<SUBMISSION>
<ACCESSION-NUMBER>0001019687-04-001998
<TYPE>10QSB/A
<PUBLIC-DOCUMENT-COUNT>7
<PERIOD>20040630
<FILING-DATE>20040909
<DATE-OF-FILING-DATE-CHANGE>20040909
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CRDENTIA CORP
<CIK>0001073857
<ASSIGNED-SIC>7361
<IRS-NUMBER>760585701
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10QSB/A
<ACT>34
<FILE-NUMBER>000-31152
<FILM-NUMBER>041022790
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>14114 DALLAS PARKWAY
<STREET2>SUITE 600
<CITY>DALLAS
<STATE>TX
<ZIP>75254
<PHONE>972-850-0780
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>14114 DALLAS PARKWAY
<STREET2>SUITE 600
<CITY>DALLAS
<STATE>TX
<ZIP>75254
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>LIFEN INC
<DATE-CHANGED>20001115
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>DIGIVISION INTERNATIONAL LTD
<DATE-CHANGED>20001005
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>10QSB/A
<SEQUENCE>1
<FILENAME>crdentia_10qa-063004.txt
<TEXT>
<PAGE>

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


                                  FORM 10-QSB/A

(Mark One)

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

         FOR THE QUARTERLY PERIOD ENDED JUNE 30, 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)

6,302,269 shares of Common Stock, $.0001 par value, outstanding on August 13,
2004.

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

<PAGE>


                                 CRDENTIA CORP.

                         Form 10-QSB/A Quarterly Report
                    For Quarterly Period Ended June 30, 2004

                                TABLE OF CONTENTS


                                                                            PAGE
                                                                            ----

PART I   FINANCIAL INFORMATION                                                 3


Item 1.  Condensed Consolidated Financial Statements                           3

         Condensed Consolidated Balance Sheets at June 30, 2004 (unaudited)
            and December 31, 2003                                              3

         Condensed Consolidated Statements of Operations (unaudited) for the
            Three and Six Months Ended June 30, 2004 and 2003                  4

         Condensed Consolidated Statements of Cash Flows (unaudited) for
            the Six Months Ended June 30, 2004 and 2003                        5

         Notes to Condensed Consolidated Financial Statements                  6

Item 2.  Management's Discussion and Analysis of Operations              15 & 16

Item 3.  Controls and Procedures                                              19


PART II  OTHER INFORMATION                                                    20

Item 1.  Legal Proceedings                                                    20

Item 2.  Change in Securities and Use of Proceeds                             20

Item 3.  Defaults Upon Senior Securities                                      20

Item 4.  Submission of Matters to a Vote of Security Holders                  20

Item 5.  Other Information                                                    21

Item 6.  Exhibits and Reports on Form 8-K                                     21


SIGNATURES                                                                    25


<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                           CRDENTIA CORP.
                                Condensed Consolidated Balance Sheets


                                                                  June 30, 2004   December 31, 2003
                                                                ----------------  -----------------
                                                                   (unaudited)
<S>                                                             <C>                <C>
Current assets:
   Cash and cash equivalents                                    $        86,362    $     1,469,076
   Accounts receivable, net of allowance for doubtful
     accounts of $100,380 in 2004 and $195,465 in 2003                3,186,877          3,058,084
   Unbilled receivables                                                 204,179            268,590
   Other current assets                                                 640,971            333,383
                                                                ----------------   ----------------
Total current assets                                                  4,118,389          5,129,133

Property and equipment, net                                             352,412            363,815
Goodwill                                                              8,562,910          8,519,821
Intangible assets, net                                                3,108,236          3,462,736
Other assets                                                            709,768            120,895
                                                                ----------------   ----------------

Total assets                                                    $    16,851,715    $    17,596,400
                                                                ================   ================

Current liabilities:
   Accounts payable and accrued expenses                        $     1,697,035    $       901,410
   Accrued employee compensation and benefits                           537,834            612,439
   Revolving lines of credit                                          2,151,616          2,871,890
   Current portion of notes payable to lenders                               --            191,667
   Subordinated convertible notes, net of discount                      690,279            250,833
   Current portion of notes payable to sellers                        1,637,215          1,435,115
   Other current liabilities                                             89,346             86,644
                                                                ----------------   ----------------
Total current liabilities                                             6,803,325          6,349,998

Notes payable to lenders, less current portion                               --             27,777
Long term bonus payable                                                 841,976            801,000
Notes payable to sellers, less current portion                        3,217,434          3,925,983
                                                                ----------------   ----------------

Total liabilities                                                    10,862,735         11,104,758
                                                                ----------------   ----------------

Commitments and contingencies

Convertible Preferred Stock,  10,000,000 shares authorized
Series A Convertible Preferred Stock
   $0.0001 par value, 2,750,000 issued and outstanding in
   2004 and 2003  (liquidation preference of $2,750,000)              2,750,000          1,750,000
Series B Convertible Preferred Stock
   $0.0001 par value 6,250,000 issued and outstanding in 2004
   (liquidation preference of $1,250,000)                             1,250,000                 --
                                                                ----------------   ----------------
                                                                      4,000,000          1,750,000
                                                                ----------------   ----------------
Stockholders' equity:
   Common stock, par value $0.0001,                                         738                736
      50,000,000 shares authorized in 2004 and 2003,
      7,378,675 shares issued and 6,302,269 shares
         outstanding in 2004
      7,355,758 shares issued and 6,279,352 shares
         outstanding in 2003
   Additional paid in capital                                        60,814,304         60,547,358
   Deferred stock compensation                                         (822,057)          (828,000)
   Accumulated deficit                                              (58,004,005)       (54,978,452)
                                                                ----------------   ----------------
Total stockholders' equity                                            1,988,980          4,741,642
                                                                ----------------   ----------------

Total liabilities and stockholders' equity                      $    16,851,715    $    17,596,400
                                                                ================   ================

          See accompanying notes to unaudited condensed consolidated financial statements.

                                             3
</TABLE>
<PAGE>


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


                                                       THREE MONTHS ENDED JUNE 30,      SIX MONTHS ENDED JUNE 30,
                                                      -----------------------------   -----------------------------
                                                          2004            2003            2004            2003
                                                      -------------   -------------   -------------   -------------

<S>                                                   <C>             <C>             <C>             <C>
Revenue from services                                 $  5,489,946    $         --    $ 11,707,498    $         --
Direct operating expenses                                4,307,653              --       9,255,370              --
                                                      -------------   -------------   -------------   -------------
          Gross margin                                   1,182,293              --       2,452,128              --
                                                      -------------   -------------   -------------   -------------

Operating expenses:
     Selling, general and administrative expenses        2,141,755         384,864       4,205,679         479,221
     Non-cash stock based compensation                     142,808              --         159,455          80,822
                                                      -------------   -------------   -------------   -------------
          Total operating expenses                       2,284,563         384,864       4,365,134         560,043
                                                      -------------   -------------   -------------   -------------

          Loss from operations                          (1,102,270)       (384,864)     (1,913,006)       (560,043)

Interest expense, net                                      547,645           3,881         999,109           4,858
                                                      -------------   -------------   -------------   -------------

          Loss from operations before income taxes      (1,649,915)       (388,745)     (2,912,115)       (564,901)

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

          Net loss                                    $ (1,649,915)   $   (388,745)   $ (2,912,115)   $   (564,901)
                                                      =============   =============   =============   =============

Deemed dividend related to beneficial conversion
  feature on Series A convertible preferred stock        1,000,000              --       1,000,000              --
Deemed dividend related to beneficial conversion
  feature on Series B convertible preferred stock        1,250,000              --       1,250,000              --
                                                      -------------   -------------   -------------   -------------

Net loss attributable to common stockholders          $ (3,899,915)   $   (388,745)   $ (5,162,115)   $   (564,901)
                                                      =============   =============   =============   =============

Basic and diluted net loss per common share
  attributable to common stockholders                 $      (0.62)   $      (0.12)   $      (0.82)   $      (0.17)
                                                      =============   =============   =============   =============


Weighted-average shares of common stock outstanding      6,288,166       3,374,423       6,283,759       3,345,576
                                                      =============   =============   =============   =============


                  See accompanying notes to unaudited condensed consolidated financial statements.

