U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                  Form 10-KSB/A


[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934

                  For the fiscal year ended: December 31, 2003

[ ]  TRANSITION  REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES  EXCHANGE
     ACT OF 1934

                For the transition period from _______ to _______

                         Commission File Number: 0-30275

                                  I-TRAX, INC.
                   ------------------------------------------
                 (Name of small business issuer in its charter)



                Delaware                                  23-3057155
-----------------------------------------   ------------------------------------
     (State or other jurisdiction of        (I.R.S. Employer Identification No.)
     incorporation or organization)


            One Logan Square
     130 N. 18th Street, Suite 2615
       Philadelphia, Pennsylvania                         19103
-----------------------------------------   ------------------------------------
(Address of principal executive offices)                (Zip Code)

                    Issuer's telephone number: (215) 557-7488

Securities registered under Section 12(b) of the Exchange Act:   None

Securities registered under Section 12(g) of the Exchange Act:   Common Stock,
                                                                $.001 par value

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act 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. [X] Yes [ ] No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the best of the  registrant's  knowledge,  in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year: $4,188,860.

The  aggregate  market value of the voting  common stock held by  non-affiliates
computed  with  reference  to the price at which the stock was sold on March 25,
2003 on the American Stock Exchange was $112,921,667.  As of March 25, 2003, the
number of  outstanding  shares of common stock,  par value $.001 per share,  was
28,374,852.

DOCUMENTS  INCORPORATED BY REFERENCE:  Portions of the issuer's definitive proxy
statement  for its 2004  Annual  Meeting of  Stockholders  are  incorporated  by
reference in Part III of this report.

Transitional Small Business Disclosure Format (Check one): [ ] Yes [X] No




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                                  I-TRAX, INC.

                    FORM 10-KSB/A AMENDMENT TO ANNUAL REPORT

                      FOR THE YEAR ENDED DECEMBER 31, 2003

                                TABLE OF CONTENTS
Item                                                                                                      Page No.

                                     PART I
1.       Description of Business............................................................................ 1
2.       Description of Properties..........................................................................16
3.       Legal Proceedings..................................................................................17
4.       Submission of Matters to a Vote of Security Holders................................................17


                                     PART II

5.       Market for Common Equity, Related Stockholder Matters
              and Small Business Issuer Purchases of Equity Securities......................................18
6.       Management's Discussion and Analysis of Financial Condition and Results of Operations..............21
7.       Financial Statements...............................................................................31
8.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...............98
8A.      Controls and Procedures............................................................................98


                                    PART III

9.       Directors, Executive Officers, Promoters and Control Persons; Compliance with
         Section 16(a) of the Exchange Act .................................................................98
10.      Executive Compensation.............................................................................98
11.      Security Ownership of Certain Beneficial Owners and Management and
              Related Stockholder Matters...................................................................98
12.      Certain Relationships and Related Transactions.....................................................98
13.      Exhibits and Reports on Form 8-K...................................................................99
14.      Principal Accounting Fees and Services............................................................101




                                       ii

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                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS

         This report includes and incorporates forward-looking statements. All
statements, other than statements of historical facts, included or incorporated
in this report regarding our strategy, future operations, financial position,
future revenues, projected costs, prospects, plans and objectives of management
are forward-looking statements. The words "anticipates," "believes,"
"estimates," "expects," "intends," "may," "plans," "projects," "will," "would"
and similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying words. We
cannot guarantee that we actually will achieve the plans, intentions or
expectations disclosed in our forward-looking statements and you should not
place undue reliance on our forward-looking statements. Actual results or events
could differ materially from the plans, intentions and expectations disclosed in
the forward-looking statements we make. We have included important factors in
the cautionary statements included or incorporated in this report, particularly
under the heading "Risk Factors" beginning on page 7 that we believe could cause
actual results or events to differ materially from those stated in or implied by
the forward-looking statements we make. Our forward-looking statements do not
reflect the potential impact of any future acquisitions, mergers, dispositions,
joint ventures or investments we may make.

Introduction

         I-trax is a combination of two companies that merged on March 19, 2004:
I-trax, Inc. and Meridian Occupational Healthcare Associates, Inc., a private
company, which does business as CHD Meridian Healthcare. The merger and its
terms are described in greater detail below.

         This Annual Report on Form 10-KSB describes the business of the merged
companies. However, because the merger occurred subsequent to the year ended
December 31, 2003, certain portions of this report, including Management's
Discussion and Analysis of Financial Condition and Results of Operations and the
discussion of results of operations presented in that section, are limited to
I-trax. To present the performance and results of operations of the merged
companies for the years ended December 31, 2003 and 2002, we are including in
this report the balance sheet of CHD Meridian Healthcare as of December 31, 2003
and the statements of operations for the years ended December 31, 2003 and 2002,
and the unaudited combined condensed balance sheet of I-trax and CHD Meridian
Healthcare on a pro forma basis as if the merger had been consummated on
December 31, 2003 and the unaudited combined condensed statements of operations
on a pro forma basis as if the merger had been consummated on January 1, 2002.

I-trax and CHD Meridian Healthcare Business Description

         We offer two categories of services, which can be integrated or blended
as necessary or appropriate based on each client's needs. The first category
includes on site services such as occupation health, primary care, corporate
health and pharmacy, which were historically offered by CHD Meridian Healthcare.
The second category includes personalized health management programs, which were
historically offered by I-trax. Each of these services is described in greater
detail below.


         As the result of the merger, we believe we are the nation's largest
provider of on-site corporate health management services. Our health management
services are designed to allow employers to contract directly for a wide range
of employee healthcare needs. We can deliver these services at or near the
client's work site by opening, staffing and managing a clinic or pharmacy
dedicated to the client and its employees, or remotely by using the Internet and
our state-of-the-art Care Communications Center staffed with trained nurses and
other healthcare professionals 24 hours per day, 7 days per week. Our array of
services provides each client with flexibility to meet its specific pharmacy,
primary care, occupational health, corporate health, wellness, lifestyle
management or disease management needs. Pursuant to multi-year agreements, our
clients can offer their employees, dependents and retirees any combination of
our various services which integrate seamlessly, through on-site or off-site
delivery platforms, or as a component of or complement to existing health plan
options.




                                       1
<PAGE>


         Our primary target market is large and mid-sized self-insured employers
and business consortia. These entities are more likely to derive immediate and
meaningful financial benefit from our services because of their scale and focus
on controlling healthcare costs.

         We currently operate approximately 160 locations in 32 states. We also
maintain contracts with approximately 150 clients, including many leading
employers. Our clients pay us directly for our services and include automotive
and automotive parts manufacturers, consumer products manufacturers, large
financial institutions, health plans, integrated delivery networks, and third
party administrators. Our client retention rate is high because we establish
strong client relationships, which are supported by the critical nature of our
services, the benefits achieved by employer and employee constituents, and the
utilization of multi-year service contracts.

         CHD Meridian Healthcare's Historic Business - Services Delivered At or
         Near the Work Site


         Occupational Health Services. We provide professional staffing and
management of on-site health facilities that address the occupational health,
workers' compensation injuries, and minor illness needs of the employer's
workforce. These programs are designed to operate across the entire array of
occupational health regulatory environments and emphasize work-related injury
cost-reduction, treatment, medical surveillance or testing, disability
management, case management, return-to-work coordination, medical community
relations or oversight, on-site physical therapy and injury prevention, and
ergonomic assessment and intervention. Our health programs improve compliance
with treatment protocols and drug formularies, enhance employee productivity,
and allow for greater employer control of occupational health costs. We
currently operate 77 occupational health facilities.


         Primary Care Services. We operate employer-sponsored health centers
designed to integrate with the employer's existing healthcare plans. In such
arrangements, employers contract with us directly for primary care health
services and in the process regain control of costs, quality and access. Our
health centers generally service a single employer and offer health management
programs addressing the primary care needs of the employee base, including
optometry services and limited prevention and disease management programs.
Clients may combine our health centers with a dedicated pharmacy. We also offer
customized solutions in network management and absence management, including
non-work related case management and disability management. Our physicians,
nurses, and other staff are dedicated to the customer's employee population,
allowing employees, retirees, and their dependents to receive cost-effective,
high quality, accessible and convenient care. We currently operate 17 primary
care centers.

         Pharmacy Services. We operate employer-sponsored pharmacies that offer
prescription services exclusively to the client's covered population. Clients
may also combine our pharmacy with a dedicated primary care center. By
leveraging prescription volume across our client base and procuring
pharmaceuticals as a captive class of trade, we purchase products at
considerable savings for our clients, thus significantly and positively
affecting what we understand is one of our clients' fastest-growing healthcare
cost categories. Our pharmacy services also use sophisticated information
technologies. These technologies may be integrated with each client's existing
pharmacy management programs and plans, and improve employees' prescription
fulfillment convenience. We currently operate 24 pharmacies.

         Corporate Health Services. We offer non-industrial clients that do not
experience significant physical injury rates, but that nonetheless maintain
large workforces that require general and specialized medical services, custom
designed workplace programs that combine preventative care, occupational health,
medical surveillance or testing, travel medicine and health education. Clients
for which we provide corporate health services include financial service,
advertising and consulting firms. We currently operate 47 corporate healthcare
facilities.

         I-trax's Historic Business - The Health-e-LifeSM Program

         We enable individuals to obtain better healthcare through our
personalized Health-e-LifeSM Program. The Program is designed to deliver
lifestyle and wellness management, and disease and risk reduction interventions
to a client's entire population, across multiple locations and irrespective of
population size, by using predictive science, sophisticated proprietary computer
software, clinical expertise, and personal care coordination. We currently have
approximately 37 clients, which include self-insured employers, health plans,
and integrated delivery networks,


                                       2
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using various components of our Health-e-LifeSM Program. Self-insured employers,
health plans, hospital and health systems, and governmental agencies continue to
be prime consumers of lifestyle and wellness management, and disease and risk
reduction programs, and we are actively marketing to these potential clients.

         We believe the Health-e-LifeSM Program enables our clients to evolve
from fragmented care management practices into a cohesive and efficient system
of healthcare. The Health-e-LifeSM Program is fully integrated, uses a
single-data platform that allows all caregivers to share records, and enables
our clients to provide true coordination of care. We believe that by
facilitating real-time secure communication between our client, the patient, the
doctor, the care coordinator and the insurer within today's complex healthcare
system, the Health-e-LifeSM Program reduces costs and enables improved delivery
of care.

         Predictive Science. Our Health-e-LifeSM Program incorporates predictive
science to analyze our clients' medical claims and pharmacy and clinical data to
predict future healthcare costs. We believe this is an essential step to
effective disease and lifestyle management. Experts agree that predictive
science provides a comprehensive advantage to health plans, employers and
providers, and leads to cost-effective medical management and greater
profitability for the ultimate payor. Using predictive science, we analyze our
clients' entire populations to predict our clients' future healthcare costs,
including avoidable costs, the health conditions that will drive those costs and
the people within our clients' populations who are at risk for those conditions.
Armed with this information, we target our resources to achieve for each client
the best value for the amount the client will invest in providing healthcare
and, consequently, savings.


         Technology Solutions. All technology components of our Health-e-LifeSM
Program utilize a single data platform--Medicive(R) Medical Enterprise Data
System--a proprietary software architecture developed to collect, store, sort,
retrieve and analyze a broad range of information used in the healthcare
industry.


         Furthermore, our web accessible software includes portals for key
stakeholders in the care delivery process--consumers, physicians and care
managers--and permit real-time sharing of information and support the adherence
to our health and disease intervention programs. The key technology we use for
effective care coordination includes:


     o    Health-e-Coordinator(TM), a web-based care management application;

     o    MyFamilyMD (TM), a consumer health management portal

     o    CarePrime(R), a clinical care application for physicians and
          clinicians; and


     o    I-talk(TM)interactive smart voice technology.


         Interventions and Clinical Expertise. The Health-e-LifeSM Program
includes personalized health and disease interventions for individuals who
suffer from, or are at high risk for, active or chronic disease and tailored
programs for individuals who are at low risk. Depending on the individual's
level of risk, our custom tailored interventions include self-help programs
available through the web or person-assisted programs administered through our
Care Communication Center. All interventions include lifestyle and risk
reduction programs that follow evidence-based clinical guidelines to optimize
health, fitness, productivity and quality of life.

         The Health-e-Life ProgramSM currently includes interventions for a
number of specific chronic conditions, including congestive heart failure,
coronary artery disease, asthma, diabetes, cancer management, cystic fibrosis,
lower back pain, and chronic obstructive pulmonary disease.

         Care Communication Center. A vital component of our program is our Care
Communications Center, which is staffed with trained nurses and other healthcare
professionals 24 hours per day, 7 days per week. Through the Care Communication
Center, we effect targeted interventions to improve the health management of the
populations we serve. The Care Communication Center helps each member or
employee of our client make informed decisions about his or her health and
provides ongoing support for those with chronic diseases. Our demand management
and nurse triage services incorporate nationally recognized, evidence-based
clinical guidelines to increase compliance by caregivers and consumers with best
practices.



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         I-trax and CHD Meridian Healthcare Joint Market Opportunity

         To change the health status of a defined population and manage the
upward claim trend experienced by employers and employees, self-insured
employers are seeking programs that promote health, manage disease and
disability and complement existing health initiatives and benefits. Self-insured
employers invest in such health programs because they reduce later need for
critical care and related costs, maximize health, increase productivity, reduce
absenteeism, improve health status of both active employees and retirees, and
reduce overall costs.


         We believe that I-trax and CHD Meridian Healthcare offer a complete
solution to meet this need. We service each segment of a self-insured employer's
population and achieve the desired clinical and financial outcomes. CHD Meridian
Healthcare's programs reduce healthcare costs of the defined population it
serves. Complementing the CHD Meridian Healthcare services, I-trax's
personalized health management solutions for focused disease and lifestyle and
wellness management improve the health of the entire population, achieving the
same result. The services offered by the merged companies respond to a specific
and frequent request of large employers, including many historic CHD Meridian
Healthcare clients, for a comprehensive range of health management services.

         We also believe that with a nominal increase in variable costs, the
merged companies can offer to CHD Meridian Healthcare's historic clients the
value added benefit of our Health-e-LifeSM Program and, with respect to certain
of these clients, can successfully negotiate participation in future medical
cost savings that may result from the merged companies' services.


         Put more specifically, we currently serve approximately 650,000 lives
through our on-site clinics, which represent only approximately 25% of our
clients' employees, dependents and retirees. We charge these clients for our
services on a "cost plus" basis to manage these lives. We believe that the
merged companies' suite of products will allow us several opportunities with
respect to those of our clients that elect to expand their relationship with us.
These include:

     o    Because our services now encompass on-site facilities, which offer
          high quality, better access and lower costs, and Internet and
          telephone care delivery capabilities, we have access to a larger
          portion of our clients' populations, which affords us an opportunity
          to expand substantially our services within our existing client base.


     o    We price our population-based service on a "per member per month"
          basis. This model enables us to direct resources to those of our
          clients' employees, dependents and retirees that represent the
          greatest potential future costs. Because in certain instances we
          participate in the savings our programs generate, when properly
          deployed in new business opportunities, management believes the merged
          companies' suite of products will afford us increased gross margin
          opportunities for incremental, integrated business.


     o    We are one vendor for predictive modeling, primary care, pharmacy,
          occupational health, lifestyle and wellness management, and disease
          management, and as such our inherent efficiency leads to savings.

     o    Our combined services offer multiple entry points for employer
          customers to meet their budget restrictions and specific needs. This
          available menu of services could shorten our current sales cycle and
          provide us with an opportunity to build a more comprehensive program
          as the relationship grows with each client over time.


         I-trax and CHD Meridian Healthcare - Risks Inherent in Our Business

         As we pursue the opportunities outlined above, we face numerous and
significant challenges specific to our company and the healthcare industry in
general. Challenges specific to our company include:



                                       4
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     o    Our ability to integrate I-trax and CHD Meridian Healthcare, which
          prior to the merger operated independently and focused on different
          delivery methods within the corporate health management solutions
          market. If we are not able to integrate successfully, we are not going
          to realize the benefits we anticipate from selling our combined
          services.

     o    The long and complex sales cycle inherent in our business. If we
          cannot shorten the sales cycle for our services, we will not realize
          the benefit of quick revenue growth.

     o    Increasing competition in our industry. We are competing with numerous
          companies offering services that may be construed as similar to ours.
          Such additional competition could reduce the number of new clients we
          obtain and could cause us to reduce our pricing and, consequently, our
          gross margins.

     o    We may not succeed in deploying the merged companies' combined
          services. If we do not, we will not realize the growth in revenue we
          anticipate from the merger.

        Challenges specific to our industry include:

     o    In recent years, healthcare costs have grown significantly and as a
          result the healthcare industry is under significant price pressure.
          Although this has increased interest in our services as they are
          designed to contain costs, we are nonetheless subject to this general
          trend. It is conceivable that new and potential clients will continue
          to pressure us to reduce our prices and if we do, our revenues growth
          will slow and our gross margins will decrease.

     o    We are subject to extensive state and Federal regulation, which grows
          more complex each year. As such, compliance efforts have also
          increased in complexity. We may need additional resources to incur
          compliance, which will increase our expenses and decrease our gross
          margins.

I-trax Corporate History

         I-trax was incorporated in Delaware on September 15, 2000 at the
direction of the Board of Directors of I-trax Health Management Solutions, Inc.,
I-trax's then parent company. On February 5, 2001, I-trax became the holding
company of I-trax Health Management at the closing of a reorganization pursuant
to Section 251(g) of Delaware General Corporation Law. At the effective time of
the reorganization, all of the stockholders of I-trax Health Management became
the stockholders of I-trax and I-trax Health Management became a wholly owned
subsidiary of I-trax. Further, all outstanding shares of I-trax Health
Management were converted into shares of I-trax in a non-taxable transaction.
I-trax's common stock is traded on the American Stock Exchange under the symbol
"DMX."

         The holding company structure has allowed us greater flexibility in our
operations and expansion and diversification plans, including in the
acquisitions of Meridian Occupational Healthcare Associates, Inc. and WellComm
Group, Inc.

         I-trax acquired WellComm effective February 6, 2002. In the
acquisition, we paid the WellComm stockholders approximately $2,200,000 in cash
and 1,488,000 shares of our common stock. We also issued to each of two senior
officers of WellComm options to acquire 56,000 shares of our common stock at a
nominal exercise price. Because the acquisition was structured as a merger, we
also assume all of WellComm's liabilities, which equaled approximately $775,000.

         We funded this acquisition by selling a 6% convertible senior debenture
in the aggregate principal amount of $2,000,000 to Palladin Opportunity Fund
LLC. We also issued Palladin a warrant to purchase up to 307,692 shares of our
common stock. As of March 19, 2004, Palladin has converted all amounts
outstanding under the debenture into common stock and has exercised the warrant
in full at the conversion price and exercise price of $1.75 per share.





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         On March 19, 2004, we finalized the acquisition of CHD Meridian
Healthcare. Under the merger agreement, we delivered to CHD Meridian Healthcare
stockholders 10,000,000 shares of I-trax common stock, 400,000 shares of I-trax
Series A Convertible Preferred Stock, each of which is convertible into 10
shares of I-trax common stock, and paid $25,508,000 in cash. Immediately prior
to the merger, CHD Meridian Healthcare also redeemed certain of its then
outstanding shares of common stock and options to purchase common stock for
which it paid approximately $9,492,000 in the aggregate. Further, if CHD
Meridian Healthcare, continuing its operations following the closing of the
merger as a subsidiary of I-trax, achieves calendar 2004 milestones for earnings
before interest, taxes, depreciation and amortization, or EBITDA, additional
shares of common stock will be payable as follows: If EBITDA equals or exceeds
$8,100,000, the number of such additional shares of common stock payable will be
3,473,280; the number of such shares increases proportionately up to a maximum
of 3,859,200 shares if EBITDA equals or exceeds $9,000,000. Any escrowed shares
that are not released will be returned to I-trax for cancellation. Further, the
escrowed shares are not deemed outstanding for accounting purposes until
released.

         In the merger, I-trax assumed all of CHD Meridian Healthcare's
liabilities, which equaled approximately $21,000,000.

         Immediately following the closing of the merger, I-trax redeemed from
former CHD Meridian Healthcare stockholders that participated in the merger, pro
rata, an aggregate of 200,000 shares of Series A Convertible Preferred Stock at
their original issue price of $25.00 per share.

         I-trax obtained the cash portion of the merger consideration by selling
1,000,000 shares of Series A Convertible Preferred Stock at a purchase price of
$25.00 per share for gross proceeds of $25,000,000 by borrowing $12,000,000 on a
new $20,000,000 senior secured debt facility from a national lender.

         I-trax has committed to register for resale on Form S-3 the shares of
common stock issued in the merger and issuable upon conversion of the Series A
Convertible Preferred Stock issued in the merger and issued to the purchasers of
Series A Convertible Preferred Stock, and the shares of common stock issuable
upon the exercise of warrants issued to the placement agents in connection with
the sale of the Series A Convertible Preferred Stock.


I-trax and CHD Meridian Healthcare Competition

         Numerous companies are currently delivering one or several components
of our services, including disease management companies, health insurers and
plans, Internet health information companies and pharmacy benefit management
companies, among others. Many of these companies are larger than we are and have
greater resources, including access to capital. We believe, however, that our
corporate health management services are unique. We also believe that our broad
expertise in establishing and managing employer-dedicated pharmacies and
clinics, our software applications and our expertise in designing and deploying
scalable software applications allow us to compete effectively against these
larger competitors. We consider the following types of companies to compete with
us in providing a similar product:


     o    Disease  management and care enhancement  companies,  such as American
          Healthways,   LifeMasters,   Matria  Healthcare,   CorSolutions,  SHPS
          Healthcare Services, and Health Dialog.

     o    Wellness  companies,  such as  StayWell,  HealthMedia,  Harris  Health
          Trends, and Impact Health.


     o    Health-related,  online  services or web sites  targeted at consumers,
          such    as     careenhance.com,     drweil.com,     healthcentral.com,
          healthgate.com,  intelihealth.com,  mayoclinic.com,  thriveonline.com,
          webmd.com and wellmed.


     o    On-site healthcare  providers,  such as Comprehensive Health Services,
          MedCor and Whole Health Management.

     o    Pharmacy benefit  management  companies,  such as Caremark and Express
          Scripts.


     o    Regional occupational health clinics and providers.



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Intellectual Property

         Our proprietary software applications are protected by United States
copyright laws. We have registered the use of certain of our trade names and
service names in the United States. We also have the rights to a number of
Internet domain names, including I-trax.com and .net, MyFamilyMD.com and .net,
CHDMeridianHealthcare.com, CarePrime.com and .net and healthecoordinator.com. In
addition, we continue to explore potential availability of patent protection for
our business processes and innovations.

Research and Development

         We conduct research and development related to our technology products
on three levels on a continuing basis. First, we continually study the business
process in the medical community. A pivotal part of the success of our services
is understanding the exact needs of our clients, and applying that knowledge to
the graphic user interface, thus allowing our systems to integrate into the
user's workflow without disruption. I-trax was founded on this principle. We are
constantly studying the changing work environment and clinical landscape of our
clients and the industry as a whole. New modules are under development and
modifications and additional functionality will continue to be added to
currently available technology products.

         Second, as a by-product of the business process study, the invention
and development of unique problem solving tools embedded in our software
applications make possible the process of entering and retrieving vast amounts
of information in short periods of time. Constant development, re-engineering
and implementation of these tools is a priority of the design and engineering
staff and will continue to be our focus, allowing us to maintain a leading role
in information systems development.

         Third, further technology platform research, development and
engineering are conducted on a continual basis. We believe we are creating
software components to solve new problems that arise for our clients and us, and
we are constantly educating ourselves on available and emerging technologies
that will help support and enhance our services.

         We invested approximately $1,237,000 in software development in 2003,
which amount was capitalized, and $413,000 in research on development in 2002,
which amount was charged to operations. The majority of these amounts was
attributable to the completion of MedWizards(R) health assessment tools, and
Health-e-Coordinator(TM) and CarePrime(R) applications. We expect to continue to
invest in research and software development for the foreseeable future,
including to add functionality to the MyFamilyMD(TM) application by adding
MedWizard(R) tools, on CarePrime(R), which interacts with the MyFamilyMD(TM)
application and its MedWizards(R) tools, and on Health-e-Coordinator(TM)
software by adding additional disease management capabilities.

I-trax and CHD Meridian Healthcare Employees

         We believe our success depends to a significant extent on our ability
to attract, motivate and retain highly skilled, vision-oriented management and
employees. To this end, we focus on incentive programs for our employees and
endeavor to create a corporate culture that is challenging, rewarding and fun.
As of March 26, 2004, we had 925 full-time, and 624 part-time and 42 temporary
employees.

Risk Factors


         In addition to other information in this report, you should carefully
consider the following risks in evaluating I-trax and its business. Our
business, financial condition and results of operations could be materially and
adversely affected by each of these risks. Such an adverse effect could cause
the market price of our common stock to decline, and you could lose all or part
of your investment.





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Risk Related to I-trax

         If we are not able to implement our business  strategy of deploying our
         integrated  services  effectively to existing and new clients,  we will
         not be able to grow our revenue.


         Although we believe that there is significant demand for the our
services and products in the corporate healthcare market, there are many reasons
why we may be unable to execute our business strategy, including our possible
inability to:

     o    deploy our integrated services and solutions on a large scale;


     o    attract a  sufficiently  large  number of  self-insured  employers  to
          subscribe for our services and software applications;


     o    increase awareness of our brand;

     o    strengthen user loyalty;

     o    develop and improve our services and solutions;

     o    continue to develop and upgrade our services  and software  solutions;
          and

     o    attract, retain and motivate qualified personnel.


         Our  inability  to  achieve  the above  goals will  impact our  revenue
growth.

         Increasing   competition   for   contracts  to  establish   and  manage
         employer-dedicated pharmacies and clinics increases the likelihood that
         we may lose business to our competitors.

         CHD Meridian Healthcare pioneered the field of employer-dedicated
pharmacies and primary care clinics. Although CHD Meridian Healthcare has always
faced competition from other methods by which business enterprises can arrange
and pay for healthcare services for their employees, until recently we rarely
experienced face-to-face bidding for a contract to manage a particular
employer's pharmacy or clinic. We have recently begun to see direct competition
for employer-dedicated pharmacy management contracts, including from Caremark
and Express Scripts. We expect this competition will increase over time. We
believe that we have certain advantages in facing such competition, including
our experience and know-how. However, some of our competitors and potential
competitors, including prescription benefit management companies, with revenues
in the multiple billions of dollars, are substantially bigger than we are. We
believe that the potential market for employer-dedicated pharmacies is large
enough for us to meet our growth plans despite increasing competition, but there
are no assurances that we will in fact be able to do so. Our ability to maintain
existing clients, expand services to existing clients, add new clients so as to
meet our growth objectives, and maintain attractive pricing for our services,
will depend on the interplay among overall growth in the use of
employer-dedicated facilities, entry of new competitors into our business, and
our success or failure in maintaining our market position as against these new
entrants.


         In addition to this increasing head-to-head competition for contracts
to establish and manage employer-dedicated facilities, we expect to continue to
face competition for large employers' healthcare budget from other kinds of
enterprises, including pharmacy benefit managers, health insurers, managed
health care plans, and retail pharmacy chains.

         Loss of advantageous  pharmaceutical pricing could adversely affect our
         income and the value we provide to our clients.


         We receive favorable pricing from pharmaceutical manufacturers as a
result of our class of trade designation, which means that we only sell
pharmaceutical products to our clients' employees, dependents and retirees. We
also receive rebates from pharmaceutical manufacturers for driving market share
to preferred products.




                                       8
<PAGE>



The benefit of favorable pricing is generally passed on to our clients under the
terms of client contracts. In the last few years, retail pharmacies have brought
legal cases against pharmaceutical manufacturers challenging class of trade
designations as unlawful price discrimination under the Robinson-Patman Act.
Although these challenges have generally failed, there remains a possibility
that we could lose the benefit of this favorable pricing, either due to a legal
challenge or to a change in policies of the pharmaceutical manufacturers. Such a
loss would diminish the value that we can provide to our clients and, therefore,
would make our services less attractive. We also receive volume performance
incentives from our pharmaceutical wholesaler which directly affect our revenue
and the loss of which could adversely affect our income.

         Our business involves exposure to professional  liability claims, and a
         failure to manage  effectively our  professional  liability risks could
         expose us to unexpected expenses, which would result in losses.

         Under the terms of our contracts to manage employer sponsored clinics
or pharmacies, we must procure professional liability insurance covering the
operations of that clinic or pharmacy. We also typically agree to indemnify our
clients against vicarious professional liability claims arising out of acts or
omissions of healthcare providers working at the clinics and pharmacies we
manage. Further, under the terms of our services agreements with affiliated
professional corporations, we are contractually obligated to procure malpractice
insurance on behalf of the professional corporations and their employed
physicians and typically absorb such claims as are subject to the policy
self-insured retention limit (which is explained below) or above the policy
limit. Finally, there also exists the possibility of vicarious professional
liability claims being made directly against us. As a result of these
contractual arrangements, we routinely incur significant expenses arising out of
professional liability claims. If we fail to manage the professional liability
claims and associated risk effectively, we may sustain losses beyond our
historic trend.

         Certain of our past professional liability insurance policy years were
insured by two insurance companies that are now either insolvent or under
regulatory supervision. As a result, we are effectively partially uninsured for
those periods. We have established reserves in connection with the six pending
claims from such policy years. Although we believe such reserves are reasonable
based on our historic loss experience, there is no assurance that these reserves
will be sufficient to pay all judgments or settlements. In addition, our current
professional liability insurance provides for self-insured retention of
$500,000. A self-insured retention is the amount that we have agreed to assume
responsibility for under our insurance policy as if we are the insurer subject
to the terms of the policy and related regulatory scheme. This means that we
are, effectively, partially uninsured against a variety of claims that may arise
from other years. We maintain a layer of excess insurance that begins with
losses in excess of $1,000,000 per claim, including for the years in which our
primary insurer is insolvent. We have reserved for projected future professional
liability expenses based on our operations to date. These reserves, however,
could prove inadequate, the size of our ultimate uninsured liability could
exceed our established reserves and we will sustain losses.

         Our professional liability insurance policies are written on a
"claims-made" basis, meaning that they cover only claims made during the policy
period, and not events that occur during the policy period but result in a claim
after the expiration of the policy. With this insurance strategy, we must renew
or replace coverage each year in order to have coverage for prior years'
operations. Availability and cost of such coverage are subject to market
conditions, which can fluctuate significantly.

         We have established a subsidiary  insurance company,  which subjects us
         to additional regulatory requirements and once operating,  will subject
         us to the risks associated with the insurance business.

