UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                  FORM 10-QSB/A

(Mark One)

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

          For the quarterly period ended: June 30, 2004

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

          Commission File Number: 0-30275

                                  I-TRAX, INC.
    ------------------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                                    Delaware
    ------------------------------------------------------------------------
         (State or other jurisdiction of incorporation or organization)

                                   23-3057155
    ------------------------------------------------------------------------
                      (I.R.S. Employer Identification No.)

                           4 Hillman Drive, Suite 130
                         Chadds Ford, Pennsylvania 19317
    ------------------------------------------------------------------------
                    (Address of principal executive offices)

                                 (610) 459-2405
    ------------------------------------------------------------------------
                           (Issuer's telephone number)

                One Logan Square, 130 N. 18th Street, Suite 2615
                        Philadelphia, Pennsylvania 19103
    ------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

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. Yes [X] No [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of August 12, 2004, the number of
outstanding shares of common stock, par value $.001 per share, was 28,655,871.

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




<PAGE>


                              Explanatory Statement

         This amendment amends I-trax, Inc.'s Quarterly Report on Form 10-QSB
for the quarter ended June 30, 2004, filed with the Securities and Exchange
Commission on August 18, 2004. This amendment:

     o    Amends I-trax's  consolidated  statement of operations,  Note 3 to the
          financial  statements,  and portions of  Management's  Discussion  and
          Analysis of Financial  Condition  and Results of Operations to reflect
          an   accounting   change  as  a  result  of  which  all  of   I-trax's
          pharmaceutical  pass-through contracts are reported on a net basis and
          pharmaceutical   performance   incentives,   previously   recorded  as
          reductions of operating expense, are reclassifed to revenue.

         Except as described above, no other changes have been made to our
Quarterly Report on Form 10-QSB for the quarter ended June 30, 2004 filed on
August 18, 2004.




                                       2
<PAGE>




                          PART I. FINANCIAL INFORMATION

Item 1.           Financial Statements




                                  I-TRAX, INC.
              INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


                                                                        Page No.


Report of Independent Registered Public Accounting Firm                      4

Condensed Consolidated Balance Sheets at June 30, 2004 (unaudited)
     and December 31, 2003                                                   5

Condensed Consolidated Statements of Operations
     for the three months ended June 30, 2004 and 2003 (unaudited)           6

Condensed Consolidated Statements of Operations
     for the six months ended June 30, 2004 and 2003 (unaudited)             7

Condensed Consolidated Statement of Stockholders' Equity
     for the six months ended June 30, 2004 (unaudited)                      8

Condensed Consolidated Statements of Cash Flows
     for the six months ended June 30, 2004 and 2003 (unaudited)             9

Notes to Condensed Consolidated Financial Statements                        11





                                       3
<PAGE>




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 June 30, 2004, and
the related condensed consolidated  statements of operations for the three month
and six month periods ended June 30, 2004 and 2003,  the condensed  consolidated
statements of stockholders'  equity for the six month period ended June 30, 2004
and the  condensed  consolidated  statements  of cash  flows  for the six  month
periods ended June 30, 2004 and 2003. 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 the
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 U.S. generally accepted accounting principles.

We have  previously  audited,  in  accordance  with the  standards of the Public
Company  Accounting  Oversight  Board (United  States),  the balance sheet as of
December  31,  2003,  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 16, 2004, we expressed an unqualified
opinion on those financial statements. In our opinion, the information set forth
in the  accompanying  condensed  consolidated  balance  sheet as of December 31,
2003,  is  fairly  stated,  in  all  material  respects,   in  relation  to  the
consolidated balance sheet from which it has been derived.


GOLDSTEIN GOLUB KESSLER LLP
New York, New York

July 27, 2004



                                       4
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                   <C>            <C>

                          I-TRAX, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

                                                            ASSETS
                                                                                   June 30, 2004     December 31,
                                                                                    (unaudited)         2003
                                                                                      ---------      ---------
Current assets
     Cash and cash equivalents                                                        $   3,214      $     574
     Accounts receivable, net                                                            14,090            549
     Income tax receivable                                                                  279           --
     Other current assets                                                                 1,560            188
                                                                                      ---------      ---------
         Total current assets                                                            19,143          1,311

Property and equipment, net                                                               5,096          1,675
Goodwill                                                                                 45,853          8,424
Customer list, net                                                                       29,075            769
Other intangible assets, net                                                              2,204          1,400
Other long term assets                                                                       61             24
                                                                                      ---------      ---------

       Total assets                                                                   $ 101,432      $  13,603
                                                                                      =========      =========

                                             LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
     Accounts payable                                                                 $   6,730      $     606
     Accrued expenses                                                                     4,575            361
     Due to officers and related parties                                                   --              280
     Notes payable                                                                        2,000           --
     Net liabilities of discontinued operations                                           1,299           --
     Other current liabilities                                                            7,040            355
                                                                                      ---------      ---------
       Total current liabilities                                                         21,644          1,602

Common stock warrants                                                                      --            2,760
Note payable                                                                              4,459           --
Other long term liabilities                                                               2,451            856
                                                                                      ---------      ---------

       Total liabilities                                                                 28,554          5,218
                                                                                      ---------      ---------

Commitments and contingencies                                                              --             --

Stockholders' equity
     Preferred stock - $.001 par value, 2,000,000 shares authorized,
       1,200,000 and -0- issued and outstanding, respectively                                 1           --
     Common stock - $.001 par value, 100,000,000 shares authorized,
       24,595,074 and 13,966,817 shares issued and outstanding, respectively                 24             14
     Additional paid in capital                                                         131,198         47,276
     Accumulated deficit                                                                (58,345)       (38,905)
                                                                                      ---------      ---------
       Total stockholders' equity                                                        72,878          8,385
                                                                                      ---------      ---------

Total liabilities and stockholders' equity                                            $ 101,432      $  13,603
                                                                                      =========      =========


    See accompanying notes to consolidated financial statements (unaudited).


</TABLE>



                                       5
<PAGE>
<TABLE>
<CAPTION>

<S>                                                                                <C>                    <C>

                          I-TRAX, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)
                        (in thousands, except share data)



                                                                               Three months           Three months
                                                                                   ended                  ended
                                                                               June 30, 2004          June 30, 2003
                                                                             ------------------     ------------------

Net revenue                                                                        $    24,384            $     1,051
                                                                             ------------------     ------------------

Costs and expenses:
     Operating expenses                                                                 19,117                    503
     General and administrative expenses                                                 4,651                  2,015
     Depreciation and amortization                                                       1,357                    441
                                                                             ------------------     ------------------
Total costs and expenses                                                                25,125                  2,959
                                                                             ------------------     ------------------

Operating loss                                                                            (741)                (1,908)
                                                                             ------------------     ------------------

Other expenses:
     Interest expense                                                                      163                    654
     Amortization of financing costs                                                        12                    180
                                                                             ------------------     ------------------
Total other expenses                                                                       175                    834
                                                                             ------------------     ------------------

Net loss                                                                                  (916)                (2,742)
                                                                             ------------------     ------------------

Less preferred stock dividend                                                             (598)                    --
                                                                             ------------------     ------------------

Net loss applicable to common stockholders                                         $    (1,514)           $    (2,742)
                                                                             ==================     ==================

Loss per common share, basic and diluted                                           $     (0.06)           $     (0.28)
                                                                             ==================     ==================

Weighted average number of shares outstanding, basic and diluted                    24,586,681              9,873,184
                                                                             ==================     ==================




    See accompanying notes to consolidated financial statements (unaudited).

</TABLE>

                                       6
<PAGE>


<TABLE>
<CAPTION>

<S>                                                                   <C>               <C>

                          I-TRAX, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)
                        (in thousands, except share data)



                                                                     Six months ended  Six months ended
                                                                       June 30, 2004     June 30, 2003
                                                                      ------------      ------------

Net revenue                                                           $     25,831      $      2,667
                                                                      ------------      ------------

Costs and expenses:
     Operating expenses                                                     19,814             1,064
     General and administrative expenses                                     6,672             3,019
     Depreciation and amortization                                           1,792               878
                                                                      ------------      ------------
Total costs and expenses                                                    28,278             4,961
                                                                      ------------      ------------

Operating loss                                                              (2,447)           (2,294)
                                                                      ------------      ------------

Other expenses:
     Interest expense                                                          776               975
     Amortization of financing costs                                            47               237
     Other expenses                                                            350               200
                                                                      ------------      ------------
Total other expenses                                                         1,173             1,412
                                                                      ------------      ------------

Net loss                                                                    (3,620)           (3,706)

Less preferred stock dividend                                                 (677)             --

Less deemed dividends applicable to preferred stockholders                 (15,820)             --
                                                                      ------------      ------------

Net loss applicable to common stockholders                            $    (20,117)     $     (3,706)
                                                                      ============      ============


Loss per common share, basic and diluted:                             $      (1.01)     $      (0.39)
                                                                      ============      ============


Weighted average number of shares outstanding, basic and diluted:       19,995,997         9,620,206
                                                                      ============      ============





    See accompanying notes to consolidated financial statements (unaudited).


