UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





T
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF
      1934


For the
quarterly period ended:     SEPTEMBER 30,
2009




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


For the
transition period from ______________ to ____________________





Commission
File Number: 001-11497





AUTOINFO,
INC.


(Exact
name of Registrant as specified in its charter)





DELAWARE
            13-2867481(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification number)





6413
Congress Ave., Suite 260, Boca Raton, FL 33487


(Address
of principal executive office)





(561)
988-9456


(Registrant’s
telephone number, including area code)





Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.





YES T               NO
£





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).





YES £               NO
£





Indicate
by check mark whether the Registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):





LARGE
      ACCELERATED FILER £
            
            ACCELERATED
      FILER                        £NON-ACCELERATED
      FILER     £
            
            SMALLER
      REPORTING COMPANY T


Indicate
by check mark whether the Registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).





YES £               NO
T





The
number of shares outstanding of the Registrant’s common stock as of
November 13, 2009:   32,996,060 shares of common
stock.










AUTOINFO, INC. AND SUBSIDIARIES





INDEX







Part I.
              Financial
      Information:Item 1.
              
              Consolidated
      Financial Statements:
              PageBalance
      SheetsSeptember 30, 2009 (unaudited) and December 31, 2008
      (audited)
              3Statements
      of Income (unaudited)Three and Nine months ended September 30, 2009
      and 2008
              4Statements
      of Cash Flows (unaudited)Nine months ended September 30, 2009 and
      2008
              5Notes to Unaudited Consolidated Financial
      Statements
              6Item 2.
              
              Management’s Discussion and Analysis of
      FinancialCondition and
      Results of Operations
              10Item 3.
              
              Quantitative and Qualitative Disclosures About Market
      Risk
              16Item 4T.
              
              Controls and Procedures
              16Part II.
              Other
      InformationItem 6.
              
              Exhibits
              16Signatures
              17


2
 Index


PART
I - FINANCIAL INFORMATION




Item 1.
            CONSOLIDATED
      FINANCIAL STATEMENTS




AUTOINFO, INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS




September 30, 2009
              
              
              December 31, 2008Unaudited
              
              
              AuditedASSETSCurrent
      assets:Cash
      and cash equivalents
              
              $
              409,000
              
              
              $
              390,000Accounts
      receivable, net of allowance for doubtful accounts of $371,000 and
      $370,000 as of September 30, 2009 and December 31, 2008,
      respectively
              
              
              35,533,000
              
              
              
              29,863,000Deferred
      income taxes (Note 2)
              
              
              687,000
              
              
              
              1,100,000Prepaid
      expenses
              
              
              798,000
              
              
              
              560,000Current
      portion of advances and other assets
              
              
              2,351,000
              
              
              
              1,260,000Total
      current assets
              
              
              39,778,000
              
              
              
              33,173,000Fixed
      assets, net of accumulated depreciation
              
              
              559,000
              
              
              
              590,000Deferred
      income taxes (Note 2)
              
              
              525,000
              
              
              
              680,000Advances
      and other assets, net of current portion
              
              
              10,502,000
              
              
              
              8,333,000$
              51,364,000
              
              
              $
              42,776,000LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts
      payable and accrued liabilities
              
              $
              17,857,000
              
              
              $
              12,303,000Loan
      payable
              
              
              16,124,000
              
              
              
              14,164,000Stockholders’
      EquityCommon
      stock - authorized 100,000,000 shares $.001 par value; issued and
      outstanding -32,946,000 shares as of September 30, 2009 and December 31,
      2008
              
              
              33,000
              
              
              
              33,000Additional
      paid-in capital
              
              
              20,012,000
              
              
              
              19,904,000Deficit
              
              
              (2,662,000
              )
              
              
              (3,628,000
              )Total
      stockholders’ equity
              
              
              17,383,000
              
              
              
              16,309,000$
              51,364,000
              
              
              $
              42,776,000


The
accompanying notes are an integral part of these consolidated financial
statements.


