CORPORATE PROFILE

Weighted Average Common Shares Outstanding  - Basic and Diluted (12/31/07) 26,050,221
Float 8,951,000
Stock Symbol OTC:BB CLAI.OB
Don Crosbie, Chairman & CEO
(972) 458-1701 Ext. 112
dcrosbie@claimsnet.com

Laura Bray, CFO
(972) 458-1701 Ext. 110
lbray@claimsnet.com

Gary Austin, COO
(972) 458-1701 Ext. 118
gaustin@claimsnet.com

Claimsnet.com
14860 Montfort Drive, Suite 250
Dallas, TX 75254
972-458-1701

COMPANY OVERVIEW

Claimsnet is completing a turnaround to move the Company to profitability as rapidly as possible.  It has divested its legacy business, adopted a new business model, hired a new CEO, cut expenses, cleaned up its balance sheet, and implemented a sales and marketing initiative that is demonstrating successful results.

BUSINESS DESCRIPTION

Claimsnet is a recognized innovator in the rapidly growing healthcare clearinghouse industry.  Its proprietary technology is used by industry leaders and gives Claimsnet a competitive advantage through greater flexibility and cost effectiveness.

THE BUSINESS MODEL

Claimsnet’s business model is based on high volume transaction customers generating recurring revenue.  The Company is primarily targeting healthcare payers (insurance companies, HMO’s, PPO’s and TPA’s) and related entities (“the payers”). The Company has established very valuable business alliances with several companies (“the partners”) that provide adjudication systems and other services to the payer market. The Company believes that these partnerships will help the Company achieve rapid market penetration.  The first joint payer initiatives from these alliances have been successfully implemented and additional clients are now under contract. For these alliance partners and their payer clients, Claimsnet offers a better product, reduced costs for the payers and new revenue streams for the partners. The first three partner Companies have an aggregate of 500+ payer clients that collectively represent an outstanding marketing opportunity for cross-sale of the Company’s services which along with our direct sales efforts have resulted in 40 new customers since June 2003.

The Company has recently completed several contracts that helped large payers comply with federally mandated HIPAA regulations.  The software solution created for these clients expands the Company’s product offerings for the payer market.

MARKET ANALYSIS

There are more than 4 billion healthcare claims filed annually in the United States.  In addition to the initial claim submission, a large percentage of claims generate additional transactions between entities that perform specific steps in the complex process required to accurately adjudicate a claim.  Managed care has only made the process more complex. Claims bounce between the payer and many trading partners; third party administrators (TPA’s), preferred provider organizations (PPO’s), independent physician associations (IPA’s), managed service organizations (MSO’s), re-pricing organizations (RPO’s) and out-of-network claim administrators (ONCA’s).  In large part due to the surging cost of healthcare, increasingly more complex arrangements are being created every day.

The Company believes there are two significant forces converging on the healthcare industry which, when combined, will significantly alter the way healthcare transactions are processed and will work together to drive rapid growth in electronic healthcare transaction processing.

First, the introduction and proliferation of the Internet and Internet-related technologies offer a significantly improved and measurable return on investment (ROI) by:

§          Creating solutions that do not require expensive hardware and communications equipment purchases

§          Creating solutions that can be deployed to a high number of geographically diverse locations or wide area virtual private networks

§          Creating solutions that are more cost-efficient to deploy and operate.

Second, the federal mandates related to the Health Insurance Portability and Accountability Act of 1996 (HIPAA) will call for healthcare payers to implement secure electronic transaction processing systems for a much larger variety of transactions.  The requirements of HIPAA dovetail very closely with the capabilities of Internet solutions.  For the first time ever, there will be an Internet based network that providers can rely on to:

§          Process secure transactions for virtually any payer organization

§          Process all of the most common provider/payer transactions in an electronic format, while maintaining HIPAA compliance.

INVESTMENT HIGHLIGHTS

·          The Company brought in a new Chief Executive Officer with an impressive track record and the skills to take the Company’s product to market. 

·          The Company has materially amended its sales and marketing strategies and procedures to create larger revenue events and revenue streams that also provide improved gross margins.

·          The combined aggregate 500+ payer client base of the Company’s strategic partners represents a very substantial and unique marketing opportunity.

·          The Company is also increasing its focus on the TPA, HMO, PPO and payer segment of the healthcare industry.

·          The Company has signed more than 40 new client contracts and relationships since June 2003 as a direct result of successful sales and marketing efforts.  

Certain statements contained in this document may be construed as "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words “may”,” believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. The Company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause the Company's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include the ability to attract sufficient capital, the impact of regulatory actions, the success of the Company’s revised marketing strategy, difficulty in predicting the completion of implementations and consequently the timing of revenue recognition, the inability to attract and retain key employees, reliance on key third-party relationships, management of the Company's growth, and other risks and uncertainties. Further information regarding these and other factors which could cause the Company's actual results to differ materially from any forward-looking statements contained in this business plan is contained in the Company's periodic reports as filed with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.
This document is for informational purposes only. This document is not an offer to buy or sell securities. The information contained has been obtained from sources, which are believed to be reliable, but the accuracy or completeness of the contents cannot be guaranteed. Prospective investors are encouraged to review in detail the Company’s periodic filings with the Securities and Exchange Commission and/or other additional information, including consultation with their personal financial advisor. Any projections or estimates made herein assume certain economic and industry conditions and parameters that may be subject to change and involve various risks and uncertainties.