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 APRIL 30, 2006

[ ] 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 a large accelerated filer, or
non-accelerated filer. See definition of "accelerated filer and large
accelerated filer" in Rule 12b-2 of the Exchange Act).

Large accelerated filer [ ]   Accelerated filer [ ]   Non-accelerated filer [X]

     Indicated by check mark whether the registrant is a shell company (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 May 31, 2006 was 80,518,869.


<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                                             22



                                     PART II

                                OTHER INFORMATION

Item 1.  Legal Proceedings                                                   23

Item 1A. Risk Factors                                                        23

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds         23

Item 3.  Defaults Upon Senior Securities                                     24

Item 4.  Submission of Matters to a Vote of Security Holders                 24

Item 5.  Other Information                                                   24

Item 6.  Exhibits and Reports on Form 8-K                                    25

Signatures                                                                   25

Certifications


                                        1

<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>
<CAPTION>
                                                                                                                  E AUTOCLAIMS, INC.

                                                                                                                     BALANCE SHEETS
------------------------------------------------------------------------------------------------------------------------------------

                                                                                               APRIL 30, 2006          JULY 31, 2005
                                                                                                (UNAUDITED)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                              <C>                    <C>
ASSETS

Current Assets:
  Cash                                                                                           $ 1,539,884            $   306,280
  Accounts receivable, less allowance for doubtful accounts
    of $209,000 and $208,000 respectively                                                            575,202                742,237
  Due from related parties                                                                                 -                  6,231
  Prepaid expenses and other current assets                                                          124,078                 88,290
------------------------------------------------------------------------------------------------------------------------------------
         TOTAL CURRENT ASSETS                                                                      2,239,164              1,143,038

Property and Equipment, net of accumulated depreciation                                              720,909                857,440

Goodwill                                                                                           1,093,843              1,093,843

Other Assets                                                                                          85,800                 25,800

Deferred Income Tax Asset, net of valuation
   allowance of $10,327,000 and $9,841,000 respectively                                                    -                      -
------------------------------------------------------------------------------------------------------------------------------------
         TOTAL ASSETS                                                                            $ 4,139,716            $ 3,120,121
====================================================================================================================================

LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current Liabilities:
   Accounts payable, advanced payments and accrued expenses                                      $ 4,268,960            $ 4,701,483
   Current portion of capital lease obligation                                                        95,899                 86,642
   Convertible debenture                                                                                                    275,000
------------------------------------------------------------------------------------------------------------------------------------
         TOTAL CURRENT LIABILITIES                                                                 4,364,859              5,063,125


Capital Lease Obligation, net of current portion                                                      51,516                108,979
------------------------------------------------------------------------------------------------------------------------------------
         TOTAL LIABILITIES                                                                         4,416,375              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 150,000,000 shares, issued
   and outstanding 80,496,369 shares and 59,488,026 shares respectively                               80,496                 59,488
  Additional paid-in capital                                                                      28,742,828             25,081,358
  Accumulated deficit                                                                            (29,068,358)           (27,192,829)
  Treasury Stock, at cost, 137,500 shares and 0 shares respectively                                  (31,625)
------------------------------------------------------------------------------------------------------------------------------------
         STOCKHOLDERS' DEFICIENCY                                                                   (276,659)            (2,051,983)
------------------------------------------------------------------------------------------------------------------------------------
         TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                          $ 4,139,716            $ 3,120,121
====================================================================================================================================
</TABLE>


                                       3

<PAGE>


<TABLE>
<CAPTION>
                                                                                                                   EAUTOCLAIMS, INC.

                                                                                                            STATEMENTS OF OPERATIONS
------------------------------------------------------------------------------------------------------------------------------------

                                                       THREE-MONTH           THREE-MONTH           NINE-MONTH           NINE-MONTH
                                                      PERIOD ENDED          PERIOD ENDED          PERIOD ENDED         PERIOD ENDED
                                                     APRIL 30, 2006        APRIL 30, 2005        APRIL 30, 2006       APRIL 30, 2005
------------------------------------------------------------------------------------------------------------------------------------
                                                       (UNAUDITED)           (UNAUDITED)           (UNAUDITED)          (UNAUDITED)
<S>                                                    <C>                 <C>                    <C>                  <C>
Revenue:
  Collision repairs management                         $ 3,050,894         $   2,793,224          $  8,426,989         $  8,762,082
  Glass repairs                                             56,984               104,405               213,032              372,833
  Fleet repairs management                                 228,811               181,446               697,426              508,057
  Fees and other revenue                                   654,392               473,123             2,089,736            1,554,594
  Gain on sale of building                                                                             756,943
------------------------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE                                            3,991,081             3,552,198            12,184,126           11,197,566
------------------------------------------------------------------------------------------------------------------------------------

