##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
  þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 September 30, 2007
  o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
  001-14665
 CLAIMSNET.COM INC.
  Delaware
    
    75-2649230(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 
 
 
 þ
 þ
  þ
    -1-




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##### 



PART I. FINANCIAL INFORMATION
    
    
    2ITEM 1. Financial Statements
    
    
    2Consolidated Balance Sheets as of September 30, 2007 (unaudited) and December 31, 2006 (audited)
    
    
    3Consolidated Statements of Operations (unaudited) for the Three Months Ended September 30, 2007 and 2006, and for the Nine Months Ended September 30, 2007 and 2006
    
    
    4Consolidated Statements of Changes in Stockholders Deficit for the Year Ended December 31, 2006 (audited) and the Nine Months Ended September 30, 2007 (unaudited)
    
    
    5Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2007 and 2006
    
    
    6Notes to Consolidated Financial Statements
    
    
    7ITEM 2. Managements Discussion and Analysis or Plan of Operations
    
    
    12ITEM 3. Controls and Procedures
    
    
    17PART II. OTHER INFORMATION
    
    
    18ITEM 6. Exhibits
    
    
    18SIGNATURES
    
    
    20CERTIFICATIONS
    
    
    21Exhibit 10.1Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
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##### Table of Contents



(Unaudited)
    
    
    (Audited)September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCURRENT ASSETSCash and equivalents
    
    $
    61
    
    
    $
    251Accounts receivable, net of allowance for
doubtful accounts of $1 and $6, respectively
    
    
    284
    
    
    
    207Prepaid expenses and other current assets
    
    
    36
    
    
    
    38Total current assets
    
    
    381
    
    
    
    496EQUIPMENT, FIXTURES AND SOFTWARETotal equipment, fixtures and software, net
    
    
    183
    
    
    
    230TOTAL ASSETS
    
    $
    564
    
    
    $
    726LIABILITIES AND STOCKHOLDERS DEFICITCURRENT LIABILITIESAccounts payable
    
    $
    127
    
    
    $
    168Accrued payroll and other current liabilities
    
    
    111
    
    
    
    91Accrued interest
    
    
    144
    
    
    
    97Capital leases  current portion
    
    
    39
    
    
    
    35Deferred revenues  current portion
    
    
    32
    
    
    
    44Notes payable to related parties  current portion
    
    
    195
    
    
    
    175Convertible notes payable to related parties  current portion
    
    
    200
    
    
    
    200Convertible notes payable  current portion
    
    
    200
    
    
    
    200Total current liabilities
    
    
    1,048
    
    
    
    1,010LONG-TERM LIABILITIESOther long-term liabilities
    
    
    1
    
    
    
    3Capital leases  long-term portion
    
    
    52
    
    
    
    82Deferred revenues  long-term portion
    
    
    17
    
    
    
    23Convertible notes payable to related parties  long-term portion
    
    
    710
    
    
    
    700Convertible notes payable  long-term portion
    
    
    100
    
    
    
    Total long-term liabilities
    
    
    880
    
    
    
    808Total liabilities
    
    
    1,928
    
    
    
    1,818STOCKHOLDERS 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 as of September
30, 2007 and December 31, 2006
    
    
    
    
    
    
    Common stock, $.001 par value; 40,000,000 shares authorized; 26,051,180
shares issued and outstanding as of September 30, 2007 and 26,001,180 as of
December 31, 2006
    
    
    26
    
    
    
    26Additional capital
    
    
    43,169
    
    
    
    43,166Accumulated deficit
    
    
    (44,559
    )
    
    
    (44,284
    )Total stockholders deficit
    
    
    (1,364
    )
    
    
    (1,092
    )TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT
    
    $
    564
    
    
    $
    726
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Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006REVENUES
    
    $
    414
    
    
    $
    381
    
    
    $
    1,240
    
    
    $
    1,054COST OF REVENUES
    
    
    274
    
    
    
    239
    
    
    
    846
    
    
    
    690GROSS PROFIT
    
    
    140
    
    
    
    142
    
    
    
    394
    
    
    
    364OPERATING EXPENSESSelling, general and administrative
    
    
    195
    
    
    
    218
    
    
    
    594
    
    
    
    602Total operating expenses
    
    
    195
    
    
    
    218
    
    
    
    594
    
    
    
