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

FORM 10-QSB

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

For the fiscal quarter ended: June 30, 2003

Commission file number: 333-36666

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

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

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

(561) 998-3020 (Registrant's
telephone number, including area code)

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

Yes X No
----- -----

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of July 17, 2003: 51,516,977 shares of common stock, $.005 par
value per share.

IBX GROUP, INC. AND SUBSIDIARIES
FORM 10-QSB
QUARTERLY PERIOD ENDED JUNE 30, 2003
INDEX

Page
PART I - FINANCIAL INFORMATION ----

Item 1 - Consolidated Financial Statements

Consolidated Balance Sheet (Unaudited) June 30, 2003 .............3

Consolidated Statements of Operations (Unaudited)
For the Three and Six Months Ended June 30, 2003 and 2002.........4

Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended June 30, 2003 and 2002...................5

Notes to Consolidated Financial Statements (Unaudited).........6-15

Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations.................16-22

Item 3 - Control and Procedures...........................................23

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings................................................23

Item 2 - Changes in Securities and Use of Proceeds.....................23-24

Item 4 - Submission of Matters to a Vote of Security Holders..............24

Item 6 - Exhibits and Reports on Form 8-K.................................24

Signatures................................................................24

-2-

IBX GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30, 2003
(Unaudited)

ASSETS

Current assets:

Cash .................................................................. $ 54,669
Accounts receivable, net of allowance for doubtful accounts of $102,273 649,782
Other current assets .................................................. 27,011
-----------

Total current assets .............................................. 731,462
-----------

Property and equipment, net .............................................. 357,815
-----------

Other assets:
Intangible assets, net of accumulated amortization of $8,256 .......... 233,116
Goodwill .............................................................. 380,734
Other ................................................................. 3,126
-----------

Total other assets ................................................ 616,976
-----------

Total assets ...................................................... $ 1,706,253
===========

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Note payable .......................................................... $ 413,678
Checks outstanding in excess of bank balances ......................... 6,468
Accounts payable ...................................................... 666,412
Accrued expenses ...................................................... 121,939
Payroll taxes payable ................................................. 1,183,054
Deferred revenue ...................................................... 33,301
-----------

Total current liabilities ......................................... 2,424,852
-----------

Commitments and contingencies

Stockholders' deficit:
Preferred Stock ($0.005 par value; 4,700,000 authorized shares;
none issued and outstanding) ........................................ -
Class A Non-voting Convertible Preferred Stock ($0.005 par value;
300,000 authorized shares; 80,000 shares issued and outstanding) .... 400
Common stock ($0.005 par value; 100,000,000 authorized shares;
51,016,977 shares issued and outstanding) ........................... 255,086
Common stock issuable (3,000,000 shares) .............................. 15,000
Additional paid-in capital ............................................ 2,242,319
Accumulated deficit ................................................... (3,080,101)
Less: Stock subscription receivable ................................... (67,070)
Less: Deferred compensation and consulting ............................ (84,233)
-----------

Total stockholders' deficit ....................................... (718,599)
-----------

Total liabilities and stockholders' deficit ....................... $ 1,706,253
===========

See accompanying notes to consolidated financial statements.

-3-

IBX GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

For the Three Months Ended For the Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
2003 2002 2003 2002
------------ ------------ ------------ ------------

REVENUES ....................................... $ 979,672 $ 745,613 $ 2,205,483 $ 1,346,547
------------ ------------ ------------ ------------

OPERATING EXPENSES:
Salaries and payroll taxes ................. 576,783 303,442 1,020,094 594,774
Depreciation and amortization .............. 43,774 28,621 77,321 56,732
Professional fees .......................... 46,479 30,803 140,534 84,604
Rent ....................................... 81,141 53,898 187,950 105,800
Other selling, general and administrative .. 503,465 222,163 998,465 411,747
------------ ------------ ------------ ------------

Total Operating Expenses ............... 1,251,642 638,927 2,424,364 1,253,657
------------ ------------ ------------ ------------

INCOME (LOSS) FROM OPERATIONS .................. (271,970) 106,686 (218,881) 92,890
------------ ------------ ------------ ------------

OTHER EXPENSES:
Interest expense ........................... (27,137) (76,922) (45,842) (156,286)
------------ ------------ ------------ ------------

Total Other Expenses ................... (27,137) (76,922) (45,842) (156,286)
------------ ------------ ------------ ------------

NET INCOME (LOSS) .............................. $ (299,107) $ 29,764 $ (264,723) $ (63,396)
============ ============ ============ ============

EARNING (LOSS) PER SHARE:

Net Income (Loss) Per Common Share - Basic . $ (0.01) $ 0.00 $ (0.01) $ (0.00)
============ ============ ============ ============
Net Income (Loss) Per Common Share - Diluted $ (0.01) $ 0.00 $ (0.01) $ (0.00)
============ ============ ============ ============

Weighted Common Shares Outstanding - Basic . 46,646,743 37,237,500 45,762,903 37,237,500
============ ============ ============ ============
Weighted Common Shares Outstanding - Diluted 46,646,743 37,237,500 45,762,903 37,237,500
============ ============ ============ ============

See accompanying note to consolidated financial statements.