         We have established as a wholly owned subsidiary insurance company and
expect to begin operating it in the second quarter of 2004 to insure our
professional liability exposure. We believe this approach will enhance our
ability to manage malpractice exposure and stabilize insurance costs. Operating
an insurance subsidiary, however, represents additional risk to our operations,
including a potential perception among our existing and potential clients that
we are not adequately insured. We have hired a manager and have engaged an
actuarial consulting firm for the insurance subsidiary. When we commence its
operations, we will be subject to the risks associated with any insurance
business, which include investment risk relating to the performance of our
invested assets set aside as reserves for future claims, the uncertainty of
making actuarial estimates of projected future professional liability losses,
and loss adjustment expenses. Failure to make an adequate return on our
investments, to maintain the




                                       9
<PAGE>



principal of invested funds, or to estimate future losses and loss adjustment
expenses accurately, could cause us to sustain losses. Also, maintaining the
insurance subsidiary has exposed us to substantial additional regulatory
requirements, with attendant risks if we fail to comply with applicable
regulations.


         We may be unable to integrate  successfully  our operations and realize
         the full cost savings we anticipate from the merger.

         The merger of CHD Meridian Healthcare and I-trax involves the
integration of two companies that have previously operated independently and
focused on different delivery methods within the corporate health management
solutions market. The difficulties of combining the merged companies' operations
include:

     o    integrating  complementary  businesses  under  centralized  management
          efficiently;

     o    coordinating geographically separated organizations;

     o    integrating personnel with diverse business backgrounds; and

     o    combining different corporate cultures.

         The process of integrating operations could cause an interruption of,
or loss of momentum in, the activities of I-trax or CHD Meridian Healthcare's
businesses or the loss of key personnel. The diversion of management's attention
and any delays or difficulties encountered in connection with the integration of
the merged companies' operations could have an adverse effect on the business,
results of operations or financial condition of the merged companies.

         Among the factors considered by the CHD Meridian Healthcare and the
I-trax boards of directors in connection with their respective approvals of the
merger were the opportunities for reduction of operating costs and improvements
in operating efficiencies and other financial synergies that could result from
the merger. We cannot give any assurance that these savings will be realized, or
if realized, will be realized within the time periods contemplated by
management.


         If we lose key  employees or fail to recruit and retain  other  skilled
         employees, we may not be able to continue our growth.

         Our business greatly depends on, among others, Frank A. Martin,
chairman, chief executive officer and director, Haywood D. Cochrane, Jr., vice
chairman and director, John R. Palumbo, president, Charles D. (Chip) Phillips,
executive vice president and chief operating officer, and Shannon W. Farrington,
senior vice president and chief financial officer. If we cannot retain any one
of these individuals, we will loose employees with considerable knowledge of our
business, which could significantly reduce our ability to compete and succeed in
the future.

We maintain employment agreements with Messrs. Martin, Cochrane and Palumbo and
Ms. Farrington. Mr. Martin's employment agreement expires in December 2004. Mr.
Cochrane's and Ms. Farrington's agreements expire in January 2005. And Mr.
Palumbo's agreement expires in October 2005. Each employment agreement may be
terminated by us with or without cause and by the applicable executive with or
without good reason. We maintain a $5,000,000 key-man life insurance policy on
Mr. Martin.

         Our future success also depends on our ability to attract, retain and
motivate highly skilled employees. As we secure new contracts and implement our
services and products, we will need to hire additional personnel in all
operational areas. We may be unable, however, to attract, assimilate or retain
such highly qualified personnel. Although we have not experienced such
difficulties in the recent past, we may do so in the future, especially if the
labor markets continue to tighten. If we cannot attract new personnel or retain
and motivate current personnel, the service level we provide to our clients may
suffer, which may cause us to loose clients and revenue.




                                       10
<PAGE>



         Our sales cycle is long and complex, which may slow our growth.


         The corporate health management business is growing rapidly and has
many entrants. Further, although each entrant may define its service as
corporate health management, the details of the services among the entrants are
quite different. Because the services offered are complex, require clients to
incur significant upfront costs and there are significant variations in the
offered services by many vendors, potential clients take a long time to evaluate
and purchase such services, lengthening our sales cycle. Further, the sales and
implementation process for our services and software applications is lengthy,
involves a significant technical evaluation and requires our clients to commit a
great deal of time and money. Finally, the sale and implementation of our
services are subject to delays due to our clients' internal budgets and
procedures for approving large capital expenditures and deploying new services
and software applications within their organizations. The sales cycle for our
solutions, therefore, is unpredictable and has generally ranged from 3 to 24
months from initial contact to contract signing. The time it takes to implement
our services is also difficult to predict and has lasted as long as 18 months
from contract execution to the commencement of live operation. During the sales
cycle and the implementation period, we may expend substantial time, effort and
money preparing contract proposals, negotiating the contract and implementing
the solution without receiving any related revenue.


         Deterioration of the financial health of our clients, many of which are
         large U.S.  manufacturing  enterprises,  may impair our business volume
         and collections.


         An adverse trend in one or more U.S. manufacturing industries could
lead to plant closings or layoffs that could eliminate or reduce the need for
some of our employer-dedicated healthcare facilities. Also, if our client
becomes insolvent, we may not be able to recover outstanding accounts receivable
owed by that client, and may suffer premature contract termination.


         Our professional liability insurance is written on a "claims-made"
basis. This means that we are protected from malpractice claims only if the
company that insured us at the time of the alleged "occurrence" is the same
company at the time the claim is filed in court. If it is not, we will not have
coverage. To continue coverage in such circumstances, we must obtain "tail"
insurance coverage or continue to purchase insurance written on a "claims made"
basis. We typically charge our clients for tail insurance coverage when the
contract terminates. If a client is insolvent when the contract terminates,
however, we may not be able to recoup the cost of tail insurance coverage, or
other costs related to that facility's shutdown. We already experienced this in
the case of Bethlehem Steel and National Steel, two clients for which we managed
several facilities when these clients became debtors in Federal bankruptcy
proceedings. This resulted in difficulty in collecting some amounts due to us,
and generated claims against us of approximately $920,000 in the aggregate for
repayment of allegedly preferential transfers previously received from the
client. Because of the risks associated with client insolvency, and the
concentration of CHD Meridian Healthcare's client base, our business is to some
extent dependent on the continued health of U.S. manufacturing industries.

         We are dependent on the Internet and Internet-related  technologies and
         as such subject to frequent  change and risks  associated with Internet
         viruses and outages, which could destroy the information we maintain or
         prevent our clients from accessing important information.


         Our web-based software applications that form the backbone of our
disease management and comprehensive health management solutions depend on the
continuous, reliable and secure operation of Internet servers and related
hardware and software. Numerous viruses and outages on the Internet could cause
outages of our applications from time to time. To the extent that our services
are interrupted, our users will be inconvenienced and our reputation may be
diminished. If access to our system becomes unavailable at a critical time,
users could allege we are liable, which could depress our stock price, cause
significant negative publicity and possibly lead to litigation. Although our
computer and communications hardware is protected by physical and software
safeguards, it is still vulnerable to fire, storm, flood, power loss,
telecommunications failures, physical or software break-ins and similar events.
We do not have 100% redundancy for all of our computer and telecommunications
facilities. A catastrophic event could have a significant negative effect on our
business, results of operations, and financial condition.




                                       11
<PAGE>


         We also depend on third parties to provide certain of our clients with
Internet and online services necessary for access to our servers. It is possible
that our clients will experience difficulties with Internet and other online
services due to system failures, including failures unrelated to our systems.
Any sustained disruption in Internet access provided by third parties could have
a material adverse effect on our business, results of operations and financial
condition.

         Finally, we retain confidential healthcare information on our servers.
It is, therefore, important that our facilities and infrastructure remain secure
and are perceived by clients to be secure. Although we operate our software
applications from a secure facility managed by a reputable third party, our
infrastructure may be vulnerable to physical or virtual break-ins, computer
viruses, programming errors or similar disruptive problems. A material security
breach could damage our reputation or result in liability to us.


         We may be  sued  and  incur  losses  if we  provide  inaccurate  health
         information  on our  website  or  inadvertently  disclose  confidential
         health information to unauthorized users.


         Because users of our website will access health content and services
relating to a medical condition they may have or may distribute our content to
others, third parties may sue us for defamation, negligence, copyright or
trademark infringement, personal injury or other matters. We could also become
liable if confidential information is disclosed inappropriately. These types of
claims have been brought, sometimes successfully, against online services in the
past. Others could also sue us for the content and services that will be
accessible from our website through links to other websites or through content
and materials that may be posted by our users in chat rooms or bulletin boards.
Any such liability will have a material adverse effect on our reputation and our
business, results of operations or financial position.


         We may be unable to compete  successfully  against  companies  offering
         other  disease  management  products,  which will  impair  our  revenue
         growth.


         Many healthcare companies are offering disease management services and
healthcare focused software solutions. Further, a vast number of Internet sites
offer healthcare content, products and services. In addition, traditional
healthcare providers compete for consumers' attention both through traditional
means as well as through new Internet initiatives. Although we believe our
technology-enabled service solutions are unique and better than our
competitors', we compete for customers with numerous other businesses.


         We believe our competitors include the following:


     o    Disease  management and care enhancement  companies,  such as American
          Healthways,   LifeMasters,   Matria  Healthcare,   CorSolutions,  SHPS
          Healthcare Services, and Health Dialog.

     o    Wellness  companies,  such as  StayWell,  HealthMedia,  Harris  Health
          Trends, and Impact Health.

     o    On-site healthcare  providers,  such as Comprehensive Health Services,
          MedCor and Whole Health Management.

     o    Pharmacy benefit  management  companies,  such as Caremark and Express
          Scripts.

     o    Regional occupational health clinics and providers.



         Many of these potential competitors are likely to enjoy substantial
competitive advantages compared to us, including:

     o    greater name recognition and larger marketing budgets and resources;

     o    larger customer and user bases;

     o    larger production and technical staffs;



                                       12
<PAGE>


     o    substantially greater financial, technical and other resources; and

     o    a wider array of online products and services.


         To be competitive, we must continue to enhance our products and
services as well as our sales and marketing channels. If we do not, we will not
be able to grow our revenue.

         If other companies develop  intellectual  property identical or similar
         to ours, we will loose what we believe to be our competitive advantage.

         Our intellectual property is important to our business. We rely on a
combination of copyright, trademark and trade secret laws, confidentiality
procedures and contractual provisions to protect our intellectual property. Our
efforts to protect our intellectual property may not be adequate. Our
competitors may independently develop similar technology or duplicate our
products or services. Unauthorized parties may infringe upon or misappropriate
our products, services or proprietary information. In addition, the laws of some
foreign countries do not protect proprietary rights as well as the laws of the
United States do, and the global nature of the Internet makes it difficult to
control the ultimate destination of our products and services. In the future,
litigation may be necessary to enforce our intellectual property rights or to
determine the validity and scope of the proprietary rights of others. Any such
litigation would probably be time-consuming and costly. We could be subject to
intellectual property infringement claims as the number of our competitors grows
and the content and functionality of software applications and services overlap
with competitive offerings. Defending against these claims, even if not
meritorious, could divert our attention from operating our company. If we become
liable to third parties for infringing their intellectual property rights, we
could be required to pay a substantial damage award and forced to develop
noninfringing technology, obtain a license or cease selling the applications
that contain the infringing technology. We may be unable to develop
noninfringing technology or obtain a license on commercially reasonable terms,
or at all. We also intend to rely on a variety of technologies that we will
license from third parties, including any database and Internet server software,
which will be used to operate our applications. These third-party licenses may
not be available to us on commercially reasonable terms. The loss of or
inability to obtain and maintain any of these licenses could delay the
introduction of enhancements to our software applications, interactive tools and
other features until equivalent technology could be licensed or developed. Any
such delays could materially and adversely affect our business, results of
operations and financial condition.

         The loss of a major client will significantly reduce our revenues.

         In 2003, we had one client, Goodyear, which accounted for 10% of our
pro forma revenue. We anticipate that our results of operations in any given
period will continue to be influenced to a certain extent by a relatively small
number of clients. Accordingly, if we were to lose the business of such a
client, our results of operations could be materially and adversely affected.

Risk Related to Our Industry



         The healthcare industry is subject to general cost pressures that could
         reduce our revenue and gross margins.

         The healthcare industry is currently under pressure by governmental and
private-sector revenue sources to cut spiraling costs. These pressures will
continue and possibly intensify. Although we believe that our services and
software applications assist public health agencies, hospitals, health plans and
self-insured employers to control the high costs associated with treating
patients, the pressures to reduce costs immediately may hinder our ability (or
increase the length of time we require) to obtain new contracts. In addition,
the focus on cost reduction may pressure our customers to restructure contracts
and reduce our fees.

         We are affected by changes in the laws governing health plan, hospital
and public health agency reimbursement under governmental programs such as
Medicare and Medicaid. There are periodic legislative and regulatory initiatives
to reduce the funding of the Medicare and Medicaid programs in an effort to
curtail or reduce overall Federal healthcare spending. Federal legislation has
and may continue to significantly reduce Medicare and



                                       13
<PAGE>





Medicaid reimbursements to most hospitals. These reimbursement changes are
negatively affecting hospital revenues and operations. Such legislative
initiatives or government regulations could reduce demand for our services, our
revenue and gross margins.



         We are subject to judicial and statutory  prohibitions on the corporate
         practice of  medicine,  and  failure to comply with these  prohibitions
         will expose us to heightened  scrutiny by regulatory  agencies,  fines,
         litigation and possibly loss of revenue.


         There are judicial and statutory prohibitions on the corporate practice
of medicine, which vary from state to state. The corporate practice of medicine
doctrine prohibits a corporation, other than a professional corporation, from
practicing medicine or employing physicians. Some states also prohibit a
non-physician from splitting or sharing fees charged by a physician for medical
services. The services we provide include establishing and managing medical
clinics. Most physician services at clinics we manage are provided by physicians
who are employees of professional corporations with which we contract to provide
non-professional services such as purchasing equipment and supplies, patient
scheduling, billing, collection, accounting, and computer services. The
professional corporations control hiring and supervise physicians and all
medical functions. We have option agreements with the physician-owners of these
affiliated professional corporations that entitle us to require the
physician-owners to sell the stock of the professional corporations to any
licensed physician we designate. This structure is intended to permit
consolidation of the professional corporations' financial statements with ours,
while maintaining sufficient separation to comply with the corporate practice of
medicine doctrine and with fee-splitting and fee-sharing prohibitions. There
remains, however, potential exposure to claims that this structure violates the
corporate practice of medicine doctrine or fee-splitting or fee-sharing
prohibitions, even though we do not believe that it does. If such a claim is
successfully asserted against us in any jurisdiction, we could be subject to
civil and criminal penalties, or could be required to restructure our
contractual arrangements with clients. Any restructuring of contractual
arrangements could result in lower revenues, increased expenses and reduced
influence over the business decisions of those operations. Alternatively, some
existing CHD Meridian Healthcare contracts could be found to be illegal and
unenforceable, which could result in their termination and an associated loss of
revenue, or inability to enforce valuable provisions of those contracts.


         We have  custody  of  confidential  patient  records  and if we fail to
         comply with  regulations  applicable to maintaining such records we may
         be fined or sued.

         Our personnel who staff our on-site pharmacies and clinics have custody
of confidential patient records. Also, the computer servers we use to store our
software applications and deliver our technology services also contain
confidential health risk assessments completed by employees, patients and
beneficiaries of our clients. In our capacity as a covered entity or as a
business associate of a covered entity, we and the records we hold are subject
to a rule entitled Privacy of Individually Identifiable Health Information, or
Privacy Rule, promulgated by the U.S. Department of Health and Human Services
under the Health Insurance Portability and Accountability Act of 1996, or HIPAA,
and also to any state laws that may have more stringent privacy requirements. We
attempt to protect the privacy and security of confidential patient information
in accordance with applicable law, but could face claims of violation of the
Privacy Rule, invasion of privacy or similar claims, if our patient records or
computer servers were compromised, or if our interpretation of the applicable
privacy requirements, many of which are complex, were incorrect or allegedly
incorrect, or if we failed to maintain a sufficiently effective compliance
program.

         Furthermore, while we believe that the Privacy Rule protects our
ability to obtain patient identifiable medical information for disease
management purposes from certain of our clients, state legislation or
regulations will preempt Federal legislation if state legislation or regulations
are more restrictive. Accordingly, new Federal or state legislation or
regulations restricting the availability of this information for disease
management purposes could prevent us from performing services for our existing
clients, termination of our disease management contracts and loss of revenue.



                                       14
<PAGE>


         We are subject to fraud and abuse statutes because we bill the Medicare
         and Medicaid  programs to recover  amounts  that offset the  healthcare
         costs  of our  clients  and if we  violate  such  statutes,  we will be
         subject to civil and criminal penalties.

         In recent years, various government entities have actively investigated
potential violations of fraud and abuse statutes and regulations by healthcare
providers and by pharmaceutical manufacturers. The fraud and abuse provisions of
the Social Security Act provide civil and criminal penalties and potential
exclusion from the Medicare and Medicaid programs for persons or businesses who
offer, pay, solicit or receive remuneration in order to induce referrals of
patients covered by Federal healthcare programs (which include Medicare,
Medicaid, TriCare and other Federally funded health programs). Although our
services and those of our affiliated professional corporations are generally
paid for by employer clients, we do bill the Medicare and Medicaid programs, and
private insurance companies, as agent of our affiliated professional
corporations, to recover reimbursable amounts that offset the healthcare costs
borne by our clients. We are therefore subject to various regulations under the
Medicare and Medicaid programs, including fraud and abuse prohibitions. We
believe that we are compliant with these requirements, but could face claims of
non-compliance if our interpretations of the applicable requirements, many of
which are complex, were incorrect or allegedly incorrect, or if we fail to
maintain a sufficiently effective compliance program.

         The professionals that staff our affiliated professional corporations
         as well as those we employ are subject to state and Federal licensure
         requirements and if we fail to comply with such licensure requirements,
         we may be scrutinized by regulatory agencies and fined.

         The doctors, nurses and other healthcare professionals that staff our
affiliated professional corporations, the nurses that staff our care
communication centers, and our on-site pharmacies and clinics, are subject to
individual licensing requirements. All of our healthcare professionals and
facilities that are subject to licensing requirements are licensed in the state
in which they are physically present. Multiple state licensing requirements for
healthcare professionals who provide services telephonically over state lines
may require us to license some of our healthcare professionals in more than one
state. We continually monitor the developments in telemedicine. There is no
assurance, however, that new judicial decisions or Federal or state legislation
or regulations would not increase the requirement for multi-state licensing of
all central operating unit call center health professionals, which would
significantly increase our administrative costs. Further, in the event a state
regulatory agency alleges that we do not comply with relevant licensing
requirements, we may be subject to fines and administrative action.

         The recently adopted  Medicare  prescription  drug benefit  legislation
         could reduce the demand for the prescription drug benefits we provide.

         In December 2003, President Bush signed into law the Medicare
Prescription Drug, Improvement and Modernization Act of 2003. This law provides
Medicare beneficiaries with insurance coverage that offers access to
prescription medicines. The prescription drug benefit, which will be called
Medicare Part D, begins January 1, 2006. In the interim, a national prescription
drug discount card for Medicare-eligible seniors will be instituted in April
2004. Under the new law, drug benefits will be provided through risk-bearing
private plans contracting with the government (including plans offering only the
Medicare Part D coverage as well as integrated plans offering all Medicare
benefits). There will be an annual open period during which Medicare
beneficiaries will choose their drug plan from among those available in their
area of residence. In any areas where there are fewer than two private plan
choices, the government will make a drug plan available directly.

         We do not know how this law will affect our business. Subsidies for
employers providing retiree drug benefits will decrease the costs to those
employers of providing such benefits, and therefore may increase the number of
employers willing to provide retiree drug benefits, which would positively
affect our business. On the other hand, employers that now offer prescription
drug benefits may decide no longer to do so, on the basis that their retirees
now will be able to obtain such benefits on their own through Medicare. In that
case, such employers would have less need for employer-dedicated pharmacies of
the kinds that we establish and manage and reduce our revenue.




                                       15
<PAGE>



Investment Risks

         The price of our common stock is volatile and investors may loose money
         if they invest in our stock.

         Our stock price has been and we believe will continue to be volatile.
For example, from May 1, 2002 through May 28, 2004, the per share price of our
stock has fluctuated from a high of $6.40 to a low of $1.37. The stock's
volatility may be influenced by the market's perceptions of the healthcare
sector in general, or other companies believed to be similar to us or by the
market's perception of our operations and future prospects. Many of these
perceptions are beyond our control. In addition, our stock is not heavily traded
and therefore the ability to achieve relatively quick liquidity without a
negative impact on our stock price is limited.

         Some of our outstanding shares are restricted from immediate resale but
         may be sold into the market in the immediate future,  which would cause
         the market price of our common stock to drop significantly, even if our
         business is doing well.

         As of May 28, 2004, 28,448,121 shares of our common stock were issued
and outstanding. Of this number, approximately 14,000,000 shares were issued in
the CHD Meridian Healthcare merger as "restricted securities." Further, an
additional 12,000,000 shares of our common stock, which are not reflected as
issued and outstanding, are issuable upon conversion of our outstanding shares
of Series A Convertible Preferred Stock. Of this latter amount, 2,000,000 shares
are issuable upon conversion of Series A Convertible Preferred Stock issued in
the CHD Meridian Healthcare merger and 10,000,000 shares are issuable upon
conversion of Series A Convertible Preferred Stock sold to third party investors
to fund a portion of the cash I-trax needed to acquire CHD Meridian Healthcare.
All such shares of our common stock total approximately 26,000,000, and we are
required to register them for resale under the Securities Act of 1933. If the
selling shareholders under the prospectus covering the resale of such shares
sell them at the same time, the market price of our common stock would drop,
possibly significantly.

         Shares  reserved  for future sale upon the  conversion  of  outstanding
         shares of Series A Convertible Preferred Stock and upon the exercise of
         issued options and warrants may cause dilution.

         As of May 28, 2004, approximately 12,000,000 shares of our common stock
were reserved for issuance upon conversion of outstanding shares of Series A
Convertible Preferred Stock and 5,845,429 shares of our common stock were
reserved for issuance upon the exercise of our outstanding warrants and options.
Our stockholders, therefore, could experience dilution of their investment upon
conversion or exercise, as applicable, of these securities.

         Provisions of our certificate of incorporation  could impede a takeover
         of our company, even though a takeover may benefit our stockholders, or
         delay or prevent a change in management.

         Our board of directors has the authority, without further action by the
stockholders, to issue from time to time, shares of preferred stock in one or
more classes or series, and to fix the rights and preferences of such preferred
stock, subject, however, to the limitations contained in the certificate of
designations filed with respect to our Series A convertible preferred stock. We
are subject to provisions of Delaware corporate law which, subject to certain
exceptions, prohibit us from engaging in any "business combination" with a
person who, together with affiliates and associates, owns 15% or more of our
common stock (referred to as an interested stockholder) for a period of three
years following the date that such person became an interested stockholder,
unless the business combination is approved in a prescribed manner.
Additionally, bylaws establish an advance notice procedure for stockholder
proposals and for nominating candidates for election as directors. These
provisions of Delaware law and of our certificate of incorporation and bylaws
may have the effect of delaying, deterring or preventing a change in our
existing management or control, may discourage bids for our common stock at a
premium over market price and may adversely affect the market price, and the
voting and other rights of the holders of our common stock.



                                       16
<PAGE>




ITEM 2.  DESCRIPTION OF PROPERTIES

I-trax Leases

Certain of our executive, administrative and sales offices are located in
Philadelphia, Pennsylvania, where we lease approximately 4,659 square feet of
office space pursuant to a lease expiring in June 2005 at a current base annual
rate of $128,123. The property is in good condition.

         Our Care Communication Center is located in Omaha, Nebraska, where we
lease approximately 6,212 square feet of office space pursuant to a lease
expiring in May 2007, at a current base annual rate of $55,908. The property is
in good condition.

CHD Meridian Healthcare Leases

         Certain of our executive, administrative and sales offices are located
in Nashville, Tennessee, where we lease approximately 25,000 square feet of
office space pursuant to a lease expiring in November 2009 at a current base
annual rate of $637,104. The property is in good condition.

         Certain of our executive and administrative offices are located in
Latham, New York, where we lease approximately 4,703 square feet of office space
pursuant to a lease expiring in July 2007 at a current base annual rate of
$76,894. The property is in good condition.

         Certain of our executive and administrative offices are located in New
York, New York, where we lease approximately 4,500 square feet of office space
pursuant to a lease expiring in April 2007 at a current base annual rate of
$98,193. The property is in good condition.

         We maintain offices in Elko, Nevada, where we lease approximately
10,000 square feet of office space pursuant to a lease expiring in July 2004 at
a current base annual rate of $147,200. Our clients reimburse us the rent owed
under this lease. The property is in good condition.

         We maintain offices in Winnemucca, Nevada, where we lease approximately
5,950 square feet of office space pursuant to a lease expiring in January 2005
at a current base annual rate of $78,540. Our clients reimburse us the rent owed
under this lease. The property is in good condition.

         Real Estate Investments

         We do not invest in real estate or have interest in real estate, in
real estate mortgages or in securities or of or interests in persons primarily
engaged in real estate activities.


ITEM 3.  LEGAL PROCEEDINGS

         None.

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

         No matters were submitted to a vote of our stockholders during the
quarter ended December 31, 2003.





                                       17
<PAGE>


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL
         BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

Market For Our Common Stock

         Our common stock trades on the American Stock Exchange under the symbol
"DMX." Prior to January 15, 2003, our common stock was quoted on the
Over-the-Counter Bulletin Board under the symbol "IMTX" and "ITRX." The
following table sets forth the high and low closing prices for our common stock
for the periods indicated. All closing prices have been adjusted to reflect a
1-for-5 reverse stock split effected as of close of business on January 3, 2003.

<TABLE>
<CAPTION>

<S>                                                    <C>                     <C>

                                                           High                    Low
   2004                                                   -----                   ------
        First Quarter (through March 25, 2004)         $  5.170                $  3.910

   2003
        Fourth Quarter                                    4.490                   2.600
        Third Quarter                                     3.790                   2.600
        Second Quarter                                    3.000                   1.510
        First Quarter                                     5.000                   1.370

   2002
        Fourth Quarter                                    4.300                   2.500
        Third Quarter                                     5.100                   2.750
        Second Quarter                                    6.625                   4.150
        First Quarter                                     7.650                   5.100

         We obtained the information presented above from Nasdaq.com.

</TABLE>


         As of March 25, 2004, there were approximately 630 registered holders
of our common stock. On March 25, 2004, the last reported sales price of our
common stock was $5.17.

Dividend Policy

         We have never paid or declared any cash dividends on our common stock
and do not anticipate paying cash dividends on our common stock in the
foreseeable future.

         Our Series A Convertible Preferred Stock accrues dividend on the
original issue price at the rate of 8% per annum. The dividend is payable upon
conversion of Series A Convertible Preferred Stock into common stock in
additional shares of common stock or, subject to the consent of our senior
secured lender, in cash.

Recent Sales of Unregistered Securities

         As of October 31, 2003, we issued 1,400,000 shares of common stock and
granted warrants to purchase 700,000 additional shares pursuant to a private
placement in which we offered as a unit two shares of common stock and a warrant
to purchase an additional share of common stock exercisable at $3.00 (the market
price of our common stock on the date we commenced the private placement) for a
unit purchase price of $5. Westminster Securities Corporation, a Member of the
New York Stock Exchange, acted as placement agent for this private placement. In
this private placement, we realized proceeds of $3,037,894 net of placement
agent commissions and expenses. Each of the participants in this private
placement is an accredited investor. In undertaking this issuance, we relied on
an exemption from registration under Section 4(2) of the Securities Act and
Regulation D promulgated under the Securities Act.



                                       18
<PAGE>


         Effective as of October 31, 2003, we issued warrants to acquire an
aggregate of 140,000 shares of our common stock at an exercise price of $2.50
per share to 13 principals of an investment bank as consideration for completing
the private placement described above. Each of the principals is an accredited
investor. In undertaking this issuance, we relied on an exemption from
registration under Section 4(2) of the Securities Act and Regulation D
promulgated under the Securities Act.

         On November 11, 17, 21 and 25 and December 2, 2003, an investor
exercised warrants to acquire an aggregate of 125,000 shares of our common stock
by paying the exercise price of $1.50 per share. The investor is an accredited
investor. In undertaking these issuances, we relied on an exemption from
registration under Section 4(2) of the Securities Act and Regulation D
promulgated under the Securities Act.

         On November 26, 2003, two investors exercised warrants to acquire an
aggregate of 23,889 shares of our common stock by paying the exercise price of
$1.80 per share. The investors are accredited investors. In undertaking this
issuance, we relied on an exemption from registration under Section 4(2) of the
Securities Act and Regulation D promulgated under the Securities Act.


         On November 18, 2003, an investor exercised warrants to acquire 114,285
shares of our common stock at at an exercise price of $1.75 per share. In lieu
paying the exercise price in cash, the investor used the warrants' cashless
exercise feature, such that the investor received 55,271 shares of our common
stock and surrendered to us for cancellation 59,014 shares of our common stock.
The investor is an accredited investor. In undertaking this issuance, we relied
on an exemption from registration under Section 4(2) of the Securities Act and
Regulation D promulgated under the Securities Act.


         On December 11, 2003 (but effective as of October 18, 2003), we issued
warrants to acquire an aggregate of 50,000 shares of our common stock at an
exercise price of $2.50 per share to seven principals of an investment bank as
consideration for mergers and acquisitions advisory services related to the
initial merger discussions with CHD Meridian Healthcare. Each of the principals
is an accredited investor. In undertaking this issuance, we relied on an
exemption from registration under Section 4(2) of the Securities Act and
Regulation D promulgated under the Securities Act.

         Effective as of December 31, 2003, we issued warrants to acquire 50,000
shares of our common stock at an exercise price of $1.75 per share as
consideration for extending the maturity date of a 6% convertible senior
debenture in the initial aggregate principal amount of $2,000,000. The investor
exercised the warrants on the date of grant. We valued the warrants at $200,000
utilizing the Black-Scholes model, which amount was recorded as a discount to
the debenture payable and will be accreted to interest expense over the
extension period of one year. Also, on various dates ending on December 31,
2003, the investor converted amounts outstanding under the debenture into
847,629 shares of our common stock at the conversion price of $1.75 per share.
Finally, On October 10 and December 19, 2003, the investor exercised warrants to
acquire an additional 307,692 shares of our common stock by paying the exercise
price of $1.75 per share. The investor is an accredited investor. In undertaking
each of these issuances, we relied on an exemption from registration under
Section 4(2) of the Securities Act and Regulation D promulgated under the
Securities Act.

