**United
      States**


**Securities
      and Exchange Commission**


**Washington,
      D.C. 20549**





**FORM
      10-Q**





[X]
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**For
                the quarterly period ended: March 31, 2006[ 
                ]
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**Commission
                File Number: 001-31584





**I-TRAX,
      INC.**


(Exact
      name of registrant as specified in its charter)





**Delaware**
            
            **23-3057155**(State
                or other jurisdiction of
              incorporation
                or organization)
            
            (I.R.S.
                Employer Identification Number)





**4
      Hillman Drive, Suite 130**


**Chadds
      Ford, Pennsylvania 19317**





(Address
      of principal executive offices)


(Zip
      Code)





**(610)
      459-2405**


(Registrant’s
      telephone number, including area code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days.


Yes
      [X]  No
      [
      ]





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer” and large accelerated filer in Rule 12b-2 of Securities Exchange Act of
      1934. (Check one):





Large
                accelerated filer [ ]
            Accelerated
                filer [ ]
            Non-Accelerated
                filer [X]





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Securities Exchange Act of 1934).  Yes
      [
      ]  No
      [X]





As
      of May
      1, 2006, there were 36,321,421 shares of the registrant’s $0.001 par value
      common stock outstanding.












**TABLE
      OF CONTENTS**




**Item**
            
            **Page****Part
                I - Financial Information**1.
            Financial
                Statements
            3Report
                of Independent Registered Public Accounting
                Firm
            3Condensed
                Consolidated Balance Sheet at March 31, 2006 and
                December 31, 2005
            4Condensed
                Consolidated Statements of Operations for the three
                months ended March 31, 2006 and 2005
            5Condensed
                Consolidated Statements of Cash Flows for the
                three months ended March 31, 2006 and 2005
            6Notes
                to Condensed Consolidated Financial Statements
            72.
            Management’s
                Discussion and Analysis of Financial Condition
                and Results of Operations
            163.
            Quantitative
                and Qualitative Disclosure About Market
                Risks
            224.
            Controls
                and Procedures
            22**Part
                II - Other Information**1.
            Legal
                Proceedings
            231A.
            Risk
                Factors
            232.
            Unregistered
                Sales of Equity Securities and Use of
                Proceeds
            233.
            Defaults
                Upon Senior Securities
            244.
            Submission
                of Matters to a Vote of Security
                Holders
            245.
            Other
                Information
            246.
            Exhibits
            24





2








**PART
      I.**  **FINANCIAL
      INFORMATION**





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


**Report
      of Independent Registered Public Accounting Firm**








To
      the
      Board of Directors and


Stockholders
      of I-trax, Inc.





We
      have
      reviewed the accompanying condensed consolidated balance sheet of I-trax, Inc.
      (a Delaware corporation) and Subsidiaries as of March 31, 2006, and the related
      condensed consolidated statements of operations and cash flows for the
      three-month periods ended March 31, 2006 and 2005. These interim financial
      statements are the responsibility of the company’s management.





We
      conducted our reviews in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). A review of interim financial
      information consists principally of applying analytical procedures and making
      inquiries of persons responsible for financial and accounting matters. It is
      substantially less in scope than an audit conducted in accordance with standards
      of the Public Company Accounting Oversight Board, the objective of which is
      the
      expression of an opinion regarding the condensed consolidated financial
      statements taken as a whole. Accordingly, we do not express such an
      opinion.





Based
      on
      our reviews, we are not aware of any material modifications that should be
      made
      to the condensed consolidated financial statements referred to above for them
      to
      be in conformity with United States generally accepted accounting
      principles.





We
      have
      previously audited, in accordance with standards of the Public Company
      Accounting Oversight Board (United States), the balance sheet as of December
      31,
      2005, and the related consolidated statements of operations, stockholders’
equity and cash flows, for the year then ended (not presented herein); and
      in
      our report dated February 3, 2006, we expressed an unqualified opinion on those
      consolidated financial statements. In our opinion, the information set forth
      in
      the accompanying condensed consolidated balance sheet as of December 31, 2005,
      is fairly stated, in all material respects, in relation to the consolidated
      balance sheet from which it has been derived.





As
      disclosed in Note 4, the Company changed its method of accounting for
      stock-based compensation, effective January 1, 2006.











**GOLDSTEIN
      GOLUB KESSLER LLP**


New
      York,
      New York





April
      19,
      2006


3


**I-TRAX,INC.
      AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED BALANCE SHEET**


***(in
      thousands, except share data)***





**ASSETS****March
                31, 2006 (Unaudited)**
            
            December
                31, 2005Current
                assetsCash
                and cash equivalents
            
            **$**
            **6,944**
            
            $
            5,386Accounts
                receivable, net
            
            
            **16,693**
            
            
            15,490Other
                current assets
            
            
            **1,464**
            
            
            1,899Total
                current assets
            
            
            **25,101**
            
            
            22,775Property
                and equipment, net
            
            
            **4,007**
            
            
            4,042Goodwill
            
            
            **51,620**
            
            
            51,620Customer
                list, net
            
            
            **19,270**
            
            
            19,641Other
                intangible assets, net
            
            
            **744**
            
            
            864Other
                long-term assets
            
            
            **41**
            
            
            41Total
                assets
            
            **$**
            **100,783**
            
            $
            98,983**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilitiesAccounts
                payable
            
            **$**
            **9,543**
            
            $
            8,069Accrued
                payroll and benefits
            
            
            **4,064**
            
            
            3,961Net
                liabilities of discontinued operations
            
            
            **1,299**
            
            
            1,299Accrued
                loss contracts
            
            
            **276**
            
            
            419Current
                portion of accrued restructuring charges
            
            
            **241**
            
            
            312Other
                current liabilities
            
            
            **10,500**
            
            
            11,782Total
                current liabilities
            
            
            **25,923**
            
            
            25,842Senior
                secured credit facility
            
            
            **9,057**
            
            
            8,649Note
                payable
            
            
            **171**
            
            
            --Accrued
                restructuring charges, net of current portion
            
            
            **--**
            
            
            14Other
                long-term liabilities
            
            
            **2,315**
            
            
            2,315Total
                liabilities
            
            
            **37,466**
            
            
            36,820Stockholders’
                equityPreferred
                stock - $.001 par value, 2,000,000 shares authorized, 570,253 and
                853,039
                issued and outstanding, respectively; Liquidation preference: $14,256,000
                and $21,326,000 at March 31, 2006 and December 31, 2005,
                respectively
            
            
            **1**
            
            
            1Common
                stock - $.001 par value, 100,000,000 shares authorized 36,268,386
                and
                32,818,955 shares issued and outstanding, respectively
            
            
            **35**
            
            
            32Additional
                paid in capital
            
            
            **136,044**
            
            
            134,864Accumulated
                deficit
            
            
            **(72,763**
            **)**
            
            (72,734
            )Total
                stockholders’ equity
            
            
            **63,317**
            
            
            62,163Total
                liabilities and stockholders’ equity
            
            **$**
            **100,783**
            
            $
            98,983





The
      accompanying notes are an integral part of these financial statements.


