U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission File No. 1-11182
BIO-IMAGING TECHNOLOGIES, INC.
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(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 11-2872047
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
830 Bear Tavern Road, West Trenton, New Jersey 08628-1020
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(Address of Principal Executive Offices)
(609) 883-2000
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(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:
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State the number of shares outstanding of each of the Issuer's
classes of common stock, as of June 30, 1998:
Class Number of Shares
- ----- ----------------
Common Stock, $.00025 par value 7,773,878
Transitional Small Business Disclosure Format (check one):
Yes: No: X
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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TABLE OF CONTENTS
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Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.............................................1
CONSOLIDATED BALANCE SHEETS
as of June 30, 1998 (unaudited) and
September 30, 1997.................................................2
CONSOLIDATED STATEMENTS OF OPERATIONS For the Nine Months
Ended June 30, 1998 and 1997
(unaudited)........................................................3
CONSOLIDATED STATEMENTS OF OPERATIONS For the Three Months
Ended June 30, 1998 and 1997
(unaudited)........................................................4
CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months
Ended June 30, 1998 and 1997
(unaudited)........................................................5
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS (unaudited).............................................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ............................10
Results of Operations.............................................10
Liquidity and Capital Resources...................................16
PART II OTHER INFORMATION
Item 1. Legal Proceedings...............................................18
Item 5. Other Information...............................................19
Item 6. Exhibits and Reports on Form 8-K................................20
SIGNATURES ...................................................................21
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PART I. FINANCIAL INFORMATION.
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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,
1997.
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.
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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June 30, September 30,
1998 1997
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(unaudited)
ASSETS
Current assets:
Cash and cash equivalents..................... $ 1,800,798 $ 2,367,658
Accounts receivable, net...................... 850,254 1,214,052
Prepaid expenses and other current assets..... 86,761 88,518
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Total current assets....................... 2,737,813 3,670,228
Property and equipment, net...................... 1,520,518 1,669,678
Other assets .................................... 32,235 67,076
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Total assets............................... $ 4,290,566 $ 5,406,982
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Deferred revenue.............................. $ 254,485 $ 414,360
Accounts payable.............................. 79,644 81,832
Accrued expenses and other current
liabilities ................................ 496,925 239,351
Current maturities of long-term debt.......... 64,793 87,084
-------- --------
Total current liabilities.................. 895,847 822,627
Long-term debt................................... 36,430 12,794
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Total liabilities.......................... 932,277 835,421
-------- --------
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 and 7,753,878
shares issued and outstanding at June 30, 1998
and September 30, 1997, respectively........... 1,944 1,939
Additional paid-in capital...................... 9,231,497 9,215,603
Accumulated deficit............................. (5,875,256) (4,646,085)
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Stockholders' equity........................... 3,358,289 4,571,561
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Total liabilities and stockholders' equity..... $ 4,290,566 $ 5,406,982
============ ============
See Notes to Consolidated Financial Statements
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
For the Nine Months Ended
June 30,
----------------------------
1998 1997
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Project revenue ................................ $ 2,930,463 $ 3,935,789
Project costs .................................. 1,478,528 1,427,218
----------- -----------
Gross profit ................................... 1,451,935 2,508,571
General and administrative expenses ............ 1,120,269 1,284,634
Sales and marketing expenses ................... 800,257 586,278
Research and development expenses .............. 194,729 170,695
Proxy and litigation expenses .................. 320,000 -
Restructuring and severance expenses ........... 277,000 -
----------- ----------
(Loss) income from operations .................. (1,260,320) 466,964
Interest income - net .......................... 71,434 26,912
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Net (loss) income .............................. (1,188,886) 493,876
Dividends on preferred stock ................... 30,000 30,000
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Net (loss) income applicable to common stock ... $ (1,218,886) $ 463,876
============ =========
Basic (loss) earnings per common share.......... $ (0.16) $ 0.08
============= ==========
Weighted average number of common
shares........................................ 7,771,672 6,152,340
============= ==========
Diluted (loss) earnings per common share........ $ (0.16) $ 0.06
============= ==========
Weighted average number of common and dilutive
common equivalent shares...................... 7,771,672 7,966,246
============= ==========
See Notes to Consolidated Financial Statements
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(unaudited)
For the Three Months Ended
June 30,
--------------------------
1998 1997
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Project revenue ................................... $ 866,552 $ 1,309,388
Project costs ..................................... 515,807 472,231
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Gross profit ...................................... 350,745 837,157
General and administrative expenses ............... 356,173 444,817
Sales and marketing expenses ...................... 274,160 198,828
Research and development expenses ................. 55,420 76,512
Proxy and litigation expenses ..................... 38,864 --
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(Loss) income from operations ..................... (373,872) 117,000
Interest income - net ............................. 21,803 7,635
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Net (loss) income ................................. (352,069) 124,635
Dividends on preferred stock ...................... 10,000 10,000
----------- -----------
Net (loss) income applicable to common stock ...... $ (362,069) $ 114,635
=========== ===========
Basic (loss) earnings per common share ............ $ (0.05) $ 0.02
=========== ===========
Weighted average number of common
shares .......................................... 7,773,878 6,288,880
=========== ===========
Diluted (loss) earnings per common share .......... $ (0.05) $ 0.02
=========== ===========
Weighted average number of common and dilutive
common equivalent shares ........................ 7,773,878 7,902,736
=========== ===========
See Notes to Consolidated Financial Statements
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<TABLE>
<CAPTION>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(unaudited)
For the Nine Months Ended
June 30,
-------------------------
1998 1997
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<S> <C> <C>
Cash flows from operating activities:
Net (loss) income ........................................................ $(1,188,886) $ 493,876
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Depreciation and amortization ....................................... 423,339 508,717
Changes in operating assets and liabilities:
Decrease in accounts receivable ................................... 363,798 110,609
Decrease (increase) in prepaid expenses and other current assets .. 1,757 (98,373)
Decrease (increase) in other assets ............................... 34,841 (42,636)
Decrease in deferred revenue ...................................... (159,875) (199,062)
(Decrease) increase in accounts payable ........................... (2,188) 86,106
Increase in accrued expenses and other current
liabilities ..................................................... 257,574 12,877
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Net cash (used in) provided by operating activities ............... (269,640) 872,114
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment .................................... (198,585) (865,917)
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Net cash used in investing activities ............................. (198,585) (865,917)
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Cash flows from financing activities:
Payments under equipment lease obligations ............................. (74,249) (67,677)
Dividends paid on preferred stock ...................................... (40,285) (41,222)
Net proceeds from exercise of options to purchase common stock ......... 15,899 283,160
Net proceeds from exercise of warrants to purchase common stock ........ -- 600,000
----------- -----------
Net cash (used in) provided by financing activities ............... (98,635) 774,261
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Net (decrease) increase in cash and cash equivalents ...................... (566,860) 780,458
Cash and cash equivalents at beginning of period .......................... 2,367,658 1,377,633
----------- -----------
Cash and cash equivalents at end of period ................................ $ 1,800,798 $ 2,158,091
=========== ===========
Supplemental disclosures of cash flow information:
Cash paid during the period for interest ............................... $ 1,619 $ 3,428
=========== ===========
Equipment purchased under capital lease obligation ..................... $ 75,595 $ --
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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(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, 1997.
