**United
      States**


**Securities
      and Exchange Commission**


**Washington,
      D.C. 20549**





**FORM
      10-Q**





[X]
            QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934For
                the quarterly period ended: September 30, 2007OR[   ]
            TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934For
                the transition period from ___________ to _____________Commission
                File Number: 001-31584





**I-TRAX,
      INC.**


(Exact
      name of registrant as specified in its charter)





**Delaware**
            
            **23-3057155**(*State
                or Other Jurisdiction of*
              *Incorporation
                or Organization*)
            
            (*I.R.S.
                Employer*
              *Identification
                Number*)





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





**(610)
      459-2405**


(*Registrant’s
      telephone number, including area code*)





Indicate
      by check mark whether the
      registrant (1) has filed all reports required to be filed by Section 13 or
      15(d)
      of the Securities Exchange Act of 1934 during the preceding 12 months (or for
      such shorter period that the registrant was required to file such reports),
      and
      (2) has been subject to such filing requirements for the past 90
      days.  [X] Yes  [   ] No





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





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





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





As
      of
      November 7, 2007, there were 41,315,366 shares of the registrant’s $0.001 par
      value common stock outstanding.




















**TABLE
      OF CONTENTS**





**Item**
            
            **Page****Part
                I - Financial Information**1.
            Financial
                Statements
            1Report
                of Independent
                Registered Public Accounting Firm
            1Condensed
                Consolidated Balance
                Sheet at September 30, 2007 and December 31, 2006
            2Condensed
                Consolidated
                Statements of Operations for the three and nine month periods ended
                September 30, 2007 and 2006
            3Condensed
                Consolidated
                Statements of Cash Flows for the nine month periods ended September
                30,
                2007 and 2006
            4Notes
                to Condensed
                Consolidated Financial Statements
            52.
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            123.
            Quantitative
                and Qualitative Disclosures About Market Risk
            224.
            Controls
                and Procedures
            22**Part
                II – Other Information**1.
            Legal
                Proceedings
            231A.
            Risk
                Factors
            232.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            233.
            Defaults
                Upon Senior Securities
            234.
            Submission
                of Matters to a Vote of Security Holders
            235.
            Other
                Information
            236.
            Exhibits
            23













**PART
      I.                      FINANCIAL
      INFORMATION**




**Item
      1.  Financial Statements**


**Report
      of Independent Registered Public Accounting Firm**




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




We
      have
      reviewed the accompanying condensed consolidated balance sheet of I-trax, Inc.
      (a Delaware corporation) and Subsidiaries as of September 30, 2007, and the
      related condensed consolidated statements of operations for the three and nine
      month periods ended September 30, 2007 and 2006, and the related condensed
      consolidated statements of cash flows for the nine month periods ended September
      30, 2007 and 2006.  These interim financial statements are the
      responsibility of the company’s management.




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




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




We
      have
      previously audited, in accordance with standards of the Public Company
      Accounting Oversight Board (United States), the consolidated balance sheet
      as of
      December 31, 2006, 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 March 10, 2007, we expressed an unqualified
      opinion on those consolidated financial statements.  In our opinion,
      the information set forth in the accompanying condensed consolidated balance
      sheet as of December 31, 2006, 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


November
      8, 2007








1




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


**CONDENSED
      CONSOLIDATED BALANCE SHEET**


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





**ASSETS****September
                30, 2007 (Unaudited)**
            
            
            December
                31, 2006Current
                assetsCash
                and cash
                equivalents
            
            **$**
            **8,708**
            
            
            $
            6,558Accounts
                receivable,
                net
            
            ****
            **24,863**
            
            
            
            21,704Other
                current
                assets
            
            ****
            **1,278**
            
            
            
            1,526Total
                current
                assets
            
            ****
            **34,849**
            
            
            
            29,788Property
                and equipment, net
            
            ****
            **4,736**
            
            
            
            3,377Goodwill
            
            ****
            **51,620**
            
            
            
            51,620Customer
                list, net
            
            ****
            **17,047**
            
            
            
            18,159Other
                intangible assets, net
            
            ****
            **198**
            
            
            
            402Other
                long term assets
            
            ****
            **36**
            
            
            
            41Total
                assets
            
            **$**
            **108,486**
            
            
            $
            103,387**LIABILITIES
                AND STOCKHOLDERS’ EQUITY**Current
                liabilitiesAccounts
                payable
            
            **$**
            **7,730**
            
            
            $
            10,376Accrued
                payroll and
                benefits
            
            ****
            **4,388**
            
            
            
            4,444Accrued
                restructuring
                charges
            
            ****
            **--**
            
            
            
            118Other
                current
                liabilities
            
            ****
            **9,868**
            
            
            
            11,627Total
                current
                liabilities
            
            ****
            **21,986**
            
            
            
            26,565Senior
                secured credit facility
            
            ****
            **13,370**
            
            
            
            9,057Note
                payable
            
            ****
            **902**
            
            
            
            129Other
                long term liabilities
            
            ****
            **3,905**
            
            
            
            1,945Total
                liabilities
            
            ****
            **40,163**
            
            
            
            37,696Commitments
                and contingenciesStockholders’
                equityPreferred
                stock - $.001 par
                value, 2,000,000 shares authorized,
              219,126
                and 559,101 issued and outstanding, respectively;
              Liquidation
                preference: $5,478,000 and $13,978,000 at September
              30,
                2007 and December 31, 2006, respectively
            
            ****
            **--**
            
            
            
            1Common
                stock - $.001 par value,
                100,000,000 shares authorized
              41,230,123
                and 36,613,707 shares issued and outstanding,
              respectively
            
            ****
            **41**
            
            
            
            35Additional
                paid in
                capital
            
            ****
            **140,138**
            
            
            
            136,623Accumulated
                deficit
            
            ****
            **(71,856**
            **)**
            
            
            (70,968
            )Total
                stockholders’
                equity
            
            ****
            **68,323**
            
            
            
            65,691Total
                liabilities and stockholders’ equity
            
            **$**
            **108,486**
            
            
            $
            103,387








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






2




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


**CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS**


**(Unaudited)**


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





**Three
                months ended**
              **September
                30**
            
            
            **Nine
                months ended**
              **September
                30****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Net
                revenue
            
            **$**
            **35,148**
            
            
            $
            30,495
            
            
            **$**
            **103,234**
            
            
            $
            91,061Costs
                and expensesOperating
                expenses
            
            ****
            **26,618**
            
            
            
            22,622
            
            
            ****
            **78,280**
            
            
            
            68,849General
                and administrative
                expenses
            
            ****
            **7,118**
            
            
            
            6,437
            
            
            ****
            **21,793**
            
            
            
            18,356Lease
                termination expense (Note
                10)
            
            ****
            **780**
            
            
            
            --
            
            
            ****
            **780**
            
            
            
            --Depreciation
                and
                amortization
            
            ****
            **1,155**
            
            
            
            826
            
            
            ****
            **3,004**
            
            
            
            2,513Total
                costs and expenses
            
            ****
            **35,671**
            
            
            
            29,885
            
            
            ****
            **103,857**
            
            
            
            89,718Operating
                income (loss)
            
            ****
            **(523**
            **)**
            
            
            610
            
            
            ****
            **(623**
            **)**
            
            
            1,343Other
                expenses (income)Other
                expense
                (income)
            
            ****
            **(2**
            **)**
            
            
            --
            
            
            ****
            **(1,421**
            **)**
            
            
            --Interest
                expense
            
            ****
            **116**
            
            
            
            113
            
            
            ****
            **424**
            
            
            
            342Amortization
                of financing
                costs
            
            ****
            **14**
            
            
            
