U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

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

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

                        Commission file number 333-36666

                                 IBX GROUP, INC.
                                 ---------------
                 (Name of Small Business issuer in its charter)

                  Florida                                 65-0810941
                  -------                                 ----------
        (State or Other Jurisdiction                    (IRS Employer
      of Incorporation or Organization)             Identification Number)

      350 Jim Moran Boulevard; Deerfield Beach, Florida         33442
      --------------------------------------------------        -----
           (Address of Principal Executive Offices)           (Zip Code)

         Issuer's Telephone Number, Including Area Code: (561) 998-3020
                                                         --------------

        Securities registered pursuant to Section 12(b) of the Act: None

    Securities registered pursuant to Section 12(g) of the Act: Common Stock

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

        Check if there is no disclosure of delinquent filers pursuant to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year: $3,220,104.

The aggregate market value of the issuer's common stock, $.001 par value, held
by non-affiliates on March 27, 2003 was approximately $2,724,000.

On March 27, 2003, there were 46,046,743 shares of the issuer's common stock
outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
None

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                                TABLE OF CONTENTS

                            FORM 10-KSB ANNUAL REPORT

                                 IBX GROUP, INC.

                                                                            PAGE
PART I

Item 1.   Description of Business.............................................3

Item 2.   Description of Property............................................11

Item 3.   Legal Proceedings..................................................11

Item 4.   Submission of Matters to a Vote of Security Holders................11


PART II

Item 5.   Market for the Registrant's Common Equity and
          Related Stockholder Matters........................................12

Item 6.   Management's Discussion and Analysis of Financial Condition
          and Results of  Operations.........................................13

Item 7.   Financial Statements...............................................22

Item 8.   Changes in and Disagreements on Accounting and
          Financial Disclosure ..............................................22


PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons,
          Compliance with Section 16(a) of the Exchange Act..................22

Item 10.  Executive Compensation.............................................23

Item 11.  Security Ownership of Certain Beneficial Owners and Management.....24

Item 12.  Certain Relationships and Related Transactions.....................25


PART IV

Item 13.  Exhibits and Reports of Form 8-K...................................27

Item 14.  Controls and Procedures............................................27

SIGNATURES...................................................................28

CERTIFICATIONS...............................................................29

FINANCIAL STATEMENTS................................................F-1 to F-23

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                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS.

        We develop and deploy innovative, cost-effective methods for integrating
financial, administrative and information services for the healthcare industry.
We operate under two divisions--Healthcare Transaction Management and Technology
and Physical Therapy and Rehabilitation. By creating and utilizing the latest
technologies, Internet-based communications and hands-on expertise, iBX strives
to meet the needs of hospitals, single and multi-specialty physician group
practices and healthcare service organizations seeking to achieve the maximum
financial benefit of their accounts receivables by controlling workflow,
consolidating administrative functions and addressing compliance issues.

        During the last two years, we significantly expanded our services.
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.

        We provide our clients in the healthcare industry with a combination of
administrative services and technology development, including but not limited to
physicians practice management, billing and collections and network services.
Our current business focus is on specialty physicians practices, hospital-based
medical services organizations and ancillary diagnostic facilities. Our current
core services involve accounts receivable management and the delivery of
powerful information management systems. Our in-house development capability
allows us to provide technology tools directly to the clients.

        In addition, our Florida Health Source subsidiary is opening a
multi-disciplinary clinic later this month 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. This is the
first of several new physical therapy and occupational medicine clinics planned
throughout Florida. Florida Healthsource is a is the preferred provider network
for more than 450,000 employees throughout the state of Florida and a physical
and occupational therapy vendor for a major U.S. retailer.

OUR BUSINESS

        We provide our clients in 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 and
software application development. Our current business focus is on specialty
physicians practices, hospital-based medical services organizations and
ancillary diagnostic facilities. All of the software products and services are
distributed using our data servers located in our data center in Deerfield
Beach, Florida. Our current core services involve accounts receivable management
and the delivery of powerful information management systems. Our in-house
development capability allows us to provide technology tools directly to the
clients.

        We are focusing on deploying our traditional management services, as
well as capitalizing on new opportunities to provide accounts receivable
services for physician hospital organizations, private practice and ancillary
service facilities. We are also concentrating on our electronic medical records
management service and our consumer-oriented online medical information services
that will be available worldwide. We have contracts with various healthcare
providers focusing on account receivable management.

PRODUCTS AND SERVICES

        We provide our medical industry clients with a full range of
administrative and technological services through web-based, browser-enabled,
secured applications including a broad range of communication and networking
options

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required for the diverse settings in which patient care is delivered. Our
systems manage the collection, integration and distribution of information from
disparate sources in order to help physicians manage patient care more
efficiently, meet medical necessity guidelines, analyze clinical utilization
patterns and perform patient profiling. Our systems are easy to use, permitting
client physicians and their office staffs to quickly integrate them into their
daily routines. The following summarizes the services of our Services and the
benefit to the client:

ADMINISTRATIVE SERVICES:      Back office administrative services for medical
                              practices. These services include: Accounts
                              receivable management, billing and collections,
                              accounting services, electronic claims processing
                              and contract negotiation, dictation and
                              transcription services, work flow analysis,
                              credentialing and staffing, and cost control..

               Benefits:      Aids healthcare professionals by incorporating
                              clinical and administrative information, along
                              with performing transactions, that enhance the
                              managing of their practice and the reimbursement
                              process. These applications run on almost every
                              desktop system and are virtually self-installing.
                              Our management services are added-value benefits
                              available to each practice that enhance their
                              ability to conduct business.

DOCUMENT MANAGEMENT SERVICES: A secure, web-enabled, browser-based service
                              allowing document imaging, data storage and
                              retrieval technologies to be integrated into the
                              medical practice. This easy to use system is the
                              beginning of the "paperless" office. Document
                              images of every conceivable type are scanned and
                              permanently burned to optical disks and are
                              available online.

               Benefits:      The ability for a physician to have lifetime
                              backup of all medical records of every patient
                              increases the provider's ability to provide
                              quality medical care. Additionally, quality
                              medical records management will lead to a
                              potential reduction of malpractice insurance
                              premiums.

DICTATION AND TRANSCRIPTION
SERVICES:                     We provide enterprise-wide dictation capabilities
                              that utilize standardized systems, structured
                              reporting and interactive document management.

               Benefits:      Voice files are permanently archived and available
                              online, allowing transcriptions to be turned
                              around faster and more efficiently. Physicians are
                              able to dictate from any telephone anywhere in the
                              world.

RECEIVABLES FINANCING
AND MANAGEMENT:               Options include factoring, buyouts, and revolving
                              credit. Management of and Management receivables
                              is available to hospitals, PHO's, MSO's, practices
                              and ancillary service organizations. Analytical
                              and detailed reporting as well as invoicing
                              services complete the picture.

               Benefits:      Allows freedom to focus on building your business.
                              Enables you to use all of to handle what is
                              happening "today".

RISK MANAGEMENT
AND COMPLIANCE:               One of the fastest growing concerns facing
                              healthcare professionals today. Expert assistance
                              in OIG and HIPPA compliance.

        Benefits Constant updating of compliance issues by our in-house
healthcare attorneys keep you and your business informed and trained to maintain
compliance and reduce the risk of malpractice.

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ONLINE MEDICAL RECORDS:       We recently announced that we will introduce an
                              online medical records and information package
                              that patients can access through a web-based
                              application. The service will be offered through
                              medical practices, corporate human resource
                              departments and affinity groups such as credit
                              card companies and auto clubs.

INVENTORY MANAGEMENT SYSTEMS
AND PRODUCT DISTRIBUTION:     We recently announced the release of a web based
                              inventory management application for the durable
                              medical equipment industry. With this application
                              practices, hospitals, and healthcare organizations
                              and suppliers can maintain more accurate
                              inventories and send prescriptions electronically.
                              Billing and invoicing is also done electronically.

NON-PRESCRIPTION PRODUCTS:    Wellness, homeopathic remedies and personal
                              diagnostic machines such as a mobile ECG machine.

SPORTSHEALTHNET.COM:          We intend to relaunch our "Sportshealthnet"
                              project, an interactive web portal, a referral
                              network for physicians and patients who have
                              sports medicine related problems.

PHYSICIAN AND NURSE PLACEMENT:We are setting up a medical placement division.

ONLINE MEDICAL BILL PAYMENT:

WEB BASED APPLICATIONS:       Created and maintained for our Physicians'
                              Services Division as well as the Consumer Products
                              Division.

ISP AND IP TELEPHONY:         We have a strategic partnership with Digital
                              Ingenuity, Inc., an Internet Protocol telephony
                              service provider, to provide voice over services
                              to Our customers. This will allow healthcare
                              clients to connect multiple Offices and locations
                              through a single source telecom service, which
                              will Cut costs and increase efficiency.

SUPPORT:                      Full Network, hardware, and software maintenance.
                              Value added resellers (VAR) of various software
                              products.

MAJOR CLIENTS

        We have several agreements that have provided a significant portion of
our revenues.

        PROVIDENCE HOSPITAL: We have provided Providence Hospital with accounts
receivable management services since early 2001. In February 2002, this hospital
expanded the scope of the agreement to include electronic claims processing
using our proprietary file transfer protocol. This expansion is estimated to
result in up to $500,000 additional revenue in 2002. Providence Hospital is the
oldest continuously operating hospital in Washington, D.C.

        HILCO RECEIVABLES, LLC: Hilco acquired approximately $40 million in
receivables from Intracoastal Health Systems, Inc. relating to Good Samaritan
Hospital and St. Mary's Medical Center in West Palm Beach, Florida as a result
of an introduction by IBX. In October 2002, in connection with the Agreement,
the Company received a one-time non-refundable payment of $500,000.
Additionally, the Company is entitled to fifteen (15%) percent of the gross
amounts collected as it relates to the Accounts. After Hilco has received an
aggregate total of $6,400,000 for the Accounts, in addition to the fifteen (15%)
percent, the Company will receive an additional thirty five (35%) percent of the
total revenue collected as it relates to the Accounts, less and net of the
commissions of 15% payable to us. The initial term of the Agreement is for a
period of one year unless earlier terminated under the terms of the agreement..

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FLORIDA HEALTH SOURCE

        In October 2002 we acquired Florida Health Source, LLC, a leading
workers' compensation referral network for rehabilitation services throughout
the state of Florida. Florida Health Source is a leader in providing
comprehensive health care services in the areas of chronic pain and job-related
injuries to meet the needs of Florida's employers and payers throughout the
state. Its mission is to reduce lost time and medical and indemnity costs by
combining board certified pain management physicians, physical and occupational
therapists, transportation and translation services throughout the state.
Florida HealthSource has been established as the preferred provider network for
more than 100,000 employees throughout the state of Florida. Since its
acquisition by IBX, Florida HealthSource, has entered into two new vendor
agreements, including a contract that establishes the company as a preferred
physical and occupational therapy vendor for a major U.S. retailer. In January
2003, Florida Health Source entered into a contract with First Health Group
Corp., the largest directly contracted medical network for workers compensation,
group health and government in the U.S. In March 2003, received national
referral status through a contract with CorVel Corp., a California-based
independent provider of leading-edge managed care services and solutions for
workers' compensation, group health and auto insurance markets.

        Florida Health Source provides case managers and adjusters with a
Florida statewide referral network of over 100 pre-approved and qualified
service providers for their insured patients. This allows the payor to control
its costs by sending the patients to providers with negotiated fees. Florida
Health Source will refer patients to facilities owned by IBX if they meet the
criteria for the patient.

        In January 2003, Florida Health Source opened its first facility in
Jacksonville, Florida and in March 2003, Florida HealthSource will open a new
facility in a prominent downtown medical building in Boca Raton, Florida with
plans to operate a full-service "multi-disciplinary" clinic designed to offer
physical therapy, occupational medicine, pain management and chiropractic care.
The new clinic is part of the company's strategic plan to expand its
capabilities in the area of Physical and Occupational Medicine by creating an
"owner/manager" model for operating multiple centers and referral networks
throughout the state of Florida. Such centers would showcase the wide range of
technology and information services offered by iBX.

MEDICOMPLIANT

        IBX is in the process of completing the acquisition of the assets of
MediCompliant Solutions, which include all the intellectual property, trademarks
and copyrights, as well as the 85 physician clients. The business will be
operated under the technology services division.

        MediCompliant allows iBX to offer turnkey compliance solutions to all
healthcare providers in anticipation of the federal Health Insurance Portability
and Accountability Act (HIPAA) deadline of April 2003. The system also offers
effective Medicare compliance programs. Currently the over 200 users of the
web-based application, called "Compliance Now," can target all general Medicare
compliance risk areas identified by the Office of the Inspector General (OIG),
as well as the wide-ranging issues covered by HIPAA's privacy and security
standards.

        In February 2003, MediCompliant entered into an agreement with Paris
Health Services, a developer of comprehensive EDI transaction and compliance
software for the health-care industry, to provide hospitals, large physician
groups and ancillary health-care organizations access to all general Medicare
compliance risk areas identified by OIG, as well as the wide-ranging issues
covered by the HIPAA privacy and security standards. This agreement will allow
IBX to offer a complete compliance package to physicians for less than $5,000 a
year.

        Paris also produces authorization and eligibility verification software
that will enhance iBX's ability to reduce unpaid claims and maximize accounts
receivables management for its retail store customer.

        Congress enacted HIPAA in 1996 to ensure the protection and
confidentiality of health information in an era of electronic transmission and
access to medical records. Failure to meet these standards can result in severe
financial penalties and criminal sanctions. Because of a lack of clear
understanding about the HIPAA requirements, and the burden of day-to-day
operations, many healthcare providers are choosing to outsource the development
and implementation of individualized compliance programs.

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SALES AND MARKETING

        Our current marketing focus for our administrative services is the
14,000+ physician market in the South Florida area, the majority of whom are not
currently using Windows-based practice management software. We believe that
physicians are trained to concentrate on the professional rather than business
aspects of their practices. They do, however, recognize that their income is
being limited by the prevailing healthcare system while their cost of doing
business has increased substantially. We intend to continue to offer our
services through physician office administrators and hospital account receivable
managers who make most service provider selection decisions. Administrators are
often over-worked, under paid and looking for reasonable means to increase their
productivity while decreasing the time demands with which they are faced. These
practices typically pay between $75,000 and $350,000 annually for their current
suite of services.

        We intend to expand our target market geographically and through a
segment-oriented approach by contacting physician groups outside the South
Florida market in areas that we can already demonstrate expertise, results and
third-party endorsements.

        Our marketing program has consisted mostly of referrals from other
medical professionals, attorneys and accountants. A formal marketing campaign is
expected to begin during the second half of 2002. Our website along with printed
materials are being distributed at all times to maintain exposure within the
local healthcare community.

CONCENTRATION OF CUSTOMERS

        For the year ended December 31, 2002, our three largest customers
accounted for an aggregate of 81% of our sales and 22% of our accounts
receivable. Consequently, our success is materially dependent on our
relationship with these customers and their continued viability.

COMPETITION

        The market for medical business solutions is highly competitive and is
characterized by rapidly changing technology, evolving user needs and frequent
introduction of new products. Each of our products and services have material
competition from other companies, however we believe that few, if any, of its
competitors offer its clients the comprehensive services available from us.

        Our principal competitors in the practice management market include
WebMD and ProxyMed, which have substantial reputations in the Internet medical
services market. However, we believe that they do not concentrate on providing
primary services such as accounts receivable management, billing and collections
processing or standard day-to-day operational services designed to increase
physicians' profits. In addition, many well-known accounting and consulting
firms have entered into the medical practice management market by advertising
business management services specifically to physicians on the basis that their
expertise can enhances physician's receivable collections and better manage
their work flow. We view these companies as significant competitors in a market
where knowing physician nuances requires extreme sensitivity, empathy and
understanding of their dynamic work environment.

        There are many companies offering physical therapy/rehabilitation
services in Florida, ranging from large companies like Healthsouth to single
office centers owed by chiropractors and physical therapists. IBX believes that
the the most important issue in obtaining new business is the source of
referral, which is often from a physician or an insurance company.

