<PAGE>

         U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

                                   FORM 10-QSB

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

                For the quarterly period ended March 31, 2004

Commission File Number 0-29525

                               DEBT RESOLVE, INC.
                               ------------------
        (Exact name of small business issuer as specified in its charter)

       Delaware                                                 33-0889197
       --------                                                 ----------
(State of incorporation)                                 (I.R.S Employer ID No.)

         707 Westchester Avenue, Suite 409, White Plains, New York 10604
         ---------------------------------------------------------------
                    (Address of principal executive offices)

                                 (914) 949-5500
                                 --------------
                           (Issuer's telephone number)

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 May 1, 2004, the Company had 29,029,000 shares of its $.001 par value
common stock issued and outstanding.

<PAGE>
<TABLE>

                                 DEBT RESOLVE, INC.

                                        INDEX

                                                                                Page
<S>                                                                             <C>
PART I.  Financial Information

         Item 1.  Financial Statements (Unaudited)

                  Condensed Balance Sheet at March 31, 2004                      3

                  Condensed Statements of Operations for the Three Months Ended
                           March 31, 2004 and 2003 and Cumulative from inception
                           (April 21, 1997) to March 31, 2004                    4

                  Condensed Statements of Cash Flows for the Three Months Ended
                           March 31, 2004 and 2003 and Cumulative from inception
                           (April 21, 1997) to March 31, 2004                    5

                  Notes to Condensed Financial Statements                        6

         Item 2.  Management's Discussion and Analysis or Plan of Operation     11

         Item 3.  Controls and Procedures                                       12

PART II. Other Information

         Item 1.  Legal Proceedings                                             13

         Item 2.  Changes in Securities and Use of Proceeds                     13

         Item 3.  Defaults Upon Senior Securities                               13

         Item 4.  Submission of Matters to a Vote of Security Holders           13

         Item 5.  Other Information                                             13

         Item 6.  Exhibits and Reports on Form 8-K                              13

         Signatures                                                             13

         Certifications
</TABLE>

                                         2

<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1.  Condensed Financial Statements (Unaudited)

                               DEBT RESOLVE, INC.
                          (A Development Stage Company)
                             Condensed Balance Sheet

                                                         March 31,
                                                           2004
                                                        (Unaudited)
                                                       ------------
                             ASSETS

Current assets:
  Cash                                                 $   610,512
  Deferred offering expenses                                40,350
  Prepaid expenses and other current assets                 24,887
                                                       ------------
         Total current assets                              675,749

Fixed assets, net                                           88,619
                                                       ------------
Total assets                                           $   764,368
                                                       ============

              LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                     $    50,948
   Accrued compensation expenses                             95,667
   Accrued expenses                                         110,142
   Income taxes payable                                       1,992
   Loan payable to shareholder                               10,000
                                                        ------------
      Total liabilities                                     268,749
                                                        ------------

Commitments and contingencies                                    --

Shareholders' equity:
   Preferred stock, 10,000,000 shares authorized,
      $.001 par value, none issued and outstanding               --
   Common stock, 20,000,000 and 50,000,000 shares
      authorized, respectively, $0.001 par value,
      29,020,000 and 29,029,000 shares
      issued and outstanding, respectively                   29,029
   Additional paid in capital                             3,435,954
   Deficit accumulated during the development stage      (2,969,364)
                                                        ------------
      Total shareholders' equity                            495,619
                                                        ------------
Total liabilities and shareholders' equity              $   764,368
                                                        ============

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

                                        3

<PAGE>
<TABLE>

                                              DEBT RESOLVE, INC.
                                         (A Development Stage Company)
                                      Condensed Statements of Operations
                                                  (Unaudited)

                                                                                   Cumulative
                                                                                 from inception
                                                       Three months             (April 21, 1997)
                                                      ended March 31,             to March 31,
                                             -------------------------------     -------------
                                                  2003              2004              2004
                                             -------------     -------------     -------------
<S>                                          <C>               <C>               <C>
Costs and expenses:
  Payroll and related expenses                                 $    197,504      $    977,228
  General and administrative expenses        $    223,488           248,140         1,518,523
  Research and development expenses               129,351            46,022           453,301
  Depreciation expense                                 --            10,589            24,454
                                             -------------     -------------     -------------