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, 1998, the results of its operations for the
three-month and nine-month periods ended June 30, 1998 and 1997 and its cash
flows for the nine-month periods ended June 30, 1998 and June 30, 1997.
Interim results are not necessarily indicative of results for the
full fiscal year.
Basic (loss) earnings per common share was calculated based upon the
net (loss) income 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-month and nine-month periods ended June 30,
1998 excludes the impact of options and warrants as they are antidilutive.
Diluted earnings per common share for the three-month and nine-month periods
ended June 30, 1997 were calculated based upon the net income available to
common stockholders, after giving effect to the assumed conversions of preferred
stock divided by the weighted average number of shares of Common Stock adjusted
for the incremental dilution of outstanding options, warrants and preferred
stock during such periods.
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<TABLE>
<CAPTION>
BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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(unaudited)
Note 1 - Basis of Presentation: (continued)
The computation of basic (loss) earnings per common share and diluted
(loss) earnings per common share were as follows:
Nine Months Ended Three Months Ended
June 30, June 30,
-------------------------- -------------------------
1998 1997 1998 1997
------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net (loss) income .......................... $(1,188,886) $ 493,876 $ (352,069) $ 124,635
Dividends on preferred stock ............... 30,000 30,000 10,000 10,000
----------- ----------- ----------- -----------
Net (loss) income applicable
to common stock - basic ................. $(1,218,886) $ 463,876 $ (362,069) $ 114,635
Dilutive dividends on preferred stock ...... -- 30,000 -- 10,000
----------- ----------- ----------- -----------
Net (loss) income applicable
to common stock - diluted ................ (1,218,886) 493,876 (362,069) 124,635
----------- ----------- ----------- -----------
Denominator:
Weighted average number of
common shares .......................... 7,771,672 6,152,340 7,773,878 6,288,880
=========== =========== =========== ===========
Basic (loss) earnings per
common share ........................... $ (0.16) $ 0.08 $ (0.05) $ 0.02
=========== =========== =========== ===========
Denominator:
Weighted average number of
common shares ............................ 7,771,672 6,152,340 7,773,878 6,288,880
Common share equivalents of outstanding
stock options and warrants ............... -- 1,397,239 -- 1,197,189
Common share equivalents of dilutive
outstanding preferred stock .............. -- 416,667 -- 416,667
----------- ----------- ----------- -----------
Total shares ............................... 7,771,672 7,966,246 7,773,878 7,902,736
=========== =========== =========== ===========
Diluted (loss) earnings per
common share ............................. $ (0.16) $ 0.06 $ (0.05) $ 0.02
=========== =========== =========== ===========
</TABLE>
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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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.
Note 3 - Litigation
On February 23, 1998, five stockholders of the Company (the
"Committee Members") describing themselves as The Bio-Imaging Technologies
Independent Shareholders' Committee (the "Committee"), as plaintiffs, filed a
verified complaint and motion in the United States District Court for the
District of New Jersey (the "New Jersey District Court") seeking to enjoin the
Company and each of the Company's then current directors, Jeffrey S. Hurwitz,
Esq., Jeffrey H. Berg, Ph.D. and James A. Taylor, Ph.D. (collectively, the
"Incumbent Directors"), from holding the election of the Board of Directors, at
the Annual Meeting of Stockholders, on February 27, 1998. The Committee Members
alleged, among other things, use of a false and misleading proxy statement,
manipulation of the proxy process and manipulation of the stockholder democracy
process in connection with the pending election on February 27, 1998. The New
Jersey District Court, on February 26, 1998, denied the Committee Members'
application for a temporary restraining order and denied the Committee Members'
application for a preliminary injunction. The New Jersey District Court
determined, among other things, that the proxy statement furnished in connection
with the solicitation by the Incumbent Directors was not misleading. Subsequent
to the end of the quarter, on July 22, 1998, the Company entered into a
settlement agreement relating to such litigation. For further discussion of this
settlement agreement, see -- "Part II. Other Information -- Item 1. Legal
Proceedings."