            59
            
            
            ****
            **72**
            
            
            
            172Total
                other expenses (income)
            
            ****
            **128**
            
            
            
            172
            
            
            ****
            **(925**
            **)**
            
            
            514Income
                (loss) before provision for income taxes
            
            ****
            **(651**
            **)**
            
            
            438
            
            
            ****
            **302**
            
            
            
            829Provision
                for income taxes
            
            ****
            **149**
            
            
            
            234
            
            
            ****
            **428**
            
            
            
            414Net
                income (loss)
            
            ****
            **(800**
            **)**
            
            
            204
            
            
            ****
            **(126**
            **)**
            
            
            415Less
                preferred stock dividend
            
            ****
            **121**
            
            
            
            282
            
            
            ****
            **467**
            
            
            
            902Net
                loss applicable to common stockholders
            
            **$**
            **(921**
            **)**
            
            $
            (78
            )
            
            **$**
            **(593**
            **)**
            
            $
            (487
            )Earnings
                (loss) per common share:Basic
                and Diluted
            
            **$**
            **(0.02**
            **)**
            
            $
            0.00
            
            
            **$**
            **(0.01**
            **)**
            
            $
            (0.01
            )Weighted
                average number of shares outstanding:Basic
                and Diluted
            
            ****
            **40,949,053**
            
            
            
            36,462,797
            
            
            ****
            **39,938,780**
            
            
            
            35,875,461




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






3






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


**CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**


**(Unaudited)**


***(in
      thousands)***





**Nine
                months ended**
              **September
                30****2007**
            
            
            2006Operating
                activities:Net
                income
                (loss)
            
            **$**
            **(126**
            **)**
            
            $
            415Adjustments
                to reconcile net
                income (loss) to net cash provided by (used in) operating
                activities:Stock
                issued as bonus
                compensation
            
            ****
            **31**
            
            
            
            --Stock
                based
                compensation
            
            ****
            **1,238**
            
            
            
            961FIN
                48
                Liability
            
            ****
            **235**
            
            
            
            --Accrued
                loss on
                contracts
            
            ****
            **--**
            
            
            
            (419
            )Depreciation
                and
                amortization
            
            ****
            **3,004**
            
            
            
            2,513Modification
                of
                warrants
            
            ****
            **--**
            
            
            
            57Issuance
                of stock below market
                value
            
            ****
            **--**
            
            
            
            130Issuance
                of warrants for
                services
            
            ****
            **47**
            
            
            
            72Amortization
                of financing
                costs
            
            ****
            **72**
            
            
            
            172Loss
                on disposal of
                assets
            
            ****
            **--**
            
            
            
            390Changes
                in operating assets and
                liabilities:Accounts
                receivable
            
            ****
            **(3,159**
            **)**
            
            
            (1,466
            )Other
                current
                assets
            
            ****
            **248**
            
            
            
            (227
            )Other
                long term
                assets
            
            ****
            **5**
            
            
            
            --Accounts
                payable
            
            ****
            **(2,646**
            **)**
            
            
            (485
            )Accrued
                payroll and
                benefits
            
            ****
            **(57**
            **)**
            
            
            (52
            )Accrued
                restructuring
                charges
            
            ****
            **(118**
            **)**
            
            
            (197
            )Other
                current
                liabilities
            
            ****
            **(496**
            **)**
            
            
            642Other
                long term
                liabilities
            
            ****
            **964**
            
            
            
            (7
            )Net
                cash provided by (used in) operating activities
            
            ****
            **(758**
            **)**
            
            
            2,499Investing
                activities:Purchases
                of property and
                equipment
            
            ****
            **(1,840**
            **)**
            
            
            (1,152
            )Acquisition
                of intangible
                assets
            
            ****
            **(61**
            **)**
            
            
            (4
            )Net
                cash used in investing activities
            
            ****
            **(1,901**
            **)**
            
            
            (1,156
            )Financing
                activities:Proceeds
                from option
                exercises
            
            ****
            **536**
            
            
            
            132Proceeds
                from stock
                issuance
            
            ****
            **--**
            
            
            
            107Issuance
                of (repayment of) note
                payable
            
            ****
            **(40**
            **)**
            
            
            143Proceeds
                from exercise of
                warrants
            
            ****
            **--**
            
            
            
            22Proceeds
                from bank credit
                facility
            
            ****
            **4,313**
            
            
            
            1,776Net
                cash provided by financing activities
            
            ****
            **4,809**
            
            
            
            2,180Net
                increase in cash and cash equivalents
            
            ****
            **2,150**
            
            
            
            3,523Cash
                and cash equivalents at beginning of period
            
            ****
            **6,558**
            
            
            
            5,386Cash
                and cash equivalents at end of period
            
            **$**
            **8,708**
            
            
            $
            8,909Schedule
                of non-cash investing and financing activities:Software
                acquired under a capital
                lease
            
            **$**
            **1,219**
            
            
            $
            --Modification
                of
                warrants
            
            **$**
            **--**
            
            
            $
            57Stock
                issuance below market
                value
            
            **$**
            **--**
            
            
            $
            130Issuance
                of warrants for
                services
            
            **$**
            **47**
            
            
            $
            72Preferred
                stock
                dividend
            
            **$**
            **467**
            
            
            $
            902Conversion
                of accrued dividends
                to common stock
            
            **$**
            **2,034**
            
            
            $
            1,115




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





4




**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 **($
        in thousands, except per share amounts)**




**1.  Organization**




I-trax,
      Inc. offers integrated workplace health and productivity management
      solutions.  We operate on-site health centers which deliver primary
      care, pharmacy care management, acute care corporate health, and occupational
      health as well as disease, wellness and lifestyle management
      programs.  We enhance the services we offer at our on-site centers
      with larger scale disease management and wellness programs that use telephonic
      and e-health tools and which benefit from the trusted relationships established
      with patients by our clinicians at the worksite.  We are focused on
      helping our customers achieve employer-of-choice status, making the workplace
      safer, and improving the quality of care and productivity of the workforce
      while
      mitigating healthcare costs.




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




Physician
      services at our 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 our on-site services, including the development of
      professional standards, policies, and procedures.  We provide a wide
      array of business services to the Physician Groups, including administrative
      services, support personnel, facilities, marketing, insurance, and other
      non-medical services.




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




The
      condensed consolidated financial statements include the accounts of I-trax,
      Inc.
      and its subsidiaries.  We have prepared these statements without
      audit, pursuant to the rules and regulations of the Securities and Exchange
      Commission.




Certain
      information and footnote disclosures normally included in annual financial
      statements prepared in accordance with generally accepted accounting principles
      have been condensed or omitted pursuant to such rules and
      regulations.  We believe that the disclosures are adequate to make the
      financial information presented not misleading.  These condensed
      consolidated financial statements should be read in conjunction with the audited
      consolidated financial statements and the notes thereto included in the our
      Annual Report on Form 10-K for the year ended December 31, 2006, filed with
      the
      Securities and Exchange Commission on March 16, 2007 (“**2006 Annual
      Report**”).  All adjustments were of a normal recurring nature
      unless otherwise disclosed.  In the opinion of management, all
      adjustments necessary for a fair statement of the results of operations for
      the
      interim periods have been included.  The results of operations for
      such interim periods are not necessarily indicative of the results for the
      full
      year.




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








5


**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 **($
        in thousands, except per share amounts)**




Consolidation
      of the Physician Groups with CHD Meridian LLC, and consequently, with I-trax,
      Inc. is necessary to present fairly the financial position and results of our
      operations.  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 September 30, 2007 or December 31,
      2006.