         On December 31, 2003, an investor exercised warrants to acquire 100,000
shares of our common stock by paying the exercise price of $1.50 per share. The
investor is an accredited investor. In undertaking this issuance, we relied on
an exemption from registration under Section 4(2) of the Securities Act and
Regulation D promulgated under the Securities Act.

         We acquired CHD Meridian Healthcare effective March 19, 2004 in a
two-step merger transaction pursuant to a Merger Agreement dated as of December
26, 2003, as amended. To acquire CHD Meridian Healthcare common stock, we issued
a total of 10,000,000 shares of common stock and 200,000 shares of our Series A
Convertible Preferred Stock to 22 CHD Meridian Healthcare stockholders and
deposited 3,859,200 shares of our common stock into escrow. Each share of Series
A Convertible Preferred Stock is convertible into 10 shares of our common stock
at an initial conversion price of $2.50 per share. In undertaking this issuance,
we relied on an exemption from registration under Section 4(2) and Regulation D
promulgated under the Securities Act.



                                       19
<PAGE>



         On March 19, 2004 we completed a private placement of 1,000,000 shares
of Series A Convertible Preferred Stock at $25 per share. Each share of Series A
Convertible Preferred Stock is convertible into 10 shares of our common stock at
an initial conversion price of $2.50 per share. We realized proceeds of
$25,000,000, net of approximately $1,500,000 in placement agent commissions and
approximately $1,169,000 in transaction related expenses. Each of the 49
participants in this private placement is an accredited investor. In undertaking
this issuance, we relied on an exemption from registration under Section 4(2) of
the Securities Act and Regulation D promulgated under the Securities Act.


         Effective as of March 19, 2004, we issued warrants to acquire an
aggregate of 492,000 shares of our common stock at an exercise price of $2.50
per share to two placement agents that assisted us with the Series A Convertible
Preferred Stock private placement referred to above. Each of the placement
agents is an accredited investor. In undertaking this issuance, we relied on an
exemption from registration under Section 4(2) of the Securities Act and
Regulation D promulgated under the Securities Act.

Purchases of Equity Securities by the Small Business Issuer and Affiliated
Purchases

         None.










                                       20
<PAGE>


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The following Management's Discussion and Analysis of Financial
Condition and Results of Operations of I-trax, Inc. and its subsidiaries should
be reviewed in conjunction with our audited financial statements and related
notes appearing in this Annual Report on Form 10-KSB for the fiscal years ended
December 31, 2003 and 2002.

         I-trax is a combination of two companies that merged on March 19, 2004:
I-trax, Inc. and Meridian Occupational Healthcare Associates, Inc., a private
company, which does business as CHD Meridian Healthcare. Although this Annual
Report on Form 10-KSB describes the business of the merged companies, because
the merger occurred subsequent to the year ended December 31, 2003, certain
portions of this report, including the results of operations presented in this
Management's Discussion and Analysis of Financial Condition and Results of
Operations, are limited to I-trax. To present the performance and results of
operations of the merged companies for the years ended December 31, 2003 and
2002, we are including in this report the balance sheet of CHD Meridian
Healthcare as of December 31, 2003 and the statements of operations for the
years ended December 31, 2003 and 2002, and the unaudited combined condensed
balance sheet of I-trax and CHD Meridian Healthcare on a pro forma basis as if
the merger had been consummated on December 31, 2003 and the unaudited combined
condensed statements of operations on a pro forma basis as if the merger had
been consummated on January 1, 2002.

         The following discussion also contains forward-looking statements,
which are based upon current expectations and involve a number of risks and
uncertainties. In order for I-trax to utilize the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995, investors are hereby
cautioned that these statements may be affected by important factors, which are
set forth below and elsewhere in this report, and consequently, actual
operations and results may differ materially from those expressed in these
forward-looking statements. The most important factor is our ability
successfully to integrate our operations and health management programs with the
operations and services of CHD Meridian Healthcare and successfully introduce to
our market place our combined products and services. This and other risks
concerning the merged companies business are discussed above beginning on page
7. The acquisition is discussed further below.

         Our consolidated financial statements and applicable notes are prepared
in accordance with the generally accepted accounting principles in the United
States of America. The preparation of these financial statements requires us to
make estimates and judgments that affect the reported amounts of assets and
liabilities and the reported amounts of revenues and expenses during the covered
periods. We base our estimates and judgments on our historical experience and on
various other factors that we believe are reasonable under the circumstances. We
evaluate our estimates and judgments, including those related to revenue
recognition, bad debts, restructuring costs, and goodwill and other intangible
assets on an ongoing basis. Notwithstanding these efforts, there can be no
assurance that actual results will not differ from the respective amount of
those estimates.

Business Description

         Following I-trax and CHD Meridian Healthcare merger, we offer two
categories of services, which can be integrated or blended as necessary or
appropriate based on each client's needs. The first category includes on site
services such as occupation health, primary care, corporate health and pharmacy,
which were historically offered by CHD Meridian Healthcare. The second category
includes personalized health management programs, which were historically
offered by I-trax.


         Also as the result of the merger, we believe we are the nation's
largest provider of on-site corporate health management services. Our health
management services are designed to allow employers to contract directly for a
wide range of employee healthcare needs. We can deliver these services at or
near the client's work site by opening, staffing and managing a clinic or
pharmacy dedicated to the client and its employees, or remotely by using the
Internet and our state-of-the-art Care Communications Center staffed with
trained nurses and other healthcare professionals 24 hours per day, 7 days per
week. Our array of services provides each client with flexibility to meet its
specific pharmacy, primary care, occupational health, corporate health,
wellness, lifestyle management or disease management needs. Pursuant to
multi-year agreements, our clients can offer their employees, dependents and
retirees any combination of our various services which integrate seamlessly,
through on-site or off-site delivery platforms, or as a component of or
complement to existing health plan options.





                                       21
<PAGE>



         Our primary target market is large and mid-sized self-insured employers
and business consortia. These entities are more likely to derive immediate and
meaningful financial benefit from our services because of their scale and focus
on controlling healthcare costs.


         We currently operate approximately 160 locations in 32 states. We also
maintain contracts with approximately 150 clients, including many leading
employers. Our clients pay us directly for our services and include automotive
and automotive parts manufacturers, consumer products manufacturers, large
financial institutions, health plans, integrated delivery networks, and third
party administrators. Our client retention rate is high because we establish
strong client relationships, which are supported by the critical nature of our
services, the benefits achieved by employer and employee constituents, and the
utilization of multi-year service contracts.

Corporate Overview; Acquisition of CHD Meridian Healthcare

         I-trax was incorporated in Delaware on September 15, 2000 at the
direction of the board of directors of I-trax Health Management Solutions, Inc.,
or Health Management, I-trax's then parent company. On February 5, 2001, I-trax
became the holding company of Health Management at the closing of a
re-organization.


         The holding company structure has allowed us greater flexibility in our
operations and expansion and diversification plans, including in the
acquisitions of CHD Meridian Healthcare and WellComm Group, Inc.

         On March 19, 2004, we finalized the acquisition of CHD Meridian
Healthcare. Under the merger agreement, we delivered to CHD Meridian Healthcare
stockholders 10,000,000 shares of I-trax common stock, 400,000 shares of I-trax
Series A Convertible Preferred Stock, each of which is convertible into 10
shares of I-trax common stock, and paid $25,508,000 in cash. Immediately prior
to the merger, CHD Meridian Healthcare also redeemed certain of its then
outstanding shares of common stock and options to purchase common stock for
which it paid approximately $9,492,000 in the aggregate. Further, if CHD
Meridian Healthcare, continuing its operations following the closing of the
merger as a subsidiary of I-trax, achieves calendar 2004 milestones for earnings
before interest, taxes, depreciation and amortization, or EBITDA, additional
shares of common stock will be payable as follows: If EBITDA equals or exceeds
$8,100,000, the number of such additional shares of common stock payable will be
3,473,280; the number of such shares increases proportionately up to a maximum
of 3,859,200 shares if EBITDA equals or exceeds $9,000,000. Any escrowed shares
that are not released will be returned to I-trax for cancellation. Further, the
escrowed shares are not deemed outstanding for accounting purposes until
released.

         In the merger, I-trax assumed all of CHD Meridian Healthcare's
liabilities, which equaled approximately $21,000,000.

         Immediately following the closing of the merger, I-trax redeemed from
former CHD Meridian Healthcare stockholders that participated in the merger, pro
rata, an aggregate of 200,000 shares of Series A Convertible Preferred Stock at
their original issue price of $25.00 per share.

         I-trax obtained the cash portion of the merger consideration by selling
1,000,000 shares of Series A Convertible Preferred Stock at a purchase price of
$25.00 per share for gross proceeds of $25,000,000 by borrowing $12,000,000 on a
new $20,000,000 senior secured debt facility from a national lender.

         Under the merger agreement and the related financing documents, we are
required to register for resale the shares of common stock issued in the merger
and issuable upon conversion of shares of Series A Convertible Preferred Stock
issued in the merger and in the related financing.

         The estimated purchase price we paid for CHD Meridian Healthcare,
valuing our common stock at $4.96 per share as of March 19, 2004, the date of
acquisition, and before the issuance of any of the earn-out shares, is
approximately $86.2 million. The acquisition will be accounted for as a
purchase. As such, the purchase price will be allocated to the estimated fair
values of the assets acquired and liabilities assumed. If the escrow shares are
paid to former CHD Meridian Healthcare in accordance with the terms of the
merger agreement, the purchase price of the acquisition will increase, and the
additional purchase price will be also allocated to the estimated fair values of
the assets acquired and liabilities assumed. We will obtain a third-party
valuation of the acquired intangible assets.



                                       22
<PAGE>


         The following are our unaudited pro forma results of operations giving
effect to the acquisition of CHD Meridian Healthcare as though the transaction
had occurred on January 1, 2002.


                                        Year ended             Year ended
                                       December 31,           December 31,
                                          2003                   2002
                                  ------------------    -------------------
           Sales                      $ 121,966,000         $  111,056,000
           Expenses                     128,632,000            121,622,000
                                  ------------------    -------------------
           Net loss                   $  (6,666,000)        $  (10,566,000)
                                  ==================    ===================

         We acquired WellComm effective February 6, 2002. In the acquisition, we
paid the WellComm stockholders approximately $2,200,000 in cash and 1,488,000
shares of our common stock. We also issued to each of two senior officers of
WellComm options to acquire 56,000 shares of our common stock at a nominal
exercise price. Because the acquisition was structured as a merger, we also
assume all of WellComm's liabilities, which equaled approximately $775,000.

         We funded this acquisition by selling a 6% convertible senior debenture
in the aggregate principal amount of $2,000,000 to Palladin Opportunity Fund
LLC. We also issued Palladin a warrant to purchase up to 307,692 shares of our
common stock. As of March 19, 2004, Palladin has converted all amounts
outstanding under the debenture into common stock and has exercised the warrant
in full at the conversion price and exercise price of $1.75 per share.


Listing on the American Stock Exchange

         Effective January 3, 2003 we completed a 1-for-5 reverse stock split.
Our board of directors and stockholders authorized the reverse stock split in
connection with the then pending application to list our common stock on the
American Stock Exchange. We began trading on the American Stock Exchange on
January 15, 2003 under the symbol "DMX."


Key Trends and Other Factors

         Our business is facing the following trends and other factors, which
are discussed in greater detail in management's discussion and analysis of
financial condition and results of operations:

     o    CHD Meridian Healthcare Acquisition: On March 19, 2004, we finalized
          the acquisition of CHD Meridian Healthcare. We will commence reporting
          financial results that include CHD Meridian Healthcare operations
          beginning as of April 1, 2004. When we begin to report the revenue of
          CHD Meridian Healthcare, our operational expenses, general and
          administration expenses, depreciation and amortization expenses and
          interest expense will also increase significantly.

     o    Revenue and Cost of Revenue: Revenue and cost of revenue increased
          modestly from year ended December 31, 2002 to year ended December 31,
          2003. In accordance with management's expectations, we continued to
          increase our service revenue and decrease our technology revenue. We
          expect this trend to continue. We also expect to increase our revenue
          both as a result of the merger and because of I-trax's continuing
          sales efforts.

     o    Operating Expenses: Operating expenses have decreased from year ended
          December 31, 2002 to year ended December 31, 2003, with salary and
          related benefits, research and development, depreciation and
          amortization and impairment charges related to intangible assets
          declining. The decline was partially offset by an increase in
          marketing and publicity expenses. In coming periods, we expect
          operating expenses to increase as our revenue increases.

     o    Other Income and Expenses: Interest expense and financing costs
          increased from year ended December 31, 2002 to year ended December 31,
          2003. We expect interest expense to increase in future periods because
          of the additional interested required to service amounts outstanding
          under our senior secured credit facility.

     o    Working Capital: We finished the year ended December 31, 2003 with
          negative working capital. However, as of March 31, 2004, we had
          estimated pro forma working capital that, together with operating cash
          flow and amounts available under a newly established secured credit
          facility, we expect will be sufficient to conduct our operations for
          the next twelve months.







                                       23
<PAGE>

Results of Operations

         The following discussion of results of operations is limited to the
historic business of I-trax as in effect as of December 31, 2003.

         Year Ended December 31, 2003 Compared to Year Ended December 31, 2002.

         Revenue for the year ended December 31, 2003 was $4,188,860, an
increase of $256,950 or 7% from $3,931,910 for the year ended December 31, 2002.
Total revenue was comprised of two components: (1) prevention and care services
revenue of $2,612,941; and (2) technology license and services revenue of
$1,575,919. Of the total technology license and services revenue, approximately
$1,400,000 represents revenue from a perpetual license of CarePrime(R) and
MyFamilyMD(TM) to UICI, Inc. This license also grants UICI an exclusive right to
use CarePrime(R) and MyFamilyMD(TM) in the student health market. We contracted
this license and software development in the third quarter of 2002 and we
recognize it based on deliverables throughout 2002 and 2003. We expect to
commence reporting CHD Meridian Healthcare revenue beginning as of April 1, 2004
pursuant to a letter of understanding between the two companies.

         Cost of revenue for the year ended December 31, 2003 was $1,371,870, an
increase of 12% from $1,229,044 for the year ended December 31, 2002. The
increase is attributable to the personnel costs required to service our
prevention and care services contracts. Cost of revenue will increase when we
begin to report CHD Meridian Healthcare revenue as of April 1, 2004.

         Software development costs amounting to $1,237,713 were capitalized for
the year ended December 31, 2003, since the development stage of these products
had reached technological feasibility. For the year ended December 31, 2002, we
charged to operations $410,220 in research and development costs. We expensed
such costs during the year ended December 31, 2002 because the products under
development had not reached technological feasibility and therefore, the related
expense could not be capitalized. We expect to continue to spend funds to
improve our technology and to add functionality to our technology products. Such
products include the MyFamilyMD(TM) application and its MedWizard(R) tools, the
CarePrime(TM) application, which interacts with MyFamilyMD(TM) and its
MedWizard(R) tools, and the Health-e-Coordinator(TM) application, which is a
disease management platform.

         General and administrative expenses (excluding salary and related
benefits which are discussed separately below) increased from $1,721,685 for the
year ended December 31, 2002 to $1,740,710 for the year ended December 31, 2003,
an immaterial increase of $19,025. Our ability to control general and
administrative expenses is attributable to increased efficiencies and
implementation of stringent budgetary controls. General and administrative
expenses will increase when we begin to report CHD Meridian Healthcare revenue
and associated expenses as of April 1, 2004.

         Salary and related benefits were $2,468,468 for the year ended December
31, 2003 as compared to $4,233,209 for the year ended December 31, 2002. This
decrease amounted to $1,764,741 or 42%. The two major reasons for the large
decrease in salary and related benefits were: (1) capitalization of
approximately $805,000 of development salaries to software development costs in
2003, and (2) implementation of a variable pay plan in December 2002. Pursuant
to the plan, all employees accepted a 10% salary reduction in order to fund the
variable plan. If certain financial and personal goals were met during 2003, the
employees were eligible to participate in the plan, thus potentially receiving
additional compensation in excess of the accepted 10% salary reduction. Because
we only met the financial goals established under the plan during the first
quarter of 2003, the net reduction in salary associated with the plan amounted
to approximately $500,000. The balance of the decrease in salary and related
benefits is the result of consolidating positions and improving efficiencies.
Salary and related benefits will increase effective April 1, 2004 when we begin
to report CHD Meridian Healthcare revenue and related expenses.



                                       24
<PAGE>


         Depreciation and amortization expenses were $1,702,469 for the year
ended December 31, 2003, as compared to $2,045,461 for the year ended December
31, 2002. The decrease is primarily attributable to the write down of certain
intangible assets during the last quarter of 2002.

         During 2002, we incurred an impairment charge of $1,648,332 in
connection with certain intangible assets (customer relations) acquired in the
WellComm acquisition. During the quarter ended December 31, 2003, we recorded an
impairment charge of approximately $458,000 representing the un-amortized
portion of covenants not to compete attributable to the founder of WellComm, who
passed away.

         Marketing and publicity expenses were $1,762,567 for the year ended
December 31, 2003 as compared to $773,963 for the year ended December 31, 2002.
The increase of 128% or $988,604 is a direct result of augmented marketing and
investor relation campaigns to promote I-trax in the capital markets and its
products in the wellness and disease management market. The marketing and
publicity expense for 2003 includes a non-cash charge of approximately
$1,414,000, for the issuance of common stock, granting of warrants and
contribution of common stock by certain of our stockholders to an investor
relations firm.

         Interest expense and financing costs for the year ended December 31,
2003 were $2,405,015 an increase of $1,297,383 or 117% from $1,107,632 for the
year ended December 31, 2002. For the year ended December 31, 2003, interest
expense includes charges of approximately $1,880,826 related to the debenture
and related warrants issued to Palladin Opportunity Fund, LLC. Of this amount,
$224,350 represents interest of 6% on the debenture for the year ended December
31, 2003; $1,125,085 represents amortization of the value assigned to the
original beneficial conversion value of the Palladin debenture and the
associated warrants and additional charges and amortization for the further
beneficial conversion value caused by the June 2003 reset of the conversion
price of such debenture and the exercise price of the associated warrants; and
$531,391 represents an accelerated charge to interest expense for the portion of
the debenture converted during the year ended December 31, 2003. During the
period, Palladin converted $1,483,351 of principal outstanding under the
debenture into common stock. Generally, the beneficial conversion value
represents the benefit to the investor that results from purchasing an
immediately convertible debenture with a conversion price that is less than fair
market value on the date of purchase after first allocating a portion of the
proceeds from the debenture to the associated warrants. The remaining balance of
interest expense of approximately $524,189 is associated with interest on other
debt and the amortization of the value of warrants granted to certain
shareholders for loans made to us. Interest expense will increase effective
April 1, 2004 to reflect interest payable in connection with $12,000,000
outstanding under a new $20,000,000 senior secured credit facility established
to fund a portion of the CHD Meridian Healthcare acquisition price.

         Amortization of debt issuance and conversion costs was $336,783 and
$187,337 for the years ended December 31, 2003 and 2002, respectively. These
amounts represented costs incurred in selling the $2,000,000 debenture to
Palladin and were amortized over the two-year life of the debenture. During the
year ended December 31, 2003, however, we recorded a one-time charge of $122,228
in connection with the re-pricing of the exercise price of the warrants issued
to the third party that brokered the Palladin investment and increasing the
number of shares covered by the warrant as per the broker agreement.

         Under the terms of the registration rights agreement entered in
connection with the private placement of common stock and warrants closed on
October 31, 2003, we were required to file with the Securities and Exchange
Commission a registration statement under the Securities Act of 1933, as
amended, covering the resale of all the common stock purchased and the common
stock underlying the warrants within 30 days of the placement's closing.
Additionally, under the same registration rights agreement, we were required to
use our best efforts to cause such registration statement to become effective
within 90 days of closing of the placement. The registration rights agreement
further provided that if the registration statement was not filed, or did not
become effective within the defined time period, I-trax would have been required
to pay each holder an amount in cash, as liquidated damages, equal to 1.5% per
month of the aggregate purchase price paid by such holders. The registration
statement was filed within the allowed time, and was declared effective by the
Commission on February 17, 2004.

         In accordance with EITF 00-19, "Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company's Own Stock," the
fair value of the warrants issued in the October 2003 private placement was
accounted for as a liability, with an offsetting reduction to additional paid-in
capital received in the




                                       25
<PAGE>


private  placement.  The  warrant  liability  was  reclassified  to equity as of
February  17, 2004,  the  effective  date of the  registration  statement.  Such
transaction did not impact our financial position or business operations.

         The fair value of the warrants was estimated using the Black-Scholes
option-pricing model with the following assumptions: no dividends; risk-free
interest rate of 4%; the contractual life of 5 years and volatility of 112%. The
fair value of the warrants at December 31, 2003 was estimated to be
approximately $2,760,000, which reflects an increase in fair value of $301,305
from the time the warrants were granted. This amount has been charged to
operations as an increase in common stock warrants. The fair value of the
warrants increased by approximately an additional $350,000 from December 31,
2003 to February 17, 2004. This increase will be charged in the statement of
operations for the quarter ended March 31, 2004 as an increase in common stock
warrants.

         The adjustments required by EITF 00-19 were required because of a
private placement subscription agreement, which specified a penalty if we did
not timely register the common stock underlying the warrants issued in the
transaction. The Securities and Exchange Commission declared the related
registration statement effective within the contractual deadline and we did not
incur any penalties. The adjustments for EITF 00-19 had no impact on our working
capital, liquidity, or business operations.

         During January 2003, in connection with the termination of our
agreement to acquire DxCG, Inc., a Boston-based predictive modeling company, we
charged $200,000 to earnings. This sum was paid to DxCG following DxCG's
termination of the merger agreement because certain conditions to closing,
including third party financing for the cash portion of the purchase price, were
not satisfied.


         No provision or benefit for Federal or state income taxes has been
recorded for the years ended December 31, 2003 and 2002, because we have
incurred net operating losses and have no carry-back potential. Based on a
number of factors, including the lack of a history of profits and net operating
loss carry-forward limitations due to changes in ownership, management believes
that there is sufficient uncertainty regarding the realization of deferred tax
assets such that a valuation allowance has been provided. At December 31, 2003,
our net operating loss carry-forwards of approximately $23,700,000 were
available to reduce future taxable income. These losses expire at various times
beginning in 2004. These carry-forward losses are also of no value unless we are
profitable. To the extent that we are profitable, the utilization of these
carry-forward losses may be limited as a result of substantial changes in our
stock ownership in the past along with the effect of the CHD Meridian Healthcare
acquisition. The amount of the limitation has not yet been calculated.


         For the year ended December 31, 2003, our net loss was $8,058,579,
inclusive of $500,000 of income resulting from a life insurance policy pay out
following the death of an executive officer, compared to a net loss of
$9,424,973 for the year ended December 31, 2002, a decrease of 14%.

Liquidity and Capital Resources

         The following discussion concerns the liquidity and capital resources
of I-trax, with the exception of portions specifically addressing the CHD
Meridian Healthcare acquisition and certain pro forma information subsequent to
the CHD Meridian Healthcare acquisition.

         Working Capital

         As of December 31, 2003, we had a working capital deficiency of
$290,042.

         On March 19, 2004, we completed the CHD Meridian Healthcare
acquisition. We obtained some of the cash merger consideration by selling
1,000,000 shares of Series A Convertible Preferred Stock at a purchase price of
$25.00 per share for gross proceeds of $25 million.

         In addition, on March 19, 2004, contemporaneously with the CHD Meridian
Healthcare acquisition, we obtained a permanent $20 million senior secured
credit facility from Bank of America, N.A., and borrowed $12 million under this
facility to fund the balance of the cash merger consideration. The credit
facility expires on April 1, 2007. The credit facility has a $6 million term
loan commitment with a $14 million revolving credit commitment, which is reduced
by letter of credit liabilities, which currently amount to $3.25 million. The
credit facility is secured


                                       26
<PAGE>


by  substantially  all of our  assets.  At any time prior to June 1,  2004,  the
borrowings  under the revolving  credit  commitment  may not exceed $10 million.
From June 1, 2004 until  November 1, 2005,  the  borrowings  under the revolving
credit commitment may not exceed 80% of eligible receivables and 50% of eligible
fixed assets. Borrowings, at our election, may be either Base rate or Eurodollar
rate loans.  Base rate loans bear  interest at the prime rate as published  from
time to time, plus up to 0.75% per annum depending on our coverage rations.  The
Eurodollar  rate loans bear interest at the Eurodollar  rate plus up to 3.0% per
annum likewise  depending on our coverage  ratios.  As of March 26, 2004, we had
outstanding  $6 million under the term loan, $6 million under the revolving loan
and an aggregate of $3.25 million under letters of credit.

         The credit facility includes certain financial covenants customary for
the amount of duration of this commitment. As of the date of this filing, we
were in compliance with all such covenants.

         We are required to make twelve principal installment payments of $0.5
million each quarter beginning on July 1, 2004.


         As of March 31, 2004, we had estimated pro forma working capital of
approximately $5,500,000. We believe that this amount, together with our
operating cash flow and amounts available to be drawn from the credit facility,
is sufficient to meet our working capital and operating expense requirements for
the next twelve months. We also believe that cash flow from operations, existing
working capital and additional availability under the credit facility should be
sufficient to fund long-term operations, capital expenditures and expansion of
our existing client base. If we have other long-term capital needs, however,
such as for acquisition capital, additional equity or debt financings may be
needed.


         Sources and Uses of Cash

         Despite negative cash flows from operations, which amounted to
$3,509,478 for the year ended December 31, 2003 and $2,871,201 for the year
ended December 31, 2002, we have been able to secure funds to support our
operations. During the year ended December 31, 2002, we secured funding by
selling equity securities, issuing a debenture and receiving advances from
officers, directors and other related parties, which aggregated approximately
$4,800,000. Of the $4,800,000, approximately $2,200,000 was used to acquire
WellComm, $190,000 was used to repay debt and the remainder was used to fund
operations. During the year ended December 31, 2003, we borrowed, net of
repayments, approximately $600,000 from officers, related parties and certain
stockholders. Additionally, during the year ended December 31, 2003, we raised
an aggregate of $5,010,000 in two private placements of our securities and upon
the exercise of warrants to acquire 720,866 shares of common stock, which
yielded approximately $970,000. The funds were used primarily to fund
operations, continue the investment in our technology and satisfy certain
liabilities, including the pay off of a $300,000 credit line.

         Current Liabilities. As of December 31, 2003, our current liabilities
were $1,601,524, of which $280,000 was due to related parties. The remainder of
current liabilities of $1,321,524 was comprised primarily of trade payables of
$605,689, accrued expenses of $361,168, $114,452 of short term loans and capital
lease obligations and $250,000 of deferred revenue. We have good relationships
with all of our vendors.

         Long-Term Debt. As of December 31, 2003, the face value of our
long-term debt was $1,358,808 (with a carrying value of $797,805), and was held
by two investor groups. Psilos Group Partners and affiliated entities were owed
$617,809 for which principal and interest was not due until March 2006. The
balance of $740,999 was outstanding under the convertible debenture held by
Palladin, which was not due until February 2005 (after receiving a one year
extension effective December 31, 2003).

         Pay-off of Liabilities. In connection with obtaining a senior secured
credit facility to fund the CHD Meridian Healthcare acquisition, we repaid all
related party loans and advances, and all other outstanding loans on March 19,
2004. Accordingly, contemporaneously with the closing of the CHD Meridian
Healthcare acquisition, we repaid an aggregate of $1,233,932 of which $289,897
was for related party loans and accrued interest and $944,035 was for principal
and accrued interest under various promissory notes.

         In the first quarter of 2004,  Palladin converted the remaining balance
of its debenture into 427,106 shares of our common stock.



                                       27
<PAGE>


         Equity Sales. Under a private placement initiated in June 2003, we
raised approximately $1,000,000 in cash, converted approximately $1,169,270 in
related party loans, of which $1,037,038 represented principal and $132,232
represented interest, and converted $121,997 of deferred salaries by selling or
issuing, as applicable, common stock. In this offering, we issued a total of
1,311,682 shares.

         During August 2003 we commenced a private placement whereby we offered
as a unit, two shares of common stock and a warrant to purchase an additional
share of common stock exercisable at $3.00, the market price of our common stock
on the date we commenced the private placement, for a unit purchase price of $5.
The maximum amount offered was $3,500,000. Through October 31, 2003, the end of
the private placement, we issued a total of 1,400,000 shares of common stock and
granted warrants to purchase 700,000 additional shares. We realized net proceeds
of $3,037,894 after expenses as of December 31, 2003.

         For the year ended December 31, 2003, we received approximately
$973,000 from exercises of warrants.

         Material Commitments

         The following schedules summarizes the contractual obligations of
I-trax and CHD Meridian Healthcare by the indicated period as of December 31,
2003:

<TABLE>
<CAPTION>
<S>                  <C>                              <C>              <C>                <C>

            For the year ending                       I-trax          CHD Meridian           Total
            December 31:                                               Healthcare
            ----------------------------------    ----------------   ---------------     --------------

                     2004                             $   206,000      $  1,294,000       $  1,500,000
                     2005                                 119,000           986,000          1,105,000
                     2006                                  56,000           927,000            983,000
                     2007                                  24,000           780,000            804,000
                     2008                                      --           651,000            651,000
                     Thereafter                                --           574,000            574,000
                                                  ----------------   --------------      --------------
            Total future payments                     $   405,000      $  5,212,000       $  5,617,000
                                                  ================   ===============     ==============
</TABLE>

         Related Party Transactions

         During February 2003, we repaid $140,000 of the $225,000 loan
outstanding to a relative of our former chief operating officer.

         During February 2003, pursuant to two promissory notes, two of our
former directors advanced us $200,000 for working capital. The notes accrued
interest at 8% per year and matured in February 2004.

         As of June 30, 2003, our chief executive officer and former chief
operating officer, along with a director, advanced us a total of $540,000 for
working capital at an interest rate of 8% per year.

         As of December 31, 2003, we repaid an aggregate of $99,622 to our chief
executive officer and other related parties. As of March 22, 2004, we repaid all
related party loans, and interest accrued on such loans, in the aggregate amount
$289,897.

         In connection with the death of a senior executive officer, in October
2003 we were entitled to receive proceeds of $500,000 from a key-person life
insurance policy we maintained on the life of such senior executive officer. The
proceeds from the life insurance policy were pledged as security for loans made
to us in 2002 and 2003 by the deceased executive officer, a former director and
a key employee. Accordingly, the life insurance company was instructed to
disburse such proceeds directly to the note holders in partial satisfaction of
such loans.



                                       28
<PAGE>


Critical Accounting Policies

         The following critical accounting policies concern the business of
I-trax at December 31, 2003. The policies will be reassessed effective as of
April 1, 2004 when we begin to report revenue, expenses and other financial
information concerning CHD Meridian Healthcare.