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BIO-IMAGING TECHNOLOGIES, INC. AND SUBSIDIARIES
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(unaudited)
Note 3 - Litigation: (continued)
On July 22, 1998 the Company and Dr. James J. Conklin, a former
director and executive officer of the Company and member of the Committee
("Conklin"), executed a separation agreement, which contains severance terms
(the "Separation Agreement"), whereby the parties exchanged mutual releases and
entered covenants not to sue. The Separation Agreement also contains, among
other things, certain confidentiality, non-competition, non-solicitation and
non-disparagement provisions. Pursuant to the terms of the Separation Agreement,
the Company will pay Conklin $127,000. The Company previously recorded this
severance expense during the quarter ended March 31, 1998.
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Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
RESULTS OF OPERATIONS
The Company is a biomedical information services company that derives
its revenue primarily from medical image processing and digital image management
services to the pharmaceutical, biotechnology and medical device industries. The
Company experienced a loss for the three months and nine months ended June 30,
1998, as a result of (i) insufficient project revenue to support the
infrastructure of the Company, (ii) a proxy contest and related litigation, and
(iii) restructuring and severance expenses related to the elimination of two
former business divisions and the resignation in December 1997 of a former
executive officer. 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 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 vary during the
course of a project. In an effort to obtain additional contracts and generate
additional revenue, the Company has increased its sales and marketing efforts
during the past year. As of June 30, 1998, 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 revenue will
increase to levels required to achieve and maintain profitability. Although the
Company's client base increased from 21 clients in the nine months ended June
30, 1997 to 24 clients in the nine months ended June 30, 1998, the revenue
generated from such client base remains highly concentrated. Two clients
represented approximately 50% of the Company's project revenue for the nine
months ended June 30, 1998, of which one European client represented
approximately 27% of project revenue.
In February 1998 the Committee and management of the Company engaged
in a proxy contest in an effort to, among other things, elect the members of the
Company's Board of Directors at the Annual Meeting of Stockholders held on
February 27, 1998. In connection with such proxy contest and the related
litigation, the Company expended $320,000 in the nine months ended June 30,
1998. For a discussion of the settlement of this litigation see "Part II. Other
Information -- Item 1. Legal Proceedings."
During the nine months ended June 30, 1998 the Company recorded
restructuring and severance expenses of $277,000. This amount consists of
restructuring expenses of $105,000 and severance expenses of $172,000.
In December 1997, the Company terminated two business divisions, the
Marketing Information Services Division (the "MISD") and the Data Management and
Information Systems Division (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
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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 the DMISD. Each of these charges has been reflected
in restructuring and severance expenses for the nine months ended June 30, 1998.
The Company believes that the restructuring will not have an impact on the
Company's future results of operations, liquidity and sources and uses of
capital resources.
In a separate matter, two executive officers of the Company resigned
in December 1997. The Company entered into the Separation Agreement with one
such former executive officer. The Company will pay such former executive
officer $127,000 in connection with the Separation Agreement. The Company has
not entered, and does not expect to enter, into an agreement with the other
executive officer who resigned in December 1997. As a result of these
resignations, the Company recorded severance expenses of approximately $172,000.
Such expenses have been reflected in restructuring and severance expenses for
the nine months ended June 30, 1998.
Despite lower project revenue for the first nine months of Fiscal
1998, 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. 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.
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 longer term growth
of the Company's business, the information concerning existing client contracts,
the timing of the projects 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, such as the
Company's client concentration and lengthy sales cycle, the Company's ability to
obtain new business and accurately estimate 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 not within the Company's
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control, and others 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.
NINE MONTHS ENDED JUNE 30, 1998 AND 1997
----------------------------------------
Project revenue for the nine months ended June 30, 1998 and 1997 were
approximately $2,930,000 and $3,936,000, respectively, a decrease of
approximately $1,006,000 or 25.6%. Project revenue in the nine months ended June
30, 1998 and 1997 were derived from 24 and 21 clients, respectively. Revenue
generated from the Company's client base remains highly concentrated. Two
clients represented approximately 50% of the Company's project revenue for the
nine months ended June 30, 1998 of which one European client represented
approximately 27% or $796,000 of project revenue. For the comparable period last
year, four clients represented approximately 66% of the Company's project
revenue of which one European client represented 34% or $1,338,000 of project
revenue. The decrease in project revenue 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 nine months ended June 30, 1998 as compared to the
same period in Fiscal 1997. There can be no assurance that the Company will
generate revenues from such European client at historic levels. The Company's
scope of work in both periods included medical imaging core laboratory services
and image-based information management services. The Company entered into three
new projects with its European client in April 1998, which it expects to
complete by the end of calendar 1999. The revenues generated from such projects
in the nine months ended June 30, 1998 were not material. There can be no
assurance that project revenues from such projects will be material in the
future.
Project costs for the nine months ended June 30, 1998 and 1997 were
comprised of professional salaries and benefits and allocated overhead. Project
costs for the nine months ended June 30, 1998 and 1997 were approximately
$1,479,000 and $1,427,000, respectively, an increase of approximately $52,000 or
3.6%. Project costs increased slightly, despite a decrease in project revenues,
as the cost of professional salaries and benefits and allocated overhead
expenses increased in the nine months ended June 30, 1998 and 1997.
The gross margin percentage during the nine months ended June 30,
1998 decreased to 49.5% from 63.7% for the corresponding Fiscal 1997 period.
Such decrease is attributable primarily to constant staffing levels and the mix
of services for which the Company was engaged to provide, and, to a lesser
extent, a decrease in prices the Company charged for certain services as a
result of increased competition.
General and administrative expenses in each of the nine months ended
June 30, 1998 and 1997 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 $1,120,000 in the nine months ended June 30, 1998 and
approximately $1,285,000 in the nine months ended June 30, 1997. The decrease
during the nine months ended June 30, 1998 of approximately $165,000 or 12.8%,
from the corresponding
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Fiscal 1997 period, resulted primarily from 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 are independent of the expenditures that supported the former MISD and
DMISD divisions. The decrease in general and administrative expenses reflects,
and is partially offset by, a full nine months of expenses incurred during the
Fiscal 1998 period by the Company's European facility which commenced operations
during the second quarter of Fiscal 1997.