3
 Index


AUTOINFO, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF INCOME


(Unaudited)





Nine
      Months Ended
            
            
            Three
      Months EndedSeptember 30,
            
            
            September 30,2009
            
            
            2008
            
            
            2009
            
            
            2008Gross
      revenuesTransportation
      services
            
            $
            127,634,000
            
            
            $
            134,540,000
            
            
            $
            48,847,000
            
            
            $
            52,744,000Agent
      support services
            
            
            1,003,000
            
            
            
            -
            
            
            
            362,000
            
            
            
            -Total
      revenues
            
            
            128,637,000
            
            
            
            134,540,000
            
            
            
            49,209,000
            
            
            
            52,744,000Cost
      of transportation
            
            
            102,809,000
            
            
            
            111,805,000
            
            
            
            39,863,000
            
            
            
            44,291,000Gross
      profit
            
            
            25,828,000
            
            
            
            22,735,000
            
            
            
            9,346,000
            
            
            
            8,453,000Commissions
            
            
            18,414,000
            
            
            
            14,660,000
            
            
            
            6,806,000
            
            
            
            5,548,000Operating
      expenses
            
            
            5,453,000
            
            
            
            4,971,000
            
            
            
            1,796,000
            
            
            
            1,829,00023,867,000
            
            
            
            19,631,000
            
            
            
            8,602,000
            
            
            
            7,377,000Income
      from operations
            
            
            1,961,000
            
            
            
            3,104,000
            
            
            
            744,000
            
            
            
            1,076,000Interest
      expense
            
            
            330,000
            
            
            
            353,000
            
            
            
            131,000
            
            
            
            142,000Income
      before income taxes
            
            
            1,631,000
            
            
            
            2,751,000
            
            
            
            613,000
            
            
            
            934,000Income
      taxes (Note 2)
            
            
            665,000
            
            
            
            1,105,000
            
            
            
            255,000
            
            
            
            374,000Net  income
            
            $
            966,000
            
            
            $
            1,646,000
            
            
            $
            358,000
            
            
            $
            560,000Net
      income per share:Basic
            
            $
            .03
            
            
            $
            .05
            
            
            $
            .01
            
            
            $
            .02Diluted
            
            $
            .03
            
            
            $
            .05
            
            
            $
            .01
            
            
            $
            .02Weighted
      average number of common shares:Basic
            
            
            32,946,000
            
            
            
            32,717,000
            
            
            
            32,946,000
            
            
            
            32,901,000Diluted
            
            
            34,239,000
            
            
            
            34,740,000
            
            
            
            34,352,000
            
            
            
            34,406,000








The
accompanying notes are an integral part of these consolidated financial
statements.


4
 Index


AUTOINFO, INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(Unaudited)





Nine
      Months EndedSeptember 30,2009
            
            
            2008Cash
      flows from operating activities:Net
      income
            
            $
            966,000
            
            
            $
            1,646,000Adjustments
      to reconcile net income to net cash used in operating
      activities:Change
      in allowance for doubtful accounts
            
            
            1,000
            
            
            
            92,000Depreciation
      and amortization
            
            
            162,000
            
            
            
            117,000Stock-based
      compensation expense
            
            
            104,000
            
            
            
            187,000Deferred
      income taxes
            
            
            568,000
            
            
            
            944,000Changes
      in operating assets and liabilities:Accounts
      receivable
            
            
            (5,671,000
            )
            
            
            (12,278,000
            )Advances
      and other assets
            
            
            (3,497,000
            )
            
            
            (3,373,000
            )Accounts
      payable and accrued liabilities
            
            
            5,558,000
            
            
            
            7,012,000Net
      cash used in operating activities
            
            
            (1,809,000
            )
            
            
            (5,653,000
            )Cash
      flows from investing activities:Capital
      expenditures
            
            
            (132,000
            )
            
            
            (266,000
            )Net
      cash used in investing activities
            
            
            (132,000
            )
            
            
            (266,000
            )Cash
      flows from  financing activities:Exercise
      of stock options
            
            
            -
            
            
            
            54,000Increase
      in  loan payable, net
            
            
            1,960,000
            
            
            
            7,853,000Net
      cash provided by financing activities
            
            
            1,960,000
            
            
            
            7,907,000Net
      change in cash and cash equivalents
            
            
            19,000
            
            
            
            1,988,000Cash
      and cash equivalents, beginning of period
            
            
            390,000
            
            
            
            270,000Cash
      and cash equivalents, end of period
            
            $
            409,000
            
            
            $
            2,258,000








The
accompanying notes are an integral part of these consolidated financial
statements.


