form-10q_033103






                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003


[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the transition period from __________ to ___________


Commission File Number:                         0-24768
                        -------------------------------------------------------

                              MEDIX RESOURCES, INC.
               (Exact name of issuer as specified in its charter)

            Colorado                                   84-1123311
------------------------------------------------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

          420 Lexington Avenue, Suite 1830 New York, New York     10170
 ------------------------------------------------------------------------------
            (Address of principal executive offices)           (Zip Code)


                                 (212) 697-2509
--------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)

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

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2of the Exchange Act).

             [  ] Yes          [ X] No

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of May 10, 2003.

        Common Stock, $0.001 par value              80,767,065
        ------------------------------              ----------
                   Class                         Number of Shares




                              MEDIX RESOURCES, INC.



                                      INDEX


PART I.   Financial Information
          ---------------------

Item 1. Financial Statements

Consolidated Balance Sheets - March 31, 2003 (Unaudited) and December 31, 2002

Unaudited Consolidated Statements of Operations -- For the Three Months Ended March 31, 2003 and March 31, 2002

Unaudited Consolidated Statements of Cash Flows -- For the Three Months Ended March 31, 2003 and March 31, 2002

Notes to Unaudited Consolidated Financial Statements

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II.  Other Information
          -----------------

Item 1. Legal Proceedings

Item 2. Changes in Securities and Use of Proceeds

Item 6. Exhibits and Reports on Form 8-K

SIGNATURES

Index to Exhibits




                              MEDIX RESOURCES, INC.

                           Consolidated Balance Sheets



                                                                March 31,     December 31,
                                                                  2003            2002
                                                              ------------    ------------
                                                               (Unaudited)
                                      Assets

Current assets
  Cash ....................................................   $     38,000    $  1,369,000
  Stock subscription receivable ...........................           --            76,000
     Note receivable ......................................         25,000            --
  Prepaid expenses and other ..............................        391,000         478,000
                                                              ------------    ------------
      Total current assets ................................        454,000       1,923,000
                                                              ------------    ------------

Non-current assets
  Property and equipment, net .............................        255,000         265,000
  Goodwill, net ...........................................      1,943,000       1,605,000
                                                              ------------    ------------
      Total non-current assets ............................      2,198,000       1,870,000
                                                              ------------    ------------

Total assets ..............................................   $  2,652,000    $  3,793,000
                                                              ============    ============

                       Liabilities and Stockholders' Equity

Current liabilities
  Notes payable ...........................................   $    134,000    $    175,000
  Accounts payable ........................................      1,256,000         961,000
  Accounts payable - related parties ......................        115,000         130,000
  Accrued expenses ........................................        268,000         736,000
  Deferred revenue ........................................        228,000         173,000
                                                              ------------    ------------
      Total current liabilities ...........................      2,001,000       2,175,000
                                                              ------------    ------------

Commitments and contingencies

Stockholders' equity
  1996 Preferred stock, 10% cumulative convertible, $1
   par value, 488 shares authorized, 155 shares issued,
   1 share outstanding, liquidation preference $19,000 ....           --              --
  1997 convertible preferred stock, $1 par value, 300
   shares authorized, 167.15 shares issued, zero shares
   outstanding ............................................           --              --
  1999 Series A convertible preferred stock, $1 par
   value, 300 shares authorized, 300 shares issued,
   zero shares outstanding ................................           --              --
  1999 Series B convertible preferred stock, $1 par
   value, 2,000 shares authorized, 1,832 shares issued
   and zero shares outstanding ............................           --              --
  1999 Series C convertible stock, $1 par value, 2,000
   shares authorized, 1,995 shares issued, 75 and 75
   shares outstanding, liquidation preference $75,000
   and $75,000 ............................................           --              --
  Common stock, $0.001 par value, 125,000,000 shares
   authorized, 80,767,065 and 77,160,817 issued and
   outstanding, respectively ..............................         81,000          77,000

  Dividends payable with common stock .....................          9,000           9,000

  Additional paid-in capital ..............................     46,092,000      44,605,000

  Accumulated deficit .....................................    (45,531,000)    (43,073,000)
                                                              ------------    ------------

      Total stockholders' equity ..........................        651,000       1,618,000
                                                              ------------    ------------
Total liabilities and stockholders' equity ................   $  2,652,000    $  3,793,000
                                                              ============    ============




                See notes to consolidated financial statements.




                              MEDIX RESOURCES, INC.