Sales and marketing expenses in each of the nine months ended June
30, 1998 and 1997 were comprised of direct sales and marketing costs,
professional salaries and benefits and allocated overhead. Sales and marketing
expenses were approximately $800,000 in the nine months ended June 30, 1998 and
approximately $586,000 in the corresponding Fiscal 1997 period. The increase
during the nine months ended June 30, 1998 of approximately $214,000, or 36.5%,
from the corresponding Fiscal 1997 period, resulted primarily from the increase
in personnel and resources dedicated to sales and marketing activities in the
United States and in Europe.
Research and development expenses in each of the nine months ended
June 30, 1998 and 1997 consisted of professional salaries and benefits and
overhead charged to research and development projects. Research and development
expenses during the nine months ended June 30, 1998 and 1997 were approximately
$195,000 and $171,000, respectively. The increase during the nine months ended
June 30, 1998 of approximately $24,000, or 14.0%, from the corresponding Fiscal
1997 period, resulted primarily from an increase in resources dedicated to
research and development projects. Research and development expenses in each of
the nine months ended June 30, 1998 and 1997 primarily focused on the
formulation and design of product and process alternatives. There were no
capitalized computer software development costs in either the nine months ended
June 30, 1998 or 1997. However, the Company has in the past capitalized, and in
the future may capitalize, certain computer development costs in accordance with
the Statement of Financial Accounting Standards Board No. 86.
Total operating expenses in each of the nine months ended June 30,
1998 and 1997 consisted primarily of project costs, general and administrative
expenses, sales and marketing expenses and research and development expenses.
The Company's total operating expenses were approximately $3,594,000 in the nine
months ended June 30, 1998 (excluding restructuring expenses of approximately
$105,000, severance expenses of approximately $172,000 and proxy and litigation
expenses of approximately $320,000) and approximately $3,469,000 in the
corresponding period in Fiscal 1997. Such increase of approximately $125,000 or
3.6% is primarily attributable to expenses incurred by the Company's European
facility which commenced operations in the second quarter of Fiscal 1997 and an
increase in the Company's sales and marketing expenses offset, in part, by the
elimination of expenditures in support of the former MISD and DMISD divisions
and lower personnel costs due to the resignation of former executive officers in
December 1997. Such personnel costs are independent of the expenditures that
supported the former MISD and DMISD divisions.
-13-
<PAGE>
Net interest income of approximately $71,000 during the nine months
ended June 30, 1998, 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 nine months ended
June 30, 1998 than in the corresponding period of Fiscal 1997 due to higher cash
balances maintained during the Fiscal 1998 period. Net interest income was
approximately $27,000 in the nine months ended June 30, 1997.
The Company's net loss for the nine months ended June 30, 1998 was
approximately $1,189,000, while the Company had net income of approximately
$494,000 in the nine months ended June 30, 1997. The Company's net loss for the
nine months ended June 30, 1998 was attributable primarily to insufficient
project revenue to support the infrastructure of the Company, coupled with
expenses associated with a proxy contest and related litigation, restructuring
expenses related to the elimination of the former MISD and DMISD divisions and
severance expenses associated with the resignation in December 1997 of a former
executive officer.
THREE MONTHS ENDED JUNE 30, 1998 AND 1997
-----------------------------------------
Project revenue for the quarters ended June 30, 1998 ("Third Quarter
of Fiscal 1998") and 1997 ("Third Quarter of Fiscal 1997") were approximately
$867,000 and $1,309,000, respectively, a decrease of approximately $442,000 or
33.8%. Project revenues in the Third Quarter of Fiscal 1998 and Fiscal 1997 were
derived from 20 and 16 clients, respectively. Revenue generated from the
Company's client base remains highly concentrated. Two clients represented
approximately 58% of the Company's project revenue for the three months ended
June 30, 1998. For the comparable period last year, three clients represented
approximately 65% of the Company's project revenue of which one European client
represented 39% or $513,000 of project revenue. The decrease in project revenue
is primarily a result of a decrease in the work performed by the Company on
existing contracts for such European client during the Third Quarter of Fiscal
1998 as compared to the Third Quarter of Fiscal 1997. There can be no assurance
that the Company will generate revenues from such European client at historic
levels. The Company's scope of work in both periods included medical imaging
core laboratory services and image-based information management services. The
Company entered into three new projects with its European client in April 1998,
which it expects to complete by the end of calendar 1999. The revenues generated
from such projects in the three months ended June 30, 1998 were not material.
There can be no assurance that project revenues from such projects will be
material in the future.
Project costs in each of the Third Quarter of Fiscal 1998 and Fiscal
1997 were comprised of professional salaries and benefits and allocated
overhead. Project costs for the Third Quarter of Fiscal 1998 and Fiscal 1997
were approximately $516,000 and $472,000, respectively, an increase of
approximately $44,000 or 9.3%. This increase is primarily attributable to an
increase in the cost of professional salaries and benefits and allocated
overhead expenses in the Third Quarter of Fiscal 1998 as compared to the Third
Quarter of Fiscal 1997.
-14-
<PAGE>
The gross margin percentage during the Third Quarter of Fiscal 1998
decreased to 40.5% from 63.9% for the corresponding period in 1997. Such
decrease is attributable to constant staffing levels and the mix of services for
which the Company was engaged to provide, and, to a lesser extent, a decrease in
prices the Company charged for certain services as a result of increased
competition.