5
 Index


AUTOINFO, INC. AND SUBSIDIARIES


NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





Forward Looking
Statements





Certain statements made in this
Quarterly Report on Form 10-Q are “forward-looking statements regarding the
plans and objectives of management for future operations.  Such
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.  The
forward-looking statements included herein are based on current expectations
that involve numerous risks and uncertainties.  Our  plans
and objectives are based, in part, on assumptions involving judgments with
respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our
control.  Although we believe that our assumptions underlying the
forward-looking statements are reasonable, any of the assumptions could prove
inaccurate and, therefore, there can be no assurance that the forward-looking
statements included in this report will prove to be accurate.  In
light of the significant uncertainties inherent in the forward-looking
statements included herein particularly in view of the current state of our
operations, the inclusion of such information should not be regarded as a
statement by us or any other person that our objectives and plans will be
achieved.Factors that could cause actual
results to differ materially from those expressed or implied by forward-looking
statements include, but are not limited to, the factors set forth under the
headings “Business,”and“Risk Factors”
in  our Annual Report on Form 10-K for the year ended December 31,
2008 as filed with the United States Securities and Exchange Commission
(“SEC”).








Note 1. - Business and
Summary of Significant Accounting Policies





Business





Through
June 30, 2009, AutoInfo, Inc., through its wholly-owned subsidiaries, Sunteck
Transport Group, Inc., Inc. and Eleets Logistics, Inc. (collectively, the
Company),  operated in one business segment. During the third quarter
of 2009, the Company determined that it operated in two business segments,
non-asset based transportation services and agent support services. The
non-asset based transportation services segment includes our brokerage and
contract carrier services which are provided through a network of independent
sales agents throughout the United States and Canada. Revenue in this segment is
generated from freight transportation transactions.  The agent support
services  segment includes an array of services that we provide to our
agent network to support and encourage the expansion of our agents’ businesses,
primarily financial support through interest bearing long-term loans and
non-interest bearing short-term loans, as well as other services including
training, margin analysis, marketing assistance, industry and market segment
data, and business analysis tools.  This segment also includes
potential revenues related to profit participations and realization on the
option to acquire equity that the Company may receive related to a loan or
advance extended to an agent.




As a
non-asset based provider of brokerage and contract carrier transportation
services, the Company does not own any equipment and its services are provided
through its strategic alliances with less than truckload, truckload, air, rail,
ocean common carriers and independent owner-operators to service customers’
needs. The Company’s brokerage and contract carrier services are provided
through a network of independent sales agents throughout the United States and
Canada. During its most recently completed fiscal year, the Company generated
revenue, gross profit and net income of approximately $180.2 million, $30.7
million and $2.2 million, respectively.




6
 Index


Economic
Downturn





During
the latter part of the fourth quarter of 2008, the general economic conditions
in the United States and globally experienced a significant downturn, impacting
the market segments in which the Company operates.  This downturn,
referred to by many economic experts as a world-wide recession, has continued
into 2009.








Summary of Significant
Accounting Policies





Basis of
Presentation





The
financial statements of the Company have been prepared using the accrual basis
of accounting under accounting principles generally accepted in the United
States of America (GAAP).





The
consolidated financial statements, which are unaudited, have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC). In management’s opinion, these financial statements include all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the results of operations for the interim periods
presented. The results of operations for the three and nine months ended
September 30, 2009 and 2008 are not necessarily indicative of results to be
expected for the entire year.  Pursuant to SEC rules and regulations,
certain information and footnote disclosures normally included in financial
statements prepared in accordance with GAAP have been omitted from these
statements.  The consolidated financial statements and notes thereto
should be read in conjunction with the financial statements and notes included
in our Annual Report on Form 10-K for the year ended December 31,
2008.





Principles of
Consolidation





The
consolidated financial statements include the accounts of the AutoInfo, Inc.,
its wholly-owned subsidiaries, Sunteck Transport Group, Inc. and Eleets
Logistics, Inc.  All significant intercompany balances and
transactions have been eliminated in consolidation.





Use of
Estimates





The
preparation of these financial statements in conformity with GAAP requires
management to make certain estimates and assumptions.  These estimates
and assumptions affect the reported amounts of assets, liabilities and
contingent liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the periods presented. The Company
believes that all such assumptions are reasonable and that all estimates are
adequate, however, actual results could differ from those
estimates.