4


**I-TRAX,
      INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**For
      the three months ended March 31**


**(Unaudited)**


***(in
      thousands, except share data)***





**2006**
            
            2005Net
                revenue
            
            **$**
            **30,525**
            
            $
            27,465Costs
                and expensesOperating
                expenses
            
            
            **23,443**
            
            
            21,151General
                and administrative expenses
            
            
            **5,992**
            
            
            5,503Depreciation
                and amortization
            
            
            **859**
            
            
            1,052Total
                costs and expenses
            
            
            **30,294**
            
            
            27,706Operating
                income/(loss)
            
            
            **231**
            
            
            (241
            )Other
                expensesInterest
                expense
            
            
            **114**
            
            
            127Amortization
                of financing costs
            
            
            **56**
            
            
            45Other
                expenses
            
            
            --
            
            
            --Total
                other expenses
            
            
            **170**
            
            
            172Income/(loss)
                before provision for income taxes
            
            
            **61**
            
            
            (413
            )Provision
                for income taxes
            
            
            **90**
            
            
            7Net
                loss
            
            
            **(29**
            **)**
            
            (420
            )Less
                preferred stock dividend
            
            
            **(337**
            **)**
            
            (525
            )Net
                loss applicable to common stockholders
            
            $
            **(366**
            **)**
            $
            (945
            )Loss
                per common share, basic and diluted
            
            $
            **(0.01**
            **)**
            $
            (0.04
            )Weighted
                average number of shares outstanding, basic and diluted
            
            
            **34,788,257**
            
            
            26,319,748








The
      accompanying notes are an integral part of these financial
      statements.





5


**I-TRAX,
      INC. AND SUBSIDIARIES**


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**For
      the three months ended March 31**


**(Unaudited)**


***(in
      thousands)***





**2006**
            
            2005Operating
                activities:Net
                loss
            
            $
            **(29**
            **)**
            $
            (420
            )Adjustments
                to reconcile net loss to net cash provided by/(used in) operating
                activities:Depreciation
                and amortization
            
            
            **859**
            
            
            1,052Stock-based
                compensation
            
            
            **285**
            
            
            --Issuance
                of warrants for services
            
            
            **16**
            
            
            --Amortization
                of financing costs
            
            
            **56**
            
            
            45Changes
                in operating assets and liabilities:Accounts
                receivable
            
            
            **(1,328**
            **)**
            
            (5,719
            )Deferred
                tax asset
            
            
            **--**
            
            
            144Other
                current assets
            
            
            **435**
            
            
            560Accounts
                payable
            
            
            **1,474**
            
            
            897Accrued
                payroll and benefits
            
            
            **165**
            
            
            1,124Accrued
                restructuring charges
            
            
            **(85**
            **)**
            
            --Accrued
                loss on contracts
            
            
            **(143**
            **)**
            
            --Other
                current liabilities
            
            
            **(491**
            **)**
            
            1,808Net
                cash provided by/(used in) operating activities
            
            
            **1,214**
            
            
            (509
            )Investing
                activities:Purchases
                of property, plant and equipment
            
            
            **(389**
            **)**
            
            (967
            )Net
                cash used in investing activities
            
            
            **(389**
            **)**
            
            (967
            )Financing
                activities:Principal
                payments on capital leases
            
            
            **--**
            
            
            (5
            )Proceeds
                from stock option exercises
            
            
            **132**
            
            
            --Repayments
                of note payable
            
            
            **(13**
            **)**
            
            --Proceeds
                from exercise of warrants
            
            
            **22**
            
            
            --Proceeds
                from bank credit facility
            
            
            **592**
            
            
            2,450Net
                cash provided by financing activities
            
            
            **733**
            
            
            2,445Net
                increase in cash and cash equivalents
            
            
            **1,558**
            
            
            969Cash
                and cash equivalents at beginning of period
            
            
            **5,386**
            
            
            3,805Cash
                and cash equivalents at end of period
            
            **$**
            **6,944**
            
            $
            4,774Supplemental
                disclosure of cash flow information:Cash
                paid during the period for:Interest
            
            **$**
            **159**
            
            $
            157Income
                taxes
            
            **$**
            **130**
            
            $
            115Schedule
                of non-cash investing and financing activities:Issuance
                of warrants for services
            
            **$**
            **16**
            
            $
            --Reduction
                in accrued purchase price
            
            **$**
            **--**
            
            $
            1,346Preferred
                stock dividend
            
            **$**
            **337**
            
            $
            525Conversion
                of accrued dividends to common stock
            
            **$**
            **1,068**
            
            $
            22














The
      accompanying notes are an integral part of these financial
      statements.


6


**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**


**1.
      Organization**





I-trax,
      Inc. (the **“Company”** )
      was
      incorporated in the State of Delaware on September 15, 2000. On March 19, 2004,
      the Company consummated a merger with Meridian Occupational Healthcare
      Associates, Inc., a private company, which did business as CHD Meridian
      Healthcare ( **“CHD
      Meridian”** ).





The
      Company offers health-related services such as on-site health centers that
      deliver primary care, acute care corporate health, occupational health, and
      pharmacy care management services, as well as integrated disease management,
      wellness and disability management programs.





The
      Company conducts its on-site services through CHD Meridian Healthcare, LLC,
      a
      Delaware limited liability company ( **“CHD
      Meridian LLC”** ),
      and
      its subsidiary companies, and its integrated disease management and wellness
      programs through I-trax Health Management Solutions, LLC, a Delaware limited
      liability company, and I-trax Health Management Solutions, Inc., a Delaware
      corporation.





Physician
      services at the Company’s on-site locations are provided under management
      agreements with affiliated physician associations, which are organized
      professional corporations that hire licensed physicians who provide medical
      services (the **“Physician
      Groups”** ).
      The
      Physician Groups provide all medical aspects of the Company’s on-site services,
      including the development of professional standards, policies, and procedures.
      The Company provides a wide array of business services to the Physician Groups,
      including administrative services, support personnel, facilities, marketing,
      and
      other non-medical services.








**2.
      Basis of Presentation and Interim Results**





The
      condensed consolidated financial statements include the accounts of the Company
      and its subsidiaries and have been prepared by the Company, without audit,
      pursuant to the rules and regulations of the Securities and Exchange Commission.





Certain
      information and footnote disclosures normally included in annual financial
      statements prepared in accordance with generally accepted accounting principles
      have been condensed or omitted pursuant to such rules and regulations. The
      Company believes that the disclosures are adequate to make the financial
      information presented not misleading. These condensed consolidated financial
      statements should be read in conjunction with the audited consolidated financial
      statements and the notes thereto included in the Company’s Annual Report on Form
      10-K for the year ended December 31, 2005, filed with the Securities and
      Exchange Commission on March 22, 2006 ( **“2005
      Annual Report”** ).
      All
      adjustments were of a normal recurring nature unless otherwise disclosed. In
      the
      opinion of management, all adjustments necessary for a fair statement of the
      results of operations for the interim period have been included. The results
      of
      operations for such interim periods are not necessarily indicative of the
      results for the full year.


