UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q

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

                      For the period ended October 31, 2005

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

                         Commission File Number 0-23903


                                EAUTOCLAIMS, INC.
               (Exact name of registrant as specified in charter)


              Nevada                                 95-4583945
              ------                                  ----------
     (State or other jurisdiction                   (IRS Employer
     of incorporation or organization)              Identification No.)


     110 East Douglas Road, Oldsmar, Florida             34677
     ---------------------------------------             -----
     (Address of principal executive offices)          (Zip Code)

          Registrant's telephone Number, including area code: (813) 749-1020

          Securities registered pursuant to Section 12(b) of the Exchange Act:
     None

          Indicate by check 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.

                                        [ X ] Yes  [   ] No

          Indicate by check whether the registrant is an accelerated filer (as
     defined in Rule 12b-2 of the Exchange Act).

                                        [    ] Yes  [ X ] No


     Indicate the number of shares outstanding of each of the Issuer's classes
of common stock, $.001 Par Value, as of November 30, 2005 was 65,780,764.

<PAGE>

                                EAUTOCLAIMS, INC.


                               INDEX TO FORM 10-Q
--------------------------------------------------------------------------------

                                     PART I

                              FINANCIAL INFORMATION

Item 1.  Financial Statements                                          2

          Balance Sheets                                               3
          Statements of Operations                                     4
          Statement of Stockholders' Deficiency                        5
          Statements of Cash Flows                                     6
          Notes to Financial Statements                                7

Item 2. Management's Discussion and Analysis of Financial
         Condition and Results of Operations                          12

Item 3. Quantitative and Qualitative Disclosures About Market Risk    21

Item 4. Controls and Procedures                                       21



                                     PART II

                                OTHER INFORMATION

Item 1. Legal Proceedings                                            22

Item 2. Changes in Securities and Use of Proceeds                    19

Item 3. Defaults Upon Senior Securities                              21

Item 4. Submission of Matters to a Vote of Security Holders          19

Item 5. Other Information                                            19

Item 6. Exhibits and Reports on Form 8-K                             20

Signatures                                                           21

Certifications                                                       22




<PAGE>



                                EAUTOCLAIMS, INC.




                                     PART I

                              FINANCIAL INFORMATION



ITEM 1.    FINANCIAL STATEMENTS.

The financial  statements of eAutoclaims,  Inc. (the "Company")  included herein
were  prepared,  without  audit,  pursuant  to  rules  and  regulations  of  the
Securities  and  Exchange  Commission.  Because  certain  information  and notes
normally included in financial  statements prepared in accordance with generally
accepted accounting  principles were condensed or omitted pursuant to such rules
and regulations,  these financial  statements should be read in conjunction with
the financial  statements and notes thereto included in the financial statements
of the Company as included  in the  Company's  Form 10-K for the year ended July
31, 2005.











                                       2
<PAGE>

<TABLE>
                                                                                                           EAUTOCLAIMS, INC.

                                                                                                              BALANCE SHEETS
<CAPTION>

-----------------------------------------------------------------------------------------------------------------------------
                                                                                      October 31, 2005          July 31, 2005
                                                                                        (unaudited)
-----------------------------------------------------------------------------------------------------------------------------
ASSETS

<S>                                                                                    <C>                       <C>
Current Assets:
  Cash                                                                                   $ 392,897                 $ 306,280
  Accounts receivable, less allowance for doubtful accounts
    of $225,000 and $208,000 respectively                                                  941,933                   742,237
  Due from related parties                                                                       -                     6,231
  Prepaid expenses and other current assets                                                135,431                    88,290
-----------------------------------------------------------------------------------------------------------------------------
        Total current assets                                                             1,470,261                 1,143,038

Property and equipment, net of accumulated depreciation                                    828,270                   857,440

Goodwill                                                                                 1,093,843                 1,093,843

Other assets                                                                                25,800                    25,800

Deferred income tax asset, net of valuation
   allowance $10,001,000 and $9,841,000 respectively
-----------------------------------------------------------------------------------------------------------------------------
        Total Assets                                                                   $ 3,418,174               $ 3,120,121
=============================================================================================================================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
   Accounts payable, advanced payments and accrued expenses                            $ 4,798,425               $ 4,701,483
   Note payable                                                                            500,000                         -
   Current portion of capital lease obligation                                              92,547                    86,642
   Convertible debenture                                                                                             275,000
-----------------------------------------------------------------------------------------------------------------------------
        Total current liabilities                                                        5,390,972                 5,063,125


Capital lease obligation                                                                    99,871                   108,979
-----------------------------------------------------------------------------------------------------------------------------
        Total liabilities                                                                5,490,843                 5,172,104
-----------------------------------------------------------------------------------------------------------------------------

Stockholders' Deficiency:

  Convertible preferred stock - $.001 par value; authorized 5,000,000 shares
   No shares outstanding
  Common stock - $.001 par value; authorized 100,000,000 shares, issued
   and outstanding 64,557,431 shares and 59,488,026 shares respectively                     64,558                    59,488
  Additional paid-in capital                                                            26,026,511                25,081,358
  Accumulated deficit                                                                  (28,163,738)              (27,192,829)
-----------------------------------------------------------------------------------------------------------------------------
        Stockholders' Deficiency                                                        (2,072,669)               (2,051,983)
-----------------------------------------------------------------------------------------------------------------------------
        Total Liabilities and Stockholders' Deficiency                                 $ 3,418,174               $ 3,120,121
=============================================================================================================================
</TABLE>

                                       3
<PAGE>
<TABLE>
-----------------------------------------------------------------------------------------------------------------
                                                                                            EAUTOCLAIMS, INC.
                                                                                         STATEMENTS OF OPERATIONS
-----------------------------------------------------------------------------------------------------------------
<CAPTION>

                                                                      Three-month                  Three-month
                                                                     Period Ended                 Period Ended
                                                                    October 31, 2005             October 31, 2004
                                                                      (unaudited)                  (unaudited)
-----------------------------------------------------------------------------------------------------------------
Revenue:
<S>                                                                    <C>                         <C>
  Collision repairs management                                         $2,753,654                  $3,269,607
  Glass repairs                                                            94,711                     161,088
  Fleet repairs management                                                242,179                     134,749
  Other revenue                                                           711,502                     554,352
-----------------------------------------------------------------------------------------------------------------
Total revenue                                                           3,802,046                   4,119,796
-----------------------------------------------------------------------------------------------------------------

Expenses:
  Claims processing charges                                             2,687,349                   3,200,486
  Selling, general and administrative                                   1,478,493                   1,330,271
  Depreciation and amortization                                           122,284                     134,584
-----------------------------------------------------------------------------------------------------------------
Total expenses                                                          4,288,126                   4,665,341
-----------------------------------------------------------------------------------------------------------------
Net loss                                                               $ (486,080)                 $ (545,545)

Adjustment to net loss to
 compute loss per common share:
       Preferred stock dividends                                                                    $ (16,128)
        Dividend to unit holders                                         (475,829)
-----------------------------------------------------------------------------------------------------------------
Net loss applicable to common stock                                    $ (961,909)                 $ (561,673)
=================================================================================================================
Loss per common share - basic and
  diluted                                                                 $ (0.02)                    $ (0.02)
=================================================================================================================
Weighted-average number of common
  shares outstanding-basic and diluted                                 63,358,825                  35,361,541
=================================================================================================================
</TABLE>

                                       4
<PAGE>
<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                EAUTOCLAIMS, INC.

