UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

         ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

                              EXCHANGE ACT OF 1934

                    FOR THE FISCAL YEAR ENDED MARCH 31, 2004

                           Commission File No. 0-24624

                           CHINDEX INTERNATIONAL, INC.

             (Exact name of registrant as specified in its charter)

                                 [Chindex Logo]

             DELAWARE                                13-3097642
   (State or other jurisdiction of       (I.R.S. Employer Identification No.)
   incorporation or organization)

                              7201 Wisconsin Avenue

                            Bethesda, Maryland, 20814

                                 (301) 215-7777

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

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

                          COMMON STOCK, $.01 PAR VALUE

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

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K contained is not contained herein,  and will not be contained,
to the best of  registrant's  knowledge,  in a definitive  proxy or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. [ x ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [ x ]

The aggregate market value of the voting stock held by  non-affiliates  computed
by  reference  to the price at which the stock was sold,  or the average bid and
asked prices of such stock,  as of September  30, 2003 (the last business day of
the   registrant's   most  recently   completed   second  fiscal   quarter)  was
approximately $24,703,000.

The number of shares outstanding of each of the issuer's class of common equity,
as of June 23, 2004, was 4,551,152  shares of Common Stock and 775,000 shares of
Class B Common Stock.

Documents Incorporated by Reference: Part III: Proxy Statement.

<PAGE>

                                     PART I

ITEM 1.   BUSINESS

GENERAL

     Chindex  International,  Inc.,  founded  in 1981,  is an  American  company
operating in several  healthcare sectors of the Chinese  marketplace,  including
Hong Kong.  Revenue  is  generated  from the sale of  healthcare  equipment  and
products and the provision of healthcare services. The Company operates in three
segments:

     o    MEDICAL CAPITAL EQUIPMENT DIVISION.  This division markets,  sells and
          facilitates  the export of select  capital  healthcare  equipment  and
          instrumentation   to  China  on  the  basis  of  both   exclusive  and
          non-exclusive  agreements  with the  manufacturers  of these products.
          Chindex believes that it is the largest  independent U.S.  distributor
          of healthcare  equipment in China. For the fiscal year ended March 31,
          2004, the Medical Capital Equipment  Division accounted for 38% of our
          revenue.

     o    HEALTHCARE PRODUCTS DISTRIBUTION  DIVISION.  This division,  through a
          network of wholly owned  foreign  subsidiaries  in China,  imports and
          distributes     off-the-shelf    healthcare     instrumentation    and
          health-related consumable products developed by third parties. For the
          fiscal year ended March 31, 2004, the Healthcare Products Distribution
          Division accounted for 44% of the Company's revenue.

     o    HEALTHCARE  SERVICES  DIVISION.  This division  operates the Company's
          private  hospital  and clinics.  Beijing  United  Family  Hospital and
          Clinics (BJU) opened in 1997 and Shanghai  United Family  Hospital and
          Clinics  (SHU),  is scheduled to open in 2004.  In 2002, we opened our
          first satellite clinic associated with BJU in Shunyi County outside of
          Beijing.  For the fiscal year ended  March 31,  2004,  the  Healthcare
          Services Division accounted for 18% of the Company's revenue.

MEDICAL CAPITAL EQUIPMENT

     On the  basis  of  exclusive  and  non-exclusive  distribution  agreements,
Chindex offers  manufacturers of quality medical capital equipment access to the
greater  Chinese  marketplace  through a wide  range of  marketing,  sales,  and
technical services for their products.  Through a matrix of dedicated  marketing
and technical service departments, local area product and technical specialists,
and local area territory  representatives and clinical application  specialists,
we  provide  comprehensive  marketing  coverage  on  behalf of our  clients  and
suppliers on a nationwide basis. Marketing efforts are based on annual marketing
plans  developed by each marketing  department  within Chindex for each product,
and normally include  attendance at a variety of trade shows  throughout  China,
advertisement  in leading  Chinese  industrial,  trade,  and clinical  journals,
production of Chinese  language  product  literature  for  dissemination  to the
potential  customer base,  direct mail and  telemarketing  campaigns,  and other
product promotions.

     The  medical  capital  equipment  operations  in China are  managed  by our
medical  department,  which focuses on exporting quality Western medical capital
equipment  to the China  market.  These  export  sales are  denominated  in U.S.
dollars and are made to China's  larger  hospitals.  The medical  department  is
organized both by clinical or therapeutic product specialty and by region.

<PAGE>

     The medical department markets its products directly to hospitals,  through
hospital  administrators  and the  doctors  who are the  ultimate  users  of the
products.  There is virtually  no private  practice of medicine in China and all
physicians are affiliated with hospitals or similar institutions.  Our marketing
is addressed to all relevant participants in the purchasing decision,  including
the doctors and hospital administrators.  Chindex has sold products to more than
2,000 hospitals in China, many of which have been repeat customers.

     Most purchases of the medical  capital  equipment sold by Chindex in China,
regardless  of the  nature  of the  end-user,  are made  through  foreign  trade
corporations, or FTCs. Although the purchasing decision is made by the end-user,
which may be an individual or a group having the required  approvals  from their
administrative organizations, we enter into formal purchase contracts with FTCs.
The FTCs make purchases on behalf of the end-users and are legally authorized by
the Chinese  government to conduct  import  business.  These  organizations  are
chartered and regulated by the government  and are formed to facilitate  foreign
trade. We market our products directly to end-users,  but in consummating a sale
we also must interact with the particular  FTC  representing  the end-user.  For
this  reason,  we seek to maintain  ongoing  relationships  with the FTCs in our
industries.

     Chindex maintains a separate  technical service unit, which is closely tied
to the medical department.  The Company is responsible for the technical support
of virtually  all the medical  equipment  that it sells.  To support our capital
healthcare  equipment  business,  we own and  operate a  full-service  technical
service  center.  This  service  center  supports  spare parts  inventories  and
factory-trained  service engineers on a nationwide basis. It also makes use of a
joint venture  organization,  the Chindex Meheco technical service center, which
provides access to bonded warehousing  facilities.  This joint venture is a true
contractual joint venture with each party assuming  different  responsibilities.
Chindex  handles the daily  management  while Meheco handles many of the customs
and  approval  issues  related to the  importation  of parts.  Meheco also takes
responsibility  for the sale of some parts and the  collection  of  payment  for
them.

     Since 1995, Chindex has from time to time helped arrange  government-backed
financing  to help  hospitals  in  China  finance  their  purchases  of  medical
equipment from the Company. Such financing has included loan guarantees from the
U.S.  Ex-Im  Bank as well as  commercial  financing  that is  guaranteed  by the
Chinese   government   but  without  Ex-Im  Bank   participation.   While  these
transactions  are primarily  used to promote  purchases of the products that the
Company  exclusively  distributes  in  China,  equipment  manufactured  by other
suppliers  has  also  been  incorporated.   Sales  utilizing   government-backed
financing are different from the standard sales of capital equipment in a number
of ways. A standard sale will usually  involve one hospital  purchasing a single
item of equipment by using a letter of credit.  This,  of course,  requires that
the hospital  have the funds  available at the time of the  purchase.  In a sale
involving government-backed  financing, a financing package is made available at
attractive  interest  rates  to a  number  of  hospitals  as part of a  hospital
improvement project approved by the Chinese government.  The hospital is able to
arrange  to pay for the  equipment  over a number of years  instead of having to
have all the funds available up front. Since the hospitals involved in a project
are likely to desire to purchase a variety of equipment, including equipment not
normally  supplied by  Chindex,  such sales  involve  Chindex  establishing  new
relationships  with  suppliers in order to present the hospital with the package
of  equipment  that it  desires.  Although  these and other  differences  exist,
ultimately sales that utilize government-backed financing are simply another way
of financing the sale of equipment.

     Among the  products  sold by the Medical  Capital  Equipment  Division  are
diagnostic color ultrasound imaging devices,  chemistry analyzers,  sterilizers,
surgical equipment,  computerized electrophysiology systems, bone densitometers,
mammography and breast biopsy devices,  Pneumatic tube systems, and image-guided
surgery and stereotactic radiosurgery systems.

<PAGE>

HEALTHCARE PRODUCTS DISTRIBUTION

     Through our Healthcare  Products  Distribution,  or HPD, division,  Chindex
offers foreign  manufacturers a unique  nationwide  distribution  system for low
price medical devices and consumables sold in hospitals,  home  healthcare,  and
other  products  sold to consumers  in retail  pharmacies.  With an  established
distribution  network, the Company's HPD division is poised to take advantage of
new  opportunities  created  by  China's  WTO-based  liberalization,  as well as
Chinese  government-mandated  consolidation in the distribution industry, and to
continue to leverage our experience and increasing scale of operations.

     Through a network of wholly foreign-owned  enterprise,  or WFOE, companies,
chartered in China's free trade zones, the HPD division  imports  healthcare and
other products into China, carries them in inventory,  sells them downstream for
local  currency,  and pays the suppliers in foreign  exchange  obtained  legally
under Chinese regulations.

     The HPD division imports  products into China via two Chindex  subsidiaries
that it operates,  one domiciled in the Shanghai  Waigaoqiao Free Trade Zone and
the other in the Tianjin Free Trade Zone.

     Our HPD division is comprised of three primary business units:

     o    Retail Pharmacy Sales;

     o    Hospital Dealer Sales; and

     o    Logistic Services.

     RETAIL PHARMACY SALES

     Our HPD retail products business unit is focused on distribution, including
sales and marketing,  of branded healthcare and health-related consumer products
through China's  burgeoning  retail pharmacy sector.  Sales began in mid-1998 in
Shanghai and plans call for coverage of all of the major  pharmacies  in the top
30 urban markets. The Company currently  distributes to 36 cities and nearly 350
stores,  doing  business  with  eight of the top ten retail  pharmacy  chains in
China.

     Our  personalized,  high service approach calls for coverage of all partner
outlets  by a field  force of  customer  service  representatives.  Several  new
product  areas are under  development  in  parallel  with  growing  distribution
capabilities.  All of  these  branded  healthcare  and  health-related  consumer
products are subject to a strict  regulatory  regime in China and the process of
registration of the products often presents substantial difficulties.

     Chindex initiated retail pharmacy  distribution  through a partnership with
the L'Oreal Group, the world's largest producer of cosmetic  products.  In 1998,
under a partnership  agreement,  Chindex  became the exclusive  distributor of a
prominent brand of health-oriented  cosmetics and skin care products.  Chindex's
ability to closely  control both inventory and  distribution in China has proven
successful in both the test market and expansion phases of distribution for this
product line.  Chindex  currently has exclusive  distribution  rights to certain
premier brands, which are marketed through its Retail Pharmacy Sales channel.

     HOSPITAL DEALER SALES

     Through our Hospital Dealer Sales division, Chindex HPD taps the market for
quality  imported  medical  consumables  and  low-priced  instrumentation  via a

<PAGE>

network of sub-distributors  located throughout China. The network includes over
two hundred  active  accounts which cover all of China's 350 hospitals with more
than 500 beds. These hospitals  account for  approximately 80% of the demand for
imports in China.

     Chindex  provides  marketing,  logistical  and  distribution  services to a
number of manufacturers of medical instrumentation and consumables.

     LOGISTICS SERVICES

     Chindex  logistics is the core of the HPD  division,  as it is through this
business unit that we operate the import and distribution  channels for bringing
products to buyers nationwide.  This business unit provides customized logistics
services to other Chindex  departments and business units, as well as to outside
clients on a third party  logistics  basis.  Chindex  logistics  services  allow
clients to avoid having to immerse  themselves in the minutiae of China's opaque
and  heavily-regulated  distribution  sector so that they can focus on providing
solutions to their end-user customers in China. The logistics services cover all
aspects of importing  products and delivering them to the local customers' sites
as well as value-added  administrative  and financial  services.  In addition to
providing  logistics  support to internal clients,  Chindex  logistics  provides
third party  logistics  services to  providers  of products  related to our core
healthcare and health-related markets.

HEALTHCARE SERVICES

     In 1994,  using our expertise in  healthcare  as a  foundation,  we began a
long-term  program to establish a private hospital network in China. In 1997, we
opened Beijing United Family Hospital and Clinics (BJU),  marking the successful
completion  of the  first  phase of our  program.  BJU is the  first  officially
approved  private,  international-standard  hospital in China.  Future phases of
Chindex's  private  hospital  network  program are planned to expand delivery of
international-standard  healthcare  services  to China's  growing  middle  class
throughout the country.

     BEIJING UNITED FAMILY HOSPITAL AND CLINICS

     BJU  is  a  unique,  state-of-the-art,  fee-for-service,  50-bed  specialty
hospital  providing  primary family care for expatriates and Chinese citizens in
Beijing.  The hospital is housed in a modern  facility in the eastern section of
Beijing,  and features seven 5-star birthing suites, three operating theaters, a
medical - surgical inpatient ward, a pediatric ward, two executive VIP suites, a
neonatal intensive care unit, an adult intensive care unit,  nursery, a clinical
laboratory,  extensive digital diagnostic  imaging  facilities,  a pharmacy,  24
hours emergency department and six outpatient clinics.

     BJU completed a significant expansion development program in 2002 resulting
in a doubling of the hospital's capacity. In 2002, BJU also began to fulfill our
strategy of expansion through well-placed satellite clinics, with the opening of
the Beijing  United Family  Clinic - Shunyi,  or the Shunyi  Clinic.  The Shunyi
Clinic  is the  first  satellite  clinic  associated  with  BJU and is the  only
outpatient clinic located in the densely  expatriate-populated  suburb of Shunyi
County. It is also located near the International School of Beijing. This clinic
has further broadened the patient base of BJU and subsequently the referral base
for  BJU's  inpatient  services.  Plans  are also  underway  to open  additional
affiliated  satellite clinics  throughout  Beijing,  expanding upon this initial
program to provide outpatient services

     Emphasizing  the need for  well-care  (routine  visits  in the  absence  of
illness)  and  patient-centered  care  (involving  the  patient  in health  care
decisions),  BJU offers a full range of top-quality family healthcare  services,
including mental health services,  for men, women and children.  The hospital is
staffed by a mix of Western and Chinese  physicians  and operates in  accordance
with  international  hospital  standards.  BJU is also  committed  to  community
outreach  programs  and offers  healthcare  education  classes,  including  CPR,
Lamaze, and Stress Management.

<PAGE>

     BJU was the first officially  approved  healthcare joint venture to provide
international-standard  healthcare services in China. An international  standard
hospital not only provides healthcare  services at a level generally  recognized
and  accepted  internationally  in the  developed  world,  but also  manages the
hospital  according  to generally  accepted  international  principles,  such as
transparency, infection control, medical records, patient confidentiality,  peer
review, etc. BJU was formed as a 90/10 contractual joint venture between Chindex
and the Chinese  Academy of Medical  Sciences and received the initial  national
level  approvals  from the Chinese  Ministry of Health,  or MOH, and Ministry of
Foreign Trade and Economic Cooperation, or MOFTEC, in 1995.

     SHANGHAI UNITED FAMILY HOSPITAL AND CLINICS

     In late  2001,  Chindex  received  approval  from the MOH and in early 2002
received  approval  from  MOFTEC  to open a  second  hospital  venture.  The new
hospital, located in Shanghai is designed as a 50-bed facility,  offering a full
range of inpatient and  outpatient  services to both  Shanghai's  expatriate and
Chinese  communities.   This  hospital  is  also  a  contractual  joint  venture
undertaking,  with  Chindex  being  entitled  to  70%  of  the  profits  of  the
enterprise.  Construction  on the  hospital  has been  underway  for a number of
months and Shanghai United is scheduled to open in 2004. Funding for the initial
development  of this  hospital  was obtained  through an agreement  with a major
supplier for deferred payment on equipment purchases by us from the supplier.

     CHINDEX HEALTHCARE NETWORK EXPANSION

     Our strategy is to continue to provide care to the expatriate community and
increasingly  to  provide  quality  specialty  healthcare  to  affluent  Chinese
society.  An increasing  portion of our healthcare  network's market will be the
growing urban middle class population. Our strategic business plan calls for the
establishment of additional  hospitals,  each with affiliated satellite clinics,
in selected urban cities  throughout  eastern China.  These  hospitals  would be
networked   with  each  other  and  with  Beijing   United   through  a  central
administrative  arm. In addition to the  top-quality  primary family  healthcare
services that would be available at each  hospital in the network,  we also plan
to integrate  visits by rotating  specialists  to each  hospital,  expanding the
range of services offered.

