UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
     FOR THE TRANSITION PERIOD  FROM ________TO__________


                         Commission File Number: 022597

                                  CIMNET, INC.
               --------------------------------------------------
               (Exact name of registrant as specified in charter)


           Delaware                                           52-2075851
  ------------------------------                        ----------------------
  State or other jurisdiction of                          (I.R.S. Employer
   incorporation or organization                        Identification Number)


                946 W. Penn Avenue, Robesonia, Pennsylvania  19551
               ----------------------------------------------------
               (Address of principal executive offices)  (Zip Code)


                                 (610) 693-3114
                ------------------------------------------------
                (Issuer's telephone number, including area code)


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

                                 Yes [X] No [ ]

As of November 12, 2004, there were 7,293,859 shares of common stock, par value
$.0001 per share, issued and outstanding.
<PAGE>

TABLE OF CONTENTS



                                                                            Page
                                                                            ----

PART I - FINANCIAL INFORMATION
------------------------------

Item 1     Financial Statements
           Balance Sheets                                                     3
           Statements of Operations                                           4
           Statements of Cash Flows                                           5
           Notes to Financial Statements                                      6

Item 2     Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                         11

Item 3     Controls and Procedures                                           17

PART II - OTHER INFORMATION
---------------------------

Item 1     Legal Proceedings                                                 18

Item 2     Unregistered Sales of Equity Securities and Use of Proceeds       18

Item 3     Defaults Upon Senior Securities                                   18

Item 4     Submission of Matters to Vote of Security Holders                 18

Item 5     Other Information                                                 18

Item 6     Exhibits                                                          18

Signatures                                                                   19

Exhibit 31                                                                   20

Exhibit 32                                                                   21

                                       2
<PAGE>

                                  CIMNET, INC.

                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                   September 30,   December 31,
                                                                                       2004            2003
                                                                                   ------------    ------------
                                                                                   (Unaudited)
                                     ASSETS
CURRENT ASSETS
<S>                                                                                <C>             <C>
     Cash and cash equivalents                                                     $     38,406    $    137,641
     Available for sale securities                                                            0         201,016
     Accounts receivable, net of allowance of $14,289 at September 30, 2004
         and $17,022 at December 31, 2003                                               271,500         333,108
     Other Receivables                                                                        0          75,000
     Inventories                                                                         93,876          94,841
     Prepaid expenses                                                                    29,791          57,254
     Income tax receivable                                                                    0         117,390
     Deferred Tax Assets                                                                148,713         148,713
                                                                                   ------------    ------------

         Total Current Assets                                                           582,286       1,164,963

PROPERTY AND EQUIPMENT, NET                                                             293,927         575,865

GOODWILL                                                                              2,364,145       2,364,145

OTHER ASSETS                                                                             50,000          77,500
                                                                                   ------------    ------------

                                                                                   $  3,290,358    $  4,182,473
                                                                                   ============    ============
                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES

     Line of Credit                                                                $    179,068    $    331,000
     Current portion of long-term debt                                                        0          59,067
     Accounts payable                                                                    49,093         103,287
     Accrued expenses                                                                    56,684          68,968
     Accrued income taxes                                                                     0          19,077
     Dividends payable on preferred stock                                               246,000         186,000
     Deferred income                                                                    861,872         965,977
                                                                                   ------------    ------------
         Total Current Liabilities                                                    1,392,717       1,733,376


LONG-TERM DEBT, NET OF CURRENT PORTION                                                        0         127,705
                                                                                   ------------    ------------

                                                                                      1,392,717       1,861,081
                                                                                   ------------    ------------
STOCKHOLDERS' EQUITY

     Common stock, 15,000,000 shares authorized at $.0001 par value;                        729             655
         7,293,859 shares issued and outstanding at September 30, 2004 and
         6,553,859 at December 31, 2003
     Preferred stock, $.0001 8% cumulative convertible; 5,000,000 shares
         authorized; 746,965 shares issued and outstanding at September 30, 2004
         and December 31, 2003                                                               75              75
     Paid-in capital                                                                  5,945,314       5,557,761
     Accumulated deficit                                                             (4,036,011)     (3,002,737)
     Accumulated other comprehensive loss                                                     0        (174,481)
     Deferred stock compensation                                                        (12,466)        (59,881)
                                                                                   ------------    ------------

                                                                                      1,897,641       2,321,392
                                                                                   ------------    ------------
                                                                                   $  3,290,358    $  4,182,473
                                                                                   ============    ============
</TABLE>

The accompanying notes are an integral part of these statements

                                       3
<PAGE>

                                  CIMNET, INC.

