##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the Fiscal Year EndedDecember 31, 2007
 o
    
    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.
  Delaware
    
    75-2649230(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)14860 Montfort Dr., Suite 250Dallas, Texas
    
    75254(Address of principal 
executive offices)
    
    (Zip Code)
    o
 þ o
 þ
 o þ
     o þ




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##### 




    
    the ability to easily configure the system to meet the specific needs of our clients, both
in the format and content of data being exchanged;
 
    
    the ability to accept input from a variety of sources (direct output from a providers
practice management system, EDI files from clearinghouses and trading partners, and data
conversion from scanned paper forms), pre-process the data, improve the data or reject the
transaction according to client-specific business rules, and deliver the data in a consistent
and client-defined format;
 
    
    the ability to create multiple custom website formats to be promoted by partners and
sponsors without modification of the server-based processing systems;
 
    
    the ability of healthcare providers utilizing their websites to interactively process
claims on the Internet and receive real time edits prior to claim submission; and
 
    
    the minimal software and processing power required for providers to utilize our proprietary
software.
     2




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##### 




    
    to utilize our technology to help large healthcare organizations achieve more efficient and
less costly administrative operations;
 
    
    to market our services directly to the payer community and its trading partners;
 
    
    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;
 
    
    to provide total claim management services to payer organizations, including Internet claim
submission, paper claim conversion to electronic transactions, and receipt of EDI
transmissions;
 
    
    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
 
    
    to license our technology for other applications, including stand-alone purposes, Internet
systems and private label use, and for original equipment manufacturers.
      3




---



##### 




    
    core processing software developed by us which provides claims review, claims editing, and
a table-based software coding of claims variables at a payer-specific level;
 
    
    data mapping software that allows us to accept a wide variety of data input formats;
 
    
    data format generating software developed by us that allows us to easily create a wide
variety of data output formats;
 
    
    an integrated web-based user interface that can be easily configured to support co-branded
and private-labeled deployment;
 
    
    industry standard website management software; and
 
    
    state-of-the-art commercial security and encryption software.
         4




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##### 




    
    are engaged in electronic claims processing and expect to benefit by using our advanced
technology; and
 
    
    serve or are engaged in direct sales and marketing to the healthcare market and desire to
expand the products and services they offer to their clients without incurring substantial
costs by using our advanced technology in a co-branded or private-label arrangement.
 5




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##### 



6




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##### 




    
    inability to realize the expected synergies and benefits of the acquisition;
    
    difficulties and costs incurred integrating the business of the Company with that of
Acceptius;
    
    exposure to unknown liabilities of Acceptius;
    
    the consequences and significant costs of our managements attention having been diverted
from our day-to-day business over an extended period of time; and
    
    the expenses that we have incurred relating to the acquisition.
 7




---



##### 




    
    significantly reduce operating expenses to a point which would be detrimental to business
operations;
 
    
    curtail research and development activities and marketing efforts;
 
    
    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.
    
    
    maintain and increase our strategic partnerships,
 
    
    maintain and increase our customer base,
 
    
    implement and successfully execute our business and marketing strategy,
 
    
    continue to develop and upgrade our technology and transaction-processing systems,
 
    
    continually update and improve our website,
 
    
    provide superior customer service,
 
    
    respond to competitive developments,
 
    
    appropriately evaluate merger and acquisition opportunities, and
 
    
    attract, retain, and motivate qualified personnel.
 8




---



##### 




    
    our ability to satisfy capital requirements in an investment climate that may be somewhat
more reluctant generally to invest in Internet companies,
 
    
    our ability to retain existing customers, attract new customers at a steady rate, and
maintain customer satisfaction in an industry in which significant changes are occurring,
 
    
    our ability to introduce new sites, services and products,
 
    
    our ability to effectively develop and implement plans to potentially reposition our
products, services and marketing efforts,
 
    
    the effect of announcements or introductions of new sites, services, and products by our
competitors in a rapidly evolving industry,
 
    
    price competition or price increases in our industry,
 
    
    the level of use of the Internet and online services and the rate of market acceptance of
the Internet and other online services for the purchase and delivery of health claims
processing services,
 
    
    our ability to upgrade and develop our systems and infrastructure in a timely and effective
manner,
 
    
    the amount of traffic on our website,
 
    
    the occurrence of technical difficulties, system downtime, or Internet brownouts to which
we are acutely sensitive insofar as our medical claims processing service is Internet-based,
 
    
    the amount and timing of operating costs and capital expenditures relating to expansion of
our business, operations, and infrastructure which cannot be predicted with any large degree
of accuracy in light of the rapidly evolving nature of the medical claims processing industry,
 
    
    our ability to comply with existing and added government regulations such as HIPAA, and
 
    
    general economic conditions and economic conditions specific to the Internet, electronic
commerce, and the medical claims processing industry.
     9




---



##### 



10




---



##### 



11




---



##### 



12




---



##### 




    
    rapid technological change,
 
    
    changes in user and customer requirements and preferences,
 
    
    changes in federal legislation and regulation,
 
    
    frequent new product and service introductions embodying new technologies, and
 
    
    the emergence of new industry standards and practices that could render our existing
website and proprietary technology and systems obsolete.
  
    
    enhance and improve the responsiveness and functionality of our online claims processing
services,
 
    
    license leading technologies useful in our business and to enhance our existing services,
 
    
    comply with all applicable regulations regarding our industry and the Internet,
 
    
    develop new services and technology that address the increasingly sophisticated and varied
needs of our prospective or current customers, and
 
    
    respond to technological advances and emerging industry standards and practices on a
cost-effective and timely basis.
      13




---



##### 



14




---



##### 



CAUTIONARY NOTES REGARDING THE FORWARD-LOOKING STATEMENTS.
   