    602LOSS FROM OPERATIONS
    
    
    (55
    )
    
    
    (76
    )
    
    
    (200
    )
    
    
    (238
    )OTHER INCOME (EXPENSE)Interest income
    
    
    1
    
    
    
    
    
    
    
    6
    
    
    
    Interest expense  related parties
    
    
    (18
    )
    
    
    (12
    )
    
    
    (27
    )
    
    
    (28
    )Interest expense  other
    
    
    (9
    )
    
    
    (5
    )
    
    
    (54
    )
    
    
    (16
    )Total other income (expense)
    
    
    (26
    )
    
    
    (17
    )
    
    
    (75
    )
    
    
    (44
    )NET LOSS
    
    $
    (81
    )
    
    $
    (93
    )
    
    $
    (275
    )
    
    $
    (282
    )NET LOSS PER COMMON SHARE (BASIC AND DILUTED)
    
    $
    (0.00
    )
    
    $
    (0.00
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING (BASIC AND DILUTED)
    
    
    26,051
    
    
    
    25,977
    
    
    
    26,048
    
    
    
    25,976
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Number of
    
    
    
    
    
    
    Number ofPreferred
    
    
    
    
    
    
    Common
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalShares
    
    
    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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    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
    
    
    
    
    
    
    
    
    
    
    50
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    10Stock based
compensation (reversal)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    (7
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (275
    )
    
    
    (275
    )Balances at September
30, 2007
    
    
    1
    
    
    $
    
    
    
    
    26,051
    
    
    $
    26
    
    
    $
    43,169
    
    
    $
    (44,559
    )
    
    $
    (1,364
    )
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Nine Months EndedSeptember 30,2007
    
    
    2006CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (275
    )
    
    $
    (282
    )Adjustments to reconcile net loss to net cash
used in operating activities:Depreciation and amortization
    
    
    55
    
    
    
    39Bad debt expense
    
    
    
    
    
    
    5Stock based compensation (reversal)
    
    
    (7
    )
    
    
    10Changes in operating assets and liabilities:Accounts receivable
    
    
    (77
    )
    
    
    10Prepaid expenses and other current assets
    
    
    2
    
    
    
    (10
    )Current and non-current liabilities
    
    
    6
    
    
    
    25Net cash used in operating activities
    
    
    (296
    )
    
    
    (203
    )CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of property and equipment
    
    
    (2
    )
    
    
    (11
    )Capitalized software development costs
    
    
    (6
    )
    
    
    (45
    )Net cash used in investing activities
    
    
    (8
    )
    
    
    (56
    )CASH FLOWS FROM FINANCING ACTIVITIES:Principal payments on capital lease obligation
    
    
    (26
    )
    
    
    Proceeds from notes payable
    
    
    100
    
    
    
    45Payment of notes payable
    
    
    
    
    
    
    (69
    )Proceeds from notes payable to related parties
    
    
    60
    
    
    
    372Payment of notes payable to related parties
    
    
    (30
    )
    
    
    (72
    )Proceeds from exercise of stock warrants
    
    
    10
    
    
    
    Net cash provided by financing activities
    
    
    114
    
    
    
    276NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS
    
    
    (190
    )
    
    
    17CASH AND EQUIVALENTS, BEGINNING OF PERIOD
    
    
    251
    
    
    
    28CASH AND EQUIVALENTS, END OF PERIOD
    
    $
    61
    
    
    $
    45SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:Cash paid for interest
    
    $
    32
    
    
    $
    3Cash paid for taxes
    
    $
    
    
    
    $
    SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIES:Payments of interest through exercise of warrants
    
    $
    
    
    
    $
    5
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1.
    
    BASIS OF PRESENTATIONIn the opinion of management, the accompanying unaudited consolidated financial statements
include all necessary adjustments (consisting of normal recurring adjustments) and present
fairly the consolidated financial position of Claimsnet.com inc. and subsidiaries (the
Company) as of September 30, 2007 and the results of its operations and cash flows for the
three and nine months ended September 30, 2007 and 2006, in conformity with generally
accepted accounting principles for interim financial information applied on a consistent
basis. The results of operations for the three and nine months ended September 30, 2007 are
not necessarily indicative of the results to be expected for the full year.Certain information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been omitted. These
financial statements should be read in conjunction with the audited consolidated financial
statements and notes thereto included in the Companys Annual Report on Form 10-KSB for the
year ended December 31, 2006, as filed with the Securities and Exchange Commission on March
8, 2007.2.
    
