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

                                   FORM 10-KSB

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

         For the fiscal year ended July 31, 2002

         [   ]  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.)


    110 E. 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

         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

         Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy of information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB [ X ]

State issuer's revenues for its most recent reporting period (July 31,
2002)...................................................$32,283,363.

Aggregate market value of the voting stock held by non-affiliates of the
registrant at July 31, 2002 was $4,495,288.

The number of shares outstanding of the Issuer's Common Stock, $.001 Par Value,
as of July 31, 2002 was 18,390,118.

Transitional Small Business Disclosure Format:          [   ] Yes  [ X ] No


<PAGE>







                               FORM 10-KSB - Index

                                     PART I

Page

Item 1.   Description of Business..............................             2

Item 2.   Description of Property..............................            17

Item 3.   Legal Proceedings....................................            17

Item 4.   Submission of Matters to a Vote of Security Holders..            17


                             PART II

Item 5.   Market for Common Equity.............................            18

Item 6.   Management's Discussion and Analysis of

          Financial Condition and Results of Operations........            22

Item 7.   Financial Statements and Supplementary Data..........            26

Item 8.   Changes in and Disagreements with Accountants on Accounting
                   and Financial Disclosures...................            26

                            PART III

Item  9.  Directors and Executive Officers.....................            27

Item 10.  Executive Compensation................................           30

Item 11.  Security Ownership of Certain Beneficial Owners and Management.  36

Item 12.  Certain Relationships and Related Transactions........           37

Item 13.  Exhibits, Consolidated Financial Statements,
          Schedules and Reports on Form 8-K....................            39

          Signatures...........................................            41

          Certification........................................            42






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This Annual Report on Form 10-KSB and the documents incorporated herein by
reference contain forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations, estimates and
projections about our industry, management's beliefs, and assumptions made by
management. Words such as "anticipates," "expects," "intends," "plans,"
"believes," "seeks," "estimates," variations of such words and similar
expressions are intended to identify such forward-looking statements. These
statements are not guarantees of future performance and are subject to certain
risks, uncertainties and assumptions that are difficult to predict; therefore,
actual results and outcomes may differ materially from what is expressed or
forecasted in any such forward-looking statements.

                                     PART I
                                     ------
ITEM 1.  DESCRIPTION OF BUSINESS

General

eAutoclaims is a Nevada corporation which provides Internet based vehicle
collision claims services for insurance companies, Managing General Agents (MGA)
and third party claims administrators (TPA) and self-insured automobile fleet
management companies. We accept assignment of claims from our customers, and
provide vehicle repairs through a network of repair shops. We also handle
estimate, audit and claims administration services for claims for which we do
not perform the repair.

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.

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.com administers the vehicle repair process from the reporting of the
accident through the satisfactory repair of damage. We 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 of parts and service
providers 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 contracted relationships
with over 3,000 repair shops throughout the United States. Because of these
relationships, we are typically able to obtain lower cost parts and services for
our customers and increase the volume of work for repair shops that are part of
our preferred provider network.

We derive our revenues by accepting assignments of auto repair claims from our
customers and having them repaired through our network of contracted repair
shops. Once we accept these claims, we also accept the risk that the repair will
not be done properly. Additionally, we derive revenue from fees for processing
and coordinating claims that do not go through our network of body shops.

During the fiscal year ended July 31, 2002, two customers accounted for 58% and
12% of our total gross revenues. Our long-term success depends upon increasing
revenues by expanding our base of customers and reducing our reliance upon a few
customers. Because of the competitive nature of our business and the uncertainty
as to the acceptance of the Internet to handle insurance claims, we may not be
able to increase revenues sufficiently to become profitable.

Products and Services

We have introduced our latest product, eJusterSuiteTM, in fiscal year ended July
31, 2002. This new product expands our potential customer base as well as
provides significant new features to our current customer base. Our
long-standing Bricks-to-ClicksTM product is solely an outsourcing solution that
requires eAutoclaims personnel to audit and coordinate the vehicle repair.
eJusterSuiteTM allows both the outsourcing solution and a true application
service provider (ASP) solution whereby the insurance company can use our
technology independent of our personnel. The ASP solution allows us to market
our product to 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 will provide margin
without the associated personnel and operating costs.

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eJusterSuiteTM also provides significant new features to our current customers
because it builds in service partners that can provide the needed services by
clicking an Icon that is added to the screen of the customer's desktop in the
current system. The system automatically provides the service partner with
access to information that is in our system. The service partner will
systematically provided 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 most cases it also reduces the cost
of the service partner to obtain and process the transaction, even after paying
our transaction fee. This added revenue will provide additional margin without
the need for additional personnel or operating costs. The service partners
include independent adjustors, car rentals, desk review, towing service, glass
network, skip trace service, police reports pick up and scene re-creation. These
service partners will be available to both our ASP and outsourcing clients.

For our outsourcing customers, we approve all repair shops for inclusion in our
network and determine which repair shop will ultimately perform the repairs. We
receive a discount, ranging from 10% to 15%, from repair facilities that are
members of our provider network. The revenues generated from the vehicle repair
facilities through our provider network accounts for 95% of the revenue for the
fiscal year ended July 31, 2002. We are paid on a per claims basis from all our
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
fiscal year ended July 31, 2002, 5% of the revenue has been received from claims
processing fees and other income.

Outsourcing Solutions:

In our outsourcing solution we handle the entire collision repair function for
our customers from the time of reporting of the accident through the vehicle's
satisfactory repair. Through our network of parts and repair service providers,
we are frequently able to obtain parts and services at lower costs than
otherwise available. We monitor and audit all repair work to help assure that
the proper repair work is performed at the negotiated price. In most cases,
digital photographs of the damaged vehicle are transmitted to us via the
Internet to assist us in monitoring repairs.

We strive to provide our customers with ways to control costs associated with
processing collision claims. These services include:

1.  Centralized accident reporting.
2.  Copies of accident reports.
3.  Identifying the appropriate network repair facility and directing the
     policyholder to such facility.
4.  Deliver repair estimates and photographs/digital images of damage to any
     location overnight or same day upload.
5.  Audit of every claim by our in-house physical damage experts.
6.  Assignment of independent field appraiser, when necessary.
7.  Expedited deliver of part and materials as needed.
8.  Computerized tracking and follow-up system to minimize repair time.
9.  Replacement rental vehicles.
10. A lifetime guarantee (for as long as the insured owns the vehicle) on all
     physical damage body repairs and administration of manufacturer or
     installer's warranty on replacement parts.

We help our clients monitor their automobile claims losses by providing the
following:

     o Technology - We built one of the first customized web-based vehicle claim
     assignment and delivery system for insurance companies and corporate
     fleets. eAutoclaims.com uses state-of-the-art technology and security for
     the transmission of files and records. In addition, we utilize digital
     cameras, Internet communication, advanced data storage and scanners for
     auto repair shops that are not equipped with digital cameras, to create a
     defined audit trail and high capacity digital storage. We provide these
     applications to our clients with their own private label that includes
     their corporate colors and logos, which makes the claims process
     transparent to both insurance company personnel and the insured.

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     o Online, real time reporting - We provide our customers with online,
     real-time reports of the most critical information used in their
     operations. These reports include a comparison of their average paid losses
     (cost to repair a vehicle), cycle time (time to complete an estimate of the
     damage), and lost adjustment expense (cost of the repair estimate or
     appraisal) between the eAutoclaims network, independent appraisers and
     staff appraisers. This comparison allows them to see the cost saving they
     realize while using our outsourcing solution.

     o Audit Trail - We audit every claim that comes into our network. This
     helps us deliver the lowest available audited cost to out clients on every
     repair.

Our system produces financial benefits for our customers as follows:

     o Our audit process reduces the average paid loss per vehicle.

     o We share a portion of the discounts obtained from the body shops with our
     clients based on their submitted volume.

     o With lower average paid losses, insurance companies are able to establish
     lower loss claims reserves. This, in turn, frees up capital and surplus
     allowing for additional premiums at lower premium rates.

     o Technology efficiencies reduce their cost of processing each file.

     o Our typically faster settlement time reduces the days and cost of rental
     cars and increases customer satisfaction.

     o Our process of claims investigation helps reduces fraudulent claims.

Application Service Provider (ASP):

With the introduction of eJusterSuiteTM we now have the capability to provide
the largest insurance companies with an ASP solution that fits into their
current environment. Our ASP solution allows these insurance companies to
utilize our advanced technology while continuing to use their staff and network
of body shops. We host the data on our servers while their staff and body shop
network processes the claims based on their current operating procedures and
shop relationships. Under this solution, the customer pays us a click fee for
each transaction they process through our system.

Additionally, the service partners described above can also be plugged into the
ASP solution, whereby we are paid a fee for each referral being made to the
service partner.

Since this product has just recently been introduced into the market, there were
no existing clients for the fiscal year ended July 31, 2002.

Turnkey solution:

Also introduced with eJusterSuiteTM was a turnkey solution that allows an
insurance company that likes the ASP model to plug in our network of body shops.
This provides a solution for insurance companies that have their own claims
coordinators, but that need to use our network of body shops. By using our body
shops they receive approximately a 10% discount on the repair work. We receive a
click fee for each transaction.

Customers

Our customers consist primarily of insurance companies, MGAs, TPAs and managers
of self-insured automobile fleets. We start with a 90-day test contract with
each customer. This test period allows the customer to see the cost and time
saving that we can provide them. At or before the end of the 90 days, the
customer can choose to enter into a contract between one and five years. The one
to five-year contract allows them to lock in their 90 day contract rates. Most
of our customers are on a one to five-year contract. That contract specifies
that we take responsibility for, and liability of, all repairs that are assigned
to our network of body and glass repair providers. If the vehicle is not
assigned to our shops for repair then we collect a file handling fee within
thirty days. Within seven days of the assignment of the vehicle to the body or
glass shop, our insurance and TPA customers pay us the completed audited repair
price, before the shop discount, less the customer's volume discount. Our fleet
customers pay us within 30 days of the repair.

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Sales and Marketing

We believe that a strong sales and marketing organization is essential to
effectively market our services. We are working to establish recognition of our
corporate identity and service offering through direct mail, promotion
activities, web site presence, tradeshow participation and other media events.

Because our services require considerable customer education and post-sales
support, we have chosen to solicit prospective customers through a direct sales
force. We anticipate hiring additional sales representatives to provide
additional coverage in the continental United States. As of October 30, 2002, we
had nine personnel in our sales and marketing department. In connection with our
recent internal restructuring aimed at lowering expenses and improving sales,
our CEO, Eric Seidel, will be taking a more active role in our sales and
marketing efforts.

Competition

The auto collision claims service industry is highly competitive and has low
barriers to entry. We are aware of several other companies that offer
internet-based services similar to ours. These competitors provide their
services primarily to the insurance industry as well. One competitor we are
aware of offers repair shop connectivity with the claims review and along with
the volume discount we offer.

         Several of our competitors offer application services (ASP models)
along with electronic auditing capabilities. Even though most of our competitors
have either changed their targeted marketing efforts or narrowed their focus to
the insurance arena, the majority of these competitors have been in business
longer than we have. They have significantly greater assets and financial
resources than currently available to us. We expect competition to continue to
intensify in the on-line claims management segment of this industry as current
non-Internet competitors expand their market into the Internet and new
competitors enter the market utilizing the Internet.

         We cannot assure you that we will be able to compete successfully
against current or future competitors. Competitive pressures could force us to
reduce our prices and may make it more difficult for us to attract new customers
and retain current customers. As competition in our industry increases, it is
likely that many of our competitors will have access to greater resources than
are currently available to us, including financial, employee, customer
relations, technology, and expertise in developing and implementing new
technologies as the industry evolves.

         The principal factors that helps us to maintain and grow our market
share are:

o      Turn around time for claims processing;
o      Quality of repair shop services;
o      Ability to offer nationwide access to repair facilities;
o      Processing of claims/assignment fees and charges;
o      Ability to offer new services and efficiencies while incorporating
        technological change into existing services;
o      Access to claim status 24/7;
o      The increase in the volume of vehicles that a repair facility can expect
         to repair as part of our network;

Customer Service

Our continued growth will be dependent upon our ability to consistently deliver
customer centered service at competitive prices. Our eJusterSuiteTM system is
designed to ensure that the claims process flows smoothly and seamlessly. The
Company's follow-up on claims assignments helps to ensure that all details of
the claim will be verified to our quality standards.

We have implemented a "Customer Service Professional" certification as part of
our Associate Development Program to ensure that our employees are fully trained
in the latest in customer service techniques and to help us in attaining our
objective of becoming known as one of the best customer service organizations in
the industry.

To help us monitor our performance, we own Customer Service Index (CSI). This
involves sending surveys to the drivers who have used eAutoclaim's repair
facilities with questions related to their satisfaction with eAutoclaims and the
service of the collision repair shop. We also survey customers who have selected
repair shops that are not part of our network to ascertain the reasons for such
selection. This information is utilized in evaluating and training our staff. We
also use these surveys in evaluating the quality of our network collision shops.

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Employees

As of October 31, 2002, eAutoclaims, Inc. had 112 full-time employees. There is
no union contract relating to any of our employees nor does the company
anticipate there to be unionization of its employees. We believe that our
relationship with our employees is generally good.

Intellectual Property

We rely on various intellectual property laws and contractual restrictions to
protect our proprietary rights in products and services. These include
confidentiality, invention assignment and nondisclosure agreements with our
employees, contractors, suppliers and strategic partners. The confidentiality
and nondisclosure agreements with employees, contractors and suppliers are in
perpetuity. Despite these precautions, it may be possible for a third party to
copy or otherwise obtain and use our intellectual property without our
authorization. In addition, we intend to pursue the registration of our
trademarks and service marks in the U.S.

We have licensed various proprietary rights to third parties. We attempt to
ensure that these licensees maintain the quality of our services. However, these
licensees may nevertheless take actions that materially adversely affect the
value of or proprietary rights or reputation. We also rely on technologies that
we license from third parties. These licenses may not continue to be available
to us on commercially reasonable terms in the future. As a result, we may be
required to obtain substitute technology of lower quality or at greater cost,
which could materially adversely affect our business, results of operations and
financial condition.

We have filed for and have been granted the fictitious name EAUTOCLAIMS in the
State of Florida. We also own seventy-four (74) URL Internet domain names,
including Premier Express Claims.com, eAutoFleet.com and eProcessclaims.com. We
maintain a website located at www.eautoclaims.com. We are not incorporating by
reference any information on our website and information on our website should
not be considered part of this Form 10-K.

On January 19, 2001, we were notified by our trademark counsel that although the
trademark examiner did not find any similar or pending marks which would prevent
registration of "eAutoclaims.com", she refused registration of this mark on the
principal register because the service mark "eAutoclaims.com" is merely
descriptive of our service since we combined the letter "e" with the word
"Autoclaims". Our trademark counsel has advised us that there is some merit to
the trademark examiner's position. Based upon the advice of our trademark
counsel, we amended the application for registration on the "supplemental
register" which is reserved for those marks which have a descriptive quality,
but have not achieved the degree of use or secondary meaning necessary to
establish distinctiveness, which is a requirement for registration on the
principal register. Our application for registration and the supplemental
registration for the mark eAutoclaims.com(R) was granted in October 2001.
Registration on the supplemental register is valid for 10 years but does not
prevent other parties from use of a similar mark.

We have pending trademark and service mark applications for eAudit, eAutoclaims,
EJuster's Suite, Ejuster Transfer and eProperty Suite. Each of these products is
in various stages of development. There is no assurance we will be successful in
registering these marks. Furthermore, we are exposed to the risk that other
parties may claim we infringe their rights on these marks, which could result in
us ceasing use of these marks, licensing the marks or becoming involved in
costly and protracted litigation.

There can be no assurance that other parties will not claim infringement by us
with respect to our current or future technologies. We expect that participants
in our markets will be increasingly subject to infringement claims as the number
of services and competitors in our industry segment grows. Any such claim, with
or without merit, could be time-consuming, result in costly litigation, cause
service upgrade delays or require us to enter to royalty or licensing
agreements. Such royalty or licensing agreements might not be available on terms
acceptable to us, or at all. As a result, any such claim of infringement against
us could have a material adverse effect upon our business, results of operations
and financial condition.

We also license and market our proprietary insurance claims processing software
systems. These systems provide insurance agents with access to competitive
pricing structures and help them in determining competitive repair costs for
their geographic region. Upon determining such repair cost, the insurance agent
can process the claim to completion and provide insurance proceeds to the
insured to be used to pay costs of repairs to the damaged vehicle. We have
abandoned our prior patent application for a communications network method for
processing property damage insurance claims. Even if we were to proceed with a
new patent application, there is no assurance that our application will be
accepted or that other parties may claim infringement or otherwise object to
this patent application.

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Operations and Technology

We have designed and developed our own web based technology platform using
proprietary software and systems in combination with commercially available
licensed technologies and software. Our network topology is designed to
facilitate expansion by the addition of servers for dedicated processes without
interrupting our current operating systems.

We rely on Cold Fusion MX, Peer Net Doc2Fax Driver, Microsoft Internet
Information Server, Microsoft Windows 2000 and Microsoft SQL Server 2000 to
operate our primary software applications. These are standard shrink-wrap
software programs and are not considered proprietary or unique to our
applications. However, we are dependent upon the continued operation and
maintenance of these software programs to operate our systems.

eAutoclaims.com has selected Dell Computer Corporation as its hardware provider.
Dell has assigned a three member "Business Alliance Solution" team to work with
us. Pursuant to a joint Non-Disclosure Agreement, Dell is providing us with
information to help us develop technology for our proprietary "eJusterSuite" web
service.

Our core hardware and server architecture are based on Dell Poweredge servers
and Dell Powervault Storage Units. We maintain individual servers for Web
content delivery, data base storage and retrieval, mail storage and management,
fax generation and delivery and back room operations. Our internal workstations
use Windows 98 or higher operating systems. The only technological requirements
for our Clients is that they have sufficient Internet Bandwidth Access and they
use Internet Explorer 5.5 or above for their Web Browser. We have segregated
development servers as well as staging servers that we use to test our
pre-production code prior to deployment to production. Our sales staff has
access to a dedicated production site for live demonstrations as well as a set
of static HTML pages that they can use.

Our original software is proprietary and licensed as the "Bricks to Clicks"
Internet claims system. We also have developed a proprietary eAutoFleet "Bricks
to Clicks" Internet Claims System that is patterned after the insurance company
model but has distinct differences for capturing loss information and related
reports. We have incorporated an enormous amount of customization that the end
client can control. This customization assist in the application integrating
efficiently into our customer's existing business process flow.

As demand for our services increase we will need to add additional servers to
our network to deliver content and information. Our Internal network is based on
100 mbs Ethernet connectivity. Internet access to the Web Publishing Servers is
available after traffic passes through redundant configured routers, redundant
configured firewalls, and external and internal intrusion detection systems, and
public network interface cards housed in a DMZ zone separate from the internal
network.

Although recent trends in network switch technology, telecommunications cost,
and server architecture have substantially reduced expansion costs we will
require substantial capital to scale up our network to meet anticipated demand
for our services. Our system operates as a `paperless' environment, which
necessitates the need for higher density storage devices and higher capacity off
line storage systems. Our current Intranet network was constructed to support up
to 300 local users. Our existing Internet Bandwidth capacity and server
architecture can satisfactorily serve content to about 5500 concurrent users.

Prevention of Access to Data by Unauthorized Personnel

Our technology systems are designed to address important security concerns.

Only personnel in our Information and Technology Department are allowed access
to stored data. Our Information and Technology Department provides indirect
access to our clients via controlled program codes. We protect our servers
against viruses and malicious programs with anti-virus software that is updated
monthly. Our email server is also protected by anti-virus software, with virus
definition updates conducted weekly. Notwithstanding such safeguards and
procedures, a successful unauthorized access to sensitive data or a virus attack
on systems such as ours is possible. A malicious unauthorized access or
effective virus could adversely affect our business.

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Protection from Catastrophic Events

eAutoClaims.com takes the following precautions to help assure continuous
service in the event of catastrophic events such as fire, water intrusion or
loss of power:

o   All data and program code is backed up nightly to a magnetic tape. One
    month of historical data is maintained with the previous weeks backups
    stored in an off site location that is rated as a Category 5 Shelter.
    We use real time replication of our databases to our remotely hosted
    server facility. In the event that our facility were destroyed, we
    would be able to deploy a recent set of production code and a fresh
    data set to our remotely hosted server within a matter of hours.

o   An additional copy of historical data is stored on a development server
    outside of the production server area nightly to provide further
    redundancy protection.

o   Our Network Operation Center is separately housed within the facility
    and has a dedicated power supply and air-handling unit.

o   All units are on UPS (Uninterruptible Power Supplies) in the event of a
    momentary loss of power. o Our fire suppression system is computer
    friendly. o We have a diesel powered backup generator that will keep us up
    and running for a minimum of three days in case the power were to fail for
    any reason. Assuming we have access to additional diesel fuel, it will keep
    us running indefinitely.

o   We have redundant Internet Service Providers with separate fiber paths
    to our building. Each server is dual homed with Ips from two separate
    Class C IP blocks.

Notwithstanding these precautions, a catastrophic event could interrupt our
service for a substantial period of time, which would adversely affect our
business prospects.

We anticipate that we will continue to devote significant resources to product
development in the future as we add new features and functionality to our Web
site and services. The market in which we compete is characterized by rapidly
changing technology, evolving industry standards, frequent new service and
product announcements and enhancements and changing customer demands.
Accordingly, our future success will depend on our ability to:

o    Adapt to rapidly changing technologies;
o    Adapt our services to evolving industry standards;
o    Continually improve the performance, features and reliability
     of our service in response to competitive service and product
     offerings and evolving demands of the marketplace.

Our failure to adapt to such changes would have a material adverse effect on our
business, results of operations and financial condition. In addition, the
widespread adoption of new Internet, networking or telecommunications
technologies or other technological changes could require substantial
expenditures by us to modify or adapt our services or infrastructure. This could
have a material adverse effect on our business, results of operations and
financial condition.