    
    our ability to raise additional capital and secure additional financing;
 
    
    our ability to successfully implement our revised business strategy;
 
    
    our ability to market our services;
 
    
    our ability to develop and maintain strategic partnerships or alliances;
 
    
    our ability to maintain and increase our customer base;
 
    
    our ability to protect our intellectual property rights;
 
    
    our ability to further develop our technology and transaction processing system;
 
    
    our ability to respond to competitive developments;
 
    
    our ability to attract and retain key employees;
 
    
    our ability to comply with government regulations;
 
    
    the effects of natural disasters, computer viruses and similar disruptions to our
computer systems;
 
    
    threats to Internet security; and
 
    
    acceptance of the Internet and other online services in the healthcare industry and
in general
       15




---



##### 



HIGH
    
    LOW2006Three months ended March 31, 2006
    
    
    0.19
    
    
    
    0.09Three months ended June 30, 2006
    
    
    0.15
    
    
    
    0.07Three months ended September 30, 2006
    
    
    0.19
    
    
    
    0.08Three months ended December 31, 2006
    
    
    0.20
    
    
    
    0.122007Three months ended March 31, 2007
    
    
    0.20
    
    
    
    0.13Three months ended June 30, 2007
    
    
    0.16
    
    
    
    0.11Three months ended September 30, 2007
    
    
    0.17
    
    
    
    0.10Three months ended December 31, 2007
    
    
    0.16
    
    
    
    0.11
        16




---



##### 



17




---



##### 




    
    to utilize state of the art technology to help large healthcare organizations achieve more
efficient and less costly administrative operations;
    
    to market our services directly to the payer community and its trading partners;
    
    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;
    
    to provide total claim management services to payer organizations, including Internet claim
submission, paper claim conversion to electronic transactions, and receipt of EDI
transmissions;
    
    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
    
    to license our technology for other applications, including stand-alone purposes, Internet
systems and private label use, and for original equipment manufacturers.
       18




---



##### 



Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109, Accounting for Income Taxes
   The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115.
 19




---



##### 



20




---



##### 



21




---



##### 



PageReport of Independent Registered Public Accounting Firm
    
    
    23Consolidated Balance Sheet  December 31, 2007
    
    
    24Consolidated Statements of Operations for the Years Ended
December 31, 2007 and 2006
    
    
    25Consolidated Statements of Changes in Stockholders Deficit
for the Years Ended December 31, 2007 and 2006
    
    
    26Consolidated Statements of Cash Flows for the Years Ended
December 31, 2007 and 2006
    
    
    27Notes to Consolidated Financial Statements
    
    
    28
  22




---



##### 



/s/ Whitley Penn LLPDallas, TexasFebruary 26, 2008 23




---



##### 



December 31,2007ASSETSCURRENT ASSETSCash and equivalents
    
    $
    98Accounts receivable, net of allowance for doubtful accounts of $2
    
    
    255Prepaid expenses and other current assets
    
    
    22Total current assets
    
    
    375EQUIPMENT, FIXTURES AND SOFTWARETotal equipment, fixtures and software, net
    
    
    109TOTAL ASSETS
    
    $
    484LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIESAccounts payable
    
    $
    136Accrued payroll and other current liabilities
    
    
    103Accrued interest
    
    
    135Capital lease  current portion
    
    
    40Deferred revenues  current portion
    
    
    30Notes payable to related parties  current portion
    
    
    295Convertible notes payable to related parties  current portion
    
    
    600Convertible notes payable  current portion
    
    
    200Total current liabilities
    
    
    1,539LONG TERM LIABILITIESOther long term liabilities
    
    
    1Capital lease  long-term portion
    
    
    42Deferred revenues  long-term portion
    
    
    28Convertible notes payable to related parties  longterm portion
    
    
    310Convertible notes payable  longterm portion
    
    
    100Total long-term liabilities
    
    
    481Total liabilities
    
    
    2,020COMMITMENTS AND CONTINGENCIES
    
    
    STOCKHOLDERS DEFICITConvertible preferred stock, $.001 par value; 4,000,000 shares authorized, 720
shares of Series D (liquidation preference of $180) and 50 shares of Series E
(liquidation preference of $15) issued and outstanding, convertible into common
shares at 1,000 common shares per 1 convertible preferred share
    
    
    Common stock, $.001 par value; 40,000,000 shares authorized; 26,101,180
shares issued and outstanding
    
    
    26Additional capital
    
    
    43,179Accumulated deficit
    
    
    (44,741
    )Total stockholders deficit
    
    
    (1,536
    )TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT
    
    $
    484
  24




---



##### 



Year Ended December 31,2007
    
    
    2006REVENUES
    
    $
    1,648
    
    
    $
    1,464COST OF REVENUES
    
    
    1,156
    
    
    
    944GROSS PROFIT
    
    
    492
    
    
    
    520OPERATING EXPENSES:Research and development
    
    
    3
    
    
    
    4Impairment of software
    
    
    57
    
    
    
    Selling, general and administrative
    
    
    780
    
    
    
    840LOSS FROM OPERATIONS
    
    
    (348
    )
    
    
    (324
    )OTHER INCOME (EXPENSE):Interest expense-related parties
    
    
    (73
    )
    
    
    (44
    )Interest expense
    
    
    (36
    )
    
    
    (21
    )Total other expense
    
    
    (109
    )
    
    
    (65
    )NET LOSS
    
    $
    (457
    )
    
    $
    (389
    )NET LOSS PER SHARE  BASIC AND DILUTED
    
    $
    (0.02
    )
    
    $
    (0.01
    )WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING  BASIC AND DILUTED
    
    
    26,050
    
    
    
    25,983
  25




---



##### 



Number of
    
    
    
    
    
    
    Number ofConvertible
    
    
    
    
    