Total expenses                                    352,839           502,255         2,973,506
  Interest income                                      --             2,536             6,514
                                             -------------     -------------     -------------
Loss before taxes                                (352,839)         (499,719)       (2,966,992)
Income taxes                                           --             1,000             2,372
                                             -------------     -------------     -------------
Net loss                                     $   (352,839)     $   (500,719)      $(2,969,364)
                                             =============     =============     =============
Basic and diluted net loss per common
  share                                      $      (0.02)     $      (0.02)
                                             =============     =============
Basic and diluted weighted average
  number of common shares outstanding          23,120,000        29,020,890
                                             =============     =============

                             The accompanying notes are an integral part of these
                                        condensed financial statements.
</TABLE>
                                                       4
<PAGE>
<TABLE>
                                              DEBT RESOLVE, INC.
                                         (A Development Stage Company)
                                      Condensed Statements of Cash Flows
                                                  (Unaudited)

                                                                                          Cumulative
                                                                                        from inception
                                                                  Three months         (April 21, 1997)
                                                                 ended March 31,          to March 31,
                                                        -----------------------------   ----------------
                                                            2003             2004             2004
                                                        ------------     ------------     ------------
<S>                                                     <C>              <C>              <C>
Cash flows from operating activities:
Net loss                                                $  (352,839)     $  (500,719)     $(2,969,364)
Adjustments to reconcile net loss to net cash
    used by operating activities:
  Depreciation                                                   --           10,589           24,454
  Common stock issued in lieu of compensation                    --               --           27,000
  Deferred offering expenses                                     --          (40,350)         (40,350)
  Decrease (increase) in prepaid expenses                        --            7,175          (24,887)
  Increase (decrease) in accounts payable                    65,774          (44,695)          50,948
  Increase in accrued expenses                              213,065           24,873          205,809
  Increase in income taxes payable                               --              620            1,992
                                                        ------------     ------------     ------------
    Net cash used in operating activities                   (74,000)        (542,507)      (2,724,398)
                                                        ------------     ------------     ------------
Cash flows from investing activities:
  Purchases of fixed assets                                      --           (8,691)        (113,073)
                                                        ------------     ------------     ------------
    Net cash used in investing activities                        --           (8,691)        (113,073)
                                                        ------------     ------------     ------------
Cash flows from financing activities
  Issuance of common stock                                   26,100            9,000        1,766,674
  Capital contributions                                          --          112,500        1,571,309
  Shareholders' loans                                        58,500               --          110,000
                                                        ------------     ------------     ------------
    Net cash provided by financing activities                84,600          121,500        3,447,983
                                                        ------------     ------------     ------------
Net increase (decrease) in cash                              10,600         (429,698)         610,512

Cash at beginning of period                                      --        1,040,210               --
                                                        ------------     ------------     ------------
Cash at end of period                                   $    10,600      $   610,512      $   610,512
                                                        ============     ============     ============

There were no cash payments for interest.

Cash payments for income taxes                          $        --      $       380      $       380
                                                        ============     ============     ============
Non cash investing and financing activities
  Conversion of shareholder's loan to common stock      $        --      $   100,000      $   100,000
                                                        ============     ============     ============

                             The accompanying notes are an integral part of these
                                        condensed financial statements.
</TABLE>

                                                       5

<PAGE>

                               DEBT RESOLVE, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                     Notes to Condensed Financial Statements
                                   (Unaudited)
                                  March 31, 2004

1.       ORGANIZATION AND DEVELOPMENT STAGE ACTIVITIES:
         ----------------------------------------------

         Organization
         ------------

Debt Resolve, Inc., formerly Lombardia Acquisition Corp. (the "Company"), is a
Delaware corporation and was formed on April 21, 1997. The Company was inactive
and had no significant assets, liabilities or operations through February 24,
2003.

On February 24, 2003, Charles S. Brofman, James D. Burchetta and Michael S.
Harris (collectively, the "Principal Shareholders") purchased 22,500,000
newly-issued shares of the Company's common stock, representing 84.6% of the
then outstanding shares, pursuant to a Stock Purchase Agreement effective
January 13, 2003 between the Company and each of the Principal Shareholders. The
Company received an aggregate cash payment of $22,500 in consideration for the
sale of such shares to the Principal Shareholders.

