UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549


                                   FORM 10-QSB



             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934



For the fiscal quarter ended:               March 31, 2004
Commission file number:                     333-36666



                                 IBX GROUP, INC.
             (Exact name of registrant as specified in its charter)


         FLORIDA                                   65-0810941
         (State or other jurisdiction of           (I.R.S. Employer
         incorporation or organization)            Identification No.)



                             350 JIM MORAN BOULEVARD
                         DEERFIELD BEACH, FLORIDA 33442
                    (Address of principal executive offices)
                                   (Zip code)

                                 (954) 312-1660
              (Registrant's telephone number, including area code)


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

                                 Yes  X    No
                                     ---      ---

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of May 12, 2004: 96,007,877 shares of common stock, $.005 par
value per share.

<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                                   FORM 10-QSB
                      QUARTERLY PERIOD ENDED MARCH 31, 2004
                                      INDEX

                                                                            Page
                                                                            ----
PART I - FINANCIAL INFORMATION

      Item 1 - Consolidated Financial Statements

      Consolidated Balance Sheet (Unaudited)
        March 31, 2004.........................................................3

      Consolidated Statements of Operations (Unaudited)
        For the Three Months Ended March 31, 2004 and 2003.....................4

      Consolidated Statements of Cash Flows (Unaudited)
        For the Three Months Ended March 31, 2004 and 2003.....................5

      Notes to Consolidated Financial Statements (Unaudited)................6-14

      Item 2 - Management's Discussion and Analysis of Financial
               Condition and Results of Operations.........................15-21

      Item 3 - Control and Procedures.........................................21


PART II - OTHER INFORMATION

      Item 1 - Legal Proceedings..............................................22

      Item 2 - Changes in Securities and Use of Proceeds......................22

      Item 4 - Submission of Matters to a Vote of Security Holders............22

      Item 5 - Other Information..............................................22

      Item 6 - Exhibits and Reports on Form 8-K...............................22

      Signatures..............................................................23

                                       -2-
<PAGE>
<TABLE>
                            IBX GROUP, INC. AND SUBSIDIARIES
                               CONSOLIDATED BALANCE SHEET
                                     March 31, 2004
                                      (Unaudited)
<CAPTION>

                                         Assets
<S>                                                                        <C>
Current assets:
  Cash ..................................................................  $     6,230
  Restricted cash .......................................................      438,696
  Accounts receivable, net of allowance for doubtful accounts of $258,612      365,295
  Deferred consulting expense ...........................................      371,217
  Other current assets ..................................................      111,509
                                                                           -----------

    Total current assets ................................................    1,292,947
                                                                           -----------

Property and equipment, net .............................................      263,949
                                                                           -----------

Other assets:
  Intangible assets, net ................................................          879
  Other .................................................................      219,200
                                                                           -----------

    Total other assets ..................................................      220,079
                                                                           -----------

    Total assets ........................................................  $ 1,776,975
                                                                           ===========

                         LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Note payable, current maturities ......................................  $   674,503
  Checks outstanding in excess of bank balances .........................      201,855
  Accounts payable ......................................................      589,865
  Accrued expenses ......................................................      493,999
  Payroll taxes payable .................................................    1,655,478
  Deferred revenue ......................................................        4,063
  Due to related party ..................................................      114,847
                                                                           -----------

    Total current liabilities ...........................................    3,734,610
                                                                           -----------

Long-term debt:
  Debentures payable ....................................................      501,372
                                                                           -----------

Commitments and contingencies

Stockholders' deficit:
  Preferred Stock ($0.005 par value; 3,700,000 authorized shares;
   none issued and outstanding) .........................................            -
  Class A Non-voting Convertible Preferred Stock ($0.005 par value;
    300,000 authorized shares; 57,000 shares issued and outstanding) ....          165
  Series B Convertible Preferred Stock ($0.005 par value;
    1,000,000 authorized shares; 1,200 shares issued and outstanding) ...            6
  Common stock ($0.005 par value; 100,000,000 authorized shares;
    96,007,877 shares issued and outstanding) ...........................      480,040
  Common stock issuable (2,100 shares) ..................................           10
  Additional paid-in capital ............................................    6,274,398
  Accumulated deficit ...................................................   (8,145,827)
  Less: Stock subscription receivable ...................................      (90,000)
  Less: Deferred compensation and consulting ............................     (977,799)
                                                                           -----------

    Total stockholders' deficit .........................................   (2,459,007)
                                                                           -----------

    Total liabilities and stockholders' deficit .........................  $ 1,776,975
                                                                           ===========

              See accompanying notes to consolidated financial statements.
                                          -3-
</TABLE>
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

                                                       For the Three Months
                                                          Ended March 31,
                                                    ---------------------------
                                                        2004           2003
                                                    ------------   ------------

REVENUES .........................................  $    326,499   $  1,225,811
                                                    ------------   ------------


OPERATING EXPENSES:
    Salaries and payroll taxes ...................       606,428        443,311
    Depreciation and amortization ................        38,168         33,547
    Consulting fees ..............................        11,983              -
    Professional fees ............................        85,581         94,055
    Rent .........................................       103,478        106,809
    Bad debt expense .............................       220,000              -
    Other selling, general and administrative ....       382,969        495,000
                                                    ------------   ------------

        Total Operating Expenses .................     1,448,607      1,172,722
                                                    ------------   ------------

INCOME (LOSS) FROM OPERATIONS ....................    (1,122,108)        53,089
                                                    ------------   ------------

OTHER INCOME (EXPENSES):
    Settlement expense ...........................             -              -
    Interest expense .............................      (609,778)       (18,705)
                                                    ------------   ------------

        Total Other Income (Expenses) ............      (609,778)       (18,705)
                                                    ------------   ------------

NET INCOME (LOSS) ................................  $ (1,731,886)  $     34,384
                                                    ============   ============

EARNING (LOSS) PER SHARE:
      Net Income (Loss) Per Common Share - Basic .  $      (0.03)  $       0.00
                                                    ============   ============
      Net Income (Loss) Per Common Share - Diluted  $      (0.03)  $       0.00
                                                    ============   ============

      Weighted Common Shares Outstanding - Basic .    60,604,049     44,869,243
                                                    ============   ============
      Weighted Common Shares Outstanding - Diluted    60,604,049     61,298,357
                                                    ============   ============