</TABLE>


                                       7
<PAGE>

<TABLE>
<CAPTION>

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

                                                I-TRAX, INC. AND SUBSIDIARIES
                                  CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                           FOR THE SIX MONTHS ENDED JUNE 30, 2004
                                                         (UNAUDITED)
                                              (in thousands, except share data)


                                           Preferred Stock               Common Stock      Additional                    Total
                                       ---------------------- ---------------------------   Paid-in     Accumulated   Stockholders'
                                         Shares     Amount       Shares         Amount      Capital       Deficit        Equity
                                       ----------- ---------- ------------ -------------- ------------ -------------  -------------
Balances at January 1, 2004                    --   $     --   13,966,817       $     14   $   47,276   $   (38,905)    $    8,385

Reclassification of common
     stock warrants to paid in capital         --         --           --             --        3,110            --          3,110

Issuance of common stock in connection
   with conversion of promissory note
   and other settlement, net of costs          --         --       69,165             --           71            --             71

Issuance of common stock for conversion
   of debenture and accrued interest           --         --      427,106             --          747            --            747

Issuance of common stock for exercise
   of warrants                                 --         --      131,986             --           52            --             52

Sale of preferred stock, net of costs   1,000,000          1           --             --       23,509            --         23,510

Issuance of preferred stock for
   acquisition of CHD Meridian            400,000         --           --             --       10,000            --         10,000

Redemption of preferred stock            (200,000)        --           --             --       (5,000)           --         (5,000)

Issuance of common stock for
   acquisition of CHD Meridian                 --         --   10,000,000             10       36,290            --         36,300

Beneficial conversion feature in
    connection with issuance of
    preferred stock                            --         --           --             --       15,820       (15,820)            --

Preferred stock dividend                       --         --           --             --         (677)           --           (677)

Net loss for the six months
    ended June 30, 2004                        --         --           --             --           --        (3,620)        (3,620)
                                       ----------- ---------- ------------ -------------- ------------ -------------  -------------

Balances at June 30, 2004               1,200,000   $      1   24,595,074       $     24  $   131,198   $   (58,345)    $   72,878
                                       =========== ========== ============ ============== ============ =============  =============


                               See accompanying notes to consolidated financial statements (unaudited).
</TABLE>

                                       8
<PAGE>


<TABLE>
<CAPTION>

<S>                                                                                 <C>           <C>

                          I-TRAX, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003
                                   (UNAUDITED)
                        (in thousands, except share data)

                                                                                   Six months     Six months
                                                                                     ended          ended
                                                                                 June 30, 2004   June 30, 2003
                                                                                    --------      --------

Operating activities:
     Net loss                                                                       $ (3,620)     $ (3,706)
     Adjustments to reconcile net loss to net cash used in operating
       activities:
         Depreciation and amortization                                                 1,792           878
         Accretion of discount on notes payable charged to interest expense
            and beneficial conversion value of debenture                                 573           780
         Increase in fair value of common stock warrants                                 350          --
         Amortization of debt issuance costs                                              34           237
         Write-off of deposit on cancelled acquisition                                  --             200
         Issuance of securities for services                                            --           1,414
         Other non-cash items                                                           --              10

Changes in operating assets and liabilities, net of acquisition:
     Decrease (increase) in accounts receivable                                         (731)          135
     Decrease (increase) in other current assets                                        (375)          (56)
     Decrease in accounts payable                                                       (242)         (230)
     Increase in accrued expenses                                                        378            80
     (Decrease) increase in other current liabilities                                     70        (1,255)
                                                                                    --------      --------
Net cash used in operating activities                                                 (1,771)       (1,513)
                                                                                    --------      --------

Investing activities:
     Purchases of property, plant and equipment                                         (770)         (380)
     Acquisition of intangible assets                                                   (637)         --
     Acquisition of CHD Meridian, net of acquired cash                               (18,134)         --
                                                                                    --------      --------
Net cash used in investing activities                                                (19,541)         (380)
                                                                                    --------      --------

Financing activities:
     Principal payments on capital leases                                                (21)          (35)
     Proceeds from/ repayment to related parties                                        (280)          600
     Repayment of note payable                                                          (618)          325
     Proceeds from exercise of warrants                                                   52          --
     Proceeds from bank credit facility, net of issuance costs                         6,309          --
     Proceeds from sale of preferred stock, net of issuance costs                     23,510          --
     Proceeds from sale of common stock                                                 --           1,004
     Redemption of preferred stock                                                    (5,000)         --
                                                                                    --------      --------

Net cash provided by financing activities                                             23,952         1,894
                                                                                    --------      --------

Net increase (decrease) in cash and cash equivalents                                   2,640             1

Cash and cash equivalents at beginning of period                                         574           360
                                                                                    --------      --------

Cash and cash equivalents at end of period                                          $  3,214      $    361
                                                                                    ========      ========
Supplemental disclosure of non-cash flow information:
     Cash paid during the year for:
       Interest                                                                     $    266      $   --
                                                                                    ========      ========


                         (Continues on following page.)
    See accompanying notes to consolidated financial statements (unaudited).


</TABLE>



                                       9
<PAGE>

<TABLE>
<CAPTION>

<S>                                                                                     <C>                <C>

                                           I-TRAX, INC. AND SUBSIDIARIES
                                       CONSOLIDATED STATEMENT OF CASH FLOWS
                                  FOR THE SIX MONTHS ENDED JUNE 30, 2004 AND 2003

                                          (Continues from previous page.)

                                                                                     Six months        Six months
                                                                                       ended             ended
                                                                                   June 30, 2004      June 30, 2003
                                                                                   -------------      --------------

       Income taxes                                                                  $    151            $   --
                                                                                     ========            ========

Schedule of non-cash financing activities:

     Reclassification of common stock warrants to paid in capital                    $  3,110            $   --
                                                                                     ========            ========
     Issuance of common stock in connection with conversion of promissory
       note and other settlement                                                     $     71            $  1,169
                                                                                     ========            ========

     Issuance of common stock in connection with conversion of debenture
       payable                                                                       $    747            $   --
                                                                                     ========            ========
     Beneficial conversion feature in connection with issuance of preferred
       stock                                                                         $ 15,820            $   --
                                                                                     ========            ========
     Issuance of common and preferred stock in connection with the
       acquisition of CHD Meridian                                                   $ 46,300            $   --
                                                                                     ========            ========

     Preferred stock dividend                                                        $    677            $   --
                                                                                     ========            ========
     Issuance of common stock in connection with the conversion of deferred
       salaries                                                                      $   --              $    122
                                                                                     ========            ========
     Purchase of all capital stock of CHD Meridian and assumption of liabilities
       in the acquisition as follows:
         Fair value of non-cash tangible assets acquired                             $ 17,257            $   --
                                                                                     ========            ========

         Goodwill                                                                      37,429                --

         Customer list                                                                 29,184                --

         Other intangibles                                                              1,167                --

         Cash paid, net of cash acquired (includes $85 of transaction costs
           incurred in a prior period)                                                (18,834)               --

         Common stock issued                                                          (36,300)               --

         Preferred stock issued                                                       (10,000)               --
                                                                                     --------            --------
         Liabilities assumed                                                         $(19,903)           $   --
                                                                                     ========            ========

</TABLE>




    See accompanying notes to consolidated financial statements (unaudited).



                                       10
<PAGE>



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



NOTE 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 does
business as CHD Meridian  Healthcare  ("CHD  Meridian").  (See Note  3--Business
Combination.)

Following the merger, the Company offers two categories of services: (1) on-site
health related  services such as occupational  health,  primary care,  corporate
health, and pharmacy and (2) personalized health 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 personalized health management 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 non-medical services.


NOTE 2--INTERIM RESULTS AND BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance
with accounting  principles  generally  accepted in the United States of America
for interim  financial  information and the instructions to Form 10-QSB and Item
310(b) of Regulation S-B promulgated under the Securities  Exchange Act of 1934.
In the opinion of  management,  the  unaudited  financial  statements  have been
prepared on the same basis as the annual  financial  statements  and reflect all
adjustments  necessary to present  fairly the financial  position as of June 30,
2004 and the  results  of the  operations  and cash  flows for the three and six
months  ended June 30,  2004.  Because  the  combination  of the Company and CHD
Meridian for accounting  purposes was effective as of April 1, 2004, the results
for the six months  ended  June 30,  2004 only  include  the  operations  of CHD
Meridian for the three months ended June 30, 2004. The balance sheet at December
31, 2003 has been derived from the audited  financial  statements of the Company
at that date.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with accounting  principles generally accepted
in the United States of America have been  condensed or omitted  pursuant to the
Securities and Exchange Commission's rules and regulations.

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  stockholders  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  preferred  stock.  As of June  30,  2004  and  2003,
17,719,554 and 5,444,093 shares issuable upon exercise of options,  warrants and
convertible preferred stock,  respectively,  were excluded from the diluted loss
per share computation because their effect would be anti-dilutive.