                 Unaudited Consolidated Statements of Operations


                                           For the Three Months Ended
                                                   March 31,
                                          ----------------------------
                                               2003           2002
                                          ------------    ------------

Revenues ..............................   $       --      $     10,000
                                          ------------    ------------
Costs and expenses
  Software and technology costs .......        393,000         585,000
  Selling, general and administrative
    expenses ..........................      1,927,000         890,000
  Costs associated with terminated
    acquisition .......................        142,000            --
                                          ------------    ------------
      Total operating expenses ........      2,462,000       1,475,000
                                          ------------    ------------

Other income (expense)
  Other income ........................          9,000           1,000
  Interest expense ....................         (3,000)        (10,000)
  Financing costs .....................         (1,000)       (203,000)
                                          ------------    ------------
      Total other (expense) income ....          5,000        (212,000)
                                          ------------    ------------

Loss from continuing operations and net
loss ..................................   $ (2,457,000)   $ (1,677,000)
                                          ------------    ------------

Basic and diluted weighted average
 common shares outstanding ............     79,181,065      57,861,294
                                          ============    ============

Basic and diluted loss per common share   $      (0.03)   $      (0.03)
                                          ============    ============


                 See notes to consolidated financial statements



                              MEDIX RESOURCES, INC.

                 Unaudited Consolidated Statements of Cash Flows


                                           For the Three Months Ended
                                                    March 31,
                                           --------------------------
                                               2003           2002
                                           -----------    -----------
Cash flows from operating activities
  Net loss .............................   $(2,457,000)   $(1,677,000)
                                           -----------    -----------
  Adjustments to reconcile net loss to
   net cash used in operating activities
   Depreciation and amortization .......        21,000         80,000
   Amortization of discount and
     warrants-convertible debt .........          --           70,000
   Common stock, options and warrants
    issued for settlements, consulting
    services and financing costs .......        72,000        149,000
   Net changes in current assets and
    current liabilities ................        56,000        (42,000)
                                           -----------    -----------
                                               149,000        257,000
                                           -----------    -----------
      Net cash used in operating
       activities ......................    (2,308,000)    (1,420,000)
                                           -----------    -----------

Cash flows from investing activities
  Software development costs incurred ..          --          (81,000)
  Purchase of property and equipment ...        (1,000)        (9,000)
  Note Receivable ......................       (25,000)          --
  Business acquisition costs, net of
   cash acquired .......................      (300,000)          --
                                           -----------    -----------
      Net cash used in investing
       activities ......................      (326,000)       (90,000)
                                           -----------    -----------

Cash flows from financing activities
  Proceeds from issuance of debt and
   notes payable .......................          --        1,000,000
  Principal payments on debt and notes
   payable .............................       (68,000)       (77,000)
  Issuance of preferred and common
   stock, net of offering costs ........     1,209,000        882,000
  Proceeds from the exercise of options
   and warrants ........................       162,000          4,000
                                           -----------    -----------
      Net cash provided by financing
       activities ......................     1,303,000      1,809,000
                                           -----------    -----------

Net increase (decrease) in cash ........    (1,331,000)       299,000

Cash - beginning of period .............     1,369,000          8,000
                                           -----------    -----------

Cash - end of period ...................   $    38,000    $   307,000
                                           ===========    ===========

Non-cash and investing and financing activities for the three months ended March
31, 2003:

     Options and warrants valued at $72,000 for services provided.

     100,000  shares of $0.001 par value common  stock valued at $48,000  issued
     with cash of $300,000; the total being the purchase price of the ePhysician
     Assets.


Non-cash and investing and financing activities for the three months ended March
31, 2002:

     Options and warrants valued at $17,000 for services provided.

     Options valued at $132,000 as financing costs issued to an officer for past
     financial support.

     An accrued  liability of $590,000 for warrants earned in 2001 was satisfied
     by issuing the warrants.

     In-the-money conversion feature on convertible debt valued at $70,000.

                 See notes to consolidated financial statements



                             MEDIX RESOURCES, INC.

                   Notes to Consolidated Financial Statements


1.    Summary Of Significant Accounting Policies

     The  consolidated  financial  statements  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  financial
position and operating results for the interim periods presented.  The unaudited
consolidated  balance sheets as of March 31, 2003 have been derived from audited
financial statements.  The unaudited consolidated financial statements contained
herein should be read in  conjunction  with the financial  statements  and notes
thereto  contained in the Company's Form 10-K for the fiscal year ended December
31, 2002.  The results of  operations  for the three months ended March 31, 2003
are not necessarily  indicative of the results for the entire fiscal year ending
December  31,  2003 or for any other  interim  period in the fiscal  year ending
December 31, 2003.


