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

                                   FORM 10-QSB

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

         For the period ended April 30, 2001

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

                         Commission File Number 0-23903

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


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


2708 Alt. 19 N., Suite 604, Palm Harbor, Florida                 34683
------------------------------------------------                 -----
  (Address of principal executive offices)                     (Zip Code)

     Registrant's telephone Number, including area code: (727) 781-0414

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

     Check  whether  the issuer (1) filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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

     The number of shares  outstanding of the Issuer's  Common Stock,  $.001 Par
Value, as of April 30, 2001 was 11,252,278.

     Transitional Small Business Disclosure Format:

     [   ] Yes  [ X ] No


                         TRANSFORMATION PROCESSING, INC.
                         ------------------------------
         (Former name or former address, if changed since last report)


<PAGE>




                                          EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES


                                                            INDEX TO FORM 10-QSB
--------------------------------------------------------------------------------





                                     PART I

                              FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements                                  2

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

Item 2.  Management's Discussion and Analysis of
 Financial Condition and Results of Operations                             10

                                     PART II

                                OTHER INFORMATION

Item 1.  Legal Proceedings                                                 16

Item 2.  Changes in Securities                                             16

Item 5.  Other Information                                                 19

Item 6.  Exhibits and Reports on Form 8-K                                  19

Signatures                                                                 20



<PAGE>




                     EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES

                                     PART I

                              FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS.

The consolidated financial statements of eAutoclaims.com,  Inc. and Subsidiaries
(collectively  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 audited financial  statements of the Company as included
in the Company's Form 10-KSB for the year ended July 31, 2000.


                                       2
<PAGE>

<TABLE>
<CAPTION>


                                                                                      EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES

                                                                                                 CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------------------------------------------------------------

                                                                                             April 30,             July 31,
                                                                                               2001                  2000
-----------------------------------------------------------------------------------------------------------------------------
ASSETS                                                                                     (Unaudited)

<S>                                                                                      <C>                     <C>
Current Assets:
  Cash and cash equivalents                                                                   $ 346,432            $ 239,979
  Accounts receivable, less allowance for doubtful accounts
    of $60,000 and $30,000, respectively                                                      1,107,366              578,729
  Due from related parties                                                                      182,742              182,684
  Prepaid expenses and other current assets                                                      91,089               81,686
-----------------------------------------------------------------------------------------------------------------------------
         Total current assets                                                                 1,727,629            1,083,078
Property and Equipment, net of accumulated depreciation
   of $174,806 and $55,731, respectively                                                        555,794              285,212

Goodwill, net of accumulated amortization
    of $186,344 and $7,019, respectively                                                      1,367,308            1,534,633

Deferred offering costs                                                                         148,224                    -

Other Assets                                                                                    131,646               11,661

Deferred Income Tax Asset, net of valuation
   allowance of $3,410,000 and $1,121,000, respectively                                               -                    -
-----------------------------------------------------------------------------------------------------------------------------
         Total Assets                                                                       $ 3,930,601          $ 2,914,584
=============================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                                                    $ 3,022,915            $ 778,265
   Advances for the issuance of preferred stock                                                       -              500,000
   Common stock to be issued for acquisition                                                          -            1,200,000
   Loans payable - stockholders                                                                 179,000              218,365
-----------------------------------------------------------------------------------------------------------------------------
         Total current liabilities                                                            3,201,915            2,696,630
Loans Payable - stockholders, net of current maturities                                               -               66,635
-----------------------------------------------------------------------------------------------------------------------------
         Total liabilities                                                                    3,201,915            2,763,265
-----------------------------------------------------------------------------------------------------------------------------



Stockholders' Equity:
  Convertible  preferred stock - $.001 par value;  authorized  5,000,000 shares,
   issued and outstanding 420 and -0- shares, respectively,
   aggregate liquidation preference of $2,100,000                                                     1                    -
  Common stock - $.001 par value; authorized 50,000,000 shares, issued
   and outstanding 11,252,278  and 10,790,367 shares, respectively                               11,252               10,790
  Additional paid-in capital                                                                 13,473,092            3,216,286
  Accumulated deficit                                                                       (12,755,659)          (3,075,757)
-----------------------------------------------------------------------------------------------------------------------------
         Stockholders' equity                                                                   728,686              151,319
-----------------------------------------------------------------------------------------------------------------------------
         Total Liabilities and Stockholders' Equity                                         $ 3,930,601          $ 2,914,584
=============================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements

                                       3
<PAGE>

<TABLE>
<CAPTION>

                                                                        EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES

                                                                         CONSOLIDATED STATEMENTS OF OPERATIONS
----------------------------------------------------------------------------------------------------------------
                                                                                                 Period from
                                                                                                 December 7,
                                                  Three-month    Three-month    Nine-Month           1999
                                                  period ended   period ended   period ended     (inception)
                                                 April 30, 2001 April 30, 2000 April 30, 2001 to April 30, 2000
----------------------------------------------------------------------------------------------------------------
                                                   (Unaudited)     (Unaudited)    (Unaudited)     (Unaudited)
<S>                                            <C>            <C>             <C>            <C>
Revenue:
  Collision repairs management                   $ 5,521,511     $   400,772     $10,904,535     $   451,358
  Glass repairs                                      554,054               -       1,523,842               -
  Fleet repairs management                           398,917         195,041         927,582         329,244
  Other revenue and fees                             204,876          17,179         477,522          20,340
-----------------------------------------------------------------------------------------------------------------
Total revenue                                      6,679,358         612,992      13,833,481         800,942
-----------------------------------------------------------------------------------------------------------------

Expenses:
  Claims processing charges                        5,624,181         499,276      11,481,692         659,124
  Selling, general and administrative              5,418,519       2,306,179       8,154,219       2,387,476
  Depreciation and amortization                      111,096          13,549         298,400          13,549
-----------------------------------------------------------------------------------------------------------------
Total expenses                                    11,153,796       2,819,004      19,934,311       3,060,149
-----------------------------------------------------------------------------------------------------------------
Net loss                                         $(4,474,438)    $(2,206,012)    $(6,100,830)    $(2,259,207)
=================================================================================================================

Loss per common share - basic and diluted        $     (0.40)    $     (0.21)    $     (0.87)    $     (0.23)
=================================================================================================================

Weighted-average number of common
 shares outstanding - basic and diluted           11,236,149      10,520,000      11,189,990       9,901,027
=================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements

                                       4
<PAGE>

<TABLE>
<CAPTION>

                                                                                             EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES

                                                                                     CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------------------------
     Nine-month period ended April 30, 2001 (unaudited)
                                                                                           Additional
                                                Preferred Stock       Common Stock          Paid-in     Accumulated  Stockholders'
                                               Shares      Amount   Shares      Amount      Capital       Deficit       Equity
------------------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>         <C>    <C>            <C>       <C>          <C>           <C>
Balance at July 31, 2000                          -           -   10,790,367      10,790    3,216,286    (3,075,757)     151,319
(unaudited)
     Shares of common stock issued
      in acquisitions                             -           -      322,372         322    1,211,678             -    1,212,000
     Issuance of common stock for services        -           -      139,539         140      360,201             -      360,341
     Issuance of preferred stock                420         $ 1            -           -    1,849,943             -    1,849,944
     Recognition of beneficial conversion
      feature of convertible preferred stock     -            -            -           -    1,715,198    (1,715,198)           -
     Proceeds from stock options                 -            -            -           -          750             -          750
      Accrued dividend on preferred stock        -            -            -           -            -       (88,838)     (88,838)
     Fair value of warrants issued in
      connection with the preferred stock        -            -            -           -    1,775,036    (1,775,036)           -
     Issuance of compensatory stock options      -            -            -           -    3,344,000             -    3,344,000
     Net loss                                    -            -            -           -            -    (6,100,830)  (6,100,830)
------------------------------------------------------------------------------------------------------------------------------------
Balance at April 30, 2001 (unaudited)          420          $ 1   11,252,278    $ 11,252  $13,473,092  $(12,755,659)   $ 728,686
====================================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements

                                       5
<PAGE>

<TABLE>
<CAPTION>

                                                                                     EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES

                                                                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
----------------------------------------------------------------------------------------------------------------------------
                                                                                                               Period from
                                                                                                               December 7,
                                                                                            Nine-Month            1999
                                                                                           period ended        (inception)
                                                                                           April 30, 2001  to April 30, 2000
----------------------------------------------------------------------------------------------------------------------------
                                                                                            (Unaudited)         (Unaudited)

<S>                                                                                     <C>                 <C>
Cash flows from operating activities:
  Net loss                                                                                 $ (6,100,830)       $ (2,259,207)
  Adjustments to reconcile net loss to net cash used in operating activities:
    Depreciation and amortization                                                               298,400              13,549
    Common stock issued for services                                                            332,554                   -
    Issuance of compensatory stock options                                                    3,344,000                   -
    Allowance for doubtful accounts                                                              30,000                   -
    Changes in operating assets and liabilities:
      Increase in accounts receivable                                                          (558,637)           (406,200)
      Increase in due from related parties                                                          (58)           (153,705)
      Increase in prepaid expenses and other current assets                                      (9,403)                  -
      Increase in other assets                                                                 (119,985)               (744)
      Increase in accounts payable and accrued expenses                                       2,183,600             329,202
----------------------------------------------------------------------------------------------------------------------------
            Net cash used in operating activities                                              (600,359)         (2,477,105)
----------------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
  Purchases of property and equipment                                                          (389,657)           (199,651)
----------------------------------------------------------------------------------------------------------------------------


Cash flows from financing activities:
  Proceeds from stock options                                                                       750                   -
  Net proceeds from issuance of preferred stock                                               1,349,944                   -
  Increase in deferred offering costs                                                          (148,225)                  -
  Net proceeds from issuance of common stock                                                          -           3,038,931
  Principal payments on stockholder loans                                                      (106,000)                  -
----------------------------------------------------------------------------------------------------------------------------
            Cash provided by financing activities                                             1,096,469           3,038,931
----------------------------------------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents                                                       106,453             362,175

Cash and cash equivalents at beginning of period                                                239,979                   -
----------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents at end of period                                                 $    346,432        $    362,175
============================================================================================================================


Supplemental disclosure of cash flow information:

  Cash paid during the period for interest                                                 $     14,334         $         -
============================================================================================================================


Supplemental disclosure of noncash investing and financing activities:

============================================================================================================================
  Contribution of fixed assets for common stock                                            $          -         $    68,930
============================================================================================================================
  Accrued dividends on convertible preferred stock                                         $     88,838         $         -
============================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements

                                       6
<PAGE>

                                         EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES

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


Note 1 - Basis of presentation
------------------------------

The accompanying  consolidated  financial  statements  reflect the operations of
eAutoclaims.com,  Inc. and its wholly owned Subsidiaries for the three-month and
nine-month  periods ended April 30, 2001 and the three-month  period ended April
30, 2000 and the period from  December 7, 1999  (inception)  to April 30,  2000.
eAutoclaims.com,  Inc. and Transformation  Processing,  Inc. completed a reverse
merger on May 25, 2000. Prior to the reverse merger,  Transformation Processing,
Inc. had ceased operations. The Company began operations on December 7, 1999.

The  accompanying   unaudited  consolidated  financial  statements  contain  all
adjustments (consisting only of those of a normal recurring nature) necessary to
present  fairly the  financial  position of the Company as of April 30, 2001 and
its results of operations and its cash flows for the  three-month and nine-month
periods ended April 30, 2001 and the three-month period ended April 30, 2000 and
the period  from  December 7, 1999  (inception)  to April 30,  2000.  Results of
operations for the three-month  and nine-month  periods ended April 30, 2001 are
not  necessarily  indicative  of the results  that may be expected  for the year
ending July 31, 2001.

Note 2 - Deferred offering costs
--------------------------------

Deferred  offering  costs  represent  costs  attributable  to a proposed  public
offering.  The Company  intends to offset these costs  against the proceeds from
the transaction.  In the event that such offering is not completed,  these costs
will be charged to the Company's operations.