The Parts.com Licensing and Joint Marketing Agreement

On May 7, 2001, we entered into a License and Joint Marketing Agreement with
Parts.com, Inc. Parts.com is an online original equipment manufacturer (OEM)
automotive parts procurement provider. Parts.com has developed proprietary
software that enables a user to search and order for OEM automotive parts in
local areas. Under this agreement we acquired rights to the Raptor and
ReallyKnow software programs and products developed by Parts.com. Raptor is a
software product designed to provide for the translation of estimating code into
a binary format capable of being imported and transported to other estimating
software programs without manually rekeying the underlying data. ReallyKnow is a
software program designed to allow ad hoc reporting search engines to customize
reports specific to a user's need.

In addition, we were granted the exclusive rights for a five (5) year period to
market Parts.com TradeMotion software products directly or as part of our
system. TradeMotion software allows automobile dealerships to operate a web site
that enables the dealership to sell OEM automotive parts online. In turn,
Parts.com has a non-exclusive right for a period of five (5) years to market our
products and services to their automobile dealership customers. Under this
agreement, we agree to cooperate in the development of fulfillment procedures
regarding each party's products. The agreement provides for revenue sharing
arrangements between EACC and Parts.com. EACC will pay Parts.com 70% of all
setup and subscription fees received from automobile dealerships that acquire
the TradeMotion software products that are exclusively marketed by EACC.

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Under this agreement we paid Parts.com a total of $360,000 for the Raptor and
ReallyKnow software products. Unfortunately, the Raptor and ReallyKnow software
programs do not function as anticipated, and we have not been able to generate
significant revenues from these products. In addition, we have not been able to
develop a mutually beneficial working relationship with Parts.com, which allows
us to commercially exploit these products. Our attempts at amending the current
agreement in a mutually agreeable manner have been unsuccessful. We dispute any
obligation to remit any monies under revenue sharing arrangements to Parts.com.
While there continues to be interest in this product from outside parties and
while we believe the concept is sound, because of the uncertainty at achieving
additional revenues and because material market interests have not materialized,
we have elected to write-off our investment for these software products as of
July 31, 2002.

Governmental Regulation

From time to time we receive inquiries from state regulators relating to
licensing and qualification requirements as an insurance claims adjuster under
the laws of that particular jurisdiction. To date, we have been successful in
either convincing the appropriate state regulators that qualification is not
required or we have agreed to register certain of our personnel or the entity,
as appropriate, as a licensed insurance claims adjuster in that jurisdiction..

Certain jurisdictions could adopt laws directed at the auto insurance industry,
which could affect our business in an unforeseen and adverse manner.

It is possible that a number of laws and regulations may be adopted with respect
to the Internet. These laws may cover issues such as user privacy, freedom of
expression, pricing, content and quality of products and services, taxation,
advertising, intellectual property rights and information security. Furthermore,
the growth of electronic commerce may prompt calls for more stringent
information gathered online or require online services to establish privacy
policies. The Federal Trade Commission has also initiated actions against online
service providers regarding the manner in which personal information regarding
our users to third parties. We do not currently provide personal information
regarding our users to third parties. However, the adoption of such consumer
protection laws could create uncertainty in Web usage and reduce the demand for
our products and services.

We are not certain how our business may be affected by the application of
existing laws governing issues such as property ownership, copyrights,
encryption and other intellectual property issues, taxation, libel, obscenity
and export or import matters. The vast majority of such laws were adopted prior
to the advent of the Internet. As a result, they do not contemplate or address
the unique issues of the Internet and related technologies. Changes in laws
intended to address such issues could create uncertainty in the Internet market
place. Such uncertainty could reduce demand for our services or increase the
cost of doing business as a result of litigation costs or increased service
delivery costs.

In addition, because our services are available over the Internet in multiple
states and foreign countries, other jurisdictions may claim that we are required
to qualify to do business in each such state or foreign country. We are
incorporated in Nevada and are currently only required to be qualified as a
foreign corporation authorized to do business in the State of Florida because
our offices are located in Oldsmar, Florida. Changes in the laws affecting the
Internet or the automobile insurance repair industry may require us to quality
in additional jurisdictions. Our failure to qualify in a jurisdiction where we
are required to do so could subject us to taxes and penalties. It could also
hamper our ability to enforce contracts in such jurisdictions. The application
of laws or regulations from jurisdictions whose laws do not currently apply to
our business could have a material adverse effect on our business, results of
operations and financial condition.

Special Considerations

The risks and uncertainties described below are not the only ones we face.
Additional risks and uncertainties not presently known to us may also adversely
impact our business operations. If any of the following risks actually occur,
our business, financial condition, or operating results could be negatively
affected.

                                       9
<PAGE>

                          Risks Related to Our Business

Our limited operating history makes evaluating our business and prospects
difficult.

We have only been involved in the internet based automobile collision insurance
claims business since May 2000. Our limited operating history in this industry
makes an evaluation of our future prospects very difficult. We have not achieved
profitability and may never be profitable. If we do achieve profitability in any
period, we cannot be certain that we will sustain or increase such profitability
on a quarterly or annual basis. You should carefully consider our prospects in
light of the risks and difficulties frequently encountered by early stage
companies in new and rapidly evolving markets. There is a risk that we will not
be able to accomplish our objectives. Failure to achieve any of our objectives
could negatively affect our business, financial condition and results of
operations.

We have all the risks of a principal in the automobile repair process.

We receive revenue 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 perform the repairs. We are
responsible for collecting our revenue directly from the insurance company. We
therefore act as a principal in the transaction.

If the repairs are not completed correctly, and the vehicle must be sent to
another repair shop for repairs to be performed, we must pay for the repairs to
be completed again. This cost is not passed on to the insurance company but is a
risk that we bear. We control this risk by monitoring work performed by the
repair shops, monitoring customer complaints, reviewing the repair shop history
and actual site visits to repair shops. We add or remove repair shops from our
network based on our review of the repair shop's performance. We eliminate
repair shops that we feel are not providing repair work up to its standards.
Repairs are approved by customers upon retrieval of their vehicle. We constantly
review and revise our network to determine if repair shops included should be
removed. We have the risks and rewards of ownership such as the risk of loss for
collection, delivery or returns.

All our fees are negotiated between us and the insurance company, and the
negotiation does not include any repair shop. We must pay the repair shop a fee
negotiated between us and the repair shop, and the negotiation does not include
any insurance company. The amount owed to the repair shop is owed directly by us
and is not guaranteed, directly or indirectly, by any insurance company. We are
not acting as an agent or broker (including performing services, in substance,
as an agent broker) with compensation on a commission or fee basis.

To date, additional repairs that our repair shops have to provide after a
vehicle has been returned to its user have not been material. We have not
experienced any material bad debts or collection difficulties from our
customers. However, because we act as the principal in the automobile repair
process, we are subject to the risks of poor repair work and accounts receivable
write-offs from our customers due to dissatisfaction with our services.

We have historically incurred losses and these losses may increase in the
future.

We have never been profitable. During the year ended July 31, 2002, we had a net
loss of $4,210,954. As of July 31, 2002, our accumulated deficit was
$20,107,438. In order to become profitable and sustain profitability, we will
need to generate significant revenues to offset our sales and marketing and
general and administrative expenses. We may not achieve or sustain our revenue
or profit goals and our losses may grow in the future.

We are dependent on only a few customers for a substantial portion of our
revenues.

During the year ended July 31, 2002, two customers accounted for approximately
58% and 12% of our total gross revenues. The loss of these customers or a
significant reduction in the amount of business it does with us would
substantially reduce our revenues and adversely affect our ability to continue
operations. Our long-term success depends upon increasing revenues by expanding
our base of customers and reducing our reliance upon a few customers. Because of
the competitive nature of our business and the uncertainty as to the acceptance
of the Internet to handle insurance claims, we may not be able to increase
revenues sufficiently to become profitable.

                                       10
<PAGE>

We depend upon independently owned and operated repair shops to provide services
to our customers.

We have agreements with a network of independently owned and operated vehicle
repair facilities to provide services to our customers. Either we or the repair
facility can terminate our contracts at will. Our business could suffer if a
significant number of these repair shops terminate their agreements with us or
fail to provide the quality of service expected by our customers.

We may not be indemnified for all losses resulting from our vehicle repair
business.

We require that all repair shops in our network indemnify us from claims
relating to their negligent acts or breach of their agreement with us, maintain
a specified amount of liability insurance coverage, and name us as an additional
insured under their liability policy. This coverage may not, however, cover all
liabilities to which we may be subject, and our business could suffer if we need
to draw significant funds from operating revenue to pay claims that are not
covered or that exceed the limits of our coverage.

The market for insurance auto collision claims services is extremely
competitive.

Because the auto collision claims service industry is highly competitive and has
low barriers to entry, we cannot assure you that we will be able to compete
effectively. We are aware of three other companies that offer internet-based
services similar to ours, CEI Group, Consolidated Service Corporation and
Driversshield, Inc. These competitors provide their services primarily to the
fleet management industry. DriverShield, Inc., is the one competitor we are
aware of that offers repair shop connectivity with the claims review and volume
discount we offer. All of these competitors have been in business longer than we
have and have significantly greater assets and financial resources than
currently available to us. We expect competition to intensify in the
Internet-based segment of this industry as current non-Internet competitors
expand their market into the Internet and new competitors enter the market
utilizing the Internet. We cannot assure you that we will be able to compete
successfully against current or future competitors. Competitive pressures could
force us to reduce our prices and may make it more difficult for us to attract
new customers and retain current customers. The principal competitive factors
for our services are:

 o        turn around time for claims processing;

 o        quality of repair shop services;

 o        ability to offer nationwide access to repair facilities;

 o        claims processing fees and charges;

 o        ability to offer new services and incorporate technological
          change into existing services;

 o        24/7 access to status of claim;

 o        volume of repair claims a repair facility can expect to
          support discount amounts.

As competition in our industry increases, it is likely that many of our
competitors will have access to greater resources than are currently available
to us, including financial, employee, customer relations, technology, and
expertise in developing and implementing new technologies as the industry
evolves. In addition, competitors may be able to develop services that are
superior to our service, that achieve greater customer acceptance or that
significantly improves functionality as compared to our existing and future
products and services.

The use of the Internet to provide collision claims administration services is a
recent development and the extent of customer acceptance is not yet known.

Internet-based collision claims administration is a relatively new and evolving
industry. As such, there is no clearly defined business model that has a lengthy
history of customer acceptance and profitability. For the industry to be
successful, insurance companies and policyholders must both be willing to obtain
collision administration services over the Internet. There is no way to be sure
that a sufficient number of customers will utilize our services to enable us to
become and remain profitable.

                                       11
<PAGE>

We depend on key personnel and will need to recruit new personnel as we grow.

Because we are a small company, we are currently dependent on the efforts of a
limited number of management personnel. We believe that given the development
stage of our business and the large amount of responsibility being placed on
each member of our management team, the loss of the services of any member of
this team at the present time would harm our business. Each member of our
management team supervises the operation and growth of one or more integral
parts of our business.

If we are successful in expanding our customer base, we will need to add
additional key personnel as we continue to grow. If we cannot attract and retain
enough qualified and skilled staff, the growth of our business may be limited.
Our ability to provide services to clients and expand our business depends, in
part, on our ability to attract and retain staff with professional experiences
that are relevant to technology development and other functions we perform.
Competition for personnel with these skills is intense. Some technical job
categories are under conditions of severe shortage in the United States. In
addition, restrictive immigration quotas could prevent us from recruiting
skilled staff from outside the United States. We may not be able to recruit or
retain the caliber of staff required to carry out essential functions at the
pace necessary to sustain or expand our business.

We believe our future success will depend in part on the following:

o        the continued employment and performance of our senior management,
o        our ability to retain and motivate our officers and key employees, and
o        our ability to identify, attract, hire, train, retain, and
         motivate other highly skilled technical, managerial,
         marketing, and customer service personnel.

Our business will suffer if our independent automobile collision repair shops do
not provide good service.

We currently have relationships with over 3,000 independently owned and operated
body shops upon which we depend to perform quality repair services at a
reasonable cost and in a timely manner. Although we monitor the quality and
timeliness of their services and can terminate our relationship with those shops
that do not meet our standards, we do not have meaningful control over the
quality of their services. Poor workmanship or service by any of these shops can
adversely affect our relationships with customers and could cause them to stop
dealing with us or reduce the amount of business that they do with us. In
addition, because we assume the responsibility for the quality of repairs, poor
workmanship and inferior work can negatively affect our financial position
because of the additional costs we incur in properly repairing an automobile.

We are dependent on third parties and certain relationships to fulfill our
obligations to our customers.

We are heavily dependent upon the collision repair shops and support facilities
which are members of our Preferred Provider Network to adequately and promptly
service our customers' needs. eAuto is dependent upon its ability to enter into
agreements with collision repair shops, glass shops and other providers of
services who provide quality service at the negotiated prices. Our business is
also generally dependent upon our ability to obtain the services of programmers
and website designers and other persons and entities necessary for the
development and maintenance of our website. There can be no assurance that the
Company will obtain the services of any such person or entities on satisfactory
terms, if at all, or that the Company will be able to maintain such
relationships.

If we fail to adequately protect our trademarks and proprietary rights, our
business could be harmed. Our rights to our servicemarks are uncertain.

The steps we take to protect our proprietary rights may be inadequate. We regard
our copyrights, service marks, trademarks, trade secrets and similar
intellectual property as critical to our success. We rely on trademark and
copyright law, trade secret protection and confidentiality or license agreements
with our employees, customers, partners and others to protect our proprietary
rights. Although we were granted supplemental registration rights for
eAutoclaims.com(R), our service mark applications for eAutoclaims.com and Bricks
to Clicks on the primary federal register were rejected, however this product is
no longer in service and has been replaced by our latest product eJusterSuite.
There is no assurance our pending trademark and service mark applications for
eAudit, eAutoclaims, EJuster Suite, EJuster Transfer, and eProperty Suite will
be approved. We have been involved in litigation regarding the rights to use the
name eAutoclaims.com. Effective trademark, service mark, copyright and trade
secret protection may not be available in every country in which we may in the
future offer our products and services. Furthermore, the relationship between
regulations governing domain names and laws protecting trademarks and similar
proprietary right is unclear. Therefore, we may be unable to prevent third
parties from acquiring domain names that are similar to, infringe upon or
otherwise decrease the value of our trademarks and other proprietary rights.

                                       12
<PAGE>

We may not be able to protect our proprietary technology.

Despite any precautions we may take, a third party may be able to copy or
otherwise obtain and use our software or other proprietary information without
authorization or develop similar software independently. We cannot assure you
that the steps we have taken or will take will prevent misappropriation of our
technology. Litigation may be necessary in the future to determine the validity
and scope of the proprietary rights of others, or defend against claims of
infringement or invalidity. This litigation, whether successful or unsuccessful,
could result in substantial costs and diversions of resources, either of which
could harm our business. If we are unable to protect our current or future
proprietary technology, our ability to compete effectively will be harmed.

We may not be able to adequately protect our domain name.

eAutoclaims.com currently holds various Web domain names relating to its
business, including the domain name: "eAutoclaims.com." Governmental agencies
and their designees generally regulate the acquisition and maintenance of domain
names. For example, in the United States, the National Science Foundation has
appointed Network Solutions, Inc. as the current exclusive registrar for the
".com", ".net" and ".org" generic top-level domains. The regulation of domain
names in the United States and in foreign countries is subject to change in the
near future. Such changes in the United States are expected to include a
transition from the current system to a system that is controlled by a
non-profit corporation and the creation of additional top-level domains.
Governing bodies may establish additional top-level domains, appoint additional
domain name registrars or modify the requirements for holding domain names. As a
result, we may be unable to acquire or maintain relevant domain names in all
countries in which we conduct business. Furthermore, the relationship between
regulations governing domain names and laws protecting trademarks and similar
proprietary rights is unclear. Therefore, we may be unable to prevent third
parties from acquiring domain names that are similar to, infringe upon or
otherwise decrease the value of our proprietary rights. We are currently
involved in litigation involving our rights to the domain name and service mark
of eAutoclaims.com. If we are not able to prevent our competitors from securing
our domain name, they could capitalize on our name recognition.

If we are to remain competitive, we must be able to keep pace with rapid
technological change.

To remain competitive, we must continue to enhance and improve the
responsiveness, functionality and features of our website. The online commerce
industry is characterized by rapid technological change, changes in user and
customer requirements and preferences, frequent new product and service
introductions embodying new technologies and the emergence of new industry
standards and practices that could render our business model and proprietary
technology and systems obsolete in comparison to systems competitors may
implement. Our future success will depend, in part, on our ability to develop or
license leading technologies useful in our business, enhance the ease of use of
our existing services, develop new services and technologies that address the
varied needs of our customers, and respond to technological advances and
emerging industry standards and practices on a cost-effective and timely basis.
If we were unable, for technical, legal, financial or other reasons, to
incorporate new technology in new features or products, we may not be able to
adapt in a timely manner to changing market conditions or customer requirements.

We may infringe intellectual property rights of third parties.

Litigation regarding intellectual property rights is common in the software and
technology industries. We may in the future be the subject of claims for
infringement, invalidity, or indemnification claims based on such claims of
other parties' proprietary rights. These claims, with or without merit, could be
time consuming and costly to defend or litigate, divert our attention and
resources, or require us to enter into royalty or licensing agreements. There is
a risk that such licenses would not be available on reasonable terms, or at all.
Although we believe we have the ability to use our intellectual property to
operate and market our existing services without incurring liability to third
parties, there is a risk that our products and services infringe the
intellectual property rights of third parties.

Our products and technology depend on the continued availability of licensed
technology from third parties.

We license and will continue to license certain technology and software from
third parties. These licenses are integral to our business. If any of these
relationships were terminated or if any of these third parties were to cease
doing business, we would be forced to spend significant time and money to
replace the licensed software. If we are not able to replace these licenses on
commercially reasonable terms, it may be necessary for us to modify or
discontinue some of our services that depend upon technology licensed from third
parties. We cannot assure you that we would be able to replace these licenses.

                                       13
<PAGE>

                          Risks Related to the Internet

The Internet could become subject to regulations that affect our business.

Our business relies on the Internet and other electronic communications
gateways. We intend to expand our use of these gateways. To date, the use of the
Internet has been relatively free from regulatory restraints. However,
legislation, regulations, or interpretations may be adopted in the future that
constrain our own and our customers' abilities to transact business through the
Internet or other electronic communications gateways. Legislation or other
attempts at regulating commerce over the Internet could impair the growth of
commerce on the Internet or could impose licensing or other requirements that
could increase our cost of providing Internet-based services.

We are vulnerable to the effects of natural disasters, computer viruses, and
similar disruptions.

The continued and uninterrupted performance of our computer system is critical
to our success. Our ability to successfully provide our applications and
high-quality customer service largely depends on uninterrupted operation of our
computer and communications hardware and software systems. We have taken
measures to help assure that our systems are protected from unauthorized access.
In addition, we maintain redundant systems for backup and disaster recovery.
Despite these safeguards, we may be vulnerable to damage or interruption from
fire, flood, power loss, telecommunications failure, break-ins, and similar
events. In addition, we do not, and may not in the future, carry sufficient
business interruption insurance to compensate us for losses that may occur.
Despite our implementation of Internet security measures, our servers will be
vulnerable to computer viruses, physical or electronic break-ins, and similar
disruptions which could lead to interruptions, delays, loss of data or the
inability to process transactions.

Our future success will depend on the Internet's ability to accommodate growth.

The recent growth in the use of the Internet has caused frequent periods of
performance degradation. Any failure in performance or reliability of the
Internet could adversely affect our ability to fulfill our obligations to
customers in a timely manner and, consequently, hurt our operating results. To
the extent that the Internet continues to experience increased numbers of users,
frequency of use or increased bandwidth requirements of users, the Internet
infrastructure may not be able to continue to support the demands placed on it
and, as a result, the performance or reliability of the Internet may be
adversely affected. Furthermore, the Internet has experienced a variety of
outages and other delays as a result of damage to portions of its infrastructure
or otherwise. The relatively complex and unproven technology that makes up the
Internet infrastructure poses a risk of material outages or delays that could
adversely affect the ability of our customers to use our trading systems. In
addition, the Internet could lose its viability as a form of media due to delays
in the development or adoption of new standards and protocols that can handle
increased levels of activity. The infrastructure and complementary products and
services necessary to maintain the Internet as a viable commercial medium may
not be developed or maintained.

We are dependent on the continued growth of online commerce.

Our future revenues and any future profits will be dependent upon the widespread
acceptance and use of the Internet and other online services as an effective
medium of commerce by consumers. No standards have yet been widely accepted for
the measurement of the effectiveness of Internet sales, and there can be no
assurance that such standards will develop sufficiently to support Internet
sales as a purchasing medium. Rapid growth in the use of and interest in the
Internet, and other online services is a recent phenomenon, and there can be no
assurance that acceptance and use will continue to develop or that a
sufficiently broad base of consumers will adopt, and continue to use, the
Internet and other online services as a medium of commerce. Demand and market
acceptance for recently introduced services and products over the Internet are
subject to a high level of uncertainty and there exist few proven services and
products. We rely, and will continue to rely, on consumers who have historically
used traditional means of commerce to purchase merchandise. For us to be
successful, these consumers must accept and utilize novel ways of conducting
business and exchanging information. There can be no assurance that our
customers will accept the Internet as a means to purchase the Company's services
or that our customers will adopt its systems as a means to purchase services.

Governmental regulation and taxation of the Internet is subject to change.

A number of legislative and regulatory proposals under consideration by federal,
state, local and foreign governmental organizations may result in there being
enacted laws concerning various aspects of the Internet, including online
content, user privacy, access charges, liability for third-party activities, and
jurisdictional issues. These laws could harm our business by increasing our cost
of doing business or discouraging use of the Internet.

                                       14
<PAGE>

In addition, the tax treatment of the Internet and electronic commerce is
currently unsettled. A number of proposals have been made that could result in
Internet activities, including the sale of goods and services, being taxed. The
U.S. Congress passed the Internet Tax Information Act, which places a three-year
moratorium on new state and local taxes on Internet commerce. There may,
however, be enacted in the future laws that change the federal, state or local
tax treatment of the Internet in a way that is detrimental to our business.

