Filed with the Securities and Exchange Commission on July 29, 2005
Registration No. ______________
-----------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM S-8 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
----------------------------------
eAUTOCLAIMS, INC.
(Exact name of registrant as specified in its charter)
State of Nevada
(State or Other Jurisdiction of Incorporation or Organization)
95-4583945
(I.R.S. Employer Identification No.)
110 E. Douglas Road; Oldsmar, FL 34677
Address of Principal Executive Offices
eAutoclaims 1998 Stock Option Plan
Directors Stock Options
Non-Qualified Stock Options to Employees
Compensation Agreement
(Full title of the plan)
Michael T. Cronin, Esquire
Johnson, Pope, Bokor, Ruppel & Burns, LLP
911 Chestnut Street
Post Office Box 1368
Clearwater, Florida 34617
(727) 461-1818
(Name, address, and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered (3) Registered Offering Price Per Aggregate Offering Registration Fee
Share (1) Price (1)
--------------------------------------------------------------------------------------------------------
Common Stock, $.0001 16,302,594 shares $0.27 $ 4,446,403 $523.34
par value (2) (4)
(1) Pursuant to Rules 457(c) and 457(h) under the Securities Act of 1933,
as amended (the "Securities Act"), the offering price per share and the
aggregate offering price are derived from the actual exercise price for
shares subject to outstanding stock options and the closing price of
the Registrant's Common Stock on June 15, 2005 as reported by the Over
The Counter Bulletin Board for the shares not yet subject to currently
outstanding options. The offering price per share and the aggregate
offering price are calculated as follows:
a. 2,266,517 shares of Common Stock issuable pursuant to
outstanding options under the 1998 Stock Option Plan having
exercise prices between $0.10 and $3.38 per share, resulting
in an aggregate offering price of $1,878,814; and
b. 1,253,087 shares of Common Stock issuable pursuant to
outstanding options issued to employees and a consultant
outside of the 1998 Stock Option Plan having an exercise price
of $0.01 per share, resulting in an aggregate offering price
of $12,531; and
c. 2,145,000 shares of Common Stock issuable pursuant to
outstanding options issued to our directors having exercise
prices between $0.01 and $2.00 per share, resulting in an
aggregate offering price of $746,600; and
d. 5,712,638 additional shares authorized under the 1998 Stock
Option Plan of which no shares or options have been issued and
accordingly the registration fee for which has been calculated
by using $0.17, the closing price of the Registrant's Common
Stock on June 15, 2005 as reported by the over-the-counter
bulletin board, resulting in an aggregate offering price of
$971,148.
e. 2,000,000 shares to be issued to the management team as
compensation for services as described in their employment
contract signed in June 2005. The registration fee has been
calculated by using $0.17, the closing price of the
Registrant's Common Stock on June 15, 2005 as reported by the
over-the-counter bulletin board, resulting in an aggregate
offering price of $340,000
f. 2,267,350 shares issued pursuant to stock options exercised by
employees, a consultant and Board members. The registration
fee has been calculated by using $0.17, the closing price of
the Registrant's Common Stock on June 15, 2005 as reported by
the over-the-counter bulletin board, resulting in an aggregate
offering price of $385,450.
g. 658,002 shares issued to Board members as compensation for
Board services provided to the Company. The registration fee
has been calculated by using $0.17, the closing price of the
Registrant's Common Stock on June 15, 2005 as reported by the
over-the-counter bulletin board, resulting in an aggregate
offering price of $111,860.
2
(2) Represents (i) 2,266,517 shares underlying options issued pursuant to
the Registrant's 1998 Stock Option Plan, (ii) 1,253,087 shares
underlying options issued to employees and a consultant outside of the
Registrant's Stock Options Plan, (iii) 2,145,000 shares issuable
pursuant to options issued to the Registrant's directors, (iv)
5,712,638 shares underlying the Registrant's 1998 Stock Option Plan.,
(v) 2,000,000 shares to be issued under management compensation
agreements signed in 2005. (vi) 2,267,350 shares issued pursuant to
stock options that were exercised by employees, a consultants and Board
members, and (vii) 658,002 shares issued to Board members as
compensation for Board services provided to the Company.
(3) This Registration Statement will become effective immediately upon
filing with the Securities and Exchange Commission.
(4) Also registered hereby are such additional and intermediate number of
shares of Common Stock as may become issuable because of the provisions
of the 1998 Stock Option Plan relating to adjustments for changes
resulting from stock dividends, stock splits and similar changes.