7
 **I-TRAX,
          INC. AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**





**2.
      Basis of Presentation and Interim Results (continued)**




The
      accompanying condensed consolidated financial statements include the
      accounts of the Company and its direct and indirect subsidiaries, which
      include CHD Meridian LLC, Green Hills Insurance Company (see Note 9), and the
      Physician Groups. All
      material intercompany accounts and transactions have been eliminated. The
      financial statements of the Physician Groups are consolidated with CHD Meridian
      LLC in accordance with the nominee shareholder model of Emerging Issues Task
      Force ( **“EITF”** )
      Issue
      No. 97-2, “Application of FASB Statement No. 94 and APB Opinion No. 16 to
      Physician Practice Management Entities and Certain Other Entities with
      Contractual Management Arrangements.” CHD Meridian LLC has unilateral control
      over the assets and operations of the Physician Groups.





Consolidation
      of the Physician Groups with CHD Meridian LLC, and consequently, the Company,
      is
      necessary to present fairly the financial position and results of operations
      of
      the Company. Control of the Physician Groups is perpetual and other than
      temporary because of the nominee shareholder model and the management agreements
      between the entities. The net tangible assets of the Physician Groups were
      not
      material at March 31, 2006 and December 31, 2005.





The
      Company records pass-through pharmaceutical purchases on a net basis in
      compliance with EITF Issue No. 99-19, “Reporting Gross Revenue as a Principal
      vs. Net as an Agent.” The amounts of pass-through pharmaceuticals purchased by
      the Company for the three months ended March 31, 2006 and 2005 were $37,442,000
      and $31,800,000, respectively.





**3.** ****** **Earnings/Loss
      Per Share**





The
      Company presents both basic and diluted earnings/loss per share on the face
      of
      the condensed consolidated statement of operations. As provided by Statement
      of
      Financial Accounting Standards ( **“SFAS”** )
      No.
      128, “Earnings per Share,” basic earnings/loss per share is calculated as income
      available to common stockholders divided by the weighted average number of
      shares outstanding during the period. Diluted
      earnings/loss per share reflects the potential dilution that could occur from
      common shares issuable through stock options, warrants and convertible preferred
      stock. As of March 31, 2006 and 2005, 12,496,987 and 17,868,999 shares,
      respectively, issuable upon exercise of options, warrants, and convertible
      securities were excluded from the diluted loss per share computation because
      their effect would be anti-dilutive.




**4.
      Share-** **Based** **Compensation**





The
      Company has two equity compensation plans for employees, non-employee directors
      and certain consultants. The plans authorize the granting of stock options
      consistent with the purpose of the plans (see Note 13 to the Company’s
      consolidated financial statements included in the 2005 Annual Report). The
      number of shares authorized for issuance under the Company’s plans as of March
      31, 2006 totaled 4,800,000, of which 1,213,146 shares were available for future
      issuance. Stock options granted under these plans are typically granted with
      an
      exercise price equal to the market price of the Company’s stock at the date of
      grant. Options also generally vest over a period of three years with respect
      to
      grants made to employees and consultants and over a period of two years with
      respect to options granted to directors. Options typically expire ten years
      from
      the date of grant.


8
 **I-TRAX,
          INC. AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**








**4.
      Share-** **Based** **Compensation (continued)**





Prior
      to
      January 1, 2006, the Company accounted for its stock based compensation under
      the recognition and measurement principles of Accounting Principles Board
      ( **“APB”** )
      Opinion
      No. 25, “Accounting for Stock Issued to Employees,” and related interpretations,
      the disclosure-only provisions of SFAS No. 123, “Accounting for Stock-Based
      Compensation” and the disclosures required by SFAS No. 148, “Accounting for
      Stock-Based Compensation-Transition and Disclosure.” In accordance with APB
      Opinion No. 25, no stock-based compensation cost was reflected in the Company’s
      prior year net income for grants of stock options to employees because the
      Company granted stock options with an exercise price equal to the market value
      of the stock on the date of grant.





Had
      the
      Company used the fair value based accounting method for stock compensation
      expense prescribed by SFAS Nos. 123 and 148 for the first quarter ended March
      31, 2005, the Company’s consolidated net loss and net loss per share would
      have been reduced to the pro-forma amounts illustrated as follows:





2005Net
                loss as reported
            
            $
            (420,000
            )Deduct
                total stock-based employee
              compensation expense determined under fair
              value based methods for all awards
            
            
            (339,000
            )Pro
                forma net loss
            
            $
            (759,000
            )Net
                loss per common share as reported, basic and diluted
            
            $
            (0.04
            )Pro
                forma net loss per common share, basic and diluted
            
            $
            (0.05
            )





Effective
      January 1, 2006, the Company adopted the fair value recognition provisions
      of
      SFAS No. 123 (revised 2004), “Share-Based Payment” ( **“SFAS
      123R”** )
      using
      the modified prospective method. Under this method, compensation cost in the
      first quarter of 2006 includes the portion vesting in the period for (1) all
      share-based payments granted prior to, but not vested as of January 1, 2006,
      based on the grant date fair value estimated in accordance with the original
      provisions of SFAS No. 123 and (2) all share-based payments granted subsequent
      to January 1, 2006, based on the grant date fair value estimated in accordance
      with the revised provisions of SFAS 123R. Before adoption of SFAS No. 123R,
      pro
      forma disclosures reflected the fair value of each option grant estimated on
      the
      date of grant using the Black-Scholes option-pricing model with the following
      weighted-average assumptions:





Dividend
                yield
            0.00%Expected
                volatility
            94.44%Risk-free
                interest rate
            3.99%Expected
                life
            5
                years


9
 **I-TRAX,
          INC. AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**





**4.
      Share-** **Based** **Compensation (continued)**





Under
      the
      Black-Scholes option-pricing model, the Company estimated volatility using
      only
      its historical share price performance over the expected life of the option.
      Under SFAS No. 123R, however, the Company estimates expected volatility using
      historical volatility of the Company’s common stock as well as historical
      volatility of the common stock of comparable companies over the expected life
      of
      the options. The expected life of the options has been determined using the
      simplified method as prescribed in SEC Staff Accounting Bulletin No. 107
      ( **“SAB
      107”** ).
      Results of prior periods do not reflect any restated amounts and the Company
      had
      no cumulative effect adjustment upon adoption of SFAS No. 123R under the
      modified prospective method. The Company’s policy is to recognize compensation
      cost for awards with only service conditions and a graded vesting schedule
      on a
      straight-line basis over the requisite service period for the entire award.
      Additionally, the Company’s policy is to issue new shares of common stock to
      satisfy stock option exercises.





The
      adoption of SFAS No. 123R decreased the Company’s first quarter 2006 reported
      operating income and net income by $ 285,000
      and reported basic and diluted net income by $0.01 per share. The expense is
      classified as general and administrative expense on the condensed consolidated
      statement of operations.





Compensation
      cost for share-based payment arrangements recognized in general and
      administrative expenses for the first quarter of 2006 was $285,000 for stock
      options. No income tax benefit was recognized in the income statement for the
      first quarter of 2006 for share-based compensation arrangements.





The
      fair
      value of each option award is estimated on the date of grant using a
      Black-Scholes option-pricing valuation model. The ranges of assumptions for
      inputs shown in the following table are as follows:





·
            The
                expected volatility is based on a combination of the historical volatility
                of the Company’s and comparable companies’ stock over the contractual life
                of the options.





·
            The
                Company uses historical data to estimate employee termination behavior.
                The expected life of options granted is derived from SAB 107 and
                represents the period of time the options are expected to be outstanding.