         Impairment of Goodwill and Intangible

         We operate in an industry that is rapidly evolving and extremely
competitive. It is reasonably possible that our accounting estimates with
respect to the useful life and ultimate recoverability of our carrying basis of
goodwill and intangible assets could change in the near term and that the effect
of such changes on the financial statements could be material. During the year
ended December 31, 2003 and 2002, we recorded an impairment charge of $458,252
and $1,648,332, respectively in connection with certain intangible assets
acquired in the WellComm acquisition. For 2003, the charge related to the
unamortized portion of covenants not to compete directly attributable to the
founder of WellComm. The founder of WellComm passed away in 2003. For 2002, the
charge related to the write off of a portion of an intangible asset associated
with customer relations.

         Revenue Recognition

         Technology Revenue. We derive our revenue pursuant to different
contract types, including perpetual software licenses, subscription licenses and
custom development services, all of which may include support services revenue
such as licensed software maintenance, training, consulting and web hosting
arrangements. As described below, significant management judgments and estimates
must be made and used in connection with the revenue recognized in any
accounting period. Material differences may result in the amount and timing of
our revenue for any period if our management made different judgments or
utilized different estimates.

         We license our software products for a specific term or on a perpetual
basis. Most of our license contracts also require maintenance and support. We
apply the provisions of Statement of Position 97-2, "Software Revenue
Recognition," as amended by Statement of Position 98-9 "Modification of SOP
97-2, Software Revenue Recognition, With Respect to Certain Transactions" to all
transactions involving the sale of software products and hardware transactions
where the software is not incidental. For hardware transactions where software
is not incidental, we do not unbundle our fee and, accordingly, do not apply
separate accounting guidance to the hardware and software elements. For hardware
transactions where no software is involved we apply the provisions of Staff
Accounting Bulletin 101 "Revenue Recognition." In addition, we apply the
provisions of Emerging Issues Task Force Issue No. 00-03 "Application of AICPA
Statement of Position 97-2 to Arrangements that Include the Right to Use
Software Stored on Another Entity's Hardware" to our hosted software service
transactions.

         We recognize revenue from the sale of software licenses when persuasive
evidence of an arrangement exists, the product has been delivered, the fee is
fixed and determinable and collection of the resulting receivable is reasonably
assured. Delivery generally occurs when the product is delivered to a common
carrier.

         We assess collection based on a number of factors, including past
transaction history with the customer and the credit worthiness of the customer.
We do not request collateral from our customers. If we determine that collection
of a fee is not reasonably assured, we defer the fee and recognize revenue at
the time collection becomes reasonably assured, which is generally upon receipt
of cash.

         For arrangements with multiple obligations (for example, undelivered
maintenance and support), we allocate revenue to each component of the
arrangement using the residual value method based on the fair value of the
undelivered elements. Accordingly, we defer revenue for the amount equivalent to
the fair value of the undelivered elements.

         We recognize revenue for maintenance services ratably over the contract
term. Our training and consulting services are billed based on hourly rates, and
we generally recognize revenue as these services are performed. However, upon
execution of a contract, we determine whether or not any services included
within the arrangement require us to perform significant work either to alter
the underlying software or to build additional complex interfaces so that the
software performs as the customer requests. If these services are included as
part of an


                                       29
<PAGE>


arrangement, we recognize the fee using the percentage of completion method. We
determine the percentage of completion based on our estimate of costs incurred
to date compared with the total costs budgeted to complete the project.

         Services Revenue. We recognize service revenue as services are
rendered. We contract with our customers to provide services based on an agreed
upon monthly fee, a per-call charge or a combination of both.

         Upon execution of a contract for services, we assess whether the fee
associated with our revenue transactions is fixed and determinable and whether
or not collection is reasonably assured. We assess whether the fee is fixed and
determinable based on the payment terms associated with such contract. If a
significant portion of a fee is due after our normal payment terms, which are
generally 30 to 90 days from invoice date, we account for such fee as services
are provided.

         We also enter into risk-sharing contracts. These contracts are
generally for a term of three to five years, provides for automatic renewal, and
may provide that a percentage of our fee is refundable ("performance based")
based on achieving a targeted percentage reduction in a customer's healthcare
costs.

Material Equity Transactions

         In 2003, we executed equity transactions with related and unrelated
parties in connection with the raising funds for working capital along with
issuing securities in lieu of compensation for services received. We believe
that we have valued all such transaction pursuant to the various accounting
rules and that they ultimately represent the economic substance of each
transaction. Please refer to "Management's Discussion and Analysis of Financial
Condition and Results of Operations-Sources and Uses of Funds" and "Item
5-Recent Sales of Unregistered Securities" above.




                                       30
<PAGE>






ITEM 7.  FINANCIAL STATEMENTS

<TABLE>
<CAPTION>

<S>                                                                                                        <C>

Item                                                                                                     Page No.


I-trax, Inc. and Subsidiaries Consolidated Financial Statements as of December 31, 2003
         and For The Years Ended December 31, 2003 and 2002.................................................32


Meridian Occupational Healthcare Associates, Inc. and Subsidiaries (d/b/a CHD Meridian Healthcare)
         Consolidated Financial Statements For the Years Ended December 31, 2003, 2002 and 2001.............64

Unaudited Combined Condensed Balance Sheet of I-trax and CHD Meridian Healthcare
         on a Pro Forma Basis as if the Merger Had Been Consummated On December 31, 2003
         and the Unaudited Combined Condensed Statements of Operations on a Pro Forma Basis
         as if the Merger Had Been Consummated on January 1, 2002...........................................88





                                       31
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                        CONSOLIDATED FINANCIAL STATEMENTS
                             AS OF DECEMBER 31, 2003
                                       AND
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Item                                                                                                     Page No.


Report of Independent Registered Public Accounting Firm.....................................................33


Balance sheet at December 31, 2003..........................................................................34

Statements of operations for the years ended December 31, 2003 and 2002.....................................35

Statement of stockholders' equity for the years ended December 31, 2003 and 2002............................36

Statements of cash flows for the years ended December 31, 2003 and 2002.....................................38

Notes to consolidated financial statements..................................................................40


</TABLE>


                                       32
<PAGE>









             Report of Independent Registered Public Accounting Firm



To the Board of Directors and
  Stockholders of I-trax, Inc.:

         We have audited the accompanying  consolidated balance sheet of I-trax,
Inc. &  Subsidiaries  (the  "Company") as of December 31, 2003,  and the related
consolidated  statements of operations,  stockholders' equity and cash flows for
each of the two years in the period then  ended.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.


         We conducted our audits in accordance  with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects,  the financial position of the Company
at December 31, 2003,  and the results of its operations and cash flows for each
of the two years in the period  then  ended in  conformity  with U.S.  generally
accepted accounting principles.




Goldstein Golub Kessler LLP
New York, New York
February 16, 2004, except for Note 19, as to which the date is as of March 19,
2004.


                                       33
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                          <C>

                          I-TRAX, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 2003

                                                      ASSETS

     Current assets
          Cash                                                                               $     573,774
          Accounts receivable, net                                                                 549,229
          Prepaid expenses                                                                         150,631
          Other current assets                                                                      37,848
                                                                                          -----------------
              Total current assets                                                               1,311,482
                                                                                          -----------------

     Office equipment, furniture, leasehold improvements and
       software development costs, net                                                           1,514,767
     Deposit on acquisition of perpetual license                                                   160,000
     Deferred marketing costs, net                                                                 831,109
     Deferred acquisition costs                                                                     84,783
     Debt issuance costs, net                                                                       34,718
     Goodwill                                                                                    8,424,062
     Intangible assets, net                                                                      1,217,609
     Security deposits                                                                              24,659
                                                                                          -----------------
            Total assets                                                                     $  13,603,189
                                                                                          =================

                                       LIABILITIES AND STOCKHOLDERS' EQUITY

     Current liabilities
          Accounts payable                                                                   $     605,689
          Accrued expenses                                                                         361,168
          Due to officers and related parties                                                      280,000
          Capital lease payable                                                                     26,814
          Note payable - other, net of discount of $12,362                                          87,638
          Deferred revenue                                                                         240,215
                                                                                          -----------------
            Total current liabilities                                                            1,601,524
                                                                                          -----------------

     Common stock warrants                                                                       2,760,105
     Capital lease obligation, net of current portion                                               58,626
     Promissory notes and debenture payable, net of discount of $561,003                           797,805
                                                                                          -----------------

            Total liabilities                                                                    5,218,060
                                                                                          -----------------


     Commitments and contingencies

     Stockholders' equity
          Preferred stock - $.001 par value, 2,000,000 shares authorized,
            -0- issued and outstanding
          Common Stock - $.001 par value, 100,000,000 shares authorized,
            13,966,817 shares issued and outstanding                                                13,966
          Additional paid in capital                                                            47,276,266
          Accumulated deficit                                                                  (38,905,103)
                                                                                          -----------------
            Total stockholders' equity                                                           8,385,129
                                                                                          -----------------

            Total liabilities and stockholders' equity                                       $  13,603,189
                                                                                          =================

                                            See accompanying notes to financial statements.


                                       34
<PAGE>
</TABLE>



<TABLE>
<CAPTION>

<S>                                                                      <C>                 <C>

                          I-TRAX, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



                                                                               2003              2002
                                                                          ------------      ------------

Revenue:
     Technology licenses                                                  $  1,575,919      $  2,225,308
     Services                                                                2,612,941         1,706,602
                                                                          ------------      ------------
Total revenue                                                                4,188,860         3,931,910
                                                                          ============      ============

Cost of revenue:
     Technology licenses                                                        63,363            67,788
     Services                                                                1,308,507         1,161,256
                                                                          ------------      ------------
Total cost of revenue                                                        1,371,870         1,229,044
                                                                          ------------      ------------

Gross profit                                                                 2,816,990         2,702,866

Operating expenses:
     General and administrative                                              1,740,710         1,721,685
     Salary and related benefits                                             2,468,468         4,233,209
     Research and development                                                     --             410,220
     Depreciation and amortization                                           1,702,469         2,045,461
     Marketing and publicity, includes non-cash charges of $1,414,000
         for 2003                                                            1,762,567           773,963
     Impairment charge related to intangible assets                            458,252         1,648,332
                                                                          ------------      ------------
Total operating expenses                                                     8,132,466        10,832,870
                                                                          ------------      ------------

Operating loss                                                              (5,315,476)       (8,130,004)
                                                                          ------------      ------------

Other income (expenses):
     Proceeds from life insurance company                                      500,000              --
     Costs in connection with terminated acquisition                          (200,000)             --
     Amortization of debt issuance and conversion costs                       (336,783)         (187,337)
     Interest expense and financing costs                                   (2,405,015)       (1,107,632)
     Increase in fair value of common stock warrants                          (301,305)             --
                                                                          ------------      ------------
Total other income (expenses)                                               (2,743,103)       (1,294,969)
                                                                          ------------      ------------

Net loss                                                                  $ (8,058,579)     $ (9,424,973)
                                                                          ============      ============

Loss per common share:

Basic and diluted                                                         $       (.74)     $      (1.04)
                                                                          ============      ============

Weighted average number of shares outstanding:                              10,904,553         9,096,958
                                                                          ============      ============



                                            See accompanying notes to financial statements.

</TABLE>

                                       35
<PAGE>

<TABLE>
<CAPTION>


                          I-TRAX, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                          Common Stock            Additional                         Total
                                                   ---------------------------      Paid-in       Accumulated    Stockholders'
                                                      Shares        Amount          Capital         Deficit         Equity
                                                   -------------  ------------  ---------------- -------------- ----------------

<S>                                                   <C>            <C>           <C>           <C>               <C>
Balances at December 31, 2001                         6,987,894      $  6,987      $ 22,992,730  $ (21,421,551)    $  1,578,166

Cancellation of unclaimed shares and reverse stock
   split adjustment                                     (45,332)          (45)               45             --               --

Issuance of compensatory stock options                       --            --           163,200             --          163,200

Fair market value of detachable warrants issued in
   connection with debenture and beneficial
   conversion value                                          --            --         1,838,923             --        1,838,923

Issuance of common stock and granting of options
   in connection with the acquisition of WellComm
   Group, Inc.                                        1,488,000         1,488        10,478,512             --       10,480,000

Issuance of common stock and warrants as
   consideration for finder fee                          22,200            22           391,386             --          391,408

Sale of common stock, net of $7,150 in costs            540,833           541         1,942,935             --        1,943,476

Issuance of common stock and warrants as
   consideration for services                            23,708            24         1,677,243             --        1,677,267

Issuance of common stock in connection with
   exercise of options and warrants                     355,424           355             1,145             --            1,500

Mark-to-market of options granted to officers in
   lieu of canceling note and pledge agreement
   during 2001                                               --            --          (250,000)            --         (250,000)

Net loss for the year ended December 31, 2002                --            --                --     (9,424,973)      (9,424,973)
                                                   -------------  ------------  ---------------- -------------- ----------------

Balances at December 31, 2002                         9,372,727      $  9,372      $ 39,236,119  $ (30,846,524)    $  8,398,967
                                                   =============  ============  ================ ============== ================





                                            See accompanying notes to financial statements.


</TABLE>



                                       36
<PAGE>

<TABLE>
<CAPTION>


                          I-TRAX, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


                                                     Common Stock            Additional                          Total
                                             -----------------------------     Paid-in        Accumulated    Stockholders'
                                                Shares          Amount         Capital          Deficit          Equity
                                             --------------  ------------- ----------------  --------------  ---------------

<S>                                             <C>            <C>           <C>            <C>               <C>
Balances at December 31, 2002                    9,372,727      $   9,372     $ 39,236,119   $ (30,846,524)    $  8,398,967

Issuance of compensatory stock options                  --             --           27,942              --           27,942

Mark to market of warrants granted for
   investor relations services and stock
   options granted to a former employee                 --             --           (4,097)             --           (4,097)

Fair market value of detachable warrants
   and additional beneficial conversion
   value in connection with re-pricing of
   convertible debenture                                --             --        1,007,833              --        1,007,833

Issuance of common stock for services              332,760            333          522,375              --          522,708

Contribution of common stock given by
   shareholders to vendor for services
   rendered to the Company                              --             --          246,240              --          246,240

Proceeds from sale of common stock and
   exercise of warrants, net of costs and
   common stock warrants liability               2,675,838          2,676        2,549,373              --        2,552,049

Issuance of warrants for services                       --             --          649,448              --          649,448

Fair value of detachable warrants issued in
   connection with convertible note                     --             --          268,000              --          268,000

Issuance of common stock for conversion of
   related party debt and assigned debt            668,152            668        1,168,602              --        1,169,270

Issuance of common stock for conversion of
   deferred salaries                                69,711             69          121,928              --          121,997

Issuance of common stock upon conversion of
   debenture                                       847,629            848        1,482,503              --        1,483,351

Net loss for the year ended December 31, 2003           --             --               --      (8,058,579)      (8,058,579)
                                             --------------  ------------- ----------------  --------------  ---------------

Balances at December 31, 2003                   13,966,817      $  13,966     $ 47,276,266   $ (38,905,103)    $  8,385,129
                                             ==============  ============  ================  ==============  ===============


                                            See accompanying notes to financial statements.



</TABLE>



                                       37
<PAGE>
<TABLE>
<CAPTION>

<S>                                                                             <C>                 <C>

                          I-TRAX, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                                                      2003                2002
                                                                             -----------------   -----------------

Operating activities:
     Net loss                                                                   $  (8,058,579)      $  (9,424,973)
     Adjustments to reconcile net loss to net cash used in operating
activities:
         Accretion of discount on notes payable charged to interest                   858,887             498,751
expense
         Accretion of beneficial conversion value of debenture                      1,168,285             434,798
         Amortization of option liability                                             (13,423)           (147,655)
         Amortization of debt issuance costs                                          336,783             187,337
         Depreciation and amortization                                              1,702,469           2,045,461
         Impairment charge related to intangible assets                               458,252           1,648,332
         Expenses for compensatory stock options and warrants                          23,845                  --
         Bad debt expense                                                              58,829                  --
         Issuance of securities for services                                        1,418,396             230,467
         Increase in fair value of common stock warrants                              301,305                  --
         Write-off of deposit on terminated acquisition                               200,000                  --
Changes in operating assets and liabilities, net of acquisitions:
     Decrease (increase) in:
       Accounts receivable                                                              8,406            (119,888)
       Prepaid expenses                                                               (73,062)             54,828
       Other current assets                                                           (16,888)            (19,045)
     (Decrease) increase in:
       Accounts payable                                                              (333,582)            235,686

       Accrued expenses                                                              (409,694)            273,608

       Deferred revenue                                                            (1,139,707)          1,231,092
                                                                             -----------------   -----------------
Net cash used in operating activities                                              (3,509,478)         (2,871,201)
                                                                             -----------------   -----------------

Investing activities:
     Proceeds from repayment of note receivable                                            --              72,437
     Increase in transaction costs                                                    (84,783)                 --
     Proceeds from release of security deposit                                          6,905              38,839
     Deposit on potential acquisition                                                      --            (200,000)
     Deposit on acquisition of perpetual license                                     (160,000)                 --
     Property, equipment and software development costs acquired                   (1,278,891)            (68,040)
     Net cash to acquire WellComm Group, Inc.                                              --          (2,199,136)
                                                                             -----------------   -----------------
Net cash used in investing activities                                              (1,516,769)         (2,355,900)
                                                                             -----------------   -----------------

Financing activities:
     Principal payments on capital leases                                             (71,372)            (21,918)
     Proceeds from credit line payable                                                     --             125,000
     Repayments to credit line                                                       (300,000)                 --
     Repayment to related parties                                                    (239,622)           (190,000)
     Proceeds from related parties                                                    740,000             700,000
     Proceeds from notes payable                                                      350,000                  --
     Proceeds from sale of Common Stock and exercise of warrants                    5,010,849           1,944,976
     Proceeds from sale of option                                                          --             161,078
     Proceeds from issuance of debenture                                                   --           1,838,923
     Notes payable repayments                                                        (250,000)                 --
                                                                             -----------------   -----------------

Net cash provided by financing activities                                           5,239,855           4,558,059
                                                                             -----------------   -----------------

Net increase (decrease) in cash                                                       213,608            (669,042)

Cash at beginning of period                                                           360,166           1,029,208
                                                                             -----------------   -----------------

Cash at end of period                                                             $   573,774         $   360,166
                                                                             =================   =================

Supplemental disclosure of non-cash flow information: Cash paid during the year
     for:
       Interest                                                                   $     83,833        $    15,163
                                                                             =================   =================


</TABLE>



                                       38
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                 <C>                 <C>

                          I-TRAX, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                         (Continues from previous page.)

                                                                                          2003             2002
                                                                                    ---------------     -----------
Schedule of non-cash investing activities:

     Issuance of 1,488,000 shares of common stock and granting of 112,000 stock
       options in connection with acquisition of WellComm Group,
       Inc                                                                          $          --       $10,480,000
                                                                                    ===============     ===========


     Issuance of common stock and warrants for finder fee                           $          --       $   391,408
                                                                                    ===============     ===========

Schedule of non-cash financing activities:
     Issuance of common stock in connection with conversion of  promissory
       notes, related party advances, and accrued interest                          $     1,169,270     $      --
                                                                                    ===============     ===========

     Issuance of common stock in connection with conversion of deferred
       salaries                                                                     $       121,997     $      --
                                                                                    ===============     ===========

     Issuance of common stock in connection with conversion of debenture
       payable                                                                      $     1,483,351     $      --
                                                                                    ===============     ===========



     Accrued interest expense on debenture payable and promissory notes             $       394,538     $      --
                                                                                    ===============     ===========


     Proceeds from life insurance company in connection with the death of
       executive officer                                                            $       500,000     $      --
                                                                                    ===============     ===========

     Repayments to related parties from pledged life insurance proceeds             $       500,000     $      --
                                                                                    ===============     ===========

     Issuance of common stock in connection with conversion of accounts
       payable                                                                      $          --       $    16,667
                                                                                    ===============     ===========

     Acquisition of office equipment in connection with capital lease
       obligation                                                                   $          --       $   107,709
                                                                                    ===============     ===========

     Issuance of warrants in connection with marketing agreement                    $          --       $ 1,360,000
                                                                                    ===============     ===========

     Fair market value of detachable warrants and beneficial conversion
       value in connection with re-pricing                                          $     1,007,833     $      --
                                                                                    ===============     ===========

     Fair market value of warrants granted in connection with convertible
       note                                                                         $       268,000     $      --
                                                                                    ===============     ===========



                                            See accompanying notes to financial statements.

</TABLE>



                                       39
<PAGE>






                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

NOTE 1--ORGANIZATION

I-trax,   Inc.  (the  "Company")   provides   focused  disease   management  and
comprehensive  health management solutions designed to improve the health of the
populations  it serves while  reducing the cost of medical care. The Company was
incorporated  in the State of Delaware on  September  15,  2000.  On February 5,
2001,  the  Company  and  I-trax  Health  Management  Solutions,  Inc.  ("Health
Management") completed a holding company  reorganization.  At the effective time
of the reorganization, Health Management became a wholly owned subsidiary of the
Company.  The Company's  common stock is traded on the American  Stock  Exchange
under the symbol "DMX."

As of December 31, 2003, the Company had two wholly owned  subsidiaries:  Health
Management, a corporation, and I-trax Health Management Solutions, LLC (formerly
known as WellComm  Group,  LLC)  ("Health  Management,  LLC"),  a single  member
limited liability company. The Company formed Health Management,  LLC to conduct
the activities of WellComm Group,  Inc.,  which the Company acquired on February
6, 2002,  as further  described in Note 4. The Company  conducts its  operations
through Health Management and Health Management, LLC.

Effective  January 3, 2003, the Company completed a 1-for-5 reverse stock split.
Accordingly,  all information  presented in these financial  statements has been
adjusted retroactively to reflect this reverse stock split.


The Company entered into a merger agreement,  as amended,  on December 26, 2003,
with Meridian Occupational  Healthcare  Associates,  Inc, (doing business as CHD
Meridian  Healthcare) ("CHD Meridian"),  a privately held company and a provider
of  outsourced,   employer-sponsored   healthcare   services.   The  merger  was
consummated on March 19, 2004. (See note 19 for additional information.)


NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Income Taxes

The Company  accounts for income taxes in accordance  with Financial  Accounting
Standards Board's ("FASB") Statement of Financial  Accounting Standards ("SFAS")
No. 109, "Accounting for Income Taxes," which requires the use of the "liability
method" of accounting for income taxes.  Accordingly,  deferred tax  liabilities
and  assets  are  determined  based  on the  difference  between  the  financial
statement  and tax bases of assets and  liabilities,  using enacted tax rates in
effect for the year in which the  differences  are expected to reverse.  Current
income taxes are based on the respective periods' taxable income for federal and
state income tax reporting purposes.

Loss Per Common Share

Loss per common  share is  computed  pursuant  to SFAS No.  128,  "Earnings  Per
Share."  Basic loss per share is  computed  as net income  (loss)  available  to
common  shareholders  divided by the weighted  average  number of common  shares
outstanding  for the  period.  Diluted  loss per share  reflects  the  potential
dilution that could occur from common  shares  issuable  through stock  options,
warrants,  and convertible debt. As of December 31, 2003 and 2002, 5,469,286 and
3,843,755,  respectively, of options and warrants were excluded from the diluted
loss per share computation, as their effect would be anti-dilutive.



                                       40
<PAGE>


                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

Use Of Estimates

In preparing the financial  statements in  conformity  with  generally  accepted
accounting principles,  management is required to make estimates and assumptions
which affect the reported  amounts of assets and  liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

Fair Value Disclosure At December 31, 2003

The carrying value of cash,  accounts  receivable,  accounts payable and accrued
expenses  are  reasonable  estimates of their fair value  because of  short-term
maturity.  The  fair  value  of  the  promissory  notes  and  debenture  payable
approximates their principal amount of $1,358,808.

Office Equipment, Furniture And Leasehold Improvements

The Company records office  equipment,  furniture and leasehold  improvements at
cost less accumulated  depreciation and  amortization,  which is provided for on
the  straight  line basis over the  estimated  useful  lives of the assets which
range  between  three and seven years.  The Company  expenses  expenditures  for
maintenance and repairs as incurred.

Accounts Receivable

The Company utilizes the allowance method for determining the  collectibility of
its  accounts  receivable.  The  allowance  method  recognizes  bad debt expense
following  a  review  of the  individual  accounts  outstanding  in light of the
surrounding facts. Accounts receivables are reported at their outstanding unpaid
principal  balances  reduced by an  allowance  for  doubtful  accounts  based on
historical bad debts,  factors related to specific customers' ability to pay and
economic  trends.  The  Company  writes off  accounts  receivables  against  the
allowance when a balance is determined to be uncollectible.

Research And Development Costs

Research and  development  costs are  expensed as  incurred.  For the year ended
December 31, 2003, the Company did not incur any research and development costs.
Such costs amounted to $410,220 for the year ended December 31, 2002.

Revenue Recognition


Fees under the  Company's  service  contracts  are  generally  fixed-fee and are
recorded as services are  provided.  Service fees are  generally  determined  by
multiplying a  contractually  negotiated  rate per  call/member by the number of
calls/members  for the month.  These contracts are generally for a term of three
years with a provision for automatic  renewals.  The Company  recognizes service
revenue when persuasive  evidence of an arrangement exists, the service has been
performed,  the fee is fixed and  determinable  and collections of the resulting
receivable is reasonably assured.

The Company  recognizes  revenue from  technology  licenses in  accordance  with
Statement of Position  ("SOP") 97-2 "Software  Revenue  Recognition"  as further
modified by  Statement of Position  98-9  "Modification  of SOP 97-2,  "Software
Revenue  Recognition with Respect to Certain  Transactions."  SOP 97-2 generally
requires revenue earned on software  arrangements  involving  multiple  elements
such  as  software  products,  upgrades,  enhancements,  post-contract  customer
support,  installation  and training to be  allocated  to each element  based on
vendor-specific  objective  evidence  (VSOE) of the fair value of the  elements.
VSOE consists of the price charged when the same element is sold separately, or,
for an  element  not  yet  being  sold  separately,  the  price  established  by
management having the relevant  authority,  where it is probable that the price,
once  established  will not change before separate  introduction of the elements
into the market place.




                                       41
<PAGE>




NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

Revenue Recognition (cont'd)


The  Company  recognizes  revenue  from  software  development  contracts  on  a
percentage-of-completion  method with progress to completion measured based upon
labor hours incurred or achievement of contract milestones. Revenue from re-sale
of hardware and  software,  obtained  from  vendors,  is  recognized at the time
hardware and software is delivered to or received by customers depending on when
title passes. If a sale is subject to specific customer  acceptance  provisions,
or if there are any  uncertainties  about  customer  acceptance,  revenue is not
recognized until accptance occurs. Customer deposits represent funds received in
advance in excess of revenue recognized.


Software Development Costs

In  accordance  with the  provisions  of AICPA  Statement  of Position No. 98-1,
"Accounting  for the  Costs of  Computer  Software  Developed  or  Obtained  for
Internal Use," the Company  capitalizes  all application  development  costs and
expenses  all  preliminary   project  and   post-implementation   costs  in  the
accompanying statement of operations.

For the year ended  December 31, 2003,  the Company  capitalized  $1,237,713  of
software  developed  for internal use. The Company  expects to start  amortizing
such software development costs during the first quarter of 2004.

Deferred Marketing Costs

Deferred  marketing costs consist of the value of the warrant to acquire 400,000
shares of common stock issued to a customer in October 2002 in connection with a
three-year  joint  marketing  agreement.  The warrant  was valued at  $1,360,000
utilizing the  Black-Scholes  pricing  model.  The value of the warrant is being
amortized  over  the  three-year  life of the  joint  marketing  agreement  on a
straight-line  basis.  For the years ended December 31, 2003 and 2002,  $453,336
and $75,555,  respectively was charged to amortization  expense. The unamortized
portion of the  deferred  marketing  costs was  $831,109 and is reflected on the
accompanying consolidated balance sheet.

Marketing  and publicity  costs are expensed as incurred and totaled  $1,762,567
and  $773,963  for the years ended  December  31,  2003 and 2002,  respectively.
Marketing  and  publicity  costs  for  2003  included  a  non-  cash  charge  of
approximately  $1,414,000  in addition to the  amortization  of the value of the
warrant referred to in the preceding paragraph.

Debt Issuance Costs


The Company  recorded a total of $416,610 of debt  issuance  costs in connection
with the sale of a 6% senior  debenture in February 2002.  These costs consisted
of a cash payment of $130,000 and common stock and warrants  valued at $286,610,
which was issued to a  placement  agent as a finder fee.  The Company  amortized
these costs on a  straight-line  basis over the two-year life of the  debenture.
Accordingly,  for the years ended  December 31, 2003 and 2002,  amortization  of
debt issuance costs amounted to $214,555 and $187,337, respectively.


Additionally,  during  June  2003,  in  connection  with the  re-pricing  of the
warrants  granted to such  placement  agent,  the Company  charged an additional
$122,228 as amortization of debt issuance costs, bringing the total amortization
expense for the year ended  December  31, 2003 to  $336,783.  As of December 31,
2003,  the remaining  un-amortized  portion of debt issuance  costs  amounted to
$34,718.



                                       42
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

Comprehensive Income

The Company adopted SFAS No. 130,  "Accounting for  Comprehensive  Income." This
statement  establishes  standards for reporting and disclosing of  comprehensive
income and its components (including revenues,  expenses, gains and losses) in a
full  set  of  general-purpose   financial   statements.   The  items  of  other
comprehensive  income that are  typically  required to be disclosed  are foreign
currency items, minimum pension liability adjustments,  and unrealized gains and
losses on certain investments in debt and equity securities.  The Company had no
items of other  comprehensive  income for the years ended  December 31, 2003 and
2002.

Stock-Based Compensation

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure, an amendment of FASB Statement No. 123."
SFAS No.  148  amends  FASB  Statement  No.  123,  "Accounting  for  Stock-Based
Compensation," to provide  alternative  methods of transition for an entity that
chooses to change to the  fair-value-based  method of accounting for stock-based
employee  compensation.  It  also  amends  the  disclosure  provisions  of  that
statement to require prominent  disclosure about the effects that accounting for
stock-based employee  compensation using the fair-value-based  method would have
on  reported  net  income  and  earnings  per  share  and to  require  prominent
disclosure  about the  entity's  accounting  policy  decisions  with  respect to
stock-based employees  compensation.  Certain of the disclosure requirements are
required  for all  companies,  regardless  of whether  the fair value  method or
intrinsic  value  method  is  used  to  account  for  stock-based   compensation
arrangements.  The  amendments  to SFAS  No.  123 are  effective  for  financial
statements  for fiscal  years  ended  after  December  15,  2002 and for interim
periods beginning after December 15, 2002.

