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<PAGE>

--------------------------------------------------------------------------------

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

                                   FORM 10-QSB

     (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, 2004.

         [ ]      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 0-31152


                                 CRDENTIA CORP.
        (Exact name of small business issuer as specified in its charter)



              DELAWARE                                   76-0585701
  (State or other jurisdiction of             (IRS Employer Identification No.)
   incorporation or organization)


              14114 DALLAS PARKWAY, SUITE 600, DALLAS, TEXAS 75254
                    (Address of principal executive offices)


                                  (972)850-0780
                           (Issuer's telephone number)

18,838,057 shares of Common Stock, $.0001 par value, outstanding on May 10,
2004.

Transitional Small Business Disclosure Format (check one):  Yes [ ]  No  [X]

<PAGE>

                                 CRDENTIA CORP.

                          Form 10-QSB Quarterly Report
                    For Quarterly Period Ended March 31, 2004

                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I -- FINANCIAL INFORMATION                                               2


Item 1.    Condensed Consolidated Financial Statements (Unaudited)            2

           Condensed Consolidated Balance Sheets at March 31, 2004
           (Unaudited) and December 31, 2003                                  2

           Condensed Consolidated Statements of Operations (Unaudited)
           For Three Months Ended March 31, 2004 and 2003                     3

           Condensed Consolidated Statements of Cash Flows (Unaudited)
           For Three Months Ended March 31, 2004 and 2003                     4

           Notes to Condensed Consolidated Financial Statements               5

Item 2.    Management's Discussion and Analysis of Operations                11

Item 3.    Controls and Procedures                                           16


PART II -- OTHER INFORMATION                                                 16

Item 1.    Legal Proceedings                                                 16

Item 2.    Change in Securities and Use of Proceeds                          17

Item 3.    Defaults Upon Senior Securities                                   17

Item 4.    Submission of Matters to a Vote of Security Holders               17

Item 5.    Other Information                                                 17

Item 6.    Exhibits and Reports on Form 8-K                                  17


SIGNATURES                                                                   19


                                       1
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>
                                        CRDENTIA CORP.
                            CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                            March 31,
                                                              2004             December 31,
                                                           (Unaudited)             2003
                                                        ----------------     ----------------

Current assets:
<S>                                                     <C>                  <C>
   Cash and cash equivalents                            $       667,923      $     1,469,076
   Accounts receivable, net of allowance                      3,387,114            3,058,086
     for doubtful accounts of $75,380 in
     2004, and $195,465 in 2003
   Unbilled receivables                                         244,986              268,590
   Other current assets                                         661,044              333,379
                                                        ----------------     ----------------
Total current assets                                          4,961,067            5,129,131

Property and equipment, net                                     363,967              363,815
Goodwill                                                      8,554,621            8,519,821
Intangible assets, net                                        3,333,763            3,485,334
Other assets                                                    117,280               98,297
                                                        ----------------     ----------------

Total assets                                            $    17,330,698      $    17,596,398
                                                        ================     ================

Current liabilities:
   Accounts payable and accrued expenses                $       829,902      $       756,686
   Accrued employee compensation and benefits                 1,008,803              828,884
   Revolving lines of credit                                  2,679,055            2,871,890
   Current portion of notes payable to lenders                  125,000              191,667
   Subordinated convertible notes, net of discount              470,556              250,833
   Current portion of notes payable to sellers                1,147,969            1,435,115
   Other current liabilities                                     48,936               14,921
                                                        ----------------     ----------------
Total current liabilities                                     6,310,221            6,349,996

Note payable to lender, less current portion                     27,777               27,777
Long term bonus payable                                         821,194              801,000
Notes payable to sellers, less current portion                3,925,417            3,925,983
                                                        ----------------     ----------------

Total liabilities                                            11,084,609           11,104,756
                                                        ----------------     ----------------

Commitments and contingencies

Series A Convertible Preferred Stock
   $0.0001 par value, 10,000,000 shares authorized,
    2,750,000 issued and outstanding
   (liquidation preference of $2,750,000)                     2,750,000            1,750,000
                                                        ----------------     ----------------

Stockholders' equity:
   Common stock, par value $0.0001,                               2,207                2,207
     50,000,000 shares authorized in 2004 and 2003,
     22,067,276 shares issued and
     18,838,057 shares outstanding in 2004 and 2003
   Additional paid in capital                                60,563,133           60,545,887
   Deferred non-cash stock compensation                        (828,000)            (828,000)
   Accumulated deficit                                      (56,241,251)         (54,978,452)
                                                        ----------------     ----------------
Total stockholders' equity                                    3,496,089            4,741,642
                                                        ----------------     ----------------

Total liabilities and stockholders' equity              $    17,330,698      $    17,596,398
                                                        ================     ================

   The accompanying notes are an integral part of these consolidated financial statements.

                                              2
</TABLE>
<PAGE>

<TABLE>
                                       CRDENTIA CORP.
                      CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>

                                                           Three Months Ended March 31,
                                                      -------------------------------------
                                                           2004                 2003
                                                        (Unaudited)          (Unaudited)
                                                      ----------------     ----------------
<S>                                                   <C>                  <C>
Revenue from services                                 $     6,217,554      $            --
Direct operating expenses                                   4,947,715                   --
                                                      ----------------     ----------------
   Gross profit                                             1,269,839                   --
                                                      ----------------     ----------------

Operating expenses:
   Selling, general, and administrative expenses            2,113,151              175,179
   Non-cash stock based compensation                           17,246
                                                      ----------------     ----------------
Total operating expenses                                    2,130,397              175,179
                                                      ----------------     ----------------

Loss from operations                                         (860,558)            (175,179)

   Interest expense, net                                      402,241                  978
                                                      ----------------     ----------------

Loss from operations before income taxes                   (1,262,799)            (176,157)

Income tax expense                                                 --                   --
                                                      ----------------     ----------------

Net loss                                              $    (1,262,799)     $      (176,157)
                                                      ================     ================

Deemed dividend related to beneficial conversion
  feature on Series A convertible preferred stock           1,000,000                   --
                                                      ----------------     ----------------

Net loss attributable to common stockholders          $    (2,262,799)     $      (176,157)
                                                      ================     ================

Basic and diluted loss per common share
  attributable to common stockholders                 $         (0.12)     $         (0.02)
                                                      ================     ================

Weighted average number of common
 shares outstanding                                        18,838,057           10,998,166
                                                      ================     ================

  The accompanying notes are an integral part of these consolidated financial statements.

                                             3
</TABLE>
<PAGE>

<TABLE>
                                            CRDENTIA CORP.
                            CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>

                                                                        Three Months Ended March 31,
                                                                     ---------------------------------
                                                                          2004               2003
                                                                       (Unaudited)        (Unaudited)
                                                                     --------------     --------------
<S>                                                                  <C>                <C>
CASH FLOWS FROM:
OPERATING ACTIVITIES
Net loss                                                             $  (1,262,799)     $    (176,157)
Adjustments to reconcile net loss to
  net cash used in operating activities:
  Amortization of subordinated convertible note discounts                  242,411                 --
  Depreciation and amortization                                            245,348              1,003
  Bad debt expense                                                        (120,085)                --
  Non-cash stock based compensation                                         17,246                 --
  Changes in operating assets and liabilities, net of effects of
     purchases of subsidiaries:
     Accounts receivable                                                  (208,943)                --
     Unbilled receivables                                                   23,604                 --
     Other current assets                                                 (327,665)           (11,501)
     Accounts payable and accrued expenses                                  73,216             (7,366)
     Accrued employee compensation and benefits                            179,919                 --
     Long term bonus payable                                                20,194                 --
                                                                     --------------     --------------
Net cash used in operating activities                                   (1,117,554)          (194,021)
                                                                     --------------     --------------

INVESTING ACTIVITIES
Purchases of property and equipment                                        (49,583)                --
Proceeds from sale of (purchase of) long term prepaid expenses             (18,983)            13,679
Cash paid for acquisition of subsidiaries, net of cash received            (36,407)                --
                                                                     --------------     --------------
Net cash provided by (used in) investing activities                       (104,973)            13,679
                                                                     --------------     --------------

FINANCING ACTIVITIES
Issuance of preferred stock                                              1,000,000                 --
Net decrease in revolving lines of credit                                 (192,836)                --
Proceeds from notes payable to lenders                                          --            100,000
Repayment of notes payable to lenders                                      (66,667)                --
Repayment of notes payable to sellers                                     (287,712)                --
Payment of debt issuance costs                                             (31,411)                --
                                                                     --------------     --------------
Net cash provided by financing activities                                  421,374            100,000
                                                                     --------------     --------------

Net decrease in cash                                                      (801,153)           (80,342)
Cash and cash equivalents at beginning of period                         1,469,076            125,462
                                                                     --------------     --------------
Cash and cash equivalents at end of period                           $     667,923      $      45,120
                                                                     ==============     ==============

Supplemental cash flow information:
      Cash paid for interest                                         $     159,830      $          --
      Cash paid for income tax                                       $          --      $          --

       The accompanying notes are an integral part of these consolidated financial statements.

                                                   4
</TABLE>
<PAGE>

                                 CRDENTIA CORP.

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                 MARCH 31, 2004
                                 --------------


NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-------------------------------------------------------------------

Organization
------------
Crdentia Corp. (the "Company"), a Delaware corporation, is a provider of
healthcare staffing services in the United States. Such services include travel
nursing, per diem staffing, contractual clinical services and private duty home
health care. The Company considers the different services above to be one
segment. Each of these services relate solely to providing healthcare staffing
to customers that are healthcare providers and the Company utilizes similar
distribution methods, common systems, databases, procedures, processes and
similar methods of identifying and serving these customers.

Basis of Presentation
---------------------
The accompanying unaudited condensed consolidated financial statements of the
Company have been prepared in accordance with accounting principles generally
accepted in the United States for interim information and with the instructions
to Form 10-QSB. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
State for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three months
ended March 31, 2004 are not necessarily indicative of the results that may be
expected for the year ended December 31, 2004. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
Company's Form 10-KSB for the year ended December 31, 2003.

Goodwill and Intangible Assets
------------------------------
Intangible assets other than goodwill consist of customer relationships and
international nurse contracts and are presented net of accumulated amortization.
Intangibles are amortized over their respective useful lives estimated to be 5
years. Goodwill is assessed for impairment at least annually. The valuation of
these intangibles is determined based upon valuations performed by third-party
specialists and management's best estimates of fair value. As a result, the
ultimate value and recoverability of these assets is subject to the validity of
the assumptions used.

Income Taxes
------------
The Company accounts for income taxes under an asset and liability approach that
requires the recognition of deferred tax assets and liabilities for the expected
future tax consequences of events that have been recognized in the Company's
financial statements or tax return. A valuation allowance is recorded, based on
currently available information, when it is more likely than not that any or all
of a deferred tax asset will not be realized. The Company files a consolidated
Federal income tax return with its subsidiaries.

                                       5
<PAGE>

                                 CRDENTIA CORP.

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                 MARCH 31, 2004
                                 --------------


Revenue Recognition and Allowances
----------------------------------
The Company recognizes revenue generally on the date the Company's healthcare
staff provides services to healthcare facilities or individuals in their home.
The Company recognizes revenue at the gross amounts billed, as our healthcare
staff are employees of the Company.

Accounts receivable are uncollateralized customer obligations due under normal
trade terms. The Company provides services to various public and private medical
facilities such as hospitals, nursing care facilities, etc. Management performs
continuing credit evaluations of the customers' financial condition. In
addition, the Company provides home healthcare to individuals on a private pay
arrangement. The Company collects one week of services in advance for this type
of service which is recorded as deferred revenue until services are performed.

Senior management reviews accounts receivable on a regular basis to determine if
any receivables will potentially be uncollectible. An allowance for possible
doubtful accounts is recorded based upon management's evaluation of current
industry conditions, historical collection experience and other relevant factors
which, in the opinion of management, require recognition in estimating the
allowance. After all attempts to collect a receivable have failed, the
receivable is written off against the allowance. In the first quarter of 2004
the Company recovered amounts previously reserved in the allowance in the amount
of approximately $120,000.

Stock Based Compensation
------------------------
As permitted under the provisions of SFAS 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION, the Company continues to account for employee stock-based
transactions under Accounting Principles Board Opinion ("APB") No. 25,
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES. However, SFAS 123 requires the Company
to disclose pro forma net income and earnings per share as if the fair value
method had been adopted. Under the fair value method, compensation cost is
measured at the grant date based on the fair value of the award and is
recognized over the service period, which is usually the vesting period. For
non-employees, cost is also measured at the grant date, using the fair value
method, but is actually recognized in the financial statements over the vesting
period, or immediately if no further services are required.