General and administrative expenses in each of the Third Quarter of
Fiscal 1998 and Fiscal 1997 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 $356,000 in the Third Quarter of Fiscal 1998 and approximately
$445,000 in the Third Quarter of Fiscal 1997. The decrease during the Third
Quarter of Fiscal 1998 of approximately $89,000 or 20.0%, from the corresponding
Fiscal 1997 quarter, resulted primarily from 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 are independent of the expenditures that supported the former MISD and
DMISD divisions.
Sales and marketing expenses in each of the Third Quarter of Fiscal
1998 and Fiscal 1997 were comprised of direct sales and marketing costs,
professional salaries and benefits and allocated overhead. Sales and marketing
expenses were approximately $274,000 in the Third Quarter of Fiscal 1998 and
approximately $199,000 in the Third Quarter of Fiscal 1997. The increase during
the Third Quarter of Fiscal 1998 of approximately $75,000, or 37.7%, from the
corresponding Fiscal 1997 quarter, resulted primarily from the increase in
personnel and resources dedicated to sales and marketing activities in the
United States and in Europe.
Research and development expenses in each of the Third Quarter of
Fiscal 1998 and Fiscal 1997 consisted of professional salaries and benefits and
overhead charged to research and development projects. Research and development
expenses during the Third Quarter of Fiscal 1998 and 1997 were approximately
$55,000 and $77,000, respectively. The decrease during the Third Quarter of
Fiscal 1998 of approximately $22,000, or 28.6%, from the corresponding Fiscal
1997 quarter, resulted primarily from a decrease in resources dedicated to
research and development projects. Research and development projects during the
quarter ended June 30, 1997 also included developmental work on the product line
for the MISD business unit. The Company terminated such business unit in
December 1997. Research and development expenses in each of the Third Quarter of
Fiscal 1998 and Fiscal 1997 primarily focused on the formulation and design of
product and process alternatives.
Total operating expenses in each of the Third Quarter of Fiscal 1998
and Fiscal 1997 consisted primarily of project costs, general and administrative
expenses, sales and marketing expenses and research and development expenses.
The Company's total operating expenses were approximately $1,202,000 in the
Third Quarter of Fiscal 1998 (excluding proxy and litigation expenses of
approximately $39,000, all of which in the Third Quarter of Fiscal 1998 involve
litigation expenses) and approximately $1,192,000 in the corresponding quarter
in Fiscal 1997.
-15-
<PAGE>
Such slight increase of approximately $10,000 or 0.8% is due primarily to an
increase in the Company's sales and marketing efforts offset, for the most part,
by 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 are independent of the
expenditures that supported the former MISD and DMISD divisions.
Net interest income of approximately $22,000 during the Third Quarter
of 1998, 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 Third Quarter of 1998 than in the
Third Quarter of Fiscal 1997 due to higher cash balances maintained during the
Fiscal 1998 period. Net interest income was approximately $8,000 in the Third
Quarter of Fiscal 1997.
The Company's net loss for the Third Quarter of 1998 was
approximately $352,000, while the Company had net income of approximately
$125,000 in the Third Quarter of 1997. The Company's net loss for the Third
Quarter of 1998 was attributable primarily to insufficient project revenue to
support the infrastructure of the Company.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had cash and cash equivalents of
approximately $1,801,000. Working capital at June 30, 1998 was approximately
$1,842,000.
Net cash used in operating activities for the nine months ended June
30, 1998 was approximately $270,000. Such use of cash reflects the net loss for
the nine months ended June 30, 1998 and changes in certain of the Company's
operating assets and liabilities. Accounts receivable decreased by approximately
$364,000 during the nine months ended June 30, 1998 as a result of the reduction
in project revenue during such period. Deferred revenue also decreased by
approximately $160,000 as a result of a decline in advance payments that the
Company received on signed contracts during the nine months ended June 30, 1998.
In addition, accrued expenses and other current liabilities increased by
approximately $258,000 due primarily to the litigation and severance expenses
that the Company incurred during the nine months ended June 30, 1998. There can
be no assurance that such trends will not continue in the future or that the
continuation of such trends will not adversely affect the Company's future
liquidity.
For the nine months ended June 30, 1998, the Company invested
approximately $199,000 in capital and leasehold improvements. The Company
currently anticipates that capital expenditures for the balance of Fiscal 1998
will approximate $100,000. 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 June 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 January 1, 1998 through and including June 30,
1998. For future dividend obligations, see "Note 2 -
-16-
<PAGE>
Notes to Consolidated Financial Statements."
The Company anticipates that its cash and cash equivalents as at June
30, 1998, together with cash from operations, will be sufficient to fund current
working capital needs and capital requirements for at least the next twelve
months.
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'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. 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.
-17-
<PAGE>
PART II. OTHER INFORMATION.
---------------------------
ITEM 1. LEGAL PROCEEDINGS.
On February 23, 1998, each of the Committee Members, as plaintiffs,
filed a verified complaint and motion in the New Jersey District Court seeking
to enjoin the Company and the Incumbent Directors from holding the election of
the Board of Directors, at the Annual Meeting of Stockholders, on February 27,
1998. The Committee Members alleged, among other things, use of a false and
misleading proxy statement, manipulation of the proxy process and manipulation
of the stockholder democracy process in connection with the pending election on
February 27, 1998. The New Jersey District Court, on February 26, 1998, denied
the Committee Members' application for a temporary restraining order and denied
the Committee Members' application for a preliminary injunction. The New Jersey
District Court determined, among other things, that the proxy statement
furnished in connection with the solicitation by the Incumbent Directors was not
misleading.
