<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 June 30, 2003
                                                 -------------

                                       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

                               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 executive offices)(Zip Code)

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,
19,683,180 shares outstanding.

                                       1





<PAGE>

                        CLAIMSNET.COM INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION

       ITEM 1.    Financial Statements

                  Consolidated Balance Sheets as of June 30, 2003 (unaudited)
                  and December 31, 2002

                  Consolidated Statements of Operations (unaudited) for the
                  Three Months Ended June 30, 2003 and 2002, and for the Six
                  Months Ended June 30, 2003 and 2002

                  Consolidated Statements of Changes in Stockholders' Equity
                  (Deficit) (unaudited) for the Year Ended December 31, 2002 and
                  the Six Months Ended June 30, 2003

                  Consolidated Statements of Cash Flows (unaudited) for the Six
                  Months Ended June 30, 2003 and 2002

                  Notes to  Consolidated Financial Statements

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

       ITEM 4.    Controls and Procedures

PART II.  OTHER INFORMATION

       ITEM 6.    Exhibits and Reports on Form 8-K

SIGNATURES

CERTIFICATIONS

                                       2





<PAGE>
<TABLE>

PART I - FINANCIAL INFORMATION

ITEM 1:   FINANCIAL STATEMENTS

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

                                                                              (Unaudited)
                                                                                June 30,    December 31,
                                                                                 2003           2002
                                                                               ---------      ---------
<S>                                                                            <C>            <C>
ASSETS

CURRENT ASSETS
   Cash and equivalents                                                        $    122       $    153
   Accounts receivable, net of allowance for
     doubtful accounts of $3 and $33 as of June 30, 2003
     and December 31, 2002, respectively                                            111            150
   Prepaid expenses and other current assets                                         59             79
                                                                               ---------      ---------
     Total current assets                                                           292            382

EQUIPMENT, FIXTURES AND SOFTWARE
   Computer hardware and software                                                 1,685          1,685
   Software development costs                                                     1,938          1,922
   Furniture and fixtures                                                           108            108
   Office equipment                                                                  25             25
                                                                               ---------      ---------
                                                                                  3,756          3,740
   Accumulated depreciation and amortization                                     (3,674)        (3,601)
                                                                               ---------      ---------
     Total equipment, fixtures and software                                          82            139
                                                                               ---------      ---------
TOTAL ASSETS                                                                   $    374       $    521
                                                                               =========      =========
LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES
   Notes payable to related parties - short term                               $    151       $    118
   Accounts payable                                                                 151            486
   Accrued severance                                                               --              241
   Accrued acquisition costs                                                       --              500
   Accrued payroll and other current liabilities                                    163            228
   Deferred revenues                                                                 50             47
                                                                               ---------      ---------
     Total current liabilities                                                      515          1,620

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                                                              550          1,655

STOCKHOLDERS' DEFICIT
   Preferred stock, $.001 par value; 4,000,000 shares authorized;
     2,789 and 3,471 shares issued and outstanding as of
     June 30, 2003 and December 31, 2002, respectively (liquidation
     preference of $735 and $876 at June 30, 2003 and December 31, 2002,
     respectively)                                                                 --             --
   Common stock, $.001 par value; 40,000,000 shares authorized;
     19,173,000 shares and 14,816,000 shares issued and outstanding as of
     June 30, 2003 and December 31, 2002, respectively                               19             15
   Additional capital                                                            42,183         41,275
   Accumulated deficit                                                          (42,378)       (42,424)
                                                                               ---------      ---------
     Total stockholders' deficit                                                   (176)        (1,134)
                                                                               ---------      ---------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                    $    374       $    521
                                                                               =========      =========

</TABLE>
                                See notes to consolidated financial statements.