On February 24, 2003, in accordance with the Company's by-laws for filling
newly-created board vacancies, Danilo Cacciamatta, the sole existing director,
appointed Messrs. Brofman, Burchetta, Harris and Lawrence E. Dwyer, Jr. to the
board of directors of the Company. Mr. Burchetta was named Co-Chairman of the
Board and Chief Executive Officer, Mr. Brofman was named non-executive
Co-Chairman of the Board, Mr. Harris was named Executive Vice President and
General Counsel, and Mr. Cacciamatta resigned his position as Chief Executive
Officer. On April 7, 2003, William M. Mooney, Jr. was elected to the board of
directors. Effective June 9, 2003, Alan M. Silberstein was elected to the board
of directors and was appointed the Company's President and Chief Operating
Officer.

On May 7, 2003, following approvals by the Board of Directors and holders of a
majority of the Company's common stock, the Company's Certificate of
Incorporation was amended to change the Company's corporate name to Debt
Resolve, Inc. and increase the number of the Company's authorized shares of
common stock from 20,000,000 to 50,000,000 shares.

         Development stage activities
         ----------------------------

Since February 24, 2003, the Company has devoted substantially all of its
efforts to planning and budgeting, research and development activities, and
raising capital. In January 2004, the Company substantially completed the
development of an online system for the settlement of credit card and other
consumer debt and began marketing its product to banks and other creditors. In
February 2004, the Company implemented its online system, on a test basis, with
a collection agency. The Company does not expect to generate any significant
revenues during this initial test period.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
         -------------------------------------------

         Going concern
         -------------

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. The Company's working capital is not sufficient to
fund its plan of operations over the next 12 months. This factor raises
substantial doubt about the Company's ability to continue as a going concern.
The Company is seeking to raise additional capital through private equity
investments. However, there can be no assurance that the Company will be able to
raise sufficient additional capital as needed to execute its business plan.

         Interim periods
         ---------------

The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly, they do not include all of the information required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 2004 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2004 or for any other interim period. These statements should be read in
conjunction with the Company's audited financial statements and notes thereto
for the year ended December 31, 2003 included in the Company's annual report on
Form 10-KSB filed with the Securities and Exchange Commission on March 30, 2004.

         Development stage enterprise
         ----------------------------

In accordance with Statement of Financial Accounting Standards No. 7, ACCOUNTING
AND REPORTING BY DEVELOPMENT STAGE ENTERPRISES, the Company is considered to be
in the development stage since it is devoting substantially all of its efforts
to establishing a new business and its planned principal operations have not
commenced or produced any significant revenues.

         Use of estimates
         ----------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
the accompanying notes. These estimates and assumptions are based on
management's judgment and available information and, consequently, actual
results could be different from these estimates.

         Research and development expenses
         ---------------------------------

Research and development expenses consist primarily of payroll and related
expenses and consulting fees incurred in connection with employees and
consultants involved in the development of the Company's online software
product. The Company follows the guidelines of AICPA Statement of Position 98-1,
ACCOUNTING FOR THE COSTS OF COMPUTER SOFTWARE DEVELOPED OR OBTAINED FOR INTERNAL
USE, Statement of Financial Accounting Standards No. 86, ACCOUNTING FOR THE
COSTS OF COMPUTER SOFTWARE TO BE SOLD, LEASED, OR OTHERWISE MARKETED, and
Statement of Financial Accounting Standards No. 2, ACCOUNTING FOR RESEARCH AND
DEVELOPMENT COSTS. Since the Company intended and has begun to market its online
product, these costs have been charged to expense as incurred and classified as
research and development expenses. In January 2004, the Company substantially
completed the development of and began marketing its online product. Commencing
February 2004, costs incurred in connection with the operation, maintenance,
modification, and customization of the Company's product have been charged to
expense as incurred, but are not classified as research and development
expenses.

                                        6

<PAGE>

         Property and equipment
         ----------------------

Property and equipment is stated at cost, less accumulated depreciation.
Depreciation is provided over the estimated useful life of each class of assets
using the straight-line method. Expenditures for maintenance and repairs are
charged to expense as incurred. Additions and betterments that substantially
extend the useful life of the asset are capitalized. Upon the sale, retirement,
or other disposition of property and equipment, the cost and related accumulated
depreciation are removed from the balance sheet, and any gain or loss on the
transaction is included in the statement of operations.