    NEED FOR ADDITIONAL CAPITAL AND LIQUIDITYManagement believes that available cash resources, together with anticipated revenues from
operations and the proceeds from recently completed financing activities and funding
commitments may not be sufficient to satisfy the Companys capital requirements past December
31, 2007. Necessary additional capital may not be available on a timely basis or on
acceptable terms, if at all. In any of these events, the Company may be unable to implement
current plans for expansion or to repay debt obligations as they become due. If sufficient
capital cannot be obtained, the Company may be forced to significantly reduce operating
expenses to a point which would be detrimental to business operations, curtail research and
development activities, sell business assets or discontinue some or all of its business
operations, take other actions which could be detrimental to business prospects and result in
charges which could be material to its operations and financial position, or cease operations
altogether. In the event that any future financing should take the form of the sale 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.
    
    EQUIPMENT, FIXTURES AND SOFTWAREEquipment, fixtures and software consists of the following at September 30, 2007 (in
thousands):
 Computer hardware and software
    
    $
    1,091Software development costs
    
    
    2,110Furniture and fixtures
    
    
    31Office equipment
    
    
    28Leasehold improvements
    
    
    35Equipment under capital lease
    
    
    1213,416Less accumulated depreciation and amortization
    
    
    (3,233
    )$
    183
 The assets held under capital leases have been included in property and equipment and total
$121,000 with accumulated amortization of $34,000 for the quarter ended September 30, 2007.
Amortization expense related to capital leases is included in depreciation expense.4.
    
    REVENUE RECOGNITIONThe Company generally enters into service agreements with its customers to provide access to
its hosted software platform for processing of customer transactions. The Company operates
the software application for all customers and the customers are not entitled to ownership of
its software at any time during or at the end of the agreements. The end users of the
Companys software application access its hosted software platform or privately hosted
versions of its software application via the internet with no additional software required to
be located on the customers systems. Customers pay implementation fees, transaction fees
and time and materials charges for additional services. Revenues primarily include fees for
implementation and transaction fees, which may be subject to monthly minimum provisions.
Customer agreements may also provide for development fees related to private labeling of the
Companys software platform (i.e. access to its 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. The Company accounts for its service
agreements by combining the contractual revenues from development, implementation, license,
support and certain additional service fees and recognizing the revenue ratably over the
expected period of performance. The Company currently uses an estimated expected business
arrangement term of three years which is currently the term of the typical contracts signed
by its customers. The Company does not segment these services and uses the underlying
contractual terms to recognize revenue because it does not have objective and reliable
evidence of fair value to allocate the arrangement consideration to the deliverables in the
arrangement. To the extent that implementation fees are received in advance of recognizing
the revenue, the Company defers these fees and records them as deferred revenue. The Company
recognizes service fees for transactions and some additional services as the services are
performed. The Company expenses the costs associated with its customer service agreements as
those costs are incurred.
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5.
    
    ACCOUNTING CHANGESIn June 2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in Income
Taxes, an Interpretation of FASB Statement No. 109, Accounting for Income Taxes(FIN 48),
to create a single model to address accounting for uncertainty in tax positions. FIN 48
clarifies the accounting for income taxes by prescribing a minimum recognition threshold a
tax position is required to meet before being recognized in the financial statements. FIN 48
also provides guidance on derecognition, measurement, classification, interest, and
penalties, accounting in interim periods, disclosure and transition. The Company adopted FIN
48 as of January 1, 2007, and the adoption did not have a material impact on the Companys
consolidated financial statements or effective tax rate and did not result in any
unrecognized tax benefits.Interest costs and penalties related to income taxes are classified as interest expense and
general and administrative costs, respectively, in the Companys consolidated financial
statements. For the three and nine months ended September 30, 2007 and 2006, the Company did
not recognize any interest or penalty expense related to income taxes. It is determined not
to be reasonably possible for the amounts of unrecognized tax benefits to significantly
increase or decrease within the next 12 months. The Company is currently subject to a three
year statute of limitations by major tax jurisdictions. The Company and its subsidiaries file
income tax returns in the U.S. federal jurisdiction.In February 2007, FASB issued Statement of Financial Accounting Standard (SFAS) No. 159,
The Fair Value Option for Financial Assets and Financial Liabilities  Including an
Amendment of FASB Statement No. 115(SFAS 159).The fair value option permits entities to
choose to measure eligible financial instruments at fair value at specified election dates.
The entity will report unrealized gains and losses on the items on which it has elected the
fair value option in earnings. SFAS 159 is effective beginning in fiscal year 2008. The
Company is currently evaluating the effect of adopting SFAS 159, but does not expect it to
have a material impact on its consolidated results of operations or financial condition.6.
    