We
      record
      pass-through pharmaceutical purchases on a net basis in compliance with EITF
      Issue No. 99-19, *Reporting Gross Revenue as a Principal vs. Net as an
      Agent*.  The amounts of pass-through pharmaceuticals purchased by
      us for the three month period ended September 30, 2007 and 2006 were $37,357
      and
      $37,888, respectively, and for the nine months ended September 30, 2007 and
      2006
      were $114,160 and $113,113, respectively.




**3. 
      Initial Adoption of FIN 48**




We
      adopted the provisions of Financial Accounting Standards Board
      (**“FASB”**) Interpretation No. 48, *Accounting for Uncertainty
      in Income Taxes – an interpretation of FASB Statement No. 109* (**“FIN
      48”**), on January 1, 2007.  FIN 48 increases the relevancy and
      comparability of financial reporting by clarifying the way companies account
      for
      uncertainty in income taxes.  FIN 48 prescribes a consistent recognition
      threshold and measurement attribute, as well as clear criteria for subsequently
      recognizing, derecognizing and measuring such tax positions for financial
      statement purposes.  FIN 48 also requires expanded disclosure with respect
      to the uncertainty in income taxes.  As a result of the implementation of
      FIN 48, we recognized approximately $761 as a liability for unrecognized tax
      benefits, including estimated interest and penalties of $135.  This amount
      was included in other long-term liabilities on our condensed consolidated
      balance sheet as of March 31, 2007.  We recorded a corresponding
      increase in our opening
      accumulated deficit of $761.  During
      the nine months ended September 30, 2007, we recorded an additional $235 of
      FIN
      48 expense which increased our total unrecognized tax benefits to $996, all
      of
      which would, if recognized, affect the effective tax rate.  The increase is
      the result of additional uncertainties identified subsequent to the adoption
      date.  Cumulative potential interest and penalties accrued related to
      unrecognized tax benefits at September 30, 2007 totaled $198 which is included
      in the $996 figure mentioned above.




Wefile income tax
      returns in the U.S. federal jurisdiction andnumerous state and local
      jurisdictions.  With
      few exceptions, we are no longer subject to U.S. federal examinations by tax
      authorities for years before 2003 and state and local income tax examinations
      by
      tax authorities for years before 2001.The New York Department
      of Revenue is currently examining state income tax returns for one of our
      subsidiaries for years 2003 through 2005.  The results of this
      examination are not expected to have a material impact on our financial position
      or results of operations.




We
      do not
      currently anticipate that the total amount of unrecognized tax benefits will
      significantly increase or decrease by the end of 2007.




**4.**Net
      Loss Per Share**




We
      present both basic and diluted loss per share on the face of the consolidated
      statements of operations.  As provided by Statement of Financial
      Accounting Standards (**“SFAS”**) No. 128, *Earnings per
      Share*, basic loss per share is calculated as income available to common
      stockholders divided by the weighted average number of shares outstanding during
      the period.  Diluted loss per share reflects the potential




6


**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 **($
        in thousands, except per share amounts)**








dilution
      that could occur from common shares issuable through stock options, warrants
      and
      convertible preferred stock.




The
      following shares issuable upon exercise of options, warrants, and convertible
      securities were excluded from the diluted loss per share computation because
      their effect would be anti-dilutive for the three and nine months ended
      September 30:




**2007**
            
            
            **2006**Series
                A Convertible Preferred Stock
            
            
            2,191,260
            
            
            
            5,591,600Warrants
            
            
            1,765,561
            
            
            
            2,813,603Stock
                options
            
            
            4,552,625
            
            
            
            4,309,100Anti-dilutive
                shares
            
            
            8,509,466
            
            
            
            12,714,303




**5.  Long
      Term Debt**




We
      use
      our senior credit facility with Bank of America, N.A. to finance operations,
      which include the purchase of pharmaceuticals on a pass-through basis for the
      benefit of our pharmacy clients.  Borrowings under the facility are
      secured by substantially all of our tangible assets and bear interest at rates
      specified in the credit agreement.




At
      September 30, 2007 and December 31, 2006, we had $10,870 and $9,057,
      respectively, of debt outstanding under the revolving loan
      facility.  We also had $2,500 outstanding under our Swingline
      Commitment at September 30, 2007.  At September 30, 2007, the interest
      rate applicable under the revolving loan facility was 7.1%.  In
      addition, at September 30, 2007, $1,700 of the facility was outstanding to
      secure a standby letter of credit, which reduces the amount available under
      the
      facility for borrowings.  Availability under the revolving loan
      facility was $2,430 and $4,943 at September 30, 2007 and December 31, 2006,
      respectively.  Availability under the Swingline Commitment at
      September 30, 2007 was $2,500.  As of September 30, 2007, we were in
      compliance with our facility covenants, including covenants measuring: (1)
      our
      fixed charges coverage ratio, (2) our ratio of funded indebtedness to earnings
      before income, taxes, depreciation and amortization, (3) our funded indebtedness
      to capitalization, and (4) minimum stockholders’ equity amounts.




**6.  Stockholders’
      Equity**




**Preferred
      Stock**




During
      the third quarter of 2007, stockholders converted 22,159 shares of Series A
      Convertible Preferred Stock into 221,591 shares of common stock, and 42,643
      shares of common stock were issued to satisfy the dividends accrued on the
      converted shares.  As of September 30, 2007, 219,126 shares of Series
      A Convertible Preferred Stock were issued and outstanding.  Accrued
      dividends relating to our preferred stock at September 30, 2007 and December
      31,
      2006 were $1,549 and $3,116, respectively, which amounts are included in other
      current liabilities on the condensed consolidated balance sheet.




**Common
      Stock**




On
      August
      13, 2007, we granted options to acquire 473,166 shares of common stock to
      certain employees with an exercise price of $3.60 per share, which approximated
      the market value at the date of grant.  The options vest over a three
      year period.




7


**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 **($
        in thousands, except per share amounts)**






On
      August
      13, 2007, we granted 105,000 shares of restricted stock to certain
      employees.  The restricted shares were valued at $3.60 per share,
      which approximated the market value at the date of grant, and vest over a three
      year period.




On
      September 10, 2007, we granted options to acquire 146,000 shares of common
      stock
      to certain employees with an exercise price of $3.25 per share, which
      approximated the market value at the date of grant.  The options vest
      over a three year period.




On
      September 10, 2007, we granted 6,000 shares of restricted stock to certain
      employees.  The restricted shares were valued at $3.25 per share,
      which approximated the market value at the date of grant, and vest over a three
      year period.




**Share
      Based Compensation**




During
      the three months ended September 30, 2007, we recognized $418 of share
      compensation expense which is included in general and administrative expense
      on
      our condensed consolidated statement of operations.




**8.  Commitments
      and Contingencies**




**Litigation**




We
      are
      involved in legal disputes on a variety of matters in the ordinary course of
      business.  After reasonable diligence, we expect these matters will be
      resolved without a material adverse effect on our consolidated financial
      position or results of operations.  Further, after reasonable
      diligence, we believe that our estimated losses from such matters have been
      adequately reserved in other current and other long term liabilities to the
      extent probable and reasonably estimable.  Nonetheless, it is possible
      that our future results of operations for any particular quarterly or annual
      period may be materially affected by changes in such matters.  See
      Note 9, *Professional Liability and Related Reserves*, for further
      details.




**Compliance
      with Healthcare Regulations**




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




We
      believe we are in compliance with laws and regulations applicable to our
      business.  Further, compliance with such laws and regulations in the
      future is subject to further government review, changing interpretations and
      other regulatory actions.  Accordingly, major changes in healthcare
      laws, regulations or regulatory interpretations may have an adverse effect
      on
      our future results of operations.