    
    Common
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalPreferred Shares
    
    
    Preferred
    
    
    Shares
    
    
    Common
    
    
    Additional
    
    
    Accumulated
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Outstanding
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    DeficitBalances at December 31, 2005
    
    
    1
    
    
    $
    
    
    
    
    25,976
    
    
    $
    26
    
    
    $
    43,154
    
    
    $
    (43,895
    )
    
    $
    (715
    )Warrants exercised for common
stock
    
    
    
    
    
    
    
    
    
    
    25
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    5Stock based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    7Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (389
    )
    
    
    (389
    )Balances at December 31, 2006
    
    
    1
    
    
    
    
    
    
    
    26,001
    
    
    
    26
    
    
    
    43,166
    
    
    
    (44,284
    )
    
    
    (1,092
    )Warrants exercised for common
stock
    
    
    
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    20
    
    
    
    
    
    
    
    20Stock based compensation expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    (7
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (457
    )
    
    
    (457
    )Balances at December 31, 2007
    
    
    1
    
    
    $
    
    
    
    
    26,101
    
    
    $
    26
    
    
    $
    43,179
    
    
    $
    (44,741
    )
    
    $
    (1,536
    )
  26




---



##### 



Year Ended December 31,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (457
    )
    
    $
    (389
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    72
    
    
    
    54Impairment of software
    
    
    57
    
    
    
    Provision for doubtful accounts
    
    
    2
    
    
    
    5Stock based compensation expense (reversal)
    
    
    (7
    )
    
    
    7Changes in operating assets and liabilities:Accounts receivable
    
    
    (50
    )
    
    
    (51
    )Prepaid expenses and other current assets
    
    
    16
    
    
    
    (10
    )Accounts payable, accrued payroll, accrued interest, and other liabilities
    
    
    16
    
    
    
    75Deferred revenues
    
    
    (9
    )
    
    
    (67
    )Net cash used in operating activities
    
    
    (360
    )
    
    
    (376
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of equipment and fixtures
    
    
    (2
    )
    
    
    (14
    )Capitalized software development costs
    
    
    (6
    )
    
    
    (59
    )Net cash used in investing activities
    
    
    (8
    )
    
    
    (73
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on capital lease obligation
    
    
    (35
    )
    
    
    (4
    )Proceeds from notes payable
    
    
    100
    
    
    
    45Proceeds from notes payable  related parties
    
    
    150
    
    
    
    772Payments of notes payable
    
    
    
    
    
    
    (69
    )Payments of notes payable  related parties
    
    
    (20
    )
    
    
    (72
    )Proceeds from exercise of common stock warrants
    
    
    20
    
    
    
    Net cash provided by financing activities
    
    
    215
    
    
    
    672NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS
    
    
    (153
    )
    
    
    223CASH AND EQUIVALENTS, BEGINNING OF YEAR
    
    
    251
    
    
    
    28CASH AND EQUIVALENTS, END OF YEAR
    
    $
    98
    
    
    $
    251SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    69
    
    
    $
    5SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES:Acquisition of equipment through capital lease
    
    $
    
    
    
    $
    121Payment of accrued interest through issuance of common stock
    
    $
    
    
    
    $
    5
  27




---



##### 



28




---



##### 



29




---



##### 



Share-Based Payment
 Accounting for Stock Issued to Employees
         30




---



##### 



Disclosure About Fair Value of Financial Instruments
  Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109, Accounting for Income Taxes
   The Fair Value Option for Financial Assets and
Financial Liabilities  Including an Amendment of FASB Statement No. 115 .
   Computer hardware and software
    
    $
    1,091Software development costs
    
    
    2,053Furniture and fixtures
    
    
    31Office equipment
    
    
    28Leasehold improvements
    
    
    35Equipment under capital lease
    
    
    1213,359Less accumulated depreciation and amortization
    
    
    (3,250
    )$
    109
 31




---



##### 



Year Ended December 31,2007
    
    
    2006Benefit computed at federal statutory rate
    
    $
    (155
    )
    
    $
    (132
    )Permanent differences
    
    
    20
    
    
    
    26Effect of change in state tax law
    
    
    1,222
    
    
    
    State income tax benefit, net of federal
tax effect at state statutory rate
    
    
    (82
    )
    
    
    (12
    )Increase (decrease) in valuation reserve
    
    
    (1,012
    )
    
    
    157Change in prior year estimate
    
    
    7
    
    
    
    (39
    )$
    
    
    
    $
    
  December 31,2007
    
    
    2006Deferred tax assets:Net operating loss carryforwards
    
    $
    14,714
    
    
    $
    15,737Fixed assets
    
    
    8
    
    
    
    11Allowance for doubtful accounts
    
    
    1
    
    
    
    2Deferred revenue
    
    
    20
    
    
    
    25Other
    
    
    57
    
    
    
    37Total deferred tax assets
    
    
    14,800
    
    
    
    15,812Valuation allowance for deferred tax assets
    
    
    (14,800
    )
    
    
    (15,812
    )Deferred income tax assets, net of
deferred tax liabilities
    
    $
    
    
    
    $
    
   32




---



##### 



33




---



##### 



Determining Fair Value Under SFAS No. 123R
 Valuation and Amortization Method.
 Expected Life.
 Expected Volatility.
 Risk-Free Interest Rate.
 Expected Dividend Yield.
 Expected Forfeitures.
  December 31,2006Volatility
    
    
    142
    %Weighted-average expected lives
    
    6 yearsExpected dividend yields
    
    
    Weighted-average risk-free interest rates
    
    
    4.68
    %Weighted-average fair value of options/warrants granted
    
    $
    .11
 Share-Based Compensation Under SFAS No. 123R
  December 31, 2007WarrantsforStock Options
    
    
    Common Stock
    
    
    TotalSelling, general and
administrative expense
    
    
    