Expenses:
  Claims processing charges                              2,783,315             2,689,195             7,929,250            8,564,174
  Selling, general and administrative                    1,921,779             1,512,695             5,215,098            4,169,569
  Depreciation and amortization                            112,323               123,981               348,474              391,668
------------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES                                           4,817,417             4,325,871            13,492,822           13,125,411
------------------------------------------------------------------------------------------------------------------------------------
NET LOSS                                               $  (826,336)         $   (773,673)         $ (1,308,696)        $ (1,927,845)
====================================================================================================================================

ADJUSTMENT TO NET LOSS  TO COMPUTE
       LOSS PER COMMON SHARE:
    PREFERRED STOCK DIVIDENDS                                                    (15,273)                    -              (42,790)
    DIVIDEND TO UNIT HOLDERS                               (82,004)             (432,572)             (557,833)            (986,623)
------------------------------------------------------------------------------------------------------------------------------------
NET LOSS APPLICABLE TO COMMON STOCK                    $  (908,340)         $ (1,221,518)         $ (1,866,529)        $ (2,957,258)

LOSS PER COMMON SHARE - BASIC AND DILUTED              $     (0.01)         $      (0.02)         $      (0.03)        $      (0.07)
====================================================================================================================================

WEIGHTED-AVERAGE NUMBER OF COMMON
        SHARES OUTSTANDING - BASIC AND DILUTED          73,706,683            51,529,115            67,553,951           41,231,707
====================================================================================================================================
</TABLE>


                                       4

<PAGE>


<TABLE>
<CAPTION>
                                                                                                                   EAUTOCLAIMS, INC.

                                                                                               STATEMENT OF STOCKHOLDERS' DEFICIENCY
------------------------------------------------------------------------------------------------------------------------------------
NINE MONTH PERIOD ENDED APRIL 30, 2006
             (UNAUDITED)                                                ADDITIONAL
                                                     COMMON STOCK         PAID-IN       ACCUMULATED                    STOCKHOLDERS'
                                                 SHARES       AMOUNT      CAPITAL         DEFICIT     TREASURY STOCK     DEFICIENCY
------------------------------------------------------------------------------------------------------------------------------------


<S>                                            <C>            <C>        <C>           <C>                 <C>           <C>
BALANCE AT JULY 31, 2005                       59,488,026     59,488     25,081,358    (27,192,829)              0       (2,051,983)

Issuance of common stock upon exercise
    of options                                  1,203,437      1,202         19,847                                          21,049

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

Issuance of common stock for services           3,105,140      3,105        750,796                                         753,901

Dividends issued to unit holders in the form
    of warrants and shares                      2,162,860      2,163        555,670       (557,833)                               0

Issuance of common stock upon exercise
    of warrants                                12,412,505     12,413      1,908,491                                       1,920,904

Purchase of Treasury Stock                                                                                 (31,625)         (31,625)

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

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

Issuance of common stock in conjunction
    with building transaction                     400,000        400        115,600                                         116,000

Vesting of options granted to employees                                      27,887                                          27,887

Net Loss                                                                                (1,308,696)                      (1,308,696)
------------------------------------------------------------------------------------------------------------------------------------

BALANCE AT APRIL 30, 2006                      80,496,369     80,496     28,742,828    (29,068,358)        (31,625)        (276,659)
====================================================================================================================================
</TABLE>


                                       5

<PAGE>


<TABLE>
<CAPTION>
                                                                                                                   EAUTOCLAIMS, INC.

                                                                                                            STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------------------------------------------------------------------

                                                                                       NINE-MONTH                      NINE-MONTH
                                                                                      PERIOD ENDED                    PERIOD ENDED
                                                                                     APRIL 30, 2006                  APRIL 30, 2005
------------------------------------------------------------------------------------------------------------------------------------
                                                                                       (unaudited)                     (unaudited)

<S>                                                                                     <C>                            <C>
Cash flows from operating activities:
  Net loss                                                                               (1,308,696)                   $ (1,927,845)
  Adjustments to reconcile net loss to net cash used in
     operating activities:
    Depreciation and amortization                                                           348,474                         391,668
    Gain on sale of building                                                               (756,943)
    Common stock issued for services                                                        753,901                         180,879
    Common stock issued for interest                                                            904                          17,967
    Bad debts                                                                                 1,000                          45,000
    Vesting of options granted to employees                                                  27,887
    Changes in operating assets and liabilities
      Accounts receivable                                                                   166,035                         (45,458)
      Prepaid expenses and other current assets                                             (42,479)                        (30,438)
      Accounts payable, advanced payments and accrued expenses                             (432,523)                        231,365
------------------------------------------------------------------------------------------------------------------------------------
Net cash used in operating activities                                                    (1,242,440)                     (1,136,862)

Cash flows from investing activity:
  Purchases of property and equipment                                                      (192,376)                       (177,715)
  Proceeds from sale of building                                                            819,634
  Payments from related parties                                                               6,231                          50,000
  Principal payments on stockholder loans                                                                                   (36,866)
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities                                         633,489                        (164,581)