If the Company had elected the fair value method of accounting for employee
stock-based compensation, compensation cost would be accrued at the estimated
fair value of the stock award grants over the service period, regardless of
later changes in stock prices and price volatility. The date of grant fair
values for options granted have been estimated based on a modified Black-Scholes
pricing model with the assumptions identified in the following table.

                                       6
<PAGE>

                                 CRDENTIA CORP.

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                 MARCH 31, 2004
                                 --------------


                                                             MARCH 31, 2004
                                                             --------------

          Dividend Yield                                     -

          Volatility                                         60%

          Risk-Free Interest Rates                           4.5%

          Expected Lives in Years                            0-5 years


The table below shows net loss per share for March 31, 2004 as if the Company
had elected the fair value method of accounting for stock options.

                                                                  MARCH 31, 2004
                                                                  --------------

          Net loss as reported                                    $ (2,262,799)

          Add: stock-based employee compensation included in
          reported net income, net of related tax effects               17,246

          Deduct: total stock-based employee compensation
          determined under fair value method for all awards,
          net of related tax effects                                   (17,358)

          Proforma net loss, as adjusted                          $ (2,262,911)

          Loss per share:
          Basic and diluted, as reported                          $      (0.12)
          Basic and diluted, as adjusted                          $      (0.12)
                                                                  -------------

NOTE 2. PROPERTY AND EQUIPMENT
------------------------------

<TABLE>
<CAPTION>
                                                         MARCH 31,        DECEMBER 31,
                                                           2004              2003
                                                       -------------     -------------
<S>                                                    <C>               <C>
Property and equipment consisted of the following:

Leasehold improvements                                 $     21,688      $     21,688
Computers, office furniture and equipment                   432,603           371,691
                                                       -------------     -------------
                                                            454,291           393,379
Less accumulated depreciation and amortization              (90,324)          (29,564)
                                                       -------------     -------------
                                                       $    363,967      $    363,815
                                                       =============     =============
</TABLE>

                                       7
<PAGE>

                                 CRDENTIA CORP.

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                 MARCH 31, 2004
                                 --------------


NOTE 3. REVOLVING LINES OF CREDIT
---------------------------------

The Company has credit facilities with two commercial financing institutions for
the financing of eligible accounts receivable. These accounts receivables serve
as security for the lines of credit. The Company pays interest monthly at 24%
per annum on one obligation and approximately 10% on the other, based on the
daily outstanding balance. Customer payments are used to repay the advances from
the financing institutions after deducting charges for bad debts, reserves for
chargebacks, and interest expense. At March 31, 2004, $2,679,054 was payable by
the Company on these two credit facilities, which approximates the maximum
borrowing available.

NOTE 4. NOTES PAYABLE
---------------------

On August 18, 2003, the Company executed a variable rate installment note with a
financial institution in the amount of $250,000. The note is subject to the same
security and covenants as the related line of credit. On September 12, 2003, the
Company received a loan for this amount. Under the terms of the note, the
Company is required to make monthly payments of $13,889 plus accrued interest on
the unpaid principal at the institution's Base Rate plus 2% (6% at March 31,
2004). The principal balance at March 31, 2004 is $152,777.

NOTE 5. SUBORDINATED CONVERTIBLE NOTES
--------------------------------------

On September 2, 2003, the Company issued $675,000 in principal amount of
Convertible Subordinated Promissory Notes (the "Notes") to six investors. On
September 29, 2003 and October 16, 2003, the Company issued additional Notes in
the principal amounts of $25,000 and $120,000 to two additional investors,
respectively. On December 3 and December 12, 2003, the Company issued additional
Notes in the principal amount of $90,000 to four additional investors. Subject
to the conversion provisions set forth in the Notes, the unpaid principal
together with all accrued interest on the Notes is due and payable in full one
year following the issuance date of each such note. Interest accrues on the
unpaid principal balance at a rate of ten percent (10%) per annum, simple
interest, and is payable in quarterly payments. The notes are convertible to our
common stock at the holder's option, prior to the due date, at an initial
conversion price of $1.50 per share. The conversion price was subsequently
adjusted to $1.00 per share upon the issuance of the Series A Convertible
Preferred Stock.

NOTE 6. NOTES PAYABLE TO SELLERS
--------------------------------

A note to the sellers of New Age Staffing, Inc. with the principal amount of
$1,385,000 is payable in equal installments of $65,952, began January 31, 2004,
for 21 months plus interest at 4%. The note balance at March 31, 2004 was
$1,187,143.

Two notes to the sellers of Nurses Network, one with a balance of $64,000 is due
in three equal installments on October 2, 2004, October 2, 2005 and October 2,
2006. Interest is accrued at a financial institution's Base Rate plus 1% (5% at

                                       8
<PAGE>

                                 CRDENTIA CORP.

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                 MARCH 31, 2004
                                 --------------


March 31, 2004). The second note, in the amount of $50,432 plus interest accrued
at a financial institution's Base Rate plus 1% (5% at March 31, 2004) is due and
payable on July 2, 2004.

The company assumed two notes from the PSR entities, one with an approximate
balance of $188,911, which is based on outstanding credit card balances owed by
the previous seller. The Company will make at least minimum payments on the
credit card balances until they are paid in full. The second note had a
principal amount of $2,525,000. Interest only payments are payable each month at
a rate of 8%. Principal and interest payments begin on December 1, 2004 for 8
years.

A note to a seller of PSR entities with a principal amount of $1,200,000 is
payable over a three year period beginning November 30, 2003 at an interest rate
of 12%. The outstanding balance at March 31, 2004 was $1,057,900. At March 31,
2004, the long-term debt discussed in Notes 4, 5, and 6 consists of the
following:

                                                                  MARCH 31,
                                                                    2004
                                                                -----------

               Variable rate installment note                   $  152,777
               Subordinated convertible notes                      910,000
               Seller note - New Age Staffing                    1,187,143
               Seller note - Nurses Network                        114,432
               Seller note - PSR Nurses original seller          2,713,911
               Seller note - PSR Nurses                          1,057,900
                                                                -----------
                                                                 6,136,163
               Less subordinated convertible notes discount        439,444
               Less current portion                              1,743,525
                                                                -----------
                                                                $3,953,194
                                                                ===========

NOTE 7. LONG TERM BONUS PAYABLE
-------------------------------

On December 16, 2003, the board of directors granted the Chief Executive Officer
two cash bonuses in the amount of $540,000 each. The bonuses are to be paid on
December 31, 2006 and January 4, 2007. The present value of bonuses has been
recorded at our estimated incremental cost of borrowing of 10%.

                                       9
<PAGE>

                                 CRDENTIA CORP.

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                 MARCH 31, 2004
                                 --------------


NOTE 8. STOCKHOLDERS' EQUITY AND PREFERRED STOCK
------------------------------------------------

Preferred Stock
---------------
The Company is authorized to issue 10,000,000 shares of preferred stock at a par
value of $0.0001. Currently there are 2,750,000 shares issued and outstanding.

On February 4, 2004, the Company issued an additional 1,000,000 shares of Series
A Convertible Preferred Stock at a per share price of $1.00 to one investor. The
holders of the Series A Convertible Preferred Stock are entitled to receive a
quarterly dividend in the amount equal to .025 shares of common stock for each
share of outstanding Series A Convertible Preferred Stock held by them. Unless
previously voluntarily converted prior to such time, the Series A Convertible
Preferred Stock will automatically convert into common stock at an initial
conversion ratio of one-to-one, one year from the date of issuance of such
shares.

Stock Based Awards
------------------
In October, 2002 the Company authorized the issuance of 100,000 restricted
shares of its common stock to three directors for a total of 300,000 shares in
exchange for providing services to the Company. The shares were valued at $700
($0.007 per share) for each of the three directors for a total value of $2,100,
and are subject to a three year vesting period commencing at the date of
issuance.

In November, 2002 the Company authorized the issuance of 399,931 restricted
shares of its common stock to its President for $0.0067 per share. These shares
were issued in exchange for providing services as a consultant to the Company.
The shares are subject to a four year vesting period beginning in July, 2002. In
accordance with the guidance in EITF 96-18 "Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services" the Company recorded these awards at their fair
value on the measurement date, generally based upon the Black-Scholes valuation
model. Although these awards have a four year vesting (service) period, the
measurement date is the date performance by the consultant is complete which was
September 30, 2003. As a result, management made assumptions regarding the
market value of its common stock given the limited number of shares traded at
the valuation date. Other variables in the Black-Scholes valuation model
(volatility, expected future dividend yield and risk free interest rate) must
also be estimated by management. Therefore, the fair market value used for
accounting purposes is based on an appraisal performed by an independent,
third-party professional valuation firm.

At March 31, 2004, officers and directors had outstanding stock purchase rights
and options totaling 7,818,224 shares.

                                       10
<PAGE>

                                 CRDENTIA CORP.

                          NOTES TO FINANCIAL STATEMENTS
                          -----------------------------
                                 MARCH 31, 2004
                                 --------------


NOTE 9. SUBSEQUENT EVENTS
-------------------------

In April 2004, the Company declared a common stock dividend of 68,750 shares
payable to the holders of the Series A Convertible Preferred Stock in accordance
with the terms of the agreement. See also Note 8.



ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH THE
UNAUDITED FINANCIAL STATEMENTS AND NOTES THERETO INCLUDED IN PART I - ITEM 1 OF
THIS REPORT, AND MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND RISK
FACTORS CONTAINED IN OUR REPORT ON FORM 10-KSB FOR THE YEARS ENDED DECEMBER 31,
2003 & 2002 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30,
2004.

AVAILABLE INFORMATION

We maintain a corporate website at www.crdentia.com. Our annual reports on Form
10-KSB, quarterly reports on Form 10-QSB, current reports on Form 8-K, and
amendments to these reports, are made available, free of charge, through this
website as soon as reasonably practicable after being filed with or furnished to
the Securities and Exchange Commission. In addition, on or before the date of
our annual stockholders meeting in 2004, our Code of Business Conduct, charters
of the Audit Committee and Compensation Committee will each be available on our
website. We will provide reasonable quantities of electronic or paper copies of
filings free of charge upon request. In addition, we will provide a copy of the
above referenced charters to stockholders upon request.

FORWARD-LOOKING STATEMENTS

Some of the information contained in this report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995. Any such forward-looking statements are based on current expectations and
projections about future events. The words estimate, plan, intend, expect,
anticipate and similar expressions are intended to identify forward-looking
statements which involve, and are subject to, known and unknown risks,
uncertainties and other factors which could cause our actual results, financial
or operating performance, or achievements to differ materially from future
results, financial or operating performance, or achievements expressed or
implied by such forward-looking statements. Projections and assumptions
contained and expressed herein were reasonably based on information available to
us at the time so furnished and as of the date of this filing. All such
projections and assumptions are subject to significant uncertainties and
contingencies, many of which are beyond our control, and no assurance can be
given that the projections will be realized. Readers are cautioned not to place

                                       11
<PAGE>

undue reliance on any such forward-looking statements, which speak only as of
the date hereof. Careful consideration should be given to those risk factors
discussed in our Form 10-KSB for the years ended December 31, 2003 & 2002.
Actual results that we achieve may differ materially from any forward looking
statements due to such risks and uncertainties, and we undertake no obligation
to publicly release any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

GENERAL
-------

         We are a provider of healthcare staffing services, focusing on the
areas of travel nursing, per diem staffing, contractual clinical services, and
private duty home care. Our travel nurses are recruited domestically as well as
internationally, and placed on temporary assignments at healthcare facilities
across the United States. Our per diem nurses are local nurses placed at
healthcare facilities on short-term assignments. Our contractual clinical
services group provides complete clinical management and staffing for healthcare
facilities and our private duty home care group provides nursing case management
and staffing for skilled and non-skilled care in the home. We consider the
different services described above to be one segment as each of these services
relate solely to providing healthcare staffing to customers and utilize similar
recruitment methods, common systems, databases, procedures, processes and
similar methods of identifying and serving these customers.

         At the beginning of 2003, we were a development stage company with no
commercial operations. During the year, we pursued our operational plan of
acquiring companies in the healthcare staffing field and completed the
acquisition of four companies. As a result, at the end of 2003 we were providing
temporary healthcare in 25 states and have contracts with approximately 150
healthcare facilities. In 2004, we have continued to follow our plan to acquire
specialized companies in the healthcare staffing field for the foreseeable
future. Approximately 75% of our revenue in the first quarter of 2004 was
derived from the placement of travel nurses and approximately 13% from per diem
services. The balance came from a mix of private duty nursing and complete
clinical management.