         Income taxes
         ------------

In accordance with Statement of Financial Accounting Standards No. 109,
ACCOUNTING FOR INCOME TAXES, the Company uses an asset and liability approach
for financial accounting and reporting for income taxes. The basic principles of
accounting for income taxes are: (a) a current tax liability or asset is
recognized for the estimated taxes payable or refundable on tax returns for the
current year; (b) a deferred tax liability or asset is recognized for the
estimated future tax effects attributable to temporary differences and
carryforwards; (c) the measurement of current and deferred tax liabilities and
assets is based on provisions of the enacted tax law and the effects of future
changes in tax laws or rates are not anticipated; and (d) the measurement of
deferred tax assets is reduced, if necessary, by the amount of any tax benefits
that, based on available evidence, are not expected to be realized.

         Stock-based compensation
         ------------------------

Stock options issued under stock-based compensation plans are accounted for
under the recognition and measurement principles of Accounting Principles Board
Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related
Interpretations. No stock-based employee compensation cost is reflected in the
net loss, as all options granted under these plans had an exercise price equal
to the market value of the underlying common stock, as determined by the board
of directors, on the date of grant. Statement of Financial Accounting Standards
No. 148, ACCOUNTING FOR STOCK-BASED COMPENSATION- TRANSITION AND DISCLOSURE- AN
AMENDMENT OF FASB STATEMENT NO. 123, requires the disclosure of the effect on
net loss and loss per share had the Company applied the fair value recognition
provisions of FASB Statement No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION,
to stock-based employee compensation. The fair value of each option granted is
estimated as of the grant date using the Black-Scholes option pricing model with
the following assumptions: dividend yield of 0%, expected volatility of
0%,risk-free interest rates for individual options ranging from 1.66% to 4.12%
based on the closing U.S. Treasury Yield Curve Rate on the date of the grant for
U.S. Treasury securities with a time to maturity equal to or approximately equal
to the expected life of each option, and an expected life of each option,
ranging from three to ten years, equal to the time from the date of the grant to
its expiration date. Since there is no public market for the Company's stock,
its expected volatility cannot be estimated and is not considered in estimating
the fair value of each option. For purposes of pro forma disclosures, the
estimated fair value of the options granted is amortized to expense over the
option vesting periods. During the three months ended March 31, 2004, and 2003
the Company did not grant any options. As of March 31, 2004, there were options
to purchase 4,268,333 shares outstanding, of which 3,168,333 had vested. As of
March 31, 2004, the weighted average exercise price and the weighted average
expected life of the options granted were $0.57 and 8.96 years, respectively.
The following table illustrates the pro forma effects on net loss and net loss
per common share for the three months ended March 31, 2004 and 2003 as if the
Company had applied the fair value recognition provisions of FASB Statement No.
123 to stock-based compensation.

<TABLE>
                                                                     Three months
                                                                    ended March 31,
                                                              -------------------------
                                                                 2003           2004
                                                              ----------     ----------
<S>                                                           <C>            <C>
Net loss - as reported                                        $(352,839)     $(500,719)
Pro forma compensation cost, net of taxes                            --         49,076
                                                              ----------     ----------
Net loss - pro forma                                          $(352,839)     $(549,785)
                                                              ==========     ==========
Basic and diluted net loss per common share - as reported     $   (0.02)     $   (0.02)
                                                              ==========     ==========
Basic and diluted net loss per common share - pro forma       $   (0.02)     $   (0.03)
                                                              ==========     ==========
</TABLE>


         Basic and diluted net loss per share
         ------------------------------------

Net loss per share is calculated in accordance with Statement of Financial
Accounting Standards No. 128, EARNINGS PER SHARE, which superseded Accounting
Principles Board Opinion No. 15, EARNINGS PER SHARE. Basic net loss per share
was computed by dividing the net loss by the weighted average number of common
shares outstanding. Diluted net loss per share was computed based on the
assumption that all dilutive convertible shares, stock options and warrants were
converted or exercised. Dilution is computed by applying the treasury stock
method. Under this method, options and warrants are assumed to be exercised at
the beginning of the period (or at the time of issuance, if later), and as if
funds obtained thereby were used to purchase common stock at the average market
price during the period.

                                        7

<PAGE>



The following table shows the calculation of the numerator and denominator, as
well as the number of common stock equivalents that would have been included in
the denominator if they were dilutive.