Approximate date of proposed sales pursuant to the plan: As soon as practicable
after this Registration Statement becomes effective.
EXPLANATORY NOTE
This Registration Statement has been prepared in accordance with the
requirements of Form S-8 under the Securities Act, to register shares of our
common stock, $.001 par value, including shares issuable pursuant to stock
options. Under cover of this Form S-8 is our reoffer prospectus prepared in
accordance with Part I of Form S-3 under the Securities Act. Our reoffer
prospectus has been prepared pursuant to Instruction C of Form S-8, in
accordance with the requirements of Part I of Form S-3, and may be used for
reofferings and resales on a continuous or delayed basis in the future of
"restricted securities" which may be issued, pursuant to stock options.
3
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEM 1. PLAN INFORMATION
We will send or give the documents containing the information specified in Part
1 of Form S-8 to employees as specified by the Securities and Exchange
Commission Rule 428(b)(1) under the Securities Act. We do not need to file these
documents with the Commission either as part of this Registration Statement or
as prospectuses or prospectus supplements under Rule 424 of the Securities Act.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
eAutoclaims, Inc., a Nevada corporation, will furnish without charge to each
person to whom the reoffer prospectus is delivered, upon the oral or written
request of such person, a copy of any and all of the documents incorporated by
reference (other than exhibits to such documents). Requests should be directed
to the attention of Larry Colton at eAutoclaims, Inc., 110 East Douglas Road,
Oldsmar, Florida, 34677, telephone number (813) 749-1020.
4
REOFFER PROSPECTUS
16,302,594 SHARES OF COMMON STOCK
eAutoclaims, Inc.
110 East Douglas Road
Oldsmar, FL 34677
(813) 749-1020
This reoffer prospectus relates to 16,302,594 shares of the common stock of
eAutoclaims, Inc. which may be offered and sold from time to time by the selling
stockholders identified in this prospectus for their own accounts. It is
anticipated that the selling stockholders will offer shares for sale at
prevailing prices on the OTC Bulletin Board on the date of sale. We will receive
no part of the proceeds from sales made under this reoffer prospectus. The
selling stockholders will bear all sales commissions and similar expenses. Any
other expenses incurred by us in connection with the registration and offering
and not borne by the selling stockholders will be borne by us.
The selling stockholders and any brokers executing selling orders on behalf of
them may be deemed to be "underwriters" within the meaning of the Securities
Act, in which event commissions received by such brokers may be deemed to be
underwriting commissions under the Securities Act.
Our common stock is traded on the OTC Bulletin Board under the symbol "EACC." On
June 15, 2005, the last reported price of our common stock on such market was
$0.17 per share. This investment involves a high degree of risk. Please see
"Risk Factors" beginning on page 7. Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of
these securities or determined whether this reoffer prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
The date of this reoffer prospectus is July 29, 2005.
5
TABLE OF CONTENTS
PAGE
SUMMARY 7
RISK FACTORS 7
USE OF PROCEEDS 17
SELLING STOCKHOLDERS 18
PLAN OF DISTRIBUTION 18
LEGAL MATTERS 19
EXPERTS 20
INDEMNIFICATION OF DIRECTORS AND OFFICERS 20
WHERE YOU CAN FIND ADDITIONAL INFORMATION 21
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 21
You should only rely on the information incorporated by reference or provided in
this reoffer prospectus or any supplement. We have not authorized anyone else to
provide you with different information. The common stock is not being offered in
any state where the offer is not permitted. You should not assume that the
information in this reoffer prospectus or any supplement is accurate as of any
date other than the date on the front of this reoffer prospectus.
6
SUMMARY
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 provide
online systems to connect clients with service providers of estimates, audits
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.
RISK FACTORS
You should carefully consider the following factors and other information in
this Prospectus before deciding to purchase our Common Stock. 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.
Risks Related to Our Business
Our limited operating history makes evaluating our business and prospects
difficult.
We have been involved in the Internet based automobile collision insurance
claims business since January 2000. Our limited operating history in this
industry makes an evaluation of our future prospects very difficult. 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.