Some local telephone carriers claim that the increasing popularity of the
Internet has burdened the existing telecommunications infrastructure and that
many areas with high Internet use are experiencing interruptions in telephone
service. These carriers have petitioned the Federal Communications Commission to
impose access fees on Internet service providers. If these access fees are
imposed, the cost of communicating on the Internet could increase, and this
could decrease the demand for our services and increase our cost of doing
business.

                        Risks Related to Our Common Stock

Our Common Stock price may be volatile, which could result in substantial losses
for individual stockholders.

The market price for our Common Stock is likely to be highly volatile and
subject to wide fluctuations in response to factors including the following,
some of which are beyond our control, which means our market price could be
depressed and could impair our ability to raise capital:

o    actual or anticipated variations in our quarterly operating results;
o    announcements of technological innovations or new products or
     services by us or our competitors; o changes in financial estimates by
     securities analysts; o conditions or trends in the Internet and/or
     online commerce industries; o changes in the economic performance
     and/or market valuations of other Internet, online commerce companies;
o    additions or departures of key personnel.

Our Certificate of Incorporation limits director liability thereby making it
difficult to bring any action against them for breach of fiduciary duty.

As permitted by Nevada law, the Company's Certificate of Incorporation limits
the liability of directors to the Company or its stockholders for monetary
damages for breach of a director's fiduciary duty except for liability in
certain instances. As a result of the Company's charter provision and Nevada
law, stockholders may have limited rights to recover against directors for
breach of fiduciary duty.

We may be unable to meet our future capital requirements.

We are substantially dependent on receipt of additional capital to effectively
execute our business plan. If adequate funds are not available to us on
favorable terms we will not be able to develop new services or enhance existing
services in response to competitive pressures, which would affect our ability to
continue as a going concern. We do not anticipate issuing any additional shares
of our Series A Preferred Stock as a source of capital. We cannot be certain
that additional financing will be available to us on favorable terms when
required, or at all. If we raise additional funds through the issuance of
equity, equity-related or 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.

                                       15
<PAGE>

Penny stock regulations may impose certain restrictions on marketability of our
stock.

The Securities and Exchange Commission (the "Commission") has adopted
regulations which generally define a "penny stock" to be any equity security
that has a market price (as defined) of less than $5.00 per share or an exercise
price of less than $5.00 per share, subject to certain exceptions. As a result,
our Common Stock is subject to rules that impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together
with their spouse). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the transaction,
of a risk disclosure document mandated by the Commission relating to the penny
stock market. The broker-dealer must also disclose the commission payable to
both the broker-dealer and the registered representative, current quotations for
the securities and, if the broker-dealer is the sole market maker, the
broker-dealer must disclose this fact and the broker-dealer's presumed control
over the market. Finally, monthly statements must be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell our securities.

We have never paid dividends on our Common Stock and do not expect to pay any in
the foreseeable future. We are subject to restrictions on our ability to pay
dividends.

A potential purchaser should not expect to receive a return on their investment
in the form of dividends on our Common Stock. We have never paid cash dividends
on our Common Stock and we do not expect to pay dividends in the foreseeable
future. Our ability to pay dividends on our Common Stock is restricted by the
terms of our agreements with the holders of our Series A Preferred Stock.
Holders of our Series A Preferred Stock are entitled to annual dividends of 8%
(aggregating $107,200 annually, assuming no conversion). For the foreseeable
future, we anticipate that we will retain all of our cash resources and
earnings, if any, for the operation and expansion of our business, except to the
extent required to satisfy our obligations under the terms of the Series A
Preferred Stock.

Substantial sales of our Common Stock could cause our stock price to rapidly
decline.

The market price of our Common Stock may fall rapidly and significantly due to
sales of our Common Stock from other sources such as:

 o   The sale of Common Stock underlying the conversion rights of
     our Series A Preferred Stock and convertible debentures.

 o   The sale of shares of our Common Stock underlying the exercise of
     outstanding options and warrants.

 o   The sale of shares of our Common Stock, which are available
     for resale under Rule 144 or are otherwise freely tradable and
     which are not subject to lock-up restrictions.

Any sale of substantial amount of our Common Stock in the public market, or the
perception that these sales might occur, whether as a result of the sale of
Common Stock received by shareholders upon conversion of our Series A Preferred
Stock, exercise of outstanding warrants or options or otherwise, could lower the
market price of our Common Stock. Furthermore, substantial sales of our Common
Stock by such parties in a relatively short period of time could have the effect
of depressing the market price of our Common Stock and could impair our ability
to raise capital through the sale of additional equity securities. Moreover, our
ability to obtain additional equity capital may be adversely affected by the
restrictions imposed upon us under the agreements relating to the issuance of
our Series A Preferred Stock.

The covenants with our Series A Preferred Shareholders restrict our ability to
incur debt outside the normal course, acquire other businesses, pay dividends,
sell assets or issue our securities without the consent of the Series A
Preferred Shareholders. Such arrangements may adversely affect our future
operations or may require us to make additional concessions to the holders of
the Series A Preferred Stock in order to enter into transactions or take actions
management deems beneficial and in our best interests of the holders of our
Common Stock.

                                       16
<PAGE>

The forward-looking information in this Form 10-KSB may prove inaccurate.

This Form 10-KSB contains forward-looking statements and information that are
based on management's beliefs as well as assumptions made by, and information
currently available to, management. When used in this prospectus, words such as
"anticipate," "believe," "estimate," "expect," and, depending on the context,
"will" and similar expressions, are intended to identify forward-looking
statements. Such statements reflect our current views with respect to future
events and are subject to certain risks, uncertainties and assumptions,
including the specific risk factors described above. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, believed,
estimated or expected. We do not intend to update these forward-looking
statements and information.

ITEM 2.  DESCRIPTION OF PROPERTY

Our main offices are located at 110 East Douglas Road, Oldsmar, Florida 33467.
Monthly rent of approximately $16,900 terminates on November 30, 2006. The
monthly rent increases annually until it reaches approximately $19,000 per month
in the year ended November 30, 2006. We have the option to renew the lease for
two additional years after the initial five-year term. On or after December 31,
2004, we also have the right to purchase the entire facility, totaling 62,000
square feet, with the associated land for $2,950,000. We issued 45,956 shares of
our Common Stock to the landlord of this lease with registration rights to
obtain the purchase option.

We also leased and occupied an office for our call center at 720 Gracern Road,
Suite 420, Columbia, South Carolina 29210. The monthly base rent was $4,250. We
cancelled this lease as of November 30, 2002 because our facilities in Oldsmar,
Florida are adequate to house our growth for the foreseeable future.

ITEM 3.  LEGAL PROCEEDINGS

In August 2002, we received a letter from counsel to Body Shops Unlimited, which
included a copy of a complaint filed in a California State
Court, which was not served on us. We then filed and served a complaint upon
Body Shops Unlimited, Case No. 02-7390-CI-02I in and for the Sixth Judicial
Circuit for Pinellas County, Florida. Body Shops claims to have developed and
delivered a software program to us, which remains unpaid. We contend the
software does not meet specifications, and accordingly we are entitled to
terminate the contract and any related maintenance fees. Body Shop alleges it is
owed $114,000 plus potential damages for fraud and unjust enrichment. We dispute
these allegations. Body Shop has moved to have the case dismissed from the
Pinellas County, Florida Circuit Court for lack of jurisdiction. This case is in
the early stages. Although we believe these are meritorious defenses and claims
against Body Shops irrespective of the forum for litigation, it is too early to
predict the ultimate outcome of this dispute.

In August 2002, we were served with a complaint styled David B. Linka vs.
eAutoclaims.com, in and for the Court of Common Place for the Fifteenth Judicial
Circuit of South Carolina, Case No. 2001-CP-26-4726. Mr. Linka is a former
employee of ours and alleges he is due substantial past and future compensation
relating to his alleged improper termination. Mr. Linka advances various legal
theories based upon (i) a claim for wages, (ii) breach of express employment
contract, (iii) breach of contract implied in law and fact (iv) breach of
contract accompanied by fraudulent acts and (v) breach of covenant of good faith
and fair dealing. Essentially, this dispute concerns Mr. Linka's entitlement to
past and future commissions relating to an account Mr. Linka assisted in
selling.. We have made a motion to remove this case to federal court in South
Carolina. We believe there are meritorious defenses to Mr. Linka's allegations
and do not believe he is entitled to future commissions from our accounts.
Because this dispute is in its preliminary stages, it is too early to predict
with any certainty the ultimate outcome.

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

None during the current fiscal year ended July 31, 2002.


                                       17
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                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Value

Our Common Stock is traded on the OTCBB under the symbol "EACC". The following
table sets forth, the high and low bid prices of the Common Stock for the
periods shown as reported by the National Quotation Bureau. The bid prices
quoted on the OTCBB reflect inter-dealer prices without retail mark-up,
mark-down or commission and may not represent actual transactions.

                                                          High Bid    Low Bid

Fiscal Year Ended July 31, 2001

First Quarter (August 1, 2000 to October 31, 2000)            4.25       1.44
Second Quarter (November 1, 2000 to January 31, 2001)         2.75       0.75
Third Quarter (February 1, 2001 to April 30, 2001)            2.19       1.16
Fourth Quarter (May 1, 2001 to July 31, 2001)                 2.80       1.14


Fiscal Year Ended July 31, 2002

First Quarter (August 1, 2001 to October 31, 2001)            1.68       0.39
Second Quarter (November 1, 2001 to January 31, 2002)         0.92       0.37
Third Quarter (February 1, 2002 to April 30, 2002)            0.70       0.40
Fourth Quarter (May 1, 2002 to July 31, 2002)                 0.45       0.28

DESCRIPTION OF SECURITIES

Our authorized capital stock consists of 50,000,000 shares of Common Stock,
$.001 par value ("Common Stock"), and 5,000,000 of preferred stock, $.001 par
value ("Preferred Stock"), issuable in series. The following description of our
capital stock does not purport to be complete and is subject to and qualified in
its entirety by our Certificate of Incorporation and Bylaws, amendments thereto,
including the Certificates of Designation for our Series A Preferred Stock, and
by the provisions of applicable Nevada law. Our current transfer agent is Equity
Transfer Services, Inc., 120 Adelaide West, Suite 420, Toronto, Ontario, M5H 4C3

Common Stock

As of September 30, 2002, there were approximately 18,994,483 shares of our
Common Stock outstanding. In addition, as of September 30, 2002, there were
1,044,385 shares of Common Stock subject to outstanding warrants issued to the
agent and purchasers of our Series A Preferred Stock at exercise prices of
between $1.46 and $4.50 and 1,150,000 shares of Common Stock underlying the
warrants issued to the purchasers of our convertible debentures at a exercise
price of $0.63. As of September 30, 2002, we have reserved 5,363,899 shares of
our Common Stock underlying options issued to our directors, employees and
consultants with exercise prices of between $.01 and $12.50. We have also
deposited 585,040 shares of our Common Stock in escrow in connection with the
conversion rights of our outstanding Series A Convertible Preferred Stock, which
shares are included in the number of currently outstanding shares. As of
September 30, 2002, we had approximately 220 common shareholders of record.

The holders of Common Stock are entitled to one vote per share for the election
of directors and all other purposes and do not have cumulative voting rights.
The holders of our Common Stock are entitled to receive dividends when, as, and
if declared by our Board of Directors, and in the event of our liquidation to
receive pro-rata, all assets remaining after payment of debts and expenses and
liquidation of the preferred stock. Holders of our Common Stock do not have any
pre-emptive or other rights to subscribe for or purchase additional shares of
capital stock, no conversion rights, redemption, or sinking-fund provisions.

                                       18
<PAGE>

Preferred Stock and Related Warrants

Our Board of Directors (without further action by the shareholders) has the
option to issue from time to time authorized un-issued shares of Preferred Stock
and determine the terms, limitations, residual rights, and preferences of such
shares. The Company has the authority to issue up to 5,000,000 shares of
Preferred Stock pursuant to action by its Board of Directors. As of September
30, 2002, we had 257 shares of Series A Preferred Stock outstanding.

We entered into a Securities Purchase Agreement and related agreements effective
June 27, 2000, with Thomson Kernaghan, as agent (the "Agent"), relating to the
issuance of our Series A Preferred Stock. The following discussion is only a
summary of certain of the terms and provisions of the Securities Purchase
Agreement, Registration Rights Agreement, Security Agreement, Certificate of
Designation for our Series A Preferred Stock, Purchaser's Warrants and Agent's
Warrants.

Each time we issued our Series A Preferred Stock we issued to the purchaser
warrants (the "Purchaser's Warrants") to purchase the number of shares of our
Common Stock determined by dividing 30% of the dollar amount of our Preferred
Stock issued to that purchaser by 130% of the closing bid price of our Common
Stock on the day immediately preceding the issuance of our Preferred Stock. We
also issued warrants to the Agent (the "Agent's Warrants") equal to 10% of the
number of our Common Stock that our Preferred Stock would be convertible into if
the Series A Preferred Stock were convertible into our Common Stock, assuming
the conversion date was the date the Preferred Stock was issued at an exercise
price of $4.50. All Purchaser's Warrants and Agent's Warrants are immediately
exercisable, and have five (5) year exercise period.

On October 3, 2000, we received approximately $1,160,000 (net of the Agent's
selling commission and legal fees) in a transaction in which we privately placed
to a group of accredited investors 260 shares of our Preferred Stock at $5,000
per share. In connection with their purchase of the Preferred Stock, these
investors were issued Purchaser's Warrants to purchase 390,000 shares of our
Common Stock at $3.00 to $3.33 per share. On December 5, 2000, we netted an
additional $270,000 from the issuance of 60 shares of our Preferred Stock at
$5,000 per share. In connection with this placement, we issued Purchaser's
Warrants to acquire 90,000 shares of our Common Stock at $1.4625 per share.

In January and February 2001, we received approximately $420,000 (net of the
Agent's selling commission and legal fees) in a transaction in which we
privately placed to a group of accredited investors and will issue 100 shares of
our Preferred Stock at $5,000 per share. In connection with this placement, we
issued Purchaser's Warrants to acquire 150,000 shares of our Common Stock at
$2.60 per share.

We paid the Agent in these transactions a selling commission of 10% of the
purchase price of the Preferred Stock issued or $210,000, and issued the Agent
warrants to purchase 188,165 shares of our Common Stock at a price of $4.50 per
share.

On June 6, 2001, Governors Road, LLC, one of the existing holders of our Series
A Preferred Stock purchased 100 shares of our Series A Preferred Stock. We
netted $440,000 after payment of a $50,000 fee payable to Greenfield
Investments, an affiliate of Governors Road, LLC and $10,000 of legal fees. The
conversion price for these shares is $.62.5.

In connection with the issuance of these shares, we also issued to Governors
Road, LLC warrants to purchase 150,000 shares of Common Stock. These warrants
are immediately exercisable at $2.60 per share. In addition, we issued warrants
to Greenfield Investments to purchase 76,220 shares of our Common Stock at an
exercise price of $4.50 per share. The exercise prices of these warrants have
anti-dilution rights and are subject to downward adjustment. These warrants
expire five years from their issuance date.

The Series A Preferred Stock carries a cumulative preferred dividend of 8% per
annum and a liquidation preference of $5,000 per share. Each share of Series A
Preferred Stock was originally convertible into shares of our Common Stock at a
per share price equal to the lesser of (i) 120% of the closing bid price of a
share of our Common Stock on the trading day immediately preceding the date we
issued our Series A Preferred Stock, or (ii) 75% of the average of the three
lowest closing bid prices of the Common Stock during the twenty trading days
preceding the date of conversion. This conversion price has been adjusted as
described below. If they have not previously been converted, each share of
Series A Preferred Stock will automatically convert into shares of our Common
Stock three (3) years from issuance of the Series A Preferred Stock (subject to
such holders not exceeding a 4.9% ownership threshold). We have the right to
redeem the Series A Preferred Stock at a price of $5,500 per share upon giving
not less than thirty days prior written notice to holders. Upon receipt of our
notice of conversion, a holder of the Series A Preferred Stock may elect to
convert the shares into Common Stock at any time prior to the date of redemption
as specified in our notice. As part of this transaction, we agreed to file a
registration statement covering all of the shares of our Common Stock
purchasable upon conversion of the Series A Preferred Stock. We were subject to
certain penalty provisions if the registration statement covering these shares
is not declared effective within 180 days of the day we issued our Series A
Preferred Stock. This penalty equaled 2% per month of the amount of Series A
Preferred Stock issued, not to exceed 10%. We paid this penalty with 344,500
shares of eAutoclaims stock in July 2001.

                                       19
<PAGE>

In May 2001, we amended our agreements and understandings with the holders of
our Series A Preferred Stock, which provide for, among other matters, as
follows:

o    We issued to the holders of our Series A Preferred Stock
     344,500 restricted shares of our Common Stock to satisfy the
     penalty provisions for our failure to register our Common
     Stock underlying the Series A Preferred Stock and related
     warrants to the holders of this Series A Preferred Stock under
     our Registration Rights Agreement.

o    The conversion price of our Series A Preferred Stock is set at
     the lower of 75% of the average of the three lowest bid prices
     of our Common Stock for the twenty trading days preceding the
     Conversion Date or $.62.5 cents.

o    All Series A Preferred Stock is converted at such time as the
     outstanding Series A Preferred Stock is less than $250,000,
     subject to the 4.9% beneficial ownership limitation.

o    The Series A Preferred Shareholders may not acquire any
     additional shares of our Common Stock in the open market or
     convert our Series A Preferred Stock into Common Stock or
     exercise their warrants if the effect of such a purchase or
     conversion would be to increase such entities equity
     beneficial ownership position above 4.9%.

o    The Series A Preferred Shareholders agreed to allow us to
     withdraw our prior registration statement, which registered
     the shares of Common Stock underlying the conversion rights of
     the Series A Preferred Stock and related investor and agent
     warrants. The holders of the Series A Preferred Stock have a
     demand registration right upon 60 days notice.

o    Thomson Kernaghan was granted the exclusive rights to provide
     any future equity line financing arrangements through May,
     2003.

o    The mandatory conversion date of the Series A Preferred Stock was
     extended from 2 years to 3 years, subject to the 4.9% beneficial
     ownership limitation.

In January 2002, we issued 551,629 shares to Governors Road in connection with
the conversion of 42 shares of preferred stock and its accrued interest. In
March 2002, we issued 4,097,951 common shares to Canadian Advantage Limited
Partnership (2,991,504 shares) and Advantage (Bermuda) Fund, Ltd. (1,106,447
shares) in connection with the conversion of 210 shares of Series A Preferred
Stock.

In September 2002, we issued 327,250 common shares to Governors Road in
connection with the conversion of 11 shares of preferred stock and its accrued
interest. Accordingly, Governors Road, LLC is the sole owner of the 257 shares
of our currently outstanding Series A Preferred Stock.

The agreements we entered into in connection with the issuance of the Series A
Preferred Stock contain numerous affirmative and negative covenants, which may
adversely affect our ability to attract other sources of capital or grow our
business. We cannot incur debt outside the normal course, acquire other
businesses, pay dividends, sell assets or issue our securities so long as our
Series A Preferred Stock remains unpaid. The Agent has no obligation to acquire
any additional shares of our Series A Preferred Stock.

In the future, subject to the limitations imposed by the Securities Purchase
Agreement for the Series A Preferred Stock, our Board of Directors has the
authority to issue additional shares of our Preferred Stock in series with
rights, designations and preferences as determined by the Board of Directors.
When any shares of our Preferred Stock are issued, certain rights of the holders
of our Preferred Stock may affect the rights of the holders of Common Stock. The
authority of the Board of Directors to issue shares of our Preferred Stock with
characteristics which it determines (such as preferential voting, conversion,
redemption and liquidation rights) may have a deterrent effect on persons who
might wish to make a takeover bid to purchase our shares at a price, which might
be attractive to our shareholders. However, the Board of Directors must fulfill
its fiduciary obligation to our shareholders in evaluating an takeover bid.

                                       20
<PAGE>

Certain Provisions of the Certificate of Incorporation and Bylaws

Our Certificate of Incorporation provides that no director shall be personally
liable to the Company or its stockholders for monetary damages for breach of
fiduciary duty as a director except as limited by Nevada law. Our Bylaws provide
that we shall indemnify to the full extent authorized by law each of its
directors and officers against expenses incurred in connection with any
proceeding arising by reason of the fact that such person is or was an agent of
the corporation.

Insofar as indemnification for liabilities may be invoked to disclaim liability
for damages arising under the Securities Act of 1933, as amended, or the
Securities Act of 1934 (collectively, the "Acts"), as amended, it is the
position of the Securities and Exchange Commission that such indemnification is
against public policy as expressed in the Acts and are therefore, unenforceable.

Dividends

We have not paid any cash dividends on its common or preferred stock and do not
anticipate paying any such cash dividends in the foreseeable future. Earnings,
if any, will be retained to finance future growth.

Shares Eligible for Future Sale

As of September 30, 2002, we had outstanding 18,994,483 shares of Common Stock.
Of these shares, 12,621,681 shares of Common Stock are freely tradable without
restriction or limitation under the Securities Act, except for any shares
purchased by "affiliates" or persons acting as "underwriters" as these terms are
defined under the Securities Act.

The 6,372,802 shares of Common Stock held by existing shareholders that are
"restricted" within the meaning of Rule 144 adopted under the Securities Act
(the "Restricted Shares"), may not be sold unless they are registered under the
Securities Act or sold pursuant to an exemption from registration, such as the
exemption provided by Rule 144 promulgated under the Securities Act. The
Restricted Shares were issued and sold by us in private transactions in reliance
upon exemptions from registration under the Securities Act and may only be sold
in accordance with the provisions of Rule 144 of the Securities Act, unless
otherwise registered under the Securities Act.