    
    
    
    (7
    )
    
    
    (7
    )Total share-based compensation
    
    $
    
    
    
    $
    (7
    )
    
    $
    (7
    )
  34




---



##### 



December 31, 2006WarrantsforStock Options
    
    
    Common Stock
    
    
    TotalSelling, general and
administrative expense
    
    
    
    
    
    
    7
    
    
    
    7Total share-based compensation
    
    $
    
    
    
    $
    7
    
    
    $
    7
     WEIGHTEDAVERAGENUMBER
    
    
    PER SHARE
    
    
    EXERCISEOF SHARES
    
    
    EXERCISE PRICE
    
    
    PRICEOutstanding options-December 31, 2005
    
    
    906,776
    
    
    $
    0.30-8.00
    
    
    $
    1.15Granted
    
    
    50,000
    
    
    
    0.15
    
    
    
    0.15Expired and/or Cancelled
    
    
    
    
    
    
    
    
    
    
    Outstanding options-December 31, 2006
    
    
    956,776
    
    
    $
    0.15-8.00
    
    
    $
    1.10Granted
    
    
    
    
    
    
    
    
    
    
    Expired and/or Cancelled
    
    
    56,000
    
    
    
    0.15-8.00
    
    
    
    0.29Outstanding options-December 31, 2007
    
    
    900,776
    
    
    $
    0.30-8.00
    
    
    $
    1.15Options exercisable-December 31, 2007
    
    
    900,776
    
    
    $
    0.30-8.00
    
    
    $
    1.15
   35




---



##### 



WEIGHTEDNUMBER
    
    
    PER SHARE
    
    
    AVERAGEOF SHARES
    
    
    EXERCISE PRICE
    
    
    EXERCISE PRICEOutstanding
warrants December 31, 2005
    
    
    2,624,324
    
    
    $
    0.15-0.35
    
    
    $
    0.18Granted
    
    
    2,000,000
    
    
    
    0.15-0.25
    
    
    
    0.20Expired and/or Cancelled
    
    
    (1,000,000
    )
    
    
    0.15
    
    
    
    0.15Outstanding warrantsDecember 31, 2006
    
    
    3,624,324
    
    
    $
    0.15-0.35
    
    
    $
    0.20Granted
    
    
    
    
    
    
    
    
    
    
    Expired and/or Cancelled
    
    
    (1,225,000
    )
    
    
    0.15-0.25
    
    
    
    0.24Outstanding warrantsDecember 31, 2007
    
    
    2,399,324
    
    
    $
    0.15-0.35
    
    
    $
    0.18Warrants exercisableDecember 31, 2007
    
    
    2,399,324
    
    
    $
    0.15-0.35
    
    
    $
    0.18
     Note payable to a 5% shareholder. Principal due
January 31, 2008; unsecured. Interest payable at 7%.
    
    $
    50,000Note payable to a 5% shareholder. Principal due 
January 31, 2008; unsecured. Interest payable at 7%.
    
    
    100,000Note payable to a 5% shareholder. Principal due 
on demand; unsecured. Interest payable at 8%.
    
    
    100,000Note payable to a 5% shareholder. Principal due 
on demand; unsecured. Interest payable at 9.5%.
    
    
    35,000Note payable to a 5% shareholder. Principal due
on demand; unsecured. Interest payable at 8%.
    
    
    10,000Current notes payable  related parties
    
    $
    295,000
  Convertible note to a 5% shareholder. Principal originally due September 22, 2007, 
amended to January 31, 2008; unsecured. Interest payable at 7%.(1)
    
    $
    50,000Convertible note to a 5% shareholder. Principal originally due December 28, 2007, 
amended to January 31, 2008; unsecured. Interest payable at 7%.(1)
    
    
    150,000Convertible note to a 5% shareholder. Principal due 
November 2, 2008; unsecured. Interest payable at 7.5%.(2)
    
    
    100,000Convertible note to a 5% shareholder. Principal due 
December 31, 2008; unsecured. Interest payable at 7.5%.(2)
    
    
    100,000Convertible note to a 5% shareholder. Principal due 
December 31, 2008; unsecured. Interest payable at 7.5%.(2)
    
    
    50,000Convertible note to a 5% shareholder. Principal due 
December 31, 2008; unsecured. Interest payable at 7.5%.(2)
    
    
    100,000Convertible note to a Director. Principal due December 31, 2008; 
unsecured. Interest payable at 7.5%.(2)
    
    
    50,000Current convertible notes payable  related parties
    
    $
    600,000
 36




---



##### 



Convertible note to a 5% shareholder. Principal due 
November 30, 2010; unsecured. Interest payable at 5%.(3)
    
    
    300,000Convertible note to a Director. Principal due November 30, 2010; 
unsecured. Interest payable at 5%.(3)
    
    
    10,000Long-term convertible notes payable  related parties
    
    $
    310,000Convertible notes payable  related parties
    
    $
    910,000Convertible note. Principal originally due September 21, 2007, 
amended to January 31, 2008; unsecured. Interest payable at 7%.(1)
    
    $
    50,000Convertible note. Principal due October 4, 2007, 
amended to January 31, 2008; unsecured. Interest payable at 7%.(1)
    
    
    50,000Convertible note. Principal due October 5, 2007, 
amended to January 31, 2008; unsecured. Interest payable at 7%.(1)
    
    
    100,000Current convertible notes payable
    
    $
    200,000Convertible note. Principal due November 30, 2010; unsecured. 
Interest payable at 7%.(4)
    
    
    100,000Long-term convertible notes payable
    
    $
    100,000Convertible notes payable
    
    $
    300,000
 
 (1)
    