Subsequent to the end of the quarter, on July 22, 1998, the Company
and each of Jeffrey S. Hurwitz, Esq., Jeffrey H. Berg, Ph.D., James A. Taylor,
Ph.D. and Mark L. Weinstein (collectively, the "Company Group") executed a
settlement agreement (the "Settlement") with the Committee, each of the
Committee Members and Investment Partners of America, L.P. (collectively, the
"Stockholders Group"). The Settlement relates to all legal matters that have
been ongoing since February 1998 between the Company Group and Stockholders
Group. The Settlement calls for, among other things, (i) mutual releases from
all parties, (ii) an expansion of the Company's Board of Directors to include
two nominees of the Committee acceptable to the Company, and (iii) the execution
of the Separation Agreement. The Company Group will immediately begin the
interview process for potential Board members that will be nominated by the
Committee. The Settlement also contains certain non-disclosure and
non-disparagement provisions. In connection with the Settlement, each of the
Committee Members, each of the Incumbent Directors and the Company agreed to
dismiss all claims and counterclaims asserted in their consolidated action, with
prejudice, except for any claims made by the Company against Donald W. Lohin
("Lohin"). The Company's claims against Lohin were previously dismissed without
prejudice on April 16, 1998.
On July 22, 1998 the Company and Conklin executed the Separation
Agreement, whereby the parties exchanged mutual releases and entered covenants
not to sue. The Separation Agreement also contains, among other things, certain
confidentiality, non-competition, non-solicitation and non-disparagement
provisions. Pursuant to the terms of the Separation Agreement, the Company will
pay Conklin $127,000. The Company previously recorded this severance expense
during the quarter ended March 31, 1998.
-18-
<PAGE>
ITEM 5. OTHER INFORMATION.
ADDITION TO THE BOARD OF DIRECTORS
On July 22, 1998, the Board of Directors increased the size of the
Board to five (5) members and elected David E. Nowicki, DMD, to fill the vacancy
created and to serve on the Company's Board of Directors until the next annual
meeting of stockholders and until his successor has been duly elected and
qualified. Dr. Nowicki has conducted a full time practice of Periodontics for
approximately twenty years, and has been Assistant Clinical Professor
(1980-1994) and Director of Postgraduate Research and Literature Review
(1984-1992) at the New Jersey Dental School, Department of Periodontics.
NOTIFICATION FROM NASDAQ
On March 2, 1998, the Company received notice from the Nasdaq Stock
Market, Inc. ("Nasdaq"), that the Company's Common Stock was trading below the
new minimum bid price requirement of $1.00 required for continued listing on the
Nasdaq SmallCap Market. As a result, the Company had until May 28, 1998 for its
Common Stock to trade at or above the minimum requirement for at least
10-consecutive trade days. On May 29, 1998, the Company was notified by Nasdaq
that based on a review of the Company's Common Stock trading history with
respect to the closing bid, the Company was in compliance with the new bid
requirement for continued listing on Nasdaq. The notification was based on a
review of the Company's Common Stock trading history with respect to the closing
bid since February 27, 1998. There can be no assurance, however, that the
Company will be able to continue to meet the Nasdaq criteria for continued
listing. In the event the Company fails to meet such continued listing criteria,
the Company's Common Stock could cease to be listed on the Nasdaq SmallCap
Market. In such event, the Company believes that its Common Stock would continue
to be quoted and traded on 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.
LEASE RENEWAL
On June 22, 1998, the Company entered into a lease renewal beginning
on December 1, 1998 and ending November 30, 1999 for approximately 9,100 square
feet of office space at the Company's headquarters in West Trenton, New Jersey.
Such lease renewal provides for base rent of approximately $9,800 per month
through November 30, 1999. The Company believes that these facilities will be
adequate for its needs for the foreseeable future, but continuously evaluates
its property needs.
-19-
<PAGE>
PRESIDENT AND CHIEF EXECUTIVE OFFICER
On April 15, 1998, the Company entered into an employment agreement
with Mark L. Weinstein in connection with his election to the offices of
President and Chief Executive Officer of the Company. Such agreement has an
initial term of two years with an initial annual base salary of $180,000.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
10.1 Employment Agreement dated April 15, 1998
between the Company and Mark L. Weinstein.
27.1 Financial Data Schedule for the period ended
June 30, 1998.
27.2 Restated Financial Data Schedule for the
period ended December 31, 1997.
27.3 Restated Financial Data Schedule for the year
ended September 30, 1997.
27.4 Restated Financial Data Schedule for the
period ended June 30, 1997.
27.5 Restated Financial Data Schedule for the
period ended December 31, 1996.
27.6 Restated Financial Data Schedule for the year
ended September 30, 1996.
27.7 Restated Financial Data Schedule for the
period ended June 30, 1996.
(b) Reports on Form 8-K.
None.
-20-
<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: August 10, 1998 By: /S/ MARK L. WEINSTEIN
---------------------
Mark L. Weinstein, President and
Chief Executive Officer
(Principal Executive Officer)
DATE: August 10, 1998 By: /S/ ROBERT J. PHILLIPS
----------------------
Robert J. Phillips, Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
-21-
<PAGE>
BIO-IMAGING TECHNOLOGIES, INC.
April 15, 1998
Mark L. Weinstein, President & Chief Executive Officer
Bio-Imaging Technologies, Inc.