COMPETITION

     In the sale of products, we compete with other independent  distributors in
China  that  market  similar   products.   In  addition  to  other   independent
distributors,  we face more significant  competition from direct distribution by
established manufacturers. In the medical products field we compete with General
Electric Corporation, or GE, which maintains its own direct sales force in China
as  well  as  selling   through   distributors.   In  addition,   since  certain
manufacturers,  such as GE,  market a wide  variety of products  under one brand
name in China to different  market sectors,  those  manufacturers  may be better
able than we are to  establish  name  recognition  across  industry  lines.  For
example,  GE manufactures and markets other electrical products in China as well
as other  medical  instruments  not sold by us. We believe that GE,  Philips and
Toshiba are the largest such direct competitors in the medical products field.

     In the  sales  and  distribution  of  off-the-shelf  medical  products  and
consumables,  our sales,  marketing and  logistical  distribution  networks also
compete with similar distribution operations of other independent  distributors,
both foreign and Chinese, joint ventures and foreign manufacturers. In addition,
the products  themselves supplied by us to the China market compete with similar
products of foreign, joint venture and domestic  manufacturers.  Our competitive
position  for  product  sales  depends in part upon our  ability to attract  and
retain qualified personnel in sales, technical and administrative capacities. In
addition,  many of our various competitors have greater resources,  financial or
otherwise, than we do.

<PAGE>

     Two of our  subsidiaries,  Chindex Holdings  International  Trade (Tianjin)
Ltd.,  and Chindex  Shanghai  International  Trading Co.,  Ltd.,  sell goods and
receive payment in local Chinese  currency and use the currency to pay for local
expenses.  Payments  are often  required  to be made in advance  for  consumable
products.  We recognize  that any  devaluation  in the local currency may have a
negative impact on the results of operations.

     At the present time, there are no Western-owned  hospitals in Beijing which
compete  with  Beijing  United  Family  Hospital in  catering to the  expatriate
diplomatic   and   affluent   local   Chinese   markets.   There   are   several
Western-operated  clinics and a variety of foreign-invested joint ventures which
provide outpatient services.

EMPLOYEES

     At March 31,  2004,the  Company had 759 full-time  salaried  employees.  Of
these,  744 are in China and Hong Kong. Of the full-time  personnel in China and
Hong Kong, 74 are expatriates and 670 are Chinese or third country nationals. Of
our non-U.S. based full-time employees, 363 are employed at Beijing United.

INTERNET INFORMATION AND SEC DOCUMENTS

     The Company's  internet site is located at  www.chindex.com.  Copies of the
Company's  reports and  amendments  thereto  filed  pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934,  including Annual Reports filed on
Form 10-K,  Quarterly  Reports  filed on Form 10-Q and Current  Reports filed on
Form 8-K may be accessed from the Company's website,  free of charge, as soon as
reasonably practicable after the Company electronically files such reports with,
or  furnishes  such reports to, the  Securities  and  Exchange  Commission.  The
information  found on our internet  site is not part of this or any other report
Chindex files with or furnishes to the Commission.

ITEM 2.   PROPERTIES

     Our  representative  headquarters in China are located at a newly renovated
facility in Beijing. Our prior facility was designated for redevelopment in 2002
and accordingly,  we moved into new space in mid-2002.  We have a ten year lease
for this new space.  We also lease  regional  offices in the  Chinese  cities of
Shanghai,  Guangzhou and Tianjin.  Our executive and administrative  offices are
located in Bethesda, Maryland, which provides access to nearby Washington, D.C.

     We also lease a four story building of approximately  52,000 square feet in
Beijing for Beijing  United.  This lease expires in 2010. In 1998,  the Hospital
entered into a five-year lease for the building housing the dental clinic.  This
lease provides for a ten-year  extension.  We initially  renovated the first two
floors of the main building for Beijing United Family Hospital. We had subleased
the remaining two floors until the end of 2001, when the tenant moved out of the
space,  allowing  the  hospital to renovate  the space for  hospital  use.  This
renovation  was  completed  in 2002.  We  believe  that our  facilities  will be
sufficient  to satisfy  our  current  requirements  for at least the next twelve
months.

     On March 1, 2002,  we entered  into an 18-year  lease for our new  hospital
facility in Shanghai.  The lease is for a four-story stand alone building on the
grounds of the Shanghai  Changning  District Central Hospital.  The building has
55,339 square feet.

<PAGE>

ITEM 3.   LEGAL PROCEEDINGS

     There are no pending material legal proceedings to which the Company or any
of its properties is subject.

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

     None

                                    PART II

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

                             MARKET FOR COMMON STOCK

     Our common stock is listed on the Nasdaq  SmallCap  Market under the symbol
"CHDX."  The  following  table shows the high and low common  stock  closing bid
prices  as  quoted  on the  Nasdaq  SmallCap  Market.  Such  quotations  reflect
interdealer prices, without retail mark-up,  mark-down or commission and may not
necessarily  represent  actual  transactions.  The closing bid prices below have
been adjusted to give effect to two two-for-one stock splits in the form of 100%
stock  dividends,  the first of which was in  September  2003 and the  second of
which was in January 2004, as well as an eleven-for-ten  stock split in the form
of a 10% stock dividend in July 2002.

                                                     HIGH                  LOW
        YEAR ENDED MARCH 31, 2003:
             First Quarter.................       $  2.95               $  2.61
             Second Quarter................          2.75                  1.70
             Third Quarter.................          2.24                  1.61
             Fourth Quarter................          2.01                  1.81
        YEAR ENDED MARCH 31, 2004:
             First Quarter.................          5.10                  2.12
             Second Quarter................         11.10                  5.05
             Third Quarter.................         17.92                  8.23
             Fourth Quarter ...............         24.00                  9.15

     As of June 23, 2004,  there were 41 record  holders of our common stock and
six record owners of our Class B common stock.

                                 DIVIDEND POLICY

     We have never  declared  or paid cash  dividends  on our common  stock.  We
currently intend to retain all available funds and future earnings,  if any, for
use in the operation and expansion of our business and do not anticipate  paying
dividends in the foreseeable future.

<PAGE>

ITEM 6.   SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

                                                                     (in thousands except share data)

                                         Year ended       Three months ended
                                          March 31,            March 31,                       Year ended December 31,
                                         ----------       ------------------         -------------------------------------------
                                             2004          2003         2002         2002         2001         2000         1999
                                             ----          ----         ----         ----         ----         ----         ----
                                                                     (unaudited)
<S>                                         <C>          <C>           <C>         <C>          <C>          <C>         <C>
Net sales                                   $88,183      $21,849       $15,578     $70,617      $56,118      $45,064     $37,128
Percent increase                                 25%          40%           47%         26%          25%          21%         72%
(Loss) income from operations                (1,582)         222          (293)        133         (401)         152        (221)
Other expense and income                       (111)         (66)          (12)       (126)         726          664         896
Net (loss) income before tax                 (1,923)         156          (305)         19          307          780         657
(Provision for) benefit from income
   taxes                                         64          (80)          113         240           77         (139)       (265)
Net (loss) income                            (1,987)          76          (192)        259          384          641         392

Net (loss) income per share-basic            (.53)          .02          (.05)         .07          .10          .17         .11
Net (loss) income per share-diluted          (.53)          .02          (.05)         .07          .10          .17         .11
Market closing price per share -
   end of period                              10.09         2.00           2.78       1.86         3.18         1.53        3.77
Book value per share at end of period          3.92         3.79           3.94       3.77         3.71         3.89        3.72
Cash dividends declared                         .00          .00            .00        .00          .00          .00         .00

</TABLE>

<TABLE>
<CAPTION>
                                                                                                     December 31,
                                          March 31,     March 31,     March 31,     -------------------------------------------
                                             2004          2003         2002         2002         2001         2000         1999
                                             ----          ----         ----         ----         ----         ----         ----
                                                              (unaudited)
<S>                                         <C>          <C>            <C>         <C>          <C>         <C>           <C>
Total assets                                $47,851      $42,340        $32,859     $43,126      $33,369     $36,498       $24,384
Short term debt                               5,668          696            702       1,946          200           0             0
Long term debt or vendor financing              125        3,734              0       3,609            0           0            91
Total shareholders' equity                   17,198       14,044         13,497      13,968       13,611      13,235        12,587

</TABLE>

<TABLE>
<CAPTION>

                                          Year ended      Three months ended
Segment information for the period:       March 31,            March 31                          Year ended December 31,
                                          ----------      ------------------          ------------------------------------------
                                             2004          2003         2002          2002          2001        2000        1999
                                             ----          ----         ----          ----          ----        ----        ----
                                                                     (unaudited)
<S>                                         <C>           <C>           <C>          <C>           <C>        <C>         <C>
Medical Capital Capital Equipment
   - sales                                  $33,837       $7,716        $6,653       $28,708       $25,819
Medical Capital Capital Equipment
   - gross margin percent                        28%          32%           22%           27%           29%
Medical Capital Capital Equipment
   - operations (loss) income                  (269)         521          (174)          198           439
Healthcare Products Distribution
   - sales                                   38,393       10,663         6,126        28,946        21,520
Healthcare Products Distribution
   - gross margin percent                        13%          10%           12%           13%           13%
Healthcare Products Distribution
   - operations loss                           (641)        (121)         (161)         (601)       (1,316)
Healthcare Products-sales                         *            *             *             *             *    $39,049     $33,182
Healthcare Products-gross margin
   percent                                        *            *             *             *             *         24%         25%
Healthcare Products-operations
   (loss) income                                  *            *             *             *             *        (66)        243
Healthcare Services-sales                    15,954        3,470         2,799       12,963          8,779      6,015       3,946
Healthcare Services-operations
   (loss) income                               (672)        (178)           42          536            476        218        (464)
*the company expanded to three segments in 2002 and restated 2001
</TABLE>

<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATION

OVERVIEW

     Chindex  International,  Inc., is a Delaware  corporation with headquarters
located in the Washington,  D.C.  metropolitan  area. The Company was founded in
1981 and currently is a leading  American  provider of  healthcare  products and
services to China, including Hong Kong. We operate in three business segments:

     o    MEDICAL CAPITAL EQUIPMENT DIVISION.  This division markets,  sells and
          facilitates  the export of select  capital  healthcare  equipment  and
          instrumentation   to  China  on  the  basis  of  both   exclusive  and
          non-exclusive  agreements  with the  manufacturers  of these products.
          Chindex believes that it is the largest  independent U.S.  distributor
          of  healthcare  equipment in China.  For the twelve months ended March
          31, 2004, the Medical Capital Equipment  Division accounted for 38% of
          our revenue.

     o    HEALTHCARE PRODUCTS DISTRIBUTION  DIVISION.  This division,  through a
          network of wholly owned  foreign  subsidiaries  in China,  imports and
          distributes     off-the-shelf    healthcare     instrumentation    and
          health-related consumable products developed by third parties. For the
          twelve  months  ended  March  31,  2004,   the   Healthcare   Products
          Distribution Division accounted for 44% of the Company's revenue.

     o    HEALTHCARE  SERVICES  DIVISION.  This division  operates the Company's
          private  hospital  and clinics.  Beijing  United  Family  Hospital and
          Clinics (BJU) opened in 1997 and Shanghai  United Family  Hospital and
          Clinics  (SHU),  is scheduled to open in 2004.  In 2002, we opened our
          first satellite clinic associated with BJU in Shunyi County outside of
          Beijing.  For the twelve months ended March 31, 2004,  the  Healthcare
          Services Division accounted for 18% of the Company's revenue.

     Substantially  all of our assets are located in China and substantially all
our revenue is derived from our operations in China. Accordingly,  our business,
financial  condition  and results of  operations  are subject,  to a significant
degree,  to economic,  political and legal  developments in China.  The economic
system in China differs from the economics of most  developed  countries in many
respects,  including  government  investment,  level of development,  control of
capital investment, control of foreign exchange and allocation of resources.

     Our Medical Capital Equipment Division and Healthcare Products Distribution
Divisions are subject to challenges  and risks as a result of our  dependence on
our relations with suppliers of equipment and products. In addition,  the timing
of our revenue  from the sale of medical  capital  equipment  is affected by the
availability  of funds to  customers in the  budgeting  processes of the Chinese
government,  the  availability  of credit  from the Chinese  banking  system and
otherwise. The timing of sales of such equipment may depend on the timing of our
customers' ability to arrange for credit sources.  Further, because we recognize
revenue and expenses relating to certain contracts as such products are shipped,
the timing of shipments, among other things, affects our operating results for a
particular  period.  Consequently,  our  operating  results  have varied and are
expected to continue to vary from period to period.

<PAGE>

CRITICAL ACCOUNTING POLICIES

     The  preparation of our financial  statements in conformity with accounting
principles generally accepted in the United States requires us 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 revenue and expenses during the reporting
period. Our estimates, judgments and assumptions are continually evaluated based
on  available  information  and  experience.  Because  of the  use of  estimates
inherent in the financial  reporting  process,  actual results could differ from
those estimates.

     Some of our  accounting  policies  require  higher degrees of judgment than
others in their  application.  These include income tax  recognition of deferred
tax items and  accruals  for  contingencies.  There were no material  changes to
these  items.  In  addition,  Note 1 to the  Consolidated  Financial  Statements
includes further discussion of our significant accounting policies.

REVENUE RECOGNITION

      Sales of equipment and consumables  are recognized upon product  shipment.
The Company provides  installation,  warranty, and training services for certain
of its capital equipment sales.  These services are viewed as perfunctory to the
overall  arrangement  and are not  accounted for  separately  from the equipment
sale. Cost associated with installation,  after-sale  servicing and warranty are
not  significant  and are recognized in cost of sales as they are incurred.  The
estimated cost for training services is accrued upon shipment.

      Revenue related to services provided in our Healthcare Services segment is
recognized in the period services are provided.  Revenue includes an estimate of
services at the end of the period for patients who have not  completed  service.
Costs associated with such services are recognized in the period incurred.

RECEIVABLE COLLECTIBILITY

      The Company  grants  credit to some  customers in the  ordinary  course of
business.  It evaluates  collectibility of accounts receivable  periodically and
adjusts  its  allowance  for  doubtful  accounts  accordingly.   Bad  Debts  are
experienced predominately in Healthcare Services business and to a lesser extent
in Medical Capital Equipment business. The Company has experienced few losses in
Healthcare Products Distribution business.

      The Company  incurred bad debt expense of $777,000,  $118,000 and $279,000
in the year ended March 31, 2004, three months ended March 31, 2003 and the year
ended December 31, 2002. The increased loss  experience in 2004 is the result of
periodic  review of accounts  and resulted in an increase to the  allowance  for
doubtful  accounts from $883,000 at December 31, 2002 to $1,131,000 at March 31,
2004.

VALUATION ALLOWANCE OF DEFERRED TAX ASSETS

      The Company's operations are taxed in various jurisdictions  including the
United States and China. In certain  jurisdictions  individual  subsidiaries are
taxed separately.  The Company has identified deferred tax assets resulting from
cumulative  temporary  differences  at each  balance  sheet  date.  A  valuation
allowance  is  provided  for those  deferred  tax assets in which the Company is
unable to conclude  that it is more likely than not that the tax benefit will be
realized.

      The Company released deferred tax valuation  allowances totalling $660,000
and $232,000 in the years ended  December 31, 2002 and 2001 based on assessments
in those years that it was more likely than not that it would be able to use its
U.S.  federal net operating loss  carryforwards.  Certain of these benefits were
realized  in tax filings for the period  ended  March  2003.  While  losses were
incurred in the U.S. in fiscal year 2004,  the  Company's  assessment,  based on
expected  income in 2005 and  2006,  is that it is more  likely  than not that a
substantial  portion of the deferred tax asset will be realized.  These U.S. net
operating loss carryforwards do not expire before 2014.

      The Company has provided substantial deferred tax valuation allowances for
certain deferred tax assets related to various  subsidiaries in China because it
is not able to conclude  that it is more likely than not that those  assets will
be realized.