Cash flows from financing activities:
  Proceeds from exercise of warrants                                                      1,920,904
  Proceeds from exercise of options                                                          21,049                           7,000
  Proceeds from sale of common stock                                                                                      1,508,954
  Principal payments on capital lease                                                       (67,773)                        (43,131)
  Purchase of treasury stock                                                                (31,625)
  Payments on redemption of preferred stock                                                                                (170,698)

------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                                 1,842,555                       1,302,125


------------------------------------------------------------------------------------------------------------------------------------
Net increase in cash                                                                      1,233,604                             682

Cash at beginning of period                                                                 306,280                         415,549
------------------------------------------------------------------------------------------------------------------------------------

Cash  at end of period                                                                  $ 1,539,884                    $    416,231
====================================================================================================================================


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

  Cash paid during the period for interest                                              $    37,588                    $     32,779
====================================================================================================================================


SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
====================================================================================================================================
  Conversion of debentures to common stock                                              $   275,000                          25,000
====================================================================================================================================
  Issuance of common stock for preferred stock dividends                                                               $    109,346
====================================================================================================================================
  Accrued dividends on preferred stock                                                                                 $     42,790
====================================================================================================================================
  Gross proceeds from sale of equity                                                                                      1,724,000
   Less costs paid to raise equity                                                                                         (215,046)
------------------------------------------------------------------------------------------------------------------------------------
  Net proceeds from sale of equity                                                      $         -                    $  1,508,954
====================================================================================================================================
  Shares and warrants issued  to unit holders                                           $   557,833                         986,623
====================================================================================================================================
  Equipment acquired by capital lease                                                   $    19,567
====================================================================================================================================
  Fair value of warrants issued in conjunction with bridge loan                         $     9,000
====================================================================================================================================
</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 April 30, 2006 and its
results of operations and cash flows for the three and nine-month periods ended
April 30 2006 and 2005. Results of operations for the three and nine-month
periods ended April 30, 2006 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.

As shown in the financial statements, the Company has suffered recurring losses
from operations, has a stockholders' deficiency and a working capital
deficiency. The Company has been able to raise additional funds from debt and
equity offerings and management believes it can continue to do so in the future.
During the year ending July 31, 2006 the Company expects to realize increased
revenue from agreements signed in prior years. In addition, the Company has
secured a non-cancellable line of equity from a shareholder in the amount of
$2,000,000.

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.





                                       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:

Nine-month period ended April 30,                              2005
                                                            -----------

Net loss as reported                                        $(1,927,845)

Deduct total stock based employee
    compensation expense determined under
    fair value based methods for all awards                     (40,094)
                                                            -----------
Pro forma net loss                                          $(1,967,939)
                                                            ===========

Basic and diluted net loss per share as reported            $      (.07)
Pro forma and diluted basic loss per share                  $      (.05)

Effective August 1, 2005, the Company adopted FAS No. 123R utilizing the
modified prospective method. 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, measured 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.

The implementation of FAS No. 123R had the following effect on the statement of
operations for nine-month period ended April 30, 2006.

                                                               2006
                                                            -----------
Net loss before stock option expense                        $(1,280,809)

Deduct stock option expense                                     (27,887)
                                                            -----------

Net loss  as reported                                       $(1,308,696)
                                                            ===========


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 five or ten years. Compensation expense for stock
options is recognized over the vesting 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 nine months ended
April 30, 2006 is as follows:

<TABLE>
<CAPTION>
                                                            April 30, 2006
                                        ---------------------------------------------------
                                                                                  Aggregate
                                                     Weighted     Remaining       Intrinsic
                                         Shares      Avg Price      Life            Value
                                        ---------    ---------    ---------       ---------
<S>                                     <C>              <C>           <C>          <C>
Balance at beginning of year            5,197,042        $0.37
Granted                                   152,500        $0.25
Cancelled or Expired                     (716,685)       $0.86
Exercised                              (1,323,437)       $0.22

Outstanding at end of period            3,309,420        $0.33         2.39         344,451
</TABLE>


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
April 30, 2006 and 2005, 26,301,704 and 32,246,797 options and warrants,
respectively, were excluded from the diluted loss per share computation, as
their effect would be anti-dilutive.

NOTE 3 - PURCHASE AND SALE OF BUILDING
--------------------------------------

On December 9, 2005 the Company completed a transaction in which it purchased
its Oldsmar facility under a purchase agreement completed with the previous
landlord, and immediately sold the facility to a third party. As part of the
agreement to purchase the facility, the Company issued the previous landlord
400,000 shares of the Company's common stock. The net result of the purchase and
sale transaction, after deducting applicable expenses, was a gain to the Company
of $756,943. As part of the agreement to sell the facility, the Company signed a
new 7-year lease with the new owner, which runs through December, 2012.

NOTE 4 - EQUITY TRANSACTIONS
----------------------------

As part of the provisions of the sales of equities in March through May of 2004
there was a requirement to meet certain claims volume targets under the ADP
Co-Marketing Agreement. If we failed 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.