8


**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 **($
        in thousands, except per share amounts)**






**Significant
      Customers**




One
      customer represented 26% and 27% of our trade accounts receivable at September
      30, 2007 and 2006, respectively. This customer also represented 12% and 13%
      of our net revenue for the three and nine month periods ended September 30,
      2007, respectively.




For
      both
      the three and nine month periods ended September 30, 2007, a different customer
      represented 12% of our net revenue.  This same customer accounted for
      13% of our net revenue for both the three and nine month periods ended September
      30, 2006.




**9.  Professional
      Liability and Related Reserves**




Since
      2004, we have secured professional and general liability insurance for certain
      of our direct and indirect subsidiaries through Green Hills Insurance Company,
      a
      Risk Retention Group (**“GHIC”**), incorporated as a subsidiary of
      CHD Meridian LLC under the laws of the State of Vermont.  GHIC
      provides professional and general liability insurance to I-trax, Inc., its
      subsidiaries, and the Physician Groups and professional liability insurance
      to
      our medical professionals.  The professional liability insurance is a
      claims-made policy, which covers claims made during a given period of time
      regardless of when the causable event occurred.  We purchase excess
      insurance to mitigate risk in excess of GHIC’s policy limits.  In
      years prior to 2004, we secured similar insurance in the commercial
      market.




The
      operations of GHIC are reflected in our consolidated financial
      statements.  We maintain professional liability reserves as
      follows:




**Total**Reserves
                at December 31, 2006
            
            $
            5,759Payments
            
            
            (777
            )Charged
                to operating expenses
            
            
            404Adjustment
                (1)
            
            
            (253
            )Reserves
                at March 31, 2007
            
            
            5,133Payments
            
            
            (87
            )Charged
                to operating expenses
            
            
            404Adjustment
                (1)
            
            
            (42
            )Reserves
                at June 30, 2007
            
            
            5,408Payments
            
            
            (50
            )Charged
                to operating expenses
            
            
            400Adjustment
                (1)
            
            
            4Reserves
                at September 30, 2007
            
            $
            5,762




(1)       Represents
      changes in estimates of outstanding reported claims and unreported
      claims.




**Reported
      Claims**




Our
      reported claims reserves include our estimated exposure for claims pre-dating
      GHIC as well as claims that have been reported under GHIC’s
      policies.  These reserves are included in other current liabilities on
      our consolidated balance sheet.  These reserves are estimated using
      individual case-basis valuations, statistical analyses, and independent third
      party valuations.  These reserves represent our best estimate of the
      cost of satisfying all obligations associated with the claims.  Our
      estimates are reviewed and adjusted as experience develops or new information
      becomes known.  We also record loss and loss




9


**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 **($
        in thousands, except per share amounts)**






adjustment
      expenses, which include changes in exposure estimates related to reported claims
      on a monthly basis.  Any changes in estimates are reflected in
      operating expenses.  At September 30, 2007 and December 31, 2006, the
      reserves for reported claims included in other current liabilities on our
      consolidated balance sheet were $1,189 and $1,745, respectively.




**Unreported
      Claims**




We
      maintain additional reserves for potential claims that may be reported in the
      future.  On an annual basis, we use independent actuaries to estimate
      our exposure for unreported claims.  Our estimates are subject to the
      effects of trends in claim severity and frequency.  Although
      considerable variability is inherent in such estimates, management believes
      the
      reserves for losses and loss adjustment expenses are adequate.  The
      estimates are reviewed and adjusted as experience develops or new information
      becomes known and such adjustments are included in current
      operations.  Reserves for unreported claims that have been transferred
      to GHIC or relate to current operations are recorded as current
      liabilities.  Unreported claims reserves that have not yet been transferred
      to GHIC are included in other long-term liabilities.




At
      September 30, 2007 and December 31, 2006, unreported claims reserves were $4,573
      and $4,014, respectively.  Of these amounts, unreported claims
      exposure not transferred to GHIC of $1,638 was included in other long-term
      liabilities on our consolidated balance sheet.  The remaining amount
      is classified as other current liabilities.




**10.  Lease
      Amendment**




Under
      the
      terms of a Lease Agreement dated January 25, 2002, as amended on May 17, 2005,
      we lease from Burton Hills IV Investments, Inc. approximately 31,000 square
      feet
      of office space in Nashville, Tennessee for use as executive, administrative
      and
      sales offices.




On
      August
      9, 2007, we executed an Amended and Restated Second Amendment to the Lease
      Agreement with Burton Hills IV Investments.  Under the terms of the
      Amended and Restated Second Amendment, we agreed to relinquish the majority
      of
      the office space on May 1, 2008 in consideration of an early termination payment
      of $964.




On
      August
      9, 2007, CHD Meridian, LLC executed an Office Facility Lease with First
      Industrial Development Services, Inc.  Under the terms of this Office
      Facility Lease:




·
            First
                Industrial paid Burton Hills IV Investments on our behalf the early
                termination payment of $964 required under the Amended and Restated
                Second
                Amendment.




·
            First
                Industrial will build for us an office building in Franklin, Tennessee
                of
                approximately 50,000 square feet, which we expect to occupy on or
                about
                May 1, 2008.




·
            The
                total value of contractual lease payments related to this facility
                is
                approximately $9,409.




·****
            Thefacility
                lease is for a term of 11
                years.****




We
      account for lease expenses in accordance with FASB Technical Bulletin 85-3,
      *Accounting for Operating Leases with Scheduled Rent Increases*, which
      stipulates that rent expense for operating leases with rent-free periods or
      scheduled increases must be accounted for on a straight-line basis over the
      lease




10


**I-TRAX,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **(Unaudited)**
 **($
        in thousands, except per share amounts)**






term.  In
      connection with the termination of the Burton Hills IV Investments lease, $184
      of deferred rent related to our lease with Burton Hills IV Investments was
      offset against the termination payment of $964 resulting in a net lease
      termination charge of $780.




At
      September 30, 2007, other long term liabilities on our condensed consolidated
      balance sheet included deferred rent of $964 related to our new lease
      agreement.  Our scheduled lease payments to First Industrial include
      the repayment of deferred rent.












11


**Item
      2.   Management’s Discussion and Analysis of
      Financial Condition and Results of Operation**




We
      believe the primary goals of successful financial reporting are transparency
      and
      understandability.  We are committed to providing our stockholders
      with informative financial disclosures and presenting an accurate view of our
      financial position and operating results.




**Forward
      Looking Statements**




The
      following discussion 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-K for the
      year ended December 31, 2006, filed with the Securities and Exchange Commission
      on March 16, 2007 (“**2006 Annual Report**”) that we believe could
      cause actual results or events to differ, possibly materially, from our
      forward-looking statements.  Our forward-looking statements do not
      reflect the potential impact of any future acquisitions, mergers, dispositions,
      joint ventures or investments we may make.  We undertake no duty to
      update these forward-looking statements, even though our situation may change
      in
      the future.




**Risk
      Considerations**




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




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




·
            loss
                of advantageous pharmaceutical
                pricing;




·
            inability
                to meet covenants and financial tests under the terms of our senior
                secured credit facility;




·
            long
                and complex sales cycles;




·
            loss
                of a major client;




·
            cost
                pressures in the healthcare
                industry;




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




12


·
            economic
                uncertainty; and




·
            each
                of the factors discussed under “Item 1A. – Risk Factors” in our 2006
                Annual Report.




**Basis
      of Presentation**




The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with generally accepted accounting principles in the
      United States of America for interim financial information, the instructions
      to
      Form 10-Q, and Regulation S-X.  In our opinion, the unaudited
      condensed consolidated financial statements have been prepared on the same
      basis
      as the annual financial statements and reflect all adjustments necessary to
      present fairly our financial position as of September 30, 2007 and the results
      of the operations and cash flows for the three and nine month periods ended
      September 30, 2007.  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 revenue 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.