7
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 are dependent on only a few customers for a substantial portion of our
revenue and our two largest customer have recently had reductions in their
claims volume
During the year ended July 31, 2004, we derived 60% and 13% of our revenues from
two customers.. Our largest customer sold half of its U.S. based auto physical
damage business. This customer accounted for 60% of our revenue for year ended
July 31, 2004. We also experienced a decrease in revenue from our second largest
customer because of a change in their state's legislation regarding a special
type of insurance policy requiring a direct repair networks. We believe the
decrease of business from these two customers is complete. The loss of this
business combined with the increase expenditures required to roll out the ADP
contract and the time lag involved before we begin recognizing significant
revenues under the ADP contract will result in us incurring losses for fiscal
2005. Because of the competitive nature of our business and the uncertainty of
bringing on enough business to offset the loss of business, we may be unable to
replace revenues quickly enough to sustain profitability.
Our recent agreement with ADP Claims Services Group may not be profitable for
us.
We may not be successful in commercially exploiting the ADP Agreement. The ADP
Agreement anticipates that we will substantially increase the volume of claims
that we are currently processing. Our current infrastructure is not capable of
processing the anticipated number of claims. We are in the process of improving
our technological infrastructure by acquiring the equipment and resources
necessary to increase the volume of claims we anticipate handling with ADP.
There is no assurance we will be able to substantially increase our claims
processing capacity in such a short period of time. Although we have achieved
certain milestones and met certain conditions for the continuation of this
agreement, the program is early in its sales cycle. There is no requirement that
ADP refer a minimum number of claims to us under the Agreement. There is no
assurance we will achieve the anticipated revenues, gross margins or profits
anticipated under this Agreement. ADP has the ability to cancel this Agreement,
which would adversely affect our business prospects. Our Agreement with ADP will
result in a different revenue recognition model for claims processed through the
ADP system. Because ADP is the obligor to make the payments directly to the
repair shops we will only recognize our portion of the net revenues from sales
under this agreement. Thus, our revenue will not grow as significantly as in the
past, if and when we generate more business with ADP. However, our margins would
grow significantly if and when we generate more business with ADP.
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 the repair
facility or we 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.
8
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 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 two other companies that offer internet-based
services similar to ours. These competitors provide their services primarily to
the fleet management and auto glass industries. 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 must 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 remain
profitable.
9
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 2,500 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.
If we fail to adequately protect our trademarks and proprietary rights, our
business could be harmed. Our rights to our service marks 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, eJusterSuite, eJuster Transfer, and eProperty Suite will be
approved. We have been involved in litigation regarding the rights to use the
name eAutoclaims. 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.
10
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.
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.
Our information technology systems are subject to certain risks that we cannot
control.
Our information systems, including our accounting systems, are dependent, to an
extent, upon third-party software, global communications providers, telephone
systems and other aspects of technology and Internet infrastructure that are
susceptible to failure. Though we have implemented redundant systems and network
security measures, our information technology remains susceptible to outages,
11
computer viruses, break-ins and similar disruptions that may inhibit our ability
to provide services to our customers and the ability of our customers to access
our systems. In addition, because we are located in Florida we are susceptible
to power disruptions and outages due to hurricanes and other weather events.
This may result in the loss of customers or a reduction in demand for our
services. If disruption occurs, our profitability and results of operations may
suffer.
We are exposed to potential risks from recent legislation requiring companies to
evaluate their internal control over financial reporting.
We are working diligently toward evaluating and documenting our internal control
systems in order to allow management to report on, and our independent auditors
to attest to, our internal control over financial reporting, as required by
Section 404 of the Sarbanes-Oxley Act of 2002. This system for the purpose of
complying with Sarbanes-Oxley Section 404 will require significant effort in a
compressed timeframe, as well as result in our incurring costs to comply with
Sarbanes-Oxley Section 404. There can be no assurances that the evaluation
required by Sarbanes-Oxley Section 404 will not result in the identification of
significant control deficiencies or that our auditors will be able to attest to
the effectiveness of our internal control over financial reporting.
We have account payables that have long payment cycles due to the nature of the
collision repair business.
Many of our contracts with customers provide for payment to us for vehicle
repairs at the time the repair cost has been determined. Under these agreements,
we bear all risks associated with the repair of the vehicle beginning with
receipt of payment from our customer. Historically, approximately two percent
(2%) of policyholders fail to have the vehicle repaired after filing a claim
with their insurance carrier. Although we bear the risk of these repairs, it is
not entirely clear as to when, or if, we are entitled to hold these payments. It
is possible that other parties (i.e. the insurance carrier, the repair facility
or the individual automobile owner) may claim that they are entitled to such
funds. The policyholder often saves for the deductible portion of their claim,
which can result in a long period of time between the time they file their claim
and the time that the vehicle is repaired. Because of the uncertainty as to if
we may be required to make these payments, when we may be required to make them,
and who we may be required to pay, we book such amounts as accounts payable in
our financial statements. As of April 30, 2005, $2,815,388 of our accounts
payable consisted of advance payments. Although management believes we are
entitled to hold such funds due to the risk we assume for repair of a vehicle,
there is no assurance that customers will agree with our position. Should
eAutoclaims be required to issue payment for all such amounts at one time, we
may not be able to do so.