                                       11
<PAGE>



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



NOTE 2--INTERIM RESULTS AND BASIS OF PRESENTATION (continued)

These  unaudited  financial  statements  should be read in conjunction  with the
Company's  audited  financial  statements  and the  financial  statements of CHD
Meridian and notes thereto for the year ended  December 31, 2003 included in the
Company's  annual report on Form 10-KSB/A for the year ended  December 31, 2003,
and the  Company's  current  report on Form 8-K/A,  respectively,  each filed on
August 11, 2004.

The consolidated  financial statements include the balance sheet of CHD Meridian
LLC, its wholly owned  subsidiaries,  and the  Physician  Groups.  The financial
statements of the  Physician  Groups are  consolidated  with CHD Meridian LLC in
accordance with the nominee shareholder model of EITF 97-2, "Application of FASB
Statement  No.  94 and APB  Opinion  No.  16 to  Physician  Practice  Management
Entities and Certain Other Entities with Contractual  Management  Arrangements."
CHD Meridian LLC has  unilateral  control over the assets and  operations of the
Physician  Groups.  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 June 30, 2004.

The Company  records  pass-through  pharmaceutical  purchases  on a net basis in
compliance  with  Emerging  Issues Task Force Issue No. 99-19,  Reporting  Gross
Revenue  as a  Principal  vs.  Net as an  Agent.  The  amounts  of pass  through
pharmaceutical  purchased by the Company for the three and six months ended June
30, 2004 was $24,870,731.

NOTE 3--BUSINESS COMBINATION

On March 19,  2004,  the Company  merged  with CHD  Meridian,  a privately  held
company  and a  major  provider  of  outsourced,  employer-sponsored  healthcare
services.  CHD Meridian provides such services to large self-insured  employers,
including Fortune 1,000 companies.

Pursuant to the merger agreement,  the Company,  (1) issued 10,000,000 shares of
common stock,  (2) issued 400,000 shares of  convertible  preferred  stock (with
each share  convertible  into 10 shares of common  stock) at $25.00 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 $25.00 per share or  $5,000,000.  The total
value of the merger consideration is $73,592,000, made up of common stock valued
at $36,300,000,  preferred stock valued at $10,000,000,  cash of $25,908,000 and
transaction  expenses  of  $1,384,000.  The  Company  has  filed a  registration
statement with the Securities and Exchange Commission to register for resale the
(a) common  stock  issued in the  merger,  and (b) common  stock  issuable  upon
conversion of convertible preferred stock issued in the merger.

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 will increase
proportionately  with  EBITDA  above  $8,100,000,  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 shares are not  recorded as  outstanding  for  accounting
purposes until the earn-out target is satisfied.


                                       12
<PAGE>



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



NOTE 3--BUSINESS COMBINATION (continued)

The Company funded the cash portion of the merger  consideration  by (1) selling
1,000,000  shares of convertible  preferred stock at $25.00 per share (with each
share  convertible  into 10 shares  of common  stock),  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. (See Note 6 - Long Term Debt.)

In connection with the sale and issuance of the convertible preferred stock, the
Company  reported  $15,820,000  as a deemed  dividend to preferred  stockholders
representing the beneficial  conversion value for the underlying common stock as
of the date the merger was agreed. The beneficial conversion value is treated as
a  dividend  on the  convertible  preferred  stock  solely  for the  purpose  of
computing  earnings per share.  The dividend is computed by multiplying  (1) the
difference  between the value of the underlying  common stock  calculated  using
average  closing  price  for the three  days  prior  and  three  days  after the
announcement of the merger ($3.63 per share) and the conversion price ($2.50 per
share) by (2) the number of shares of common  stock  into which the  convertible
preferred  stock  outstanding  at the merger's  effective  time was  convertible
(14,000,000 shares).

The aggregate purchase price of $73,592,000 for this transaction is summarized
as follows:

Fair value of tangible assets acquired (includes
    cash of $8,444,000)                                  $   25,715,000
Liabilities assumed                                         (19,903,000)
Goodwill                                                     37,429,000
Customer list                                                29,184,000
Other intangibles                                             1,167,000
                                                     -------------------
                                                         $   73,592,000
                                                     ===================

The acquisition  was accounted for using the purchase method of accounting.  The
Company  incurred  acquisition  costs of  $1,384,000  that are  included  in the
purchase  price.  In  addition,  $832,000  of  transaction  related  bonuses and
termination pay are included in the general and  administrative  expense item on
the condensed consolidated statement of operations.

The following are the Company's unaudited pro forma results of operations giving
effect to the acquisition of CHD Meridian as though the transaction had occurred
on January 1, 2003.  The results  exclude  transaction  costs of $1,938,000  and
transaction  related bonuses and termination pay of $832,000 included in the CHD
Meridian and the Company's statements of operations, respectively. The pro forma
results also include  adjustments to  amortization  expense  associated with the
intangibles acquired and interest expense related to the new credit facility.

                                    Six months ended      Six months ended
                                      June 30, 2004         June 30, 2003
                                    ------------------    ------------------

        Net revenue                     $  49,186,000         $  48,392,000
                                    ------------------    ------------------

        Operating income                   (1,005,000)             (700,000)
                                    ------------------    ------------------

        Net loss                        $  (2,329,000)        $  (2,756,000)
                                    ==================    ==================

        Loss per share                    $     (0.10)          $     (0.14)
                                    ==================    ==================




                                       13
<PAGE>



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



NOTE 4--GOODWILL AND INTANGIBLE ASSETS

During the quarter  ended June 30, 2004,  goodwill  increased by $615,000.  This
increase is related to additional  transaction costs incurred by the Company and
an adjustment in the liabilities acquired. The changes in the carrying amount of
goodwill for the quarter ended June 30, 2004 is as follows:

                                                Total
                                          ----------------

Balance as of January 1, 2004                $   8,424,000
Goodwill acquired in the six months
ended June 30, 2004                             37,429,000
                                          ----------------
Balance as of June 30, 2004                  $  45,853,000
                                          ================

The components of identifiable intangible assets, which are included in the
consolidated balance sheet as of June 30, 2004, are as follows:

<TABLE>
<CAPTION>

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

                                            Gross Carrying       Accumulated         Net Carrying
                                                Amount           Amortization           Amount
                                           -----------------    ---------------    -----------------
 Amortized intangible assets:
     Customer lists                           $  36,492,000      $   7,417,000        $  29,075,000
     Other intangibles                            5,284,000          3,080,000            2,204,000
                                           ----------------    ---------------    -----------------
 Total                                        $  41,776,000      $  10,497,000        $  31,279,000
                                           ================    ===============    =================

</TABLE>


Customer lists are amortized on a straight-line  basis over the expected periods
to be benefited,  generally 12 - 15 years.  Other  intangible  assets  represent
technology and deferred  marketing costs, which are amortized on a straight-line
basis over the  expected  periods to be  benefited,  generally  3 - 5 years.  In
accordance  with SFAS No. 142, the Company  completes a test for  impairment  of
goodwill and certain other intangible assets annually.


NOTE 5--CONVERTIBLE DEBENTURE

During the first quarter of 2004,  Palladin  Opportunity  Fund LLC converted the
remaining  balance of the  debenture  payable and accrued  interest  into common
stock.  Accordingly,  the Company  issued 427,106 shares of common stock for the
conversion of principal and accrued interest amounting to $747,000.

Interest expense associated with the convertible  debenture amounted to $368,000
for the six months  ended June 30,  2004.  This amount  includes  $362,000  that
represents  accelerated  accretion  to interest  expense for the discount of the
value assigned to the warrants issued to the debenture holder and the beneficial
conversion value at date of issuance.




                                       14
<PAGE>



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



NOTE 6--LONG TERM DEBT

On March 19, 2004, in connection with the CHD Meridian acquisition,  the Company
obtained a $20,000,000  senior  secured credit  facility from a national  lender
that expires on April 1, 2007.  The credit  facility has a $6,000,000  term loan
commitment with a $14,000,000 revolving credit commitment. Outstanding letter of
credit  liabilities  reduce  the  amount  available  to be  borrowed  under  the
revolving credit commitment.

The credit  facility is secured by  substantially  all of the Company's  assets.
From June 1, 2004 until  November 1, 2005,  the  borrowings  under the revolving
credit  commitment  may not  exceed  80% of  eligible  receivables  plus  50% of
eligible fixed assets. Borrowings, at the Company's 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 the
Company's debt service coverage  ratios.  Eurodollar rate loans bear interest at
the  Eurodollar  rate  plus up to  3.0%  per  annum  likewise  depending  on the
Company's debt service coverage ratios.

As of June 30, 2004, the Company had outstanding $6,000,000 under the term loan,
$2,000,000  of which is  classified  as short  term and  $4,000,000  of which is
classified as long term,  and $459,000  under the revolving  credit  commitment,
which is classified as long term,  and an aggregate of $3,000,000  under letters
of credit.  On the first day of each calendar quarter beginning July 1, 2004 and
ending on April 1, 2007, the Company is required to make a principal installment
payment of $500,000.  The balance  outstanding on the term loan as of the filing
of this report is $5,500,000.