                                                                                            STATEMENT OF STOCKHOLDERS' DEFICIENCY
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Three month period ended October 31, 2005
                   (unaudited)                                                  Additional
                                                             Common Stock         Paid-in        Accumulated          Stockholders'
                                                         Shares       Amount       Capital          Deficit             Deficiency
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                   <C>             <C>        <C>              <C>                 <C>
Balance at July 31, 2005                              $59,488,026     $59,488    $25,081,358      ($27,192,829)       ($2,051,983)

Issuance of common stock upon exercise
    of options                                            200,000         200          1,800                                2,000

Issuance of common stock for interest                       5,651           6            898                                  904

Issuance of common stock for services                     625,001         625        118,625                              119,250

Dividends issued to unit holders in the form of
    warrants and shares                                 2,162,860       2,163        473,666          (475,829)                 0

Issuance of common stock upon exercise
    of warrants                                           357,143         357         56,786                 0             57,143

Conversion of convertible note to equity                1,718,750       1,719        273,281                 0            275,000

Issuance of warrants in conjunction with
    note payable                                                                       9,000            (9,000)                 0

Vesting of options granted to employees                                               11,097                               11,097

Net Loss                                                                                              (486,080)          (486,080)
-----------------------------------------------------------------------------------------------------------------------------------
Balance at October 31, 2005                           $64,557,431     $64,558    $26,026,511      ($28,163,738)       ($2,072,669)
===================================================================================================================================

</TABLE>

                                       5
<PAGE>

<TABLE>
--------------------------------------------------------------------------------------------------------------------
                                                                                                  EAUTOCLAIMS, INC.

                                                                                          STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                              Three-month               Three-month
                                                                             Period Ended               Period Ended
                                                                            October 31, 2005         October 31, 2004
                                                                              (unaudited)                (unaudited)
--------------------------------------------------------------------------------------------------------------------

<S>                                                                           <C>                       <C>
Cash flows from operating activities:
  Net loss                                                                    $ (486,080)               $ (545,545)
  Adjustments to reconcile net loss to net cash used in
     operating activities:
    Depreciation and amortization                                                122,284                   134,584
    Common stock issued for services                                             119,250                    73,701
    Common stock issued for interest                                                 904                     5,792
    Bad debts                                                                     17,000                    14,000
    Vesting of options granted to employees                                       11,097
    Changes in operating assets and liabilities
      Accounts receivable                                                       (216,696)                  (29,804)
      Prepaid expenses and other current assets                                  (47,141)                  (23,461)
      Accounts payable, advance payments and accrued expenses                     96,942                   289,322
--------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities                                           (382,440)                  (81,411)

Cash flows from investing activity:
  Purchases of property and equipment                                            (73,547)                  (71,438)
  Proceeds from related parties                                                    6,231                     5,960
--------------------------------------------------------------------------------------------------------------------
Net cash used in investing activity                                              (67,316)                  (65,478)

Cash flows from financing activities:
  Proceeds from exercise of warrants                                              57,143
  Proceeds from exercise of options                                                2,000
  Proceeds from note payable                                                     500,000
  Principal payments on capital lease                                            (22,770)                   (3,912)
  Principal payments on shareholder loans                                                                  (21,859)
--------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities                              536,373                   (25,771)

--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash                                                   86,617                  (172,660)
Cash at beginning of period                                                      306,280                   415,549
--------------------------------------------------------------------------------------------------------------------
Cash  at end of period                                                         $ 392,897                 $ 242,889
==================================================================================================================

Supplemental disclosure of cash flow information:

  Cash paid during the period for interest                                      $ 13,463                   $ 9,751
==================================================================================================================


Supplemental disclosure of noncash investing and financing activities:
==================================================================================================================
  Conversion of debentures to common stock                                     $ 275,000                  $ 25,000
==================================================================================================================
  Equipment acquired by capital lease                                           $ 19,567
==================================================================================================================
  Shares and warrants issued to unit holders                                   $ 475,829
==================================================================================================================
  Fair value of warrants issued in conjunction with bridge loan                  $ 9,000
==================================================================================================================
  Conversion of preferred stock and accrued dividends for common stock                                   $ 232,106
==================================================================================================================
  Accrued dividends on preferred stock                                                                    $ 16,128
==================================================================================================================
</TABLE>


                                       6
<PAGE>

                                                      EAUTOCLAIMS, INC.

  NOTES TO FINANCIAL STATEMENTS
  ------------------------------------------------------------------------------

Note 1 - Basis of presentation

The  accompanying   unaudited  financial   statements  contain  all  adjustments
(consisting  only of those of a normal  recurring  nature)  necessary to present
fairly the financial  position of  eAutoclaims,  Inc. as of October 31, 2005 and
its  results of  operations  and cash flows for the  three-month  periods  ended
October 31, 2005. Results of operations for the three-month period ended October
31, 2005 are not necessarily  indicative of the results that may be expected for
the year ending July 31, 2006.

The Company derives revenue primarily from collision repairs,  glass repairs and
fleet repairs.  Revenue is recognized when an agreement  between the Company and
its customer  exists,  the repair  services have been  completed,  the Company's
revenue is fixed and determinable and collection is reasonably assured.

The Company records revenue gross when the Company is the primary obligor in its
arrangements,  the  Company  has  latitude in  establishing  price,  the Company
controls what services are provided and where the services will take place,  the
Company has  discretion  in supplier  selection,  the Company is involved in the
determination  of product or service  specifications  and the Company has credit
risk. The Company records revenue net when situations occur whereby the supplier
(not the  Company)  is the  primary  obligor in an  arrangement,  the amount the
Company earns is fixed or the supplier (and not the Company) has credit risk.

In December  2004, the Financial  Accounting  Standards  Board  ("FASB")  issued
Statement  of  Financial   Accounting   Standards  No.  123R   (revised   2004),
"Share-Based  Payment" which revised Statement of Financial Accounting Standards
No. 123,  "Accounting for Stock-Based  Compensation".  This statement supersedes
APB Opinion No. 25,  "Accounting  for Stock  Issued to  Employees."  The revised
statement  addresses the accounting for share-based  payment  transactions  with
employees  and other  third  parties,  eliminates  the  ability to  account  for
share-based  compensation  transactions  using  APB 25  and  requires  that  the
compensation  costs relating to such transactions be recognized in the statement
of  operations.  The  revised  statement  has been  implemented  for the Company
effective August 1, 2005.

The  implementation of FAS No. 123R had the following effect on the statement of
operations for three-month period ended October 31, 2005

                                                              2005
                                                          ----------
Net loss before stock option expense                      $(474,983)
Deduct stock option expense                                 (11,097)
                                                          ----------
Net loss  as reported                                     $(486,080)
                                                          ==========

There is no impact on the basic or diluted  earnings  per share  reported on the
statement of operations.

                                       7
<PAGE>

Note 1 - Basis of presentation (continued)

For the 2005 fiscal year the Company accounted for its employee  incentive stock
option plans using the intrinsic value method in accordance with the recognition
and  measurement  principles  of  Accounting  Principles  Board  Opinion  No 25,
"Accounting  for  Stock  Issued  to  Employees."  Had  the  Company   determined
compensation expense based on the fair value at the grant dates for those awards
consistent  with the method of SFAS 123,  the  Company's  net income  (loss) per
share would have been increased to the following pro forma amounts:

  Three-month period ended October 31,                      2004
                                                        ----------

  Net loss as reported                                  $(545,545)

  Deduct total stock based employee
      compensation expense determined under
      fair value based methods for all awards
                                                          (16,733)
                                                        ----------
 Pro forma net loss                                     $(562,278)
                                                        ==========

  Basic and diluted net loss per share as reported          $(.02)
  Pro forma and diluted basic loss per share                $(.02)

Effective  August 1, 2005,  the  Company  adopted  FAS No.  123R  utilizing  the
modified   prospective   method.  FAS  No.  123R  requires  the  recognition  of
stock-based compensation expense in the financial statements. Under the modified
prospective  method,  the provisions of FAS No. 123R apply to all awards granted
or modified after the date of adoption. In addition, the unrecognized expense of
awards not yet vested at the date of  adoption,  determined  under the  original
provisions  of FAS 123,  "Accounting  for Stock  Based  Compensation",  shall be
recognized in net earnings in the periods after the date of adoption.

Stock based compensation consists primarily of stock options.  Stock options are
granted to  employees  at exercise  prices equal to the fair market value of the
Company's stock at the dates of grant.  Stock options  generally vest over three
years and have a term of ten years.  Compensation  expense for stock  options is
recognized  over the period  for each  separately  vesting  portion of the stock
option award.