           See accompanying note to consolidated financial statements.
                                       -4-
<PAGE>
<TABLE>
                            IBX GROUP, INC. AND SUBSIDIARIES
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (Unaudited)
<CAPTION>
                                                               For the Three Months
                                                                  Ended March 31,
                                                             -------------------------
                                                                 2004          2003
                                                             -----------   -----------
<S>                                                          <C>           <C>
Cash flows from operating activities:
  Net (loss) income .......................................  $(1,731,886)  $    34,384
  Adjustments to reconcile net (loss) income to
   net cash used in operating activities:
    Depreciation and amortization .........................       38,168        33,547
    Stock based compensation ..............................       10,538       181,004
    Amortization of debt discount .........................        3,637             -
    Beneficial interest on debentures payable .............      547,784             -
    Allowance for doubtful accounts .......................      207,354             -
    Bad debt recovery .....................................            -       (10,503)
    (Increase) decrease in:
      Accounts receivable .................................      (30,957)     (468,705)
      Deferred consulting expense .........................        1,345             -
      Other current assets ................................      (12,933)      (31,784)
      Other ...............................................      (17,963)            -

    Increase (decrease) in:
      Accounts payable ....................................      158,594        85,225
      Accrued expenses ....................................      (59,607)      (29,366)
      Payroll taxes payable ...............................      116,870        77,360
      Customer deposits ...................................            -      (185,925)
      Deferred revenue ....................................      (10,404)      (62,500)
                                                             -----------   -----------

Net cash (used in) provided by operating activities .......     (779,460)     (377,263)
                                                             -----------   -----------

Cash flows from investing activities:
  Increase in restricted cash .............................         (605)            -
  Purchase of property and equipment ......................      (10,894)      (88,876)
                                                             -----------   -----------

Net cash used in investing activities .....................      (11,499)      (88,876)
                                                             -----------   -----------

Cash flows from financing activities:
  Proceeds from exercise of stock warrants ................            -       529,500
  Proceeds from sale of common stock ......................      119,000             -
  Proceeds from sale of preferred stock ...................            -       100,000
  Checks outstanding in excess of bank balances ...........      159,531        60,596
  Payments on loans .......................................      (69,268)     (100,771)
  Proceeds from loans .....................................      125,000             -
  Proceeds from debentures payable ........................      150,000             -
  Proceeds from (payments on) advances from related party .      190,793             -
                                                             -----------   -----------

Net cash provided by financing activities .................      775,056       489,325
                                                             -----------   -----------

Net (decrease) increase in cash ...........................      (15,903)       23,186

Cash at beginning of year .................................       22,133        23,304
                                                             -----------   -----------

Cash at end of period .....................................  $     6,230   $    46,490
                                                             ===========   ===========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:
  Interest ................................................  $         -   $         -
                                                             ===========   ===========
  Income Taxes ............................................  $         -   $         -
                                                             ===========   ===========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
  Accrued expenses reclassified to debt ...................  $   101,438   $         -
                                                             ===========   ===========
  Preferred shares issued for debt ........................  $    25,000   $         -
                                                             ===========   ===========

              See accompanying notes to consolidated financial statements.
                                          -5-
</TABLE>
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

IBX Group, Inc. (the "Company") was organized under the laws of the state of
Florida in July 1997 as Vidkid Distribution, Inc. ("Vidkid"). On September 25,
2001 (the "acquisition date"), the Company acquired all of the outstanding
capital stock of PriMed Technologies, Inc., a Florida corporation ("PriMed").
PriMed was organized under the laws of the State of Florida on February 4, 1999
as a limited liability company and reorganized as a corporation on January 1,
2000. PriMed was acquired in a stock-for-stock transaction in which PriMed's
shareholders received approximately 81% of the outstanding common stock of
Vidkid on a fully diluted basis. Under the Agreement, Vidkid issued 11,550,000
shares of its common stock in exchange for each and every share of common stock
of PriMed and Vidkid's name was changed to IBX Group, Inc.

The Company is engaged in providing administrative services (accounting, billing
and collection, claims processing, information management), network support and
maintenance to clients predominantly in the healthcare sector. In addition, the
Company has developed proprietary software and applications with interactive
web-enabled multimedia capabilities with which the Company will develop new
markets and lines of business. In September 2002, the Company acquired Florida
Health Source, LLC and entered the business of providing physical therapy
services to referred patients.

All of the shares and assets of the Company's primary operating subsidiary have
been pledged to secure a loan obligation to a creditor. Two of the Company's
primary officers have also pledged the shares of the Company owned by them. The
parties entered into an amended settlement agreement effective November 7, 2002
whereby the creditor agreed to dismiss his action against the Company. Pursuant
to the terms of the Agreement, the Company is obligated to make certain monthly
payments, all of which have been made to date. Mr. Dudziak, the creditor,
pursuant to the settlement agreement, has a lien and perfected security interest
on all of the assets of IBX Technologies, Inc., which is IBX's primary operating
subsidiary and on shares of IBX common stock owned by Evan Brovenick and David
Blechman. As of March 31, 2004, approximately $66,000 was outstanding on the
loan. Failure to comply with the terms and conditions of the loan documents
could result in a default and the transfer of these assets and shares to the
lender.

The consolidated statements include the accounts of IBX Group, Inc. and its
wholly owned subsidiaries. All significant inter-company balances and
transactions have been eliminated.

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). The accompanying consolidated
financial statements for the interim periods are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the consolidated
financial position and consolidated operating results for the periods presented.
These consolidated financial statements should be read in conjunction with the
consolidated financial statements of IBX Group, Inc. for the year ended December
31, 2003 and 2002 and notes thereto contained in the Report on Form 10-KSB for
the year ended December 31, 2003 as filed with the SEC . The results of
operations for the three months ended March 31, 2004 are not necessarily
indicative of the results for the full fiscal year ending December 31, 2004.

The Company follows the guidance of the Securities and Exchange Commision's
Staff Accounting Bulletin 104 for revenue recognition. In general, the Company

                                       -6-
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF NEW ACCOUNTING POLICIES
         (CONTINUED)

records revenue when persuasive evidence of an arrangement exists, services have
been rendered or product delivery has occurred, the sales price to the customer
is fixed or determinable, and collectability is reasonably assured. The
following policies reflect specific criteria for the various revenues streams of
the Company:

Revenue derived from billing and collections and administrative services is
recognized at the completion of the service performed. For billing and
collection services, the Company receives a commission from the customer based
on a percentage of amounts actually collected. Revenues are recognized as a net
amount equal to the percentage commission once the customer's receivable had
been received. Software application revenue (from licensing) is recognized in
accordance with the terms of the specific agreements.

Maintenance and support revenues are recognized over the term of the related
agreements.