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.
12
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
hurricanes, 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.
13
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.
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 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.
14
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 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.
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%
(currently aggregating $42,790 annually, assuming no conversion). To date, we
have fulfilled our dividend obligations on the Series A Preferred Stock through
the issuance of additional shares of our Common Stock to the holders of our
series A Preferred Stock.
15
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.
Antidilution rights granted to certain investors may cause substantial dilution
to our other stockholders.
During March through May, 2004 we sold a total of 9,004,429 units at an offering
price of $.28 per unit generating gross offering proceeds of $2,521,240. We
netted $2,428,125 after payment of placement fees and expenses. Each unit
consists of one (1) share of Common Stock and one Common Stock purchase
exercised with $.35 per share. The warrant contained "4 ratchet" antidilution
protection to avoid dilution of the equity interest represented by the
underlying shares upon the occurrence of certain events, including the issuance
of equity securities if an issuance, conversion or exercise price less than
$.35. The warrant holders are entitled to demand registration rights for a two
year period. In addition, we are subject to liquidated damages if we do not
maintain the effectiveness of the subject registration statement. Our Common
Stock currently trades at a price less than $.35 per share. If we raise
additional capital to meet our current working capital requirements this may
trigger the antidilution rights of the investors in our March through May 2004
private placement which may result in additional dilution to our current
shareholders. In addition, if we fail to process 9,000 claims under the ADP
Co-Marketing Agreement by March 1, 2005 or 25,000 claims by August 1, 2005 these
same investors are entitled to receive additional units for no additional
consideration. If we fail to process 6,000 claims under the ADP Co-Marketing
Agreement by March 1, 2005 or 16,500 claims by August 1, 2005 these same
investors are entitled to a 50% increase in the number of purchased units on
each date for no additional consideration. The additional units that could be
issued if both targets are not met are 9,004,429. If we process between 6,000
and 9,000 before March 1, 2005 and/or between 16,500 and 25,000 before August 1,
2005, these investors would receive a prorated portion of 4,502,215 units for
the March 1, 2005 target date and a prorated portion of 4,502,215 units for the
August 1, 2005 target date.
In order to help resolve this open issue, in December 2004 we offered those
prior investors 50% of the total potential True up Units (i.e.- the units that
were potentially issuable if the March 2005 target volumes are not met) in
exchange for releasing the Company from the remaining August 2005 target volume
commitment. Investors representing 4,678,716 of these units accepted our offer.
We therefore granted 2,339,358 units to the investors that agree to the True Up
amendment. We did not make the March 1, 2005 claim target and, therefore, issued
2,162,860 Units to the Investors. We are still subject to the August 2005 target
volumes on the remaining 4,325,713 units and the 790,200 placement agent unit
warrants, if the placement agent warrants are exercised, and we could have to
issue up to another 2,953,060 Units if we don't meet the August 2005 claims
target volumes.
16
In addition, with the sale of new equity units represented by this registration
statement, we have notified the shareholders that the exercise price of their
warrants for common shares were reduced from $0.35 to $0.16 (the price of the
units).
During January and February, 2005 we sold a total of 10,775,000 units at an
offering price of $.16 per unit generating gross offering proceeds of
$1,724,000. We netted $1,508,954 after payment of $215,046 in placement fees and
expenses. We also issued 1,616,250 placement agent warrants to purchase units at
$0.16 per units, that if exercised have the same rights as the other units
purchased by the investors, except they have a term of five years. Each unit
consists of one (1) share of Common Stock and one-half Common Stock purchase
warrant exercised with $.30 per share. The warrant contained "full ratchet"
antidilution protection to avoid dilution of the equity interest represented by
the underlying shares upon the occurrence of certain events, including the
issuance of equity securities if an issuance, conversion or exercise price less
than $.30. The warrant holders are entitled to registration rights for a two
year period. In addition, we are subject to liquidated damages if we do not
maintain the effectiveness of the subject registration statement. Our Common
Stock currently trades at a price less than $.30 per share. If we raise
additional capital to meet our current working capital requirements this may
trigger the antidilution rights of the investors in our January through February
2005 private placement which may result in additional dilution to our current
shareholders.