         The companies we acquired in 2003 -- Baker Anderson Christie, Inc., New
Age Nurses, Inc., Nurses Network, Inc., and PSR Nurse Recruiting, Inc. and PSR
Nurses Holdings Corp., which hold the limited partner and general partner
interests in PSR Nurses, Ltd. -- provide the foundation for our continued
growth. During the first quarter of 2004, we continued to streamline the
operations we acquired in 2003 and began preparing for the integration of future
acquisitions.

PLAN OF OPERATIONS
------------------

         Our success in achieving profitability will depend on our ability to
consummate acquisitions of healthcare companies, to implement our marketing
strategy and to achieve a revenue stream from the sale of services, while not
exceeding budgeted expenses. As we continue to implement our business plan, we
will be subject to all of the risks inherent in an emerging business, including
the need to provide reliable and effective services, to develop marketing
expertise, and to generate sales. In the event that our market declines
significantly or fails to grow as anticipated, our business, financial condition
and results of operations could be materially adversely affected.

                                       12
<PAGE>

         During the first quarter of 2004, most of our customers were acute care
hospitals located throughout the continental United States. As we grow, we
anticipate that acute care facilities will continue to be the majority of our
customer base but that the overall percentage will decline as we increase our
presence in the home health area. We did not have any revenue during the first
half of 2003 and did not have revenue until August 7, 2003, when we closed our
first acquisition.

         Our overall gross profit margin in the first quarter of 2004 was
approximately 20.5%, which we anticipate will increase throughout 2004. This
represents a 15% decline from the 24.2% gross profit margin reported in 2003,
caused, generally, by a softening in the market for travel nurses in first
quarter of 2004. In the travel nursing industry, the first quarter of each year
is commonly the weakest quarter for results. The margin was also affected by
extension bonuses paid to some of our travel nurses in the first quarter. We
anticipate that this decline in margin was temporary. Our gross margin is the
difference between the revenue we realize when we bill our customers for the
services of our healthcare professionals and our direct operating costs, which
include the cost of the healthcare professionals and the related housing and
travel costs, certain employment related taxes and workers compensation
insurance coverage. Any increase in margin will be the result of our continuing
efforts to increase the number of international nurses under contract and to
slightly alter our overall product mix to include more home health and allied
health services, which generally have higher margins. As a result of these
efforts, during the second quarter of 2004, we anticipate adding 12
international nurses to the 29 international nurses we had under contract at the
end of the first quarter.

         During the first quarter of 2004, our selling, general and
administrative expense was comprised, primarily, of personnel costs, legal and
audit fees related to being a public company and various other office and
administrative expenses. Our selling, general and administrative expense in the
first quarter of 2003 is only a fraction of that experienced in the same period
in 2004 because we were in our development stage in early 2003 and did not have
any operations. Our first acquisition of an operating entity was not until
August 2003.

         In 2004, we intend to continue growing the businesses acquired in 2003
and to further expand our operations through acquisitions. Our goal is to
acquire at least four additional companies in 2004, generally in the areas of
travel nursing, per diem staffing and private duty home care. We are also
exploring opportunities in the allied health and home health areas. As we
acquire companies, we expect to realize immediate savings in their operations as
we integrate them into our operations and as we decrease their general and
administrative costs by merging their back office and support operation into
ours. We have engaged an independent consulting firm to assist us in identifying
acquisition targets that meet general guidelines with regard to revenue, gross
profit margin and projected earnings. We have begun the process of contacting
the companies that have been so identified.

         During the first quarter of 2004 the cash flow generated by our
operations was not sufficient to fund our operations and was supplemented by
$1.0 million of convertible preferred stock issued in February 2004. During the
first quarter we utilized several factoring relationships and one banking
relationship to fund our cash needs on a short-term basis. These were
consolidated into a single relationship in April of 2004, to simplify the record
keeping and decrease the overall cost. At March 31, 2004, we owed approximately
$5.1 million to the selling shareholders of several of the companies we acquired
in 2003, of which approximately $1.1 million will be repaid during 2004.

                                       13
<PAGE>

         As noted above in the discussion of gross margins, the first quarter
results were significantly below expectations. At March 31, 2004, our cash
balance was $667,923. However, by April 30, 2004, through a combination of
expanded borrowing capacity and collections, our cash balance had increased to
over $800,000. Operationally, we have seen a significant upturn in our business
since the end of the first quarter. Through mid-May, we have already experienced
an increase in the number of travel nurses under contract and, based on the
input from our nurse recruiters, we expect that positive trend to continue at
least through the end of the year. We are also seeing an increase in the number
of international travel nurses under contract. In addition, we have experienced
a 20% increase in the number of contracts we have with hospitals since March 31,
2004.

         As a result, we have reforecast our financial statements for the
balance of the year based on the positive trends we are seeing. Management
believes that the worst of the downturn in our business is behind us and that
the operational increases noted above will result in a significant improvement
in our monthly cash flow, such that it will turn positive sometime in the second
half of the year. We are also working with various lending sources to further
expand our borrowing capacity and believe that our current cash on hand, coupled
with our available borrowing capacity and improving cash flow from operations,
will provide sufficient resources to continue operations at its current level,
at least through the end of the year. If our business fails to improve as
rapidly as we expect, we would be forced to significantly curtail our operations
until additional capital could be raised. There is no assurance that additional
capital could be raised for operational purposes.

         Based on our current acquisition pipeline, we believe that additional
capital will be required to acquire additional companies. We are currently
exploring various debt and equity options for raising this capital. While we
believe we will be successful in raising additional capital, there is no
assurance that we will be able to raise the amount of capital required to meet
our objectives. If additional capital is not readily available, we will be
forced to scale back our acquisition activities and our operations until our
income exceeds our expenses. This would result in an overall slowdown of our
development.

         As a result of certain account collection issues, we are currently
working to end the relationship with one of our hospital group customers. As of
May 7, 2004, this customer owed us approximately $96,135, all within the payment
terms of the contract. This is down from the $459,198 owed to us as of March 23,
2004. We anticipate that this contract will terminate by the end of May, 2004
and we have a signed agreement from the customer to pay a set amount each week
until the balance is paid in full. The customer has fully complied with the
signed agreement to date and we expect to be fully paid by the middle of May,
2004. Consequently, we have reversed the specific allowance for doubtful account
of approximately $120,000 that was recorded as of the end of 2003.

         Our capital commitments for the next twelve months are minimal as our
business does not require the purchase of plants, extensive capital equipment or
inventory.

                                       14
<PAGE>

CRITICAL ACCOUNTING POLICIES AND MANAGEMENT JUDGEMENT
-----------------------------------------------------

         The preparation of the financial statements in accordance with
accounting principles generally accepted in the United States of America
requires us to make judgments, estimates, and assumptions regarding
uncertainties that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities, and the reported amounts of
revenues and expenses. Areas that require significant judgments, estimates, and
assumptions include the assignment of fair values upon acquisition of goodwill
and other intangible assets, testing for impairment and valuation of the stock
used to consummate our acquisitions. We use historical experience, qualified
independent consultants and all available information to make these judgments
and estimates, and actual results will inevitably differ from those estimates
and assumptions that are used to prepare the company's financial statements at
any given time.

         ACCOUNTS RECEIVABLE

         Accounts receivable are reduced by an allowance for doubtful accounts
that provides a reserve with respect to those accounts for which revenue was
recognized but with respect to which management subsequently determines that
payment is not expected to be received. We analyze the balances of accounts
receivable to ensure that the recorded amounts properly reflect the amounts
expected to be collected. This analysis involves the application of varying
percentages to each accounts receivable category based on the age of the
uncollectible accounts receivable. The amount ultimately recorded as the reserve
is determined after management also analyzes the collectibility of specific
large or problematic accounts on an individual basis, as well as the overall
business climate and other factors. Our estimate of the percentage of
uncollectible accounts may change from time to time and any such change could
have a material impact on our financial condition and results of operations.

         ACCOUNTING FOR STOCK OPTIONS

         We have used stock grants and stock options to attract and retain
directors and key executives and intend to use stock options in the future to
attract, retain and reward employees for long-term service. In 2003 the grant
prices were significantly under the publicly traded market value per share of
our stock. Therefore, we calculated the intrinsic value of the stock and options
granted and recorded non-cash compensation expense for the difference between
the grant price and the market value at issuance. In the future, we may issue
additional shares and/or options under market, at which time we would incur
additional non-cash compensation expense, but we anticipate that the
preponderance of future issues will be at the prevailing market price of our
stock.

         PURCHASE ACCOUNTING, GOODWILL AND INTANGIBLE ASSETS

         All business acquisitions have been accounted for using the purchase
method of accounting and, accordingly, the statements of operations include the
results of each acquired business since the date of acquisition. The assets
acquired and liabilities assumed are recorded at their estimated fair value as
determined by management based on an independent third-party valuation. We
determined to use third-party valuations because in 2003 our common stock had
just begun to trade and it was thinly traded throughout the year. We finalize
the allocation of the purchase price to the fair value of the assets acquired

                                       15
<PAGE>

and liabilities assumed when we obtain information sufficient to complete the
allocation, but in any case, within one year after acquisition. In 2003, this
allocation was also based on an independent third-party valuation.

         Goodwill arising from the acquisitions of businesses is recorded as the
excess of the purchase price over the estimated fair value of the net assets of
the businesses acquired. Statement of Financial Accounting Standards No. 142
("Goodwill and Other Intangible Assets") provides that goodwill is to be tested
for impairment annually or more frequently if circumstances indicate potential
impairment. Consistent with this standard, we will review goodwill, as well as
other intangible assets and long-term assets, for impairment annually or more
frequently as warranted, and if circumstances indicate that the recorded value
of any such other asset is impaired, such asset is written down to its new,
lower fair value.

         The Company currently does not believe any impairment of its goodwill
or any such other asset existed at March 31, 2004. Nevertheless, future
conditions or events could adversely affect the recorded value of goodwill or
such other assets. If any item of goodwill or such other asset is determined to
be impaired, an impairment loss would be recognized equal to the amount by which
the recorded value exceeds the estimated fair market value.


ITEM 3.           CONTROLS AND PROCEDURES

         Subsequent to March 31, 2004 and prior to the filing of this Report, we
conducted an evaluation of the effectiveness of the design and operation of our
disclosure controls and procedures under the supervision of, and with the
participation of, our management, including the Chief Executive Officer and
Chief Financial Officer. Based on that evaluation, our management, including the
Chief Executive Officer and Chief Financial Officer, concluded that our
disclosure controls and procedures were effective at March 31, 2004, and during
the period prior to the execution of this Report. There have been no changes in
our internal controls over financial reporting during our most recent fiscal
year that have materially affected or are likely to materially affect our
internal control over financial reporting.


                           PART II. OTHER INFORMATION

ITEM 1.           LEGAL PROCEEDINGS

         There is no material litigation currently pending against us.


ITEM 2.           CHANGE IN SECURITIES AND USE OF PROCEEDS

         (c) On February 4, 2004 we issued an aggregate of 1,000,000 shares of
Series A Convertible Preferred Stock at a per share price of $1.00 to an
investor. This investor is one of the two investors that purchased $1,750,000 of
the Series A Convertible Preferred Stock as of December 17, 2003. The holders of
the Series A Convertible Preferred Stock are entitled to receive a quarterly
dividend in an amount equal to .025 shares of common stock for each share of
outstanding Series A Convertible Preferred Stock held by them. Unless previously
voluntarily converted prior to such time, the Series A Convertible Preferred
Stock will automatically convert into shares of our common stock at an initial
conversion ratio of one-to-one, one year from the date of issuance of such
shares, subject to certain conversion price adjustments.

                                       16
<PAGE>

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES

         None.


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

         None.


ITEM 5.           OTHER INFORMATION

         None.

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

EXHIBIT NO.      DESCRIPTION
-----------      -----------

3.1(1)            Restated Certificate of Incorporation.

3.2(2)            Certificate of Amendment to Restated Certificate of
                  Incorporation.

3.3(3)            Restated Bylaws.

4.1(4)            Certificate of Amendment of Certificate of Designations,
                  Preferences and Rights of Series A Preferred Stock of Crdentia
                  Corp.