The Company's FHS subsidiary primarily acts as a referral network for physical
therapy patients who are referred by insurance carriers. Revenue from providing
physical therapy services was recognized upon completion of the patient services
and was recorded net of amounts due to service providers for the fiscal year
ended December 31, 2002. In 2003, the Company re-evaluated this revenue
recognition policy of the FHS subsidiary and determined that it qualifies for
the use of the Gross Method under EITF 99-19, "Recording Revenues Gross as a
Principal versus Net as an Agent". The cumulative effect of the change in
accounting principal was not material. Revenues from providing medical staffing
application services will be recognized as services are provided. Customer
prepayments from outsourced legal compliance services are deferred and
recognized as earned over the service period.
..
Basic earnings per share is computed by dividing net loss by weighted average
number of shares of common stock outstanding during each period. Diluted loss
per share is computed by dividing net loss by the weighted average number of
shares of common stock, common stock equivalents and potentially dilutive
securities outstanding during each period. Diluted loss per common share is not
presented because it is anti-dilutive. At March 31, 2004, there were options and
warrants to purchase 42,105,000 shares of common stock, which could potentially
dilute future earnings per share.

Intangible assets, if any, consist of acquired goodwill, and acquired customer
lists. Goodwill and other intangible assets are considered to have an indefinite
life pursuant to SFAS 142 and accordingly are not amortized until their useful
life is determined to be no longer indefinite. The Company evaluates the
remaining useful life of intangible assets that are not being amortized each
reporting period to determine whether events and circumstances continue to
support an indefinite useful life. If an intangible asset that is not being
amortized is subsequently determined to have a finite useful life, the asset is
tested for impairment in accordance with SFAS144. That intangible asset shall
then be amortized prospectively over its estimated remaining useful life and
accounted for in the same manner as other intangible assets that are subject to
amortization. Other intangible assets are amortized over a three to ten year
term. At December 31, 2003, substantially all of the intangible assets were
impaired and charged to operations. Amortizable intangibles are also evaluated
periodically for impairment. The amortization expense in the three month periods
ended March 31, 2004 was $106 compared to $0, respectively, for the same periods
in 2003.

                                       -7-
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 2 - LOAN PAYABLE

The Company's borrowings consisted of the following at March 31, 2004:

Loan payable to an individual, payable in various installments. The
loan payable includes accrued interest and is collateralized by all
of the assets of one of the Company's subsidiaries and outstanding
common shares of the Company held by certain guarantors. See (a)
below. ............................................................   $  65,736

Loan payable to an individual, payable on March 12, 2005. The loan
payable includes accrued interest at 8% per annum, is
collateralized by all of the assets of the Company, and in
convertible into common shares. See (b) below. ....................     174,000

Line of credit agreement with a financial institution. The Company
can borrow up to $425,000. Interest is payable on the outstanding
principal balance by adding the prevailing base loan rate charged
by the financial institution and the sliding scale percentage rate,
determined by the level of the daily net loan balance ranging from
2.5% to .75% over the base loan rate ( 5.375% at March 31, 2004).
The loan is collateralized by restricted cash and is payable on
demand. See (c) below. ............................................     422,267

Loan payable to an individual, payable on demand. The loan payable
bears interest at 18% per annum and is unsecured. .................      12,500
                                                                      ---------
                                                                        674,503

Less: Current portion of loans payable ............................    (674,503)
                                                                      ---------
Total .............................................................   $       -
                                                                      =========

(a)      On October 8, 2002, the Company made a payment and renegotiated a note
         payable with an individual. Accordingly, the principal amount of such
         note was reduced to $692,497 as of October 28, 2002. The lender
         retroactively restated the per annum interest rate prior to October 8,
         2002 from 25% to 15%. Furthermore, so long as the Company does not
         breach this agreement, effective October 8, 2002, the annual rate of
         interest was further reduced to 12.5% per annum. However, if the
         Company defaults on this agreement the loan will contingently revert to
         its previous outstanding balance on the date of this agreement with
         interest at 25% per annum. Certain shareholders of the Company's have
         pledged their shares of the Company owned by them and also personally
         guaranteed the note. As on the date of this report, the Company has met
         its obligations under this revised agreement. Failure to comply with
         the terms and conditions of the loan documents could result in a
         default and the transfer of these assets and shares to the lender.

(b)      On March 14, 2004, the Company signed a promissory note with a
         shareholder for $174,000, which converted to a note payable amounts due
         to this shareholder of approximately $69,000 and additional borrowing
         of $105,000. The note provides for 8% interest, a maturity date of
         March 12, 2005 and a security interest in all of the Company's assets.
         The Company is required to provide the holder with 90 days' notice of
         any prepayment, although there is no prepayment penalty. The note is
         convertible to common stock. The conversion price is the lowest of
         $.035, 70% of the closing bid price on the date of conversion or 70% of

                                       -8-
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 2 - LOAN PAYABLE (CONTINUED)

         the offering price any offering by the Company until March 2005. The
         Company agreed to include the shares issuable upon the exercise of this
         note in this registration statement. Additionally, the note contained a
         requirement that the funds of the loan were to be used to pay down
         certain loans and trade payables and that the Company was to supply
         written verification to the satisfaction of the note holder by March
         31, 2004. Since the Company failed to supply this verification, the
         Company is obligated to issue twice as many shares as would have been
         issuable when and if the holder converts. In connection with this
         penalty provision, the Company recorded a penalty expense of $248,571,
         which has been included in interest expense for the three months ended
         March 31, 2004. Pursuant to EITF Issue No. 98-5 "Accounting for
         Convertible Securities with Beneficial Conversion Features or
         Contingently Adjustable Conversion Ratios" and EITF Issue No. 00-27
         "Application of Issue No. 98-5 to Certain Convertible Instruments", the
         convertible note contains an imbedded beneficial conversion feature
         since the fair market value of the common stock exceeds the most
         beneficial exercise price on the debenture Issuance Date. This
         beneficial conversion value was computed by the Company as $174,000.
         Since the conversion feature is exercisable immediately, the $174,000
         was recognized as interest expense during the three months ended March
         31, 2004.

(c)      The Company maintains restricted cash in a brokerage account that is
         collateral for this line of credit and shown as restricted cash on the
         accompanying balance sheet.