    Notes bear interest at the rate of 7.0% per annum. Payments equal to the principal
and accrued and unpaid interest on the note were due in 2007. All five notes were amended to
extend the due date to January 31, 2008. Interest was paid through the original maturity date. At
the option of the holder, at any time or from time to time prior to the maturity date, all or any
portion of the outstanding principal and interest may be converted into a number of shares of the
Companys common stock at a conversion price of $0.40 per share.(2)
    
    Notes bear interest at the rate of 7.5% per annum. Payments equal to the principal
and accrued and unpaid interest on the note are due in 2008. At the option of the holder, at any
time or from time to time prior to the maturity date, all or any portion of the outstanding
principal and interest may be converted into a number of shares of the Companys common stock at a
conversion price of $0.25 per share.(3)
    
    Notes bear interest at the rate of 5.0% per annum. Payments equal to the principal
and accrued and unpaid interest on the note are due in 2010. At the option of the holder, at any
time or from time to time prior to the maturity date, all or any portion of the outstanding
principal may be converted into a number of shares of the Companys common stock at a conversion
price of 36,500 per $10,000 of principal. Interest is payable on maturity.(4)
    
    Note bears interest at the rate of 7.0% per annum. Payments equal to the principal
and accrued and unpaid interest on the note are due in 2010. At the option of the holder, at any
time or from time to time prior to the maturity date, all or any portion of the outstanding
principal may be converted into a number of shares of the Companys common stock at a conversion
price of 30,000 per $10,000 of principal. Interest is payable on maturity.  2008
    
    $
    1,095,0002009
    
    
    2010
    
    
    410,000Total
    
    $
    1,505,000
   37




---



##### 



OPERATING
    
    
    CAPITALLEASES
    
    
    LEASES2008
    
    $
    102,000
    
    
    $
    49,0002009
    
    
    56,000
    
    
    
    45,0002010
    
    
    
    
    
    
    2011
    
    
    
    
    
    
    2012 and thereafter
    
    
    
    
    
    
    Total minimum lease obligations
    
    $
    158,000
    
    
    
    94,000Less amounts representing interest
    
    
    
    
    
    
    (12,000
    )Present value of capital lease payments
    
    
    
    
    
    
    82,000Current portion
    
    
    
    
    
    
    (40,000
    )Long-term portion
    
    
    
    
    
    $
    42,000
         38




---



##### 



39




---



##### 



40




---



##### 



NAME
    
    AGE
    
    POSITIONDon Crosbie
    
    
    64
    
    
    Chief Executive Officer, Chairman of the Board of Directors and Class I DirectorLaura M. Bray
    
    
    50
    
    
    Chief Financial OfficerGary J. Austin
    
    
    63
    
    
    President, Chief Operating OfficerAlfred Dubach
    
    
    60
    
    
    Vice Chairman of the Board of Directors and Class I DirectorJohn C. Willems, III
    
    
    52
    
    
    Class II DirectorThomas Michel
    
    
    56
    
    
    Class II DirectorK. Scott Spurlock
    
    
    40
    
    
    Vice President of Development
  1 2
    41




---



##### 



42




---



##### 



ALL OTHERNAME AND
    
    
    
    
    
    SALARY
    
    COMPENSATION
    
    TOTALPRINCIPALPOSITION
    
    YEAR
    
    $
    
    $ (1)
    
    $Don Crosbie
    
    
    2007
    
    
    $
    146,000
    
    
    $
    1,446
    
    
    $
    147,446CEO
    
    
    2006
    
    
    $
    145,000
    
    
    $
    1,430
    
    
    $
    146,430Gary Austin
    
    
    2007
    
    
    
    109,846
    
    
    
    
    
    
    
    109,846President and COO
    
    
    2006
    
    
    
    101,231
    
    
    
    
    
    
    
    101,231K. Scott Spurlock
    
    
    2007
    
    
    
    127,000
    
    
    
    
    
    
    
    127,000VP  Development
    
    
    2006
    
    
    
    127,000
    
    
    
    
    
    
    
    127,000
 
 (1)
    
    Company match on employee contributions to the Companys 401(k) plan.  43




---



##### 



Option AwardsEquityIncentivePlan Awards:Number of
    
    Number of
    
    Number ofSecurities
    
    Securities
    
    SecuritiesUnderlying
    
    Underlying
    
    UnderlyingUnexercised
    
    Unexercised
    
    Unexercised
    
    OptionOptions
    
    Options
    
    Unearned
    
    Exercise
    
    Option(#)
    
    (#)
    
    Options
    
    Price
    
    ExpirationName
    
    Exercisable
    
    Unexercisable
    
    (#)
    
    ($)
    
    DateDon Crosbie
    
    
    1,500,000
    (1)
    
    
    
    
    
    
    
    
    
    
    0.15
    
    
    
    6/3/13Don Crosbie
    
    
    200,000
    (1)
    
    
    
    
    
    
    
    
    
    
    0.29
    
    
    
    9/21/14Gary Austin
    
    
    400,000
    (1)
    
    
    
    
    
    
    
    
    
    
    0.35
    
    
    
    3/24/14Gary Austin
    
    
    100,000
    (1)
    
    
    
    
    
    
    
    
    
    
    0.29
    
    
    
    9/21/14K. Scott Spurlock
    
    
    51,100
    (1)
    
    
    
    
    
    
    
    
    
    
    7.00
    
    
    
    4/6/09K. Scott Spurlock
    
    
    20,000
    (1)
    
    
    
    
    
    
    
    
    
    
    1.25
    
    
    
    1/4/11K. Scott Spurlock
    
    
    30,000
    (1)
    
    
    
    
    
    
    
    
    
    
    0.60
    
    
    
    1/2/12K. Scott Spurlock
    
    
    400,000
    (1)
    
    
    
    
    
    
    
    
    
    
    0.15
    
    
    