The fair value for options  issued prior to August 1, 2005 was  estimated at the
date of grant using a Black-Scholes option-pricing model. The risk free rate was
derived from the U.S.  Treasury  yield curve in effect at the time of the grant.
The  volatility  factor was  determined  based on a study done by an independent
securities valuation firm. The Black-Scholes  option-pricing model was developed
for use in  estimating  the fair  value of traded  options  that have no vesting
restrictions  and are fully  transferable.  In addition,  option-pricing  models
require the input of highly subjective  assumptions including the expected stock
price   volatility.   Because  the   Company's   employee   stock  options  have
characteristics significantly different from those of traded options and because
changes in the subjective input assumptions can materially affect the fair value
estimate, in management's opinion the existing models do not necessarily provide
a reliable single measure of the fair value of its employee stock options.

                                       8
<PAGE>

Note 1 - Basis of presentation (continued)

A summary of the status of the  company's  options  for the three  months  ended
October 31, 2005 is as follows:

                                                                      Aggregate
                                                Weighted  Remaining   Intrinsic
                                    Shares     Avg Price   Life        Value
                                   ---------   ---------  ---------   ---------
Balance at beginning of year       5,197,042    $0.37
Granted                               37,500    $0.21
Cancelled or Expired                (99,718)    $1.06
Exercised                          (200,000)    $0.18

Outstanding at end of period       4,934,824    $0.37        6.8         461,643


 Note 2 - Per share calculations

Basic loss per share is computed as net loss  available to common  stockholders'
divided by the weighted-  average  number of common shares  outstanding  for the
period.  Diluted loss per share reflects the potential dilution that could occur
from common shares issuable  through  stock-based  compensation  including stock
options,  restricted stock awards,  warrants and convertible  securities.  As of
October 31,  2005 and 2004,  32,156,776  and  19,753,245  options and  warrants,
respectively,  were  excluded  from the diluted loss per share  computation,  as
their effect would be anti-dilutive.

Note 3 - Note Payable

The Company entered into temporary financing through a $500,000 bridge loan from
an investor in order to secure  additional  working capital.  The loan, which is
secured by the purchase option the Company has on its Oldsmar facility,  accrues
interest at 15% per annum.  Interest and principal will be paid in full from the
proceeds of the sale of the Oldsmar  facility at the closing  date. In the event
the building  sale does not take place,  the Company has 120 days to replace the
current  buyer.  After  that  time,  the holder of the note has the right to the
purchase option on the building as collateral. The Company retains the rights to
the net  profits  on any  sale to any new  buyer  after  repayment  of the  note
according to the above terms.


Note 4 - Equity Transactions

As part of the  provisions of the sales of equities in March through May of 2004
there is a  requirement  to meet certain  claims  volume  targets  under the ADP
Co-Marketing  Agreement.  If we fail to meet  those  targets,  up to 100% of the
original  Units (as defined in that  document)  would have to be issued to those
2004  investors  for no  additional  consideration  (True up).  In order to help
resolve this open issue,  in December 2004 we offered the 2004  investors 50% of
the total potential True up Units in exchange for releasing the Company from the
remaining target volume commitment.

On August 1, 2005, the Company  evaluated the claims volume that it had received
from customers generated by the ADP Claims Service Group Co-marketing  agreement

                                       9
<PAGE>
Note 4 - Equity Transactions (continued)

as specified in the  subscription  agreements  from the 2004 capital  raise.  In
accordance  with those  agreements,  the Company did not meet the minimum volume
requirements  and  therefore had to issue  2,162,860  Units (one share of common
stock  and one,  3-year,  $0.16  warrant  to  purchase  a common  share)  to the
investors  who did not accept our  December  2004  offer.  Issuing  these  units
resulted in the Company recording a stock dividend of approximately $476,000.

On August 12, 2005 an investor  exercised warrants to purchase 357,143 shares of
common  stock  with a strike  price of $0.16 per  share.  The  Company  received
$57,143 from this transaction.

On August 15, 2005 the holder of the  convertible  debenture  converted the note
into 1,718,750  shares of the Company's  common stock. In addition,  interest on
the note from the end of July 2005 until  August 15, 2005 was paid to the holder
of the note with 5,651 shares of the Company's common stock.

During the three  months  ended  October 31, 2005 the Company  issued a total of
625,001  shares of common  stock in exchange  for  services.  A total of 200,000
shares of stock were issued to an officer as a result of a  modification  to his
employment  contract. A total of $30,000 was charged to expense during this time
period,  which was approximately equal to the fair market value of the shares at
the time of issuance. The Company issued 425,001 shares of common stock to three
non-employee  directors in exchange for their services.  Of this total,  357,144
shares were  issued for  services  to be  rendered  for fiscal year 2006.  These
shares are being  expensed  over the year as they are  earned.  During the three
months ended October 31, 2005 the Company  expensed  $18,750,  or 89,286 shares,
which  was  approximately  equal to the fair  market  value of the  shares  when
earned.  In  addition,  a total of  67,857  shares  were  issued  to these  same
directors for services  rendered during the three months ended October 31, 2005.
A total of $14,250 was charged to expense  during  this time  period,  which was
approximately equal to the fair market value of these shares when earned.

On October 17, 2005 a director  exercised  options to purchase 200,000 shares of
the Company's common stock, with an exercise price of $0.01.

In October  2005,  the Company  issued  200,000  warrants with a strike price of
$0.20 to an investor for providing the Company with bridge loan financing and an
additional  250,000  warrants  with a strike  price of $0.20 were  issued to two
finders for helping to  facilitate  the  transaction.  The Company  valued these
warrants at $0.02 each, utilizing a warrant valuation provided by an independent
investment banker, and recorded a charge of $9,000 for these warrants during the
period ended October 31, 2005.

In accordance with the Financial  Accounting  Standards No. 123R (revised 2004),
"Accounting for Stock-Based  Compensation",  the Company expensed $11,097 during
the three months ended October 31, 2005,  representing the cost of stock options
that would have vested during this period.

Additionally, options to purchase 99,718 shares of common stock were canceled.

                                       10
<PAGE>

Note 5 - Subsequent Event

During the month of November 2005 an officer and director  exercised  options to
purchase 100,000 shares of common stock with an exercise price of $0.01. Also in
November, two officers and a consultant exercised options to purchase a total of
370,000 shares of common stock with an exercise price of $0.01.

Additionally  in November,  this same consultant  exercised  options to purchase
20,000 shares of common stock with an exercise price of $0.15 and 33,333 options
with an exercise price of $0.13.

On  November  8, 2005 the Board  voted to adjust the strike  price from $0.35 to
$0.16 on 1,000,000  warrants  owned by an investor,  who is also a director,  in
order to match the strike price of other  investor's  warrants  issued under the
anti-dilution provisions of their agreements.

On  November 8, 2005 the Board of  Directors  gave  approval  for the Company to
issue  1,000,000  shares of the  Company's  common  stock to the Chairman of the
Board to  compensate  him for his past  services  and his role as  Chairman.  In
addition,  the Board also approved future  compensation  for the Chairman of the
Board to include the same annual retainer of $25,000 to be paid in shares of the
Company's  common  stock  as  well  as the  same  quarterly  stock  compensation
currently paid to other non-employee directors.

On November 29, 2005 an investor  exercised  warrants to purchase 300,000 shares
of common  stock with a strike  price of $0.16 per share.  The Company  received
$48,000 from this transaction.

On November 29, 2005 the Company  issued  400,000  shares of common stock in the
name of its current  landlord as part of an agreement to facilitate  the sale of
the  building.  The shares will be a part of the building sale  transaction  and
will be delivered to the landlord at the closing date.


                                       11
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The  statements  contained  in this  Report on Form  10-Q,  that are not  purely
historical, are forward-looking information and statements within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange Act of 1934.  These  include  statements  regarding  our  expectations,
intentions,   or  strategies   regarding  future  matters.  All  forward-looking
statements included in this document are based on information available to us on
the date hereof.  It is important to note that our actual  results  could differ
materially from those projected in such forward-looking  statements contained in
this Form 10-Q. The  forward-looking  statements  contained  herein are based on
current expectations that involve numerous risks and uncertainties.  Assumptions
relating to the foregoing involve judgments  regarding,  among other things, our
ability to secure  financing  or  investment  for capital  expenditures,  future
economic and competitive market conditions,  and future business decisions.  All
these  matters are difficult or  impossible  to predict  accurately  and many of
which may be beyond  our  control.  Although  we  believe  that the  assumptions
underlying our forward-looking statements are reasonable, any of the assumptions
could  be  inaccurate  and,  therefore,  there  can  be no  assurance  that  the
forward-looking statements included in this form 10-Q will prove to be accurate.