                                                      3





<PAGE>
<TABLE>

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

                                                    Three Months Ended            Six Months Ended
                                                          June 30,                     June 30,
                                                  ------------------------      ------------------------
                                                     2003           2002          2003           2002
                                                  ---------      ---------      ---------      ---------
<S>                                               <C>            <C>            <C>            <C>
REVENUES                                          $    171       $    338       $    344       $    653

Cost of Revenues                                       173            463            374          1,023
                                                  ---------      ---------      ---------      ---------
Gross Loss                                              (2)          (125)           (30)          (370)
                                                  ---------      ---------      ---------      ---------
OPERATING EXPENSES:
   Research and development                              4             81             14            176
   Selling, general and administrative                 506            527            817          1,287
                                                  ---------      ---------      ---------      ---------
     Total operating expenses                          510            608            831          1,463
                                                  ---------      ---------      ---------      ---------

LOSS FROM OPERATIONS                                  (512)          (733)          (861)        (1,833)

OTHER INCOME (EXPENSE)
   Gain on settlement of liabilities                   912             --            916             --
   Interest expense - related parties                   (3)            (7)            (5)            (9)
   Interest expense - other                             (2)            --             (4)            --
                                                  ---------      ---------      ---------      ---------
     Total other income (expense)                      907             (7)           907             (9)
                                                  ---------      ---------      ---------      ---------
NET INCOME (LOSS)                                 $    395       $   (740)      $     46       $ (1,842)
                                                  ---------      ---------      ---------      ---------

NET INCOME (LOSS) PER COMMON SHARE - BASIC        $   0.02       $  (0.07)      $   0.00       $  (0.17)
                                                  =========      =========      =========      =========
WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING - BASIC                            17,730         11,175         16,533         11,158
                                                  =========      =========      =========      =========

NET INCOME (LOSS) PER COMMON SHARE - DILUTED      $   0.02       $  (0.07)      $   0.00       $  (0.17)
                                                  =========      =========      =========      =========
WEIGHTED AVERAGE COMMON SHARES
     OUTSTANDING - DILUTED                          22,136         11,175         20,097         11,158
                                                  =========      =========      =========      =========

</TABLE>

                                See notes to consolidated financial statements.

                                                      4





<PAGE>
<TABLE>

                                                CLAIMSNET.COM INC. AND SUBSIDIARIES
                               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                Year Ended December 31, 2002 and the Six Months Ended June 30, 2003
                                                          (In thousands)
                                                            (Unaudited)
<CAPTION>

                                Number of                   Number of
                                Preferred                   Common                                                Total
                                Shares         Preferred    Shares                      Additional   Accumulated  Stockholders'
                                Outstanding    Stock        Outstanding   Common Stock  Capital      Deficit      Equity (Deficit)
                                -------------  -----------  ------------   -----------  -----------  -----------  ----------------
<S>                                        <C> <C>               <C>       <C>          <C>          <C>           <C>
Balances at January 1, 2002                -   $        -        11,141    $       11   $   39,571   $ (39,497)    $        85

Sale of preferred stock                    3            -             -             -          875           -             875

Sale of common stock                       -            -         3,675             4          731           -             735

Issuance of warrants and
options for services                       -            -             -             -           98           -              98

Net loss                                   -            -             -             -            -      (2,927)         (2,927)
                                -------------  -----------  ------------   -----------  -----------  ----------    ------------
Balances at December 31, 2002              3            -        14,816            15       41,275     (42,424)         (1,134)
                                -------------  -----------  ------------   -----------  -----------  ----------    ------------

Preferred stock converted into
common stock                               -            -           682             1          (1)           -               -

Sale of common stock                       -            -         2,675             2          530           -             532

Issuance of warrants and
options for services                       -            -             -             -          180           -             180

Warrants exercised for common
stock                                      -            -         1,000             1          199           -             200

Net income                                 -            -             -             -            -          46              46
                                -------------  -----------  ------------   -----------  -----------  ----------    ------------
Balances at June 30, 2003                  3   $        -        19,173    $       19   $   42,183   $ (42,378)    $      (176)
                                =============  ===========  ============   ===========  ===========  ==========    ============

                                          See notes to consolidated financial statements.
</TABLE>
                                                                5