In general, under Rule 144 as currently in effect, any person (or persons whose
shares are aggregated), including an affiliate, who has beneficially owned
shares for a period of at least one year is entitled to sell, within any
three-month period, a number of shares that does not exceed the greater of:

(1)      1% of the then-outstanding shares of Common Stock; and

(2)      the average weekly trading volume in the Common Stock during
         the four calendar weeks immediately preceding the date on
         which the notice of such sale on Form 144 is filed with the
         Securities and Exchange Commission.

Sales under Rule 144 are also subject to provisions relating to notice and
manner of sale and the availability of current public information about us. In
addition, a person (or persons whose shares are aggregated) who has not been an
affiliate of us at any time during the 90 days immediately preceding a sale, and
who has beneficially owned the shares for at least two years, would be entitled
to sell such shares under Rule 144(k) without regard to the volume limitation
and other conditions described above. While the foregoing discussion is intended
to summarize the material provisions of Rule 144, it may not describe all of the
applicable provisions of Rule 144, and, accordingly, you are encouraged to
consult the full text of that Rule.

In addition, our employees, directors, officers, advisors or consultants who
were issued shares pursuant to a written compensatory plan or contract may be
entitled to rely on the resale provisions of Rule 701, which permits
non-affiliates to sell their Rule 701 shares without having to comply with the
public information, holding period, volume limitation or notice provisions of
Rule 144, and permits affiliates to sell their Rule 701 shares without having to
comply with Rule 144's holding period restrictions. We also have the ability to
file Form S-8 registration statements, which registers for resale securities
issued to our employees, officers, directors, consultants and advisors.

         We are required to register the shares of Common Stock underlying
conversion features of our Series A Preferred Stock along with the shares of
Common Stock underlying the Agent's Warrants and Purchaser's Warrants upon 60
days prior to notice. The sale of our Common Stock underlying this registration
statement may also adversely affect the market price of our Common Stock, result
in substantial dilution to our stockholders and might also adversely affect our
ability to raise additional capital.

The possibility of future sales by existing stockholders under Rule 144 or
otherwise will, in the future, have a depressive effect on the market price of
our Common Stock, and such sales, if substantial might also adversely affect our
ability to raise additional capital.

                                       21
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

IMPORTANT NOTE ABOUT FORWARD-LOOKING STATEMENTS

The following discussion and analysis should be read in conjunction with our
audited financial statements as of July 31, 2002 and the notes thereto, all of
which financial statements are included elsewhere in this form 10-KSB. In
addition to historical information, the following discussion and other parts of
this Form 10-KSB contain forward-looking information that involves risks and
uncertainties. Our actual results could differ materially from those anticipated
by such forward-looking information due to factors discussed under "Business"
and elsewhere in this Form 10-KSB.

The statements that are not historical constitute "forward-looking statements".
Said forward-looking statements involve risks and uncertainties that may cause
the actual results, performance or achievements of the Company and its
subsidiaries to be materially different from any future results, performance or
achievements, express or implied by such forward-looking statements. These
forward-looking statements are identified by their use of such terms and phrases
as "expects", "intends", "goals", "estimates", "projects", "plans",
"anticipates", "should", "future", "believes", and "scheduled".

The variables which may cause differences include, but are not limited to, the
following: general economic and business conditions; competition; success of
operating initiatives; operating costs; advertising and promotional efforts; the
existence or absence of adverse publicity; changes in business strategy or
development plans; the ability to retain management; availability, terms and
deployment of capital; business abilities and judgment of personnel;
availability of qualified personnel; labor and employment benefit costs;
availability and costs of raw materials and supplies; and changes in, or failure
to comply with various government regulations. Although the Company believes
that the assumptions underlying the forward-looking statements contained herein
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-KSB will prove to be accurate.

In light of the significant uncertainties inherent in the forward-looking
statements included herein the inclusion of such information should not be
regarded as a representation by the Company or any person that the objectives
and expectations of the Company will be achieved.

OVERVIEW

We are a business-to-business e-commerce company that uses the Internet to
streamline and lower the overall costs of automotive repair paid by insurance
companies. We are establishing ourselves as the preeminent service provider for
the automobile insurance industry, providing a seamless back-end infrastructure
that links thousands of collision repair shops and support facilities. We
provide a proprietary, cost-effective and highly advanced system for the
processing and ultimate repair of claims for damaged vehicles filed by
policyholders of our insurance company clients. 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 through our
provider network accounts for 95% and 96% of the revenue for the years ended
July 31, 2002 and 2001, respectively. 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 years ended July 31, 2002 and 2001, 5% and 4% of the
revenue has been received from claims processing fees and other income,
respectively.

CRITICAL ACCOUNTING POLICIES

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

                                       22
<PAGE>

Revenue recognition

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

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.

We maintain an allowance for doubtful accounts for losses that we estimate will
arise from our customers' inability to make required payments. We make our
estimates of the collectibilty of our accounts receivable by analyzing
historical bad debts, specific customer creditworthiness and current economic
trends. At July 31, 2002 the allowance for doubtful accounts was $400,000.

Accounting for Income taxes

The Company records a valuation allowance to reduce its deferred tax assets to
the amount that is more likely than not to be realized. While we consider
historical levels of income, expectations and risks associated with estimates of
future taxable income and ongoing prudent and feasible tax planning strategies
in assessing the need for the valuation allowance, in the event that we
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 $5,649,000 at July 31,
2002. The valuation allowance consists mainly of net operating losses previously
realized and stock compensation currently not deductible. The valuation
allowance was necessary because the use of these deductions is not reasonably
assured since the company has not yet reached profitability.

Valuation of long-lived assets

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

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

The Company purchased a software product in the fiscal year ended July 31, 2001
as part of a license and joint marketing agreement. This software was to
facilitate the local distribution of auto parts throughout the country. Neither
the seller nor the software packages functioned as anticipated by the agreement.
Consequently, there is substantial doubt as to the Company's ability to receive
any significant revenue from the software or license and joint marketing
agreement, and an impairment charge of $360,000 has been recognized in the
fiscal year ended July 31, 2002.

Goodwill is amortized using the straight-line method over 7 years through July
31, 2002. At each balance sheet date, the Company evaluates the period of
amortization of intangible assets. The factors used in evaluating the period of
amortization include: (i) current operating results, (ii) projected future
operating results, and (iii) any other material factors that effect the
continuity of the business.

                                       23
<PAGE>

RESULTS OF OPERATIONS

The accompanying financial statements reflect the operations of eAutoclaims for
the fiscal years ended July 31, 2002 and 2001.

REVENUE

Total revenue for the year ended July 31, 2002 was approximately $32.3 million,
which consists of approximately $28.5 million in collision repair management for
insurance companies, approximately $1.0 million in auto glass repairs and
approximately $2.8 million in fleet repair management and other repairs and
fees. Total revenues increased approximately $12.1 million or 60% compared to
approximately $20.2 million for the year ended July 31, 2001. This increase is
primarily the result of 131% growth in revenues attributed to our core collision
repairs management business. Total revenues are expected to increase again in
fiscal 2003.

The glass revenue decrease by 49% from approximately $1.9 million in fiscal year
ended July 31, 2001 to approximately $1.0 million in fiscal year ended July 31,
2002. This decrease is a result of the loss of a major customer due to the
maturing and increased competition for the glass repair business. The customer
was offered lower pricing that, at that time, would have reduced margins below
acceptable levels. We have recently negotiated lower pricing from one of our
larger glass vendors, which will help our competitiveness in this market in the
future. The glass repair business complements our core business and allows our
customers to use a single source for all their repair needs. The fleet revenue
decreased approximately $204,000 from approximately $1.3 million in fiscal 2001
to approximately $1.1 in fiscal 2002. This decrease is a normal fluctuation in
the fleet repair revenue due to the actual accident rate experienced by our
customers for the year.

During the year ended July 31, 2002, we derived 58% and 12% of our revenues from
two customers. We have a five-year contract with the first customer which ends
in April 2006.

eAutoclaims.com, Inc. recognizes revenues by assuming the risk and completing
the repair of insurance claims for insurance companies and on corporately own
fleet vehicles. In addition to recognizing revenue associated with the repair of
insurance claims, we charge additional fees on a per-claims basis to our
insurance and corporate fleet customers pursuant to the terms of a Services
Agreement. eAutoclaims.com generates additional revenues by retaining a portion
of the discount received from its collision repair shops, which are part of its
network in return for assurances of minimum volumes of collision repair
business.

EXPENSES

Claims processing charges for the year ended July 31, 2002 were approximately
$27.3 million, or 84.5% of total revenues. This is an increase from
approximately $16.8 million, or 83.4%, of sales in fiscal year ended July 31,
2001. Claims processing charges are primarily the costs of collision repairs
paid by eAutoclaims to its collision repair shop network. This increase in the
percentage of the claims processing charges compared to sales over the same
periods last year was mostly caused by volume discounts extended to our largest
customer. We expect this percentage of claims process charges to revenues to
decrease in the future as the click fee revenue increases as a result of the
eJusterSuiteTM product implementation.

We are dependent upon our third party collision repair shops for insurance
claims repairs. eAutoclaims currently has over 3,000 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 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 year ended July 31, 2002
were approximately $8.1 million or 25% of revenue compared to approximately
$10.5 million or 52% of revenue for the year ended July 31, 2001. Selling,
general and administrative expenses consisted of non-cash charges of
approximately $997,000 for the year ended July 31, 2002. In the fiscal year
ended July 31, 2002 the were non-cash charges of approximately $161,000 incurred
pertaining to consulting agreements for investor relation services, legal, board
and professional consultants. In the year ended July 31, 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
of approximately $396,000 for the issuance of stock to settle penalties for not
registering certain stock and approximately $463,000 incurred pertaining to
consulting agreements for investor relation services, legal, board and
professional consultants. In addition there was approximately $278,000 of
offering costs associated with registration statement that were charged to
earnings when the registration was withdrawn in July 2001. During the year ended
July 31, 2002 and 2001 we incurred payroll related expenses of approximately $
5.1 million and approximately $3.9 million, respectively.

                                       24
<PAGE>

Depreciation and amortization was approximately $1,086,000 and $505,000 for the
years ended July 31, 2002 and 2001, respectively. Depreciation of fixed assets
represented approximately $312,000 and $176,000, respectively. Amortization
expense of approximately $218,000 and $234,000 in fiscal year ended 2002 and
2001, respectively reflects the amortization of goodwill of from the purchase of
Premier Express Claims and salvage connection. The remaining amortization in the
fiscal year ended 2002 and 2001 of approximately $556,000 and $95,000,
respectively, relates to the warrants and debenture conversion feature created
by the debenture financing in fiscal year 2001. Due to a change in the
accounting standards, no amortization is expected in the year-ended July 31,
2003 from our acquisition of Premier Express Claims or salvage connection, nor
is there any amortization remaining from the debentures issued in fiscal year
ended July 31, 2001.

Interest income of approximately $33,000 is included in selling, general and
administrative expenses, net of interest expense of approximately $35,000
(including approximately $10,000 of debenture interest) for the year ended July
31, 2002. Interest income of approximately $24,000 is included in selling,
general and administrative expenses, net of interest expense of approximately
$20,000 for the year ended July 31, 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

We recognized a net loss of approximately $4.2 million and $7.6 million for the
years ended July 31, 2002 and 2001, respectively. This represents a 45% decrease
in the loss between the two years. Net loss before non-cash charges, which are
described above, were approximately $2.1 million and $2.8 million for the years
ended July 31, 2002 and 2001, respectively. We expect our net loss to narrow and
then become profitable as we experience higher revenues that will increasingly
absorb our fixed costs associated with our infrastructure.

LIQUIDITY AND CAPITAL RESOURCES

At July 31, 2002, we had cash and cash equivalents of $44,655, a $440,437
decrease from last year, and a working capital deficiency of approximately $4.5
million as of July 31, 2002 compared to $1.5 million as of July 31, 2001. The
primary source of our working capital during the year ended July 31, 2002, was
cash from the operations, which was $217,349 for fiscal year 2002.

We were not able to generate significant capital from the sale of our securities
during fiscal year end 2002. $650,000 of convertible debentures, plus accrued
interest were converted into 965,883 shares of our Common Stock effective as of
September 30, 2001. On June 17, 2002, we received $99,000, net of $11,000 of
expenses for 220,000 shares of Common Stock from 3 individual investors. These
investors also received warrants to purchase 220,000 shares of our Common Stock
at an exercise price of $.75 per share.

On November 12, 2002 we signed a term sheet on a $10,000,000 equity line of
credit that will allow eAuto, once the shares are registered, to access funds
over a 36-month period by selling registered shares of common stock at 94% of
the market value of the shares. Under this agreement, the amount of funds
available to the Company would be based on the volume of the previous 20 trading
days. The purchasing party offering the equity line of credit will receive
warrants for 3% of the shares sold as well as a 2% placement fee.

On November 12, 2002 we also received a commitment letter from a current
investor to invest an additional $1,000,000-$2,000,000 into eAutoclaims. We
expect this financing and the equity line of credit to cover the operational
shortfall, if any, until we are able to reach profitability

During fiscal year ended 2002, one of our major customers filed a Chapter 11
Bankruptcy proceeding and two other insurance companies customers were placed
into receivership in California. This resulted in us not collecting in excess of
$800,000 in receivables from these customers during fiscal year ended 2002. We
reserved approximately $400,000 of bad debt expense in connection with these
proceedings for fiscal year ended 2002. Based on the current status of
settlement negotiations, we anticipate collecting at least $400,000 of the
receivables during fiscal year ended 2003. The collection of these outstanding
receivables combined with the cost cutting measures described below should
substantially improve the Company's working capital position during fiscal 2003.

                                       25
<PAGE>

Our management continues to analyze our operations and streamline where
appropriate. In May 2002, we made cost cuts that should save approximately
$35,000 per month for approximately $420,000 per year when fully implemented. In
October 2002, we instituted additional cost cutting, which should result in
savings of approximately $100,000 per month or approximately $1.2 million per
year once fully instituted. These cost cutting focus primarily upon the
termination of personnel, deferral of new product development and reduction in
capital expenditures. We believe that cash generated from the financing and
operations together with cost cuts and the collection of past due receivables
described above will be sufficient to meet our working capital requirements for
the next 12 months.

However, we will need to raise additional capital to pursue other business or
technology acquisitions or if we experience losses that exceed our current
expectations. Although we will be able to continue to grow our business base, we
will not be able to grow as quickly as management would like without the
infusion of additional capital. We cannot assure that we will be able to raise
such funds or that such funds will be available to us on favorable terms. If we
raise additional funds for the issuance of our securities, such securities may
have rights, preferences or privileges similar to those of the rights of our
Common Stock and our stockholders may experience additional dilution.

We are currently restricted from raising other additional debt or equity without
the consent of the holders of our Series A Preferred Stock. The Series A
Preferred shareholder has exclusive rights to provide any future equity line
financing agreements through May 31, 2003.

Management expects revenue growth over the next fiscal year, which provides it's
own working capital. However, there is no assurance that we will continue to
sustain our growth. Our business has grown significantly since our inception.
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.

Our principle commitments at July 31, 2002 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.

Seasonality

eAutoclaims does not deem its revenues to be seasonal.

RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARDS

In June 2001, the FASB issued Statement no. 142, "Goodwill and Other Intangible
Assets," which we must adopt as of August 1, 2002, that changes the accounting
for goodwill from an amortization method to an impairment-only approach. As of
August 1, 2002, eAutoclaims will cease the amortization of goodwill. This
statement also requires companies with goodwill recorded on their financial
statements to evaluate if the goodwill has been impaired and if a charge should
be recorded to write-off any impairment. We do not expect this statement to have
an impact on our financial statements except to cease recording amortization
expense of the goodwill.

ITEM 7.  FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

The financial statements to be provided pursuant to this Item 7 begin on page
F-1 of this Report, following Part III hereof.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.

                                       26
<PAGE>

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS

The names, ages and respective positions of the Executive Officers and
Directors of the Company are as follows:

Name                               Age      Position

Eric Seidel                        39       Chief Executive Officer,
                                            President and Director

Randal K. Wright                   38       Chief Development Officer, Director

Scott Moore                        41       Chief Financial Officer

Dave Mattingly                     44       Chief Information Officer

Reed Mattingly                     33       Executive Vice President

Jeffrey D. Dickson                 59       Chairman of the Board of Directors

David Jolley                       60       Director (1)

Christopher Korge                  48       Director

Nicholas D. Trbovich, Jr.          42       Director

(1) Mr. Jolley served as a director until his death on November 6, 2002.

Because we are a small company, we are currently dependent on the efforts of a
limited number of management personnel. We believe that, given the development
stage of our business and the large amount of responsibility being placed on
each member of our management team, the loss of the services of any member of
this team at the present time would harm our business. Each member of our
management team supervises the operation and growth of one or more integral
parts of our business.

The Chief Executive Officer/President is elected and can be removed by the Board
of Directors. Directors are elected at the annual meeting of shareholders to
serve for their term and until their respective successors are duly elected and
qualify, or until their earlier resignation, removal from office, or death. The
remaining directors may fill any vacancy in the Board of Directors for an
unexpired term.

Business Experience of Executive Officers and Directors

Eric Seidel has been a director and our chief executive officer and president
since June 1, 2000. From January 1, 2000 through May 31, 2000, Mr. Seidel was
the chief executive officer and president of eAutoclaims, Inc., which was the
privately held Delaware corporation, which merged with us. From September 1997
through December 1999, Mr. Seidel was employed as a senior executive officer of
First American AMO. From August 1995 through June, 1997, Mr. Seidel was a senior
executive at Salex Corporation; a fleet management company serving Fortune 500
companies, where, among other responsibilities he was responsible for insurance
company services. Mr. Seidel is a past president of the U.S. Junior Chamber of
Commerce.

Randal K. Wright became a director and our chief operating office in June 2000.
In May 2001, Mr. Wright became our chief development officer. From 1996 through
May 2000, Mr. Wright was the founder and chief executive officer of Premier
Express Claims, Inc., which merged with us in June 2000. Mr. Wright has
approximately 15 years of experience in the automotive insurance servicing
business.

Scott Moore, CPA became our chief financial officer effective September 11,
2000. From December 1988 through September, 2000, Mr. Moore was employed by in
the Certified Public Accounting firm of Harper Van Scoik & Company in
Clearwater, Florida and was a partner in that firm for the last three years.
Prior to that time Mr. Moore was a senior accountant with Deloitte Haskins &
Sells. Mr. Moore has 15 years of public accounting experience.

                                       27
<PAGE>

Reed Mattingly, Sr., Executive Vice President. Mr. Mattingly was formerly the
VP and General Manager of Premier Express Claims, which was recently acquired by
eAutoclaims.com. He has 11 years of experience in the automotive insurance
services business. Mr. Mattingly manages the overall day-to-day operations of
eAutoclaims.com's Call Center in Columbia, South Carolina and the Processing
Center in Oldsmar, Florida. Mr. Mattingly is responsible for customer service
and overseeing the integration of new programs. Previously, he had been
instrumental in expanding a start-up auto glass shop into a $5 million regional
network. He had also built and managed a 24-hour/7 day national claim reporting
call center. Companies under his management have been known for a "high-tech,
high-touch" approach to personalized customer service. He earned a degree in
Business Management from the University of South Carolina.

David Mattingly became our Chief Information Officer in June 2002. He had
previously held the position of VP IT at eAutoclaims since March of 2001. Mr.
Mattingly develops and manages the Company's technology initiatives. He is
responsible for research of `cutting edge' technologies and the creation of
`next horizon' eAutoclaims products. He oversees and manages all eAutoclaims
technology projects, inclusive of projects in both Network Administration and
Programming departments. Mr. Mattingly also develops and maintains internal
intranet applications and processes. Mr. Mattingly has been in the Computer
Technology field for over 21 years. He earned a degree in Electronic Engineering
Technology from the State University of New York during his seven-year tour with
the United States Air Force. Mr. Mattingly has several other Computer
Electronics & Technology degrees and is currently enrolled in the University of
Phoenix MBA program with an emphasis in Technology Management.

Stacey Adams, Sr. Vice President Operations. Ms. Adams has been with eAutoclaims
since its inception in December 1999. She is formerly the Operations Manager of
the Royal Care Division. She has over 5 years experience in the insurance and
technology industries. Prior to eAutoclaims Ms. Adams was with a Senior Customer
Account Representative/Account Executive with NetWireless from April 1998 to
February 1999, where she provided technical support and marketing support for
the customers and sales team. Stacey has earned a bachelor's in communications
from Arizona State University and carries agents license in Property & Casualty
Insurance.

Jeffrey D. Dickson has been a director and the chairman of our board of
directors since June, 2000. From May 1997 through November 1999, Mr. Dickson was
the president and chief executive officer of First American AMO. From February
1995 through May, 1997, Mr. Dickson was the president and chief operating
officer of Salex Corporation. Mr. Dickson has served as an executive vice
president of the American Bankers Insurance Group and president of Interloc
Corp. Mr. Dickson was awarded a Masters of Business Administration degree from
Harvard University in 1979.

David Jolley served as a director from June 2000 until his death on November 6,
2002.

Christopher Korge has been a director since June 2000. He is the managing
partner at the law firm of Korge & Powell, P.A. in Miami, Florida. He received
his J.D. degree from Temple School of Law in 1981 and B.S. in Business
Administration, from the University of Florida, in 1977. Mr. Korge's firm
represents numerous major corporations including Bell South, Bechtel, Inc.,
Montenay Power Corporation, Host Marriott and other Fortune 500 corporations.
Mr. Korge serves on numerous boards of directors and is a major shareholder in
various companies including two housing development companies, and one E
commerce company, Intune Group. He is Chairman of Intune. Mr. Korge is Finance
Vice Chairman of the Democratic National Committee. He is past Co-Chair of the
Democratic National Committee Business Council.

Nicholas D. Trbovich, Jr., has been a director since June 2000. He is a director
and vice president of AMEX-listed Servotronics, Inc., President of TSV, Inc., a
Servotronics development subsidiary, and President and CEO of Queen Cutlery and
of Ontario Knife Company (the U.S. Military's largest supplier of edged tools
and survival knives).

