<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

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

For the Quarterly Period Ended September 30, 2000
                               ------------------

                                       OR

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

For the Transition Period from                       to
                               ---------------------    ------------------------

                                    001-14665
                             COMMISSION FILE NUMBER


                               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.)


  12801 N. Central Expressway, Suite 1515
  Dallas, Texas                                                  75243

    (Address of principal                                     (Zip Code)
      executive offices)

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

Indicate 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,
8,795,000 shares outstanding as of November 14, 2000.

                                       1
<PAGE>

                        CLAIMSNET.COM INC. AND SUBSIDIARY

                                TABLE OF CONTENTS




PART I.  FINANCIAL INFORMATION

     ITEM 1.   Financial Statements

               Condensed Consolidated Balance Sheets as of September 30, 2000
               (unaudited) and December 31, 1999

               Condensed Consolidated Statements of Operations (unaudited) for
               the Three Months Ended September 30, 2000 and 1999, and for the
               Nine Months Ended September 30, 2000 and 1999

               Condensed Consolidated Statements of Changes in Stockholders'
               Equity for the Year Ended December 31, 1999 and the Nine Months
               Ended September 30, 2000 (unaudited)

               Condensed Consolidated Statements of Cash Flows (unaudited) for
               the Nine Months Ended September 30, 2000 and 1999

               Notes to Condensed Consolidated Financial Statements

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


PART II.  OTHER INFORMATION

     ITEM 6.   Exhibits and Reports on Form 8-K


SIGNATURES

                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1:   FINANCIAL STATEMENTS

                        CLAIMSNET.COM INC. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (In thousands except per share data)
                                   (unaudited)

                                                     September 30,  December 31,
                                                         2000          1999(1)
ASSETS                                                 ---------     ---------
CURRENT ASSETS:
   Cash and cash equivalents                           $  1,369      $  3,021
   Marketable securities                                      -         3,832
   Accounts receivable, less allowance for
     doubtful accounts of $35 and $26, respectively         163            98
   Prepaid expenses and other current assets                687           225
                                                       ---------     ---------
       Total current assets                               2,219         7,176

EQUIPMENT, FIXTURES AND SOFTWARE
 Computer hardware and software                           1,874         1,617
 Software development costs                               1,923         1,923
 Furniture and fixtures                                     139           109
 Office equipment                                            25            25
 Leasehold improvements                                       8            31
                                                       ---------     ---------
                                                          3,969         3,705
 Accumulated depreciation and amortization               (2,613)       (1,983)
                                                       ---------     ---------
         Total equipment, fixtures and software           1,356         1,722

INTANGIBLE ASSETS, net                                      400             -
DEFERRED COSTS AND OTHER ASSETS                              25            25
                                                       ---------     ---------
TOTAL                                                  $  4,000      $  8,923
                                                       =========     =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable                                    $    309      $    489
   Accrued expenses and other current liabilities         1,210           463
                                                       ---------     ---------
       Total current liabilities                          1,519           952
                                                       ---------     ---------
STOCKHOLDERS' EQUITY
   Preferred stock, $.001 par value; 4,000 shares
     authorized, no shares issued and outstanding
   Common stock, $.001 par value; 40,000 shares
     authorized; 8,795 shares and 6,625 shares
     outstanding as of September 30, 2000 and
     December 31, 1999, respectively                          9             7
   Additional capital                                    34,051        24,572
   Accumulated deficit                                  (31,579)      (16,608)
                                                       ---------     ---------
       Total stockholders' equity                         2,481         7,971
                                                       ---------     ---------
TOTAL                                                  $  4,000      $  8,923
                                                       =========     =========

(1)      The condensed consolidated balance sheet as of December 31, 1999 has
         been derived from the audited financial statements at that date.

            See notes to condensed consolidated financial statements.