    6/3/13
 
 (1)
    
    These are shares underlying warrants and options that originally vested over 3
years. All the shares vested prior to 2007.          44




---



##### 



WEIGHTEDNUMBER
    
    
    PER SHARE
    
    
    AVERAGEOF SHARES
    
    
    EXERCISE PRICE
    
    
    EXERCISE PRICEOutstanding options-December 31, 2005
    
    
    906,776
    
    
    $
    0.30-8.00
    
    
    $
    1.15Granted
    
    
    50,000
    
    
    
    0.15
    
    
    
    0.15Expired and/or Cancelled
    
    
    
    
    
    
    
    
    
    
    Outstanding options-December 31, 2006
    
    
    956,776
    
    
    $
    0.15-8.00
    
    
    $
    1.10Granted
    
    
    
    
    
    
    
    
    
    
    Expired and/or Cancelled
    
    
    56,000
    
    
    
    0.15-8.00
    
    
    
    0.29Outstanding options-December 31, 2007
    
    
    900,776
    
    
    $
    0.30-8.00
    
    
    $
    1.15Options exercisable-December 31, 2007
    
    
    900,776
    
    
    $
    0.30-8.00
    
    
    $
    1.15
  45




---



##### 



WEIGHTEDNUMBER
    
    
    PER SHARE
    
    
    AVERAGEOF SHARES
    
    
    EXERCISE PRICE
    
    
    EXERCISE PRICEOutstanding warrants- December 31, 2005
    
    
    2,624,324
    
    
    $
    0.15-0.35
    
    
    $
    0.18Granted
    
    
    2,000,000
    
    
    
    0.15-0.25
    
    
    
    0.20Expired and/or Cancelled
    
    
    (1,000,000
    )
    
    
    0.15
    
    
    
    0.15Outstanding warrants-December 31, 2006
    
    
    3,624,324
    
    
    $
    0.15-0.35
    
    
    $
    0.20Granted
    
    
    
    
    
    
    
    
    
    
    Expired and/or Cancelled
    
    
    (1,225,000
    )
    
    
    0.15-0.25
    
    
    
    0.24Outstanding warrants-December 31, 2007
    
    
    2,399,324
    
    
    $
    0.15-0.35
    
    
    $
    0.18Warrants exercisable-December 31, 2007
    
    
    2,399,324
    
    
    $
    0.15-0.35
    
    
    $
    0.18
    46




---



##### 




    
    each person who is known by us to be the beneficial owner of more than 5% of the
outstanding common stock,
    
    each director and each of our named executive officers,
    
    all of our directors and executive officers as a group, and
    
    the number of shares of common stock beneficially owned by each such person and such
group and the percentage of the outstanding shares owned by each such person and such
group.
    SHARES BENEFICIALLY OWNEDAmount and Natureof Beneficial
    
    
    
    
    
    Percent of VotingName and Address of Beneficial Owner
    
    Class of Security
    
    Ownership
    
    Percent of Class
    
    PowerDon Crosbie (1)
    
    Common Stock
    
    
    1,700,000
    
    
    
    6.1
    
    
    
    4.8Gary Austin (2)
    
    Common Stock
    
    
    500,000
    
    
    
    1.9
    
    
    
    1.4Scott Spurlock (3)
    
    Common Stock
    
    
    501,100
    
    
    
    1.9
    
    
    
    1.4John C. Willems, III (4)
    
    Common Stock
    
    
    24,277
    
    
    
    *
    
    
    
    *Thomas Michel (5)
    
    Common Stock
    
    
    1,081,500
    
    
    
    4.0
    
    
    
    3.1Series D Preferred Stock
    
    
    100
    
    
    
    13.9Series E Preferred Stock
    
    
    50
    
    
    
    100.0Alfred Dubach (6)
    
    Common Stock
    
    
    1,220,000
    
    
    
    4.6
    
    
    
    3.4Bo W. Lycke (7)(8)
    
    Common Stock
    
    
    2,581,326
    
    
    
    9.8
    
    
    
    7.34730 Melissa Ln.
Dallas, Texas 75229Robert H. Brown, Jr.(7)(9)
    
    Common Stock
    
    
    1,362,354
    
    
    
    5.2
    
    
    
    3.82626 Cole Ave, #400
Dallas, Texas 75204McKesson Corporation
    
    Common Stock
    
    
    1,514,285
    
    
    
    5.8
    
    
    
    4.3One Post Street
San Francisco, CA 94104J. R. Schellenberg(7)(10)
    
    Common Stock
    
    
    1,793,603
    
    
    
    6.9
    
    
    
    5.1Kohlrainstrasse 1Kusnacht
Switzerland CH-8700
 47




---



##### 



SHARES BENEFICIALLY OWNEDAmount and Natureof Beneficial
    
    
    
    
    
    Percent of VotingName and Address of Beneficial Owner
    
    Class of Security
    
    Ownership
    
    Percent of Class
    
    PowerElmira United Corporation (11)
    
    Common Stock
    
    
    9,350,000
    
    
    
    35.8
    
    
    
    26.4Swiss Tower  16th Floor
Panama
Republic of PanamaNew York Ventures(12)
    
    Common Stock
    
    
    620,000
    
    
    
    2.3
    
    
    
    1.7c/o BDO Visura
    
    Series D Preferred Stock
    
    
    620
    
    
    
    86.1Entfelderstrasse 1
CH-5001 AarauAll our directors and
    
    Common Stock
    
    
    4,675,777
    
    
    
    17.1
    
    
    
    14.6executive officers as a
    
    Series D Preferred Stock
    
    
    100
    
    
    
    13.9group (6 persons) (13)
    
    Series E Preferred Stock
    
    
    50
    
    
    
    100.0
 
 *
    
    Less than one percent.(1)
    