        We believe that competition will continue to increase as a
result of a number of factors, including the aging of baby boomers and their
resulting medical-related needs, the growth of the Internet and physicians
evolving awareness of what the Internet can do for their business and the
continuing consolidation of Internet companies' services. We believe that the
primary factors affecting competition in our markets include

o       product functionality,
o       performance, flexibility and features,
o       use of open standards technology,
o       quality of service and support,
o       reputation,
o       product and service pricing, and,
o       overall cost of ownership.

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SUPPLIERS

        As we develop much of our software or purchase readily available
software, we are not reliant on a single vendor for our software development
activities. Consequently, our success is not materially dependent on our
relationship with any one vendor.

GOVERNMENT REGULATION AND HEALTHCARE REFORM

        The healthcare industry is subject to changing political, economic and
regulatory influences that may affect the procurement practices and operations
of healthcare organizations. Our products are designed to function within the
structure of the healthcare financing and reimbursement system currently being
used in the United States. During the past several years, the healthcare
industry has been subject to an increase in governmental regulation of, among
other things, reimbursement rates.

        Proposals to reform the U.S. healthcare system have been and will
continue to be considered by the U.S. Congress. These programs may contain
proposals to increase governmental involvement in healthcare and otherwise
change the operating environment for our existing and potential customers.
Healthcare organizations may react to these proposals and the uncertainty
surrounding those proposals by curtailing or deferring investments, including
those for our products and services. On the other hand, changes in the
regulatory environment have in the past increased and may continue to increase
the needs of healthcare organizations for cost-effective information management
and thereby enhance the marketability of our products and services. We cannot
predict with any certainty what impact, if any, such proposals or healthcare
reforms might have on our results of operations, financial condition and
business.

RELATIONSHIPS WITH PHYSICIANS AND OTHER PROVIDERS

Various state and federal laws regulate relationships among providers of
healthcare services, including employment or service contracts and investment
relationships. These restrictions include a federal criminal law prohibiting (a)
the offer, payment, solicitation or receipt of remuneration by individuals or
entities to induce referrals of patients for services reimbursed under the
Medicare or Medicaid programs or (b) the leasing, purchasing, ordering,
arranging for or recommending the lease, purchase or order of any item, good,
facility or service covered by such programs (the "Fraud and Abuse Law"). In
addition to federal criminal sanctions, violators of the Fraud and Abuse Law may
be subject to significant civil sanctions, including fines and/or exclusion from
the Medicare and/or Medicaid programs.

In 1991, the OIG issued regulations describing compensation arrangements which
are not viewed as illegal remuneration under the Fraud and Abuse Law (the "1991
Safe Harbor Rules"). The 1991 Safe Harbor Rules create certain standards ("Safe
Harbors") for identified types of compensation arrangements which, if fully
complied with, assure participants in the particular arrangement that the OIG
will not treat that participation as a criminal offense under the Fraud and
Abuse Law or as the basis for an exclusion from the Medicare and Medicaid
programs or an imposition of civil sanctions.

In 1992, regulations were published in the Federal Register implementing the OIG
sanction and civil money penalty provisions established in the Fraud and Abuse
Law. The regulations provide that the OIG may exclude a Medicare provider from
participation in the Medicare Program for a five-year period upon a finding that
the Fraud and Abuse Law has been violated. The regulations provide that if one
purpose of remuneration that is offered, paid, solicited or received is to
induce referrals, then the statute is violated. The regulations also provide
that after the OIG establishes a factual basis for excluding a provider from the
program, the burden of proof shifts to the provider to prove that it has not
violated the Fraud and Abuse Law.

The OIG closely scrutinizes healthcare joint ventures involving physicians and
other referral sources. In 1989, the OIG published a Fraud Alert that outlined
questionable features of "suspect" joint ventures, and has continued to rely on
such Fraud Alert in later pronouncements. The 1991 Safe Harbor Rules do not
expand the scope of activities that the Fraud and Abuse Law prohibits, nor do
they provide that failure to fall within a Safe Harbor constitutes a violation
of the Fraud and Abuse Law; however, the OIG has indicated that failure to fall
within a Safe Harbor may subject an arrangement to increased scrutiny.

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The so-called "Stark II" provisions of the Omnibus Budget Reconciliation Act of
1993 amended the federal Medicare statute to prohibit the making by a physician
of referrals for "designated health services" including physical therapy,
occupational therapy, radiology services or radiation therapy, to an entity in
which the physician has an investment interest or other financial relationship,
subject to certain exceptions. In January 1998, the Department of Health and
Human Services published proposed regulations (the "Proposed Stark Regulations")
under the Stark II statute and solicited comments thereon. On January 4, 2001,
the Department of Health and Human Services published final regulations relating
to part of the Stark II statute (the "Phase I Final Stark Regulations") and
announced its intention to publish a second, "Phase II" set of regulations
covering the remainder of the statute and responding to comments received on the
Phase I Final Stark Regulations at some unspecified future date. The Phase I
Final Stark Regulations, which differ substantially in many respects from the
Proposed Stark Regulations, had a specified effective date of January 4, 2002.
In addition, a number of states have passed or are considering statutes which
prohibit or limit physician referrals of patients to facilities in which they
have an investment interest.

All of iBX's current businesses are exempt from the above statutes since no
physician has any direct interest in any of its facilities.

THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996

        In an effort to combat healthcare fraud, Congress included several
anti-fraud measures in the Health Insurance Portability and Accountability Act
of 1996 ("HIPAA"). HIPAA, among other things, amends existing crimes and
criminal penalties for Medicare fraud and enacts new federal healthcare fraud
crimes. HIPAA also expands the Fraud and Abuse Law to apply to all federal
healthcare programs, defined to include any plan or program that provides health
benefits through insurance that is funded by the federal government. Under
HIPAA, the Secretary of the Department of Health and Human Services (the
"Secretary") may exclude from the Medicare program any individual who has a
direct or indirect ownership or control interest in a healthcare entity that has
been convicted of a healthcare fraud crime or that has been excluded from the
Medicare program. HIPAA directs the Secretary to establish a program to collect
information on healthcare fraud and abuse to encourage individuals to report
information concerning fraud and abuse against the Medicare program and provides
for payment of a portion of amounts collected to such individuals. HIPAA
mandates the establishment of a Fraud and Abuse Program, among other programs,
to control fraud and abuse with respect to health plans and to conduct
investigations, audits, evaluations, and inspections relating to the delivery of
and payment for healthcare in the United States.

        HIPAA prohibits any person or entity from knowingly and willfully
committing a federal healthcare offense relating to a "health care benefit
program". Under HIPAA, a "health care benefit program" broadly includes any
private plan or contract affecting interstate commerce under which any medical
benefit, item, or service is provided to any individual. Among the "federal
health care offenses" prohibited by HIPAA are healthcare fraud and making false
statements relative to healthcare matters. Any person or entity that knowingly
and willfully defrauds or attempts to defraud a healthcare benefit program or
obtains by means of false or fraudulent pretenses, representations or promises,
any of the money or property of any healthcare benefit program in connection
with the delivery of healthcare services is subject to a fine and/or
imprisonment. In addition, HIPAA provides that any person or entity that
knowingly and willfully falsifies, conceals or covers up a material fact or
makes any materially false or fraudulent statements in connection with the
delivery of or payment of healthcare services by a healthcare benefit plan is
subject to a fine and/or imprisonment.

        HIPAA further expands the list of acts which are subject to civil
monetary penalties under federal law and increases the amount of civil penalties
which may be imposed. HIPAA provides for civil fines for individuals who retain
an ownership or control interest in a Medicare or Medicaid participating entity
after such individuals have been excluded from participating in the Medicare or
Medicaid program. HIPAA further provides for civil fines for individuals who
offer inducements to Medicare or Medicaid eligible patients if the individuals
know or should know that their offers will influence the patients to order or
receive items or services from a particular provider, practitioner or supplier.

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        In addition, HIPAA mandates, for all healthcare providers,
standardization in the use, storage, and transfer of electronically transmitted
healthcare data and also requires that healthcare providers, payors and
clearinghouses adopt detailed new procedures for ensuring the privacy and
security of individually identifiable health information. In August 2000, the
Department of Health and Human Services published final regulations adopting
standards for electronic transactions and for code sets to be used in those
transactions. Those regulations have a specified effective date of October 16,
2002 for most providers, including us. In December 2000, the Department released
final regulations establishing standards for the privacy of individually
identifiable health information. The final privacy regulations, which differ
substantially from previously proposed regulations, impose significant
limitations on the use and disclosure of individually identifiable health
information by providers, including us, as well as payors and clearinghouses.
The final regulations take effect in April 2003. The final privacy regulations
have been significantly criticized by many parts of the healthcare industry, and
further changes in such regulations or delays in their implementation are
possible.

        Compliance with the HIPAA privacy and electronic standards regulations
will require significant changes in current information and claims processing
practices utilized by most healthcare providers, although we believe we are
compliant at this time.

        We cannot predict whether other regulatory or statutory provisions will
be enacted by federal or state authorities which would prohibit or otherwise
regulate relationships which we have established or may establish with other
healthcare providers or the possibility of materially adverse effects on its
business or revenues arising from such future actions. We believe, however, that
we will be able to adjust our operations so as to be in compliance with any
regulatory or statutory provision that may be applicable.

INTELLECTUAL PROPERTY

        We seek to protect our proprietary information through nondisclosure
agreements with our employees. Our policy is to have employees enter into
nondisclosure agreements containing provisions prohibiting the disclosure of
confidential information to anyone outside IBX, requiring disclosure to us of
any new ideas, developments, discoveries or inventions conceived during
employment, and requiring assignment to IBX of proprietary rights to such
matters that are related to our business.

        We also rely on a combination of trade secrets, copyright and trademark
laws, contractual provisions and technical measures to protect our rights in
various methodologies, systems and products and knowledge bases. We believe that
because of the rapid pace of technological change in the healthcare industry,
trade secret and copyright protection are less significant than factors such as
the knowledge, ability, experience and integrity of our employees, frequent
product enhancements and the timeliness and quality of support services.

        Although we believe that our products do not infringe on the
intellectual property rights of others, we cannot assure you that such a claim
will not be asserted against us in the future. If asserted, such a claim could
cause us to lose revenues or incur substantial litigation expense.

EMPLOYEES

        As of March 28, 2003, we had 24 full time employees, of which three were
executive, 18 were administrative and three are technical employees. No
employees are presently represented by any labor unions. We believe our
relations with employees to be good, however additional employees will need to
be recruited to meet our growth projections.

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ITEM 2. DESCRIPTION OF PROPERTY

        Our principal place of business is located at 350 Jim Moran Boulevard,
Deerfield Beach, Florida, 33442. This is an office park type setting where
others businesses are administrative in nature. We occupy approximately 15,000
square feet space pursuant to a lease ending on August 31, 2005. The rent is
currently $ 21,700 per month. We operate two Florida Health Source facilities.
The Jacksonville location is for approximately 2,000 square feet pursuant to a
lease expiring December 31, 2007 with annual rent of $40,128. The Boca Raton
location is for approximately 2,100 square feet pursuant to a lease expiring
February 1, 2008 with annual rent of $55,524.

ITEM 3. LEGAL PROCEEDINGS

        We are not a party to any material litigation, nor are we aware of any
potential material litigation, other than as set forth below.

WILLIAM DUDZIAK V. PRIMED TECHNOLOGIES, L.C., EVAN BROVENICK, ET AL,

        Mr. Dudziak loaned PriMed approximately $870,000 on November 28, 1999,
repayment of which was secured by all ownership interests in PriMed LC. The
proceeds of the loan were used by PriMed to repurchase the PriMed stock held by
Primus Physician Services. A lawsuit was filed against PriMed, Evan
Brovenick, Natalie Brovenick, Alvin Brovenick, Susan Brovenick and David
Blechman. It was originally agreed between the parties that this money would be
paid back within 30 days.

        Since the defendants failed to repay the money in a timely fashion, in
2001 a stipulation of settlement was executed between the parties, whereby it
was agreed that Mr. Dudziak would suspend the litigation pending efforts by
PriMed and Evan Brovenick to complying with certain terms set forth in the
stipulation. IBX did not stay current with that agreement. In October 2002, IBX
made a payment of $275,000 and the parties entered into an amended settlement
agreement effective November 7, 2002 whereby Dudziak agreed to dismiss his
action. 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,
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 11,550,000 shares of IBX common stock owned by Evan Brovenick
and David Blechman. As of March 28, 2003, approximately $548,000 was
outstanding.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None


                                       11
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                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

Our common stock began trading on January 4, 2002 on the OTC Bulletin Board
under the symbol IBXG. The following table sets forth the range of high and low
closing sale price as reported by the OTC Bulletin Board for our common stock
for the fiscal quarters indicated. The OTC Bulletin Board quotations represent
quotations between dealers without adjustment for retail mark-up, markdowns or
commissions and may not represent actual transactions.

          2002                         HIGH           LOW
          ----                         ----           ---
January 1 to December 31               $.70          $.13
April 1 to June 30                     $.43          $.17
July 1 to September 30                 $.18          $.09
October 1 to December 31               $.17          $.04

DIVIDEND POLICY

        No dividends have been paid on the shares of our common stock, and we do
not anticipate the payment of cash dividends in the foreseeable future. We
anticipate that, for the foreseeable future any profit we report will be devoted
to our future operations and that cash dividends would not be paid to our
shareholders.

SALES OF UNREGISTERED SECURITIES

        In September 2001, we issued 11,550,000 shares of common stock to two
individuals pursuant to the acquisition of Primed.

        In November 2001, we issued 125,000 shares each to two consultants.

        In December 2001, we issued 10,062,500 shares to three accredited
investors upon conversion of outstanding convertible bonds originally issued by
Primed.

        On December 19, 2001, we concluded a private placement of $200,000 in
units comprised of an aggregate of 10,937,500 shares of common stock, class A
warrants entitling the holders to purchase up to 20,000,000 shares of common
stock at an exercise price of $0.10 per share; and class B warrants entitling
the holders to purchase up to 20,000,000 shares of common stock at an exercise
price of $0.20 per share.

        In December 2001, we issued 750,000 shares of common stock to Market
Watch Corporation as partial payment under a corporate information services
agreement.

        In December 2001, we issued an aggregate of 1,000,000 shares to 11
persons, all of whom were employees or consultants of the Company, for services
rendered.

        In May 2002, we issued an aggregate of 1,081,880 shares to one entity in
exchange for cancellation of a $90,618 portion of a $104,588 promissory note and
subscription receiveable of $17,570. This entity subsequently transferred the
shares to its four shareholders.

        In May 2002, we issued an aggregate of 250,000 shares upon the exercise
of outstanding warrants to two persons.

        In May and June 2002, an aggregate of 850,000 class A warrants were
exercised by three persons using the repayment of a loan.

        In 2002, as described under Item 12-Certain Relationships and Related
Transactions, the Calvo Family Spendthrift Trust, a principal shareholder,
converted 8,000,000 shares of common stock into 80,000 shares of Class A
Non-Voting Convertible Preferred Stock.

        In December 2002, IBX issued 1,000,000 shares of common stock to
consultants, employees and an outside director for services rendered and to be
rendered in the future.

All of such issuances were exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933 based on the relationship of such persons to IBX.

                                       12
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ITEM 6. 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.

OVERVIEW

        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.

        For financial accounting purposes, the exchange of stock was treated as
a recapitalization of Primed with the former shareholder's of Vidkid retaining
2,637,500 or approximately 19% of the outstanding stock. The shareholders'
equity section reflects the change in the capital structure of Primed due to the
recapitalization and the consolidated financial statements reflect the
operations of Primed for the periods presented and the operations of IBX Group
from the exchange date.

        We are engaged in providing administrative services such as accounting,
billing and collection, claims processing, information management, network
support and maintenance to clients predominantly in the healthcare sector. We
have developed proprietary software and applications with interactive
web-enabled multimedia capabilities.