                                       3
<PAGE>
<TABLE>

                                  CLAIMSNET.COM INC. AND SUBSIDIARY
                           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (In thousands except per share data)
                                             (Unaudited)
<CAPTION>

                                                      Three Months Ended          Nine Months Ended
                                                         September 30,              September 30,
                                                    -----------------------     -----------------------
                                                      2000          1999          2000          1999
                                                    ---------     ---------     ---------     ---------
<S>                                                 <C>           <C>           <C>           <C>
REVENUES                                            $    483      $     84      $  1,093      $    213

Cost of Revenues                                         746           475         2,108         1,102
                                                    ---------     ---------     ---------     ---------
Gross Loss                                              (263)         (391)       (1,015)         (889)
                                                    ---------     ---------     ---------     ---------
OPERATING EXPENSES:
   Research and development                              523           212         1,579           560
   Purchased research & development & write-off
    of purchased intangibles                           1,540             -         7,694             -
   Amortization of software & intangibles                305           192           794           528
   Selling, general & administrative                   1,098         1,420         4,012         3,620
                                                    ---------     ---------     ---------     ---------

       Total operating expenses                        3,466         1,824        14,079         4,708
                                                    ---------     ---------     ---------     ---------

LOSS FROM OPERATIONS                                  (3,729)       (2,215)      (15,094)       (5,597)

OTHER INCOME (EXPENSE)
   Interest expense                                       (2)            -            (5)            -
   Interest expense - bridge debt                          -             -             -          (967)
   Interest expense - affiliate                            -             -             -          (124)
   Interest income                                         3           135           128           219
                                                    ---------     ---------     ---------     ---------
       Total Other income (expense)                        1           135           123          (872)
                                                    ---------     ---------     ---------     ---------


NET LOSS                                            $ (3,728)     $ (2,080)     $(14,971)     $ (6,469)
                                                    ---------     ---------     ---------     ---------


BASIC AND DILUTED NET LOSS PER COMMON SHARE         $  (0.41)     $  (0.31)     $  (1.91)     $  (1.17)
                                                    =========     =========     =========     =========

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - BASIC AND DILUTED                        9,107         6,625         7,831         5,536
                                                    =========     =========     =========     =========
</TABLE>

                      See notes to condensed consolidated financial statements.

                                                 4

<PAGE>
<TABLE>

                                  CLAIMSNET.COM INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                            (Unaudited)
<CAPTION>

                                                                                             Total
                                      Number of     Common     Additional   Accumulated   Stockholders
                                        Shares       Stock       Capital      Deficit        Equity
                                      ---------    ---------    ---------    ---------     ---------

<S>                                      <C>       <C>          <C>          <C>           <C>
Balance at December 31, 1998             3,625     $      4     $  3,882     $ (7,750)     $ (3,864)

Sale of common stock with                  125            -          850            -           850
 Series A 12% Subordinated Notes

Non-employee stock option grants             -            -          155            -           155

Issuance of common stock warrants            -            -          121            -           121

Sale of common stock in initial
   public offering                       2,875            3       19,512            -        19,515

Amortization of deferred sales
   discounts                                 -            -           52            -            52

Net loss                                     -            -            -       (8,858)       (8,858)
                                      ---------    ---------    ---------    ---------     ---------
Balance at December 31, 1999             6,625            7       24,572      (16,608)        7,971
                                      ---------    ---------    ---------    ---------     ---------

Sale of common stock                     1,370            1        4,244            -         4,245

Issuance of common stock for
   asset purchase                        1,200            1        6,375            -         6,376

Retirement of common stock                (400)           -       (1,375)           -        (1,375)

Amortization of deferred
   sales discounts                           -            -          235            -           235

Net loss                                     -            -            -      (14,971)      (14,971)
                                      ---------    ---------    ---------    ---------     ---------
Balance at September 30, 2000            8,795     $      9     $ 34,051     $(31,579)     $  2,481
                                      =========    =========    =========    ==========    =========
</TABLE>

                      See notes to condensed consolidated financial statements.

                                                 5
<PAGE>

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

                                                           Nine Months Ended
                                                              September 30,
                                                            2000          1999
                                                         ---------     ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss                                              $(14,971)     $ (6,469)
   Adjustments to reconcile net loss to net cash
   used by operating activities:
     Depreciation and amortization                          1,015           602
     Provision for doubtful accounts                           32            56
     Amortization of deferred sales discounts                 235             -
     Purchased research and development and
       write-off of purchased intangibles                   7,694             -
     Amortization of debt discount and
         deferred financing costs                               -           958
     Non-cash compensation for past services                    -           276
     Changes in operating assets and liabilities:
         Accounts receivable                                  (98)         (108)
         Prepaid expenses and other current assets           (462)         (201)
         Accounts payable, accrued expenses and
           other current liabilities                           68           449
                                                         ---------     ---------
   Net cash used in operating activities                   (6,487)       (4,437)
                                                         ---------     ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Sales of marketable securities                           3,832             -
   Purchases of property and equipment                       (264)       (1,261)
   Purchase of intangible assets & research
     and development                                       (2,978)            -
                                                         ---------     ---------
   Net cash provided by(used in)investing activities          590        (1,261)
                                                         ---------     ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Increase in line of credit - affiliate                       -           791
   Payments of notes and line of credit - affiliate             -        (5,114)
   Issuance of Series A 12% Subordinated Notes                  -           892
   Payment of Series A 12% Subordinated Notes                   -        (1,000)
   Payment of contingent notes                                  -          (125)
   Proceeds from sale of common stock                       4,245             -
   Net proceeds from issuance of common stock
     in initial public offering                                 -        19,510
                                                         ---------     ---------
   Net cash provided by financing activities                4,245        14,954
                                                         ---------     ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS       (1,652)        9,256
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD              3,021            44
                                                         ---------     ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD                 $  1,369      $  9,300
                                                         =========     =========

