were approximately
$317,000 in the First Quarter of Fiscal 1999 and  approximately  $469,000 in the
First  Quarter of Fiscal 1998.  The decrease  during the First Quarter of Fiscal
1999 of  approximately  $152,000 or 32.4%,  from the  corresponding  Fiscal 1998
quarter,  resulted  primarily from the elimination of expenditures in support of
the  former  Marketing  Information  Services  Division  (the  "MISD")  and Data
Management and  Information  Systems  Division (the "DMISD") and personnel costs
associated  with former  executive  officers who resigned in December 1997. Such
personnel costs were independent of the  expenditures  that supported the former
MISD and DMISD divisions.  This decrease was offset, in part, by personnel costs
associated with the  appointment of a new President and Chief Executive  Officer
after the First Quarter of Fiscal 1998.

     Sales and  marketing  expenses in each of the First  Quarter of Fiscal 1999
and Fiscal 1998 were comprised of direct sales and marketing costs, professional
salaries and benefits and allocated overhead.  Sales and marketing expenses were
approximately  $241,000 in the First  Quarter of Fiscal  1999 and  approximately
$277,000 in the First  Quarter of Fiscal  1998.  The  decrease  during the First
Quarter  of  Fiscal  1999  of  approximately   $36,000,   or  13.0%,   from  the
corresponding  Fiscal 1998  quarter,  resulted  primarily  from the  decrease in
personnel costs associated with the Senior Vice President of Sales and Marketing
incurred in the First  Quarter of Fiscal 1998.  The  executive  officer who held
that position was  appointed  President  and Chief  Executive  Officer after the
First Quarter of Fiscal 1998. These personnel costs are reflected in general and
administrative expenses for the First Quarter of Fiscal 1999.

     Research and  development  expenses in each of the First  Quarter of Fiscal
1999 and Fiscal  1998  consisted  of  professional  salaries  and  benefits  and
overhead charged to research and development projects.  Research and development
expenses  during the First  Quarter of Fiscal  1999 and 1998 were  approximately
$60,000 and  $73,000,  respectively.  The decrease  during the First  Quarter of
Fiscal 1999 of approximately  $13,000,  or 17.8%, from the corresponding  Fiscal
1998  quarter,  resulted  primarily  from a decrease in  resources  dedicated to
research and development projects.  Research and development expenses in each of
the First  Quarter  of Fiscal  1999 and  Fiscal  1998  primarily  focused on the
formulation, design and testing of product and process alternatives.



                                     - 10 -
<PAGE>
     During the First Quarter of Fiscal 1998, the Company recorded non-recurring
charges of $150,000.  This amount consists of restructuring expenses of $105,000
and severance expenses of $45,000.

     In December 1997, the Company terminated two business  divisions,  the MISD
and the DMISD,  which were  established in October 1996. These divisions did not
meet the Company's expectations and the Company believed that its resources were
better  focused  on its core  clinical  trials  service  business.  The  Company
incurred  restructuring charges of approximately $105,000 which consisted of (i)
$38,000 of severance  costs paid to the former Senior Vice President and General
Manager  of the MISD and (ii)  $67,000  related to the  write-off  of assets and
costs  associated  with the  termination  of the MISD and  DMISD.  Each of these
charges has been  reflected in  non-recurring  charges for the First  Quarter of
Fiscal 1998.

     In a separate  matter,  two executive  officers of the Company  resigned in
December 1997. As a result of these resignations, the Company recorded severance
expenses of  approximately  $45,000 as of December 31, 1997.  Such expenses have
been reflected in non-recurring charges for the First Quarter of Fiscal 1998.

     Total cost and  expenses  in each of the First  Quarter of Fiscal  1999 and
Fiscal 1998 consisted primarily of cost of revenues,  general and administrative
expenses,  sales and marketing  expenses and research and development  expenses.
The  Company's  cost and expenses  were  approximately  $1,179,000  in the First
Quarter of Fiscal 1999 and approximately $1,323,000 in the corresponding quarter
in Fiscal 1998 (excluding  non-recurring charges of $150,000).  Such decrease of
approximately  $144,000  or  10.9%  is  due  primarily  to  the  elimination  of
expenditures  in support of the former MISD and DMISD  divisions  and  personnel
costs associated with former  executive  officers who resigned in December 1997.
Such personnel  costs were  independent of the  expenditures  that supported the
former MISD and DMISD divisions.