                                             Three months
                                            ended March 31,
                                   -------------------------------
                                        2003              2004
                                   -------------     -------------
Numerator
  Net loss                         $   (352,839)     $   (500,719)
                                   =============     =============

Denominator
  Weighted average common
    shares outstanding               23,120,000        29,020,890
                                   =============     =============

Incremental common shares
(not included in denominator
of diluted earnings per
share calculation due to
their anti- dilutive nature)
attributable to exercise/
conversion of:
  Outstanding options                        --         1,848,000
  Preferred stock                            --                --
                                   -------------     -------------
                                             --         1,848,000
                                   =============     =============

3.       PROPERTY AND EQUIPMENT:
         -----------------------

                                                                  March 31,
                                       Useful life                  2004
                                       -----------               ----------
Computer equipment                       3 years                 $  69,666
Computer software                        3 years                     1,919
Office equipment                         3 years                     2,191
Furniture and fixtures                   5 years                    24,250
Leasehold improvements                  Lease term                  15,046
                                                                 ----------
                                                                   113,072
Less: accumulated depreciation                                     (24,453)
                                                                 ----------
                                                                 $  88,619
                                                                 ==========

Depreciation expense totaled $10,589 and $-0- for the three months ended March
31, 2004 and 2003, respectively.

4.       SHAREHOLDERS' (DEFICIT) EQUITY:
         -------------------------------

<TABLE>
<CAPTION>
                                                                                                           Deficit
                                      Preferred Stock               Common stock                         accumulated
                                --------------------------  ---------------------------    Additional    during the
                                 Number of                   Number of                       paid in     development
                                  shares         Amount        shares         Amount         capital        stage           Total
                                ------------  ------------  ------------   ------------   ------------   ------------   ------------
<S>                                      <C>  <C>            <C>           <C>            <C>            <C>            <C>
Balance at December 31, 2003             --            --    29,020,000    $    29,020    $ 3,314,463    $(2,468,645)    $  874,838

Common stock issued to pay
  consulting fees                        --            --         9,000              9          8,991             --          9,000

Capital contributed from
  imputed compensation                   --            --            --             --        112,500             --        112,500

Net loss                                 --            --            --             --             --       (500,719)      (500,719)
                                ------------  ------------  ------------   ------------   ------------   ------------   ------------
Balance at December 31, 2003             --   $        --    29,029,000    $    29,029    $ 3,435,954    $(2,969,364)   $   495,619
                                ============  ============  ============   ============   ============   ============   ============

In March 2004, the Company issued 9,000 shares of its common stock to two
consultants for services provided to the Company in connection with the
preparation of a private placement memorandum.

                                        8

</TABLE>

<PAGE>

5.       COMMITMENTS AND CONTINGENCIES:
         ------------------------------

         Limited license agreement
         -------------------------

On February 20, 2003, the Company entered into a Limited License Agreement (the
"License") with Messrs. Brofman and Burchetta (together, the "Licensors") for
the licensed usage (the "Licensed Usage") of the intellectual property rights
relating to U.S. Patent No. 6,330,551 issued by the U.S. Patent and Trademark
Office on December 11, 2001 (the "Patent") for "Computerized Dispute and
Resolution System and Method." The Licensed Usage is limited to the creation of
software and other code enabling an automated system used solely for the
settlement and collection of credit card receivables and other consumer debt,
and specifically excludes the settlement and collection of insurance claims, tax
and other municipal fees of all types. In February 2004, the License was amended
(the "Amendment") to modify the royalty fee obligations and the termination
rights. Pursuant to the Amendment, the Company will pay a royalty fee to the
Licensors as follows: (1) in 2004, the Company will pay no royalties; (2) in
2005, the Company will pay a royalty fee of 10% of the Company's annual gross
revenues attributable to the use of the patented computerized dispute resolution
system and method (the "Fee"); (3) in 2006, the Company will pay the Fee with a
minimum guaranteed royalty payment of $300,000; and (4) in 2007 and thereafter,
the Company will pay the Fee with a minimum guaranteed royalty payment of
$600,000 annually, subject to certain conditions relating to the Licensors'
continued affiliation with the Company, or potentially as much as $3,000,000 in
the aggregate, depending on the circumstances of their separation from the
Company. In addition, pursuant to the Amendment, if the Company's annual gross
revenues do not exceed one hundred and ten percent (110%) of the Company's
annual gross revenues for the immediately preceding calendar year (the `Minimum
Annual Gross Revenue Clause"), the Licensors may not terminate the License prior
to January 1, 2006, provided that the Company has not breached its obligations
to pay the Fee.