        We provide our clients in 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 and
software application development. Our current business focus is on specialty
physicians practices, hospital-based medical services organizations and
ancillary diagnostic facilities. All of the software products and services are
distributed via the application services provider or ASP model with data servers
located in our data center in Deerfield Beach, Florida. Our current core
services involve accounts receivable management and the delivery of powerful
information management systems. Our in-house development capability allows us to
provide technology tools directly to the clients.

        In addition, our Florida Healthsource subsidiary is opening a
multi-disciplinary clinic later this month 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. This is the
first of several new physical therapy and occupational medicine clinics planned
throughout Florida. Florida Healthsource is a is the preferred provider network
for more than 450,000 employees throughout the state of Florida and a physical
and occupational therapy vendor for a major U.S. retailer.

                                       13
<PAGE>

        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.

RESULTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2002 COMPARED TO YEAR ENDED DECEMBER 31, 2001

        Revenues are generated from our administrative services including
accounting, billing and collection, claims processing and information management
and from our new physical therapy and rehabilitation business. Revenues for the
year ended December 31, 2002 were $3,220,104 as compared to revenues for the
year ended December 31, 2001 of $1,885,322. The increase was due to the signing
of new service agreements and the Hilco servicing agreement, for which we
received a one-time fee of $500,000 and recorded revenue of $312,500 in 2002
related to that fee as well as ongoing revenues for collection services. In
addition, we generated $74,600 of revenues from our physical therapy business.

        Salaries and payroll taxes were $1,300,563 for 2002 as compared to
$1,052,357 for 2001. Salaries, which consist of salaried and hourly employees,
include staff used for our administrative services, our technical development
staff, marketing staff and office personnel. Overall our salary and payroll
expense increased $248,296 . The increase in salaries was directly attributable
to the increase in collection efforts related to our new service contracts and
our the growth of our Florida Health Source business during the fourth quarter
of 2002.

        Depreciation and amortization expense for 2002 was $115,826 as compared
to $681,307 for 2001. We regularly review the carrying value of software
development 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 software. As of December 31, 2001, we determined that the carrying
value of our software development was impaired since the software has not
generated revenues and future positive cash flows could not be estimated.
Accordingly, in 2001, we wrote off all remaining capitalized software costs of
$364,097 to amortization expense. Depreciation expense, related to our property
and equipment, for 2002 was $115,826 and for 2001 was $117,878.

        Professional fees were $191,106 for the year ended December 31, 2002 as
compared to $245,673 for the year ended December 31, 2001. The decrease was
attributable to lower legal and accounting fees as there were one-time fees
incurred in 2001 in connection with the initial audit of our consolidated
financial statements for 2001 and 2000 and legal fees incurred related to the
merger in September 2001.

        Rent expense was $230,275 for the year ended December 31, 2002 as
compared to $203,761 for the year ended December 31, 2001. The increase related
to $2,400 for the new leases for the Florida Health Source facilities and the
remainder for scheduled rent increases in existing facilities.

        Other selling, general and administrative expenses, which include
contract labor, travel and entertainment, insurance and other expenses, were
$1,077,836 for the year ended December 31, 2001 as compared to $703,441 for the
year ended December 31, 2001, although as a percent of revenues such expenses
declined from 37.3% to 33.4% of revenues.

        Total expenses from operations in 2002 were $2,915,606 compared to
$2,913,539. Income from operations for 2002 was $304,498 compared to a loss from
operations of $1,028,217.

        During 2002, we recognized a gain on settlement of debt of $289,662 for
our loan to Dudziak as part the loan described below. For the year ended
December 31, 2001, we incurred settlement expenses of $100,000 related to
certain litigation. Additionally, as of December 31, 2001, we assumed the debt
of an officer relating to a predecessor company lawsuit. In connection with this
assumption, we recognized settlement expense of $88,834 and a related accrued
liability at December 31, 2001 of $27,000.

                                       14
<PAGE>

        Interest expense was $430,867 for the year ended December 31, 2002 as
compared to $325,174 for the year ended December 31, 2001. The increase was
directly attributable to increased borrowings and interest on the payroll tax
liabilities.

        As a result of these factors, we reported net income of $163,293 or $nil
per share for the year ended December 31, 2002 as compared to a net loss of
$1,542,225 or $(.12) per share for the year ended December 31, 2001.

LIQUIDITY AND CAPITAL RESOURCES

        During the first part of 2002, 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. During the second half of
2002, we received a $500,000 payment from Hilco Receivables LLC for services and
received $79,000 in cash from the exercise of warrants. 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 December 31, 2002, we had a stockholders' deficit of $2,030,819. We
have an accumulated deficit from losses of $2,815,378. Our operations and growth
during 2002 have been funded from loans from third parties amounting to
$163,000, exercises of warrants aggregating $79,000 and the conversion of
$269,854 of loans and payables to equity. 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, which requires us to
pay $12,000 per month for 84 months. At December 31, 2002, accrued payroll taxes
and estimated accrued interest and penalties aggregated $978,352.

        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. During
2003 and through March 26, 2003, 5,295,000 warrants were exercised providing
$529,500 of cash. We expect that additional outstanding class A and class B
warrants will be exercised in 2003, which will provide additional cash. 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 provided by operations during the year ended December 31, 2002
was $495,796 as compared net cash used in operations of $(175,741) in 2001.
The increase was primarily a result of net income, the increase in payroll taxes
payable and related interest and increases in deferred revenues.

        Net cash used in investing activities during the year ended December 31,
2002 was $(124,054) compared to net cash used in investing activities of
$(79,783) for the year ended December 31, 2001. The increase was primarily
related to $35,000 paid to acquire Florida Health Source and approximately
$10,000 increase in equipment purchases.

        Net cash used in financing activities for the year ended December 31,
2002 was $350,629 as compared to net cash provided by financing activities of
$257,715 for the year ended December 31, 2001. The proceeds in 2002 include
$79,000 from the exercises of warrants, proceeds of $163,000 from loans. IBX
also made payments of $293,782 on loans, payments of $189,676 on related party
loans and had cash overdrafts of $109,171.

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

                                       15
<PAGE>

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following tables summarize our contractual obligations and commercial
commitments as of December 31, 2002:

  Significant Capital               Within                              After
  Obligations             Total     1 Year    2-3 Years   4-5 Years    5 Years
  -------------------   --------   --------   ---------   ---------    -------
  Capital Leases        $   -          -          -           -           -
  Operating Leases      $933,442   $307,036   $549,517     $76,889       $-

CRITICAL ACCOUNTING POLICIES

A summary of significant accounting policies is included in Note 1 to the
audited financial statements included in this Annual Report on Form 10-KSB. We
believe that the application of these policies on a consistent basis enables us
to provide useful and reliable financial information about our operating results
and financial condition.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results may differ from those estimates.

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

Revenue derived from billing and collections and administrative services is
recognized at the completion of the service performed. 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 subsidiary primarily acts as a
referral network for physical therapy patients who are referred by insurance
carriers. Revenue from providing physical therapy services is recognized upon
completion of the patient services and is recorded net of amounts due to service
providers

STOCK-BASED COMPENSATION

The Company accounts for stock options issued to employees in accordance with
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations. As
such, compensation cost is measured on the date of grant as the excess of the
current market price of the underlying stock over the exercise price. Such
compensation amounts are amortized over the respective vesting periods of the
option grant. The Company adopted the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation," which permits entities to provide pro
forma net income (loss) and pro forma earnings (loss) per share disclosures for
employee stock option grants as if the fair-valued based method defined in SFAS
No. 123 had been applied.

The Company accounts for stock options and stock issued to non-employees for
goods or services in accordance with the fair value method of SFAS 123.

RECENT PRONOUNCEMENTS

Statement No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142") provides
new guidance concerning the accounting for the acquisition of intangibles,
except those acquired in a business combination, which is subject to SFAS 141,
and the manner in which intangibles and goodwill should be accounting for
subsequent to their initial recognition. Generally, intangible assets with
indefinite lives, and goodwill, are no longer amortized; they are carried at
lower of cost or market and subject to annual impairment evaluation, or interim
impairment evaluation if an interim triggering event occurs, using a new fair
market value method. Intangible assets with finite lives are amortized over
those lives, with no stipulated maximum, and an impairment test is performed
only when a triggering event occurs. This statement is effective for all fiscal
years beginning after December 15, 2001. The implementation of SFAS 142 on
January 1, 2002 did not have a material effect on the Company's financial
position, results of operations or liquidity.

                                       16
<PAGE>

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." The standard requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002. The adoption of SFAS
No. 143 is not expected to have a material impact on the Company's consolidated
financial statements.

Statement No. 144 "Accounting for the Impairment or Disposal of Long-Lived
Assets" supercedes Statement No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121").
Though it retains the basic requirements of SFAS 121 regarding when and how to
measure an impairment loss, SFAS 144 provides additional implementation
guidance. SFAS 144 excludes goodwill and intangibles not being amortized among
other exclusions. SFAS 144 also supercedes the provisions of APB 30, "Reporting
the Results of Operations", pertaining to discontinued operations. Separate
reporting of a discontinued operation is still required, but SFAS 144 expands
the presentation to include a component of an entity, rather than strictly a
business segment as defined in SFAS 131, Disclosures about Segments of an
Enterprise and Related Information.

SFAS 144 also eliminates the current exemption to consolidation when control
over a subsidiary is likely to be temporary. This statement is effective for all
fiscal years beginning after December 15, 2001. The implementation of SFAS 144
did not have a material effect on the Company's financial position, results of
operations or liquidity.

Statement No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" ("SFAS 145") updates,
clarifies, and simplifies existing accounting pronouncements. Statement No. 145
rescinds Statement 4, which required all gains and losses from extinguishment of
debt to be aggregated and, if material, classified as an extraordinary item, net
of related income tax effect. As a result, the criteria in Opinion 30 will now
be used to classify those gains and losses. Statement 64 amended Statement 4,
and is no longer necessary because Statement 4 has been rescinded. Statement 44
was issued to establish accounting requirements for the effects of transition to
the provisions of the motor Carrier Act of 1980. Because the transition has been
completed, Statement 44 is no longer necessary.

Statement 145 amends Statement 13 to require that certain lease modifications
that have economic effects similar to sale-leaseback transactions be accounted
for in the same manner as sale-leaseback transactions. This amendment is
consistent with FASB's goal requiring similar accounting treatment for
transactions that have similar economic effects. This statement is effective for
fiscal years beginning after May 15, 2002. The adoption of SFAS 145 on October
1, 2002 did not have a material impact on the Company's financial position,
results of operations or liquidity.

Statement No. 146, "Accounting for Exit or Disposal Activities" ("SFAS 146")
addresses the recognition, measurement, and reporting of cost that are
associated with exit and disposal activities that are currently accounted for
pursuant to the guidelines set forth in EITF 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to exit an Activity
(including Certain Cost Incurred in a Restructuring)," cost related to
terminating a contract that is not a capital lease and one-time benefit
arrangements received by employees who are involuntarily terminated - nullifying
the guidance under EITF 94-3. Under SFAS 146, the cost associated with an exit
or disposal activity is recognized in the periods in which it is incurred rather
than at the date the Company committed to the exit plan. This statement is
effective for exit or disposal activities initiated after December 31, 2002 with
earlier application encouraged. The adoption of SFAS 146 is not expected to have
a material impact on the Company's financial position, results of operations or
liquidity.

                                       17
<PAGE>

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure.
Statement 148 provides alternative methods of transition to Statement 123's fair
value method of accounting for stock-based employee compensation. It also amends
the disclosure provisions of Statement 123 and APB Opinion No. 28, Interim
Financial Reporting, to require disclosure in the summary of significant
accounting policies of the effects of an entity's accounting with respect to
stock-based employee compensation on reported net income and earnings per share
in annual and interim financial statements. Statement 148's amendment of the
transition and annual disclosure requirements of Statement's 123 are effective
for fiscal years ending after December 15, 2002. Statement 148's amendment of
the disclosure requirements of Opinion 28 is effective for interim periods
beginning after December 15, 2002.

FACTORS THAT MAY AFFECT FUTURE RESULTS

        You should carefully consider the following risks in evaluating IBX. The
risks described below are not the only ones that we face. Additional risks that
we do not yet know of or that we currently think are immaterial may also impair
our business operations. Our business, operating results or financial condition
could be materially adversely affected by any of the following risks. The
trading price of our common stock could decline due to any of these risks, and
you may lose all or part of your investment. You should also refer to the other
information set forth in this Report, including our financial statements and the
related notes.

        IBX cautions readers that certain important factors may affect IBX's
actual results and could cause those results to differ significantly from any
forward-looking statements made in this report or otherwise made by or on behalf
of IBX.

        WE HAVE NEGATIVE WORKING CAPITAL. Primarily due to a loan maturing in
2003, we had a negative working capital of $2,660,757 at December 31, 2002 and
have continued to need cash for operations.

        OUR ACCOUNTANTS HAVE ISSUED A GOING CONCERN OPINION DUE TO THE LACK OF
CAPITAL. Because of the uncertainties in its ability to satisfy its future
capital needs, our auditors' report on its financial statements for the year
ended December 31, 2002 contains an explanatory paragraph about its ability to
continue as a going concern.

        WE NEED ADDITIONAL CAPITAL TO BE SUCCESSFUL, WHICH WILL POTENTIALLY
DILUTE THE VALUE OF SHARES OF SHAREHOLDERS. We need substantial capital to
execute our business plan. To finance our operations to date, we have relied on
private offerings of common stock, exercises of warrants and loans. The terms on
which we obtains additional financing, including the exercise of the outstanding
warrants may dilute the existing shareholders investments, or otherwise
adversely affect its position. It is also possible that we will be unable to
obtain the additional funding we need as and when we need it. If we were unable
to obtain additional funding as and when needed, we could be forced to curtail
our operations.

        OUR ASSETS ARE SUBJECT TO A LIEN, AND IF JUDGMENTS ARE ENTERED AND
ENFORCED, IT MAY SHUT DOWN OUR OPERATIONS. We have granted a lien on all of our
assets in connection with a financing transaction. We are current in the
repayment obligation. Unless we are successful in repaying this obligation, our
business may be shut down if these creditors are able to collect on their
judgments.

        THERE ARE MANY COMPETITORS IN THE OUR MARKETS AND WE MAY NOT BE ABLE TO
COMPETE EFFECTIVELY AGAINST THEM. There are many companies that compete with us
in both transaction management and physical therapy/rehabilitation businesses.
Many of these companies compete with us for hospitals and medical practices,
which are our primary customers. We expect competition to continue to increase
as there are no substantial barriers to entry in our market. Increased
competition could result in reductions in the fees we receive for our services,
lower margins or loss of clients. Any of these occurrences could materially and
adversely affect our business, financial condition and results of operations.
Competition is also likely to increase significantly, not only as new entities
enter the market, but also as current competitors expand their services.

                                       18
<PAGE>

        Our ability to compete depends on a number of factors, many of which are
outside of our control. These factors include ease of use, timing and market
acceptance of new and enhanced services, and level of sales and marketing
efforts.

        Many of our existing competitors, as well as a number of potential new
competitors, have longer operating histories, greater name recognition, existing
relationships with pharmaceutical and other healthcare companies and
significantly greater financial, technical and marketing resources than we do.
This may allow them to devote greater resources than we can to the development
and promotion of their services. These competitors may also engage in more
extensive development efforts, undertake more far-reaching marketing campaigns
and adopt more aggressive pricing policies. Our competitors may develop services
that are equal or superior to those we provide or that achieve greater market
acceptance and brand recognition than we achieve. We may not be able to compete
successfully or competitive pressures may have a material adverse effect on our
business, results of operations and financial condition.

        OUR BUSINESS HAS BEEN CONCENTRATED WITH A FEW CUSTOMERS AND SUPPLIERS.
For the year ended December 31, 2002,our three largest customers accounted for
an aggregate of 81% of sales and 22% of accounts receivable. Consequently, our
success is materially dependent on our relationship with these customers and
their continued viability. We are also reliant on a single vendor for the
majority of our software development activities, consequently, our success is
materially dependent on its relationship with this vendor and its continued
viability.