-4-

IBX GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

For the Six Months
Ended June 30,
---------------------------
2003 2002
--------- ---------

Cash flows from operating activities:
Net income (loss) ...................................... $(264,723) $ (63,396)
Adjustments to reconcile net loss to net cash
used in (provided by) operating activities:
Depreciation and amortization ...................... 77,321 56,732
Non-cash compensation and consulting expense ....... 193,383 20,071
Interest expense ................................... - 1,752
Bad debt recovery .................................. (10,503) -

(Increase) decrease in:
Accounts receivable ............................. (481,209) (60,195)
Other current assets ............................ (4,696) (49,912)
Other ........................................... (3,126)

Increase (decrease) in:
Accounts payable ................................ 184,669 70,354
Accrued expenses ................................ 15,055 (173,098)
Payroll taxes payable ........................... 204,702 213,859
Customer deposits ............................... (185,925) 41,873
Deferred revenue ................................ (154,199) -
Interest payable ................................ - 109,889
--------- ---------

Net cash (used in) provided by operating activities ......... (429,251) 167,929
--------- ---------

Cash flows from investing activities:
Net cash from acquisitions ............................. 3,108 -
Purchase of property and equipment ..................... (115,306) (31,701)
--------- ---------

Net cash used in investing activities ....................... (112,198) (31,701)
--------- ---------

Cash flows from financing activities:
Proceeds from exercise of stock warrants ............... 826,900 -
Checks outstanding in excess of bank balances .......... (18,596) 48,251
Payments on loans ...................................... (235,036) (110,000)
Proceeds from loans - related parties .................. (454) 163,000
Proceeds from (payments on) advances from related party - (69,734)
--------- ---------

Net cash provided by financing activities ................... 572,814 31,517
--------- ---------

Net increase in cash ........................................ 31,365 167,745

Cash at beginning of period ................................. 23,304 2,191
--------- ---------

Cash at end of period ....................................... $ 54,669 $ 169,936
========= =========

See accompanying notes to consolidated financial statements.

-5A-

IBX GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(continued)

For the Six Months
Ended June 30,
---------------------------
2003 2002
--------- ---------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid during the period for:
Interest ............................................... $ - $ 28,000
========= =========
Income Taxes ........................................... $ - $ -
========= =========

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Loan payable-related party contributed to capital ...... $ - $ 93,000
========= =========
Common stock issued for debt and subscription receivable $ - $ 184,000
========= =========
Common stock issued and issuable for future services ... $ - $ 141,279
========= =========

Acquisition details:
Fair value of assets acquired .......................... $ 256,565 $ -
========= =========
Liabilities assumed .................................... $ 9,432 $ 168,000
========= =========
Goodwill ............................................... $ 309,527 $ -
========= =========

See accompanying notes to consolidated financial statements.

-5B-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2003
(UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF ACCOUNTING POLICIES

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

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

All of the shares and assets of the Company's primary operating subsidiary have
been pledged to secure a loan obligation to a creditor. Two of the Company's
primary officers have also pledged the shares of the Company owned by them. The
parties entered into an amended settlement agreement effective November 7, 2002
whereby the creditor agreed to dismiss his action against the Company. Pursuant
to the terms of the Agreement, the Company is obligated to make certain monthly
payments, all of which have been made to date. Mr. Dudziak, the creditor,
pursuant to the settlement agreement, has a lien and perfected security interest
on all of the assets of IBX Technologies, Inc., which is IBX's primary operating
subsidiary and on 11,550,000 shares of IBX common stock owned by Evan Brovenick
and David Blechman. As of June 30, 2003, approximately $414,000 was outstanding
on the loan. Failure to comply with the terms and conditions of the loan
documents could result in a default and the transfer of these assets and shares
to the lender.

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

Revenue derived from billing and collections and administrative services is
recognized at the completion of the service performed. Software application
revenue (from licensing) is recognized in accordance with the terms of the
specific agreements. Maintenance and support revenues are recognized over the
term of the related agreements. The Company's FHS subsidiary primarily acts as a
referral network for physical therapy patients who are referred by insurance
carriers. Revenue from providing physical therapy services was recognized upon
completion of the patient services and was recorded net of amounts due to
service providers for the fiscal year ended December 31, 2002. In 2003, the
Company re-evaluated this revenue recognition policy of the FHS subsidiary and
determined that it qualifies for the use of the Gross Method under EITF 99-19,
"Recording Revenues Gross as a Principal versus Net as an Agent". The cumulative
effect of the change in accounting principal was not material. Revenue from our
acquired subsidiaries is recognized as services are rendered.

-6-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

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

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission ("SEC"). The accompanying consolidated
financial statements for the interim periods are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the consolidated
financial position and consolidated operating results for the periods presented.
These consolidated financial statements should be read in conjunction with the
consolidated financial statements of IBX Group, Inc. for the year ended December
31, 2002 and 2001 and notes thereto contained in the Report on Form 10-KSB for
the year ended December 31, 2002 as filed with the SEC . The results of
operations for the six months ended June 30, 2003 are not necessarily indicative
of the results for the full fiscal year ending December 31, 2003.

Basic earnings per share is computed by dividing net loss by weighted average
number of shares of common stock outstanding during each period. Diluted loss
per share is computed by dividing net loss by the weighted average number of
shares of common stock, common stock equivalents and potentially dilutive
securities outstanding during each period. Diluted loss per common share is not
presented because it is anti-dilutive. At June 30, 2003, there were options and
warrants to purchase 32,852,634 shares of common stock, which could potentially
dilute future earnings per share.
Intangible assets consist of acquired goodwill, acquired websites, and acquired
customer lists. Goodwill and other intangible assets are considered to have an
indefinite life pursuant to SFAS 142 and accordingly are not amortized until
their useful life is determined to be no longer indefinite. The Company
evaluates the remaining useful life of intangible assets that are not being
amortized each reporting period to determine whether events and circumstances
continue to support an indefinite useful life. If an intangible asset that is
not being amortized is subsequently determined to have a finite useful life, the
asset is tested for impairment in accordance with SFAS144. That intangible asset
shall then be amortized prospectively over its estimated remaining useful life
and accounted for in the same manner as other intangible assets that are subject
to amortization. Other intangible assets are being amortized over a three to ten
year term. Amortizable intangibles are also evaluated periodically for
impairment. The amortization expense in the three and six month periods ended
June 30, 2003 was $8,256 and $8,256, respectively, compared to $0 and $0,
respectively, for the same periods in 2002