                                                          4
</TABLE>
<PAGE>


<TABLE>
<CAPTION>
                                                CRDENTIA CORP.
                                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
                                                  (UNAUDITED)


                                                                                   SIX MONTHS ENDED JUNE 30,
                                                                                  ---------------------------
                                                                                      2004           2003
                                                                                  ------------   ------------
<S>                                                                               <C>            <C>
Cash flows from operating activities:
       Net loss                                                                   $(2,912,115)   $  (564,901)
       Adjustment to reconcile net loss to net cash
          used in operating activities:
             Amortization of subordinated convertible
                   note discounts                                                     439,446             --
             Depreciation and amortization                                            483,901          2,007
             Net recovery of uncollectible accounts receivable                        (95,085)            --
             Non-cash stock based compensation expense                                159,455         80,822
             Amortization of debt issue costs                                          73,499             --
             Amortization of long term bonus payable                                   40,976             --
             Net loss on disposition of fixed assets                                    9,888             --
       Changes in operating assets and liabilities, net of
          effects of purchases of subsidiaries:
             Accounts receivable                                                      (33,706)            --
             Unbilled receivables                                                      64,411             --
             Other current assets and liabilties                                     (304,890)       (15,598)
             Other assets                                                              41,275             --
             Accounts payable and accrued expenses                                    350,627        166,507
             Accrued employee compensation and benefits                               (74,605)            --
                                                                                  ------------   ------------
Net cash used in operating activities                                              (1,756,923)      (331,163)
                                                                                  ------------   ------------

Cash flows from investing activities:
       Purchase of property and equipment                                            (127,887)            --
       Proceeds from sale of long term prepaid expenses                                    --         31,917
       Cash paid for acquisition of subsidiaries, net of cash
             received                                                                 (43,089)            --
                                                                                  ------------   ------------
Net cash provided by (used in) investing activities                                  (170,976)        31,917
                                                                                  ------------   ------------

Cash flows from financing activities:
       Issuance of preferred stock                                                  2,250,000             --
       Net decrease in revolving lines of credit                                   (2,871,890)            --
       Proceeds from notes payable to lenders                                       2,767,527        180,000
       Payment of notes payable to lenders                                           (835,356)            --
       Payment of notes payable to sellers                                           (506,448)            --
       Payment of debt issue costs                                                   (258,648)            --
                                                                                  ------------   ------------
Net cash provided by financing activities                                             545,185        180,000
                                                                                  ------------   ------------

Net decrease in cash                                                               (1,382,714)      (119,246)
Cash and cash equivalents at beginning of period                                    1,469,076        125,463
                                                                                  ------------   ------------
Cash and cash equivalents at end of period                                        $    86,362    $     6,217
                                                                                  ============   ============

Supplemental cash flow information:
       Cash paid for interest                                                     $   338,729    $        --
       Cash paid for income tax                                                   $        --    $        --


               See accompanying notes to unaudited condensed consolidated financial statements.

                                                      5
</TABLE>
<PAGE>


                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 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 commons
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. 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 future growth.

Basis of Presentation
---------------------

The accompanying unaudited financial data as of and for the three months and six
months ended June 30, 2004 and 2003 have been prepared by the Company pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with accounting principles generally accepted in the
United States of America have been condensed or omitted pursuant to such rules
and regulations. These unaudited condensed consolidated financial statements
should be read in conjunction with the audited financial statements and the
notes thereto included in the Company's annual Report on Form 10-KSB for the
fiscal year ended December 31, 2003.

In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows as of and for the three months and six
months ended June 30, 2004 have been made. The results of operations for the
three months and six months ended June 30, 2004 are not necessarily indicative
of the operating results for the full year.

Certain of the prior year financial statement amounts have been reclassified to
conform to the current year presentation. These reclassifications had no impact
on previously reported net loss or accumulated deficit.

The Company has a working capital deficit of $2.7 million and incurred a cash
flow loss from operations of $1.8 million for the six months ended June 30,
2004. Further, the Company was in default of a covenant of its revolving line of
credit at June 30, 2004, for which it received a waiver, and is in default of
multiple covenants of the line of credit in the third quarter. These issues
raise concerns about the ability of the Company to continue as a going concern.
During the six months ended June 30, 2004, the Company raised $2,250,000 through
the issuance of

                                       6
<PAGE>


                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 2004
                                  -------------

Series A and Series B Convertible Preferred Stock. Subsequent to June 30, 2004,
the Company raised an additional $475,000 through the issuance of Series B-1
Convertible Preferred Stock and anticipates raising additional funds during the
third quarter through the issuance of additional preferred stock. In addition,
approximately $2.1 million of the $4.9 million of notes payable to selling
shareholders were paid off or converted to equity during the third quarter.
Also, the Company believes that operational improvements occurring in the third
quarter will result in an improvement to its cash flow. The Company's financial
statements have been prepared assuming the Company will continue as a going
concern. The Company's ability to continue as a going concern is dependent upon
its ability to develop additional sources of capital and to achieve profitable
operations. If the Company's business fails to improve as expected or if the
Company fails to raise additional capital, it will be forced to significantly
curtail its operations until additional capital could be raised. There is no
assurance that additional capital can be raised for operational purposes. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

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
five 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.

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 a deposit until services are performed.

                                       7
<PAGE>


                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 2004
                                  -------------

Senior management reviews accounts receivable on a regular basis to determine if
any receivables will potentially be uncollectible. An allowance for 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 Statement of Financial Accounting Standard
(SFAS) No. 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.

                                                                   JUNE 30, 2004
                                                                   -------------

Dividend Yield                                                             --
Volatility                                                              133.7%
Risk-Free Interest Rates                                                  4.5%
Expected Lives in Years                                                0-5 years

The table below shows net loss per share for June 30, 2004 as if the Company had
elected the fair value method of accounting for stock options.

                                       8
<PAGE>


<TABLE>
<CAPTION>
                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 2004
                                  -------------


                                                                  THREE MONTHS ENDED JUNE 30,    SIX MONTHS ENDED JUNE 30,
                                                                  ---------------------------   ---------------------------
                                                                      2004           2003           2004           2003
                                                                  ------------   ------------   ------------   ------------

<S>                                                               <C>            <C>            <C>            <C>
Net loss as reported attributable to common stockholders          $(3,899,315)   $  (388,745)   $(5,162,115)   $  (564,901)

Add:
Stock-based compensation included in reported net income,
     net of related tax effects                                       142,808             --        159,455             --

Deduct:
Total stock-based employee compensation determined under
     the fair value method for all awards, net of
     related tax effects                                             (134,546)            --       (208,090)            --

                                                                  ------------   ------------   ------------   ------------
Proforma net loss, as adjusted                                    $(3,891,053)   $  (388,745)   $(5,210,750)   $  (564,901)
                                                                  ------------   ------------   ------------   ------------

Loss per share attributable to common stockholders:
     Basic and diluted, as reported                               $     (0.62)   $     (0.12)   $     (0.82)   $     (0.17)
     Basic and diluted, as adjusted                               $     (0.62)   $     (0.12)   $     (0.83)   $     (0.17)

</TABLE>

NOTE 2.  REVOLVING LINES OF CREDIT
----------------------------------

The Company had credit facilities with two commercial financing institutions for
the financing of eligible accounts receivable. These accounts receivables served
as security of the lines of credit. The Company paid 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
charge backs, and interest expense. These credit facilities were paid off on
June 16, 2004 with the proceeds from the Loan & Security Agreement, discussed
below.