USE OF PROCEEDS
We will not receive any proceeds from the sale of stock by the selling
stockholders. All sales proceeds will be received by the selling stockholders.
We will, however, receive proceeds of approximately $2,637,944 if all options
related to the shares are exercised by the selling stockholders. We intend to
use such proceeds for general corporate purposes.
SELLING STOCKHOLDERS
The selling stockholders acquired or will acquire beneficial ownership of all
shares to be registered under this reoffer prospectus through stock options
granted by us. The following table shows the names of the selling stockholders,
the number of shares of common stock beneficially owned by such stockholder as
of May 31, 2005, and the number of shares of common stock that he may sell
from time to time under this reoffer prospectus.
17
We may amend or supplement this reoffer prospectus from time to time in the
future to update or change this list of selling stockholders and shares which
may be resold.
---------------------------- ------------- ------------- ------------ ----------- -----------
Number of Shares Number of Percentage of Shares
Beneficially Owned (1) Shares Beneficially Owned (2)
Offered
---------------------------- ------------- ------------- ------------ ----------- -----------
Selling Before After Before After
Shareholders (3) Offering Offering Offering Offering
---------------------------- ------------- ------------- ------------ ----------- -----------
Eric Seidel 3,336,759 - 3,336,759 6.0% *
---------------------------- ------------- ------------- ------------ ----------- -----------
Larry Colton 425,364 - 425,364 * *
---------------------------- ------------- ------------- ------------ ----------- -----------
Reed Mattingly 765,164 89,701 675,463 1.4% *
---------------------------- ------------- ------------- ------------ ----------- -----------
Dave Mattingly 496,204 - 496,204 * *
---------------------------- ------------- ------------- ------------ ----------- -----------
Stacey Adams 439,135 439,135 * *
---------------------------- ------------- ------------- ------------ ----------- -----------
Jeffrey Dickson 938,550 28,550 910,000 1.7% *
---------------------------- ------------- ------------- ------------ ----------- -----------
Nicholas D. Trbovich, Jr. 527,033 12,080 514,953 1.0% *
---------------------------- ------------- ------------- ------------ ----------- -----------
Christopher Korge 4,798,428 1,949,903 2,848,525 8.4% 3.6%
---------------------------- ------------- ------------- ------------ ----------- -----------
John K. Pennington 82,082 - 82,082 * *
---------------------------- ------------- ------------- ------------ ----------- -----------
* - Less than 1%
(1) Represents shares owned beneficially by the named individual, including
shares that such individual has the right to acquire within 60 days of
the date of this Reoffer Prospectus. Unless otherwise noted, all
persons referred to above have sole voting and sole investment power.
(2) Based on 54,761,033 shares outstanding as of May 31, 2005.
(3) All individuals named are officers and/or directors of eAutoclaims,
Inc.
PLAN OF DISTRIBUTION
The selling stockholders and any of their pledges, donees, assignees,
transferees, may sell any or all of the shares of common stock for value from
time to time under this reoffer prospectus in one or more transactions on the
Over-the-Counter Bulletin Board or any stock exchange, market or trading
facility on which the common stock is traded, in a negotiated transaction or in
a combination of such methods of sale, at market prices prevailing at the time
of sale, at prices related to such prevailing market prices or at prices
otherwise negotiated. The selling stockholders will act independently of us in
making decisions with respect to the timing, manner and size of each sale. The
selling stockholders may use any one or more of the following methods when
selling shares:
- ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
- block trades in which the broker-dealer will attempt to sell
the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
- an exchange distribution in accordance with the rules of the applicable
exchange;
- privately negotiated transactions;
- underwritten offerings;
- short sales;
- agreements by the broker-dealer and a selling stockholder to sell a
specified number of such shares at a stipulated price per share;
- a combination of any such methods of sale; and
18
- any other method permitted by applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, under Section 4(1) of the Securities Act or
directly to us in certain circumstances rather than under this reoffer
prospectus.