-7-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

NOTE 2 - ACQUISITIONS

Effective April 1, 2003, the Company acquired all of the membership interests in
NursesStat, LLC, a Florida limited liability company. The closing date occurred
in late June 2003. NursesStat is a medical staffing application service
provider. The Company accounted for this acquisition using the purchase method
of accounting in accordance with SFAS No. 141. In connection with the
acquisition, the Company issued 3,000,000 and 200,000 shares of common stock to
the sellers and a third party, respectively. The value of the 3,000,000 common
shares issued of $.137 per share or $410,400 was determined based on the average
market price of the Company's common shares over the 5-day period before and
after the terms of the acquisition were agreed to and announced (March 17,
2003). Additionally, the Company issued 200,000 common shares to consultant in
connection with the acquisition of NursesStat. These shares were values at $.18
per share, based on the grant date, for a value of $36,000. The purchase price
exceeded the fair value of net assets acquired by $404,527. The Company has
applied $95,000 of the excess to customer lists based on the present value of
future cash flows of a sales contract, which is being amortized over a 36 month
period. The remaining excess of $309,527 has been applied to goodwill. The
results of operations of NursesStat are included in the consolidated results of
operations of the Company from the acquisition date of April 1, 2003. On April
1, 2003, the Company's NurseStat subsidiary entered into two employment
agreements with its Managing Directors. The term of the agreements are for three
years with an annual base salary of $80,000 each, with an option to renew for
two additional three years periods. Additionally, each of these individual will
be entitled to a bonus of 12.5% of net profits of NursesStat, as defined.

On May 5, 2003, the Company, through its wholly-owned subsidiary IBX
Transcription Services, Inc. ("IBXT"), acquired certain assets and the business
of ITS Acquisition, Inc. d/b/a Independent Transcription Services ("ITS"), a
Florida corporation. ITS provides dictation, transcription and document
management services for the healthcare industry. As a result of the acquisition,
the Company is a provider of transcription services for the healthcare industry
and will sell its transcription technology to ITS customers. It also expects to
reduce costs through economies of scale. The Company accounted for this
acquisition using the purchase method of accounting in accordance with SFAS No.
141. In connection with the acquisition of certain assets, prior to the
acquisition date, the Company issued 150,000 shares of common stock to the
seller. The value of the 150,000 common shares issued of $.1564 per share or
$23,460 was determined based on the fair market price of the Company's common
shares over the 5-day period before and after the terms of the acquisition were
agreed to and announced (May 5, 2003). The purchase price exceeded the fair
value of net assets acquired by $17,128. The excess has been applied to customer
lists and is being amortized over a 36 month period. The results of operations
of ITS are included in the consolidated results of operations of the Company
from the acquisition date of May 5, 2003 to June 30, 2003. Effective November 4,
2002, the Company's IBXT subsidiary entered into an employment agreement. The
term of the agreement is for one year with a base salary of $36,400.
Additionally, this individual will be entitled to a bonus of 10% of net taxable
income on any new business of IBXT and a bonus of 30% of net taxable income of
IBXT any new business of the IBXT that relates specifically to certain clients
as defined in the agreement.

-8-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

NOTE 2 - ACQUISITIONS (CONTINUED)

On May 6, 2003, the Company, through its wholly-owned subsidiary, Medicompliant
Solutions II, Inc. ("Medicompliant"), acquired certain assets and the business
of Medicompliant Solutions and Legal Services, Inc. ("MSL"), a Florida
corporation. MSL provides outsourced legal compliance services for the
healthcare industry. As a result of the acquisition, the Company is expected to
be the leading provider of outsourced legal compliance services. The Company
accounted for this acquisition using the purchase method of accounting in
accordance with SFAS No. 141. The Company acquired MSL for cancellation of
approximately $20,000 owed to the Company under an informal agreement for back
rent. The Company had not recorded such rental income in prior periods since
collection was unlikely. Additionally, on May 6, 2003, Medicompliant granted an
option to a third party to purchase from Medicompliant, upon terms and
conditions as defined in the options agreement, such number of Medicompliant's
common shares as shall, after issuance, be equivalent to twenty (20%) percent of
all outstanding shares of Medicompliant, for a consideration of $.01 per share.
The results of operations of Medicompliant are included in the consolidated
results of operations of the Company from the acquisition date of May 6, 2003 to
June 30, 2003.

On May 20, 2003, the Company formed a new Florida limited liability company,
Robo Massage, LLC ("Robo"), in which the Company has an 80% interest.
Simultaneously, the Company issued 500,000 shares of common stock in connection
with a licensing agreement, whereby, Robo licensed the rights to "RoboMassage",
a programmable, interactive massage table for use in healthcare and leisure
settings. The licensor has the option to terminate the Licensing agreement at
the end of each year commencing January 2005 for year 2004 if for any such year,
the sum of royalties paid pursuant to the licensing agreement plus the
Licensor's distributions from its membership interest in Robo are less than
$25,000. Robo agreed to pay to Licensor a royalty calculated as 6% of realized
revenue, defined as cash revenue received by Robo from the sale of licensed
products. The Company valued the 500,000 common shares issued at $.1736 per
share based on the trading price on the May 20, 2003 license date or $86,800.
Amortization will begin once the Company places the license in service.