General

eAutoclaims  provide  Internet based  collision  claims  services for automobile
insurance  companies,  Managing  General  Agents  (MGA) and third  party  claims
administrators (TPA) and self-insured automobile fleet management companies. Our
business  strategy is to use the  Internet to  streamline  and lower the overall
costs of automobile  repairs and the claims adjustment  expenses of our clients.
We believe that our proprietary  web-based  software  products and services make
the management of collision  repairs more  efficient by controlling  the cost of
the repair and by  facilitating  the gathering and  distribution  of information
required in the automobile repair process.

eAutoclaims  controls  the vehicle  repair  process  from the  reporting  of the
accident  through  the  satisfactory  repair of damage.  We bring  together  and
coordinate the activities of the insurance company, its insured, and the various
parties involved in evaluating a claim,  negotiating the cost of the repair, and
performing necessary repair services. We have contracted with approximately 2700
body  shops  throughout  the  United  States to repair  vehicles.  These  shops,
referred to as our  "provider  network,"  provide us 10% to 15%  discount on the
vehicle repair  because of the volume of repairs we provide to them.  Because we
audit every line of every repair  estimate and because we share a portion of the
volume  discount with our customer,  we are able to lower the average cost being
paid by our customer.

Our  product,  eJusterSuite,  provides  both  outsourcing  and ASP  (application
service provider)  solutions.  The outsourcing solution requires eAuto personnel
to audit and coordinate the vehicle repair. The ASP solution allows the customer
to use  our  technology  independent  of our  personnel;  thereby,  providing  a
solution  for the largest  insurance  companies  that  already have the staff to
process  and  control  the  claims  process,  while  paying  us a fee for  every
transaction  that is run  through  our  system.  The ASP model  provides  margin
without the associated personnel and operating costs.

eJusterSuite  also  builds in  service  partners  that can  provide  the  needed
services such as  Independent  adjustors,  car rentals,  tow trucks and accident
reporting by only clicking an Icon that is added to the screen of the customer's
desk top in the current system.  The system  automatically  provides the service
partner  the  information  already in our system via the  Internet.  The service
partner will systematically provided the requested services and pay us a fee for

                                       12
<PAGE>

each  assignment  they receive  through our system.  This process  significantly
reduces the  customers'  time and cost to process  claims as well as reduces the
number of mistakes that occur in a manual process. In many cases it also reduces
the cost of the  service  partner to obtain and process  the  transaction,  even
after paying our  transaction  fee.  This  revenue  provides  additional  margin
without the additional personnel and operation costs.

For our outsourcing customers,  we approve all repair shops for inclusion in our
network and determine which repair shop will ultimately perform the repairs.  We
receive a discount,  ranging from 10% to 15%,  from repair  facilities  that are
members of our provider network.  The revenues generated from the vehicle repair
facilities  through our provider network accounts for 81% of the revenue for the
three-months  ended October 31, 2005. We are paid on a per claims basis from our
insurance and fleet company customers for each claim that we process through our
system.  These fees vary from $10 to $65 per claim  depending  upon the level of
service  required.  For the  three-months  ended  October 31,  2005,  19% of the
revenue has been received from claims  processing  fees and other income.  Other
income  consists  mostly of the sale of estimating  software,  fees from service
partners (ASP fees) and subrogation income.

eAutoclaims has focused more resources on marketing products whereas eAutoclaims
serves in the capacity of an Application  Service  Provider  (ASP).  eAutoclaims
applications  are  user-friendly,  customizable  to  meet  the  client's  unique
workflow,  and are scalable.  The applications  currently  offered under the ASP
category  include  eJusterSuite,  AuditPro,  the  Appraisal  Management  System,
eDataTransfer and several custom applications for automotive  collision and auto
glass industry repair providers.

eAutoclaims   recently  released  AuditPro,   a  rules-based  estimate  auditing
application that has been well received by existing clients and prospects, which
has allowed eAutoclaims to grow our high margin ASP revenue.  Large carriers can
use  AuditPro  as a  stand-alone  model  that  can be  integrated  within  their
organization   without  the  need  for  significant  initial  cost  and  without
materially changing their internal workflow


Critical Accounting Policies

Our  discussion  and analysis of our financial  condition and the results of our
operations are based upon our financial  statements and the data used to prepare
them. The Company's  financials have been prepared in accordance with accounting
principles  generally  accepted  in the United  States.  On an ongoing  basis we
re-evaluate our judgments and estimates including those related to revenues, bad
debts,  long-lived assets, and income taxes. We base our estimates and judgments
on our historical experience, knowledge of current conditions and our beliefs of
what could occur in the future considering available information. Actual results
may differ from these estimates under different  assumptions or conditions.  Our
estimates are guided by observing the following critical accounting policies.

Revenue recognition

The Company derives revenue primarily from collision repairs,  glass repairs and
fleet repairs.  Revenue is recognized when an agreement  between the Company and
its customer  exists,  the repair  services have been  completed,  the Company's
revenue is fixed and determinable and collection is reasonably assured.

                                       13
<PAGE>

The Company  records  revenue gross in the areas of collision and fleet repairs.
It also  records  at gross in  certain  glass  repair  transactions.  Revenue is
recorded at gross in these areas when:

o The  Company  is the  primary  obligor  in its  arrangements.  The  Company is
responsible  for the quality of the repair and must  satisfy the customer if the
body shop fails to repair the vehicle properly.

o The Company has latitude in establishing price. The price is established based
on the Company's audit of the repair estimate  submitted by the repair facility.
The  repair  facility  cannot  begin the  repair  until an agreed  upon price is
established between the facility and the Company for the repair.

o The Company  controls what is repaired with their  contracted  shops,  as they
audit the estimate submitted by the repair facility. The Company must agree that
the repair is reasonable and necessary  before the repair facility is allowed to
proceed with the work being requested.

o The Company has discretion in supplier selection. Through the use of software,
the Company  prioritizes  which repair  facility is used based on the efficiency
and effectiveness of the repair facility, and

o The Company has credit  risk.  The  Company is  responsible  to pay the repair
facility even if the customer does not pay for the repair.

The  Company   records  revenue  net  of  the  repair  costs  in  certain  glass
transactions  when the supplier,  not the Company,  is the primary obligor in an
arrangement,  the amount the Company  earns is fixed or the  supplier has credit
risk.  This occurs when the repair has been  performed  before it is referred to
the Company.  When the Company receives notice of the  transaction,  we call the
glass repair facility to ask them to become part of our network and to negotiate
a better price on the repair. If the Company is able to negotiate a better price
for the customer we keep a portion of the added discount.  In that situation the
revenue is recorded net of the repair costs even though the Company pays for the
entire claim and are reimbursed by the insurance company,  since we did not have
the risk of loss and are not responsible for the repair.

The revenue generated from a co-marketing agreement with the ADP Claims Services
Group (ADP) will be recorded  net of the repair costs  because in the  agreement
the  Company is  performing  a fee for  service.  The  insurance  company is the
customer of ADP, who will be collecting the revenue and paying the shop.

The Company  maintains an allowance  for doubtful  accounts for losses that they
estimate will arise from the  customers'  inability to make  required  payments.
Collectability of the accounts  receivable is estimated by analyzing  historical
bad debts,  specific customer  creditworthiness  and current economic trends. At
October 31, 2005 the allowance for doubtful accounts was approximately $225,000.