        OUR SUCCESS IS BASED ON INCREASING DEMAND FOR OUR PRODUCTS AND SERVICES.
We depend on the continued demand for outsourcing of health information
technology services, on the growing use of the Internet for healthcare commerce
and communication and on favorable general economic conditions. We cannot assure
you that our business strategy will be successful or that we will successfully
address these risks or difficulties. If we should fail to adequately address any
of these risks or difficulties, our business would likely suffer.

        WE MUST KEEP UP WITH THE RAPID CHANGE IN TECHNOLOGY OR OUR PRODUCTS WILL
BECOME OBSOLETE. We are heavily reliant on computer software and plan to merge
the software technology with applications on the Internet whenever possible.
Both the Internet and computer software are characterized by rapid technological
change, changes in user and customer requirements, frequent new service or
product introductions embodying new technologies and the emergence of new
industry standards and practices that could render our product and proprietary
technology obsolete. Our performance will depend, in part, on our ability to
continue to develop leading technologies, enhance existing services and
software, develop new proprietary technology that addresses the increasingly
sophisticated and varied needs of prospective customers, and respond to
technological advances and emerging industry standards and practices on a timely
and cost-effective basis. The further development of our proprietary technology
entails significant technical and business risks. There can be no assurance that
we will be successful in using new technologies effectively or adapting its
current proprietary technology to customer requirements or emerging industry
standards. If we are unable, for technical, legal, financial or other reasons,
to adapt in a timely manner in response to changing market conditions or
customer requirements, or if our proprietary technology does not achieve market
acceptance, then our business, results of operations and financial condition
would be materially adversely affected.

        THE SUCCESS OF OUR NEW PHYSICAL THERAPY REHABILITATION CENTERS IS HIGHLY
DEPENDENT ON REIMBURSEMENT FROM THIRD-PARTY PAYORS. Substantially all of our
revenues are derived from private and governmental third-party payors such as
Medicare, Medicaid, commercial insurers, managed care plans, workers'
compensation payors and other private pay revenue sources. There are increasing
pressures from many payors to control healthcare costs and to reduce or limit
increases in reimbursement rates for medical services. There can be no
assurances that payments from government or private payors will remain at levels
comparable to present levels. In attempts to limit federal spending, there have
been, and we expect that there will continue to be, a number of proposals to
limit Medicare reimbursement for various services. We cannot now predict whether
any of these pending proposals will be adopted or what effect the adoption of
such proposals would have on our business.

                                       19
<PAGE>

        OUR NEW PHYSICAL THERAPY/REHABILITATION BUSINESS IS SUBJECT TO EXTENSIVE
FEDERAL AND STATE REGULATION THAT CAN AFFECT OUR OPERATIONS. Our business is
subject to extensive federal and state regulation with respect to financial
relationships among healthcare providers, physician self-referral arrangements
and other fraud and abuse issues. Penalties for violation of federal and state
laws and regulations include exclusion from participation in the Medicare and
Medicaid programs, asset forfeiture, civil penalties and criminal penalties, any
of which could have a material adverse effect on our business, results of
operations or financial condition. The Office of Inspector General of the
Department of Health and Human Services, the Department of Justice and other
federal agencies interpret healthcare fraud and abuse provisions liberally and
enforce them aggressively.

        WE NEED TO INSURE THAT OUR CUSTOMER DATA THAT IS TRANSMITTED ONLINE IS
SECURE. A significant part of our business is involves transmitting patient and
other healthcare-related data online. Our customers are required to comply with
federal and state regulations relating to this data. If a compromise of security
were to occur, it could have a material adverse effect on our reputation,
business, prospects, financial condition and results of operations. We may be
required to expend significant capital and other resources to protect against
such security breaches or to alleviate problems caused by such breaches. To the
extent that our activities involve the storage and transmission of proprietary
information, security breaches could damage our reputation and expose it to a
risk of loss or litigation and possible liability. There can be no assurance
that our security measures will prevent security breaches or that failure to
prevent such security breaches will not have a material adverse effect on our
business, prospects, financial condition and results of operations.

        OUR PRINCIPAL SHAREHOLDERS AND MANAGEMENT CONTROL A MAJORITY OF OUR
COMMON STOCK. Current management and our principal shareholders hold a majority
of ours common stock and will be able to control our policies and elect all of
the members of our board of directors regardless of the opinions or votes by
other shareholders.

        WE RELY ON OUR SENIOR MANAGEMENT AND WILL BE HARMED IF ANY OR ALL OF
THEM LEAVE. Our success is dependent on the efforts, experience and
relationships of Evan R. Brovenick, David Blechman, Alvin Brovenick, and other
essential staff. If any of these individuals become unable to continue in their
role, our business or prospects could be adversely affected. Although we have
entered into an employment agreement with each of our executive officers, we
cannot assure you that such individuals will continue in their present capacity
for any particular period of time.

        THERE IS ONLY A LIMITED PUBLIC MARKET FOR OUR SHARES, AND IF AN ACTIVE
MARKET DOES NOT DEVELOP, INVESTORS MAY HAVE DIFFICULTY SELLING THEIR SHARES.
There is a limited public market for our common stock. We cannot predict the
extent to which investor interest in us will lead to the development of an
active trading market or how liquid that trading market might become. If a
liquid trading market does not develop or is not sustained, it may be difficult
for investors to sell shares of our common stock at a price that is attractive.
As a result, an investment in our common stock may be illiquid and investors may
not be able to liquidate their investment readily or at all when he/she desires
to sell.

        FLUCTUATIONS IN OUR OPERATING RESULTS MAY ADVERSELY AFFECT OUR STOCK
PRICE AND PURCHASERS OF OUR SHARES OF COMMON STOCK MAY LOSE ALL OR A PORTION OF
THEIR INVESTMENT. Historically, there has been volatility in the market price
for our common stock. Our quarterly operating results, changes in general
conditions in the economy, the financial markets or the healthcare industry, or
other developments affecting us or our competitors, could cause the market price
of our common stock to fluctuate substantially. We expect to experience
significant fluctuations in our future quarterly operating results due to a
variety of factors. Factors that may adversely affect our quarterly operating
results include:

                                       20
<PAGE>

o       the announcement or introduction of new products by us and our
        competitors;

o       our ability to retain existing clients and attract new clients at a
        steady rate, and maintain client satisfaction;

o       the amount and timing of operating costs and capital expenditures
        relating to expansion of our business and operations;

o       government regulation; and

o       general economic conditions and economic conditions specific to the
        healthcare industry.

        As a result of these factors, in one or more future quarters, our
operating results may fall below the expectations of securities analysts and
investors. In this event, the market price of our common stock would likely be
materially adversely affected.

        THE EXERCISE OF WARRANTS WILL BE DILUTIVE TO OUR EXISTING SHAREHOLDERS.
We have outstanding options and warrants to purchase a total of approximately
36,400,000 shares of our common stock at prices ranging between $ .10 to $.50
per share. The exercise of these warrants and options may materially adversely
affect the market price of our common stock and will have a dilutive effect on
our existing shareholders.

        IF THE SELLING SHAREHOLDERS ALL ELECT TO SELL THEIR SHARES OF OUR COMMON
STOCK AT THE SAME TIME, THE MARKET PRICE OF OUR SHARES MAY DECREASE. It is
possible that the selling shareholders will offer all of the shares for sale.
Further, because it is possible that a significant number of shares could be
sold at the same time, the sales, or the possibility thereof, may have a
depressive effect on the market price of our common stock.

        BECAUSE OUR STOCK CURRENTLY TRADES BELOW $5.00 PER SHARE, AND IS QUOTED
ON THE OTC BULLETIN BOARD, OUR STOCK IS CONSIDERED A "PENNY STOCK" WHICH CAN
ADVERSELY EFFECT ITS LIQUIDITY. OUR COMMON STOCK DOES NOT CURRENTLY QUALIFY FOR
LISTING ON THE NASDAQ STOCK MARKET AND WE DO NOT FORESEE THAT WE WILL QUALIFY
FOR SUCH A LISTING IN THE FORESEEABLE FUTURE. If our common stock continues to
be quoted on the OTC Bulletin Board, and the trading price of our common stock
remains less than $5.00 per share, our common stock is considered a "penny
stock," and trading in our common stock is subject to the requirements of Rule
15g-9 under the Securities Exchange Act of 1934. Under this rule, broker/dealers
who recommend low-priced securities to persons other than established customers
and accredited investors must satisfy special sales practice requirements. The
broker/dealer must make an individualized written suitability determination for
the purchaser and receive the purchaser's written consent prior to the
transaction.

        SEC regulations also require additional disclosure in connection with
any trades involving a "penny stock," including the delivery, prior to any penny
stock transaction, of a disclosure schedule explaining the penny stock market
and its associated risks. These requirements severely limit the liquidity of
securities in the secondary market because few broker or dealers are likely to
undertake these compliance activities. In addition to the applicability of the
penny stock rules, other risks associated with trading in penny stocks could
also be price fluctuations and the lack of a liquid market.

        OUR OUTSTANDING PREFERRED STOCK IS CONVERTIBLE INTO COMMON STOCK AND THE
UNDERLYING COMMON STOCK MAY BE SOLD IN THE MARKET UNDER RULE 144. In 2002 we
issued our Series A Nonvoting Convertible Preferred Stock to the Calvo Family
Spendthrift Trust to prevent that shareholder from exercising any control over
our affairs. However, these shares are convertible into up to 8,000,000 shares
of our common stock. All of these shares are eligible for sale under Rule 144
from time to time, which may affect the market price of our common stock. The
preferred stock was issued since William A. Calvo, a beneficiary of the trust,
was found guilty of violating Section 5 of the Securities Act by reselling, or
by being a necessary or substantial participant in the resale of, unregistered
Systems of Excellence shares and that Diversified Corporate Consulting Group, a
limited liability company of which Mr. Calvo was a member, had violated Section
17(a) of the Securities Act and Section 10(b) of the Exchange Act with respect
to the fraudulent and manipulative trading in Systems of Excellence shares. The
conversion into the class A preferred stock will help us to limit any control
that Mr. Calvo may have over IBX.

                                       21
<PAGE>

        ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS AND FLORIDA LAW MAY
PREVENT AN ACQUISITION. Provisions in our charter documents and Florida law
could prevent or delay a change in control of its management and possible reduce
the amount paid for its common stock in the future. Such provisions could,
separately or together:

o       discourage potential acquisition proposals;

o       delay or prevent a change in control; and

o       limit the price that investors might be willing to pay in the future for
        shares of its common stock.

        The application of these provisions could make it more difficult for a
third party to acquire us, even if doing so would be beneficial to its
shareholders. Also, our board of directors has authority to issue up to shares
of common and preferred stock and to determine the price, voting rights,
restrictions, preferences and privileges of its preferred stock without the
approval of its shareholders. The rights of holders of common stock will be
subject to, and may be impaired by, the rights of the holders of any shares of
common or preferred stock that may be issued in the future. The issuance of
common or preferred stock may delay, defer or prevent a change in control by
making it more difficult for a third party to acquire a majority of our stock.
We have no present plans to issue shares of preferred stock. However, even the
potential issuance of common or preferred stock could reduce the price that
investors are willing to pay for our common stock.

ITEM 7. FINANCIAL STATEMENTS

        The Financial Statements are located after the signature page.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

        None

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

DIRECTORS AND EXECUTIVE OFFICERS

        The following persons are members of our board of directors and
executive officers, in the capacities indicated:

        NAME                    AGE     POSITION
        ----                    ---     --------
        Evan Brovenick          41      Chairman of the Board, President and
                                        Chief Executive Officer
        David Blechman          50      Vice President, Secretary and Director
        Alvin Brovenick         71      Director
        Steve Adelstein         56      Director

        EVAN R. BROVENICK has been chairman of the board, president and chief
executive officer since the acquisition of PriMed in September 2001 and was a
founder and president and chief executive officer of PriMed and its predecessors
since its inception in 1999. From January 1994 until March 1999, Mr. Brovenick
served as the director of marketing and business development for ManageMed, a
healthcare services company .

        DAVID J. BLECHMAN has been vice president and secretary, since the
acquisition of PriMed in September 2001 and was a founder and president and
chief executive officer of PriMed and its predecessors since its inception in
1999. From January 1994 until March 1999, Mr. Blechman served as the director of
technical services for ManageMed from January 1994 until March 1999.

                                       22
<PAGE>

        ALVIN BROVENICK has served as a member of PriMed's board of directors
since its inception. Mr. Brovenick served materially similar roles with PriMed
LC prior to its merger with PriMed. During the immediately preceding five years,
in addition to his roles with PriMed and its predecessors, Mr. Brovenick served
as the treasurer of ManageMed. He is the father of Evan Brovenick, PriMed's
founder and president and is employed as a management consultant by PriMed. Mr.
Brovenick is a retired certified public accountant.

        STEVEN ADELSTEIN has been a director since July 1997 and served as our
chairman of the board, chief executive officer, president and director from July
1997 until our acquisition of Primed in September 2001. From May 1995 until
October 1999, Mr. Adelstein served as chairman of the board, chief executive
officer and president of emailthatpays.com, Inc. From 1993 to 1995, Mr.
Adelstein served as executive producer of "Jelly Bean Jungle", a children's
television series syndicated in over 85% of the U.S. markets and in many foreign
territories. Mr. Adelstein has served as president of A.U.W., Inc., a venture
capital company, since 1993.

        The directors hold office until the next annual meeting of the
shareholders and until there successors have been duly elected or qualified.

COMMITTEES

        The audit committee currently consists of Steven Adelstein.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

        To IBX's knowledge, based solely on a review of the copies of such
reports furnished to IBX and on representations that no other reports were
required, all reports were timely filed during fiscal 2002 as required under
Section 16(a) of the Securities Exchange Act of 1934.

ITEM 10. EXECUTIVE COMPENSATION

        The following tables summarize the total compensation paid to Evan
Brovenick, our chief executive officer and the other executive offers with
compensation of at least $100,000 in 2002.

                           Summary Compensation Table
                           --------------------------

                            Annual Compensation          Long-Term Compensation
                      -------------------------------   ------------------------
                                             Other      Restricted  Securities
                                             Annual       Stock     Underlying
 Name and                   Salary           Compen-      Awards    Options/SARs
 Principal Position   Year    ($)    Bonus  sation(1)      ($)          (#)
 ------------------   ----  -------  -----  ---------   ----------  ------------
 Evan Brovenick       2002  125,000    -     $15,476        -            -
 President and Chief  2001  100,000    -     $15,000        -            -
 Executive Officer    2000  100,000    -     $15,000        -            -

 David Blechman       2002  125,000    -     $12,359        -            -
 Vice President       2001  100,000    -     $15,000        -            -
                      2000  100,000    -     $15,000        -            -

(1) Includes car allowance, health coverage and life insurance.

GRANTS OF STOCK OPTIONS

No options were granted to the executive officers named above in 2002.

COMPENSATION OF DIRECTORS

We do not currently pay any compensation to our outside directors.

                                       23
<PAGE>

EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS.

        On December 19, 2001, we entered into an employment agreement with Evan
Brovenick for a period ending on December 31, 2006. Mr. Brovenick's
responsibilities involve all services, acts, or things necessary or advisable to
serve as its president and chief executive officer including but not limited to
assist in establishing our policies and strategic planning, identify potential
acquisition candidates, assist in financial planning and capital formation and
oversee our day to day operations.

        As compensation for his services, Mr. Brovenick will receive in 2003 an
annual base compensation of $125,000. Subject to board approval, the annual base
salary in each succeeding year will be equal to at least 110% of the annual base
salary from the prior year.

        In addition to the monthly compensation, Mr. Brovenick was issued
6,600,000 shares of our common stock, that vest only if during the term of Mr.
Brovenick's employment, we have a net pre-tax profit of at least one dollar as
determined by our year-end audited financial statements. Until such time as the
shares have vested, Mr. Brovenick will have no right to vote the shares nor may
he have the right to pledge, encumber, hypothecate or in any way transfer the
shares. These shares vested as a result of the 2002 financial results.