The assets acquired and liabilities assumed were as follows:

Medicompliant
IBX Transcription NursesStat Soultions II,
Services, Inc. LLC Robo Massage Inc. Total
----------------- ---------- ------------ ------------- ---------

Cash ..................... $ 2,548 $ 560 $ - $ - $ 3,108
Accounts receivable ...... 13,216 - - - 13,216
Other current assets ..... - 1,360 - - 1,360
Property and equipment ... - 26,376 - - 26,376
Patents .................. - 13,577 - - 13,577
Customer lists and license 17,128 95,000 86,800 1,267 200,195
Accounts payable ......... (9,432) - - (1,267) (10,699)
Goodwill ................. - 309,527 - - 309,527
-------- -------- ------- ------- ---------

Total purchase price ..... $ 23,460 $446,400 $86,800 $ - $ 556,660
======== ======== ======= ======= =========

-9-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

NOTE 2 - ACQUISITIONS (CONTINUED)

The following unaudited pro forma consolidated results of operations have been
prepared as if the acquisitions had occurred as of the beginning of the
following periods:

Six Months Ended Six Months Ended
June 30, 2003 June 30, 2002
---------------- ----------------

Net Revenues ....................... $ 2,215,209 $ 1,378,740
Net Loss ........................... $ (281,598) $ (416,668)
Net Loss per Share from
continuing operations ............ $ (0.01) $ (.01)

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

NOTE 3 - LOAN PAYABLE

The Company's borrowings consisted of the following at June 30, 2003:

Loan payable to an individual, payable in various
installments. The loan payable includes accrued interest and
is collateralized by all of the assets of one of the Company's
subsidiaries and 11,550,000 outstanding common shares of the
Company held by certain guarantors. See (a) below. ...................$ 413,678

Less: Current portion of loans payable ............................... (413,678)
----------
Total ................................................................$ -
==========
__________

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

-10-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

NOTE 4 - RELATED PARTY TRANSACTIONS

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

NOTE 5 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

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

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

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

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45). FIN 45 requires that upon
issuance of a guarantee, a guarantor must recognize a liability for the fair
value of an obligation assumed under a guarantee. FIN 45 also requires
additional disclosures by a guarantor in its interim and annual financial
statements about the obligations associated with guarantees issued. The
recognition provisions of FIN 45 are effective for any guarantees issued or
modified after December 31, 2002. The disclosure requirements are effective for
financial statements of interim or annual periods ending after December 15,
2002. . The adoption of this pronouncement does not have a material effect on
the earnings or financial position of the Company.

-11-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

NOTE 5 - RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS (CONTINUED)

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

In January 2003, the EITF finalized a consensus on Issue No. 02-16, "Accounting
by a Customer (Including a Reseller) for Cash Consideration Received from a
Vendor." The Task Force concluded that cash consideration in excess of specific
identifiable costs, including sales incentives, allowances, discounts, coupons,
rebates and price reductions, when meeting certain criteria, constitute a
reduction in vendor price, and should therefore be reflected as a reduction in
cost of sales when the related merchandise is sold. The EITF concluded that this
literature should be applied to new arrangements, including modifications of
existing arrangements, entered into after December 31, 2002. We adopted EITF
02-16 as of January 1, 2003. The adoption of EITF 02-16 had an immaterial impact
on our consolidated financial position and results of operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity." This statement
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. This
statement is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective for the first interim period beginning
after June 15, 2003, with certain exceptions. We plan to adopt SFAS No. 150 in
the second quarter of Fiscal 2004. We do not expect the adoption of SFAS No. 150
to have a significant impact on our consolidated financial position or results
of operations.

NOTE 6 - STOCKHOLDERS' DEFICIT

Preferred Stock

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

-12-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

NOTE 6 - STOCKHOLDERS' DEFICIT (CONTINUED)

Common Stock

In April 2003, 600,000 shares of common stock previously issuable were issued.

In April 2003, a consultant to the Company entered into separate agreements with
the Tucker Family Spendthrift Trust and the Calvo Family Spendthrift Trust
pursuant to which he has the right to purchase all of the class A warrants from
the Tucker Family Spendthrift Trust and all of the class E warrants from the
Calvo Family Spendthrift Trust. The Trusts have agreed with the consultant to
not exercise the warrants so long as the consultant purchases 1,000,000 warrants
per month from each Trust. As consideration for arranging the transaction
between the parties, the Company agreed to pay another third party a finder's
fee of $.005 per warrant for each warrant that is purchased by the consultant
and subsequently exercised. There is no financial accounting effect of these
transactions other than offsetting the fee paid against paid in capital as an
offering cost.

During the three months ended June 30, 2003, majority shareholders of the
Company and consultants exercised warrants to purchase 3,520,000 shares of
common stock at $.10 per share for proceeds of $297,400, net of fees paid of
$7,600 and subscription receivables of $47,000.