Other Key Employees

In addition to the individuals identified above as "Executive Officers", the
following individuals are considered key employees and certain information with
respect to these key employees is described below:

Sydney Ward, Vice President of Sales/Marketing. Sydney is responsible for the
sales/marketing division of eAutoclaims. Sydney has 20 years of experience in
the insurance industry where she has served in various positions including
claims, retail, wholesale and insurer experience. For the last few years, Sydney
was employed as Senior Vice President of a large managing general agency in
Texas where she was responsible for all aspects of the operation including
overall responsibility of a premium finance company. Sydney presently serves as
President of the U.S. Junior Chamber until December 31, 2001.

                                       28
<PAGE>

John Prozinski, Vice President Business Development. Mr. Prozinski joined
eAutoclaims in August 1998. During his time with eAutoclaims he has also held
positions as Regional Sales Manager, National Body Shop Manager, and Director of
Consumer Products. In March of 2002 he was promoted to the Vice President of
Business Development. From August of 1995 through August of 1998 Mr. Prozinski
was a regional sales manager for Ashland, Inc. covering North American and
Canadian. He holds a bachelor's degree from St. John's University and is a past
president of the United States Junior Chamber of Commerce.

Larry C. Colton, Controller. Mr. Colton joined eAutoclaims in December 2000. He
has over 25 years experience in accounting and finance, having held a variety of
positions in several industries. Between December 1997 and December 2000, Mr.
Colton was Vice President of an asset management division of Sky Financial
Group. He holds a bachelor's degree from Elmhurst College and a Masters of
Business Administration degree from Northern Illinois University.

Election

The Company's Bylaws fix the size of the Board of Directors at no fewer than
three and no more than nine members, to be elected annually by a plurality of
the votes cast by the holders of Common Stock, and to serve until the next
annual meeting of stockholders and until their successors have been elected or
until their earlier resignation or removal. Currently there are six directors.

Committees of the Board and Meetings

During the fiscal year ended July 31, 2002 we have held five board of directors
meetings.

The Board of Directors established an Audit Committee and a Compensation
Committee. The Board of Directors has not established a nominating committee.
Each of the Audit and Compensation Committees is responsible to the full Board
of Directors. The functions performed by these committees are summarized below:

Audit Committee. The Audit Committee makes recommendations to the Board of
Directors regarding the selection and retention of the independent auditors,
reviews the scope and results of the audit and reports the results to the Board
of Directors. In addition, the Audit Committee reviews the adequacy of internal
account, financial and operating controls and reviews the Company's financial
reporting compliance procedures. The members of the Audit Committee are Mr.
Dickson, Chairman, Mr. Trbovich and Mr. Korge.

Compensation Committee. The Compensation Committee reviews and approves the
compensation of the Company's officers, reviews and administers the Company's
stock option plans for employees and makes recommendations to the Board of
Directors regarding such matters. The members of the Compensation Committee are
Mr. Dickson, Chairman, and Mr. Trbovich.

Director Compensation

The board members are paid $500 plus expenses for each board meeting they attend
in person, and $300 for each board meeting they attend via conference call. Each
outside director is entitled to $1,250 worth of Common Stock to be issued on a
quarterly basis at the fair market value as of the end of each quarter. For the
fiscal year ended July 31, 2002 and 2001, we have issued 35,257 and 10,702
shares, respectively, to our outside directors under this arrangement.

         Directors are also compensated with stock options at various points
throughout the year. All these options have an exercise price set at the market
value of the stock on the date of the granting of the option. The have an
exercise term of five years and vest after one year. For the fiscal year ended
July 31, 2001, five directors received options on December 14, 2000 of 10,000
shares at $0.90 each, and four outside directors received 25,000, 12,500 and
12,500 options on April, 9 2001, April 30, 2001 and July 31, 2001 at an exercise
prices of $1.53, $1.91 and $1.75, respectively, for a total of 250,000 options.
For the fiscal year ended July 31, 2002, four directors received 12,500 options
on both October 31, 2001 and January 31, 2002 with exercise prices $0.47 and
$0.73 each, and three outside directors received 12,500 options on both April,
30 2002 and July 31, 2002 at an exercise prices of $0.51, $0.36, respectively,
for a total of 175,000 options. The outside board members will be issued 12,500
options at the end of each quarter at the market value at the end of each
quarter as compensation for their services. All these options are exercisable
after one year and have terms of five years. No additional options or
compensation are issued or paid for serving on committees.

                                       29
<PAGE>

ITEM 10.  EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows the compensation paid or accrued by us for the fiscal
years ended July 31, 2002 and 2001 to or for the account of our Officers that
exceed $100,000. During fiscal year ended July 31, 2000, no other executive
officer or director received benefits or annual salary and bonus of $100,000 or
more during the stated period. Accordingly, the summary compensation table does
not include compensation of those other executive officers.
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
                                                                                         Long-Term Compensation
------------------------------------------------------------------------------------------------------------------------------------
                                                 Annual Compensation                 Awards                    Payouts
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Long-Term
<CAPTION>
                                                                      Other       Restricted    Securities    Incentive      All
Name of Individual &            Fiscal                                Annual         Stock      Underlying      Plan        Other
Principal Position               Year     Salary     Bonus (2)     Compensation     Awards     Options/SARs    Payouts  Compensation
------------------------------------------------------------------------------------------------------------------------------------
<S>                             <C>       <C>          <C>          <C>              <C>        <C>              <C>         <C>
Eric Seidel                     2000 (1)   $76,920       -0-          -0-            -0-           65,000        -0-         -0-
President and                   2001      $162,835       -0-          -0-            -0-        1,080,000        -0-         -0-
Chief Executive Officer         2002      $249,398     $37,500      $76,311          -0-          182,870        -0-         -0-

Scott Moore                     2001      $111,539       -0-          -0-            -0-          222,000        -0-         -0-
Chief Financial Officer         2002      $130,726       -0-          -0-            -0-          106,250        -0-         -0-

Randy Wright                    2001      $118,038       -0-          -0-            -0-          120,000        -0-         -0-
Chief Development Officer       2002      $123,718       -0-          -0-            -0-          102,778        -0-         -0-

Gaver Powers                    2001       $98,700       -0-          -0-            -0-          165,000        -0-         -0-
Chief Information Officer       2002      $100,946       -0-          -0-            -0-           99,306        -0-         -0-

Reed Mattingly                  2001       $95,078       -0-          -0-            -0-           90,000        -0-         -0-
Executive Vice President        2002      $115,932       -0-          -0-            -0-          100,463        -0-         -0-

Dave Mattingly
Chief Information Officer       2002      $100,303       -0-          -0-            -0-           66,204        -0-         -0-
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

The cost to us of personal benefits, including premiums for life insurance and
any other perquisites, to such executives do not exceed 10% of such executive's
annual salary and bonus.

(1)   Reflects compensation paid to Mr. Seidel from
      eAutoclaims.com-Delaware from inception (December 7, 1999) through
      the date of the merger and compensation paid to Mr. Seidel by us
      for the period June 1, 2000 through July 31, 2000. See "Employment
      Contracts and Other Arrangements" below.

(2)  Other  annual  compensation,  including  cell  phones  is less  than  10%
     of the officers' salaries and is therefore not disclosed above.

Option/SAR Grants in Last Fiscal Year
<TABLE>
------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                          Percent of Total
                           Number of         Options/SARs
                           Securities          Granted
                           Underlying       to Employees/         Exercise       Fair Market Value
                          Options/SARs        Directors           or Base            At date of            Expiration
Name of Individual        Granted (2)       In Fiscal Year         Price               Grant                  Date
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                <C>                <C>                 <C>                  <C>
Eric Seidel                  50,000             12.3%              $0.69               $0.69                9/18/06
                             75,000              8.3%              $0.55               $0.55                3/27/07
                             57,870 (1)         23.8%              $0.01               $0.35                7/29/12

Scott Moore                  25,000              6.2%              $0.69               $0.69                9/18/06
                             50,000              5.6%              $0.55               $0.55                3/27/07
                             31,250(1)          12.9%              $0.01               $0.35                7/29/12

Randy Wright                 25,000              6.2%              $0.69               $0.69                9/18/06
                             50,000              5.6%              $0.55               $0.55                3/27/07
                             27,778(1)          11.4%              $0.01               $0.35                7/29/12

Gaver Powers                 25,000              6.2%              $0.69               $0.69                9/18/06
                             50,000              5.6%              $0.55               $0.55                3/27/07
                             24,306(1)          10.0%              $0.01               $0.35                7/29/12

Reed Mattingly               25,000              6.2%              $0.69               $0.69                9/18/06
                             50,000              5.6%              $0.55               $0.55                3/27/07
                             25,463(1)          11.4%              $0.01               $0.35                7/29/12

Dave Mattingly               15,000              3.7%              $0.69               $0.69                9/18/06
                             35,000              3.9%              $0.55               $0.55                3/27/07
                             16,204(1)           6.7%              $0.01               $0.35                7/29/12

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  These options were granted with a term of 10 years and vests immediately.
(2)  Except as described in the description of Mr. Seidel's employment
     contract below, each option granted has a term of 5 years, vests
     1/3 each year of 3 years.

                                       30
<PAGE>

Aggregate Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values

The following table provides information with respect to the named officer
concerning exercised and unexercised options in fiscal year ended July 31, 2002.
<TABLE>

------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
                                                                  Number of Securities         Value of Unexercised
                                                                 Underlying Unexercised            In-The-Money
                              Shares                                  Options/SARs                 Options/SARs
Name of                    Acquired on          Value            at Fiscal Year End (#)       at Fiscal Year End($)
Individual                 Exercise (#)     Realized (1)       Exercisable/Unexercisable     Exercisable/Unexercisable
------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>               <C>                <C>                            <C>
Eric Seidel                  100,000           $37,000            1,065,370 / 162,500            $ 293,255
Scott Moore                       -0-               -0-             138,584 / 189,666             $ 28,437
Randy Wright                  50,000           $23,500              116,112 / 121,666               $9,722
Gaver Powers                      -0-               -0-             132,640 / 191,666              $26,007
Reed Mattingly                40,000           $18,800              107,129 / 108,334              $ 8,912
Dave Mattingly                25,000           $11,750                42,870 / 83,334              $ 5,671

------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)   Value Realized represents the market value of the underlying
      securities on the exercise date minus the exercise price of
      such options.

(2)   Value Realized represents the market value of the underlying
      securities on 7/31/02 minus the exercise price of such
      options.

Employment Contracts and Other Arrangements

On May 21, 2001, our Board of Directors approved an Amended and Restated
Employment Agreement with Mr. Seidel. This agreement has a two (2) year term.
His annual base salary was increased to $200,000, effective May 21, 2001 through
December 31, 2001. From January 1, 2002 through May 20, 2003, his minimum annual
base salary will be $250,000. His base salary may be increased, but not
decreased. Mr. Seidel was paid a special one-time bonus equal to 15% of his base
salary on January 15, 2002.Mr. Seidel took a voluntary pay cut reducing his
annual salary to $212,500 effective May 2002. He retains his right to bonus
compensation as determined by the Compensation Committee, which at no time may
be less than 5% of our pre-tax profits. Mr. Seidel may elect to receive part or
his entire bonus, if any, in shares of our Common Stock valued at 90% of the
then current market value. He continues his entitlement to reimbursement of
ordinary, necessary and reasonable business expenses incurred in connection with
his services. He continues his right to participate in any retirement, medical,
dental, welfare and stock options plans, life and disability insurance coverages
and other benefits afforded our employees. He is entitled to a $750 per month
automobile allowance and additional benefits with the fair market value of
$24,000 per year. He is entitled to reimbursement for educational costs that are
relevant to our business or his management duties.

Upon execution of this Agreement, we agreed to loan Mr. Seidel $50,000, without
interest, repayable in 24 months after the date of the loan. Mr. Seidel has
repaid this loan in full. Mr. Seidel's Employment Agreement also granted him the
right to receive a $250,000 loan if we closed a public offering. If made, this
loan was to be forgiven under certain circumstances, including a change of
control or a termination for any reason other than for cause pursuant to his
Agreement. In light of the Sarbanes-Oxley Act of 2002, Mr. Seidel has requested
that this provision be deleted from his Employment Agreement.

Mr. Seidel agrees that during the terms of this Agreement and for a period of 18
months after termination of the Agreement, he will not compete with us. However,
if he is terminated for any reason other than for "Cause" (including voluntary
termination on his behalf) or after a Change of Control, then his non-compete
covenant is released. A Change of Control is defined to mean any merger or sale
of the Company, a change in the composition of the Board of Directors, such that
current members of the Board are no longer a majority in number of the Board of
Directors, an event of default is declared under our agreements and
understandings with the Series A Preferred Stockholders, or any holder of the
Series A Preferred Stock elects to convert such Series A Preferred Stock into
shares of our Common Stock, which results in the holders of the Series A
Preferred Stock or their affiliates owning greater than 15% of our outstanding
shares of Common Stock. All stock options granted to Mr. Seidel's vests over the
remaining term in his contract.

                                       31
<PAGE>

In connection with the acquisition of Premier Express Services, Inc. ("PEC"), we
entered into an employment agreement with Randal K. Wright. Mr. Wright is
currently our Chief Development Officer, and was a founder and president of PEC.
This agreement was effective July 1, 2000, and has a term of three (3) years.
Under this agreement, Mr. Wright is entitled to an annual base salary of
$110,000 through June 30, 2001, $120,000 through June, 2002, and $125,000
through June 30, 2003. Mr. Wright took a pay cut reducing his annual salary to
$102,000 effective May 2002. Mr. Wright is entitled to bonuses as determined by
our Compensation Committee, which may be paid in cash or shares of our Common
Stock on such terms as approved by our board of directors. Mr. Wright is
entitled to reimbursement for ordinary, necessary and reasonable business
expenses in connection with his services. He may participate in any retirement,
medical, dental, welfare and stock option plans, life and disability insurance
coverages and other benefits afforded our employees. He is entitled to a $700
per month automobile allowance. Mr. Wright was issued options to acquire 65,000
shares of our Common Stock at an exercise price of $2.00 per shares, which was
the fair market value of such shares as of the date of his agreement. The
options granted to Mr. Wright are fully vested and exercisable immediately.
These options have an exercise period of five (5) years from the date of his
agreement. During the term of his agreement and for a period of two (2) years
after termination of his agreement, Mr. Wright is subject to a non-competition
and restrictive covenant with us.

In connection with the acquisition of Premier Express Services, Inc. ("PEC"), we
entered into an employment agreement with Reed Mattingly. Mr. Mattingly is
currently our Chief Operating Officer. This agreement was effective July 1,
2000, and has a term of three (3) years. Under this agreement, Mr. Mattingly is
entitled to an annual base salary of $110,000 through June 30, 2003. Mr.
Mattingly took a pay cut reducing his annual salary to $93,500 effective May
2002. Mr. Mattingly is entitled to bonuses as determined by our Compensation
Committee, which may be paid in cash or shares of our Common Stock on such terms
as approved by our board of directors. Mr. Mattingly is entitled to
reimbursement for ordinary, necessary and reasonable business expenses in
connection with his services. He may participate in any retirement, medical,
dental, welfare and stock option plans, life and disability insurance coverages
and other benefits afforded our employees. He is entitled to a $700 per month
automobile allowance. Mr. Mattingly was issued options to acquire 65,000 shares
of our Common Stock at an exercise price of $2.00 per shares, which was the fair
market value of such shares as of the date of his agreement. The options granted
to Mr. Mattingly are fully vested and exercisable immediately. These options
have an exercise period of five (5) years from the date of his agreement. During
the term of his agreement and for a period of two (2) years after termination of
his agreement, Mr. Mattingly is subject to a non-competition and restrictive
covenant with us.

On August 14, 2000, we entered into an employment agreement with M. Scott Moore,
our Chief Financial Officer. This agreement has a term of three (3) years, and
commences on September 11, 2000. Under this agreement, Mr. Moore is entitled to
an annual base salary of $125,000 through September 10, 2001, $135,000 through
September 10, 2002, and $145,000 through September 10, 2003. Mr. Moore took a
pay cut reducing his annual salary to $114,750 effective May 2002. Mr. Moore is
entitled to bonus compensation as determined by the Company's board of directors
or Compensation Committee. Such bonuses may be paid in cash or issued in shares
of our Common Stock on such terms as approved by our board of directors. Mr.
Moore is entitled to reimbursement for ordinary, necessary and reasonable
business expenses in connection with his services. He may participate in any
retirement, medical, dental, welfare and stock options plans, life and
disability insurance coverages and other benefits afforded our employees. He is
entitled to an automobile allowance of $400 per month during the term of his
agreement. Mr. Moore was issued options to purchase 102,000 shares of our Common
Stock at an exercise price of $2.6875 per share, which was the fair market value
of the closing price of our shares as of the effective date of his agreement.
These options vest in 1/3 installments over each year of employment. These
options have a cashless exercise provision and a maximum exercise period of 5
years. We have agreed to pay directly all co-payments for his spouse and family,
until such time as his spouse and family qualify under our benefit plans. If Mr.
Moore is terminated with cause or we elect not to renew this agreement, then he
is entitled to three (3) months severance pay at his then current base salary.
Mr. Moore has agreed not to compete with us during the term of this agreement
and for a period of two (2) years after termination of this agreement.

All the Executive management team, including Mr. Seidel, Mr. Wright, Mr.
Mattingly, Mr. Moore, and Mr. Powers, has taken a 15% pay cut effective May 2002
in exchange for stock options. Additionally, six other senior managers took at
10%-15% salary reduction in exchange for stock options.

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<PAGE>

Board Compensation Committee Report on Executive Compensation

The Compensation Committee of the Board of Directors administers our Chief
Executive Officer's compensation package. The committee reviews, recommends and
approves changes to our compensation policies and programs, makes
recommendations to the Board of Directors as to the amount and form of executive
officer compensation, and administers our stock option plans.

General Compensation Philosophy. Our compensation programs are designed to
directly align compensation with our performance and increases in stockholder
value as measured by our stock price and to enable us to attract, retain and
reward executives and employees needed to accomplish our goals. The committee
believes that executive pay should be linked to our overall performance.
Therefore, we provide an executive compensation program, which includes base
pay, long-term incentive opportunities through the use of stock options and, in
some cases, cash bonuses.

The Compensation Committee is currently evaluating and studying the level of
equity participation by our employees and executives. The Compensation Committee
feels strongly that our employees and executives must have a greater equity
stake in order to more closely align the interest of our employees and
executives with our stockholders. Therefore, it is the intent of the
Compensation Committee to recommend that our executives and employees be issued
significantly more shares of our stock and options in the near future. It is
anticipated that any such issuance of our additional equity to employees and
executives will be performance based, and tied to the market value of our Common
Stock.

Base Salary. Base salary is designed primarily to be competitive with base
salary levels in effect at high technology companies that area of comparable
size and with which we compete for executive personnel. Base salary is set
annually based on job-related experience, individual performance and pay levels
of similar positions at comparable companies. Salaries for executive officers
for 2002 were generally determined on an individual basis by evaluating each
executive's scope of responsibility, performance, prior experience and salary
history, as well as salaries for similar positions at comparable companies.

Cash Performance Awards. Cash performance awards, such as bonuses, will be tied
to the achievement of performance goals, financial or otherwise, established by
the committee. We had no formal management incentive plan in 2002.

Stock Options. In order to link the interests of our stockholders and senior
management, we issue stock options. We believe that the practice of granting
stock options is critical to retaining and recruiting the key talent necessary
at all employee levels to ensure our success. Stock options generally have value
for executive officers only if the price of our Common Stock increases above the
fair market value of a share of Common Stock on the grant date and the officer
remains in our employ for the period required for the options granted to such
person to vest.

The number of shares subject to stock options granted is within the discretion
of the Compensation Committee. In determining the size of stock option grants,
the Compensation Committee considers the officer's responsibilities, the
expected future contribution of the officer to the Company's performance and the
number of shares, which continue to be subject to vesting under outstanding
options. For 2002, options were granted to the executive officers based on their
positions and a subjective assessment of individual performances. Stock options
typically have been granted to executive officers when the executive first joins
the Company. At the discretion of the Committee, executive officers may also be
granted stock options to provide greater incentives to continue their employment
with the Company and to strive to increase the value of the Company's Common
Stock.

Compensation for the Chief Executive Officer. Mr. Seidel's base salary for the
year 2002 was determined by the employment agreement we assumed with Mr. Seidel.
The Compensation Committee believes that the employment agreement terms are in a
manner consistent with the factors described above for all executive officers.
As part of Mr. Seidel's employment agreement, Mr. Seidel's base salary was
increased to an annual rate of $250,000 effective January 1, 2002. Mr. Seidel
took a voluntary 15% reduction in pay to $212,500 effective May 2002 until the
company becomes profitable.

Internal Revenue Code Section 162(m) Limitation. Section 162(m) of the Internal
Revenue Code imposes a limit, with certain exceptions, on the amount that a
publicly held corporation may deduct in any year for the compensation paid or
accrued with respect to its five most highly compensated executive officers. In
general, it is the Committee's policy to qualify, to the maximum extent
possible, executives' compensation for deductibility under applicable tax laws.

Stock Options

We established the 1998 Stock Option Plan (the "1998 Plan"). The 1998 Plan is
intended to provide the employees and directors of the Company with an added


                                       33
<PAGE>

incentive to continue their services to the Company and to induce them to exert
their maximum efforts toward the Company's success. The 1998 Plan provides for
the grant of options to directors and employees (including officers) of the
Company to purchase up to an aggregate of twenty percent (20%) of the number of
shares of Common Stock in the capital of the Company issued and outstanding from
time to time less any shares of Common Stock reserved, set aside and made
available pursuant to the terms of the Company's employee share purchase plan
(the "Share Purchase Plan") and pursuant to any options for services rendered to
the Company. The number of shares of Common Stock subject to options granted to
any one person under the Plan, the Share Purchase Plan and options for services
rendered to the Company may not at any time exceed five percent (5%) of the
outstanding shares of Common Stock. The 1998 Plan is currently administered by
the Board of Directors. The Board determines, among other things, the persons to
be granted options under the 1998 Plan, the number of shares subject to each
option and the option price.