In 2003, prior to the Amendment, the License provided for a royalty fee, payable
to the Licensors, of ten percent (10%) of the Company's annual gross revenues
attributable to the Licensed Usage commencing July 1, 2003 and continuing until
the expiration of the Patent. The minimum annual royalty for any fiscal year was
$600,000. Under certain circumstances, if Mr. Burchetta was no longer employed
as a director and officer of the Company, or if Mr. Brofman was no longer
retained as a consultant to the Company, the minimum annual royalty fee for any
fiscal year would be $3,000,000. The Licensors had the right to terminate the
License if, among other reasons, the Company had not developed and produced a
fully functional and commercially usable system contemplated by the License on
or before September 30, 2003 (which was extended to March 31, 2004), or the
Company's annual gross revenues during any calendar year did not exceed $500,000
through December 31, 2004, or if the Company failed to meet the Minimum Annual
Gross Revenue Clause.

Royalty fee expense was $-0- for the three months ended March 31, 2004 and 2003.
The Licensors waived the entire amount of the royalty fee for the year ended
December 31, 2003, resulting in a capital contribution of $600,000.

         Employment agreements
         ---------------------

The Company has entered into employment agreements with five executives. Future
aggregate minimum compensation under these agreements as of March 31, 2004 is as
follows:

2004                          $   487,500
2005                              300,000
2006                              300,000
2007                              300,000
2008                               16,849
                              ------------
Total                         $ 1,404,349
                              ============

Messrs. Burchetta, Harris and Silberstein each amended their employment
agreements on February 25, 2004, with each agreeing to modify their respective
level of compensation, subject to the Company meeting certain financial and
performance milestones. The employment agreements, as amended, provide that the
base salary for each of Messrs. Burchetta, Harris and Silberstein will be as
follows: (1) if at the date of any salary payment, the aggregate amount of the
Company's net cash on hand provided from operating activities and net cash
and/or investments on hand provided from financing activities is sufficient to
cover the Company's projected cash flow requirements (as established by the
Company's Board of Directors in good faith from time to time) for the following
succeeding 12 months (the "Projected Cash Requirement"), the annual base salary
will be $150,000; and (2) if at the date of any salary payment, the Company's
net cash on hand provided from operating activities is sufficient to cover the
Company's Projected Cash Requirement, the annual base salary will be $240,000,
and increased to $450,000 upon the later to occur of (a) January 1, 2004 and (b)
the date upon which the Company completes the sale or license of its system with
respect to 400,000 consumer credit accounts. Since the annual base salaries of
Messrs. Burchetta, Harris and Silberstein are subject to the Company meeting
these specified financial and performance milestones, any salary payments to
Messrs. Burchetta, Harris and Silberstein will be allocated equally among each
of them at the time payment is made.

Under the terms of the amended employment agreements, no salary payments were
made to Messrs. Burchetta, Harris and Silberstein during the three months ended
March 31, 2004. The Company recorded compensation expense and a capital
contribution totaling $112,500 during the three months ended March 31, 2004,
representing an imputed compensation expense for the minimum base salary amounts
under the agreements with Messrs. Burchetta, Harris and Silberstein, as if the
Company had met the condition for paying their salaries.

         Office lease
         ------------

The Company leases office facilities under a non-cancelable operating lease
through July 2005. Rent expense and utilities for the three months ended March
31, 2004 and 2003 was $16,782 and $6,518, respectively. Future aggregate minimum
lease payments as of March 31, 2003 are $50,345 for 2004 and $39,158 for 2005.

                                        9


<PAGE>

6.       TRANSACTIONS WITH RELATED PARTIES:
         ----------------------------------

As described in Note 5 above, on February 20, 2003, the Company entered into a
Limited License Agreement with Messrs. Brofman and Burchetta, directors of the
Company, which provides for a royalty fee payable to the Licensors, subject to
minimum annual amounts, and which contains certain termination rights of the
Licensors.

On February 20, 2003, Charles S. Brofman entered into a consulting agreement
with the Company under which he would serve as the Company's non-executive
Co-Chairman of the Board. The Company and Mr. Brofman mutually agreed to
terminate the consulting agreement on February 25, 2004. Although the consulting
agreement has been terminated, Mr. Brofman will continue to serve as the
Co-Chairman of the Board.