Accounting for income taxes

The Company  records a valuation  allowance to reduce its deferred tax assets to
the  amount  that is more  likely  than not to be  realized.  While we  consider
historical levels of income, expectations and risks associated with estimates of
future taxable income and ongoing  prudent and feasible tax planning  strategies
in  assessing  the  need  for the  valuation  allowance,  in the  event  that we

                                       14
<PAGE>

determine that we would be able to realize  deferred tax assets in the future in
excess of the net recorded  amount an adjustment to the deferred tax asset would
increase income in the period such determination was made.  Likewise,  should we
determine  that we would not be able to realize all or part of the net  deferred
tax asset in the  future,  an  adjustment  to the  deferred  tax asset  would be
charged to income in the period such  determination  was made.  We have recorded
valuation  allowances  against our deferred tax assets of $10,001,000 at October
31, 2005.  The  valuation  allowance  consists  mainly of net  operating  losses
previously  realized  and  stock  compensation  currently  not  deductible.  The
valuation  allowance  was necessary  because the use of these  deductions is not
reasonably assured since the company has not reached profitability.

Valuation of long-lived assets

The Company identifies and records  impairment on long-lived  assets,  including
goodwill,  when  events and  circumstances  indicate  that such assets have been
impaired.   The  Company  periodically   evaluates  the  recoverability  of  its
long-lived  assets based on expected  undiscounted  cash flows,  and  recognizes
impairment, if any, based on expected discounted cash flows. Factors we consider
important which could trigger an impairment review include the following:

o Significant negative industry trends
o Significant underutilization of the assets
o Significant changes in how we use the assets of our plans for their use.

At each balance sheet date, the Company  evaluates the period of amortization of
intangible  assets.  The factors used in evaluating  the period of  amortization
include: (i) current operating results, (ii) projected future operating results,
and (iii) any other material factors that effect the continuity of the business.
No charge for  impairment  of these assets was  considered to be necessary as of
October 31, 2005.

Management's Operating Plan

Management has taken  specific  actions to mitigate the effects of the events of
fiscal  2005,  which  included  the loss of  revenue  from our first and  second
largest  customers  and the longer than  expected  time taken to  implement  the
national  Sales  and  Marketing  efforts  associated  with the ADP  Co-Marketing
agreement.  Although  this delay  resulted in the company  incurring  additional
expenses for carrying support personnel, we have recently seen sales efforts net
results in new pilots, and more specifically the rollout of Continental Casualty
Company (C N A Insurance)  that began in late July 2005 and the  utilization  of
our shop network by C N A that began in late October 2005.

Specifically,  management is taking the  following  actions that are expected to
positively impact the Company's financial position in fiscal 2006:

o ADP  Co-Marketing  Agreement  -  Management  continues  to focus on the  sales
development of the ADP  Co-Marketing  Agreement,  which is part of the Company's
Special Markets Division.  The most material development is the early rollout of
a, Continental  Casualty Company (C N A Insurance),  a top 20 insurance  carrier
that is described  above.  Once the national  rollout is completed,  the Company
would expect a meaningful  improvement  in its  operating  results,  as this new
client would become one of the largest  clients of  eAutoclaims  in a very short
period.

                                       15
<PAGE>

The Company was also  notified in September  2005 that it had been selected by a
second top 20 insurance client through the ADP Co-marketing agreement.  Although
the  process is still in the early  stages,  the Company  expects  rollout to be
completed  in the  first  half of  fiscal  2006 and  meaningful  revenues  to be
produced by the completion of the third quarter of fiscal 2006.

Since  August 2004 the ADP  agreement  has  produced  over a dozen  signed pilot
agreements  with  insurance  Companies  or third party  administrators,  and has
produced  four annual  agreements  after the pilot  periods were  completed.  In
addition,  other than the two top 20 insurance  clients listed above,  there are
other accounts in the sales cycle that are expected to mature into new accounts.
While  there are no  guarantees  that these  pilot  agreements  will mature into
annual or multi-year  contracts,  maturing  these  accounts past the pilot stage
would produce  significant claims volume. The Company would share the associated
revenues with ADP Claims Services Group.

o Rolling out Higher Margin Product Lines - Management is leveraging  internally
developed ASP/technologies that will allow other companies in related industries
to significantly  reduce labor costs and improve operating  efficiencies,  as is
the case with the  Company's  recently  announced  new product  "Audit  Pro",  a
programmatic  electronic estimate auditing tool. Many of these technologies have
already been  implemented  in the Company's  operating  processes and have shown
themselves  to be of  significant  value.  By modifying  the  interface to these
technologies,  the  Company can produce  significant  click fee revenue  without
adding  significant  operating costs.  The target market for these  technologies
will  include a wide range of  organizations,  including  the  largest  (tier 1)
insurance  companies.  The Company's management believes this additional product
line will result in a greater growth in high volume,  high margin  revenues that
will have a meaningful impact to the Company's  bottom-line.  While there are no
guarantees these  transactions or that the new business will mature,  management
believes this will be a growth market for the Company in the future.

o Raising  Additional  Capital - The  Company  has an  option  to  purchase  the
building it is currently  leasing and the  associated  land for  $2,950,000.  In
September  2005 the  Company  entered  into an  agreement  to sell  its  Oldsmar
facility,  while remaining in the facility under a new favorable long term lease
to be signed  concurrent with the closing of the sale. The due diligence  period
has passed  successfully  and the  closing is expected to take place in December
2005 as part of a simultaneous closing process whereby the Company purchases the
facility from the current landlord under the purchase option provided for in the
Company's current lease agreement and subsequently sells the facility to a third
party  buyer.  The  completed  transaction  is  expected  to net the  Company  a
significant  profit.  In  anticipation  of the  completing  of the building sale
transaction,  the Company  completed a bridge loan in October 2005 for $500,000.
The principal and interest  associated  with this loan will be paid in full from
the proceeds of the building  sale at time of closing.  The company is currently
reviewing  additional  options in the event the sale  closing  takes longer than
expected.

Based on the early results of the ADP  Co-Marketing  agreement and the expansion
of the Company's  ASP/Technology sales, we expect to need the extra staff we are
currently  carrying on our payroll.  However,  there are no guarantees  this new
expected  business  will  materialize;  therefore  the Company  has  developed a
contingency  plan in the event  these  events do not occur.  If  necessary,  the
Company would reduce staff  positions  currently  being carried for the expected
new business from the ADP Co-Marketing  agreement.  In addition,  our management
team would also take a second round of salary reductions ranging from 5% to 15%.
The  senior  management  team  would  once  again  take the  highest  percentage
reductions.

                                       16
<PAGE>
Results of Operations
---------------------
For the three months ended October 31, 2005 compared to the  three-months  ended
October 31, 2004.

Revenue

Total  revenue for the  three-months  ended  October 31, 2005 was $3.8  million,
which is a 8% decrease  from the $4.1  million of revenue  for the  three-months
ended October 31, 2004.  Collision repair  management  revenue  decreased 16% to
$2.8 million for the  three-months  ended October 31, 2005 from $3.3 million for
the three-months  ended October 31, 2004.  During the three months ended October
31, 2005 we derived 50% and 10% of our revenue from two customers.  The decrease
in revenue is  partially  the result of a reduction by consumers in the usage of
network shops. Also included in the collision  management revenue is the revenue
earned  through  repairs  processed for clients  acquired as a result of the ADP
Co-Marketing  agreement.  As previously stated, this revenue is recorded at net,
which significantly  reduces the amount of gross revenue reported,  although the
overall gross margin is increased as a result of not having to pay the shops for
the work  performed.  During the three months  ended  October 31, 2005 we earned
over $110,000 in net revenue from clients  acquired as a result of the agreement
with ADP.  This  additional  revenue  resulted in the gross  margin  percent for
collision  management  to increase  from 10% to 13%,  not  including  fees.  The
Company  anticipates  meaningful  growth in new clients based on these favorable
early results of its  co-marketing  agreement  with ADP Claims  Services  Group.
However,  because of the competitive  nature of our business and the uncertainty
of bringing on enough business to offset the loss of business,  we may be unable
to replace  revenues  quickly  enough to  sustain  profitability.  However,  the
company's  management  will cut  expenses  in the event we are  unable to obtain
profitability.