<PAGE>
<TABLE>
                            CLAIMSNET.COM INC. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                      (In thousands)
                                        (Unaudited)
<CAPTION>

                                                                    Six Months Ended
                                                                       June 30,
                                                                   2003          2002
                                                                 --------      --------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                              <C>           <C>
   Net income (loss)                                             $    46       $(1,842)
     Adjustments to reconcile net income (loss) to net cash
     used in operating activities:
       Depreciation and amortization                                  73           269
       Provision for doubtful accounts                                (8)            5
       Stock options and warrants issued for services                180            53
       Gain on settlement of liabilities                            (916)           --
       Changes in operating assets and liabilities:
       Accounts receivable                                            47           (75)
       Prepaid expenses and other current assets                      19            34
       Current liabilities                                          (221)          212
                                                                 --------      --------
         Net cash used in operating activities                      (780)       (1,344)
                                                                 --------      --------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of property and equipment                            --             (15)
     Capitalized software development costs                          (16)         (171)
                                                                 --------      --------
       Net cash used in investing activities                         (16)         (186)
                                                                 --------      --------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from notes payable to related parties                  100           475
     Payment of notes payable to related parties                     (67)         (305)
     Proceeds from notes payable                                    --              50
     Proceeds from issuance of common stock                          732           200
     Proceeds from issuance of preferred stock                      --             826
                                                                 --------      --------
       Net cash provided by financing activities                     765         1,246
                                                                 --------      --------
NET DECREASE IN CASH AND EQUIVALENTS                                 (31)         (284)
CASH AND EQUIVALENTS, BEGINNING OF PERIOD                            153           531
                                                                 --------      --------
CASH AND EQUIVALENTS, END OF PERIOD                              $   122       $   247
                                                                 ========      ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid for interest                                           $    --       $     2
                                                                 ========      ========
Pending equity investment from Directors                         $    --       $    50
                                                                 ========      ========
</TABLE>

                      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 accruals) and present fairly the consolidated
         financial position of Claimsnet.com inc. (the "Company") and
         subsidiaries as of June 30, 2003 and the results of their operations
         and cash flows for the three months and six months ended June 30, 2003
         and 2002, in conformity with generally accepted accounting principles
         for interim financial information applied on a consistent basis. The
         results of operations for the three and six months ended June 30, 2003
         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, 2002, as filed with the
         Securities and Exchange Commission on April 1, 2003.

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 past August
         31, 2003. Necessary additional capital may not be available on a timely
         basis or on acceptable terms, if at all. 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. EQUITY TRANSACTIONS

         From January through June 2003, the Company completed the private
         placement of 2,675,000 shares of common stock to accredited investors
         at $0.20 per share, for net proceeds of $532,000. In connection with
         these private placements, the Company also issued warrants to the
         investors to purchase an aggregate of 2,675,000 shares of common stock.
         The warrants contain an exercise price of $0.20 per share and expire
         December 31, 2007. These private placements included 350,000 shares of
         common stock plus warrants to acquire an additional 350,000 shares of
         common stock purchased by National Financial Corporation, a related
         party, 1,250,000 shares of common stock plus warrants to acquire an
         additional 1,250,000 shares of common stock purchased by Elmira United
         Corporation, which owned at the time more than 5% of the outstanding
         shares of common stock of the Company, and 50,000 shares of common
         stock plus warrants to acquire an additional 50,000 shares of common
         stock purchased by a director of the Company.

         On April 7, 2003, Elmira United Corporation, a 5% shareholder,
         exercised a previously issued warrant to purchase 1,000,000 shares of
         the Company's common stock and tendered payment in the amount of
         $200,000.

         In May 2003, 682 shares of preferred stock were converted into 682,000
         shares of common stock.

4. ISSUANCE OF WARRANTS

         In June 2003, the Company issued warrants to acquire an aggregate of
         3,450,000 shares of common stock to employees. The warrants contain an
         exercise of $0.15 per share and expire in June 2013. In June 2003, the
         Company issued warrants to acquire an aggregate of 1,200,000 shares of
         common stock to two directors as compensaton for services outside of
         their director duties. The warrants were valued at $0.15 per warrant
         for a total charge of approximately $180,000 based on the Black-Scholes
         valuation method (using the following assumptions: life of ten years,
         risk free rate of 4.77%, no dividends during the term, and a volatility
         of 2.04).