This
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations (**“MD&A”**), is designed to provide a reader of our
      financial statements with a narrative from the perspective of our management
      on
      our financial condition, results of operations, liquidity and certain other
      factors that may affect our future results. Our MD&A is presented in the
      following sections:




·
            Overview




·
            Critical
                Accounting Policies




·
            Results
                of Operations




·
            Liquidity
                and Capital Resources




·
            Material
                Equity Transactions




**Overview**




I-trax,
      Inc. provides integrated workplace medical, pharmacy, wellness, and disease
      management services to enhance the health and productivity of the employees,
      dependents, and retirees of our clients.  We deliver these services at
      or near the client’s worksite by opening, staffing and managing health centers
      and pharmacies dedicated to our clients and their eligible
      populations.  We enhance our on-site services with larger scale
      disease management and wellness programs through the use of telephonic and
      e-health tools and pharmaceutical benefits management programs.  We
      believe our clinicians deliver excellent care in part because of the trusted
      relationship they establish with their patients at the worksite.




We
      believe our services improve the health status of client populations and
      mitigate the upward cost trend experienced by employers, employees, and
      government agencies with respect to healthcare.  By proactively
      managing the healthcare needs of our clients’ eligible populations, we believe
      our programs improve health, increase productivity, reduce absenteeism, reduce
      the need for future critical care, and




13


manage
      overall costs.  We also believe the breadth of our services allows our
      clients the flexibility to meet many of their needs in a cost-effective and
      professional manner.




As
      of
      September 30, 2007, we were providing services to over 105 clients, including
      large financial institutions, consumer products manufacturers, automotive and
      automotive parts manufacturers, diversified industrial companies, and a variety
      of other employers.  As of September 30, 2007, we were operating 234
      on-site facilities in 35 states.  Our client retention rate is high
      due to strong client relationships that are supported by the critical nature
      of
      our services, the benefits achieved by employer and employee constituents,
      and
      the utilization of multi-year service contracts.




Historically,
      our on-site services separated into four general categories: occupational
      health, primary care, and corporate health centers, and
      pharmacies.  Traditional lines among the occupational health, primary
      care, and corporate health categories are blurring, however, as employers seek
      unique combinations of services to challenge rising healthcare
      costs.  Accordingly, although we continue to use the general
      categories to emphasize the primary purpose of a specific facility, we do so
      with the recognition that many components of excellent care are uniform across
      all of our facilities.




**Critical
      Accounting Policies**




A
      summary
      of significant accounting policies is disclosed in Note 2 to the consolidated
      financial statements included in our 2006 Annual Report.  Our critical
      accounting policies are further described under the caption “Critical Accounting
      Policies” in Management’s Discussion and Analysis of Financial Condition and
      Results of Operations in our 2006 Annual Report.




**Results
      of Operations**




***Third
      Quarter Summary***




During
      the quarter ended September 30, 2007, we:




·
            Accelerated
                revenue growth to 15.3% over the prior-year quarter and achieved
                the
                highest quarterly revenue in our company’s history, $35.1
                million;




·
            Opened
                9 net new sites, which brings total sites under management to
                234;




·
            Recorded
                $0.8 million of expense related to the early termination of our lease
                as
                discussed below;




·
            Reported
                diluted loss per share of $(0.02) (which includes the effect of $0.8
                million of lease termination expense) compared to prior-year quarter
                of
                $0.00;




·
            Reduced
                the preferred stock dividend to a run rate of $0.1 million per
                quarter;




·
            Increased
                discretionary spending on selling, marketing and new product development
                efforts by $0.3 million from prior-year;
                and




·
            Reported
                share-based compensation expense of $0.4
                million.




14


***Consolidated
      Results***




The
      following table presents selected consolidated financial data for the three
      and
      nine month periods ended September 30:




*$
      in thousands, except per share
      amounts*




**Three
                Months Ended**
              **September
                30**
            
            
            **Nine
                Months Ended**
              **September
                30****Consolidated Performance Summary**
            
            **2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**Net
                revenue
            
            $
            35,148
            
            
            $
            30,495
            
            
            $
            103,234
            
            
            $
            91,061Gross
                profit as % of net revenue
            
            
            24.3
            %
            
            
            25.8
            %
            
            
            24.2
            %
            
            
            24.4
            %General
                and administrative expense as % of net revenue
            
            
            20.3
            %
            
            
            21.1
            %
            
            
            21.1
            %
            
            
            20.2
            %Operating
                income (loss)
            
            $
            (523
            )
            
            $
            610
            
            
            $
            (623
            )
            
            $
            1,343Operating
                income (loss) as % of net revenue
            
            
            (1.5
            )%
            
            
            2.0
            %
            
            
            (0.6
            )%
            
            
            1.5
            %Lease
                termination expense
            
            $
            780
            
            
            $
            --
            
            
            $
            780
            
            
            $
            --Net
                income (loss)
            
            $
            (800
            )
            
            $
            204
            
            
            $
            (126
            )
            
            $
            415Net
                loss applicable to common stockholders
            
            $
            (921
            )
            
            $
            (78
            )
            
            $
            (593
            )
            
            $
            (487
            )Diluted
                loss per common share
            
            $
            (0.02
            )
            
            $
            0.00
            
            
            $
            (0.01
            )
            
            $
            (0.01
            )




***Three
      Months Ended September 30, 2007 Compared to Three Months Ended September 30,
      2006***




Net
      revenue for the three months ended September 30, 2007 increased by $4.6 million
      to $35.1 million, or by 15.3%, from $30.5 million for the three months ended
      September 30, 2006.  The increase in revenue is primarily attributable
      to the increase in the number of sites we operated.  At September 30,
      2007, we operated 234 sites compared to 211 sites at September 30,
      2006.  In the three months ended September 30, 2007, same site net
      revenue growth for sites in operation for more than one year was 2.7% compared
      to net revenue for the three months ended September 30, 2006.




Our
      operating expenses, that is our direct costs associated with the operation
      of
      our on-site and health management services, increased by $4.0 million to $26.6
      million for the three months ended September 30, 2007 from $22.6 million for
      the
      three months ended September 30, 2006.  This increase of 17.7%
      reflects the greater number of facilities under management and the growth of
      services provided to existing clients.  In addition, the year-ago
      quarter included a reduction of operating expenses by $0.3 million due to a
      health insurance reserve true-up.




Operating
      expenses as a percent of revenue were 75.7% for the third quarter of 2007,
      which
      is slightly higher than 74.2% recorded in the third quarter of
      2006.  Consequently, our third quarter gross margin (net revenue minus
      operating expenses) decreased to 24.3% of net revenue from 25.8% of net revenue
      in the prior-year quarter.  Excluding the health insurance true-up
      from the year-ago quarter, gross margin would have been 24.8% of net
      revenue.  Our ratio of new site gross margin to existing site gross
      margin at the end of the third quarter was 1.17.  For purposes of this
      ratio, we define new sites as sites that have been in operation for less than
      two full fiscal years.




General
      and administrative (“**G&A**”) expense increased to $7.1
      million for the three months ended September 30, 2007 from $6.4 million for
      the
      three months ended September 30, 2006, an increase of $0.7 million or
      10.6%.  Discretionary spending in sales and marketing and research and
      development




15


accounted
      for approximately $1.0 million of G&A expense for the third quarter of 2007
      or $0.3 million of the increase from the prior year’s comparable
      period.  Non-cash stock compensation expenses required by Statement of
      Financial Accounting Standards No.123 (revised 2004), *Share-Based
      Payment*, (“**SFAS 123R**”) totaled approximately $0.4 million
      in both the current year and prior year quarters.  The balance of the
      increase in G&A expense was approximately $0.4 million.  This
      increase is the result of upgrades in our operating systems and information
      technology infrastructure which will help provide scalable operations, lower
      maintenance costs, better client reporting, and improved overall
      efficiency.