During the three months ended June 30, 2003, the Company extended the expiration
date of it $.10 warrants to December 31, 2003 and the $.20 warrants to June 24,
2004

In April 2003, in connection with the acquisition of NursesStat LLC, the Company
was required to issue 3,000,000 shares of common stock. As of June 30, 2003,
these shares have not been issued and are included in common stock issuable at
June 30, 2003. Additionally, as part of this acquisition, the Company issued
200,000 shares of common stock to a consultant for services rendered. (See note
2)

In May 2003, in connection with the acquisition of Independent Transcription
Services, Inc., the Company issued 150,000 shares of common stock. (See note 2)

In May 2003, in connection with the acquisition of a licensing agreement, the
Company issued 500,000 shares of common stock. (See note 2)

NOTE 7 - SEGMENT INFORMATION

For the three and six months ended June 30, 2003, the Company operated in two
reportable business segments - (1) healthcare transaction management and
technology services and (2) physical therapy and rehabilitation services. The
healthcare transaction management and technology services segment provides the
healthcare industry with a combination of administrative services and technology
development, including but not limited to physicians practice management,
billing and collections, network services, transcription services, staffing
solutions, and software application development. The physical therapy and
rehabilitation services segment operates multi-disciplinary clinics offering
physical therapy, occupational medicine, pain management, chiropractic care and
wellness services. The Company's reportable segments are strategic business
units that offer different products, which compliment each other. They are
managed separately based on the fundamental differences in their operations.
Information with respect to these reportable business segments for the three and
six months ended June 30, 2003 is as follows.

-13-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

NOTE 7 - SEGMENT INFORMATION (CONTINUED)

FOR THE THREE FOR THE THREE FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED MONTHS ENDED MONTHS ENDED
JUNE 30, 2003 JUNE 30, 2002 JUNE 30, 2003 JUNE 30, 2002
------------- ------------- ------------- -------------

NET REVENUES:
Healthcare Transaction
Management and Technology .... $ 801,326 $745,613 $ 1,815,310 $ 1,346,547
Physical Therapy and Rehabilitation .... 178,346 - 390,173 -
------------- ------------- ------------- -------------

Consolidated Net Revenue .... 979,672 745,613 2,205,483 1,346,547
------------- ------------- ------------- -------------

OPERATING EXPENSES:
Healthcare Transaction
Management and Technology .... 910,467 610,306 1,813,009 1,196,925
Physical Therapy and Rehabilitation .... 297,401 - 534,034 -

DEPRECIATION:
Healthcare Transaction
Management and Technology .... 42,153 28,621 73,433 56,732
Physical Therapy and Rehabilitation .... 1,621 - 3,888 -

INTEREST EXPENSE:
Healthcare Transaction
Management and Technology .... 27,137 76,922 45,842 156,286
Physical Therapy and Rehabilitation .... - - - -
------------- ------------- ------------- -------------

INCOME (LOSS):
Healthcare Transaction
Management and Technology .... $(178,431) $ 29,764 $ (116,974) $ (63,396)
Physical Therapy and Rehabilitation .... (120,676) - (147,749) -
------------- ------------- ------------- -------------

NET INCOME( LOSS) .... $(299,107) $ 29,764 $ (264,723) $ (63,396)
============= ============= ============= =============

TOTAL ASSETS AT JUNE 30, 2003:
Healthcare Transaction
Management and Technology ...................................... $ 1,309,027 $ 693,820
Physical Therapy and Rehabilitation ...................................... 397,226 -
------------- -------------

Consolidated Asset Total ...................................... $ 1,706,253 $ 693,820
============= =============

-14-

IBX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
June 30, 2003
(UNAUDITED)

NOTE 8 - GOING CONCERN

As reflected in the accompanying consolidated financial statements, the Company
has a working capital deficiency of $1,693,390 at June 30, 2003, and has an
accumulated deficit and stockholders' deficit of $3,080,101 and $718,599,
respectively, and has cash used in operations of $429,251 for the six months
ended June 30, 2003. The ability of the Company to continue as a going concern
is dependent on the continuation of profitable operations, its ability to
maintain positive cash flows from operations, and the obtaining additional
equity and/or debt financing to pay off outstanding debt obligations and unpaid
payroll taxes. There can be no assurance that the Company's efforts will be
successful. The consolidated financial statements do not include any adjustments
that might be necessary if the Company is unable to continue as a going concern.
No estimate has been made should management's plan be unsuccessful.

NOTE 9 - SUBSEQUENT EVENTS

Common Stock

Subsequent to June 30, 2003, the Company issued 2,315,000 shares of common stock
in connection with the exercise of warrants to purchase 2,315,000 shares of
common stock at $.10 per share for net proceeds of $207,500 and subscription
receivables of $24,000.

In July 2003, 2,300,000 shares of common stock were issued in exchange for
23,000 shares of Class A preferred stock. At the exchange date, the fair market
value of the issued preferred stock equaled the fair market value of the
exchanged common shares resulting in no charges to operations.

-15-

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

The following analysis of the results of operations and financial condition of
the Company should be read in conjunction with the consolidated financial
statements of IBX Group, Inc. for the year ended December 31, 2002 and 2001 and
notes thereto contained in the Report on Form 10-KSB as filed with the
Securities and Exchange Commission.

This report on Form 10-QSB contains forward-looking statements that are subject
to risks and uncertainties that could cause actual results to differ materially
from those discussed in the forward-looking statements and from historical
results of operations. Among the risks and uncertainties which could cause such
a difference are those relating to our dependence upon certain key personnel,
our ability to manage our growth, our success in implementing the business
strategy, our success in arranging financing where required, and the risk of
economic and market factors affecting us or our customers. Many of such risk
factors are beyond the control of the Company and its management.