·
            The
                risk-free interest rate is based on the U.S. Treasury yield curve
                in
                effect at the time of grant for periods within the contractual life
                of the
                option.





·
            The
                expected dividend yield is based on the Company’s current dividend yield
                as the best estimate of projected dividend yield for periods within
                the
                contractual life of the option.





10
 **I-TRAX,
          INC. AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**








**4.
      Share-Based Compensation (continued)**





Dividend
                yield
            0.00%Expected
                volatility
            75.41%Risk-free
                interest rate
            4.45%Expected
                life
            6
                years




A
      summary
      of the Company’s stock option activity as of March 31, 2006, and changes during
      the first quarter of 2006 is presented in the following table:





Number
                of Shares
            
            Weighted
                Average Exercise Price
            
            Options
                Exercisable
            
            Weighted
                Average Exercise PriceDecember
                31,
                2005
            
            
            3,841,652
            
            $
            1.79
            
            
            1,382,185
            
            $
            2.33Exercised
            
            
            (147,330
            )
            $
            0.89Granted
            
            
            140,000
            
            $
            2.65Forfeited
            
            
            (84,468
            )
            $
            1.42March
                31, 2006
            
            
            3,749,854
            
            $
            1.87
            
            
            1,731,526
            
            $
            2.21





The
      weighted-average grant-date fair value of options granted during the first
      quarter of 2006 was $1.83. The intrinsic value for a stock option is defined
      as
      the difference between the current market value and the grant price. The total
      intrinsic value of options exercised during the first quarter of 2006 was
      $376,000.





As
      of
      March 31, 2006, there was $1,844,000 of total unrecognized compensation cost
      related to unvested share-based compensation arrangements that is expected
      to be
      recognized over a weighted-average period of 1.85 years. During the first
      quarter of 2006, cash received from options exercised was $132,000.





On
      January 25, 2006, the Company granted options to acquire 75,000 and 40,000
      shares of common stock to certain employees and a director, respectively, with
      an exercise price of $2.64, which approximated the market value at the date
      of
      grant.





On
      February 16, 2006, the Company granted options to acquire 25,000 shares of
      common stock to an employee with an exercise price of $2.70 per share, which
      approximated the market value at the date of grant.





Information
      regarding options outstanding at March 31, 2006 was as follows:





Options
                Outstanding
            
            Options
                ExercisableRange
                of Exercise Price
            
            Number
                Outstanding
            
            Weighted
                Average Remaining Contractual Life
            
            Weighted
                Average Exercise Price
            
            Number
                Exercisable
            
            Weighted
                Average Exercise Price$0.00-$2.00
            
            
            3,002,502
            
            
            8.71
            
            $
            1.42
            
            
            1,149,478
            
            $
            1.37$2.01-$4.00
            
            
            590,788
            
            
            6.63
            
            $
            2.84
            
            
            434,703
            
            $
            2.88$4.01-$6.00
            
            
            61,565
            
            
            5.67
            
            $
            4.74
            
            
            52,344
            
            $
            4.80$6.01-$8.00
            
            
            52,800
            
            
            5.12
            
            $
            6.33
            
            
            52,800
            
            $
            6.33$8.01-$10.00
            
            
            42,200
            
            
            3.58
            
            $
            10.00
            
            
            42,200
            
            $
            10.003,749,854
            
            
            8.22
            
            $
            1.87
            
            
            1,731,525
            
            $
            2.21







11


**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**


**5.
      Restructuring and Related Activities**





During
      2005, the Company completed an in-depth analysis of its structure and product
      development efforts. This analysis led to the conclusion that certain products
      and services that the Company had been offering were no longer essential to
      its
      integrated business model. The Company then implemented a restructuring of
      its
      operations and related activities, which was substantially completed as of
      June
      30, 2005. A summary of the activity and balances of the restructuring and
      provision for loss contract reserve accounts was as follows:





Balance
                at
              December
                31, 2005
            
            Cash
                Payments
            
            Balance
                at
              March
                31, 2006RestructuringOne-time
                termination benefits
            
            $
            185,000
            
            
            (84,000
            )
            $
            101,000Contract
                termination costs
            
            
            141,000
            
            
            (1,000
            )
            
            140,000Restructuring
                total
            
            
            326,000
            
            
            (85,000
            )
            
            241,000Provision
                for loss contracts
            
            $
            419,000
            
            
            (143,000
            )
            $
            276,000







**6.
      Long Term Debt**





The
      Company’s senior credit facility with Bank of America, N.A., which is secured by
      substantially all of the Company’s tangible assets, provides financing up to
      $15,000,000 through a revolving credit line.





The
      Company amended the facility on May 4, 2006 (effective March 31, 2006). Under
      the amendment, the maturity of the facility was extended from April 1, 2007
      to
      October 1, 2007. The amendment also reset the “Fixed Charge Coverage Ratio” and
      redefined “EBITDA” to exclude non-cash stock-based compensation expense. Minimum
      EBITDA targets for periods ending March 31, 2006 through December 31, 2006
      remain:





Period
            
            Minimum
                EBITDAJuly
                1, 2005 - March 31, 2006
            
            $
            2,560,000Last
                four fiscal quarters ending June 30, 2006
            
            
            3,580,000Last
                four fiscal quarters ending September 30, 2006
            
            
            3,960,000Last
                four fiscal quarters ending December 31, 2006
            
            
            4,450,000





At
      March
      31, 2005, the Company had $9,057,000 of debt outstanding under the senior credit
      facility and was in compliance with all covenants included in the facility.
      In
      addition, based on the borrowing base calculation, the Company had access to
      an
      additional $4,750,000 under the revolving line of credit.





12
 **I-TRAX,
          INC. AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**





**7.
      Stockholders’ Equity**





***Warrants***





On
      March
      12, 2006, the Company issued a warrant to purchase 100,000 shares of the
      Company’s common stock at an exercise price of $2.70 per share to a consultant.
      The warrant vests over fifteen months and expires on March 12, 2009. The warrant
      was valued at $140,000, with $5,000 included as general and administrative
      expense in the accompanying condensed consolidated statements of operations.





The
      following table summarizes the Company’s activity as it relates to
      warrants:





Shares
                Underlying WarrantsBalance
                outstanding at December 31, 2005
            
            
            3,069,514Granted
            
            
            100,000Exercised
            
            
            (112,911
            )Expired
            
            
            (12,000
            )Balance
                outstanding at March 31, 2006
            
            
            3,044,603





At
      March
      31, 2006, all outstanding warrants were exercisable at a weighted average
      exercise price of $2.87 per share.





***Series
      A Convertible Preferred Stock***





During
      the three months ended March 31, 2006, 282,786 shares of Series A Convertible
      Preferred Stock, and $1,068,000 in dividends accrued on such stock, were
      converted into an aggregate of 3,229,761 shares of common stock.





As
      of
      March 31, 2006, 570,253 shares of Series A Convertible Preferred Stock were
      issued and outstanding. Each share of Series A Convertible Preferred Stock
      converts into 10 shares of common stock. Each share of Series A Convertible
      Preferred Stock also accrues dividends at the rate of 8% per year on $25.00
      per
      share, the original sale price. The Company accrued dividends of $337,000 for
      the three months ended March 31, 2006.