                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                   Three Months Ended              Nine Months Ended
                                                                      September 30,                   September 30,
                                                              ----------------------------    ----------------------------
                                                                  2004            2003            2004            2003
                                                              ------------    ------------    ------------    ------------
                                                                      (Unaudited)                     (Unaudited)
<S>                                                           <C>             <C>             <C>             <C>
NET SALES                                                     $    594,267    $    591,034    $  1,876,082    $  2,036,474

COST OF GOODS SOLD                                                  58,580          73,862         239,795         197,807
                                                              ------------    ------------    ------------    ------------

         Gross Profit                                              535,687         517,172       1,636,287       1,838,667
                                                              ------------    ------------    ------------    ------------

OPERATING EXPENSES

     Selling, general and administrative                           470,481         571,666       1,448,117       1,739,260
     Research and development                                      282,254         412,894         887,489       1,303,070
                                                              ------------    ------------    ------------    ------------

         Total Operating Expenses                                  752,735         984,560       2,335,606       3,042,330
                                                              ------------    ------------    ------------    ------------

         Operating Loss                                           (217,048)       (467,388)       (699,319)     (1,203,663)
                                                              ------------    ------------    ------------    ------------

NONOPERATING INCOME (EXPENSES)

     Interest income (expense), net                                 (3,929)            223         (18,025)         (5,684)
     Realized loss on sale of available for sale securities              0               0        (115,135)       (176,006)
     Loss on disposition of investment                            (132,428)                       (132,428)
     Other income (loss)                                            (4,996)         13,226          21,383          46,040
                                                              ------------    ------------    ------------    ------------

         Total Nonoperating Income (Expenses)                     (141,353)         13,449        (244,205)       (135,650)
                                                              ------------    ------------    ------------    ------------

         Loss before Income Tax Benefit                           (358,401)       (453,939)       (943,524)     (1,339,313)

INCOME TAX EXPENSE (BENEFIT)                                             0         174,677               0         (63,971)
                                                              ------------    ------------    ------------    ------------

         Net Loss                                             ($   358,401)   ($   628,616)   ($   943,524)   ($ 1,275,342)
                                                              ============    ============    ============    ============

NET LOSS PER COMMON SHARE
     Basic                                                    ($      0.05)   ($      0.11)   ($      0.15)   ($      0.22)
                                                              ============    ============    ============    ============

     Diluted                                                  ($      0.05)   ($      0.11)   ($      0.15)   ($      0.22)
                                                              ============    ============    ============    ============
</TABLE>

The accompanying notes are an integral part of these statements

                                       4
<PAGE>

                                  CIMNET, INC.

                            STATEMENTS OF CASH FLOWS

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                         Nine Months Ended
                                                                                           September 30,
                                                                                   ----------------------------
                                                                                       2004            2003
                                                                                   ------------    ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                                <C>             <C>
     Net loss                                                                      ($   943,524)   ($ 1,275,342)
     Adjustments to reconcile net loss to net cash used in operating activities:
         Depreciation and amortization                                                   82,755         105,490
         Realized loss on sale of securities                                            115,135         176,006
         Provision for doubtful accounts                                                 (2,733)        (28,025)
         Deferred income tax benefit                                                          0         (51,372)
            Gain on sale of equipment                                                    (3,765)              0
         Loss on disposition of investment                                              132,428               0
         Stock options - employees                                                       32,792          60,280
         Stock options and warrants - consulting and legal services                       1,500           8,250
            Common stock-consulting services                                             11,000               0
         (Increase) decrease in assets:
              Accounts receivable and other receivables                                 139,341         592,291
              Inventories                                                                   965           8,218
              Prepaid expenses                                                           27,463             (80)
              Income tax receivable                                                     117,390         501,167
         Increase (decrease) in liabilities:
              Accounts payable                                                          (54,194)        (37,715)
              Accrued expenses                                                          (12,284)          3,036
                   Accrued income taxes                                                 (19,077)              0
              Deferred income                                                          (104,105)       (253,394)
                                                                                   ------------    ------------

         Net Cash Used in Operating Activities                                         (478,913)       (191,190)
                                                                                   ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES

     Investment in limited partnership                                                   (7,000)        (25,000)
     Purchase of property and equipment                                                  (4,422)         (6,965)
     Purchase of software sub-license agreement                                         (50,000)              0
     Proceeds from the sale of equipment                                                  3,765               0
     Proceeds from the sale of available for sale securities                            260,362          73,460
                                                                                   ------------    ------------

         Net Cash Provided by  Investing Activities                                     202,705          41,495
                                                                                   ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES

     Net borrowings (payments) on line of credit                                       (151,932)        270,000
     Proceeds from issuance of common stock                                             360,000               0
     Principal payments on long-term borrowings                                         (31,095)        (45,907)
                                                                                   ------------    ------------

         Net Cash Provided by Financing Activities                                      176,973         224,093
                                                                                   ------------    ------------

         Net Increase (Decrease) in Cash                                                (99,235)         74,398

CASH AND CASH EQUIVALENTS- BEGINNING                                                    137,641         117,825
                                                                                   ------------    ------------

CASH AND CASH EQUIVALENTS - ENDING                                                 $     38,406    $    192,223
                                                                                   ============    ============
</TABLE>

The accompanying notes are an integral part of these statements

                                       5
<PAGE>

                                  CIMNET, INC.