The credit facility includes certain financial  covenants,  including a covenant
measuring: (1) the ratio of the Company's funded indebtedness to earnings before
income,  taxes,  depreciation and amortization,  or EBITDA, (2) the ratio of the
Company's  funded  indebtedness to  capitalization,  and (3) the Company's fixed
charges  coverage  ratio.  The first  measuring  date under the credit  facility
occurred on June 30, 2004.  As of that date,  the Company was not in  compliance
with the funded  indebtedness  to EBITDA  ratio and the fixed  charges  coverage
ratio.

On August 12,  2004,  the  Company  agreed  with the senior  lender to amend the
credit facility, and, accordingly, as of the date of this filing, the Company is
in compliance with all covenants. Among other things, the amendment includes two
additional covenants:  (1) the Company must achieve minimum stockholders' equity
of  $82,878,000  as of October 31,  2004,  an increase of  $10,000,000  from the
stockholder's equity reflected on the balance sheet as of June 30, 2004, and (2)
the Company must achieve pro forma 2004 EBITDA (giving effect to the acquisition
of CHD Meridian  Healthcare as though the transaction had occurred on January 1,
2004) of $3,560,000. The Company will need to raise approximately $10,000,000 in
the form of equity to satisfy the  stockholders'  equity  covenant in the credit
facility amendment.

The credit  facility  amendment  also  limits the amount the  Company can borrow
under the  facility,  although the amount of the  revolving  credit  commitments
under the facility remains at $14,000,000. Through October 31, 2004, the Company
may use up to  $5,500,000  (including  outstanding  letters  of  credit).  After
October 31, 2004 and assuming the Company is in compliance with all covenants as
of such date, the Company may borrow additional amounts up to the borrowing base
(approximately  $11,000,000 as of June 30, 2004), less the amount of outstanding
letters of credit.

In addition to funding the merger and related  costs,  a portion of the proceeds
from the credit  facility  was used by the Company to repay  $280,000 in related
party loans and  $944,000 in principal  and  interest for all other  outstanding
promissory notes.



                                       15
<PAGE>




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



NOTE 7--COMMITMENTS AND CONTINGENCIES

Litigation

CHD Meridian is a defendant in two  lawsuits  seeking a return of  approximately
$920,000  in  payments  received in the  ordinary  course of  business  from two
clients that filed for protection  under  bankruptcy  laws during 2002 and 2003.
Management believes that such amounts were not preference payments,  and as such
are not subject to repayment. The outcome of these lawsuits,  however, cannot be
determined.

CHD Meridian is also  involved in certain  legal actions and claims on a variety
of matters  related to the normal course of business.  Management  believes that
such legal actions will not have a material  effect on the results of operations
or the  financial  position of the  Company.  (See also Note 9 - Risk  Retention
Group.)

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.  Recently,  government  activity has increased  with respect to
investigations and allegations concerning possible violations of fraud and abuse
statutes and regulations by healthcare  providers.  Violations of these laws and
regulations  could  result in, among other  things,  expulsion  from  government
healthcare  programs  together  with the  imposition  of  significant  fines and
penalties,  as well as significant  repayments for patient  services  previously
billed.

Management  believes  that the  Company  is in  compliance  with fraud and abuse
statutes as well as other applicable government laws and regulations. Compliance
with such laws and  regulations can be subject to future  government  review and
interpretation as well as regulatory actions unknown or unasserted at this time.

Significant Customers

As of June 30, 2004,  two customers  represented  20% of the Company's  accounts
receivable as reflected on the Company's condensed consolidated balance sheets.

For the three and six months  ended June 30,  2004,  one customer of the Company
accounted  for  14% of the  Company's  revenue  as  reflected  on the  Company's
condensed consolidated statement of operations.

Risk-Sharing Contracts

From time to time the Company enters into risk-sharing contracts. A risk-sharing
contract  generally  requires the Company to manage the health and wellness of a
predetermined  set  of  individuals  for a  term  of  three  to  five  years.  A
risk-sharing  contract  provides  that the  Company is required to refund to its
client a  percentage  of the  Company's  fees if its  program  does not save the
client an agreed upon percentage of the client's  healthcare  costs. The Company
did not generate material risk revenue, which may be subject to a refund, during
the quarter and six months ended June 30, 2004.





                                       16
<PAGE>




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



NOTE 8--STOCKHOLDERS' EQUITY

Preferred Stock

The Company has 2,000,000  authorized  shares of preferred stock. As of June 30,
2004,  the  Company  had issued  and  outstanding  1,200,000  shares of Series A
Convertible  Preferred Stock. Each share of Series A Convertible Preferred Stock
is  convertible  into shares of common  stock.  Holders of Series A  Convertible
Preferred  Stock may convert  such shares  into  common  stock at any time.  The
Series A Convertible Preferred Stock has a liquidation  preference of $25.00 per
share (the original  purchase price).  The Series A Convertible  Preferred Stock
accrues,  from  issuance,  dividends  at a rate of 8% per year on the $25.00 per
share  original  issue price.  Dividends will only be payable upon the Company's
liquidation  or  conversion  of the Series A  Convertible  Preferred  Stock into
common stock and will be payable,  at the  Company's  option,  in cash or common
stock.   For  the  six  months  ended  June  30,  2004,  the  Company   recorded
approximately $677,000 in accrued dividends.

The placement  agents of the Series A Convertible  Preferred  Stock sold to fund
the acquisition of CHD Meridian received a commission of $1,490,000 and warrants
to acquire 492,000 shares of common stock  exercisable at $2.50 per share.  Such
warrants were valued at $1,506,000 utilizing the Black-Scholes  valuation model.
The amount of the cash paid and the value of the warrants  have been  classified
as a cost of equity in the  condensed  consolidated  statement of  stockholders'
equity.

Common Stock

The Company has  100,000,000  authorized  shares of common stock. As of June 30,
2004, the Company had issued and outstanding  24,595,074 shares,  which excludes
3,859,200 shares held in escrow for the CHD Meridian earn out.

Warrants

Under  the terms of a private  placement  completed  during  October  2003,  the
Company filed a  registration  statement  under the  Securities  Act of 1933, as
amended, covering the resale of the common stock and the common stock underlying
warrants issued in the private placement. The Securities and Exchange Commission
declared the registration statement effective on February 17, 2004.



                                       17
<PAGE>



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



NOTE 8--STOCKHOLDERS' EQUITY (continued)

Warrants (continued)

In accordance with EITF 00-19,  "Accounting for Derivative Financial Instruments
Indexed To, and Potentially  Settled In a Company's Own Stock," upon issuance of
the warrants,  the Company  recorded a liability in the amount of the fair value
of $2,459,000  for certain  warrants to acquire  890,000 shares of common stock.
The fair value of the warrants was estimated using the  Black-Scholes  valuation
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 was estimated to be $2,760,000  and $3,110,000 at December 31, 2003
and  February  17,  2004,  respectively.  The  Company  recorded  an  additional
liability,  with a corresponding charge to operations,  of $301,000 and $350,000
on December 31, 2003 and February 17, 2004,  respectively,  associated  with the
increase in fair value of the warrants.

The  adjustments  required  by EITF  00-19  were  triggered  by the terms of the
private placement subscription agreement, which imposed penalties if the Company
did not timely  register the common stock  underlying the warrants issued in the
private placement.  The Securities and Exchange  Commission 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.

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 has been 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  following  table  summarizes  the  Company's  activity as it relates to its
warrants for the six months ended June 30, 2004:

                                                       Shares Underlying
                                                           Warrants
                                                     -------------------

       Balance outstanding at January 1, 2004                 3,351,372
       Quarter ended March 31, 2004:
                Granted                                         492,000
                Exercised                                      (179,278)
                                                     -------------------
       Balance outstanding at March 31, 2004                  3,664,094
                                                     -------------------
       Quarter ended June 30, 2004:
                Granted
                Exercised                                        (7,500)
                                                     -------------------
       Balance outstanding at June 30, 2004                   3,656,594
                                                     ===================


Warrants  issued  during the six months ended June 30, 2004 are  exercisable  at
$2.50 per share.  Such warrants were valued at $1,506,000 and recorded as a cost
of equity because they were granted to placement agents in connection with sales
of convertible preferred stock.