As
      of
      March 31, 2006, the Company had accrued aggregate dividends of $2,319,000,
      which
      at the Company’s option are payable in cash (subject to the consent of the
      senior secured creditor) or common stock valued at market price. If such
      dividends were paid in common stock at $3.39, the closing price of the common
      stock on March 31, 2006, the Company would be required to issue approximately
      684,000 additional shares of common stock.





13
 **I-TRAX,
          INC. AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**





**8.
      Commitments and Contingencies**





***Litigation***





The
      Company is involved in legal disputes on a variety of matters related to the
      ordinary course of the Company’s business. After reasonable diligence, the
      Company’s management believes that the estimated losses of the Company from such
      legal disputes have been adequately provided for in other current and other
      long-term liabilities to the extent probable and reasonably estimable and
      management expects these disputes will be resolved without a material adverse
      effect on the Company’s consolidated financial position or results of
      operations. Nonetheless, it is possible that the Company’s future results of
      operations for any particular quarterly or annual period may be materially
      affected by changes in the status of such legal disputes.





***Compliance
      with Healthcare Regulations***





Because
      the Company operates in the healthcare industry, it is subject to numerous
      laws
      and regulations of Federal, state, and local governments. These laws and
      regulations include, but are not limited to, matters regarding licensure,
      accreditation, government healthcare program participation requirements,
      reimbursement for patient services, and Medicare and Medicaid fraud and abuse.
      Government activity has stayed high with respect to investigations and
      allegations concerning possible violations of fraud and abuse laws and
      regulations by healthcare providers. Violations of these laws and regulations
      could result in, among other things, expulsion from government healthcare
      programs, fines, penalties, and restitution for billed services.





The
      Company’s management believes that the Company is in compliance with laws and
      regulations applicable to the Company’s business. Further, compliance with such
      laws and regulations is subject to future government review and interpretation
      as well as regulatory actions unknown or unasserted at this time.





***Significant
      Customers***





As
      of
      March 31, 2006, two customers represented 14% and 13% of the Company’s accounts
      receivable as reflected on the condensed consolidated balance sheet. As of
      March
      31, 2005, two customers represented 21% and 12% of the total accounts
      receivable.





For
      the
      three months ended March 31, 2006, one customer accounted for 11% of the
      Company’s revenue. For the three months ended March 31, 2005, one customer
      accounted for 13% of the Company’s revenue.





14
 **I-TRAX,
          INC. AND SUBSIDIARIES**
 **NOTES
          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**







**9.
      Professional Liability and Related Reserves**





Since
      2004, the Company has secured medical malpractice and general liability
      insurance for certain of its direct and indirect subsidiaries through Green
      Hills Insurance Company, a Risk Retention Group ( **“GHIC”** ),
      incorporated as a subsidiary of CHD Meridian LLC under the laws of the State
      of
      Vermont. In years prior to 2004, the Company secured such insurance in the
      commercial market.





On
      an
      annual basis, the Company uses independent actuaries to estimate its exposures
      for claims obligations (for both asserted and unasserted claims) related to
      deductibles and exposures in excess of coverage limits. The Company maintains
      reserves for these obligations. Loss and loss adjustment expense reserves are
      recorded monthly and represent management’s best estimate of the ultimate net
      cost of all reported and unreported losses incurred. The reserves for unpaid
      losses and loss adjustment expenses are estimated using individual case-basis
      valuations and statistical analyses. Those estimates are subject to the effects
      of trends in claim severity and frequency. Although considerable variability
      is
      inherent in such estimates, management believes the reserves for losses and
      loss
      adjustment expenses are adequate. The estimates are reviewed and adjusted
      continuously as experience develops or new information becomes known; such
      adjustments are included in current operations.





At
      March
      31, 2006, the Company’s estimated loss reserve for cost and settlement of
      reported claims predating GHIC was $1,362,000, which is included in other
      current liabilities on the condensed consolidated balance sheet. The Company
      also maintains a reserve for incurred but not reported losses and loss
      adjustment expense predating or otherwise not assumed by GHIC.  At March
      31, 2006, this reserve was $2,000,000 ,
      which
      is included in other long-term liabilities on the condensed consolidated balance
      sheet.





During
      the three months ended March 31, 2006, GHIC increased its reserves for reported
      claims and incurred but not reported losses and loss adjustment expense by
      $274,000 to $2,179,000, which is included in other current liabilities on the
      condensed consolidated balance sheet.





15
 **I-TRAX,
            INC. AND SUBSIDIARIES**
 **NOTES
            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**








**Item
                2.**
            **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 read in
      conjunction with our unaudited condensed consolidated financial statements
      and
      related notes appearing on the preceding pages as well as our audited financial
      statements and related notes included in our Annual Report on Form 10-K for
      the
      year ended December 31, 2005 filed on March 22, 2006 ( **“2005
      Annual Report”** ).





***Forward
      Looking Statements***





The
      following discussion also contains forward-looking statements. All statements,
      other than statements of historical facts, included in this quarterly report
      regarding our strategy, future operations, financial position, future revenues,
      projected costs, prospects, plans and objectives of management are
      forward-looking statements. The words “anticipates,” “believes,” “estimates,”
“expects,” “intends,” “may,” “plans,” “projects,” “will,” “would” and similar
      expressions are intended to identify forward-looking statements, although not
      all forward-looking statements contain these identifying words. We cannot
      guarantee that we actually will achieve the plans, intentions or expectations
      disclosed in our forward-looking statements, and readers of this report should
      not place undue reliance on our forward-looking statements. Actual results
      or
      events could differ, possibly materially, from the plans, intentions and
      expectations disclosed in our forward-looking statements. We have identified
      important factors in the cautionary statements below and in our 2005 Annual
      Report that we believe could cause actual results or events to differ, possibly
      materially, from our forward-looking statements. Our forward-looking statements
      do not reflect the potential impact of any future acquisitions, mergers,
      dispositions, joint ventures or investments we may make. We undertake no duty
      to
      update these forward-looking statements, even though our situation may change
      in
      the future.





***Risk
      Considerations***





You
      are
      cautioned not to place undue reliance on the statements and other discussion
      set
      forth in this quarterly report. These statements and other discussion speak
      only
      as of the date this quarterly report is filed with the Securities and Exchange
      Commission, and these statements are based on management’s current expectations
      and are subject to uncertainty and changes in circumstances. Factors that may
      cause actual results to differ materially from management expectations include,
      but are not limited to:





·
            effects
                of increasing competition for contracts to establish and manage
                employer-dedicated pharmacies and clinics;





·
            loss
                of advantageous pharmaceutical pricing;





·
            inability
                to meet covenants and financial tests related to our senior secured
                credit
                facility;





·
            long
                and complex sales cycles;





·
            loss
                of a major client;





·
            cost
                pressures in the healthcare industry;






16





·
            exposure
                to professional liability claims and a failure to manage effectively
                our
                professional liability risks;





·
            economic
                uncertainty; and





·
            each
                of the factors discussed under “Item 1A. - Risk Factors” in our 2005
                Annual Report.