The Company  accounts  for its employee  incentive  stock option plans using the
intrinsic  value  method in  accordance  with the  recognition  and  measurement
principles of Accounting  Principles Board Opinion No. 25, "Accounting for Stock
Issued  to  Employees,"  as  permitted  by SFAS No.  123.  The  adoption  of the
disclosure  requirements  of SFAS No. 148 did not have a material  effect on the
Company's financial position or results of operations.

Had the Company determined  compensation  expense based on the fair value at the
grant  dates for  those  awards  consistent  with the  method  of SFAS 123,  the
Company's  net loss per share would have been  increased  to the  following  pro
forma amounts:





                                       43
<PAGE>


                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


<TABLE>
<CAPTION>

<S>                                                       <C>                   <C>

NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

                                                               2003                 2002
                                                         -----------------    ------------------

Net loss as reported                                      $ (8,058,579)         $ (9,424,973)

Add back intrinsic value of the options issued to
employee and charged to operations                              27,942               163,200

Deduct total stock based employee compensation
expense determined under fair value based methods
for all awards                                              (2,952,906)           (2,844,904)
                                                          ------------          ------------

Pro forma net loss                                        $(10,983,543)         $(12,106,677)
                                                          ============          ============



Basic and diluted net loss per share as reported          $       (.74)         $      (1.04)

Pro forma basic and diluted net loss per share            $      (1.01)         $      (1.33)

</TABLE>


The above pro forma  disclosure  may not be  representative  of the  effects  on
reported net  operations for future years as options vest over several years and
the Company may continue to grant options to employees.

The fair market  value of each option  grant is  estimated  at the date of grant
using the Black Scholes option-pricing model with the following weighted-average
assumptions:

                   Dividend yield                              0.00%
                   Expected volatility                         112%
                   Risk-free interest rate                     4%
                   Expected life                               5 year

Segment Reporting

The Company  evaluates  segment  performance  based on income  from  operations.
Through  December 31, 2003,  the Company has not  measured  segment  performance
because the Company has operated in only one segment.

New Accounting Pronouncements

In May 2003, the Financial  Accounting Standards Board issued Statement No. 150,
Accounting  for  Certain  Financial  Instruments  with  Characteristics  of Both
Liabilities and Equity, effective for the fiscal period beginning after December
15, 2003.  Statement No. 150 establishes  standards for how an issuer classifies
and  measures  certain  financial   instruments  with  characteristics  of  both
liabilities  and equity.  To the extent that the Company is either now or in the
future required to repurchase  shares of common stock, the adoption of Statement
No. 150 would require the Company to classify common stock subject to redemption
as  a  liability  as  of  January  1,  2004,   based  on  the  latest  revision.
Prospectively,  changes in the liability with the exception of redemptions  will
be included in pre-tax income.


                                       44
<PAGE>


                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 2--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)

New Accounting Pronouncements (cont'd)

In November 2002, the Emerging Issues Task Force ("EITF") reached a consensus on
Issue  No.  00-21   ("Issue   00-21"),   Revenue   Arrangements   with  Multiple
Deliverables.  Issue 00-21 provides  guidance on how to account for arrangements
that involve  delivery or  performance  of multiple  products,  services  and/or
rights to use assets.  The  adoption  of Issue 00-21 is not  expected to have an
impact  on  the  Company's   consolidated   financial  position  or  results  of
operations.

The Company does not believe that any other recently issued and adopted, but not
yet  effective,  accounting  standards  would  have  a  material  effect  on the
accompanying financial statements.


NOTE 3--OFFICE EQUIPMENT, FURNITURE AND LEASEHOLD IMPROVEMENTS

Office equipment, furniture and leasehold improvements are as follows at
December 31, 2003:


       Office equipment                                          $   889,720
       Furniture                                                     145,422
       Software Development Costs                                  1,237,713
       Leasehold improvements                                         50,000
                                                               -------------

       Less accumulated depreciation and amortization               (808,088)

                                                               -------------
                                                                 $ 1,514,767
                                                               =============

Certain office equipment is pledged as collateral for related capital lease
obligations. (See Note 8.)

Depreciation and amortization expense for the years ended December 31, 2003 and
2002 amounted to $176,903 and $216,762, respectively.


NOTE 4--ACQUISITION OF WELLCOMM GROUP

On February  6, 2002,  the Company  acquired  all of the issued and  outstanding
common stock of WellComm Group, Inc.  ("WellComm  Group").  WellComm Group was a
disease management  company. As stipulated in the Merger Agreement dated January
28, 2002, as amended, the Company issued 1,488,000 shares of common stock valued
at  $9,746,400,  granted  112,000  options  valued at $733,600 to acquire common
stock at a nominal exercise price and paid $2,199,136 in cash. In addition,  the
Company issued 16,000 shares of common stock,  valued at $104,800 and charged to
operations as compensation  expense,  to an employee for introducing the Company
to WellComm Group. The aggregate acquisition price amounted to $12,679,136.  The
value of common stock issued and stock options  granted was determined  based on
the  average  market  price of common  stock  immediately  before  and after the
acquisition was agreed to and announced.  For accounting purposes, the effective
date of the acquisition was January 31, 2002.


                                       45
<PAGE>


                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 4--ACQUISITION OF WELLCOMM GROUP (cont'd)

The Company now conducts the former  operations of WellComm Group through Health
Management,  LLC. The  financial  statements  include the former  operations  of
WellComm Group from February 1, 2002 forward.

The purchase  price  allocation was based on a formal  valuation  prepared by an
independent  appraiser.  Of the total  purchase  price,  the  Company  allocated
$1,648,000  to  non-compete  covenants,  $4,501,563  to customer  relationships,
$330,237 to net assets  acquired  with the  remainder of $6,199,336 to goodwill.
Non-compete  covenants  are being  amortized  on a  straight-line  basis  over a
four-year life and customer relationships are amortized over a three-year life.

The following table summarizes the actual fair values of the assets acquired and
liabilities assumed at the acquisition date:

                      Current assets                             $   651,474
                      Property and equipment                         190,000
                      Intangible assets                            6,149,563
                      Goodwill                                     6,199,336
                                                             ----------------
                      Total assets acquired                     $ 13,190,373
                                                             ================

                      Current liabilities                        $   482,882
                      Long term debt                                  28,355
                                                             ----------------
                      Total liabilities assumed                      511,237
                                                             ----------------
                      Net assets acquired                       $ 12,679,136
                                                             ================

The  following pro forma results of operations of the Company give effect to the
acquisition of WellComm Group as though the  acquisition  was  consummated as of
January 1, 2002.


                                                             For the year
                                                            ended December
                                                               31, 2002
                                                            -----------------

     Total revenue                                             $    4,185,689
                                                            =================

     Total expenses                                            $   13,688,289
                                                            =================

     Net loss                                                  $   (9,502,600)
                                                            =================

     Pro forma net loss per share:
        Basic and Diluted                                      $        (1.03)
                                                            =================

     Weighted average number of shares outstanding:
        Basic and Diluted                                           9,220,958
                                                            =================


                                       46
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 5--GOODWILL AND INTANGIBLE ASSETS

The  Company  has  adopted  SFAS No. 142 as of  January  1,  2002.  SFAS No. 142
eliminates the amortization of goodwill and certain other intangible  assets and
requires the Company to complete a test for impairment of these assets  annually
as well as a transitional goodwill impairment test within six months of the date
of adoption.  The Company has completed its impairment assessment as required by
SFAS No. 142 and concluded that no impairment of recorded goodwill exists.

There were no  changes in the  carrying  amount of  goodwill  for the year ended
December 31, 2003.

The  components of  identifiable  intangible  assets,  which are included in the
consolidated balance sheet as of December 31, 2003, are as follows:

<TABLE>
<CAPTION>

<S>                                          <C>               <C>                     <C>

                                     Gross Carrying        Accumulated          Net Carrying
                                         Amount            Amortization            Amount
                                    -----------------    ---------------    -----------------
   Amortized intangible assets:
       Non-compete covenants                 1,648,000         (1,198,815)             449,185
       Customer relationships                4,501,563         (3,733,139)             768,424
                                     -----------------    ---------------    -----------------
   Total                                 $   6,149,563      $  (4,931,954)       $   1,217,609
                                     =================    ===============    =================

</TABLE>



During the quarter ended December 31, 2003,  the Company  recorded an impairment
charge  of  approximately  $458,000  representing  the  unamortized  portion  of
covenants not to compete directly  attributable to the founder of WellComm Group
who passed away. For the year ended  December 31, 2002, the Company  recorded an
impairment  charge  amounting to $1,648,332  related to customer  relationships.
Total  amortization  expense for all the intangibles  amounted to $1,072,230 for
the year ended  December 31, 2003.  The estimated  amortization  expense for the
years ending December 31, 2004 and 2005 is $1,095,944 and $37,185, respectively.


NOTE 6--DEPOSIT ON ACQUISITION OF PERPETUAL LICENSE

On April 25, 2003 the Company  entered into a Marketing  and Services  Agreement
with  BioSignia,  Inc.  ("BioSignia"),  whereby  the  Company  committed  to pay
BioSignia certain minimum payments in return for allowing the Company to private
label  BioSignia's  technology,  products and services in  connections  with the
Company's products and services. BioSignia provides products and services in the
field of predictive  modeling,  health  economics,  epidemiology and prospective
medicine.  Pursuant to the  agreement,  the  Company  paid  BioSignia  $160,000.
Subsequent to December 31, 2003,  the Company and  BioSignia  entered into a new
agreement whereby for an additional  $575,000,  the Company acquired a perpetual
license to BioSignia's technology and products.  Accordingly, as of December 31,
2003, the Company classified the $160,000 paid under the original agreement as a
deposit on perpetual license.



                                       47
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 7--ACCRUED EXPENSES

Accrued expenses consist of the following at December 31, 2003:

                      Interest                           $ 157,280
                      Salaries                             203,888
                                                      ------------
                          Total                          $ 361,168
                                                      ============


NOTE 8--CAPITAL LEASE OBLIGATIONS

In April 2000, the Company  acquired a telephone  system for $34,290 by entering
into capital lease  obligations  with interest at  approximately  10% per annum,
requiring 60 monthly payments of $731, which include principal and interest. The
related equipment secures the lease.

In October  2000,  the Company  acquired web hosting  equipment  for $107,288 by
entering into a capital lease  obligation with interest at  approximately 9% per
annum,  requiring 36 monthly  payments of $3,572,  which  include  principal and
interest. Such lease terminated during October 2003.

In July 2002,  the Company  acquired a new telephony  system for its call center
with a total cost of $107,709 by entering into a capital lease  obligation  with
interest  at  approximately  8% per  annum,  requiring  60 monthly  payments  of
approximately  $2,278,  which  includes  principal  and  interest.  The  related
equipment secures the lease.

The future minimum lease commitments under the capital leases as of December 31,
2003 are as follows:

       For the year ending December 31:
       --------------------------------
                2004                                              $  32,836
                2005                                                 26,257
                2006                                                 24,064
                2007                                                 14,037
                                                                  ----------
                Total future payments                                97,194
                Less amount representing interest                   (11,754)
                                                                  ----------
                Present value of minimum lease payments              85,440
                Less current portion                                 26,814
                                                                  ----------
                Net long term portion                             $  58,626
                                                                  ==========

At December 31, 2003 equipment under capital leases is carried at a book value
of $79,424.



                                       48
<PAGE>


                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 9--RELATED PARTIES TRANSACTIONS

During  February  2003,  the  Company  repaid  $140,000  of  the  $225,000  loan
outstanding to a relative of the Company's Chief Operating Officer.

During February 2003,  pursuant to two promissory notes, two former directors of
the Company  advanced  $200,000 to the  Company for working  capital.  The notes
accrued interest at 8% per year and matured in February 2004.

As of June 30, 2003, the Company's Chief Executive and Operating Officers, along
with a director of the  Company,  advanced  the Company a total of $540,000  for
working capital at an interest rate of 8% per year.

As of December 31, 2003, the Company repaid an aggregate of $99,622 to its Chief
Executive Officer and other related parties.

During May 2003,  certain  stockholders  of the Company  contributed  a total of
163,073  shares of common  stock  valued at $246,240  to an  investor  relations
consultant for services rendered.  Accordingly,  the Company charged this amount
to operations.

In June 2003, certain of the Company's officers, directors and a venture capital
fund  managed  by the  Company's  Chief  Executive  Officer  converted  a  total
$909,421,  comprised of loans and advances of $790,697  (includes $75,000 from a
venture  fund  managed by the  Company's  Chief  Executive  Officer) and accrued
interest of $118,724, into 519,667 shares of common stock at $1.75 per share. In
addition, certain of the same parties assigned additional loans in the principal
amount of  $246,342,  and accrued  interest of $13,507  thereon,  to an investor
relations firm, which thereafter  converted the assigned loans into common stock
also at $1.75  per  share.  The price of the  conversions  was  determined  with
reference to a private  placement of common stock to third parties  completed by
the Company  contemporaneously  with the  conversions  as  disclosed  in Note 17
below.

In  connection  with the death of a senior  executive  officer  of the  Company,
during  2003,  the Company was entitled to receive  proceeds of $500,000  from a
key-person life insurance  policy  maintained by the Company on the life of such
senior  executive  officer.  The proceeds  from the life  insurance  policy were
pledged  as  security  for  loans  made to the  Company  in 2002 and 2003 by the
deceased  senior  executive  officer,  a  former  director  and a key  employee.
Accordingly, the life insurance company was instructed to disburse such proceeds
directly to the related note holders in partial satisfaction of such loans.

As of December 31, 2003, the amount due to officers and related parties amounted
to $280,000,  which are classified as current  liabilities since they are due on
demand.  On March 19, 2004, the Company repaid such related party advances along
with accrued interest. See Note 19.

Interest  expense  associated with related party loans and advances  amounted to
$83,761  and  $79,735  for  the  years  ended   December   31,  2003  and  2002,
respectively.


NOTE 10--CREDIT LINE

The Company, by virtue of acquiring WellComm Group,  assumed a revolving line of
credit that  allowed the Company to borrow up to $300,108.  Amounts  outstanding
under the line of credit incurred interest at 0.5% over the national prime rate,
as reported by the Wall Street Journal, and were payable monthly. During October
2003,  the  Company  repaid  $300,000  owed on the line of credit,  representing
payment in full.  Interest  expense  associated with the credit line amounted to
$12,996  and  $11,742  for  the  years  ended   December   31,  2003  and  2002,
respectively.


                                       49
<PAGE>


                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002




NOTE 11--NOTES PAYABLE--OTHER

In April 2003, the Company  borrowed  $100,000 from a shareholder  pursuant to a
convertible  promissory  note.  The note,  with an  eleven-month  term,  accrues
interest  at 6% per annum  and a default  interest  rate of 12% per  annum.  The
principal  and  related  accrued  and  unpaid  interest  is  convertible  by the
shareholder  into common stock at anytime at $1.50 per share.  As  consideration
for this loan,  the Company  also granted the  shareholder  a warrant to acquire
100,000  shares of common  stock at an  exercise  price of $1.50 per share.  The
value  assigned  to the  warrant of $68,000  was  recorded  as a discount to the
promissory note using the relative fair value of the debt and the warrant to the
actual proceeds from the convertible  promissory  note. The discount is accreted
to interest  expense over the term of the convertible  promissory  note. For the
year ended  December  31,  2003,  the  discount  accreted  to  interest  expense
associated with the convertible promissory note amounted to $55,638. At December
31, 2003 the carrying  value of the note  amounted to $87,638 and is included in
"Notes  payable  - other,  net of  discount"  on the  accompanying  consolidated
balance  sheet.  On March 19, 2004,  the Company  repaid such note payable along
with accrued interest. See Note 19.

Pursuant  to a  promissory  note dated  April 10,  2003,  the  Company  borrowed
$150,000  from a shareholder  with an interest rate of 12% per annum,  requiring
monthly  payments of $25,000 plus accrued  interest  with a final payment due on
December 31, 2003. As of December 31, 2003, the  outstanding  principal  balance
and related  accrued  interest was paid in full. For the year ended December 31,
2003, interest expense amounted to $7,981.

On May 29, 2003,  the Company  borrowed  $100,000  from a  shareholder.  For the
period the loan was outstanding,  interest expense amounted to $12,000. The loan
and related  interest  amounting to $112,000 was repaid in full on September 29,
2003.


NOTE 12--PROMISSORY NOTES PAYABLE

On March 2, 2001,  the Company  borrowed  $692,809  from an investor  group that
included  $75,000 from a venture  capital fund  managed by the  Company's  Chief
Executive Officer.  The loan bears interest at 8% per annum, with a default rate
of 12% per annum,  and is due on March 2, 2006.  The Company  also  granted this
investor group warrants to purchase  364,694 shares of common stock at $0.50 per
share, which were exercised during the first quarter of 2002 into 340,317 shares
of common stock, net of shares surrendered as exercise price. The value assigned
to  detachable  warrants of $459,854  is accreted to interest  expense  over the
five-year term of the underlying promissory notes.

In June 2003, as part of certain related  parties  converting and assigning debt
as discussed in Note 9 above,  the venture capital fund managed by the Company's
Chief Executive  Officer,  with the consent of the Company,  assigned the fund's
loan in the  principal  amount of $75,000 and a portion of the accrued  interest
thereon  amounting to $6,669 to an investment  relations firm,  which thereafter
converted the assigned loan into common stock at $1.75 per share. The balance of
the accrued  interest  not assigned in the amount of $6,098 was  converted  into
3,484  shares  of  common  stock  also at  $1.75  per  share.  The  price of the
conversion was determined with reference to a private  placement of common stock
to third parties completed by the Company  contemporaneously with the conversion
as disclosed in Note 17 below.

The amount accreted to interest  expense amounted to $90,708 and $90,708 for the
years ended December 31, 2003 and 2002, respectively.  At December 31, 2003, the
carrying  value  of the  notes  amounted  to  $418,744  and is  included  in the
"Promissory  notes and debenture  payable,  net of discount" on the accompanying
consolidated  balance sheet.  The face value of the promissory notes amounted to
$617,809 at December 31, 2003.

On March 19, 2004, the Company repaid such  promissory  notes along with accrued
interest. See note 19.


                                       50
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 13--CONVERTIBLE DEBENTURE

The Company funded the acquisition of WellComm Group by selling a 6% convertible
senior  debenture in the  aggregate  principal  amount of $2,000,000 to Palladin
Opportunity  Fund LLC.  Pursuant to the  purchase  agreement,  the Company  also
issued  Palladin a warrant to purchase an aggregate  of up to 307,692  shares of
common stock at an exercise price of $5.50 per share. The outstanding  principal
and any interest  under the debenture was payable in full on or before  February
3,  2004.  Further,  outstanding  principal  and  any  accrued  interest  may be
converted  at any time at the  election  of  Palladin  into  common  stock.  The
original  conversion  price of the debenture was $5.00 per share.  In accordance
with the terms of the  debenture,  the price was reset to $3.03 in February 2003
and to $1.75 in June 2003.  In  accordance  with the terms of the  warrant,  the
exercise price of the warrant was reset from $5.50 to $1.75 in June 2003.

The initial value assigned to the warrant of $890,272 was recorded as a discount
to the  debenture  and is  accreted  to  interest  expense  over the term of the
debenture.  The amount accreted to interest expense associated with the original
value  assigned to the warrant  amounted to $343,782  and $257,650 for the years
ended December 31, 2003 and 2002, respectively.  As a result of resetting of the
exercise price of the warrant in June 2003,  the Company  recorded an additional
charge of $203,077 for interest  expense for the additional  market value of the
warrant on the date of  resetting.  Lastly,  as a result of  Palladin's  partial
conversion  of the  debenture,  the  Company  recorded  $165,682  of  additional
interest  expense for the year ended December 31, 2003.  This amount  represents
the  acceleration  of  the  unamortized  discount  of  the  warrant,   which  is
attributable to the converted portion of principal.

Upon the  initial  sale of the  debenture,  the  Company  recorded a  beneficial
conversion  value of $948,651.  The beneficial  conversion  value represents the
difference  between  the fair market  value of the common  stock on the date the
debenture was sold (or the date the  conversion  price is changed) and the price
at  which  the  debt  could be  converted  into  common  stock.  The  beneficial
conversion  value was  increased  by  $682,528  as a result of the reset in June
2003.  The Company  recorded  $802,576 and $424,113 of interest  expense for the
years ended December 31, 2003 and 2002,  respectively,  for the  amortization of
the  beneficial  conversion  value of the  debenture.  As a result of Palladin's
partial conversion of the debenture, the Company recorded $365,709 of additional
interest  expense for the year ended December 31, 2003.  This amount  represents
the  unamortized   portion  of  the  beneficial   conversion  value,   which  is
attributable to the converted portion of principal.

The Company,  pursuant to the debenture  agreement,  has also  recorded  accrued
interest  at  the  rate  of 6% on  the  outstanding  principal  portion  of  the
debenture.  Interest  accrued for the year ended  December 31, 2003  amounted to
$224,350.

For the year ended  December  31,  2003,  Palladin  converted  an  aggregate  of
$1,483,351  of the  amount due on the  debenture  for which the  Company  issued
847,629 shares of common stock.

As of  December  31,  2003,  the  carrying  value of the  debenture  amounted to
$379,061 and is included in  "Promissory  notes and  debenture  payable,  net of
discount" on the accompanying  consolidated balance sheet. The face value of the
debenture amounted to $740,999 at December 31, 2003.

The debenture is classified as a long-term  liability  because,  during December
2003,  Palladin  agreed to  extend  the  maturity  date of the  debenture  until
February 2005. As  consideration  for the extension,  the Company granted 50,000
warrants to acquire common stock at $1.75,  which Palladin exercised on December
30, 2003. The warrants have been valued at approximately  $200,000 utilizing the
Black-Scholes  valuation  model.  This amount was  recorded as a discount to the
debenture and is accreted to interest  expense over the extension  period of one
year.


                                       51
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002





NOTE 13--CONVERTIBLE DEBENTURE (cont'd)

During  November  and  December  2003,   Palladin  exercised  307,692  warrants,
representing the warrants granted upon the sale of the debenture during February
2002 and the 50,000  warrants  granted for the extension of the maturity date of
the debenture.  As a result of the exercise,  the Company  received  proceeds of
$625,961.

Lastly,  in connection  with  facilitating  the transaction  with Palladin,  the
Company recorded  $416,610 of debt issuance costs comprised of $130,000 of cash,
6,200 shares of common  stock valued at $40,610 and a warrant to acquire  40,000
shares of common  stock at $5.00 per share  valued at  $246,000  delivered  to a
third party that brokered the transaction.  In connection with the reset in June
2003 of the conversion  price of Palladin's  debenture and the exercise price of
Palladin's  warrant,   the  Company  also,  in  accordance  with  a  contractual
commitment:  (1) reset the exercise price of the warrant  originally  granted to
the  third  party  from  $5.00 to $1.75  per  share,  resulting  in a charge  to
operations of $26,400 for additional debt issuance costs;  and (2) increased the
shares of common stock issuable under the warrant by 74,285 shares, resulting in
a further charge to operations of $95,828.

For the years ended  December 31, 2003 and 2002 the  amortization  of these debt
issuance costs amounted to $336,783 and $187,337, respectively.

During  the  first  quarter  of 2004,  Palladin  converted  the  balance  of the
debenture payable. See Note 19.


NOTE 14--COMMITMENTS AND CONTINGENCIES

Employment Agreements

The  Company is a party to various  employment  agreements  with  certain of its
officers and key employees.  Such employment  agreements  range between three to
five years with annual salaries ranging from $83,000 to $200,000.

Nature of Business

The Company is subject to risks and uncertainties  common to growing  technology
companies,  including rapid  technological  developments,  reliance on continued
development  and  acceptance  of  the  Internet  and  health  care  applications
utilizing the Internet, intense competition and a limited operating history.

Significant Customers

Financial instruments,  which may expose the Company to concentrations of credit
risk,  consist  primarily of accounts  receivable.  As of December 31, 2003, one
customer  represented 25% of the total accounts  receivable.  For the year ended
December 31, 2003, the Company had three  unrelated  customers,  which accounted
for 29%,  13%,  and 14%,  respectively,  of total  revenue.  For the year  ended
December 31, 2002, the Company had two unrelated customers,  which accounted for
42% and 30%, respectively of total revenue.

Office Leases

During  October  1999,  the  Company  entered  into a  lease  agreement  for its
technology and product development  offices.  The lease was to expire on October
31, 2004 with annual rent of approximately  $162,000 before annual  escalations.
During  December 2001,  the Company was  successful in  negotiating  out of this
lease by entering into an  amendment\relocation  lease  agreement  with the same
landlord for materially less space.  The Company entered into an  eighteen-month
lease requiring monthly payments of approximately  $3,600.  The lease expired on
October 31, 2003.


                                       52
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 14--COMMITMENTS AND CONTINGENCIES (cont'd)

Office Leases (cont'd)

During April 2000, the Company  entered into a lease agreement for its executive
offices.  The lease  expires  June 2005 and  requires  annual  rent  payments of
approximately $150,000 before annual escalations.

During May 2002, the Company  entered into a lease agreement for its call center
located in Omaha,  Nebraska.  The lease expires during May 2007 with annual rent
of approximately $56,000 before annual escalations.

The Company's  approximate  future  minimum  annual rental  payments,  including
annual  escalations  under the  non-cancelable  operating leases in effect as of
December 31, 2003, are as follows:

                      For the year ending December 31:

                          2004               $  206,000
                          2005                  119,000
                          2006                   56,000
                          2007                   24,000
                                            -----------
                                             $  405,000
                                            ===========

Rent  expense  for the  years  ended  December  31,  2003 and 2002  amounted  to
approximately $245,000 and $275,000, respectively.

Profit Sharing Plan

The Company maintains a 401(k) profit sharing plan covering qualified employees,
which includes  employer  participation in accordance with the provisions of the
Internal Revenue Code. The plan allows participants to make pretax contributions
and the Company to match certain percentages of employee contributions depending
on a number of factors,  including  the  participant's  length of  service.  The
profit sharing portion of the plan is  discretionary  and  noncontributory.  All
amounts  contributed to the plan are deposited into a trust fund administered by
an  independent  trustee.  As of  December  31,  2003,  the  Company has made no
contributions.

Risk Sharing Contracts

The Company  enters into risk sharing  contracts  with some customers in certain
disease  management  arrangements.  These  contracts  are generally for terms of
three to five years and provide that a percentage of the  Company's  fees may be
refunded  to  a  customer  if  the  Company  does  not  save  such   customer  a
pre-determined  percentage of the expenses  incurred by individuals whose health
is managed by the Company.  As of December 31, 2003,  the Company is not a party
to any risk sharing contracts.




                                       53
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002




NOTE 15--COSTS IN CONNECTION WITH TERMINATED ACQUISITION

On November 8, 2002,  the Company  entered into a merger  agreement to acquire a
technology company,  which had developed web based predictive modeling software.
Under the terms of this  agreement and at the time this  agreement was executed,
the  Company  deposited  $200,000  into an  escrow  account.  This sum was to be
released to the company being acquired if the Company failed to satisfy  certain
conditions to closing,  including  third party financing for the cash portion of
the purchase  price.  As a result of not  securing the  financing by January 31,
2003 as stipulated in the merger agreement,  the sum of $200,000 was released in
the first quarter of 2003 and charged to  operations  as terminated  acquisition
cost.


NOTE 16--PROVISION FOR INCOME TAXES

Income taxes are provided  for the tax effects of  transactions  reported in the
financial  statements  and consist of taxes  currently due plus  deferred  taxes
related to differences  between the financial  statement and tax bases of assets
and  liabilities  for financial  statement  and income tax  reporting  purposes.
Deferred tax assets and liabilities represent the future tax return consequences
of these  temporary  differences,  which will either be taxable or deductible in
the year when the assets or liabilities  are recovered or settled.  Accordingly,
measurement  of the  deferred  tax assets and  liabilities  attributable  to the
book-tax basis differentials are computed at a rate of 34% federal and 6% state.

As of December  31, 2003,  the Company had deferred tax assets of  approximately
$9,561,000   resulting  from  temporary   differences  and  net  operating  loss
carry-forwards  of  approximately  $25,160,000,  which are  available  to offset
future taxable income, if any, through 2018. As utilization of the net operating
loss  carry-forwards and temporary  difference is not assured,  the deferred tax
asset  has  been  fully  reserved  through  the  recording  of a 100%  valuation
allowance.  Further,  the Company will be limited in the amount of net operating
losses it may utilize  following the merger with CHD Meridian.  Such limitations
resulting from 50% or more change in ownership have not been determined.

The tax effects of temporary differences,  loss carry-forwards and the valuation
allowance that give rise to deferred income tax assets are as follows:

<TABLE>
<CAPTION>


                                                                                     December 31,
                                                                                         2003
                                                                                    ---------------
           Temporary differences:

<S>                                                                                     <C>
                 Fair value of warrants and common stock                                $   574,000
                 Net operating losses                                                     8,987,000
                 Less valuation allowance                                                (9,561,000)
                                                                                    ---------------
                    Deferred tax assets                                                 $         0
                                                                                    ===============

           The reconciliation of the effective income tax rate to the federal
           statutory rate for the years ended December 31, 2003 and 2002 is as
           follows:

                 Federal income tax rate                                                      (38.0)%
                 Change in valuation allowance on net operating carry-forwards                 38.0
                                                                                    ---------------
                    Effective income tax rate:                                                  0.0 %
                                                                                    ===============

</TABLE>


                                       54
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 17--STOCKHOLDERS' EQUITY

2002 Issuance of Common Stock and Warrants

The Company has been unable to locate one stockholder entitled to receive common
stock as a result of a 1999  merger.  Accordingly,  the  Company  has  cancelled
45,141  unclaimed  shares of common stock.  In connection with a 1-for-5 reverse
stock split, the Company paid  stockholders  cash for all fractional shares that
resulted from the reverse stock split.  Accordingly,  a total of 191 shares were
cashed out.

The Company funded the acquisition of WellComm Group by selling a 6% convertible
senior  debenture in the  aggregate  principal  amount of $2,000,000 to Palladin
Opportunity  Fund LLC.  Pursuant to the  purchase  agreement,  the Company  also
issued  Palladin a warrant to purchase an aggregate  of up to 307,692  shares of
common stock at an exercise  price of $5.50 per share.  The original  conversion
price of the debenture was $5.00 per share.  In accordance with the terms of the
debenture,  the price was reset to $3.03 in  February  2003 and to $1.75 in June
2003. In  accordance  with the terms of the warrant,  the exercise  price of the
warrant was reset from $5.50 to $1.75 in June 2003.

The  Company  valued  the  warrant  issued to  Palladin  at  $890,272  using the
Black-Scholes  pricing model,  thereby allocating a portion of the proceeds from
the debt to the warrant and the option using the relevant fair value of the debt
and warrant to the actual  proceeds  from the  debenture.  The Company  recorded
$890,272  as a discount  to the  debenture.  This amount is accreted to interest
expense over the life of the debenture.