The 1998 Plan allows the Company to grant Non-Qualified Stock Options ("NQSOs")
not intended to qualify under Section 422(b) of the Internal Revenue Code of
1986, as amended (the "Code"). The exercise price of NQSO's may not be less than
the fair market value of the Common Stock on the date of grant. Options may not
have a term exceeding ten years. Options are not transferable, except upon the
death of the optionee.

During the fiscal year ended July 31, 2002 the President/CEO distributed
1,623,170 options to employees in accordance with the 1998 Plan. In addition,
175,000 options were granted to board members.

All of these options are subject to vesting and are exercised at the current
market price of our stock as of the date of issuance. We have the right to
increase the total amount of options, which may be issued so long as total
outstanding options do not exceed 15% of the number of our fully-diluted
outstanding shares of Common Stock. Furthermore, in lieu of paying cash bonuses,
the employees may be issued shares of our Common Stock at the then fair market
value in an amount not to exceed 50% of that employee's base salary. All of the
options we have issued are subject to immediate vesting and are exercisable in
the event of a change of control, which is defined as a sale of substantially
all of our assets or a merger in which we are not the surviving entity.

As of September 30, 2002, we have issued, or reserved for issuance, 7,778,284
shares of our Common Stock relating to outstanding options and warrants which
are categorized as follows:

 Options issued to Directors                               1,388,000 (1)

 Options issued to Chief Executive Officer                 1,227,870 (2)

 Options issued in connection with acquisition of PEC        130,000 (3)

 Options issued to Employees                               2,527,600 (4)

 Options issued to Consultants                                86,429 (5)

 Options Outstanding prior to eAutoclaims.com merger           4,000

 Warrants relating to debentures                           1,150,000 (6)

 Warrants relating to private placement                      220,000 (7)

 Purchaser's Warrants                                        780,000 (8)

 Agent's Warrants                                            264,385 (9)
                                                          ----------

                            Total                         7,778,284
                                                         ==========

(1)  2,000 of each director's options are exercisable after one year at $2.00
     per share. 20,000 of each director's options are exercisable after one year
     at $5.06 per share. 10,000 of each director's option are exercisable after
     one year at $.90 per share. We granted Mr. Jessop, a former director,
     immediately exercisable options to acquire 50,000 shares of Common Stock at
     $1.312. The exercise price of all above described options was equal to the
     fair market value at the dates these director's options were authorized. On
     April 9, 2001, we awarded Mr. Dickson, our chairman, immediately
     exercisable non-qualified options to acquire up to 900,000 common shares at


                                       34
<PAGE>

     an exercise price of $.01. As of April 9, 2001, the closing bid price of a
     share of our Common Stock on the OTCBB was $1.53. See "Directors and
     Executive Officers - Director Compensation". On April 9, 2001, 25,000
     options were given to each of four outside board members for a total of
     100,000 options. These options were at a fair market value exercise price
     of $1.53 per share, vested after one year with a term of 5 years. On April
     30, 2001, we issued options to acquire a total of 50,000 shares of our
     Common Stock to our four (4) outside directors (12,500 each). The options
     have an exercise price of $1.91 per share, which was the market price of
     our Common Stock as of that date. On July 31, 2001, we issued options to
     acquire a total of 50,000 shares of our Common Stock to our four (4)
     outside directors (12,500 each). The options have an exercise price of
     $1.75 per share, which was the market price of our Common Stock as of that
     date. These options are exercisable after one year and have a five (5) year
     term. For the fiscal year ended July 31, 2002, four directors received
     12,500 options on both October 31, 2001 and January 31, 2002 with exercise
     prices $0.47 and $0.73 each, and three outside directors received 12,500
     options on both April, 30 2002 and July 31, 2002 at an exercise prices of
     $0.51, $0.36, respectively, for a total of 175,000 options. Mr. Jessop
     resigned from the board causing 75,000 options to be cancelled.

(2)  65,000 of these options are exercisable at any time through April 2005 at
     $2.00 per share. The remaining 200,000 options vest over the remaining life
     of his contract, which ends on 5/21/03, at exercise prices of between $0.69
     and $2.00. On April 9, 2001, we awarded Mr. Seidel, immediately exercisable
     non-qualified options to acquire up to 880,000 common shares at an exercise
     price of $.01. As of April 9, 2001, the closing bid price of a share of our
     Common Stock on the OTCBB was $1.53. During the year ended July 31, 2002,
     100,000 of the options issued on April 9, 2001 were exercised. During the
     fiscal year ended July 31, 2002 Mr. Seidel was awarded 50,000, 75,000 and
     57,870 options with exercise prices of $0.69, $0.55 and $0.01 per share,
     respectively. See "Directors and Executive Officers - Employment Contracts
     and Other Matters".

(3)  65,000 options immediately exercisable at $2.00 per share were issued to
     each of Randall K. Wright and Reed Mattingly. See "Executive Compensation -
     Employment Contracts and Other Matters".

(4)  Represents options issued to our employees at exercise prices ranging from
     $0.01 to $3.37. 995,739 shares of these options are currently exercisable.
     The remaining options vest over a three year term. On April 9, 2001,
     420,000 options were granted to various employees with an exercise price of
     $.01 per share, vested immediately with a term of 10 years. On July 29,
     2002, the employees were issued 184,800 options with an exercise price of
     $0.01 per share.

(5)  65,000 of these options are held by our Chairman, Mr. Dickson, and are
     immediately exercisable at $2.00 per share. See "Certain Relationships and
     Related Transactions". The other 21,429 options were given to a public
     relations consultant with an exercise price of $0.49 per share.

(6)  Represents warrants issued to the agents of the debenture investors,
     exercisable at $0.63 per share, with a term of 10 years.

(7)  Represents warrants issued to purchasers of commons stock on June 17, 2002
     with an exercise price of $0.75 per share, with a term of 5 years.

(8)  Represents warrants issued to the purchasers of our Series A Preferred
     Stock. Of these warrants, 300,000 are exercisable at $3.00; 90,000 are
     exercisable at $1.4625; 90,000 exercisable at $3.33; and 300,000 are
     exercisable at $2.60. See "Market for Common Equity and Related Stockholder
     Matters - Preferred Stock and Related Warrants".

(9)  Represents warrants issued to Thomson Kernaghan and Greenfield Investments,
     as Agents, exercisable at $4.50. See "Market for Common Equity and Related
     Stockholder Matters - Preferred Stock and Related Warrants".

                                       35
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table contains information with respect to the beneficial
ownership of our Common Stock as of September 30, 2002, by:

o    each person who we know beneficially owns more than 5% of our Common Stock;
o    each of our directors and each individual who serve as our named executive
o    officers individually; and all of our directors and executive officers as
      a group.

 Name and Address of             Amount and Nature of
 Beneficial Owner (1)            Beneficial Ownership      Percentage(2)(19)
 --------------------            --------------------      -----------------
 Eric Seidel (3)                       1,577,771                 7.88%
 Randal K. Wright (4)                    483,645                 2.53%
 Scott Moore (5)                         182,417                 0.95%
 Gaver Powers (6)                        200,345                 1.05%
 Reed Mattingly (7)                      261,129                 1.37%
 Dave Mattingly (8)                       81,037                 0.43%
 Jeffrey D. Dickson (9)                1,169,350                 5.86%
 David Jolley (10)                        99,709                 0.52%
 Nicholas D. Trbovich, Jr. (11)          106,789                 0.56%
 Christopher Korge (12)                1,597,799                 7.97%
 High Tor Limited (13)                 1,000,000                 5.27%
 John E. McConaughy (14)               1,358,235                 7.16%
 Canadian Advantage Limited            2,991,504                15.77%
 Partnership (15)                      1,137,330                 6.00%
 Advantage (Bermuda) Fund,
     Ltd. (16)                         1,315,680                 6.94%
 Entrade, Inc. (17)

 Directors and officers                5,759,931                25.10%
 as a group (10 persons) (18)

(1)  Unless otherwise noted, the Company believes that all persons named in the
     table have sole voting and investment power with respect to all shares of
     Common Stock beneficially owned by them. Unless otherwise noted, each such
     person is deemed to be the beneficial owner of shares of Common Stock held
     by such person on September 30, 2002, and any shares of Common Stock which
     such person has the right to acquire pursuant to securities exercisable or
     exchangeable for, or convertible into, Common Stock, within 60 days from
     such date. The address of each beneficial owner is in care of the Company,
     110 East Douglas Rd, Oldsmar, Florida 34677.

(2)  Based on 18,994,483 shares of Common Stock outstanding at the close of
     business on September 30, 2002. This amount excludes shares of our Common
     Stock underlying the conversion rights of our Series A Preferred Stock and
     excludes 7,778,284 shares reserved for outstanding options and warrants.
     1,000,000 warrants issued to Mr. Korge were included (see note12 below).

(3)  400,000 shares of our Common Stock were issued to Mr. Seidel as founder
     shares. He acquired 12,341 in open market purchases and exercised 100,000
     of options granted to him by the company. This amount also includes vested
     options to acquire 837,870 Common Shares at an exercise price of $.01 and
     options to acquire 227,500 Common Shares at exercise prices between $0.55
     and $2.00. This amount excludes options, which are not vested over the next
     60 days, to acquire 162,500 Common Shares at an exercise price of between
     $0.55 to $2.00 , which vest through May 21, 2003. See "Executive
     Compensation - Employment Contracts and Other Matters".

(4)  256,000 shares of our Common Stock were issued to Mr. Wright in connection
     with the Premier Express Services, Inc. merger. 50,000 shares of our Common
     Stock were issued in satisfaction of a $24,000 promissory note due to Mr.
     Wright in connection with the Premier Express Services, Inc. merger. Mr.
     Wright exercised options to acquire 50,000 shares of our Common Stock at an
     exercise price of $.01 in September 2001. Mr. Wright has acquired
     approximately 3,200 shares (net) in open market purchases. He is also the
     holder of vested options to acquire up to 27,778 shares of our common stock
     at an exercise price of $0.01, and 96,667 shares of our Common Stock at an
     exercise price between $0.69 and $2.00. This amount excludes options to
     acquire 113,333 shares of our Common Stock, which are not vested or
     exercisable over the next 60 days at the exercise prices of $0.55 to $2.00,
     which vest through March 27, 2005. See "Executive Compensation".

(5)  This amount represents (i) 1,500 common shares acquired in open market
     purchase, (ii) options to acquire 81,250 common shares at an exercise price
     of $.01, and (iii) vested options to acquire up to 99,667 common shares at
     an exercise price between $0.55 and $2.00. This amount excludes unvested
     options for 147,333 common shares at exercise prices between $0.69 and
     $2.69, which vest through March 27, 2005. See "Executive Compensation -
     Employment Contracts and Other Matters".

(6)  This amount represents (i) 4,372 common shares, (ii) vested options to
     acquire up to 74,306 common shares at an exercise of $.01, and (iii) vested
     options to acquire up to 121,667 common shares at exercise prices between
     $0.69 and $2.38. This amount excludes unvested options for up to 128,333
     common shares at exercise prices of $0.55 to $2.38, which vest through
     March 27, 2005.

(7)  Mr. Reed Mattingly's ownership consists of (i) 64,000 of our common shares
     issued to him in connection with the Premier Express Claims, Inc. merger,
     (ii) the issuance of 41,667 shares in satisfaction of a $20,000 promissory
     note plus interest related to the Premier Express Claims, Inc. merger,
     (iii) the exercise of options to acquire 40,000 shares at an exercise price
     of $.01, (iv) vested options to acquire up to 25,463 shares of our common
     stock at an exercise price of $0.01, and (v) options to acquire up to
     89,999 shares at exercise prices between $0.69 to $2.00. This amount
     excludes unvested options to acquire up to 100,001 common shares at
     exercise prices of $0.69 to $2.00, which vest through March 27, 2005. See
     "Executive Compensation".

                                       36
<PAGE>

(8)  Mr. Dave Mattingly's ownership consists of (i) 25,000 of our common shares
     issued to him when he exercised his option to purchase 25,000 shares at
     $.01 per share, (ii) 1,500 shares that he purchased on the open market,
     (iii) vested options to acquire up to 16,204 shares of our common stock at
     an exercise price of $0.01, and (v) options to acquire up to 38,333 shares
     at exercise prices between $0.69 and $2.00. This amount excludes unvested
     options to acquire up to 71,667 common shares at exercise prices of $0.55
     to $2.00, which vest through March 27, 2005. See "Executive Compensation".

(9)  160,000 shares of our Common Stock were issued to Mr. Dickson as founder
     shares. Also includes options to acquire up to 997,000 shares of our Common
     Stock and 12,350 shares acquired in the open market. See Directors and
     Executive Officers - Director Compensation".

(10) Mr. Jolley's ownership consists of (i) 12,709 shares issued to him for his
     service on the board, (ii) 5,000 shares that he purchased on the open
     market, (iii) options to acquire up to 82,000 shares at exercise prices
     between $0.90 and $5.06. This amount excludes unvested options to acquire
     up to 50,000 common shares at exercise prices of $0.36 to $0.73, which vest
     through July 31, 2003. See Directors and Executive Officers - Director
     Compensation".

(11) Mr. Trbovich, Jr.'s ownership consists of (i) 12,709 shares issued to him
     for his service on the board, (ii) 2,080 shares that he purchased on the
     open market, (iii) 10,000 shares owned by Mr. Trbovich's wife, of which he
     disclaims beneficial ownership, and (iv) options to acquire up to 82,000
     shares at exercise prices between $0.90 and $5.06. This amount excludes
     unvested options to acquire up to 50,000 common shares at exercise prices
     of $0.36 to $0.73, which vest through July 31, 2003. See Directors and
     Executive Officers - Director Compensation".

(12) Mr. Korge's ownership consists of (i) 488,090 common shares relating to the
     conversion of $300,000 of our convertible debentures, which matured on
     September 30, 2001 at a conversion price of $0.63, (ii) 12,709 shares
     issued to him for his service on the board, (iii) 15,000 shares that he
     purchased on the open market, (iv) warrants to acquire up to 1,000,000
     shares of our Common Stock at a conversion price of $0.63 in connection
     with the issuance of our convertible debentures, and (v) options to acquire
     82,000 shares at exercise prices between $0.90 and $5.06 for services as a
     director. This amount excludes unvested options to acquire up to 50,000
     common shares at exercise prices of $0.36 to $0.73, which vest through July
     31, 2003. See Directors and Executive Officers - Director Compensation".

(13) Represents shares acquired through open market purchases as reported on
     Schedule 13G filed on or about May 31, 2001. Mr. Paul R. Sandford is the
     managing director of High Tor Limited, and has investment making and voting
     control over these securities.

(14) Represents shares acquired privately in October, 2001 as reported on a
     Schedule 13G filed on or about October 21, 2001.

(15) Represents shares received upon the conversion of preferred shares in March
     2002 as reported on a Schedule 13D on or about March 26, 2002.

(16) Represents shares received upon the conversion of preferred shares in March
     2002 as reported on a Schedule 13D on or about March 26, 2002.

(17) Represents shares acquired privately in December 2001 as reported on a
     Schedule 13G filed on or about December 13, 2001.

(18) Includes outstanding options to acquire up to 2,488,000 shares of our
     Common Stock issued to our officers and directors, which are currently
     exercisable.

(19) Excludes warrants to acquire 641,220 shares of our common stock and
     excludes shares of our common stock relating to the conversion of our
     Series A Preferred Stock owned by Governor's Road, LLC. David Sims as the
     director of Navigator Management, which is the general partner of this
     fund, is the natural person who controls and has investment making decision
     authority over our securities owned by Governors Road, LLC. Mr. Sims
     disclaims beneficial ownership of all of these shares. Each of these
     entities has entered into an agreement which provides that such entity will
     not acquire any additional shares of our Common Stock in the open market
     or, convert our Series A Preferred Stock into the Common Stock or exercise
     warrants if the effect of such a purchase, exercise or conversion would be
     to increase such entity's equity ownership position above 4.9%.
     Accordingly, because it is not anticipated that any of these entities will
     acquire beneficial ownership within the next 60 days of shares of our
     Common Stock underlying warrants or conversion privileges of our Series A
     Preferred Stock such amounts are excluded from the above tables.

         *     Less than .1%.
ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

As a result of the eAutoclaims (Del.) merger, we assumed obligations under a
Consulting Agreement with Jeffrey D. Dickson. This agreement was effective
December 1, 1999 and is renewable on an annual basis. Mr. Dickson agreed to
provide Mr. Seidel, our Chief Executive Officer, day-to-day advisory services
concerning management, capitalization, corporate structure, organizational,
industrial and regulatory issues. In addition, Mr. Dickson agreed to serve as
our Chairman of the Board of Directors, as well as Chairman of our Audit and
Compensation Committees.

                                       37
<PAGE>

In consideration for these consulting services Mr. Dickson is entitled to an
annual consulting fee of $84,500, payable every two (2) weeks. Mr. Dickson took
a voluntary fee reduction of 15% to $71,825 effective May 2002. In addition, Mr.
Dickson is entitled to a non-interest bearing $126,500 line of credit. As of
July 31, 2002, $107,794 is outstanding under this arrangement. Commencing in
September 2002, Mr. Dickson has agreed to take a more active role in the affairs
of the Company. Mr. Dickson is spending a substantial amount of his time dealing
with administrative matters, investor relations and public relations. This frees
up Mr. Seidel's time to focus on sales and marketing. In consideration of such
additional services, Mr. Dickson's annual consulting fee has been increased to
$100,000. The Company and Mr. Dickson have agreed that $3,000 per month of his
consulting fee will be withheld by the Company and used to reduce the
outstanding balance under the line of credit. No further borrowings will be made
under this line of credit.

In January 2002, we issued 551,629 shares to Governors Road in connection with
the conversion of 42 shares of preferred stock and its accrued interest. In
March 2002, we issued 4,097,951 common shares to Canadian Advantage Limited
Partnership (2,991,504 shares) and Advantage (Bermuda) Fund, Ltd. (1,106,447
shares) in connection with the conversion of 210 shares of Series A Preferred
Stock.

In September 2002, we issued 327,250 common shares to Governors Road in
connection with the conversion of 11 shares of preferred stock and its accrued
interest. Accordingly, Governors Road, LLC is the sole owner of the 257 shares
of our currently outstanding Series A Preferred Stock.

In July 2002, a receiving order was issued against Thompson Kernaghan by the
Ontario Superior Court of Justice and Ernst & Young, Inc. was named trustee to
the Estate of Thompson Kernaghan. Mark Valentine was dismissed as an officer of
Thompson Kernaghan. Mr. Valentine was also the managing partner of the
partnerships, which were distributed our common shares in connection with the
conversion of our Series A Preferred Stock in March 2002, described above. It is
our understanding that these partnerships have removed Mr. Valentine as the
managing partner and replacing him with a new managing partner with investment
decision-making authority over the Company's shares held by these partnerships.
We do not currently know the identity of the person or entity which has
decision-making authority over these shares.

Thomson Kernaghan, either directly or through entities it controls, is also the
holder of warrants to acquire 310,000 shares of our Common Stock at exercise
prices of $1.46 to $3.33, which were issued to the purchasers of our Preferred
Stock. Thomson Kernaghan has been paid fees of $210,000 and is the holder of
188,165 Placement Agent Warrants at an exercise price of $4.50. All of these
warrants have five (5) year term from the date of issuance. See "Market of the
Registrants Securities and Related Stockholder Matters - Preferred Stock".

On June 6, 2001, we received the proceeds from the purchase of 100 shares of our
Series A Preferred Stock by Governors Road, LLC. Greenfield Investments, an
affiliate of Governors Road, LLC was paid a $50,000 investment banking fee and
issued the agent warrants. See "Description of Securities" - "Preferred Stock
and Related Warrants".

We have entered into employment agreements with Eric Seidel, our Chief Executive
Officer, Randal K. Wright, our Chief Development Officer, Scott Moore, our Chief
Financial Officer, Gaver Powers, our Chief Information Officer, and Reed
Mattingly, our Chief Operating Officer. For description of these employment
agreements and related rights to our stock options, see "Executive Compensation
- Employment Contracts and Other Related Matters".

In fiscal year ended 2002 and 2001, we issued 234,277 and 150,000 shares,
respectively, of our Common Stock to Michael T. Cronin, Esq., who is a partner
in the law firm which serves as our corporate and securities counsel, in
consideration for $105,040 and $157,720 of his services charged at normal hourly
rates. All other charges incurred by us for other employees of his firm are paid
in cash. As of July 31, 2002, all these common shares have been earned.

In November 2000, we agreed to issue 35,000 shares to Couture & Company, which
serves as a financial consultant, in exchange for $80,150 of
services charged at hourly rates. At July 31, 2001, all 35,000 shares have been
earned.

In July 2001, we executed debenture agreements totaling $650,000. These
debentures bear interest at Libor plus 3% and matured on September 30, 2001.
Once these debentures mature they are converted to Common Stock at the lesser or
(i) $1.00 or (ii) 75% of the average of the closing bid price of our Common
Stock in 30 trading days immediately preceding the conversion date, but in no
event shall the floating conversion price be less than $0.75. A purchaser of
$100,000 of these convertible debentures is the brother-in-law of Mr. Seidel.
Investors who purchase $300,000 or more of the debentures have a conversion
price equal to the lesser of (i) $.63 or (ii) 75% of the average of the closing
bid price of our Common Stock in the 30 trading days immediately preceding the
conversion date, but in no event shall the floating conversion price be less
than $0.63. Holders of these convertible debentures are granted piggyback
registration rights.

                                       38
<PAGE>

Christopher Korge, one of our directors, purchased $300,000 of these debentures.
Upon the September 30, 2001 maturity date, we converted the $300,000 face amount
of debentures acquired by Mr. Korge into 476,190 shares of our Common Stock (a
$0.63 conversion price). In consideration for Mr. Korge's purchasing and
facilitating the placement of these debentures, we have agreed to issue Mr.
Korge, or his assigns, warrants to acquire 1,000,000 shares of our Common Stock
and Mr. Seidel's brother-in-law warrants to acquire 150,000 shares of our Common
Stock, both at an exercise price of $0.63 per share.