                          NOTES TO FINANCIAL STATEMENTS

                                   (Unaudited)



NOTE 1 - BASIS OF PRESENTATION

              The accompanying unaudited financial statements have been prepared
         in accordance with accounting principles generally accepted in the
         United States of America. Certain information and footnote disclosures
         normally included in financial statements under accounting principles
         generally accepted in the United States of America have been condensed
         or omitted pursuant to the Securities and Exchange Commission rules and
         regulations. These financial statements should be read in conjunction
         with the financial statements and notes thereto included in Form 10-KSB
         for the fiscal year ended December 31, 2003. In the opinion of
         management, all adjustments (consisting only of normal recurring
         adjustments) necessary for a fair presentation of the financial
         statements have been included. The results of operations for the three
         and nine months ended September 30, 2004 are not necessarily indicative
         of the results which may be expected for the entire fiscal year.


NOTE 2 - NET LOSS PER COMMON SHARE

              Basic net loss per common share is calculated by dividing the net
         loss less preferred stock dividends and less the accretion of the
         discount on preferred stock by the weighted average number of shares of
         common stock outstanding. Diluted net income per share is calculated by
         adjusting the weighted average number of shares of common stock
         outstanding to include the effect of stock options and warrants, if
         dilutive, using the treasury stock method and the effects of
         convertible preferred shares outstanding, using the if-converted
         method.

              The Company's calculation of net income per common share in
         accordance with SFAS No. 128 for the nine months ended September 30,
         2004 is as follows:

<TABLE>
<CAPTION>
                                                                       Weighted
                                                                       Average
                                                         Income         Shares        Per Share
                                                       (Numerator)   (Denominator)      Amount
                                                      ------------    ------------   ------------
<S>                                                   <C>                <C>         <C>
         Basic and diluted earnings per share:
              Net loss                                ($   943,524)
              Preferred stock dividends                    (60,000)
              Accretion of preferred stock discount        (29,750)
                                                      ------------

              Net loss available to common
                  stockholders                        ($ 1,033,274)      6,737,742   ($      0.15)
                                                      ============    ============   ============
</TABLE>

                                       6
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (Unaudited)



NOTE 2 - NET LOSS PER COMMON SHARE (CONTINUED)

              The Company's calculation of net income per common share in
         accordance with SFAS No. 128 for the three months ended September 30,
         2004 is as follows:

<TABLE>
<CAPTION>
                                                                       Weighted
                                                                       Average
                                                         Income         Shares        Per Share
                                                       (Numerator)   (Denominator)      Amount
                                                      ------------    ------------   ------------
<S>                                                   <C>                <C>         <C>
         Basic and diluted earnings per share:
              Net loss                                ($   358,401)
              Preferred stock dividends                    (20,000)
              Accretion of preferred stock discount         (7,412)
                                                      ------------

              Net loss available to common
                  stockholders                        ($   385,813)      7,285,637   ($      0.05)
                                                      ============    ============   ============
</TABLE>

              A total of 2,422,500 common stock options and warrants and 746,965
         shares of convertible preferred stock were not included in the
         computation of diluted earnings per share because of their
         anti-dilutive effect.

              The Company's calculation of net income per common share in
         accordance with SFAS No. 128 for the nine months ended September 30,
         2003 is as follows:

<TABLE>
<CAPTION>
                                                                       Weighted
                                                                       Average
                                                         Income         Shares        Per Share
                                                       (Numerator)   (Denominator)      Amount
                                                      ------------    ------------   ------------
<S>                                                   <C>                <C>         <C>
         Basic and diluted earnings per share:
              Net loss                                ($1,275,342)

              Preferred stock dividends                   (60,000)
              Accretion of preferred stock discount       (33,507)
                                                      -----------

              Net loss available to common
                  stockholders                        ($ 1,368,849)      6,292,321   ($      0.22)
                                                      ============    ============   ============
</TABLE>

                                       7
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (Unaudited)

              The Company's calculation of net income per common share in
         accordance with SFAS No. 128 for the three months ended September 30,
         2003 is as follows:

<TABLE>
<CAPTION>
                                                                       Weighted
                                                                       Average
                                                         Income         Shares        Per Share
                                                       (Numerator)   (Denominator)      Amount
                                                      ------------    ------------   ------------
<S>                                                   <C>                <C>         <C>
         Basic and diluted earnings per share:
              Net loss                                ($  628,616)
              Preferred stock dividends                   (20,000)
              Accretion of preferred stock discount       (11,169)
                                                      -----------

              Net loss available to common
                  stockholders                        ($   659,785)      6,292,321   ($      0.11)
                                                      ============    ============   ============
</TABLE>

              A total of 1,777,500 common stock options and warrants and 746,965
         shares of convertible preferred stock were not included in the
         computation of diluted earnings per share for the six months and three
         months ended June 30, 2003 because of their anti-dilutive effect.

