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Letter to the Editor

eAutoclaims Reports 35 Percent Growth in 3rd Quarter Revenues

PALM HARBOR, Fla. -- eAutoclaims announced results for it's quarter ending April 30th 2001. EACC reported revenue growth of over 35 percent from the previous quarter. The company saw revenues grow from $4.9M in the previous reporting quarter to $6.7 Million an increase of 35 percent.

EACC invested heavily in building support infrastructure for the rollout of new clients including the planned rollout of Royal & SunAlliance -- a top twenty-five US automobile insurance carrier.

During the three months ended April 30, 2001 EACC experienced an increase in losses when compared to the previous quarter. The increase in losses is a result of (i), a non-cash expense of $3,500,000 from the issuance of stock options and common stock as a management incentive and compensation to consultants, (ii), a charge of $280,000 resulting from a stockholder modification agreement that extended the filing deadline for registration of shareholder stock, and (iii), additional payroll and infrastructure costs associated with the roll-out of new clients as previously stated. The total cash & non-cash loss for the quarter was $4,500,000 of which $3,500,000 is attributed to non-cash items.

EACC also reported that it closed on a $500,000 placement of Series A Preferred Stock. In addition, the company signed a term sheet for up to a $1,000,000 issuance of convertible debentures facilitated by one of its directors. EACC anticipates filing an amendment to its Form SB-2 in the next 7-14 days for its secondary public offering.

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