                                       9

<PAGE>


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 $475,829.

During the nine months ended April 30, 2006 the Company issued a total of
12,412,505 shares of common stock in connection with the exercise of a like
number of outstanding common stock purchase warrants with exercise prices
ranging from $0.16 to $0.20 per share. Of this total, 11,341,076 shares were
issued effective March 21, 2006 for warrants exercised. As a result of
exercising these warrants, the Company received $1,749,475 after paying $18,435
in legal fees and $50,662 for certain financial advisory and investment banking
services in connection with the program. In addition, the Company issued
8,200,359 new 3 year, $0.30 warrants to investors who exercised warrants.
Issuing these units resulted in the Company recording a stock dividend of
$82,004. An additional 1,071,429 warrants at a $0.16 exercise price were
exercised during the nine months ended April 30, 2006 for which the Company
received $171,429.

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 of $904 was paid to the
holder of the note with 5,651 shares of the Company's common stock.

During the nine months ended April 30, 2006 the Company issued a total of
3,105,140 shares of common stock in exchange for services. Of this total,
1,260,000 shares were issued to members of senior management in accordance with
terms of their employment agreements. The Company recorded a charge to expense
of $388,500, which was approximately equal to the fair market value of the
shares at the time of issuance. In addition, 200,000 shares of stock were issued
to an officer in October 2005 as a result of a modification to his employment
contract. An expense of $30,000 was recorded for these shares, which was
approximately equal to the fair market value of the shares at the time of
issuance. On November 8, 2005 the Board of Directors gave approval for, and the
Company subsequently issued, 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. The Company expensed a total of $190,000 for these shares, which
was equal to the fair market value of the shares at the grant date. 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 non-employee directors. The Company issued 645,140 shares of
common stock to three non-employee directors and the Chairman of the Board in
exchange for their services. Of this total, 443,576 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 nine months ended April 30, 2006
the Company expensed $66,622, or 317,248 shares, which was approximately equal
to the fair market value of the shares when earned. In addition, a total of
201,564 shares were issued to these same directors and the Chairman of the Board
for services rendered during the nine months ended April 30, 2006. A total of
$52,250 was charged to expense during this time period, which was approximately
equal to the fair market value of these shares when earned.

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 29, 2005 the Company issued 400,000 shares of common stock in the
name of its landlord at that time as part of an agreement to facilitate the sale
of the building (See Note 3: Purchase and Sale of Building). These shares were
part of the building sale transaction and were delivered to the landlord at the
December 9, 2005 closing.

                                       10

<PAGE>


During the nine months ended April 30, 2006 a total of 1,203,437 shares of the
Company's common stock were issued as a result of the exercise of outstanding
options. Of this total, 200,000 options were exercised by a director, 512,500 by
an officer and director, 250,000 by two officers combined, 137,500 by two
consultants and 44,104 by other employees, all with a strike price of $0.01. In
addition, a consultant and two employees exercised a total of 59,333 options to
purchase shares of the Company's common stock with exercise prices ranging from
$0.13 to $0.15 per share. A total of 137,500 shares were sold back to the
Company by an officer who delivered these shares to satisfy tax withholding
requirements. These shares were valued at $31,625, which represents the fair
value of the shares at the time of surrender.

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 in October
2005.

NOTE 5 - SUBSEQUENT EVENT
-------------------------

On May 31, 2006 the Company issued a total of 22,500 shares of common stock to
three officers according to the terms of their employment agreements.






                                       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 provides 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 2500
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.


                                       12

<PAGE>


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 provide the requested services and pay us a fee for
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 accounted for 82% and 84% of the revenue
for the nine and three-months ended April 30, 2006. 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 nine and three-months ended April
30, 2006, 18% and 16%, respectively, 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. Our financial statements 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.


                                       13

<PAGE>


REVENUE RECOGNITION
-------------------

We derive revenue primarily from collision repairs, glass repairs and fleet
repairs. Revenue is recognized when an agreement between us and our customer
exists, the repair services have been completed, our revenue is fixed and
determinable and collection is reasonably assured.

We record revenue on a gross basis in the areas of collision and fleet repairs.
We also record revenue on a gross basis in certain glass repair transactions.
Revenue is recorded at gross in these areas when:

o    We are the primary obligor in the arrangements. We are responsible for the
     quality of the repair and must satisfy the customer if the body shop fails
     to repair the vehicle properly.

o    We have latitude in establishing price. The price is established based on
     our audit of the repair estimate submitted by the repair facility. The
     repair facility cannot begin the repair until an agreed upon price for the
     repair is established between the facility and us.

o    We control what is repaired with our contracted shops, as we audit the
     estimate submitted by the repair facility. We must agree that the repair is
     reasonable and necessary before the repair facility is allowed to proceed
     with the work being requested.

o    We have discretion in supplier selection. Through the use of software, we
     prioritize which repair facility is used based on the efficiency and
     effectiveness of the repair facility, and

o    We have credit risk. We are responsible to pay the repair facility even if
     the customer does not pay for the repair.