NOTE 3 - STOCK OPTION PLAN

              The Company accounts for its stock options under APB Opinion 25.
         Had compensation cost for the options been determined based on the fair
         value of the employee options at the grant dates consistent with the
         method of SFAS No. 123, the Company's net loss and net loss per share
         of common stock would have been increased to the pro forma amounts
         indicated below:

<TABLE>
<CAPTION>
                                                                       Nine Months Ended
                                                                          September 30,
                                                                  ----------------------------
                                                                      2004            2003
                                                                  ------------    ------------
<S>                                                               <C>             <C>
         Net loss available to common stockholders:
              As reported                                         ($ 1,033,274)   ($ 1,368,849)
              Add stock-based employee compensation
                  expense included in reported net loss, net
                  of related tax effects                                32,792          60,280
              Deduct total stock-based employee
                  compensation expense determined under
                  fair value based method for all awards, net
                  of related tax effect                               (101,978)       (202,202)
                                                                  ------------    ------------

                Pro Forma                                         ($ 1,102,460)   ($ 1,510,771)
                                                                  ============    ============

         Net loss per share of common stock, basic and diluted:
              As reported                                         ($      0.15)   ($      0.22)
                                                                  ============    ============

              Pro forma                                           ($      0.16)   ($      0.24)
                                                                  ============    ============
</TABLE>

                                       8
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (Unaudited)



NOTE 3 - STOCK OPTION PLAN (CONTINUED)

<TABLE>
<CAPTION>
                                                                       Three Months Ended
                                                                          September 30,
                                                                  ----------------------------
                                                                      2004            2003
                                                                  ------------    ------------
<S>                                                               <C>             <C>
         Net loss available to common stockholders :
              As reported                                         ($   385,813)   ($   659,785)
              Add stock-based employee compensation
                  expense included in reported net loss, net
                  of related tax effects                                10,930          20,069
              Deduct total stock-based employee
                  compensation expense determined under
                  fair value based method for all awards, net
                  of related tax effect                                (33,992)        (65,812)
                                                                  ------------    ------------

                Pro Forma                                         ($   408,875)   ($   705,528)
                                                                  ============    ============

         Net loss per share of common stock, basic and diluted:
              As reported                                         ($      0.05)   ($      0.11)
                                                                  ============    ============

              Pro forma                                           ($      0.06)   ($      0.11)
                                                                  ============    ============
</TABLE>

NOTE 4 - INCOME TAXES

              No benefit for income taxes was recorded for the nine months ended
         September 30, 2004. In contrast, a $63,971 benefit for income taxes was
         recognized for the nine months ended September 30, 2003. The change is
         primarily due to the Company incurring net operating losses for 2002,
         2003 and the first nine months of 2004. These related net operating
         loss carry forwards will, however, be available to off-set taxable
         income in future periods. The Company has approximately $1.5 million of
         deferred tax assets that have been reserved at September 30, 2004.


NOTE 5 - COMPREHENSIVE LOSS

              Total comprehensive loss was $(769,043) and $(1,086,623) for the
         nine months ended September 30, 2004 and 2003, respectively.
         Comprehensive loss differed from net loss for the nine months ended
         September 30, 2004 and 2003 primarily as a result of changes in the
         unrealized gains and losses on the Company's available for sale
         securities and reclasses resulting from the sale of the Company's
         available for sale securities. All of the Company's available for sale
         securities were sold during the first quarter of 2004.

              Total comprehensive loss was $(358,401) and $(688,876) for the
         three months ended September 30, 2004 and 2003, respectively.
         Comprehensive loss differed from net loss for the three months ended
         September 30, 2003 primarily as a result of changes in the unrealized
         gains and losses on the Company's

                                       9
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (Unaudited)


         securities and reclasses resulting from the sale of the Company's
         available for sale securities. All of the Company's available for sale
         securities were sold during the first quarter of 2004.


NOTE 6 - INVESTMENT IN PARTNERSHIP

              In July of 2004 the Company discontinued its membership interests
         in Reading Air Charter LLC. Prior to this discontinuance, the Company
         owned a 25% membership interest in Reading Air Charter LLC and
         recognized a total investment of $84,500. As a result of this
         transaction, the Company was required to surrender its rights to an
         aircraft with a net book value of $203,605 and was relieved of its
         obligation to repay a note payable of $155,677. These transactions
         resulted in the Company recording a loss of $132,428 in July 2004. This
         activity is represented as a non-cash Investing and financing Activity
         for Statement of Cash Flow purposes.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

              In July 2004, the Company sold units ("Units") in a private
         placement transaction to a limited number of investors. Each Unit
         consisted of 100,000 shares of Common Stock and 100,000 Class A Common
         Stock Purchase Warrants (the "Class A Warrants"), and sold for a
         purchase price of $50,000 per Unit. The Company paid no commissions or
         other fees and received proceeds of $360,000 from the private
         placement. The Class A Warrants are exercisable for a period of five
         (5) years at an exercise price of $1.00 per share. The investors in the
         Units have piggyback registration rights, and included certain officers
         and directors: Lynn Richardson, the wife of John Richardson, the Chief
         Executive Officer of the Company (2 Units); Karl Gerhart, a director of
         the Company (1 Unit); and J. Jeffrey Fox, a director of the Company
         (1/5 Unit).