NOTE 3 - DEBENTURES PAYABLE

On February 19, 2004, the Company entered into a Securities Purchase Agreement
to issue and sell 7.5% convertible debentures, in the aggregate amount of
$200,000, convertible into shares of common stock of the Company. As of March
31, 2004, $150,000 in convertible debentures was issued Investors. The holders
of this debt have the right to convert all or any amount of this debenture into
fully paid and non-assessable shares of common stock at the conversion price
with the limitation that any debenture holder may not convert any amount of the
debentures if after conversion that debenture holder would beneficially hold
more than 4.99% of the total outstanding common stock of the Company. The
conversion price generally is the lesser of (i) 65% of the average of the three
lowest closing bid prices of the common stock during the five trading days
immediately prior to the conversion date or (ii) $.08. Interest is payable at
the conversion date, in cash or in shares of common stock, at the option of the
Company. The convertible debentures mature three years from the debenture
issuance date. The Company recorded an imbedded beneficial conversion amount of
$80,769 as interest expense on February 19, 2004 since the debentures were
immediately convertible.

In connection with these convertible debentures issued, warrants to purchase
375,000 common shares were issued to the holders at an exercise price per share
of $0.05. The warrants are exercisable immediately and expires on March 15,
2007. These warrants were treated as a discount on the convertible debenture and
in 2004 were valued at $16,765 under SFAS No.123 using the Black-Scholes
option-pricing model to be amortized over the debenture term. Amortization
expense for the three months ended March 31, 2004 was $1,947 and is included in
interest expense.

                                       -9-
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 3 - DEBENTURES PAYABLE (CONTINUED)

On March 29, 2004, the Company entered into Securities Purchase Agreements to
issue and sell 7.5% convertible debentures, in the aggregate amount of $400,000,
convertible into shares of common stock of the Company. As of March 31, 2004,
$400,000 in convertible debentures was issued to consultants. The holders of
this debt have the right to convert all or any amount of this debenture into
fully paid and non-assessable shares of common stock at the conversion price
with the limitation that any debenture holder may not convert any amount of the
debentures if after conversion that debenture holder would beneficially hold
more than 4.99% of the total outstanding common stock of the Company. The
conversion price generally is the lesser of (i) 90% of the average of the three
lowest closing bid prices of the common stock during the five trading days
immediately prior to the conversion date or (ii) $.08. Interest is payable at
the conversion date, in cash or in shares of common stock, at the option of the
Company. The Company recorded an imbedded beneficial conversion amount of
$44,444 as interest expense on March 29, 2004 since the debentures were
immediately convertible.

NOTE 4 - RELATED PARTY TRANSACTIONS

Certain officers/shareholders of the Company from time to time advanced funds to
the Company for operations. These amounts are non-interest bearing,
non-collateralized, and are payable on demand. These advances are subordinated
to the loan payable (see Note 2). At March 31, 2004, amounts owed to officers
amounted to $114,847.

NOTE 5 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board has recently issued several new
accounting pronouncements:

In January 2003, the FASB issued Interpretation No. 46 ("FIN 46"),
"Consolidation of Variable Interest Entities." FIN 46 requires that if an entity
has a controlling financial interest in a variable interest entity, the assets,
liabilities and results of activities of the variable interest entity should be
included in the consolidated financial statements of the entity. FIN 46 requires
that its provisions are effective immediately for all arrangements entered into
after January 31, 2003. The Company does not have any variable interest entities
created after January 31, 2003. For those arrangements entered into prior to
January 31, 2003, the FIN 46 provisions are required to be adopted at the
beginning of the first interim or annual period beginning after June 15, 2003.
The Company has not identified any variable interest entities to date and will
continue to evaluate whether it has variable interest entities that will have a
significant impact on its consolidated balance sheet and results of operations.


In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." This statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. This
statement is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective for the first interim period beginning
after June 15, 2003, with certain exceptions. The adoption of SFAS No. 150 did
not have a significant impact on our consolidated financial position or results
of operations.

                                      -10-
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 6 - STOCKHOLDERS' DEFICIT

Preferred Stock

In August 2002, the Company designated 300,000 shares of its authorized
preferred stock as Class A Non-Voting Convertible Preferred Stock ("Class A
Preferred"). Each share of Class A Preferred is convertible into 100 shares of
common stock. A holder of Class A Preferred may not convert shares if such
conversion would result in such holder owning in excess of 4.9% of the Company's
common stock. At such time, 80,000 shares of Class A Preferred were issued in
exchange for 8,000,000 shares of common stock held by one entity. Through March
31, 2004, the Class A preferred shareholder converted 47,000 Class A preferred
shares into 4,700,000 shares of common stock.

On February 17, 2004, the Company's board of directors adopted an article of
amendment for 1,000,000 shares of the 5,000,000 shares of preferred stock
designating it as Series B 8% Convertible Preferred Stock or Series B preferred
stock. The holder of shares of the Series B preferred stock will be entitled to
all dividends declared by the board of directors at a rate of $80.00 per share
per annum. Dividends are not cumulative and will not accrue. The holder will be
entitled to convert each share of Series B preferred stock for 2,000 shares of
common stock, subject to adjustment upon the occurrence of certain limited
events as specified in the articles of amendment. Each share will be entitled to
a liquidation preference of $1,000.00 per share plus any declared but unpaid
dividend. The Series B preferred stock will have voting rights as if converted
into common stock and will vote as a class with the common stock on all matters.
Certain protective provisions apply that limits the Company's authority to a)
issue new classes of capital stock senior to the series B preferred, and b) sell
or merge the Company.

During February 2004, the Company had a private placement to five accredited
investors in which the Company issued an aggregate of 1,000 shares of Series B
Preferred Stock convertible into 2,000,000 shares of common stock, warrants
entitling the holders to purchase up to 1,000,000 shares of our common stock at
an exercise price of $0.10 per share expiring on December 31, 2005 for proceeds
of $100,000. Additionally, the Company issued 250 shares of Series B Preferred
Stock convertible into 500,000 shares of common stock, warrants entitling the
holders to purchase up to 250,000 shares of our common stock at an exercise
price of $0.10 per share expiring on December 31, 2005 in exchange for debt
amounting to $25,000.

Common Stock

In January 2004, the Company issued 2,380,000 shares of common stock for net
proceeds of $119,000 or $0.05 per share.

In connection with a securities purchase agreement (see note 3), the Company
issued 500,000 shares of common stock. The shares were value at the quoted
trading price on the date of the securities purchase agreement of $35,500. The
$35,500 was treated as a discount on the convertible debenture and is being
amortized into interest expense over the debenture term.

During the three months ended March 31, 2004, the Class A preferred shareholder
converted 24,000 Class A preferred shares into 2,400,000 shares of common stock.

During the three months ended March 31. 2004, the Company cancelled 2,000 shares
of common stock previously issued.

                                      -11-
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 6 - STOCKHOLDERS' DEFICIT (CONTINUED)

In connection with the issuance Series B convertible preferred stock, the
Company granted 1,250,000 common stock warrants to purchase 1,250,000 shares of
the Company's common stock at $.10 per share. The warrants expire in December
31, 2005.