NOTE 3.  NOTES PAYABLE
----------------------

On June 16, 2004, the Company entered into a Loan & Security Agreement with a
company specializing in healthcare finance, pursuant to which the Company
obtained a revolving credit facility up to $15,000,000 (the "Loan"). The Loan
has a term of three years and bears interest at a rate equal to the greater of
three percent (3.0%) per annum over the prime rate or nine and one-half percent
(9.5%) per annum (9.5% at June 30, 2004). Accounts receivable serves as security
for the Loan and it is subject to financial and reporting covenants. Customer
payments are used to repay the advances on the credit facility after deducting
charges for interest expense, unused line and account management fees. The
financial covenants are for the maintenance of minimum net worth, minimum debt
service coverage ratio, minimum EBITDA, maximum capital expenditure limits and
maximum operating lease obligations. The proceeds of the Loan were used to pay
off the revolving lines of credit and a note payable to a financial institution.
At June 30, 2004, the Company was out of compliance with the minimum EBITDA
financial covenants of the Loan, for which a waiver was received from the
lender. Until such time as the Company

                                       9
<PAGE>


                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 2004
                                  -------------

demonstrates its ability to comply with this and other financial covenants of
the Loan, the outstanding balance has been classified as a current liability on
the Balance Sheet.

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 loan, 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 loan was paid off on June 16, 2004, with the proceeds from the Loan
and Security Agreement.

NOTE 4.  SUBORDINATED CONVERTIBLE NOTES
---------------------------------------

On September 2, 2003, the Company issued $675,000 in Convertible Subordinated
Promissory Notes (the "Notes") to six investors. On September 29, 2003 and
October 16, 2003, the Company issued additional Notes for $25,000 and $120,000
to two additional investors, respectively. On December 3 and December 12, 2003,
the Company issued additional Notes for $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
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 5.  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, beginning January 31,
2004, for 21 months plus interest at 4%.

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
June 30, 2004). The second note, in the amount of $50,432 plus interest accrued
at a financial institution's Base Rate plus 1% (5% at June 30, 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

                                       10
<PAGE>


                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 2004
                                  -------------


eight years. Both of these notes are convertible to Common Stock at the holder's
option at the then current market price of the Common Stock.

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%. This note is convertible to Common Stock at the holder's option at the
then current market price for the Common Stock.

At June 30, 2004, the long-term debt discussed in Notes 3, 4, and 5 consisted of
the following:

                                                                 JUNE 30, 2004
                                                                 -------------


         Subordinated convertible notes, net of discount          $  690,279

         Seller note - New Age Staffing                            1,029,410

         Seller note - Nurses Network                                114,432

         Convertible Seller note - PSR Nurses original seller      2,711,756

         Convertible Seller note - PSR Nurses                        999,051

         Revolving Line of Credit                                  2,151,616
                                                                  -----------
                   Subtotal                                        7,696,544

         Less current portion                                      4,479,110
                                                                  -----------
                   Long-term portion of notes payable             $3,217,434
                                                                  ===========

NOTE 6.  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%.

NOTE 7.  STOCKHOLDERS' EQUITY AND PREFERRED STOCK
-------------------------------------------------

Common Stock
------------

On June 28, 2004, the Company affected a one-for-three reverse stock split of
the outstanding shares of Common Stock. All common share and per share
information included in these financial statements have been retroactively
adjusted to reflect the reverse stock split.

                                       11
<PAGE>


                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 2004
                                  -------------


On May 18, 2004, the Company and a current investor entered into a Stock
Purchase Agreement pursuant to which both parties agreed to purchase an
aggregate of 588,671 shares of our Common Stock from certain of our
stockholders. Under the Stock Purchase Agreement, the investor purchased 338,671
shares of Common Stock for $762,011 on May 18, 2004. The remaining 250,000
shares of common stock were delivered to an escrow agent. These shares will be
released from escrow as follows: (i) beginning on July 1, 2004 and continuing on
the first day of each month through and including June 1, 2005, the Company, or
its assign, shall pay $31,250 to the escrow agent, and the escrow agent shall
cause 10,417 shares to be transferred to us or our assign; and (ii) beginning on
July 1, 2005 and continuing on the first day of each month through and including
June 1, 2006, the Company, or its assign, shall pay $46,875 to the escrow agent,
and the escrow agent shall cause 10,417 shares to be released to us or our
assign. The escrow agent shall distribute funds received from the Company, or
its assign, to the stockholders who are parties to the Stock Purchase Agreement.
For July and August 2004, the Company assigned its right to purchase under the
Stock Purchase Agreement to an existing shareholder.

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 9,000,000 shares issued and outstanding
consisting of 2,750,000 shares of Series A and 6,250,000 shares of Series B.

Series a Preferred Stock
------------------------

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,
when declared by the Board of Directors, a quarterly dividend in the amount
equal to .0083 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 a conversion ratio of one share of
Common Stock for three shares of Series A Preferred Stock, one year from the
date of issuance of such shares.

On April 8, 2004 the Board of Directors declared a dividend to the Series A
stockholders equal to .0083 shares of Common Stock for each holder of Series A
Convertible Preferred Stock. As a result, 7,639 shares of Common Stock were
issued on May 26, 2004.

Series B Preferred Stock
------------------------

On June 16, 2004, the Company issued 6,250,000 shares of Series B Convertible
Preferred Stock at a per share price of $0.20 to an investor who is managed by a
member of the Company's Board of Directors. The holder of the Series B
Convertible Preferred Stock is entitled to receive a quarterly dividend in an
amount equal to .0017 shares of Common Stock for each share of outstanding
Series B Convertible Preferred Stock held by them. In the event of any
liquidation or winding up of the Company, the holder of the Series B shares will
be entitled to receive in

                                       12
<PAGE>


                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 2004
                                  -------------


preference to the holders of Common Stock, and any other series of Preferred
Stock, an amount equal to the amount of their purchase price. Unless previously
voluntarily converted prior to such time the Series B shares will be
automatically converted into Common Stock at a conversion ratio of one share of
Common Stock for three shares of Series B Preferred Stock upon the earlier of
the closing of an underwritten public offering of Common Stock pursuant to a
registration statement under the Securities Act of 1933, as amended, with
aggregate net proceeds of at least $25 million or the date specified by written
consent or agreement of the holders of a majority of the then outstanding shares
of Series B Convertible Preferred Stock.

NOTE 8.  SUBSEQUENT EVENTS
--------------------------

Conversion of Notes Payable to Sellers
--------------------------------------

As of July 31, 2004, holders of approximately $2.1 million of the $4.9 million
notes payable to selling shareholders of several of the companies we acquired in
2003 have accepted a cash payment of $225,000 and converted their remaining debt
to equity. Approximately $122,000 of the seller debt converted to Common Stock
(40,822 shares at $3.00 per share price) and $1.8 million converted to Series
B-1 Convertible Preferred Stock (29,991 shares at $60.00 per share price).

Issuance of Series B-1 Convertible Preferred Stock
--------------------------------------------------

The holders of the Series B-1 Convertible Preferred Stock are entitled to
receive a quarterly dividend in an amount equal to 1.5 shares of Common Stock
for each share of outstanding Series B-1 Convertible Preferred Stock held by
them. If any dividend is declared on the Common Stock, the holders of the Series
B-1 will be entitled to receive dividends out of the legally available funds as
if each share of Series B-1 had been converted to Common Stock. The holders of
the Series B-1 Convertible Preferred Stock have the right, at the option of the
holder at any time, to convert shares of the Series B-1 into shares of the
Company's Common Stock at an initial conversion ratio of 100 shares of Common
Stock for each one share of Series B-1. Unless previously voluntarily converted
prior to such time the Series B-1 shares will be automatically converted into
Common Stock at an initial conversion ratio of one-to-one upon the earlier of
the closing of an underwritten public offering of Common Stock pursuant to a
registration statement under the Securities Act of 1933, as amended, with
aggregate net proceeds of at least $25 million or the date specified by written
consent or agreement of the holders of a majority of the then outstanding shares
of Series B-1 Convertible Preferred Stock.

In addition to the Series B-1 Convertible Preferred Stock issued for the
conversion of the seller notes as described above, the Company issued 3,750
shares of Series B-1 Convertible Preferred Stock at a per share price of $60.00
to an investor during July, 2004 for cash proceeds of $225,000.

                                       13
<PAGE>


                                 CRDENTIA CORP.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------
                                  JUNE 30, 2004
                                  -------------


Also during July 2004, the Company issued 4,166 shares of Series B-1 Convertible
Preferred Stock at a per share price of $60.00 to the Company's Chief Executive
Officer for cash proceeds of $250,000.