***Basis
      of Presentation***





The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles
      generally accepted in the United States of America for interim financial
      information, the instructions to Form 10-Q and Regulation S-X. In our
      opinion, the unaudited condensed consolidated financial statements have been
      prepared on the same basis as the annual financial statements and reflect all
      adjustments necessary to present fairly our financial position as of March
      31,
      2006 and the results of the operations and cash flows for the three months
      ended
      March 31, 2006. The preparation of these financial statements requires us to
      make estimates and judgments that affect the reported amounts of assets and
      liabilities and the reported amounts of revenues and expenses during the covered
      periods. We base our estimates and judgments on our historical experience and
      on
      various other factors that we believe are reasonable under the circumstances.
      We
      evaluate our estimates and judgments, including those related to revenue
      recognition, bad debts, 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
      Overview***





I-trax
      is
      an integrated health and productivity management company formed by the merger
      on
      March 19, 2004 of I-trax, Inc. and Meridian Occupational Healthcare Associates,
      Inc., which did business as CHD Meridian Healthcare. We offer a range of health
      and productivity-related services to large, self-insured employers. Our services
      can be integrated or blended as necessary or appropriate based on each client’s
      needs. The
      services include on-site health centers, which deliver primary care, acute
      care
      corporate health, occupational health and pharmacy care management services,
      as
      well as integrated disease management, wellness, and disability management
      programs. We
      believe we are the nation’s largest provider of on-site healthcare on an
      outsourced basis.





We
      believe our services improve the health status of employees and mitigate the
      upward cost trend experienced by employers, employees, and government agencies.
      By proactively managing the healthcare needs of our clients’ employees and their
      families, we believe our programs improve health, increase productivity, reduce
      absenteeism, reduce the need for future critical care, and manage overall costs. We
      also
      believe the breadth of our services allows our clients the flexibility to meet
      each of the following needs in a cost-effective and professional manner:
      pharmacy; primary care; occupational health; corporate health; wellness;
      lifestyle management; and disease management.





We
      deliver our services at or near the client’s work site by opening, staffing and
      managing a health center or pharmacy dedicated to the client and its eligible
      population. We also provide support services to enhance our on-site health
      centers by using the Internet and our call center services. In all, we provide
      care “face to face,” telephonically, and via the Internet. We believe that our
      integrated care delivery model enhances the trusted relationship established
      by
      our clinical providers on-site with their patients, using the support services
      of our call center and our Internet programs.




As
      of
      March 31, 2006, we were providing services to clients that include large
      financial institutions, consumer products manufacturers, health plans,
      integrated delivery networks, automotive and






17






automotive
      parts manufacturers, and diversified industrial companies. For 92 of these
      clients, we operated 196 on-site facilities in 32 states, providing a variety
      of
      health management programs. Our client retention rate is high due to strong
      client relationships that 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.





***Critical
      Accounting Policies***





A
      summary
      of significant accounting policies is disclosed in Note 2 to the consolidated
      financial statements included in our 2005 Annual Report. Our critical accounting
      policies are further described under the caption “Critical Accounting Policies”
in Management’s Discussion and Analysis of Financial Condition and Results of
      Operations in our 2005 Annual Report.





Effective
      January 1, 2006, we adopted Statement of Financial Accounting Standards No.
      123
      (revised 2004), “Share-Based Payment” ( **“SFAS
      123R”** ),
      using
      the modified prospective method. Under this method, compensation cost in the
      first quarter of 2006 included the portion vesting in the period for (1) all
      share-based payments granted prior to, but not vested as of January 1, 2006,
      based on the grant date fair value estimated in accordance with the original
      provisions of SFAS No. 123 and (2) all share-based payments granted subsequent
      to January 1, 2006, based on the grant date fair value estimated in accordance
      with the revised provisions of SFAS 123R. Prior to adoption of SFAS 123R, we
      accounted for stock based compensation under the recognition and measurement
      principles of Accounting Principles Board ( **“APB”** )
      Opinion
      No. 25, “Accounting for Stock Issued to Employees,” and related interpretations,
      the disclosure-only provisions of SFAS No. 123, “Accounting for Stock-Based
      Compensation” and the disclosures required by SFAS No. 148, “Accounting for
      Stock-Based Compensation-Transition and Disclosure.” In accordance with APB
      Opinion No. 25, no stock-based compensation cost was reflected in prior year
      net
      income for grants of stock options to employees because we granted stock options
      with an exercise price equal to the market value of the stock on the date of
      grant.





As
      of
      March 31, 2006, there was $1,844,000 of total unrecognized compensation cost
      related to unvested share-based compensation arrangements that is expected
      to be
      recognized over a weighted-average period of 1.85 years.





Other
      than the adoption of SFAS 123R, there have been no changes in the nature of
      our
      critical accounting policies or the application of those policies since December
      31, 2005.





***Key
      Financial Trends and Analytical Points***





***Milestones.*** During
      the quarter ended March 31, 2006, we:





·
            reported
                net revenue of $30,525,000, an increase of 11.1%, from $27,465,000
                for the
                quarter ended March 31, 2005;





·
            generated
                $231,000 of operating income as compared to last year’s operating loss of
                $241,000 for the comparable period;





·
            increased
                our earnings before interest, taxes, depreciation and amortization,
                or
                EBITDA, to $1,090,000 from $811,000 for last year’s first quarter (2006
                EBITDA includes $285,000 of share-based compensation resulting from
                the
                implementation of SFAS 123R);








18





·
            reduced
                our net losses to $29,000 in the first quarter of 2006 from $420,000
                for
                the first quarter of 2006; and





·
            implemented
                SFAS 123R, resulting in additional general and administrative expense
                of
                $285,000 during this quarter.





In
      managing our business, we make ** use
      of
      EBITDA, which is a non-GAAP financial measure. We believe that EBITDA is a
      reliable and useful performance indicator for measuring the growth of our core
      operations. It also allows us to monitor the trend in our core operations.
      O ur
      results of operations for the three months ended March 31 and reconciliation
      of
      net income to EBITDA for those periods follows:





2006
            
            2005Revenue
            
            
            30,525,000
            
            
            27,465,000Total
                costs and expenses
            
            
            30,294,000
            
            
            27,706,000Operating
                income (loss)
            
            
            231,000
            
            
            (241,000
            )Other
                expenses
            
            
            170,000
            
            
            172,000Income
                before taxes
            
            
            61,000
            
            
            (413,000
            )Provision
                for taxes
            
            
            90,000
            
            
            7,000Net
                loss
            
            
            (29,000
            )
            
            (420,000
            )Reconciliation
                of net income to EBITDANet
                loss
            
            
            (29,000
            )
            
            (420,000
            )Add:
                Depreciation and amortization
            
            
            915,000
            
            
            1,097,000Add:
                Provision for income taxes
            
            
            90,000
            
            
            7,000Add:
                Interest
            
            
            114,000
            
            
            127,000EBITDA
            
            
            1,090,000
            
            
            811,000





***Working
      Capital.*** We rely
      on our senior credit facility to meet our working capital needs. At March 31,
      2006, we had $4,750,000 available under our credit facility to fund our working
      capital deficit of $822,000. Our working capital deficit at December 31, 2005
      was $3,067,000. While our current liabilities have remained fairly consistent,
      increasing $81,000 from December 31, 2005, our current assets have increased
      by
      $2,326,000 due to higher client receivables and increased cash balances. In
      addition, as a result of the conversion of certain of our Series A Convertible
      Preferred Stock, accrued dividends payable upon conversion of such Series A
      Convertible Preferred Stock, which we pay in shares of common stock, decreased
      to $2,319,000 at March 31, 2006 from $3,048,000 at December 31, 2005.