ORGANIZATION

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

All of the shares and assets of the Company's primary operating subsidiary have
been pledged to secure a loan obligation to a creditor. Two of the Company's
primary officers have also pledged the shares of the Company owned by them.
Payments of $275,000 were recently made and the terms of the loan have been
restructured. The parties entered into an amended settlement agreement effective
November 7, 2002 whereby the creditor agreed to dismiss his action against the
Company. Pursuant to the terms of the Agreement, the Company is obligated to
make certain monthly payments, all of which have been made to date. Mr. Dudziak,
the creditor, pursuant to the settlement agreement, has a lien and perfected
security interest on all of the assets of IBX Technologies, Inc., which is IBX's
primary operating subsidiary and on 11,550,000 shares of IBX common stock owned
by Evan Brovenick and David Blechman. As of June 30, 2003, approximately
$414,000 was outstanding on the loan. Failure to comply with the terms and
conditions of the loan documents could result in a default and the transfer of
these assets and shares to the lender.

-16-

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

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THREE MONTHS ENDED JUNE 30, 2002

REVENUES

Revenues are generated from our administrative services (accounting, billing and
collection, claims processing, information management, transcription and legal
services) and from our business of providing physical therapy services to
referred patients. Revenues for the three months ended June 30, 2003 were
$979,672 as compared to revenues for the three months ended June 30, 2002 of
$745,613, an increase of $234,059 or 31%. The increase was substantially
attributable to increased collections on behalf of customers under the Company's
service contracts and revenues generated from our physical therapy clinics and
services. Additionally, the increase was due to the signing of new service
agreements and the Hilco servicing agreement, for which we recorded revenue of
$125,000 for the three months ended June 30, 2003. For the three months ended
June 30, 2003, revenues by segment consisted of the following. For the three
months ended June 30, 2002, we only operated in the health transaction
management and technology segment.

Health transaction management and technology segment $801,326
Physical therapy and rehabilitation services segment 178,346
--------

Total revenues ............................ $979,672
========

In June 2003, Hilco cancelled their service agreement with us. The cancellation
of this agreement may have an adverse effect on our revenue in the future

OPERATING EXPENSES

The Company's operating results for the quarter were materially impacted by the
start-up costs for the several acquisitions that were consummated during 2003,
including Florida HealthSource, IBX Transcription, NurseStat and MediCompliant,
all of which had losses for the quarter, while the core business remained
profitable. The Company expects that these new businesses will have
substantially increased revenues and lower expenses by the end of the year.

Salaries and payroll taxes were $576,783 for the three months ended June 30,
2003 as compared to $303,442 for the three months ended June 30, 2002. Salaries,
which consist of salaried and hourly employees, include staff used for our
administrative services, our technical development staff, marketing staff and
office personnel, and clinic staff. Overall, for the three months ended June 30,
2003, salary and payroll expenses increased by $273,341 or 90%. The increase is
attributable to an increase in billing and collections staff required to service
our growing billing and collection contracts of $61,407, increased staff related
to our physical therapy and rehabilitation segment of $124,756, and increased
staff from related to our acquisitions during the period of $87,178.

Depreciation and amortization expense for the three months ended June 30, 2003
was $43,774 as compared to $28,621 for the three months ended June 30, 2002 due
to an increase in depreciable assets from additions primarily in the Company's
subsidiary, FHS and NurseStat.

-17-

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

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2003 COMPARED TO THREE MONTHS ENDED JUNE 30, 2002
(CONTINUED)

Professional fees were $46,479 for the three months ended June 30, 2003 as
compared to $30,803 for the three months ended June 30, 2002, an increase of
$15,676 or 51%. The increase was attributable to increased legal fees associated
with our acquisitions as of June 30, 2003 as well as increased reporting
obligations as a public company.

Rent expense was $81,141 for the three months ended June 30, 2003 as compared to
$53,898 for the three months ended June 30, 2002, an increase of $27,243.
Currently, we offset our rent expense by subleasing office space to certain
entities on a month-to-month basis. Due to our growth and need for additional
space, reductions in rent expense due to sublease income has decreased.
Additionally, we incurred additional rent expense related to our physical
therapy and rehabilitation segment of $16,979 versus none in the prior period.

Other selling, general and administrative expenses, which include advertising,
insurance, contract labor, consulting expense, travel and entertainment,
telephone, and other expenses, were $503,465 for the three months ended June 30,
2003 as compared to $222,163 for the three months ended June 30, 2002 as is
summarized by segment as follows:

Health transaction management and technology segment $346,661
Physical therapy and rehabilitation services segment 156,804
--------

Total other selling, general and administrative $503,465
========

For our health transaction management and technology segment, other selling,
general administrative expenses increased by $124,498. Additional increases were
attributable to increased advertising, health insurance expense, and commissions
offset by a decrease in outside services and other expenses due to cost cutting
measures. The physical therapy and rehabilitation services segment did not exist
in the prior period.

Interest expense was $27,137 for the three months ended June 30, 2003 as
compared to $76,922 for the three months ended June 30, 2002. The decrease was
attributable to the fact that we renegotiated our primary loan to more favorable
terms in October 2002, reducing our interest rate fro 25% to 12.5%.
Additionally, we entered into an installment agreement with the U.S. Internal
Revenue Service (IRS) in October 2002 relating to unpaid payroll taxes. In
connection with this installment agreement, interest expense related to the
unpaid payroll taxes has decreased.

As a result of these factors, we reported a net loss of $(299,107) or $(.01) per
share for the three months ended June 30, 2003 as compared to net income of
$29,764 or ($.00) per share for the three months ended June 30, 2002.