2.    Acquisition Of Assets

     On March 4,  2003 the  Company  purchased  from  Comdisco  Ventures,  Inc.,
substantially  all the assets formerly used by ePhysician,  Inc. in its software
and  technology  business.  Prior  to  its  cessation  of  operations  in  2002,
ePhysician  developed  and  provided  ePhysician  Practice,  a suite of software
products that enables physicians to prescribe medications, access drug reference
data,  schedule patients,  view formulary  information,  review critical patient
information  and  capture  charges  at the point of care  using a Palm  OS-based
handheld device and the Internet.

     The aggregate  purchase price was $348,000,  including $300,000 of cash and
100,000  shares of  common  stock  valued at  $48,000.  The  purchase  price was
allocated to the assets purchased based on the fair market values at the date of
acquisition as follows:

        Computer equipment ................      $ 10,000
        Goodwill ..........................       338,000
                                                 --------
                                                 $348,000
                                                 ========


3.    Goodwill

                                               March 31,     December 31,
                                                  2003           2002
                                              -----------    -----------

        Goodwill ..........................     2,577,000    $ 2,239,000
        Less accumulated amortization .....      (634,000)      (634,000)

        Net Goodwill ......................   $ 1,943,000    $ 1,605,000
                                              ===========    ===========

Total Net  Goodwill at March 31, 2003  includes  $1,605,000  related to Goodwill
acquired through the Cymedix acquisition. The balance of $338,000 relates to the
March 2003 acquisition of assets formerly owned by ePhysician, Inc. and has been
assigned to the same reporting unit as the Cymedix goodwill.


4.    Equity Transactions

Acquisition of ePhysician Assets

     On March 4, 2003, the Company  completed the  acquisition of certain assets
previously used in the ePhysician  business for total  consideration of $348,000
comprised of $300,000 in cash and 100,000 shares of the Company's  common stock.
The common  stock was valued at $48,000  based on the share price on the date of
the closing.

Options and Warrant Exercise

     During the quarter ended March 31, 2003, the Company  received  proceeds of
$162,000  from the  exercise of stock  options  and  warrants  resulting  in the
issuance of 355,000 shares of common stock.  In the  comparable  period of 2002,
the Company  received  proceeds of $4,000 from the exercise of stock options and
warrants resulting in the issuance of 15,000 shares of common stock.

Warrants

     The company issued warrants to a shareholder to purchase  1,305,283  shares
of common stock at an exercise price of $0.50 that expire  February 5, 2006, and
have been treated as a capital  transaction  with no net value being recorded to
equity.

     At March 31,  2003 the  Company  had the  obligation  to provide  5,150,000
warrants  under the Amended and  Restated  Common  Stock  Purchase  Warrant with
WellPoint Pharmacy Management if certain performance criteria specified are met.
No additional  warrants were earned during the first quarter of 2003. Had all of
the remaining performance criteria been met at March 31, 2003, the fair value of
the  related  warrants  and  resulting  expense  would  have been  approximately
$397,000, using the Black-Scholes option pricing model, with assumptions of 104%
volatility, no dividend yield and a risk-free rate of 5.5%.

Private Placements

     During January and February 2003, the Company completed a private placement
of its $.001 par value common stock and raised  proceeds of  $1,209,000,  net of
$51,000 in fees. A total of 3,151,250 units were placed,  each consisting of one
share of common stock and one warrant. Subscribers purchased each unit for $0.40
and are entitled to exercise  warrant rights to purchase one share of the common
stock of the  Company  at a  purchase  price of $.0.50 per share for a five year
period on or after  January 1, 2003 and prior to January  1, 2008.  The  Company
registered the above shares and shares covered by the warrants in a registration
statement with the Securities and Exchange Commission.

     During April 2003, the Company  completed the private placement of $400,000
in convertible  notes.  The notes have an 18-month term, bear interest at 7% per
annum and are convertible  into common stock at a price of $0.15 per share.  The
Company  received a total of $351,000 from this  placement net of offering costs
of $49,000. In connection with this transaction,  the Company issued warrants to
purchase 1.5 million  shares of common  stock at an exercise  price of $0.01 per
share, which we valued at $400,000 based on running a Black Scholes  calculation
limited to the amount of proceeds received of $400,000.  The Company will record
this  transaction and related  discount of $400,000,  which will be amortized as
finance costs over the next 18 months. The Company has committed to register the
shares underlying the convertible notes in a registration  statement to be filed
with the Securities and Exchange  Commission within 90 days of completion of the
offering.


