<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB


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

                  For the Quarterly Period Ended March 31, 2004

                                       OR

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

For the Transition Period from __________ to __________

                        COMMISSION FILE NUMBER 001-14665

                               CLAIMSNET.COM INC.
                               ------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                               75-2649230
          --------                                               ----------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                          14860 Montfort Dr, Suite 250
                               Dallas, Texas 75254
                               -------------------
               (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code: 972-458-1701

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. Common Stock, $.001 par value,
24,201,180 shares outstanding as of May 7, 2004.

Transitional Small Business Disclosure Format Yes [ ]  No [X]


                                       1

<PAGE>


                       CLAIMSNET.COM INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS




PART I. FINANCIAL INFORMATION

     ITEM 1. Financial Statements

                  Consolidated Balance Sheets as of March 31, 2004 (unaudited)
                  and December 31, 2003 (audited)

                  Consolidated Statements of Operations (unaudited) for the
                  Three Months Ended March 31, 2004 and 2003

                  Consolidated Statements of Changes in Stockholders' Deficit
                  for the Year Ended December 31, 2003 (audited) and the Three
                  Months Ended March 31, 2004 (unaudited)

                  Consolidated Statements of Cash Flows (unaudited) for the
                  Three Months Ended March 31, 2004 and 2003

                  Notes to Consolidated Financial Statements

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

     ITEM 3. Controls and Procedures


PART II. OTHER INFORMATION

     ITEM 2. Changes in Securities

     ITEM 6. Exhibits and Reports on Form 8-K


SIGNATURES

CERTIFICATIONS



                                       2

<PAGE>


PART I -- FINANCIAL INFORMATION

ITEM 1:   Financial Statements
<TABLE>

                               CLAIMSNET.COM INC. AND SUBSIDIARIES
                                   CONSOLIDATED BALANCE SHEETS
                                (In thousands, except share data)
<CAPTION>

                                                                      (Unaudited)     (Audited)
                                                                       March 31,     December 31,
                                                                         2004            2003
                                                                      ------------   ------------
<S>                                                                   <C>            <C>
                                              ASSETS

CURRENT ASSETS
   Cash and equivalents                                               $        48    $        66
   Accounts receivable, net of allowance for
     doubtful accounts of $6 and $9, respectively                             105            114
   Prepaid expenses and other current assets                                   24             56
                                                                      ------------   ------------
     Total current assets                                                     177            236

EQUIPMENT, FIXTURES AND SOFTWARE
   Computer hardware and software                                           1,077          1,077
   Software development costs                                               1,977          1,977
   Furniture and fixtures                                                      31             31
   Office equipment                                                            25             25
   Leasehold Improvements                                                      35             26
                                                                      ------------   ------------
                                                                            3,145          3,136
   Accumulated depreciation and amortization                               (3,047)        (3,036)
                                                                      ------------   ------------
     Total equipment, fixtures and software, net                               98            100
                                                                      ------------   ------------
TOTAL ASSETS                                                          $       275    $       336
                                                                      ============   ============

                              LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
   Accounts payable                                                   $       174    $       162
   Accrued payroll and other current liabilities                              142            134
   Customer prepayments                                                        24             --
   Deferred revenues                                                          200            208
   Notes payable to related parties - short term                              151            151
                                                                      ------------   ------------
     Total current liabilities                                                691            655

LONG TERM LIABILITIES
   Notes payable to related parties - long term                                10             10
   Notes payable - long term                                                   25             25
                                                                      ------------   ------------
     Total long term liabilities                                               35             35
                                                                      ------------   ------------
     Total liabilities                                                        726            690

STOCKHOLDERS' DEFICIT
   Preferred stock, $.001 par value; 4,000,000 shares authorized,
     720 shares of Series D (liquidation preference of $180) and
     50 shares of Series E (liquidation preference of $15) issued
     and outstanding as of March 31, 2004 and December 31, 2003                --             --
   Common stock, $.001 par value; 40,000,000 shares authorized;
     23,701,000 shares and 23,201,000 shares issued and outstanding
     as of March 31, 2004 and December 31, 2003, respectively                  24             23
   Additional capital                                                      42,681         42,582
   Accumulated deficit                                                    (43,156)       (42,959)
                                                                      ------------   ------------
     Total stockholders' deficit                                             (451)          (354)
                                                                      ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                           $       275    $       336
                                                                      ============   ============


                         See notes to consolidated financial statements.