                                       14
<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
-----------------------------------------------------------

         THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION
WITH THE UNAUDITED CONDENSED CONSOLIDATED 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. 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 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 and 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.

                                       15
<PAGE>

OVERVIEW

         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 employees provide complete clinical management and staffing for
healthcare facilities and our private duty home care employees provide 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 had contracts with approximately 150
healthcare facilities. Approximately 72% of our revenue in the first half of
2004 was derived from the placement of travel nurses and approximately 14% 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 future growth.
During the first half of 2004, we continued to streamline the operations we
acquired in 2003 and began preparing for the integration of future acquisitions.
We have continued to follow our plan to build and strengthen our existing
business and to target acquisition of specialized companies in the healthcare
staffing field.

         For the three and six months ended June 30, 2004, sales to one
customer, Rhode Island Hospital, represented more than 10% of our revenues. Our
top ten customers for the three and six months ended June 30, 2004 accounted for
61% and 58% of our revenues, respectively.

         During the first half 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.

         The gross margin on our revenues has been below the levels that our
business has historically achieved. The decline was caused, generally, by a
softening in the market for travel nurses in the first quarter of 2004. In the
travel nursing industry, the first quarter of each year is commonly a weak
quarter for results. In the second quarter, our results improved to a margin of
approximately 21.5%, primarily due to the efforts of our operational staff in
controlling the costs associated with the revenues and in upgrading the margins
received on some contracts as they renew. 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,

                                       16
<PAGE>

certain employment related taxes and workers compensation insurance coverage.
Our margin can be increased by 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.

         Our limited operating history in the healthcare staffing industry makes
it difficult to forecast our future operating results. To date, we have not
achieved profitability in any quarterly period, and as of June 30, 2004, we had
an accumulated deficit of $58.0 million. Our revenues have declined in recent
quarters. We cannot be certain that our revenues will increase and increase at a
rate sufficient to achieve and maintain profitability.

         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, to generate sales and to raise capital sufficient to fund our growth.
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.

RESULTS OF OPERATIONS

         Our revenue in the second quarter of 2004 of $5.5 million was
approximately 12% below the revenue realized in the first quarter of 2004. Since
our average revenue per nurse remained relatively constant between the quarters,
this decline can be attributed to a decrease in the number of nurses we had
under contract. Almost the entire headcount decline is the result of the
termination of a large contract with a hospital group that had a poor payment
history. The termination of this one contract resulted in the loss of a number
of nurse positions. At December 31, 2003, we partially reserved the outstanding
receivables from this hospital group but, ultimately, fully recovered all
amounts owed to us by early in the second quarter of 2004.

         During the first half of 2004, our selling, general and administrative
expense was comprised, primarily, of personnel costs, legal, audit and
administrative fees related to being a public company and various other office
and administrative expenses. Almost two-thirds of our selling, general and
administrative expense is personnel related. Our selling, general and
administrative expense in the first half of 2003 was 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 until our first acquisition of an
operating entity in August, 2003.

OUTLOOK

         In 2004, we intend to continue growing and strengthening 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 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 and are in various stages of
discussions with several companies.

                                       17
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         During the first half 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 and $1.25 million of
convertible preferred stock issued in June 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. In June 2004, we replaced our factoring relationship with a
revolving credit agreement provided by a company specializing in healthcare
finance.

         At June 30, 2004, we owed approximately $4.9 million to the selling
shareholders of several of the companies we acquired in 2003. As of July 31,
2004, holders of approximately $2.1 million of this seller debt have accepted a
cash payment of $225,000 and converted their remaining debt to equity.
Approximately $122,000 of seller debt converted to Common Stock and $1.8 million
converted to Series B-1 Convertible Preferred Stock. We continue to negotiate
with the holder of the remaining seller debt.

         As noted above in the discussion of revenue and gross margins, our
operating results for the first half of 2004 have been significantly below
expectations. As a result, we have continued to deplete our available cash
resources such that, at June 30, 2004, our cash balance had declined to $86,000,
down from $1.5 million at December 31, 2003. Subsequent to June 30, 2004, we
received $475,000 from the issuance of additional convertible preferred stock
and anticipate that additional equity may be available to us if we consummate
the acquisitions discussed below. Operationally in the third quarter, we are
experiencing an increase in travel nurses under contract and, we expect our
nurse counts to increase such that by the end of the third quarter, the number
of nurses we have under contract will meet or exceed our projected nurse counts.

         Management believes that the operational increases noted above will
result in an improvement in our monthly cash flow, such that it will turn
positive sometime in the second half of the year. Through the revolving credit
agreement noted above we have expanded our borrowing capacity and believe that
our current cash on hand, coupled with this increased borrowing capacity, the
additional capital we have raised since the end of the second quarter, the
capital we anticipate we will raise in the third quarter, and anticipated
improvements in cash flow from operations, will provide sufficient resources to
continue operations at our current level, at least for the next twelve months.
If our business fails to improve as we expect or if we fail to raise additional
capital, 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
negotiating with the same finance group that provides our revolving line of
credit to provide us with a term loan facility for the capital required to
acquire additional companies. We also anticipate that if we are successful in
acquiring additional companies, additional equity capital may also be available
to us. While we believe we will be successful in negotiating this term loan,
there can be no assurance to that effect. If additional capital is not readily

                                       18
<PAGE>

available, we will be forced to scale back our acquisition activities and our
operations until our income exceeds our expenses. This would result in a
significant slowdown of our development.

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


CRITICAL ACCOUNTING POLICIES

         The Company's discussion and analysis of its financial condition and
results of operation are based on the Company's financial statements, which have
been prepared in accordance with accounting policies generally accepted in the
United States of America. The Company believes certain critical accounting
policies affect its more significant judgments and estimates used in the
preparation of financial statements. A description of the Company's critical
accounting policies is set forth in the Company's Form 10-K for the year ended
December 31, 2003. As of, and for the three and six month periods ended June 30,
2004, there have been no material changes or updates to the Company's critical
accounting policies except for the possible outcome of the current Exposure
Draft on Stock Compensation.


ITEM 3.  CONTROLS AND PROCEDURES

         Subsequent to June 30, 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 June 30, 2004, and during
the period prior to the execution of this Report with the exception of the
significant deficiency noted below.

         During its review of the Company's internal controls over financial
reporting, the Company's management became aware of a significant deficiency,
which is not considered a material weakness, related to the reporting of
stock-based transactions. The Company is addressing this issue with additional
training for key personnel, recruitment of additional key personnel and
increased internal review by management and the audit committee throughout each
reporting period. This significant deficiency in our internal controls arose
from a correction in the application of accounting principles relating to the
recording of a beneficial conversion premium in connection with the purchase of
our Series B Preferred Stock by an investor (see footnote 7 to our Condensed
Consolidated Financial Statements as of June 30, 2004).

         There have been no other changes in our internal controls over
financial reporting during our most recent fiscal quarter that have materially
affected or are likely to materially affect our internal control over financial
reporting.

                                       19
<PAGE>


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. When declared
by the Board of Directors, the holders of the Series A Convertible Preferred
Stock are entitled to receive a quarterly dividend in an amount equal to ..0083
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 a conversion ratio of one share of Common
Stock for three shares of Series A Preferred Stock, one year from the date of
issuance of such shares, subject to certain conversion price adjustments.

         On June 16, 2004, we issued 6,250,000 shares of Series B Convertible
Preferred Stock at a per share price of $0.20 to an investor who is managed by a
member of the Company's Board of Directors. This investor is also a holder of
Series A Convertible Preferred Stock. The holders of the Series B Convertible
Preferred Stock are entitled to receive a dividend on each of September 30,
2004, December 31, 2004, March 31, 2005, June 30, 2005, September 30, 2005 and
December 31, 2005 in the amount equal to .0017 shares of Common Stock for each
share of outstanding Series B Convertible Preferred Stock held by them. In the
event of any liquidation or winding up of the Company, the holders of the Series
B shares will be entitled to receive in preference to the holders of Common
Stock and any other series of Preferred Stock expressly entitled to participate
in such distribution, until the holders of Series B have received, in the
aggregate, an amount equal to the amount of their purchase price. Unless
previously voluntarily converted prior to such time the Series B shares will be
automatically converted into Common Stock at a conversion ratio of one share of
Common Stock for three shares of Series B Preferred Stock upon the earlier of
the closing of an underwritten public offering of our Common Stock pursuant to a
registration statement under the Securities Act of 1933, as amended, with
aggregate net proceeds of at least $25 million or the date specified by written
consent or agreement of the holders of a majority of the then outstanding shares
of Series B Convertible Preferred Stock.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None.