A summary of outstanding options and warrants at March 31, 2004 are as follows:
<TABLE>
<CAPTION>
                                  Shares Underlying       Range of         Remaining         Average
                                 Options and warrants  Exercise Prices  Contractual Life  Exercise Price
                                 --------------------  ---------------  ----------------  --------------
<S>                                   <C>               <C>                <C>                 <C>
Outstanding at December 31, 2003         530,000        $0.10 - $0.50      2.75 years          $0.28
Granted .........................     41,575,000        $0.05 - $0.10      2.0  years           0.10
Exercised .......................              -              -                -                 -
Cancelled .......................              -              -                -                 -
                                      ----------        -------------      ----------          -----

Outstanding at March 31, 2004 ...     42,105,000        $0.05 - $0.50      2.0  years          $0.10
                                      ==========        =============      ==========          =====
</TABLE>

Weighted average fair value of warrants and options
granted during fiscal 2004 ........................         $0.10
                                                            =====

The following table summarizes information about employee stock options and
consultant warrants outstanding at March 31, 2004:

                                                         Options and Warrants
          Options and Warrants Outstanding                    Exercisable
 --------------------------------------------------    -------------------------
                              Weighted
                               Average     Weighted                     Weighted
 Range of       Number        Remaining     Average        Number        Average
 Exercise   Outstanding at   Contractual   Exercise    Exercisable at   Exercise
   Price    March 31, 2004       Life        Price     March 31, 2004     Price
 --------   --------------   -----------   --------    --------------   --------
  $ 0.50         250,000     3.00 Years     $ 0.50          250,000      $ 0.50
    0.10      41,480,000     2.00 Years       0.10       41,480,000        0.10
    0.05         375,000     2.00 years       0.05          375,000        0.05
            --------------                 --------    --------------   --------
              42,105,000                    $ 0.10       42,105,000      $ 0.10
            ==============                 ========    ==============   ========

                                      -12-
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 7 - SEGMENT INFORMATION

For the three months ended March 31, 2004, the Company operated in two
reportable business segments - (1) healthcare transaction management and
technology services and (2) physical therapy and rehabilitation services. The
healthcare transaction management and technology services segment provides the
healthcare industry with a combination of administrative services and technology
development, including but not limited to physicians practice management,
billing and collections, network services, transcription services, staffing
solutions, and software application development. The physical therapy and
rehabilitation services segment operates multi-disciplinary clinics offering
physical therapy, occupational medicine, pain management, chiropractic care and
wellness services. The Company's reportable segments are strategic business
units that offer different products, which compliment each other. They are
managed separately based on the fundamental differences in their operations.
Information with respect to these reportable business segments for the three
months ended March 31, 2004 and 2003 is as follows.

                                                FOR THE THREE     FOR THE THREE
                                                 MONTHS ENDED      MONTHS ENDED
                                                MARCH 31, 2004    MARCH 31, 2003

                               NET REVENUES:
                      Healthcare Transaction
                   Management and Technology ... $   293,252       $ 1,013,984
         Physical Therapy and Rehabilitation ...      33,247           211,827

                    Consolidated Net Revenue ...     326,499         1,225,811

                         OPERATING EXPENSES:
                      Healthcare Transaction
                   Management and Technology ...   1,129,542           902,542
         Physical Therapy and Rehabilitation ...     280,897           236,633
              DEPRECIATION AND AMORTIZATION:
                      Healthcare Transaction
                   Management and Technology ...      34,718            31,280
         Physical Therapy and Rehabilitation ...       3,450             2,267
                           INTEREST EXPENSE:
                      Healthcare Transaction
                   Management and Technology ...     609,778            18,705
         Physical Therapy and Rehabilitation ...           -                 -
                              INCOME (LOSS):
                      Healthcare Transaction
                   Management and Technology ... $(1,480,786)      $    61,457
         Physical Therapy and Rehabilitation ...    (251,100)          (27,073)

                           NET INCOME( LOSS) ... $(1,731,886)      $    34,384

TOTAL ASSETS AT SEPTEMBER 30, 2003 AND 2002:
                      Healthcare Transaction
                   Management and Technology ... $ 1,667,050       $   793,202
         Physical Therapy and Rehabilitation ...     109,925           369,423

                    Consolidated Asset Total ... $ 1,776,975       $ 1,162,625

                                      -13-
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
                                 March 31, 2004
                                   (UNAUDITED)

NOTE 8 - ACQUISITION

Effective February 20, 2004 the Company closed on the acquisition of all the
membership units of South Florida Therapy I, LLC ("SFT") a company operating in
the physical and respiratory therapy business. As part of the agreement, the
Company will administer collections for all accounts receivable through February
20, 2004 on behalf of the sellers and receive a 10% fee of amounts collected. In
addition, the Company will administer and collect future receivables on behalf
of its wholly owned subsidiary for a 10% fee which would eliminate in
consolidation. The purchase price was $1.00 plus 5% of future gross revenues
collected of SFT through February 20, 2006. In addition, if the Company does not
fund and maintain the SFT business through February 20, 2006, a termination
payment of $50,000 will be due to the sellers.

The Company accounted for this acquisition using the purchase method of
accounting, however, as there were no tangible assets or liabilities, and a
nominal $1.00 purchase price, there was no accounting entry at the acquisition
date.

In accordance with SFAS 141 "Business Combinations" the contingent consideration
of 5% of future revenues collected will be recorded as a component of the
purchase price as such amounts are determined in the future.

NOTE 9 - GOING CONCERN

As reflected in the accompanying consolidated financial statements, the Company
has a working capital deficiency of $2,441,663 at March 31, 2004, and has an
accumulated deficit and stockholders' deficit of $8,145,827 and $2,459,007,
respectively, and has cash used in operations of $779,460 for the three months
ended March 31, 2004. The ability of the Company to continue as a going concern
is dependent on achieving profitable operations, its ability to generate
positive cash flows from operations, and the obtaining additional equity and/or
debt financing to pay off outstanding debt obligations and unpaid payroll taxes.
There can be no assurance that the Company's efforts will be successful. The
consolidated financial statements do not include any adjustments that might be
necessary if the Company is unable to continue as a going concern. No estimate
has been made should management's plan be unsuccessful.

NOTE 10 - SUBSEQUENT EVENTS

The Company entered into a placement agency agreement with a third party agent.
For services rendered under the Agency Agreement, the Company will pay a cash
fee equal to 10% of the aggregate consideration received by the Company in the
capital raise.