FISCAL 2004 COMPARED TO TWELVE MONTHS ENDED DECEMBER 31, 2002

GENERAL

     The  Company's  revenue  for fiscal 2004 was  $88,183,000,  up 25% from the
twelve  months  ended  December  31, 2002  revenue of  $70,617,000.  The Company
experienced  continued  revenue  growth  in each of the  three  segments  of the
business,  with revenue growth of 18% in the medical capital equipment  segment,
33% in the healthcare products  distribution  segment, and 23% in the healthcare
services  segment,  compared to the twelve months ended December 31, 2002. Costs
and  expenses  were  $89,987,000  for  fiscal  2004 as  compared  with costs and
expenses of  $70,522,000  for the twelve  months ended  December  31, 2002.  The
Company  recorded a net loss of  $1,987,000  for the fiscal year ended March 31,
2004, as compared to net income of $259,000 for the twelve months ended December
31, 2002.  Each of the three  segments of the Company  experienced  an operation
loss in fiscal 2004. The Company believes that there are three principal reasons
for the loss from  operations  for the fiscal year.  First,  the fiscal year was
marked by the extraordinary  experience of dealing with Severe Acute Respiratory
Syndrome (SARS), which had a significant negative impact in a variety of ways on
the  Company's  business.  Normal  Beijing  business  activity  came  to a  near
standstill  resulting  in the  delay of  contract  negotiations  for the sale of
medical capital equipment and hospital visits were far below our expectations as
foreign   residents  in  Beijing  left  the   capital.   Second,   the  lack  of
government-sponsored  loan  programs in the period also  adversely  impacted the
volume of sales.  Third, the Company continued to incur operational  expenses in

<PAGE>

connection  with SHU,  while the opening of that  hospital  was delayed due to a
number of factors.  Cost increases for the segments are discussed  below.  There
were a number of increased  costs at the parent level of the Company,  including
for an  upgrade  of the  Company's  data  systems  in China and new  offices  in
Beijing. The largest parent level increases, which have been allocated among the
segments as described below,  include increased  payroll of $163,000,  increased
professional fees of $117,000,  increased  accounting and legal fees of $82,000,
and increased rent of $136,000.

MEDICAL CAPITAL EQUIPMENT SEGMENT

     The medical capital  equipment segment exports high quality Western medical
capital  equipment to the China market. In fiscal 2004, this segment had revenue
of $33,837,000, an 18% increase over revenue of $28,708,000 in the twelve months
ended December 31, 2002.  Loss from operations was $269,000 in the recent fiscal
year compared with income from operations of $198,000 in the twelve months ended
December 31, 2002.

     Gross profit in fiscal 2004 increased to $9,428,000  from $7,822,000 in the
twelve  months  ended  December 31,  2002.  Gross profit  margin for the medical
capital  equipment segment for the recent fiscal year was 28% as compared to 27%
in the prior  period.  Expenses  for the medical  capital  equipment  segment in
fiscal 2004 increased to $9,697,000  from  $7,624,000 in the twelve months ended
December 31, 2002,  and, as a percentage of revenue over the periods,  increased
to 29% from 27%.  Payroll for the segment in fiscal 2004  increased  by $864,000
over payroll in the twelve months ended  December 31, 2002,  and as a percentage
of revenue was 11%  compared to 10% for the twelve  months  ended  December  31,
2002.  The payroll  increase was primarily due to increased  sales  personnel in
connection with expanding the marketing of the segment's products.  In addition,
travel and  entertainment  expenses for the segment  increased  $428,000.  Other
costs  increased  $781,000  over the  periods,  primarily  due to the  segment's
allocated portion of additional parent-level  administrative expenses and higher
costs for new  customs  fees  related  to parts  purchases,  promotion,  meeting
expenses, and telephones.

HEALTHCARE PRODUCTS DISTRIBUTION SEGMENT

     The  healthcare  products  distribution  segment,   consisting  of  medical
consumables  and  personal  healthcare  products,  had revenue  growth of 33% to
$38,393,000  fiscal 2004,  as compared to revenue of  $28,946,000  in the twelve
months  ended  December  31,  2002.  The segment had a loss from  operations  of
$863,000 in the recent  fiscal year,  compared  with a loss from  operations  of
$601,000 in the twelve  months  ended  December  31, 2002.  We  anticipate  that
revenue growth in this segment will be slower as several  customers  contemplate
and  effectuate  direct sales and new products are subjected to an  increasingly
formalized  Chinese regulatory  process.  For example,  one significant  client,
Becton-Dickenson,  has  recently  established  a  subsidiary  in China that will
perform the logistical services previously  performed by our healthcare products
distribution  division.  Another  client,  Guidant,  is  establishing  a similar
subsidiary in China.  Both these  principals  have  indicated  their interest in
Chindex  continuing to perform  value-added and higher margin  distribution  and
marketing services for certain products and channels.  This transition away from
lower margin logistical  services is consistent with the division's  strategy of
prioritizing  higher  margin  business.  With  respect to delays in the  Chinese
regulatory  process,  the launch of new products is requiring longer lead times,
due  to  the  fact  that  China's   regulatory   environment  is  becoming  more
professional,  bureaucratic and transparent resulting in longer regulatory cycle
time. During the regulatory  approval  process,  some products that the division
planned to launch  encountered  delays.  The division's  local currency sales of
medical  consumables and personal  healthcare products are made from inventories
maintained  locally in China (see "FOREIGN  CURRENCY  EXCHANGE") to a network of
sub-dealers and pharmacies.

<PAGE>

     Gross  profit in fiscal  2004 rose to  $4,788,000  from  $3,856,000  in the
twelve months ended  December 31, 2002.  Gross profit margin from the healthcare
products  distribution  segment for the recent period was the same,  13%, as for
the twelve months ended December 31, 2002.

     Expenses for the healthcare  products  distribution  segment in fiscal 2004
increased to $5,429,000  from $4,457,000 in the twelve months ended December 31,
2002, but decreased to 14% as a percentage of revenue as compared to 15% for the
twelve  months  ended  December  31,  2002.  Payroll for the  segment  increased
$281,000 primarily due to increased staff compensation.  In addition, travel and
entertainment expense for the segment was relatively unchanged while other costs
increased  $694,000,  due  primarily  to  the  segment's  allocated  portion  of
additional parent-level  administrative costs, increased other professional fees
of $221,000 and $163,000 in promotion.

HEALTHCARE SERVICES SEGMENT

     The healthcare  services segment consists of two Western style primary care
hospitals,  Beijing United Family Hospital and Clinics (BJU) and Shanghai United
Family Hospital and Clinics (SHU), which continues to be under construction,  as
well as an affiliated  satellite clinic in Beijing. For fiscal 2004, the revenue
from this  segment was  $15,954,000,  an increase of 23% over the twelve  months
ended  December  31, 2002  revenue of  $12,963,000.  The segment had a loss from
operations  of $672,000 in the recent  fiscal  year,  compared  with income from
operations of $536,000 for the twelve months ended December 31, 2002. During the
recent fiscal year, the hospital was  significantly  negatively  impacted by the
SARS crisis in Beijing.  Many of BJU's expatriate  patients left the country and
many  others  deferred  visits  during  the April to August  period.  Healthcare
services costs increased for fiscal 2004 to $16,626,000, a 34% increase over the
twelve months ended  December 31, 2002 costs of  $12,427,000.  This increase was
due primarily to the costs  associated with adding to BJU  dermatology  services
and an intensive  care unit plus  $780,000 of operating  expenses of the not yet
open SHU facility.  Payroll increased by $2,181,000  (payroll was 55% of revenue
for fiscal 2004 and 50% for the twelve months ended December 31, 2002), with all
other costs increasing a total of $2,027,000, including increases of $679,000 in
bad debt  accounts  primarily  related  to a  systems  conversion  and  periodic
assessments of receivables  collectibility,  $437,000 in other professional fees
and $193,000 in depreciation.

     The  opening  of SHU,  originally  scheduled  for the fall of 2003,  is now
expected in the fall of 2004.  The delay in opening the new hospital is due to a
number of factors. During the SARS epidemic, travel between Beijing and Shanghai
was very difficult and proved a major disruption in the schedule. After the SARS
experience  ended,  the Company decided to reevaluate the SHU design in light of
lessons learned during the epidemic. As a result of this reevaluation,  a number
of specific  design changes were made,  such as adding a fever clinic,  changing
the air  conditioning  system and  increasing the number of rooms where negative
pressure could be utilized.

<PAGE>

LOSS ON EQUITY INVESTMENT

     The Company recorded an additional equity investment loss of $222,000 which
represents  the  Company's  pro-rata  share of  additional  capital  for Natural
Formula Asia (NFAL),  a joint  venture in which the Company has a 40%  interest.
The Joint Venture purchases various cosmetics made by Nesh, an Israeli cosmetics
manufacturer  and sells such  products  into  China  through  pharmacy  channels
developed by the Company.  The  investment  represents  an amount that the joint
venture partners  determined was required to provide  additional working capital
for the venture.  The Company's investment is in the form of a loan to the joint
venture.  The Company  reported a loss of $38,000  for this  venture in the year
ended December 31, 2002.

OTHER INCOME AND EXPENSES

     Interest  expense on short-term  debt of  $5,668,000  and long term debt of
$125,000  amounted  to  $249,000  whereas  the  company had $54,000 in the prior
period.  Over $2,900,000 of debt is for the development of SHU that is currently
under construction (see "LIQUIDITY AND CAPITAL RESOURCES").

TAXES

     The  Company  recorded  a $64,000  provision  for  taxes in fiscal  2004 as
compared  to a benefit  from  taxes of  $240,000  for the  twelve  months  ended
December 31, 2002. The Company's deferred tax asset increased by $909,000.  This
tax computation is in accordance with current accounting standards but assumes a
certain  level of future  profitability.  The  Company  believes  this  properly
recognizes  the  benefits  the  Company  has  achieved  as a  result  of its tax
restructuring  and expects to utilize the losses in fiscal  years 2005 and 2006.
The Company has  provided a 100%  valuation  allowance  on deferred tax benefits
related to development  expenses  incurred at Shanghai  United since there is no
operating history to support a conclusion that realization of the tax benefit is
more likely than not.

THREE MONTHS ENDED MARCH 31, 2003  COMPARED TO THREE MONTHS ENDED MARCH 31, 2002
(TRANSITION)

     The  Company's  revenue  for the three  months  ended  March  31,  2003 was
$21,849,000,  up 40% from the three  months  ended  March 31,  2002  revenue  of
$15,578,000.  We experienced  continued  growth in each of the three segments of
the  business,  with  revenue  growth of 16% in the  medical  capital  equipment
segment,  74% in the healthcare products  distribution  segment,  and 24% in the
healthcare  service segment,  compared to the same period last year. We recorded
net income of $76,000 for the three months ended March 31, 2003,  as compared to
a net loss of $192,000 for the three months ended March 31, 2002.

MEDICAL CAPITAL EQUIPMENT SEGMENT

     In the three  months ended March 31, 2003,  the medical  capital  equipment
segment had revenue of $7,716,000,  a 16% increase over revenue of $6,653,000 in
the three months ended March 31, 2002.  Income from  operations  was $521,000 in
the recent period  compared with a loss from operations of $174,000 in the prior
period.

     Gross  profit  in the  three  months  ended  March 31,  2003  increased  to
$2,474,000  from  $1,439,000  in the three months  ended March 31,  2002.  Gross
profit  margin for this segment for the recent period was 32% as compared to 22%
in  the  prior  period.  The  increase  in  gross  profit  margin  is  primarily
attributable  to two factors.  First,  we had made this a priority for our sales
staff and  instituted  additional  reporting  and  reviewed  margin  issues on a
contract by contract basis.  Accordingly,  where a salesperson  might previously
have been  inclined to accept an offer from a customer to purchase our equipment
at a less than optimum margin,  the salesperson  knew that the contract would be
reviewed  critically  once it was brought back to the  Company's  senior  review
staff.  This created an additional  incentive for the salesperson to seek better
pricing  from the  customer.  Second,  in the recent  period  there were no loan
program  sales,  which  typically are at a lower gross margin because we are not

<PAGE>

required to provide  warranty  service.  Thus,  in periods  where there are loan
sales,  such as the three months ended March 31, 2003,  the average gross profit
margin is often lower because of the inclusion of these  lower-margin loan sales
in the mix.

     Expenses  for the medical  capital  equipment  segment in the three  months
ended March 31, 2003 increased to $1,937,000 from $1,609,000 in the three months
ended March 31, 2002, and as a percentage of revenue over the periods  increased
to 25% from 24%.  Salaries  for the segment in the three  months ended March 31,
2003  increased by $238,000 from the three months ended March 31, 2002, and as a
percentage  of revenue  over the  periods  increased  to 11% from 9%. The salary
increase was primarily due to increased payroll benefits mandated by the Chinese
government  and increased  commissions.  In addition,  travel and  entertainment
expenses for the segment decreased $11,000.  Other costs increased $101,000 over
the periods, primarily due to additional administrative expenses offset by lower
costs for exhibitions.

HEALTHCARE PRODUCTS DISTRIBUTION SEGMENT

     The healthcare products  distribution  segment had revenue growth of 74% to
$10,663,000  in the three months ended March 31, 2003, as compared to revenue of
$6,126,000 in the three months ended March 31, 2002. The segment had a loss from
operations  of  $121,000  in the  recent  period,  compared  with  a  loss  from
operations  of $161,000 in the prior period.  The large revenue  growth over the
periods is attributed 26% to a temporary  arrangement with an existing client to
handle part of their product line that we had not previously handled and that we
will not handle in the future.  The remaining 48% increase in revenue was caused
by growth  across  multiple  product  lines  resulting  from  strong  demand for
healthcare and consumer  products by our Chinese customers as well as our strong
competitive position and management.

     Gross profit in the three  months  ended March 31, 2003 rose to  $1,097,000
from $767,000 in the three months ended March 31, 2002. Gross profit margin from
the healthcare products segment for the recent period was 10% as compared to 12%
in the prior period.  The decrease in gross profit is primarily  attributable to
the low margin non-recurring sale mentioned above.

     Expenses  for the  healthcare  products  distribution  segment in the three
months ended March 31, 2003  increased to $1,218,000  from $928,000 in the three
months ended March 31, 2002,  but  decreased as a percentage of revenue over the
periods to 11% from 15%. Payroll for the segment  increased  $151,000  primarily
due to  increased  staff  compensation.  In addition,  travel and  entertainment
expense for the segment increased $6,000 (but was flat at 1% of revenue for both
periods) and other costs increased $134,000 due primarily to increased promotion
expense and costs relating to facilities.

HEALTHCARE SERVICES SEGMENT

     For the three months  ended March 31,  2003,  the revenue from this segment
was  $3,470,000,  an increase of 24% over the three  months ended March 31, 2002
revenue of $2,799,000. The segment had a loss from operations of $178,000 in the
recent  period,  compared  with income from  operations  of $42,000 in the prior
period.  During the recent  period,  the  hospital  completed  the $2.6  million
expansion of its Beijing facility, which contributed to increased patient visits
as well as increased  inpatient stays over the periods.  Total inpatient days in
the hospital  increased to 669 in the three months ended March 31, 2003 from 518
in the three  months ended March 31,  2002,  an increase of 29%. For  outpatient
clinic visits, total clinic visits increased to 13,152 in the three months ended
March 31,  2003,  from  12,200 for the three  months  ended March 31,  2003,  an
increase of 12%.  Healthcare  services costs increased 32% over the periods from
$2,757,000  to  $3,648,000.  This  increase  was  due  primarily  to  the  costs
associated  with  expanded  services  offered.  Payroll  increased  by  $452,000
(payroll  was 56% and 54% of revenue for the three  months  ended March 31, 2003
and 2002,  respectively),  with all other costs increasing  $445,000,  including

<PAGE>

increases  of  $186,000  in  development  expenses  related  to SHU,  $90,000 in
doubtful  accounts  reserve,  $134,000 in professional  fees and $90,000 in rent
expense.

     OTHER INCOME AND EXPENSES

     Interest  expense  on  short-term  debt of  $696,000  and long term debt of
$3,734,000  amounted to $51,000  whereas  the company had little  expense in the
prior  period.  The  long-term  debt relates to the  development  of SHU that is
currently under construction (see "-- Liquidity and Capital Resources").

     TAXES

     We recorded a $80,000  provision for taxes for the three months ended March
31, 2003 as compared to a benefit  from taxes of $113,000  for the three  months
ended March 31, 2002.