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

         (a) The information set forth in this Item 4 relates to matters
submitted to a vote at the Company's Annual Meeting of Stockholders on May 27,
2004.

                                       20
<PAGE>

         (b) Not applicable.

         (c)      (i) A proposal to approve an amendment to the Company's
Amended and Restated Certificate of Incorporation to affect a reverse stock
split of the Company's Common Stock was approved with 16,239,831 for, and
121,730 against.

                  (ii) A proposal to reelect the Class II directors to serve for
a three year term ending in 2007 and until their successors are duly elected and
qualified was approved with the following vote:

                                            VOTES FOR          VOTES AGAINST
                                            ----------         -------------
         Robert J. Kenneth                  16,238,331            123,230
         Robert P. Oliver                   16,360,061              1,500

                  (iii) A proposal to adopt the Company's 2004 Stock Incentive
Plan, pursuant to which an aggregate of 2,400,000 shares of the Company's Common
Stock will be authorized for issuance thereunder, was approved with 14,021,687
for, 337,630 against and 2,002,244 abstentions.

                  (iv) A proposal to ratify the appointment of BDO Seidman, LLP
as the Company's independent accountants for the fiscal year ending December 31,
2004 was approved with 16,360,061 votes for and 1,500 against.


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)   Certificate of Amendment to Restated Certificate of Incorporation.

3.4(4)   Certificate of Correction of Certificate of Amendment to Restated
         Certificate of Incorporation.

3.5(5)   Certificate of Correction of Certificate of Amendment to Restated
         Certificate of Incorporation.

3.3(6)   Restated Bylaws.

                                       21
<PAGE>

4.1(7)   Certificate of Designations, Preferences and Rights of Series A
         Preferred Stock of Crdentia Corp.

4.2(8)   Certificate of Amendment of Certificate of Designations, Preferences
         and Rights of Series B Preferred Stock of Crdentia Corp.

4.1(9)   Certificate of Designations, Preferences and Rights of Series B
         Preferred Stock of Crdentia Corp.

4.2(10)  Amended and Restated Registration Rights Agreement dated June 16, 2004
         by and among Crdentia Corp. and MedCap Partners L.P.

10.1(11) Stock Purchase Agreement dated May 18, 2004 by and among Crdentia
         Corp., MedCap Partners L.P. and the parties listed on the Schedule of
         Stockholders attached thereto as Exhibit A.

10.2(12) Loan and Security Agreement dated June 16, 2004 by and among Crdentia
         Corp., Baker Anderson Christie, Inc., Nurses Network, Inc., New Age
         Staffing, Inc., PSR Nurses, Ltd., PSR Nurse Recruiting, Inc., PSR
         Nurses Holdings Corp. and Bridge Healthcare Finance, LLC.

10.3#    Form of Notice of Stock Option Award and Form of Stock Option Award
         Agreement dated May 27, 2004 by and between Crdentia Corp. and the
         individuals listed on Schedule A thereto.

10.4     Form of Indemnification Agreement dated February 26, 2004 by and
         between Crdentia Corp. and the individuals listed on Schedule A
         thereto.

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.

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

#        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 4.1 to the Form 8-K/A filed with the
         Securities and Exchange Commission on June 28, 2004 and incorporated
         herein by reference.

                                       22
<PAGE>

(4)      Previously filed as Exhibit 4.2 to the Form 8-K/A filed with the
         Securities and Exchange Commission on June 28, 2004 and incorporated
         herein by reference.
(5)      Previously filed as Exhibit 4.3 to the Form 8-K/A filed with the
         Securities and Exchange Commission on June 28, 2004 and incorporated
         herein by reference.
(6)      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.
(7)      Previously filed as Exhibit 4.1 to the Form 8-K filed with the
         Securities and Exchange Commission on December 30, 2003 and
         incorporated herein by reference.
(8)      Previously filed as Exhibit 4.1 to the Form 8-K filed with the
         Securities and Exchange Commission on February 20, 2004 and
         incorporated herein by reference.
(9)      Previously filed as Exhibit 4.1 to the Form 8-K filed with the
         Securities and Exchange Commission on June 22, 2004 and incorporated
         herein by reference.
(10)     Previously filed as Exhibit 4.2 to the Form 8-K filed with the
         Securities and Exchange Commission on June 22, 2004 and incorporated
         herein by reference.
(11)     Previously filed as Exhibit 10.1 to the Form 8-K filed with the
         Securities and Exchange Commission on May 20, 2004 and incorporated
         herein by reference.
(12)     Previously filed as Exhibit 10.1 to the Form 8-K filed with the
         Securities and Exchange Commission on June 22, 2004 and incorporated
         herein by reference.

(b)      Reports on Form 8-K

         On May 20, 2004, we filed a Form 8-K under Item 5, Other Events, to
         report a Stock Purchase Agreement we entered with MedCap Partners L.P.
         and certain of our stockholders.

         On June 22, 2004, we filed a Form 8-K under Item 5, Other Events, to
         report that on Jun 16, 2004 we (i) entered a Loan and Security
         Agreement with Bridge Healthcare Finance, LLC, and (ii) issued
         6,250,000 shares of Series B Preferred Stock to MedCap Partners L.P.

         On June 28, 2004, we filed a Form 8-K under Item 5, Other Events, to
         report a one-for-three reverse split of our outstanding shares of
         common stock.

         On June 28, 2004, we filed a Form 8-K/A under Item 5, Other Events, to
         amend the Form 8-K previously filed on June 28, 2004 to report that
         beginning on June 29, 2004 our common stock would trade with the ticker
         symbol "CRDE."

                                       23
<PAGE>


                                   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:  September 9, 2004           By: /S/ JAMES D. DURHAM
                                       -----------------------------------------
                                          James D. Durham
                                          Chief Executive Officer

Date:  September 9, 2004           By: /S/ WILLIAM S. LEFTWICH
                                       -----------------------------------------
                                          William S. Leftwich
                                          Chief Financial Officer and Secretary

                                       24

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>2
<FILENAME>crdentia_10qaex10-3.txt
<TEXT>

<PAGE>

                                                                    Exhibit 10.3

                    CRDENTIA CORP. 2004 STOCK INCENTIVE PLAN

                          NOTICE OF STOCK OPTION AWARD


         Grantee's Name and Address:
                                          ----------------------------
                                          ----------------------------
                                          ----------------------------


         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"), the Crdentia Corp. 2004 Stock Incentive Plan, as amended
from time to time (the "Plan") and the Stock Option Award Agreement (the "Option
Agreement") attached hereto, as follows. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Notice.

         Award Number                                __

         Date of Award                               May 27, 2004

         Vesting Commencement Date                   May 27, 2004

         Exercise Price per Share                    $1.70

         Total Number of Shares Subject
         to the Option (the "Shares")                25,000

         Total Exercise Price                        $42,500

         Type of Option:                             Non-Qualified Stock Option

         Expiration Date:                            May 27, 2014

         Post-Termination Exercise Period:           Sixty (60) Days

VESTING SCHEDULE:

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

         1/3rd of the Shares subject to the Option shall vest twelve months
after the Vesting Commencement Date, and 1/36th of the Shares subject to the
Option shall vest on each monthly anniversary of the Vesting Commencement Date
thereafter.

                                       1
<PAGE>

         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, the Plan, and the Option Agreement.

                               Crdentia Corp.,
                               a Delaware corporation

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

                               Title:
                                      ------------------------------------------

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 GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER).