10.1#             Executive Employment Agreement dated March 22, 2004 by and
                  between Crdentia Corp. and William S. Leftwich.

10.2#             Notice of Stock Option Award and Stock Option Award Agreement
                  dated April 8, 2004 by and between Crdentia Corp. and William
                  S. Leftwich.

31.1              Certification of Chief Executive Officer pursuant to Rules
                  13a-14(a) and 15d-14(a) promulgated pursuant to the Securities
                  Exchange Act of 1934, as amended.

31.2              Certification of Chief Financial Officer pursuant to Rules
                  13a-14(a) and 15d-14(a) promulgated pursuant to the Securities
                  Exchange Act of 1934, as amended.

32.1              Certification of Chief Executive Officer pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002.

32.2              Certification of Chief Financial Officer pursuant to Section
                  906 of the Sarbanes-Oxley Act of 2002.

                                       17
<PAGE>

-----------------

#        Indicates management contract or compensatory plan.

(1)      Previously filed as Exhibit 3.1 to the Form 8-K filed with the
         Securities and Exchange Commission on August 22, 2002 and incorporated
         herein by reference.
(2)      Previously filed as Exhibit 3.2 to the Form 10-QSB filed with the
         Securities and Exchange Commission on August 12, 2003 and incorporated
         herein by reference.
(3)      Previously filed as Exhibit 3.2 to the Form 8-K filed with the
         Securities and Exchange Commission on August 22, 2002 and incorporated
         herein by reference.
(4)      Previously filed as Exhibit 4.3 to the Form 8-K filed with the
         Securities and Exchange Commission on February 20, 2004 and
         incorporated herein by reference.

                                       18
<PAGE>

(b)      Reports on Form 8-K

         On January 12, 2004, we filed a Form 8-K under Item 5, Other Events and
         Required FD Disclosure and Item 7 Financial Statements, PRO FORMA
         Financial Information and Exhibits, to report certain modifications to
         our current equity arrangements with James D. Durham, our Chairman and
         Chief Executive Officer.

         On February 7, 2004, we filed a Form 8-K/A under Item 2, Acquisition or
         Disposition of Assets and Item 7, Financial Statements, PRO FORMA
         Financial Information and Exhibits, to amend the Form 8-K filed on
         December 12, 2003 to provide financial statements and PRO FORMA
         financial information for PSR Nurse Recruiting, Inc. and PSR Nurses
         Holdings Corp.

         On February 20, 2004, we filed a Form 8-K under Item 5, Other Events
         and Required FD Disclosure and Item 7 Financial Statements, PRO FORMA
         Financial Information and Exhibits, to report the issuance of an
         additional 1,000,000 shares of Series A Convertible Preferred Stock.



                                   SIGNATURES

In accordance with the requirements of Section 13 of 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed in
its behalf by the undersigned, thereunto duly authorized.

Date:  May 17, 2004              By:  /s/ James D. Durham
                                      ------------------------------------------
                                          James D. Durham
                                          Chief Executive Officer

Date:  May 17, 2004              By:  /s/ William S. Leftwich
                                      ------------------------------------------
                                          William S. Leftwich
                                          Chief Financial Officer and Secretary

                                       19

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>crdentia_10qex10-1.txt
<TEXT>
<PAGE>

                                                                   Exhibit 10.1

                                 CRDENTIA CORP.

                         EXECUTIVE EMPLOYMENT AGREEMENT

--------------------------------------------------------------------------------

         This Executive Employment Agreement (the "AGREEMENT"), dated March 22,
2004 (the "EFFECTIVE DATE"), is between Crdentia Corp., a Delaware corporation
(the "COMPANY") and William S. Leftwich, an individual residing at 521 Spinner
Road, De Soto, Texas 75115 ("EXECUTIVE").

1.       POSITION AND RESPONSIBILITIES

         a. POSITION. Executive is employed by the Company to render services to
the Company in the position of Chief Financial Officer and Secretary. Executive
shall perform such duties and responsibilities as are normally related to such
position in accordance with the standards of the industry and any additional
duties now or hereafter assigned to Executive by the Company. To the extent not
inconsistent with the express terms of this Agreement, Executive shall abide by
the rules, regulations, and practices for the Company's senior management as
adopted or modified from time to time in the Company's sole discretion.

         b. OTHER ACTIVITIES. Except upon the prior written consent of the
Company, Executive will not, during the term of this Agreement, (i) accept any
other employment, or (ii) engage, directly or indirectly, in any other business
activity (whether or not pursued for pecuniary advantage) that interferes with
Executive's duties and responsibilities hereunder or create a conflict of
interest with the Company.

         c. NO CONFLICT. Executive represents and warrants that Executive's
execution of this Agreement, Executive's employment with the Company, and the
performance of Executive's proposed duties under this Agreement shall not
violate any obligations Executive may have to any other employer, person or
entity, including any obligations with respect to proprietary or confidential
information of any other person or entity.

2.       COMPENSATION AND BENEFITS

         a. BASE SALARY. In consideration of the services to be rendered under
this Agreement, the Company shall pay Executive a salary at the rate of One
Hundred Seventy Five Thousand Dollars ($175,000) per year ("BASE SALARY"). The
Base Salary shall be paid in accordance with the Company's regularly established
payroll practice. Executive's Base Salary will be reviewed from time to time in
accordance with the established procedures of the Company for adjusting salaries
for similarly situated employees and may be adjusted in the sole discretion of
the Company; provided, however, that the Company may not reduce Executive's Base
Salary unless the base salaries of all executive employees holding the position
of vice president or above are reduced by the same percentage as Executive's
Base Salary.

         b. STOCK OPTION(S). In consideration of the services to be rendered
hereunder, upon the requisite approval of the Company's board of directors,
Executive shall be entitled to receive an option to purchase up to 331,512

<PAGE>

shares of the Company's common stock ("Common Stock") at an exercise price per
share equal to the then current fair market value as determined by the board of
directors. Such option shall be evidenced by, and subject to the terms and
conditions set forth in, the form of Stock Option Agreement which is attached
hereto as Exhibit A (the "STOCK OPTION AGREEMENT").

         c. BENEFITS. Executive shall be eligible to participate in the benefits
made generally available by the Company to similarly-situated Executives, in
accordance with the benefit plans established by the Company, and as may be
amended from time to time in the Company's sole discretion.

         d. BONUS PROGRAM. Executive shall be eligible to participate in the
Bonus Program made generally available to the Company's Executives ("BONUS
PROGRAM"), such participation to be at a level consistent with
similarly-situated Executives and in accordance with the terms of the Bonus
Program established by the Company, and as may be amended from time to time in
the Company's sole discretion.

         e. EXPENSES. The Company shall reimburse Executive for reasonable
business expenses incurred in the performance of Executive's duties hereunder in
accordance with the Company's expense reimbursement guidelines.

3.       AT-WILL EMPLOYMENT; TERMINATION BY COMPANY

         a. AT-WILL TERMINATION BY COMPANY. The employment of Executive shall be
"at-will" at all times. The Company may terminate Executive's employment with
the Company at any time, without any advance notice, for any reason or no reason
at all, notwithstanding anything to the contrary contained in or arising from
any statements, policies or practices of the Company relating to the employment,
discipline or termination of its employees. Upon and after such termination by
the Company, all obligations of the Company under this Agreement shall cease,
unless Executive's employment is terminated without Cause, in which case the
Company shall provide Executive with the severance benefits described in Section
3(b) below.

         b. SEVERANCE. Except in situations where the employment of Executive is
terminated For Cause or By Disability (as defined in Section 4 below), in the
event that the Company terminates the employment of Executive at any time, or
upon Executive's death, Executive will be eligible to receive an amount, payable
in a lump sum, equal to (i) one (1) month of Base Salary of the Executive plus
(ii) two (2) weeks of Base Salary of the Executive for each full month of
employment in excess of six (6) months of employment beginning on the Effective
Date, up to an aggregate maximum of amount (with respect to subsections (i) and
(ii)) of twelve (12) months of Base Salary. For purposes of such calculation,
"Base Salary" shall refer to the greater of (i) $175,000 per year or (ii)
Executive's then current base salary on the termination date (plus the amount of
any cash bonus received by Executive for the prior year, if any). Executive's
eligibility for severance is conditioned on Executive having first signed a
release agreement in the form attached as Exhibit B. Executive shall not be
entitled to any severance payments if Executive's employment is terminated For
Cause, By Death or By Disability (as defined in Section 4 below) or if
Executive's employment is terminated by Executive without Good Reason (in
accordance with Section 5 below).

                                       2
<PAGE>

4.       OTHER TERMINATIONS BY COMPANY

         a. TERMINATION FOR CAUSE. For purposes of this Agreement, "For Cause"
shall mean: (i) Executive is indicted for or charged with a crime involving
dishonesty, breach of trust, or physical harm to any person (provided, however,
that the foregoing shall not include any misdemeanor resulting from harm caused
by Executive to another person through the operation of a motor vehicle); (ii)
Executive willfully engages in conduct that is in bad faith and materially
injurious to the Company, including but not limited to, misappropriation of
trade secrets, fraud or embezzlement; (iii) Executive commits a material breach
of this Agreement, which breach (if curable) is not cured within thirty days
after written notice to Executive from the Company; (iv) Executive willfully
refuses to implement or follow a lawful policy or directive of the Company that
is consistent with the terms of this Agreement, which breach is not cured within
sixty (60) days after written notice to Executive from the Company; or (v)
Executive engages in misfeasance or malfeasance demonstrated by a pattern of
failure to perform job duties diligently and professionally, which failure (if
curable) is not cured within sixty (60) days after written notice to Executive
from the Company. Except for the notices required above, the Company may
terminate Executive's employment For Cause at any time, without any advance
notice. The Company shall pay to Executive all compensation to which Executive
is entitled up through the date of termination, subject to any other rights or
remedies of the Company under law; and thereafter all obligations of the Company
under this Agreement shall cease.

         b. BY DEATH. Executive's employment shall terminate automatically upon
Executive's death. The Company shall pay to Executive's beneficiaries or estate,
as appropriate, any compensation then due and owing. Thereafter all obligations
of the Company under this Agreement shall cease. Nothing in this Section shall
affect any entitlement of Executive's heirs or devisees to the benefits of any
life insurance plan or other applicable benefits.

         c. BY DISABILITY. If Executive becomes eligible for the Company's long
term disability benefits or if, in the sole opinion of a qualified medical
doctor in Executive's municipality of residence selected by the Company but
otherwise not affiliated with the Company or its senior management, Executive is
unable to carry out the responsibilities and functions of the position held by
Executive by reason of any physical or mental impairment for more than ninety
(90) consecutive days or more than one hundred and twenty (120) days in any
twelve-month period, then, to the extent permitted by law, the Company may
terminate Executive's employment. The Company shall pay to Executive all
compensation to which Executive is entitled through the date of termination, and
thereafter all obligations of the Company under this Agreement shall cease.
Nothing in this Section shall affect Executive's rights under any disability
plan in which Executive is a participant.

5. TERMINATION BY EXECUTIVE

         a. AT-WILL TERMINATION BY EXECUTIVE. Executive may terminate employment
with the Company at any time for any reason or no reason at all, upon ninety
(90) days' advance written notice. During such notice period Executive shall
continue to diligently perform all of Executive's duties hereunder. The Company
shall have the option, in its sole discretion, to make Executive's termination

                                       3
<PAGE>

effective at any time prior to the end of such notice period as long as the
Company pays Executive all compensation to which Executive is entitled up
through the last day of the ninety (90) day notice period. Thereafter all
obligations of the Company shall cease.

         b. TERMINATION FOR GOOD REASON. Executive's termination shall be for
"Good Reason" if Executive provides written notice to the Company of the Good
Reason within thirty (30) days of the event constituting Good Reason and
provides the Company with a period of thirty (30) days to cure the event
constituting Good Reason and the Company fails to cure the Good Reason within
that period. For purposes of this Agreement, "Good Reason" shall mean any of the
following events, if such event is effected by the Company without the consent
of Executive: (i) a change in Executive's position with the Company which
materially reduces Executive's level of responsibility; (ii) a reduction in
Executive's Base Salary, except for reductions in accordance with Section 2(a)
hereof; (iii) a relocation of Executive's principal place of employment by more
than fifty (50) miles (excluding any relocation to Dallas, Texas); or (iv) a
material breach of this Agreement by the Company. In such event Executive may
terminate his employment for Good Reason, in which case Executive will be
eligible to receive an amount, payable in the form of a lump sum, equal to (i)
one (1) month of Base Salary of the Executive plus (ii) two (2) weeks of Base
Salary of the Executive for each full month of employment in excess of six (6)
months of employment beginning on the Effective Date, up to an aggregate maximum
of amount (with respect to subsections (i) and (ii)) of twelve (12) months of
Base Salary. For purposes of such calculation, "Base Salary" shall refer to the
greater of (i) $175,000 per year or (ii) Executive's Base Salary on the
termination date (plus the amount of any cash bonus received by Executive for
the prior year, if any). Executive's eligibility for severance is conditioned on
Executive having first signed a release agreement in the form attached as
Exhibit B. Thereafter all obligations of the Company or its successor under this
Agreement shall cease.