830 Bear Tavern Road
West Trenton, NJ 08628-1020
Dear Mark:
On behalf of the Board of Directors of Bio-Imaging Technologies,
Inc., the (Company) I am pleased to offer you the following compensation package
in connection with your employment as the Company's President and Chief
Executive Officer.
a) BASE SALARY. You will be paid an annual base salary of
$180,000 payable in bi-weekly installments. Such base
salary shall be reviewed at the end of each 12-month period
of employment and any adjustments to be made shall be
determined by the Board of Directors at that time.
b) BONUSES. You will be eligible for and may receive bonuses,
the amount of which are to be determined by the Board of
Directors in its sole discretion.
c) INCENTIVE COMPENSATION. You will be eligible for awards
from the Company's incentive compensation plans on a basis
commensurate with your position and responsibility.
d) STOCK OPTIONS. Upon the date hereof, you will be granted an
option to purchase up to 150,000 shares of Common Stock of
the Company at a purchase price equal to 100% of the fair
market value of the Common Stock on the date of the grant,
which options shall vest as follows: 50,000 on the date
hereof and 25,000 on each of the first, second, third and
fourth anniversary of the date of the grant. This stock
option grant is in addition to existing stock option grants
to you relating to your option to purchase 100,000 shares
of Common Stock of the Company.
e) RELOCATION EXPENSES. You will, upon presentation to the
Company of receipts therefor, be reimbursed by the Company
for actual, out-of-pocket relocation expenses, if any,
related to the purchase of a new primary residence for the
purpose of relocating closer to the Company's principal
executive offices in West Trenton, New Jersey. These
expenses may include the following: (i) realtor's
commission, not to exceed 6% payable on the sale of the
Employee's existing primary residence; (ii) other closing
costs, not to exceed $2,000 and (iii) expenses incurred in
moving the contents of your existing primary residence,
provided, however, that in no event, shall the amount
payable by the Company pursuant to this subsection exceed
$50,000.
<PAGE>
f) EXPENSES. Subject to and in accordance with the Company's
policies and procedures, you are hereby authorized to
incur, and, upon presentation of itemized accounts, shall
be reimbursed for any and all reasonable and necessary
business-related expenses, which expenses are incurred by
you on behalf of the Company.
g) BENEFITS. You and your dependents shall be included in any
and all plans, programs and policies which provide benefits
for employees and their dependents. Such plans, programs
and policies may include health care insurance, long-term
disability plans, life insurance, supplemental disability
insurance, supplemental life insurance, holidays and other
similar or comparable benefits made available to Company
employees.
h) ABSENCES. You will be entitled to absences because of
illness or other incapacity, and such other absences,
whether for holiday, personal time, or for any other
purpose, as set forth in the Company's employment manual or
current policies and procedures, as the case may be. You
will be entitled to four weeks per year of vacation time,
to be taken consistent with the policies of the Company and
the effective discharge of your duties. You will also have
the right to accumulate such vacation time from year to
year as specified by current Company policies and
procedures.
You will be subject to all of the Company's other policies and
procedures, including, without limitation, the requirement that you execute a
copy of the attached form of (1) Invention Assignment and Confidentiality
Agreement and (2) Non-Competition Agreement. Further, the Company and you hereby
agree and acknowledge that your employment with the Company is for an initial
term of two years from the date of approval of this offer letter by the Board of
Directors of the Company and, thereafter, will not, unless otherwise agreed to
by the Company and you, be for any specified term but rather will be an
"at-will" relationship pursuant to which your employment relationship may be
terminated by the Company with or without cause. 18 months into the intitial
two-year term of agreement, the Board of Directors will give an initial
indication in writing of their intended actions as it relates to Mr. Weinstein's
employment status at the end of the initial term. It is understood that this
notification is not binding on the ultimate decision but is an indication of
intent at that time. During the initial two-year term, however, your employment
relationship with the Company may be terminated by the Company upon your death,
disability (defined as 180 days of disability in a one-year period, whether or
not such days are continuous) or for cause (as hereinafter defined). For
purposes of this offer letter, "cause" is defined as:
"The Company may terminate the Employee's employment
hereunder for cause immediately and with prompt notice to the
Employee, which cause shall be determined in good faith solely by the
Board of Directors. 'Cause' for termination shall include, but is not
limited to, the following conduct of the Employee:
(1) Material breach of any provision of this Agreement by the Employee,
which breach shall not have been cured by the Employee within thirty (30) days
of receipt of written notice of said breach;
Page 2 of 3
<PAGE>
(2) Misconduct as an employee of the Company, including but not limited to:
(i) misappropriating any funds or property of the Company; (ii) attempting to
willfully obtain any personal profit from any transaction in which the Employee
has an interest which is adverse to the interests of the Company; or (iii) any
other act or omission which substantially impairs the Company's ability to
conduct its ordinary business in its usual manner;
(3) Unreasonable neglect or refusal to perform the duties assigned to the
Employee under or pursuant to this Agreement;
(4) Conviction of a felony; or
(5) Any other act or omission which subjects the Company or any of its
subsidiaries to substantial public disrespect, scandal or ridicule."
If you agree with the stated provisions, please sign and date both
copies enclosed and return one copy to me. I will copy other Board members and
Corporate Counsel. When you sign this document, please provide a copy to Rob
Phillips for his information as well.
Sincerely,
James A. Taylor, Ph.D.
/s/ James A. Taylor 4/15/98 /s/ Mark L. Weinstein 4/15/98
- --------------------- ------- ---------------------- -------
James A. Taylor, Ph.D. Date Mark L. Weinstein Date
Page 3 of 3
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<TOTAL-COSTS> 1,937,872
<OTHER-EXPENSES> 2,868,880
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (53,412)
<INCOME-PRETAX> 791,353
<INCOME-TAX> 0
<INCOME-CONTINUING> 791,353
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 791,353
<EPS-PRIMARY> 0.12 <F1>
<EPS-DILUTED> 0.10 <F2>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED INTERIM FINANCIAL STATEMENTS INCLUDED IN THE REGISTRANT'S FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
F1 -- This amount represents Basic Earnings per Share restated in accordance
with the requirements of Statement of Financial Accounting Standards No. 128
"Earnings per Share."
F2 -- This amount represents Diluted Earnings per Share in accordance with the
requirements of Statement of Financial Accounting Standards No. 128 - "Earnings
per Share."