Note 3 - Per share calculations
-------------------------------

Basic loss per share is  computed  as net loss  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.  Potential common shares have not
been included in diluted loss per share since the effect would be anti-dilutive.
The calculation of basic and diluted loss per common share is as follows:

<TABLE>
<CAPTION>

                                                                                                  Period from
                                                                                                   December 7,
                                                  Three-month       Three-month    Nine-Month         1999
                                                  period ended     period ended   period ended    (inception) to
                                                 April 30, 2001   April 30, 2000 April 30, 2001   April 30, 2000
----------------------------------------------------------------------------------------------------------------
<S>                                               <C>            <C>            <C>              <C>
Net loss                                          $ (4,474,438)    $ (2,206,012)   $(6,100,830)     $ (2,259,207)

Less: Preferred stock dividends                        (42,000)               -        (88,838)                -
         Deduction related to Series A convertible
           preferred stock                                   -                -     (3,490,234)                -
                                                 --------------  ---------------  -------------  ----------------

Net loss applicable to common stock               $ (4,516,438)    $ (2,206,012)   $(9,679,902)     $ (2,259,207)
                                                 ==============  ===============  =============  ================

Basic and diluted:

Weighted average number of
 common shares outstanding                          11,236,149       10,520,000     11,189,990         9,901,027
                                                 ==============  ===============  =============  ================

Basic and diluted loss per common share           $      (0.40)    $      (0.21)   $     (0.87)     $      (0.23)
                                                 ==============  ===============  =============  ================
</TABLE>

                                       7
<PAGE>
                                         EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES

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


Note 4 - Equity Transactions
----------------------------

As of July 31, 2000,  the Company had not issued any shares of  preferred  stock
but had received  $500,000 in cash toward shares of preferred stock.  During the
nine-month  period  ended  April 30,  2001,  the  Company  issued  420 shares of
preferred  stock and received an  additional  $1,349,944 in cash that was net of
$250,056 of offering costs.

In connection  with the issuance of  convertible  preferred  stock,  the Company
issued  warrants to purchase  818,165  shares of common stock.  The warrants are
exercisable at prices ranging from $1.4625 to $4.50 per share,  are  exercisable
upon  issuance,  and  expire  in  five  years.  The  fair  value  of  $1,775,036
attributable  to the  warrants has been  treated as a cost  associated  with the
issuance  of the  convertible  preferred  stock,  and has  been  recorded  as an
increase to  accumulated  deficit and an increase in the net loss  available  to
common shareholders.

On the  date of  issuance  of the  convertible  preferred  stock,  a  beneficial
conversion feature of the convertible stock existed represented by the intrinsic
value of that feature.  That amount is calculated as the difference  between the
conversion price and the fair value of the common stock into which the preferred
stock is  convertible,  multiplied  by the  number  of  shares  into  which  the
preferred stock is convertible.  This amount has been recorded as an increase to
accumulated  deficit  and an  increase  in the  net  loss  available  to  common
shareholders.  The aggregate  amount  attributable to the beneficial  conversion
feature is $1,715,198.

During the  nine-month  period  ended April 30, 2001,  the company  issued 2,372
shares of restricted  common stock on the acquisition of  SalvageConnection.com,
Inc.  These  shares were valued at the fair market value at the date of issuance
that totaled $12,000.

During the  nine-month  period  ended April 30, 2001,  the Company  entered into
agreements  with three  consultants  to provide  services to the Company.  These
consultants  will receive cash and 86,136 shares of the  Company's  common stock
for these  services.  The Company  will record a charge to  operations  when the
services  are  performed  based on the fair market value of the shares of common
stock on the date in which the services  are  performed.  During the  nine-month
period ended April 30, 2001, approximately $151,335 was charged to operations as
a result of these agreements.  At April 30, 2001, 81,693 common shares have been
earned.

After renegotiation of a consulting agreement, 200,000 shares of stock that were
issued in fiscal year ended July 31, 2000 were  cancelled as the  services  were
not  performed.  During April 2001,  the Company issued 200,000 shares of common
stock  to a member  of the  Company's  board of  directors  who  provided  those
consulting  services.  As a result of these  transactions the Company recorded a
net charge to operations of $106,000,  which was equal to the  difference in the
fair  market  value of the  shares at the  dates of  original  issuance  and the
subsequent new issuance.

During the  nine-month  period ended April 30, 2001, the Company agreed to issue
50,000 shares of common stock in exchange for $100,000 of legal services.  As of
April 30, 2001,  $100,000 in legal  services had been invoiced (of which $42,280
had been  treated as a cost of issuance  of the  equity)  and all 50,000  common
shares have been earned.

During the nine-month period ended April 30, 2001, the Company issued options to
employees and members of the Company's Board of Directors to purchase  1,292,700
shares of common stock where the exercise  prices of the options are equal to or
greater than the fair market value of the Company's  common stock on the date of
each grant.

                                       8
<PAGE>
                                         EAUTOCLAIMS.COM, INC. AND SUBSIDIARIES

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

During the  nine-month  period  ended April 30, 2001,  the Company  issued 7,846
shares of common stock to directors in exchange for their services.  The Company
charged  operations  $17,500,  which was equal to the fair  market  value of the
shares when earned.

During April 2001, the Company issued  options to purchase  2,200,000  shares of
common stock to  officers,  directors  and  employees of the Company at $.01 per
share.  Accordingly,  the Company recorded a charge to operations of $3,344,000,
representing  the  difference  between the exercise price of the options and the
market price of the  Company's  common stock at the time of issuance  related to
these issuances.

Note 5 - Acquisitions
---------------------

On  August  1,  2000,   the  Company   acquired   the   outstanding   shares  of
SalvageConnection.com,  Inc.  for the  issuance  of 2,372  shares of  restricted
common  stock.  These shares were valued at the fair market value at the date of
issuance  that  totaled  $12,000.  SalvageConnection.com  is  an  Internet-based
procurement network for recycled and remanufactured automobile parts.

SalvageConnection.com  was  incorporated  in  December  1999 had no  significant
assets  and  liabilities  and  has  not had  any  substantial  operations  since
incorporation.  The  acquisition  has been  accounted for as a purchase with the
entire consideration recorded as goodwill, to be amortized over 7 years.

Note 6 - Additional information
-------------------------------

The Company's  records and the records of its transfer agent differ with respect
to the number of outstanding shares of the Company's common stock.  According to
the  transfer  agent,  the  number  of shares of  common  stock  outstanding  is
approximately  31,500  shares  greater  than  the  11,252,278  indicated  by the
Company's  records.  The Company believes that its records are correct and is in
the  process of  resolving  this  difference.  The number of shares  outstanding
reflected in the Company's  financial  statements do not include these shares or
any adjustment that might be necessary to resolve this difference.

Note 7 - Subsequent Events
--------------------------

On June 6, 2001 the Company received $440,000,  net of $60,000 of expenses,  for
100 shares of convertible preferred stock from Governors Road, LLC, an affiliate
of Thomson  Kernaghan.  This stock is redeemable at the Company's option at 120%
of face value plus accrued  interest on $500,000 upon the earlier of the closing
of the proposed  public  offering or August 15, 2001. The preferred stock cannot
be converted  within this period.  If the preferred stock is not redeemed by the
Company within this period,  its terms become  identical to the Company's  other
convertible preferred stock.