                                       7





<PAGE>

5. 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 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. Payments totaling $216,000
         pursuant to the agreements were made in April 2003, resulting in a gain
         on settlement of liabilities totaling $912,000.

6. LOANS FROM RELATED PARTY

         In May 2003, the Company entered into an unsecured short-term loan
         agreement with National Financial Corp., a related party, in the
         aggregate amount of $100,000. The Company repaid a portion of this note
         in the principal amount of $34,000 plus accrued interest thereon in
         June 2003. The Company repaid a second note in the principal amount of
         $18,000 plus accrued interest thereon in June 2003. The remaining note
         in the principal amount of $66,000 plus interest, at 9.5% per annum on
         the unpaid principal, is due on demand.

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 and six months ended June 30, 2003 and 2002.
         Had the Company determined compensation based on the fair value at the
         grant date for its stock options under SFAS 123 "Accounting for
         Stock-Based Compensation," as amended by SFAS No. 148 "Accounting for
         Stock-Based Compensation - Transition and Disclosure," net income
         (loss) and net income (loss) per share would have been affected as
         indicated below (in thousands, except per share amounts):
<TABLE>
<CAPTION>
                                                 Three Months Ended     Six Months Ended
                                                       June 30,             June 30,
                                                   2003       2002       2003      2002
                                                 --------   --------   --------   --------
<S>                                              <C>        <C>        <C>        <C>
Net income (loss), as reported                   $   395    $(1,740)   $    46    $(1,842)
Stock-based compensation expense:
     Included in reported net income (loss)           --         --         --         --
     Determined using the fair value method          (17)       (92)       (17)      (183)
                                                 --------   --------   --------   --------
Pro forma net income (loss)                      $   378    $  (832)   $    29    $(2,025)
                                                 --------   --------   --------   --------

Net income (loss) per share - basic
     As reported                                 $  0.02    $ (0.07)   $  0.00    $(0.17)
     Pro forma                                   $  0.02    $ (0.08)   $  0.00    $(0.18)

Net income (loss) per share - diluted
     As reported                                 $  0.02    $ (0.07)   $  0.00    $(0.17)
     Pro forma                                   $  0.02    $ (0.08)   $  0.00    $(0.18)
</TABLE>

8. SUBSEQUENT EVENTS

         In July 2003, the Company completed the private placement of 475,000
         shares of common stock to accredited investors at $0.20 per share, for
         net proceeds of $80,000 cash and $15,000 in services performed by a
         director of the Company outside of his director duties. In connection
         with these private placements, the Company also issued warrants to the
         investors to purchase an aggregate of 475,000 shares of common stock.
         The warrants contain an exercise price of $0.20 per share and expire
         December 31, 2007. These private placements included 250,000 shares of
         common stock plus warrants to acquire an additional 250,000 shares of
         common stock purchased by Elmira United Corporation, which owned at the
         time more than 5% of the outstanding shares of common stock of the
         Company.

                                       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 INVOLVE 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.

GENERAL OVERVIEW

As of June 30, 2003, we had a working capital deficit of $(223,000) and
stockholders' deficit of $(176,000). We generated revenues of $344,000 for the
six months ended June 30, 2003 and $653,000 for the six months ended June 30,
2002. We have incurred net losses since inception and had an accumulated deficit
of $(42,378,000) at June 30, 2003. We expect to continue to operate at a loss
for the near future. There can be no assurance that we will ever achieve
profitability.