6.       TERMINATION OBLIGATIONS

         a. RETURN OF PROPERTY. Executive agrees that all property (including,
without limitation, all equipment, tangible proprietary information, documents,
records, notes, contracts and computer-generated materials) furnished to or
created or prepared by Executive incident to Executive's employment belongs to
the Company and shall be promptly returned to the Company upon termination of
Executive's employment.

         b. RESIGNATION AND COOPERATION. Upon termination of Executive's
employment, Executive shall be deemed to have resigned from all offices and
directorships then held with the Company. Following any termination of
employment, subject to Executive's receiving reasonable and customary
compensation, Executive shall cooperate with the Company in the winding up of
pending work on behalf of the Company and the orderly transfer of work to other
employees. Executive shall also cooperate with the Company, at the Company's
expense, in the defense of any action brought by any third party against the
Company that relates to Executive's employment by the Company.

         c. CONTINUING OBLIGATIONS. Executive understands and agrees that
Executive's obligations under Sections 6, 7, and 8 herein (including Exhibits C
and D) shall survive the termination of Executive's employment for any reason
and the termination of this Agreement.

                                       4
<PAGE>

7. INVENTIONS AND PROPRIETARY INFORMATION; NON COMPETITION; PROHIBITION ON THIRD
PARTY INFORMATION

         a. PROPRIETARY INFORMATION AGREEMENT. Executive agrees to sign and be
bound by the terms of the Proprietary Information and Inventions Agreement,
which is attached as Exhibit C ("PROPRIETARY INFORMATION AGREEMENT").

         b. NON-COMPETITION. As an inducement for the Company's entering into
this Agreement and in consideration of the Company's agreement to furnish
Executive with certain confidential and proprietary information regarding the
Company pursuant to Exhibit C, Executive covenants that commencing on the
Effective Date and for a period ending eighteen (18) months following the
termination of Executive's employment with the Company (the "TERM"), Executive
shall not, directly or indirectly, manage, engage in, operate or conduct,
prepare to or plan to conduct or assist any person or entity to conduct any
business, or have any controlling interest in any business, person, firm,
corporation or other entity (as a principal, owner, agent, employee,
shareholder, officer, director, joint venturer, partner, member, security
holder, creditor, consultant or in any other capacity) whose revenue is
generated principally from a business which is competitive with the Business
anywhere in the United States (the "TERRITORY"). As used herein, the term
"Business" shall refer to the business of the company and its subsidiaries of
operating a temporary nurse staffing company, including, without limitation, the
provision of travel and per diem temporary nurse staffing services. The
covenants set forth in this Section 7(b) shall be construed as a series of
separate covenants covering their subject matter in each of the separate states
within the Territory, and except for geographic coverage, each such separate
covenant shall be deemed identical in terms to the covenant set forth above in
this Section 7(b). To the extent that any such covenant shall be judicially
unenforceable in any one or more states in the United States, such covenant
shall not be affected with respect to each of such other states in the
Territory. Each covenant with respect to such state in the Territory shall be
construed as severable and independent.

         c. NON-SOLICITATION; NON-DISPARAGEMENT. Executive acknowledges that
because of Executive's position in the Company, Executive will have access to
material intellectual property and confidential information. During the Term (as
previously defined), in addition to Executive's other obligations hereunder or
under the Proprietary Information Agreement, Executive shall not, for Executive
or any third party, directly or indirectly (a) divert or attempt to divert from
the Company or its subsidiaries any business of any kind, including without
limitation the solicitation of or interference with any of its customers,
clients, members, business partners or suppliers, or (b) solicit or otherwise
induce any person engaged by the Company or any of its subsidiaries (as an
agent, employee, consultant, or in any other capacity) to terminate his or her
employment, consultancy or other relationship with the Company or its
subsidiaries. In addition, Executive will not disparage the Company or any of
its stockholders, directors, employees or agents (collectively the "COMPANY
REPRESENTATIVES"), and neither the Company nor the Company Representatives will
disparage Executive.

         d. NON-DISCLOSURE OF THIRD PARTY INFORMATION. Executive represents and
warrants and covenants that Executive shall not disclose to the Company, or use,
or induce the Company to use, any proprietary information or trade secrets of
others at any time, including but not limited to any proprietary information or
trade secrets of any former employer, if any; and Executive acknowledges and

                                       5
<PAGE>

agrees that any violation of this provision shall be grounds for Executive's
immediate termination and could subject Executive to substantial civil
liabilities and criminal penalties. Executive further specifically and expressly
acknowledges that no officer or other employee or representative of the Company
has requested or instructed Executive to disclose or use any such third party
proprietary information or trade secrets.

         e. REASONABLENESS OF RESTRICTIONS. EXECUTIVE HAS CAREFULLY READ AND
CONSIDERED THE PROVISIONS OF SECTION 7 HEREOF AND, HAVING DONE SO, HEREBY AGREES
THAT THE RESTRICTIONS SET FORTH IN SUCH SECTIONS ARE FAIR AND REASONABLE AND ARE
REASONABLY REQUIRED FOR THE PROTECTION OF THE INTERESTS OF THE COMPANY AND ITS
ASSETS AND PROPERTIES, INCLUDING, WITHOUT LIMITATION, THE BUSINESS. IF ANY
COVENANT IN SECTION 7 IS HELD TO BE UNREASONABLE, ARBITRARY, OR AGAINST PUBLIC
POLICY, SUCH COVENANT WILL BE CONSIDERED TO BE DIVISIBLE WITH RESPECT TO SCOPE,
TIME, AND GEOGRAPHIC AREA, AND SUCH LESSER SCOPE, TIME, OR GEOGRAPHIC AREA, OR
ALL OF THEM, AS A COURT OF COMPETENT JURISDICTION MAY DETERMINE TO BE
REASONABLE, NOT ARBITRARY, AND NOT AGAINST PUBLIC POLICY, WILL BE EFFECTIVE,
BINDING AND ENFORCEABLE AGAINST THE EXECUTIVE.

8.       ARBITRATION

         Executive agrees to sign and be bound by the terms of the Arbitration
Agreement, which is attached as Exhibit D.

9.       AMENDMENTS; WAIVERS; REMEDIES

         This Agreement may not be amended or waived except by a writing signed
by Executive and by a duly authorized representative of the Company other than
Executive. Failure to exercise any right under this Agreement shall not
constitute a waiver of such right. Any waiver of any breach of this Agreement
shall not operate as a waiver of any subsequent breaches. All rights or remedies
specified for a party herein shall be cumulative and in addition to all other
rights and remedies of the party hereunder or under applicable law.

10.      ASSIGNMENT; BINDING EFFECT

         a. ASSIGNMENT. The performance of Executive is personal hereunder, and
Executive agrees that Executive shall have no right to assign and shall not
assign or purport to assign any rights or obligations under this Agreement. This
Agreement may be assigned or transferred by the Company; and nothing in this
Agreement shall prevent the consolidation, merger or sale of the Company or a
sale of any or all or substantially all of its assets.

         b. BINDING EFFECT. Subject to the foregoing restriction on assignment
by Executive, this Agreement shall inure to the benefit of and be binding upon
each of the parties; the affiliates, officers, directors, agents, successors and

                                       6
<PAGE>

assigns of the Company; and the heirs, devisees, spouses, legal representatives
and successors of Executive.

11.      NOTICES

         All notices or other communications required or permitted hereunder
shall be made in writing and shall be deemed to have been duly given if
delivered: (a) by hand; (b) by a nationally recognized overnight courier
service; or (c) by United States first class registered or certified mail,
return receipt requested, to the principal address of the other party, as set
forth below. The date of notice shall be deemed to be the earlier of (i) actual
receipt of notice by any permitted means, or (ii) five business days following
dispatch by overnight delivery service or the United States Mail. Executive
shall be notify the Company in writing of any change in Executive's address.
Notice of change of address shall be effective only when done in accordance with
this paragraph.

Company's Notice Address:

14111 Dallas Parkway, Suite 600
Dallas, Texas  75240
Attention:  Chief Executive Officer

Executive's Notice Address:

521 Spinner Road
De Soto, Texas  75115

12.      SEVERABILITY

         If any provision of this Agreement shall be held by a court or
arbitrator to be invalid, unenforceable, or void, such provision shall be
enforced to the fullest extent permitted by law, and the remainder of this
Agreement shall remain in full force and effect. In the event that the time
period or scope of any provision is declared by a court or arbitrator of
competent jurisdiction to exceed the maximum time period or scope that such
court or arbitrator deems enforceable, then such court or arbitrator shall
reduce the time period or scope to the maximum time period or scope permitted by
law.

13.      TAXES

         All amounts payable to Executive under this Agreement (including,
without limitation, Executive's Base Salary and any bonuses and severance pay)
shall be paid less all applicable state and federal tax withholdings and any
other withholdings required by any applicable jurisdiction.

14.      GOVERNING LAW

         This Agreement shall be governed by and construed in accordance with
the laws of the State of Texas.

                                       7
<PAGE>

15.      INTERPRETATION

         This Agreement shall be construed as a whole, according to its fair
meaning, and not in favor of or against any party. Sections and section headings
contained in this Agreement are for reference purposes only, and shall not
affect in any manner the meaning or interpretation of this Agreement. Whenever
the context requires, references to the singular shall include the plural and
the plural the singular.

16.      COUNTERPARTS

         This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original of this Agreement, but all of which together
shall constitute one and the same instrument.

17.      AUTHORITY

         Each party represents and warrants that such party has the right, power
and authority to enter into and execute this Agreement and to perform and
discharge all of the obligations hereunder; and that this Agreement constitutes
the valid and legally binding agreement and obligation of such party and is
enforceable in accordance with its terms.

18.      ENTIRE AGREEMENT

         This Agreement is intended to be the final, complete, and exclusive
statement of the terms of Executive's employment by the Company and may not be
contradicted by evidence of any prior or contemporaneous statements or
agreements, except for agreements specifically referenced herein (including the
Stock Option Agreement attached as Exhibit A, the Proprietary Information
Agreement attached as Exhibit C and the Arbitration Agreement attached as
Exhibit D). By executing this Agreement, the parties intend to amend and restate
the terms of that certain Employment Agreement by and between the Company and
Executive dated on or about November 7, 2003. To the extent that the practices,
policies or procedures of the Company, now or in the future, apply to Executive
and are inconsistent with the terms of this Agreement, the provisions of this
Agreement shall control. Any subsequent change in Executive's duties, position,
or compensation will not affect the validity or scope of this Agreement.

19.      INJUNCTIVE RELIEF AND TERMINATION.

         a. GENERAL. Executive acknowledges and agrees that (i) the covenants
and restrictions contained in Section 7 of this Agreement are necessary,
fundamental and required for the protection of the Business, (ii) such covenants
relate to matters which are of a special, unique and extraordinary character
that gives each of such covenants a special, unique and extraordinary value; and
(iii) the Company will suffer irreparable harm in the event that Executive
breaches any of his obligations under Section 7 hereof, and that monetary
damages shall be inadequate to compensate the Company for any such breach.
Executive agrees that in the event of any breach or threatened breach by
Executive of any of the provisions of Section 7 hereof, the Company shall be

                                       8
<PAGE>

entitled to a temporary restraining order, preliminary injunction and/or
permanent injunction in order to prevent or restrain any such breach or
threatened breach by Executive, or by any or all of Executive's agents,
representatives or other persons directly or indirectly acting for, on behalf of
or with Executive, and the Company will not be obligated to post bond or other
security in seeking such relief.

         b. NO LIMITATION OF REMEDIES. Notwithstanding the provisions set forth
in Section 19(a) above, or any other provision contained in this Agreement, the
parties hereby agree that no remedy conferred by any of the specific provisions
of this Agreement, including, without limitation, this Section 19, is intended
to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise.