We record revenue net of the repair costs in certain glass transactions when the
supplier, not us, is the primary obligor in an arrangement, the amount we earn
is fixed or the supplier has credit risk. This occurs when the repair has been
performed before it is referred to us. When we receive 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 we are 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 we pay 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.

We maintain an allowance for doubtful accounts for losses that we 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 April 30, 2006 the
allowance for doubtful accounts was approximately $209,000.


                                       14

<PAGE>


ACCOUNTING FOR INCOME TAXES
---------------------------

We record a valuation allowance to reduce our 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 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 $10,327,000 at April 30, 2006. The deferred
tax asset consists mainly of net operating losses previously not 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
------------------------------

We identify and record impairment on long-lived assets, including goodwill, when
events and circumstances indicate that such assets have been impaired. We
periodically evaluate the recoverability of our long-lived assets based on
expected undiscounted cash flows, and recognize 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.



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 our incurring additional expenses for
carrying support personnel, we have begun to feel the effects of new sales and
are realizing the expected return on investment in the way of new long-term
sales contracts and new pilot agreements. The rollout of Continental Casualty
Company (C N A Insurance) that began in late July 2005 was completed during the
third quarter of fiscal 2006. We have also entered into a new long-term contract
with Safe Auto Insurance, a large Insurance client based in Ohio who has been
rolling out their business on our shop network. We continue to expand the
program to additional states handled by Safe Auto Insurance.

In May 2006, ADP Claims Services Group was acquired by Solera, Inc. a privately
held company and a new-co (Audatex, a Solera Company) has been established as
the operating organization. When this transaction occurred, it triggered two
provisions of our Co-Marketing Agreement with ADP. The first one was EACC's
right to terminate the exclusivity clause and the second was the need for EACC
to give consent to ADP for the assignment of our Co-Marketing Agreement to
another organization.

We were not provided access to, nor were we requested to consent to, the
ADP/Solera transaction prior to its closing. Thus we were unable to clearly
identify how our Co-Marketing Agreement would be part of Audatex's strategic
plans. Since the closing of the transaction, the Audatex organization has had a
major restructuring of its personnel, including many of the key personnel
associated with our program. As a result of the aforementioned circumstances, on
May 1, 2006, EACC chose to withhold the consent of assigning our agreement to
Audatex and elected to terminate the exclusivity clause with ADP Claims Services
Group. These changes had and will have a


                                       15

<PAGE>


short-term negative effect on our anticipated growth in new revenues. However,
we are working with Audatex to develop a forecast of anticipated sales for the
next 12-months. The new forecast will assist both parties in understanding the
value of the relationship and the potential return on investment of this
program. Although our management believes this assessment process will be
completed quickly, we have limited access to information and accordingly cannot
predict the ultimate outcome or our future relationship with Audatex.

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

o    Management is exploring possible new or additional strategic partners in
     the industry who have a large client base and represent additional new
     sales with a short sales cycle & acquisition cost.

o    ADP Co-Marketing Agreement - Management continues to focus on the sales
     development of the ADP Co-Marketed clients. The most material development
     is the rollout of Continental Casualty Company (C N A Insurance), a top 20
     insurance carrier that is described above and the rollout of Safe Auto
     Insurance. Once both rollouts are completed, we expect meaningful
     improvement in our operating results. As these new clients mature they will
     become eAutoclaims largest clients.

     As previously disclosed, we were also notified in September 2005 that we
     had been selected by a second top 20 insurance client through the ADP
     Co-marketing Agreement. The recent events surrounding ADP makes this
     potential new client more uncertain, however, the client was originally
     introduced to the EACC Managed Repair Solution prior to the ADP
     relationship and management believes this opportunity is still a viable
     one.

     Since August 2004 the ADP agreement has produced twenty signed pilot
     agreements with insurance Companies or third party administrators, and has
     produced seven annual agreements after the pilot periods were completed.

o    Rolling out Higher Margin Product Lines - Management continues to make
     progress in building our operating margins by focusing on higher margin
     products. The results have been an increase in gross margin to 31% for the
     first nine months of fiscal 2006 as compared to 24% from the same reporting
     period last year. While future reports on margin will be influenced by the
     revenue recognition related to the ADP Co-Marketing Agreement or with other
     possible partners, this quarter still reflects the greatest impact coming
     from new high margin sales. 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 our recently announced new product "Audit Pro", a
     programmatic electronic estimate auditing tool. Many of these technologies
     have already been implemented in our operating processes and have shown
     themselves to be of significant value. By modifying the interface to these
     technologies, we 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. Our 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 our 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 eAutoclaims in the
     future.