                                       6
<PAGE>

                        CLAIMSNET.COM INC. AND SUBSIDIARY
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                                 (In thousands)
                                   (Unaudited)

                                                           Nine Months Ended
                                                              September 30,
                                                            2000          1999
                                                         ---------     ---------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Common Stock issued in connection with Series A
12% Subordinated Notes                                   $      -      $    850
                                                         =========     =========
Non-employee stock options issued for past services      $      -      $    155
                                                         =========     =========
Common stock warrants issued for past services           $      -      $    121
                                                         =========     =========
Issuance of common stock for intangible assets
  and research and development                           $  5,001      $      -
                                                         =========     =========





            See notes to condensed consolidated financial statements.

                                       7
<PAGE>

                        CLAIMSNET.COM INC. AND SUBSIDIARY
              Notes to Condensed Consolidated Financial Statements

1.      BASIS OF PRESENTATION

        In the opinion of management, the accompanying condensed consolidated
        financial statements include all necessary adjustments (consisting of
        normal recurring accruals) and present fairly the financial position of
        Claimsnet.com Inc. (the "Company") and subsidiaries as of September 30,
        2000 and the results of its operations and cash flows for the three
        months and nine months ended September 30, 2000 and 1999, in conformity
        with generally accepted accounting principles for interim financial
        information applied on a consistent basis. The results of operations for
        the three and nine months ended September 30, 2000 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-K for the year ended December 31, 1999, as filed with the
        Securities and Exchange Commission on March 30, 2000.

        During February 1999 the Board of Directors authorized a 1.115385 for 1
        split in the common shares of the Company. All shares and per share
        amounts have given retroactive effect to this stock split.

2.      TRANSACTIONS WITH MCKESSONHBOC, INC.

        In October of 1999, the Company entered into a Development and Services
        Agreement (the "Agreement") with McKessonHBOC, Inc. (McKesson), whereby
        the Company granted McKesson a multi-year, non-exclusive, private label
        license for certain of the Company's proprietary technology and has
        agreed to manage McKesson's operation of the system on a fully
        outsourced basis. The Company will receive development fees, license
        fees, subscription fees, and transaction fees pursuant to the agreement.

        In connection with the Agreement, the Company issued McKesson a warrant
        for the purchase of 819,184 shares of common stock at an exercise price
        of $7.00 per share. The warrant is immediately exercisable and can be
        exercised at any time through October 27, 2002. The value of the
        warrant, which was estimated at approximately $1.7 million using the
        Black-Scholes valuation method, is being amortized ratably over the life
        of the agreement as a sales discount. Amortization of the deferred sales
        discounts of $235,000 was recorded in the nine month period ended
        September 30, 2000.

3.      ACQUISITION OF VHx ASSETS

        On April 18, 2000, Claimsnet.com Inc., through its newly formed,
        wholly-owned subsidiary, HealthExchange.com, Inc., a Delaware
        corporation ("HECOM"), successfully executed an asset purchase agreement
        (the "Asset Purchase Agreement") with VHx Company, a Nevada corporation
        ("VHx"), whereby HECOM acquired selected properties and assets of VHx,
        including the HealthExchange.com name and HealthExchange.com trademarks,
        related to all efforts of VHx to develop products and services designed
        to use Internet technology to facilitate and improve interaction between
        physicians, health plans, employers and their members in exchange for
        (i) 1,200,000 shares of common stock, par value $.001 per share (ii) the
        assumption of certain liabilities, and (iii) the cancellation of a $2
        million advance owed by VHx to the Company. In addition, the Company
        issued additional consideration comprised of 13,767 shares of Series A
        8% Convertible Redeemable Preferred Stock , stated value of $725.60 per
        share, and 13,767 shares of Series B 8% Convertible Redeemable Preferred
        Stock, stated value of $725.60 per share, (the Preferred Stock).