20.      EXECUTIVE ACKNOWLEDGEMENT

         EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS HAD THE OPPORTUNITY TO
CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT EXECUTIVE HAS READ AND
UNDERSTANDS THIS AGREEMENT, THAT EXECUTIVE IS FULLY AWARE OF ITS LEGAL EFFECT,
AND THAT EXECUTIVE HAS ENTERED INTO THIS AGREEMENT FREELY BASED ON EXECUTIVE'S
OWN JUDGMENT AND NOT ON ANY REPRESENTATIONS OR PROMISES OTHER THAN THOSE
CONTAINED IN THIS AGREEMENT.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       9
<PAGE>

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.

CRDENTIA CORP.:                               EXECUTIVE:



By:  /s/ Pamela Atherton                      By:  /s/ William S. Leftwich
     -----------------------------                 ----------------------------
Name:    Pamela Atherton                               William S. Leftwich
Title:   President


               [SIGNATURE PAGE TO EXECUTIVE EMPLOYMENT AGREEMENT]


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>crdentia_10qex10-2.txt
<TEXT>
<PAGE>

                                                                   Exhibit 10.2

                                 CRDENTIA CORP.

                          NOTICE OF STOCK OPTION AWARD
                          ----------------------------

         Grantee's Name and Address:      William S. Leftwich
                                          521 Spinner Road
                                          De Soto, Texas 75115

         You (the "Grantee") have been granted an option to purchase shares of
Common Stock, subject to the terms and conditions of this Notice of Stock Option
Award (the "Notice") and the Stock Option Award Agreement (the "Option
Agreement") attached hereto, as follows. Unless otherwise defined herein, the
terms defined in the Option Agreement shall have the same defined meanings in
this Notice.

         Award Number                                5

         Date of Award                               April 8, 2004

         Vesting Commencement Date                   November 7, 2003

         Exercise Price per Share                    $1.05

         Total Number of Shares Subject
         to the Option (the "Shares")                331,512

         Total Exercise Price                        $348,087.60

         Type of Option                              Non-Qualified Stock Option

         Expiration Date:                            April 8, 2014

         Post-Termination Exercise Period:           Three (3) Months

Vesting Schedule:
-----------------

         Subject to the Grantee's Continuous Service and other limitations set
forth in this Notice and the Option Agreement, the Option may be exercised, in
whole or in part, in accordance with the following schedule:

         1/4th of the Total Number of Shares Subject to the Option shall vest
upon the first anniversary of the Vesting Commencement Date, and 1/48th of the
Total Number of Shares Subject to the Option shall thereafter vest in a series
of thirty six (36) successive equal monthly installments upon Grantee's
completion of each additional month of service to the Company such that the
Option will be fully vested four (4) years after the Vesting Commencement Date.

         During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall be suspended after the leave of absence exceeds
a period of ninety (90) days. Vesting of the Option shall resume upon the
Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity. The Vesting Schedule of the Option shall be
extended by the length of the suspension.

                                       1
<PAGE>

         In the event of termination of the Grantee's Continuous Service for
Cause, the Grantee's right to exercise the Option shall terminate concurrently
with the termination of the Grantee's Continuous Service, except as otherwise
determined by the Board.

         In the event of the Grantee's change in status from Employee to
Consultant or from an Employee whose customary employment is 20 hours or more
per week to an Employee whose customary employment is fewer than 20 hours per
week, vesting of the Option shall continue only to the extent determined by the
Board as of such change in status.

         IN WITNESS WHEREOF, the Company and the Grantee have executed this
Notice and agree that the Option is to be governed by the terms and conditions
of this Notice and the Option Agreement.

                                                 Crdentia Corp.,
                                                 a Delaware corporation

                                                 By:  /s/ Pamela Atherton
                                                      -------------------------
                                                      Pamela Atherton
                                                      President

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE OR THE OPTION AGREEMENT SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH
RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE'S CONTINUOUS SERVICE,
NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT OF THE
COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE
THE GRANTEE'S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT
NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN
EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE'S STATUS IS
AT WILL.

         The Grantee acknowledges receipt of a copy of the Option Agreement, and
represents that he or she is familiar with the terms and provisions thereof, and
hereby accepts the Option subject to all of the terms and provisions hereof and
thereof. The Grantee has reviewed this Notice and the Option Agreement in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Notice, and fully understands all provisions of this Notice and
the Option Agreement. The Grantee hereby agrees that all disputes arising out of
or relating to this Notice and the Option Agreement shall be resolved in
accordance with Section 17 of the Option Agreement. The Grantee further agrees
to notify the Company upon any change in the residence address indicated in this
Notice.

Dated:  April 8, 2004                      Signed:  /s/ William S. Leftwich
                                                    ----------------------------
                                                    William S. Leftwich, Grantee

                                       2
<PAGE>

                                                                 AWARD NUMBER: 5

                                 CRDENTIA CORP.

                          STOCK OPTION AWARD AGREEMENT
                          ----------------------------

         1. GRANT OF OPTION. Crdentia Corp., a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Award (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of this Stock Option
Award Agreement (the "Option Agreement") and the Notice which are incorporated
herein by reference.

         2. EXERCISE OF OPTION.

                  (a) RIGHT TO EXERCISE. The Option shall be exercisable during
its term in accordance with the Vesting Schedule set out in the Notice and with
the applicable provisions of this Option Agreement. The Option shall be subject
to the provisions of Section 20 of this Option Agreement relating to the
exercisability or termination of the Option in the event of a Corporate
Transaction. The Grantee shall be subject to reasonable limitations on the
number of requested exercises during any monthly or weekly period as determined
by the Board. In no event shall the Company issue fractional Shares.

                  (b) METHOD OF EXERCISE. The Option shall be exercisable by
delivery of an exercise notice (a form of which is attached as Exhibit A) or by
such other procedure as specified from time to time by the Board which shall
state the election to exercise the Option, the whole number of Shares in respect
of which the Option is being exercised, and such other provisions as may be
required by the Board. The exercise notice shall be delivered in person, by
certified mail, or by such other method (including electronic transmission) as
determined from time to time by the Board to the Company accompanied by payment
of the Exercise Price. The Option shall be deemed to be exercised upon receipt
by the Company of such notice accompanied by the Exercise Price, which, to the
extent selected, shall be deemed to be satisfied by use of the broker-dealer
sale and remittance procedure to pay the Exercise Price provided in Section
4(d), below.

                  (c) TAXES. No Shares will be delivered to the Grantee or other
person pursuant to the exercise of the Option until the Grantee or other person
has made arrangements acceptable to the Board for the satisfaction of applicable
income tax and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares. Upon exercise of the
Option, the Company or the Grantee's employer may offset or withhold (from any
amount owed by the Company or the Grantee's employer to the Grantee) or collect
from the Grantee or other person an amount sufficient to satisfy such tax
obligations and/or the employer's withholding obligations.

         3. GRANTEE'S REPRESENTATIONS. The Grantee understands that neither the
Option nor the Shares exercisable pursuant to the Option have been registered
under the Securities Act of 1933, as amended, or any United States securities

                                       3
<PAGE>

laws. In the event the Shares purchasable pursuant to the exercise of the Option
have not been registered under the Securities Act of 1933, as amended, at the
time the Option is exercised, the Grantee shall, if requested by the Company,
concurrently with the exercise of all or any portion of the Option, deliver to
the Company his or her Investment Representation Statement in the form attached
hereto as Exhibit B.

         4. METHOD OF PAYMENT. Payment of the Exercise Price shall be made by
any of the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Law and, provided further, that the portion of the Exercise Price
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

                  (a) cash;

                  (b) check;

                  (c) surrender of Shares or delivery of a properly executed
form of attestation of ownership of Shares as the Board may require which have a
Fair Market Value on the date of surrender or attestation equal to the aggregate
Exercise Price of the Shares as to which the Option is being exercised,
provided, however, that Shares acquired under the Option or any other equity
compensation plan or agreement of the Company must have been held by the Grantee
for a period of more than six (6) months; or

                  (d) payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (i) shall provide written instructions
to a Company-designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company sufficient funds to cover
the aggregate exercise price payable for the purchased Shares and (ii) shall
provide written directives to the Company to deliver the certificates for the
purchased Shares directly to such brokerage firm in order to complete the sale
transaction.

         5. RESTRICTIONS ON EXERCISE. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws.

         6. TERMINATION OR CHANGE OF CONTINUOUS SERVICE. In the event the
Grantee's Continuous Service terminates, other than for Cause, the Grantee may,
but only during the Post-Termination Exercise Period, exercise the portion of
the Option that was vested at the date of such termination (the "Termination
Date"). In the event of termination of the Grantee's Continuous Service for
Cause, the Grantee's right to exercise the Option shall, except as otherwise
determined by the Board, terminate concurrently with the termination of the
Grantee's Continuous Service (also the "Termination Date"). In no event shall
the Option be exercised later than the Expiration Date set forth in the Notice.
In the event of the Grantee's change in status from Employee, Director or
Consultant to any other status of Employee, Director or Consultant, the Option
shall remain in effect and vesting of the Option shall continue only to the
extent determined by the Board as of such change in status. Except as provided
in Sections 7 and 8 below, to the extent that the Option was unvested on the

                                       4
<PAGE>

Termination Date, or if the Grantee does not exercise the vested portion of the
Option within the Post-Termination Exercise Period, the Option shall terminate.

         7. DISABILITY OF GRANTEE. In the event the Grantee's Continuous Service
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months from the Termination Date (and in no event later than
the Expiration Date), exercise the portion of the Option that was vested on the
Termination Date. To the extent that the Option was unvested on the Termination
Date, or if the Grantee does not exercise the vested portion of the Option
within the time specified herein, the Option shall terminate.

         8. DEATH OF GRANTEE. In the event of the termination of the Grantee's
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee's termination of Continuous Service as a
result of his or her Disability, the Grantee's estate, or a person who acquired
the right to exercise the Option by bequest or inheritance, may exercise the
portion of the Option that was vested at the date of termination within twelve
(12) months from the date of death (but in no event later than the Expiration
Date). To the extent that the Option was unvested on the date of death, or if
the vested portion of the Option is not exercised within the time specified
herein, the Option shall terminate.

         9. TRANSFERABILITY OF OPTION. The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution, provided,
however, that the Option may be transferred to members of the Grantee's
Immediate Family to the extent and in the manner authorized by the Board.
Notwithstanding the foregoing, the Grantee may designate members of the
Grantee's Immediate Family as beneficiaries of the Grantee's Option in the event
of the Grantee's death on a beneficiary designation form provided by the Board.
The terms of the Option shall be binding upon the executors, administrators,
heirs and successors of the Grantee.

         10. TERM OF OPTION. The Option must be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein. After the Expiration Date or such earlier date, the Option
shall be of no further force or effect and may not be exercised.

         11. STOP-TRANSFER NOTICES. In order to ensure compliance with the
restrictions on transfer set forth in this Option Agreement or the Notice, the
Company may issue appropriate "stop transfer" instructions to its transfer
agent, if any, and, if the Company transfers its own securities, it may make
appropriate notations to the same effect in its own records.

         12. REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Option Agreement or (ii) to treat as
owner of such Shares or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such Shares shall have been so
transferred.

         13. TAX CONSEQUENCES. Set forth below is a brief summary as of the date
of this Option Agreement of some of the federal tax consequences of exercise of
the Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY

                                       5
<PAGE>

INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE
SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE
SHARES.

                  (a) EXERCISE OF NON-QUALIFIED STOCK OPTION. On exercise of a
Non-Qualified Stock Option, the Grantee will be treated as having received
compensation income (taxable at ordinary income tax rates) equal to the excess,
if any, of the Fair Market Value of the Shares on the date of exercise over the
Exercise Price. If the Grantee is an Employee or a former Employee, the Company
will be required to withhold from the Grantee's compensation or collect from the
Grantee and pay to the applicable taxing authorities an amount in cash equal to
a percentage of this compensation income at the time of exercise, and may refuse
to honor the exercise and refuse to deliver Shares if such withholding amounts
are not delivered at the time of exercise.

                  (b) DISPOSITION OF SHARES. If Shares are held for more than
one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes.