5.    Stock Options

     During the first quarter of 2003, the Company  issued to employees  options
to purchase 615,000 shares of common stock at exercise prices ranging from $0.29
to $0.68.  Such options have been granted under the 1999 Plan. The Black-Scholes
option-pricing  model  estimates  the  options  fair  value  to be  $289,000  by
considering the following  assumptions:  the options exercise price and expected
life, the underlying current market price of the stock and expected  volatility,
expected  dividends and the risk free interest rate corresponding to the term of
the option.

     The Company has adopted the  disclosure-only  provisions  of  Statement  of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation."  Accordingly,  no  compensation  cost has been recognized for the
stock option plan.  Had  compensation  cost for the Company's  options issued to
employees been  determined  based on the fair value at the grant date for awards
consistent  with the provisions of SFAS No. 123, as amended by SFAS No. 148, the
Company's  net loss and basic loss per common  share would have been  changed to
the pro forma amounts indicated below:

                                                               For the Three Months Ended
                                                                        March 31,
                                                               ---------------------------
                                                                  2003            2002
                                                               -----------    ------------

     Net loss - as reported ...............................   $(2,457,000)   $  (1,677,000)

        Deduct recorded employee compensation expense .....          --               --

        Add fair value of employee compensation expense ...      (289,000)        (498,000)
                                                               -----------    ------------

     Net loss per common share - pro forma ................   $(2,746,000)      (2,175,000)
     Basic loss per common share - as reported ............   $     (0.03)   $       (0.03)
     Basic loss per common share - pro forma ..............   $     (0.04)   $       (0.04)

The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions used:

                                                               For the Three Months Ended
                                                                        March 31,
                                                               ---------------------------
                                                                   2003           2002
                                                               -----------    ------------
     Approximate risk free rate ...........................       4.50%          4.50%
     Average expected life ................................      5 years        5 years
     Dividend yield .......................................         0%             0%
     Volatility ...........................................        97%            95%


6.    Related Party Transactions

     During February 2002, the Company repaid an advance from a related party in
the amount of $166,000.  During the third quarter of 2002, the Company  received
$130,000 from a related party in the form of a loan. At March 31, 2003, $115,000
of that loan remains  outstanding.  Payment  terms agreed with the related party
call for repayment of the loan in May 2003.

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


Overview


The Company develops and intends to market healthcare  communication  technology
products for electronic  prescribing of drugs,  laboratory orders and laboratory
results.  These  technologies  are designed to provide  connectivity  of medical
related information between point-of-care  providers ("POCs") (i.e. physician or
caretaker) and specific  healthcare value chain  intermediaries  ("HVCIs") (e.g.
pharmacy, lab, pharmacy benefit managers,  pharmaceutical companies,  etc.). The
Company's  technology is designed to improve the accuracy and the  efficiency of
the processes of drug  prescribing and the ordering of laboratory  tests and the
receiving of laboratory results.

Forward-Looking Statements and Associated Risks

     This Report contains forward-looking statements, which statements relate to
events or transactions that have not yet occurred, our expectations or estimates
for our future  operations and economic  performance,  our growth  strategies or
business plans or other events that have not yet occurred.  Such  statements can
be identified by the use of forward-looking  terminology such as "might," "may,"
"will," "could," "expect,"  "anticipate,"  "estimate,"  "likely,"  "believe," or
"continue"  or the negative  thereof or other  variations  thereon or comparable
terminology.  The following  paragraphs contain discussions of important factors
that should be considered by prospective investors for their potential impact on
forward-looking  statements included in this Report. These important factors, as
well as other  factors  described in our Annual Report on Form 10-K for the year
ended  December 31,  2002,  may cause actual  results to differ  materially  and
adversely  from  the  results  expressed  or  implied  by  the   forward-looking
statements.

     We have reported net losses of ($9,014,000), ($10,636,000) and ($5,415,000)
for the years ended December 31, 2002, 2001, and 2000,  respectively,  and a net
loss of  ($2,457,000)  for the three months  ended March 31, 2003.  At March 31,
2003 we had an accumulated  deficit of ($45,531,000).  These losses and negative
operating  cash flow have caused our  accountants  to include a "going  concern"
qualification  in their report in  connection  with their audit of our financial
statements for the year ended December 31, 2002.