The
      following table shows details our G&A expenditures in functional
      categories:




*$
      in
      thousands*




**Three
                Months Ended****September
                30,**
              **2007**
            
            
            **%
                of Net**
              **Revenue**
            
            
            **September
                30,**
              **2006**
            
            
            **%
                of Net**
              **Revenue**Net
                revenue
            
            $
            35,148
            
            
            
            100%
            
            
            $
            30,495
            
            
            
            100%Total
                G&A expenses
            
            
            7,118
            
            
            
            20.3%
            
            
            
            6,437
            
            
            
            21.1%Less:Sales
                and marketing and research
                and development
            
            
            993
            
            
            
            2.8%
            
            
            
            708
            
            
            
            2.3%SFAS
                123R expense
            
            
            418
            
            
            
            1.2%
            
            
            
            405
            
            
            
            1.3%“Core”
                G&A (1)
            
            
            5,707
            
            
            
            16.2%
            
            
            
            5,324
            
            
            
            17.5%Information
                technology expenditures
              included
                in “core” G&A
            
            
            1,193
            
            
            
            3.4%
            
            
            
            741
            
            
            
            2.4%




(1)      Excludes
      SFAS 123R stock based compensation expense, new product development, and sales
      and marketing.




We
      monitor our general and administrative expenses as a percentage of
      revenue.  We define our “core” G&A expense to be all G&A
      expenditures necessary to maintain current operations.  This excludes
      sales and marketing and new product development, which we view as investments
      made to grow the business.  Core G&A also excludes SFAS 123R
      expense.  The significant reduction in core G&A as a percentage of
      revenue for the third quarter of 2007 is due to operating leverage gained from
      consciously monitoring and controlling core G&A expenditures while
      substantially increasing revenue.




Lease
      termination expense in the third quarter of 2007 relates to an early termination
      penalty under the lease for our current Nashville corporate operations
      facility.  An early termination penalty of $1 million, offset by a
      reduction in deferred rent on our current facility of $0.2 million, resulted
      in
      net charge of $0.8 million.  We concurrently signed a new lease for
      more space at less cost per square foot, which management believes will better
      accommodate our anticipated growth.  The early termination penalty was
      paid by our new landlord and will be spread over the term of our new
      lease.




Our
      depreciation and amortization expense was $1.2 million for the three months
      ended September 30, 2007, an increase of $0.3 million as compared to $0.8
      million for the three months ended September 30, 2006.  An amortization
      expense of $0.4 million for the third quarter of 2007 is primarily related
      to
      amortization of our customer list.  Our depreciation expense of $0.7
      million has increased from $0.4 million for the year-ago quarter due to
      investments in operating systems and information technology
      infrastructure.  Our fixed asset investment for the third quarter of
      2007 was approximately $1.9 million compared to $0.4 million for the year-ago
      period.  Current year fixed asset investments include cash investments
      of $0.7 million and software licenses which are treated as a capital lease
      of
      $1.2 million.




16


Our
      interest expense for the three months ended September 30, 2007 and September
      30,
      2006 was $0.1 million.  Interest expense is primarily attributable to
      our senior secured credit facility.




The
      provision for income taxes for the three months ended September 30, 2007 was
      $0.1 million compared to $0.2 million for the three months ended September
      30,
      2006.  This decrease is related to prior period expense adjustment and
      book income variances.




For
      the
      three months ended September 30, 2007, our net loss was $(0.8) million compared
      to net income $0.2 in the year-ago period.  Net loss applicable to
      common stockholders was $(0.9) million for the three months ended September
      30,
      2007 and $(0.1) million for the year-ago period.  Current year results
      were largely affected adversely by $0.8 million of early lease termination
      expense recorded during the third quarter.  We continued to expand
      services to both new and existing clients while investing in sales, marketing
      and research and development to take advantage of what management believes
      will
      be future market opportunities and also to invest in revenue growth and
      profitability in the future.




***Nine
      Months Ended September 30, 2007 Compared to Nine Months Ended September 30,
      2006***




Net
      revenue for the nine months ended September 30, 2007 increased by $12.1 million
      to $103.2 million from $91.1 million for the nine months ended September 30,
      2006, an increase of approximately 13.4%.  This increase is primarily
      attributable to the addition of 22 net new sites since December 31,
      2006.  In the first nine months of 2007, same site net revenue growth
      for sites in operation for more than one year was 1.7% compared to net revenue
      for the three months ended September 30, 2006.




Our
      operating expenses, that is our direct costs associated with the operation
      of
      our on-site and health management services, increased by $9.5 million to $78.3
      million for the nine months ended September 30, 2007 from $68.8 million for
      the
      nine months ended September 30, 2006, an increase of 13.7%.  The
      increase reflects the greater number of facilities under management and the
      growth of services provided to existing clients.




Operating
      expenses as a percent of revenue were 75.8% for the first nine months of 2007,
      a
      slight increase of 0.2% from the 75.6% achieved in the year ago
      period.  Consequently, gross margin (net revenue minus operating
      expenses) for the nine months ended September 30, 2007 decreased to 24.2% of
      net
      revenue from 24.4% of net revenue in the year ago period. Our ratio of new
      site gross margin to existing site gross margin at the end of the third quarter
      was 1.18.  For purposes of this ratio, we define new sites as sites
      that have been in operation for less than two full fiscal years.




G&A
      expense increased to $21.8 million for the nine months ended September 30,
      2007
      from $18.4 million for the nine months ended September 30, 2006, an increase
      of
      $3.4 million, or 18.7%.  Discretionary spending in sales and marketing
      and research and development accounted for approximately $3.1 million of G&A
      expense for the first three quarters of 2007, or $1.4 million of the increase
      from the prior year period.  An additional increase of $0.3 million is
      attributable to increased SFAS 123R non-cash stock compensation expenses, which
      totaled approximately $1.2 million for the nine months ended September 30,
      2007.  The balance of the increase in G&A expense was $1.4
      million, of which $1.2 million represents the increase in information
      technology spend over the year-ago period.  We believe these
      investments enhance our client delivery infrastructure, increase customer
      awareness, and accelerated growth in revenue and operating margins, and prove
      our concept and significant competitive advantage in the
      marketplace.




The
      following table shows details our G&A expenditures in functional
      categories:




17


*$
      in
      thousands*




**Three
                Months Ended****September
                30,**
              **2007**
            
            
            **%
                of Net Revenue**
            
            
            **September
                30,**
              **2006**
            
            
            **%
                of Net Revenue**Net
                revenue
            
            $
            103,234
            
            
            
            100%
            
            
            $
            91,061
            
            
            
            100%Total
                G&A expenses
            
            
            21,793
            
            
            
            21.1%
            
            
            
            18,356
            
            
            
            20.2%Less:Sales
                and marketing and research
                and development
            
            
            3,089
            
            
            
            3.0%
            
            
            
            1,706
            
            
            
            1.9%SFAS
                123R expense
            
            
            1,238
            
            
            
            1.2%
            
            
            
            961
            
            
            
            1.1%“Core”
                G&A (1)
            
            
            17,466
            
            
            
            16.9%
            
            
            
            15,689
            
            
            
            17.2%Information
                technology expenditures
              included
                in “core” G&A
            
            
            3,285
            
            
            
            3.2%
            
            
            
            2,086
            
            
            
            2.3%




(1)      Excludes
      SFAS 123R stock based compensation expense, new product development, and sales
      and marketing.