Glass repair  revenues  decreased by  approximately  $66,000 from  approximately
$161,000 for the three months ended  October 31, 2004 to  approximately  $95,000
for the three months ended  October 31, 2005.  This decrease is primarily due to
the reduction in claim volume for our existing customers.  The Company continues
to pursue  additional  glass customers as the glass repair business  complements
our core  business and allows our customers to use a single source for all their
repair needs.

Other revenue increased by approximately  $158,000 from  approximately  $554,000
for the three months ended  October 31, 2004 to  approximately  $712,000 for the
three months  ended  October 31,  2005.  This  increase is primarily a result of
revenue  earned from taking first notice loss reports for clients as a result of
damages  sustained  by  consumers  due to the  hurricanes  of  2005.  A total of
$136,000 of  additional  revenue was earned as a result of this activity for the
three months ended October 31, 2005 over the same period in 2004. Revenue earned
from the sale of estimatic software  increased from  approximately  $200,000 for
the three months ended October 31, 2004 to approximately  $218,000 for the three
months ended October 31, 2005.

Claims Processing Charges

Claims processing  charges include the costs of collision and glass repairs paid
to repair shops within our repair shop network.  Claims  processing  charges for
the three-months ended October 31, 2005 was approximately $2.7 million. This was
71% of total revenue,  compared to approximately  $3.2 million,  or 78% of total
revenue for the three-months  ended October 31, 2004. Claims processing  charges
are  primarily  the  costs  of  collision  repairs  paid by the  Company  to its
collision repair shop network.  The decrease in claims  processing  charges as a


                                       17
<PAGE>

percentage  of total revenue is a result of the change in the product mix with a
higher  percentage  of  higher  margin  products  as  compared  to lower  margin
products.  This also  includes the growth in click fees,  which are fees charged
when a client uses our technology that has little to no associate cost of sale.

We are  dependent  upon our third party  collision  repair  shops for  insurance
claims repairs.  eAutoclaims currently has approximately 2,700 affiliated repair
facilities in its network for claims  repairs.  We  electronically  and manually
audit  individual  claims  processes to their  completion  using remote  digital
photographs  transmitted over the Internet.  However,  if the number of shops or
the  quality  of  service  provided  by  collision  repair  shops  fall  below a
satisfactory  level leading to poor customer service,  this could have a harmful
effect on our business.

Selling, General And Administrative (SG&A) Expenses

SG&A expense is mainly  comprised of salaries and benefits,  facilities  related
expenses, telephone and internet charges, legal and other professional fees, and
travel  expenses.  SG&A  expenses for the  three-months  ended  October 31, 2005
totaled $1.5 million compared to $1.3 million for the three-months ended October
31, 2004. The increase in SG&A expenses of  approximately  $150,000 is primarily
due to increases in payroll and benefit  related  expenses.  Payroll and benefit
related  expenses for the  three-months  ended October 31, 2005 and 2004 totaled
approximately $990,000 and $864,000  respectively,  which is approximately a 15%
increase.  This  increase is  primarily  the result of  increases in health care
costs,  non-cash  compensation  expenses as provided for in management contracts
and of increasing staff in preparation for the significant new business expected
to  be  forthcoming  as a  result  of  new  clients  acquired  through  the  ADP
Co-Marketing Agreement.

SG&A expenses also include non-cash  charges of  approximately  $165,000 for the
three-month  period  ended  October 31, 2005.  These  non-cash  charges  include
approximately  $89,000  of  common  stock  issued  to  pay  fees  to  directors,
approximately  $64,000  of  common  stock  that is to be  issued  to  management
according to terms of their contracts and  approximately  $1,000 of common stock
issued for accrued interest associated with the conversion of debt. In addition,
a charge of approximately  $11,000 was taken as a result of implementing FAS123R
(revised 2004), which requires expensing of stock options as they become vested.
The non-cash  charges for the three-month  period ended October 31, 2004 include
approximately  $50,000  of  common  stock  issued  to  pay  fees  to  directors,
approximately  $25,000 of common stock issued in exchange for legal services and
approximately $6,000 of common stock issued for accrued interest associated with
the conversion of debt.

Also included in the SG&A is interest  expense related to capital  leases.  This
interest expense totals approximately $13,000 for the three-months ended October
31, 2005 compared to approximately $10,000 for the three-months ended October 31
2004.

Depreciation

Depreciation of property and equipment of approximately  $122,000 was recognized
in  the  three-month  period  ended  October  31,  2005.  This  is  compared  to
approximately $135,000 for the three-month periods ended October 31, 2004.

Net Income/Loss

Net loss for the  three-months  ended  October  31, 2005  totaled  approximately
$486,000  compared to a net loss of  approximately  $545,000 for the three-month
period ended  October 31,  2004.  These  amounts  include  non-cash  expenses of
approximately $305,000 and $230,000, respectively.

                                       18
<PAGE>

Liquidity and Capital Resources

At October 31, 2005, we had approximately  $393,000 in cash. This is an increase
of  approximately  $87,000  from  July  31,  2005.  We  have a  working  capital
deficiency  of  approximately  $3.9 million.  The primary  source of our working
capital  during the  three-month  period ended  October 31, 2005,  was from cash
generated by operations  and the $500,000  bridge loan we obtained in advance of
the sale of our Oldsmar facility. However, there is no assurance that we will be
able to continue to provide cash through operations.

As  described  in  management's  operating  plan  above,  we  expect  to  net  a
significant  profit form the sale of our Oldsmar  facility.  The Company is also
reviewing  additional  financing  options in the event the sale of the  facility
takes longer than expected. We believe that cash generated from operations,  the
sale of our facility and  additional  financing  will be  sufficient to meet our
working  capital  requirements  for  the  next 12  months.  This  estimate  is a
forward-looking statement that involves risks and uncertainties. The actual time
period  may differ  materially  from that  indicated  as a result of a number of
factors so that we cannot assure that our cash  resources will be sufficient for
anticipated   or   unanticipated   working   capital  and  capital   expenditure
requirements for this period.

Debt and Contractual Obligations

Our  commitments for debt and other  contractual  arrangements as of October 31,
2005 are summarized as follows:

                                   Years ending October 31,
                      ----------------------------------------------------------
                             2006            2007           2008          Total
                      ----------------------------------------------------------

Property lease             227,000         19,000                       246,000
Equipment lease             93,000         94,000          6,000        193,000
Note payable               500,000                                      500,000
Employee compensation      592,000        829,000                     1,421,000
                      ----------------------------------------------------------
                         1,412,000        942,000          6,000      2,360,000
                      ==========================================================




The Company leases  equipment and facilities  under  non-cancelable  capital and
operating  leases  expiring on various dates through  2008.  The main  operating
lease  consists of a 5-year lease for 30,000 square feet of a 62,000 square foot
facility.  The  Company  has an  option  to buy the  entire  facility  with  the
associated  land for  $2,950,000.  In September 2005 the Company entered into an
agreement to sell the  facility,  while  remaining  in the facility  under a new
favorable long term lease to be signed  concurrent with the closing of the sale.
After a due  diligence  period,  the closing is expected to take place within 95
days from the effective date of the agreement and will be part of a simultaneous
closing  process  whereby the Company  purchases  the facility  from the current
landlord under the purchase option  provided for in the Company's  current lease
agreement and subsequently sells the facility to a third party buyer.

                                       19
<PAGE>

As of October 31, 2005 the Company owed $500,000 on a bridge loan we obtained in
advance of the sale of our Oldsmar facility. The loan bears interest at the rate
of 15% per annum and the  principal and interest will be paid in full out of the
proceeds from the sale of our facility at the time of closing. The holder of the
note has the right to the purchase  option on the building as  collateral in the
event the building sale does not take place.  The Company  retains the rights to
the net  profits  on any  sale to any new  buyer  after  repayment  of the  note
according to the above terms.