                                       18
<PAGE>



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



NOTE 8--STOCKHOLDERS' EQUITY (continued)

Stock Options

The table below summarizes the activity in the Company's stock option plans for
the six moths ended June 30, 2004:

<TABLE>
<CAPTION>

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

                             Non-Qualified Non-Plan
                             Incentive Options           Options          Non-Qualified           Total
                                                                          Options
   ------------------------ -------------------- ------------------- ------------------- -------------------
   Outstanding as of
   January 1, 2004                      652,941             795,973             669,000           2,117,914
   Granted                               70,921                  --                  --              70,921
   Exercised                                 --                  --                  --                  --
   Forfeited/Expired                         --             (30,000)                 --             (30,000)
                            -------------------- ------------------- ------------------- -------------------
   Outstanding as of
   March 31, 2004                       723,862             765,973             669,000           2,158,835
                            -------------------- ------------------- ------------------- -------------------
   Granted                                   --                  --                  --                  --
   Exercised                                 --                  --                  --                  --
   Forfeited/Expired                    (95,875)                 --                  --             (95,875)
                            -------------------- ------------------- ------------------- -------------------
   Outstanding as of June
   30, 2004                             627,987             765,973             669,000           2,062,960
                            ==================== =================== =================== ===================
   Vesting Dates:
         December 31, 2004              122,541             170,998             177,496             471,035
         December 31, 2005              122,062              82,665             101,665             306,392
         December 31, 2006               72,062              50,004              75,006             197,072
         December 31, 2007                5,549                  --                  --               5,549
         December 31, 2008                   --                  --              20,000              20,000
                Thereafter                   --                  --                  --                  --

</TABLE>


As of June 30,  2004,  exercisable  plan and  non-plan  options to  purchase  an
aggregate  of  1,329,648  shares,  with  exercise  prices  ranging from $.005 to
$10.00, were outstanding.

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.



                                       19
<PAGE>



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



NOTE 8--STOCKHOLDERS' EQUITY (continued)

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:

<TABLE>
<CAPTION>

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

                                     For the three     For the three     For the six      For the six
                                     months ended       months ended     months ended     months ended
                                     June 30, 2004     June 30, 2003    June 30, 2004    June 30, 2003
                                      -----------      -----------      -----------      -----------

Net loss as reported                  $  (916,000)     $(2,742,000)     $(3,620,000)     $(3,706,000)

Deduct total stock based employee
compensation expense determined
under fair value based methods
for all awards                           (201,000)      (1,400,000)        (418,000)      (2,113,000)
                                      -----------      -----------      -----------      -----------

Pro forma net loss                    $(1,117,000)     $(4,142,000)     $(4,038,000)     $(5,819,000)
                                      ===========      ===========      ===========      ===========

Basic and diluted net loss per
share as reported                     $     (0.06)     $     (0.28)     $     (1.01)     $     (0.39)
                                      ===========      ===========      ===========      ===========

Pro forma basic and diluted net
loss per share                        $     (0.07)     $     (0.42)     $     (1.03)     $     (0.60)
                                      ===========      ===========      ===========      ===========

</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  valuation  model with the  following  weighted-average
assumptions:

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

Securities and Exchange Commission Registration

Pursuant  to the terms of the  merger  agreement  between  the  Company  and CHD
Meridian, on April 19, 2004 the Company filed a registration statement under the
Securities Act of 1933, as amended,  covering the resale of (1) the common stock
issued in the merger, (2) the common stock underlying the convertible  preferred
stock issued in the merger and the related  financing,  and (3) the common stock
issuable upon exercise of warrants issued to the placement  agents in connection
with the merger.



                                       20
<PAGE>



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


NOTE 9--Risk Retention Group

During the first quarter of 2004, CHD Meridian formed Green Hills  Insurance,  a
Risk  Retention  Group (the  "RRG"),  licensed  in the State of Vermont  for the
purposes of  self-insuring a portion of the merged  companies'  professional and
general liability insurance.

The RRG was  capitalized  with  $2,000,000  in cash and a  $1,000,000  letter of
credit under the Company's credit facility.  The RRG began issuing policies on a
claims-made  basis to CHD Meridian  LLC, its direct  subsidiaries  and Physician
Groups in May 2004.  As of June 30,  2004,  cash held by the RRG is  invested in
cash equivalents in accordance with the regulations  promulgated by the State of
Vermont and is reflected on the balance sheet as cash and cash equivalents.

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 from May 1, 2004 through June 30, 2004.  Management's
estimates are based on an  independent  actuarial  report.  The Company does not
discount  loss and loss  adjustment  expense  reserves.  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  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.  No claims  have been filed
against  these  policies  as of June 30,  2004.  To the  extent  claims are made
against the policies in the future,  we expect such claims to be resolved within
five years of original date of claim.

The RRG does not plan to pay dividends to the  policyholders  in the foreseeable
future.






                                       21
<PAGE>






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 reviewed in conjunction with our 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-KSB for the year ended
December 31, 2003, as amended, and the audited financial statements of CHD
Meridian Healthcare and related notes for the year ended December 31, 2003
included in our current report on Form 8-K/A filed on August 11, 2004.

         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 Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2003, as amended, 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.

         The accompanying unaudited 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-QSB and
Item 310(b) of Regulation S-B. In our opinion, the unaudited financial
statements have been prepared on the same basis as the annual financial
statements and reflect all adjustments necessary to present fairly the financial
position as of June 30, 2004 and the results of the operations and cash flows
for the six months ended June 30, 2004. 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.

Our Business

         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 does business as CHD Meridian Healthcare.
Accordingly, this quarterly report on Form 10-QSB describes the business of the
merged companies. For accounting purposes, the consolidation of results of
operations of the two constituent companies was effective April 1, 2004. As a
result, our consolidated results of operations for the six months ended June 30,
2004 include the operations of CHD Meridian Healthcare only from April 1, 2004
until June 30, 2004.

         We offer two categories of services that can be integrated or blended
as necessary or appropriate based on each client's needs. The first category
includes on-site health related services such as occupational health, primary
care, corporate health, and pharmacy, which were historically offered by CHD
Meridian Healthcare. We believe we are the nation's largest provider of on-site
corporate health management services. The second category includes personalized
health management programs, which were historically offered by I-trax.

         Our 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 Communication Center staffed with trained
nurses and other healthcare professionals who are available 24 hours per day



                                       22
<PAGE>


, 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.

         We provide services to approximately 150 clients, including automotive
and automotive parts manufacturers, consumer products manufacturers, large
financial institutions, health plans, integrated delivery networks, and third
party administrators. These services include operating for certain of such
clients approximately 160 on-site facilities in 32 states. Our client retention
rate is high because we establish 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.

Our Acquisition of CHD Meridian Healthcare

         We acquired CHD Meridian Healthcare on March 19, 2004. 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. 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, and by borrowing $12,000,000 on a new $20,000,000 senior secured
debt facility from a national lender.

         In the merger, I-trax assumed all of CHD Meridian Healthcare's
liabilities, which equaled approximately $20,000,000.

         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.

         Further, under the terms of the merger, 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. The escrowed shares are not deemed
outstanding for accounting purposes until released. Based upon CHD Meridian
Healthcare's results of operations as of June 30, 2004, management believes that
CHD Meridian Healthcare will achieve at least the minimum EBITDA target set
forth in the merger agreement.

Our Services

         Occupational Health Services

         We provide professional staffing and management of on-site health
facilities that address the occupational health, workers' compensation injuries,
and minor illness needs of the employer's workforce. These programs are designed
to operate across the entire array of occupational health regulatory
environments and emphasize work-related injury cost-reduction, treatment,
medical surveillance or testing, disability management, case management,
return-to-work coordination, medical community relations or oversight, on-site
physical therapy and injury prevention, and ergonomic assessment and
intervention. Our health programs improve compliance with treatment protocols
and drug formularies, enhance employee productivity, and allow for greater
employer control of occupational health costs. We currently operate 79
occupational health facilities.

         Primary Care Services

         We operate employer-sponsored health centers designed to integrate with
the employer's existing healthcare plans. In such arrangements, employers
contract with us directly for primary care health services and in the process
regain control of costs, quality and access. Generally, each of our health
centers services a single employer and offers health management programs
addressing the primary care needs of the employee base, including optometry
services and prevention and disease management programs. Clients may combine our
health



                                       23
<PAGE>


centers with a dedicated pharmacy. We also offer customized solutions in network
management and absence management, including non-work related case management
and disability management. Our physicians, nurses, and other staff are dedicated
to the customer's employee population, allowing employees, retirees, and their
dependents to receive cost-effective, high quality, accessible and convenient
care. We currently operate 18 primary care centers.

         Pharmacy Services

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

         Corporate Health Services

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

         Personalized Health Management Programs

         Our personalized health management programs are designed to deliver
lifestyle and wellness management, and disease and risk reduction interventions
to a client's entire population, across multiple locations and irrespective of
population size. Using predictive science, sophisticated, proprietary computer
software, clinical expertise, and personal care coordination, we enable our
clients to evolve from fragmented care management practices into a cohesive and
efficient system of healthcare. We use a single-data platform to allow all
caregivers to share records, thus enabling our clients to provide true
coordination of care. We believe that facilitating real-time secure
communication between our client, the patient, the doctor, the care coordinator
and the insurer reduces costs and enables improved delivery of care.

         Predictive Science. Our programs incorporate predictive science to
analyze our client's medical claims and pharmacy and clinical data to predict
future healthcare costs, which of those costs are avoidable, the health
conditions that will drive those costs, and the people within our client's
populations who are at risk for those conditions. Armed with this information,
we tailor our programs to help the client achieve better care, savings and other
desired results.