                                      -14-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The following discussion should be read in conjunction with iBX's audited
financial statements and notes thereto included herein. In connection with, and
because it desires to take advantage of, the "safe harbor" provisions of the
Private Securities Litigation Reform Act of 1995, iBX cautions readers regarding
certain forward looking statements in the following discussion and elsewhere in
this report and in any other statement made by, or on the behalf of iBX, whether
or not in future filings with the Securities and Exchange Commission. Forward
looking statements are statements not based on historical information and which
relate to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond iBX's
control and many of which, with respect to future business decisions, are
subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward looking statements made by, or on behalf of, iBX. iBX disclaims
any obligation to update forward looking statements.

ORGANIZATION

iBX Group, Inc. was organized under the laws of the State of Florida in July
1997 as Vidkid Distribution, Inc. to own, distribute and produce children's
intellectual properties. to own, distribute and produce children's intellectual
properties In February 2001, we were spun-off from our parent company
emailthatpays.com, Inc. On September 25, 2001, Vidkid acquired all of the
outstanding capital stock of Primed Technologies, Inc., a Delaware corporation
in a stock-for stock exchange. Primed was organized under the laws of the State
of Florida on February 4, 1999 as a limited liability company and reorganized as
a corporation in the State of Delaware on January 1, 2000. Primed's
shareholders, Evan Brovenick and David Blechman, received 11,550,000 shares or
approximately 81% of the outstanding common stock of Vidkid on a fully diluted
basis. Vidkid's name was changed to iBX Group, Inc.

We are engaged in providing administrative services such as accounting, billing
and collection, claims We develop and deploy innovative, cost-effective methods
for integrating financial, administrative and information services for the
healthcare industry. IBX Group, Inc. develops and deploys innovative,
cost-effective methods for integrating financial, administrative and information
services for the healthcare industry. During the last two years, we
significantly expended our capabilities. Our business initially focused on
healthcare transaction services, primarily assisting providers with billing and
collection of receivables. We have since added expertise in regulatory
compliance, transcription services, staffing and technology solutions. We have
devoted significant resources towards developing various strategic partners and
opportunities to better address the needs of the healthcare marketplace. These
investments in our product development and infrastructure resulted in
significant expenditures and we are now starting to recognize new revenue from
these initiatives.

                                      -15-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

iBX operates under five divisions:

      o  IBX TECHNOLOGIES, which enables healthcare organizations to maximize
         their accounts receivables;

      o  FLORIDA HEALTHSOURCE, a network of physical therapy and wellness
         centers;

      o  MEDICOMPLIANT SOLUTIONS, which ensures medical practices' compliance
         with today's complex legal requirements;

      o  IBX TRANSCRIPTION SERVICES, which offers physicians quick turn-around
         and Web-accessible progress reports;

      o  NURSESSTAT, which deploys leading-edge staffing administration
         technology to healthcare facilities and provides cost-effective
         temporary staffing solutions.

Our Florida Healthsource subsidiary recently opened a multi-disciplinary clinic
in a prominent medical center in Boca Raton, Florida. The healthcare clinic will
offer physical therapy, occupational medicine, pain management, chiropractic
care and wellness services. The new clinic is part of the company's strategic
plan to capitalize on the emerging "wellness" trend in healthcare by bringing
these various services under one roof. Florida HealthSource centers will also
serve as a showcase for iBX's menu of products and services specially designed
for the healthcare industry. Florida HealthSource provides case managers and
adjusters with a statewide referral network of over 100 pre-approved and
qualified service providers for their insured patients. This allows the payer to
control its costs by sending the patients to providers with negotiated fees.

An aggregate of 11,550,000 shares of iBX held by Evan Brovenick and David
Blechman, our principal officers, and the assets of PriMed are subject to a
creditor's lien. Failure to comply with the terms and conditions of the related
loan documents could result in a default and the forfeiture of these shares
and/or assets to the lender.

CURRENT DEVELOPMENTS

On April 7, 2004 we announced that Florida HealthSource, our network of physical
therapy, occupational therapy and rehabilitation centers throughout the state
and a division of the Company, launched the Aevum HealthSource network, which
will operate a physicians' network to provide patients with age-management and
life-enhancement protocols and treatments. With the recent launch of our Aevum
HealthSource network, a division of our Company, we have become positioned for
major growth within the $17 billion anti-aging industry. The network will enable
board-certified physicians to provide patients with age-management and
life-enhancement protocols and treatments, and will be headquartered at our
Florida HealthSource's flagship physical therapy and rehabilitation center in
Boca Raton, Fla.

On April 27, 2004, we announced that we were retained by Beacon Business
Finance, LLC to manage more than $9 million in accounts receivable from a
defunct physical therapy and rehabilitation concern.

                                      -16-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

THREE MONTHS ENDED MARCH 31, 2004 COMPARED TO THREE MONTHS ENDED MARCH 31, 2003

REVENUES

For financial reporting purposes, iBX operated in two reportable business
segments: healthcare transaction management and technology services; and
physical therapy and rehabilitation services.

Revenues are generated from our administrative services (accounting, billing and
collection, claims processing, information management, transcription and legal
services) and from our business of providing physical therapy services to
referred patients. Revenues for the three months ended March 31, 2004 were
$326,499 as compared to revenues for the three months ended months ended March
31, 2003 of $1,225,811, a decrease of $899,312 or 73.4%. Revenues from our
health transaction management and technology segment decreased to $293,252 for
the three months ended March 31, 2004 as compared to $1,013,984 for the three
months ended March 31, 2003, a decrease of $720,732. The decrease was
attributable to a decrease in collections on behalf of customers under the
Company's service contracts. Our collection rate has decreased as we wind up
certain portfolios. With the addition of new portfolios, we expect our revenue
to increase in the following quarters of 2004. Additionally, in June 2003, Hilco
modified their service agreement with us. The modification of this agreement had
an adverse effect on our revenues. Revenues from our physical therapy and
rehabilitation services segment decreased to $33,247 for the three months ended
March 31, 2004 as compared to $211,827 for the three months ended March 31,
2003, a decrease of $178,580. The decrease was attributable to a decrease the
abandonment of our Jacksonville, Florida office, the closing of our Jacksonville
clinic. For the three months ended March 31, 2004, revenues by segment consisted
of the following.