We
      monitor our general and administrative expenses as a percentage of
      revenue.  We define our “core” G&A expense to be all G&A
      expenditures necessary to maintain current operations.  This excludes
      sales and marketing and new product development, which we view as investments
      made to grow the business.  Core G&A also excludes SFAS 123R
      expense.  The reduction in core G&A as a percentage of revenue for
      the nine months ended September 31, 2007, is due to operating leverage gained
      from consciously monitoring and controlling core G&A expenditures while
      substantially increasing revenue.




Lease
      termination expense in the third quarter of 2007 relates to an early termination
      penalty under the lease for our current Nashville corporate operations
      facility.  An early termination penalty of $1 million, offset by a
      reduction in deferred rent on our current facility of $0.2 million, resulted
      in
      net charge of $0.8 million.  We concurrently signed a new lease for
      more space at less cost per square foot, which management believes will better
      accommodate our anticipated growth.  The early termination penalty was
      paid by our new landlord and will be spread over the term of our new
      lease.




Our
      depreciation and amortization expense was $3.0 million for the nine months
      ended
      September 30, 2007, an increase of $0.5 million as compared to $2.5 million
      for
      the nine months ended September 30, 2006. An amortization expense of
      $1.4 million for the nine months ended September 30, 2007 is primarily related
      to amortization of our customer list.  Our depreciation expense of
      $1.6 million is an increase of $0.5 million over the year-ago period related
      to
      increased purchases of software and information technology equipment over the
      past year.




Our
      interest expense for the nine months ended September 30, 2007 was $0.4 million,
      an increase of $0.1 million from that for the nine months ended September 30,
      2006 of $0.3 million.  Interest expense is primarily attributable to
      our senior secured credit facility.




Amortization
      of financing costs for the nine months ended September 30, 2007 were $0.1
      million, a decrease of $0.1 million from the year ago period.




The
      provision for income taxes for both the nine months ended September 30, 2007
      and
      2006 was $0.4 million.  2007 results include $0.2 million of expense
      related to the increase in FIN 48 liability recorded during 2007.




18


During
      the second quarter of 2007, we received a premium refund of $1.4 million in
      accordance with the terms of our terminated excess liability insurance
      policy.  This amount is included in other expense (income) on the face
      of our consolidated income statement.




For
      the
      nine months ended September 30, 2007, our net loss was $(0.1) million compared
      to net income of $0.4 million for the year-ago period.  Net loss
      applicable to common stockholders was $(0.6) million for the first nine months
      of 2007 compared to $(0.5) million for the year-ago period.  Current
      year results were affected by two non-recurring events:




·
            During
                the second quarter of 2007, we secured a new excess insurance
                policy.  We also allowed our old excess policy to
                expire.  The terms of our old excess policy allowed us to
                receive a refund of a portion of the premiums we paid during the
                policy
                period.  This absolutely and unconditionally released and
                discharged the insurer from and against any and all obligations to
                us for
                claims covered during the policy’s three year period. Consequently, we
                recorded a premium refund of $1.4
                million.




·
            We
                made a decision to relocate our Nashville operations to accommodate
                our
                significant anticipated growth over the next several years.  As
                a result of this decision, we recognized a loss of $0.8 million during
                the
                third quarter of 2007 related to the buy out of our existing
                lease.




The
      increase in gross profit was used to fund the business of the future through
      discretionary expenditures for sales and marketing, research and development,
      and information technology infrastructure.




**Liquidity
      and Capital Resources**




***Summary***




We
      use
      our credit facility to finance operations, which includes the purchase of
      pharmaceuticals.  Borrowings under the facility are secured by
      substantially all of our tangible assets and bear interest at rates specified
      in
      the credit agreement.  At September 30, 2007, $1,700 of the facility
      was outstanding to secure a standby letter of credit, which reduces the amount
      available under the facility for borrowings.




Cash
      recorded on our consolidated balance sheet consists primarily of cash held
      by
      our insurance subsidiary.  We utilize a revolving senior secured
      credit facility and our swingline commitment to manage our working capital
      needs
      during the year.  Our accounts payable and cash outlays are driven
      primarily by pass-through pharmaceutical purchases averaging $6 million every
      two weeks.  During the third quarter of 2007, our weighted-average
      balance outstanding under our revolving credit facility was
      $9.1 million.  As of September 30, 2007, $2.4 million was
      available under the revolving credit facility and $2.5 million was outstanding
      under our swingline commitment.  Total borrowings under the credit
      facility (revolving and swingline) at September 30, 2007 and December 31, 2006
      were $13.4 million and $9.1 million, respectively.




We
      ended
      the third quarter with $8.7 million of cash and cash equivalents, an increase
      of
      $2.2 million from the end of 2006, of which $8.3 million is held in our
      insurance subsidiary.  Our current ratio, the ratio of current assets
      to current liabilities, was 1.59 at September 30, 2007, as compared to 1.12
      at
      December 31, 2006 and 1.26 at September 30, 2006.  We believe that
      these ratios demonstrate improving financial liquidity.  We believe
      that availability under our credit facility and our cash and cash equivalents
      will be sufficient to meet our anticipated cash needs for the next 12
      months.




19


***Cash
      Flows***




The
      following table summarizes our cash flows from operating, investing and
      financing activities for the nine months ended September 30:




*$
      in
      thousands*




**2007**
            
            
            **2006**Total
                cash provided by (used in):Operating
                activities
            
            $
            (758
            )
            
            $
            2,499Investing
                activities
            
            
            (1,901
            )
            
            
            (1,156
            )Financing
                activities
            
            
            4,809
            
            
            
            2,180Increase
                in cash and cash equivalents
            
            $
            2,150
            
            
            $
            3,523




***Operating
      Activities***




Cash
      used
      in operating activities was $0.8 million for the first nine months of 2007,
      compared with cash provided by operations of $2.5 million for the first nine
      months of 2006. This decrease is primarily attributable to the increase in
      accounts receivable and the decrease in accounts payable and other current
      liabilities, offset in part by the increase in other long term
      liabilities.  The increase in accounts receivable is due to our growth
      in sites and a longer average collection period.  We do not believe
      that this constitutes an increased risk of uncollectible accounts, however,
      as
      we continue to have a strong history of collecting outstanding accounts
      receivable balances.




***Investing
      Activities***




Cash
      used
      in investing activities was $1.9 million for the first nine months of 2007
      compared with $1.2 million for the first nine months of 2006.  We
      entered into a licensing arrangement with a vendor resulting in non-cash
      investment in software licenses of $1.2 million during the third quarter of
      2007.  The primary purpose of our cash investment activities was to
      support our clinicians at site locations, improve our operational efficiency
      and
      create scalability for future service offerings.




***Financing
      Activities***




Cash
      provided by financing activities was $4.8 million for the first nine months
      of
      2007, compared with $2.2 million for the first nine months of
      2006.  Financing activity in each period primarily constituted
      additional draws under our credit facility.




***Sources
      of Liquidity***




Generally,
      we rely on three principal sources of cash for liquidity:  (1) funds
      generated by operating activities; (2) cash and cash equivalents in excess
      of
      the amounts necessary to meet reserve requirements in our insurance subsidiary;
      and (3) borrowings under our revolving credit facility.  During the
      first nine months of 2007, however, we used $0.8 million of funds in operating
      activities principally as a result of the $3.2 million increase in accounts
      receivable and the $3.1 million decrease in other current liabilities and
      accounts payable, offset in part by the increase in other long term
      liabilities.  Moreover, we carry very little cash in excess of amounts
      necessary to meet our insurance reserves.  As a result, during the
      period ended September 30, 2007, we have relied exclusively on draws under
      our
      credit facility for liquidity.  To fund operations since December 31,
      2006, we have increased the balance owed on our credit facility by approximately
      $4.3 million, of which $1.8 million represents an increase in




20


borrowing
      under the revolving line and $2.5 million represents a borrowing under the
      newly-available swingline commitment.