Upon the  initial  sale of the  debenture,  the  Company  recorded a  beneficial
conversion  value of $948,651.  The beneficial  conversion  value represents the
difference  between  the fair market  value of the common  stock on the date the
debenture was sold (or the date the  conversion  price is changed) and the price
at which the debt could be converted into common stock.

In connection with facilitating the transaction with Palladin,  the Company paid
$130,000,  issued  6,200  shares of common stock valued at $40,610 and granted a
warrant to acquire  40,000  shares of common stock at $5.00 per share to a third
party that  brokered the  transaction.  In addition,  the Company  issued 16,000
shares of common  stock valued at $104,800 to an employee  for  introducing  the
Company to  WellComm.  The Company has valued the shares at the market  price on
day  of  issuance  or  $145,408  and  has  valued  the  warrants  utilizing  the
Black-Scholes option-pricing model or $246,000.

On February  6, 2002,  the Company  acquired  all of the issued and  outstanding
common stock of WellComm Group, Inc. by issuing 1,488,000 shares of common stock
valued at $9,746,400,  granting  options  valued at $733,600 to acquire  112,000
shares  common  stock at a nominal  exercise  price,  and  paying  approximately
$2,200,000 in cash. The aggregate  acquisition  price amounted to  approximately
$12,680,000.

During  January  2002,  the Company sold in a private  placement an aggregate of
22,000 shares of common stock for $47,850,  net of $7,150 of direct costs.  This
private  placement was commenced in November 2001.  Additionally,  pursuant to a
private placement commenced in February 2002, the Company sold 505,500 shares of
common stock,  yielding  proceeds of  $1,895,626.  In  connection  with the fund
raising efforts from an existing  stockholder,  the Company issued 13,333 shares
as consideration to such stockholder.


                                       55
<PAGE>




                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 17--STOCKHOLDERS' EQUITY (cont'd)

2002 Issuance of Common Stock and Warrants (cont'd)

During the year ended  December 31,  2002,  pursuant to various  agreements  and
board  approvals,  the Company  issued an aggregate  of 23,708  shares of common
stock and granted 60,000 warrants to various  consultants for services  received
and for  settlement of debt. The common stock was valued at fair market value on
the date of  issuance  or  $114,167  in the  aggregate,  which  was  charged  to
operations.  The warrants were valued utilizing the Black-Scholes  option-model.
Accordingly, the Company recorded a charge of $222,000 for investor relations as
a result of granting such warrants.

During the year ended  December 31, 2002,  the Company  charged  operations  for
$163,200 related to the issuance of options to a former employee.

Effective  October 31, 2002, the Company and one of its customers entered into a
three year Joint Marketing  Agreement.  Under this  agreement,  each party will,
using its  reasonable  discretion,  market  to its  clients  the  other  party's
products and services.  In connection  with the agreement,  the Company  granted
UICI, a New York Stock Exchange Company,  a seven-year  warrant to acquire up to
400,000 shares of common stock at $5.50 per share.

The Company and UICI are also  parties to a license  and  maintenance  agreement
entered into on September 30, 2002,  pursuant to which the Company  granted UICI
an  exclusive   license  to  certain  software  in  the  student  market  and  a
non-exclusive license to such software for use by UICI for its other businesses.
The Company,  utilizing the Black-Scholes  option-pricing model, has valued such
warrant at  approximately  $1,360,000.  Such amount has been  capitalized and it
will be  amortized  on a monthly  basis over the life of the  agreement of three
years.

During the year ended  December  31,  2002,  a total of  380,960,  warrants  and
options  were  exercised  and  accordingly,  the Company  issued an aggregate of
355,424 shares of common stock, net of shares surrendered as exercise price.

2003 Issuance of Common Stock and Warrants

During May 2003 the  Company  issued an  aggregate  of 332,760  shares of common
stock to four  investor  relations  firms.  The common stock valued at $522,708,
based on the market price of the Company's common stock on the date of issuance,
has been charged to operations for 2003.

During May 2003,  certain  shareholders of the Company  contributed loans (which
were thereafter  converted into common stock) and 163,073 shares of common stock
to an  investor  relations  firm  retained by the  Company as  compensation  for
services.  The benefit  that the Company has received  from these  contributions
aggregates  $246,240 based on the market price of the Company's  common stock on
the date of the contribution, and was charged to operations.

During June 2003 the Company  sold  613,986  shares of common stock at $1.75 per
share  yielding net proceeds  (after  direct costs  including  40,167  shares of
common stock) of $1,004,186.

During  June  2003,  the  Company  issued  519,667  shares  of  common  stock in
connection  with the  conversion  of  related  party debt and  accrued  interest
thereon  amounting to $909,421 based on the market price of the Company's common
stock on the date of issuance.

During  June  2003,  the  Company  issued  148,485  shares  of  common  stock in
connection  with the  conversion of assigned debt to an investor  relations firm
amounting to $259,849 based on the market price of the Company's common stock on
the date of issuance.


                                       56
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 17--STOCKHOLDERS' EQUITY  (cont'd)

2003 Issuance of Common Stock and Warrants (cont'd)

During June 2003, the Company issued 69,711 shares of common stock in connection
with the  conversion  of deferred  salaries  amounting to $121,997  based on the
market price of the Company's common stock on the date of issuance.

During August 2003, the Company commenced a private placement whereby it offered
as a unit,  two shares of common  stock and a warrant to purchase an  additional
share of common stock  exercisable  at $3.00 (the market price on the  Company's
common stock on the date the Company commenced the private placement) for a unit
purchase price of $5. The maximum amount offered was $3,500,000. Through October
31, 2003,  the end of the private  placement,  the Company has issued a total of
1,400,000  shares of common  stock and  granted  warrants  to  purchase  700,000
additional  shares  under this private  placement.  The Company has realized net
proceeds of $3,037,894 after expenses as of December 31, 2003.

Pursuant to the terms of the registration rights agreement entered in connection
with the  transaction,  within 30 days of the closing of the private  placement,
the Company was required to file with the  Securities  and  Exchange  Commission
(the  "SEC") a  registration  statement  under the  Securities  Act of 1933,  as
amended,  covering the resale of all the common stock  purchased  and the common
stock  underlying  the warrants.  Additionally,  within 90 days of closing,  the
Company  was  required  to use its  best  efforts  to  cause  such  registration
statement  to  become  effective.  The  registration  rights  agreement  further
provided  that if a  registration  statement  is not  filed,  or does not become
effective, within the defined time periods, then in addition to any other rights
the holders may have, the Company would be required to pay each holder an amount
in  cash,  as  liquidated  damages,  equal to 1.5%  per  month of the  aggregate
purchase price paid by such holders. The registration statement was filed within
the allowed time, and was declared effective by the SEC on February 17, 2004.

In accordance with EITF 00-19,  "Accounting for Derivative Financial Instruments
Indexed To, and Potentially  Settled In a Company's Own Stock," and the terms of
the  warrants  and the  transaction  documents,  the fair value of the  warrants
amounted to  $2,458,800 on date of grant.  The warrants were  accounted for as a
liability,  with an offsetting  reduction to additional paid-in capital received
in the private  placement.  The warrant liability will be reclassified to equity
as of February 17,  2004,  the  effective  date of the  registration  statement,
evidencing  the  non-impact  of these  adjustments  on the  Company's  financial
position and business operations.

The fair value of the warrants was  estimated  using the  Black-Scholes  option-
pricing model with the following assumptions:  no dividends;  risk-free interest
rate of 4%; the  contractual  life of 5 years and  volatility of 112%.  The fair
value of the  warrants at December 31, 2003 was  estimated  to be  approximately
$2,760,000,  which  reflects an increase in fair value of $301,305 from the time
the warrants  were  granted.  This amount has been charged to  operations  as an
increase in common  stock  warrants.  The fair value of the  warrants  increased
additionally  by  approximately  $350,000 from December 31, 2003 to February 17,
2004. Accordingly,  such increase will be charged in the statement of operations
for the quarter ended March 31, 2004 as an increase in common stock warrants.

The  adjustments  required  by EITF  00-19  were  triggered  by the terms of the
private placement agreement, specifically the potential penalties if the Company
did not timely  register the common stock  underlying the warrants issued in the
transaction.  The SEC  declared  the related  registration  statement  effective
within the  contractual  deadline  and the Company  incurred no  penalties.  The
adjustments  for EITF  00-19  had no impact on the  Company's  working  capital,
liquidity, or business operations.

For the year ended  December  31,  2003,  Palladin  converted  an  aggregate  of
$1,483,351 of its debenture into 847,629 shares of the Company's common stock.


                                       57
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 17--STOCKHOLDERS' EQUITY  (cont'd)

2003 Issuance of Common Stock and Warrants

During 2003,  the Company  granted  fully  vested,  non-forfeitable  warrants to
purchase  375,000 shares of common stock with exercise prices of $1.50 and $1.76
(based on market value at the date of issuance) to certain  individuals  and one
institution  for  investor  relations  services  pursuant to various  consulting
agreements expiring in May and June 2004. The value of such warrants,  utilizing
the Black-Scholes model amounted to $649,448.

During May 2003 pursuant to the approval of the Board of Directors,  the Company
granted  warrants  to purchase an  aggregate  of 450,000  shares for an exercise
price of $1.80 per share  (representing  a premium over market price on the date
of grant) to its Chief  Executive  and  Operating  Officers for their  continued
financial  support and for their  guarantees  to continue to support the Company
through  January  2004.  The  granting  of such  warrants  did not result in any
charges to operations because they were granted to employees.

In April 2003, the Company  borrowed  $100,000 from a shareholder  pursuant to a
convertible  promissory  note.  The note,  with an  eleven-month  term,  accrues
interest  at 6% per annum  and a default  interest  rate of 12% per  annum.  The
principal  and  related  accrued  and  unpaid  interest  is  convertible  by the
shareholder  into common stock at anytime at $1.50 per share.  As  consideration
for this loan,  the Company  also granted the  shareholder  a warrant to acquire
100,000  shares of common  stock at an  exercise  price of $1.50 per share.  The
value  assigned  to the  warrant of $68,000  was  recorded  as a discount to the
promissory note using the relevant fair value of the debt and the warrant to the
actual proceeds from the convertible promissory note.

During  December  2003,  Palladin  agreed to  extend  the  maturity  date of the
Debenture  until  February 2005, in exchange for which,  the Company  granted an
additional  50,000  warrants with an exercise price of $1.75.  The warrants have
been valued at  approximately  $200,000  utilizing the  Black-Scholes  valuation
model. This amount, also recorded as a discount to the debenture, is accreted to
interest expense over the extension period of one year.

In connection with the reset in June 2003 of the conversion  price of Palladin's
debenture  and the  exercise  price  of  Palladin's  warrant,  the  Company,  in
accordance  with a  contractual  commitment,  reset  the  exercise  price of the
warrant  originally  granted  to  a  third  party  that  brokered  the  Palladin
investment from $5.00 to $1.75 per share and amended the warrant to increase the
number of shares  issuable  thereunder by 74,285  shares of common  stock.  This
reset of the exercise and the  amendment to the warrant  resulted in a charge to
operations in the amount of $95,828.

During the last  quarter of the year,  the  Company  received  an  aggregate  of
$968,769  (net of financing  costs) from the  exercise of warrants  from various
holders.



                                       58
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 17--STOCKHOLDERS' EQUITY  (cont'd)

2003 Issuance of Common Stock and Warrants  (cont'd)

The following table summarizes the Company's activity as it relates to its
warrants for the year ended December 31, 2003:

                                                             Shares
                                                       -----------------

   Balance outstanding at January 1, 2003                       2,132,953
   Quarter ended March 31, 2003:
            Granted                                                    --
            Exercised                                                  --
                                                       -----------------
   Balance outstanding at March 31, 2003                        2,132,953
                                                       -----------------
   Quarter ended June 30, 2003:
            Granted                                               999,285
            Exercised                                                  --
                                                       -----------------
   Balance outstanding at June 30, 2003                         3,132,238
                                                       -----------------
   Quarter ended September 30, 2003:
            Granted                                               320,000
            Exercised
                                                       -----------------
   Balance outstanding at September 30, 2003                    3,452,238
                                                       -----------------

   Quarter ended December 31, 2003:
            Granted                                               620,000
            Exercised                                            (720,866)
                                                       -----------------
   Balance outstanding at December 31, 2003                     3,351,372
                                                       =================

Outstanding warrants are exercisable at prices ranging from $.75 to $5.50.

NOTE 18--STOCK OPTIONS

Equity Compensation Plans and Non-Plan Stock Options

The Company has two equity  compensation  plans,  which were adopted in 2000 and
2001.  The  purpose of the plans is to  provide  the  opportunity  for grants of
incentive  stock options,  nonqualified  stock options and  restricted  stock to
employees of the Company and its subsidiaries,  certain consultants and advisors
who  perform  services  for the  Company or its  subsidiaries  and  non-employee
members  of the  Company's  Board  of  Directors.  The  2001  plan  has  several
additional  features,  including,  a salary investment option grant program that
permits  eligible  employees to reduce their  salary  voluntarily  as payment of
two-thirds  of the fair  market  value of the  underlying  stock  subject to the
option,  with the  remaining  one-third of the fair market value  payable as the
exercise price for the option and, if specifically implemented,  automatic grant
program  for  non-employee  members  of  the  Board  of  Directors  at  periodic
intervals.


                                       59
<PAGE>


                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 18--STOCK OPTIONS  (cont'd)

Equity Compensation Plans and Non-Plan Stock Options  (cont'd)

Originally,  there were 600,000  shares of common stock  authorized for issuance
under the 2000 plan and 1,200,000 shares of common stock authorized for issuance
under the 2001 plan. The number of shares authorized for issuance under the 2001
plan  increases  automatically  on the first day of each year beginning with the
year 2002 by an amount equal to the lesser of (a) three percent of the shares of
common stock then  outstanding  or (b) 200,000  shares.  As a result,  effective
January 1, 2003,  the number of shares of common  stock  available  for issuance
under the 2001 plan increased from 1,200,000 to 1,400,000.

The maximum  aggregate  number of shares of common  stock that can be granted to
any individual during any calendar year is 70,000 under the 2000 plan and 80,000
and under the 2001 plan.

         2000 Plan Grants

As of December 31, 2003, an aggregate of 226,500 options were outstanding  under
the 2000 plan.  Exercise  prices of these options range from $5.00 to $10.00 per
share (depending on the fair market value of the stock on the date of grant).

         2001 Plan Grants

As of December 31, 2003,  an  aggregate  of 1,222,414  options were  outstanding
under the 2001 plan.  Exercise prices of these options range from $1.77 to $7.50
(depending on fair market value of the stock on the date of grant).

         Non-Plan Stock Option Grants

As of December 31,  2003,  the Company had  outstanding  an aggregate of 669,000
options  outside of any stock option plan with exercise prices ranging from $.01
to $10.00 per share  (depending on fair market value of the stock on the date of
grant).


                                       60
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 18--STOCK OPTIONS  (cont'd)

Equity Compensation Plans and Non-Plan Stock Options  (cont'd)

The table below summaries the activity in the Company's stock option plans for
the years ended December 31, 2002 and 2003:

<TABLE>
<CAPTION>

<S>        <C>                          <C>                 <C>                 <C>               <C>

                                                       Non-Qualified         Non-Plan
                             Incentive Options             Options        Non-Qualified            Total
                                                                               Options
   ------------------------ -------------------- ------------------- ------------------- -------------------
   Outstanding as of
   January 1, 2002                      463,500             527,371             209,000           1,199,871
   Granted                              342,878              95,700             230,000             668,578
   Exercised                                 --             (2,727)                  --             (2,727)
   Forfeited/Expired                   (70,549)            (84,371)                  --           (154,920)
                            -------------------- ------------------- ------------------- -------------------
   Outstanding as of
   December 31, 2002                    735,829             535,973             439,000           1,710,802
   Granted                              288,000             340,000             300,000             928,000
   Exercised                                 --                  --                  --                  --
   Forfeited/Expired                  (370,888)            (80,000)            (70,000)           (520,888)
                            -------------------- ------------------- ------------------- -------------------
   Outstanding as of
   December 31, 2003                    652,941             795,973             669,000           2,117,914
                            ==================== =================== =================== ===================
   Vesting Dates:
         December 31, 2004              172,045             200,998             177,496             550,539
         December 31, 2005              112,248              82,665             101,665             296,578
         December 31, 2006               75,089              50,004              75,006             200,099
         December 31, 2007                   --                  --                  --                  --
         December 31, 2008                   --                  --              20,000              20,000
                Thereafter                   --                  --                  --                  --

</TABLE>


As of December 31,  2003,  there were  outstanding  an aggregate of 1,050,698 of
exercisable  plan and non-plan options with exercise prices ranging from $.01 to
$10.00.

The  weighted  average  fair  value of  options  granted  during  the year ended
December 31, 2003 amounted to $2.90.

For the year ended December 31, 2003 and 2002, the Company  recorded $27,942 and
$163,000, respectively, of compensation in connection with granting of options.

NOTE 19--SUBSEQUENT EVENTS

Acquisition of CHD Meridian (unaudited)


The Company entered into a merger agreement,  as amended,  on December 26, 2003,
with CHD  Meridian,  a privately  held  company  and a provider  of  outsourced,
employer-sponsored healthcare services.



                                       61
<PAGE>



                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002


NOTE 19--SUBSEQUENT EVENTS  (cont'd)

Acquisition of CHD Meridian (unaudited)  (cont'd)


Pursuant to the merger agreement,  the Company, on March 19, 2004, the effective
date of the  merger,  (1) issued  10,000,000  shares of common  stock  valued at
$49,600,000  utilizing  $4.96 (the closing market price on effective date of the
merger) per share,  (2) issued  400,000 shares of  convertible  preferred  stock
(with each share  convertible into 10 shares of common stock at a price of $2.50
per share or 4,000,000  shares in the aggregate) at $25 per share or $10,000,000
in the  aggregate,  and (3) paid  approximately  $25,508,000 to the CHD Meridian
stockholders.  Immediately following the closing of the merger, the Company also
redeemed from former CHD Meridian  stockholders that participated in the merger,
pro rata, an aggregate of 200,000 shares of convertible  preferred  stock at its
original issue price of $25 per share or $5,000,000.

The former CHD Meridian  stockholders will also receive additional shares of the
Company's common stock if CHD Meridian,  continuing its operations following the
closing of the merger as CHD Meridian LLC, achieves calendar 2004 milestones for
earnings before  interest,  taxes,  depreciation and amortization (or EBITDA) as
follows: If EBITDA equals or exceeds  $8,100,000,  the number of such additional
common  shares  payable will be 3,473,280;  the number of such shares  increases
proportionately up to a maximum of 3,859,200  additional shares of the Company's
common stock if EBITDA equals or exceeds  $9,000,000.  In  connection  with this
earn-out, the Company placed 3,859,200 shares in escrow.


The Company funded the cash portion of the merger  consideration  by (1) selling
1,000,000  shares of  convertible  preferred  stock at $25 per  share  with each
preferred share  convertible  into 10 shares of common stock at a price of $2.50
per share, for gross proceeds of $25,000,000,  and (2) drawing $12,000,000 under
a new  $20,000,000  senior secured credit facility with a national  lender.  The
credit  facility  expires on April 1, 2007. The credit facility has a $6,000,000
term loan commitment with a $14,000,000  revolving credit  commitment,  which is
reduced by letters of credit,  which currently amount to $3,250,000.  The credit
facility is secured by substantially all of the Company's assets.


The acquisition,  which is valued at $ 86,277,000 as of March 19, 2004, the date
of acquisition, is accounted for as a purchase. As such, the purchase price will
be allocated to the estimated fair values of the assets acquired and liabilities
assumed.  The  Company  will be  obtaining  third-party  valuations  of  certain
intangible assets.


The  following  unaudited  pro forma  results of  operations of the Company give
effect to the acquisition of CHD Meridian as though the transaction had occurred
on January 1, 2002.

                                            Year ended             Year ended
                                           December 31,           December 31,
                                               2003                   2002
                                          -------------          -------------

Sales                                     $ 121,966,000          $ 111,056,000
Expenses                                    128,632,000            121,622,000
                                          -------------          -------------
Net loss                                  $  (6,666,000)         $ (10,566,000)
                                          =============          =============
Less: Dividends applicable to
  Preferred Stockholders                  $        --            $  34,440,000
                                          -------------          -------------
Net loss applicable to common stock       $  (6,666,000)         $ (45,006,000)
                                          =============          =============
Loss per share
  Basic and Diluted                       $        (.32)         $       (2.36)
                                          =============          =============
Weighted average shares outstanding
  Basic and Diluted                          20,905,000             19,097,000
                                          =============          =============



                                       62
<PAGE>




                          I-TRAX, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002



NOTE 19--SUBSEQUENT EVENTS  (cont'd)

Repayments of related party loans and advances and promissory notes

In connection  with  obtaining a credit line facility for the funding of the CHD
Meridian  merger,  the Company was required to repay all related party loans and
advances  and  any  other   outstanding  loans  immediately  prior  to  closing.
Accordingly,  contemporaneously  with the  closing of the  merger,  the  Company
repaid an aggregate of $1,233,932 of which  $289,897 was for related party debts
and accrued  interest  and  $944,035  was for  principal  and  accrued  interest
(through March 19, 2004) pursuant to various promissory notes.

Conversion of Debenture Payable

During the first quarter of 2004,  Palladin  converted the remaining  balance of
the debenture payable.  Accordingly, the Company issued 427,106 shares of common
stock.

Conversion of Note Payable

Effective  March 19, 2004,  the Company  issued 70,533 shares of common stock in
connection  with  the  conversion  of  a  note  payable,  and  interest  accrued
thereunder, issued to a stockholder.




                                       63
<PAGE>



Consolidated Financial Statements

Meridian Occupational Healthcare Associates, Inc. and Subsidiaries
(d/b/a CHD Meridian Healthcare)
Years ended December 31, 2003, 2002 and 2001 with Report of Independent Auditors



                                       64
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

                        Consolidated Financial Statements

                  Years ended December 31, 2003, 2002 and 2001


                                    Contents


Report of Independent Registered Public Accounting Firm...................66


Consolidated Financial Statements


Consolidated Balance Sheets...............................................67
Consolidated Statements of Operations.....................................68
Consolidated Statements of Stockholders' Equity...........................69
Consolidated Statements of Cash Flows.....................................70
Notes to Consolidated Financial Statements................................71





                                       65
<PAGE>







             Report of Independent Registered Public Accounting Firm



The Board of Directors
CHD Meridian Healthcare

We have  audited  the  accompanying  consolidated  balance  sheets  of  Meridian
Occupational  Healthcare  Associates,  Inc. and subsidiaries (d/b/a CHD Meridian
Healthcare),  a Delaware corporation,  as of December 31, 2003 and 2002, and the
related consolidated  statements of operations,  stockholders'  equity, and cash
flows for each of the three years in the period ended  December 31, 2003.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.


We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,   the  consolidated   financial  position  of  Meridian
Occupational  Healthcare Associates,  Inc. and subsidiaries at December 31, 2003
and 2002, and the consolidated  results of their operations and their cash flows
for each of the three years in the period ended December 31, 2003, in conformity
with U.S. generally accepted accounting principles.


As  discussed  in Note 2,  effective  January 1, 2002,  the Company  changed its
method of accounting for goodwill and other intangible assets.

As  discussed  in Note 4,  effective  January 1, 2001,  the Company  changed its
method of accounting for discontinued operations.


Ernst & Young, LLP
Nashville, Tennessee
February 24, 2004



                                       66
<PAGE>


<TABLE>
<CAPTION>

<S>                                                                                  <C>               <C>

                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

                           Consolidated Balance Sheets
                        (in thousands, except share data)

                                                                                              December 31
                                                                                         2003             2002
                                                                                `   -----------------------------
Assets
Current assets:
   Cash and cash equivalents                                                         $ 11,299          $  7,621
   Accounts receivable, less allowance for doubtful accounts
     of $601 and $639, at December 31, 2003 and 2002, respectively                     17,167            14,373
   Income tax receivable                                                                  153               529
   Other current assets                                                                 1,849             1,069
                                                                                `   -----------------------------
Total current assets                                                                   30,468            23,592

Property and equipment, net                                                             2,880             3,063

Goodwill                                                                                8,181             8,181
Customer lists, net                                                                     7,101             7,645
Other intangible assets, net                                                               70              --
Other long-term assets                                                                     36                36
                                                                                `   -----------------------------
Total assets                                                                         $ 48,736          $ 42,517
                                                                                    =============================

Liabilities and stockholders' equity
Current liabilities:
   Accounts payable                                                                  $  5,955          $  5,796
   Accrued employee benefits                                                            4,088             3,496
   Deferred revenue                                                                       951             1,644
   Net liabilities of discontinued operations                                           1,299             1,299
   Other accrued liabilities                                                            6,287             4,066
                                                                                `   -----------------------------
Total current liabilities                                                              18,580            16,301

Other long-term liabilities                                                             2,548             2,896

Stockholders' equity:
   Preferred stock, no par value, authorized 153,500 shares, no shares
     issued and outstanding at December 31, 2003 and 2002                                --                --
   Common stock, $0.001 par value; authorized 250,000 shares, 220,015 shares
     issued and outstanding at December 31, 2003, and 208,415 shares issued
     and outstanding at December 31, 2002                                                --                --
   Additional paid-in capital                                                          68,605            66,944
   Notes due from stockholders                                                         (1,682)             --
         Accumulated deficit                                                          (39,315)          (43,624)
                                                                                `   -----------------------------
Total stockholders' equity                                                             27,608            23,320
                                                                                `   -----------------------------
Total liabilities and stockholders' equity                                           $ 48,736          $ 42,517
                                                                                    =============================

See accompanying notes to consolidated financial statements.


                                       67
<PAGE>


                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

                      Consolidated Statements of Operations
                                 (in thousands)


                                                                                Year ended December 31
                                                                       2003             2002              2001
                                                               -----------------------------------------------------

Net revenues                                                     $   117,777      $    107,124      $    100,411

Costs and expenses:
    Operating expenses                                                96,750            88,858            82,950
    General and administrative expenses                               15,005            14,275            14,057
    Depreciation and amortization                                      1,461             1,854             2,117
                                                               -----------------------------------------------------
Total costs and expenses                                             113,216           104,987            99,124
                                                               -----------------------------------------------------

Operating income                                                       4,561             2,137             1,287

Other (income) expense:
    Interest, net                                                        (87)             (124)              255
                                                               -----------------------------------------------------
Total other (income) expense                                             (87)             (124)              255
                                                               -----------------------------------------------------

Income from continuing operations before income taxes                  4,648             2,261             1,032

Provision for income taxes                                               339               337               139
                                                               -----------------------------------------------------

Income from continuing operations                                      4,309             1,924               893

Gain on discontinued operations, net of income taxes of $80                -                 -               527
Loss on disposal of discontinued operations, net of income
    tax benefit of $506                                                    -                 -            (3,128)
                                                               -----------------------------------------------------
Net income (loss)                                                $     4,309      $      1,924      $     (1,708)
                                                               =====================================================

See accompanying notes to consolidated financial statements.

</TABLE>




                                       68
<PAGE>

<PAGE>

<TABLE>
<CAPTION>

<S>                              <C>         <C>               <C>       <C>              <C>         <C>              <C>

                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

                 Consolidated Statements of Stockholders' Equity
                        (in thousands, except share data)




                                      Common Stock    Preferred Stock                     Additional                      Total
                               ---------------------- ----------------  Notes due from     Paid-in      Accumulated    Stockholders'
                                  Shares      Amount  Shares    Amount   Stockholders      Capital       Deficit         Equity
                               ----------- ---------- ------- -------- ---------------- ------------- ---------------- -------------

Balance at December 31, 2000      208,415     $  -       -      $  -      $       -        $ 66,944    $  (43,840)      $ 23,104
Net loss                                -        -       -         -              -               -        (1,708)        (1,708)
                               ----------- ---------- ------- -------- ---------------- ------------- ---------------- -------------
Balance at December 31, 2001      208,415        -       -         -              -          66,944       (45,548)        21,396
Net income                              -        -       -         -              -               -         1,924          1,924
                               ----------- ---------- ------- -------- ---------------- ------------- ---------------- -------------
Balance at December 31, 2002      208,415        -       -         -              -          66,944       (43,624)        23,320
Repurchase of common stock           (700)       -       -         -              -            (111)            -           (111)
Exercise of stock options          12,300        -       -         -         (1,682)          1,772             -             90
Net income                              -        -       -         -              -               -         4,309          4,309
                               ----------- ---------- ------- -------- ---------------- ------------- ---------------- -------------
Balance at December 31, 2003      220,015     $  -       -      $  -       $ (1,682)       $ 68,605    $  (39,315)      $ 27,608
                               =========== ========== ======= ======== ================ ============= ================ =============


See accompanying notes to consolidated financial statements.


</TABLE>

                                       69
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                    <C>              <C>               <C>

                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

                      Consolidated Statements of Cash Flows
                        (in thousands, except share data)

                                                                                Year ended December 31
                                                                         2003            2002             2001
                                                                   --------------------------------------------------
Operating activities
Net income from continuing operations                                  $   4,309        $  1,924          $   893
Adjustments to reconcile net income from continuing operations to
   net cash provided by operating activities:
   Depreciation and amortization                                           1,462           1,854            2,117
   Loss on disposal of fixed assets                                            -              72                -
   Changes in operating assets and liabilities, net of effects of
     acquisitions:
       Accounts receivable                                                (2,794)           (778)           2,955
       Other current assets                                                 (780)           (585)            (581)
       Accounts payable                                                      159             (17)            (466)
       Income taxes receivable (payable)                                     376             120             (270)
       Deferred revenue                                                     (693)           (800)           1,103
       Other accruals and liabilities                                      2,813           1,195            1,377
       Other long-term liabilities                                          (348)            171              521
                                                                   --------------------------------------------------
Net cash provided by operating activities                                  4,504           3,156            7,649
                                                                   --------------------------------------------------

Investing activities
Purchase of property and equipment                                          (735)         (1,170)          (1,266)
Proceeds from sale of fixed assets                                             -             172                -
Increase in intangible assets                                                (70)              -                -
Cash paid for acquisitions                                                     -               -              (43)
                                                                   --------------------------------------------------
Net cash used in investing activities                                       (805)           (998)          (1,309)
                                                                   --------------------------------------------------

Financing activities
Payments under line of credit, net                                             -               -           (6,030)
Payments on debt and capital lease obligations                                 -               -              (22)
Issuance of common stock                                                      90               -                -
Repurchase of common stock                                                  (111)              -                -
                                                                   --------------------------------------------------
Net cash used in financing activities                                        (21)              -           (6,052)
                                                                   --------------------------------------------------

Discontinued operations
Cash flows of discontinued operations                                          -           2,308              959
                                                                   --------------------------------------------------
Net cash provided by discontinued operations                                   -           2,308              959
                                                                   --------------------------------------------------

Net change in cash and cash equivalents                                    3,678           4,466            1,247
Cash and cash equivalents at beginning of year                             7,621           3,155            1,908
                                                                   --------------------------------------------------
Cash and cash equivalents at end of year                               $  11,299        $  7,621          $ 3,155
                                                                   ==================================================

Supplemental cash flow information:
   Cash paid for interest                                              $       -        $      -          $   350
                                                                   ==================================================
   Cash paid for income taxes                                          $     339        $    217          $ 1,392
                                                                   ==================================================


See accompanying notes to consolidated financial statements.