         14. LOCK-UP AGREEMENT.

                  (a) AGREEMENT. The Grantee, if requested by the Company and
the lead underwriter of any public offering of the Common Stock (the "Lead
Underwriter"), hereby irrevocably agrees not to sell, contract to sell, grant
any option to purchase, transfer the economic risk of ownership in, make any
short sale of, pledge or otherwise transfer or dispose of any interest in any
Common Stock or any securities convertible into or exchangeable or exercisable
for or any other rights to purchase or acquire Common Stock (except Common Stock
included in such public offering or acquired on the public market after such
offering) during the 180-day period following the effective date of a
registration statement of the Company filed under the Securities Act of 1933, as
amended, or such shorter period of time as the Lead Underwriter shall specify.
The Grantee further agrees to sign such documents as may be requested by the
Lead Underwriter to effect the foregoing and agrees that the Company may impose
stop-transfer instructions with respect to such Common Stock subject to the
lock-up period until the end of such period. The Company and the Grantee
acknowledge that each Lead Underwriter of a public offering of the Company's
stock, during the period of such offering and for the 180-day period thereafter,
is an intended beneficiary of this Section 14.

                  (b) NO AMENDMENT WITHOUT CONSENT OF UNDERWRITER. During the
period from identification of a Lead Underwriter in connection with any public
offering of the Company's Common Stock until the earlier of (i) the expiration
of the lock-up period specified in Section 14(a) in connection with such
offering or (ii) the abandonment of such offering by the Company and the Lead
Underwriter, the provisions of this Section 14 may not be amended or waived
except with the consent of the Lead Underwriter.

         15. ENTIRE AGREEMENT: GOVERNING LAW. The Notice and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter

                                       6
<PAGE>

hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice
and this Option Agreement (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties. The Notice
and this Option Agreement are to be construed in accordance with and governed by
the internal laws of the State of Texas without giving effect to any choice of
law rule that would cause the application of the laws of any jurisdiction other
than the internal laws of the State of Texas to the rights and duties of the
parties. Should any provision of the Notice or this Option Agreement be
determined by a court of law to be illegal or unenforceable, such provision
shall be enforced to the fullest extent allowed by law and the other provisions
shall nevertheless remain effective and shall remain enforceable.

         16. HEADINGS. The captions used in the Notice and this Option Agreement
are inserted for convenience and shall not be deemed a part of the Option for
construction or interpretation.

         17. DISPUTE RESOLUTION. The provisions of this Section 17 shall be the
exclusive means of resolving disputes arising out of or relating to the Notice
and this Option Agreement. The Company, the Grantee, and the Grantee's assignees
(the "parties") shall attempt in good faith to resolve any disputes arising out
of or relating to the Notice and this Option Agreement by negotiation between
individuals who have authority to settle the controversy. Negotiations shall be
commenced by either party by notice of a written statement of the party's
position and the name and title of the individual who will represent the party.
Within thirty (30) days of the written notification, the parties shall meet at a
mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to resolve the dispute. If the dispute has not been resolved by
negotiation, the parties agree that any suit, action, or proceeding arising out
of or relating to the Notice or this Option Agreement shall be brought in the
United States District Court for the Northern District of Texas (or should such
court lack jurisdiction to hear such action, suit or proceeding, in a Texas
state court in the County of Dallas) and that the parties shall submit to the
jurisdiction of such court. The parties irrevocably waive, to the fullest extent
permitted by law, any objection the party may have to the laying of venue for
any such suit, action or proceeding brought in such court. THE PARTIES ALSO
EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH
SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 17
shall for any reason be held invalid or unenforceable, it is the specific intent
of the parties that such provisions shall be modified to the minimum extent
necessary to make it or its application valid and enforceable.

         18. NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery, upon
deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown in these instruments, or to such
other address as such party may designate in writing from time to time to the
other party.

         19. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any required
action by the stockholders of the Company, the number of Shares covered by the
Option, the exercise price of the Option, as well as any other terms that the

                                       7
<PAGE>

Board determines require adjustment shall be proportionately adjusted for (i)
any increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Shares, or similar transaction affecting the Shares, (ii) any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Company, or (iii) as the Board may determine in its
discretion, any other transaction with respect to Common Stock including a
corporate merger, consolidation, acquisition of property or stock, separation
(including a spin-off or other distribution of stock or property),
reorganization, liquidation (whether partial or complete) or any similar
transaction; provided, however that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board and its determination
shall be final, binding and conclusive. Except as the Board determines, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason hereof shall be made with respect to, the number or price of Shares
subject to the Option.

         20. CORPORATE TRANSACTIONS.

                  (a) TERMINATION OF OPTION TO EXTENT NOT ASSUMED IN CORPORATE
TRANSACTION. Effective upon the consummation of a Corporate Transaction, the
Option shall terminate. However, the Option shall not terminate to the extent it
is Assumed in connection with the Corporate Transaction.

                  (b) ACCELERATION OF OPTION UPON CORPORATE TRANSACTION. In the
event of a Corporate Transaction and:

                           (i) for the portion of the Option that is Assumed or
Replaced, then the Option (if Assumed), the replacement award (if Replaced), or
the cash incentive program (if Replaced) automatically shall become fully
vested, exercisable and payable for all of the Shares at the time represented by
such Assumed or Replaced portion of the Option, immediately upon termination of
the Grantee's Continuous Service if such Continuous Service is terminated by the
successor company, the Company or a Related Entity without Cause or voluntarily
by the Grantee with Good Reason within eighteen (18) months after the Corporate
Transaction; and

                           (ii) for the portion of the Option that is neither
Assumed nor Replaced, such portion of the Option shall automatically become
fully vested and exercisable for all of the Shares at the time represented by
such portion of the Option, immediately prior to the specified effective date of
such Corporate Transaction.

         21. DEFINITIONS. As used herein, the following definitions shall apply:

                  (a) "APPLICABLE LAWS" means the legal requirements applicable
to the Option under applicable provisions of federal securities laws, state
corporate and securities laws, the Code, the rules of any applicable stock
exchange or national market system, and the rules of any non-U.S. jurisdiction
applicable to Options granted to residents therein.

                                       8
<PAGE>

                  (b) "ASSUMED" means that pursuant to a Corporate Transaction
either (i) the Option is expressly affirmed by the Company or (ii) the
contractual obligations represented by the Option are expressly assumed (and not
simply by operation of law) by the successor entity or its Parent in connection
with the Corporate Transaction with appropriate adjustments to the number and
type of securities of the successor entity or its Parent subject to the Option
and the exercise or purchase price thereof which at least preserves the
compensation element of the Option existing at the time of the Corporate
Transaction as determined in accordance with the instruments evidencing the
agreement to assume the Option.

                  (c) "BOARD" means the Board of Directors of the Company and
shall include any committee of the Board or Officer of the Company to which the
Board has delegated its authority under this Agreement.

                  (d) "CAUSE" means, with respect to the termination by the
Company or a Related Entity of the Grantee's Continuous Service, that such
termination is for "Cause" as such term is expressly defined in a then-effective
written agreement between the Grantee and the Company or such Related Entity, or
in the absence of such then-effective written agreement and definition, is based
on, in the determination of the Board, the Grantee's: (i) performance of any act
or failure to perform any act in bad faith and to the detriment of the Company
or a Related Entity; (ii) dishonesty, intentional misconduct or material breach
of any agreement with the Company or a Related Entity; or (iii) commission of a
crime involving dishonesty, breach of trust, or physical or emotional harm to
any person.

                  (e) "CODE" means the Internal Revenue Code of 1986, as
amended.

                  (f) "COMMON STOCK" means the common stock of the Company.

                  (g) "COMPANY" means Crdentia Corp., a Delaware corporation.

                  (h) "CONSULTANT" means any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.

                  (i) "CONTINUOUS SERVICE" means that the provision of services
to the Company or a Related Entity in any capacity of Employee, Director or
Consultant is not interrupted or terminated. In jurisdictions requiring notice
in advance of an effective termination as an Employee, Director or Consultant,
Continuous Service shall be deemed terminated upon the actual cessation of
providing services to the Company or a Related Entity notwithstanding any
required notice period that must be fulfilled before a termination as an
Employee, Director or Consultant can be effective under Applicable Laws.
Continuous Service shall not be considered interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any Related Entity,
or any successor, in any capacity of Employee, Director or Consultant, or (iii)
any change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director or Consultant
(except as otherwise provided in the Option Agreement). An approved leave of
absence shall include sick leave, military leave, or any other authorized
personal leave.

                                       9
<PAGE>

                  (j) "CORPORATE TRANSACTION" means any of the following
transactions:

                           (i) a merger or consolidation in which the Company is
not the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated;

                           (ii) the sale, transfer or other disposition of all
or substantially all of the assets of the Company (including the capital stock
of the Company's subsidiary corporations);

                           (iii) the complete liquidation or dissolution of the
Company;

                           (iv) any reverse merger or series of related
transactions culminating in a reverse merger (including, but not limited to, a
tender offer followed by a reverse merger) in which the Company is the surviving
entity but in which securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger or the initial transaction culminating in such
merger but excluding any such transaction or series of related transactions that
the Board determines shall not be a Corporate Transaction; or

                           (v) acquisition in a single or series of related
transactions by any person or related group of persons (other than the Company
or by a Company-sponsored employee benefit plan) of beneficial ownership (within
the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Company's
outstanding securities but excluding any such transaction or series of related
transactions that the Board determines shall not be a Corporate Transaction.

                  (k) "DIRECTOR" means a member of the Board or the board of
directors of any Related Entity.

                  (l) "DISABILITY" shall have the same meaning as defined under
the long-term disability policy of the Company or the Related Entity to which
the Grantee provides services regardless of whether the Grantee is covered by
such policy. If the Company or the Related Entity to which the Grantee provides
service does not have a long-term disability plan in place, "Disability" means
that the Grantee is unable to carry out the responsibilities and functions of
the position held by the Grantee by reason of any medically determinable
physical or mental impairment for a period of not less than ninety (90)
consecutive days. The Grantee will not be considered to have incurred a
Disability unless he or she furnishes proof of such impairment sufficient to
satisfy the Board in its discretion.

                  (m) "EMPLOYEE" means any person, including an Officer or
Director, who is in the employ of the Company or any Related Entity, subject to
the control and direction of the Company or any Related Entity as to both the
work to be performed and the manner and method of performance. The payment of a
director's fee by the Company or a Related Entity shall not be sufficient to
constitute "employment" by the Company.

                                       10
<PAGE>

                  (n) "EXCHANGE ACT" means the Securities Exchange Act of 1934,
as amended.

                  (o) "FAIR MARKET VALUE" means, as of any date, the value of
Common Stock determined as follows:

                           (i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation The
Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market,
its Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the date of determination (or, if no closing sales price or closing bid was
reported on that date, as applicable, on the last trading date such closing
sales price or closing bid was reported), as reported in The Wall Street Journal
or such other source as the Board deems reliable;

                           (ii) If the Common Stock is regularly quoted on an
automated quotation system (including the OTC Bulletin Board) or by a recognized
securities dealer, but selling prices are not reported, the Fair Market Value of
a Share of Common Stock shall be the mean between the high bid and low asked
prices for the Common Stock on date of determination (or, if no such prices were
reported on that date, on the last date such prices were reported), as reported
in The Wall Street Journal or such other source as the Board deems reliable; or

                           (iii) In the absence of an established market for the
Common Stock of the type described in (i) and (ii), above, the Fair Market Value
thereof shall be determined by the Board in good faith.

                  (p) "GOOD REASON" means the occurrence after a Corporate
Transaction of any of the following events or conditions unless consented to by
the Grantee (and the Grantee shall be deemed to have consented to any such event
or condition unless the Grantee provides written notice of the Grantee's
non-acquiescence within 30 days of the effective time of such event or
condition):

                           (i) a reduction in the Grantee's base salary to a
level more than fifteen percent (15%) below that in effect at any time within
six (6) months preceding the consummation of a Corporate Transaction or at any
time thereafter (not including a similar reduction with respect to all of the
Company's management); or

                           (ii) requiring the Grantee to be based at any place
outside a 50-mile radius from the Grantee's job location prior to the Corporate
Transaction except for reasonably required travel on business which is not
materially greater than such travel requirements prior to the Corporate
Transaction

                  (q) "IMMEDIATE FAMILY" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Grantee's household (other than a tenant or employee), a trust in which these
persons (or the Grantee) have more than fifty percent (50%) of the beneficial
interest, a foundation in which these persons (or the Grantee) control the

                                       11
<PAGE>

management of assets, and any other entity in which these persons (or the
Grantee) own more than fifty percent (50%) of the voting interests.

                  (r) "NON-QUALIFIED STOCK OPTION" means an Option not intended
to qualify as an incentive stock option within the meaning of Section 422 of the
Code.