o    Direct Sales Channel - While we have focused much of our efforts over the
     past eighteen months on the building of clients through the ADP
     Co-Marketing Agreement for our Collision Management product, we continue to
     market our services to the insurance industry through our direct sales
     channel. We continue to make sales progress in this area. One specific new
     client is a meaningful size carrier who entered into an annual contract and
     is testing our product in a district office, utilizing our network of shops
     and traditional


                                       16

<PAGE>


     eJusterSuite product. While this test is in early stages and there are no
     guarantees the client will expand the program, the early test results have
     been very positive. Should this test continue to yield such results, the
     client would likely roll the program out to all of its district offices
     over the course of the calendar year 2006. The potential sales volume and
     the full revenues of our direct sales channel model would make this
     account's contribution to profit the most material of all current clients
     under contract, including our clients from the ADP Co-Marketing Agreement.

o    Expansion of Sales Staff - We have recently expanded our direct sales staff
     and plan to further increase our sales force in the market place. With the
     recent success of adding new larger clients and the improvement of our
     balance sheet, management believes we will have greater success in the
     direct sales channel.

o    Expansion of product offering- We are exploring new product lines to offer
     to existing and new clients that are congruent to our business model. We
     are exploring partnering options to reduce market entrance expenses to
     ensure a quicker return on investment. This gives us the opportunity to
     expand our relationship with existing clients by integrating new products
     into the current mix, thereby expanding and adding revenue streams, while
     at the same time allowing us the opportunity of increasing the value of our
     customer relationship.

o    Reduction in Direct Processing Expense - We have recently begun an
     investment into automating additional parts of our processing business. We
     expect the end result will be a net reduction in direct expense. In
     addition, we are exploring off-shoring possibilities with a new strategic
     partner and the restructuring of our management and processing staff.

o    Raising Additional Capital - In March 2006, as part of a special warrant
     exchange program, a significant number of outstanding warrants were
     exercised by current investors. This resulted in our receiving more than
     $1.7 million of additional capital. While we believe that this will be
     sufficient for our working capital needs for the next twelve months, we
     continue to explore all options in the event additional financing becomes
     necessary.


RESULTS OF OPERATIONS
---------------------

For the nine and three-months ended April 30, 2006 compared to the nine and
three-months ended April 30, 2005.

Revenue

Excluding the gain on the sale of the building of $756,943, total revenue for
the nine-months ended April 30, 2006 was $11.4 million, which is a 2% increase
from the $11.2 million of revenue for the nine-months ended April 30, 2005. For
the three months ended April 30, 2006 total revenue was $4.0 million, which is a
12% increase over the $3.6 million for the three months ended April 30, 2005.
During the nine and three-months ended April 30, 2006 we derived 51% of our
revenue from one customer. The contract with this customer automatically renewed
for a period of one year in April 2006. The business associated with this client
has been sold by the client to a third party and we subsequently assigned the
agreement to this new entity. We have been working with the new owner to create
a new contract. While we do not anticipate any short term loss of business from
this client and expect we will receive a new servicing contract, we cannot
guarantee that the new agreement will be a long term contract with the new
client, or that any new contract will be on more favorable terms.


                                       17

<PAGE>


Collision repair management revenue decreased 3% to $8.4 million for the
nine-months ended April 30, 2006 from $8.8 million for the nine-months ended
April 30, 2005. For the three-months ended April 30, 2006, collision management
revenue was $3.0 million, which is a 9% increase from the $2.8 million for the
three-months ended April 30, 2005. The increase in revenue for the three months
just ended is a combination of increased shop utilization of our network shops
by consumers associated with our core clients, as well as increased revenue
earned from 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 nine and three-months ended April 30, 2006 we
earned over $490,000 and $241,000, respectively, 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 13% to 15%
for the-nine months ended April 30, 2006, not including fees. 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 increase
revenues quickly enough to reach our objective of a return to profitability.
Notwithstanding the fact of the ADP/Audatex relationship's inability to meet the
projected volume of claims throughput, management will review all options and is
prepared to take the necessary actions to meet the desired objective.

Glass repair revenues decreased by approximately $160,000 from approximately
$373,000 for the nine months ended April 30, 2005 to approximately $213,000 for
the nine months ended April 30, 2006. For the three months ended April 30, 2006
glass revenues were $57,000 compared to $104,000 for the three months ended
April 30, 2005. This decrease is due to the reduction in claim volume for our
existing customers. We have been notified that our largest glass customer, who
was recently acquired by a third party, will be terminating their contract
effective June 1, 2006, due to their desire to consolidate their glass
processing consistent with methods currently in use by the acquiring entity. We
continue 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.

Fleet repair revenue increased by approximately $189,000 from approximately
$508,000 for the nine months ended April 30, 2005 to approximately $697,000 for
the nine months ended April 30, 2006. For the three months ended April 30, 2006
fleet repair revenue was approximately $229,000 compared to approximately
$181,000 for the three months ended April 30, 2005. This increase represents
additional business from our existing customers.