ITEM 13. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
         ON FORM 8-K


(a)      Exhibits

The following exhibits are amended/restated in their entirety to reflect our
merger with eAutoclaims.com.

Exhibit No.       Description

1.1     [Reserved]
1.2     [Reserved]
3.1     Articles of Incorporation of Samuel Hamann Graphix, Inc. (Nevada) as
        amended (1)
3.2     Articles of Merger between Samuel Hamann Graphix, Inc. (Nevada) and
        Samuel Hamann Graphix, Inc. (California) (1)
3.3     By-laws of Transformation Processing Inc. (Nevada).(1)
3.4     Articles of Merger between of TPI (Ontario) and TPI (Nevada) (1)
3.5     Agreement and Plan of Merger by and between Transformation Processing,
        Inc. and eAutoclaims.com, Inc., dated April 26, 2000 (3)
3.6     Articles of Merger of eAutoclaims.com, Inc., a Delaware corporation with
        and into Transformation Processing, Inc., a Nevada corporation (5)
3.7     Agreement and Plan of Merger by and among eAutoclaims.com, Inc., a
        Nevada corporation, eAutoclaims.com Acquisition, a South Carolina
        corporation, Premier Express Claims, Inc., a South Carolina corporation,
        and its stockholders, dated June 8, 2000 (2)
3.8     First Amendment to Agreement and Plan of Merger with Premier Claims,
        Inc., dated June 27, 2000 (2)
3.9     Articles of Merger or Share Exchange between Premier Express, Inc., as
        the surviving corporation and eAutoclaims.com Acquisition Corporation,
        filed July 20, 2000 with the Secretary of State of South Carolina (5)
3.10    Promissory Note dated June 27, 2000 between eAutoclaims.com, Inc. and
        Randal K. Wright and S. Reed Mattingly (2)
3.11    Promissory Note dated June 16, 2000 between eAutoclaims.com, Inc. and
        Randal K. Wright (2)
3.12    Promissory Note dated June 16, 2000 between eAutoclaims.com, Inc. and S.
        Reed Mattingly. (2)
4.1     Specimen of Common Stock Certificate (1)
4.2     [Reserved]
4.3     [Reserved]
4.4     The Registrants 1998 Stock Option Plan (4)
4.5     [Reserved]
4.6     Form of Stock Option Agreement to Employees(6)
4.7     Form of Directors Stock Option Agreement(6)
4.8     Form of Non-Qualified Stock Option Agreement(6)
5.1     [Reserved]
10.1    Employment Agreement between eAutoclaims.com, Inc. and Eric Seidel dated
        February 1, 2000 (5)
10.2    Employment Agreement between eAutoclaims.com, Inc. and Randal K. Wright
        dated July 1, 2000 (2)
10.3    Employment Agreement between eAutoclaims.com, Inc. and S. Reed Mattingly
        dated July 1, 2000 (2)
10.4    Employment Agreement between eAutoclaims.com, Inc. and M. Scott Moore
        dated August 14, 2000 (5)
10.5    Employment Agreement between eAutoclaims.com, Inc. and Gaver Powers
        dated April 13, 2000 (5)
10.6    Consulting Agreement between eAutoclaims.com, Inc. and Jeffrey D.
        Dickson dated December 1, 1999 (5)
10.7    Consulting Agreement between eAutoclaims.com, Inc. and Liviakis
        Financial Communications, Inc. dated February 1, 2000 (5)
10.8    Amendment No. 1 to Consulting Agreement between eAutoclaims.com, Inc.
        and Liviakis Financial Communications, Inc. dated September 18, 2000 (5)


                                       39
<PAGE>

10.9    Lease Agreement between eAutoclaims.com, Inc. and KWPH, Inc., dated
        October 17, 2000 (5)
10.10   Service Agreement between eAutoclaims.com, Inc. and WE Securities, Inc.
        dated August 8, 2000 (5)
10.11   Business Consulting Agreement between eAutoclaims.com, Inc. and TTG LLC
        dated September 8, 2000 (5)
10.12   Commercial lease dated October 12, 1998 between Premier Express Claims,
        Inc. and Stephenson Park Associates Limited (5)
10.13   [Reserved]
10.14   Certificate of Full Performance of Proposal - Form 46 filed by BDO
        Dunwoody Limited - Trustee dated May 8, 2000 (5)
10.15   Order of the Superior Court of Justice in the Matter of the Proposal of
        Transformation Processing, Inc. dated November 25, 1999 (5)
10.16   Proposal of Transformation Processing, Inc. - Court File No. 32-107046
        filed in the Superior Court of Justice dated October 14, 1999. (5)
10.17   Share Exchange Agreement between Transformation Processing, Inc. and
        certain of its securities holders dated April 30, 2000 (5)
10.18   [Reserved]
10.19   Securities Purchase Agreement effective June 27, 2000 between Thomson
        Kernaghan, as Agent and eAutoclaims.com, Inc. (5)
10.20   Certificate of Rights, Designations, Preferences and Limitations of
        Series A Convertible Preferred Stock (5)
10.21   Security Agreement between Thomson Kernaghan, as Agent and
        eAutoclaims.com, Inc. (5)
10.22   Form of Purchasers Warrant (5)
10.23   Form of Agents Warrant (5)
10.24   Registration Rights Agreement (5)
10.25   eAutoclaims.com, Inc. Agreement with Certain Securities Holders
        effective May 31, 2000 (5)
10.26   eAutoclaims.com, Inc. Agreement with Sovereign Partners, Ltd. effective
        May 31, 2000 (5)
10.27   eAutoclaims.com, Inc. Agreement with Dominium Capital Fund (5)
10.28   Form of Master Modification Agreement with Certain Security Holders
        dated January 12, 2001(6)
10.29   Restated master Modification Agreement dated May 2001
10.30   Modification agreement dated November 2001 superceding the original
        Modification Agreement dated January 12, 2001 and the Restated
        Modification Agreement dated May 2001
10.31   Form of Bricks to Clicks Service and License Agreement (6)
10.32   Form of Collision Repair Facility Agreement and Procedures (6)
10.33   Form of Change of Control and Termination Agreement (6)
10.34   Form of Officers/Directors Indemnification Agreement (6)
10.35   Bricks to Clicks Service and Licensing Agreement with Inspire Claims
        Management, Inc., dated November 1, 2000(6)
10.36   Lease Agreement for 110 East Douglas Road dated September 2001
10.37   Form of Employee Confidentiality Agreement (6)
10.38   Letter Agreement with Liviakis Financial Communications, Inc. (6)
10.39   Letter Agreement with Former Liviakis Financial Communications, Inc.
        Employees (6)*
10.40   Claims Management Services and License Agreement with Royal Indemnity
        Company, dated April 24, 2001(6)

10.41   Amended and Restated Employment Agreement with Eric Seidel effective May
        21, 2001(6)
10.42   Form of Amendment to Certificate of Designation, Rights and Preferences
        of Series A Preferred Stock effective May 21, 2001*
10.43   Agreement between Parts.com, Inc. and the Registrant effective May 1,
        2001(6)
10.44   Form of Convertible Debenture(6)
10.45   Form of Warrants issued in connection with Convertible Debentures (6)
10.46   Form of Subscription Agreement for purchasers of Convertible Debentures
        (6)


                                       40
<PAGE>

10.00   Officers Certifications*

(1)     Incorporated by reference from the Registrant's Form 10-SB filed on
        March 12, 1998 and amended on August 31, 1998 and October 22, 1998
(2)     Incorporated by reference from the Registrant's Form 8-K filed on July
        25, 2000
(3)     Incorporated by reference from the Registrant's Form 10-KSB for fiscal
        year ended July 31, 1999
(4)     Incorporated by reference from the Registrant's Form 10-KSB for fiscal
        year ended July 31, 1998
(5)     Incorporated by reference from the Registrant's Form 10-KSB for fiscal
        year ended July 31, 2000
(6)     Incorporated by reference from the Registrant's Form 10-KSB for fiscal
        year ended July 31, 2001 * Filed herewith

(b)      Reports on Form 8-K

Item 5./Item 9. Regarding termination of merger with DriverShield dated October
2, 2002 Item 5./Item 9. Regarding merger with DriverShield dated September 10,
2002. Item 5./Item 9. Customer replaces carriers, dated April 29, 2002 Item
5./Item 9. Carriers placed in Receivership, dated April 26, 2002 Item 5/Item 9
regarding termination of proposed public offering dated July 23, 2001

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

Dated:   November 13, 2001                     eAUTOCLAIMS.COM, INC.


By:  /s/ Scott Moore                By:  /s/ Eric Seidel
   ---------------------------          ----------------------------------------
  Scott Moore                           Eric Seidel
  Chief Financial Officer and           Chief Executive Officer
  Accounting Officer


                                       41
<PAGE>

                                 CERTIFICATIONS

I certify that:

1.        I reviewed this annual report on Form 10-KSB;

2.        Based on my knowledge, this annual report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary to make the statements made, in light of the circumstances
          under which such statements were made, not misleading with respect to
          the period covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         materials respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the period presented in
         this annual report;

4.        The registrant's other certifying officers and I are responsible for
          establishing and maintaining disclosure controls and procedures (as
          defined in Exchange Ac Rules 13a-14 and 15d-14) for the registrant and
          have:

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

          b)       evaluated the effectiveness of the registrant's disclosure
                   controls and procedures as of a date within 90 days prior to
                   the filing date of this annual report (the "Evaluation
                   Date"); and

          c)       presented in this annual report our conclusions about the
                   effectiveness of the disclosure controls and procedures
                   based on our evaluation as of the Evaluation Date;

5.        The registrant's other certifying officers and I have disclosed, based
          on our most recent evaluation, to the registrant's auditors and the
          audit committee of the registrant's board of directors (or persons
          performing the equivalent functions);

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

          b)       any fraud,  whether  or not  material,  that  involves
                   management  or other  employees  who have a significant role
                   in the registrant's internal controls; and

6.        The registrant's other certifying officers and I have indicated in
          this annual report whether there were significant changes in internal
          controls or in other factors that could significantly affect internal
          controls subsequent to the date of our most recent evaluation,
          including any corrective actions with regard to significant
          deficiencies and material weaknesses.

Date:  11/13/02          /s/ Eric Seidel
     -----------         -----------------------------------------------------
                         President and C.E.O.



Date:  11/13/02          /s/ Scott Moore
     -----------         -----------------------------------------------------
                         Chief Financial Officer


                                       42
<PAGE>

EAUTOCLAIMS.COM, INC. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2002


<PAGE>

                                            EAUTOCLAIMS.COM, INC. AND SUBSIDIARY


                                      INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------









Independent Auditor's Report                                         F - 2


Consolidated Financial Statements:

   Balance Sheet                                                     F - 3
   Statement of Operations                                           F - 4
   Statement of Stockholders' Equity (Deficiency)                    F - 5
   Statement of Cash Flows                                           F - 6
   Notes to Consolidated Financial Statements                    F - 7 - F-18



<PAGE>

INDEPENDENT AUDITOR'S REPORT




To the Board of Directors
eAutoclaims.com, Inc.

We have audited the accompanying consolidated balance sheet of eAutoclaims.com,
Inc. and Subsidiary as of July 31, 2002, and the related consolidated statements
of operations, stockholders' equity (deficiency), and cash flows for each of the
two years in the period then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of eAutoclaims.com,
Inc. and Subsidiary as of July 31, 2002 and the results of their operations and
their cash flows for each of the two years in the period then ended, in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Goldstein Golub Kessler LLP
-------------------------------
GOLDSTEIN GOLUB KESSLER LLP
New York, New York

September 27, 2002, except for the last two paragraphs of note 9 as to which
the date is November 12, 2002.

                                      F-2
<PAGE>



                                      EAUTOCLAIMS.COM, INC. AND SUBSIDIARY

                                                CONSOLIDATED BALANCE SHEET

                                                             July 31, 2002
--------------------------------------------------------------------------

ASSETS

Current Assets:
  Cash                                                            $ 44,655
  Accounts receivable, less allowance for doubtful accounts
    of $400,000                                                    864,352
  Due from related parties                                         143,384
  Prepaid expenses and other current assets                        233,513
--------------------------------------------------------------------------
         Total current assets                                    1,285,904

Property and Equipment, net of accumulated depreciation
   of $543,766                                                     999,149

Goodwill, net of accumulated amortization
    of $459,809                                                  1,093,843

Other Assets                                                        24,930

Deferred Income Tax Asset, net of valuation
   allowance of $5,649,000                                               -
--------------------------------------------------------------------------
         Total Assets                                          $ 3,403,826
==========================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
   Accounts payable and accrued expenses                       $ 5,349,968
   Deferred software subscription revenue                          284,676
   Loans payable - stockholders                                    135,000
--------------------------------------------------------------------------
         Total current liabilities                               5,769,644

Stockholders' Deficiency:
  Convertible preferred stock - $.001 par value;
    authorized 5,000,000 shares,
    268 shares issued and outstanding, aggregate
    liquidation preference of $1,340,000                                 1
  Common stock - $.001 par value; 50,000,000
    shares authorized, 18,390,118 shares
    shares issued and outstanding                                   18,390
  Additional paid-in capital                                    17,723,229
  Accumulated deficit                                          (20,107,438)
--------------------------------------------------------------------------
         Stockholders' Deficiency                               (2,365,818)
--------------------------------------------------------------------------
         Total Liabilities and Stockholders' Deficiency        $ 3,403,826
==========================================================================

See Notes to Consolidated Financial Statements

                                      F-3
<PAGE>


                                        EAUTOCLAIMS.COM, INC. AND SUBSIDIARY

                                        CONSOLIDATED STATEMENT OF OPERATIONS

       Year Ended July 31,                     2002                   2001
----------------------------------------------------------------------------

Revenue:
  Collision repairs management             $ 28,485,167         $ 16,186,861
  Glass repairs                                 995,972            1,944,721
  Fleet repairs management                    1,129,784            1,333,452
  Fees and other revenue                      1,672,440              723,215
----------------------------------------------------------------------------
Total revenue                                32,283,363           20,188,249

Expenses:
  Claims processing charges                  27,293,568           16,842,287
  Selling, general and administrative         8,114,580           10,479,232
  Depreciation and amortization                 530,618              504,656
  Amortization of beneficial conversion
    feature on convertible debentures and
    fair value of warrants issued in
    connection with debentures                  555,551
----------------------------------------------------------------------------
Total expenses                               36,494,317           27,826,175
----------------------------------------------------------------------------
Net loss                                   $ (4,210,954)        $ (7,637,926)
============================================================================

Adjustment to net loss to compute
  loss per common share:
    Preferred stock dividends and
    Deduction relating to Series A
    Convertible Preferred Stock                (570,997)          (4,611,804)
----------------------------------------------------------------------------
Net loss applicable to common stock        $ (4,781,951)       $ (12,249,730)
Loss per common share - basic and
  diluted                                       $ (0.32)             $ (1.09)
============================================================================

Weighted-average number of common
  shares outstanding-basic and diluted       14,813,549           11,252,514
============================================================================


See Notes to Consolidated Financial Statements

                                      F-4
<PAGE>
<TABLE>
                                                                                    EAUTOCLAIMS.COM, INC. AND SUBSIDIARY

                                                              CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIENCY)
<CAPTION>

                                                                                  Additional                Stockholders'
                                              Preferred Stock     Common Stock     Paid-in    Accumulated      Equity
Years ended July 31, 2002 and 2001            Shares  Amount    Shares    Amount   Capital      Deficit     (Deficiency)
------------------------------------------------------------------------------------------------------------------------

<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

Shares of common stock issued
 in acquisitions                                                 322,372     322  1,211,678                    1,212,000
Issuance of common stock for services                            599,138     600    885,912                      886,512
Issuance of preferred stock                       520    $1                       2,265,428                    2,265,429
Recognition of beneficial conversion
 feature of convertible preferred stock                                           2,233,600   (2,233,600)
Recognition of beneficial conversion feature of
 convertible debentures                                                             389,400                      389,400
Proceeds from stock options                                                             750                          750
 Accrued dividend on preferred stock                                                            (134,179)       (134,179)
Fair value of warrants issued in
 connection with the preferred stock                                              2,244,025   (2,244,025)
Fair value of warrants issued in
 connection with convertible debentures                                             260,600                      260,600
Issuance of compensatory stock options                                            3,344,000                    3,344,000

Net loss                                                                                      (7,637,926)     (7,637,926)
------------------------------------------------------------------------------------------------------------------------
Balance at July 31, 2001                          520     1   11,711,877  11,712 16,051,679  (15,325,487)        737,905

Issuance of common stock                                         220,000     220     93,245                       93,465
Issuance of common stock upon exercise of options                326,000     326      2,934                        3,260
Issuance of common stock for amounts
     due to shareholders                                          91,667      92     43,908                       44,000
Issuance of common stock for services                            327,184     327    160,933                      161,260
Issuance of common stock in conjunction with lease                97,927      98     92,933                       93,031
Issuance of compensatory stock options                                               82,509                       82,509
Issuance of common stock upon conversion
   of debentures                                                 942,855     943    649,057                      650,000
Issuance of common stock for interest on debentures               23,028      23      9,188                        9,211
Recognition of beneficial conversion feature of
   convertible preferred stock                                                      408,000     (408,000)
Accrued dividends on preferred stock                                                            (162,997)       (162,997)
Issuance of common stock for preferred stock
  dividends                                                      441,537     441    133,051                      133,492
Issuance of common stock upon conversion of
  preferred stock                                (252)         4,208,043   4,208     (4,208)
Net loss                                                                                       (4,210,954)    (4,210,954)
------------------------------------------------------------------------------------------------------------------------
Balance at July 31, 2002                          268    $1   18,390,118 $18,390 $17,723,229 $(20,107,438)   $(2,365,818)
========================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements

                                      F-5
<PAGE>
<TABLE>
                                                                              EAUTOCLAIMS.COM, INC. AND SUBSIDIARY
                                                                              CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
------------------------------------------------------------------------------------------------------------------
Year Ended July 31,                                                                  2002                 2001
------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                  <C>
Cash flows from operating activities:
  Net loss                                                                       $ (4,210,954)        $ (7,637,926)
  Adjustments to reconcile net loss to net cash provided by
     (used in) operating activities:
    Depreciation and amortization                                                     530,618              504,656
    Write off of computer software                                                    360,000
    Amortization of discount on debentures                                            555,551
    Common stock issued for services                                                  161,260              858,724
    Common stock issued for interest                                                    9,211
    Common stock issued for rent and option to purchase facility                       43,659
    Issuance of compensatory stock options                                             82,509            3,344,000
    Allowance for doubtful accounts                                                   340,000              148,814
    Changes in operating assets and liabilities:
      Decrease (increase) in accounts receivable                                        4,057             (659,680)
      (Increase) in prepaid expenses and other current assets                         (57,448)             (45,007)
      (Increase) decrease in other assets                                             (19,930)               6,660
      Increase in accounts payable and accrued expenses                             2,245,810            2,189,997
      Increase in deferred software subscription revenue                              173,006              111,670
------------------------------------------------------------------------------------------------------------------
           Net cash provided by (used in) operating activities                        217,349           (1,178,092)
------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
  Purchases of property and equipment                                                (765,980)            (435,991)
  Acquisition of software                                                                                 (360,000)
  Payments from related parties                                                        53,469
  Loans to related parties                                                            (42,000)             (90,983)
------------------------------------------------------------------------------------------------------------------
           Cash used in investing activities                                         (754,511)            (886,974)
------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities:
  Proceeds from sale of common stock                                                   93,465
  Proceeds from issuance of debentures                                                                     650,000
  Proceeds from exercise of stock options                                               3,260                  750
  Net proceeds from issuance of preferred stock                                                          1,765,429
  Principal payments on stockholder loans                                                                 (106,000)
------------------------------------------------------------------------------------------------------------------
           Cash provided by financing activities                                       96,725            2,310,179
------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash                                                      (440,437)             245,113
Cash at beginning of year                                                             485,092              239,979
------------------------------------------------------------------------------------------------------------------
Cash at end of year                                                                    44,655            $ 485,092
==================================================================================================================

Supplemental disclosure of cash flow information:
  Cash paid during the year for interest                                                                  $ 19,664
==================================================================================================================
Supplemental schedule of noncash investing and financing activities:
------------------------------------------------------------------------------------------------------------------
  Common stock to be issued in conjunction with acquisition of subsidiary                                 $ 12,000
  ================================================================================================================
  Fair value of warrants issued in conjunction with convertible debentures                               $ 260,600
  ================================================================================================================
  Conversion of debentures to common stock                                            650,000
  ================================================================================================================
  Issuance of common stock for amount due to shareholders                              44,000
  ================================================================================================================
  Issuance of stock for payment of rent and purchase option                            49,373
  ================================================================================================================
  Issuance of stock for preferred stock dividends                                     133,492
  ================================================================================================================
</TABLE>
See Notes to Consolidated Financial Statements
                                      F-6
<PAGE>

1.   THE BUSINESS AND
     BASIS OF PRESENTATION:

     eAutoclaims.com, Inc. (Company) is a Nevada corporation which provides
     Internet based vehicle collision claims services for insurance companies,
     Managing General Agents (MGA) and third party claims administrators (TPA)
     and self-insured automobile fleet management companies. The Company accepts
     assignment of claims from customers, and provides vehicle repairs through a
     network of repair shops. The Company also handles estimate, audit and
     claims administration services for claims for which the Company does not
     perform the repair.

     The Company uses the Internet to streamline and lower the overall costs of
     automobile repairs and the claims adjustment expenses of its clients.
     Management believes that the 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.

2.   SUMMARY OF SIGNIFICANT
     ACCOUNTING POLICIES:

     The accompanying consolidated financial statements include the accounts of
     the Company and its wholly owned subsidiary, SalvageConnection.com, Inc.
     ("Salvage). All intra-company accounts and transactions have been
     eliminated.

     The Company maintains cash in bank deposit accounts that, at times, exceed
     federally insured limits. The Company has not experienced any losses on
     these accounts.