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

     The Company's revenue for 2002 was $70,617,000, up 26% from 2001 revenue of
$56,118,000.  Of these  amounts,  $8,821,000 in 2002 and $4,175,000 in 2001 were
attributable to loan project sales by the Company for its customers. The Company
believes  that this type of financing is  important  to its  customers  and will
continue to try to offer such financings in the future.  These financings can be
very complex and their timing and impact on the Company's  results are difficult
to predict (see "TIMING OF REVENUE").

MEDICAL CAPITAL EQUIPMENT SEGMENT

     In 2002 this segment had revenue of  $28,708,000,  an 11% increase over the
revenue of  $25,819,000  in 2001.  Income  from  operations  for the segment was
$198,000 in 2002  compared to income from  operations  of $439,000 in 2001.  The
decrease  was  primarily   attributable  to  a  decrease  in  the  gross  profit
percentage.  The  period-to-period  revenue  of this  segment  fluctuate  due to
financing  programs  facilitated  by the  Company  from  time to time and due to
fluctuating  hospital  purchasing  cycles in China.  The  increase  for 2002 was
primarily  attributable  to loan project sales by the Company to its  customers,
which were  $8,821,000 in the recent year as compared to $4,175,000 in the prior
year.  The U.S.  dollar-based  sales of  capital  medical  equipment  are  often
contingent on financing (see "TIMING OF REVENUE").

     Gross profit in 2002 increased to $7,822,000 from $7,451,000 in 2001. Gross
profit margin from the capital medical  equipment  segment for the recent period
was 27% as  compared  to 29% in the  prior  period.  The  gross  profit  in 2001
reflected a different mix of revenue sources having different profit margins. In
particular,  in the recent year, the Company had less service contract  revenue,
which carries higher margins,  than in the prior year.  Service contract revenue
in Hong Kong was down  significantly  because  of the  downturn  in the  economy
there. The Company  anticipates that service contract revenue will not return to
previous  levels.  In  addition,  competitive  factors  such as the  timing  and
composition of major tenders,  as well as ongoing  competitive pricing pressures
due to Chinese government  tendering  regulations in the sale of capital medical
equipment in the recent year yielded lower margins on such sales. Finally, gross
margins on loan project  sales are generally  lower than on the Company's  other
sales because the Company is not required to provide warranty service on many of
the products sold through the loan programs. Loan program shipments in 2002 were
more than twice as large as in 2001.

     Expenses for the capital  medical  equipment  segment in 2002  increased to
$7,624,000  from  $7,012,000  in 2001,  and as a percentage  of revenue over the
period  was the same at 27%.  Salaries  for the  segment  in 2002  increased  by
$561,000  from 2001and as a percentage  of revenue over the period  increased to
10% from 9%. The salary increase was primarily due to increased payroll benefits
mandated by the Chinese government.

<PAGE>

     In addition,  travel and  entertainment  expenses for the segment increased
$197,000  but were flat at 5% of revenue in both years.  Other  costs  decreased
$123,000 as compared to the prior year,  primarily  due to lower  administration
allocations and lower  promotion  costs offset by increased  exhibition fees and
bad debt reserve.

HEALTHCARE PRODUCTS DISTRIBUTION SEGMENT

     The  healthcare  products  distribution  segment,   consisting  of  medical
consumables  and  personal  healthcare  products,  had revenue  growth of 35% to
$28,946,000  in 2002  from  2001  revenue  of  $21,520,000.  This  increase  was
attributable  to an  increase  in  sales in the  hospital  and  retail  pharmacy
markets.  The segment had a loss from operations of $639,000 in 2002 compared to
a loss from  operations of $1,316,000 in 2001. The sales of medical  consumables
and  personal  healthcare  products  are local  currency-based  sales  made from
inventories  maintained  locally in China (see  "FOREIGN  CURRENCY  EXCHANGE AND
IMPACT OF INFLATION") to a network of sub-dealers and pharmacies.

     Gross profit in 2002 rose to  $3,856,000  from  $2,842,000  in 2001.  Gross
profit margin from the segment remained consistent at 13% in 2002 and 2001.

     Expenses for the healthcare products distribution segment in 2002 increased
to $4,457,000  from $4,158,000 in 2001, but decreased as a percentage of revenue
over the periods to 15% from 19%. Salaries for the segment  increased  $354,000,
but remained  flat as a percentage of revenue over the years at 5%. The increase
is  primarily  due  to  increased  payroll  benefits  mandated  by  the  Chinese
government.  In  addition,  travel and  entertainment  expense  for the  segment
increased  $76,000  but was flat at 1% of revenue for both years and other costs
decreased $131,000 primarily from decreased promotion.

HEALTHCARE SERVICES SEGMENT

     For 2002, the revenue from this segment was $12,963,000, an increase of 48%
over 2001 revenue of $8,779,000.  Income from operations in 2002 was $536,000 as
compared to $476,000 in 2001. During the recent period, Beijing United continued
to expand the services offered, which contributed to increased patient visits as
well as increased inpatient stays over the prior year. Healthcare services costs
during 2002 were $12,427,000,  an increase of 50% over 2001 costs of $8,303,000.
This increase was due primarily to the costs associated with increased  services
offered.  The hospital had recently  finished  expanding its present facility to
include  space  formerly  occupied by a sublease  tenant.  The hospital also had
continued  its efforts to explore the  establishment  of  additional  affiliated
satellite clinics to serve as referral sites. In this regard,  Beijing United is
affiliated with a satellite clinic that opened in November of 2002. This clinic,
in Shunyi County  outside of Beijing,  is funded by a Chindex  subsidiary and is
staffed by doctors and other health professionals from Beijing United.  Salaries
increased by $2,450,000 (salaries were 50% and 46% of revenue for 2002 and 2001,
respectively), with all other costs increasing $1,674,000, including $193,000 in
supplies,  $457,000  in rent,  $129,000  to  establish  a bad debt  reserve  and
$104,000  in  administrative  allocation.  The salary  increases  resulted  from
increased  staffing for the emergency room and for other expanded  facilities as
well as additional payroll benefits.

MINORITY INTEREST

     The Company's  agreement with its joint venture  partner for Beijing United
calls for the partner to receive 10% of the  profits of the  hospital.  In 2002,
this  minority  interest in the net local income of Beijing  United  amounted to
$71,000 as compared to $18,000 for 2001. This income is directly  related to the
local entity profitability of the hospital.  The Company also recorded a $38,000
start-up loss on its investment in a joint venture in Hong Kong. This was offset
by The  Company's  minority  partner  share loss of $121,000 in its new start-up
hospital venture in Shanghai.

<PAGE>

OTHER INCOME AND EXPENSES

         Other expense (other than  interest) in 2002 was $131,000,  compared to
other income (other than  interest) of $578,000 for 2001. The prior period other
income was derived  substantially  from the  sublease  of space in the  facility
housing Beijing United that ended on December 31, 2001. The part of the building
that was  subleased  has now been  renovated as part of the hospital  expansion.
Although the Company did not  anticipate  any sublease  revenue in 2002, it does
anticipate  that now that the space is  renovated  and in  service  for  Beijing
United,  the Company  will  recognize  additional  revenue  through the expanded
operations of Beijing United, which may offset part or all of the loss of income
from the sublease.

TAXES

     The Company recorded a $240,000 benefit from taxes in 2002 as compared to a
benefit for taxes of $77,000 in 2001. This tax computation is in accordance with
current   accounting   standards   but   assumes  a  certain   level  of  future
profitability.  The Company  believes this properly  recognizes the benefits the
Company  has  achieved  as a  result  of its tax  restructuring  and  short-term
anticipation of future income tax loss carry forward utilization.

     As a result of this  restructuring  the  Company  expects  to make use of a
portion of its U.S.  federal net operating  losses and  accordingly,  recorded a
$660,000  deferred tax valuation  adjustment in addition to last years  $232,000
recorded on previously fully reserved tax losses.

LIQUIDITY AND CAPITAL RESOURCES

     As of  March  31,  2004,  our  cash  and  cash  equivalents,  net  accounts
receivable and net inventories  were  $6,791,000,  $17,374,000 and  $10,363,000,
respectively,   as  compared  to  $6,100,000,   $16,195,000   and   $10,346,000,
respectively, as of December 31, 2002.

     As of March 31, 2004,  our  short-term  loan payable was  comprised of bank
loans of  $2,670,000  and  extended  payment  accounts  payable to one vendor of
$2,998,000.  With respect to the vendor accounts payable,  the vendor has agreed
to provide  continuing credit facilities for purchases for a seven-year  period,
each grant of credit bearing  interest of five percent per annum and expiring at
the end of 18 months, to be replaced by subsequent  purchases and payables.  The
classification  from  long-term to short-term is a result of the maturity of the
first group of payables  under this  program  having been less than 12 months at
March 31, 2004. As of March 31, 2004, the accounts  payable  attributable to the
vendor financing was $2,998,000.  The Company is currently completing renovation
and  outfitting  of its hospital  facility in Shanghai,  which has been financed
primarily through the vendor financing and local bank borrowings.  The estimated
total costs for design and construction,  including demolition, is $4.2 million.
The  Company  has  negotiated  a loan  with the Hong Kong and  Shanghai  Banking
Corporation  (HSBC),  with which the Company has an existing  loan  relationship
relating to Beijing  United.  This new loan totals $4 million and received final
approval June 2, 2004.  Although the Company has sufficient capital resources to
complete  SHU as currently  scheduled,  it will  continue to explore  additional
financing  opportunities,  although there are no assurances that such additional
financing will be available.

     As of March  31,  2004,  letters  of  credit  in the  aggregate  amount  of
approximately  $420,000 and borrowings in the aggregate  amount of $883,000 were
outstanding under a credit facility with M&T Bank, the Company's principal bank.
The borrowings bear interest at 1% over the three-month London Interbank Offered
Rate (LIBOR).  Beijing  United has a short-term  financing  arrangement in China
with HSBC for $600,000 in  revolving  loans  bearing  interest at 1.75% over the
three-month Singapore Interbank Money Market Offer Rate (SIBOR).  Beijing United
has agreed to utilize HSBC for a portion of its credit card settlement business.
Also,  a new line of credit is included in the  arrangement  with HSBC for up to
$1,200,000,  bearing  interest  at 2.25%  over  SIBOR and having a term of up to

<PAGE>

three  years.  As of March 31,  2004,  the  balances on these  credit lines were
$600,000 and  $1,087,000  respectively.  The Company on behalf of Beijing United
has guaranteed the full amount of those facilities.

RECENT ISSUANCE OF SECURITIES

     As of March 29, 2004, we entered into a securities  purchase agreement with
a limited  number of accredited  investors  pursuant to which we agreed to issue
and the  investors  agreed to purchase  at a price of $9.00 per share  1,500,000
shares of our common  stock,  together  with  warrants to purchase an additional
300,000 shares of our common stock at an exercise price of $12.00 per share, for
an aggregate purchase price of $13,500,000. The net proceeds to the Company from
the financing,  after deducting  expenses of the financing  including  placement
agent fees, were $12,300,000.  In connection with the financings, we also agreed
to issue the placement agent five-year warrants to purchase 90,000 shares of our
common stock at an exercise price of $12.00 per share.  On March 31 and April 1,
2004, the initial closings of the financing occurred at which a total of 600,000
shares of our common stock together with warrants to purchase  120,000 shares of
our common stock were issued to the  investors.  In connection  with the initial
closings,  the placement  agent was issued warrants to purchase 36,000 shares of
our common stock.  The final closing of the financing  took place on May 5, 2004
at which  the  remaining  900,000  shares  of  common  stock  together  with the
remaining warrants to purchase 180,000 shares of our common stock were issued to
the  investors.  Pursuant  to the  Securities  Purchase  Agreement  executed  in
connection  with the  financing,  each investor  irrevocably  subscribed for and
agreed to purchase the initial securities and the remaining securities,  subject
only to, in addition to the delivery of  customary  closing  documentation,  the
completion of stockholder  consent to the financing in accordance with the rules
of the Nasdaq SmallCap  Market as described  below. In connection with the final
closing,  the  placement  agent was issued the  remaining  warrants  to purchase
54,000 shares of our common stock.

     The Nasdaq  SmallCap  Market,  where the Company's  common stock is traded,
prohibits us from issuing  shares of our common stock in an amount  greater than
20% of our  outstanding  common stock,  if the purchase  price per share in such
issuance is less than the greater of book or market  value of our common  stock,
without obtaining stockholder approval.  Since the issuance of the shares was at
such a lesser price, we structured the financing so that a portion of the common
stock and  warrants  (600,000  shares of common  stock and  warrants to purchase
120,000 shares of common stock for aggregate gross proceeds of $5,400,000)  were
issued to the  investors  at the initial  closings on March 31 and April 1, 2004
and the  remaining  shares and warrants  were issued to the investors at a final
closing,  which  occurred  on May 5, 2004,  more than 20 days after we mailed an
information statement to our stockholders.

     The Company  continues to consider various other financing  alternatives to
satisfy its future expansion, capital improvements and equipment requirements.

     The following table sets forth the Company's  contractual  cash obligations
as of March 31, 2004:

<TABLE>
<CAPTION>

                                                                (in thousands)
                             TOTAL         2005      2006      2007      2008      2009      THEREAFTER
                             -----         ----      ----      ----      ----      ----      ----------
<S>                          <C>       <C>       <C>       <C>        <C>       <C>          <C>
Line of credit               $  2,670  $  2,670  $      0  $      0   $      0  $      0     $      0
Vendor financing                2,998     2,998         0         0          0         0            0
                                                        -         -          -         -            -
Capital leases                    320       152       150        17          1         0            0
Equity investment                 220       220
                                  ---       ---
Operating leases               10,719     1,616     1,387     1,348      1,263     1,219        3,886
                               ------     -----     -----     -----      -----     -----       ------
Total contractual cash
     obligations              $16,927    $7,656    $1,537    $1,365     $1,264    $1,219       $3,886
                              =======    ======    ======    ======     ======    ======       ======
</TABLE>

     For information about these contractual cash obligations, see Notes 4 and 8
to the consolidated financial statements appearing elsewhere in this report.

<PAGE>

                                TIMING OF REVENUE

     The timing of the  Company's  revenue is  affected  by several  significant
factors.  Many end-users of the capital  equipment  products sold by the Company
depend  to a  certain  extent  upon the  allocation  of  funds in the  budgeting
processes  of the Chinese  government  and the  availability  of credit from the
Chinese banking system. These processes and the availability of credit are based
on policy  determinations  by the  Chinese  government  and are not  necessarily
subject to fixed time schedules.

     In addition,  the sales of certain products often require  protracted sales
efforts,  long lead times and other time-consuming  steps.  Further, in light of
the dependence by some  purchasers of capital  equipment on the  availability of
credit,  the timing of sales may depend upon the timing of the  Company's or its
purchasers'  abilities to arrange for credit  sources,  including  Ex-Im Bank or
other loan financing.  As a result, the Company's  operating results have varied
and are expected to continue to vary from period to period and year to year.  In
addition,  a relatively  limited number of orders and shipments may constitute a
meaningful percentage of the Company's revenue in any one period. As a result, a
relatively small reduction in the number of orders can have a material impact on
the  Company's  revenue in any year.  Further,  because the  Company  recognizes
revenue and expense as  products  are  shipped,  the timing of  shipments  could
affect the  Company's  operating  results for a particular  period.  At the same
time, a growing  percentage of the Company's revenue is attributable to hospital
services and local  currency sales through the HPD, both of which have more even
revenue streams.

                FOREIGN CURRENCY EXCHANGE AND IMPACT OF INFLATION

     The results of operations of the Company for the periods discussed have not
been significantly affected by inflation or foreign currency fluctuation.  Since
the Company  receives  over 60% of its revenue in local  Chinese  currency,  the
Company has some foreign currency risk.  Changes in the valuation of the Chinese
RENMINBI  or Hong Kong  dollar  may have an impact on the  Company's  results of
operations in the future. The Company's subsidiaries,  Chindex Tianjin,  Chindex
Shanghai and Beijing United, sell products and services in RENMINBI. For over 20
years the Chinese and Hong Kong dollars have been pegged to the US dollar. While
discussions about the possible removal of this pegged rate have been in the news
we do not believe at this time any change is imminent.  Also,  these  currencies
are not  freely  tradable  and the  Company  does not have a method to hedge its
transactions.  It does monitor the  situation  globally and continues to keep up
with the  discussion.  While there can be no  assurances  that a change will not
occur we do not believe any such change will have a large negative effect.