         The Grantee acknowledges receipt of a copy of the Plan and 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, the
Plan, 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, the Plan and the Option Agreement.
The Grantee hereby agrees that all questions of interpretation and
administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 13 of the Option
Agreement. The Grantee further agrees to the venue selection and waiver of a
jury trial in accordance with Section 14 of the Option Agreement. The Grantee
further agrees to notify the Company upon any change in the residence address
indicated in this Notice.


Dated: ______________________         Signed: _________________________________
                                                           Grantee

                                       2
<PAGE>


                                                                AWARD NUMBER: __

                    CRDENTIA CORP. 2004 STOCK INCENTIVE PLAN

                          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 the Notice, this
Stock Option Award Agreement (the "Option Agreement") and the Company's 2004
Stock Incentive Plan, as amended from time to time (the "Plan"), which are
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option
Agreement.

         The Option is intended to qualify as a Non-Qualified Stock Option and
not as an Incentive Stock Option as defined in Section 422 of the Code.

         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 the Plan and this Option Agreement. The Option
shall be subject to the provisions of Section 11 of the Plan and Section 2(d) of
this Option Agreement relating to the exercisability or termination of the
Option in the event of a Corporate Transaction or Change in Control. The Grantee
shall be subject to reasonable limitations on the number of requested exercises
during any monthly or weekly period as determined by the Administrator. 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 Administrator 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 Administrator. 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 Administrator 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 3(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 Administrator for the satisfaction of
applicable income tax and employment tax withholding obligations, including,
without limitation, such other tax obligations of the Grantee incident to the
receipt of Shares. Upon exercise of the Option, the Company or the Grantee's

                                       3
<PAGE>

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 withholding obligations.

                  (d) ACCELERATION OF OPTION UPON CORPORATE TRANSACTION OR
CHANGE IN CONTROL.

                           (i) CORPORATE TRANSACTION. In the event of a
Corporate Transaction and irrespective of whether the Option is Assumed or
Replaced, the Option automatically shall become fully vested and exercisable
immediately prior to the specified effective date of such Corporate Transaction,
for all of the Shares at the time represented by the Option, provided that the
Grantee's Continuous Service has not terminated prior to such date.

                           (ii) CHANGE IN CONTROL. In the event of a Change in
Control (other than a Change in Control which also is a Corporate Transaction),
the Option shall become fully vested and exercisable immediately prior to the
specified effective date of such Change in Control, for all of the Shares at the
time represented by the Option, provided that the Grantee's Continuous Service
has not terminated prior to such date.

         3. 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 Administrator 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 Plan 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 (and not used for another Award
exercise by attestation during such period); 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.

         4. 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. If the exercise of the Option within the
applicable time periods set forth in Section 6, 7 and 8 of this Option Agreement
is prevented by the provisions of this Section 5, the Option shall remain
exercisable until one (1) month after the date the Grantee is notified by the
Company that the Option is exercisable, but in any event no later than the
Expiration Date set forth in the Notice.

                                       4
<PAGE>

         5. TERMINATION OR CHANGE OF CONTINUOUS SERVICE. In the event the
Grantee's Continuous Service terminates, 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"). The
Post-Termination Exercise Period shall commence on the Termination Date. In no
event, however, 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 Administrator as of such change in
status. Except as provided in Sections 6 and 7 below, 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 Post-Termination Exercise Period,
the Option shall terminate.

         6. 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 commencing on the Termination Date (but 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.

         7. 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 person who acquired the right to exercise
the Option pursuant to Section 8 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months commencing on 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.

         8. 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 during the lifetime of the Grantee
to the extent and in the manner authorized by the Administrator. Notwithstanding
the foregoing, the Grantee may designate one or more beneficiaries of the
Grantee's Option in the event of the Grantee's death on a beneficiary
designation form provided by the Administrator. Following the death of the
Grantee, the Option, to the extent provided in Section 7, may be exercised (a)
by the person or persons designated under the deceased Grantee's beneficiary
designation or (b) in the absence of an effectively designated beneficiary, by
the Grantee's legal representative or by any person empowered to do so under the
deceased Grantee's will or under the then applicable laws of descent and
distribution. The terms of the Option shall be binding upon the executors,
administrators, heirs, successors and transferees of the Grantee.

                                       5
<PAGE>

         9. 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.

         10. 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
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. In the case of a Non-Qualified
Stock Option, 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.

         11. ENTIRE AGREEMENT: GOVERNING LAW. The Notice, the Plan 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
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 Plan 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, the Plan 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, the Plan
or this Option Agreement be determined 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.

         12. CONSTRUCTION. 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. Except when otherwise indicated by
the context, the singular shall include the plural and the plural shall include
the singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.

                                       6
<PAGE>

         13. ADMINISTRATION AND INTERPRETATION. Any question or dispute
regarding the administration or interpretation of the Notice, the Plan or this
Option Agreement shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

         14. VENUE AND WAIVER OF JURY TRIAL. The Company, the Grantee, and the
Grantee's assignees pursuant to Section 8 (the "parties") agree that any suit,
action, or proceeding arising out of or relating to the Notice, the Plan 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 14 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.

         15. 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.

                                END OF AGREEMENT


                                       7
<PAGE>


                                    EXHIBIT A
                                    ---------

                    CRDENTIA CORP. 2004 STOCK INCENTIVE PLAN

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

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

         1. EXERCISE OF OPTION. Effective as of today, ______________, ___ the
undersigned (the "Grantee") hereby elects to exercise the Grantee's option to
purchase 25,000 shares of the Common Stock (the "Shares") of Crdentia Corp. (the
"Company") under and pursuant to the Company's 2004 Stock Incentive Plan, as
amended from time to time (the "Plan") and the Non-Qualified Stock Option Award
Agreement (the "Option Agreement") and Notice of Stock Option Award (the
"Notice") dated May 27, 2004. Unless otherwise defined herein, the terms defined
in the Plan 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, the Plan 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 10 of the Plan.

         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 3(d) 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 foreign,
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.

                                       8
<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. This
Exercise Notice shall be binding upon the Grantee and his or her heirs,
executors, administrators, successors and assigns.

         8. CONSTRUCTION. 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. Except when otherwise indicated by the context,
the singular shall include the plural and the plural shall include the singular.
Use of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.

         9. ADMINISTRATION AND INTERPRETATION. The Grantee hereby agrees that
any question or dispute regarding the administration or interpretation of this
Exercise Notice shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.

         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, the Plan 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 Plan, 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.

                                       9
<PAGE>

Submitted by:                                  Accepted by:
GRANTEE:                                       CRDENTIA CORP.
                                               By:
                                                  ----------------------------
                                               Title:
                                                     -------------------------
------------------------------------
          (Signature)
ADDRESS:                                       ADDRESS:
-------                                        -------
_____________________                          14114 Dallas Parkway, Suite 600
_____________________                          Dallas, Texas  75254


                                       10
<PAGE>


                                   SCHEDULE A
                                   ----------

Robert Oliver
Joseph DeLuca
Robert Kenneth
C. Fred Toney
Thomas Herman


                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>3
<FILENAME>crdentia_10qaex10-4.txt
<TEXT>

<PAGE>

                                                                    Exhibit 10.4


                            INDEMNIFICATION AGREEMENT


         This INDEMNIFICATION AGREEMENT (this "AGREEMENT") is made and entered
into this 26th day of February, 2004 (the "EFFECTIVE DATE") by and between
Crdentia Corp., a Delaware corporation (the "COMPANY"), and ______________ (the
"INDEMNITEE").