We have only 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. Much of the cost of revenue and operating expenses reflected in
our consolidated financial statements are associated with people costs, and not
directly related to transaction volumes. Our expenses decreased for the year
ended December 31, 2002 due to staffing and other cost reductions and further
expense reductions were effected at the beginning of 2003. In 2002 we recognized
a significant gain on sale of certain business assets and a significant one-time
expense due to the impairment of in-process software development. In 2003, we
realized a gain of $916,000 from the settlement of certain liabilities. The
majority of our revenues in prior years were generated by contracts which have
either terminated or were assigned through an asset sale in September 2002. Our
operating expenses in prior years included a significant one-time charge related
to termination of a business agreement and significant costs associated with an
asset acquisition and the subsequent impairment of purchased assets.
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

From January through June 2003, we completed the private placement of 2,675,000
shares of common stock to accredited investors at $0.20 per share, for net
proceeds of $532,000. In connection with these private placements, we also
issued warrants to the investors to purchase an aggregate of 2,675,000 shares of
common stock. The warrants contain an exercise price of $0.20 per share and
expire December 31, 2007. These private placements included 350,000 shares of
common stock plus warrants to acquire an additional 350,000 shares of common
stock purchased by National Financial Corporation, a related party, 1,250,000
shares of common stock plus warrants to acquire an additional 1,250,000 shares
of common stock purchased by Elmira United Corporation, which owned at the time
more than 5% of the outstanding shares of our common stock, and 50,000 shares of
common stock plus warrants to acquire an additional 50,000 shares of common
stock purchased by a member of our Board of Directors.

In May 2003, 682 shares of preferred stock were converted into 682,000 shares of
our common stock.

In April 2003, Elmira United Corporation, a 5% shareholder, exercised a
previously issued warrant to purchase 1,000,000 shares of our common stock and
tendered payment in the amount of $200,000.

The Company used $217,000 of the proceeds from the April 2003 transactions to
make payments pursuant to creditor agreements, as described in Note 5 to the
consolidated financial statements.

None of the above sales of securities involved the use of an underwriter and
except as indicated 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.

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. Each of the offerees
and investors in such private placements provided representations to us that the
offeree or investor is an "accredited investor," as defined in Rule 501 under
the Act, as well as highly sophisticated (some of whom were existing
stockholders of us at the time of such transaction.) The shares subject to the
options have been registered under the Act.

                                       9





<PAGE>

PLAN OF OPERATIONS

Our recently modified 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;
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; and
o        to license our technology for other applications, including stand-alone
         purposes, Internet systems and private label use, and for original
         equipment manufacturers.

We anticipate that our primary source of revenues will be fees paid by payers
and vendors for private-label or co-branded licenses and services. Historically,
our primary source of revenues was fees paid by users for insurance claims and
patient statement services, and fees from medical and dental payers for
processing claims electronically. We expect most of our revenues to be recurring
in nature.

Our principal costs to operate are anticipated to be technical and customer
support 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 we hope will 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 enter into services agreements with our customers to provide access to our
hosted software platform for processing of customer transactions, including base
level support. 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 customers' systems. Customers pay transaction fees and pay
time and materials charges for support above the base level. Customer agreements
also may provide for (i) 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, and (ii) periodic license
fees. We account for our service agreements by combining the contractual
revenues from development, license and support fees and recognizing the revenue
ratably over the estimated period covered by the development and license. We do
not segment these services and use the contractual allocation 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.
We recognize service fees for transactions, above base support and monthly
hosting as the services are performed.

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.

                                       10





<PAGE>

RESULTS OF OPERATIONS FOR THREE AND SIX MONTHS ENDED JUNE 30, 2003 COMPARED TO
THREE AND SIX MONTHS ENDED JUNE 30, 2002

REVENUES

Revenues in the three months ended June 30, 2003 (the "2003 second quarter")
were $171,000 compared to $338,000 in the three months ended June 30, 2002 (the
"2002 second quarter"), representing a decrease of 49%. Revenues of $308,000
during the 2002 second quarter were generated by our Internet-based healthcare
provider clients, under contracts which were sold in September 2002. Revenues
for the 2003 second quarter from recurring revenue sources totaled $160,000 and
represented 92% of total revenues. Revenues from non-recurring sources totaled
$11,000 and were related to implementation, development, support and other fees.