                                                3
</TABLE>

<PAGE>

                       CLAIMSNET.COM INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In thousands, except per share data)
                                   (Unaudited)

                                                           Three Months Ended
                                                               March 31,
                                                         -----------------------
                                                           2004           2003
                                                         ---------     ---------
REVENUES                                                 $    215      $    162

Cost of Revenues                                              140           200
                                                         ---------     ---------
Gross PROFIT (Loss)                                            75           (38)
                                                         ---------     ---------
OPERATING EXPENSES:
   Research and development                                    --            10
   Selling, general and administrative                        267           311
                                                         ---------     ---------
     Total operating expenses                                 267           321
                                                         ---------     ---------

LOSS FROM OPERATIONS                                         (192)         (359)

OTHER INCOME (EXPENSE)
   Gain on settlement of liabilities                           --             4
   Interest expense - related parties                          (4)           (2)
   Interest expense - other                                    (1)           (2)
                                                         ---------     ---------
     Total other income (expense)                              (5)           --
                                                         ---------     ---------
NET LOSS                                                 $   (197)     $   (359)
                                                         ---------     ---------

NET LOSS PER COMMON SHARE (BASIC AND DILUTED)            $  (0.01)     $  (0.02)
                                                         =========     =========
WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING (BASIC AND DILUTED)                       23,667        15,323
                                                         =========     =========



                 See notes to consolidated financial statements.


                                       4


<PAGE>

<TABLE>
                                          CLAIMSNET.COM INC. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
             Year Ended December 31, 2003 (Audited) and the Three Months Ended March 31, 2004 (Unaudited)
                                                    (In thousands)
<CAPTION>

                                 Number of               Number of
                                 Preferred               Common                                          Total
                                 Shares       Preferred  Shares       Common    Additional  Accumulated  Stockholders'
                                 Outstanding  Stock      Outstanding  Stock     Capital     Deficit      Deficit
                                 -----------  ---------  -----------  --------  ----------  -----------  -------------
<S>                                 <C>       <C>             <C>     <C>       <C>         <C>          <C>
Balances at January 1, 2003               3   $      --       14,816  $     15  $  41,275   $  (42,424)  $     (1,134)

Sale of common stock                     --          --        3,425         3        680           --            683

Issuance of common stock in
payment of notes payable and
accrued interest                         --          --          375        --         75           --             75

Warrants exercised for common
stock                                    --          --        1,875         2        373           --            375

Preferred stock converted into
common stock                             (2)         --        2,701         3         (3)          --             --

Issuance of common stock for
services                                 --          --            9        --          2           --              2

Issuance of warrants and
options to related parties for
services                                 --          --           --        --        180           --            180

Net loss                                 --          --           --        --         --         (535)          (535)
                                 -----------  ---------  -----------  --------  ----------  -----------  -------------
Balances at December 31, 2003             1          --       23,201        23     42,582      (42,959)          (354)
                                 -----------  ---------  -----------  --------  ----------  -----------  -------------

Warrants exercised for common
stock                                    --          --          500         1         99           --            100

Net loss                                 --          --           --        --         --         (197)          (197)
                                 -----------  ---------  -----------  --------  ----------  -----------  -------------
Balances at March 31, 2004                1   $      --       23,701  $     24  $  42,681   $  (43,156)  $       (451)
                                 ===========  =========  ===========  ========  ==========  ===========  =============


                                    See notes to consolidated financial statements.


                                                          5
</TABLE>

<PAGE>


                       CLAIMSNET.COM INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)

                                                              Three Months Ended
                                                                   March 31,
                                                                2004       2003
                                                               ------     ------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                                    $(197)     $(359)
     Adjustments to reconcile net loss to net cash
     used in operating activities:
       Depreciation and amortization                              11         53
       Gain on settlement of liabilities                          --         (4)
     Changes in operating assets and liabilities:
       Accounts receivable                                         9         28
       Prepaid expenses and other current assets                  32         46
       Current liabilities                                        36        (46)
                                                               ------     ------
         Net cash used in operating activities                  (109)      (282)
                                                               ------     ------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment                          (9)        --
     Capitalized software development costs                       --         (6)
                                                               ------     ------
       Net cash used in investing activities                      (9)        (6)
                                                               ------     ------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from issuance of common stock                      100        187
                                                               ------     ------
       Net cash provided by financing activities                 100        187
                                                               ------     ------
NET DECREASE IN CASH AND EQUIVALENTS                             (18)      (101)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD                         66        153
                                                               ------     ------
CASH AND EQUIVALENTS, END OF PERIOD                            $  48      $  52
                                                               ======     ======


                 See notes to consolidated financial statements.