        Mr. Brovenick will also be entitled to such other bonuses based upon our
performance as determined in the sole and absolute discretion of the board of
directors; will be offered health insurance coverage at no cost; be entitled to
participate in such employee benefit programs as are offered to other employees;
and be entitled to annual paid vacation Mr. Brovenick will also be reimbursed
for out-of-pocket expenses incurred by him in the performance of his duties.

        We have the right to terminate the agreement for good cause or by reason
of Mr. Brovenick's disability on 30 days' prior written notice to Mr. Brovenick.
As used in the agreement, disability means Mr. Brovenick's inability caused by
mental or physical illness to satisfactory perform his obligations and duties
hereunder for a consecutive period in excess of 120 days during the term of the
agreement or for a period of 180 out of a total of 360 work days; and, good
cause means any breach by Mr. Brovenick of his obligations under the agreement,
habitual neglect of duties, continued incapacity or inability to perform the
obligations set forth in the agreement or the conviction of any felony. If Mr.
Brovenick is terminated for any other reason than good cause, we will be
obligated to pay Mr. Brovenick a severance payment of the greater of $100,000 or
the remaining sums due under the agreement.

        The agreement also contains non-competition and confidentiality
provisions.

        David Blechman's agreement is identical to Mr. Brovenick's except that
he has not been granted any restricted stock.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

        The following tables disclose information concerning ownership of common
stock by officers, directors and holders of 5% or more of our common stock. Our
currently outstanding shares of common stock, for purposes of these
calculations, are calculated based on information available as of March 15, 2003
and include both currently outstanding securities and securities which a named
person has a right to acquire within 60 days following the date of this report.

                                       24
<PAGE>

                                        Amount and Nature of
 Name and Address of Beneficial Owner   Beneficial Ownership    Percent of Class
 ------------------------------------   --------------------    ----------------
 Evan Brovenick                             17,262,500 (1)            37.5
 David Blechman                              2,887,500                 6.3
 Tucker Family Spendthrift Trust            24,911,424 (2)            40.5
 Calvo Family Spendthrift Trust             25,834,741 (3)            45.1
 Steven Adelstein                              787,790 (4)             2.0
 Alvin Brovenick                                     0                  -
 All officers and directors as              20,577,790                45.8
   a group (4 persons)

(1)     Includes 15,262,500 shares and 2,000,000 shares issuable upon exercise
        of outstanding warrants.

(2)     The Tucker family is comprised of Michelle Tucker, Leonard Miles Tucker,
        her husband, and their minor daughters Shayna and Montana. Includes
        7,355,533 shares, 5,463,391 class A warrants and 10,000,000 class B
        warrants. Also includes 2,092,500 shares owned by Blue Lake Capital
        Corp., which is owned by members of the Tucker family.

(3)     The Calvo family is comprised of Cyndi Calvo; William A. Calvo, III, her
        husband; William, Alexander and Edward, their minor sons. All the shares
        are held by the Calvo Family Spendthrift Trust. Includes 609,741 shares
        of common stock. Excludes 80,000 shares of Class A Nonvoting Convertible
        Preferred Stock that are convertible into 8,000,000 shares of common
        stock subject to certain restrictions and 72,250 class E warrants and
        100,000 class F warrants that are exercisable into an 172,250 shares of
        Class A Nonvoting Convertible Preferred Stock which is then convertible
        into 25,225,000 shares of common stock. The terms of the Preferred Stock
        prohibit the holder from owning more than 4.9% of the outstanding voting
        stock at any time. Accordingly, the Trust will never hold the number of
        shares set forth above at any time.

(4)     Includes 427,790 shares owned by Mr. Adelstein and 360,000 class C
        warrants exercisable at $.10 per share.

STOCK SELLING PLAN

Evan Brovenick and David Blechman's shares in IBX have been pledged to secure
the repayment of IBX's obligations to Bill Dudziak. They have each advised us
that he has entered into a written stock selling plan in accordance with SEC
Rule 10b5-1 pursuant to which he will gradually liquidate a portion of his
holdings in the Company. The proceeds of any sales will be held in escrow and
will secure in part the repayment of IBX's obligations to Bill Dudziak. At such
time as the Dudziak obligation is repaid in full by IBX, any escrowed funds and
shares will be released to Messrs. Brovenick and Blechman. The plans calls for
weekly sales of stock of up to 44,000 shares for Mr. Brovenick and 22,000 shares
for Mr. Blechman, with the amounts dependent upon the prevailing market price.
The minimum price for sales under the plans is $.15 per share. Selling according
to this plan will commence the week of March 31, 2003, and end when Mr.
Brovenick has sold 1,000,000 shares and Mr. Blechman 500,000 shares, unless the
plan is terminated earlier. Messrs. Brovenick and Blechman have not sold any
shares of IBX Common Stock and have stated they have no present intention to do
so other than as set forth above.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Evan Brovenick, our president and chief executive officer, loaned us $93,000 in
2001 and $175,000 in 2000. The 2001 advances have been treated as a contribution
to capital. At December 31, 2002, $454 was outstanding.

In 2001, simultaneous with the private placement described below, Mr. Brovenick
was issued 2,000,000 class C warrants with an exercise price of $.10 per share
and 2,000,000 class D warrants with an exercise price of $.20 per share. Mr.
Brovenick subsequently assigned the class C warrants to Steven Adelstein, a
director. Mr. Adelstein assigned 1,640,000 of these warrants to his adult
children. Mr. Brovenick also assigned 1,000,000 class D warrants to each of Glen
Chwatt and Brett Finkelstein in exchange for their waiving anti-dilution rights
in their consulting agreements.

                                       25
<PAGE>

Mr. Adelstein was also issued 250,000 options with an exercise price of $.50 per
share in 2001 for his service as president of Vidkid, which he has assigned to
other persons.

During 2002, Todd Adelstein and Tammi Shnider, the adult children of Steven
Adelstein, a director, lent us an aggregate of $46,036 for operating expenses.
In May 2002, the $46,036 loan from Mr. Adelstein and Ms. Shnider and $25,000
from an unrelated person was converted into a purchase of restricted stock at a
price of $.10 per share. The Calvo Family Spendthrift Trust and the Tucker
Family Spendthrift Trust each cancelled 425,000 class A warrants as part of this
transaction.

YANKEES:

        The Yankee Companies Inc. and PriMed entered into a strategic consulting
agreement on January 31, 2001. Pursuant to the terms of the consulting
agreement, Yankees agreed to assist PriMed to become a publicly held corporation
and to obtain required financing and PriMed agreed to issue Yankees 10% of
PriMed's common stock. Yankees is a privately held Florida corporation that
provides clients with consulting in the areas of management, finance and
regulatory compliance. It also assists its clients with capital raising matters
by assisting in structuring debt and equity offerings and, on occasion,
investing in client securities and providing short term loans. Yankees and its
shareholders invested $92,000 in PriMed through purchase of notes, which were
converted into common stock in December 2001. In December 2001, we completed a
private placement for $200,000 to the two Yankees shareholders, which included
the outstanding class A and B warrants. At the same time, the consulting
agreement was terminated.

        While there is no contractual relationship, during 2001 Yankees provided
us with access to the services of a number of its employees and access to the
services of other persons who were under independent contractor arrangements
with Yankees, pursuant to which they provide Yankees' clients with assistance,
as required. Among such persons were Leonard Miles Tucker, Yankees president;
William A. Calvo, III, Yankees vice president; Kevin Dornan, general counsel and
Vanessa H. Lindsey, Yankees chief administrative officer. Ms. Lindsay and Mr.
Dornan formerly served as IBX directors. No compensation was paid for these
services.

        During 2002, Yankees affiliates, including the Calvo Family Spendthrift
Trust and the Tucker Family Spendthrift Trust, lent us an aggregate of $94,237.
This amount was used to convert 942,366 warrants. In May 2002, the Calvo Family
Spendthrift Trust and the Tucker Family Spendthrift Trust each agreed to
transfer 425,000 class A warrants to lenders to IBX.

        Effective May 29, 2002, we entered into an Exchange Agreement with the
Calvo Family Spendthrift Trust pursuant to which the trust exchanged 8,000,000
of the 9,682,325 shares of common stock it currently holds for 80,000 shares of
the non-voting class A preferred stock . The agreement provides that the trust
cannot own 5% or more of our voting securities. We determined to enter into the
Exchange Agreement since William A. Calvo, a beneficiary of the trust, recently
was found guilty of violating Section 5 of the Securities Act by reselling, or
by being a necessary or substantial participant in the resale of, unregistered
Systems of Excellence shares and that Diversified Corporate Consulting Group, a
limited liability company of which Mr. Calvo was a member, had violated Section
17(a) of the Securities Act and Section 10(b) of the Exchange Act with respect
to the fraudulent and manipulative trading in Systems of Excellence shares. The
conversion into the class A preferred stock will help us to limit any control
that Mr. Calvo may have over IBX.

                                       26
<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

        (a)     EXHIBITS

        Exhibit
        Number  Description
        ------  -----------
        2.1     Stock Exchange Agreement Dated August 31, 2001 between VidKid
                Distribution, Inc. and PriMed Technologies, Inc. (3)

        3.1     Articles of incorporation (1) (3)

        3.2     Bylaws (1)

        3.3     Certificate of Amendment of Articles of Incorporation (5)

        4.1     Warrant A Agreement (2)

        4.2     Warrant B Agreement (2)

        4.3     Warrant B Agreement (2)

        4.4     Warrant B Agreement (2)

        10.1    Settlement Agreement dated as of December 19, 2001 (2).

        10.2    Employment Agreement with Evan Brovenick (2)

        10.2    Employment Agreement with David Blechman (4)

        10.4    Conversion Agreement with Calvo Family Spendthrift Trust (5)

        99      Certifications
 ----------
(1)     Incorporated by reference to the Company's registration statement on
        Form SB-2 (file no. 333-36666)

(2)     Incorporated by reference to the Company's Current Report on Form 8-K
        dated December 19, 2001

(3)     Incorporated by reference to the Company's Current Report on Form 8-K
        dated September 25, 2001

(4)     Incorporated by reference to the Annual Report on Form 10-KSB for the
        year ended December 31, 2001

(5)     Incorporated by reference to the Company's Registration Statement on
        Form SB-2 (file no. 333-90660)

        (b)     REPORTS ON FORM 8-K

        None

ITEM 14. CONTROLS AND PROCEDURES

Within the 90 days prior to the filing of this report, the Company carried out
an evaluation under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as defined in Rule 13a-14(c) under the
Securities Exchange Act of 1934. Based upon that evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure
controls and procedures were effective. There were not any significant changes
in internal controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

                                       27
<PAGE>

                                   SIGNATURES

        In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has caused its Annual Report on Form 10-KSB to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                        IBX GROUP, INC.

Date:  March 31, 2003                   By: /s/ Evan Brovenick
                                            -------------------------
                                            Evan Brovenick, President


        In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated:


    SIGNATURE                        TITLE                      DATE
    ---------                        -----                      ----

 /s/ Evan R. Brovenick       Chief Executive Officer,           March 31, 2003
 ---------------------       President and Director
 Evan R. Brovenick

 /s/ David Blechman          Director, Vice President,          March 31, 2003
 ------------------          Treasurer and Secretary
 David Blechman

 /s/ Alvin Brovenick         Director                           March 31, 2003
 -------------------
 Alvin Brovenick

 /s/ Steven Adelstein        Director                           March 31, 2003
 --------------------
 Steven Adelstein


                                       28
<PAGE>
                                 CERTIFICATION

I Evan Brovenick, certify that:

1. I have reviewed this Annual Report on Form 10-KSB of IBX Group, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made know to us by others within those entities, particularly during the
period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this Annual
Report (the "Evaluation Date");

(c) Presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors:

(a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this Annual
Report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: March 31, 2003                    /s/ Evan Brovenick
                                        Evan Brovenick, Chairman and
                                        Chief Executive Officer

                                       29
<PAGE>
                                 CERTIFICATION

I David Blechman, certify that:

1. I have reviewed this Annual Report on Form 10-KSB of IBX Group, Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made know to us by others within those entities, particularly during the
period in which this annual report is being prepared;

(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this Annual
Report (the "Evaluation Date");

(c) Presented in this Annual Report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors:

(a) All significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated in this Annual
Report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.


Date: March 31, 2003                    /s/ David Blechman
                                        David Blechman, Treasurer

                                       30
<PAGE>

                        IBX GROUP, INC. AND SUBSIDIARIES

                        CONSOLIDATED FINANCIAL STATEMENTS

                  FOR THE YEAR ENDED DECEMBER 31, 2002 AND 2001



                                TABLE OF CONTENTS



Independent Auditors' Report.................................................F-2


Consolidated Financial Statements:


   Consolidated Balance Sheet at December 31, 2002...........................F-3


   Consolidated Statements of Operations for
        the year ended December 31, 2002 and 2001............................F-4


   Consolidated Statements of Changes in Stockholders' Deficit for
        the year ended December 31, 2002 and 2001............................F-5


   Consolidated Statements of Cash Flows for
        the year ended December 31, 2002 and 2001............................F-6


Notes to Consolidated Financial Statements...........................F-7 to F-23



                                       F-1
<PAGE>
                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders:

 IBX Group, Inc.

We have audited the accompanying consolidated balance sheet of IBX Group, Inc.
and Subsidiaries as of December 31, 2002, and the related consolidated
statements of operations, changes in stockholders' deficit and cash flows for
the years ended December 31, 2002 and 2001. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall consolidated financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of IBX
Group, Inc. and Subsidiaries, as of December 31, 2002, and the consolidated
results of their operations and their cash flows for the years ended December
31, 2002 and 2001, in conformity with accounting principles generally accepted
in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 11 to
the consolidated financial statements, the Company has a working capital
deficiency of $2,282,531 at December 31, 2002, and has an accumulated deficit of
$2,815,378. These matters raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regards to these matters are
also described in Note 11. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ SALBERG & COMPANY, P.A.
SALBERG & COMPANY, P.A.
Boca Raton, Florida
March 15, 2003

                                       F-2
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                               December 31, 2002

                                     ASSETS

Current assets:
  Cash ..........................................................   $    23,304
  Accounts receivable, net of allowance for doubtful
    accounts of $126,128 ........................................       144,854
  Other current assets ..........................................        20,955
                                                                    -----------

       Total current assets .....................................       189,113
                                                                    -----------

Property and equipment, net .....................................       285,198
                                                                    -----------

Other assets:
  Intangible assets .............................................        27,600
  Goodwill ......................................................        71,207
                                                                    -----------

       Total other assets .......................................        98,807
                                                                    -----------

       Total assets .............................................   $   573,118
                                                                    ===========

                LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
  Note payable, current maturities ..............................   $   516,421
  Checks outstanding in excess of bank balances .................        25,064
  Accounts payable ..............................................       475,393
  Accrued expenses ..............................................       102,535
  Payroll taxes payable .........................................       978,352
  Customer deposits .............................................       185,925
  Deferred revenue ..............................................       187,500
  Due to related party ..........................................           454
                                                                    -----------

       Total current liabilities ................................     2,471,644

Long-term liabilities:
  Note payable, net of current maturities .......................       132,293
                                                                    -----------

       Total current liabilities ................................     2,603,937
                                                                    -----------

Commitments and contingencies

Stockholders' deficit:
  Preferred Stock ($0.005 par value;
    4,700,000 authorized shares; none issued and outstanding) ...             -
  Class A Non-voting Convertible Preferred Stock
    ($0.005 par value; 300,000 authorized shares;
    80,000 shares issued and outstanding) .......................        40,000
  Common stock ($0.005 par value; 100,000,000 authorized
    shares; 40,751,743 shares issued and outstanding) ...........       203,760
  Common stock issuable (600,000 shares) ........................         3,000
  Additional paid-in capital ....................................       669,442
  Accumulated deficit ...........................................    (2,815,378)
  Less: Stock subscription receivable ...........................       (20,070)
  Less: Deferred compensation and consulting ....................      (111,573)
                                                                    -----------