              On January 23, 2004 the Company entered into a Technology License
         Agreement with ADROIT, a South African Company. That agreement was
         amended and restated on March 17, 2004. As a result, the Company will
         obtain an irrevocable license to market ADROIT's VIZNET software,
         including the right to sub-license this product to third parties. The
         Company is required to pay ADROIT $100,000 in accordance with the terms
         of the agreement. This agreement will remain in effect for 5 years and
         holds terms for annual renewals. As of September 30, 2004 the Company
         has paid $50,000 of this obligation.

              In July 2004, the Company entered into a Revolving Credit
         Agreement with Sundaresh Ramayya, a director of the Company. Mr.
         Ramayya has agreed to lend to the Company up to $2 million, but not
         more than $150,000 under any borrowing request submitted by the
         Company. The Company has agreed to pay interest on any outstanding
         amount at a rate of 4% per annum, payable quarterly, and the
         outstanding principal amount shall be due and payable on the maturity
         date which is on the second anniversary of the Agreement (unless
         accelerated upon an event of default). However, Mr. Ramayya has the
         right to terminate the Revolving Credit Agreement upon 15 days prior
         written notice to the Company at which time the obligation of Mr.
         Ramayya to lend to the Company terminates. There were no fees or
         expenses paid by the Company in connection with the execution of the
         Revolving Credit Agreement and there is no outstanding balance
         thereunder as of September 30, 2004.

              In August 2004, the Company entered into an agreement with a
         company to assist it in its efforts to raise capital. This arrangement
         included the payment of a non-refundable retainer consisting of 20,000
         shares. Accordingly, $11,000 has been included in selling, general and
         administrative expenses during the third quarter, related to this
         arrangement.

                                       10
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (UNAUDITED)



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

              This section presents a review of the Company's financial
         condition and results of operations and is intended to assist in the
         understanding and evaluating of major changes in the Company's
         financial position and earnings.

              In addition to historical information, this discussion and
         analysis contains forward-looking statements. The forward-looking
         statements contained herein are subject to certain risks and
         uncertainties that could cause actual results to differ materially from
         those projected in the forward-looking statements. Readers are
         cautioned not to place undue reliance on these forward-looking
         statements, which reflect management's analysis only as of the date
         hereof. The Company undertakes no obligation to publicly revise or
         update these forward-looking statements to reflect events or
         circumstances that arise after the date hereof.



RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 2004

              Net sales for the nine months ended September 30, 2004 decreased
         by 7.9% or $160,392 compared to net sales for the nine months ended
         September 30, 2003. This decrease is primarily due to the decrease in
         the amount of realized maintenance contract revenues for the nine
         months ended September 30, 2004. Total realized revenues from annual
         contracts for the nine months ended September 30, 2004 was $22,894 in
         contrast to $197,633 for the nine months ended September 30, 2003.

              Costs of goods sold for the first nine months of 2004 were
         $239,795 or 12.8% of net sales compared to $197,807 or 9.7% of net
         sales for the same period in 2003, an increase of $41,988 or 21.2%.
         This increase in costs of goods sold is related to the increase of
         hardware sales as a percentage of total net sales. Hardware sales were
         13.7% of total net sales in the nine months ending June 30, 2004
         compared to 9.2% of total net sales in the nine months ending June 30,
         2003. Also, $33,922 of commissions earned by third party vendors were
         classified in cost of goods sold as finders' fees in 2004, as opposed
         to $34,625 in commissions classified as a direct reduction to sales in
         2003. Due to the immateriality of the amount, the Company has not
         reclassified its 2003 statements to conform to the 2004 format.

              Gross profit for the nine months ended September 30, 2004 was
         $1,636,287 compared to $ 1,838,667 for the nine months ended September
         30, 2003, a decrease of $202,380 or 11.0%. This decrease is primarily
         due to the overall decrease in net sales and increase in costs of goods
         sold as previously discussed.

              Selling, general and administrative expenses for the nine months
         ended September 30, 2004 were $1,448,117, compared to $1,739,260 for
         the same period in 2003: a decrease of $291,143 or 16.7%. This decrease
         was primarily due to a decrease in the number of employees resulting in
         a $240,085 or 27.0% decrease in salary expense.

              Research and development costs for the nine months ended September
         30, 2004 were $887,489 compared to $1,303,070 for the nine months ended
         September 30, 2003: a decrease of $415,581 or 31.9%. This is primarily
         due to a decrease in the number of employees in 2004 and due to the
         Company

                                       11
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (Unaudited)



         not utilizing any contract employees for research and development
         purposes during 2004. Specifically, salary expense decreased by
         $354,965or 29.0% in 2004 due to the decrease in the number of
         employees.

              The operating loss for the nine months ended September 30, 2004
         was $699,319 compared to $1,203,663 for the nine months ended September
         30, 2003. This represents a decrease of $504,344 in the amount of
         operating loss. This decrease is primarily due to the reduction of
         salary expense for both the Selling, general and administrative, and
         the Research and development areas, as previously discussed.