Revenue
Recognition





Gross
revenues from transportation services consist of the total dollar value of
services purchased by shippers.  Gross profits are gross revenues less
the direct costs of transportation. Revenue is recognized upon delivery of
freight, at which time the related transportation cost, including commission, is
also recognized.  At that time, the Company’s obligations are
completed and collection of receivables is reasonably assured. Gross revenues
from agent support services consist primarily of interest on interest bearing
loans.





Emerging
Issues Task Force No. 99-19, “Reporting Revenues Gross as a Principal Versus Net
as an Agent” (EITF 99-19), establishes criteria for recognizing revenues on a
gross or net basis. The Company is the primary obligor in its transactions, has
all credit risk, maintains substantially all risk and rewards, has discretion in
selecting the supplier, and has latitude in pricing
decisions.  Accordingly, the Company records all transactions at the
gross amount, consistent with the provisions of EITF 99-19.


7
 Index


Cash and Cash
Equivalents





Cash and
cash equivalents consist of cash in banks.





Provision For Doubtful
Accounts





The
Company continuously monitors the creditworthiness of its customers and has
established an allowance for amounts that may become uncollectible in the future
based on current economic trends, its historical payment and bad debt write-off
experience, and any specific customer related collection issues.





Fixed
Assets





Fixed
assets as of September 30, 2009 and December 31, 2008, consisting primarily of
furniture, fixtures and equipment and computer system development costs, were
carried at cost net of accumulated depreciation. Depreciation of fixed assets
was provided on the straight-line method over the estimated useful lives of the
related assets which range from three to five years.





Income Per
Share





Basic
income per share is based on net income divided by the weighted average number
of common shares outstanding.  Common stock equivalents outstanding
were 1,406,000 and 1,505,000, and 1,293,000 and 2,023,000, respectively, for the
three and nine month periods ended September 30, 2009 and 2008,
respectively





Income
Taxes





The
Company utilizes the asset and liability method for accounting for income
taxes.  Under the asset and liability method, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and future benefits to be
recognized upon the utilization of certain operating loss
carryforwards.   Deferred 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 effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.








Note
2- Income Taxes





For the
three and nine month periods ended September 30, 2009 and 2008, respectively,
the provision for income taxes consisted of the following:





Three
      Months Ended September 30,2009
            
            
            2008Current
            
            
            Deferred
            
            
            Current
            
            
            DeferredTax
      expense before application of operating loss carryforwards
            
            $
            255,000
            
            
            $
            -
            
            
            $
            374,000
            
            
            $
            -Tax
      expense (benefit) of operating loss carryforwards
            
            
            (219,000
            )
            
            
            219,000
            
            
            
            (320,000
            )
            
            
            320,000Income
      tax expense
            
            $
            36,000
            
            
            $
            219,000
            
            
            $
            54,000
            
            
            $
            320,000


8
 Index





Nine
      Months Ended September 30,2009
            
            
            2008Current
            
            
            Deferred
            
            
            Current
            
            
            DeferredTax
      expense before application of operating loss carryforwards
            
            $
            665,000
            
            
            $
            -
            
            
            $
            1,105,000
            
            
            $
            -Tax
      expense (benefit) of operating loss carryforwards
            
            
            (568,000
            )
            
            
            568,000
            
            
            
            (944,000
            )
            
            
            944,000Income
      tax expense
            
            $
            97,000
            
            
            $
            568,000
            
            
            $
            161,000
            
            
            $
            944,000





The
deferred tax asset of $1,212,000 and $1,780,000 at September 30, 2009 and
December 31, 2008, respectively, represents expected future tax savings
resulting from the Company’s utilization of its net operating loss
carryforwards. As of December 31, 2008, the Company has net operating loss
carryforwards of approximately $5.2 million for federal income tax purposes
which expire through 2014. Utilization of this benefit is primarily subject to
the extent of future earning of the Company, and may be limited by, among other
things, stockholder changes, including the possible issuance by the Company of
additional shares in one or more financing or acquisition
transactions.





Based
upon available objective evidence, including the Company’s post-merger history
of profitability, management believes it is more likely than not that forecasted
taxable income will be sufficient to utilize all of the net operating loss
carryforwards before its expiration in 2014.