     We expect to continue to experience  losses,  in the near term,  until such
time as our  technologies  can be  successfully  deployed  with  physicians  and
produce  revenue.  The continuing  development,  marketing and deployment of our
technologies will depend upon our ability to obtain additional financing. We are
funding our operations now through the sale of our  securities.  There can be no
assurance that  additional  investments or financings will be available to us on
favorable  terms, or at all, as needed to support the development and deployment
of our  technologies.  Failure to obtain  such  capital on a timely  basis could
result  in  lost  business  opportunities,  the  sale  of  our  technology  at a
distressed  price or the  financial  failure of our company.  We currently  have
125,000,000 shares of common stock authorized for issuance under our certificate
of incorporation, and as of March 31, 2003, had 80,767,065 outstanding shares of
common stock and  36,247,226  shares of common stock reserved for issuance under
existing options,  warrants and outstanding shares of our convertible  preferred
stock. We intend to request that our shareholders  approve, at a special meeting
of shareholders, an increase in the number of shares of common stock that we are
authorized to issue. However, we cannot predict the outcome of that vote. If our
shareholders  do not  approve of the  increase in the number of shares of common
stock that we are  authorized  to issue,  we will be unable to raise  additional
capital.

     The  success of our  products  and  services in  generating  revenue may be
subject to the quality and completeness of the data that is generated and stored
by the  physician  or  other  healthcare  professionals  and  entered  into  our
interconnectivity  systems,  including  the  failure  to  input  appropriate  or
accurate information. Failure or unwillingness by the healthcare professional to
accommodate the required information quality may result in the payor refusing to
pay Medix for its services.

     The introduction of connectivity  products in that market has been slow due
to the large number of small  practitioners who are resistant to change, as well
as the financial  investment or workflow  interruptions  associated with change,
particularly  in a period of rising  pressure to reduce costs in the market.  We
are currently devoting significant resources toward the development of products.
There can be no assurance that we will successfully  complete the development of
these products in a timely  fashion or that our current or future  products will
satisfy the needs of the healthcare  information systems market.  Further, there
can be no assurance that products or  technologies  developed by others will not
adversely affect our competitive position or render our products or technologies
noncompetitive or obsolete.

     Certain  of our  products  provide  applications  that  relate  to  patient
medication histories and treatment plans. Any failure by our products to provide
accurate, secure and timely information could result in product liability claims
against us by our clients or their affiliates or patients. We maintain insurance
that we believe  currently is adequate to protect against claims associated with
the use of our  products,  but  there  can be no  assurance  that our  insurance
coverage would  adequately  cover any claim  asserted  against us. The limits of
that coverage are $2,000,000 in the aggregate and $1,000,000 per  occurrence.  A
successful  claim brought  against us in excess of our insurance  coverage could
have a material adverse effect on our results of operations, financial condition
or business.  Even unsuccessful  claims could result in the expenditure of funds
in litigation, as well as diversion of management time and resources.

     We have been granted  certain  patent  rights,  trademarks  and  copyrights
relating to our software  business.  However,  patent and intellectual  property
legal issues for software  programs,  such as the Cymedix products,  are complex
and currently  evolving.  Since patent applications are secret until patents are
issued,  in the United States,  or published,  in other countries,  we cannot be
sure that we are first to file any patent application. In addition, there can be
no assurance that competitors,  many of which have far greater resources than we
do, will not apply for and obtain  patents that will  interfere with our ability
to develop or market product ideas that we have originated. Further, the laws of
certain foreign countries do not provide the protection to intellectual property
that is provided in the United  States,  and may limit our ability to market our
products overseas.  We cannot give any assurance that the scope of the rights we
have are broad enough to fully protect our Cymedix software from infringement.

     Litigation  or  regulatory  proceedings  may be  necessary  to protect  our
intellectual  property  rights,  such as the scope of our patent.  In fact,  the
computer   software   industry  in  general  is   characterized  by  substantial
litigation.  Such  litigation and regulatory  proceedings are very expensive and
could be a significant  drain on our resources and divert resources from product
development.  There is no assurance that we will have the financial resources to
defend our patent rights or other  intellectual  property from  infringement  or
claims of  invalidity.  We have been  notified by a party that it  believes  our
pharmacy  product may infringe on patents that it holds. We have retained patent
counsel who has made a preliminary investigation and determined that our product
does not infringe on the  identified  patents.  At this time no legal action has
been instituted.

     We also rely upon unpatented proprietary technology and no assurance can be
given  that  others  will not  independently  develop  substantially  equivalent
proprietary  information  and techniques or otherwise gain access to or disclose
our  proprietary  technology or that we can  meaningfully  protect our rights in
such unpatented proprietary technology.  We will use our best efforts to protect
such  information and techniques;  however,  no assurance can be given that such
efforts will be  successful.  The failure to protect our  intellectual  property
could cause us to lose  substantial  revenues and to fail to reach our financial
potential over the long term.