     The Company has also  purchased and will continue to purchase some products
in Western  currencies other than U.S. dollars and has sold and will continue to
sell such  products in China for U.S.  dollars.  To the extent that the value of
the U.S. dollar declines against such a currency, the Company could experience a
negative impact on profitability.  The Company anticipates hedging  transactions
wherever possible to minimize such negative impacts. Currently there are no such
hedges.

                           FORWARD-LOOKING STATEMENTS

     With the  exception of  historical  information,  the matters  discussed or
incorporated  by  reference  in this  Report  on Form  10-K are  forward-looking
statements that involve risks and uncertainties, including risks associated with
uncertainties  pertaining  to the  Company's (i)  performance  goals,  including
successful  conclusion of efforts to secure  government-backed  financing,  (ii)
future  revenue and earnings  from each of the  Company's  divisions,  including
revenue  from the  Company's  developmental  businesses  such as the  healthcare
services,  (iii) markets,  including growth in demand in China for the Company's
products and  services,  and (iv)  proposed new  operations,  including  without
limitation that there can be no assurance as to the opening schedule,  budgeting
or success of the Company's  hospital in Shanghai.  Actual  results,  events and
performance  may differ  materially.  Readers are  cautioned  not to place undue

<PAGE>

reliance on these  forward-looking  statements,  which speak only as of the date
hereof.  The Company  undertakes no obligation to release publicly the result of
any revisions to these  forward-looking  statements  that may be made to reflect
events or  circumstances  after the date hereof or to reflect the  occurrence of
unanticipated events.

       ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to market risks in a variety of ways.  The principal
market  risk is related  to the  nature of the  Chinese  economy  and  political
system.  Since the Company  generates  all of its revenue  from China,  any risk
having to do with the  environment  in China for a  foreign  business  operating
there can have a significant impact on the Company.

MARKET RISK

     Market  risk is the risk of loss  related  to  adverse  changes  in  market
prices,  including  interest  rates and foreign  exchange  rates,  of  financial
instruments. In the normal course of our business, we are subject to market risk
associated with interest rate movements and currency  movements on non-US Dollar
denominated assets and liabilities.

INTEREST RATE RISK

     In the normal  course of business and as the Company  takes on more debt it
is exposed to market risk from  changes in interest  rates that could impact its
results of operations and financial condition.  The Company manages its exposure
to interest rate risks through its regular operations and financing activities.

     Presently the Company  invests its cash and cash  equivalents in high grade
commercial paper and other interest  bearing  accounts.  The primary  investment
objective is to ensure capital  preservation of its invested  principal funds by
limiting default and market risk.  Currently the Company does not use derivative
financial instruments in its investment portfolio.

     The Company is subject to  movements  in interest  rate risks on its credit
facilities.  All bank debt outstanding is floating.  The Company  currently does
not hedge its  interest  rate  exposure.  If interest  rates were to increase 10
percent,  assuming the amount outstanding remains constant,  the result would be
an annual increase of interest expense of approximately $30,000. However, due to
uncertainty of the actions that would be taken and their possible effects,  this
analysis  does not  consider  the  effect of the  change in the level of overall
economic activity that could exist in such environment.

<PAGE>

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders
Chindex International, Inc.

     We have audited the  accompanying  consolidated  balance  sheets of Chindex
International,  Inc.  (the  Company) as of March 31, 2004 and December 31, 2002,
and the related consolidated statements of operations, stockholders' equity, and
cash flows for the year ended March 31,  2004,  the three months ended March 31,
2003 and the years ended  December 31, 2002 and 2001.  Our audits also  included
the  financial  statement  schedule  listed  in the Index at Item  15(a).  These
financial  statements  and  schedule  are the  responsibility  of the  Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements and schedule based on our audits.

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

     In our opinion,  the financial statements referred to above present fairly,
in all  material  respects,  the  consolidated  financial  position  of  Chindex
International,   Inc.  at  March  31,  2004  and  December  31,  2002,  and  the
consolidated  results  of its  operations  and its cash flows for the year ended
March 31,  2004,  the three  months  ended  March 31,  2003 and the years  ended
December 31, 2002 and 2001 in conformity with U.S. generally accepted accounting
principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the financial  statements  taken as a whole,  presents
fairly in all material respects the information set forth therein.



                                       /s/ Ernst & Young, LLP

McLean, Virginia
June 15, 2004

<PAGE>



                                              CHINDEX INTERNATIONAL, INC.
                                              CONSOLIDATED BALANCE SHEETS
                                             (thousands except share data)

<TABLE>
<CAPTION>
                                                                                       March 31,          December 31,
                                                                                         2004                 2002
                                                                                         ----                 ----
                                               ASSETS
<S>                                                                                     <C>                  <C>
Current Assets:
         Cash and cash equivalents                                                      $    6,791           $  6,100
         Trade receivables less allowance for doubtful accounts of $1,131
                  in 2004 and $883 in 2002
                 Equipment sales receivables                                                15,039             14,378
                 Patient service receivables                                                 2,335              1,817
         Inventories                                                                        10,363             10,346
         Income taxes receivable                                                                 0                 11
         Deferred income taxes                                                                 467                892
         Other current assets                                                                2,235              1,793
                                                                                             -----              -----
                 Total current assets                                                       37,230             35,337
Property & equipment, net                                                                    8,901              7,128
Long term deferred income taxes                                                              1,334                  0
Other assets                                                                                   386                691
                                                                                               ---                ---
                 Total assets                                                           $   47,851          $  43,126
                                                                                        ==========          =========

                        LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
         Accounts payable and accrued expenses                                          $   23,383          $  22,612
         Accrued contract training                                                           1,078                920
         Short term debit or vendor financing                                                5,668              1,946
         Income taxes payable                                                                  381                  0
                                                                                               ---                  -
                 Total current liabilities                                                  30,510             25,478
Long-term debt or vendor financing                                                             125              3,609
                                                                                               ---              -----
                 Total liabilities                                                          30,635             29,087
Minority interest                                                                               18                 71
Stockholders' Equity:
         Preferred stock, $.01 par value, 500,000 shares authorized, none issued                 0                  0
         Common stock, $.01 par value, 6,800,000 shares authorized, including
         800,000 designated Class B:
                 Common stock - 3,643,152 and 2,932,956 shares issued and                       36                 29
                 outstanding in 2004 and 2002, respectively
                 Class B stock - 775,000 shares issued and outstanding in 2004 and               8                  8
                 2002
         Additional capital                                                                 22,488             17,356
         Accumulated other comprehensive income                                                 11                  9
         Accumulated deficit                                                                (5,345)            (3,434)
                                                                                            -------            -------
                 Total stockholders' equity                                                 17,198             13,968
                                                                                            ------             ------
                 Total liabilities and stockholders' equity                           $     47,851          $  43,126
                                                                                      ============          =========
</TABLE>

See accompanying notes

<PAGE>



                                           CHINDEX INTERNATIONAL, INC.
                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (thousands except share and per share data)


<TABLE>
<CAPTION>
                                                  Year ended        Three months ended              Year ended
                                                   March 31,            March 31,                  December 31,
                                                     2004          2003          2002           2002          2001
                                                     ----          ----          ----           ----          ----
                                                                             (unaudited)
<S>                                                 <C>            <C>           <C>           <C>           <C>
Total revenue                                       $88,183        $21,849       $15,578       $70,617       $56,118

Cost and expenses
         Cost of goods sold                          59,608         15,147        10,922        47,549        38,426
         Salaries and payroll taxes                  16,952          3,977         3,043        13,463        10,091
         Travel and entertainment                     2,905            419           437         2,601         2,139
         Other                                       10,300          2,084         1,469         6,871         5,863
                                                     ------          -----         -----         -----         -----

(Loss) income from operations                        (1,582)           222          (293)          133          (401)

Minority interest                                        (8)             0             0            50           (18)
Loss on equity investment                              (222)             0             0           (38)            0

Other income and (expenses)
         Interest expense                              (249)           (51)           (4)          (54)          (13)
         Interest income                                 44             14            15            59           161
         Miscellaneous income (loss), net                94            (29)          (23)         (131)          578
                                                         --            ----          ----         -----          ---
                 Total other (loss) income             (111)           (66)          (12)         (126)          726
                                                       -----           ----          ----         -----          ---

(Loss) income before income taxes                    (1,923)           156          (305)           19           307
(Provision for) benefit from income taxes               (64)           (80)          113           240            77
                                                        ----           ----          ---           ---            --
Net (loss) income                                   $(1,987)           $76         $(192)         $259          $384
                                                    ========           ===         ======         ====          ====
(Loss) income per share data
Net (loss) income per common share - basic            $(.53)           $.02        $(.05)         $.07          $.10
Weighted average shares outstanding - basic        3,758,170     3,708,232     3,672,460    3,699,052      3,667,204
Net (loss) income per common share - diluted          $(.53)          $.02         $(.05)         $.07          $.10
Weighted average shares outstanding - diluted     3,758,170      3,715,908     3,672,460     3,796,340     3,950,636
</TABLE>

See accompanying notes

<PAGE>


                                               CHINDEX INTERNATIONAL, INC.
                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                      (thousands)

<TABLE>
<CAPTION>
                                                            Year ended      Three months ended           Year ended
                                                            March 31,           March 31,               December 31,
                                                               2004         2003         2002        2002        2001
                                                               ----         ----         ----        ----        ----
                                                                                     (unaudited)
<S>                                                          <C>            <C>         <C>           <C>          <C>
OPERATING ACTIVITIES
Net (loss) income                                            $(1,987)         $76        $(192)         $259       $384

Adjustments  to  reconcile  net (loss)  income to net cash (used in) provided by
operating activities:
         Depreciation                                          1,309          280          241         1,016        773
         Inventory write-down                                    151           31           43           158        147
         Provision for doubtful accounts                         777          118            0           279          0
         Minority interest                                         8            0            0           (53)         0
         Deferred income taxes                                  (909)           0            0          (660)      (232)
         Loss on Equity Investment                               222            0            0            38          0
Changes in operating assets and liabilities:
         Trade receivables                                    (3,121)       1,047          467        (3,542)     4,264
         Inventories                                             373         (571)        (979)       (3,124)     1,608
         Income taxes receivable                                 135         (122)        (196)          154        112
         Other current assets                                   (713)         270           44          (125)      (353)
         Other assets                                             25           26           67            98        282
         Accounts payable and accrued expenses                   678          388         (898)        3,992     (3,615)
         Income taxes payable                                    381            0            0             0        (90)
                                                                 ---            -            -             -        ----
Net cash (used in) provided by operating activities           (2,671)       1,543       (1,403)       (1,510)     3,280
INVESTING ACTIVITIES
         Investment in equity joint venture                        0            0            0           (40)           0
         Purchases of property and equipment                  (2,925)        (437)        (323)       (3,382)    (1,798)
                                                              -------        -----        -----       -------    -------
Net cash used in investing activities                         (2,925)        (437)        (323)       (3,422)    (1,798)
FINANCING ACTIVITIES
         Proceeds from  (repayment of) short term debt         1,974       (1,250)         502         1,746        200
         payable
         Proceeds from issuance of common stock                4,892            0            0             0          0
         Cash from (paid to) joint venture partner
         investment                                              (61)           0            0           120          0
         Long term vendor financing                             (623)           0            0         3,609          0
         Exercise of stock options                               247            0           56            81          0
                                                                 ---            -           --            --          -
Net cash provided by (used in) financing activities            6,429       (1,250)         558         5,556        200
Effect of foreign exchange rate changes on cash and cash           2            0           22            17         (8)
                                                                   -            -                         --         ---
equivalents
Net increase (decrease) in cash and cash equivalents             835         (144)      (1,146)          641      1,674
Cash and cash equivalents at beginning of period               5,956        6,100        5,459         5,459      3,785
                                                               -----        -----        -----         -----      -----
Cash and cash equivalents at end of period                    $6,791       $5,956       $4,313        $6,100     $5,459
                                                              ======       ======       ======        ======     ======

Cash paid for interest                                          $124           $8           $1           $45        $13
Cash paid for taxes                                             $460          $71          $56          $336       $518
</TABLE>

See accompanying notes

<PAGE>

<TABLE>
<CAPTION>
                                                   CHINDEX INTERNATIONAL, INC.
                                         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                            FOR THE YEAR ENDED MARCH 31, 2004 AND YEARS ENDED DECEMBER 31, 2002, 2001
                                                  (thousands except share data)

                                                                                                      Accumulated
                                                                                                         Other
                                                                        Additional    Accumulated    Comprehensive
                              Common Stock       Common Stock-Class B     Capital       Deficit      Income (Loss)      Total
                            Shares     Amount      Shares     Amount
                          ----------- ---------- ----------- ---------- ------------ -------------- ---------------- ------------

<S>                       <C>             <C>      <C>              <C>  <C>              <C>                 <C>        <C>
Balance at
  December 31, 2000       2,895,656       $29      775,000          $8   $17,275          ($4,077)            $0         413,235
------------------------- ----------- ---------- ----------- ---------- ------------ -------------- ---------------- ------------
Net income 2001                                                                               384                            384
Foreign currency
  translation adjustment                                                                                      (8)             (8)
Comprehensive income                                                                                                         376
                          ----------- ---------- ----------- ---------- ------------ -------------- ---------------- ------------
Balance at                2,895,656        29      775,000           8    17,275           (3,693)            (8)         13,611
  December 31, 2001
------------------------- ----------- ---------- ----------- ---------- ------------ -------------- ---------------- ------------
Net income 2002                                                                               259                            259
Foreign currency
  translation adjustment                                                                                      17              17
Comprehensive income                                                                                                         276
Options exercised            37,300         0                                     81                                          81
                          ----------- ---------- ----------- ---------- ------------ -------------- ---------------- ------------
Balance at                2,932,956        29      775,000           8        17,356       (3,434)             9          13,968
  December 31, 2002
------------------------- ----------- ---------- ----------- ---------- ------------ -------------- ---------------- ------------
Net income for the
three months ended
March 31, 2003                                                                                 76                             76
Net loss 2004                                                                              (1,987)                        (1,987)
Foreign currency
  translation adjustment                                                                                       2               2
Comprehensive income                                                                                                      (1,909)
Issuance of Common Stock    600,000         6                                  4,886                                       4,892
Options exercised           110,196         1                                    246                                         247
                          ----------- ---------- ----------- ---------- ------------ -------------- ---------------- ------------
Balance at                3,643,152       $36      775,000          $8        22,488      ($5,345)           $11         $17,198
  March 31, 2004
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

See accompanying notes

<PAGE>

                           CHINDEX INTERNATIONAL, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Chindex  International,  Inc.  (the  Company  or  "Chindex")  is a  leading
American  company  operating  in  several  healthcare  sectors  of  the  Chinese
marketplace,  including  Hong  Kong.  The  Company  conducts  business  in three
segments.

     The Medical Capital  Equipment  segment  markets and sells  high-technology
medical equipment and instrumentation acquired from several major U.S., European
and other manufacturers.  The Company markets and sells these products in China,
including Hong Kong, and provides  marketing,  sales and technical  services for
the products. Substantially all direct sales, commissions and purchases of these
products are denominated in U.S. dollars.

     The Healthcare Products  Distribution segment operates a logistics platform
through which it provides  logistics  services to internal clients as well as to
other companies  doing business in the Chinese market.  Sales of consumables and
low value healthcare and health-related consumer products are undertaken through
Chindex  Holdings  International  Trade  (Tianjin)  Ltd.,  and Chindex  Shanghai
International  Trading  Co.,  Ltd.,  subsidiaries  that sell  goods and  receive
payments  in  local  Chinese  currency  and use the  currency  to pay for  local
expenses and U.S.-dollar  imported goods.  Most consumable  products are shipped
when payment is received.

     The Healthcare  Services  segment operates a hospital and clinic in Beijing
and will be opening a second hospital in Shanghai in 2004.  While Beijing United
generally  transacts  its  business  in local  Chinese  currency  it can receive
payments in U.S. dollars.



CONSOLIDATION

     The consolidated  financial  statements include the accounts of the Company
and its  subsidiaries  or controlled  enterprises  (ventures  with less than 50%
ownership but are 100% consolidated  because the Company has the power to govern
the financial  and operating  policies of the  enterprise  under an  agreement).
Minority  interest  is derived  from the  Company's  partner's  10% share of the
earnings of Beijing United and 30% share of the earnings of Shanghai United. The
Company also holds a 40%  interest in Natural  Formula  Asia  Limited,  which is
accounted for using the equity method.  The Company has agreed in principle with
the other  investors to fund an additional  $220,000,  in the form of a loan, to
its equity  investment,  NFAL,  This payment  will be made in 2005.  Significant
intercompany balances and transactions are eliminated.