        The Preferred Stock, contingent upon the completion of specified
        milestones, described below, will be convertible into shares of Common
        Stock at a conversion price based upon the market value of the Common
        Stock at a specified time provided that the conversion price cannot be
        less than $14.00 or greater than $15.00, and provided further the
        performance milestone for the relevant series of Preferred Stock has
        been satisfied by March 31, 2001. The maximum number of common shares
        into which the Preferred Stock may be converted should both of these
        milestones be satisfied is 1,427,076 (713,538 for Series A and 713,538
        for Series B).

                                       8
<PAGE>

        The performance milestone for the Series A Preferred Stock is the
        existence of 1,000,000 lives covered by the business operation
        attributable to assets acquired. The performance milestone for the
        Series B Preferred Stock is the recognition of revenue from 6,000,000
        member-months attributable to assets acquired. In the event that the
        performance milestone of any series of Preferred Stock is not satisfied
        by March 31, 2001 that series of Preferred Stock will be cancelled.
        Thus, for accounting purposes, the Preferred Stock is not considered to
        be issued until the milestones have been met. The Preferred Stock will
        be presented as mezzanine equity outside of stockholders' equity.

        One of the significant assets acquired, an agreement with John Deere
        Health ("JDH") for development of an Enterprise Care Management System,
        required the parties to negotiate mutually agreeable business terms for
        delivery of the system after acceptance of beta testing. The Company and
        JDH have been unable to reach such an agreement. Additionally, the asset
        purchase agreement contained provisions related to the satisfaction of
        pre-existing financial obligations due to JDH by VHx within 180 days of
        the acquisition and also contained certain provisions in the event that
        such obligations were not satisfied by VHx. VHx was unable to satisfy
        the JDH obligations within the 180 days. As a result, the Company,
        HECOM, VHx and JDH reached an agreement in principal in November 2000
        by which the parties agreed to cancel all pre-existing agreements, JDH
        agreed to forgive all unpaid obligations, and VHx agreed to release
        400,000 of the 1.2 million shares of the common stock from escrow and
        return them to the Company. The fair market value of the common shares
        returned to the Company was $1,375,000 as of the date the parties
        reached the agreement in principal.

        The Company retained an independent valuation firm to evaluate the
        HealthExchange asset purchase and recommend the allocation of purchase
        price to the various assets acquired. The appraisals utilized standard
        appraisal methodologies, projecting cash flows over the estimated useful
        lives of the assets, net of additional investment needs, and considering
        the stage of completion of software development projects. A blended
        state and federal effective tax rate of 40% was applied to the cash
        flows. These cash flows were discounted to their present value using
        discount rates between 60 and 70 percent, reflective of development
        products at similar risk. The initial results of the valuation valued
        the intangible assets at $3,700,000 after charges to in-process
        technology of $6,154,000, recorded in the quarter ended June 30, 2000.

        In November 2000, as a result of the contractual revisions, the Company
        reevaluated the HealthExchange asset purchase using the same valuation
        methodologies and determined that there had been an impairment of the
        assets acquired. The revised valuation valued the intangible assets
        acquired at $400,000.

        As a result of the revised agreement and return of escrowed shares
        described above, and the revised valuation of intangible assets
        acquired, the Company recognized a net charge of $1,540,000 in the
        quarter ended September 30, 2000. Amortization of $385,000 related to
        the acquisition has been recognized during the nine months ended
        September 30, 2000.

        Further adjustments to the purchase consideration are contingent upon
        accomplishment of the Preferred Stock performance milestones.

        The Company and JDH also agreed to enter into a separate business
        agreement whereby the Company will continue to provide limited services
        to JDH and its clients at fair market value for a period not to exceed
        eighteen months.