              Net interest expense for the nine months ended September 30, 2004
         was $18,025 or 0.9% of net sales, compared to net interest expense of
         $5,684 or 0.03% of net sales for the nine months ended September 30,
         2003. This $12,341 change is primarily attributable to the interest
         paid on the outstanding line of credit line balance during the nine
         months ended September 30, 2004.

              Other income for the nine months ended September 30, 2004 was
         $21,383 or 0.7% of net sales compared to $46,040 or 2.3% of net sales
         for the nine months ended September 30, 2003. This change is due to the
         Company not recognizing any aircraft rental income after July 2004
         because the Company discontinued its ownership interest in Reading Air
         Charter LLC. During the nine months ended September 30, 2004 the
         Company sold all of its remaining available for sale securities
         resulting in a loss of $115,135. During the same period in 2003, the
         Company had sold available for sale securities, resulting in a loss of
         $176,006.

               In July 2004, as a result of the Company discontinuing its
         ownership interest in Reading Air Charter LLC of $84,500, and
         relinquishing its rights to an aircraft with a Net Book Value of
         $203,605 and being relieved of its related obligations totaling
         $155,677, the Company recorded a loss of $132,428. There was no such
         transaction during the nine months ended September 30, 2003.

              No benefit for income taxes was recorded for the nine months ended
         September 30, 2004. In contrast, a benefit of $63,971 was recognized
         for the nine months ended September 30, 2003. The change is primarily
         due to the Company incurring net operating losses for 2002, 2003 and
         the first nine months of 2004. These related net operating loss carry
         forwards will, however, be available to off-set taxable income in
         future periods. The Company has approximately $1.5 million of deferred
         tax assets that have been reserved at September 30, 2004.

              Net loss for the nine months ended September 30, 2004 was
         ($943,524) or ($0.15) per basic and diluted shares as compared to
         ($1,275,342) or ($0.22) per basic and diluted shares for the nine
         months ended September 30, 2003.

                                       12
<PAGE>

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2004

              Net sales for the three months ended September 30, 2004 increased
         by 0.5% or $3,233 compared to net sales for the three months ended
         September 30, 2003. This increase is predominantly due an increase in
         the amount of realized maintenance contract revenues for the quarter.

              Costs of goods sold for the three months ended September 30, 2004
         were $58,580 or 9.4% of net sales compared to $73,862 or 12.5% of net
         sales for the three months ended September 30, 2003, a decrease of
         $15,282 or 20.7%. This decrease in costs of goods sold is primarily due
         to the fact that during the three months ended September 30, 2004 the
         Company did not need to hire any third party contractors for
         implementation of the Company's products, where as the Company utilized
         third party contractors during the three months ended September 30,
         2003 for product implementation.

              Gross profit for the three months ended September 30, 2004 was
         $535,687 compared to $517,172 for the three months ended September 30,
         2003, an increase of $18,515 or 3.6%. This increase is primarily due to
         the 20.7% decrease in cost of goods sold along with 0.5% increase in
         net sales during the three months ended September 30, 2004 over the
         three months ended September 30, 2003 as previously discussed.

              Selling, general and administrative expenses for the three months
         ended September 30, 2004 were $470,481 compared to $571,666 for the
         same period in 2003, a decrease of $101,185 or 17.7%. This decrease was
         primarily due to a $70,898 or 25.0% decrease in salary expense due to
         decrease in the number of employees; along with a decrease in travel
         and entertainment costs. Travel and entertainment decreased by $35,190
         or 51.1% due to the Company's cost cutting strategies.

              Research and development costs for the three months ended
         September 30, 2004 were $282,254 compared to $412,894 for the three
         months ended September 30 2003, a decrease of $130,640 or 31.6%.
         Research and development salaries decreased by $109,538 or 28.3% in
         2004 due to a decrease in the number of employees.

              Loss from operations for the three months ended September 30, 2004
         was ($217,048) compared to a loss of ($467,388) for the three months
         ended June 30, 2003. This represents a decrease of $250,340 in the
         amount of operating loss. This decrease is primarily due to the
         reduction of salary expense for both the Selling, general and
         administrative and the Research and development areas, as previously
         discussed.

              Net interest expense for the three months ended September 30, 2004
         was ($3,929) or 0.6% of net sales, compared to net interest income of
         $223 or 0.03% of net sales for the three months ended September 30,
         2003. This $4,152 change is primarily attributable to the interest paid
         on the outstanding line of credit balance during the three months ended
         September 30, 2004.

              Other income (loss) for the three months ended September 30, 2004
         was ($4,996) or 0.8% of net sales compared to an other income of
         $13,226 or 2.2% of net sales for the three months ended September 30,
         2003. This is due to the Company not recognizing any aircraft rental
         income after July 2004 because the Company discontinued its ownership
         interest in Reading Air Charter LLC and the aircraft.

              In July 2004, as a result of the Company discontinuing its
         ownership interest in Reading Air Charter LLC of $84,500, and
         relinquishing its rights to an aircraft with a Net Book Value of
         $203,605 and being relieved of its related obligations totaling
         $155,677, the Company recorded a loss of $132,428. There were no such
         transactions during the three months ended September 30, 2003.