In March 2003, the Company's former Chief Financial Officer, Mr. Cacciamatta,
provided the Company with a $10,000 loan. The Company agreed to issue 50,000
shares of its common stock at $0.20 per share (representing fair value at that
time as determined by the board of directors) as repayment for the loan.
However, Mr. Cacciamatta later rescinded his acceptance of the Company's common
stock as repayment for the loan and the Company reversed the original
transaction and restored the original loan payable to shareholder amount. There
is no formal loan agreement and the Company and Mr. Cacciamatta have not agreed
upon any terms for payment of interest or repayment of the loan.

Mr. Harris's wife has provided bookkeeping services to the Company since July
2003. During the three months ended March 31, 2004, Mrs. Harris's fees totaled
$3,537 and are included in general and administrative expenses.

7.       RECENTLY ISSUED AND PROPOSED ACCOUNTING PRONOUNCEMENTS:
         -------------------------------------------------------

In December 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 132 (revised 2003), EMPLOYERS'
DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS -- AN AMENDMENT OF
FASB STATEMENTS NO. 87, 88, AND 106 ("SFAS 132"). SFAS 132 revises employers'
disclosures about pension plans and other postretirement benefit plans.
Currently, the Company does not have a pension plan or postretirement benefit
plan and adoption of SFAS 132 had no effect on the Company's financial position
or results of operations.

In May 2003, FASB issued Statement of Financial Accounting Standards No. 150,
ACCOUNTING FOR CERTAIN FINANCIAL INSTRUMENTS WITH CHARACTERISTICS OF BOTH
LIABILITIES AND EQUITY ("SFAS 150"). SFAS 150 establishes standards for how an
issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. Currently, the Company does not
have any financial instruments with characteristics of both liabilities and
equity and adoption of SFAS 150 had no effect on the Company's financial
position or results of operations.

In April 2003, FASB issued Statement of Financial Accounting Standards No. 149,
AMENDMENT OF STATEMENT 133 ON DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
("SFAS 149"). SFAS 149 amends and clarifies financial accounting and reporting
for derivative instruments, including certain derivative instruments embedded in
other contracts (collectively referred to as derivatives) and for hedging
activities under FASB Statement No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS
AND HEDGING ACTIVITIES. Currently, the Company does not have any DERIVATIVE
INSTRUMENTS AND HEDGING ACTIVITIES and adoption of SFAS 149 had no effect on the
Company's financial position or results of operations.


                                       10


<PAGE>



Item 2.  Management's Discussion and Analysis or Plan of Operation

Since February 24, 2003, we have devoted substantially all of our efforts to
planning and budgeting, research and development activities, and raising
capital. In January 2004, we substantially completed the development of an
online system for the settlement of credit card and other consumer debt and
began marketing our product to banks and other creditors. In February 2004, we
implemented our online system, on a test basis, with a collection agency. We do
not expect to generate any significant revenues during this initial test period.

Initially, we intend to market our service to credit card issuers, their
collection agencies, and the buyers of their defaulted debt in the United
States. Eventually, we intend to market our service to other segments served by
the collections industry worldwide. We are currently in negotiations with a
number of potential clients to test the Debt Resolve System with their
portfolios. As of the date of this report, one potential client has implemented
our online system, on a test basis, with a limited sample of accounts.

We have financed our activities to date through our management's contributions
of cash and forgiveness of compensation, the forgiveness of royalty and
consulting fees, advances from two shareholders, and the proceeds from sales of
our common stock in a private placement.

As of March 31, 2004 and May 1, 2004, our working capital totaled $407,000 and
$287,997, respectively. We believe that our working capital as of the date of
this Report is not sufficient to fund our plan of operations over the next 12
months. We intend to continue seeking to raise additional capital over the next
12 months through private equity investments. However, we have no agreements or
commitments concerning the sale of our equity securities and there can be no
assurance we will be able to raise sufficient additional capital as needed to
execute our business plan.

We are classified as a development stage company because, to date, we have
devoted substantially all of our efforts to planning and budgeting, research and
development activities, and raising the capital necessary to execute our
business plan, and our planned principal operations have not commenced or
produced any significant revenues. There can be no assurance that we will be
successful in implementing our business plan.