Revenues in the six months ended June 30, 2003 (the "2003 first half") were
$344,000 compared to $653,000 in the six months ended June 30, 2002 (the "2002
first half"), representing a decrease of 47%. Revenues of $593,000 during the
2002 first half were generated by our Internet-based healthcare provider
clients, under contracts which were sold in September 2002. Revenues for the
2003 first half from recurring revenue sources totaled $312,000 and represented
91% of total revenues. Revenues from non-recurring sources totaled $32,000 and
were related to implementation, development, support and other fees.

COST OF REVENUES

Cost of revenues in the 2003 second quarter was $173,000, compared with $463,000
in the 2002 second quarter, representing a decrease of 63%. 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 $61,000 for the 2003 second quarter compared with
$69,000 for the 2002 second quarter. Transaction processing expenses were $1,000
in the 2003 second quarter compared to $136,000 in the 2002 second quarter,
nearly a 100% decrease. Customer support operations expense decreased by 43% to
$106,000 in the 2003 second quarter from $187,000 in the 2002 second quarter.
The decreases in third party transaction processing expenses and customer
support operations expense were primarily attributable to the assignment of
contracts with a majority of our healthcare provider clients in September 2002.
Software amortization and development project amortization expenses decreased
93% to $5,000 in the 2003 second quarter from $71,000 in the 2002 second
quarter. This decrease reflects completion in 2002 of amortization for earlier
versions of software for customer use.

Cost of revenues in the 2003 first half was $374,000, compared with $1,023,000
in the 2002 first half, representing a decrease of 63%. 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 $124,000 for the 2003 first half compared with
$164,000 for the 2002 first half. Transaction processing expenses were $2,000 in
the 2003 first half compared to $273,000 in the 2002 first half, nearly a 100%
decrease. Customer support operations expense decreased by 52% to $212,000 in
the 2003 first half from $444,000 in the 2002 first half. The decreases in third
party transaction processing expenses and customer support operations expense
were primarily attributable to the assignment of contracts with a majority of
our healthcare provider clients in September 2002. Software amortization and
development project amortization expenses decreased 75% to $36,000 in the 2003
first quarter from $142,000 in the 2002 first half. This decrease reflects
completion in 2002 of amortization for earlier versions of software for customer
use.

OPERATING EXPENSES

Research and development expenses were $4,000 in the 2003 second quarter,
compared with $81,000 in the 2002 second quarter, representing a decrease of
95%. Research and development expenses were $14,000 in the 2003 first half,
compared with $176,000 in the 2002 first half, representing a decrease of 92%.
Research and development expenses are comprised of personnel costs and related
expenses. Research and development efforts were substantially curtailed at the
beginning of 2003, while the 2002 costs were related to continuous incremental
enhancements to our proprietary software system. Software development expenses
of $64,000 and $171,000 were capitalized during the 2002 second quarter and 2002
first half, respectively for development efforts required to comply with
provisions of the Health Insurance Portability and Accountability Act of 1996
("HIPAA"). In December 2002, we terminated the ongoing HIPAA remediation
in-process development project in order to pursue a more cost-effective
development alternative and we recognized an impairment charge at that time.
During the 2003 first quarter, we began development of the alternative HIPAA
remediation project and capitalized development costs of $10,000 and $16,000
during the 2003 second quarter and 2003 first half, respectively.

Selling, general and administrative expenses were $506,000 in the 2003 second
quarter, compared with $527,000 in the 2002 second quarter, a decrease of 4%.
Selling, general and administrative expenses were $817,000 in the 2003 first
half, compared with $1,287,000 in the 2002 first half, a decrease of 37%. The
reduction is a result of cost containment measures including staff reductions,

                                       11





<PAGE>

salary reductions and other cost containment measures. A one-time charge of
$162,000 was recorded in the 2002 first half pursuant to a severance agreement
with our former chief executive officer, of which $50,000 related to the
issuance of options and warrants. A one-time charge of $195,000 was recorded in
the 2003 second quarter for services performed by two of our directors outside
of their director duties, of which $180,000 related to the issuance of warrants.

