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
       incorporation or organization)            Identification No.)



              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




<PAGE>


                              Explanatory Statement


         This amendment amends I-trax, Inc.'s Annual Report on Form 10-KSB for
the year ended December 31, 2003, filed with the Securities and Exchange
Commission on April 8, 2004 and amended on June 3, 2004, to change the value
assigned to I-trax's common stock for purposes of matters related to the
acquisition of CHD Meridian Healthcare from $4.96 to $3.63 in Managements
Discussion and Analysis of Financial Condition and Results of Operations (Item
6) and in Note 19 to I-trax's financial statements.

         This amendment also deletes from the Annual Report, as amended, (1) the
consolidated financial statements of Meridian Healthcare Associates, Inc. and
subsidiaries (d/b/a CHD Meridian Healthcare) for the years ended December 31,
2003, 2002 and 2001 and (2) 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. These financial statements and pro forma information are
contained in an amendment filed on August 11, 2004 to I-trax's Current Report on
Form 8-K, originally filed on March 30, 2004 and previously amended on June 2,
2004.

         Except as described above, no other changes have been made to our
Annual Report on Form 10-KSB/A for the year ended December 31, 2003 filed on
June 3, 2004.



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




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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.

         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 acquisition
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.





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<PAGE>

         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 $3.63 per share, the average closing share price for
the three days prior and the three days after the announcement of the merger,
and before the issuance of any of the earn-out shares, is approximately $73.0
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.

         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                       $ 117,599,000         $  107,384,000
           Expenses                      124,159,000            117,844,000
                                   ------------------    -------------------
           Net loss                    $  (6,560,000)        $  (10,460,000)
                                   ==================    ===================

         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."



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Key Trends and Analytical Points

         The following is a summary of key trends and analytical points covered
in greater detail in management's discussion and analysis:

     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 CHD Meridian
          Healthcare revenue, operational expenses, general and administration
          expenses, depreciation and amortization expenses and interest expense
          will also increase.

     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 expectation, we continued to
          increase our service revenue and decrease our technology revenue.

     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 is partially offset by an increase in marketing
          and publicity expenses.

     o    Other Income and Expenses: Interest expense and financing costs
          increased from year ended December 31, 2002 to year ended December 31,
          2003.

     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, which together with operating
          cash flow and amounts available under a newly established secured
          credit facility should be sufficient to conduct our operations for the
          next twelve months.

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



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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.

         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.



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<PAGE>


         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 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.



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<PAGE>


         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 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



                                       7
<PAGE>


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.

         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>





                                       8
<PAGE>


         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.

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



                                       9
<PAGE>



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 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.




                                       10
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                              <C>

ITEM 7.  FINANCIAL STATEMENTS


                          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...........................................12

Balance sheet at December 31, 2003................................................................13

Statements of operations for the years ended December 31, 2003 and 2002...........................14

Statement of stockholders' equity for the years ended December 31, 2003 and 2002..................15

Statements of cash flows for the years ended December 31, 2003 and 2002...........................17

Notes to consolidated financial statements........................................................19


</TABLE>




                                       11
<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.







                                       12
<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.

</TABLE>



                                       13
<PAGE>


<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>



                                       14
<PAGE>

<TABLE>
<CAPTION>

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

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

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>



                                       15
<PAGE>

<TABLE>
<CAPTION>

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

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

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>




                                       16
<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>


                                       17
<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>



                                       18
<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.



                                       19
<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

The Company recognizes service revenue as the services are rendered. The Company
contracts with its customers to provide services based on an established monthly
fee, a per-call charge or a combination of both.

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 the
relative fair value of the elements.



                                       20
<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)

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  customers.  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 were issued to an 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.




                                       21
<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:


                                       22
<PAGE>

<TABLE>
<CAPTION>

<S>                                                         <C>             <C>


                          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)

                                                                 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.


                                       23
<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.


                                       24
<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
                                                           ============


                                       25
<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.



                                       26
<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.



                                       27
<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.


                                       28
<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.


                                       29
<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.


                                       30
<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.


                                       31
<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.




                                       32
<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>

<S>                                                                          <C>

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


                                       33
<PAGE>



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.


                                       34
<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.


                                       35
<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.


                                       36
<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.



                                       37
<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.


                                       38
<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).


                                       39
<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.


                                       40
<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
$36,300,000 utilizing $3.63 (the average closing market price for the three days
prior and three days after the  announcement  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 $ 72,977,000 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                                        $ 117,599,000    $ 107,384,000
Expenses                                       124,159,000      117,844,000
                                             -------------    -------------
Net loss                                     $  (6,560,000)   $ (10,460,000)
                                             =============    =============
Less: Dividends applicable to
  Preferred Stockholders                     $        --      $  15,820,000
                                             =============    =============

Net loss applicable to common stock          $  (6,560,000)   $ (26,280,000)
                                             =============    =============
Loss per share
  Basic and Diluted                          $        (.31)   $       (1.38)
                                             =============    =============
Weighted average shares outstanding
  Basic and Diluted                             20,905,000       19,097,000
                                             =============    =============

                                       41
<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.




                                       42
<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 August 11, 2004.


                         I-TRAX, INC.

                                       By:      /s/ Frank A. Martin
                                           -------------------------------------
                                                Frank A. Martin, Chairman and
                                                Chief Executive Officer






                                       43