</LEGEND>
<CIK> 0000822418
<NAME> Bio-Imaging Technologies, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 2,218,091
<SECURITIES> 0
<RECEIVABLES> 788,574
<ALLOWANCES> 20,000
<INVENTORY> 0
<CURRENT-ASSETS> 3,097,498
<PP&E> 3,739,560
<DEPRECIATION> 2,183,417
<TOTAL-ASSETS> 4,702,129
<CURRENT-LIABILITIES> 972,744
<BONDS> 28,502
0
104
<COMMON> 1,711
<OTHER-SE> 3,699,068
<TOTAL-LIABILITY-AND-EQUITY> 4,702,129
<SALES> 0
<TOTAL-REVENUES> 3,935,789
<CGS> 0
<TOTAL-COSTS> 1,427,218
<OTHER-EXPENSES> 2,041,607
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (26,912)
<INCOME-PRETAX> 493,876
<INCOME-TAX> 0
<INCOME-CONTINUING> 493,876
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 493,876
<EPS-PRIMARY> 0.08 <F1>
<EPS-DILUTED> 0.06 <F2>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED INTERIM FINANCIAL STATEMENTS INCLUDED IN THE REGISTRANT'S FORM 10-QSB
FOR THE PERIOD ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
F1 -- This amount represents Basic Earnings per Share restated in accordance
with the requirements of Statement of Financial Accounting Standards No. 128
"Earnings per Share."
F2 -- This amount represents Diluted Earnings per Share in accordance with the
requirements of Statement of Financial Accounting Standards No. 128 - "Earnings
per Share."
</LEGEND>
<CIK> 0000822418
<NAME> Bio-Imaging Technologies, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,524,474
<SECURITIES> 0
<RECEIVABLES> 937,238
<ALLOWANCES> 60,000
<INVENTORY> 0
<CURRENT-ASSETS> 2,425,705
<PP&E> 3,043,971
<DEPRECIATION> 1,828,700
<TOTAL-ASSETS> 3,651,072
<CURRENT-LIABILITIES> 1,013,378
<BONDS> 75,572
0
104
<COMMON> 1,506
<OTHER-SE> 2,560,512
<TOTAL-LIABILITY-AND-EQUITY> 3,651,072
<SALES> 0
<TOTAL-REVENUES> 1,202,550
<CGS> 0
<TOTAL-COSTS> 450,407
<OTHER-EXPENSES> 594,976
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (6,808)
<INCOME-PRETAX> 163,975
<INCOME-TAX> 0
<INCOME-CONTINUING> 163,975
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 163,975
<EPS-PRIMARY> 0.03 <F1>
<EPS-DILUTED> 0.02 <F2>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1996 EXTRACTED FROM THE REGISTRANT'S ANNUAL REPORT ON FORM 10-KSB
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 1O-KSB.
F1 -- This amount represents Basic Earnings per Share in accordance with the
requirements of Statement of Financial Accounting Standards No. 128 "Earnings
per Share."
F2 -- This amount represents Diluted Earnings per Share in accordance with the
requirements of Statement of Financial Accounting Standards No. 128 - "Earnings
per Share."
</LEGEND>
<CIK> 0000822418
<NAME> Bio-Imaging Technologies, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 1,437,633
<SECURITIES> 0
<RECEIVABLES> 939,183
<ALLOWANCES> 60,000
<INVENTORY> 0
<CURRENT-ASSETS> 2,329,276
<PP&E> 2,873,643
<DEPRECIATION> 1,674,700
<TOTAL-ASSETS> 3,534,071
<CURRENT-LIABILITIES> 1,069,124
<BONDS> 99,878
0
104
<COMMON> 1,493
<OTHER-SE> 2,363,472
<TOTAL-LIABILITY-AND-EQUITY> 3,534,071
<SALES> 0
<TOTAL-REVENUES> 3,657,320
<CGS> 0
<TOTAL-COSTS> 1,284,180
<OTHER-EXPENSES> 2,015,834
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (24,818)
<INCOME-PRETAX> 382,124
<INCOME-TAX> 0
<INCOME-CONTINUING> 382,124
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 382,124
<EPS-PRIMARY> 0.06 <F1>
<EPS-DILUTED> 0.06 <F2>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED INTERIM FINANCIAL STATEMENTS INCLUDED IN THE REGISTRANT'S FORM 10-QSB
FOR THE PERIOD ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
F1 -- This amount represents Basic Earnings per Share restated in accordance
with the requirements of Statement of Financial Accounting Standards No. 128
"Earnings per Share."
F2 -- This amount represents Diluted Earnings per Share in accordance with the
requirements of Statement of Financial Accounting Standards No. 128 - "Earnings
per Share."
</LEGEND>
<CIK> 0000822418
<NAME> Bio-Imaging Technologies, Inc.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 1,358,076
<SECURITIES> 0
<RECEIVABLES> 510,614
<ALLOWANCES> 60,000
<INVENTORY> 0
<CURRENT-ASSETS> 1,870,700
<PP&E> 2,780,978
<DEPRECIATION> 1,530,082
<TOTAL-ASSETS> 3,128,630
<CURRENT-LIABILITIES> 889,461
<BONDS> 0
0
104
<COMMON> 1,477
<OTHER-SE> 2,114,004
<TOTAL-LIABILITY-AND-EQUITY> 3,128,630
<SALES> 0
<TOTAL-REVENUES> 2,552,462
<CGS> 0
<TOTAL-COSTS> 897,351
<OTHER-EXPENSES> 1,462,067
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 207,540
<INCOME-TAX> 0
<INCOME-CONTINUING> 207,540
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 207,540
<EPS-PRIMARY> 0.04 <F1>
<EPS-DILUTED> 0.03 <F2>
</TABLE>