During
      the three months ended March 31, 2006, we increased the outstanding balance
      under our credit facility by $592,000, from $8,465,000 at December 31, 2005
      to
      $9,057,000 at March 31, 2006.





***Operating
      trend.*** We
      intend
      to increase revenue by strengthening and expanding our core business and by
      emphasizing our market position as the leading provider of outsourced on-site
      healthcare.





***Results
      of Operations***





***Three
      Months ended March 31, 2006 Compared to Three Months ended March 31, 2005***





Revenue
      for the three months ended March 31, 2006 was $30,525,000,
      an increase of $ 3,060,000,
      or 11.1%, from $27,465,000 for the three months ended March 31, 2005. Comparable
      site sales for the first quarter increased 8% compared with the year-ago
      quarter. Our sites under management have increased from 181 as of March 31,
      2005
      to 197 as of March 31, 2006.








19





Operating
      expenses, which represent our direct costs of servicing our clients, amounted
      to $23,443,000
      for the three months ended March 31, 2006, an increase of $ 2,292,000,
      or 10.8%, from $21,151,000 for the three months ended March 31, 2005. This
      increase is attributable to expenses associated with revenue growth quarter
      over
      quarter, as operating expenses as a percentage of revenue marginally improved
      to
      76.8% for the first quarter of 2006 from 77.0% for the first quarter of 2005.





General
      and administrative expenses, which represent our corporate costs, increased
      by
      $489,000 to $5,992,000 for the three months ended March 31, 2006 from $5,503,000
      for the three months ended March 31, 2005. Our general and administrative
      expenses as a percentage of revenue decreased modestly from 20.0% to 19.6%
      for
      the three months ended March 31, 2005 and 2006, respectively. The implementation
      of SFAS 123R resulted in additional general and administrative expenses of
      $285,000, or 0.9% of revenue.





Depreciation
      and amortization expenses were $859,000 for the three months ended March 31,
      2006, a decrease of $193,000 as compared to $1,052,000 for the three months
      ended March 31, 2005. In 2005,
      we amortized $67,000 of software development costs, which were subsequently
      impaired in our restructuring activities during the second quarter of 2005.
      The
      remaining difference is due to fully depreciated or amortized
      assets.





Interest
      expense for the three months ended March 31, 2006 was $114,000, representing
      a
      decrease of $13,000, from $127,000 for the three months ended March 31, 2005.
      Interest expense primarily includes interest payable under our senior secured
      credit facility. Our average balance outstanding during the three months ended
      March 31, 2006, was $7,154,000 as compared to $8,105,000 for the comparable
      period in 2005.





Amortization
      of financing costs for the three months ended March 31, 2006 was $56,000,
      representing an increase of $11,000 from $45,000 for the three months ended
      March 31, 2005. The increase is due to additional financing costs capitalized
      in
      connection with our senior secured credit facility amendments during
      2005.





For
      the
      three months ended March 31, 2006, our net loss was $29,000, as compared to
      a
      net loss of $420,000 for the three months ended March 31, 2005.





***Liquidity
      and Capital Resources***





***Operating
      Activities***





Cash
      provided by operating activities during the three months ended March 31, 2006
      was $1,214,000. The following factors accounted for our operating cash surplus:





(1)  Our
      net
      loss for the quarter was $29,000, which included non-cash charges of $285,000
      for stock-based compensation, $915,000 of non-cash depreciation and amortization
      and $16,000 for other non-cash charges.





(2)  Our
      accounts receivable and other current assets balances increased by $893,000
      reflecting continued growth in pharmaceutical purchases and revenue, partially
      offset by a reduction of prepaid insurance related to Green Hills Insurance,
      our
      Risk Retention Group.





(3)  Our
      liabilities (which include accounts payable, accrued expenses, accrued
      restructuring charges and other current and long term liabilities) increased
      by
      $920,000. Contributing






20






factors
      to this increase were increased pharmaceutical purchases in accounts payable
      offset by the satisfaction of previously accrued other current liabilities.





***Investing
      Activities***





Net
      cash
      used in investing activities was $389,000 for the three months ended March
      31,
      2006, which consists primarily of capital expenditures on technology upgrades.





***Financing
      Activities***





Net
      cash
      provided by financing activities was $733,000 for the three months ended March
      31, 2006, driven primarily by additional draws of $592,000 under our senior
      secured credit facility and cash received upon stock option exercises of
      $132,000. We used these funds to finance our working capital requirements (which
      increased due to additional revenue, expenses and accounts receivable generated
      from increases in same-site operations as well as the addition of new facilities
      during the quarter), capital expenditures and development expenses.





Our
      senior secured credit facility provides financing up to the lesser of
      $15,000,000 or the credit facility base calculation, in each case less
      outstanding letters of credit. We amended the facility effective March 31,
      2006.
      The amendment (1) extended that maturity date of the facility from April 1,
      2007
      to October 1, 2007, (3) re-set the “Fixed Charge Coverage Ratio” covenant, and
      (3) redefined “EBITDA” to exclude non-cash stock-based compensation expense.
      Minimum EBITDA requirements for periods ending March 31, 2006 through December
      31, 2006 are as follows:





Period
            
            Minimum
                EBITDAJuly
                1, 2005 - March 31, 2006
            
            $
            2,560,000Last
                four fiscal quarters ending June 30, 2006
            
            
            3,580,000Last
                four fiscal quarters ending September 30, 2006
            
            
            3,960,000Last
                four fiscal quarters ending December 31, 2006
            
            
            4,450,000





As
      of
      March 31, 2006, we were in compliance with our credit facility covenants. As
      of
      March 31, 2006, $9,057,000 was outstanding under the credit facility, which
      was
      classified as long-term, and $1,000,000 was outstanding under a letter of
      credit. We had $4,750,000 available under the credit facility at March 31,
      2006.





Our
      ratio
      of current assets to current liabilities (excluding dividends payable on Series
      A Convertible Preferred Stock in shares of common stock) was 1.06 at March
      31,
      2006, as compared to 1.00 at December 31, 2005. We believe that these ratios
      demonstrate adequate financial liquidity and we believe that availability under
      our credit facility and our cash and cash equivalents of $6,944,000 at March
      31,
      2006 (which includes approximately $5,729,000 held at Green Hills) will be
      sufficient to meet our anticipated cash needs for the next 12
      months.





***Future
      Capital Requirements***





Our
      primary future cash needs will be to fund working capital and pay for
      anticipated capital expenditures. We had
      capital expenditures totaling $389,000 during the three months ended March
      31,
      2006 and anticipate similar quarterly expenditures throughout 2006.





We
      cannot, however, provide assurances that our actual cash requirements will
      not
      be greater than we currently anticipate. We will, from time to time, consider
      the acquisition of, or investment in,








21






complementary
      businesses, products, services and technologies, which would most likely effect
      our liquidity requirements or cause us to issue additional equity or debt
      securities.





If
      sources of liquidity are not available or if we cannot generate sufficient
      cash
      flow from operations during the next 12 months, we might be required to obtain
      additional sources of funds through additional operating improvements, capital
      market transactions (including the sale of common stock), asset sales or
      financing from third parties, or a combination thereof. We cannot provide
      assurance that these additional sources of funds will be available or, if
      available, would have reasonable terms.