In May 2005, the Company entered into a new two year  employment  agreement with
its President and Chief  Executive  Officer.  The agreement  specifies an annual
base salary of $170,000,  representing  a voluntary pay cut in base taken by the
CEO.  If the  Company  generates  positive  cumulative  EBITDA  (which  excludes
non-cash compensatory and equity charges under GAAP) of greater than $50,000 for
any three consecutive months, the base salary will be increased to $200,000. The
CEO will be entitled to receive a quarterly  bonus equal to 3% of the  Company's
EBITDA  as  computed  under  GAAP,  which  may be paid in cash or  shares of the
Company's common stock, at the CEO's election. The CEO shall also be entitled to
receive an option to  purchase  25,000  shares of the  Company's  common  stock,
exercisable at the fair market price,  for each month the Company has net income
before taxes and extraordinary items, as computed in accordance with GAAP. These
options vest over the remaining term of the employment agreement. The individual
is  entitled  to a $750 per  month  automobile  allowance  and a $1000 per month
personal allowance. The contract requires the Company to issue the CEO 1,000,000
shares of the Company's  common stock. If the individual  loses his position for
any  reason  other  than for cause  during  the term of the  agreement,  he will
receive a lump sum payment  equal to two (2) times the current base  salary.  If
the Company does not employ the  individual  beyond the  expiration  term of the
agreement,  he will receive his monthly base salary for the next twelve  months.
At the  election of the  individual,  any  compensation  including  severance or
termination  payments,  may be made one-half (1/2) in cash and one-half (1/2) in
the  Company's  shares  valued at 75% of the average  closing  price over the 30
trading  days  preceding  the  termination  date.  Any  shares  issued  shall be
registrable under a form S-8 and shall have "piggyback" registration rights.

In addition,  in May 2005 the Company entered into employment agreements ranging
in length from  eighteen to  twenty-four  months with all four of the  Company's
senior  executives  that total  $72,000 to $125,000  annually.  This  represents
voluntary  base pay cuts taken by all of the previously  contracted  executives.
These executives also receive  automobile  allowances  ranging from $400 to $700
per month and will  receive  10,000  shares of the  Company's  common stock each
month,  not to exceed  200,000 shares each. In October 2005, the contract of one
executive was modified  increasing his salary to $125,000 per year and requiring
the  company to issue  200,000  additional  shares of  registered  stock to this
executive.  If the  contracts  of all  executives  are not renewed  they receive
severance packages of six months of their annual compensation.


Inflation

We believe that the impact of inflation  and changing  prices on our  operations
since the commencement of our operations has been negligible.

Seasonality

The Company  typically  experiences a slow down in revenue  during  November and
December each year.  Consumers tend to delay repairing their vehicles during the
holidays.

                                       20
<PAGE>

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Currently,  we do not have  any  significant  market  risk.  Market  risk is the
potential  loss arising  from  adverse  change in market rates in prices such as
foreign  currency  exchange  and  interest  rates.  We do not have  any  foreign
currency  exchange  rate  exposure.  We do not  have  any  long-term  debt  from
financial  institutions.  We do not hold  any  derivatives  or  other  financial
instruments for trading or speculative  purposes.  Our financial position is not
affected by  fluctuations  in currency  against the U.S. dollar since all of our
sales and assets occur within the United States.


ITEM 4. CONTROLS AND PROCEDURES

a) Evaluation of disclosure controls and procedures.

Under the supervision and with the  participation  of our management,  including
our principal executive officer and principal financial officer, we conducted an
evaluation of the  effectiveness  of the design and operations of our disclosure
controls and  procedures,  as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities  Exchange  Act of  1934,  as of  October  31,  2005.  Based  on  this
evaluation,  our principal  executive  officer and principal  financial  officer
concluded that our disclosure  controls and procedures  were effective such that
the material  information required to be included in our Securities and Exchange
Commission  ("SEC")  reports is  recorded,  processed,  summarized  and reported
within  the  time  periods   specified  in  SEC  rules  and  forms  relating  to
eAutoclaims,  Inc., and was made known to them by others within those  entities,
particularly during the period when this report was being prepared.

b) Changes in internal controls over financial reporting.

In addition,  there were no  significant  changes in our  internal  control over
financial  reporting that could  significantly  affect these controls during the
quarter  ended  October  31,  2005.  We  have  not  identified  any  significant
deficiency or materials weaknesses in our internal controls, and therefore there
were no corrective actions taken.


                                       21
<PAGE>

                           PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

     None

ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS.

As part of the  provisions of the sales of equities in March through May of 2004
there is a  requirement  to meet certain  claims  volume  targets  under the ADP
Co-Marketing  Agreement.  If we fail to meet  those  targets,  up to 100% of the
original  Units (as defined in that  document)  would have to be issued to those
2004  investors  for no  additional  consideration  (True up).  In order to help
resolve this open issue,  in December 2004 we offered the 2004  investors 50% of
the total potential True up Units in exchange for releasing the Company from the
remaining target volume commitment.

On August 1, 2005, the Company  evaluated the claims volume that it had received
from customers generated by the ADP Claims Service Group Co-marketing  agreement
as specified in the  subscription  agreements  from the 2004 capital  raise.  In
accordance  with those  agreements,  the Company did not meet the minimum volume
requirements  and  therefore had to issue  2,162,860  Units (one share of common
stock  and one,  3-year,  $0.16  warrant  to  purchase  a common  share)  to the
investors  who did not accept our  December  2004  offer.  Issuing  these  units
resulted in the Company recording a stock dividend of approximately $476,000.

On August 12, 2005 an investor  exercised warrants to purchase 357,143 shares of
common  stock  with a strike  price of $0.16 per  share.  The  Company  received
$57,143 from this transaction.

On August 15, 2005 the holder of the  convertible  debenture  converted the note
into 1,718,750  shares of the Company's  common stock. In addition,  interest on
the note from the end of July 2005 until August 15 was paid to the holder of the
note with 5,651 shares of the Company's common stock.

During the three  months  ended  October 31, 2005 the Company  issued a total of
625,001  shares of common  stock in exchange  for  services.  A total of 200,000
shares of stock were issued to an officer as a result of a  modification  to his
employment  contract. A total of $30,000 was charged to expense during this time
period,  which was approximately equal to the fair market value of the shares at
the time of issuance. The Company issued 425,001 shares of common stock to three
non-employee  directors in exchange for their services.  Of this total,  357,144
shares were  issued for  services  to be  rendered  for fiscal year 2006.  These
shares are being  expensed  over the year as they are  earned.  During the three
months ended October 31, 2005 the Company  expensed  $18,750,  or 89,286 shares,
which  was  approximately  equal to the fair  market  value of the  shares  when
earned.  In  addition,  a total of  67,857  shares  were  issued  to these  same
directors for services  rendered during the three months ended October 31, 2005.
A total of $14,250 was charged to expense  during  this time  period,  which was
approximately equal to the fair market value of these shares when earned.

On October 17, 2005 a director  exercised  options to purchase 200,000 shares of
the Company's common stock, with an exercise price of $0.01.

In October  2005,  the Company  issued  200,000  warrants with a strike price of
$0.20 to an investor for providing the Company with bridge loan financing and an

                                       22
<PAGE>

additional  250,000  warrants  with a strike  price of $0.20 were  issued to two
finders for helping to  facilitate  the  transaction.  The Company  valued these
warrants at $0.02 each, utilizing a previous warrant valuation model provided by
an  independent  investment  banker,  and  recorded a charge of $9,000 for these
warrants during the period ended October 31, 2005.

In accordance  with the Financial  Accounting  Standards No. 123 (revised 2004),
"Accounting for Stock-Based  Compensation",  the Company expensed $11,097 during
the three months ended October 31, 2005,  representing the cost of stock options
that would have vested during this period.

Additionally, options to purchase 99,718 shares of common stock were canceled.

During the month of November 2005 an officer and director  exercised  options to
purchase 100,000 shares of common stock with an exercise price of $0.01. Also in
November, two officers and a consultant exercised options to purchase a total of
370,000 shares of common stock with an exercise price of $0.01.

Additionally  in November,  this same consultant  exercised  options to purchase
20,000 shares of common stock with an exercise price of $0.15 and 33,333 options
with an exercise price of $0.13.

On  November  8, 2005 the Board  voted to adjust the strike  price from $0.35 to
$0.16 on 1,000,000  warrants  owned by an investor,  who is also a director,  in
order to match the strike price of other  investor's  warrants  issued under the
anti-dilution provisions of their agreements.