In connection  with the recent  issuance of 100 shares of preferred  stock,  the
Company was required to enter into a Restated Master Modification Agreement with
the holders of the series A preferred  stock. See Item 2 of this Form 10-QSB for
a full description of that modified agreement.

                                       9

<PAGE>

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

The  statements  contained  in this Report on Form  10-QSB,  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-QSB. 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-QSB  will  prove  to be
accurate.


GENERAL

We  provide  Internet  based  collision  claims   administration   services  for
automobile insurance 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 facilitating the gathering and distribution of information required
in the automobile repair process.  We manage the entire collision claims process
and are  responsible  for paying the repair  bills and charges of our network of
vendors who repair the automobile under contract with us.

We provide an  infrastructure  that links  automobile  insurance  companies  and
self-insured  fleet owners with thousands of collision  repair shops and support
facilities  located  throughout  the United  States.  Our  services  provide our
automobile  insurance  companies and  self-insured  fleet owner customers with a
means of monitoring repairs and controlling  expenses incurred in the process of
evaluating and paying collision claims. We derive our revenues from fees paid by
our customers and by sharing in discounts  received by our customers  from parts
and service  providers when  processing  collision  work through our system.  We
receive  revenues from insurance  companies for repairs  completed by members of
our network of repair  shops.  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 and
glass repair  facilities  through our provider  network  accounts for 97% of the
revenue for the nine months  ended April 30,  2001.  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 $60 per claim depending
upon the level of service  required.  For the nine-month  period ended April 30,
2001, 3% of the revenue has been received from claims  processing fees and other
income.

Our  business  model is  similar  to that of  health  maintenance  organizations
("HMO's") and preferred provider organizations  ("PPO's").  HMO's and PPO's seek
to control  the cost of medical  services by  bringing  the various  health care
providers,  such as doctors and  hospitals,  together in a single  organization,
thereby  exerting control over the costs of services paid for by the HMO or PPO.
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 parts  and
services,  and performing necessary repair services.  We monitor the performance

                                       10
<PAGE>


of parts and service providers from our home office with a staff of professional
body shop experts to help assure that the expectations of the insurance  company
for  quality,  timeliness  and cost are  being  met.  As HMO's  and  PPO's  have
relationships with many providers,  we have established  relationships with over
2,600 body shops and 5,300 glass shops throughout the United States. These shops
are referred to as our "provider  network." Because of these  relationships,  we
are  typically  able to obtain  lower  cost  parts and  services  for  insurance
companies  and increase the volume of work for repair shops that are part of our
provider network.

During the three  months  ended  April 30,  2001 we  experienced  a  significant
increase in losses when compared to the previous quarter. The increase in losses
is a result of (i) a non-cash  expense  from the  issuance of stock  options and
common stock as a management  incentive and  compensation to consultant,  (ii) a
charge  resulting  from a stockholder  modification  agreement that extended the
filing deadline for  registration  of shareholder  stock,  and (iii)  additional
payroll and  infrastructure  costs  incurred to prepare to serve new  customers,
including Royal Indemnity  Company, a top 25 insurance company in revenue in the
United States,

RESULTS OF OPERATIONS

FOR THE  THREE-MONTH  PERIOD  ENDED APRIL 30, 2001  COMPARED TO THE  THREE-MONTH
PERIOD ENDED APRIL 30, 2000.

REVENUE

Total revenue for the  three-month  period ended April 30, 2001 was  $6,679,358,
which  consists of  $5,521,511  in collision  repairs  management  for insurance
companies,  $554,054 in glass repairs, $398,917 in fleet repairs management, and
$204,876  in other  revenue  and fees.  Revenues  increased  $6,066,366  or 990%
compared to three-month  period ended April 30, 2000 total revenues of $612,992.
This  increase is primarily  the result of growth in revenues  attributed to our
core  collision  repairs  management  business.   Collision  repairs  management
revenues increased 1,278% from $400,772 in the three months ended April 30, 2000
to $5,521,511 for the three months ended April 30, 2001.  During the three-month
period ended April 30, 2001,  we derived 81% of our revenues  from one customer.
The loss of this customer or a  significant  reduction in the amount of business
it provides us would substantially  reduce our revenues and adversely affect our
operations.  We have  entered  into a  Claims  Management  Service  and  License
Agreement with Royal Indemnity Company,  which is ranked in the top 25 insurance
companies  in revenue in the United  States.  This new  customer  is expected to
process claims that will exceed  revenues for our current  largest  customer and
thereby  significantly  reduce  our  revenue  concentrations  with our  existing
largest customer.

EXPENSES

Claims processing  charges for the three-month  period ended April 30, 2001 were
$5,624,181,  or 84% of revenues  which  increased 3% from 81% of revenues in the
three-month  period ended  January 31, 2001.  This  increase is caused by volume
discounts  extended  to our largest  customers  that  caused  claims  processing
charges as a percentage of collision repairs management  revenues to increase in
the period ended April 30, 2001. Claims processing  charges include the costs of
collision  repairs paid by eAutoclaims to its collision repair shop network.  We
expect  margins on claims  repairs  to remain  low in the near  future as we use
favorable  pricing as a means to obtain  increased  market  share.  However,  we
expect our margins as a whole to increase by supplementing our collision repairs
management  revenues with new complimentary  higher margin product lines such as
the sale of estimating  software to  independent  adjustors and  appraisers  and
click fees  associated  with  uploading  information  from our  network.  Claims
processing  charges  increased  $5,124,905 or 1,026% from $499,276 in the period
ended April 30, 2000.

                                       11
<PAGE>


We are  dependent  upon our third party  collision  repair  shops for  insurance
claims repairs.  eAutoclaims currently includes over 2,600 affiliated repair and
5,300 auto glass vendor  facilities in its network for insurance claims repairs.
We  electronically  and  manually  audit  individual  claims  processes to their
completion  using remote  digital  photographs  transmitted  over the  Internet.
However,  if the quality of service  provided  by a collision  repair shop falls
below a satisfactory  standard leading to poor customer service, this could have
a harmful  effect on our  business.  We  control  our  service  requirements  by
continually  monitoring  customer service levels and providing staff inspections
of our network  shops and, if required,  establish  similar  relationships  with
other collision repair shops.