-18-

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

RESULTS OF OPERATIONS

SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO SIX MONTHS ENDED JUNE 30, 2002

REVENUES

Revenues are generated from our administrative services (accounting, billing and
collection, claims processing, information management, transcription and legal
services) and from our business of providing physical therapy services to
referred patients. Revenues for the six months ended June 30, 2003 were
$2,205,483 as compared to revenues for the six months ended June 30, 2002 of
$1,346,547, an increase of $858,936 or 64%. The increase was substantially
attributable to increased collections on behalf of customers under the Company's
service contracts and revenues generated from our physical therapy clinics and
services. Additionally, the increase was due to the signing of new service
agreements and the Hilco servicing agreement, for which we recorded revenue of
$187,500 for the six months ended June 30, 2003. Additional revenues of
approximately $25,000 were derived from our second quarter acquirees. For the
six months ended June 30, 2003, revenues by segment consisted of the following.
For the six months ended June 30, 2002, we only operated in the health
transaction management and technology segment.

Health transaction management and technology segment $1,815,310
Physical therapy and rehabilitation services segment 390,173
----------

Total revenues ............................ $2,205,483
==========

In June 2003, Hilco cancelled their service agreement with us. We recognized
revenues of $187,500 during the six months ended June 30, 2003 from this
agreement. The cancellation of this agreement may have an adverse effect on our
revenue in the future

OPERATING EXPENSES

Salaries and payroll taxes were $1,020,094 for the six months ended June 30,
2003 as compared to $594,774 for the six months ended June 30, 2002. Salaries,
which consist of salaried and hourly employees, include staff used for our
administrative services, our technical development staff, marketing staff and
office personnel, and clinic staff. Overall, for the six months ended June 30,
2003, salary and payroll expenses increased by $425,320 or 71%. The increase is
attributable to an increase in billing and collections staff required to service
our growing billing and collection contracts of $89,520, increased staff related
to our physical therapy and rehabilitation segment of $248,622, and increased
staff from related to our acquisitions during the period of $87,178.

Depreciation and amortization expense for the six months ended June 30, 2003 was
$77,321 as compared to $56,732 for the six months ended June 30, 2002 due to an
increase in depreciable assets from additions primarily in the Company's
subsidiary, FHS and NurseStat.

Professional fees were $140,534 for the six months ended June 30, 2003 as
compared to $84,604 for the six months ended June 30, 2002, an increase of
$55,930 or 66%. The increase was attributable to increased legal fees associated
with our acquisitions as of June 30, 2003 as well as increased reporting
obligations as a public company.

-19-

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

Rent expense was $187,950 for the six months ended June 30, 2003 as compared to
$105,800 for the six months ended June 30, 2002, an increase of $82,150.
Currently, we offset our rent expense by subleasing office space to certain
entities on a month-to-month basis. Due to our growth and need for additional
space, reductions in rent expense due to sublease income has decreased.
Additionally, we incurred additional rent expense related to our physical
therapy and rehabilitation segment of $50,404 versus none in the prior period.

Other selling, general and administrative expenses, which include advertising,
insurance, contract labor, consulting expense, travel and entertainment,
telephone, and other expenses, were $998,465 for the six months ended June 30,
2003 as compared to $411,747 for the six months ended June 30, 2002 as is
summarized by segment as follows:

Health transaction management and technology segment $739,190
Physical therapy and rehabilitation services segment 259,275
--------

Total other selling, general and administrative $998,465
========

For our health transaction management and technology segment, other selling,
general administrative expenses increased by $327,443. During the six months
ended June 30, 2003, we recorded non-cash consulting expense of $166,000 related
to the granting of 2,000,000 warrants to a consultant. Additional increases were
attributable to increased advertising, health insurance expense, and commissions
offset by a decrease in outside services and other expenses due to cost cutting
measures. The physical therapy and rehabilitation services segment did not exist
in the prior period.

Interest expense was $45,842 for the six months ended June 30, 2003 as compared
to $156,286 for the six months ended June 30, 2002. The decrease was
attributable to the fact that we renegotiated our primary loan to more favorable
terms in October 2002, reducing our interest rate fro 25% to 12.5%.
Additionally, we entered into an installment agreement with the U.S. Internal
Revenue Service (IRS) in October 2002 relating to unpaid payroll taxes. In
connection with this installment agreement, interest expense related to the
unpaid payroll taxes has decreased.

As a result of these factors, we reported a net loss of $(264,723) or $(.01) per
share for the six months ended June 30, 2003 as compared to a net loss of
$(63,396) or ($.00) per share for the six months ended June 30, 2002.

LIQUIDITY AND CAPITAL RESOURCES

During the first part of 2002, our overall performance was hampered due to
continuing inadequacy of funding to meet our needs. During the second half of
2002 and through June 30, 2003, we received a $500,000 payment from Hilco
Receivables LLC for services and received $890,900 in cash from the exercise of
warrants. Our ability to continue as a going concern is dependent upon our
ability to attain a satisfactory level of profitability, have access to suitable
financing, satisfy our contractual obligations with creditors on a timely basis
and develop further revenue sources.

At June 30, 2003, we had a stockholders' deficit of $718,599. We have an
accumulated deficit from losses of $3,080,101. Our operations and growth during
2002 and 2003 have been funded from loans from third parties amounting to
$163,000, exercises of warrants aggregating $905,900 and the conversion of
$269,854 of loans and payables to equity. These funds were used for working
capital and capital expenditures.

-20-

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

We entered into an installment agreement with the U.S. Internal Revenue Service
in October 2002 relating to unpaid payroll taxes through June 2002, which
requires us to pay $12,000 per month for 84 months. We have incurred additional
payroll tax liabilities subsequent to June 30, 2002 which have been accrued on
the accompanying balance sheet. Additionally, we have accrued penalties and
interest on payroll tax liabilities incurred subsequent to June 30, 2002. At
June 30, 2003, accrued payroll taxes aggregated $1,183,054.