Three months ended March 31, 2004 compared to three months ended March 31, 2003

PAYROLL AND RELATED EXPENSES. Payroll and related expenses totaled $197,504 for
the three months ended March 31, 2004 and $-0- for the three months ended March
31, 2003. For the three months ended March 31, 2004, these expenses include
$112,500 of imputed compensation expense for the minimum base salary amounts
under the agreements with Messrs. Burchetta, Harris and Silberstein, as if the
Company had met the condition for paying their salaries. No salary payments were
made to Messrs. Burchetta, Harris and Silberstein during the three months ended
March 31, 2004 and the Company recorded their imputed compensation as a capital
contribution. Commencing February 2004, these expenses also include payroll and
related expenses incurred in connection with employees involved in the
operation, maintenance, modification, and customization of the Company's online
product. During January 2004 and for the three months ended March 31, 2003,
payroll and related expenses incurred in connection with employees involved in
the development of the Company's online product were classified as research and
development expenses.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses totaled
$248,140 for the three months ended March 31, 2004 and $223,488 for the three
months ended March 31, 2003. For the three months ended March 31, 2004, these
expenses consist of $92,390 for legal and accounting fees, $67,405 for
consulting fees incurred in connection with business advisory services,
marketing services and computer programming services, and $88,345 for other
general expenses, primarily consisting of marketing and promotion costs,
occupancy costs and travel related expenses. For the three months ended March
31, 2003, these expenses consist of $48,359 for legal fees, $81,900 for
consulting fees incurred in connection with business advisory services, and
$93,229 for other general expenses, primarily consisting of marketing and
promotion costs, travel related expenses and occupancy costs.

RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses totaled
$46,022 for the three months ended March 31, 2004 and $129,351 for the three
months ended March 31, 2003. These expenses consist of payroll and related
expenses and consulting fees incurred in connection with employees and
consultants involved in the development of the Company's online product. In
January 2004, the Company substantially completed the development of and began
marketing its online product. Commencing February 2004, costs incurred in
connection with the operation, maintenance, modification, and customization of
the Company's online product have been charged to expense as incurred, but are
not classified as research and development expenses.

         Critical Accounting Policies
         ----------------------------

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
the accompanying notes. These estimates and assumptions are based on
management's judgment and available information and, consequently, actual
results could be different from these estimates. We believe that the most
critical accounting policy concerns the doubt about the Company's ability to
continue as a going concern. This and our other critical accounting policies are
described in note 1 and 2 to the financial statements contained in this report,
in Item 2 above, Management's Discussion and Analysis or Plan of Operation, and
in notes 1 and 2 to our financial statements contained in our Annual Report on
Form 10-KSB for the year ended December 31, 2003.



                                       11
<PAGE>

         Customary Statement Relating to Forward Looking Statements
         ----------------------------------------------------------

This Report contains forward-looking statements that are based on our beliefs as
well as assumptions and information currently available to us. When used in this
report, the words "believe," "expect," "anticipate," "estimate" "potential" and
similar expressions are intended to identify forward-looking statements. These
statements are subject to risks, uncertainties and assumptions, including,
without limitation, the risks and uncertainties concerning our recent research
and development activities; the risks and uncertainties concerning acceptance of
our services and products, if and when fully developed, by our potential
customers; our present financial condition and the risks and uncertainties
concerning the availability of additional capital as and when required; the
risks and uncertainties concerning the Limited License Agreement with Messrs.
Brofman and Burchetta; the risks and uncertainties concerning the Company's
dependence on its key executives; the risks and uncertainties concerning
technological changes and the competition for our services and products; and the
risks and uncertainties concerning general economic conditions. Should one or
more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated, or projected. We caution you not to place undue reliance
on any forward-looking statements, all of which speak only as of the date of
this report.

Item 3.  Controls and Procedures

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


                                       12
<PAGE>

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

During the three months ended March 31, 2004, we issued 9,000 shares of our
common stock to two consultants for services provided to the Company in
connection with the preparation of a private placement memorandum. These
issuances were exempt from registration pursuant to Section 4(2) of the
Securities Act.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

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

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

         31.1     Certification of Chief Executive Officer required by Rule
                  13(a)-14(a).
         31.2     Certification of Chief Financial Officer required by Rule
                  13(a)-14(a).
         32.1     Certifications required by Rule 13(a)-14(b) and 18 U.S.C.
                  Section 1350.

(b)      Reports on Form 8-K

Form 8-K filed with the SEC on January 12, 2004 to report a change in
registrant's certifying accountant.



                                    SIGNATURES

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

                                          DEBT RESOLVE, INC.

                                          By: /s/ John M. Porta
                                              ------------------------
                                              John M. Porta
                                              Chief Financial Officer
Dated: May 5, 2004


                                       13