Selling,  general and  administrative  expenses for the three-month period ended
April 30, 2001 were $5,418,519 or 81% of revenue  compared to $2,306,179 or 376%
of revenue for the same  period of 2000.  Selling,  general  and  administrative
expenses have decreased  significantly as a percentage of revenues when compared
to the  three-month  period  ended  April 30,  2000 which is  attributed  to our
substantial  revenue  growth  and the  economies  of  scale  realized  from  our
established   infrastructure.   Selling,  general  and  administrative  expenses
consisted of salaries and other personnel related expenses,  facilities  related
expenses,  legal and other  professional  fees,  advertising  costs,  and travel
expenses.  Selling,  general and  administrative  expenses consisted of non-cash
charges of $3,513,620 for the three-month period ended April 30, 2001.  Non-cash
charges included  $3,344,000 for options to purchase  2,200,000 shares of common
stock issued to our officers,  directors and employees at $.01 per share.  Other
non-cash charges included $169,620 incurred pertaining to consulting  agreements
for investor relation services, legal, and professional consultants.  During the
three-month  period ended April 30, 2001 we incurred payroll related expenses of
$1,119,385.

Depreciation  and  amortization  was $111,096 for the  three-month  period ended
April 30, 2001.  Depreciation of fixed assets represented $51,321.  Amortization
expense of $59,775  reflects the  amortization  of goodwill  associated with our
Premier Express Acquisition.

In the event  that we  continue  to acquire  other  companies,  amortization  of
goodwill  will  continue to have an impact on our results of  operations  in the
future. Based on our previous acquisitions, future amortization of goodwill will
reduce net income  from  operations  by  approximately  $55,000 in each  quarter
through 2007.

Interest  expense  of $5,098 and  interest  income of  $11,587  is  included  in
selling,  general and  administrative  expenses for the three-month period ended
April 30,  2001.  This is compared to $4,604 of interest  income and no interest
expense in selling general and administrative expense for the three-month period
ended  April 30,  2000.  Interest  expense  related  primarily  to  interest  on
shareholder loans and capital leases and interest income resulted primarily form
interest earned on our cash reserves.

NET LOSS

We recorded a net loss of $4,474,438 for the three-month  period ended April 30,
2001. Our net loss increased by $3,838,099 or 603% from the  three-month  period
ended  January 31, 2001.  Included in the  Company's  April 30, 2001 expense was
$280,000 resulting from a stockholder  modification  agreement that extended the
filing deadline for registration of shareholder stock. After adjusting the April
30, 2001 loss for non-cash  charges of  $3,513,620  and the  $280,000,  the loss
increased  by  $44,479  from the  three-month  period  January  31,  2001.  This
represents  a decrease  in the  percentage  of loss to revenue  from 13% to 10%.
Additionally  the  Company  purposely  increased  its payroll  related  costs by
approximately  $87,000 during the three-months  ended April 30, 2001 in order to
prepare itself to serve a new customer, Royal & Sun Alliance, a top 25 insurance
company in revenue in the United States.

Net loss increased  $2,268,426 or 103% from $2,206,012 in the three-month period
ended April 30, 2000.  Management is continuing to develop its infrastructure to
support  its rapid  growth  and we believe  that our  business  operations  will
benefit  in the  long-term  by  supporting  higher  levels of claims  processing

                                       12
<PAGE>

charges leading to increased revenues. It is expected that we will break-even on
a cash flow basis (excluding  non-cash charges which could be material)  between
the fourth  quarter of this  fiscal  year and the second  quarter of fiscal year
2002,  however  there  are no  assurances  that we  will  be  able to meet  this
objective or obtain future profitability.


FOR THE  NINE-MONTH  PERIOD  ENDED  APRIL 30,  2001  COMPARED TO THE PERIOD FROM
DECEMBER 7, 1999 (INCEPTION) TO APRIL 30, 2000.

REVENUE

Total revenue for the  nine-month  period ended April 30, 2001 was  $13,833,481,
which  consists of  $10,904,535  in collision  repairs  management for insurance
companies,  $1,523,842 in glass repairs,  $927,582 in fleet repairs  management,
and  $477,522 in other  repairs and fees.  Revenues for the  three-month  period
ended April 30, 2001 represented 48% of revenues in the nine-month  period ended
April 30,  2001.  Revenues  increased  $13,032,539  or 1,627% for the nine month
period  ended April 30,  2001 as  compared  to the period from  December 7, 1999
(inception) to April 30, 2000.

During the  nine-month  period  ended  April 30,  2001,  we  derived  73% of our
revenues from one customer. The loss of this customer or a significant reduction
in the  amount  of  business  it does  with us would  substantially  reduce  our
revenues  and  adversely  affect our  operations.  We have entered into a Claims
Management Service and License Agreement with Royal Indemnity Company,  which is
ranked in the top 25 insurance  companies in revenue in the United States.  This
new  customer is expected to process  claims that will exceed  revenues  for our
current  largest   customer  and  thereby   significantly   reduce  our  revenue
concentrations with our existing largest customer.

EXPENSES

Claims  processing  charges for the nine-month  period ended April 30, 2001 were
$11,481,692,  or 83% of revenues.  Of this percentage,  claims  management costs
represented  69%,  while glass and other costs  represented  14% of total claims
processing  charges during this period.  Claims processing charges are primarily
the costs of collision  repairs paid by eAutoclaims to its collision repair shop
network. We expect margins on claims repairs to remain low in the near future as
we use favorable  pricing as a means to obtain increased market share.  However,
we expect our  margins as a whole to  increase by  supplementing  our  collision
repairs management  revenues with new complimentary  higher margin product lines
such as the sale of estimating software to independent  adjustors and appraisers
and click fees associated with uploading  information  from our network.  Claims
processing  charges increased  $10,822,568 or 1,641% from $659,124 in the period
from December 7, 1999 (inception) to April 30, 2000.

We are  dependent  upon our third party  collision  repair  shops for  insurance
claims repairs.  eAutoclaims currently includes over 2,600 affiliated repair and
5,300 auto glass vendor  facilities in its network for insurance claims repairs.
We  electronically  and  manually  audit  individual  claims  processes to their
completion  using remote  digital  photographs  transmitted  over the  Internet.
However, if the quality of service provided by collision repair shops fall below
a  satisfactory  standard  leading to poor customer  service,  this could have a
harmful  effect  on  our  business.  We  control  our  service  requirements  by
continually  monitoring  customer service levels and providing staff inspections
of our network  shops and, if required,  establish  similar  relationships  with
other collision repair shops.