We have no other material commitments for capital expenditures. Other than cash
generated from our operations, exercise of warrants and loans and advances from
shareholders, we have no external sources of liquidity. During the six months
ended June 30, 2003, 8,815,000 warrants were exercised providing $826,900 of
cash. We expect that additional outstanding class A and class B warrants will be
exercised in the third quarter of 2003, which will provide additional cash.

We may not have sufficient cash flow from operations to sufficiently meet all of
our cash requirements for the next 12 months. Our future operations and growth
is dependent on our ability to raise capital for expansion, and to seek
additional revenue sources. During the quarter, we extended the expiration date
of our $.10 warrants to December 31, 2003 and the $.20 warrants to June 24, 2004
so that we could potentially realize additional funds from their exercise.
Additional warrants were exercised in June and July 2003. We have no material
commitments for capital expenditures.

Net cash used in operations during the six months ended June 30, 2003 was
$(429,251) as compared net cash provided by operations of $167,929 for the six
months ended June 30, 2002. Net cash used in operations during the six months
ended June 30, 2003 was substantially attributable to a net loss of $(264,723),
an increase in accounts receivable of $481,209, a decrease in customer deposits
of $185,925, and a decrease in deferred revenue of $154,100, offset by a the add
back of non-cash charges for depreciation of $77,321, non-cash compensation and
consulting expense of $193,383, an increase in payroll taxes payable of
$204,702, and an increase in accounts payable of $184,669. Net cash provided by
operations during the six months ended June 30, 2002 was $167,929 and was
substantially attributable to a net loss of $(63,396) and a decrease in accrued
expenses of $(173,098) offset by non-cash charges for depreciation of $56,732
and increases in payroll taxes payable of $213,859, accounts payable of $70,354,
customer deposits of $41,873, and an increase in interest payable of $109,889.

Net cash used in investing activities during the six months ended June 30, 2003
was $(112,198) relating to the purchase of property and equipment of $(115,306)
offset by cash acquired in acquisitions of $3,108 compared to net cash used in
investing activities of $(31,701) for the six months ended June 30, 2002.

Net cash provided by financing activities for the six months ended June 30, 2003
was $572,814 as compared to net cash provided by financing activities of $31,517
for the six months ended June 30, 2002. During the six months ended June 30,
2003, we received proceeds from the exercise of warrants of $826,900 offset by a
decrease in checks outstanding in excess of bank balances of $18,596 and loan
repayments of $235,036. During the six months ended June 30, 2002, we received
net proceeds from loans and related party advances of $93,266 and had an
increase in checks outstanding in excess of bank balances of $48,251 offset by
cash used to repay loans payable of $110,000.

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

-21-

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

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS

The following tables summarize our contractual obligations and
commercial commitments as of June 30, 2003:

PAYMENTS DUE BY PERIOD
--------------------------------------------------
TOTAL WITHIN 1 YEAR 2-3 YEARS 4-5 YEARS AFTER 5 YEARS
------- ------------- --------- --------- -------------
Operating Leases .. 772,000 312,000 410,000 50,000 -
Capital Leases .... - - - - -

CRITICAL ACCOUNTING POLICIES

A summary of significant accounting policies is included in Note 1 to the
audited financial statements included in our Annual Report on Form 10-KSB for
the year ended December 31, 2002 as filed with the United States Securities and
Exchange Commission. We believe that the application of these policies on a
consistent basis enables us to provide useful and reliable financial information
about our operating results and financial condition.

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

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

-22-

ITEM 3. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

Changes in Internal Controls

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

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

In April 2003, 600,000 shares of common stock previously issuable were
issued.

In April 2003, a consultant to the Company entered into separate
agreements with the Tucker Family Spendthrift Trust and the Calvo Family
Spendthrift Trust pursuant to which he has the right to purchase all of the
class A warrants from the Tucker Family Spendthrift Trust and all of the class E
warrants from the Calvo Family Spendthrift Trust. The Trusts have agreed with
the consultant to not exercise the warrants so long as the consultant purchases
1,000,000 warrants per month from each Trust. As consideration for arranging the
transaction between the parties, the Company agreed to pay another third party a
finder's fee of $.005 per warrant for each warrant that is purchased by the
consultant and subsequently exercised. There is no financial accounting effect
of these transactions other than offsetting the fee paid against paid in capital
as an offering cost.

During the three months ended June 30, 2003, majority shareholders of
the Company and consultants exercised warrants to purchase 3,520,000 shares of
common stock at $.10 per share for net proceeds of $282,400.

In April 2003, in connection with the acquisition of NursesStat LLC,
the Company shall issue 3,000,000 shares of common stock. As of June 30, 2003,
these shares have not been issued and are included in common stock issuable at
June 30, 2003. Additionally, as part of this acquisition, the Company issued
200,000 shares of common stock to a consultant for services rendered. (See note
2)

-23-

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS (CONTINUED)

During the three months ended June 30, 2003, the Company extended the
expiration date of it $.10 warrants to December 31, 2003 and the $.20 warrants
to June 24, 2004

In May 2003, in connection with the acquisition of Independent
Transcription Services, Inc., the Company issued 150,000 shares of common stock.
(See note 2)

In May 2003, in connection with the acquisition of a licensing
agreement, the Company issued 500,000 shares of common stock. (See note 2)

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

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

(b) REPORTS ON FORM 8-K

None

SIGNATURES

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

IBX GROUP, INC.

Dated: August 19, 2003 By: /s/ Evan Brovenick
----------------------------------
Evan Brovenick,
Chief Executive Officer, President
and Director

Dated: August 19, 2003 By: /s/ David Blechman
------------------
David Blechman,
Treasurer

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