       Total stockholders' deficit ..............................    (2,030,819)
                                                                    -----------

       Total liabilities and stockholders' deficit ..............   $   573,118
                                                                    ===========

          See accompanying notes to consolidated financial statements.
                                       F-3
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS


                                                        For the Year Ended
                                                            December 31,
                                                    ----------------------------
                                                         2002          2001
                                                    ------------   ------------

REVENUES .........................................  $  3,220,104   $  1,885,322
                                                    ------------   ------------


OPERATING EXPENSES:
    Salaries and payroll taxes ...................     1,300,563      1,052,357
    Depreciation and amortization ................       115,826        681,307
    Professional fees ............................       191,106        245,673
    Rent .........................................       230,275        230,761
    Other selling, general and administrative ....     1,077,836        703,441
                                                    ------------   ------------

        Total Operating Expenses .................     2,915,606      2,913,539
                                                    ------------   ------------

INCOME (LOSS) FROM OPERATIONS ....................       304,498     (1,028,217)
                                                    ------------   ------------

OTHER INCOME (EXPENSES):
    Settlement expense ...........................             -       (188,834)
    Gain on forgiveness of debt ..................       289,662              -
    Interest expense .............................      (430,867)      (325,174)
                                                    ------------   ------------

        Total Other Income (Expenses) ............      (141,205)      (514,008)
                                                    ------------   ------------

NET INCOME (LOSS) ................................  $    163,293   $ (1,542,225)
                                                    ============   ============

EARNING (LOSS) PER SHARE:
      Net Income (Loss) Per Common Share - Basic .  $       0.00   $      (0.12)
                                                    ============   ============
      Net Income (Loss) Per Common Share - Diluted  $       0.00   $      (0.12)
                                                    ============   ============

      Weighted Common Shares Outstanding - Basic .    37,003,110     13,150,262
                                                    ============   ============
      Weighted Common Shares Outstanding - Diluted    55,176,341     13,150,262
                                                    ============   ============

           See accompanying note to consolidated financial statements.
                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                                         IBX GROUP, INC. AND SUBSIDIARIES
                                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                  For the Years Ended December 31, 2002 and 2001


                                                 PREFERRED STOCK       COMMON STOCK         COMMON STOCK ISSUABLE
                                                 ---------------  -----------------------   ---------------------
                                                 SHARES   AMOUNT    SHARES       AMOUNT       SHARES      AMOUNT
                                                 ------  -------  -----------   ---------   ----------   --------
<S>                                              <C>     <C>       <C>          <C>         <C>          <C>
Balance at December 31, 2000 ..................       -      $ -   11,550,000   $  57,750            -   $      -

Recapitalization of company ...................       -        -    2,637,500      13,188            -          -

Contributed capital ...........................       -        -            -           -            -          -

Sale of common stock ..........................       -        -   10,937,500      54,688            -          -

Common shares issued for debt .................       -        -   10,062,500      50,313            -          -

Contingently returnable common shares
     issued for services to officer ...........       -        -    6,600,000      33,000            -          -

Common stock issued for services to vendor ....       -        -       50,000         250            -          -

Common stock issuable for services ............       -        -            -           -    2,000,000     10,000

Amortization of deferred compensation .........       -        -            -           -            -          -

Net loss for the year .........................       -        -            -           -            -          -
                                                 ------  -------  -----------   ---------   ----------   --------

Balance at December 31, 2001 ..................       -        -   41,837,500     209,189    2,000,000     10,000

Exercise of stock options .....................       -        -      250,000       1,250            -          -

Exercise of warrants for cash .................       -        -      789,997       3,950            -          -

Exercise of warrants for exchange of debt .....       -        -    1,792,366       8,962            -          -

Common stock issued in exchange for debt ......       -        -    1,081,880       5,409            -          -

Grant of warrants .............................       -        -            -           -            -          -

Common stock issued for services rendered .....       -        -    1,000,000       5,000            -          -

Issuance of previously issuable common stock ..       -        -    2,000,000      10,000   (2,000,000)   (10,000)

Issuance of preferred shares for common .......  80,000   40,000   (8,000,000)    (40,000)           -          -

Common stock issuable for acquisition of assets       -        -            -           -      600,000      3,000

Amortization of deferred compensation .........       -        -            -           -            -          -

Net Income for the year .......................       -        -            -           -            -          -
                                                 ------  -------  -----------   ---------   ----------   --------

Balance at December 31, 2002 ..................  80,000  $40,000   40,751,743   $ 203,760      600,000   $  3,000
                                                 ======  =======  ===========   =========   ==========   ========

                                                                                                      (continued)
                           See accompanying note to consolidated financial statements.
                                                       F-5-A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                            IBX GROUP, INC. AND SUBSIDIARIES
                                    CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                     For the Years Ended December 31, 2002 and 2001
                                                       (continued)


                                                 ADDITIONAL                     STOCK        DEFERRED
                                                  PAID-IN      ACCUMULATED   SUBSCRIPTION   COMPENSATION
                                                  CAPITAL        DEFICIT      RECEIVABLE   AND CONSULTING      TOTAL
                                                -----------    -----------    -----------  --------------   -----------
<S>                                             <C>            <C>            <C>            <C>            <C>
Balance at December 31, 2000 .................. $   (57,550)   $(1,436,446)   $         -    $         -    $(1,436,246)

Recapitalization of company ...................    (181,188)             -              -              -       (168,000)

Contributed capital ...........................      93,000              -              -              -         93,000

Sale of common stock ..........................     145,312              -              -              -        200,000

Common shares issued for debt .................     133,687              -              -              -        184,000

Contingently returnable common shares
     issued for services to officer ...........      87,686              -              -       (120,686)             -

Common stock issued for services to vendor ....         664              -              -              -            914

Common stock issuable for services ............      28,878              -              -        (20,593)        18,285

Amortization of deferred compensation .........           -              -              -          1,430          1,430

Net loss for the year .........................           -     (1,542,225)             -              -     (1,542,225)
                                                -----------    -----------    -----------    -----------    -----------

Balance at December 31, 2001 ..................     250,489     (2,978,671)             -       (139,849)    (2,648,842)

Exercise of stock options .....................       1,250              -         (2,500)             -              -

Exercise of warrants for cash .................      75,050              -              -              -         79,000

Exercise of warrants for exchange of debt .....     170,274              -              -              -        179,236

Common stock issued in exchange for debt ......     102,779              -        (17,570)             -         90,618

Grant of warrants .............................       4,000              -              -         (2,667)         1,333

Common stock issued for services rendered .....      41,000              -              -         (9,200)        36,800

Issuance of previously issuable common stock ..           -              -              -              -              -

Issuance of preferred shares for common .......           -              -              -              -              -

Common stock issuable for acquisition of assets      24,600              -              -              -         27,600

Amortization of deferred compensation .........           -              -              -         40,143         40,143

Net Income for the year .......................           -        163,293              -              -        163,293
                                                -----------    -----------    -----------    -----------    -----------

Balance at December 31, 2002 .................. $   669,442    $(2,815,378)   $   (20,070)   $  (111,573)   $(2,030,819)
                                                ===========    ===========    ===========    ===========    ===========

                               See accompanying note to consolidated financial statements.
                                                          F-5-B
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                            IBX GROUP, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                    For the Years
                                                                  Ended December 31,
                                                              -------------------------
                                                                 2002           2001
                                                              ---------     -----------
<S>                                                           <C>           <C>
Cash flows from operating activities:
  Net income (loss) ......................................    $ 163,293     $(1,542,225)
  Adjustments to reconcile net loss to net cash
  used in (provided by) operating activities:
    Depreciation and amortization ........................      115,826         681,307
    Non-cash compensation and consulting expense .........       80,028          20,629
    Bad debt expense .....................................            -          25,612
    Gain on forgiveness of debt ..........................     (289,662)              -

    (Increase) decrease in:
      Accounts receivable ................................      (14,957)        (71,947)
      Other current assets ...............................       (5,198)        (14,157)

    Increase (decrease) in:
      Accounts payable ...................................       99,927          28,889
      Accrued expenses ...................................     (201,240)        103,882
      Payroll taxes payable ..............................      503,626         203,295
      Customer deposits ..................................     (177,923)        114,515
      Deferred revenue ...................................      187,500               -
      Interest payable ...................................       34,576         274,459
                                                              ---------     -----------
Net cash (used in) provided by operating activities ......      495,796        (175,741)
                                                              ---------     -----------
Cash flows from investing activities:
  Cash paid for acquisition ..............................      (35,000)              -
  Purchase of property and equipment .....................      (89,054)        (79,783)
                                                              ---------     -----------
Net cash used in investing activities ....................     (124,054)        (79,783)
                                                              ---------     -----------
Cash flows from financing activities:
  Proceeds from sale of common stock .....................            -         200,000
  Proceeds from exercise of stock warrants ...............       79,000               -
  Checks outstanding in excess of bank balances ..........     (109,171)        101,746
  Payments on loans ......................................     (293,782)       (202,500)
  Proceeds from loans ....................................      163,000          92,000
  Proceeds from (payments on) advances from related party      (189,676)         66,469
                                                              ---------     -----------
Net cash provided by financing activities ................     (350,629)        257,715
                                                              ---------     -----------

Net increase in cash .....................................       21,113           2,191

Cash at beginning of year ................................        2,191               -
                                                              ---------     -----------
Cash at end of year ......................................    $  23,304     $     2,191
                                                              =========     ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:
  Interest ...............................................    $       -     $    28,000
                                                              =========     ===========
  Income Taxes ...........................................    $       -     $         -
                                                              =========     ===========
NON-CASH INVESTING AND FINANCING ACTIVITIES:

  Loan payable-related party contributed to capital ......    $       -     $    93,000
                                                              =========     ===========
  Common stock issued for debt and subscription receivable    $ 108,188     $   184,000
                                                              =========     ===========
  Common stock issued and issuable for future services ...    $       -     $   141,279
                                                              =========     ===========
  Exercise of common stock warrants for debt .............    $ 179,236     $         -
                                                              =========     ===========
  Common stock issuable for assets .......................    $  27,600     $         -
                                                              =========     ===========
Acquisition details:
  Fair value of assets acquired ..........................    $  18,816     $         -
                                                              =========     ===========
  Liabilities assumed ....................................    $  55,023     $   168,000
                                                              =========     ===========
  Goodwill ...............................................    $  71,207     $         -
                                                              =========     ===========

              See accompanying notes to consolidated financial statements.
                                           F-6
</TABLE>
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

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. In September 2002,
the Company acquired Florida Health Source, LLC and entered the business of
providing physical therapy services to referred patients.

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.

For financial accounting purposes, the exchange of stock was treated as a
recapitalization of PriMed with the former shareholders of Vidkid retaining
2,637,500 or approximately 19% of the outstanding stock. The stockholders'
equity section reflects the change in the capital structure of PriMed due to the
recapitalization and the consolidated financial statements reflect the
operations of PriMed for the periods presented and the operations of IBX Group,
Inc. from the acquisition date.

All of the common shares of the Company held by two officers, which aggregates
11,550,000 shares, and the assets of PriMed are subject to a creditor's lien.
Failure to comply with the terms and conditions of the PriMed loan documents
could result in a default and the forfeiture of the PriMed Shares to the lender.

On December 19, 2001, the Company settled litigation involving its wholly owned
subsidiary, PriMed, as a result of which a material change in control has
occurred. During the period from January 17, 2001 to April 3, 2001, a third
party advanced the Company $92,000 pursuant to a consulting agreement which
stated the Company would issue convertible bonds which are convertible at a 50%
of the fair market value of the common stock to be measured as stipulated in the
agreement. Pursuant to the terms of the settlement, all of the bondholders who
purchased $92,000 worth of the bonds converted their bonds into 10,062,500
shares of the Company's common stock (see Note 7).

All of the 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 11,550,000 shares of the Company owned by them
and have personally guaranteed the loan. Payments of $275,000 were recently made
in 2002 and the terms of the loan have been restructured effective October 8,
2002 resulting in a gain on settlement of $289,662 (See Note 5). 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 Company
is in the process of moving its operating assets and liabilities, including this
loan, from Primed to IBX Technologies, Inc., another wholly-owned subsidiary.

                                       F-7
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PRINCIPLES OF CONSOLIDATION

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.

CASH AND CASH EQUIVALENTS

For purposes of the statement of cash flows, the Company considers all cash and
other demand deposits to be cash and cash equivalents. As of December 31, 2002
and 2001, the Company had no cash equivalents.

ACCOUNTS RECEIVABLE AND ALLOWANCE

The Company estimates an allowance for doubtful accounts relating to its medical
billing business on a specific identification basis. Allowance for doubtful
accounts related to the physical therapy business are estimated based on the
Company's estimate of collectibility based on factors such as age of receivables
and historical collection experiences. At December 31, 2002, $72,234 of net
accounts receivables were collateral under a loan agreement (see Note 5).

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reported in the balance sheet for cash, accounts
receivable, accounts payable and accrued expenses, and loans payable approximate
their fair market value based on the short-term maturity of these instruments.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and are being depreciated using the
straight-line method over the estimated useful lives of three to seven years.
Leasehold improvements are stated at cost and are being amortized over the
lesser of the term of the lease or the estimated useful life of the asset. When
assets are retired or otherwise disposed of, the costs and accumulated
depreciation are removed from the respective accounts and any related gain or
loss is recognized. Maintenance and repair costs are charged to expense as
incurred, and renewals and improvements that extend the useful lives of assets
are capitalized.

REVENUE RECOGNITION

Revenue derived from billing and collections and administrative services is
recognized at the completion of the service performed. 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 subsidiary primarily acts as a
referral network for physical therapy patients who are referred by insurance
carriers. Revenue from providing physical therapy services is recognized upon
completion of the patient services and is recorded net of amounts due to service
providers

                                       F-8
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates. Significant estimates in 2002 include the
allowance for doubtful accounts, the recoverability of goodwill, and the
valuation of certain equity instruments issued or granted for services.

ADVERTISING

Advertising costs are expensed when incurred. For the years ended December 31,
2002 and 2001, advertising expense amounted to $239,698 and $44,877,
respectively.

LONG-LIVED ASSETS

The Company reviews long-lived assets for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of long-lived assets is measured by comparison of
its carrying amount to the undiscounted cash flows that the asset or asset group
is expected to generate. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the property, if any, exceeds its fair market value.

INCOME TAXES

Income taxes are accounted for under the asset and liability method of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes ("SFAS
109"). Under SFAS 109 deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases. Deferred tax assets and liabilities are measured using
enacted tax rates expected to apply to taxable income in the years in which
those temporary differences are expected to be recovered or settled. Under SFAS
109, the effect on deferred tax assets and liabilities of a change in tax rates
is recognized in income in the period that includes the enactment date.

STOCK-BASED COMPENSATION

The Company accounts for stock options issued to employees in accordance with
the provisions of Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees," and related interpretations. As
such, compensation cost is measured on the date of grant as the excess of the
current market price of the underlying stock over the exercise price. Such
compensation amounts are amortized over the respective vesting periods of the
option grant. The Company adopted the disclosure provisions of SFAS No. 123,
"Accounting for Stock-Based Compensation" and SFAS 148, "Accounting for
Stock-Based Compensation -Transition and Disclosure", which permits entities to
provide pro forma net income (loss) and pro forma earnings (loss) per share
disclosures for employee stock option grants as if the fair-valued based method
defined in SFAS No. 123 had been applied. The Company accounts for stock options
and stock issued to non-employees for goods or services in accordance with the
fair value method of SFAS 123.

                                       F-9
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INCOME (LOSS) PER COMMON SHARE

Basic income (loss) per share is computed by dividing net income (loss) by the
weighted average number of shares of common stock outstanding during the period.
Diluted income per share is computed by dividing net income by the weighted
average number of shares of common stock, common stock equivalents and
potentially dilutive securities outstanding during each period. In 2001, diluted
loss per common share is not presented because it is anti-dilutive due to the
Company's net loss. Basic and diluted loss per share in 2001 does not include
6,600,000 contingently returnable shares. The 6,600,000 shares are included in
the 2002 earnings per share as they have vested at December 31, 2002.