On  November 8, 2005 the Board of  Directors  gave  approval  for the Company to
issue  1,000,000  shares of the  Company's  common  stock to the Chairman of the
Board to  compensate  him for his past  services  and his role as  Chairman.  In
addition,  the Board also approved future  compensation  for the Chairman of the
Board to include the same annual retainer of $25,000 to be paid in shares of the
Company's  common  stock  as  well  as the  same  quarterly  stock  compensation
currently paid to other non-employee directors.

On November 29, 2005 an investor  exercised  warrants to purchase 300,000 shares
of common  stock with a strike  price of $0.16 per share.  The Company  received
$48,000 from this transaction.

On November 29, 2005 the Company  issued  400,000  shares of common stock in the
name of its current  landlord as part of an agreement to facilitate  the sale of
the  building.  The shares will be a part of the building sale  transaction  and
will be delivered to the landlord at the closing date.



ITEM 3. DEFAULTS UPON SENIOR SECURITIES

   None.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

   None.


ITEM 5. OTHER INFORMATION

         None

                                       23
<PAGE>


 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

 (a)               Exhibits

 Exhibit No.       Description

   31.1    Certification of Chief Executive Officer pursuant to Section 302 of
           The Sarbanes-Oxley Act of 2002.

   31.2    Certification of Chief Financial Officer pursuant to Section 302 of
           The Sarbanes-Oxley Act of 2002.

   32.1    Certification of Chief Executive Officer pursuant to 18 U.S.C.
           Section 1350, as adopted pursuant to Section 906 of The
           Sarbanes-Oxley Act of 2002.

   32.2    Certification of Chief Financial Officer pursuant to
           18 U.S.C. Section 1350, as adopted pursuant to
           Section 906 of The Sarbanes-Oxley Act of 2002.

 (b)      Reports on Form 8-K

 Item 1.01/2.03/7.01 - Announced close on bridge loan financing
 Item 7.01/8.01- Appointment of Chief Operating Officer/Executive Vice President



 SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) 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.



 Date:        12/14/05         By:  /s/ Eric Seidel
         ---------------     ---------------------------------------------
                              Eric Seidel, President and Chief Executive Officer


 Date:        12/14/05         By:  /s/ Larry Colton
         ---------------     ---------------------------------------------
                              Larry Colton, Chief Financial Officer


                                       24
<PAGE>


EXHIBIT 31.1
                                 CERTIFICATIONS

I, Eric Seidel, certify that:

1.    I have reviewed this quarterly report on Form 10Q of eAutoclaims, Inc.
2.    Based on my knowledge,  this 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
      report;
3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  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 report;
4.    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-15(e)  and  15d-15(e))  and  internal
      control  over  financial  reporting  (as  defined  in  Exchange  Act Rules
      13a-15(f) and 15d-15(f)) for the registrant and have:

    a)  Designed  such  disclosure  controls  and  procedures,  or  caused  such
        disclosure controls and procedures to be designed under our supervision,
        to  ensure  that  material   information  relating  to  the  registrant,
        including its consolidated  subsidiaries,  is made known to us by others
        within  those  entities,  particularly  during  the period in which this
        report is being prepared;

    b)  Designed such internal control over financial reporting,  or caused such
        internal  control  over  financial  reporting  to be designed  under our
        supervision,  to provide reasonable  assurance regarding the reliability
        of financial  reporting and the preparation of financial  statements for
        external  purposes in  accordance  with  generally  accepted  accounting
        principles;

    c)  Evaluated the effectiveness of the registrant's  disclosure controls and
        procedures  and  presented  in this  report  our  conclusions  about the
        effectiveness of the disclosure  controls and procedures,  as of the end
        of the period covered by this report based on such evaluation; and

    d)  Disclosed in this report any change in the registrant's internal control
        over financial  reporting  that occurred  during the  registrant's  most
        recent fiscal  quarter that has  materially  affected,  or is reasonably
        likely to materially  affect,  the  registrant's  internal  control over
        financial reporting; and

5.    The registrant's other certifying officers and I have disclosed,  based on
      our most recent  evaluation of internal control over financial  reporting,
      to the  registrant's  auditors and the audit committee of the registrant's
      board of directors:

    a)  All significant  deficiencies  and material  weaknesses in the design or
        operation  of  internal  control  over  financial  reporting  which  are
        reasonably  likely to  adversely  affect  the  registrant's  ability  to
        record, process, summarize and report financial information; and

    b)  Any fraud,  whether or not material,  that involves  management or other
        employees  who  have a  significant  role in the  registrant's  internal
        control over financial reporting.


Date:   12/14/05                        /s/ Eric Seidel
-----------------------              -----------------------------------
                                        President and C.E.O.

                                       25
<PAGE>


EXHIBIT 31.2
                                 CERTIFICATIONS

I, Larry Colton certify that:
1.    I have reviewed this quarterly report on Form 10Q of eAutoclaims, Inc.
2.    Based on my knowledge,  this 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
      report;
3.    Based on my  knowledge,  the  financial  statements,  and other  financial
      information  included  in this  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 report;
4.    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-15(e)  and  15d-15(e))  and  internal
      control  over  financial  reporting  (as  defined  in  Exchange  Act Rules
      13a-15(f) and 15d-15(f)) for the registrant and have:

    a)  Designed  such  disclosure  controls  and  procedures,  or  caused  such
        disclosure controls and procedures to be designed under our supervision,
        to  ensure  that  material   information  relating  to  the  registrant,
        including its consolidated  subsidiaries,  is made known to us by others
        within  those  entities,  particularly  during  the period in which this
        report is being prepared;

    b)  Designed such internal control over financial reporting,  or caused such
        internal  control  over  financial  reporting  to be designed  under our
        supervision,  to provide reasonable  assurance regarding the reliability
        of financial  reporting and the preparation of financial  statements for
        external  purposes in  accordance  with  generally  accepted  accounting
        principles;

    c)  Evaluated the effectiveness of the registrant's  disclosure controls and
        procedures  and  presented  in this  report  our  conclusions  about the
        effectiveness of the disclosure  controls and procedures,  as of the end
        of the period covered by this report based on such evaluation; and

    d)  Disclosed in this report any change in the registrant's internal control
        over financial  reporting  that occurred  during the  registrant's  most
        recent fiscal  quarter that has  materially  affected,  or is reasonably
        likely to materially  affect,  the  registrant's  internal  control over
        financial reporting; and

5.    The registrant's other certifying officers and I have disclosed,  based on
      our most recent  evaluation of internal control over financial  reporting,
      to the  registrant's  auditors and the audit committee of the registrant's
      board of directors:

    a)  All significant  deficiencies  and material  weaknesses in the design or
        operation  of  internal  control  over  financial  reporting  which  are
        reasonably  likely to  adversely  affect  the  registrant's  ability  to
        record, process, summarize and report financial information; and

    b)  Any fraud,  whether or not material,  that involves  management or other
        employees  who  have a  significant  role in the  registrant's  internal
        control over financial reporting.



Date:   12/14/05                            /s/ Larry Colton
     ----------------------------         -----------------------------------
                                           Chief Financial Officer

                                       26
<PAGE>


EXHIBIT 32.1


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of eAutoclaims,  Inc. (the "Company") on
Form 10-Q for the period  ending  October 31, 2005 as filed with the  Securities
and Exchange Commission on December 14, 2005 (the "Report"), I, Eric Seidel, the
President and CEO of the Company,  certify,  pursuant to 18 U.S.C.  ss. 1350, as
adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the  requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of eAutoclaims, Inc.

   /s/ Eric Seidel
--------------------------
Print Name:  Eric Seidel
Title: President & CEO
December 14, 2005


EXHIBIT 32.2


                                       27
<PAGE>



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


         In connection with the Quarterly Report of eAutoclaims, Inc. (the
"Company") on Form 10-Q for the period ending October 31, 2005 as filed with the
Securities and Exchange Commission on December 14, 2005 (the "Report"), I, Larry
Colton, the Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:

1. The Report fully complies with the  requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of eAutoclaims, Inc.

   /s/ Larry Colton

Print Name:  Larry Colton
Title:  Chief Financial Officer
December 14, 2005



                                       28