                                       6
<PAGE>

                       CLAIMSNET.COM INC. AND SUBSIDIARIES
                   Notes to Consolidated Financial Statements

1. BASIS OF PRESENTATION

         In the opinion of management, the accompanying unaudited consolidated
         financial statements include all necessary adjustments (consisting of
         normal recurring adjustments) and present fairly the consolidated
         financial position of Claimsnet.com Inc. and subsidiaries (the
         "Company") as of March 31, 2004 and the results of its operations and
         cash flows for the three months ended March 31, 2004 and 2003, in
         conformity with generally accepted accounting principles for interim
         financial information applied on a consistent basis. The results of
         operations for the three months ended March 31, 2004 are not
         necessarily indicative of the results to be expected for the full year.

         Certain information and footnote disclosures normally included in
         financial statements prepared in accordance with generally accepted
         accounting principles have been omitted. These financial statements
         should be read in conjunction with the audited consolidated financial
         statements and notes thereto included in the Company's Annual Report on
         Form 10-KSB for the year ended December 31, 2003, as filed with the
         Securities and Exchange Commission on March 26, 2004.

2. NEED FOR ADDITIONAL CAPITAL AND LIQUIDITY

         Management believes that available cash resources, together with
         anticipated revenues from operations and the proceeds of recently
         completed financing activities and funding commitments will not be
         sufficient to satisfy the Company's capital requirements through June
         30, 2004. Necessary additional capital may not be available on a timely
         basis or on acceptable terms, if at all. In any of these events, the
         Company may be unable to implement current plans for expansion or to
         repay debt obligations as they become due. If sufficient capital cannot
         be obtained, the Company may be forced to significantly reduce
         operating expenses to a point which would be detrimental to business
         operations, curtail research and development activities, sell business
         assets or discontinue some or all of its business operations, take
         other actions which could be detrimental to business prospects and
         result in charges which could be material to its operations and
         financial position, or cease operations altogether. In the event that
         any future financing should take the form of equity securities, the
         holders of the common stock and preferred stock may experience
         additional dilution. In the event of a cessation of operations, there
         may not be sufficient assets to fully satisfy all creditors, in which
         case the holders of equity securities will be unable to recoup any of
         their investment.

3. REVENUE RECOGNITION

         We generally enter into services agreements with our customers to
         provide access to our hosted software platform for processing of
         customer transactions. We operate the software application for all
         customers and the customers are not entitled to ownership of our
         software at any time during or at the end of the agreements. The end
         users of our software application access our hosted software platform
         or privately hosted versions of our software application via the
         internet with no additional software required to be located on the
         customer's systems. Customers pay implementation fees, transaction fees
         and time and materials charges for additional services. Revenues
         primarily include fees for implementation and transaction fees, which
         may be subject to monthly minimum provisions. Customer agreements may
         also provide for development fees related to private labeling of our
         software platform (i.e. access to our servers through a web site which
         is in the name of and/or has the look and feel of the customer's other
         web sites) and some customization of the offering and business rules.
         We account for our service agreements by combining the contractual
         revenues from development, implementation, license, support and certain
         additional service fees and recognizing the revenue ratably over the
         expected period of performance. We currently use an estimated expected
         business arrangement term of three years which is currently the term of
         the typical contracts signed by our customers. We do not segment these
         services and use the underlying contractual terms to recognize revenue
         because we do not have objective and reliable evidence of fair value to
         allocate the arrangement consideration to the deliverables in the
         arrangement. To the extent that implementation fees are received in
         advance of recognizing the revenue, we defer these fees and record
         deferred revenue. We recognize service fees for transactions and some
         additional services as the services are performed. We expense the costs
         associated with our customer service agreements as those costs are
         incurred.