Unless otherwise prohibited, the selling stockholders may enter into hedging
transactions with broker-dealers or other financial institutions in connection
with distributions of the shares or otherwise. In such transactions, broker-
dealers or financial institutions may engage in short sales of the shares in the
course of hedging the position they assume with a selling stockholder. The
selling stockholders may also engage in short sales, puts and calls,
forward-exchange contracts, collars and other transactions in our securities or
derivatives of our securities and may sell or deliver shares in connection with
these trades. If a selling stockholder sells shares short, he or she may
redeliver the shares to close out such short positions. The selling stockholders
may also enter into option or other transactions with broker-dealers or
financial institutions which require the delivery to the broker-dealer or the
financial institution of the shares. The broker-dealer or financial institution
may then resell or otherwise transfer such shares pursuant to this reoffer
prospectus. In addition, the selling stockholder may loan his or her shares to
broker-dealers or financial institutions who are counterparties to hedging
transactions and the broker-dealers, financial institutions or counterparties
may sell the borrowed shares into the public market. A selling stockholder may
also pledge shares to his or her brokers or financial institutions and under the
margin loan the broker or financial institution may, from time to time, offer
and sell the pledged shares. To our knowledge, no selling stockholder has
entered into any agreements, understandings or arrangements with any
underwriters, broker-dealers or financial institutions regarding the sale of his
or her shares other than ordinary course brokerage arrangements, nor are we
aware of any underwriter or coordinating broker acting in connection with the
proposed sale of shares by a selling stockholder.
The selling stockholders and any broker-dealers that participate in the
distribution of the common stock may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, and any commissions received by
them and any profit on the resale of the common stock sold by them may be deemed
to be underwriting discounts and commissions under the Securities Act. All
selling and other expenses incurred by the selling stockholders will be borne by
the selling stockholders.
There is no assurance that the selling stockholders will sell all or any portion
of the shares of common stock offered.
We will pay all expenses in connection with this offering and will not receive
any proceeds from sales of any common stock by the selling stockholders.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby will be passed
upon for us by Johnson, Pope, Bokor, Ruppel & Burns, LLP, of Clearwater, FL. As
of May 31, 2005, Michael T. Cronin, a partner of such firm, owned 1,996,459
shares of eAutoclaims common stock.
19
EXPERTS
The balance sheet at July 31, 2004 and 2003, and the statements of operations
and cash flows for the three years in the periods then ended, incorporated by
reference in this prospectus have been audited by Goldstein Golub Kessler LLP,
independent certified public accountants, to the extent and for the periods set
forth in their report, and are incorporated by reference in reliance upon such
report given upon the authority of said firm as experts in auditing and
accounting.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our articles of incorporation eliminate the personal liability of any director
of our company to us or our stockholders for money damages for breach of
fiduciary duty as a director or officer, to the fullest extent allowed by the
General Corporation Law of Nevada, or NGCL. Under the NGCL, directors and
officers will not be individually liable to us or our stockholders for any
damages as a result of any act or failure to act in his capacity as a director
or officer unless it is proven that (a) his act or failure to act constituted a
breach of his fiduciary duties as a director or officer; and (b) his breach of
those duties involved intentional misconduct, fraud, or a knowing violation of
law. The effect of these provisions in our articles of incorporation is to
eliminate our rights and the rights of our stockholders (through stockholders'
derivative suits on our behalf) to recover money damages from a director for all
actions or omissions as a director (including breaches resulting from negligent
or grossly negligent behavior) except in the situations described above. These
provisions do not limit or eliminate our rights or the rights of our
stockholders to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care.
Our articles of incorporation require us to indemnify and advance expenses to
any person who incurs liability or expense by reason of such person acting as a
director of our company, to the fullest extent allowed by the NGCL. This
indemnification is mandatory with respect to directors in all circumstances in
which indemnification is permitted by the NGCL, subject to the requirements of
the NGCL. In addition, we, in our sole discretion, may indemnify and advance
expenses, to the fullest extent allowed by the NGCL, to any person who incurs
liability or expense by reason of such person acting as an officer, employee, or
agent of our company, except where indemnification is mandatory pursuant to the
NGCL, in which case we are required to indemnify to the fullest extent required
by the NGCL.
A corporation may not eliminate liability: (i) for acts or omissions involving
intentional misconduct or knowing and culpable violations of law; (ii) for acts
or omissions that the individual believes to be contrary to the best interests
of the corporation or its shareholders or that involve the absence of good faith
on the part of the individual; (iii) for any transaction from which the
individual derived an improper personal benefit; (iv) for acts or omissions
involving a reckless disregard for the individual's duty to the corporation or
its shareholders when the individual was aware or should have been aware of a
risk of serious injury to the corporation or its shareholders; (v) for acts or
omissions that constitute an unexcused pattern of inattention that amounts to
any abdication of the individual's duty to the corporation or its shareholders;
or (vii) for improper distribution to shareholders and loans to directors and
officers. Also, a corporation may not eliminate liability for any act or
omission occurring prior to the date on which the corporation authorizes
indemnification of its directors, officers, employees and agents.