                  (s) "OFFICER" means a person who is an officer of the Company
or a Related Entity within the meaning of Section 16 of the Exchange Act and the
rules and regulations promulgated thereunder.

                  (t) "PARENT" means a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.

                  (u) "RELATED ENTITY" means any Parent or Subsidiary of the
Company and any business, corporation, partnership, limited liability company or
other entity in which the Company or a Parent or a Subsidiary of the Company
holds a substantial ownership interest, directly or indirectly.

                  (v) "REPLACED" means that pursuant to a Corporate Transaction
the Option is replaced with a comparable stock award or a cash incentive program
of the Company, the successor entity (if applicable) or Parent of either of them
which preserves the compensation element of such Option existing at the time of
the Corporate Transaction and provides for subsequent payout in accordance with
the same (or a more favorable) vesting schedule applicable to such Option. The
determination of Option comparability shall be made by the Board and its
determination shall be final, binding and conclusive.

                  (w) "SHARE" means a share of the Common Stock.

                  (x) "SUBSIDIARY" means a "subsidiary corporation," whether now
or hereafter existing, as defined in Section 424(f) of the Code.

                                END OF AGREEMENT

                                       12
<PAGE>

                                    EXHIBIT A
                                    ---------

                                 EXERCISE NOTICE
                                 ---------------

Crdentia Corp.
14114 Dallas Parkway, Suite 600
Dallas, Texas  75254
Attention:  Secretary

         1. Effective as of today, ______________, ___ the undersigned (the
"Grantee") hereby elects to exercise the Grantee's option to purchase
___________ shares of the Common Stock (the "Shares") of Crdentia Corp. (the
"Company") under and pursuant to the Stock Option Award Agreement (the "Option
Agreement") and Notice of Stock Option Award (the "Notice") dated April 8, 2004.
Unless otherwise defined herein, the terms defined in the Option Agreement shall
have the same defined meanings in this Exercise Notice.

         2. REPRESENTATIONS OF THE GRANTEE. The Grantee acknowledges that the
Grantee has received, read and understood the Notice and the Option Agreement
and agrees to abide by and be bound by their terms and conditions.

         3. RIGHTS AS STOCKHOLDER. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 19 of the Option Agreement.

         4. DELIVERY OF PAYMENT. The Grantee herewith delivers to the Company
the full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 19 of the Option Agreement.

         5. TAX CONSULTATION. The Grantee understands that the Grantee may
suffer adverse tax consequences as a result of the Grantee's purchase or
disposition of the Shares. The Grantee represents that the Grantee has consulted
with any tax consultants the Grantee deems advisable in connection with the
purchase or disposition of the Shares and that the Grantee is not relying on the
Company for any tax advice.

         6. TAXES. The Grantee agrees to satisfy all applicable non-U.S.,
federal, state and local income and employment tax withholding obligations and
herewith delivers to the Company the full amount of such obligations or has made
arrangements acceptable to the Company to satisfy such obligations. If the
Company is required to satisfy any non-U.S., federal, state or local income or
employment tax withholding obligations as a result of such an early disposition,
the Grantee agrees to satisfy the amount of such withholding in a manner that
the Board prescribes.

                                        1
<PAGE>

         7. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this agreement
shall inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon the Grantee and his or her heirs, executors, administrators,
successors and assigns.

         8. HEADINGS. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or
interpretation.

         9. DISPUTE RESOLUTION. The provisions of Section 17 of the Option
Agreement shall be the exclusive means of resolving disputes arising out of or
relating to this Exercise Notice.

         10. GOVERNING LAW; SEVERABILITY. This Exercise Notice is to be
construed in accordance with and governed by the internal laws of the State of
Texas without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the
State of Texas to the rights and duties of the parties. Should any provision of
this Exercise Notice be determined by a court of law to be illegal or
unenforceable, such provision shall be enforced to the fullest extent allowed by
law and the other provisions shall nevertheless remain effective and shall
remain enforceable.

         11. NOTICES. Any notice required or permitted hereunder shall be given
in writing and shall be deemed effectively given upon personal delivery, upon
deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to time to
the other party.

         12. FURTHER INSTRUMENTS. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.

         13. ENTIRE AGREEMENT. The Notice and the Option Agreement are
incorporated herein by reference and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice
the Option Agreement and this Exercise Notice (except as expressly provided
therein) is intended to confer any rights or remedies on any persons other than
the parties.

                                        2
<PAGE>

Submitted by:                            Accepted by:

GRANTEE:                                 CRDENTIA CORP.

                                         By:    --------------------------------

---------------------------------        Title: --------------------------------
           (Signature)

ADDRESS:                                 ADDRESS:

---------------------------------        14114 Dallas Parkway, Suite 600
                                         Dallas, Texas  75254
---------------------------------

                                        3
<PAGE>

                                   EXHIBIT B
                                   ---------

                      INVESTMENT REPRESENTATION STATEMENT
                      -----------------------------------

GRANTEE:                      William S. Leftwich

COMPANY:                      CRDENTIA CORP.

SECURITY:                     COMMON STOCK

AMOUNT:
                              ----------------------------------------------
DATE:
                              ----------------------------------------------

In connection with the purchase of the above-listed Securities, the undersigned
Grantee represents to the Company the following:

         (a) Grantee is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. Grantee is
acquiring these Securities for investment for Grantee's own account only and not
with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").

         (b) Grantee acknowledges and understands that the Securities constitute
"restricted securities" under the Securities Act and have not been registered
under the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon among other things, the bona fide nature of Grantee's
investment intent as expressed herein. Grantee further understands that the
Securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.
Grantee further acknowledges and understands that the Company is under no
obligation to register the Securities. Grantee understands that the certificate
evidencing the Securities will be imprinted with a legend which prohibits the
transfer of the Securities unless they are registered or such registration is
not required in the opinion of counsel satisfactory to the Company.

         (c) Grantee is familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions. Rule 701 provides that if the issuer qualifies under Rule
701 at the time of the grant of the Option to the Grantee, the exercise will be
exempt from registration under the Securities Act. In the event the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, ninety (90) days thereafter (or such longer
period as any market stand-off agreement may require) the Securities exempt
under Rule 701 may be resold, subject to the satisfaction of certain of the
conditions specified by Rule 144, including: (1) the resale being made through a
broker in an unsolicited "broker's transaction" or in transactions directly with
a market maker (as said term is defined under the Securities Exchange Act of
1934); and, in the case of an affiliate, (2) the availability of certain public
information about the Company, (3) the amount of Securities being sold during

                                        1
<PAGE>

any three month period not exceeding the limitations specified in Rule 144(e),
and (4) the timely filing of a Form 144, if applicable.

         In the event that the Company does not qualify under Rule 701 at the
time of grant of the Option, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires the
resale to occur not less than one year after the later of the date the
Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of
acquisition of the Securities by an affiliate, or by a non-affiliate who
subsequently holds the Securities less than two years, the satisfaction of the
conditions set forth in sections (1), (2), (3) and (4) of the paragraph
immediately above.

         (d) Grantee further understands that in the event all of the applicable
requirements of Rule 701 or 144 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rules 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk. Grantee understands that no assurances can be given that any
such other registration exemption will be available in such event.

         (e) Grantee represents that he or she is a resident of the state of
_________________.


                                       Signature of Grantee:


                                       ----------------------------------------

                                       Date:                          ,
                                             -------------------------  -------

                                        2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>4
<FILENAME>crdentia_10qex31-1.txt
<TEXT>
<PAGE>

Exhibit 31.1

               CERTIFICATION PURSUANT TO RULES 13A-14 AND 15D-14
             UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, James D. Durham, Chief Executive Officer and Chairman of Board of the
Registrant, Crdentia Corp., certify that:

         1. I have reviewed this quarterly report on Form 10-QSB of Crdentia
Corp.;

         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
small business issuer as of, and for, the periods presented in this quarterly
report;

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

         (a)      designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the small business issuer, 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 small business issuer's
                  disclosure controls and procedures and presented in this
                  report our conclusions about the effectiveness of the
                  disclosure controls and procedures as of the end of the period
                  covered by this quarterly report based on such evaluation; and

         (c)      disclosed in this report any change in the small business
                  issuer's internal controls over financial reporting that
                  occurred during the small business issuer's most recent fiscal
                  quarter (the small business issuer's fourth fiscal quarter in
                  the case of an annual report) that has materially affected, or
                  is reasonably likely to materially affect, the small business
                  issuer's internal control over financial reporting; and

         5. The small business issuer's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):

         (a)      all significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  small business issuer's ability to record, process, summarize
                  and report financial information; and

         (b)      any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the small
                  business issuer's internal control over financial reporting.


Dated:  May 17, 2003                       By:  /s/ James D. Durham
                                                -------------------------------
                                                    James D. Durham
                                                    Chief Executive Officer and
                                                    Chairman of the Board

                                       20

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>5
<FILENAME>crdentia_10qex31-2.txt
<TEXT>
<PAGE>

Exhibit 31.2

                CERTIFICATION PURSUANT TO RULE 13A-14 AND 15D-14
              UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, William S. Leftwich, Chief Financial Officer and Secretary of the Registrant,
Crdentia Corp., certify that:

         1. I have reviewed this quarterly report on Form 10-QSB of Crdentia
Corp.;

         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
small business issuer as of, and for, the periods presented in this quarterly
report;

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

         (a)      designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the small business issuer, 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 small business issuer's
                  disclosure controls and procedures and presented in this
                  report our conclusions about the effectiveness of the
                  disclosure controls and procedures as of the end of the period
                  covered by this quarterly report based on such evaluation; and

         (c)      disclosed in this report any change in the small business
                  issuer's internal controls over financial reporting that
                  occurred during the small business issuer's most recent fiscal
                  quarter (the small business issuer's fourth fiscal quarter in
                  the case of an annual report) that has materially affected, or
                  is reasonably likely to materially affect, the small business
                  issuer's internal control over financial reporting; and

         5. The small business issuer's other certifying officer and I have
disclosed, based on our most recent evaluation of internal control over
financial reporting, to the small business issuer's auditors and the audit
committee of the small business issuer's board of directors (or persons
performing the equivalent functions):

         (a)      all significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  small business issuer's ability to record, process, summarize
                  and report financial information; and

         (b)      any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the small
                  business issuer's internal control over financial reporting.


Dated:  May 17, 2004             By:  /s/  William S. Leftwich
                                      ------------------------------------------
                                           William S. Leftwich
                                           Chief Financial Officer and Secretary

                                       21

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>6
<FILENAME>crdentia_10qex32-1.txt
<TEXT>
<PAGE>

Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Quarterly Report of Crdentia Corp. (the
"Company") on Form 10-QSB for the three month period ended March 31, 2004 as
filed with the Securities and Exchange Commission (the "Report"), I, James D.
Durham, Chief Executive Officer of the Company, hereby certify as of the date
hereof, solely for the purposes of Title 18, Chapter 63, Section 1350 of the
United States Code, that to the best of my knowledge:

         1.       the Report fully complies with the requirements of Section
                  13(a) or 15(d), as applicable, of the Securities Exchange Act
                  of 1934; and

         2.       the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company at the dates and for the periods
                  indicated.


This Certification has not been, and shall not be deemed, "filed" with the
Securities and Exchange Commission.


Date:  May 17, 2004                           By:  /s/  James D. Durham
                                                   ----------------------------
                                                        James D. Durham
                                                        Chief Executive Officer

                                       22

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>7
<FILENAME>crdentia_10qex32-2.txt
<TEXT>
<PAGE>

Exhibit 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Quarterly Report of Crdentia Corp. (the
"Company") on Form 10-QSB for the three month period ended March 31, 2004 as
filed with the Securities and Exchange Commission (the "Report"), I, William S.
Leftwich, Chief Financial Officer of the Company, hereby certify as of the date
hereof, solely for the purposes of Title 18, Chapter 63, Section 1350 of the
United States Code, that to the best of my knowledge:

         1.       the Report fully complies with the requirements of Section
                  13(a) or 15(d), as applicable, of the Securities Exchange Act
                  of 1934; and

         2.       the information contained in the Report fairly presents, in
                  all material respects, the financial condition and results of
                  operations of the Company at the dates and for the periods
                  indicated.

This Certification has not been, and shall not be deemed, "filed" with the
Securities and Exchange Commission.


Date:  May 17, 2004                            By: /s/  William S. Leftwich
                                                   ----------------------------
                                                        William S. Leftwich
                                                        Chief Financial Officer

                                       23

</TEXT>
</DOCUMENT>
</SUBMISSION>