4. SALE OF COMMON STOCK

         In February and March 2004, Elmira United Corporation, which owned at
         the time more than 5% of the outstanding shares of common stock of the
         Company, exercised previously issued warrants to purchase 500,000
         shares of the Company's common stock at $0.20 per share, for net
         proceeds of $100,000. The offer and sale of the securities in each of
         the transactions referenced in the previous sentence was exempt from
         registration under the Securities Act of 1933, as amended, by virtue of
         Section 4(2) thereof and the rules promulgated thereunder.


                                       7
<PAGE>


5. ISSUANCE OF OPTIONS

         In March 2004, the Company issued options to acquire an aggregate of
         500,000 shares of common stock to certain employees. These options
         contain an exercise price of $0.35 per share, the fair market value of
         the stock on the date of grant, vest over three years, and expire in
         March 2014.

6. GAIN ON SETTLEMENT OF LIABILITIES

         During March and April 2003, the Company entered into settlement
         agreements with various creditors, contingent upon the Company making
         payment within ten days of the date of agreement. When the agreed
         payment was made by the Company, the creditor released the Company from
         all other liabilities. The aggregate amount of the contingent
         agreements entered into required payments totaling $217,000 to settle
         certain accounts payable, accrued severance and accrued acquisition
         cost liabilities totaling $1,134,000. Payments totaling $1,000 pursuant
         to the agreements were made prior to March 31, 2003, resulting in a
         gain on settlement of liabilities totaling $4,000.

7. STOCK-BASED COMPENSATION

         The Company accounts for its stock-based employee compensation plan
         using the intrinsic value-based method prescribed by Accounting
         Principles Board Opinion No. 25, "Accounting for Stock Issued to
         Employees," and related interpretations. As such, compensation expense
         is recorded on the date of grant to the extent the current market price
         of the underlying stock exceeds the exercise price. The Company
         recorded no compensation expense associated with options issued to
         employees during the three months ended March 31, 2004 and 2003. The
         Company's calculations for employee grants were made using a
         Black-Scholes model using the following assumptions: expected life, ten
         years; risk free rate of 3.84%; no dividends during the expected term;
         and a volatility of 1.78 for 2004. No employee stock options were
         issued in the first quarter of 2003.

         If the computed values of all the Company's stock based awards were
         calculated and expensed (over the vesting period of the awards) using
         the fair value method specified under SFAS 123 "Accounting for
         Stock-Based Compensation," as amended by SFAS No. 148 "Accounting for
         Stock-Based Compensation - Transition and Disclosure," net loss would
         have been as follows:

                                                             Three Months Ended
                                                                 March 31,
                                                              2004        2003
                                                            --------    --------

Loss as reported (thousands)                                $  (197)    $  (359)

Stock-based compensation expense:
     As reported                                                 --          --
     Determined using the fair value method                     (45)         --
                                                            --------    --------
Pro forma loss                                              $  (242)    $  (359)
                                                            ========    ========
Loss per share (basic and diluted)
     As reported                                            $ (0.01)    $ (0.02)
     Pro forma                                              $ (0.01)    $ (0.02)


8. SUBSEQUENT EVENTS

         In April and May 2004, Elmira United Corporation, a 5% shareholder of
         the Company, exercised previously issued warrants to purchase 500,000
         shares of the Company's common stock and tendered payment in the amount
         of $100,000.


                                       8
<PAGE>


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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS AND OTHER PORTIONS OF THIS REPORT CONTAIN FORWARD-LOOKING INFORMATION
THAT INVOLVES RISKS AND UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED BY THE FORWARD-LOOKING INFORMATION. FACTORS
THAT MAY CAUSE SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, AVAILABILITY OF
FINANCIAL RESOURCES FOR LONG TERM NEEDS, PRODUCT DEMAND, MARKET ACCEPTANCE AND
OTHER FACTORS DISCUSSED ELSEWHERE IN THIS REPORT. THIS MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SHOULD BE READ IN
CONJUNCTION WITH OUR CONSOLIDATED FINANCIAL STATEMENTS AND THE RELATED NOTES
INCLUDED ELSEWHERE IN THIS REPORT.