    Consists of 1,700,000 shares which Mr. Crosbie has the right to acquire upon exercise of
options or warrants.(2)
    
    Consists of 500,000 shares which Mr. Austin has the right to acquire upon exercise of options
or warrants.(3)
    
    Consists of 501,100 shares which Mr. Spurlock has the right to acquire upon exercise of
options or warrants.(4)
    
    Consists of 9,277 shares of common stock owned of record by Mr. Willems and 15,000 shares
which Mr. Willems has the right to acquire upon exercise of options or warrants.(5)
    
    Common Stock consists of 326,500 shares of common stock owned of record by Mr. Michel,
150,000 shares which may be issued to Mr. Michel upon conversion of preferred stock, and
605,000 shares which Mr. Michel has the right to acquire upon exercise of options or warrants.(6)
    
    Consists of 615,000 of common stock owned of record by Mr. Dubach, and 605,000 shares which
Mr. Dubach has the right to acquire upon exercise of options or warrants.(7)
    
    Includes 1,051,603 shares of common stock owned of record by National Financial Corporation
(based upon the latest information reported to or known by us). Messrs. Lycke and Brown own
71.1% and 17.7%, respectively, of the outstanding capital stock of National Financial
Corporation. MNS Enterprises, Inc. manages all activities of National Financial Corporation
pursuant to a Management Agreement. Mr. Schellenberg is the President and a Director of MNS
Enterprises, Inc. Therefore, Messrs. Lycke, Brown and Schellenberg may be deemed to
beneficially own the shares of common stock owned by National Financial Corporation.(8)
    
    Consists of 1,279,723 shares of common stock owned of record by Mr. Lycke (based upon the
latest information reported to or known by us), 250,000 shares which Mr. Lycke has the right
to acquire upon exercise of options or warrants, and 1,051,603 shares of common stock owned of
record by National Financial Corporation.(9)
    
    Consists of 310,751 shares of common stock owned of record by Mr. Brown (based upon the
latest information reported to or known by us) and 1,051,603 shares of common stock owned of
record by National Financial Corporation.(10)
    
    Consists of 742,000 shares of common stock owned of record by Mr. Schellenberg (based upon
the latest information reported to or known by us) and 1,051,603 shares of common stock owned
of record by National Financial Corporation.(11)
    
    Consists of 9,350,000 shares of common stock owned of record by Elmira (based upon the latest
information reported to or known by us).(12)
    
    Common Stock consists of 620,000 shares which may be issued to New York Ventures upon
conversion of preferred stock.(13)
    
    Includes an aggregate of 3,575,000 shares which they have a right to acquire upon exercise of
options or warrants. 48




---



##### 



NUMBER OF
    
    
    
    
    
    
    NUMBER OFSECURITIES TO BE
    
    
    
    
    
    
    SECURITIESISSUED UPON
    
    
    WEIGHTED-AVERAGE
    
    
    REMAINING AVAILABLEEXERCISE OF
    
    
    EXERCISE PRICE OF
    
    
    FOR FUTURE ISSUANCEOUTSTANDING OPTIONS
    
    
    OUTSTANDING OPTIONS
    
    
    UNDER EQUITYAND WARRANTS
    
    
    AND WARRANTS
    
    
    COMPENSATION PLANS*(a)
    
    
    (b)
    
    
    (c)Equity Compensation
Plans Approved By
Stockholders
    
    
    900,776
    
    
    $
    1.15
    
    
    
    768,454Equity Compensation
Plans Not Approved
By Stockholders
    
    
    3,599,324
    
    
    
    0.17
    
    
    
    Total
    
    
    4,500,100
    
    
    $
    0.36
    
    
    
    768,454
 
 *
    
    Excludes securities reflected in column (a).           49




---



##### 



50




---



##### 



3.1(2)
    
    Certificate of Incorporation3.1(a)(2)
    
    Certificate of Amendment to Certificate of Incorporation3.1(b)(4)
    
    Certificate of Designation of Series A Preferred Stock3.1(c)(4)
    
    Certificate of Designation of Series B Preferred Stock3.1(d)(4)
    
    Certificate of Designation of Series C Preferred Stock3.1(e)(4)
    
    Certificate of Designation of Series D Preferred Stock3.1(f)(1)
    
    Certificate of Designation of Series E Preferred Stock3.2(2)
    
    Bylaws, as amended4.1(2)
    
    Form of Common Stock Certificate4.2(4)
    
    Form of Warrant issued to Bo W. Lycke dated February 21, 2002*4.3(5)
    
    Form of Warrant issued to Don Crosbie dated June 3, 2003*4.4(5)
    
    Form of Warrant issued to certain employees dated June 3, 2003*4.5(5)
    
    Form of Warrant issued to Thomas Michel dated June 3, 2003*4.6(5)
    
    Form of Warrant issued to Alfred Dubach dated June 3, 2003*4.7(6)
    
    Form of Warrant issued to Thomas Michel dated June 30, 2004.*4.8(6)
    
    Form of Warrant issued to Gary J. Austin dated September 21, 2004.*4.9(6)
    
    Form of Warrant issued to Laura M. Bray dated September 21, 2004.*4.10(6)
    
    Form of Warrant issued to Don Crosbie dated September 21, 2004.*10.1(2)
    
    1997 Stock Option Plan, as amended through October 19, 2000*10.2(3)
    
    Amendment dated October 20, 2000 to 1997 Stock Option Plan*10.3(2)
    
    Form of Indemnification Agreement*10.4(2)
    
    Form of Non-Employee Directors Plan10.5(1)
    
    Note dated June 6, 2002 between Claimsnet.com and J. R. Schellenberg related to $50,000 loan.10.6(1)
    
    Note dated August 1, 2002 between Claimsnet.com and J. R. Schellenberg related to $10,000 loan.*10.7(1)
    