We have entered into agreements with our directors and executive officers that
require us to indemnify such persons against expenses, judgments, fines,
settlements and other amounts actually and reasonably incurred (including
expenses of a derivative action) in connection with any proceeding, whether
actual or threatened, to which any such person may be made a party by reason of
the fact that such person is or was a director or officer or any of its
affiliated enterprises, provided such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to our best interests
and, with respect to any criminal proceeding, had no reasonable cause to believe
his or her conduct was unlawful. The indemnification agreements also set forth
certain procedures that will apply in the event of a claim for indemnification
there under.
The above discussion of our Articles of Incorporation and the General
Corporation Law of Nevada is only a summary and is qualified in its entirety by
the full text of each of the foregoing.
20
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a Registration
Statement on Form S-8. This prospectus, which is a part of the registration
statement, does not contain all of the information included in the registration
statement. Some information is omitted, and you should refer to the registration
statement and its exhibits. With respect to references made in this prospectus
to any contract, agreement or other document of ours, such references are not
necessarily complete and you should refer to the exhibits attached to the
Registration Statement for copies of the actual contract, agreement or other
document. You may review a copy of the Registration Statement, including
exhibits, at the Securities and Exchange Commission's public reference room at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 or Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The public
may obtain information on the operation of the public reference room by calling
the Securities and Exchange Commission at 1-800- SEC-0330. We will also file
annual, quarterly and current reports, proxy statements and other information
with the Securities and Exchange Commission. You may read and copy any reports,
statements or other information on file at the public reference rooms. You can
also request copies of these documents, for a copying fee, by writing to the
Securities and Exchange Commission. Our Securities and Exchange Commission
filings and the registration statement can also be reviewed by accessing the
Securities and Exchange Commission's Internet site at http://www.sec.gov, which
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Securities and Exchange
Commission. You should rely only on the information provided in this prospectus
or any prospectus supplement. We have not authorized anyone else to provide you
with different information. We are not making an offer to sell, nor soliciting
an offer to buy, these securities in any jurisdiction where that would not be
permitted or legal. Neither the delivery of this prospectus nor any sales made
hereunder after the date of this prospectus shall create an implication that the
information contained herein or our affairs have not changed since the date
hereof.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents that we filed with the SEC are incorporated herein by
reference:
(a) The Registrant's Annual Report on Form 10-K for the year ended July 31,
2004.
(b) The Registrant's Quarterly Reports on Form 10-Q for the three months ended
April 30, 2005.
(c) The Registrant's Form 8-K filed on June 10, 2005, April 8, 2005,
March 1, 2005, February 4, 2005 and October 29, 2004.
(d) All documents subsequently filed by the Registrant pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement
and to be a part hereof from the date of filing of such documents.
We will provide without charge to each person, including any beneficial owner,
to whom a copy of this reoffer prospectus is delivered a copy of any or all
documents incorporated by reference into this reoffer prospectus except the
exhibits to such documents, unless such exhibits are specifically incorporated
by reference in such documents. You may request copies by writing Mr. Larry
Colton at lcolton@eautoclaims.com or calling (813) 749-1020.
21
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Registrant with the Commission are
incorporated by reference:
(a) The Registrant's Annual Report on Form 10-K for the year ended July 31,
2004.
(b) The Registrant's Quarterly Reports on Form 10-Q for the three months
ended April 30, 2005.
(c) The Registrant's Form 8-K filed on February 4, 2005 and October 29,
2004.
(d) All documents subsequently filed by the Registrant pursuant to Section
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this
registration statement and to be a part hereof from the date of filing
of such documents.
Item 4. Description of Securities.
Not Applicable
Item 5. Interest of Named Experts and Counsel.
Michael T. Cronin, Esq., of the law firm of Johnson, Pope, Bokor, Ruppel &
Burns, P.A., has provided legal services and advice to the Company in connection
with a variety of corporate and securities matters, including the registrant's
compliance with the periodic reporting requirements of the Securities Exchange
Act of 1934, and general legal consulting and advice on a variety of matters. As
of January 31, 2005, Michael T. Cronin, a partner of such firm, owned 1,996,459
shares of eAutoclaims common stock. Such shares were issued to Mr. Cronin as
partial compensation for his services rendered before the date of this
Registration Statement. Neither Mr. Cronin nor his law firm has been employed
on a contingent basis at anytime. No securities issued to Mr. Cronin are being
registered as part of this Form S-8.