    SHARE BASED PAYMENTSThe Company accounts for options and warrants issued to employees under SFAS No. 123R,
Share-Based Payment, as of January 1, 2006, using the modified prospective application
method. This statement requires the recognition of compensation expense when an entity
obtains employee services in stock-based payment transactions.Upon the adoption of SFAS 123(R), the Company began recording compensation cost related to
all new stock based compensation grants after our adoption date. The compensation cost to be
recorded is based on the fair value at the grant date.There was no share-based compensation expense for the three months ended September 30, 2007.
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Three Months EndedSeptember 30, 2006Unvested
    
    
    Unvested WarrantsStock Options
    
    
    for Common Stock
    
    
    TotalSelling, general and
administrative expense
    
    
    
    
    
    
    5
    
    
    
    5Total share-based compensation
    
    $
    
    
    
    $
    5
    
    
    $
    5
  Nine Months EndedSeptember 30, 2007Unvested
    
    
    Unvested WarrantsStock Options
    
    
    for Common Stock
    
    
    TotalSelling, general and
administrative
expense
    
    
    
    
    
    
    (7
    )
    
    
    (7
    )Total share-based compensation
(reversal)
    
    $
    
    
    
    $
    (7
    )
    
    $
    (7
    )
  Nine Months EndedSeptember 30, 2006Unvested
    
    
    Unvested WarrantsStock Options
    
    
    for Common Stock
    
    
    TotalSelling, general and
administrative expense
    
    
    
    
    
    
    10
    
    
    
    10Total share-based compensation
    
    $
    
    
    
    $
    10
    
    
    $
    10
  WEIGHTEDNUMBER
    
    
    PER SHARE
    
    
    AVERAGEOF SHARES
    
    
    EXERCISE PRICE
    
    
    EXERCISE PRICEOutstanding options-December 31, 2006
    
    
    956,776
    
    
    $
    0.15-8.00
    
    
    $
    1.10Granted
    
    
    
    
    
    
    
    
    
    
    Expired or cancelled
    
    
    (56,000
    )
    
    
    0.15-8.00
    
    
    
    0.29Outstanding options-September 30, 2007
    
    
    900,776
    
    
    $
    0.30-8.00
    
    
    $
    1.15Options exercisable-September 30, 2007
    
    
    900,776
    
    
    $
    0.30-8.00
    
    
    $
    1.15
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WEIGHTEDNUMBER
    
    
    PER SHARE
    
    
    AVERAGEOF SHARES
    
    
    EXERCISE PRICE
    
    
    EXERCISE PRICEOutstanding warrants-December 31, 2006
    
    
    3,624,324
    
    
    $
    0.15-0.35
    
    
    $
    0.18Granted
    
    
    
    
    
    
    
    
    
    
    Expired or cancelled
    
    
    (1,025,000
    )
    
    
    0.15-0.25
    
    
    
    0.25Outstanding warrants-September 30, 20072,599,324
    
    
    
    
    
    $
    0.15-0.35
    
    
    $
    0.18Warrants exercisable-September 30, 2007
    
    
    2,599,624
    
    
    $
    0.15-0.35
    
    
    $
    0.18
  7.
    
    LOANS FROM RELATED PARTIESOn September 27, 2007, the Company entered into an unsecured loan agreement in the amount of
$50,000 pursuant to an unsecured short-term loan agreement with Elmira United Corporation
(Elmira), a 5% stockholder. The 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 January 31, 2008.On September 22, 2007, an amendment was made to an unsecured loan agreement in the amount of
$50,000 pursuant to an unsecured short-term loan agreement with Elmira dated September 22,
2004 with an original due date of September 22, 2007. Pursuant to the amendment, payments
equal to the principal and accrued and unpaid interest on the note are now due January 31,
2008. All other terms of the original agreement remain in effect.On January 23, 2007, the Company entered into an unsecured loan agreement in the amount of
$10,000 pursuant to a convertible long-term loan agreement with a director of the Company.
The note bears 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 shares per $10,000 of principal. Interest is payable
on maturity.The conversion price for the convertible note was in excess of the trading price on the date
of issuance, therefore no beneficial conversion feature exists for the note.8.
    