    Note dated August 1, 2002 between Claimsnet.com and Thomas Michel related to $50,000 loan.10.8(6)
    
    Note dated September 21, 2004 between Claimsnet.com and R.L. Armstrong Limited Partnership related to $50,000 loan.10.9(6)
    
    Note dated September 22, 2004 between Claimsnet.com and Elmira United Corporation related to $50,000 loan.10.10(6)
    
    Note dated October 4, 2004 between Claimsnet.com and Douglas R. Urquhart
related to $50,000 loan.10.11(6)
    
    Note dated October 5, 2004 between Claimsnet.com and Newman Family Trust
related to $100,000 loan.10.12(6)
    
    Note dated December 28, 2004 between Claimsnet.com and Elmira United Corporation related to $150,000 loan.
 51




---



##### 



10.13(6)
    
    Form of Registration Rights Agreement10.14(8)
    
    Note dated November 2, 2005 between Claimsnet.com and Elmira United Corporation related to $100,000 loan.10.15(8)
    
    Note dated April 5, 2006 between Claimsnet.com and Elmira United Corporation related to
$100,000 loan.10.16(7)
    
    Note dated July 22, 2005 between Claimsnet.com and National Financial Corporation related to
$100,000 loan.*10.17(9)
    
    Offer Letter of Mr. Kent McRee dated May 18, 2006.*10.18(9)
    
    Bonus Agreement Letter of Mr. Kent McRee dated May 18, 2006.10.19(8)
    
    Note dated June 15, 2006 between Claimsnet.com and Elmira United Corporation related to
$50,000 loan.10.20(10)
    
    Note dated August 29, 2006 between Claimsnet.com and Elmira United Corporation related to $100,000 loan.10.21(11)
    
    Note dated September 29, 2006 between Claimsnet.com and Elmira United Corporation related to $50,000 loan.10.22(12)
    
    Note dated November 16, 2006 between Claimsnet.com and National Financial Corporation related to
$100,000 loan.10.23(13)
    
    Note dated November 29, 2006 between Claimsnet.com and Elmira United Corporation related to
$300,000 loan.10.24(13)
    
    Equipment Lease Agreement dated December 1, 2006 between Claimsnet.com and E-Link Systems.10.25(14)
    
    Note dated January 16, 2007 between Claimsnet.com and Eganoc Services Corp related to
$100,000 loan.*10.26(15)
    
    Note dated January 24, 2007 between Claimsnet.com and Thomas Michel related to $10,000 loan.10.27(16)
    
    Note dated September 27, 2007 between Claimsnet.com and Elmira United Corporation related to
$50,000 loan.10.28(17)
    
    Note dated December 13, 2007 between Claimsnet.com and National Financial Corporation related to
$100,000 loan.21.1
    
    Subsidiaries of Claimsnet.com inc.31.1
    
    Certification of Don Crosbie31.2
    
    Certification of Laura M. Bray32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 of Don Crosbie32.2
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 of Laura M. Bray
 
 *
    
    Contract with management or compensatory arrangement.(1)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K, for the
Year Ended December 31, 2002 filed on April 1, 2003.(2)
    
    Incorporated by reference to the Registrants registration statement on Form S-1
(Registration No. 333-36209). 52




---



##### 



(3)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K
for the year ended December 31, 2000 filed on April 16, 2001 and amended on October 3, 2001(4)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the
year ended December 31, 2001 filed on April 15, 2002.(5)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-KSB for the
year ended December 31, 2003, filed on March 29, 2004.(6)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-KSB for the
year ended December 31, 2004, filed on March 16, 2005.(7)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-KSB for the
year ended December 31, 2005, filed on February 16, 2006.(8)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-QSB for
the quarter ended June 30, 2006, filed on July 26, 2006.(9)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated May
31, 2006.(10)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated
August 29, 2006.(11)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-QSB for
the quarter ended September 30, 2006, filed on October 26, 2006.(12)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated November 16, 2006.(13)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated November 29, 2006.(14)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated January 16, 2007.(15)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-QSB for
the quarter ended March 31, 2007, filed on April 26, 2007.(16)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-QSB for
the quarter ended September 30, 2007, filed on October 23, 2007.(17)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated
December 13, 2007. 53




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##### 



FEE CATEGORY
    
    WHITLEY PENN LLPAudit Fees (1)
    
    $
    57,600Audit-Related Fees (2)
    
    
    Tax Fees (2)
    
    
    All Other Fees (2)
    
    
    Total
    
    $
    57,600
  FEE CATEGORY
    
    WHITLEY PENN LLPAudit Fees (1)
    
    $
    43,400Audit-Related Fees (2)
    
    
    Tax Fees (2)
    
    
    All Other Fees (2)
    
    
    Total
    
    $
    43,400
 
 (1)
    
    Audit Fees consist of aggregate fees billed for professional services rendered for the audit
of our annual financial statements and review of the interim financial statements included in
quarterly reports or services that are normally provided by the independent auditor in
connection with statutory and regulatory filings or engagements during the fiscal years ended
December 31, 2007 and December 31, 2006.(2)
    
    No such services were provided in 2007 or 2006.   54




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##### 



CLAIMSNET.COM INC.
(Registrant)By:
    /s/ Don CrosbieDon CrosbieChief Executive OfficerDate: February 26, 2008  /s/ Don Crosbie
Don CrosbieChief Executive Officer,Class I Director andChairman of the Board/s/ Laura M. Bray

Laura M. BrayChief Financial Officer and Principal Accounting Officer/s/ Alfred Dubach
Alfred DubachClass I Director andVice Chairman of the Board/s/ John C. Willems, III

John C. Willems, IIIClass II Director/s/ Thomas Michel
Thomas MichelClass II Director
 55