Item 6. Indemnification of Directors and Officers.
Our articles of incorporation eliminate the personal liability of any director
of our company to us or our stockholders for money damages for breach of
fiduciary duty as a director or officer, to the fullest extent allowed by the
General Corporation Law of Nevada, or NGCL. Under the NGCL, directors and
officers will not be individually liable to us or our stockholders for any
damages as a result of any act or failure to act in his capacity as a director
or officer unless it is proven that (a) his act or failure to act constituted a
breach of his fiduciary duties as a director or officer; and (b) his breach of
those duties involved intentional misconduct, fraud, or a knowing violation of
law. The effect of these provisions in our articles of incorporation is to
22
eliminate our rights and the rights of our stockholders (through stockholders'
derivative suits on our behalf) to recover money damages from a director for all
actions or omissions as a director (including breaches resulting from negligent
or grossly negligent behavior) except in the situations described above. These
provisions do not limit or eliminate our rights or the rights of our
stockholders to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care.
Our articles of incorporation require us to indemnify and advance expenses to
any person who incurs liability or expense by reason of such person acting as a
director of our company, to the fullest extent allowed by the NGCL. This
indemnification is mandatory with respect to directors in all circumstances in
which indemnification is permitted by the NGCL, subject to the requirements of
the NGCL. In addition, we, in our sole discretion, may indemnify and advance
expenses, to the fullest extent allowed by the NGCL, to any person who incurs
liability or expense by reason of such person acting as an officer, employee, or
agent of our company, except where indemnification is mandatory pursuant to the
NGCL, in which case we are required to indemnify to the fullest extent required
by the NGCL.
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 Commission that such indemnification is against public policy as
expressed in the Acts and are therefore, unenforceable.
Item 7. Exemption from Registration Claim.
None
Item 8. Exhibits.
4.2 Form of 1998 Stock Option Plan(1)
4.4 Form of Non-Qualified Stock Option Agreement(1)
4.5 Form of Directors Stock Option Agreement(1)
4.6 Form of Employee Stock Option pursuant to 1998 Stock Option
Plan(1)
5 Opinion re legality(2)
10 Compensation Agreements(1)
23.1 Consent of Independent Auditors(2)
(1) Previously filed. (2) Filed herewith.
Item 9. Undertakings.
A. Undertakings Relating to Delayed or Continuous Offerings of Securities.
(1) The Registrant hereby undertakes to file, during any period in
which offers or sales are being made, a post-effective amendment to this
registration statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
23
(2) The Registrant hereby undertakes that, for the purpose of
determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) The Registrant hereby undertakes to remove from registration by
means of a post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
B. Undertaking Relating to the Incorporation of Certain Documents by Reference.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(b) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, on July 21, 2005.
eAutoclaims, Inc.
By: /s/ Eric Seidel
---------------------------------
Eric Seidel, CEO and President
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Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
SIGNATURE TITLE DATE
/s/ Eric Seidel July 21, 2005
-------------------------- -----------------------
Eric Seidel President, Director,
Chief Executive Officer
/s/ Larry Colton July 21, 2005
------------------------- -----------------------
Larry Colton Chief Financial Officer
Principal Accounting
Officer
/s/ Jeffrey D. Dickson July 6, 2005
------------------------- -----------------------
Jeffrey D. Dickson Director,
Chairman of the Board
/s/ Nicholas D. Trbovich, Jr. July 18, 2005
------------------------- -----------------------
Nicholas D. Trbovich, Jr. Director
/s/ Christopher Korge July 19, 2005
------------------------- -----------------------
Christopher Korge Director
/s/ John K. Pennington July 18, 2005
------------------------- -----------------------
John K. Pennington Director
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EXHIBIT INDEX
Exhibit
Number Title
4.2 Form of 1998 Stock Option Plan**
4.3 Form of Stock Option Agreement pursuant to 1998 Stock Option Plan**
4.4 Form of Director's Stock Option Agreement **
4.5. Form of Non-Qualified Stock Option Agreement **
5 Opinion re legality*
10 Compensation agreements**
23.1 Consent of Independent Auditors *
23.2 Consent of Legal Counsel (included as part of Exhibit 5)*
* Filed herewith
** Filed previously. See Part II, Item 8 above
ARN/MTC/ej/327720
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