Note
3 – Segment Reporting





Through
June 30, 2009, the Company operated in one business segment. During the third
quarter of 2009, the Company determined that it operated in two business
segments, non-asset based transportation services and agent support services.
The non-asset based transportation services segment includes our brokerage and
contract carrier services which are provided through a network of independent
sales agents throughout the United States and Canada. Revenue in this segment is
generated from freight transportation transactions.   The agent
support services segment includes an array of services that we provide to our
agent network to support and encourage the expansion of our agents’ businesses,
primarily financial support through interest bearing long-term loans and
non-interest bearing short-term loans, as well as other services including
training, margin analysis, marketing assistance, industry and market segment
data, and business analysis tools.  This segment also includes
potential revenues related to profit participations and realization on the
option to acquire equity that the Company may receive related to a loan or
advance extended to an agent.





Our gross
profits, expenses, and total assets by segment are summarized
below:




Transportation
      Services
            
            
            Agent
      Support Services
            
            
            Total2009Three
      months ended September 30Gross
      profit
            
            $
            8,984,000
            
            
            $
            362,000
            
            
            $
            9,346,000Expenses
            
            
            8,541,000
            
            
            
            61,000
            
            
            
            8,602,000Nine
      months ended September 30Gross
      profit
            
            
            24,825,000
            
            
            
            1,003,000
            
            
            
            25,828,000Expenses
            
            
            23,684,000
            
            
            
            183,000
            
            
            
            23,867,000Assets
            
            
            42,844,000
            
            
            
            8,520,000
            
            
            
            51,364,000


9
 Index


Item 2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





Cautionary
statement identifying important factors that could cause our actual results to
differ from those projected in forward looking statements.





Readers
of this report are advised that this document contains both statements of
historical facts and forward looking statements.  Forward looking
statements are subject to certain risks and uncertainties, which could cause
actual results to differ materially from those indicated by the forward looking
statements.  We undertake no obligation to revise or update publicly
any forward looking statements for any reason.   Examples of
forward looking statements include, but are not limited to (i) projections of
revenues, income or loss, earnings per share, capital expenditures, dividends,
capital structure and other financial items, (ii) statements of our plans and
objectives with respect to business transactions and enhancement of shareholder
value, (iii) statements of future economic performance, and (iv) statements of
assumptions underlying other statements and statements about our business
prospects.





The
following Management’s Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with our financial
statements and the notes thereto appearing elsewhere in this
report.





Overview





Through
our wholly-owned subsidiaries, Sunteck Transport Group, Inc. and Eleets
Logistics, Inc., we are a non-asset based transportation services company,
providing transportation capacity and related transportation services to
shippers throughout the United States, and to a lesser extent,
Canada.  As a non-asset based provider of brokerage and contract
carrier transportation services, we do not own any equipment and our services
are provided through our strategic alliances with less than truckload,
truckload, air, rail, ocean common carriers and independent owner-operators to
service our customers’ needs. Our services include ground transportation coast
to coast, local pick up and delivery, air freight and ocean
freight.  We have strategic alliances with less than truckload,
truckload, air, rail and ocean common carriers to service our customers’
needs.  Our business services emphasize safety, information
coordination and customer service and are delivered through a network of
independent commissioned sales agents and third party capacity providers
coordinated by us. The independent commissioned sales agents typically enter
into exclusive contractual arrangements with Sunteck and are responsible for
locating freight and coordinating the transportation of the freight with
customers and capacity providers. The third party capacity providers consist of
independent contractors who provide truck capacity to us, including
owner-operators who operate under our contract carrier license, air cargo
carriers and railroads. Through this network of agents and capacity providers,
Sunteck operates a non-asset based transportation services business with
revenue, gross profit and net income of approximately $180.2 million, $30.7
million and $2.2 million, respectively, during our most recently completed
fiscal year.





During
the third quarter of 2009, we determined that we operated in two business
segments, non-asset based transportation services and agent support services.
The non-asset based transportation services segment includes our brokerage and
contract carrier services which are provided through a network of independent
sales agents throughout the United States and Canada. Revenue in this segment is
generated from freight transportation transactions.   The agent
support services segment includes an array of services that we provide to our
agent network to support and encourage the expansion of our agents’ businesses,
primarily financial support through interest bearing long-term loans,
non-interest bearing short-term loans, as well as other services including
training, margin analysis, marketing assistance, industry and market segment
data, and business analysis tools.  This segment also includes
potential revenues related to profit participations and realization on the
option to acquire equity that we may receive related to a loan or advance
extended to an agent.





Accordingly
gross revenues during the nine months ended September 30, 2009 were
approximately $127.7 million and $1.0 million from transportation services and
agent support services, respectively. Gross profits during the nine months ended
were approximately $24.8 million and $1.0 million from transportation services
and agent support services, respectively.