</TABLE>


                                       70
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

                   Notes to Consolidated Financial Statements

                                December 31, 2003

1. Reporting Entity and Principles of Consolidation

Reporting Entity

Effective January 1, 2000, Meridian  Occupational  Healthcare  Associates,  Inc.
("Meridian") acquired Corporate Health Dimensions, based in Latham, New York. In
conjunction with the acquisition,  Meridian began doing business as CHD Meridian
Healthcare ("CHD Meridian"), also referred to herein as the "Company".


CHD Meridian  Healthcare is a provider of outsourced health care services to the
employer-sponsored  market.  The  Company's  model allows  employers to contract
directly  for a wide  range of health  care  services  on  behalf of  employees,
dependents,  and retirees that are delivered  through  facilities  located at or
near the work site. CHD Meridian develops and manages custom designed facilities
that address the pharmacy,  primary  care,  occupational  health,  and corporate
health   demands   of   its   clients.    CHD   Meridian    currently   provides
employer-sponsored services to 90 clients at 160 locations in 31 states.


Physician  services are provided at CHD Meridian's  locations  under  management
agreements with affiliated physician  associations (the Physician Groups), which
are  organized  professional  corporations  that hire  licensed  physicians  who
provide medical services.

Pursuant to the service  agreements,  the Physician  Groups  provide all medical
aspects of CHD Meridian's  services,  including the  development of professional
standards,  policies,  and  procedures  for a fee. CHD Meridian  provides a wide
array of business  services to the  Physician  Group,  including  administrative
services, support personnel, facilities,  marketing, and non-medical services in
exchange for a management fee.

Principles of Consolidation

The consolidated  financial statements include accounts of Meridian Occupational
Healthcare  Associates,  Inc., its wholly owned subsidiaries,  and the Physician
Groups.  The financial  statements of the Physician Groups are consolidated with
CHD  Meridian in  accordance  with the nominee  shareholder  model of EITF 97-2,
"Application  of FASB  Statement  No. 94 and APB  Opinion  No.  16 to  Physician
Practice  Management  Entities  and  Certain  Other  Entities  with  Contractual
Management  Arrangements".  CHD Meridian has unilateral  control over the assets
and operations of the Physician  Groups.  Consolidation  of the Physician Groups
with CHD  Meridian is  necessary to present  fairly the  financial  position and
results  of  operations  of CHD  Meridian.  Control of the  Physician  Groups is
perpetual and other than temporary because of the




                                       71
<PAGE>


                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


1. Reporting Entity and Principles of Consolidation (continued)

Principles of Consolidation (continued)

nominee  shareholder model and the management  agreements  between the entities.
The net tangible  assets of the  Physician  Groups were not material at December
31, 2003 and 2002. All significant  intercompany  accounts and transactions have
been eliminated in consolidation.

2. Summary of Significant Accounting Policies

Revenue Recognition and Accounts Receivable


The  Company   generates  revenue  from  contractual   client   obligations  for
occupational  health,  primary  care,  pharmacy and  corporate  health  services
rendered  on  either a fixed  fee or a  cost-plus  arrangement.  For  fixed  fee
contracts,  revenues  are  recorded on a  straight-line  basis as  services  are
rendered.  For cost-plus contracts,  revenues are recorded as costs are incurred
with the  management  fee component  recorded as earned based upon the method of
calculation stipulated in the client contracts.


Revenue is recorded at estimated net amounts to be received  from  employers for
services rendered.  The allowance for doubtful accounts represents  management's
estimate of potential credit issues associated with amounts due from employers.

The Company records pass-through pharmaceutical purchases on either a gross or a
net revenue basis dependent upon specific  contractual  language and obligations
in accordance with EITF 99-19, Reporting Revenue Gross as a Principal versus Net
as an Agent.

Cash received by the Company prior to the  performance  of services is reflected
as deferred revenue on the balance sheet.


Pharmaceutical Manufacturer Rebates

All rebates received by the Company from pharmaceutical manufacturers are passed
directly through to our clients. Rebates received from manufacturers but not yet
remitted to clients are reflected as liabilities on the balance sheet.




                                       72
<PAGE>


                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


2. Summary of Significant Accounting Policies (continued)

Concentration of Credit Risks

The Company's  credit risks  primarily  relate to cash and cash  equivalents and
accounts  receivable.  Cash  and cash  equivalents  are  primarily  held in bank
accounts,  whose balances may exceed federally-insured limits from time-to-time.
Accounts  receivable consist primarily of amounts due from corporate  customers.
The Company  continually  reviews  collectibility of its accounts receivable and
maintains allowances for doubtful accounts.

The Company had one customer in 2003, 2002 and 2001 that accounted for 11%, 11%
and 11% of total revenue, respectively.

Cash and Cash Equivalents

The Company  considers  highly liquid  investments  with original  maturities of
three months or less to be cash equivalents.

Property and Equipment

Property  and  equipment  are  stated  on the  basis of cost.  Depreciation  and
amortization  are  provided  on the  straight-line  method  over  the  following
estimated useful lives:

                                            Years
                                            -----------------------------------
Furniture and equipment                     5-7
Leasehold improvements                      Remaining life of the lease

Goodwill and Other Intangible Assets

Goodwill represents the excess of purchase price over fair value of net tangible
assets  acquired.  Through  December  31,  2001,  goodwill  was  amortized  on a
straight-line  basis over the expected periods to be benefited,  generally forty
years.  In June 2001, the Financial  Accounting  Standards Board ("FASB") issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 142,  "Goodwill  and
Other  Intangible  Assets"  ("Statement  142").  Effective  January 1, 2002, the
amortization  of all  goodwill was  discontinued  upon the adoption of Statement
142. This statement  prohibits the amortization of goodwill and other indefinite
lived  intangible  assets over a set period,  rather these assets must be tested
for  impairment  at  least  annually  using a fair  value  method.  The  Company
performed  a  transitional  goodwill  impairment  test,  noting  no  impairment.
Impairment is measured at the reporting unit level using a discounted cash flows
model to determine the fair value of the reporting units.



                                       73
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


2. Summary of Significant Accounting Policies (continued)

The Company will perform a goodwill  impairment  test whenever events or changes
in facts or  circumstances  indicate  that  impairment  may  exist,  or at least
annually during the fourth quarter each year.

Other  intangible  assets  represent  customer  lists,  which are amortized on a
straight-line  basis over the  expected  periods to be  benefited,  generally 16
years. The Company  evaluates  impairment of its customer lists through SFAS No.
144,   "Accounting  for  the  Impairment  or  Disposal  of  Long-Lived   Assets"
("Statement 144"), as discussed below.

Long-Lived Assets

The Company adopted Statement 144 on September 1, 2001. Statement 144 supersedes
Statement  121  and  addresses  financial   accounting  and  reporting  for  the
impairment of long-lived assets and for long-lived assets to be disposed of.

Management evaluates the carrying value of long-lived assets, including property
and  equipment in accordance  with  Statement  144.  Statement 144 requires that
companies  consider whether events or changes in facts and  circumstances,  both
internally and externally,  may indicate that an impairment of long-lived assets
held for use is present.  If this review  indicates that such long-lived  assets
will not be recoverable  based on undiscounted cash flows of the related assets,
the Company  would record an  impairment  charge,  representing  the  difference
between carrying value and fair value (generally  determined based on discounted
cash flows).  Other than as described in Note 4,  management has determined that
there was no impairment of long-lived assets at December 31, 2003 and 2002.

Stock Option Plan

The  Company,  from time to time,  grants  stock  options for a fixed  number of
common  shares to employees  and  directors.  The Company  applies the intrinsic
value method of accounting prescribed by Accounting Principles Board Opinion No.
25  ("APB  25")   "Accounting  for  Stock  Issued  to  Employees,"  and  related
interpretations  in accounting for its options.  As such,  compensation  expense
would generally be recorded on the date of grant only if the then current market
price of the underlying stock exceeded the exercise price.



                                       74
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


2. Summary of Significant Accounting Policies (continued)

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and assumptions  that affect the reported  amounts of assets and liabilities and
disclosures  of contingent  assets and  liabilities at the date of the financial
statements.  Estimates  also affect the reported  amount of revenue and expenses
during the reporting period. Actual results could differ from those estimates.

Estimated Medical Professional Liability Claims

The  Company  is  insured  for  medical  professional   liability  claims  on  a
claims-made basis through  commercial  insurance  policies.  It is the Company's
policy that provision for estimated medical professional liability costs be made
for asserted and  unasserted  claims based on actuarially  projected  estimates,
based on  historical  loss payment  patterns.  Provision  for such  professional
liability  claims includes  estimates of the ultimate costs of such claims.  The
Company  evaluates the financial  condition of its insurers and  reinsurers  and
monitors its credit risk related to insolvencies.  At December 31, 2003, certain
of the  Company's  policy  years were  insured by two  companies  who are either
insolvent or under regulatory  supervision.  The Company's  provision for losses
from   professional   liability   claims   assumes  these  policy  years  to  be
self-insured.  The Company's estimated liability for its self-insured  retention
related to medical professional claims was $3,253,784 and $3,098,000 at December
31, 2003 and 2002, respectively.




                                       75
<PAGE>




                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


2. Summary of Significant Accounting Policies (continued)

Disclosure About Fair Value of Financial Instruments

The fair value of the Company's cash and cash equivalents,  accounts receivable,
other  current  assets,  accounts  payable,  and  accrued  expenses  approximate
carrying amounts because of the short maturity of those instruments.

The fair value of the  Company's  debt  instruments  is  estimated  based on the
current  rates  offered  to the  Company  for  similar  instruments  of the same
maturities and approximates the carrying amounts.

Reclassifications

Certain prior year balances have been  reclassified  to conform with the current
year presentation.  Such  reclassifications  had no effect on the net results of
operations as previously reported.

Business Segment

The Company operates in a single reportable business segment.

Recently Issued Accounting Pronouncements

In January 2003,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46") to
expand upon and strengthen  existing  accounting  guidance that addresses when a
company should include in its financial  statements the assets,  liabilities and
activities  of  another  entity.  Until now, a company  generally  has  included
another entity in its  consolidated  financial  statements only if it controlled
the entity through voting interests. FIN 46 changes that guidance by requiring a
variable  interest entity,  as defined,  to be consolidated by a company if that
company is subject to a majority of the risk of loss from the variable  interest
entity's  activities,  or is  entitled  to  receive a majority  of the  entity's
residual  returns,  or both.  FIN 46 also  requires  disclosure  about  variable
interest  entities that the company is not required to consolidate  but in which
it has a significant variable interest.



                                       76
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


2. Summary of Significant Accounting Policies (continued)


On December  24,  2003,  the FASB issued a revision of FIN 46 that  replaced the
original  interpretation and codified proposed modifications and other decisions
previously issued through certain FASB Staff Positions including the deferral of
the effective date of applying FIN 46 to certain variable interests. The revised
FIN 46 requires the Company to apply the provisions of FIN 46 immediately to any
special purpose  entities and to any variable  interest  entities  created after
January 31, 2003.  Application of the provisions  will be required for all other
variable  interest  entities in financial  statements  for periods  ending after
March 15, 2004.  The adoption of FIN 46 had no impact on the financial  position
or operating results of the Company.


3.  Business Combinations

On December 26, 2003,  the Company  signed a definitive  merger  agreement  with
I-trax, Inc. (Amex: DMX), a Philadelphia,  Pennsylvania, based health management
solutions company.  The transaction is valued at approximately $80 million based
on the closing share price of I-trax common stock on Friday, December 26, 2003.

Under the terms of the  agreement,  I-trax will  acquire all of the  outstanding
shares of CHD Meridian in exchange for $35 million in cash, 10 million shares of
I-trax  common  stock and $10 million of I-trax  Series A preferred  stock.  CHD
Meridian  stockholders  could receive an  additional 4 million  shares of I-trax
common stock ("earn out shares")  depending  upon the  operating  results of CHD
Meridian for  calendar  year 2004.  Subsequent  to closing,  CHD  Meridian  will
operate as a wholly-owned  subsidiary of I-trax.  The transaction is expected to
close by April 30, 2004, but is subject to gaining  stockholders'  approval from
both companies,  obtaining  certain  regulatory  approvals and satisfying  other
material conditions.


The merger will create a provider of integrated corporate healthcare  management
solutions.  The merged company will offer  employers an opportunity  not only to
manage the  healthcare  of  employees  who use on-site  facilities,  but also to
provide an integrated,  comprehensive health management program for a customer's
entire employee base.



                                       77
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)



3.  Business Combinations (continued)

The merged  company  will offer  customers  a single  vendor for  primary  care,
pharmacy,  occupational  health,  as  well  as  disease  management  and  health
interventions.   These   solutions   help  to  increase   productivity,   reduce
absenteeism, and improve health status of both active employees and retirees and
reduce overall healthcare costs.

4. Discontinued Operations

During 2001,  the Company was  notified of the  cancellation  of two  government
contracts,  located in Fairfax, VA and Woodbridge, VA. The cancellation of these
contracts met the  requisite  requirements  to be accounted for as  discontinued
operations under Statement 144 because of the distinct financial  information of
the  component  entities  that was  available  and  reviewed by  management.  In
accordance with Statement 144, the gain on discontinued  operations of these two
contracts of $607,000 for the year ended December 31, 2001 was  reclassified and
reflected separately in the accompanying  Consolidated Statements of Operations.
In accordance with Statement 144, the Company recorded a loss on disposal of the
discontinued  operations  of  $3,716,000  for the year ended  December 31, 2001,
which consisted  predominantly of the write-down of the equipment and intangible
assets.  Any remaining  gains or losses on the  discontinued  operations will be
recorded  in the  period  incurred,  in  accordance  with  the  requirements  of
Statement  144.  At  December  31,  2003  and  2002,  the  net   liabilities  of
discontinued  operations  consisted of contract staffing accruals of $1,299,000.
The contract staffing accruals represent  management's estimate of the Company's
obligations  related to the  government's  right to audit the contract terms and
conditions.

The Company  divested of its 11  freestanding  occupational  healthcare  clinics
located in Northern California (California  Operations) during 1998. The sale of
the California  Operations was accounted for as  discontinued  operations in the
accompanying  consolidated  financial  statements.  During  2001,  a final lease
expired,  resulting in a gain on disposal of discontinued operations of $82,000.
There  was no impact  to the  financial  statements  related  to the  California
Operations during 2003 or 2002.



                                       78
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


5. Property and Equipment


<TABLE>
<CAPTION>

<S>                                                            <C>                <C>

Property and equipment consist of the following (in thousands):

                                                                        December 31
                                                                  2003               2002
                                                           --------------------------------------

Furniture and equipment                                        $     6,823        $     6,089
Leasehold improvements                                                 181                180
                                                           --------------------------------------
                                                                     7,004              6,269
Less accumulated depreciation                                       (4,124)            (3,206)
                                                           --------------------------------------
                                                               $     2,880        $     3,063
                                                           ======================================

</TABLE>


Depreciation expense was $918,000, $1,105,000 and $1,083,000 for the years ended
December 31, 2003, 2002 and 2001, respectively.

6. Goodwill and Other Intangible Assets

In accordance with Statement 142, the Company  discontinued  the amortization of
goodwill effective January 1, 2002. A reconciliation of previously  reported net
income  (loss) to the pro forma  amounts  adjusted for the exclusion of goodwill
amortization net of the related income tax effect follows (in thousands):


<TABLE>
<CAPTION>

<S>                                                   <C>              <C>             <C>

                                                               Year ended December 31
                                                       2003              2002             2001
                                                 ------------------ ---------------- ----------------

Reported net income (loss)                            $  4,309         $  1,924        $  (1,708)
Add:  goodwill amortization                                  -                -              200
                                                 ------------------ ---------------- ----------------
Pro forma adjusted net income (loss)                  $  4,309         $  1,924        $  (1,508)
                                                 ================== ================ ================

</TABLE>



                                       79
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


6. Goodwill and Other Intangible Assets (continued)

The Company's separately identifiable intangible assets, which consists of
customer lists and non-compete agreements, are as follows (in thousands):

                                                      December 31
                                                 2003              2002
                                           ------------------ ----------------

Amortized intangible assets:
Carrying amount                               $   10,761         $   10,691
Accumulated amortization                          (3,590)            (3,046)
                                           ------------------ ----------------
Net                                           $    7,171         $    7,645
                                           ================== ================

Amortization expense for the year ended December 31, 2003 was $544,000.
Estimated amortization expense for each of the succeeding five fiscal years is
as follows:

Year ending December 31
    2004                                                             610,000
    2005                                                             610,000
    2006                                                             610,000
    2007                                                             610,000
    2008                                                             610,000



                                       80
<PAGE>


                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


7. Long-Term Debt

Effective May 15, 2000,  the Company  obtained a permanent  $7.5 million  credit
facility  from Bank of America,  which  expired on November 15, 2002.  Effective
November  15,  2002,  the Company  amended the  permanent  $7.5  million  credit
facility from Bank of America. The permanent credit facility was reduced to $6.5
million and  extended to November  15,  2005.  The credit  facility  has a $3.25
million letter of credit portion with the remainder being a term loan revolver.

The credit facility is secured by substantially  all of the Company's assets. At
no time may the  borrowings on the credit  facility  exceed 75% of the Company's
assets.  Borrowings, at the Company's election, may be either base rate loans or
LIBOR loans. Base rate loans bear interest at the federal funds rate plus 5% per
annum.  The LIBOR loans bear  interest at the LIBOR rate plus a range of 1.5% to
3.0% based on the Company's  leverage  ratio. At December 31, 2003 and 2002, the
Company had no debt outstanding on the term loan.

The credit  facility  includes  certain  financial  covenants  customary for the
amount and duration of this  commitment.  The Company was in compliance with all
such covenants at December 31, 2003.

A letter  of  credit  of $2  million  has been  issued  for the  benefit  of The
Lexington Group, the Company's medical  malpractice  carrier. An additional $1.0
million letter of credit has been issued for the benefit of the  Commissioner of
Insurance, State of Vermont for a Risk Retention Group to be formed and licensed
in 2004 for the Company's professional and general liability insurance.

8. Income Taxes

Income tax expense is comprised of the  following  for the years ended  December
31:

                                    2003          2002            2001
                             --------------- ------------- ---------------
   Current:
     Federal                     $     278        $      -      $   (128)
     State                             339             337           267
   Deferred- federal                  (278)              -             -
                             --------------- ------------- ---------------
     Income tax expense          $     339        $    337      $    139
                             =============== ============= ===============


                                       81
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


8. Income Taxes

During the year ended  December  31, 2001 and all years  prior to  December  31,
2000, the Company  generated net operating loss (NOL)  carryforwards for federal
and state income tax  purposes.  The NOL  carryforwards  are  applicable to both
discontinued  and continuing  operations.  As a result of each period's loss and
existing NOL carryforwards, the Company recorded a provision for current federal
income tax during  the year ended  December  31,  2003 only.  No  provision  for
current federal income taxes was recorded for 2002 or 2001. At December 31, 2003
and 2002, the Company has a cumulative NOL  carryforward  for federal income tax
purposes of $14.4 million and $18.2 million, respectively, which expires between
2011 and 2021.  At December 31, 2003 and 2002,  the Company has  cumulative  NOL
carryforwards  for state income tax purposes of $29.7 million and $33.7 million,
respectively,  which  expire  between  2006 and 2021.  For  financial  reporting
purposes,  a valuation  allowance  has been  recorded  against the  deferred tax
assets related to these carryforwards.

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes. Significant components of
the  company's   deferred  tax  assets  and   liabilities   for  continuing  and
discontinued operations are as follows:

                                                2003             2002
                                         ---------------- -----------------

Deferred tax assets:
    Net operating loss carryforwards      $      6,563     $        7,880
    Allowance for doubtful accounts                234                249
    Accrued expenses                             1,913              1,712
    Amortization                                 1,282              1,387
    Other                                          450                331
                                         ---------------- -----------------
Total gross deferred tax assets                 10,442             11,559
    Less:  Valuation allowance                  (9,548)           (11,248)
                                         ---------------- -----------------
Total deferred tax assets                          894                311
Deferred tax liability:
    Depreciation                                  (616)              (311)
                                         ---------------- -----------------
Net deferred tax asset                    $        278     $            -
                                         ================ =================



                                       82
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


8. Income Taxes (continued)

The provision for income taxes for continuing operations for the years ended
December 31, 2003, 2002 and 2001 differs from the amount computed by applying
the statutory rate of 34% due to the following:

                                              2003        2002        2001
                                          ------------ ----------- -----------

Tax at federal statutory rate             $    1,611    $    769    $    351
State income taxes                               231         223         176
Nondeductible amortization                       171         225         309
Other                                             26          23         129
Change in valuation allowance                 (1,700)       (903)       (826)
                                          ------------ ----------- -----------
Income tax provision                      $      339    $    337    $    139
                                          ============ =========== ===========

During 2001, the valuation allowance changed by approximately $1.2 million for
the tax effect of discontinued operations.

9. Stockholders' Equity

Capital Stock

The Company has 93,500  authorized shares of Series A preferred stock and 60,000
authorized  shares of Series B preferred  stock.  Through December 31, 2003, the
Company has not issued any of the preferred series stock.

Stock Option Plan

The Company's 1997 Stock Incentive Plan (the "Plan")  provides for qualified and
non-qualified incentive stock option grants that may be granted to key employees
as designated by the Board of Directors.  The options are exercisable commencing
on dates  specified in the option  agreements  and generally vest ratably over a
four-year  period.  The options expire at the earlier of ten years from the date
of grant or three months after the  termination of the holder's  employment with
the Company.



                                       83
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


9. Stockholders' Equity (continued)

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-Based
Compensation-Transition and Disclosure" ("Statement 148"), which amends SFAS No.
123, "Accounting for Stock-Based  Compensation" ("Statement 123"). Statement 148
provides  alternative  methods of transition for a voluntary  change to the fair
value-based  method of accounting  for  stock-based  employee  compensation  and
amends the  disclosure  requirements  of Statement 123 to require more prominent
and more  frequent  disclosures  in  financial  statements  about the effects of
stock-based  compensation.  Statement 148 is effective for financial  statements
issued for fiscal years ending after  December 15, 2002. The Company has elected
to account for stock-based  compensation  plans under the intrinsic  value-based
method of  accounting  prescribed by APB 25 that does not utilize the fair value
method.

All options  have been  granted  with  exercise  prices equal to or greater than
management's  estimate of the fair value of the  Company's  common  stock on the
date of grant. As a result,  no compensation  cost has been  recognized.  If the
alternative  method of accounting for stock option plans prescribed by Statement
123 and Statement 148 had been  followed,  the Company's net income (loss) would
not have been  materially  different for the years ended December 31, 2003, 2002
and 2001, respectively.



                                       84
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                           <C>                  <C>

                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)


9. Stockholders' Equity (continued)

Stock Option Plan (continued)

The following is a summary of option transactions during 2003, 2002, and 2001:

                                                                       Number of Shares     Weighted Average
                                                                                             Exercise Price
                                                                     --------------------- -------------------

Outstanding at December 31, 2000                                              35,202               $ 111
   Granted                                                                     2,890                 143
   Canceled                                                                   (1,545)                139
   Exercised                                                                       -                   -
                                                                     --------------------- -------------------
Outstanding at December 31, 2001                                              36,547               $ 113
   Granted                                                                         -                   -
   Canceled                                                                     (455)                141
   Exercised                                                                       -                   -
                                                                     --------------------- -------------------
Outstanding at December 31, 2002                                              36,092               $ 112
   Granted                                                                         -                   -
   Canceled                                                                     (625)                143
   Exercised                                                                 (12,300)                137
                                                                     --------------------- -------------------
Outstanding at December 31, 2003                                              23,167              $   98
                                                                     ===================== ===================


Available for future grant                                                     1,253
                                                                     =====================

Exercisable at December 31, 2003                                              17,258              $   97
                                                                     ===================== ===================
Exercisable at December 31, 2002                                              19,301               $ 110
                                                                     ===================== ===================
Exercisable at December 31, 2001                                              11,127               $ 108
                                                                     ===================== ===================

</TABLE>


                                       85
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)



10. Employee Benefit Plan

The  Company  has  a   defined-contribution   employee  benefit  plan  that  was
established  under  provisions of Section  401(k) of the Internal  Revenue Code.
Substantially  all  full-time  regular  employees of the Company are eligible to
participate  in  the  plan.  Under  the  plan's  provisions,   an  employee  may
contribute,  on a tax-deferred basis, up to 15% of total cash compensation,  not
to exceed, within a calendar year, subject to Internal Revenue Code limitations.
The Company can make matching contributions and discretionary contributions. The
Company made matching  contributions of $588,000,  $498,000 and $565,000 for the
years ended December 31, 2003, 2002 and 2001, respectively.

11. Lease Obligations

The Company leases corporate office space,  operating facilities,  and equipment
under various  operating lease  agreements.  Future minimum lease payments under
noncancelable  operating  leases as of  December  31,  2003,  are as follows (in
thousands):

Year ending December 31
    2004                                                      $   1,294
    2005                                                            986
    2006                                                            927
    2007                                                            780
    2008                                                            651
    Thereafter                                                      574
                                                           ----------------
                                                              $   5,212
                                                           ================

Rent expense on operating leases for the years ended December 31, 2003, 2002 and
2001 was $2,589,000, $2,753,000 and $3,117,000, respectively.

12.  Related Party Transactions

In  October of 2003,  the  Company  made loans in the amount of $1.7  million to
three  officers of the Company for the purpose of exercising  12,300  options to
purchase common stock.  These recourse  loans,  which are due and payable at the
earlier of December 31, 2006 or the acquisition or merger of the Company,  carry
an annual  interest rate of 6%. The Company  recorded  approximately  $90,000 of
compensation expense related to these transactions. These loans are reflected as
a deduction to stockholders' equity.


                                       86
<PAGE>



                Meridian Occupational Healthcare Associates, Inc.
                and Subsidiaries (d/b/a CHD Meridian Healthcare)

             Notes to Consolidated Financial Statements (continued)



13. Commitments and Contingencies

Litigation

The Company  has been named as a defendant  in two  lawsuits  seeking  refund of
approximately  $920,000 in payments  received in the ordinary course of business
from two clients that filed for protection under bankruptcy laws during 2002 and
2003.  The Company  believes that amounts  received are rightfully the Company's
property.  The outcome of these lawsuits cannot be determined,  but could have a
material adverse impact on the Company.

The Company is also involved in certain legal actions and claims on a variety of
matters  related  to  the  normal  course  of  business.  It is the  opinion  of
management  that  such  legal  actions  will not have a  material  effect on the
results of operations or the financial position of the Company.

Healthcare Regulations

The healthcare  industry is subject to numerous laws and regulations of Federal,
state, and local governments.  These laws and regulations  include,  but are not
necessarily  limited to,  matters such as licensure,  accreditation,  government
healthcare  program  participation   requirements,   reimbursement  for  patient
services,  and  Medicare  and  Medicaid  fraud and abuse.  Recently,  government
activity has increased with respect to investigations and allegations concerning
possible  violations of fraud and abuse  statutes and  regulations by healthcare
providers.  Violations of these laws and  regulations  could result in expulsion
from government  healthcare programs together with the imposition of significant
fines and  penalties,  as well as significant  repayments  for patient  services
previously  billed.  Management  believes that the Company is in compliance with
fraud  and  abuse  statutes  as well as  other  applicable  government  laws and
regulations.  Compliance with such laws and regulations can be subject to future
government review and  interpretation  as well as regulatory  actions unknown or
unasserted at this time.



                                       87
<PAGE>



      UNAUDITED COMBINED CONDENSED BALANCE SHEET OF I-TRAX AND CHD MERIDIAN
    HEALTHCARE ON A PRO FORMA BASIS AS IF THE MERGER HAD BEEN CONSUMMATED ON
 DECEMBER 31, 2003 AND THE UNAUDITED COMBINED CONDENSED STATEMENTS OF OPERATIONS
                      ON A PRO FORMA BASIS AS IF THE MERGER
                     HAD BEEN CONSUMMATED ON JANUARY 1, 2002

General


         I-trax  entered into a merger  agreement,  as amended,  on December 26,
2003, with CHD Meridian  Healthcare,  a privately held company and a provider of
outsourced,  employer-sponsored  healthcare services. The merger was consummated
on March 19, 2004.

         Pursuant to the merger agreement, I-trax delivered 10,000,000 shares of
common stock,  400,000 shares of Series A Convertible  Preferred Stock, and paid
in cash, $25,508,000 to the CHD Meridian Healthcare  stockholders.  CHD Meridian
Healthcare  stockholders  will also receive  additional  shares of I-trax common
stock if CHD Meridian  Healthcare's  continuing operations following the closing
of the merger as a subsidiary of I-trax  achieve  calendar 2004  milestones  for
earnings before interest,  taxes,  depreciation and  amortization,  or EBITDA as
follows:  If EBITDA exceeds $8.1 million,  the number of such additional  shares
will be 3,473,280;  the number of such shares increases  proportionately up to a
maximum of 3,859,200 if EBITDA exceeds $9.0 million.


         I-trax funded the cash portion of the merger  consideration  by selling
1,000,000 shares of Series A Convertible Preferred Stock at $25 per share, which
are  convertible  into 10 shares of common stock at a conversion  price of $2.50
per share,  for gross  proceeds of $25 million,  and obtaining a new $20 million
senior secured credit facility with a national lender.  At closing date,  I-trax
drew down $12  million  under the  facility  to fund a portion  of the  purchase
price.

Pro Forma Condensed Combined Financial Statements

         The following information has been provided to aid you in your analysis
of the  financial  aspects of the merger  consummated  on March 19,  2004.  This
information was derived from the audited  consolidated  financial  statements of
each of I-trax and CHD Meridian Healthcare for fiscal years ended 2003 and 2002.
The information should be read together with the historical financial statements
and related notes of I-trax and CHD Meridian Healthcare contained in this Annual
Report on Form 10-KSB.

         The  unaudited  pro  forma   adjustments   are  based  on  management's
preliminary  estimates of the value of the tangible  and  intangible  assets and
liabilities  acquired. As a result, the actual determination of the value of the
tangible and intangible  assets and liabilities  acquired may differ  materially
from those presented in these unaudited pro forma condensed  combined  financial
statements. A change in the unaudited pro forma condensed combined balance sheet
adjustments of the purchase price for the acquisition  would primarily result in
the reallocation affecting the value assigned to tangible and intangible assets.
The income  statement  effect of these changes will depend on the nature and the
amount of the assets or liabilities adjusted.