     The healthcare and medical  services  industry in the United States is in a
period  of  rapid  change  and  uncertainty.  Governmental  programs  have  been
proposed,  and some adopted, from time to time, to reform various aspects of the
U.S.  healthcare  delivery system.  Some of these programs contain  proposals to
increase  government  involvement in healthcare,  lower  reimbursement rates and
otherwise  change the operating  environment  for our  customers.  Particularly,
HIPAA and the regulations that are being promulgated  thereunder are causing the
healthcare industry to change its procedures and incur substantial cost in doing
so.  Although  we expect  these  regulations  to have the  beneficial  effect of
spurring adoption of our software products, we cannot predict with any certainty
what  impact,  if any,  these and future  healthcare  reforms  might have on our
software business.

     As of April 30, 2003, we had 80,767,065 shares of common stock outstanding.
As of that date, approximately 33,283,059 shares were issuable upon the exercise
of  outstanding  options,  warrants  or  other  rights,  and the  conversion  of
preferred  stock  and  convertible  debentures.  Most of  these  shares  will be
immediately  saleable upon exercise or conversion under registration  statements
we have filed with the SEC.  The exercise  prices of options,  warrants or other
rights to acquire common stock presently  outstanding range from $0.01 per share
to $4.97 per share.  During the  respective  terms of the  outstanding  options,
warrants,  preferred  stock and other  outstanding  derivative  securities,  the
holders are given the  opportunity  to profit from a rise in the market price of
the common stock, and the exercise of any options,  warrants or other rights may
dilute the book value per share of the common stock and put downward pressure on
the price of the common stock. The existence of the options,  conversion rights,
or any  outstanding  warrants  may  adversely  affect  the terms on which we may
obtain additional equity financing. Moreover, the holders of such securities are
likely to exercise  their rights to acquire common stock at a time when we would
otherwise  be able to obtain  capital  on terms  more  favorable  than  could be
obtained through the exercise or conversion of such securities.

     As with any business,  growth in absolute  amounts of selling,  general and
administrative  expenses or the occurrence of  extraordinary  events could cause
actual results to vary materially and adversely from the results contemplated by
the  forward-looking  statements.  Budgeting and other management  decisions are
subjective  in many  respects and thus  susceptible  to incorrect  decisions and
periodic  revisions based on actual  experience and business  developments,  the
impact of which may cause us to alter our  marketing,  capital  expenditures  or
other budgets, which may, in turn, affect our results of operation.  Assumptions
relating to the foregoing involve judgments with respect to, among other things,
future  economic,   competitive  and  market  conditions,  and  future  business
decisions,  all of which are difficult or impossible to predict  accurately  and
many of which are beyond  our  control.  Although  we  believe  the  assumptions
underlying the forward-looking statements are reasonable, any of the assumptions
could  prove  inaccurate,  and  therefore,  there can be no  assurance  that the
results contemplated in the forward-looking statements will be realized.

     In light of the significant  uncertainties  inherent in the forward-looking
information  included herein,  the inclusion of such  information  should not be
regarded as a  representation  by us or any other person that our  objectives or
plans for the Company will be achieved.


Results of Operations

     At present we are not receiving revenue from the sale of our products.

     Software and  technology  costs totaled  $393,000  during the quarter ended
March 31, 2003, a $192,000  decrease over the prior year's spending of $585,000.
In  2002,   technology  costs  included  $80,000  in  license  fees  related  to
technologies  that are no longer in use and  $50,000  of  amortized  capitalized
development  expenses.  Effective  the end of  2002,  the  Company  will  not be
capitalizing its software  development  expenses.  In 2003, software development
salaries and  benefits  were  approximately  $62,000  lower than the  comparable
period in 2002 reflecting a reduction in technology staffing.

     Selling, general, and administrative expenses totaled $1,927,000 during the
quarter  ended March 31, 2003,  versus  $890,000 in the  comparable  period last
year. Consulting expenses amounted to $447,000 as the Company increased spending
to develop  marketing  relationships in newly defined market segments.  Fees for
legal  services  amounted to $246,000 and  primarily  relate to  Securities  and
Exchange  Commission  registration  requirements and activities  associated with
various business development initiatives.  Accounting expenses in the quarter of
$240,000 are primarily  due to activities in support of Securities  and Exchange
Commission filings and business development initiatives.

     The  comparison  to prior year is also impacted by the funding of corporate
advertising   initiatives  in  2003  ($51,000)  and  2002  capitalized  software
development expenses ($81,000).  These increases are somewhat mitigated by lower
expenses for occupancy  ($80,000) and compensation  ($58,000) during the quarter
ended March 31, 2003.

     Costs associated with terminated acquisitions amount to $142,000 and relate
to  the  write-off  of  certain   expenses   associated  with  the  PocketScript
acquisition.  We entered  into an  agreement  to acquire  PocketScripts,  LLC in
December 2002; the agreement was terminated in March 2003.