The following table presents a reconciliation of basic and diluted earnings per
share:

                                                                         2002
                                                                     -----------
Net income ......................................................    $   163,293
                                                                     -----------
Income available to common shares ...............................        163,293
Weighted average shares outstanding - basic .....................     37,003,110
EPS - BASIC .....................................................    $         -
                                                                     ===========

Income available to common shares ...............................    $   163,293
Weighted average shares outstanding - basic .....................     37,003,110

Effect of dilutive securities:
Convertible preferred stock .....................................      2,016,438
Contingently returnable common stock-Contingency satisfied
at December 31, 2002 ............................................      6,600,000
Exercised options and warrants ..................................        693,712
Unexercised options and warrants ................................      8,863,081
                                                                     -----------
Weighted average shares outstanding - diluted ...................     55,176,341
EPS - DILUTED ...................................................    $         -
                                                                     ===========

In 2002, 2,345,867 common stock options were not included in the computation of
diluted earnings per share as their effect would have been anti-dilutive.

RECENT ACCOUNTING PRONOUNCEMENTS

Statement No. 142 "Goodwill and Other Intangible Assets" ("SFAS 142") provides
new guidance concerning the accounting for the acquisition of intangibles,
except those acquired in a business combination, which is subject to SFAS 141,
and the manner in which intangibles and goodwill should be accounting for
subsequent to their initial recognition. Generally, intangible assets with
indefinite lives, and goodwill, are no longer amortized; they are carried at
lower of cost or market and subject to annual impairment evaluation, or interim
impairment evaluation if an interim triggering event occurs, using a new fair
market value method. Intangible assets with finite lives are amortized over
those lives, with no stipulated maximum, and an impairment test is performed
only when a triggering event occurs. This statement is effective for all fiscal
years beginning after December 15, 2001. The implementation of SFAS 142 on
January 1, 2002 did not have a material effect on the Company's financial
position, results of operations or liquidity.

                                      F-10
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." The standard requires entities to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred. When the liability is initially recorded, the entity capitalizes a
cost by increasing the carrying amount of the related long-lived asset. Over
time, the liability is accreted to its present value each period, and the
capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the liability, an entity either settles the obligation for its
recorded amount or incurs a gain or loss upon settlement. The standard is
effective for fiscal years beginning after June 15, 2002. The adoption of SFAS
No. 143 is not expected to have a material impact on the Company's consolidated
financial statements.

Statement No. 144 "Accounting for the Impairment or Disposal of Long-Lived
Assets" supercedes Statement No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121").
Though it retains the basic requirements of SFAS 121 regarding when and how to
measure an impairment loss, SFAS 144 provides additional implementation
guidance. SFAS 144 excludes goodwill and intangibles not being amortized among
other exclusions. SFAS 144 also supercedes the provisions of APB 30, "Reporting
the Results of Operations", pertaining to discontinued operations. Separate
reporting of a discontinued operation is still required, but SFAS 144 expands
the presentation to include a component of an entity, rather than strictly a
business segment as defined in SFAS 131, Disclosures about Segments of an
Enterprise and Related Information. SFAS 144 also eliminates the current
exemption to consolidation when control over a subsidiary is likely to be
temporary. This statement is effective for all fiscal years beginning after
December 15, 2001. The implementation of SFAS 144 did not have a material effect
on the Company's financial position, results of operations or liquidity.

Statement No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment
of FASB Statement No. 13, and Technical Corrections" ("SFAS 145") updates,
clarifies, and simplifies existing accounting pronouncements. Statement No. 145
rescinds Statement 4, which required all gains and losses from extinguishment of
debt to be aggregated and, if material, classified as an extraordinary item, net
of related income tax effect. As a result, the criteria in Opinion 30 will now
be used to classify those gains and losses. Statement 64 amended Statement 4,
and is no longer necessary because Statement 4 has been rescinded. Statement 44
was issued to establish accounting requirements for the effects of transition to
the provisions of the motor Carrier Act of 1980. Because the transition has been
completed, Statement 44 is no longer necessary. Statement 145 amends Statement
13 to require that certain lease modifications that have economic effects
similar to sale-leaseback transactions be accounted for in the same manner as
sale-leaseback transactions. This amendment is consistent with FASB's goal
requiring similar accounting treatment for transactions that have similar
economic effects. This statement is effective for fiscal years beginning after
May 15, 2002. The adoption of SFAS 145 on October 1, 2002 did not have a
material impact on the Company's financial position, results of operations or
liquidity.

                                      F-11
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

Statement No. 146, "Accounting for Exit or Disposal Activities" ("SFAS 146")
addresses the recognition, measurement, and reporting of cost that are
associated with exit and disposal activities that are currently accounted for
pursuant to the guidelines set forth in EITF 94-3, "Liability Recognition for
Certain Employee Termination Benefits and Other Costs to exit an Activity
(including Certain Cost Incurred in a Restructuring)," cost related to
terminating a contract that is not a capital lease and one-time benefit
arrangements received by employees who are involuntarily terminated - nullifying
the guidance under EITF 94-3. Under SFAS 146, the cost associated with an exit
or disposal activity is recognized in the periods in which it is incurred rather
than at the date the Company committed to the exit plan. This statement is
effective for exit or disposal activities initiated after December 31, 2002 with
earlier application encouraged. The adoption of SFAS 146 is not expected to have
a material impact on the Company's financial position, results of operations or
liquidity.

In December 2002, the FASB issued Statement of Financial Accounting Standards
No. 148, Accounting for Stock-Based Compensation - Transition and Disclosure.
Statement 148 provides alternative methods of transition to Statement 123's fair
value method of accounting for stock-based employee compensation. It also amends
the disclosure provisions of Statement 123 and APB Opinion No. 28, Interim
Financial Reporting, to require disclosure in the summary of significant
accounting policies of the effects of an entity's accounting with respect to
stock-based employee compensation on reported net income and earnings per share
in annual and interim financial statements. Statement 148's amendment of the
transition and annual disclosure requirements of Statement's 123 are effective
for fiscal years ending after December 15, 2002. Statement 148's amendment of
the disclosure requirements of Opinion 28 is effective for interim periods
beginning after December 15, 2002. The adoption of the disclosure provisions of
Statement 148 as of December 31, 2002 did not have a material impact on the
Company's financial condition or results of operations.

NOTE 2 - ACQUISITION

On October 4, 2002 (the "Acquisition Date") the Company acquired 100% of the
membership interest in Florida Health Source, LLC ("FHS"), a Florida limited
liability company formed on September 9, 2002. At the acquisition date, FHS was
a preferred provider network for more than 100,000 employees throughout the
state of Florida and is now a physical and occupational therapy vendor for a
major U.S. retailer. Additionally, currently FHS operates two multi-disciplinary
facilities providing physical therapy, occupational medicine, pain management
and wellness services. In connection with the acquisition, the Company entered
into employment agreements with three key employees. Each employment agreement
has a term of three years effective October 1, 2002 and grants a 13.33%
membership interest in FHS (an aggregate 39.99% interest for all three
employees) upon attaining certain stipulated financial performance goals in FHS.
The Company accounted for this acquisition using the purchase method of
accounting in accordance with SFAS No. 141. The purchase price exceeded the fair
value of net assets acquired by $71,207. The excess has been applied to
goodwill. The results of operations of FHS are included in the consolidated
results of operations of the Company from the Acquisition Date. Pursuant to
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets" Goodwill has an indefinite life and accordingly will not be
amortized.

                                      F-12
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 2 - ACQUISITION (CONTINUED)

The assets and liabilities acquired were as follows:

         Accounts receivable  $ 18,816
         Due to providers ...  (15,052)
         Accrued compensation  (39,971)
         Goodwill ...........   71,207
                              --------

         Cash purchase price  $ 35,000
                              ========

On December 6, 2002 (the "Acquisition Date") the Company entered into an asset
purchase agreement with an individual related to a director of the Company,
whereby, the Company acquired more than 170 domain names and informational
websites on healthcare topics ranging from arthritis to diabetes. In connection
with the asset purchase agreement, the Company is to issue 600,000 shares of
common stock, which as of December 31, 2002, have not been issued and are
included in common stock issuable on the accompanying balance sheet. The fair
value of the intangible assets acquired was based on the $.046 quoted trading
price of the common stock on the acquisition date and amounted to $27,600 (see
Note 6).

The following unaudited pro forma consolidated results of operations have been
prepared as if the acquisition of FHS had occurred as of inception date of FHS
which was September 9, 2002:

                                                          Year Ended
                                                       December 31, 2002
                                                       -----------------
         Net Revenues ..................................  $3,238,920
         Net Income ....................................  $  127,085
         Net Loss per Share from continuing operations .  $      .01

Pro forma data does not purport to be indicative of the results that would have
been obtained had these events actually occurred at the beginning of the periods
presented and is not intended to be a projection of future results.

NOTE 3 - PROPERTY AND EQUIPMENT

At December 31, 2002, property and equipment consisted of the following:

         Computer equipment and software  $ 424,868
         Furniture and office equipment      97,292
         Leasehold improvements ........    156,261
                                          ---------
                                            678,421
         Less accumulated depreciation .   (393,223)
                                          ---------
         Total .........................  $ 285,198
                                          =========

Depreciation expense for the years ended December 31, 2002 and 2001 was $115,826
and $117,878, respectively. At December 31, 2002, $253,330 of net property and
equipment was encumbered under a loan agreement (see Note 5).

                                      F-13
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 4 - SOFTWARE DEVELOPMENT COSTS

Under the criteria set forth in SFAS No. 86, "Accounting for the Costs of
Computer Software to be Sold, Leased or Otherwise Marketed," capitalization of
software development costs begins upon the establishment of technological
feasibility of the software. The establishment of technological feasibility and
the ongoing assessment of the recoverability of these costs require considerable
judgment by management with respect to certain external factors, including, but
not limited to, anticipated future gross product revenues, estimated economic
life, and changes in software and hardware technology. Capitalized software
development costs are amortized utilizing the straight-line method over the
estimated economic life of the software not to exceed three years. The Company
regularly reviews the carrying value of software development 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 software. As of
December 31, 2001, the Company determined that the carrying value of its
software development was impaired since the software has not generated revenues
and future positive cash flows could not be estimated. Accordingly, in 2001, the
Company wrote off all remaining capitalized software costs of $364,097 to
amortization expense. For the years ended December 31, 2002 and 2001,
amortization expense amounted to $0 and $563,429, respectively.

NOTE 5 - NOTES PAYABLE

The Company's borrowings consisted of the following at December 31, 2002:

Loan payable to an individual, payable in various
installments. The loan payable includes accrued interest and
is collateralized by the assets of one of the Company's
subsidiary and 11,550,000 outstanding common shares of the
Company held by certain guarantors. See (a) belowand notes 1 and 3..$   648,714

Less: Current portion of loans payable .............................   (516,421)
                                                                    -----------

Total ..............................................................$   132,293
                                                                    ===========

(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. 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.
In connection with this transaction the Company recognized a gain on forgiveness
of debt of $289,662.

At December 31, 2002, annual maturities of notes payable are as follows:

         2003   $516,421
         2004    132,293
                --------

         Total  $648,714
                ========

                                      F-14
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 6 - 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. As of December 31, 2002, amounts
due these officers/shareholders of the Company amounted to $454. These advances
are subordinated to the loan payable (see Note 5).

At December 31, 2001 the Company assumed the debt of an officer relating to a
predecessor company lawsuit. During 2001 the Company recognized settlement
expense of $88,834 (included in the $188,834 on the accompanying consolidated
statements of operations) and a related accrued liability at December 31, 2001
of $27,000, which was paid in 2002.

In December 2002, the Company acquired certain domain names and related content
from a party related to a director of the Company for 600,000 shares of the
Company's common stock. The shares were valued at the quoted trading price on
the acquisition date resulting in an intangible asset of $27,600 (see Note 2).


NOTE 7 - 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. In August 2002, 80,000 shares of Class A Stock were issued in
exchange for 8,000,000 shares of common stock. At the exchange date, the fair
market value of the issued preferred stock equaled the fair market value of the
exchanged common shares resulting in no charges to operations.

COMMON STOCK

On February 19, 2001, the Board of Directors approved an increase in the
authorized common shares to 100 million and to increase the Company's authorized
preferred shares to 5 million.

During October 2001, the Company issued 50,000 shares of common stock to a
consultant for services rendered. The Company valued these common shares at the
fair market value on the date of issuance or on the contract date of $914, which
has been recorded as consulting expense in the accompanying statement of
operations.

During the period from January 17, 2001 and April 3, 2001 a third party advanced
the Company $92,000 pursuant to a consulting agreement which stated the Company
would issue convertible bonds which are convertible at a 50% of the fair market
value of the common stock to be measured as stipulated in the agreement.
Pursuant to the terms of the settlement, all of the Bondholders who purchased
$92,000 worth of the Bonds converted their Bonds into 10,062,500 shares of the
Company's common stock. The common stock was valued at $184,000 on the
settlement date resulting in a loss on settlement of $92,000, which was charged
to operations.

                                      F-15
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002

NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

COMMON STOCK (CONTINUED)

On December 19, 2001, the Company concluded a private placement of $200,000 in
units comprised of an aggregate of 10,937,500 shares of common stock, class A
warrants entitling the holders to purchase up to 20,000,000 shares of the
Company's common stock, at an exercise price of $0.10 per share; and, class B
warrants entitling the holders to purchase up to 20,000,000 shares of the
Company's common stock, at an exercise price of $0.20 per share. The class A and
B warrants expire on June 24, 2003.

In connection with an employment agreement, the Company's President was issued
6,600,000 shares of the Company's common stock in 2001, subject to the following
restrictions and contingencies: If during the term of the President's
employment, the Company has not shown a net pre-tax profit of at least one
dollar as determined by the Company's year-end audited financial statements
prepared in accordance with generally accepted accounting principles (the "Net
Pre-Tax Profit" and "GAAP," respectively), all rights, title and interest in
such shares will be forfeited and the President will be required to tender the
shares to the Company for cancellation. Until such time as the Company has
generated a Net Pre-Tax Profit, the President will have no right to vote the
shares nor may he have the right to pledge, encumber, hypothecate or in any way
transfer the shares. The Company valued these common shares at the fair market
value on the date of issuance or on the contract date of $120,686, which will be
charged to operations when earned. Accordingly, the Company has recorded
deferred compensation of $96,549 as of December 31, 2002 related to these
shares. Based on 2002 net income reflected in the accompanying consolidated
financial statements, the 6,600,000 shares are considered vested at December 31,
2002 and are included in the computation of earnings per share for 2002.

During December 2001, the Company issued 1,000,000 shares of common stock to
employees and consultant for services rendered. The Company valued these common
shares at the fair market value on the grant date of $18,285, which has been
recorded as compensation of $2,285 and consulting expense of $16,000 in the
accompanying statement of operations.

During November 2001, the Company entered into consulting agreements for
investor relation services and business advisory services to be rendered. As
compensation for services, the Company issued an aggregate of 1,000,000 shares
of common stock to these consultants. Under one agreement, 750,000 common shares
were issued and the term is December 1, 2001 to November 30, 2002. Under the
other agreement, 250,000 common shares were issued and the term is November 12,
2001 to November 11, 2004. In addition, under this agreement, 250,000 common
stock options were granted with an exercise price of $.01 per share expiring in
five years. The Company valued these common shares and options at the fair
market value on the contract date of $20,593, which will be amortized over the
service periods.

During September 2001, the Company granted options to purchase 250,000 shares of
common stock to a director at an exercise price of $.50 per share. These options
expire on December 31, 2006. No compensation expense was recognized since the
exercise price exceeded the fair market value of the stock on the date of grant.