         The unaudited pro forma  condensed  combined  financial  statements are
presented for informational  purposes only and are not necessarily indicative of
the  financial  position  or results  of  operations  of I-trax  that would have
occurred had the purchase been  consummated as of the dates  indicated  below in
the section  titled  "Periods  Covered." In addition,  the  unaudited  pro forma
condensed  combined financial  statements are not necessarily  indicative of the
future financial condition or operating results of I-trax.

Accounting Treatment

         The merger is accounted  for under the purchase  method of  accounting,
with I-trax treated as the acquirer.  As a result, I-trax will record the assets
and  liabilities of CHD Meridian  Healthcare at their  estimated fair values and
will record as goodwill  the excess of the  purchase  price over such  estimated
fair values.  The unaudited pro forma condensed  combined  financial  statements
reflect  preliminary  estimates of the  allocation of the purchase price for the
acquisition  that may be adjusted,  including in connection  with payment of any
earn-out  shares.  As agreed among



                                       88
<PAGE>


the parties,  the operating results of CHD Meridian  Healthcare will be combined
with the results of I-trax commencing on April 1, 2004.

Periods Covered

         The following  unaudited pro forma condensed  combined balance sheet as
of December  31, 2003 is presented as if the merger had occurred on December 31,
2003. The unaudited pro forma  condensed  combined  statements of operations for
the years ended December 31, 2003 and 2002 are presented as if the companies had
merged as of January 1, 2002.

<TABLE>
<CAPTION>

<S>                                   <C>             <C>                     <C>             <C>

                   PRO FORMA CONDENSED COMBINED BALANCE SHEET
                          DECEMBER 31, 2003 (UNAUDITED)

                     (In thousands, except per share price.)

                                                     Meridian                               Pro Forma
                                                   Occupational                            Consolidated
                                                    Healthcare                             I-trax, Inc.
                                  I-trax, Inc.      Associates,                                 and
                                      and            Inc., and              Pro Forma       Subsidiaries
                                  Subsidiaries     Subsidiaries            Adjustments      (Unaudited)
                                  December 31,     December 31,     Adj-    (Unaudited)     December 31,
                                    2003 (a)         2003 (b)       Ref.       (c)             2003
                                 --------------- ------------------------ --------------- ----------------
   Current assets


   Cash and cash equivalents          $     574       $     11,299   A        $   37,000      $     4,470
                                                                     F           (25,508)
                                                                     F            (1,169)
                                                                     C            (1,500)
                                                                     E            (9,492)
                                                                     H              (500)
                                                                     I            (5,000)
                                                                     N            (1,234)
   Accounts receivable, net                 549             17,167                                 17,716
   Other current assets                     188              2,002                                  2,190
                                 --------------- ------------------       --------------- ----------------
   Total current assets                   1,311             30,468                (7,403)          24,376
                                 --------------- ------------------       --------------- ----------------

   Investments in CHD Meridian               --                 --   F            86,277               --
                                                                     G           (86,277)
   Property, equipment and
      furniture, net                      1,515              2,880                                  4,395
   Deferred marketing costs,
      net                                   831                 --                                    831
   Deposit on intellectual
      license                               160                 --                                    160
   Deferred acquisition costs                85                 --                                     85
   Debt issuance costs                       35                 --                                     35
   Goodwill                               8,424              8,181   G            57,063           73,668
   Customer lists\relations,
      net                                   768              7,101   G            22,235           30,104
   Non-compete agreements, net              449                                                       449
   Other intangibles, net                    --                 70   G             1,030            1,100
   Other long term assets                    25                 36                                     61
                                 --------------- ------------------       --------------- ----------------

   Total assets                     $    13,603       $     48,736            $   72,925     $    135,264
                                 =============== ==================       =============== ================


                         (Continues on following page.)


</TABLE>


                                       89
<PAGE>

<TABLE>
<CAPTION>

<S>                                         <C>              <C>                                    <C>
                         (Continues from previous page.)


                                                     Meridian                                Pro Forma
                                                   Occupational                             Consolidated
                                                    Healthcare                             I-trax, Inc.
                                   I-trax, Inc.     Associates,                                 and
                                      and            Inc., and              Pro Forma       Subsidiaries
                                  Subsidiaries     Subsidiaries            Adjustments      (Unaudited)
                                  December 31,     December 31,     Adj.   (Unaudited)     December 31,
                                    2003 (a)         2003 (b)       Ref.       (c)             2003
                                 --------------- ------------------       --------------- ----------------

Current liabilities


Accounts payable                            606              5,955                                  6,561
Accrued expenses                            361              4,088   N              (156)           4,293
Due to related parties                      280                 --   N              (280)              --
Deferred revenue                            240                951                                  1,191
Other current liabilities                   115              7,586                                  7,701
                                 --------------- ------------------       --------------- ----------------
Total current liabilities                 1,602             18,580                  (436)          19,746
                                 --------------- ------------------       --------------- ----------------

Common Stock Warrants                     2,760                 --   L               350               --
                                                                     M            (3,110)
Credit lines payable, long
   term                                      --                 --   A            12,000           12,000
Promissory notes and
   debenture payable, net of
   discount                                 798                 --   N              (798)              --

Other long term liabilities                  58              2,548                                  2,606
                                 --------------- ------------------       --------------- ----------------
Total liabilities                         5,218             21,128                 8,006           34,352
                                 --------------- ------------------       --------------- ----------------




Preferred stock                              --                 --   A            25,000           30,000
                                                                     F            10,000
                                                                     I            (5,000)
Common stock and additional
   paid -in-capital                      47,290             66,923   F            49,600          135,217
                                                                     C            (1,500)
                                                                     E            (9,492)
                                                                     B            24,600
                                                                     D             2,125
                                                                     D            (2,125)
                                                                     G           (45,264)
                                                                     L              (350)
                                                                     H               300
                                                                     M             3,110
Accumulated deficit and other           (38,905)           (39,315)  G            39,315          (64,305)
                                                                     B           (24,600)
                                                                     H              (800)
                                 --------------- ------------------       --------------- ----------------

Total stockholders' equity                8,385             27,608                64,919          100,912
                                 --------------- ------------------       --------------- ----------------

Total liabilities and
   stockholder's equity             $    13,603       $     48,736            $   72,925     $    135,264
                                 =============== ==================       =============== ================


                         (Continues on following page.)


</TABLE>


                                       90
<PAGE>


                         (Continues from previous page.)

     (a)  Represents historical balance sheet of I-trax, Inc and subsidiaries as
          of December 31, 2003 derived from the audited  consolidated  financial
          statements included in this Annual Report on Form 10-KSB.

     (b)  Represents   historical   balance   sheet  of  Meridian   Occupational
          Healthcare  Associates,  Inc. and subsidiaries as of December 31, 2003
          derived from the audited consolidated financial statements included in
          this Annual Report on Form 10-KSB.

     (c)  The  pro  forma  adjustments  give  effect  to the  financings  of the
          acquisition  and the  acquisition of CHD Meridian  Healthcare as if it
          were consummated as of December 31, 2003.






See  accompanying  notes to unaudited  pro forma  condensed  combined  financial
information.


                                       91
<PAGE>



<TABLE>
<CAPTION>

<S>                                           <C>                   <C>                                              <C>

              PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 2003
                                   (UNAUDITED)

                     (In thousands, except per share price.)

                                                                    Meridian                                         Pro Forma
                                                                  Occupational                                      consolidated
                                           I-trax, Inc. and        Healthcare                                      I-trax, Inc. and
                                          Subsidiaries for     Associates, Inc. and                                Subsidiaries for
                                           the year ended      Subsidiaries for the             Pro Forma         the year ended
                                         December 31, 2003     year ended December    Adj.     adjustments        December 31, 2003
                                                (a)               31, 2003 (b)        Ref.    (Unaudited) (c)         (Unaudited)
                                        --------------------- ---------------------- ---------------------------  ------------------


Revenue                                       $        4,189        $       117,777                                  $      121,966
                                        --------------------- ----------------------                            --------------------

Cost and expenses:
  Cost of revenue/operating expenses                   1,372                 96,750                                          98,122
  General and administrative                           4,210                 15,005                                          19,215
  Depreciation and amortization                        1,702                  1,461   J                 1,846                 5,009
  Impairment charge related to
   intangible assets                                     458                                                                    458
  Marketing and publicity                              1,763                     --                                           1,763
                                        --------------------- ----------------------       -------------------  --------------------
Total costs and expenses                               9,505                113,216                     1,846               124,567
                                        --------------------- ----------------------       -------------------  --------------------

Operating (loss) income                               (5,316)                 4,561                    (1,846)               (2,601)
                                        --------------------- ----------------------       -------------------  --------------------

Other income (expenses):
  Proceeds from life insurance policy                    500                     --                                             500
  Costs in connection with terminated
   acquisition                                          (200)                    --                                            (200)
  Amortization of debt issuance and
   conversion costs                                     (337)                    --                                            (337)
  Increase in common stock warrants                     (301)                    --   L                  (350)                 (651)
  Interest (expense) income and
   financing costs                                    (2,405)                    87   K                  (720)               (3,038)
                                        --------------------- ----------------------       -------------------  --------------------
Total other expenses                                  (2,743)                    87                    (1,070)               (3,726)
                                        --------------------- ----------------------       -------------------  --------------------

Net income (loss) before provision for
   income taxes                                       (8,059)                 4,648                    (2,916)               (6,327)
                                        --------------------- ----------------------       -------------------  --------------------

Provision for income taxes                                --                    339                        --                   339
                                        --------------------- ----------------------       -------------------  --------------------

Net income (loss)                             $       (8,059)        $        4,309            $       (2,916)       $       (6,666)
                                        ===================== ======================       ===================  ====================

Loss per common share:

Basic and diluted                             $        (0.74)                                                        $        (0.32)
                                        =====================                                                   ====================

Weighted average number of shares
   outstanding:                                       10,905                          F                10,000                20,905
                                        =====================                              ===================  ====================



                         (Continues on following page.)

</TABLE>



                                       92
<PAGE>


                         (Continues from previous page.)

     (a)  Represents   historical   statement  of   operations   of  I-trax  and
          subsidiaries  for the year ended  December  31, 2003  derived from the
          audited  financial  statements  included in this Annual Report on Form
          10-KSB.

     (b)  Represents   historical  statement  of  operations  for  CHD  Meridian
          Healthcare  and  subsidiaries  for the year ended  December  31,  2003
          derived from the audited financial  statements included in this Annual
          Report on Form 10-KSB.

     (c)  The  pro  forma  adjustments  give  effect  to the  financings  of the
          acquisition  and the  acquisition of CHD Meridian  Healthcare as if it
          were consummated on January 1, 2002.







See  accompanying  notes to unaudited  pro forma  condensed  combined  financial
information.


                                       93
<PAGE>


<TABLE>
<CAPTION>


              PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
                      FOR THE YEAR ENDED DECEMBER 31, 2002
                                   (UNAUDITED)

                     (In thousands, except per share price.)

                                                                  Meridian
                                                                Occupational                                       Pro Forma
                                          I-trax, Inc. and       Healthcare                                      consolidated
                                          Subsidiaries for   Associates, Inc. and                              I-trax, Inc. and
                                          the year ended     Subsidiaries for the            Pro Forma         Subsidiaries for
                                           December 31,       year ended December    Adj.    adjustments       the year ended
                                             2002 (a)            31, 2002 (b)        Ref.    (Unaudited) (c)   December 31, 2002
                                         ------------------ ---------------------- -------  ---------------- --------------------

<S>                                           <C>                 <C>                                             <C>
Revenue                                       $      3,932        $       107,124                                 $      111,056
                                         ------------------ ----------------------                           --------------------

Cost and expenses:
  Cost of revenue/operating expenses                 1,229                 88,858                                         90,087
  General and administrative                         5,955                 14,275    H                  500               20,730
  Depreciation and amortization                      2,045                  1,854    J                1,846                5,745
  Marketing and publicity                              774                     --                                            774
  Research & Development                               410                     --                                            410
  Impairment charges related to
   intangible assets                                 1,648                     --                                          1,648
                                         ------------------ ----------------------          ---------------- --------------------
Total costs and expenses                            12,061                104,987                     2,346              119,394
                                         ------------------ ----------------------          ---------------- --------------------

Operating (loss) income                             (8,129)                 2,137                    (2,346)              (8,338)
                                         ------------------ ----------------------          ---------------- --------------------

Other income (expenses):
  Amortization of debt issuance and
   conversion costs                                   (187)                    --                                           (187)
  Interest (expense) income and
   financing costs                                  (1,108)                   124    K                 (720)              (1,704)
                                         ------------------ ----------------------          ---------------- --------------------
Total other expenses                                (1,295)                   124                      (720)              (1,891)
                                         ------------------ ----------------------          ---------------- --------------------

Net income(loss) before provision for
   income taxes                                     (9,424)                 2,261                    (3,066)             (10,229)
                                         ------------------ ----------------------          ---------------- --------------------

Provision for income taxes                              --                    337                                            337
                                         ------------------ ----------------------          ---------------- --------------------

Net Income (loss)                                   (9,424)                 1,924                    (3,066)             (10,566)

Less: dividends applicable to preferred
   stockholders                                         --                     --   B, F             34,440               34,440
                                         ------------------ ----------------------          ---------------- --------------------

Net income (loss) applicable to common
   stock                                      $     (9,424)        $        1,924              $    (37,506)      $      (45,006)
                                         ================== ======================          ================ ====================

Loss per common share:

Basic and diluted                             $      (1.04)                                                        $       (2.36)
                                         ==================                                                  ====================

Weighted average number of shares
   outstanding:                                      9,097                           F               10,000               19,097
                                         ==================                                 ================ ====================


</TABLE>


                         (Continues on following page.)


                                       94
<PAGE>


                         (Continues from previous page.)



     (a)  Represents   historical   statement  of   operations   of  I-trax  and
          subsidiaries  for the year ended  December  31, 2002  derived from the
          audited  financial  statements  included in this Annual Report on Form
          10-KSB.

     (b)  Represents   historical  statement  of  operations  for  CHD  Meridian
          Healthcare  and  subsidiaries  for the year ended  December  31,  2002
          derived from the audited financial  statements included in this Annual
          Report on Form 10-KSB.

     (c)  The  pro  forma  adjustments  give  effect  to the  financings  of the
          acquisition  and the  acquisition of CHD Meridian  Healthcare as if it
          were consummated on January 1, 2002.






See  accompanying  notes to unaudited  pro forma  condensed  combined  financial
information.



                                       95
<PAGE>


      NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

         The pro forma adjustments to the condensed combined balance sheet below
give effect to the financing of the CHD Meridian Healthcare  acquisition and the
acquisition  of CHD Meridian  Healthcare as if they were both  consummated as of
December  31,  2003.  The  pro  forma  adjustments  to  the  condensed  combined
statements of operations  below give effect to the financing of the CHD Meridian
Healthcare acquisition and the acquisition of CHD Meridian Healthcare as if they
were both consummated as of January 1, 2002.

A.       To give effect to the receipt of $37,000 of cash comprised of a $12,000
         draw down under a senior credit facility and $25,000 from the issuance
         of 1,000,000 shares of I-trax's Series A Convertible Preferred Stock at
         $25 per share. Each share of Series A Convertible Preferred Stock is
         convertible into 10 shares of I-trax common stock at $2.50 per share.


B.       In connection with the issuance of Series A Convertible Preferred
         Stock, I-trax reported $24,600 as a deemed dividend to preferred
         stockholders, representing the value of the beneficial conversion value
         for the underlying common stock. The beneficial conversion value is the
         benefit realized by the preferred stockholder and is treated as a
         dividend for purpose of computing earnings per share. The dividend is
         computed by multiplying the difference between the market value of the
         underlying common stock at closing of the merger ($4.96 per share), and
         the conversion price ($2.50 per share) by the number of shares of
         common stock for which the preferred is convertible into (10,000,000
         shares).


C.       To give effect to the placement agent commission fees associated with
         the sale of $25,000 of Series A Convertible Preferred Stock computed at
         6% of the gross proceeds or $1,500 in cash.

D.       To give effect to the additional placement agent commission fees
         associated with the sale of $25,000 of Series A Convertible Preferred
         Stock. The consideration consists of warrants to purchase 500,000
         shares of common stock at $2.50 per share. Based on the Black-Scholes
         model, I-trax has valued such warrants at $2,125.

E.       To give effect to CHD Meridian Healthcare's redeeming approximately
         $9,492 of common stock and options from its current stockholders and
         option holders.


F.       To give effect to the acquisition of CHD Meridian Healthcare estimated
         at $86,277 as of March 19, 2004. The pro forma adjustment gives effect
         to the following items: (1) disbursement of the cash portion of the
         acquisition in the amount of $25,508, as adjusted for the redemption of
         CHD Meridian Healthcare common stock and options, and for a minimum
         cash balance requirement as per the merger agreement; (2) estimated
         disbursements in connection with the costs of the transaction amounting
         to $1,169; (3) issuance of 10,000,000 shares of I-trax common stock
         valued at $4.96 per share, or $49,600; (4) issuance of 400,000 shares
         of convertible preferred stock at $25 per share or $10,000, convertible
         into 4,000,000 shares of I-trax common stock. In connection with the
         issuance of the 400,000 shares of Series A Convertible Preferred Stock,
         I-trax reported $9,840 as a deemed dividend to the preferred
         stockholders, representing the beneficial conversion value for the
         underlying common stock. The beneficial conversion value is the benefit
         realized by the preferred stockholder and is treated as a dividend for
         purpose of computing earnings per share. The dividend is computed by
         multiplying the difference between the market value of the underlying
         common stock at closing of the merger ($4.96 per share), and the
         conversion price ($2.50 per share) by the number of shares of common
         stock for which the preferred is convertible into (4,000,000 shares).


G.       To give effect to the consolidation and the elimination of CHD Meridian
         Healthcare's equity and preliminarily to allocate the purchase price
         over the estimated fair values of the assets and liabilities acquired
         with the excess assigned to goodwill.


H.       To give effect to a $500 cash bonus pool approved by the compensation
         committee of the board of directors of I-trax for employees assisting
         with the merger.




                                       96
<PAGE>


I.       To give effect to the redemption of 200,000 shares of Series A
         Convertible Preferred Stock following the merger from certain CHD
         Meridian Healthcare stockholders.


J.       To give effect to the amortization expense for the respective periods
         utilizing an estimated amortizable life of fourteen years as it relates
         to customer lists/relations acquired and four years as it relates to
         other intangible.


K.       To give effect to the interest expense associated with the draw down of
         $12,000 under the credit facility, which has been utilized to fund a
         portion of the acquisition price as discussed in Note A above.

L.       To give effect to the increase in common stock warrants from January 1,
         2003 to February 17, 2004 (the effective date of the registration
         statement) as required by EITF 00-19.

M.       To give effect to the reclassification of the common stock warrant
         liability into equity on February 14, 2004.

N.       To give effect to the repayments of obligations subsequent to the year
         end and as part of the merger transaction.



                                       97
<PAGE>



ITEM 8.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

         There are no changes and disagreements with accountants on accounting
or financial disclosure.


ITEM 8A.  CONTROLS AND PROCEDURES

         Our management, under the supervision and with the participation of the
principal executive officer and principal financial officer, have evaluated the
effectiveness of our controls and procedures related to our reporting and
disclosure obligations as of December 31, 2003, which is the end of the period
covered by this Annual Report on Form 10-KSB. Based on that evaluation, the
principal executive officer and principal financial officer have concluded that
our disclosure controls and procedures are sufficient to provide that (a)
material information relating to us, including our consolidated subsidiaries, is
made known to these officers by our and our consolidated subsidiaries other
employees, particularly material information related to the period for which
this periodic report is being prepared; and (b) this information is recorded,
processed, summarized, evaluated and reported, as applicable, within the time
periods specified in the rules and forms promulgated by the Securities and
Exchange Commission.

         There were no changes that occurred during the fiscal quarter ended
December 31, 2003 that have materially affected, or are reasonable likely to
materially affect, our internal controls over financial reporting.


                                    PART III

ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
          COMPLIANCE WITH SECTION 16 (a) OF THE EXCHANGE ACT

         See the information set forth in the section entitled "Proposal No. 1
Election of Directors" in I-trax's Proxy Statement for the 2004 Annual Meeting
of Stockholders to be filed with the Securities and Exchange Commission within
120 days after the end of our fiscal year ended December 31, 2003, or 2004 Proxy
Statement, which is incorporated herein by reference.

ITEM 10.  EXECUTIVE COMPENSATION

         See the information set forth in the section entitled "Executive
Compensation" in the 2004 Proxy Statement, which is incorporated herein by
reference.

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

         See the information set forth in the section entitled "Security
Ownership of Certain Beneficial Owners and Management And Related Stockholder
Matters" in the 2004 Proxy Statement, which is incorporated herein by reference.

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         See the information set forth in the section entitled "Certain
Relationships and Related Transactions" in the 2004 Proxy Statement, which is
incorporated herein by reference.



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<PAGE>



ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         NUMBER            EXHIBIT TITLE
        -------            -------------

         2.1      Merger Agreement,  dated as of December 26, 2003, by and among
                  I-trax,  Inc.  Meridian  Occupational  Healthcare  Associates,
                  Inc.,   doing  business  as  CHD  Meridian   Healthcare,   DCG
                  Acquisition,   Inc.,   and  CHD  Meridian   Healthcare,   LLC.
                  (Incorporated  by reference to I-trax's current report on Form
                  8-K, filed December 29, 2003.)

         2.2      Amendment to Merger Agreement,  dated February 4, 2004, by and
                  among   I-trax,   Inc.   Meridian   Occupational    Healthcare
                  Associates,  Inc., doing business as CHD Meridian  Healthcare,
                  DCG  Acquisition,  Inc.,  and CHD  Meridian  Healthcare,  LLC.
                  (Incorporated  by  reference  to Appendix A to I-trax's  Proxy
                  Statement  dated  February  6, 2004 filed  pursuant to Section
                  14(a) of the Securities Exchange Act, as amended).

         3.1      Certificate of Incorporation  of I-trax,  Inc. filed September
                  15, 2000  (Incorporated by reference to Exhibit 3.1 to I-trax,
                  Inc.'s  Registration  Statement on Form S-4,  Registration No.
                  333-48862, filed on October 27, 2000.)

         3.2      Certificate of Amendment to Certificate  of  Incorporation  of
                  I-trax, Inc. filed June 4, 2001. (Incorporated by reference to
                  Exhibit 3.2 to I-trax, Inc.'s Annual Report on Form 10-KSB for
                  the fiscal year ended  December  31,  2001,  filed on April 4,
                  2002.)

         3.3      Certificate of Amendment to Certificate  of  Incorporation  of
                  I-trax,  Inc.  filed on  January  2,  2003.  (Incorporated  by
                  reference to Exhibit 3.3 to I-trax,  Inc.'s  Annual  Report on
                  Form 10-KSB for the fiscal year ended December 31, 2002, filed
                  on April 15, 2003.)

         3.4      By-laws of I-trax, Inc.  (Incorporated by reference to Exhibit
                  3.2 to  I-trax,  Inc.'s  Registration  Statement  on Form S-4,
                  Amendment No.1, Registration No. 333-48862,  filed on December
                  22, 2000.)

         4.1      Form of Common  Stock  certificate  of I-trax,  Inc.'s  Common
                  Stock.  (Incorporated  by  reference to Exhibit 4.1 to I-trax,
                  Inc.'s  Annual Report on Form 10-KSB for the fiscal year ended
                  December 31, 2001, filed on April 4, 2002.)


         4.2*     Certificate  of  Designations,  Preferences  and Rights of the
                  Series A Convertible  Preferred Stock of I-trax, Inc. filed on
                  March 19, 2004.


         4.3      Form of warrant  certificate of I-trax, Inc. issued to private
                  placement  participants in private placement closed on October
                  31, 2003. (Incorporated by reference to Exhibit 4.1 to I-trax,
                  Inc.'s  Registration  Statement on Form S-3,  Registration No.
                  333-110891, filed on December 3, 2003.)

         4.4      Financial  Advisor's  Warrant  Agreement  between  Westminster
                  Securities  Corporation  and I-trax,  Inc. dated as of May 23,
                  2003,  with a  form  of  warrant  attached.  (Incorporated  by
                  reference  to  Exhibit  4.2  to  I-trax,  Inc.'s  Registration
                  Statement on Form S-3,  Registration No. 333-110891,  filed on
                  December 3, 2003.)

         4.5      Financial  Advisor's  Warrant  Agreement  between  Westminster
                  Securities  Corporation  and I-trax,  Inc. dated as of October
                  31, 2003, with a form of warrant  attached.  (Incorporated  by
                  reference  to  Exhibit  4.3  to  I-trax,  Inc.'s  Registration
                  Statement on Form S-3,  Registration No. 333-110891,  filed on
                  December 3, 2003.)



                                       99
<PAGE>


         4.6      Financial  Advisor's  Warrant  Agreement  between  Westminster
                  Securities  Corporation and I-trax,  Inc. dated as of December
                  11, 2003, with a form of warrant  attached.  (Incorporated  by
                  reference  to  Exhibit  4.4  to  I-trax,  Inc.'s  Registration
                  Statement  on Form  S-3,  Amendment  No. 1,  Registration  No.
                  333-110891, filed on February 2, 2003.)


         4.7*     Form of warrant certificate of I-trax, Inc. issued as of March
                  19, 2004 to placement agents of Series A Convertible Preferred
                  Stock.


         10.1     Lease Agreement dated April 10, 2000 between I-Trax.com,  Inc.
                  and OLS Office  Partners,  L.P.  (Incorporated by reference to
                  Exhibit  10.1 to  I-Trax.com,  Inc.'s  Quarterly  Report  Form
                  10-QSB for the quarter  ended June 30,  2000,  filed on August
                  15, 2000.)

         10.2     Lease Agreement dated May 28, 2002, between I-trax, Inc. and F
                  & J  Enterprises,  Inc. dba Bedford  Plaza.  (Incorporated  by
                  reference  to  Exhibit  10.23 to I-trax,  Inc.'s  Registration
                  Statement  on Form SB-2,  Amendment  No. 1,  Registration  No.
                  333-87134, filed on July 10, 2002.)

         10.3     Employment Agreement effective as of December 29, 2000 between
                  I-trax Health Management  Solutions,  Inc. (f/k/a  I-Trax.com,
                  Inc.) and  Frank A.  Martin.  (Incorporated  by  reference  to
                  Exhibit  10.17 to I-trax  Health  Management  Solutions,  Inc.
                  (f/k/a I-Trax.com,  Inc.) Annual Report on Form 10-KSB for the
                  fiscal year ended December 31, 2000, filed on April 2, 2001.)

         10.4     Employment Agreement effective as of December 29, 2000 between
                  I-trax Health Management  Solutions,  Inc. (f/k/a  I-Trax.com,
                  Inc.) and Gary Reiss.  (Incorporated  by  reference to Exhibit
                  10.19 to  I-trax  Health  Management  Solutions,  Inc.  (f/k/a
                  I-Trax.com,  Inc.) Annual Report on Form 10-KSB for the fiscal
                  year ended December 31, 2001, filed on April 2, 2001.)

         10.5     I-Trax.com,  Inc. 2000 Equity Compensation Plan. (Incorporated
                  by reference  to Exhibit  10.16 to  I-Trax.com's  Registration
                  Statement on Form 10-SB, Registration No. 000-30275.)

         10.6     I-trax, Inc. 2001 Equity  Compensation Plan.  (Incorporated by
                  reference to  Attachment to I-trax's  2001  Preliminary  Proxy
                  Statement on Schedule 14A, filed on April 20, 2001.)

         10.7     License and  Maintenance  Agreement  dated as of September 30,
                  2002,  between I-trax,  Inc. and UICI, Inc.  (Incorporated  by
                  reference to Exhibit 10.1 to I-trax,  Inc.'s Current Report on
                  Form 8-k for filed on October 8, 2002.)

         10.8     Employment  Agreement  dated as of October  15,  2002  between
                  I-trax  Health  Management  Solutions,  Inc. and John Palumbo.
                  (Incorporated by reference to Exhibit 10.24 to I-trax,  Inc.'s
                  Annual  Report  on Form  10-KSB  for  the  fiscal  year  ended
                  December 31, 2002, filed on April 15, 2003.)


         10.9*    Employment  Agreement  dated as of  January  1,  2000  between
                  Meridian Occupational Healthcare Associates,  Inc. and Shannon
                  Wolcott Farrington.

         10.10*   Employment  Agreement  dated as of  January  1,  2000  between
                  Meridian Occupational Healthcare Associates,  Inc. and Haywood
                  D. Cochrane, Jr.

         10.11*   Credit  Agreement  dated as of  March  19,  2004 by and  among
                  I-trax,   Inc.,  all  subsidiaries  of  the  Borrower  now  or
                  hereafter  becoming parties to the Credit Agreement,  and Bank
                  of America, N.A.




                                      100
<PAGE>



         10.12**  License And Services Agreement effective as of March 5th, 2004
                  among  I-trax  Health  Management  Solutions,  Inc.,  Meridian
                  Occupational  Healthcare Associates,  Inc. (d/b/a CHD Meridian
                  Healthcare) and BioSignia, Inc.

         21*      Subsidiaries of I-trax, Inc.

         23.1**   Consent of Goldstein Golub Kessler LLP.

         23.2**   Consent of Ernst & Young LLP.

         31.1**   Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted
                  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

         31.2**   Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted
                  Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

         32.1**   Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted
                  Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

         32.2**   Certification  Pursuant to 18 U.S.C.  Section 1350, as Adopted
                  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of 2002.
                  ---------------------------------

         *        Previously filed.
         **       Filed herewith.



(b)      Reports on Form 8-K

         We filed a current report on Form 8-K with the Securities and Exchange
Commission on October 17, 2003 to report the closing of a private placement of
common stock and warrants.


         We furnished a current report on Form 8-K to the Securities and
Exchange Commission on November 17, 2003 to report results of operations and
financial condition.


         We filed a current report on Form 8-K with the Securities and Exchange
Commission on December 29, 2003 to report the signing of the merger agreement
with CHD Meridian Healthcare.

         We furnished a current report on Form 8-K with the Securities and
Exchange Commission on December 30, 2003 to report certain Regulation FD
disclosures.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

         See the information set forth in the section entitled "Principal
Accounting Fees and Services" in the 2004 Proxy Statement, which is incorporated
herein by reference.



                                      101
<PAGE>



                                   SIGNATURES


         In accordance with Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized as of June 2, 2004.



                                   I-TRAX, INC.

                                   By:      /s/ Frank A. Martin
                                       -----------------------------------------
                                            Frank A. Martin, Chairman and
                                            Chief Executive Officer



                                      102