REVENUE RECOGNITION

     The Company earns  revenue from sales of products and  providing  services.
Substantially  all  revenue in the  Medical  Capital  Equipment  segment and the
Healthcare  Products  Distribution  segment  are from the sale of  products  and
substantially all revenue in Healthcare Services is from providing services. See
Note 11 for further information on sales and cost of sales by segment.

<PAGE>

INVENTORIES

     Inventory  purchased to fill executed sales  contracts and purchase  orders
that remain undelivered at year-end (merchandise  inventory),  service parts and
inventory  of  peripheral  components  are stated at the lower of cost or market
using the specific  identification method. In addition, two wholly foreign owned
subsidiaries maintain merchandise inventory based on expected sales targets.

     Certain items are purchased for demonstration  purposes and subsequent sale
(demonstration   inventory).   Management   monitors  the   salability  of  such
demonstration  inventory and reduces the carrying amount to net realizable value
when there is any impairment in value.

     Inventory items held by the healthcare  services division are stated at the
lower of cost or market using the average cost method.

PROPERTY AND EQUIPMENT

     Property and equipment,  including such assets held by Healthcare Services,
are stated at  historical  cost.  The costs of additions  and  improvements  are
capitalized,  while  maintenance and repairs are charged to expense as incurred.
Depreciation  is computed on the straight line method over the estimated  useful
lives of the related  assets.  Useful lives for office  equipment,  vehicles and
furniture  and  fixtures  range from 5 to 7 years.  Leasehold  improvements  are
amortized by the  straight-line  method over the shorter of the estimated useful
lives of the  improvements  or the lease  term.  Certain  medical  equipment  is
depreciated over three years.

     The  Company  assesses  the  impairment  of  long-lived   assets  including
intangible  assets in accordance with Statement of Financial  Standards No. 144,
ACCOUNTING  FOR THE  IMPAIRMENT  OR DISPOSAL OF LONG-LIVED  ASSETS.  The Company
evaluates its long-lived assets for investment when indicators of impairment are
identified.  The Company  records  impairment  charges based upon the difference
between  the  fair  value  and  carrying   value  of  the  original  asset  when
undiscounted  cash flows indicate the carrying  value will not be recovered.  No
impairment losses have been recorded in the accompanying  consolidated statement
of operations.

INCOME TAXES

     The Company's U.S. entities are on a June 30 tax fiscal year and, beginning
in 2001, they filed a consolidated U.S. federal tax return.  The U.S.  provision
for income taxes is computed for each entity in the U.S.  consolidated  group at
the  statutory  rate based upon each entity's  income or loss,  giving effect to
permanent  differences.  The Company's foreign subsidiaries file separate income
tax returns on a December 31 fiscal year.

     Provisions for income taxes are based upon earnings  reported for financial
statement  purposes and may differ from amounts  currently payable or receivable
because  certain amounts may be recognized for financial  reporting  purposes in
different  periods than they are for income tax purposes.  Deferred income taxes
result from temporary  differences  between the financial  statement  amounts of
assets and  liabilities  and their  respective tax bases. A valuation  allowance
reduces  the  deferred  tax  assets  when it is more  likely  than not that some
portion or all of the deferred tax assets will not be realized.

CASH EQUIVALENTS

     The Company  considers  all highly  liquid  investments  with a maturity of
three months or less when purchased to be cash equivalents.

<PAGE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

     The Company  considers  the recorded  value of its  financial  instruments,
which  consist  primarily  of cash  and  cash  equivalents,  trade  receivables,
accounts   payable,   and  short-term  debt  payable  and  vendor  financing  to
approximate the fair value of the respective assets and liabilities at March 31,
2004 and December 31, 2002.

EARNINGS PER SHARE

     The Company follows  Statement of Financial  Accounting  Standards No. 128,
"Earnings per Share"  (Statement  128) whereby basic earnings per share excludes
any dilutive effects of options, warrants and convertible securities and diluted
earnings  per share  includes  such  effects.  The Company  does not include the
effects of stock option,  warrants and  convertible  securities for periods when
the Company reports a net loss as such effects would be antidilutive.

STOCK BASED COMPENSATION

     The Company  accounts  for  stock-based  compensation  to  employees  under
Accounting  Principles  Board ("APB") No. 25 -  "Accounting  for Stock Issued to
Employees",  and complies with the  disclosure  requirements  for SFAS No. 123 -
"Accounting  for  Stock-Based  Compensation"  and SFAS No. 148 - "Accounting for
Stock-Based Compensation - Transition and Disclosure."

DIVIDENDS

     The Company has not paid cash dividends to the  stockholders  of its common
stock and any cash dividends that may be paid in the future will depend upon the
financial  requirements of the Company and other relevant  factors.  On June 19,
2002, the Company declared a 10% stock dividend to holders of record on July 15,
2002.  100% stock splits in the form of a stock  dividend were  announced by the
Company on August 6, 2003 with a record  date of August 18, 2003 and on December
29, 2003 with a record date of January 10, 2004. Common stock as reported in the
financial  statements  has been  adjusted for all periods to reflect these stock
dividends.

FOREIGN CURRENCIES

     Financial  statements of the Company's foreign  subsidiaries are translated
from the functional  currency,  generally the local currency,  to U.S.  Dollars.
Assets and liabilities are translated at the exchange rates on the balance sheet
date.   Results  of  operations  are  translated  at  average   exchange  rates.
Accumulated  other  comprehensive   income  in  the  accompanying   consolidated
statements of stockholders'  equity consists entirely of the resulting  exchange
difference.

USE OF ESTIMATES

     The preparation of the consolidated financial statements in conformity with
U.S.  generally  accepted  accounting  principles  requires  management  to make
estimates, judgments, and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent  assets and liabilities at the date
of the consolidated financial statements and the reported amounts of revenue and
expenses during the reporting period.  Because of the use of estimates  inherent
in the  financial  reporting  process,  actual  results  could differ from those
estimates.  Areas in which significant judgments and estimates are  used include
receivable  collectibility and deferred tax valuation allowances.  There were no
material  changes to the estimates  made by the Company this year as compared to
last year.

<PAGE>

RECLASSIFICATIONS

     Certain balances in the 2003, 2002 and 2001 financial  statements have been
reclassified to conform to the 2004 presentation.

                                              2. INVENTORIES
                                              (in thousands)

<TABLE>
<CAPTION>
                                                                          March 31,          December 31,
        Inventories consist of the following:                                2004                2002
                                                                             ----                ----
            <S>                                                             <C>                 <C>
            Merchandise inventory                                            $7,834              $7,609
            Healthcare services inventory                                       247                 240
            Demonstration inventory, net                                        826                 840
            Parts and peripherals                                             1,456               1,657
                                                                              -----               -----
                                                                            $10,363             $10,346
                                                                            =======             =======
</TABLE>

<TABLE>
<CAPTION>

                                      3. PROPERTY AND EQUIPMENT, NET
                                              (in thousands)

                                                                             March 31,        December 31,
         Property and equipment, net consists of the following:                2004               2002
                                                                               ----               ----
           <S>                                                                 <C>                <C>
           Furniture and equipment                                             $7,616             $5,408
           Vehicles                                                               109                109
           Leasehold improvements                                               6,747              5,594
                                                                                -----              -----
                                                                               14,472             11,111
         Less: accumulated depreciation and amortization                       (5,571)            (3,983)
                                                                               -------            -------
                                                                               $8,901             $7,128
                                                                               ======             ======
</TABLE>


                                     4. DEBT

SHORT TERM

     The Company has a $1,750,000  credit  facility with M&T Bank for short-term
working capital needs,  standby letters of credit,  and spot and forward foreign
exchange transactions.  Balances outstanding under the facilities are payable on
demand, fully secured and collateralized by government  securities acceptable to
the Bank having an aggregate fair market value of not less than  $1,945,000.  As
of  March  31,  2004,   letters  of  credit  issued  by  the  bank  amounted  to
approximately  $420,000 and $883,000  was  outstanding  under the line of credit
facility.  Borrowings  under the credit  facility bear interest at 1% over three
month London Interbank Offered Rate (LIBOR).

     The Company's hospital has short term financing  arrangements in China with
Hongkong  Shanghai Banking Corp. (HSBC) for up to $600,000 in revolving loans or
standby  credit.  Terms of the agreement are  customary,  with the interest rate
being 1.75% over the  three-month  Singapore  Interbank  Money Market Offer Rate
(SIBOR).  The hospital  has agreed to utilize HSBC for a certain  portion of its
patient  payments via credit cards. As of March 31, 2004 this line of credit had
$600,000 outstanding.

     Also, a new line of credit is included in the arrangement  with HSBC for up
to $1,200,000,  bearing  interest at 2.25% over SIBOR and having a term of up to
three  years.  As of  March  31,  2004,  the  balance  on this  credit  line was
$1,087,000.  The  Company on behalf of Beijing  United has  guaranteed  the full
amount of these facilities.

     The Company has an agreement with a major supplier whereby the supplier has
agreed to provide long term (one and  one-half  years on  transactions  to date)

<PAGE>

payment terms on the Company's purchases of medical equipment from the supplier.
The arrangement carries an interest component of five percent. At March 31, 2004
the Company has $2,998,000 of payables  recorded under this agreement  which are
due in fiscal year 2005.

     The following  table sets forth the Company's debt  obligations as of March
31, 2004:

                                                               (in thousands )

<TABLE>
<CAPTION>
                                TOTAL       2005        2006        2007        2008       2009     THEREAFTER
                                -----       ----        ----        ----        ----       ----     ----------
    <S>                       <C>          <C>       <C>            <C>         <C>         <C>       <C>
    Line of credit            $  2,670     $ 2,670   $      0       $ 0         $ 0         $  0      $  0
    Vendor financing             2,998       2,998          0         0           0            0         0
</TABLE>


                                            5. STOCKHOLDERS' EQUITY

COMMON STOCK

     The Class B common stock and the common stock are  substantially  identical
on a share-for-share basis, except that the holders of Class B common stock have
six votes per share on each matter considered by stockholders and the holders of
common stock have one vote per share on each matter  considered by stockholders.
Each share of Class B common stock will convert at any time at the option of the
original  holder  thereof  into one share of common  stock and is  automatically
converted  into one share of  common  stock  upon (i) the death of the  original
holder  thereof,  or, if such stocks are subject to a stockholders  agreement or
voting trust granting the power to vote such shares to another  original  holder
of Class B common stock,  then upon the death of such original  holder,  or (ii)
the sale or transfer to any person other than specified transferees.

STOCK OPTION PLAN

     The Company's 1994 Stock Option Plan (the Plan) provided for the grant,  at
the  discretion of the Board of  Directors,  of (i) options that are intended to
qualify as incentive stock options  (Incentive Stock Options) within the meaning
of Section 422A of the Internal Revenue Code to certain  employees,  consultants
and directors,  and (ii) options not intended to so qualify  (Nonqualified Stock
Options) to employees,  consultants  and directors.  On April 27, 2004, the Plan
terminated by its terms and no additional options may be granted thereunder.

     The following is a summary of stock option  activity  during the year ended
March 31,  2004,  the three  months  ended  March 31,  2003 and the years  ended
December 31, 2002 and 2001:

<TABLE>
<CAPTION>
                                        Weighted               Weighted                Weighted                Weighted
                                        Average                Average                 Average                 Average
                                        Exercise               Exercise                Exercise                Exercise
                              2004        Price       2003       Price        2002       Price        2001       Price
                            ---------   --------   ---------   --------      -------   --------     -------    --------
<S>                         <C>            <C>       <C>          <C>        <C>           <C>       <C>          <C>
Options outstanding,
beginning of year:          1,053,416      $2.29     929,416      $2.35      838,404       $2.54     840,084      $2.49
     Granted                   20,000       2.60     124,000       1.90      128,508        2.60     112,240       2.34
     Exercised               (110,196)      2.25           0       0         (37,300)       2.18           0       0
     Canceled                 (14,520)      2.49           0       0            (196)       2.08    (113,920)      2.05
                            ---------      -----   ---------      -----      -------       -----     -------      -----
Options outstanding,
End of year                   948,700       2.30   1,053,416       2.29      929,416        2.35     838,404       2.54
                            =========      =====   =========      =====      =======       =====     =======
</TABLE>

<PAGE>

     Options  exercisable at March 31, 2004,  March 31, 2003,  December 31, 2002
and 2001,  were  919,360,  1,010,476,  886,752 and 736,128,  respectively,  with
weighted average exercise prices of $2.30, $2.28, $2.34 and $2.55, respectively.
The weighted  average  exercise price of options  outstanding  is $2.30,  $2.29,
$2.35 and $2.54 and the  weighted  average  remaining  contractual  life of such
options is 6.77,  7.73,  7.68 and 8.6 years  respectively  as of March 31, 2004,
March 31, 2003, December 31, 2002 and 2001

     The Company  accounts  for  stock-based  compensation  to  employees  under
Accounting  Principles  Board  Opinion  ("APB") No. 25 -  "Accounting  for Stock
Issued to Employees", and complies with the disclosure requirements for SFAS No.
123 - "Accounting for Stock-Based  Compensation"  and SFAS No. 148 - "Accounting
for Stock-Based Compensation - Transition and Disclosure." Had compensation cost
for these plans been determined  consistent with SFAS No. 123, the Company's net
earnings and earnings per share ("EPS") would have been reduced to the following
pro-forma amounts (in thousands, except share data):

<TABLE>
<CAPTION>
                                                                2004          2003          2002           2001
                                                              --------      --------      --------       --------
        <S>                                                   <C>               <C>          <C>            <C>
        Net (loss) income, as reported                        $(1,987)          $76          $259           $384
        Deduct: total stock-based employee compensation
        expense determined under fair value method for all
        awards, net of related tax effects                        (18)          (36)          (24)           (86)
                                                              --------      --------      --------       --------
        Net (loss) income, pro-forma                          $(2,005)          $40          $235           $298
                                                              ========      ========      ========       ========
        Pro forma earnings per share:
        EPS, basic             As reported                      $(.53)          .02          $.07           $.10
        EPS, basic             Pro forma                        $(.53)          .02          $.06           $.08
        EPS, diluted           As reported                      $(.53)          .01          $.07           $.10
        EPS, diluted           Pro forma                        $(.53)          .01          $.06           $.08
</TABLE>


     The fair value of each  option is  estimated  at the date of grant  using a
modified Black-Scholes option pricing model, with the following weighted-average
assumptions for 2003, 2002 and 2001:  dividend yield 0.00%;  expected volatility
of 62.3%;  risk-free interest rate of 3.00%; and expected life of 7.0 years. For
March 2004: dividend yield 0.00%; expected volatility 99.8%;  risk-free interest
rate 2.00%; expected life 7.0 years.

RECENT ISSUANCE OF SECURITIES

     As of March 29,  2004,  the  Company  entered  into a  securities  purchase
agreement  with a limited  number of accredited  investors  pursuant to which we
agreed to issue and the  investors  agreed to  purchase  at a price of $9.00 per
share 1,500,000  shares of our common stock,  together with warrants to purchase
an additional  300,000 shares of our common stock at an exercise price of $12.00
per share, for an aggregate  purchase price of $13,500,000.  The net proceeds to
the Company  from the  financing,  after  deducting  expenses  of the  financing
including  placement  agent  fees,  were  $12,300,000.  In  connection  with the
financings,  we also agreed to issue the placement agent  five-year  warrants to
purchase  90,000  shares of our common stock at an exercise  price of $12.00 per
share.  On March 31 and April 1, 2004,  the initial  closings  of the  financing
occurred at which a total of 600,000  shares of our common stock  together  with
warrants  to  purchase  120,000  shares of our common  stock were  issued to the
investors.  In connection  with the initial  closings,  the placement  agent was
issued warrants to purchase 36,000 shares of our common stock. The final closing
of the financing took place on May 5, 2004 at which the remaining 900,000 shares
of common stock together with the remaining  warrants to purchase 180,000 shares
of our common  stock were issued to the  investors. In connection with the final

<PAGE>

closing,  the  placement  agent was issued the  remaining  warrants  to purchase
54,000 shares of our common stock.