         Technology Solutions. Our technology utilizes a single data
platform--Medicive(R) Medical Enterprise Data System--a proprietary software
architecture developed to collect, store, sort, retrieve and analyze a broad
range of information used in the healthcare industry. Our web accessible
software includes portals for key stakeholders in the care delivery
process--consumers, physicians and care managers--and permit real-time sharing
of information and support the adherence to our health and disease intervention
programs.

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

         Care Communication Center. Our Care Communication Center is staffed
with trained nurses and other healthcare professionals 24 hours per day, 7 days
per week. Through the Center, we effect targeted interventions to



                                       24
<PAGE>


achieve the goals of our programs. The Center helps each member or employee of
our client make informed decisions about his or her health and provides ongoing
support for those with chronic diseases. Our demand management and nurse triage
services incorporate nationally recognized, evidence-based clinical guidelines
to increase compliance by caregivers and consumers with best practices.

Our Client Contracts

         On-Site Facilities

         Our client contracts for on-site clinics and pharmacies are typically
for an initial term of three to five years and renew automatically in the
absence of notice to the contrary. Under these contracts, we typically provide
services to our clients' employees, dependents and retirees, although
arrangements vary depending on the contract. We charge these clients for our
services on a "cost plus" basis to provide care to these individuals. Under such
contracts, we currently operate approximately 160 on-site facilities in 32
states. We also currently estimate that approximately 650,000 individuals have
access to our on-site clinics, which represents approximately 25% of our
clients' employees, dependents and retirees.

         Personalized Health Management Programs

         Similar to contracts for on-site clinics and pharmacies, contracts
covering our personalized health management programs are typically for an
initial term of three to five years and renew automatically in the absence of
notice to the contrary. Under these contracts, we typically charge our clients a
per member or per employee per month fee, which increases with a corresponding
increase in the level of service we provide. Basic personalized health
management programs provide inbound telephone access to a nurse or healthcare
professional for triage or health information, 24 hours per day, 7 days per
week, for employees, health plan members and, in many instances, dependents.
Enhanced programs, which we introduced in October 2003, provide inbound and
outbound contacts by telephone, mail and e-mail and electronic health
information and tools. Some clients also engage us to provide to their members,
employees and dependents custom disease management programs to target
individuals with a specific disease or who are at high risk for a specific
disease. We charge additional fees for individuals that elect to enroll in our
disease management programs. Our personalized health management contracts also
allow risk-sharing. These contracts provide for an incentive payment and/or fee
refund if we fail to achieve or exceed, as appropriate, a targeted percentage
reduction in our client's healthcare costs.

         We measure the number of persons, or "covered lives," under contracts
for our programs because it is a useful indicator of the growth of our
personalized health management programs. We calculate covered lives as follows.
First, the number of employees or members covered by each contract is based on
estimates provided by our client, and is adjusted regularly for the actual
number of eligible or enrolled employees or members. Further, in many instances,
in addition to serving our client's employees or members, we also provide
services to some or all dependents, as provided in the specific contract.
Covered lives, therefore, include all such employees, members and their
dependents. We estimate that as of the date of this report, we are providing
enhanced programs to approximately 41,000 covered lives. In recognition of
contract negotiations that we believe are in final stages, we estimate that we
will be providing enhanced programs to approximately 97,000 covered lives by
December 31, 2004. Finally, we expect to enroll a certain percentage of such
covered lives into our disease management programs, although we cannot estimate
that percentage at this time.

Our Strategy

         Our business strategy is to improve the health status of employee
populations and manage the upward claim trend experienced by employers and
employees, self-insured employers and government agencies. These groups often
seek programs that promote health, manage disease and disability, and complement
existing health initiatives and benefits. Self-insured employers and government
agencies invest in such health programs because they reduce later need for
critical care and related costs, increase productivity, reduce absenteeism,
improve health status of both active employees and retirees, and reduce overall
costs.

         We believe that our programs offer a complete solution to meet this
need. We service each segment of a self-insured employer's population to achieve
the desired clinical and financial outcomes. Our on-site programs


                                       25
<PAGE>


reduce healthcare costs of the populations that use our facilities.
Complementing those services, our personalized health management programs
improve the health of each client's entire population, achieving the same
result. We believe that the combination of our on-site services and personalized
health management solutions responds to a specific and frequent request of large
employers for a comprehensive range of health management services.

         We also believe that with a nominal increase in variable costs, we can
offer our on-site clients the value added benefit of our personalized health
management programs. We estimate that we service only 25% of our clients'
covered lives through our on-site facilities. We believe, however, that through
our personalized health management programs, we can provide services to the
balance of these populations. Further, with respect to certain of these clients,
we believe that we can successfully negotiate participation in future medical
cost savings that may result from our services.

         Finally, our programs offer our clients multiple services and price
entry points to meet their budget restrictions and specific needs. We believe
that this available menu of services could shorten our current sales cycle and
provide us with an opportunity to build a more comprehensive program as the
relationship grows with each client over time.

Risks Inherent in Our Business

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

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

     o    The sales cycle for our services is complex, unpredictable and has
          generally ranged from 3 to 24 months from initial contact to contract
          signing. The time it takes to implement our services is also difficult
          to predict and has lasted as long as 18 months from contract execution
          to the commencement of live operation. During the sales cycle and the
          implementation period, we may expend substantial time, effort and
          money preparing contract proposals, negotiating the contract and
          implementing the solution without receiving any related revenue.

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

     o    Implementation and delivery of our personalized health management
          programs is highly dependent on data about individuals to whom we
          provide care supplied to us by our clients, and on our information
          technology systems that process such data when we receive it. If we do
          not receive timely and accurate data from our clients, or if our
          information technology systems do not process such data accurately, we
          may not be able to fulfill our client contracts, which could have a
          material adverse effect on our business, results of operations and
          financial condition. Further, our ability to deliver on our growth
          expectations is dependent on fully implementing our personalized
          health management programs for existing clients by the end of 2004
          such that we can begin to collect recurring monthly fees under these
          programs in the beginning of 2005.

     o    Our senior secured credit facility contains certain covenants and
          financial tests that limit the way we conduct business. The credit
          facility and such covenants are described in "Liquidity and Capital
          Resources - Working Capital" section below. These covenants will
          require us to raise additional capital or to replace the credit
          facility, and may prevent us from accessing working capital, competing
          effectively or taking advantage of new business opportunities. Under
          our credit facility, we are also required to maintain specified
          financial ratios and satisfy certain financial tests. If we cannot
          comply with these covenants or meet these ratios and other tests, it
          could result in a default under our credit facility, and unless we are
          able to negotiate an amendment,



                                       26
<PAGE>


          forbearance or waiver, we could be required to repay all amounts then
          outstanding, which could have a material adverse effect on our
          business, results of operations and financial condition.

     o    Our personalized health management programs are dependent on efficient
          deployment, implementation, and scalability of our software
          technology. To date, we have implemented our software technology for
          only a relatively few covered lives. We must continue to develop our
          software technology to provide the scalability and new functionality
          necessary to accommodate the greater number of covered lives we expect
          as we add new clients. If we fail to respond to these requirements,
          our ability to process new business could be slowed, which ultimately
          could have a material adverse effect on our business, results of
          operations and financial condition.

     o    Our revenue depends on the contractual relationships we establish and
          maintain with our clients. Some of our contracts provide for early
          termination. Other contracts may be terminated by our clients because
          of their deteriorating financial condition. No assurances can be given
          that the results of contract restructurings and possible terminations
          at or prior to renewal would not have a material negative impact on
          our results of operations and financial condition.

     o    We have in the past expressed certain performance guidance in the form
          of forward-looking statements. Even though these statements were based
          on assumptions that we believed were reasonable at the time they were
          made, they are inherently subject to uncertainty and there is a risk
          that our actual results of operations may be less than estimated if
          these assumptions are not realized.

         Challenges specific to our industry include:

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

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

Key Financial Trends and Analytical Points

         The following is a summary of key trends and analytical points
affecting our business:

         CHD Meridian Healthcare Acquisition. On March 19, 2004, we finalized
the acquisition of CHD Meridian Healthcare. We commenced reporting financial
results that include CHD Meridian Healthcare operations as of April 1, 2004.

         Revenue and Expenses. Revenue and operating, general and administrative
expenses increased significantly from the three and six months ended June 30,
2003 to the three and six months ended June 30, 2004. The increase is a direct
result of the CHD Meridian Healthcare acquisition. On a pro forma basis,
assuming that the merger of I-trax and CHD Meridian Healthcare was consummated
on January 1, 2003, we have experienced a modest increase in revenue with
incremental costs increasing proportionately in connection with new and expanded
business. We expect revenue to increase modestly in the third and fourth quarter
of 2004, in tandem with the expected seasonal increase in the use of our on-site
facilities.

         Working Capital. At June 30, 2004, we had a working capital deficiency
of $2,501,000, reflecting a change in our cash management approach and use of
the revolver portion of our credit facility. The working capital deficiency is
attributable to a pay down of $5,500,000 outstanding under the revolver. Please
refer to "Liquidity and Capital Resources - Working Capital" section below for a
further discussion.