IN GENERAL

As of March 31, 2004, we had a working capital deficit of $(514,000) and
stockholders' deficit of $(451,000). We generated revenues of $215,000 for the
three months ended March 31, 2004 and $162,000 for the three months ended March
31, 2003. We have incurred net losses since inception and had an accumulated
deficit of $(43,156,000) at March 31, 2004. We expect to continue to operate at
a loss for the foreseeable future. There can be no assurance that we will ever
achieve profitability.

We have been in operation since 1996, and have operated under several different
business strategies. As a result, the relationships between revenue and cost of
revenue, and operating expenses reflected in the financial information included
in this report may not represent future expected financial relationships. The
majority of the cost of revenue and operating expenses reflected in our
consolidated financial statements are associated with the cost of personnel and
other expenditures which are fixed or semi-fixed in nature, and not directly
related to the number of clients we serve or transactions we process to generate
revenues. Accordingly, we believe that, at our current stage of operations,
period-to-period comparisons of results of operations are not meaningful.

PRIVATE PLACEMENTS, OPTIONS AND WARRANTS

Between February and May 2004, Elmira United Corporation, which owned at the
time more than 5% of the outstanding shares of our common stock, exercised
previously issued warrants to purchase 1,000,000 shares of our common stock at
$0.20 per share, for net proceeds of $200,000.

In March 2004, the Company issued options to acquire an aggregate of 500,000
shares of common stock to certain employees. These options contain an exercise
price of $0.35 per share, the fair market value of the stock on the date of
grant, vest over three years and expire in March 2014.

None of the above sales of securities involved the use of an underwriter and no
commissions were paid in connection with the sale of any securities. The
certificates evidencing the common stock issued in each of the transactions
referenced above were appropriately legended as unregistered shares.

The offer and sale of the securities in each of the transactions referenced
above was exempt from registration under the Securities Act of 1933 by virtue of
Section 4(2) thereof and the rules promulgated thereunder. Elmira United
Corporation provided representations to us that it is an "accredited investor,"
as defined in Rule 501 under the Act, as well as highly sophisticated. The
shares subject to the options have been registered under the Act.

PLAN OF OPERATIONS

Our business strategy is as follows:

o    to utilize our state of the art technology to help large healthcare
     organizations achieve more efficient and less costly administrative
     operations;
o    to market our services directly to the payer community and its trading
     partners;
o    to aggressively pursue and support strategic relationships with companies
     that will in turn aggressively market our services to large volume
     healthcare organizations, including insurers, HMO's, third party
     administrators, provider networks, re-pricing organizations, clinics,
     hospitals, laboratories, physicians and dentists;
o    to provide total claim management services to payer organizations,
     including internet claim submission, paper claim conversion to electronic
     transactions, and receipt of EDI transmissions;


                                       9
<PAGE>

o    to continue to expand our product offerings to include additional
     transaction processing solutions, such as HMO encounter forms, eligibility
     and referral verifications, claim status inquiries, electronic remittance
     advices, claim attachments, and other healthcare administrative services,
     in order to diversify sources of revenue;
o    to license our technology for other applications, including stand-alone
     purposes, Internet systems and private label use, and for original
     equipment manufacturers; and
o    to seek merger and acquisition opportunities that enhance our growth and
     profitability objectives.

We anticipate that our primary source of revenues will be fees paid by
healthcare payers and vendors for private-label or co-branded licenses and
services. We expect most of our revenues to be recurring in nature.

Our principal costs to operate are anticipated to be technical and customer
support, transaction-based vendor services, sales and marketing, research and
development, acquisition of capital equipment, and general and administrative
expenses. We intend to continue to develop and upgrade our technology and
transaction-processing systems and continually update and improve our website to
incorporate new technologies, protocols, and industry standards. No assurance
can be given that our development and upgrading efforts will be successful.
Selling, general and administrative expenses include all corporate and
administrative functions that serve to support our current and future operations
and provide an infrastructure to support future growth. Major items in this
category include management and staff salaries and benefits, travel,
professional fees, network administration, business insurance, and rent.

CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION

We generally enter into services agreements with our customers to provide access
to our hosted software platform for processing of customer transactions. We
operate the software application for all customers and the customers are not
entitled to ownership of our software at any time during or at the end of the
agreements. The end users of our software application access our hosted software
platform or privately hosted versions of our software application via the
internet with no additional software required to be located on the customer's
systems. Customers pay implementation fees, transaction fees and time and
materials charges for additional services. Revenues primarily include fees for
implementation and transaction fees, which may be subject to monthly minimum
provisions. Customer agreements may also provide for development fees related to
private labeling of our software platform (i.e. access to our servers through a
web site which is in the name of and/or has the look and feel of the customer's
other web sites) and some customization of the offering and business rules. We
account for our service agreements by combining the contractual revenues from
development, implementation, license, support and certain additional service
fees and recognizing the revenue ratably over the expected period of
performance. We currently use an estimated expected business arrangement term of
three years which is currently the term of the typical contracts signed by our
customers. We do not segment these services and use the underlying contractual
terms to recognize revenue because we do not have objective and reliable
evidence of fair value to allocate the arrangement consideration to the
deliverables in the arrangement. To the extent that implementation fees are
received in advance of recognizing the revenue, we defer these fees and record
deferred revenue. We recognize service fees for transactions and some additional
services as the services are performed. We expense the costs associated with our
customer service agreements as those costs are incurred.

SOFTWARE FOR SALE OR LICENSE

We begin capitalizing costs incurred in developing a software product once
technological feasibility of the product has been determined. Capitalized
computer software costs include direct labor, labor-related costs and interest.
The software is amortized over its expected useful life of 3 years or the
contract term, as appropriate.

Management periodically evaluates the recoverability, valuation, and
amortization of capitalized software costs to be sold, leased, or otherwise
marketed. As part of this review, management considers the expected undiscounted
future net cash flows. If they are less than the stated value, capitalized
software costs will be written down to fair value.


RESULTS OF OPERATIONS FOR THREE MONTHS ENDED MARCH 31, 2004 COMPARED TO THREE
MONTHS ENDED MARCH 31, 2003

REVENUES

Revenues in the three months ended March 31, 2004 (the "2004 first quarter")
were $215,000 compared to $162,000 in the three months ended March 31, 2003 (the
"2003 first quarter"), representing an increase of 33%. Revenues for the 2004
first quarter from recurring revenue sources totaled $204,000 and represented
95% of total revenues. Revenues from non-recurring sources totaled $11,000 and
were related to support and other fees. Revenues for the 2003 first quarter from
recurring revenue sources totaled $153,000 and represented 94% of total
revenues. Revenues from non-recurring sources totaled $9,000 and were related to
support and other fees.


                                       10
<PAGE>


COST OF REVENUES

Cost of revenues in the 2004 first quarter was $140,000, compared with $200,000
in the 2003 first quarter, representing a decrease of 30%. The four ordinary
components of cost of revenues are data center expenses, transaction processing
expenses, customer support operation expenses and software amortization. Data
center expenses decreased to $15,000 for the 2004 first quarter compared with
$63,000 for the 2003 first quarter. Transaction processing expenses were less
than $1,000 in each period. Customer support operations expense increased by 11%
to $117,000 in the 2004 first quarter from $105,000 in the 2003 first quarter.
Software amortization and development project amortization expenses decreased
77% to $7,000 in the 2004 first quarter from $31,000 in the 2003 first quarter.

OPERATING EXPENSES

There were no research and development expenses in the 2004 first quarter,
compared with $10,000 in the 2003 first quarter, representing a decrease of
100%. No research or development projects were undertaken during the 2004 first
quarter. During the 2003 first quarter, we began development of a HIPAA
remediation project and capitalized $6,000 for development costs during the
quarter.

Selling, general and administrative expenses were $267,000 in the 2004 first
quarter, compared with $311,000 in the 2003 first quarter, a decrease of 14%.
The reduction is a result of cost containment measures including staff
reductions and other cost containment measures.

OTHER INCOME (EXPENSE)

Interest expense of $5,000 was incurred in the 2004 first quarter on financing
fees and affiliate debt compared with $4,000 in the 2003 first quarter. A $4,000
gain on settlement of liabilities was recognized during the 2003 first quarter
related to settlement agreements with several creditors that were consummated
during the quarter.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities of $109,000 in the 2004 first quarter was
primarily related to net operating losses of $197,000, less depreciation of
$11,000 and changes in working capital of $77,000. Net cash used in operating
activities of $282,000 in the 2003 first quarter was primarily related to net
operating losses of $359,000, less depreciation of $53,000 and changes in
working capital of $28,000, offset by a non-cash gain of $4,000 from settlement
of liabilities.