SHARES OF COMMON STOCK RESERVED

     As of March 31, 2004, the Company had reserved  3,656,848  shares of common
stock for issuance  upon  exercise of remaining  private  placement  securities,
stock options and Class B common stock convertibility.

                              6. EARNINGS PER SHARE

     The following is a reconciliation of the numerators and denominators of the
basic and diluted Earnings per Share (EPS) computations for net income and other
related disclosures: (thousands except share and per share data)

<TABLE>
<CAPTION>
                                                                             Three months
                                              Year ended     Three months    ended March      Year ended       Year ended
                                               March 31,     ended March       31, 2002      December 31,     December 31,
                                                 2004          31, 2003      (unaudited)         2002             2001
                                               ---------      ---------       ---------       ---------        ---------
    <S>                                         <C>            <C>             <C>             <C>              <C>
    Net (loss) income                             $(1,987)           $76           $(192)           $259             $384
    Weighted average shares outstanding-
    basic                                       3,758,170      3,708,232       3,672,460       3,699,052        3,667,204
    Basic earnings per share                        $(.53)          $.02           $(.05)           $.07             $.10
    Effect of dilutive securities:
       Shares issuable upon exercise
    of     dilutive outstanding stock
    options:                                            0          7,676               0          97,288          283,432
    Weighted average shares outstanding-
    diluted                                     3,758,170      3,715,908       3,672,460       3,796,340        3,950,636
    Diluted earnings per share                      $(.53)          $.02           $(.05)           $.07             $.10
</TABLE>



For the periods in which losses were incurred, shares issuable upon exercises of
stock  options are excluded  from diluted  earnings per share because the effect
would be anti-dilutive.

<PAGE>

                                 7. INCOME TAXES

     The Company's  (provision  for) income taxes  consists of the following for
the year ended March 31, 2004,  three months ended March 31, 2003, and the years
ended December 31, 2002 and 2001:

                                                        (in thousands)
                                              2004     2003     2002     2001
                                              ----     ----     ----     ----
    Current:
         Federal                              $-       $--      $--      $-
         Foreign                              356       80      545      249
          State                                 0        0        0       34
                                              ---      ---      ---      ---
                                              187       80      545      283
     Deferred:
         Federal                             (208)       0     (681)    (190)
         State                                 (2)       0     (104)     (42)
         Foreign                              (82)       0        0     (128)
                                              ---      ---      ---      ---
                                             (292)       0     (785)    (360)
                                              ---      ---      ---      ---
                                             $(64)     $80    $(240)    $(77)
                                              ---      ---      ---      ---
                                              ===      ===      ===      ===

         Significant  components of the Company's  deferred tax  liabilities and
assets are as follows for the years ended March 31, 2004 and December 31, 2002:

                                                                2004       2002
                                                                ----       ----
    Deferred tax liabilities:
         Unremitted earnings on Foreign subsidiaries              $0         $0

    Deferred tax assets:
         Allowance for doubtful accounts                         286        286
         Sales Commissions                                       181        114
         Net operating loss carryforwards                      2,463        949
         Foreign tax credit                                      194          0
         Alternate Minimum Tax                                    47          0
         Depreciation                                             27          0
         Other                                                     0         (1)
         Subtotal                                              3,198      1,348
                                                               -----     ------
         Less valuation allowance                             (1,397)     $(456)
                                                               -----     ------
    Net deferred tax asset                                     1,801       $892
                                                               =====     ======

         The  Company's  effective  income tax rate  varied  from the  statutory
federal  income tax rate for the year ended  March 31,  2004,  the three  months
ended  March 31,  2003 and the years  ended  December  31,  2002 and 2001 are as
follows:

<TABLE>
<CAPTION>
                                                            2004           2003           2002           2001
                                                            ----           ----           ----           ----
    <S>                                                     <C>            <C>            <C>            <C>
    Statutory federal income tax rate                       34.0%          34.0%          34.0%          34.0%
    Adjustments:
         State income taxes, net of federal benefit          4.0            4.0            4.0            4.0
         Foreign tax rate differential                      (9.0)         171.0        3,036.0         (188.0)
         Use of net operating losses                         0.0           0.0       (5,289.0)         (42.0)
         Change in valuation allowance                      17.0          (38.0)      (3,474.0)         (75.0)
         Other, including permanent differences(           (49.0)        (136.0)       4,426.0          242.0
                                                            (3.0)%          35.0%      (1,263.0)%        (25.0)%
                                                           ======        =======      ==========       ========
</TABLE>

     Due to the Company's  global  restructuring  plan, it expects to be able to
make use of a substantial portion of its' U.S. federal net operating losses, and
accordingly,  recorded  $660,000 in fiscal year 2002 and $232,000 in fiscal year
2001. The Company expects the tax benefits from these net operating  losses will
be realized in 2005 or 2006.

     All  profit-seeking  hospitals  are entitled to business tax deferral for 3
years starting from the receipt of certificate  recognizing  those  hospitals as
profit-seeking.  Beijing United  received this  certificate on November 26, 2001
and as a result  Beijing  United is entitled to 3-year  business  tax  exemption
starting from  November 26, 2001 through  November 25, 2004. As of June 20, 2004
this  approval,  while only a formality,  has not been  received.  The Company's
liability is estimated at $900,000 should approval

<PAGE>

be denied. The Company has not recorded any accrual for the contingency  related
to this  matter  because  it  considers  it remote  that it will  incur this tax
liability.

     The Company has U.S.  Federal net operating  losses of  approximately  $3.2
million that expire in 2014 through  2024.  The Company also has foreign  losses
from China of approximately $559,000 that expire in 2007 and 2009.

                                 8. COMMITMENTS

LEASES

The Company  leases office space,  warehouse  space,  and space for both Beijing
United and Shanghai United under operating leases. Future minimum payments under
these noncancelable operating leases consist of the following:


                                   (in thousands)

   Year ending March 31:
               2005...........................................            $1,616
               2006...........................................             1,387
               2007...........................................             1,348
               2008...........................................             1,263
               2009...........................................             1,219
               Thereafter.....................................             3,886
                                                                         -------
               Net minimum rental commitments.................           $10,719
                                                                         =======

The above  leases  require  the Company to pay certain  pass  through  operating
expenses and rental increases based on inflation.

     Rental  expense was  approximately  $1,904,000,  $472,000,  $1,499,000  and
$1,026,000 for the year ended March 31, 2004, three months ended March 31, 2003,
and for the years ended December 31, 2002 and 2001, respectively.

                        9. CONCENTRATIONS OF CREDIT RISK

     Financial   instruments   which   potentially   subject   the   Company  to
concentrations of credit risk consist primarily of cash and cash equivalents and
trade receivables.  Substantially all of the Company's cash and cash equivalents
at  March  31,  2004 and  December  31,  2002  were  held by one U.S.  financial
institution.  All of the  Company's  sales  during the years  were to  end-users
located in China or Hong Kong.  Most of the  Company's  equipment or  consumable
sales are  accompanied by down payments of either cash and/or letters of credit.
Most of the Company's medical services provided by Beijing United were performed
in China for  patients  residing  in China.  Approximately  65% of the  payments
received for such services were  denominated  in local  currency and 35% in U.S.
dollars.

     The Company  conducts  its  marketing  and sales and  provides its services
exclusively  to buyers  located  in China,  including  Hong  Kong.  The  medical
services  and  products  provided  by the  Healthcare  Services  group  and  the
marketing of such services are performed  exclusively  for/to patients in China.
The Company's results of operations and its ability to obtain financing could be
adversely  affected if there was a deterioration in trade relations  between the
United States and China.

<PAGE>

     Of  the  Company's  assets  at  March  31,  2004  and  December  31,  2002,
approximately  $33,476,000and  $29,784,000,  respectively,  of such  assets  are
located in China,  consisting  principally  of cash,  receivables,  inventories,
leasehold improvements, equipment, and other assets. Also, see Note 10.

                       10. SIGNIFICANT CUSTOMERS/SUPPLIERS

     Substantially  all China  purchases of the Company's  U.S.-Dollar  sales of
products,  regardless of the end-user,  are made through  Chinese  foreign trade
corporations  (FTCs).  Although the purchasing decision is made by the end-user,
which may be an individual or a group having the required  approvals  from their
administrative organizations,  the Company enters into formal purchase contracts
with FTCs. The FTCs make purchases on behalf of the end-users and are authorized
by the Chinese  government to conduct  import  business.  FTCs are chartered and
regulated by the  government  and are formed to facilitate  foreign  trade.  The
Company markets its products  directly to end-users,  but in consummating a sale
the  Company  must  also  interact  with the  particular  FTC  representing  the
end-user. By virtue of its direct contractual  relationship with the FTC, rather
than the end user,  the Company is to some extent  dependent  on the  continuing
existence  of  and  contractual   compliance  by  the  FTC  until  a  particular
transaction  has been  completed.  In fiscal 2002 the Company  recorded sales to
Instrimpex FTC of $8,821,000; this is the only customer over 10% of total sales.

     Purchases from several suppliers were each over 10% of total cost of goods.
These  were  Siemens  ($14,945,000),   Becton-Dickenson  ($8,863,000),   Guidant
($11,926,000)  and  L'Oreal  ($10,311,000)  for the year ended  March 31,  2004.
Purchases  over  10%  for  the  year  ended  December  31,  2002  were  Siemens,
($11,233,000), Becton-Dickenson ($11,145,000) and L'Oreal ($7,168,000).

                              11. SEGMENT REPORTING

     The Company  has three  reportable  segments:  Medical  Capital  Equipment,
Healthcare Products Distribution and Healthcare Services.  The Company evaluates
performance  and  allocates  resources  based on profit or loss from  operations
before income taxes,  not including gains or losses on the Company's  investment
portfolio.  The following segment information has been provided per Statement of
Financial  Accounting  Standards  No.  131,  "Disclosures  about  Segments of an
Enterprise and Related Information":

For the year ended March 31, 2004:

<TABLE>
<CAPTION>
                                     Medical Capital    Healthcare Products
                                        Equipment          Distribution       Healthcare Services            Total
                                     ---------------    -------------------   -------------------        -----------
<S>                                      <C>                <C>                    <C>                   <C>
Assets                                   $23,087,000        $12,525,000            $12,339,000           $47,951,000

Sales and service revenue                $33,837,000        $38,393,000            $15,954,000           $88,183,000
Gross Profit                               9,428,000          4,788,000                    n/a                   n/a
Gross Profit %                                    28%                13%                   n/a                   n/a
(Lloss) from operations                    $(269,000)         $(643,000)             $(672,000)          $(1,582,000)
Other (expense) net                                                                                         (111,000)
Minority interest                                                                                             (8,000)
Loss on equity investment                                                                                   (222,000)
                                                                                                         ============
Loss before income taxes                                                                                 $(1,923,000)
                                                                                                         ============
</TABLE>


<PAGE>

For the three months ended March 31, 2003:

<TABLE>
<CAPTION>
                                     Medical Capital    Healthcare Products
                                        Equipment          Distribution       Healthcare Services            Total
                                     ---------------    -------------------   -------------------        -----------
<S>                                      <C>                <C>                    <C>                   <C>
Assets                                   $19,521,000        $12,571,000            $10,248,000           $42,340,000

Sales and service revenue                 $7,716,000        $10,663,000             $3,470,000           $21,849,000
Gross Profit                               2,474,000          1,097,000                    n/a                   n/a
Gross Profit %                                    32%                10%                   n/a                   n/a
Income (loss) from operations               $521,000          $(121,000)             $(178,000)             $222,000
Other (expense) net                                                                                          (66,000)
Minority interest                                                                                                  0
                                                                                                         ------------
Income before income taxes                                                                                  $156,000
                                                                                                         ============
</TABLE>

For the year ended December 31, 2002:

<TABLE>
<CAPTION>
                                     Medical Capital    Healthcare Products
                                        Equipment          Distribution       Healthcare Services            Total
                                     ---------------    -------------------   -------------------        -----------
<S>                                      <C>                <C>                    <C>                   <C>
Assets                                   $21,354,000        $10,616,000            $11,156,000           $43,126,000

Sales and service revenue                $28,708,000        $28,946,000            $12,963,000           $70,617,000
Gross Profit                               7,822,000          3,856,000                    n/a                   n/a
Gross Profit %                                    27%                13%                   n/a                   n/a
Income (loss) from operations               $198,000          $(601,000)              $536,000              $133,000
Other (expense) net                                                                                         (126,000)
Minority interest                                                                                             50,000
Loss on equity investment                                                                                    (38,000)
                                                                                                         ------------
Income before income taxes                                                                                   $19,000
                                                                                                         ============
</TABLE>

For the year ended December 31, 2001:

<TABLE>
<CAPTION>
                                     Medical Capital    Healthcare Products
                                        Equipment          Distribution       Healthcare Services            Total
                                     ---------------    -------------------   -------------------        -----------
<S>                                      <C>                <C>                     <C>                  <C>
Assets                                   $17,511,000         $8,987,000             $6,871,000           $33,369,000

Sales and service revenue                $25,819,000        $21,520,000             $8,779,000           $56,118,000
Gross Profit                               7,451,000          2,842,000                    n/a                   n/a
Gross Profit %                                    29%                13%                   n/a                   n/a
Income (loss) from operations               $439,000        $(1,316,000)              $476,000             $(401,000)
Other income, net                                                                                            726,000
Minority interest                                                                                            (18,000)
                                                                                                         ------------
Income before income taxes                                                                                  $307,000
                                                                                                         ============
</TABLE>

                     12. SELECTED QUARTERLY DATA (UNAUDITED)

                        (thousands except per share data)

<TABLE>
<CAPTION>
                                                             First                                        Fourth
                                                            Quarter     Second Quarter  Third Quarter     Quarter
                                                            -------     --------------  -------------     -------
<S>                                                          <C>           <C>             <C>            <C>
For the year ended March 31, 2004:
Revenue                                                      $20,373       $21,156         $21,630        $25,024
Gross profit from operations                                   5,670         7,152           7,506          8,247
(Loss) income before income taxes                             (1,726)          376            (502)           (71)
Net (loss) income                                             (1,338)          218            (383)          (484)
Basic (loss) earnings per share of common stock                 (.36)          .06            (.10)          (.13)
Diluted (loss) earnings per share of common stock               (.36)          .05            (.10)          (.13)
Cash dividends per share of common stock                         .00           .00             .00            .00

<PAGE>

For the three months ended March 31, 2003:
Revenue                                                      $21,849
Gross profit from operations                                   6,702
Income before income taxes                                       156
Net income                                                        76
Basic earnings per share of common stock                         .02
Diluted earnings per share of common stock                       .02
Cash dividends per share of common stock                         .00

                                                             First                                        Fourth
                                                            Quarter     Second Quarter  Third Quarter     Quarter
                                                            -------     --------------  -------------     -------
For the year ended March 31, 2002:
Revenue                                                      $15,578       $14,968         $17,801        $22,270
Gross profit from operations                                   4,656         4,973           6,361          7,078
(Loss) income before income taxes                               (305)         (612)            400            536
Net (loss) income                                               (192)         (411)            176            686
Basic (loss) earnings per share of common stock                 (.05)         (.11)            .05            .19
Diluted (loss) earnings per share of common stock               (.05)         (.11)            .04            .19
Cash dividends per share of common stock                         .00           .00             .00            .00
</TABLE>


ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING  AND
          FINANCIAL DISCLOSURE.

     None.


ITEM 9A.  CONTROLS AND PROCEDURES

The Company  maintains  disclosure  controls and procedures that are designed to
ensure that information  required to be disclosed in the Company's  reports that
are filed with the Securities and Exchange Commission is recorded, processed and
reported  within  the time  periods  required  for  each  report  and that  such
information  is  reported  to the  Company's  management,  including  its  Chief
Executive Officer and Chief Financial Officer,  as appropriate,  to allow timely
decisions regarding required disclosure.