                                       27
<PAGE>


         Risk Retention Group. During the first quarter of 2004, CHD Meridian
Healthcare formed Green Hills Insurance, a Risk Retention Group to self-insure a
portion of the merged companies' professional and general liability insurance.
The RRG was capitalized with $2,000,000 in cash and a $1,000,000 letter of
credit under our credit facility. The RRG has not had a material impact on our
operations during the six months ended June 30, 2004.

Results of Operations

         We commenced reporting financial results that include CHD Meridian
Healthcare operations beginning as of April 1, 2004, and consequently, our
historic results from the periods prior to the second quarter ended June 30,
2004 only reflect the separate operations of I-trax. Accordingly, in addition to
providing comparative analysis on a historical basis, we are also providing
supplemental unaudited pro forma information that we believe is useful to
understand how our results of operations have performed on a comparative basis
as if the acquisition of CHD Meridian Healthcare occurred on January 1, 2003.

         Three Months ended June 30, 2004 (Actual) Compared to Three Months
         ended June 30, 2003 (Actual)

         Revenue for the three months ended June 30, 2004 was $24,384,000, an
increase of $23,333,000 from $1,051,000 for the three months ended June 30,
2003. Of the total revenue for the three months ended June 30, 2004, $582,000
was from our personalized health management programs and $23,802,000 from our
on-site facilities.

         Operating expenses, which represent our direct costs associated with
the operation of our on-site facilities and our call center, amounted to
$19,117,000 for the three months ended June 30, 2004, an increase of $18,614,000
from $503,000 for the three months ended June 30, 2003.

         General and administrative expenses which represent our corporate
costs, increased to $4,651,000 for the three months ended June 30, 2004 from
$2,015,000 for the three months ended June 30, 2003. The increase of $2,636,000
is primarily attributable to an increase of $3,358,000 related to the CHD
Meridian Healthcare acquisition, offset by a non-cash charge incurred during
2003 associated with issuing common stock, granting warrants and having certain
shareholders contribute shares to an investor relations firm as consideration
for services rendered.

         Depreciation and amortization expenses were $1,357,000 for the three
months ended June 30, 2004, an increase of $916,000 as compared to $441,000 for
the three months ended June 30, 2003. Approximately $435,000 of the increase
relates to amortization for the intangibles recorded as part of the CHD Meridian
transaction. The remaining increase relates to intangible assets acquired from
CHD Meridian Healthcare.

         Interest expense for the three months ended June 30, 2004 was $163,000,
representing a decrease of $491,000 or 75% from $654,000 for the three months
ended June 30, 2003. For the three months ended June 30, 2004, interest expense
includes interest payable under the credit facility. For the three months ended
June 30, 2003, interest expense includes a charge of $517,000 attributable to
the unamortized portion of the discount and beneficial conversion value
associated with a convertible debenture.

         Amortization of financing costs for the three months ended June 30,
2004 was $12,000 representing a decrease of $168,000 or 93% from $180,000 for
the three months ended June 30, 2003. As of June 30, 2004, these financing costs
are fully amortized.

         For the three months ended June 30, 2004, our net loss was $916,000, as
compared to a net loss of $2,742,000 for the three months ended June 30, 2003.

         Six Months ended June 30, 2004 (Actual) Compared to Six Months ended
         June 30, 2003 (Actual)

         Revenue for the six months ended June 30, 2004 was $25,831,000, an
increase of $23,164,000 from $2,667,000 for the six months ended June 30, 2003.
Of the total revenue for the six months ended June 30, 2004, $2,029,000 was from
our personalized health management programs and $23,802,000 from our on-site
facilities.


                                       28
<PAGE>


Revenue of $582,000 from our personalized health management programs for the
three months ended June 30, 2004 decreased substantially from revenue of
$1,447,000 for the three months ended March 31, 2004 because revenue for the
three months ended March 31, 2004 includes approximately $750,000 of one time
set-up fees and perpetual license fee associated with the implementation of two
of our personalized health management contracts.

         Operating expenses, which represent our direct costs associated with
the operation of our on-site clinics and our call center, amounted to
$19,814,000 for the six months ended June 30, 2004, an increase of $18,750,000
from $1,064,000 for the six months ended June 30, 2003.

         General and administrative expenses, which represent our corporate
costs, increased to $6,672,000 for the six months ended June 30, 2004 from
$3,019,000 for the six months ended June 30, 2003. The increase of $3,653,000 is
primarily attributable the addition of $3,358,000 related to the CHD Meridian
Healthcare acquisition, and to an increase of $1,083,000 in salaries and wages
expenses, offset by a non-cash charge incurred during 2003 associated with
issuing common stock, granting warrants and having certain shareholders
contribute shares to an investor relations firm as consideration for services
rendered.

         Depreciation and amortization expenses were $1,792,000 for the six
months ended June 30, 2004, an increase of $914,000 as compared to $878,000 for
the six months ended June 30, 2003. Approximately $435,000 of the increase
relates to amortization for the intangibles recorded as part of the CHD Meridian
Healthcare acquisition. The remaining increase relates to intangible assets
acquired from CHD Meridian Healthcare.

         Interest expense for the six months ended June 30, 2004 was $776,000,
representing a decrease of $199,000 from $975,000 for the six months ended June
30, 2003. For the six months ended June 30, 2004, interest expense includes a
charge of $573,000 attributable to the unamortized portion of the discount and
beneficial conversion value associated with the convertible debenture and
certain other promissory notes. The discount amount is expensed because the
convertible debenture was converted into common stock and the promissory notes
were repaid during March 2004. During the six months ended June 30, 2003,
interest expense includes a charge of $748,000 attributable to the unamortized
portion of the discount and beneficial conversion value associated with a
convertible debenture.

         Amortization of financing costs for the six months ended June 30, 2004
was $47,000 representing a decrease of $190,000 or 80% from $237,000 for the six
months ended June 30, 2003. As of June 30, 2004, these financing costs are fully
amortized.

         Other expense for the six months ended June 30, 2004, represents a
one-time non-cash charge of $350,000 associated with the warrants to acquire
common stock issued in a private placement completed during October 2003. The
charge represents the increase in the value of the common stock underlying the
warrants until the effective time of a registration statement we filed with the
Securities and Exchange Commission to register the underlying shares. The
initial value of the warrants was recorded as a liability and any fluctuation in
the value was passed through the statement of operations. Once the registration
became effective, any balance in the liability account was reclassified to
equity. The registration became effective during February 2004, and accordingly,
we reclassified $3,110,000 of liability into equity. Other expense for the six
months ended June 30, 2003, reflects a charge of $200,000 in connection with the
termination in January 2003 of our agreement to acquire DxCG, Inc., a
Boston-based predictive modeling company. 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.

         For the six months ended June 30, 2004, our net loss was $3,620,000, as
compared to a net loss of $3,706,000 for the six months ended June 30, 2003. The
net loss for the six months ended June 30, 2004, includes non-cash and merger
related expenses of $1,755,000, comprised of: (1) $573,000 in non-cash interest
expense attributable to the unamortized discount and beneficial conversion value
of a previously outstanding convertible debenture and certain other promissory
notes which were converted into common stock in March 2004; (2) $350,000 of
non-cash charges related to an increase in the fair market value of common stock
underlying warrants issued in a private placement completed during October 2003;
and (3) $832,000 of merger related costs, which were included in general and
administrative expense.



                                       29
<PAGE>


Pro Forma Results of Operations

         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, 2003. The results exclude transaction costs of
$1,938,000 and transaction related bonuses and termination pay of $832,000
included in the CHD Meridian Healthcare's and our statements of operations,
respectively. The pro forma results also include adjustments to amortization
expense associated with the intangibles acquired and interest expense related to
the new credit facility.

                                  Six months ended   Six months ended
                                    June 30, 2004      June 30, 2003
                                    ------------      ------------

Net revenue                         $ 49,186,000      $ 48,392,000
                                    ------------      ------------

Operating income                      (1,005,000)         (700,000)
                                    ------------      ------------

Net loss                            $ (2,329,000)     $ (2,756,000)
                                    ============      ============

Loss per share                      $       (.10)     $       (.14)
                                    ============      ============

         Six Months ended June 30, 2004 (pro forma) Compared to Six Months ended
         June 30, 2003 (pro forma)

         Revenue for the six months ended June 30, 2004 increased to $49,186,000
an increase of approximately 1.6% from $48,392,000 for the six months ended June
30, 2003. In accordance with management's expectations, our on-site revenues
increased from a combination of expansion of existing business and new sales
growth, while we continued to increase our service revenue and decrease our
technology revenue on our personalized health management business. We expect
this trend to continue. We also expect to increase our revenue as a result of
our continuing sales efforts.

         Total costs and expenses include direct costs of our operations
(operating expenses), corporate overhead (general and administrative expenses),
and depreciation and amortization. Total costs and expenses for the six months
ended June 30, 2004 increased to $50,192,000, a $1,100,000 or 2.2% increase from
$49,092,000 reported for the six months ended June 30, 2003. The increase is
primarily related to the incremental costs associated with new and expanded
business discussed above offset by a slight reduction in general and
administrative expenses. Depreciation and amortization also increased by
$78,000. In coming periods, we expect total costs and expenses to increase as
our revenue increases.