                                       9

<PAGE>

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


RESULTS OF OPERATIONS FOR THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000
COMPARED TO THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999

REVENUES

Revenues increased 475% to $483,000 from $84,000 for the three months ended
September 30, 2000 and 1999, respectively. Revenues increased 413% to $1,093,000
from $213,000 for the nine month periods ended September 30, 2000 and 1999,
respectively. Revenues of $131,000 and $393,000 for the three and nine months
ended September 30,2000 are related to percentage completion recognition of the
McKesson Development and Services Agreement. The remainder of the revenues
during 2000 are related to the Company's Internet-based clients. Revenues for
the three months and nine months ended September 30, 2000 from recurring revenue
sources represented 93% and 92%, respectively, of total revenues. Recurring
revenues for the nine months were comprised of $393,000 from long-term
contracts, $522,000 from transaction-based fees and $88,000 from subscription
fees. Revenues from non-recurring sources totaled $90,000 and were related to
setup, support, and other fees.

Transactions processed by the Company increased 120% to 1,489,000 from 676,000
for the three months ended September 30, 2000 and 1999, respectively.
Transactions increased 137% to 3,937,000 from 1,660,000 for the nine months
ended September 30, 2000 and 1999, respectively. The increase was attributable
to internal growth in the number of accounts and healthcare providers
subscribing to the Company's services. Additionally, 74% of all transactions
were for physician and dental claim submission services and 26% were for patient
statement processing services. The Company had 383 accounts processing
transactions for 3,147 providers at September 30, 2000 compared with 334
accounts and 2,655 providers at September 30, 1999, representing increases of
15% and 19%, respectively.

Transaction-based revenue averaged $0.19 and $0.13 per transaction for the three
and nine month periods ended September 30, 2000 versus $0.08 per transaction for
the three and nine month periods ended September 30, 1999. The Company expects
the average revenue per transaction to continue to increase in future quarters
for several reasons. Revenue per transaction for the 612,000 commercial
electronic claims averaged $0.13 during the three month period and is expected
to increase as improved direct payer connections are developed. Revenue per
transaction for the 423,000 Medicare and Medicaid claims averaged $0.13 during
the three month period after implementation of a new pricing structure, which
charges a per transaction fee to a broader group of customers. Average revenue
per transaction for the 73,000 paper claims was $0.46 during the quarter. The
company processed approximately 381,000 patient statements averaging $0.30 per
statement during the three months ended September 30, 2000.

COST OF REVENUES

Cost of revenues in the three months and nine months ended September 30, 2000
were $746,000 and $2,108,000, compared with $475,000 and $1,102,000 in the prior
year periods, representing increases of 57% and 91%, respectively. The three
components of cost of revenues are data center expenses, transaction processing
expenses, and customer support operation expenses. Data center expenses were
$93,000 for the three months ended September 30, 2000 compared with $102,000 for
1999, a decrease of 9%. Transaction processing expenses were $240,000 in 2000
compared to $54,000 in the third quarter of 1999, representing a 344% increase,
primarily related to the increased volume of patient statements processed.
Customer support operations expense increased by 29% to $413,000 in the third
quarter of 2000 from $319,000 in the third quarter of 1999. The increases in
Customer support operations expense were primarily attributable to an increase
in maintenance of customer support systems.

                                       10

<PAGE>

Operating expenses

Research and development expenses were $523,000 and $1,579,000 in the three
months and nine months ended September 30, 2000, compared with $212,000 and
$560,000 in the three months and nine months ended September 30, 1999,
representing increases of 147% and 182%, respectively. Research and development
expenses are comprised of personnel costs and related expenses as a result of
Claimsnet growth and the acquisition of HealthExchange.com assets. There were no
software development expenses capitalized during either of the periods.
Development efforts during the current quarter were primarily focused on the
McKesson project and the HealthExchange product, while the year-earlier efforts
were related to continuous incremental enhancements to the Company's claim
processing system. The McKesson development project reached the beta testing
phase during the second quarter and achieved customer sign-off in the fourth
quarter, signaling completion of the development stage.

Purchased research and development reflects the charge to operations associated
with the acquisition of HealthExchange assets during the second quarter.

As a result of the agreement in principal described in Footnote 3 above, and the
revised valuation of intangible assets acquired, the Company recognized a net
charge of $1,540,000 in the quarter ended September 30, 2000. Amortization of
$385,000 related to the acquisition has been recognized during the nine months
ended September 30, 2000.

Amortization expenses increased 59% to $305,000 in the current quarter from
$192,000 in the year-earlier period. This increase reflects amortization of
intangibles related to the HealthExchange asset acquisition and amortization of
new software purchased for internal use. Prior period amortization included
software developed for customer use, which became fully amortized in the second
quarter of 2000.