Fees and other revenue increased by approximately $535,000 from approximately
$1,600,000 for the nine months ended April 30, 2005 to approximately $2,100,000
for the nine months ended April 30, 2006. For the three months ended April 30,
2006 fees and other revenue increased approximately $181,000 to approximately
$654,000 from approximately $473,000 for the three months ended April 30, 2005.
This increase is primarily a result of additional revenue earned from current
clients by taking increased numbers of first notice loss reports as a result of
damages sustained by consumers due to the hurricanes of 2005. Total first notice
of loss revenue was $363,000 higher for the nine-months ended April 30, 2006
over the nine-months ended April 30, 2005. We also experienced a 22% growth in
our click fee revenue for the nine months ended April 30, 2006 compared to the
nine months ended April 30, 2005. This growth was primarily from our regular
click fee assignments, however we also had increases in our Audit Pro revenue as
well as revenue from assignments to our network of independent appraisers.
Revenue earned from the sale of estimatic software increased from approximately
$508,000 for the nine-months ended April 30, 2005 to approximately $581,000 for
the nine-months ended April 30, 2006.


                                       18

<PAGE>


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 nine-months ended April 30, 2006 were approximately $7.9 million, or 69% of
total revenue, compared to approximately $8.6 million, or 77% of total revenue
for the nine-months ended April 30, 2005. For the three months ended April 30,
2006, claims processing charges were approximately $2.8 million, or 70% of total
revenue compared to approximately $2.7 million, or 76% of total revenue for the
three-months ended April 30, 2005. Claims processing charges are primarily the
costs of collision repairs paid by us to our collision repair shop network. The
decrease in claims processing charges as a 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 associated cost of sale.

We are dependent upon our third party collision repair shops for insurance
claims repairs. eAutoclaims currently has approximately 2,500 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 nine and three-months ended April 30,
2006 were $5.2 million and $1.9 million, respectively. This is compared to
approximately $4.2 million and $1.5 million for the nine and three-months ended
April 30, 2005. Payroll and benefit related expenses for the nine and
three-months ended April 30, 2006 totaled approximately $3.5 million and $1.4
million respectively. This is compared to $2.6 million and $.9 million for the
nine and three months ended April 30, 2005. The 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 that was expected to be forthcoming as a result of new
clients acquired through the ADP Co-Marketing Agreement. In response to the
increasing costs of health care and insurance, the Company signed a PEO
contract, effective in February 2006, with ADP TotalSource. The Company
anticipates significant savings, primarily in health care costs, will be
realized as a result of the reduced costs for these services according to the
terms of the contract.

SG&A expenses also include non-cash charges of approximately $783,000 and
$414,000 for the nine and three-month period ended April 30, 2006. These
non-cash charges include approximately $754,000 and $408,000, respectively, of
common stock issued to pay fees to directors and management according to terms
of their employment contracts and approximately $1,000 of common stock issued
for accrued interest associated with the conversion of debt. In addition,
charges of approximately $28,000 and $6,000, respectively, were taken as a
result of implementing FAS123R (revised 2004), which requires expensing of stock
options as they become vested. The non-cash charges of approximately $199,000
and $66,000 for the nine and three-months ended April 30, 2005 include
approximately $181,000 and $61,000, respectively, of common stock issued to pay
fees to directors and approximately $18,000 and $5,000, respectively, of common
stock issued to pay interest associated with the conversion of debt.


                                       19

<PAGE>


Also included in the SG&A is interest expense related to capital leases and
notes payable. For the nine and three months ended April 30, 2006, this interest
expense totals approximately $38,000 and $7,000 respectively. This compares to
interest expense of approximately $33,000 and $12,000, respectively for the nine
and three months ended April 30, 2005. Included in the interest expense for 2006
is approximately $9,800 for interest on the note for a bridge loan, which we
re-paid in full in December, 2005.

Purchase and Sale of Building

In December 2005 we completed a transaction where we purchased the facility we
had been renting and immediately sold the facility to a third party buyer. As a
result of this transaction, we realized a gain of approximately $757,000. We
signed a new 7-year lease with the new owner, in conjunction with the
transaction, which will result in additional rent expense of approximately
$3,000 per month. The monthly rent for 2006 is $21,694.

Depreciation

Depreciation of property and equipment of approximately $349,000 and $112,000
was recognized in the nine and three-months ended April 30, 2006. This is
compared to approximately $392,000 and $124,000 for the nine and three-months
ended April 30, 2006.

Net Income/Loss

Net loss for the nine-months ended April 30, 2006 totaled approximately
$1,309,000 compared to a net loss of approximately $1,928,000 for the
nine-months ended April 30, 2005. Included in the net loss number for the nine
months ended April 30, 2006 is a gain on the sale of the Oldsmar facility of
approximately $757,000. Net loss for the three months ended April 30, 2006 was
approximately $826,000 compared to a net loss of approximately $774,000 for the
three months ended April 30, 2005. Included in these numbers are non-cash
expenses of approximately $1,131,000 and $526,000, including depreciation
charges, for the nine and three months ended April 30, 2006 compared to $590,000
and $190,000 for the nine and three months ended April 30, 2005.



LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

At April 30, 2006, we had approximately $1.5 million in cash. This is an
increase of approximately $1.2 million from July 31, 2005. We have a working
capital deficiency of approximately $2.1 million compared to a deficiency of
approximately $3.6 million as of April 30, 2005. The primary source of our
working capital during the nine-months ended April 30, 2006 was from cash
generated by operations, the sale of our Oldsmar facility from which we netted
over $800,000, and the exercise of outstanding warrants by current investors
from which we netted approximately $1.7 million.

We believe that cash generated from operations and proceeds from the sale of our
securities 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 or that we will be
able to generate capital from the sale of our securities.


                                       20

<PAGE>


DEBT AND CONTRACTUAL OBLIGATIONS
--------------------------------

Our commitments for debt and other contractual arrangements as of April 30, 2006
are summarized as follows:

<TABLE>
<CAPTION>
                                        Years ending April 30,
                           ------------------------------------------------------------------------------------
                                2007        2008       2009       2010      2011     Thereafter       Total
                           ------------------------------------------------------------------------------------

<S>                           <C>          <C>       <C>        <C>       <C>          <C>           <C>
Property lease                263,000      271,000   279,000    287,000   296,000      512,000       1,908,000
Equipment lease                96,000       49,000     2,000                                           147,000
Employee compensation         538,000      518,000                                                   1,056,000
                           ------------------------------------------------------------------------------------
                              897,000      838,000   281,000    287,000   296,000      512,000       3,111,000
                           ====================================================================================
</TABLE>




We lease equipment and facilities under non-cancelable capital and operating
leases expiring on various dates through 2012. The main operating lease consists
of a 7-year lease for 30,000 square feet of a 62,000 square foot facility. This
lease, which was signed as part of the agreement to sell the facility, runs
through December 2012. The lease agreement stipulates that our rent will
increase at the rate of 3% per year through the end of the agreement.




Inflation

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

Seasonality

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




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.


                                       21

<PAGE>


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 April 30, 2006. 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.

Our management, including the principal executive officer and principal
financial officer, does not expect that our disclosure controls and procedures
will prevent all error and fraud. A control system, no matter how well conceived
and operated, can only provide reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of simple error or mistake. Additionally, controls
can be circumvented by the individual acts of some persons, collusion of two or
more people, or by management override of the control. The design of any system
of controls also is based in part upon certain assumptions about the likelihood
of future events, and there can be no assurance that any design will succeed in
achieving its stated goals under all potential future conditions.

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 April 30, 2006. We have not identified any significant deficiency
or materials weaknesses in our internal controls, and therefore there were no
corrective actions taken.



                                       22

<PAGE>


                           PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

None

ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors as disclosed in the
Company's 2005 Annual Report on Form 10-K filed with the Securities and Exchange
Commission on October 31, 2005.


ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the period ended April 30, 2006 we issued 70,372 shares of common stock
to three Directors and the Chairman of the Board for services rendered in
accordance with the approved Board compensation plan.

<TABLE>
<CAPTION>
                                           Issuer Purchases of Equity Securities

                                                                                                  (d) Maximum Number (or
                                                                     ( c ) Total Number of       approximate Dollar Value)
                        (a) Total Number     (b) Average Price     Shares or Units Purchased   of Shares (or units) that May
                       of Shares (or Units)   Paid per Share     as Part of Publicly Announced  Yet be Purchased Under the
        Period              Purchased            (or Unit)             Plans or Programs             Plans or Programs
-----------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                    <C>                               <C>                         <C>
February 1- 28, 2006                    -                   -                              -                           -
March 1 - 31, 2006                      -                   -                              -                           -
April 1 - 30, 2006                137,500                0.23                              -                           -
                       ------------------------------------------------------------------------------------------------------
Total                             137,500                0.23                              -                           -
</TABLE>

These shares were purchased from employees of eAutoclaims who surrendered the
shares to the Company to satisfy their minimum tax withholding requirements.




                                       23

<PAGE>


ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.


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

None

ITEM 5. OTHER INFORMATION

None





                                       24

<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 3.02/9.01  - Warrant exercise, dated March 22, 2006
Item 8.01/9.01  - Correspondence relating to sale of ADP Claims Services, dated
                  May 5, 2006
Item 5.02       - New Board member William Lewis, dated May 24, 2006



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, 2006               By:  /s/ Eric Seidel
     --------------------                --------------------------------------
                                         Eric Seidel, President and
                                         Chief Executive Officer


Date:    June 14, 2006              By:  /s/ Larry Colton
     --------------------                --------------------------------------
                                         Larry Colton, Chief Financial Officer
                                         and Principal Accounting Officer


                                       25