     Net interest  income of  approximately  $9,000  during the First Quarter of
1999,  resulted  from  interest  earned on cash  balances,  offset,  in part, by
interest expense incurred in conjunction with equipment lease  obligations.  The
Company earned greater  interest income in the First Quarter of 1998 than in the
First Quarter of Fiscal 1999 due to higher cash balances  maintained  during the
Fiscal 1998 period.  Net interest income was approximately  $27,000 in the First
Quarter of Fiscal 1998.

     The  Company's  net loss for the First  Quarter  of 1999 was  approximately
$346,000,  while the  Company  had a net loss of  approximately  $328,000 in the
First Quarter of 1998.  The Company's net loss for the First Quarter of 1999 was
attributable   primarily  to   insufficient   project  revenue  to  support  the
infrastructure of the Company.



                                     - 11 -
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

     At  December  31,  1998,  the  Company  had cash and  cash  equivalents  of
approximately $1,049,000. Working capital at December 31, 1998 was approximately
$1,015,000.

     Net cash used in operating  activities  for the three months ended December
31, 1998 was approximately  $422,000. Such use of cash reflects the net loss for
the three months ended December 31, 1998 and changes in certain of the Company's
operating assets and liabilities. Accounts receivable increased by approximately
$197,000  during the three  months  ended  December  31,  1998 as a result of an
increase in unbilled  receivables during such period.  Unbilled  receivables are
recorded for revenue recognized to date that is currently unbillable pursuant to
contractual terms. Amounts become billable upon the achievement of milestones or
in accordance with predetermined  payment schedules.  Deferred revenue decreased
by approximately  $141,000 as a result of a decline in advance payments that the
Company  received on signed contracts during the three months ended December 31,
1998. In addition,  accrued expenses and other current liabilities  increased by
approximately  $129,000 due primarily to an increase in expenses associated with
the Company's European operations.

     As of December 31, 1998 all of the Company's project  contracts,  including
contracts with  international  clients,  have been  denominated in United States
dollars.

     For the  three  months  ended  December  31,  1998,  the  Company  invested
approximately  $21,000  in  capital  and  leasehold  improvements.  The  Company
currently  anticipates that capital  expenditures for the balance of Fiscal 1999
will approximate $150,000.  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 December 1998, the Company paid to the holders of its Preferred Stock an
aggregate  amount  of  $20,000,  which  amount  represented  accrued  cumulative
dividends  for the period from July 1, 1998 through and  including  December 31,
1998.  For  future  dividend  obligations,  see "Note 2 -Notes  to  Consolidated
Financial Statements."

     The Company  anticipates  that its cash and cash equivalents as at December
31, 1998, 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  return  to  profitability  in the  future  or that the
continuation  of such  trends will not  adversely  affect the  Company's  future
liquidity requiring the need for the Company to raise additional capital.


                                     - 12 -
<PAGE>
YEAR 2000 COMPLIANCE

     Historically,  certain computer programs have been written using two digits
rather  than four to define  the  applicable  year,  which  could  result in the
computer  recognizing  a date using "00" as the year 1900  rather  than the year
2000. This, in turn,  could result in major system failures or  miscalculations,
and is  generally  referred  to as the "Year  2000  Problem".  The  Company  has
assessed  its state of  readiness  with  respect to the Year 2000  Problem.  The
Company's management  information systems department has reviewed and tested the
Company's  internal  business  systems  for Year 2000  compliance.  The  Company
believes  that,  based on the results of such review and testing,  the Company's
internal  business  systems,  including  its  computer  systems,  are Year  2000
compliant.  The Company does not  anticipate  any material  future  expenditures
relating to the Year 2000  compliance of its internal  systems.  There can be no
assurance,  however,  that the Year 2000 Problem will not  adversely  affect the
Company's business, financial condition, results of operations or cash flows.

     In addition,  the Company  receives  imaging data derived from the computer
systems  of its  clients,  which  data or  software  may or may not be Year 2000
compliant. Although the Company is currently taking steps to address the impact,
if any, of the Year 2000 Problem relating to the data received from its clients,
failure of such computer  systems to properly  address the Year 2000 Problem may
adversely  affect  the  Company's  business,  financial  condition,  results  of
operations  or cash  flows.  The  Company  currently  requires  its  clients  to
represent that the data-sets sent to the Company are Year 2000 compliant.