Selling, general and administrative expenses were $1,098,000 in the three months
ended September 30, 2000, compared with $1,420,000 in the same period of 1999, a
decrease of 23%. Selling, General and Administrative expenses increased 11% to
$4,012,000 from $3,620,000 for the nine months ended September 30, 2000 and
1999, respectively. The $392,000 nine month period-to-period increase includes
an increase for other general administrative expenses of $819,000, which was
primarily due to the acquisition of HealthExchange assets and increases in
office rent, telephone expenses, employee recruiting expenses, employment
agreement contractual increases, and outside professional fees. Severance costs
of $128,000 were recorded to administrative expense in the nine-month period as
was $60,000 for the out-of-court settlement of a lawsuit. Technology
infrastructure and support expenses decreased $201,000 in the current nine
months primarily for capitalization of work performed on the McKesson project.
Sales and marketing expenses decreased $138,000 due to a decline in sales
personnel between the periods related to the Company's shift from a direct sales
model to a distribution model. A one-time charge in 1999 of $276,000 for the
cost of past services related to the grant of stock options and warrants to
non-employees is also included in the decrease.

The company effected a staff reduction in June 2000 to reduce cash expenses and
to refocus expenditures on near-term opportunities.

OTHER INCOME (EXPENSE)

Interest income of $3,000 and $128,000 was provided in the three and nine months
ended September 30, 2000 from investment of excess cash in money market
instruments and marketable securities. Interest expense of $5,000 was incurred
in the nine months ended September 30, 2000. Interest expense of $1,091,000
recorded in the nine months ended September 30, 1999 included $850,000 related
to amortization of debt discount and $108,000 related to amortization of
deferred financing costs. Interest expense of $133,000 was paid to affiliates in
the year-earlier period.

                                       11

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities was $6,487,000 in the nine months ended
September 30, 2000, compared with $4,437,000 for the year-earlier period,
primarily due to increased selling, general and administrative expenses, and
purchase of in-process research and development as discussed above. Net cash
provided by investing activities was $590,000 in the nine months ended September
30, 2000. Cash was provided in the current period by sale of marketable
securities. The securities sold had a cost of $1,600,000 at the time of sale and
resulted in a net loss of $7,000. Primary uses of cash consisted of the purchase
of HealthExchange assets from VHx and the purchase of additional furniture and
equipment for the HealthExchange office. Net cash used in investing activities
in the nine months ended September 30, 1999 was $1,261,000.

In August, 2000 the Company completed the private placement of 270,000 shares of
common stock at $3.50 per share for net proceeds of $945,000. Of those proceeds,
$276,500 was received by June 30, 2000. In connection with the financing, the
Company also issued warrants to purchase 270,000 shares of common stock at a
price of $4.60 for a period of one year and warrants to purchase 270,000 shares
of common stock at a price of $5.60 for a period of two years.

On June 19, 2000 the Company completed a private placement of 1,000,000 shares
of common stock for proceeds of $3,000,000.

On May 22, 2000 the Company completed a private financing in the amount of
$300,000 with the sale of 100,000 shares of common stock to American Medical
Finance, Inc., a related party and the owner of record of 381,603 shares of
common stock prior to the transaction. At June 30, 2000, American Medical
Finance, Inc. was the owner of record of 5.4% of the outstanding common stock of
the Company. Bo W. Lycke, the Chairman of the Board, President and Chief
Executive Officer of the Company, Robert H. Brown, Jr., a Director of the
Company, and Ward L. Bensen, a Director of the Company, control 71.1%, 17.7%,
and 11.2%, respectively, of the outstanding common stock of American Medical
Finance, Inc.