Selling,  general and  administrative  expenses for the nine-month  period ended
April 30, 2001 were $8,154,219 or 59% of revenue  compared to $2,387,476 or 298%
of revenue for the period from December 7, 1999  (inception)  to April 30, 2000.
Selling,  general and  administrative  expenses consisted of non-cash charges of

                                       13
<PAGE>

$3,713,411  for the  nine-month  period ended April 30, 2001.  Non-cash  charges
included  $3,344,000 for options to purchase 2,200,000 shares of common stock to
our officers,  directors and employees at $.01 per share. Other non-cash charges
included  $369,411  incurred  pertaining to consulting  agreements  for investor
relation services,  legal, and professional  consultants.  During the nine-month
period ended April 30, 2001 we incurred payroll related expenses of $2,693,364.
Depreciation and amortization was $298,400 for the nine-month period ended April
30,  2001.  Depreciation  of fixed  assets  represented  $119,075.  Amortization
expense of $179,325  reflects the  amortization of goodwill  associated with our
Premier Express Acquisition.

In the event  that we  continue  to acquire  other  companies,  amortization  of
goodwill  will  continue to have an impact on our results of  operations  in the
future. Based on our previous acquisitions, future amortization of goodwill will
reduce net income  from  operations  by  approximately  $55,000 in each  quarter
through 2007.

Interest  income of $15,790 is included in selling,  general and  administrative
expenses,  net of interest  expense of $14,334 for the  nine-month  period ended
April 30, 2001.  Interest  expense related  primarily to interest on shareholder
loans and capital leases and interest  income  resulted  primarily form interest
earned on our cash reserves.

NET LOSS

Net loss for the nine-month period ended April 30, 2001 was $6,100,830 or 44% of
revenues.  Net loss before non-cash  charges  incurred  pertaining to consulting
agreements for investor relations services,  legal, and professional consultants
was  $2,387,419  or 17% of revenues  for the  nine-month  period ended April 30,
2001. Net loss increased  $3,841,623 or 170% from  $2,259,207 in the period from
December 7, 1999  (inception) to April 30, 2000. We expect our  year-to-date net
loss to narrow as we experience  higher revenues that will  increasingly  absorb
our fixed costs associated with our infrastructure.


LIQUIDITY AND CAPITAL RESOURCES

At April 30, 2001,  we had cash and cash  equivalents  of $346,432 and a working
capital  deficiency of  $1,474,286.  The primary  source of our working  capital
during the  nine-month  period ended April 30, 2001, was from the sale of shares
of our series A Preferred Stock.

If we are  unable  to obtain  financing  through  our  current  proposed  public
offering,  we will curtail our current growth plans.  In such event,  we believe
that our current cash resources, along with working capital from operations will
be sufficient  to fund our business at least  through 2001. If additional  funds
from our  proposed  public  offering  or other  financing  arrangements  are not
available  on  favorable  terms to us, we will not be able to continue our rapid
growth.

We believe  that,  assuming that our current  public  offering  closes,  the net
proceeds from this offering,  together with cash generated from operations, will
be sufficient to meet our anticipated cash needs for working capital and capital
expenditures  for the next 18 months  and will  allow us to  continue  the rapid
expansion of our business.  However, we may need to raise additional funds as we
pursue other business or technology  acquisitions or experience operating losses
that exceed our current expectations.  We cannot assure you that we will be able
to raise such funds or such funds will be available to us on favorable terms. If
we  raise  additional  funds  through  the  issuance  of  our  equity  for  debt
securities, such securities may have rights, preferences or privileges senior to
those of the  rights of our Common  Stock and our  stockholders  may  experience
additional dilution.

                                       14
<PAGE>

We are currently restricted from raising other additional debt or equity without
the consent of the holders of our Series A Preferred  Stock.  Thomson  Kernaghan
has exclusive rights to provide any future equity line financing  agreements for
two years after the date of this prospectus.

On June 6, 2001 we received $440,000, net of $60,000 of expenses, for 100 shares
of Series A Convertible  Preferred  stock from Governors  Road,  LLC, one of our
current holders of our Series A Preferred Stock. This stock is redeemable at our
option at 120% of face value plus accrued dividends on $500,000 upon the earlier
of the closing of our proposed  public offering or August 15, 2001. If we do not
redeem the preferred stock its term becomes  identical to our other  convertible
preferred  stock.  We also  issued  our  warrants  as part  of this  funding  in
accordance with the terms of the preferred stock agreements.

eAutoclaims'  operations used cash of $600,359 the nine-month period ended April
30, 2001, and management  expects a significant  use of cash during the upcoming
fiscal  quarter as it funds its operating  businesses.  There is no assurance we
will continue to sustain our growth. Our business has grown  significantly since
our inception. We believe that our current cash resources, access to capital and
cash flow from  operations  will be sufficient to sustain our  operations for at
least 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.  In order to
sustain our growth, we will require substantial  additional capital. If we raise
additional  funds through the issuance of our securities,  these  securities may
have rights,  preferences or privileges senior to those of our Common Stock, and
our stockholders may experience additional dilution to their equity ownership.

As of July 31,  2000,  we had not issued any shares of  preferred  stock but had
received  $500,000 in cash toward the  purchase  of shares of  preferred  stock.
During the  nine-month  period ended April 30, 2001,  we received an  additional
$1,349,944  in cash that was net of $250,056  of  offering  costs and issued 420
shares of  preferred  stock for  total  gross  cash  received  of  approximately
$2,100,000.  We have an  obligation  to register  these  shares of Common  Stock
underlying the Preferred  Stock to provide these investors  future  liquidity of
their  investment.  In connection  with the issuance of the preferred  stock, we
also issued, to purchasers of the preferred stock,  warrants to purchase 818,165
shares of Common Stock.  These  warrants are  immediately  exercisable at prices
ranging  from  $1.4625 to $4.50 per share and expire five years from the date of
issue.  In  addition,  we  agreed  to pay the  preferred  shareholders  $280,000
resulting from these  preferred  shareholders  extending the filing deadline for
registration of the underlying common stock.

We will need capital to implement our business objectives. We cannot provide any
assurance  that we  will  be  successful  in  raising  such  capital,  and  such
undertakings are difficult to complete.  Although  management is optimistic that
we will be successful in obtaining future financing,  there is no assurance that
such financing will be available to meet our needs.

Our principle  commitments at April 30, 2001 consist of monthly operating rental
payments, compensation of employees and accounts and notes payable.

INFLATION

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


                                       15
<PAGE>

SEASONALITY

eAutoclaims does not deem its revenues to be seasonal.


PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The  Company is subject to a number of  lawsuits  and claims  arising out of the
conduct of its business.  Management  believes  that the probable  resolution of
such matters  will not  materially  affect the  financial  position,  results of
operations or cash flows of the Company.