                                       13
<PAGE>

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2004 (CONTINUED)

              No benefit for income taxes was recorded for the three months
         ended September 30, 2004. In contrast, an expense of $174,677 was
         recognized for the three months ended September 30, 2003 because
         management deemed it necessary to fully reserve all Deferred tax
         assets. The Company has incurred net operating losses for 2002, 2003
         and the first nine months of 2004. These related net operating loss
         carry forwards will, however, be available to off-set taxable income in
         future periods. The Company has approximately $1.5 million of deferred
         tax assets that have been reserved at September 30, 2004.

              Net loss for the three months ended September 30, 2004 was
         ($358,401) or ($0.05) per basic and diluted shares as compared to
         ($628,616) or ($0.11) per basic and diluted shares for the three months
         ended September 30, 2003.

                                       14
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (Unaudited)



LIQUIDITY AND CAPITAL RESOURCES

              At September 30, 2004, the Company had current assets of $582,286
         as compared to $1,164,963 at December 31, 2003, a decrease of 582,677
         or 50.0%. This decrease is due primarily to a decrease of $136,608 in
         receivables resulting from collections on other receivables and
         accounts receivable, receipt of $117,390 of income tax receivable,
         along with sales of securities that were valued at $201,016 at December
         31, 2003.

              In July 2004, the Company discontinued its ownership interest in
         Reading Air Charter LLC and the related aircraft. As a result of these
         transactions the Company recorded a reduction of $84,500 in its
         investment in the Joint venture assets, which were included in other
         assets. Additionally, the Company invested $50,000 in a software
         sub-licensing agreement. Current liabilities decreased by $372,221 from
         December 31, 2003 to September 30, 2004. This decrease is primarily due
         to decreased borrowings on the line of credit as of September 30, 2004
         versus that of December 31, 2003, release from obligation on the note
         payable associated with the aircraft, and a decrease in deferred
         income.


OPERATING ACTIVITIES

              Cash used in operations for the nine months ended September 30,
         2004 and 2003 was $478,913 and $191,190, respectively. The increase in
         the cash used by operations was primarily attributable to the following
         changes: a decrease of $117,390 in income tax receivable in contrast to
         $501,167 for the same period in 2003, a decrease of $104,105 in
         deferred income compared to $253,394 in 2004, and a decrease of only
         $139,341 in accounts receivables in contrast to $592,291 in 2003.


INVESTING ACTIVITIES

              Cash provided by investing activities was $202,705 for the nine
         months ended September 30, 2004 as compared to $41,495 for the nine
         months ended September 30, 2003. This change is primarily due to the
         proceeds of $260,364 received from the sale of available for sale
         securities, and the cash expended of $50,000 to purchase a software
         sublicensing agreement.


FINANCING ACTIVITIES

              Financing activities provided $176,973 in cash for the nine months
         ended September 30, 2004 compared to $224,093 of cash provided in
         financing activities for the same period in 2003, a decrease of $47,120
         in cash provided by financing. This decrease resulted from the funds of
         $360,000 raised from issuance of common stock being used in the amount
         of $151,932 to make payments on the outstanding balance in the credit
         line and $31,095 of payments being made on principal of the long term
         borrowing, prior to the release of the Company of that obligation as
         previously described.

                                       15
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (Unaudited)



CAPITAL RESOURCES

              The Company has a line of credit available with its bank. As of
         September 30, 2004, the Company had $320,932 available on its line of
         credit. At December 31, 2003, the Company was in violation of one of
         the financial covenants in its loan document. The Bank waived this
         violation at December 31, 2003.

              In July 2004, the Company entered into a Revolving Credit
         Agreement with Sundaresh Ramayya, a director of the Company, pursuant
         to which Mr. Ramayya has agreed to lend to the Company up to $2
         million, but not more than $150,000 under any borrowing request
         submitted by the Company. The Company has agreed to pay interest on any
         outstanding amount at a rate of 4% per annum, payable quarterly, and
         the outstanding principal amount shall be due and payable on the
         maturity date which is on the second anniversary of the Agreement
         (unless accelerated upon an event of default). However, Mr. Ramayya has
         the right to terminate the Revolving Credit Agreement upon 15 days
         prior written notice to the Company at which time the obligation of Mr.
         Ramayya to lend to the Company terminates. There were no fees or
         expenses paid by the Company in connection with the execution of the
         Revolving Credit Agreement and as of September 30, 2004, there is no
         outstanding balance thereunder.

              The Company has no material commitments for capital expenditures
         at September 30, 2004 and believes that its cash from operations,
         existing balances and available credit lines will be sufficient to
         satisfy the needs of its operations and its capital commitments for the
         near future.

              In March 2004, the Company engaged Noble International
         Investments, Inc. ("Noble") to render certain financial advisory and
         investment banking services to the Company, and at the Company's
         option, to serve as a placement agent with respect to the Company's
         debt and/or equity securities. The Agreement terminates 120 days after
         the date of execution, but the Company has an on-going obligation to
         compensate Noble in the event that a party introduced to the Company by
         Noble invests in the Company's securities during the two year period
         following the date of the agreement.