         WHEREAS, the Company believes it is essential to retain and attract
qualified directors and officers;

         WHEREAS, the Indemnitee is a director and/or officer of the Company;

         WHEREAS, both the Company and the Indemnitee recognize the increased
risk of litigation and other claims being asserted against directors and
officers of public companies;

         WHEREAS, the Company's Certificate of Incorporation (the "CERTIFICATE
OF INCORPORATION") and Bylaws (the "BYLAWS") require the Company to indemnify
its directors and officers to the extent permitted by the DGCL (as hereinafter
defined); and

         WHEREAS, the Indemnitee either (i) has been serving and intends to
continue serving as a director and/or officer of the Company in part in reliance
on the Certificate of Incorporation and Bylaws, or (ii) is relying upon the
rights afforded under this Agreement in accepting Indemnitee's position as a
director, officer or employee of the Company; and

         WHEREAS, in recognition of the Indemnitee's need for (i) substantial
protection against personal liability based on the Indemnitee's reliance on the
Certificate of Incorporation and Bylaws, (ii) specific contractual assurance
that the protection promised by the Certificate of Incorporation and Bylaws will
be available to the Indemnitee, regardless of, among other things, any amendment
to or revocation of the Bylaws or any change in the composition of the Company's
Board of Directors (the "BOARD") or acquisition transaction relating to the
Company, and (iii) an inducement to continue to provide effective services to
the Company as a director and/or officer thereof, the Company wishes to provide
for the indemnification of the Indemnitee and to advance expenses to the
Indemnitee to the fullest extent permitted by law and as set forth in this
Agreement, and, to the extent insurance is maintained by the Company, to provide
for the continued coverage of the Indemnitee under the Company's directors' and
officers' liability insurance policies;

         NOW, THEREFORE, in consideration of the premises contained herein and
of the Indemnitee continuing to serve the Company directly or, at its request,
with another enterprise, and intending to be legally bound hereby, the parties
hereto agree as follows:

                                       1
<PAGE>

         1. CERTAIN DEFINITIONS.

                  (a) A "CHANGE IN CONTROL" shall be deemed to have occurred if:

                           (i) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "EXCHANGE ACT"), other than (a) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company; (b) a corporation owned, directly or indirectly, by the stockholders of
the Company in substantially the same proportions as their ownership of stock of
the Company; or (c) any current beneficial stockholder or group, as defined by
Rule 13d-5 of the Exchange Act, including the heirs, assigns and successors
thereof, of beneficial ownership, within the meaning of Rule 13d-3 of the
Exchange Act, of securities possessing more than 50% of the total combined
voting power of the Company's outstanding securities; hereafter becomes the
"beneficial owner," as defined in Rule 13d-3 of the Exchange Act, directly or
indirectly, of securities of the Company representing 20% or more of the total
combined voting power represented by the Company's then outstanding Voting
Securities;

                           (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board and any new
director whose election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors then
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof; or

                           (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company, in one transaction or a series of
transactions, of all or substantially all of the Company's assets.

                  (b) "DGCL" shall mean the General Corporation Law of the State
of Delaware, as the same exists or may hereafter be amended or interpreted;
PROVIDED, HOWEVER, that in the case of any such amendment or interpretation,
only to the extent that such amendment or interpretation permits the Company to
provide broader indemnification rights than were permitted prior thereto.

                  (c) "EXPENSES" shall mean attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing for any of the foregoing, any Proceeding relating to any Indemnifiable
Event.

                  (d) "INDEMNIFIABLE EVENT" shall mean any event or occurrence
that takes place either prior to or after the execution of this Agreement,
related to the fact that the Indemnitee is or was a director or officer of the
Company, or is or was serving at the request of the Company as a director,
officer, employee, or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, or by reason of anything done or not done by the Indemnitee in
any such capacity.

                                       2
<PAGE>

                  (e) "PROCEEDING" shall mean any threatened, pending or
completed action, suit, investigation or proceeding, and any appeal thereof,
whether civil, criminal, administrative or investigative and/or any inquiry or
investigation, whether conducted by the Company or any other party, that the
Indemnitee in good faith believes might lead to the institution of any such
action.

                  (f) "REVIEWING PARTY" shall mean any appropriate person or
body consisting of a member or members of the Company's Board or any other
person or body appointed by the Board (including the special independent counsel
referred to in Section 6) who is not a party to the particular Proceeding with
respect to which the Indemnitee is seeking indemnification.

                  (g) "VOTING SECURITIES" shall mean any securities of the
Company which vote generally in the election of directors.

         2. INDEMNIFICATION. In the event the Indemnitee was or is a party to or
is involved (as a party, witness, or otherwise) in any Proceeding by reason of
(or arising in part out of) an Indemnifiable Event, whether the basis of the
Proceeding is the Indemnitee's alleged action in an official capacity as a
director or officer or in any other capacity while serving as a director or
officer, the Company shall indemnify the Indemnitee to the fullest extent
permitted by the DGCL against any and all Expenses, liability, and loss
(including judgments, fines, ERISA excise taxes or penalties, and amounts paid
or to be paid in settlement, and any interest, assessments, or other charges
imposed thereon, and any federal, state, local, or foreign taxes imposed on any
director or officer as a result of the actual or deemed receipt of any payments
under this Agreement) (collectively, "LIABILITIES") reasonably incurred or
suffered by such person in connection with such Proceeding. The Company shall
provide indemnification pursuant to this Section 2 as soon as practicable, but
in no event later than thirty (30) days after it receives written demand from
the Indemnitee. Notwithstanding anything in this Agreement to the contrary and
except as provided in Section 5 below, the Indemnitee shall not be entitled to
indemnification pursuant to this Agreement (i) in connection with any Proceeding
initiated by the Indemnitee against the Company or any director or officer of
the Company unless the Company has joined in or consented to the initiation of
such Proceeding or (ii) on account of any suit in which judgment is rendered
against the Indemnitee pursuant to Section 16(b) of the Exchange Act for an
accounting of profits made from the purchase or sale by the Indemnitee of
securities of the Company.

         3. ADVANCEMENT OF EXPENSES. The Company shall advance Expenses to the
Indemnitee within thirty (30) business days of such request (an "EXPENSE
ADVANCE"); PROVIDED, HOWEVER, that if required by applicable corporate laws such
Expenses shall be advanced only upon delivery to the Company of an undertaking
by or on behalf of the Indemnitee to repay such amount if it is ultimately
determined that the Indemnitee is not entitled to be indemnified by the Company;
and PROVIDED FURTHER, that the Company shall make such advances only to the
extent permitted by law. Expenses incurred by the Indemnitee while not acting in
his/her capacity as a director or officer, including service with respect to
employee benefit plans, may be advanced upon such terms and conditions as the
Board, in its sole discretion, deems appropriate.

                                       3
<PAGE>

         4. REVIEW PROCEDURE FOR INDEMNIFICATION. Notwithstanding the foregoing,
(i) the obligations of the Company under Sections 2 and 3 above shall be subject
to the condition that the Reviewing Party shall not have determined (in a
written opinion, in any case in which the special independent counsel referred
to in Section 6 hereof is involved) that the Indemnitee would not be permitted
to be indemnified under applicable law, and (ii) the obligation of the Company
to make an Expense Advance pursuant to Section 3 above shall be subject to the
condition that, if, when and to the extent that the Reviewing Party determines
that the Indemnitee would not be permitted to be so indemnified under applicable
law, the Company shall be entitled to be reimbursed by the Indemnitee (who
hereby agrees to reimburse the Company) for all such amounts theretofore paid;
PROVIDED, HOWEVER, that if the Indemnitee has commenced legal proceedings in a
court of competent jurisdiction pursuant to Section 5 below to secure a
determination that the Indemnitee should be indemnified under applicable law,
any determination made by the Reviewing Party that the Indemnitee would not be
permitted to be indemnified under applicable law shall not be binding and the
Indemnitee shall not be required to reimburse the Company for any Expense
Advance until a final judicial determination is made with respect thereto (as to
which all rights of appeal therefrom have been exhausted or have lapsed). The
Indemnitee's obligation to reimburse the Company for Expense Advances pursuant
to this Section 4 shall be unsecured and no interest shall be charged thereon.
If there has not been a Change in Control, the Reviewing Party shall be selected
by the Board, and if there has been such a Change in Control, other than a
Change in Control which has been approved by a majority of the Company's Board
who were directors immediately prior to such Change in Control, the Reviewing
Party shall be the special independent counsel referred to in Section 6 hereof.