In July 2000, EAUTO, LLC, a Texas entity, asserted that the Company's use of its
EAUTOCLAIMS.COM mark and website violated its federally registered EAUTO service
mark.  The Company  denied  this  assertion  on the  grounds  that the marks are
different,  the services offered by the Company are different than those offered
by EAUTO, Inc. and there is no likelihood of confusion among relevant consumers.
In May of 2001 EAUTOCLAIMS.COM  received a favorable judgment that declared that
there was no service mark  violation.  The judgment  further  dismissed  EAUTO's
registered service mark.

On or about  October  23,  2000,  we  received  a demand  letter  from a website
developer for $135,000 alleging breach of contract. Our management believes that
we are entitled to a refund of $15,000.  A complaint  has been filed in Pinellas
County  Circuit Court  regarding  this  dispute.  It is too early to predict the
ultimate  outcome  of this  dispute.  Management  believes  we have  meritorious
defenses to this  action.  We believe  that there are no other claims or actions
pending or threatened against us, the ultimate disposition of which would have a
material adverse effect on us.

We believe  that  there are no other  claims or  actions  pending or  threatened
against us, the  ultimate  disposition  of which  would have a material  adverse
effect on us.


ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS.

As of July 31,  2000,  we had not issued any shares of  preferred  stock but had
received  $500,000 in cash toward the  purchase  of shares of  preferred  stock.
During the  nine-month  period ended April 30, 2001,  we received an  additional
$1,349,944  in cash that was net of $250,056  of  offering  costs and issued 420
shares of preferred stock for total gross cash received  $2,100,000.  We have an
obligation  to register  these shares of Common Stock  underlying  the Preferred
Stock to provide  these  investors  future  liquidity  of their  investment.  In
connection  with  the  issuance  of the  preferred  stock,  we also  issued,  to
purchasers of the preferred stock, warrants to purchase 818,165 shares of Common
Stock. These warrants are immediately exercisable at prices ranging from $1.4625
to $4.50 per share and expire five years from the date of issue.

During the  nine-month  period  ended April 30, 2001,  the Company  issued 2,372
shares of restricted  common stock on the acquisition of  SalvageConnection.com,
Inc.  These  shares were valued at the fair market value at the date of issuance
that totaled $12,000.

During the  nine-month  period  ended April 30, 2001,  the Company  entered into
agreements  with three  consultants  to provide  services to the Company.  These
consultants  will receive cash and 86,136 shares of the  Company's  common stock
for these  services.  The Company  will record a charge to  operations  when the
services  are  performed  based on the fair market value of the shares of common
stock on the date in which the services  are  performed.  During the  nine-month

                                       16
<PAGE>

period ended April 30, 2001, approximately $151,335 was charged to operations as
a result of these agreements.  At April 30, 2001, 81,693 common shares have been
earned.

After renegotiation of a consulting  agreement,  one of these consultants agreed
to cancel 200,000 shares of stock that were issued in fiscal year ended July 31,
2000 as the  services  were not  performed.  During  April  2001,  we  issued an
additional  200,000 shares of common stock to a member of our board of directors
who provided those  consulting  services.  As a result of these  transactions we
recorded  a net  charge  to  operations  of  $106,000,  which  was  equal to the
difference  in the fair  market  value of the  shares at the  dates of  original
issuance and subsequent new issuance.

During the  nine-month  period ended April 30, 2001, the Company agreed to issue
50,000 shares of common stock in exchange for $100,000 of legal services.  As of
April 30, 2001,  $100,000 in legal  services had been invoiced (of which $18,900
had been  treated as a cost of issuance of the  preferred  stock) and all 50,000
common shares have been earned.

During the nine-month period ended April 30, 2001, the Company issued options to
employees and members of the Company's Board of Directors to purchase  1,292,700
shares of common stock where the exercise  prices of the options are equal to or
greater than the fair market value of the Company's  common stock on the date of
each grant.

During the  nine-month  period  ended April 30, 2001,  the Company  issued 7,846
shares of common stock to directors in exchange for their services.  The Company
charged  operations  $17,500,  which was equal to the fair  market  value of the
shares when earned.

During April 2001, the Company issued  options to purchase  2,200,000  shares of
common stock to  officers,  directors  and  employees of the Company at $.01 per
share.  Accordingly,  the Company recorded a charge to operations of $3,344,000,
representing  the  difference  between the exercise price of the options and the
market price of the  Company's  common stock at the time of issuance  related to
these issuances.

On June 6, 2001 we received $440,000, net of $60,000 of expenses, for 100 shares
of  Convertible  Preferred  stock from Governors  Road,  LLC, one of our current
holders of our Series A Preferred  Stock.  This stock is  redeemable  at the our
option at 120% of face value plus accrued  dividend on $500,000 upon the earlier
of the closing of our proposed  public offering or August 15, 2001. If we do not
redeem  the  preferred  stock  its term  becomes  identical  to our  convertible
preferred  stock.  We also  issued  our  warrants  as part  of this  funding  in
accordance with the terms of the preferred stock agreements.

In connection  with the recent  issuance of 100 shares of our Series A Preferred
Stock to Governors  Road,  LLC, we were required to enter into a Restated Master
Modification  Agreement  with the holders of our Series A Preferred  Stock.  The
Restated Master Modification Agreement amends the Securities Purchase Agreement,
the  Registration   Rights  Agreement,   Security   Agreement,   Certificate  of
Designation for our Series A Preferred,  Purchasers  Warrant and Agents Warrant.
These agreements are collectively  referred to sometimes as the "Preferred Stock
Agreements."  The  Restated  Master  Modification   Agreement  modifies  certain
provisions of the Preferred Stock Agreement as follows:

o        Holders  of our  Series A  Preferred  Stock  and  certain  other of our
         shareholders agreed to enter into certain lock-up restrictions relating
         to the sale of our Common Stock. Notwithstanding the foregoing, we have
         agreed that up to 200,000 of our Common Stock held by Dominion Capital,
         Ltd., or Southshore Capital Fund, Ltd.,  otherwise subject to the terms
         of lock-up agreements, will be permitted to be sold at the equal to ten
         percent  (10%) of the prior day's average  trading daily volume.  These
         shares are currently  freely  tradable  without  restriction or further
         registration under the Securities Act pursuant to Rule 144(k).