     Other   income/expense   reflects  a  net   income  of  $5,000,   which  is
substantially  improved versus the prior year expense of $212,000.  The 2002 net
expense included $132,000 being recorded for options issued to an officer of the
Company for past financial  support in addition to a charge for an  in-the-money
conversion feature valued at $70,000 on a $1,000,000 convertible note payable.

     Net loss for the three months  ended March 31, 2003 total $  2,457,000,  as
compared  with a net loss of  $1,677,000  for the three  months  ended March 31,
2002.


Liquidity and Capital Resources

     In the current quarter,  the Company provided  advances of $25,000 pursuant
to a  promissory  note to a company  that has  technology  that the  Company  is
potentially  interested  in acquiring  (either  whole or in part).  No agreement
exists for the  acquisition  of this  technology,  and there can be no assurance
that the Company will desire to acquire the  technology or that an agreement can
be reached with this Company.

     As of March 31,  2003 the  Company  has  $38,000 in cash and a net  working
capital deficit of  ($1,547,000).  During the three months ended March 31, 2003,
our  cash  and cash  equivalents  decreased  by  $1,331,000.  Net  cash  used in
operating  activities  was  $2,308,000  reflecting our net loss of $2.5 million.
During  the three  months  ended  March  31,  2003,  net cash used in  investing
activities  was $326,000,  reflecting  the $300,000 cash part of the  ePhysician
assets  acquisition  and the $25,000  Note  Receivable  referred to in the prior
paragraph.

     During  the  three  months  ended  March  31,  2003,   the  Company  raised
$1,303,000,  net, from  financing  activities;  reflecting  $1,209,000  from the
issuance of common stock net of offering  costs of $51,000 and $162,000 from the
exercise of options.  These financing amounts were partially offset by principle
payments on debt of $ 68,000.

     We are funding our operations now through the sale of our securities. There
can be no assurance that additional  investments or financings will be available
to us on favorable  terms,  or at all, as needed to support the  development and
deployment of our technologies. Failure to obtain such capital on a timely basis
could result in lost  business  opportunities,  the sale of our  technology at a
distressed price or the financial  failure of our company.  See "Forward Looking
Statements and Associated Risks".

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

     We do not  hold or  engage  in  transactions  with  market  risk  sensitive
instruments.

Item 4.     Controls and Procedures

Within  the 90 days  prior  to the  date  of  this  report,  we  carried  out an
evaluation,  under the supervision and with the participation of our management,
including  our Chief  Executive  Officer  and Chief  Financial  Officer,  of the
effectiveness  of the  design  and  operation  of our  disclosure  controls  and
procedures  pursuant to  Securities  Exchange Act Rule  13a-14.  Based upon that
evaluation,  our Chief Executive  Officer and Chief Financial  Officer concluded
that our disclosure  controls and  procedures  are effective in timely  alerting
them  to  material  information  relating  to  us  (including  our  consolidated
subsidiaries)  required to be included in our periodic  SEC filings.  There have
been no  significant  changes in our internal  controls or in other factors that
could  significantly  affect internal  controls  subsequent to the date of their
evaluation,   including  any  corrective  actions  with  regard  to  significant
deficiencies and material weaknesses.





                            PART II - OTHER INFORMATION


Item 1.  Legal Proceedings


     From time to time,  the Company is involved in claims and  litigation  that
arise out of the normal course of business.  Currently,  other than as discussed
below,  there are no pending  matters  that in  management's  judgment  might be
considered potentially material to us.

     Tufts Associated Health Plans,  Inc. has threatened to commence  litigation
against us for allegedly  breaching the Services and Support  Agreement  between
Tufts and the Company.  Tufts has alleged that because of the termination of the
merger agreement between the Company and PocketScript,  the Company is unable to
provide the products and  services as  contemplated  by the Services and Support
Agreement  and is in  "material  breach"  thereunder.  We  disagree  with Tufts'
allegations. At this time, litigation has not been commenced.

     A party has notified us that it believes our pharmacy  product may infringe
on  patents  that it  holds.  We have  retained  patent  counsel  who has made a
preliminary  investigation  and determined that our product does not infringe on
the identified patents. At this time no legal action has been instituted.

Item 2.  Changes in Securities and Use of Proceeds

     Set forth below are the unregistered sales of securities by the Company for
the quarter reported on.