OTHER INCOME (EXPENSE)

Interest expense of $5,000 and $9,000 was incurred in the 2003 second quarter
and 2003 first half, respectively, on financing fees and affiliate debt compared
with $7,000 and $9,000 in the 2002 second quarter and 2002 first half,
respectively. A $916,000 gain on settlement of liabilities was recognized during
the 2003 first half related to settlement agreements with several creditors such
agreements being consummated during March and April 2003.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating activities of $780,000 in the 2003 first half was
primarily related to net income of $46,000, plus depreciation of $73,000 and
non-cash expense of $180,000 from issuance of options and warrants, less a
reduction of $8,000 in the allowance for doubtful accounts, changes in working
capital of $171,000, offset by a non-cash gain of $916,000 from settlement of
liabilities. Net cash used in operating activities of $1,344,000 in the 2002
first half was primarily related to net losses of $1,842,000, less: depreciation
of $269,000, provision of $5,000 for doubtful accounts, non-cash expense of
$53,000 from issuance of options and warrants, and net changes in working
capital of $171,000.

Net cash used in investing activities in the 2003 first half was $16,000 related
to the cost of software development capitalized during the year. Net cash used
in investing activities in the 2002 first half was $186,000, of which $15,000
was used for the purchase of property and equipment and $171,000 was the cost of
software development capitalized during the year.

Net cash provided by financing activities in the 2003 first half was $765,000,
of which $732,000 was related to the issuance of common stock and $33,000
related to proceeds of $100,000 from debt financing, offset by $67,000 used to
repay debt.. Net cash provided by financing activities in the 2002 first half
was $1,246,000 resulting from the issuance of preferred stock for net proceeds
of $826,000, the issuance of common stock for net proceeds of $200,000 and
proceeds of $525,000 from debt financing, offset by $305,000 used to repay debt.

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
past August 31, 2003. 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
certain 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.

                                       12





<PAGE>

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS QUARTERLY 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 ANNUAL REPORT ON FORM 10-K WHICH WAS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 1, 2003. NO ASSURANCE
CAN BE GIVEN THAT FUTURE RESULTS COVERED BY THE FORWARD-LOOKING STATEMENTS WILL
BE ACHIEVED.

ITEM 4.  Controls and Procedures

(a)      Evaluation of Disclosure Controls and Procedures

         Within the 90 days prior to the date of this report, 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.

                                       13





<PAGE>

PART II - OTHER INFORMATION

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

(b) REPORTS:

         During the quarter ended June 30, 2003, the Company filed Reports on
         Form 8-K dated April 8, 2003, and April 15, 2003, containing
         information under item 5.

The following Additional Exhibits are filed herewith:

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

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

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

                                       14





<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 Operating Officer and
         Chief Financial Officer

July 28, 2003

                                       15





<PAGE>

CERTIFICATION

I, Don Crosbie, certify that:

I have reviewed this quarterly report on Form 10-Q of CLAIMSNET.COM INC.;

Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;

The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by other within those entities, particularly during the
period in which this quarterly report is being prepared;

evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weakness in internal controls; and

any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant's internal controls; and

The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in 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.

/s/ Don Crosbie
------------------
Don Crosbie
President and Chief Executive Officer
July 28, 2003

                                       16





<PAGE>

CERTIFICATION

I, Paul W. Miller, certify that:

I have reviewed this quarterly report on Form 10-Q of CLAIMSNET.COM INC.;

Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

Based on my knowledge, the financial statements, and other financial information
included in this quarterly report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this quarterly report;

The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by other within those entities, particularly during the
period in which this quarterly report is being prepared;

evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

presented in this quarterly report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weakness in internal controls; and

any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant's internal controls; and

The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in 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.

/s/ Paul W. Miller
----------------------
Paul W. Miller
Chief Operating Officer and Chief Financial Officer
July 28, 2003

                                       17