                                       17
<PAGE>


o        The  conversion  rate for our Series A Preferred  Stock was set at $.75
         per share.  We have reserved a total of 2,800,000  shares of our Common
         Stock underlying the conversion rights of our Series A Preferred Stock.
         If our proposed  public  offering does not close by June 30, 2001,  the
         conversion  price on the Preferred  Stock shall be reduced from $.75 to
         the lesser of 75% of the market  value at the time of  conversion  of a
         share of our common stock or $.62.5.

o        The penalty provisions  contained in the original  Registration  Rights
         Agreement for failure to register  underlying  shares on a timely basis
         has been waived  subject to us making a cash payment of $280,000 to the
         holders of our Series A Preferred Stock on or before June 30, 2001.

o        The  holders of our Series A  Preferred  Stock will not  convert if the
         effect of conversion is to increase their  beneficial  ownership in our
         securities to greater than 9.9%. All remaining Series A Preferred Stock
         will be  converted  at such  time as the total  amount  of  outstanding
         Series A Preferred Stock is less than 250,000 (i.e. 50 shares).

o        Prior to our decision to proceed with our proposed  public  offering we
         had  negotiated  the terms and  conditions of an equity line  financing
         agreement with the Agent. We agreed that the Agent would have exclusive
         rights to provide any future  equity line  financing  agreements  for a
         period of two (2) years.

o        Certain of our shareholders agreed to waive the requirement that
         $2,000,000  of their  common  shares  be sold as part of our  proposed
         public offering.

o        We were granted an extension  until June 30, 2001 to close our proposed
         public offering. If this offering does not close by June 30, 2001, then
         the lock-up agreements are terminated and the penalty provisions of the
         Registration  Rights  Agreement  would apply on a retroactive  basis to
         April 30, 2001.

o        We agreed to issue CALP II,  LP, an  affiliate  of  Thomson  Kernaghan,
         24,500  shares of our Common Stock in  consideration  of extending  the
         required  closing date of our proposed  public  offering from April 30,
         2001 to June 30, 2001.

o        We amended the  Certificate of  Designation  for our Series A Preferred
         Stock to increase  the number of Series A  Preferred  Stock from 500 to
         600 shares.

o        We are  obligated  to redeem the 100  shares of our Series A  Preferred
         Stock  purchased by Governors  Road, LLC in June,  2001, at 120% of the
         face  amount  ($600,000)  plus  accrued and unpaid  dividends  upon the
         earlier  of August  15,  2001 or the  closing  of our  proposed  public
         offering.  If we do not redeem the 100 shares of our Series A Preferred
         Stock  issued to  Governors  Road,  LLC,  then the  amended  conversion
         features set forth above shall apply.

o        If the  public  offering  closes,  the  agent  warrants  and  purchaser
         warrants shall be automatically amended on such closing date to provide
         for an exercise  price equal to the lower or (i) the existing  exercise
         prices of the purchaser's  warrants and agent's  warrants,  or (ii) the
         lowest  exercise  price of the  warrants  included  in the units of our
         public offering.

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<PAGE>


o        We agreed to pay  Greenfield  Investments,  an  affiliate  of Governors
         Road, LLC, the sum of $50,000 as consideration  for investment  banking
         services in  connection  with the  placement  of our Series A Preferred
         Stock to Governor Road, LLC in June 2001.

o        We released the holders of our Series A Preferred  Stock,  the agent as
         well   as   her   officers,   directors,   attorneys,   employees   and
         representatives  from any and all actions,  claims,  liabilities or any
         matter  whatsoever  relating to the  Preferred  Stock  Agreements,  the
         Restated Master Modification  Agreement and/or the sale of our Series A
         Preferred Stock to Governors Road, LLC.

We may not be able to close our proposed  public  offering on or before June 30,
2001.  There is no assurance we will be able to negotiate  reasonable  extension
terms with the agent,  the  holders  of our  Series A  Preferred  Stock or other
shareholders  who have agreed to lock-up  provisions  contingent  upon a closing
date of June 30, 2001.  The failure to close this public  offering and negotiate
extensions of our lock-up  arrangements and other understandings with certain of
our current  shareholders  may have an adverse effect on the price of our Common
Stock and financial performance.


ITEM 5. OTHER INFORMATION

On April 9, 2001, our board of Directors  authorized us to enter into Change of
Control and  Termination  Agreements with Eric Seidel,  Randal K. Wright,  Scott
Moore and Gabriel Powers. If there is a change of control and our executives are
terminated without cause, then the executive shall be entitled to receive a lump
sum payment  equal to 299% of the  executive's  last 12 months base  salary.  In
addition,  all stock options issued to the executive shall  immediately vest and
be exercisable in full at any time of the remaining term of the stock options. A
change of control is defined to mean any merger,  combination,  consolidation of
other business transactions in which the holders of our common stock immediately
prior to such  transaction  are not the  holders  of a  majority  of our  voting
securities  after  the   transaction,   the  closing  of  any  sale  of  all  or
substantially  all of our assets or a change in the  composition of our Board of
Directors such that the current  members of the board of directors are no longer
the majority in number of the Board of Directors.  These arrangements constitute
an  anti-takeover  device since the obligations that are triggered upon a change
of control may thwart or make any change of control  transaction  more difficult
to accomplish  because of the liabilities  that are triggered upon the change of
control.

On April 9,  2001,  the  Board of  Directors  also  approved  us  entering  into
Indemnifications  Agreements  with  each  of our  officers  and  directors.  The
Indemnification   Agreements  provide  indemnification  to  the  maximum  extent
authorized  by Nevada  State  corporation  law and  specifically  authorize  the
reimbursement  of our  directors  and officers of legal fees on a monthly  basis
during the existence of any action  naming our officers and directors  unless it
becomes apparent that such individual is not entitled to payment of expenses. In
such event our officers and directors  are required  within 30 days to reimburse
us for all amounts previously advanced or paid.

In May 2001,  Randy Wright was  appointed as our Chief  Development  Officer and
Reed Mattingly was appointed as our Chief Operating Officer.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

The Company filed a Current  Report Form 8-K Amendment  No.2 dated July 20, 2000
with the Securities and Exchange  Commission  amending the Form 8-K/A  Amendment
No.1 filed on August 15, 2000  regarding  the financial  statements  and the pro
forma financial information for Premier Express Claims, Inc.

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<PAGE>


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:   June 14, 2001            By:      /s/ Eric Seidel
                                 -----------------------------------------------
                                         Eric Seidel, Chief Executive Officer


                                 By:     /s/ Scott Moore
                                 -----------------------------------------------
                                         Scott Moore, Chief Financial Officer



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