The
      increase in our accounts receivable balance is due to a combination of our
      revenue growth and an increase in the average days our accounts receivable
      are
      outstanding.  We do not anticipate that our average collection period
      will continue to increase.  As most of our outstanding accounts
      receivable balances are current, we do not believe there are any ultimate
      collection issues or that these outstanding balances will adversely affect
      our
      credit facility borrowing base.




We
      believe funds available under our credit facility and generated from operations
      will be sufficient to finance continuing operations and strategic initiatives
      for the next year.  As of September 30, 2007, $2.4 million was
      available under the revolving facility and $2.5 million was available under
      the
      swingline commitment.  Nonetheless, our ability to access our credit
      facility is subject to compliance with the terms and conditions of the credit
      facility, including financial covenants that require us to maintain certain
      financial ratios.  At September 30, 2007, we were in compliance with
      all such covenants.




We
      will,
      from time to time, consider the acquisition of, or investment in, complementary
      businesses, products, services and technologies, which would most likely affect
      our liquidity requirements or cause us to issue additional equity or debt
      securities.




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




***Contractual
      Obligations and Commitments***




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




As
      discussed earlier, we made a decision to relocate our Nashville operations
      to
      accommodate our significant anticipated growth over the next several
      years.  We also entered into a software licensing agreement which is
      classified as a capital lease in accordance with SFAS No. 13, *Accounting for
      Leases*.  The contractual cash outlays related to these agreements
      are as follows:




**Payments
                due by period****Contractual
                obligations**
            
            **Total**
            
            
            **<
                1 Year**
            
            
            **1
                – 3 Years**
            
            
            **3
                – 5 Years**
            
            
            **>
                5 Years**Office
                lease obligation
            
            $
            9,409
            
            
            $
            66
            
            
            $
            1,619
            
            
            $
            1,685
            
            
            $
            6,039Capital
                lease obligation
            
            $
            1,219
            
            
            $
            406
            
            
            $
            813
            
            
            $
            --
            
            
            $
            --








21




**Material
      Equity Transactions**




The
      following table describes activity related to our Series A
      Convertible Preferred Stock during the quarter ended September 30,
      2007:




Series
                A Convertible Preferred Stock shares converted
            
            
            22,159Common
                shares issued upon conversion
            
            
            221,591Common
                shares issued in satisfaction of dividends accrued
            
            
            42,643Total
                common shares issued upon Series A Convertible Preferred Stock
                conversions
            
            
            264,234




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




Our
      senior secured credit facility is not subject to risk of material interest-rate
      volatility.  The interest rate on the credit facility
      at September 30, 2007 was 7.1%.  If the interest rate on the
      debt were to increase nominally, the resulting financial impact would not be
      material to our financial statements.  We do not manage our debt
      interest-rate volatility risk through the use of derivative
      instruments.




Overall,
      there have been no material changes in our primary risk exposures or management
      of market risks since the prior year.  We do not expect any material
      changes in our primary risk exposures or management of market risks for the
      foreseeable future.




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




As
      of the
      end of the period covered by this Quarterly Report on Form 10-Q, our management,
      with the participation of our chief executive officer and chief financial
      officer, evaluated the effectiveness of our disclosure controls and
      procedures.  Based on this evaluation, our chief executive officer and
      our chief financial officer have concluded that our disclosure controls and
      procedures are effective  in providing reasonable assurancethat information we
      are
      required to disclose in reports that we file or submit under the Securities
      Exchange Act of 1934 is (A) recorded, processed, summarized and reported within
      the time periods specified in Securities and Exchange Commission rules and
      forms, and (B) accumulated and communicated to our management, including our
      chief executive officer and our chief financial officer, as appropriate to
      allow
      timely decisions regarding required disclosure.  Our disclosure
      controls and procedures are designed to provide reasonable assurance that such
      information is accumulated and communicated to our management.  Our
      disclosure controls and procedures include components of our internal control
      over financial reporting.




Our
      management, including our chief executive officer and chief financial officer,
      does not expect that our disclosure controls and procedures or our internal
      controls will prevent all errors and all fraud.  A control system, no
      matter how well conceived and operated, can provide only reasonable, not
      absolute, assurance that the objectives of the control system are
      met.  Further, the design of a control system must reflect the fact
      that there are resource constraints, and the benefits of controls must be
      considered relative to their costs.  Because of the inherent
      limitations in all control systems, no evaluation of controls can provide
      absolute assurance that all control issues and instances of fraud, if any,
      within I-trax have been detected.




There
      were no changes in our internal control over financial reporting that occurred
      during the quarterly period ended September 30, 2007 that have materially
      affected, or are reasonably likely to materially affect, our internal control
      over financial reporting.




22


**PART
      II.            OTHER
      INFORMATION**




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




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




**Item
      1A.  Risk Factors**




There
      were no material changes during the quarter ended September 30, 2007 from the
      risk factors as previously disclosed in our 2006 Annual Report.




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




**Issuance
      of Unregistered Securities**




During
      the quarter ended September 30, 2007, two stockholders converted 22,159 shares
      of the Company’s Series A Convertible Preferred Stock into 221,591 shares of
      common stock.  In these conversions, we also issued an additional
      42,643 shares of our common stock in payment of accrued dividends on the
      converted shares of Series A Convertible Preferred Stock.  The shares
      issued upon conversion, including the shares representing payment of the
      dividends, were exempt from registration under Section 3(a)(9) of the Securities
      Act of 1933, as amended.




**Purchases
      of Equity Securities by the Issuer and Affiliated
      Purchases**




None.




**Item
      3.    Defaults Upon Senior
      Securities**




None.




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




We
      did
      not submit any matters to a vote of our security holders during the quarter
      ended September 30, 2007.




**Item
      5.   Other
      Information**




None.




**Item
      6.    Exhibits**




**Number                      Exhibit
      Title**




10.1
            Employment
                Agreement dated September 1, 2007, between
                I-trax, Inc. and Bradley S.
                Wear.




10.2
            Amended
                and Restated Office Facility Lease effective
                August 9, 2007 by and between First Industrial Investment, Inc. and
                CHD
                Meridian Healthcare, LLC.




23


10.3
            Guaranty
                of Lease made as of August 9, 2007, by I-trax,
                Inc.




15
            Awareness
                letter of Goldstein Golub Kessler LLP regarding
                unaudited interim financial
                information.




31.1
            Chief
                Executive Officer Certification Pursuant to Rule
                13a-14(a) and 15d-14(a) of the Securities Exchange Act of
                1934.




31.2
            Chief
                Financial Officer Certification Pursuant to Rule
                13a-14(a) and 15d-14(a) of the Securities Exchange Act of
                1934.




32.1
            Certification
                Pursuant to 18 U.S.C. Section 1350, as
                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.




32.2
            Certification
                Pursuant to 18 U.S.C. Section 1350, as
                Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.




24


**SIGNATURES**




Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized as of November 9, 2007.





I-TRAX,
                INC.By:
            /s/
                R. Dixon ThayerR.
                Dixon Thayer, Chief Executive Officer(Principal
                Executive Officer)By:
            /s/
                Bradley S. WearBradley
                S. Wear, Senior Vice President and Chief Financial
                Officer(Principal
                Financial and Accounting Officer)








25