         5. ENFORCEMENT OF INDEMNIFICATION RIGHTS. If the Reviewing Party
determines that the Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, or if the Indemnitee has
not otherwise been paid in full pursuant to Sections 2 and 3 above within thirty
(30) days after a written demand has been received by the Company, the
Indemnitee shall have the right to commence litigation in any court in the State
of Delaware having subject matter jurisdiction thereof and in which venue is
proper to recover the unpaid amount of the demand (an "ENFORCEMENT PROCEEDING")
and, if successful in whole or in part, the Indemnitee shall be entitled to be
paid any and all Expenses in connection with such Enforcement Proceeding. The
Company hereby consents to service of process for such Enforcement Proceeding
and to appear in any such Enforcement Proceeding. Any determination by the
Reviewing Party otherwise shall be conclusive and binding on the Company and the
Indemnitee.

         6. CHANGE IN CONTROL. The Company agrees that if there is a Change in
Control of the Company, other than a Change in Control which has been approved
by a majority of the Company's Board who were directors immediately prior to
such Change in Control, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under applicable law or
the Company's Certificate of Incorporation or Bylaws now or hereafter in effect
relating to indemnification for Indemnifiable Events, the Company shall seek
legal advice only from special independent counsel selected by the Indemnitee

                                       4
<PAGE>

and approved by the Company, which approval shall not be unreasonably withheld.
Such special independent counsel shall not have otherwise performed services for
the Company or the Indemnitee, other than in connection with such matters,
within the last five years. Such independent counsel shall not include any
person who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing either the Company
or the Indemnitee in an action to determine the Indemnitee's rights under this
Agreement. Such counsel, among other things, shall render its written opinion to
the Company and the Indemnitee as to whether and to what extent the Indemnitee
would be permitted to be indemnified under applicable law. The Company agrees to
pay the reasonable fees of the special independent counsel referred to above and
to indemnify fully such counsel against any and all expenses (including
attorneys' fees), claims, liabilities and damages arising out of or relating to
this Agreement or the engagement of special independent counsel pursuant to this
Agreement.

         7. PARTIAL INDEMNITY. If the Indemnitee is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of the
Expenses and Liabilities, but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify the Indemnitee for the portion thereof
to which the Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that the Indemnitee has been
successful on the merits or otherwise in defense of any or all Proceedings
relating in whole or in part to an Indemnifiable Event or in defense of any
issue or matter therein, including dismissal without prejudice, the Indemnitee
shall be indemnified against all Expenses incurred in connection therewith. In
connection with any determination by the Reviewing Party or otherwise as to
whether the Indemnitee is entitled to be indemnified hereunder, the burden of
proof shall be on the Company to establish that the Indemnitee is not so
entitled.

         8. NON-EXCLUSIVITY. The rights of the Indemnitee hereunder shall be in
addition to any other rights the Indemnitee may have under any statute,
provision of the Company's Certificate of Incorporation or Bylaws, vote of
stockholders or disinterested directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office. To the extent that a change in the DGCL permits greater indemnification
by agreement than would be afforded currently under the Company's Certificate of
Incorporation and Bylaws and this Agreement, it is the intent of the parties
hereto that the Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by such change.

         9. LIABILITY INSURANCE. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, the Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any director or officer of the Company.

         10. SETTLEMENT OF CLAIMS. The Company shall not be liable to indemnify
the Indemnitee under this Agreement (a) for any amounts paid in settlement of
any action or claim effected without the Company's written consent, which
consent shall not be unreasonably withheld; or (b) for any judicial award if the
Company was not given a reasonable and timely opportunity, at its expense, to
participate in the defense of such action.

         11. NO PRESUMPTION. For purposes of this Agreement, to the fullest
extent permitted by law, the termination of any Proceeding, action, suit or
claim, by judgment, order, settlement (whether with or without court approval)
or conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that the Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.

                                       5
<PAGE>

         12. PERIOD OF LIMITATIONS. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company or any
affiliate of the Company against the Indemnitee, the Indemnitee's spouse, heirs,
executors or personal or legal representatives after the expiration of two years
from the date of accrual of such cause of action, or such longer period as may
be required by state law under the circumstances, and any claim or cause of
action of the Company or its affiliate shall be extinguished and deemed released
unless asserted by the timely filing of a legal action within such period;
PROVIDED, HOWEVER, that if any shorter period of limitations is otherwise
applicable to any such cause of action, such shorter period shall govern.

         13. CONSENT AND WAIVER BY THIRD PARTIES. The Indemnitee hereby
represents and warrants that he or she has obtained all waivers and/or consents
from third parties which are necessary for his or her employment with the
Company on the terms and conditions set forth herein and to execute and perform
this Agreement without being in conflict with any other agreement, obligation or
understanding with any such third party. The Indemnitee represents that he or
she is not bound by any agreement or any other existing or previous business
relationship which conflicts with, or may conflict with, the performance of his
or her obligations hereunder or prevent the full performance of his or her
duties and obligations hereunder.

         14. AMENDMENT OF THIS AGREEMENT. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver.
Except as specifically provided herein, no failure to exercise or any delay in
exercising any right or remedy hereunder shall constitute a waiver thereof.

         15. SUBROGATION. In the event of payment under this Agreement, the
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of the Indemnitee, who shall execute all papers required and shall
do everything that may be necessary to secure such rights, including the
execution of such documents necessary to enable the Company effectively to bring
suit to enforce such rights.

         16. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made against
Indemnitee to the extent the Indemnitee has otherwise actually received payment
(under any insurance policy, Bylaw, vote, agreement or otherwise) of the amounts
otherwise indemnifiable hereunder.

         17. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, spouses, heirs, and personal and legal
representatives. The Company shall require and cause any successor (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all,
substantially all, or a substantial part, of the business and/or assets of the
Company, by written agreement in form and substance satisfactory to the
Indemnitee, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. This Agreement shall continue in effect

                                       6
<PAGE>

regardless of whether the Indemnitee continues to serve as a director or officer
of the Company or of any other enterprise at the Company's request.

         18. SEVERABILITY. The provisions of this Agreement shall be severable
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

         19. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in such State without giving effect to the
principles of conflicts of laws.

         20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         21. NOTICES. All notices, demands, and other communications required or
permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand, against receipt, or mailed, postage prepaid,
certified or registered mail, return receipt requested, and addressed to the
Company at:

                                         Crdentia Corp.
                                         14114 Dallas Parkway
                                         Suite 600
                                         Dallas, Texas  75254

                  and to the Indemnitee at:

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

         Notice of change of address shall be effective only when done in
accordance with this Section. All notices complying with this Section shall be
deemed to have been received on the date of delivery or on the third business
day after mailing.

                            [Signature Page Follows]

                                       7
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the day first set forth above.

                                 THE COMPANY:

                                 CRDENTIA CORP.


                                 By:
                                    -------------------------------------------
                                    James D. Durham
                                    Chief Executive Officer



                                 INDEMNITEE:


                                 ----------------------------------------------
                                                   Signature


                                 Print Name:
                                            -----------------------------------

                                       8
<PAGE>


                                   SCHEDULE A
                                   ----------

James D. Durham
Pamela Atherton
William Leftwich
Joseph DeLuca
Robert Kenneth
Robert Oliver
C. Fred Toney
Thomas Herman


                                       9

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>4
<FILENAME>crdentia_10qaex31-1.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:  September 9, 2004             By: /S/ JAMES D. DURHAM
                                          -------------------------------
                                             James D. Durham
                                             Chief Executive Officer and
                                             Chairman of the Board



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>5
<FILENAME>crdentia_10qaex31-2.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:  September 9, 2004          By: /S/ WILLIAM S. LEFTWICH
                                       -----------------------------------------
                                          William S. Leftwich
                                          Chief Financial Officer and Secretary


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>6
<FILENAME>crdentia_10qaex32-1.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 six month period ended June 30, 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:  September 9, 2004                    By: /S/ JAMES D. DURHAM
                                                --------------------------
                                                   James D. Durham
                                                   Chief Executive Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>7
<FILENAME>crdentia_10qaex32-2.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 six month period ended June 30, 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:  September 9, 2004                    By: /S/ WILLIAM S. LEFTWICH
                                                --------------------------
                                                   William S. Leftwich
                                                   Chief Financial Officer


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