    LOANSOn September 21, 2007, an amendment was made pursuant to an unsecured loan agreement in the
amount of $50,000 pursuant to an unsecured short-term loan agreement with R.L Armstrong
Limited Partnership dated September 21, 2004 with an original due date of September 21, 2007.
Pursuant to the amendment, payments equal to the principal and accrued and unpaid interest on
the note are now due January 31, 2008. All other terms of the original agreement remain in
effect.On January 16, 2007, the Company entered into an unsecured loan agreement in the amount of
$100,000 pursuant to a convertible long-term loan agreement. The 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 shares per $10,000 of principal. Interest is payable on maturity.The conversion price for the convertible note was in excess of the trading price on the date
of issuance, therefore no beneficial conversion feature exists for the note.
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9.
    
    SUBSEQUENT EVENTSOn October 4, 2007, an amendment was made to an unsecured loan agreement in the amount of
$50,000 pursuant to an unsecured short-term loan agreement with Douglas R. Urquhart dated
October 4, 2004 with an original due date of October 4, 2007. Pursuant to the amendment,
payments equal to the principal and accrued and unpaid interest on the note are now due
January 31, 2008. All other terms of the original agreement remain in effect.On October 5, 2007, an amendment was made to an unsecured loan agreement in the amount of
$100,000 pursuant to an unsecured short-term loan agreement with the Newman Family Trust
dated October 5, 2004 with an original due date of October 5, 2007. Pursuant to the
amendment, payments equal to the principal and accrued and unpaid interest on the note are
now due January 31, 2008. All other terms of the original agreement remain in effect.
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
    
    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.
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
    
    to utilize our 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,
HMOs, 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;
    
    to license our technology for other applications, including stand-alone purposes, internet
systems and private label use, and for original equipment manufacturers; and
    
    to seek merger and acquisition opportunities that enhance our growth and profitability
objectives.
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3.1(2)
    
    Certificate of Incorporation3.1(a)(2)
    
    Certificate of Amendment to Certificate of Incorporation3.1(b)(3)
    
    Certificate of Designation of Series A Preferred Stock3.1(c)(3)
    
    Certificate of Designation of Series B Preferred Stock3.1(d)(3)
    
    Certificate of Designation of Series C Preferred Stock3.1(e)(3)
    
    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(3)
    
    Form of Warrant issued to Bo W. Lycke dated February 21, 20024.3(1)
    
    Form of Warrant issued to Don Crosbie dated October 21, 20024.4(4)
    
    Form of Warrant issued to Don Crosbie dated June 3, 20034.5(4)
    
    Form of Warrant issued to certain employees dated June 3, 20034.6(4)
    
    Form of Warrant issued to Thomas Michel dated June 3, 20034.7(4)
    
    Form of Warrant issued to Alfred Dubach dated June 3, 20034.8(5)
    
    Form of Warrant issued to Thomas Michel dated June 30, 2004.4.9(5)
    
    Form of Warrant issued to Gary J. Austin dated September 21, 2004.4.10(5)
    
    Form of Warrant issued to Laura M. Bray dated September 21, 2004.4.11(5)
    
    Form of Warrant issued to Don Crosbie dated September 21, 2004.10.1
    
    Note dated September 27, 2007 between Claimsnet.com and Elmira United Corporation related to $50,000 loan.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
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(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).(3)
    
    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.(4)
    
    Incorporated by reference to the Registrants Current Report on Form 10-KSB dated
March 29, 2004.(5)
    
    Incorporated by reference to the Registrants Current Report on Form 10-KSB dated
March 16, 2005.
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CLAIMSNET.COM INC.
(Registrant)October 23, 2007By:
    
    /s/ Don CrosbieDon Crosbie
Chief Executive OfficerOctober 23, 2007By:
    
    /s/ Laura M. BrayLaura M. Bray
Chief Financial Officer
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