     As of March 31,  2004,  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.  Based on that evaluation, the Company's Chief Executive Officer
and  Chief  Financial  Officer  concluded  that,   notwithstanding  the  matters
described below, the Company's  disclosure controls and procedures are effective
in  timely  alerting  them  to  material  information  relating  to the  Company
(including its  consolidated  subsidiaries)  which is required to be included in
its publicly filed reports.  In early June 2004, in connection with the audit of
our financial  statements for fiscal 2004, our independent  auditors informed us
that  heightened  new standards  suggest that they  characterize  three items as
material weaknesses in the Company's internal controls. The independent auditors
have completed their work and nonetheless have rendered an unqualified report on
our financial  statements as contained  elsewhere  herein.  Other than the three
items described below, there have been no significant  changes during the fourth
quarter  ended March 31,  2004 in the  Company's  internal  controls or in other
factors  which  could   significantly   affect  internal   controls  since  that
evaluation.

     The  independent   auditors  initially  were  not  able  to  test  accounts
receivable  at  Beijing  United  and  the  total  postings  could  not be  fully
reconciled with the general  ledger.  This issue was found to be the result of a
software  writing problem in connection with an outsourced  software  upgrade to
the systems at Beijing  United.  The software  provider is remedying  the system
problem.  The  reconciliation  of all  postings  with  the  general  ledger  was
ultimately  fully  achieved  and tested by measures  outside of the  system.  We
anticipate  this  matter  to be  resolved  in time for our  report  on the first
quarter of fiscal 2005.

<PAGE>

The auditors also informed the Audit Committee and management that the Company's
existing level of tax expertise appeared to be insufficient in the United States
and China and that this was a  material  weakness.  For  example,  in the United
States, the Company's tax benefit provision had to be recomputed at the close of
the audit. The auditors in prior periods had assisted the Company in the complex
computation  of this  number  but in  light of  heightened  new  standards,  the
auditors  have  notified  us that they will no  longer do so.  Accordingly,  the
Company has decided to retain  additional  outside tax  expertise as well as add
personnel to its U.S. finance  department.  The auditors also expressed the view
that our level of tax expertise in China needed to be increased. We already have
added  qualified tax staff in China.  We expect to have our tax expertise  fully
upgraded in time for our report on the first quarter of fiscal 2005.

     Finally,  the  independent  auditors  indicated the need for  procedures to
improve  the  financial  statement  close  process.  We have  already  begun  to
supplement  our resources in this regard by increasing  staff in the process and
further  formalizing the closing process,  among other  improvements.  We expect
that these  procedures  will be  implemented in time for our report on the first
quarter of fiscal 2005.

The  implementation  of the  initiatives  described  above are among our highest
priorities.  Our Board of Directors,  in coordination  with our Audit Committee,
will  continually  assess the progress and sufficiency of these  initiatives and
make adjustments,  if necessary.  As of the date of this report, we believe that
our plans, when completed,  will eliminate the weaknesses in internal accounting
control as described above.  Nonetheless,  a control system,  no matter how well
designed and operated,  cannot provide absolute assurance that the objectives of
the control  system are met, and no evaluation of controls can provide  absolute
assurance that all control issues have been detected.








                                    PART III

ITEM 10.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

     Information  required  is  set  forth  in the  Proxy  Statement,  which  is
incorporated herein by reference.

ITEM 11.   EXECUTIVE COMPENSATION

     Information  required  is  set  forth  in the  Proxy  Statement,  which  is
incorporated herein by reference.

ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information  required  is  set  forth  in the  Proxy  Statement,  which  is
incorporated herein by reference.

ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information  required  is  set  forth  in the  Proxy  Statement,  which  is
incorporated herein by reference.

<PAGE>

ITEM 14.   PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Information  required  is  set  forth  in the  Proxy  Statement,  which  is
incorporated herein by reference. PART IV

ITEM 15.   EXHIBITS AND REPORTS ON FORM 8-K

(a)(1) The following consolidated financial statements of Chindex International,
Inc. are included in Part II, Item 8:

     Independent Auditors' Report. Consolidated Statements of Operations for the
year ended March 31, 2004,  three months ended March 31, 2003,  unaudited  three
months  ended  March 31, 2002 and the years  ended  December  31, 2002 and 2001.
Consolidated  Balance  Sheets  as of March  31,  2004  and  December  31,  2002.
Consolidated  Statements of Stockholders'  Equity for the period ended March 31,
2004, and the years ended December 31, 2002 and 2001. Consolidated Statements of
Cash Flows for the years  ended March 31,  2004,  three  months  ended March 31,
2003,  unaudited  three months ended March 31, 2002 and the years ended December
31, 2002 and 2001. Notes to Consolidated Financial Statements.

(a)(2) The following  financial  statement schedule of Chindex  International is
included in Item 15(d):

Schedule II  Valuation and Qualifying Accounts.

<TABLE>
<CAPTION>
                                                    Balance
                                                   beginning     Additions    Additions not                 Balance end
Description (amounts in thousands)                  of year       expensed       expensed      Deductions     of year
----------------------------------                  -------       --------       --------      ----------     -------
<S>                                                   <C>           <C>            <C>              <C>          <C>
For the year ended March 31, 2004:
Allowance for doubtful receivables                    $1,001          $777                           647       $1,131
Deferred income tax valuation allowance                  456           278          663                         1,397
                                                      ------        ------           --            -----       ------
   Total allowances deducted from assets              $1,457        $1,055         $663             $647       $2,528
For the three months ended March 31, 2003:
Allowance for doubtful receivables                      $883          $118                                     $1,001
Deferred income tax valuation allowance                  456                                           0          456
                                                      ------        ------           --            -----       ------
   Total allowances deducted from assets              $1,339          $118           $0               $0       $1,457
For the year ended December 31, 2002:
Allowance for doubtful receivables                      $604          $279                                       $883
Deferred income tax valuation allowance                1,446                                         990          456
                                                      ------        ------           --            -----       ------
   Total allowances deducted from assets              $2,050          $279           $0             $990       $1,339
For the year ended December 31, 2001:
Allowance for doubtful receivables                      $604                                                     $604
Deferred income tax valuation allowance                3,081                                       1,635        1,446
                                                      ------        ------           --            -----       ------
   Total allowances deducted from assets             $3,685             $0           $0           $1,635       $2,050
</TABLE>

All other  schedules for which  provision is made in the  applicable  accounting
regulation of the Securities and Exchange  Commission are not required under the
related instructions or are inapplicable and, therefore, have been omitted.


<PAGE>

(a)(3)  Exhibits

The exhibits listed below are filed as a part of this annual report:
3.1      Certificate of Incorporation of the Company.  Incorporated by reference
         to Annex B to the Company's Proxy Statement on Schedule 14A, filed with
         the  Securities  and Exchange  Commission on or about June 7, 2002 (the
         "Proxy Statement")
3.2      Amendment to Certificate of Incorporation of the Company.  Incorporated
         by  reference  to Exhibit 3.2 to the  Company's  Form 10-Q for the nine
         months ended December 31, 2003.
3.3      By-laws of the  Company.  Incorporated  by  reference to Annex C to the
         Proxy Statement.
4.1      Form  of  Specimen   Certificate   of  the   Company's   Common  Stock.
         Incorporated by reference to Exhibit 4.2 to the Company's  Registration
         Statement  on  Form  SB-2  (No.   33-78446)   (the  "IPO   Registration
         Statement").
4.2      Form of Specimen  Certificate of Class B Common Stock.  Incorporated by
         reference to Exhibit 4.3 to the IPO Registration Statement.
10.1     The  Company's  1994 Stock Option Plan, as amended as of July 17, 2001.
         Incorporated  by reference to Exhibit 10.1 to the  Company's  Quarterly
         Report on Form 10-Q for the six months ended June 30, 2001.
10.2     Lease  Agreement,  dated as of March  1994,  between  the  Company  and
         Central  Properties  Limited  Partnership,  relating  to the  Company's
         Bethesda, Maryland facility.  Incorporated by reference to Exhibit 10.4
         to the IPO Registration Statement.
10.3     First  Amendment  to  Lease,  dated as of June 26,  1996,  between  the
         Company  and  Central  Properties  Limited  Partnership,   relating  to
         additional  space  at  the  Company's   Bethesda,   Maryland  facility.
         Incorporated  by  reference  to Exhibit  10.5 to the  Company's  Annual
         Report on Form 10-KSB for the fiscal year ended December 31, 1997.
10.4     Lease Agreement between the School of Posts and  Telecommunications and
         the  Company  dated  November 8, 1995.  Incorporated  by  reference  to
         Exhibit  10.14 to the  Company's  Annual  Report on Form 10-KSB for the
         fiscal year ended December 31, 1995.
10.5     Amendments  Numbers One, Two and Three to the Lease  Agreement  between
         the  School  of Posts  and  Telecommunications  and the  Company  dated
         November  8,  1995,  each  such  amendment  dated  November  26,  1996.
         Incorporated  by reference  to Exhibit  10.13 to the  Company's  Annual
         Report on Form 10-KSB for the fiscal year ended December 31, 1997.
10.6     Lease  Agreement  dated May 10,  1998,  between the School of Posts and
         Telecommunications  and the Company relating to the lease of additional
         space.  Incorporated  by  reference to Exhibit  10.13 to the  Company's
         Annual  Report on Form  10-KSB for the fiscal year ended  December  31,
         1998.
10.7     Contractual  Joint  Venture  Contract  between the  Chinese  Academy of
         Medical  Sciences  Union Medical &  Pharmaceutical  Group Beijing Union
         Medical &  Pharmaceutical  General  Corporation and the Company,  dated
         September 27, 1995.  Incorporated  by reference to Exhibit 10.16 to the
         Company's  Annual  Report on Form  10-KSB  for the  fiscal  year  ended
         December 31, 1995.
10.8     First  Investment  Loan Manager Demand  Promissory  Note dated July 10,
         1997  between  First  National  Bank  of  Maryland  and  Chindex,  Inc.
         Incorporated  by reference  to Exhibit  10.16 to the  Company's  Annual
         Report on Form 10-KSB for the fiscal year ended December 31, 1997.
10.9     Distribution  Agreement  dated October 11, 2001 between  Siemens AG and
         the  Company,  Incorporated  by  reference  to  Exhibit  10.18  to  the
         Company's  Quarterly  Report  on Form  10-Q for the nine  months  ended
         September 30, 2001.
10.10    Second amendment to lease,  dated as of November 24, 2000,  between the
         Company and Central  Properties  Limited  Partnership,  relating to the
         extension  of the  lease  term  for the  Company's  Bethesda,  Maryland
         offices.  Incorporated  by reference to Exhibit  10.19 to the Company's
         Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
10.11    Employment  Agreement,  dated as of  September  1,  2001,  between  the
         Company and Roberta Lipson.  Incorporated by reference to Exhibit 10.20
         to the  Company's  Annual Report on Form 10-K for the fiscal year ended
         December 31, 2001.
10.12    Employment  Agreement,  dated as of  September  1,  2001,  between  the
         Company and Elyse Beth Silverberg. Incorporated by reference to Exhibit
         10.21 to the  Company's  Annual Report on Form 10-K for the fiscal year
         ended December 31, 2001.
10.13    Employment  Agreement,  dated as of  September  1,  2001,  between  the
         Company and Lawrence Pemble. Incorporated by reference to Exhibit 10.22
         to the  Company's  Annual Report on Form 10-K for the fiscal year ended
         December 31, 2001.

<PAGE>

10.14    Employment  Agreement,  dated as of  September  1,  2001,  between  the
         Company and Robert C. Goodwin, Jr. Incorporated by reference to Exhibit
         10.23 to the  Company's  Annual Report on Form 10-K for the fiscal year
         ended December 31, 2001.
10.15    Contractual Joint Venture Contract between Shanghai  Changning District
         Central Hospital and the Company, dated February 9, 2002.  Incorporated
         by reference to Exhibit  10.24 to the  Company's  Annual Report on Form
         10-K for the fiscal year ended December 31, 2001.
10.16    Lease Agreement  between Shanghai  Changning  District Hospital and the
         Company related to the lease of the building for Shanghai United Family
         Hospital.  Incorporated  by reference to Exhibit 10.25 to the Company's
         Annual Report on Form 10-K for the fiscal year ended December 31, 2001.
10.17    Lease Agreement between China Arts & Crafts Import & Export Corporation
         and Chindex (Beijing)  Consulting  Incorporated related to the lease of
         the building for the Company's main office in Beijing+. Incorporated by
         reference to Exhibit  10.17 to the Company's  Quarterly  Report on Form
         10-Q for the six months ended June 30, 2002.
10.18    Agreement  between  Siemens AG and the Company for long term payment of
         vendor  invoices.  Incorporated  by reference  to Exhibit  10.18 to the
         Company's  Quarterly  Report  on Form  10-Q for the nine  months  ended
         September 30, 2002.
10.19    Form of Securities  Purchase Agreement dated as of March 29, 2004 among
         the Company and the purchasers thereunder. Incorporated by reference to
         Exhibit 10.19 to the Company's  Registration Statement on Form S-1 (No.
         333-114299).
21.1     List of subsidiaries.  Incorporated by reference to Exhibit 21.1 to the
         Company's Annual Report on Form 10-K for the fiscal year ended December
         31, 2002.
23.1     Consent of Ernst & Young LLP, Independent Auditors (filed herewith).
31.1     Certification  of the Company's  Chief  Executive  Officer  Pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
31.2     Certification  of  the  Company's   Executive  Vice  President  Finance
         Pursuant  to  Section  302 of the  Sarbanes-Oxley  Act of  2002  (filed
         herewith)
31.3     Certification of the Company's Principal Accounting Officer Pursuant to
         Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.1     Certification  of the Company's  Chief  Executive  Officer  Pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
32.2     Certification  of  the  Company's   Executive  Vice  President  Finance
         Pursuant  to  Section  906 of the  Sarbanes-Oxley  Act of  2002  (filed
         herewith)
32.3     Certification of the Company's Principal Accounting Officer Pursuant to
         Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)

- -- -- -- -- -- -- -- -- --
*  Confidential  treatment has been granted as to a portion of this  Exhibit.
+  English translation of summary from Chinese original.


b.   Reports on Form 8-K

1.   On February 12, 2004,  the Company  filed a Form 8-K  announcing  its third
     quarter and nine month results for the period ended December 31, 2003.

2.   On February  14,  2004,  under Item 12, the Company  announced  its revenue
     guidance as stated in an attached press release.

3.   On March 1, 2004,  under item 12, the Company  filed a Form 8-K  correcting
     prior filings for mathematical errors.

4.   On March 29,  2004,  under  item 12, the  Company  announced  a  securities
     purchase  agreement  relating to the  placement  of its common stock for an
     aggregate purchase price of $13.5 million.

<PAGE>

c.   Exhibits.

     The response to this portion of Item 15 is submitted as a separate  section
of this report.

d. Financial Statement Schedule.

     The response to this portion of Item 15 is submitted as a separate  section
of this report.

<PAGE>



                                   SIGNATURES

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


                                     CHINDEX INTERNATIONAL, INC.

Dated: June 28, 2004                 BY: /S/ ROBERTA LIPSON
                                         ----------------------
                                         Roberta Lipson
                                         President and Chief Executive Officer

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant in the capacities and on the dates indicated.

Dated: June 28, 2004                 BY: /S/ ROBERTA LIPSON
                                         ------------------
                                         Roberta Lipson
                                         Chairperson of the Board of Directors,
                                         Chief Executive Officer and President



Dated: June 28, 2004                 BY: /S/ ELYSE BETH SILVERBERG
                                         -------------------------
                                         Elyse Beth Silverberg
                                         Executive Vice President,
                                         Secretary and Director

Dated June 28, 2004                  BY: /S/  LAWRENCE PEMBLE
                                         --------------------
                                         Lawrence Pemble
                                         Executive Vice President-Finance
                                         and Director

Dated: June 28, 2004                 BY: /S/ ROBERT C. GOODWIN, JR.
                                         --------------------------
                                         Robert C. Goodwin, Jr.
                                         Executive Vice President of Operations,
                                         Treasurer, General Counsel and Director

Dated: June 28, 2004                 BY: /S/ RONALD ZILKOWSKI
                                         --------------------
                                         Ronald Zilkowski
                                         Senior Vice President Finance
                                         and Controller

Dated: June 28, 2004                 BY: /S/ A. KENNETH NILSSON
                                         ----------------------
                                         A. Kenneth Nilsson
                                         Director

Dated: June 28, 2004                 BY: /S/ JULIUS Y. OESTREICHER
                                         -------------------------
                                         Julius Y. Oestreicher
                                         Director

Dated: June 28, 2004                 BY: /S/ CAROL R. KAUFMAN
                                         ------------------------
                                         Carol R. Kaufman
                                         Director