     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.

     Deferred software subscription revenue is recorded when estimating software
     is sold to a body shop within the Company's repair shop network. The
     revenue from the sale is recognized over the one-year term of the contract
     on a straight-line basis.

                                      F-7
<PAGE>

     Property and equipment are stated at cost. Additions and improvements to
     property and equipment are capitalized. Maintenance and repairs are
     expensed as incurred. When property is retired or otherwise disposed of,
     the cost and related accumulated depreciation are removed from the accounts
     and any resulting gain or loss is recognized in operations. Depreciation is
     computed on the straight-line method over the estimated useful lives of the
     assets.

     The Company identifies and records impairment on long-lived assets,
     including goodwill, when events and circumstances indicate that such assets
     have been impaired. The Company periodically evaluates the recoverability
     of its long-lived assets based on expected undiscounted cash flows, and
     recognizes impairment, if any, based on expected discounted cash flows. At
     July 31, 2002, no such impairment existed.

     Goodwill is amortized using the straight-line method over 7 years through
     July 31, 2002. At each balance sheet date, the Company evaluates the period
     of amortization of intangible assets. The factors used in evaluating the
     period of amortization include: (i) current operating results, (ii)
     projected future operating results, and (iii) any other material factors
     that effect the continuity of the business.

     Deferred income tax assets and liabilities are recognized for the estimated
     future tax consequences attributable to differences between the financial
     statements carrying amounts of existing assets and liabilities and their
     respective income tax bases. Deferred income tax assets and liabilities are
     measured using enacted tax rates expected to apply to taxable income in the
     years in which those temporary differences are expected to be recovered or
     settled.

     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements and the reported
     amounts of revenue and expenses during the reporting period. Actual results
     could differ from those estimates.

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
     No.'s 141 and 142, "Business Combinations" and "Goodwill and Other
     Intangibles". FASB 141 requires all business combinations initiated after
     June 30, 2001 to be accounted for using the purchase method. Under FASB
     142, goodwill is no longer subject to amortization over its estimated
     useful life. Rather, goodwill is subject to at least an annual assessment
     for impairment applying a fair-value based test. Additionally, an acquired
     intangible asset should be separately recognized if the benefit of the
     intangible asset is obtained through contractual or other legal rights, or
     if the intangible asset can be sold, transferred, licensed, rented, or
     exchanged, regardless of the acquirer's intent to do so. Management has not
     yet determined the impact the adoption of FASB No. 142 will have on the
     Financial Statements.

     Management does not believe that any other recently issued, but not yet
     effective, accounting standards if currently adopted would have a material
     effect on the accompanying financial statements.

                                      F-8
<PAGE>

     In accordance with Emerging Issues Task Force No. 96-18, Accounting for
     Equity Instruments That Are Issued to Other Than Employees for Acquiring,
     or In Conjunction with Selling, Goods or Services, the Company measures the
     fair value of the equity instruments using the stock price and other
     measurement assumptions as of the earlier of the date at which a commitment
     for performance by the counterparty to earn the equity instruments is
     reached, or the date at which the counterparty's performance is complete.

     The costs of software developed for internal use, including web site
     development costs, incurred during the preliminary project stage are
     expensed as incurred. Direct costs incurred during the application
     development stage are capitalized. Costs incurred during the post
     implementation/operation stage are expensed as incurred. Capitalized
     software development costs are amortized on a straight-line basis over
     their estimated useful lives.

     The Company believes that the concentration of credit risk in its trade
     receivables, with respect to its limited customer base, is substantially
     mitigated by its credit evaluation process. The Company does not require
     collateral. During the fiscal year ended July 31, 2002, three customers or
     the underling insurance companies have experienced financial troubles and
     consequently a reserve of $400,000 has been established at July 31, 2002.

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:

                                               Year ended         Year ended
                                             July 31, 2002       July 31, 2001
     -------------------------------------------------------------------------

      Net Loss                                $(4,210,954)         $(7,637,926)

      Less: Preferred stock dividends            (162,997)            (134,179)
                 Deduction related to
                   Series A convertible
                   Preferred stock               (408,000)          (4,477,625)
     -------------------------------------------------------------------------
     Net loss applicable to
         Common stock                         $(4,781,951)        $(12,249,730)
     =========================================================================

     Basic and diluted:

     Weighted average number
      of common shares
      outstanding                              14,813,549           11,252,514

     Basic and diluted loss
      per common share                             $(0.32)              $(1.09)
     =========================================================================

                                      F-9
<PAGE>
4.   PROPERTY AND EQUIPMENT:

     At July 31, 2002 property and equipment, at cost, consists of the
     following:

                                                                   Estimated
                                                  2002            Useful Life
     ---------------------------------------------------------------------------

      Computer Equipment                       $ 505,450              3 years
      Software                                   574,043              3 years
      Office equipment                           141,551              3 years
      Leasehold improvements                     231,883         Term of Lease
      Furniture and fixtures                      89,988             10 years
     ---------------------------------------------------------------------------
                                               1,542,915

      Less accumulated depreciation              543,766

     ---------------------------------------------------------------------------
                                               $ 999,149
     ===========================================================================

     During the year ended July 31, 2002, the Company determined that software
     costing $360,000 purchased during the prior fiscal year and never placed in
     service had no value.

5.   ACCOUNTS PAYABLE AND ACCRUED EXPENSES:

     At July 31, 2002 accounts payable and accrued expenses consist of the
     following:


                                                                 2002
     ---------------------------------------------------------------------------
      Accounts payable                                        $ 4,674,702
      Accrued payroll and vacation wages                          233,032

      Other accrued liabilities (none in excess of
      5% of current liabilities)                                  442,234

     ---------------------------------------------------------------------------
                                                              $ 5,349,968
     ===========================================================================


6.   LOAN PAYABLE - STOCKHOLDERS:

     The Company has two loans outstanding to two stockholders/officers
     aggregating $135,000. The loans bear interest at the rate of 12% per annum
     and are due on demand. The stockholders/officers have agreed to accept
     interest only payments until the loans are paid-off. The fair value of the
     loans approximates their carrying amount based on rates available to the
     Company for similar loans.

                                      F-10
<PAGE>
7.   CONVERTIBLE DEBENTURES:

     During the months June and July 2001 the Company issued $650,000 of
     debentures with interest at the rate of Libor (2.6%) plus 3% maturing on
     September 30, 2001. Upon the maturity date the debentures were converted
     into common stock at rates between $0.63 and $0.75 per share. In connection
     with the issuance of these convertible debentures 1,150,000 warrants were
     issued to purchase shares of common stock at $0.63 per share through June
     30, 2011. The Company recorded a discount to the debentures of $260,600
     representing the fair value of the warrants, and $389,400 representing the
     beneficial conversion feature of the debentures.

     For the years ended July 31, 2002 and 2001 $555,551 and $94,449,
     respectively, has been charged to operations.

8.   COMMITMENT AND CONTINGENCIES:

     The Company has a two-year employment agreement with its president and
     chief executive officer. This two-year employment agreement effective May
     21, 2001 provides for aggregate annual base salary of $200,000 through
     December 31, 2001 and $250,000 from January 1, 2002 through May 20, 2003.
     The President and Chief Executive Officer is entitled to a special one-time
     bonus equal to 15% of his base salary, payable on or before January 15,
     2002. He retains his right to bonus compensation as determined by the
     Compensation Committee, which at no time may be less than 5% of the
     Company's pre-tax profits. He may elect to receive part or his entire
     bonus, if any, in shares of the Company's common stock based on 90% of the
     then current market price. As of May 20, 2002, the president and chief
     executive officer voluntarily reduced his salary by 15% from $250,000 to
     $212,500 per year.

     In addition, the Company has three-year employment agreements with four
     other executives that expire between February 2003 and September 2003. The
     agreements provide for aggregate annual base salaries ranging from $465,000
     to $500,000 per annum. As of May 20, 2002, these officers accepted a 15%
     salary reduction totaling $70,500 per year.

     The Company entered into an agreement with several of its top management
     personnel to compensate them if there is a change in control of the Company
     and they lose their employment with the Company without cause. The
     compensation under this agreement ranges from 200% to 299% of their annual
     salary, depending on the level of management.

     The Company leases office facilities under non-cancelable operating leases
     expiring on various dates through 2006. The office facilities leases
     contain escalation clauses relating to operating expenses and real estate
     taxes. Rent expense under the operating leases for the year ended July 31,
     2002 and 2001 totaled approximately $309,000 and $196,000, respectively.

     The Company entered into a 5-year lease for 30,000 square feet of a 62,000
     square foot facility. The Company has an option to buy the entire facility
     with the associated land for $2,950,000. The Company issued 51,971 shares
     of stock to pay for the January through March 31, 2002 rent, and another
     45,956 shares for the purchase option, for a total of 97,927 shares.

                                      F-11
<PAGE>
     Approximate minimum future payments under these leases are payable as
     follows:

     Year ending July 31,

               2003                                                   257,000
               2004                                                   229,000
               2005                                                   219,000
               2006                                                   225,000
               2007                                                    76,000
     ------------------------------------------------------------------------
                                                                  $ 1,006,000
     ========================================================================


9.   STOCKHOLDERS' EQUITY:

     The Company is authorized to issue 5,000,000 shares of $.001 par value
     preferred stock. Each share of preferred stock is convertible into a number
     of shares of common stock. As amended, the number of common shares to be
     issued is derived by taking the lesser of 75% of the average of the closing
     bid prices for the common stock for the 3 lowest trading days out of the 20
     consecutive trading days immediately preceding the date of conversion or
     $0.625. Dividends are payable at the rate of 8% of the aggregate
     liquidation preference amount per annum and are cumulative. As of July 31,
     2002, the Company had issued 520 shares of preferred stock, and 268 were
     still outstanding.

     Also issued in connection with the preferred stock were warrants to
     purchase shares of common stock of the Company. During the year ended July
     31, 2001, the Company issued 264,385 warrants to the agent, which are
     exercisable at a price of $4.50 per share, are exercisable upon issuance,
     and expire in five years. During the year ended July 31, 2001, the Company
     also issued 780,000 warrants to the purchasers, which are exercisable at
     prices between $1.46 and $3.33 per share, are exercisable upon issuance,
     and expire in five years. The fair value of $2,244,025 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, and upon amendment of the conversion terms 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 on the date of issuance was $1,715,198, and was an
     additional $418,402 on the date of amendment of conversion terms.

                                      F-12
<PAGE>
     On July 31, 2001, 100 shares of the preferred stock described above were
     redeemable at the Company's option at 120% of face value, plus accrued
     dividends by August 15, 2001. Since the Company did not redeem the
     preferred stock, its terms became identical to the Company's other
     preferred stock. An increase to accumulated deficit and the net loss
     available to common shareholders of $100,000 was recorded during the year
     ended July 31, 2001 and $408,000 has been recorded during the year ended
     July 31, 2002, representing the beneficial conversion feature. The Company
     has issued warrants as part of this funding in accordance with the terms of
     the preferred stock agreements. The fair value attributed 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 attributable to common
     shareholders.

     In August 2000, the Company issued 2,372 shares of restricted common stock
     on the acquisition of Salvage. These shares were valued at the fair market
     value at the date of issuance that totaled $12,000.

     During the year ended July 31, 2001, the Company issued shares to three
     consultants that provided services to the Company. These consultants
     received cash and 93,936 shares of the Company's common stock for these
     services. The Company recorded a charge to operations when the services
     were performed based on the fair market value of the shares of common stock
     on the date in which the services were performed. During the year ended
     July 31, 2001, $176,329 was charged to operations as a result of these
     agreements.

     During the year ended July 31, 2001, the Company issued 150,000 shares of
     common stock in exchange for $157,720 of legal services.

     During the year ended July 31, 2001, the Company issued 10,702 shares of
     common stock to five outside members of the Board of Directors. The Company
     charged operations $22,500, which was equal to the fair market value of the
     shares when 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 year ended July 31, 2001 the Company issued options to employees
     and members of the Company's Board of Directors to purchase 1,402,700
     shares of common stock. 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 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.

                                      F-13
<PAGE>
     In July 2001, the Company issued 344,500 shares of common stock to an
     investor to satisfy their expense (penalty) provisions in a preferred stock
     agreement for not registering the shares of common stock underlying the
     conversion of the preferred stock. The Company recognized a charge to
     operations of $396,175, which was equal to the fair market value of the
     shares on the date of issuance.

     On September 20, 2001, two shareholders and officers of the Company
     converted $44,000 of debt owed to them by the Company into 91,667 shares of
     common stock.

     During the year ended July 31, 2002 $650,000 of debentures which were
     issued were converted into 942,855 shares of common stock in accordance
     with the debenture agreements. In addition, accrued interest of
     approximately $9,200 on those debentures was converted to 23,028 shares of
     common stock.

     During the year ended July 31, 2002, the Company entered into an agreement
     for the lease of a new office facility that called for the issuance of
     97,927 shares of common stock for three months rent and a five-year
     purchase option of the property at a pre-established price. During the year
     ended July 31, 2002, $43,659 was charged to operations for the stock issued
     relating to the purchase option. The $49,372 associated with the rent was
     recorded as prepaid rent and will be charged to operations as the rent
     expense is incurred.

     During the year ended July 31, 2002, the Company issued 234,277 shares of
     common stock in exchange for $105,040 of legal services.

     During the year ended July 31, 2002, the Company issued options to
     employees and members of the Company's Board of Directors to purchase
     1,555,500 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. Additionally, options to purchase 468,334
     shares of common stock were canceled.

     During the year ended July 31, 2002, employees exercised 326,000 options to
     purchase shares of the Company's stock.

     During the year ended July 31, 2002, the Company issued 35,257 shares of
     common stock to four 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.

     On February 28, 2002, the Company issued 37,650 shares of common stock to a
     company in partial payment of public relations consulting services. During
     the year ended July 31, 2002, all of these shares were earned resulting in
     a charge to operations of $30,120.

     On June 5, 2002, the Company issued 20,000 shares of common stock to an
     individual for consulting services provided to the company during the
     fiscal year ended July 31, 2002. The Company charged operations $8,600
     which was equal to the fair market value of the shares when earned.

                                      F-14
<PAGE>
     On January 31, 2002, 42 shares of preferred stock with a face value of
     $210,000, plus dividends of approximately $26,000 were converted into
     551,629 shares of common stock. On March 27, 2002, 210 shares of preferred
     stock with a face value of $1,050,000, plus dividends of approximately
     $108,000 were converted into 4,097,951 shares of common stock.

     On June 17, 2002, the Company sold 220,000 shares of common stock and
     warrants to purchase 220,000 shares of common stock, with an exercise price
     of $0.75 per share, for $93,465, net of commissions and legal fees.

     During July 2002, the Company issued options to purchase 242,670 shares of
     common stock to officers and employees of the Company at $.01 per share.
     Accordingly, the Company recorded a charge to operations of $82,509,
     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 November 12, 2002 the Company signed a term sheet on a $10,000,000
     equity line of credit that will allow the Company, once the shares are
     registered, to access funds over a 36-month period by selling registered
     shares of common stock at 94% of the market value of the shares. Under this
     agreement, the amount of funds available to the Company would be based on
     the volume of the previous 20 trading days. The purchasing party offering
     the equity line of credit will receive warrants for 3% of the shares sold
     as well as a 2% placement fee.

     On November 12, 2002, the Company received a commitment letter from a
     current investor to invest an additional $1,000,000-$2,000,000 into the
     Company.

10.  STOCK OPTIONS AND STOCK WARRANTS:

     The Company has an incentive stock option plan under which options to
     purchase shares of common stock may be granted to certain key employees.
     The exercise price is based on the fair market value of such shares as
     determined by the board of directors at the date of the grant of such
     options.

     A summary of the status of the Company's options as of July 31, 2002 and
     July 31, 2001, and changes during the years then ended is presented below:

     ---------------------------------------------------------------------------
                                         July 31, 2002          July 31, 2001
                                        ---------------        ---------------
                                               Weighted-              Weighted-
                                                average                average
                                    Number of   Exercise   number of  Exercise
                                     shares      Price      shares      Price
     ---------------------------------------------------------------------------

      Balance at beginning of
        period                      4,261,134    $0.94       719,500     $2.68

      Granted                       1,798,170     0.51     3,602,700      0.61
      Canceled                       <468,334>    1.76       (61,066)     1.86

      Exercised                      <326,000>    0.01


     ---------------------------------------------------------------------------
      Outstanding at end of period  5,264,970    $0.78     4,261,134     $0.94
     ===========================================================================

      Options exercisable at end
       of period                    3,293,938    $0.70     3,158,999     $0.70
     ===========================================================================
      Weighted Average fair value of
      options granted during the
      period                         $860,239            $ 5,365,333
     ===========================================================================

                                      F-15
<PAGE>

     The  following  table  summarizes  information  about fixed  stock  options
     outstanding at July 31, 2002:

                            Options Outstanding            Options Exercisable
                      --------------------------------   -----------------------
                                   Weighted-
                                    average   Weighted-                Weighted-
                                   Remaining   average                  average
        Range of        Number    Contractual Exercise     Number      Exercise
     Exercise Prices  Outstanding    Life       Price    Exercisable     Price
     ---------------------------------------------------------------------------

            $0.01     2,116,670      8.27     $ 0.01       2,116,670    $  .01
     $ .36 - $.90     1,485,000      3.86       0.60         112,500       .74
     $1.01- $1.91       798,200      3.49       1.31         426,065      1.39
     $2.00- $5.06       865,100      2.73       2.48         638,703      2.50

     ---------------------------------------------------------------------------
     $0.01 - $5.06    5,264,970               $ .78        3,293,938    $ .70
     ===========================================================================


     The Company has elected to apply APB Opinion No. 25 and related
     interpretations in accounting for its stock options and has adopted the
     disclosure-only provisions of Statement of Financial Accounting Standards
     ("SFAS") No. 123, Accounting for Stock-Based Compensation. If the Company
     had elected to recognize compensation cost based on the fair value of the
     options granted at the grant date as prescribed by SFAS No. 123, the
     Company's net loss per common share for the year ended July 31, 2002 and
     2001 would have been as follows:

                                                  Year Ended       Year Ended
                                                 July 31, 2002    July 31, 2001
     ---------------------------------------------------------------------------

     Net loss applicable to common stock:
      As reported                                $(4,781,951)     $(12,249,730)
     ===========================================================================
     Pro forma                                   $(5,733,634)     $(13,506,636)
     ===========================================================================

     Loss per common share - basic and diluted:
        As reported                              $      (.32)     $      (1.09)
     ==========================================================================
     Pro forma                                   $      (.39)     $      (1.20)
     ==========================================================================


     The fair value for these options was estimated at the date of grant using a
     Black-Scholes option pricing model with the following weighted-average
     assumptions for the year ended July 31, 2002 and 2001. The assumptions were
     risk-free interest rate of 6.50%, dividend yield of 0%, volatility factor
     of the expected market price of the Company's common stock of 200%, and an
     expected life of the option of five years.

                                      F-16
<PAGE>
     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.

11.  INCOME TAXES:

     As of July 31, 2002, the Company had deferred tax assets of approximately
     $5,649,000 resulting from temporary differences and net operating loss
     carry-forwards of approximately $10,452,000 which are available to offset
     future taxable income, if any, through 2022. As utilization of the net
     operating loss carry-forwards and temporary differences is not assured, the
     deferred tax asset has been fully reserved through the recording of a 100%
     valuation allowance.

     The tax effects of temporary differences, loss carryforwards and the
     valuation allowance that give rise to deferred income tax assets were as
     follows:

                                                               July 31,
                                                                 2002
     ------------------------------------------------------------------
     Temporary differences:

         Allowance for doubtful accounts                       160,000
         Accrued vacation                                        32,000
         Fair value of warrants                                 104,000
         Compensation not currently deductible                1,172,000
         Net operating losses                                 4,181,000
         Less valuation allowance                            <5,649,000>
     ------------------------------------------------------------------
              Deferred tax assets                      $          - 0 -
     ==================================================================



      The reconciliation of the effective income tax
      rate to the federal statutory rate for the years
      ended July 31, 2002 and 2001 is as follows:

      Federal income tax rate                                     (34.0)%
      Change in valuation allowance on net
       operating carryforwards                                     34.0
     ------------------------------------------------------------------
              Effective income tax rate                             0.0%
     ==================================================================


                                      F-17
<PAGE>

12.  MAJOR CUSTOMERS:

     During the years ended July 31, 2002 and 2001 one customer accounted for
     58% and 64% of total revenue, respectively. During the year ended July 31,
     2002 a second customer accounted for 12% of total revenue.

13.  RELATED PARTY TRANSACTIONS

     During the year ended July 31, 2001 the Company shared an operating
     facility and certain personnel with a corporation whose chairman is also
     the chairman of the board of the Company. The Company also paid certain
     expenses on behalf of this corporation. Amounts allocated and paid on
     behalf of this corporation amounted to $118,814 for the year ended July 31,
     2001. These amounts were based on the amount of space and personnel time
     devoted to this corporation plus the actual expenses paid on behalf of this
     corporation. In the fiscal year ended July 31, 2001, $118,814 was charged
     to operations because the other company is in financial trouble and
     collection of these funds is considered unlikely.

     Also, the chairman of the board of the Company is entitled to a
     non-interest bearing line of credit. At July 31, 2002, $107,794 has been
     advanced under the line of credit and is included in due from related
     parties on the accompanying balance sheet.

     In June and July of 2001, the Company advanced the President/CEO and a
     board member $50,000 and $30,000, respectively. The $50,000 advanced to the
     President/CEO was repaid during the year ended July 31, 2002. The $30,000
     advanced to the board member is outstanding as of July 31, 2002. These
     loans are non-interest bearing.

14.  LITIGATION:

     The Company is subject to two lawsuits arising out of the normal course of
     business. These lawsuits are in the early stages. Management believes there
     are meritorious defenses and claims against these actions, but it is too
     early to predict the ultimate outcome of these disputes. 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.

15.  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 18,390,118
     indicated by the Company's records. The Company believes that its records
     are correct. 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.

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