         Interest expense and financing costs for the six months ended June 30,
2004 decreased from the six months ended June 30, 2003. During the six months
ended June 30, 2004 and June 30, 2003, we recorded non-recurring charges to
interest expense and other expenses in the amount of $923,000 and $948,000,
respectively. We expect interest expense related to outstanding amounts due
under the senior secured credit facility to increase in future periods.

         We record pass-through pharmaceutical purchases on a net basis. These
purchases were $48,093,000 and $40,919,000 for the six months ended June 30,
2004 and June 30, 2003, respectively.

Liquidity and Capital Resources

         Working Capital

         As of June 30, 2004, we had a working capital deficiency of $2,501,000,
a decrease of $6,993,000 from the $4,492,000 of working capital as of March 31,
2004. The primary reason for this decrease is the pay down of approximately
$5,500,000 of the revolving credit facility in order to limit interest expense.



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<PAGE>


         On March 19, 2004, in connection with the CHD Meridian Healthcare
acquisition, we obtained a $20,000,000 senior secured credit facility from a
national lender that expires on April 1, 2007. The credit facility has a
$6,000,000 term loan commitment with a $14,000,000 revolving credit commitment.
Outstanding letter of credit liabilities reduce the amount available to be
borrowed under the revolving credit commitment.

         The credit facility is secured by substantially all of our 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 debt service coverage ratios.
Eurodollar rate loans bear interest at the Eurodollar rate plus up to 3.0% per
annum likewise depending on our debt service coverage ratios.

         As of June 30, 2004, we had outstanding $6,000,000 under the term loan,
$2,000,000 of which is classified as short term and $4,000,000 of which is
classified as long term, and $459,000 under the revolving credit commitment,
which is classified as long term, and an aggregate of $3,000,000 under letters
of credit. We are required to make twelve principal installment payments of
$500,000 each quarter beginning on July 1, 2004, and made the first such payment
on that date. The balance outstanding on the term loan as of the filing of this
report is $5,500,000.

         We plan to raise additional equity or debt capital during 2004 to fund
investments in product development, sales and marketing, and acquisition of new
businesses and to meet certain covenants under the credit agreement. The terms
of the credit agreement will also require us to use proceeds from any such new
financing to pay off the balance outstanding on the term loan.

         The credit facility includes certain financial covenants, including a
covenant measuring: (1) the ratio of our funded indebtedness to earnings before
income, taxes, depreciation and amortization, or EBITDA, (2) the ratio of funded
indebtedness to capitalization, and (3) fixed charges coverage ratio. The first
measuring date under the credit facility occurred on June 30, 2004. As of that
date, we were not in compliance with the funded indebtedness to EBITDA ratio and
the fixed charges coverage ratio.

         On August 12, 2004, we agreed with the senior lender to amend the
credit facility, and, accordingly, as of the date of this filing, we are in
compliance with all covenants. The amendment to the credit facility is filed as
an exhibit to this report. Among other things, the amendment includes two
additional covenants: (1) we must achieve minimum stockholders' equity of
$82,878,000 as of October 31, 2004, an increase of $10,000,000 from our
stockholder's equity as of June 30, 2004, and (2) we must achieve pro forma 2004
EBITDA (giving effect to the acquisition of CHD Meridian Healthcare as though
the transaction had occurred on January 1, 2004) of $3,560,000. The 2004 EBITDA
covenant is consistent with our current expectations, and is lower than our
previously issued guidance. We will need to raise approximately $10,000,000 in
the form of equity to satisfy the stockholders' equity covenant in the credit
facility amendment.

         As of the date of this report we do not have any committed sources of
additional capital, and we cannot provide assurance that additional capital will
be available on acceptable terms, if at all. We will explore, however, all
options to meet the stockholders' equity covenant in the credit facility
amendment, which includes replacing the credit facility.

         The credit facility amendment also limits the amount we can borrow
under the facility, although the amount of the revolving credit commitments
under the facility remains at $14,000,000. Through October 31, 2004, we may use
up to $5,500,000 (including outstanding letters of credit). After October 31,
2004 and assuming we are in compliance with all covenants as of such date, we
may borrow additional amounts up to the borrowing base (approximately
$11,000,000 as of June 30, 2004), less the amount of outstanding letters of
credit.

         We believe that amounts available under our credit facility, together
with cash flow from operations, are sufficient to meet our operating needs
through December 31, 2004.

         Sources and Uses of Cash

         Cash used for operations was $1,771,000 for the six months ended June
30, 2004. A portion of the cash used for operations is the result of an increase
in accounts receivable from the CHD Meridian Healthcare acquisition


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and billings on the implementation costs of new clients. Other current assets
also increased due to additional carrying balances in prepaid insurance.
Finally, accrued expenses increased because the higher carrying amount of
accrued payroll and vacation.

         During the six months ended June 30, 2004, we received funds from
selling 1,000,000 shares of Series A Convertible Preferred Stock for
$25,000,000, before commission expenses and other transaction costs, which
amounted to approximately $1,490,000 in the aggregate. We also received funds
from borrowings of $12,000,000 from our new senior secured credit facility with
a national lender. These funds were primarily used to fund $30,508,000 required
for the cash portion of the CHD Meridian Healthcare acquisition, including the
$5,000,000 redemption of Series A Convertible Preferred Stock issued directly to
the CHD Meridian Healthcare stockholders and for working capital.

         In addition to funding the merger and related costs, we used a portion
of the proceeds from the credit facility to repay $280,000 in related party
loans and $944,000 in principal and interest for all other outstanding
promissory notes.

         During the first quarter of 2004, Palladin Opportunity Fund LLC
converted the remaining balance of the debenture payable and accrued interest
into common stock. Accordingly, the Company issued 427,106 shares of common
stock for the conversion of principal and accrued interest amounting to
$747,000.

         Material Commitments

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

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

           2004                $   206,000      $  1,217,000     $  1,423,000
           2005                    119,000           909,000        1,028,000
           2006                     56,000           850,000          906,000
           2007                     24,000           735,000          759,000
           2008                         --           651,000          651,000
           Thereafter                   --           574,000          574,000
                           ----------------   ---------------   --------------
  Total future payments        $   405,000      $  4,936,000     $  5,341,000
                           ================   ===============   ==============

Critical Accounting Policies

         Impairment of Goodwill and Intangible Assets

         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. In accordance
with SFAS No. 142, we complete a test for impairment of goodwill and certain
other intangible assets annually.



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         Revenue Recognition

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

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

         We record pass-through pharmaceutical purchases on a net basis
accordance with Emerging Issues Task Force Issue No. 99-19, "Reporting Gross
Revenue as a Principal vs. Net as an Agent." Under our pharmacy arrangements, we
provide pharmaceuticals to a client as a component of our pharmacy agreement,
which typically requires us to staff and operate a pharmacy for the sole benefit
of the client's employees and, in certain instances, dependents and retirees.
The substance of our pharmacy agreement in relation to pharmaceutical purchases
demonstrates an agent-like arrangement and points to net reporting. Our
agreements stipulate that we must be reimbursed upon purchasing pharmaceuticals,
and not upon dispensing, thus limiting inventory risk. We also price
pharmaceuticals on a pass-through basis and mitigate credit risk through
structured payment terms with our clients. Consequently, we do not have
unmitigated credit risk.

         Cash we receive prior to the performance of services is reflected as
deferred revenue on the balance sheet.

         Service Revenue - Personalized Health Management Programs. We recognize
service revenue as services are rendered. We contract with our customers to
provide services based on an agreed upon monthly fee based on the number of
employees, members or covered lives, a per-call charge to our Care Communication
Center 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
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.

         From time to time we enter into risk-sharing contracts. A risk-sharing
contract generally requires us to manage the health and wellness of a
predetermined set of individuals for a term of three to five years. A
risk-sharing contract may also provides that we are required to refund to our
client a percentage of our fees if our program does not save the client an
agreed upon percentage of the client's healthcare costs. We did not generate
material risk revenue, which may be subject to a refund, during the quarter and
six months ended June 30, 2004.

         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 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




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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 software is not involved, we apply the provisions of Staff
Accounting Bulletin 101 "Revenue Recognition." In addition, we apply the
provisions of EITF 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 creditworthiness 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 technology arrangements with multiple obligations (for example,
undelivered software 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 technology revenue in
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.

Material Equity Transactions

         During the six months ended June 30, 2004, we executed equity
transactions with unrelated parties in connection with the CHD Meridian
Healthcare merger and related financing. We believe that we have valued all such
transactions 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" and Part II, "Item 2 - Changes in Securities and Small Business
Issuer's Purchases of Securities."



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                                    SIGNATURE

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


                                  I-TRAX, INC.

Date: November 10, 2004                      By: /s/  Frank A. Martin
                                                 -----------------------------
                                             Name:   Frank A. Martin
                                             Title:  Chief Executive Officer






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