On April 18, 2000, the Company, through its newly formed, wholly-owned,
subsidiary HealthExchange.com (HECOM), successfully executed an asset purchase
agreement with VHx Company, whereby HECOM acquired selected assets of VHx,
including the HealthExchange.com name and HealthExchange.com trademarks, related
to all efforts of VHx to develop products and services designed to use Internet
technology to facilitate and improve interaction between physicians, health
plans, employers and their members in exchange for (i) 1,200,000 shares of
common stock, par value $0.001 per share, (ii) the assumption of certain
liabilities, and (iii) the cancellation of $2,000,000 of advances owed by VHx to
the Company. In addition, contingent upon the completion of specified
milestones, described below, the Company issued additional consideration
comprised of 13,767 shares of Series A 8% Convertible Redeemable Preferred Stock
, stated value of $725.60 per share, and 13,767 shares of Series B 8%
Convertible Redeemable Preferred Stock, stated value of $725.60 per share, (the
Preferred Stock). The Preferred Stock contain performance milestones which must
be satisfied for each series of Preferred Stock to convert into common stock. In
the event that the performance milestone of any series of Preferred Stock is not
satisfied by March 31, 2001, that series of Preferred Stock will be cancelled.
The purchase price will be adjusted based on the number of shares, if any, of
common stock issued upon the measurement of certain milestones contained in the
agreement. The maximum number of common shares into which the Preferred Stock
may be converted should both of these requirements be satisfied is 1,427,076
(713,538 for Series A and 713,538 for Series B).

In November 2000, the Company and VHx reached an agreement in principal whereby
400,000 shares of the common stock held in escrow will be cancelled, reducing
the shares issued to VHx and held in escrow to 800,000.

In October of 1999, the Company entered into a Development and Services
Agreement (the "Agreement") with McKesson, Inc. (McKesson), whereby the Company
granted McKesson a multi-year, non-exclusive, private label license for certain
of the Company's proprietary technology and has agreed to manage McKesson's
operation of the system on a fully outsourced basis. The Company has received
development fees of $500,000 through September 30, 2000 and will receive
additional development fees as well as license fees, subscription fees, and
transaction fees pursuant to the agreement.

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In connection with the Agreement, the Company issued McKesson a warrant for the
purchase of 819,184 shares of common stock at an exercise price of $7.00 per
share. The warrant is immediately exercisable and can be exercised at any time
through October 27, 2002. The value of the warrant, which is estimated at
approximately $1.7 million using the Black-Scholes valuation method, is being
amortized ratably over the life of the agreement as a sales discount.
Amortization of $79,000 was recorded in the current quarter.

In April of 1999, the Company completed its IPO issuing 2,875,000 shares of
common stock for proceeds of $19,515,000.

In February, 1999 the Company issued $1,000,000 of Series A 12% Subordinated
Notes along with 125,000 shares of common stock for net proceeds of $892,000
(net of closing fees and cash financing expenses). The Company retired all notes
and borrowings from affiliates with the proceeds of its IPO.

The Company believes that its current cash reserves and contractual cash inflows
will provide sufficient liquidity to fund operations, development activities,
and capital improvements into 2001. The Company also believes that it can
continue to raise additional capital, if needed, to pursue strategic business
opportunities and to fund operations to the point of profitability, however,
such future funding cannot be assured at this time.

YEAR 2000

In late 1999, the Company completed its remediation and testing of its
information systems to become year 2000 ready. The Company has experienced no
significant disruptions in mission critical information technology and
non-information technology systems and believes those systems successfully
responded to the Year 2000 date change. The Company is not aware of any material
problems resulting from Year 2000 issues, either with its products, its internal
systems, or the products and services of third parties. The Company will
continue to monitor its mission critical computer applications and those of its
suppliers and vendors throughout the Year 2000 to insure that any latent Year
2000 matters that may arise are addressed promptly.

RECENT ACCOUNTING PRONOUNCEMENTS

Recent pronouncements of the Financial Accounting Standards Board, which are not
required to be adopted at this date, include SFAS No. 133 "Accounting for
Derivative Instruments and Hedging Activities". This pronouncement is not
expected to have a material impact on the Company's financial statements.

In December of 1999, the SEC staff issued Staff Accounting Bulletin No. 101 (SAB
101). Among other things, SAB 101 requires deferral and amortization of
up-front, non-refundable fees over the term of agreement or expected period of
benefit. The Company does not expect that the adoption of SAB 101 will have a
material impact on its financial statements.

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

Information contained or incorporated by reference in this periodic report on
Form 10-Q 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 Form 10-K which was filed with the
Securities and Exchange Commission on March 30, 2000. No assurance can be given
that future results covered by the forward-looking statements will be achieved.

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                         PART II - OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(b)     REPORTS:

        During the quarter ended September 30, 2000, the Company filed a
        Report dated November 14, 2000, subsequent to the close of the
        quarter, containing information under item 5.





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                                   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/ Bo W. Lycke
         -----------------------------
         Bo W. Lycke
         President and
         Chief Executive Officer, on
         behalf of the Registrant


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


November 14, 2000


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