   Security                  Number of                                   Exemption
    Issued        Date        Shares      Consideration    Purchasers     Claimed
-------------  ----------  ------------  --------------- -------------  ------------

Common Stock                                              A total of
and Warrants                                              2
covering        January                                   accredited
Common Stock    2003         355,000        $ 162,000      investors    Section 4(2)*

Common Stock    February   6,302,500      $ 1,260,500     A total of    Section 4(2)*
and Warrants    2003                                      9
covering                                                  accredited
Common Stock                                              investors

Common Stock    March                     Purchase of     1 accredited  Section 4(2)
                2003                      assets from     investor
                            100,000       Comdisco
                                          Ventures, Inc.**


*    The  Company  issued  the  identified   securities  in  private   placement
     transactions  to  accredited  investors  who invested in the  Company.  The
     6,657,500  shares of common stock  including those covered by warrants were
     not registered under the Securities Act of 1933 (the "Act") for purposes of
     the initial  issuance of the shares to the  investors.  For purposes of the
     initial  issuance,  the Company relied upon the exemption from registration
     afforded  by  Section  4(2) of the Act.  To  support  such  exemption,  the
     investors made various  investment  representations  to the Company and the
     certificates  representing the warrants and the shares of common stock bore
     a restrictive legend.

**   In March 2003, the Company acquired certain assets from Comdisco  Ventures,
     Inc. that were formerly used by ePhysician,  Inc. The Company paid $300,000
     in cash and issued 100,000 shares of its common stock as consideration  for
     the  acquisition.  The 100,000  shares of common stock were not  registered
     under the  Securities  Act of 1933 (the "Act") for  purposes of the initial
     issuance of the shares.  For purposes of the initial issuance,  the Company
     relied upon the exemption from registration afforded by Section 4(2) of the
     Act. To support such exemption,  various  investment  representations  were
     made to the Company and the certificates  representing the shares of common
     stock bore a restrictive legend.

Item 6.  Exhibits and Reports on Form 8-K

a.    Exhibits

     Included  as  exhibits  are the items  listed  on the  Exhibit  Index.  The
     Registrant  will  furnish a copy of any of the  exhibits  listed below upon
     payment  of $5.00  per  exhibit  to cover the  costs to the  Registrant  of
     furnishing such exhibit.

b.   Reports on Form 8-K during the quarter reported on:

o    Form 8-K, dated January 13, 2003, reporting in Item 5 a press release
      regarding an alliance with PocketScript, LLC and Research in Motion;

o    Form 8-K, dated January 21, 2003, reporting in Item 5 a press release
      regarding an alliance with PocketScript, LLC and Blue Cross Blue
      Shield of Massachusetts;

o    Form 8-K, dated February 3, 2003, filing a copy of the Merger Agreement
      between the Company and PocketScript, LLC;

o    Form 8-K, dated February 6, 2003, reporting in Item 5 a press release
      regarding an initiative between the Company and Tufts Health Plans;

o    Form 8-K, dated February 10, 2003, reporting in Item 5 a press release
      regarding a pilot program between the Company and Group Health
      Incorporated;

o    Form 8-K, dated March 6, 2003, reporting in Item 5 press releases regarding
      the Company's acquisition of assets formerly used by ePhysician,
      Inc., and the termination of the Merger Agreement between the Company
      and PocketScript, LLC; and

o    Form 8-K, dated March 17, 2003, reporting in Item 9 the presentation by the
      Company at the Roth Capital Partners Growth Stock Conference.





                                   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.


Dated:  May 15, 2003

                                    MEDIX RESOURCES, INC.
                                    (Registrant)


                                    /s/ Mark W. Lerner
                                    Mark W. Lerner
                                    Chief Financial Officer



                             MEDIX RESOURCES, INC.

                           CERTIFICATIONS PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Darryl R. Cohen, certify that:

1.   I have  reviewed  this  quarterly  report on Form 10-Q of Medix  Resources,
     Inc.;

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

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

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

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

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

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions):

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

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

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

Date: May 15, 2003


/s/Darryl R. Cohen
------------------------
Darryl R. Cohen
Chief Executive Officer







I, Mark W. Lerner, certify that:

1.   I have  reviewed  this  quarterly  report on Form 10-Q of Medix  Resources,
     Inc.;

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

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

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

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

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

     c)   presented  in  this  quarterly   report  our  conclusions   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of the registrant's board of directors (or persons performing the
     equivalent functions):

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

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

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

Date: May 15, 2003


/s/ Mark W. Lerner
------------------------
Mark W. Lerner
Chief Financial Officer
(Principal financial officer)






                                   EXHIBIT INDEX


EXHIBIT NO.                         DESCRIPTION


99.1  Certification of the Chief Executive Officer Pursuant to 18 U.S.C. Section
      1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

99.2  Certification of the Chief Financial Officer Pursuant to 18 U.S.C.
      Section 1350, Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.