     The  Year  2000   disclosures   discussed   above  are  based  on  numerous
expectations  which are subject to  uncertainties.  Certain risk  factors  which
could have a material adverse effect on the Company's  results of operations and
financial condition include but are not limited to: failure to identify critical
systems  which will  experience  failures,  errors in the  remediation  efforts,
inability to obtain new  replacements  for  non-compliant  systems or equipment,
general  economic  downturn  relating to Year 2000  failures in the U.S.  and in
other  countries,  failures in global banking  systems and capital  markets,  or
extended  failures by public and private  utility  companies or common  carriers
supplying services to the Company.




                                     - 13 -
<PAGE>
                           PART II. OTHER INFORMATION.
                           ---------------------------


ITEM 5.     OTHER INFORMATION.

     CONDITIONAL LISTING ON THE NASDAQ SMALLCAP MARKET

     On August 25, 1998, the Company received  notification from Nasdaq that the
Company's  Common Stock was trading below the minimum bid price  requirement  of
$1.00 required for continued listing on The Nasdaq SmallCap Market. As a result,
the Company  had until  November  25,  1998 for its Common  Stock to trade at or
above the minimum  requirement  for at least 10 consecutive  trading days.  This
notification  was based on review of the Company's  Common Stock trading history
with  respect  to the  closing  bid price for the  previous  thirty  consecutive
trading days from the date of  notification.  The Company's Common Stock did not
regain compliance before November 25, 1998. Therefore, on November 23, 1998, the
Company  requested  a hearing,  by written  submission,  from Nasdaq and further
requested  a stay of any  termination  proceeding  pending  the  outcome of such
hearing. Such hearing was held on January 14, 1999.

     On January  25,  1999,  the Nasdaq  Hearing  Panel  granted  the Company an
exception from the minimum bid price requirement until March 1, 1999 in order to
allow the Company the  opportunity  to  effectuate a reverse  stock split of its
Common  Stock.  The  Company's  Board  of  Directors  has  recommended  that the
Stockholders  approve a proposal to provide the Board of Directors the authority
to amend the Company's  Certificate of Incorporation,  as amended, to effect, by
March 1, 1999, a reverse  stock split,  whereby the Company  would issue one new
share of Common  Stock in exchange for up to four  outstanding  shares of Common
Stock.  After March 1, 1999, the Company must evidence a closing bid price at or
above $1.00 per share for a minimum of ten consecutive trading days. In order to
fully  comply  with the terms of this  exception,  the  Company  must be able to
demonstrate compliance with all requirements for continued listing on The Nasdaq
SmallCap Market. In the event the Company is deemed to have met the terms of the
exception,  it shall  continue  to be  listed  on The  Nasdaq  SmallCap  Market.
However,  if the Company  fails to comply with the terms of the  exception,  the
Company's  Common  Stock  will be  delisted  from The  Nasdaq  SmallCap  Market.
Accordingly,  effective  January 27, 1999 and for the duration of the exception,
the trading  symbol of the  Company's  Common Stock will be changed from BITI to
BITIC.  There can be no  assurance,  however,  that the proposed  reverse  stock
split, if effected, will result in the Company's continued listing on the Nasdaq
SmallCap Market.

     In the event that Company's  Common Stock ceases to be listed on The Nasdaq
SmallCap Market, the Company believes that its Common Stock would continue to be
quoted and traded in either the OTC  Bulletin  Board or on the  over-the-counter
market. However, the Company believes that the marketability of its Common Stock
would be  negatively  impacted if moved to either the OTC Bulletin  Board or the
over-the-counter market. A decrease in the marketability of the Company's Common
Stock may cause a decline in the Company's stock price.


                                     - 14 -
<PAGE>
ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.

      (a)   Exhibits.

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

                 27           Financial Data Schedule

      (b)   Reports on Form 8-K.

            None.


                                     - 15 -
<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:   February 12, 1999              By:/s/ Mark L. Weinstein         
                                          ------------------------------
                                          Mark L. Weinstein, President and Chief
                                          Executive Officer
                                          (Principal Executive Officer)



DATE:   February 12, 1999              By:/s/ Robert J. Phillips        
                                          ------------------------------
                                          Robert J. Phillips, Vice President
                                          and Chief Financial Officer
                                          (Principal Financial and
                                          Accounting Officer)


                                     - 16 -