              In July 2004, the Company sold units ("Units") in a private
         placement transaction to a limited number of investors. Each Unit
         consisted of 100,000 shares of Common Stock and 100,000 Class A Common
         Stock Purchase Warrants (the "Class A Warrants"), and sold for a
         purchase price of $50,000 per unit. The Company paid no commissions or
         other fees and received proceeds of $360,000 from the offering. The
         Class A Warrants are exercisable for a period of five (5) years at an
         exercise price of $1.00 per share. The investors in the Units have
         piggyback registration rights, and included certain officers and
         directors: Lynn Richardson, the wife of John Richardson, the Chief
         Executive Officer of the Company (2 Units); Karl Gerhart, a director of
         the Company (1 Unit); and J. Jeffrey Fox, a director of the Company
         (1/5 Unit). The proceeds of this private placement will be used by the
         Company for working capital purposes.

              In August 2004, the Company entered into an agreement with a
         consultant to assist it in raising capital from identified prospects
         for a period of six months. The agreement includes a non-refundable
         retainer consisting of 20,000 shares of Company's common stock, as well
         as a success fee of 8% of the capital raised. In addition, the Company
         granted to the consultant an option to purchase 8% of any security sold
         to such introduced investors on the same terms and conditions for a
         period of five years.

                                       16
<PAGE>

                                  CIMNET, INC.

                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                                   (Unaudited)



ITEM 3.    CONTROLS AND PROCEDURES

              We maintain disclosure controls and procedures that are designed
         to ensure that information required to be disclosed in our Exchange Act
         reports is recorded, processed, summarized and reported within the time
         periods specified in the Securities and Exchange Commission's rules and
         forms and that such information is accumulated and communicated to our
         management, including our Chief Executive Officer and Principal
         Accounting Officer, as appropriate, to allow for timely decisions
         regarding required disclosure. In designing and evaluating the
         disclosure controls and procedures, management recognizes that any
         controls and procedures, no matter how well designed and operated, can
         provide only reasonable assurance of achieving the desired control
         objectives, and management is required to apply its judgment in
         evaluating the cost-benefit relationship of possible controls and
         procedures.

              As required by SEC Rule 13a-15(b), we carried out an evaluation as
         of September 30, 2004, under the supervision and with the participation
         of our management, including our Chief Executive Officer and Principal
         Accounting Officer, of the effectiveness of the design and operation of
         our disclosure controls and procedures as of the end of the quarter
         covered by this report. Based on the foregoing, our Chief Executive
         Officer and Principal Accounting Officer concluded that our disclosure
         controls and procedures were effective at the reasonable assurance
         level.

              There has been no change in our internal controls over financial
         reporting during our most recent fiscal quarter ended September 30,
         2004 that has materially affected, or is reasonably likely to
         materially affect, our internal controls over financial reporting.

                                       17
<PAGE>

                           PART II - OTHER INFORMATION



ITEM 1 - LEGAL PROCEEDINGS

     We are not presently a party to any material legal proceedings nor are any
material legal proceedings presently threatened against us.


ITEM 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

     In July 2004, the Company sold units ("Units") in a private placement
transaction to a limited number of investors. Each Unit consisted of 100,000
shares of Common Stock and 100,000 Class A Common Stock Purchase Warrants (the
"Class A Warrants"), and sold for a purchase price of $50,000 per unit. The
Company paid no commissions or other fees and received proceeds of $360,000 from
the offering. The Class A Warrants are exercisable for a period of five (5)
years at an exercise price of $1.00 per share. The investors in the Units have
piggyback registration rights, and included certain officers and directors: Lynn
Richardson, the wife of John Richardson, the Chief Executive Officer of the
Company (2 Units); Karl Gerhart, a director of the Company (1 Unit); and J.
Jeffrey Fox, a director of the Company (1/5 Unit). The proceeds of this private
placement will be used by the Company for working capital purposes


ITEM 3 - DEFAULTS UPON SENIOR SECURITIES - None


ITEM 4 - SUBMISSION OF MATTERS TO VOTE OF SECURITIES HOLDERS - None


ITEM 5 - OTHER INFORMATION - None


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

a.   Exhibits

           a.    Exhibits

           31.   Certificate Pursuant to Section 302 of the Sarbanes-Oxley Act
                 of 2002

           32.   Certificate Pursuant to Section 906 of the Sarbanes-Oxley Act
                 of 2002.

                                       18
<PAGE>

                                   SIGNATURES




         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following person on behalf of
the Registrant and in the capacities and on the dates indicated:




Dated:   November 12, 2004
         Robesonia, Pennsylvania


                                        CIMNET, INC.



                                        By: /s/ JOHN D. RICHARDSON
                                            ------------------------------------
                                            Name: John D. Richardson
                                            Title: Chairman of the Board,
                                            Chief Executive Officer and
                                            Principal Accounting Officer

                                       19