Net cash used in investing activities in the 2004 first quarter was $9,000
related to leasehold improvements made during the quarter. Net cash used in
investing activities in the 2003 first quarter was $6,000 related to the cost of
software development capitalized during the quarter.

Net cash provided by financing activities in the 2004 first quarter was $100,000
related to the conversion of warrants into common stock. Net cash provided by
financing activities in the 2003 first quarter was $187,000 related to the
issuance of common stock and warrants.

We believe that our available cash resources, together with anticipated revenues
from operations and the proceeds of recently completed financing activities and
funding commitments will not be sufficient to satisfy our capital requirements
through June 30, 2004. Necessary additional capital may not be available on a
timely basis or on acceptable terms, if at all. In any of these events, we may
be unable to implement current plans for expansion or to repay debt obligations
as they become due. If sufficient capital cannot be obtained, we may be forced
to significantly reduce operating expenses to a point which would be detrimental
to business operations, curtail research and development activities, sell
business assets or discontinue some or all of our business operations, take
other actions which could be detrimental to business prospects and result in
charges which could be material to our operations and financial position, or
cease operations altogether. In the event that any future financing should take
the form of equity securities, the holders of the common stock and preferred
stock may experience additional dilution. In the event of a cessation of
operations, there may not be sufficient assets to fully satisfy all creditors,
in which case the holders of equity securities will be unable to recoup any of
their investment.


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<PAGE>

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS QUARTERLY REPORT ON
FORM 10-QSB AND IN OTHER SEC FILINGS BY THE COMPANY CONTAINS "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO VARIOUS RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO VARY MATERIALLY FROM THOSE
PROJECTED IN SUCH FORWARD-LOOKING STATEMENTS. THESE RISKS AND UNCERTAINTIES ARE
DISCUSSED IN MORE DETAIL IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB WHICH WAS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 26, 2004. NO
ASSURANCE CAN BE GIVEN THAT FUTURE RESULTS COVERED BY THE FORWARD-LOOKING
STATEMENTS WILL BE ACHIEVED.

ITEM 3. Controls and Procedures

(a)      Evaluation of Disclosure Controls and Procedures

         As of the end of the period, the Company carried out an evaluation,
         under the supervision and with the participation of the Company's
         management, including the Company's Chief Executive Officer and Chief
         Financial Officer, of the effectiveness of the design and operation of
         the Company's disclosure controls and procedures pursuant to Exchange
         Act Rule 13a-14. Based upon that evaluation, the Chief Executive
         Officer and Chief Financial Officer concluded that the Company's
         disclosure controls and procedures are effective in gathering,
         analyzing and disclosing information needed to satisfy the Company's
         disclosure obligations under the Exchange Act.

(b)      Changes in Internal Controls

         There were no significant changes in the Company's internal controls or
         in other factors that could significantly affect those controls since
         the most recent evaluation of such controls.




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<PAGE>


PART II - OTHER INFORMATION

ITEM 2. Changes in Securities

(c) See Part I, Item 1, Note 4 for a description of equity securities sold by
the Company during the period covered by this Report that were not registered
under the Securities Act of 1933, as amended.

ITEM 6.   Exhibits and Reports on  Form 8-K

(b) Reports on Form 8-K:

         During the quarter ended March 31, 2004, the Company filed Reports on
         Form 8-K dated March 5, 2004 containing information under item 5 and
         March 29, 2004 containing information under items 12 and 9.

The following Additional Exhibits are filed herewith:

31.1            Certification of Don Crosbie

31.2            Certification of Paul W. Miller

32.1            Certification pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
                Don Crosbie

32.2            Certification pursuant to 18 U.S.C. Section 1350, as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of
                Paul W. Miller




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<PAGE>



                                   SIGNATURES


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


CLAIMSNET.COM INC.
(Registrant)


By: /s/ Don Crosbie
    -----------------------------
    Don Crosbie
    President and
    Chief Executive Officer, on
    behalf of the Registrant

By: /s/ Paul W. Miller
    -----------------------------
    Paul W. Miller
    Chief Financial Officer


May 7, 2004




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