                                                           2004          2003
                                                           ----          ----
Health transaction management and technology segment .. $ 293,252    $ 1,013,984
Physical therapy and rehabilitation services segment ..    33,247        211,827
                                                        ---------    -----------

Total revenues ........................................ $ 326,499    $ 1,225,811
                                                        =========    ===========

OPERATING EXPENSES

The Company's operating results for the quarter were materially impacted by the
start-up costs for the several acquisitions that were consummated during 2003,
including Florida HealthSource, IBX Transcription, NurseStat and MediCompliant,
while the core business also recorded a loss due to expenses in closing the
Jacksonville facility, marketing expenses, and non-cash charges due to the sale
of debenture instruments and issuance of $400,000 of promissory notes for
services and related 40,000,000 warrants for services. The Company expects that
these new businesses will have substantially increased revenues and lower
expenses in the latter part of 2004.

                                      -17-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2004 COMPARED TO THREE MONTHS ENDED MARCH 31, 2003
(CONTINUED)

Salaries and payroll taxes were $606,428 for the three months ended March 31,
2004 as compared to $443,311 for the three months ended March 31, 2003.
Salaries, which consist of salaried and hourly employees, include staff used for
our administrative services, our technical development staff, marketing staff
and office personnel, and clinic staff. Overall, for the three months ended
March 31, 2004, salary and payroll expenses increased by $163,117 or 37%. The
increase is attributable to increased staff related to our physical therapy and
rehabilitation segment and increased staff related to our acquisitions during
the 2003 period of.

Depreciation and amortization expense for the three months ended March 31, 2004
was $38,168 as compared to $33,547 for the three months ended March 31, 2003 due
to an increase in depreciable assets from additions primarily in the Company's
subsidiary, FHS and NurseStat. We regularly review the carrying value of our
assets and a loss is recognized when the unamortized costs are deemed
unrecoverable based on the estimated cash flows to be generated from the
applicable assets.

Consulting expense was $11,983 for the three months ended March 31, 2004 as
compared to $0 for the three months ended March 31, 2003. During the three
months ended March 31, 2004, we recorded non-cash consulting expense related to
loan agreements $10,538.

Professional fees were $85,581 for the three months ended March 31, 2004 as
compared to $94,055 for the three months ended March 31, 2003, a decrease of
$8,474 or 9%.

Rent expense was $103,478 for the three months ended March 31, 2004 as compared
to $106,809 for the three months ended March 31, 2003, a decrease of $3,331.
Currently, we offset our rent expense by subleasing office space to certain
entities on a month-to-month basis.

For the three months ended March 31, 2004, we recorded bad debt expense of
$220,000 related to non-collectible receivables.

Other selling, general and administrative expenses, which include advertising,
insurance, contract labor, consulting expense, travel and entertainment,
telephone, and other expenses, were $382,969 for the three months ended March
31, 2004 as compared to $495,000 for the three months ended March 31, 2003. The
decrease was primarily due to a decrease in outside services and other expenses
due to cost cutting measures.

Interest expense was $609,778 for the three months ended March 31, 2004 as
compared to $18,705 for the three months ended March 31, 2003. The increase was
attributable to charges recorded due to the beneficial conversion of our notes
payable and debentures payable and a default penalty of $248,571 on our $174,000
promissory note. Additionally, in 2004, we defaulted on our installment
agreement with the U.S. Internal Revenue Service (IRS) relating to unpaid
payroll taxes. In connection with this default, interest expense related to the
unpaid payroll taxes was recorded.

As a result of these factors, we reported a net loss of $(1,731,886) or $(.03)
per share for the three months ended March 31, 2004 as compared to net income of
$34,384 or ($.00) per share for the three months ended March 31, 2003.

                                      -18-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

During the first part of 2004, our overall performance continued to be hampered
due to continuing inadequacy of funding to meet our needs to, among other
things, ramp up sales and deploy our services. In 2003, we received
approximately $3,088,428 in proceeds from the exercise of our warrants. During
the three months ended march 31, 2004, we received proceeds of $119,000 from the
sale of common stock and proceeds of $100,000 from the sale of series B
preferred stock.. We are currently experiencing a cash shortage, which has
effected our operations. Our ability to continue as a going concern is dependent
upon our ability to attain a satisfactory level of profitability, have access to
suitable financing, satisfy our contractual obligations with creditors on a
timely basis and develop further revenue sources.

At March 31, 2004, we had a stockholders' deficit of $2,770,225. We have an
accumulated deficit from losses of $8,627,986. Our operations during 2004 have
been funded from loans from third parties amounting to $325,000 and from the
sale of stock of $219,000. These funds were used for working capital and capital
expenditures.

We entered into an installment agreement with the U.S. Internal Revenue Service
in October 2002 relating to unpaid payroll taxes through June 2002, which
requires us to pay $12,000 per month for 84 months. We have incurred additional
payroll tax liabilities subsequent to June 30, 2002 which have been accrued on
the accompanying balance sheet. We are currently in default on this agreement.
Additionally, we have accrued penalties and interest on payroll tax liabilities
incurred subsequent to June 30, 2002. At March 31, 2004, accrued payroll taxes
aggregated $1,655,479.

We have no other material commitments for capital expenditures. Other than cash
generated from our operations, exercise of warrants and loans and advances from
shareholders, we have no external sources of liquidity.

We may not have sufficient cash flow from operations to sufficiently meet all of
our cash requirements for the next 12 months. Our future operations and growth
is dependent on our ability to raise capital for expansion, and to seek
additional revenue sources. We have no material commitments for capital
expenditures.

Net cash used in operations during the three months ended March 31, 2004 was
$779,460 as compared net cash used in operations of $377,263 for the months
ended March 31, 2003. The increase in cash used was primarily a result of net
losses for the three months ended March 31, 2004, increases in accounts
receivable, increases in accounts payable, and the increase in payroll taxes
payable and related interest.

Net cash used in investing activities during the three months ended March 31,
2004 was $11,499 relating to the purchase of property and equipment of $10,894
and an increase in restricted cash of $605 compared to net cash used in
investing activities of $88,876 for the three months ended March 31, 2003
relating to the purchase of property and equipment.

Net cash provided by financing activities for the three months ended March 31,
2004 was $775,056 as compared to net cash provided by financing activities of
$489,325 for the three months ended March 31, 2003. During the three months
ended March 31, 2004, we received proceeds from the sale of common stock 0f
$119,000, proceeds from the sale of series B preferred stock of $100,000,
proceeds from increased loan borrowings of $275,000, proceed from advances from
related parties of $190,793, and an increase in checks outstanding in excess of

                                      -19-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (CONTINUED)

bank balances of $159,531, offset by loan repayments of $69,268. During the
three months ended March 31, 2003, we received proceeds from the exercise of
warrants of $529,500, and had an increase in checks outstanding in excess of
bank balances of $60,596 offset by loan repayment of 100,771.