On December 19, 2001, the Company's President was issued 2,000,000 class C
Warrants and 2,000,000 class D Warrants. The class C Warrants are similar to the
class A Warrants and expire on December 15, 2006 and the class D Warrants are
similar to the Class B Warrants except that the Class D Warrants do not have any
registration rights and expire on December 31, 2003. The President has assigned
1,000,000 Class C Warrants to a director of the Company and 1,000,000 Class C
Warrants to non-affiliates of the Company.

                                      F-16
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 7 - STOCKHOLDERS' DEFICIT (CONTINUED)

COMMON STOCK (CONTINUED)

In June 2002, majority shareholders of the Company exercised warrants to
purchase 942,366 shares of common stock at $.10 per share in exchange for loans
payable amounting to $94,237 (including interest of $2,237).

In June 2002, a director and shareholder of the Company exercised warrants to
purchase 850,000 shares of common stock at $.10 per share in exchange for loans
payable amounting to $85,000. Additionally, in June 2002, the Company issued
1,081,880 shares of common stock at $.10 per share in exchange for loans payable
amounting to $90,618 and a subscription receivable of $17,570.

In June 2002, 2,000,000 common shares previously issuable were issued.

In June 2002, stock options were exercised to purchase 250,000 shares of common
stock at $.01 per share for a subscription receivable of $2,500.

In August 2002, a principal shareholder of the Company converted 8,000,000
shares of common stock into 80,000 shares of Class A Non-Voting Convertible
Preferred Stock.

In August and September 2002, directors' and shareholders of the Company
exercised warrants to purchase 340,000 shares of common stock at $.10 per share
for net proceeds of $34,000.

In December 2002, majority shareholders of the Company exercised warrants to
purchase 370,000 shares of common stock at $.10 per share for net proceeds of
$37,000.

Pursuant to a stock bonus plan authorized by the board of directors on October
30, 2002 for up to 1,000,000 shares of common stock, in December 2002, the
Company issued 1,000,000 shares of common stock to consultants, employees and
directors for services rendered and to be rendered in the future. The Company
valued these common shares at the fair market value on the dates of issuance of
$.046 per share and recorded non-cash compensation of $36,800 and $9,200 in
deferred compensation relating to the issuance of 200,000 of these shares issued
to a director of the Company's for services to be rendered in 2003.

On December 6, 2002, a shareholder sold, for nominal consideration, class A
stock warrants for 2,000,000 shares of common stock to a consultant for services
rendered and to be rendered in the future on behalf of the Company. For
accounting purposes, this transaction is treated as a contribution of the
warrants by the selling warrant holder to the Company and a new grant of
warrants to the consultant resulting in a consulting expense. The options had
exercise prices of $.10 per share and expire on June 24, 2003. The fair value of
each option grant was estimated on the date of grant using the Black-Scholes
option-pricing model with the following weighted-average assumptions dividend
yield of -0- percent; expected volatility of 105%; risk-free interest rate of
4.50 percent and an expected holding periods of six months. In connection with
the sale of these options, the Company recorded non-cash compensation of $1,333
and deferred compensation of $2,667. In December 2002, the consultant exercised
class A warrants for 80,000 common shares for net proceeds of $8,000.

                                      F-17
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


COMMON STOCK (CONTINUED)

A summary of outstanding options and warrants at December 31, 2002 are as
follows:

<TABLE>
<CAPTION>
                                     Shares Underlying    Range of Exercise     Remaining         Average
                                    Options and warrants       Prices        Contractual Life  Exercise Price
                                    --------------------  -----------------  ----------------  --------------
<S>                                      <C>                <C>                 <C>                 <C>
Outstanding at December 31, 2000                  -               -                 -                 -
Granted ........................         44,500,000         $0.01 - $0.50       1-5 years           $0.15
Exercised ......................                  -               -                 -                 -
                                    --------------------  -----------------  ----------------  --------------

Outstanding at December 31, 2001         44,500,000         $0.01 - $0.50       1-5 years           $0.15
Granted ........................          2,000,000             $0.10           0.5 years           $0.10
Exercised ......................         (2,832,366)            $0.10               -               $0.10
Cancelled ......................         (2,000,000)            $0.10               -               $0.10
                                    --------------------  -----------------  ----------------  --------------

Outstanding at December 31, 2002         41,667,634         $0.10 - $0.50       0-4 years           $0.16
                                    ====================  =================  ================  ===============
</TABLE>

Weighted average fair value of warrants and options granted ............ $.01
                                                                         ====

The following table summarizes information about employee stock options and
consultant warrants outstanding at December 31, 2002:

<TABLE>
<CAPTION>

            Options and Warrants Outstanding                       Options and Warrants Exercisable
 ---------------------------------------------------------         --------------------------------
                                    Weighted
                                    Average       Weighted                                 Weighted
 Range of          Number          Remaining       Average              Number             Average
 Exercise      Outstanding at      Contractual    Exercise          Exercisable at         Exercise
   Price      December 31, 2002       Life          Price          December 31, 2002       Price
 ---------    -----------------    -----------    --------         -----------------       ------
 <S>             <C>                <C>            <C>                <C>                  <C>
 $    0.50          250,000         4.00 Years     $ 0.50                250,000           $ 0.50
 0.10-0.20       41,417,634         0.69 Years       0.15             41,417,634             0.15
                 ----------                        ------             ----------           ------
                 41,667,634                        $ 0.16             41,667,634           $ 0.16
                 ==========                        ======             ==========           ======
</TABLE>
                                      F-18
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 8 - INCOME TAXES

There was no current income tax provision for the year ended December 31, 2001
due to the Company's net loss. At December 31, 2002, the Company had net
operating loss carry forwards of approximately $1,920,000 for income tax
purposes, available to offset future taxable income expiring on various dates
through 2022. Usage of the net operating losses may be limited due to the
Company's change in ownership, which occurred in December 2001. The Company's
tax expense differs from the "expected" tax expense for the years ended December
31, 2002 and 2001 (computed by applying the Federal Corporate tax rate of 34
percent to loss before taxes), as follows:

                                                          2002           2001
                                                       ---------      ----------

Computed "expected" tax expense (benefit) ........     $  55,520      $(524,357)
State income taxes ...............................        21,729        (84,822)
Other permanent differences ......................         8,713              -
Non-deductible stock based compensation ..........        27,210          8,148
Change in blended rate estimate ..................        42,118              -
Change in valuation allowance ....................      (155,290)       601,031
                                                       ---------      ----------
                                                       $       -      $       -
                                                       =========      ==========

The tax effects of temporary differences that give rise to significant portions
of deferred tax assets and liabilities at December 31, 2002 are as follows:

                                                                2002
                                                             ---------
Deferred tax assets:
Net operating loss carry forward ..........................  $ 758,384
Allowance for doubtful accounts ...........................     47,821
                                                             ---------

Total gross deferred tax assets ...........................    767,283

Less valuation allowance ..................................   (767,283)
                                                             ---------

Net deferred tax assets ...................................  $       -
                                                             =========

The valuation allowance at December 31, 2001 was $922,573. The decrease during
2002 was $155,290.

In assessing the realizability of the deferred tax assets, management considers
whether it is more likely than not that some portions or all of the deferred tax
assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income or changes in ownership
or business during the periods in which the temporary differences become
deductible. Due to the Company's continuing losses and recent change in
ownership, it is more likely than not that the deferred tax assets will not be
realized.

                                      F-19
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 9 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASE

The Company leases its office facility under various non-cancelable operating
leases payable in monthly installments. The Company's FHS subsidiary leases its
office facility under a five-year non-cancelable operating lease payable in
monthly installments commencing in October 2002. Rent expense for the years
ended December 31, 2002 and 2001 was $230,275 and $230,761, respectively.

Future minimum lease payments as of December 31, 2002 are as follows:

         2003 .......................................... $307,036
         2004 ..........................................  318,772
         2005 ..........................................  230,745
         2006 ..........................................   37,507
         2007 ..........................................   39,382
                                                         --------
         Total future minimum lease payments ........... $933,442
                                                         --------

LITIGATION

The Company was party to a legal proceeding with its major creditor. An initial
settlement was reached in December 2000. The Company renegotiated the terms of
the settlement agreement and on August 13, 2001, the Company entered into a
second settlement agreement relating to this legal action. The Company defaulted
on this second settlement agreement and in October 2002 entered into a new
settlement agreement with the major creditor and the litigation was dismissed.
Through the date of the report, the Company has been making the scheduled
payments under this agreement. As of December 31, 2002, principal and accrued
interest amounting to $648,714 is included in the accompanying consolidated
financial statements as a loan payable (see Note 5).

The Company is involved in various claims and legal proceedings brought against
the Company arising in the normal course of business. The Company has accrued
estimated amounts related to these matters and do not believe that the ultimate
outcome will have a materially adverse effect on the Company's financial
position, results of operations, or liquidity.

INSTALLMENT AGREEMENT WITH INTERNAL REVENUE SERVICE

The Company entered into an installment agreement with the U.S. Internal Revenue
Service (IRS) in October 2002 relating to unpaid payroll taxes. In connection
with this installment agreement, the Company paid $48,000 in November 2002 and
will make monthly payments of $12,000 until the balance is paid in full. In
event of default, the IRS has the right to file a notice of Federal tax lien. At
December 31, 2002, accrued payroll taxes and estimated accrued interest and
penalties aggregated $978,352.

                                      F-20
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 9 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

EMPLOYMENT AGREEMENT

On December 19, 2001, the Company entered into an employment agreement with its
President for a period ending on December 31, 2006. As compensation for his
services, the President will receive in year one an annual base compensation of
$125,000. Subject to the continuing approval of the Company, the annual base
salary in each succeeding year will be equal to at least 110% of the annual base
salary from the prior year. Compensation will be paid no less frequently than
monthly or in such increments as are regularly paid by the Company to other
employees.

In addition to the annual salary, the President was issued 6,600,000 shares of
the Company's common stock, subject to certain restrictions and contingencies
(see Note 6). At December 31, 2002, the contingency has been satisfied and the
restriction has lapsed. Subject to the prior approval of the Company, the
President will also be entitled to such other bonuses based upon the Company's
performance as determined in the sole and absolute discretion of the Company;
will be offered health insurance coverage at no cost to the President; be
entitled to participate in such employee benefit programs as are offered by the
Company to other employees; be entitled to an annual paid vacation of three
weeks per year plus five personal days per year, and any vacation time not used
may be accrued to the following year if the President remains employed with the
Company. The President will also be reimbursed for out-of-pocket expenses
incurred by him in the performance of his job responsibilities. However, any
reimbursable expenses in excess of $1,000 must first be approved by the Company.
The initial term of the agreement commenced as of the date of the agreement, and
will continue until December 31, 2006. The Company will have the right to
terminate the agreement for good cause or by reason of the President's
disability on 30 days prior written notice to the President. If such termination
is for good cause or by reason of the President's disability, a notice of
termination specifying the nature of the good cause or disability, as the case
may be, will be given the President. If the President is terminated for any
other reason than good cause, the Company will be obligated to pay the President
a severance payment of the greater of $100,000 or the remaining sums due under
the agreement.

On October 3, 2002, the Company's FHS subsidiary entered into an employment
agreement with its Director of Marketing and Business Development. The term of
the agreement is for three years with a base salary of $102,000 and will
increase to $135,000 for the remaining to years of the agreement if the Company
achieves certain benchmarks. Additionally, this individual will be entitled to a
bonus of $13,000 by September 2003 if the Company achieves certain pro forma
income objectives. Additionally, the employee shall be entitled to a 13.33%
ownership interest in FHS if the employee meets certain financial results as
outlined in the agreement.

On October 3, 2002, the Company's FHS subsidiary entered into an employment
agreement with its Director of Industrial Programs/Business Development. The
term of the agreement is for three years with a base salary of $102,000 and will
increase to $135,000 for the remaining to years of the agreement if the Company
achieves certain benchmarks. The Company has also agreed to pay unpaid and
accrued back wages and expenses of approximately $17,000. Additionally, this
individual will be entitled to a bonus of $13,000 by September 2003 if the
Company achieves certain pro forma income objectives. Additionally, the employee
shall be entitled to a 13.33% ownership interest in FHS if the employee meets
certain financial results as outlined in the agreement.

                                      F-21
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 9 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

EMPLOYMENT AGREEMENT
On October 3, 2002, the Company's FHS subsidiary entered into an employment
agreement with its Director of Network Operations and Business Development. The
term of the agreement is for three years with a base salary of $102,000 and will
increase to $135,000 for the remaining to years of the agreement if the Company
achieves certain benchmarks. Additionally, this individual will be entitled to a
bonus of $13,000 by September 2003 if the Company achieves certain pro forma
income objectives. Additionally, the employee shall be entitled to a 13.33%
ownership interest in FHS if the employee meets certain financial results as
outlined in the agreement.

NOTE 10 - CONCENTRATIONS

CUSTOMER SALES AND ACCOUNTS RECEIVABLE
The Company sells its services predominantly within Palm Beach, Dade and Broward
Counties, Florida. The Company performs ongoing credit evaluations of its
customers' financial conditions and, generally, requires no collateral from its
customers. The Company's three largest customers accounted for approximately 81%
and 63% of sales and approximately 22% and 78% of accounts receivable for the
periods ended December 31, 2002 and 2001, respectively.

NOTE 11 - MANAGEMENT'S CONSIDERATION OF GOING CONCERN MATTERS

As reflected in the accompanying consolidated financial statements, the Company
has a working capital deficiency of $2,282,531 at December 31, 2002, and has an
accumulated deficit of $2,815,378. The ability of the Company to continue as a
going concern is dependent on the continuation of profitable operations, its
ability to maintain 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 12 - DEFERRED REVENUE

In October 2002, certain contingencies relating to a September 26, 2002 Services
Agreement (the "Agreement") with Hilco Receivables, LLC ("Hilco"), were
resolved. Under the Agreement, the Company will recover and collect monies owed
by various patients and/or insurance companies of up to $40,000,000 of accounts
receivable ("Accounts") purchased and owned by Hilco. In October 2002, in
connection with the Agreement, the Company received a one-time non-refundable
payment of $500,000. Additionally, the Company is entitled to 15% of the gross
amounts collected as it relates to the Accounts. After Hilco has received an
aggregate total of $6,400,000 for the Accounts, in addition to the 15%, the
Company will receive an additional 35% of the total revenue collected as it
relates to the Accounts, less and net of the commissions of 15% payable to the
Company. The initial term of the Agreement is for a period of one year unless
earlier terminated under the terms of the agreement. In connection with this
agreement, the Company recorded deferred revenue of $250,000, which represents
50% of the one-time non-refundable payment received by the Company attributable
to the ongoing contract. This deferred revenue is being amortized over the
contract term of one year. At December 21, 2002, deferred revenue related to
this contract was $187,500.

                                      F-22
<PAGE>
                        IBX GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 2002


NOTE 13 - SEGMENT INFORMATION

In fiscal 2002, the Company operates 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 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 year ended December 31,
2002 is as follows. In fiscal 2001, the Company did not have any reportable
segments:

                                       For the Year Ended December 31, 2002
                                 -----------------------------------------------
                                 Healthcare          Physical
                                 Transaction         Therapy
                                Management and         and          Consolidated
                                 Technology       Rehabilitation       Total
                                 ------------      -----------      -----------
   Net Sales ................    $ 3,145,504       $    74,600      $ 3,220,104
   Operating Expenses .......     (2,640,939)         (158,841)      (2,799,780)

   Depreciation .............       (115,138)             (688)        (115,826)
   Gain on Settlement of Debt        289,662                 -          289,662
   Interest Expense .........       (430,867)                -         (430,867)

   Income (Loss) ............    $   248,222       $   (84,929)     $   163,293
                                 ===========       ===========      ===========

   Total Assets .............    $   394,297       $   178,821      $   573,118
                                 -----------       -----------      ===========


NOTE 14 - SUBSEQUENT EVENTS

Subsequent to December 31, 2002, the Company issued 5,295,000 shares of common
stock in connection with the exercise of warrants to purchase 5,295,000 shares
of common stock at $.10 per share for net proceeds of $529,500.


                                      F-23