***Material
      Commitments***





We
      have
      various contractual obligations which are recorded as liabilities in our
      condensed consolidated financial statements. Other items, such as operating
      lease contract obligations are not recognized as liabilities in our condensed
      consolidated financial statements but are required to be disclosed.





The
      following table summarizes our significant contractual obligations at March
      31,
      2006, and the effect such obligations are expected to have on our liquidity
      and
      cash in future periods:





Payments
                due by periodContractual
                obligations:
            
            Total
            
            Less
                than
              1
                year
            
            1-3
                years
            
            3-5
                years
            
            More
                than
              5
                yearsOperating
                leases
            
            $
            5,926,000
            
            $
            1,737,000
            
            $
            2,648,000
            
            $
            1,540,000
            
            $
            1,000Less:
                Amounts reimbursed by clients
            
            
            897,000
            
            
            617,000
            
            
            252,000
            
            
            28,000
            
            
            --$
            5,029,000
            
            $
            1,120,000
            
            $
            2,396,000
            
            $
            1,512,000
            
            $
            1,000




From
      time
      to time, we enter into operating leases for offices and equipment leases on
      behalf of our clients in order to facilitate the delivery of our services at
      client locations. In such cases, our clients agree to reimburse us for the
      expenses incurred related to these operating leases.





**Item
      3.****Quantitative
      and Qualitative Disclosures About Market Risk**




As
      of
      March 31, 2006, we did not own any derivative instruments, but we were exposed
      to market risks, primarily due to changes in U.S. interest rates. Our credit
      facility bears a variable interest rate, and accordingly, the fair market value
      of the debt is sensitive to changes in interest rates.





**Item
      4.**  **Controls
      and Procedures**





Our
      management, under the supervision and with the participation of the principal
      executive officer and principal financial officer, has evaluated the
      effectiveness of our controls and procedures related to our reporting and
      disclosure obligations as of March 31, 2006, which is the end of the period
      covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the
      principal executive officer and principal financial officer have concluded
      that
      our disclosure controls and procedures are effective.





There
      were no changes that occurred during the fiscal quarter ended March 31, 2006
      that have materially affected, or are reasonably likely to materially affect,
      our internal controls over financial reporting.





22


**PART
      II.**  **OTHER
      INFORMATION**





**Item
      1.**  **Legal
      Proceedings**





Certain
      of our subsidiaries are involved in various claims and legal actions arising
      in
      the ordinary course of business. In the opinion of management, the ultimate
      disposition of these matters will not have a material adverse effect on our
      overall consolidated financial position, results of operations or
      liquidity.





**Item
      1A.**  **Risk
      Factors**





There
      were no material changes during the quarter ended March 31, 2006 from the risk
      factors as previously disclosed in our 2005 Annual Report.





**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds**





**Issuance
      of Unregistered Securities**





On
      January 30, 2006, two investors exercised warrants to purchase an aggregate
      of
      8,000 shares of our common stock at an exercise price of $2.50 per share. In
      lieu of paying the exercise price in cash, such investors used the warrants’
cashless exercise feature, such that the investors received 248 shares of our
      common stock and surrendered to us for cancellation 7,752 shares of our common
      stock. In undertaking this issuance, we relied on an exemption from registration
      under Section 4(2) of the Securities Act of 1933, as amended ( **“Securities
      Act”** ).





On
      February 6, 2006, two former employees exercised warrants to purchase an
      aggregate of 54,945 shares of our common stock at an exercise price of $0.75
      per
      share. In lieu of paying the exercise price in cash, such former employees
      used
      the warrants’ cashless exercise feature, such that the former employees received
      39,788 shares of our common stock and surrendered to us for cancellation 15,157
      shares of our common stock. In undertaking this issuance, we relied on an
      exemption from registration under Section 4(2) of the Securities Act.





On
      February 6, 2006, a former employee exercised a warrant to purchase 11,250
      shares of our common stock at an exercise price of $2.50 per share. In lieu
      of
      paying the exercise price in cash, such former employee used the warrant’s
      cashless exercise feature, such that the former employee received 906 shares
      of
      our common stock and surrendered to us for cancellation 10,344 shares of our
      common stock. In undertaking this issuance, we relied on an exemption from
      registration under Section 4(2) of the Securities Act.





On
      March
      7 and 8, 2006, as part of a conversion of the Series A Convertible Preferred
      Stock, we issued an aggregate of 185,626 shares of our common stock to 11
      investors in payment of accrued dividends on shares of our Series A Convertible
      Preferred Stock. The shares issued upon conversion, including the shares
      representing payment of the dividends, were exempt from registration under
      Section 3(a)(9) of the Securities Act.





Effective
      as of March 12, 2006, we issued a warrant to acquire 100,000 shares of our
      common stock at an exercise price of $2.70 to a consultant as consideration
      for
      consulting services. We valued the warrant at $140,000. The consultant is an
      accredited investor. In undertaking this issuance, we relied on an exemption
      from registration under Section 4(2) of the Securities Act.






23







On
      March
      17, 2006, an officer exercised a warrant to purchase an aggregate of 28,800
      shares of our common stock at an exercise price of $.75 per share or $21,600
      in
      the aggregate. In undertaking this issuance, we relied on an exemption from
      registration under Section 4(2) of the Securities Act.





On
      March
      27, 2006, a former employee exercised a warrant to purchase 9,916 shares of
      our
      common stock at an exercise price of $2.50 per share. In lieu of paying the
      exercise price in cash, such former employee used the warrant’s cashless
      exercise feature, such that the former employee received 2,598 shares of our
      common stock and surrendered to us for cancellation 7,318 shares of our common
      stock. In undertaking this issuance, we relied on an exemption from registration
      under Section 4(2) of the Securities Act.




**Item
      3.**  **Defaults
      Upon Senior Securities**





None.





**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders**





We
      did
      not submit any matters to a vote of our security holders during the quarter
      ended March 31, 2006.





**Item
      5.**  **Other
      Information**





None.




**Item
      6.****Exhibits**




**Number**
            **Exhibit
                Title**10.1
            Seventh
                Amendment to Credit Agreement, effective as of March 31, 2006 (executed
                on
                May 4, 2006), by and among I-trax, Inc., certain subsidiaries of
                I-trax,
                Inc., and Bank of America, N.A.15
            Awareness
                letter of Goldstein, Golub Kessler LLP regarding unaudited interim
                financial information.31.1
            Chief
                Executive Officer Certification Pursuant to Rule 13a-14(a) and 15d-14(a)
                of the Securities Exchange Act of 1934.31.2
            Chief
                Financial Officer Certification Pursuant to Rule 13a-14(a) and 15d-14(a)
                of the Securities Exchange Act of 1934.32.1
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.32.2
            Certification
                Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.







24


**SIGNATURE**





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


I-TRAX,
                  INC.Date:
                  May 15, 2006
              By:/s/
                  R. Dixon ThayerR.
                  Dixon Thayer, Chief ExecutiveOfficerDate:
                  May 15, 2006
              By:/s/
                  David R. BockDavid
                  R. Bock, Executive VicePresident
                  and Chief Financial Officer




25