During 2003, we entered into a line of credit agreement with a financial
institution pursuant to which we can borrow up to $425,000. Interest is payable
on the outstanding principal balance by adding the prevailing base loan rate
charged by the financial institution and the sliding scale percentage rate,
determined by the level of the daily net loan balance ranging from 2.5% to .75%
over the base loan rate. The loan is payable on demand at March 31, 2004
$422,267 was outstanding. The line is secured by US Treasury securities owned by
iBX, which is reflected as retricted cash.

We are currently increasing our marketing efforts and sales force and are
aggressively seeking new clients and new businesses that will increase our
revenues. . We believe that our working capital will improve as our
profitability improves and as we pay off certain debt settlements. Nevertheless,
we can provide no assurance as to our future profitability or access to capital
markets, or successful re-negotiation of existing debt.

We may not have sufficient cash flow from operations to sufficiently meet all of
our cash requirements for the next 12 months. Our ability to continue as a going
concern is dependent upon our ability to attain a satisfactory level of
profitability, have access to suitable financing, satisfy our contractual
obligations with creditors on a timely basis and develop further revenue
sources.

In February 2004, we issued two convertible notes in the aggregate amount of
$374,000. We also sold $100,000 of units consisting of shares of convertible
preferred stock and warrants.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following tables summarize our contractual obligations and commercial
commitments as of March 31, 2004:

  Significant Capital               Within                             After
  Obligations            Total      1 Year    2-3 Years   4-5 Years   5 Years
  -------------------   --------   --------   ---------   ---------   -------

  Capital Leases        $      -   $      -    $      -    $      -   $     -
  Operating Leases      $927,000   $357,000    $436,000    $134,000   $     -

CRITICAL ACCOUNTING POLICIES

We believe the following critical accounting policies affect our more
significant judgments and estimates used in the preparation of our consolidated
financial statements.

REVENUE RECOGNITION

The Company follows the guidance of the Securities and Exchange Commision's
Staff Accounting Bulletin 104 for revenue recognition. In general, the Company
records revenue when persuasive evidence of an arrangement exists, services have
been rendered or product delivery has occurred, the sales price to the customer
is fixed or determinable, and collectability is reasonably assured. The
following policies reflect specific criteria for the various revenues streams of
the Company:

                                      -20-
<PAGE>

Revenue derived from billing and collections and administrative services is
recognized at the completion of the service performed. For billing and
collection services, the Company receives a commission from the customer based
on a percentage of amounts actually collected. Revenues are recognized as a net
amount equal to the percentage commission once the customer's receivable had
been received. Software application revenue (from licensing) is recognized in
accordance with the terms of the specific agreements.

Maintenance and support revenues are recognized over the term of the related
agreements.

The Company's FHS subsidiary primarily acts as a referral network for physical
therapy patients who are referred by insurance carriers. Revenue from providing
physical therapy services was recognized upon completion of the patient services
and was recorded net of amounts due to service providers for the fiscal year
ended December 31, 2002. In 2003, the Company re-evaluated this revenue
recognition policy of the FHS subsidiary and determined that it qualifies for
the use of the Gross Method under EITF 99-19, "Recording Revenues Gross as a
Principal versus Net as an Agent". The cumulative effect of the change in
accounting principal was not material.

Revenues from providing medical staffing application services will be recognized
as services are provided.

Customer prepayments from outsourced legal compliance services are deferred and
recognized as earned over the service period.

We account for stock transactions in accordance with APB Opinion No. 25,
"Accounting for Stock Issued to Employees." In accordance with Statement of
Financial Accounting Standards No. 123 ("SFAS 123"), "Accounting for Stock-Based
Compensation," we adopted the pro forma disclosure requirements of SFAS 123.

ITEM 3.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our chief
executive officer and chief financial officer, conducted an evaluation of our
"disclosure controls and procedures" (as defined in the Securities Exchange Act
of 1934 (the "Exchange Act") Rules 13a-14I) within 90 days of the filing date of
this Quarterly Report on Form 10-QSB (the "Evaluation Date"). Based on their
evaluation, our chief executive officer and chief financial officer have
concluded that as of the Evaluation Date, our disclosure controls and procedures
are effective to ensure that all material information required to be filed in
this Quarterly Report on Form 10-QSB has been made known to them in a timely
fashion.

Changes in Internal Controls

There have been no significant changes (including corrective actions with regard
to significant deficiencies or material weaknesses) in our internal controls or
in other factors that could significantly affect these controls subsequent to
the Evaluation Date set forth above.

                                      -21-
<PAGE>
                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities and Use of Proceeds

Preferred Stock

During February 2004, the Company had a private placement to five accredited
investors in which the Company issued an aggregate of 1,000 shares of Series B
Preferred Stock convertible into 2,000,000 shares of common stock, warrants
entitling the holders to purchase up to 1,000,000 shares of our common stock at
an exercise price of $0.10 per share expiring on December 31, 2005 for proceeds
of $100,000.

Common Stock

In January 2004, we issued 2,380,000 shares of common stock for net proceeds of
$119,000.

In connection with a securities purchase agreement (see note 3), the Company
issued 500,000 shares of common stock. The shares were value at fair market
value on the date of the securities purchase agreement of $35,500. The $35,500
was treated as a discount on the convertible debenture and is being amortized
into interest expense over the debenture term.

During the three months ended March 31, 2004, the Class A preferred shareholder
converted 24,000 Class A preferred shares into 2,400,000 shares of common stock.

During the three months ended March 31. 2004, the Company cancelled 2,000 shares
of common stock previously issued.

Item 4.  Submission of Matters to Vote of Security Holders

         None

Item 5.  Other Information

         None

Item 6.  Exhibits and Reports on Form 8-K

         (a) Exhibits

         31.1   Certification by Chief Executive Officer Pursuant to Section 302
         31.2   Certification by Chief Financial Officer Pursuant to Section 302
         32.1   Certification by Chief Executive Officer Pursuant to Section 906
         32.2   Certification by Chief Financial Officer Pursuant to Section 906


         (b) Reports on Form 8-K

         None

                                      -22-
<PAGE>
                                   SIGNATURES

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

                                            IBX GROUP, INC.


Dated:   May 25, 2004                   By: /s/ Evan Brovenick
                                            ----------------------------------
                                            Evan Brovenick,
                                            Chief Executive Officer, President
                                            and Director


Dated:   May 25, 2004                   By: /s/ Alvin Brovenick
                                            -------------------
                                            Alvin Brovenick
                                            Treasurer

                                      -23-