10
 Index


In our
transportation services segment, during previous interim as well as annual
reporting periods, the increases in our gross revenues and gross profits were
measured to a significant degree by the increase in the number of transactions
processed.  However, during the nine month period ended September 30,
2009, gross revenues decreased by 5% while gross profit increased by 10% over
the same prior year period.  At the same time, the number of
transactions increased by 38%, from 93,000 to 128,500 as compared to the same
prior year period.  This is the result of several factors including,
the decrease in average revenue dollars per transaction due to the reduction of
fuel prices resulting in lower fuel surcharges, the increase in less than
truckload versus truckload freight, a trend by customers toward regional and
local distribution points reducing mileage and the reduction in per mile costs
based upon the availability of carrier capacity.  These factors
resulted in a lower cost of transportation and had a corresponding positive
impact on our gross profit and per load margins.





During
the first nine months of 2009, we incurred increased commission rates with a
significant agent. Our agreement with this agent includes revenues generated
from interest on loans, profit participation and realization on the option to
acquire equity each of which will be recorded as revenues from our agent support
services segment.  The benchmarks which would have results in profit
participation were not met during the nine months ended September 30,
2009.





During
the next twelve months, we plan to continue to offer our brokerage and contract
carrier transportation services, our agent support services and expand our agent
network.  We are presently profitable and have adequate available
lines of credit to satisfy our working capital requirements during the next
twelve months.





Economic
Downturn





During
the latter part of the fourth quarter of 2008, the general economic conditions
in the United States and globally experienced a significant downturn, impacting
the market segments in which we operate.  This downturn, referred to
by many economic experts as a world-wide recession, has continued into
2009.  This has resulted in a decrease in gross revenues for the three
and nine month periods ended September 30, 2009 compared to the same prior year
periods of approximately 8% and 5%, respectively.





Results of
operations





For the three and nine
months ended September 30, 2009 and 2008





During
the quarter ended September 30, 2009, we continued to implement our strategic
growth business plan consisting primarily of the expansion of client services,
the opening of regional operations centers in key geographical markets, and the
addition of independent sales agents providing brokerage and contract carrier
services.  Our gross profits in our transportation services segment
(gross revenues less cost of transportation) are the primary indicator of our
ability to source, add value and resell service that are provided by third
parties and are considered to be the primary measurement of
growth.  Therefore, the discussion of the results of operations for
this segment focuses on the changes in our gross profits. The increases in gross
profits and all related cost and expense categories are the direct result of our
business expansion.





The
following table represents certain statement of operation data for our
transportation services segment as a percentage of gross profits:





Three
      Months Ended
            
            Nine
      Months EndedSeptember 30,
            
            September 30,2009
            
            2008
            
            2009
            
            2008Gross
      profit
            
            100.0%
            
            100.0%
            
            100.0%
            
            100.0%Commissions
            
            75.8%
            
            65.6%
            
            74.1%
            
            64.5%Operating
      expenses
            
            18.6%
            
            21.7%
            
            21.2%
            
            21.9%Interest
      expense
            
            1.5%
            
            1.7%
            
            1.3%
            
            1.5%Income
      taxes
            
            1.7%
            
            4.4%
            
            1.3%
            
            4.9%Net
      income
            
            2.4%
            
            6.6%
            
            2.1%
            
            7.2%


11
 Index


Revenues





Gross
revenues from transportation services, consisting of freight fees and other
related services revenue, totaled $48,847,000 for the three months ended
September 30, 2009, as compared with $52,744,000 in the same prior year period,
a decrease of approximately 7%. Gross profits were $8,984,000 for the three
months ended September 30, 2009, as compared with $8,453,000 in the same prior
year period, an increase of approximately 6%.  At the same time, the
number of transactions increased by 62%, from 34,000 to 55,000 as compared to
the same prior year period.  This is the result of several factors
including, the decrease in average revenue dollars per transaction due to the
reduction of fuel prices resulting in lower fuel surcharges, the increase in
less than truckload versus truckload freight, a trend by customers toward
regional and local distribution points reducing mileage and the reduction in per
mile costs based upon the availability of carrier capacity.  These
factors resulted in a lower cost of transportation and had a corresponding
positive impact on our gross profit and per load margins.





Gross
revenues from transportation services, consisting of freight fees and other
related services revenue, totaled $127,634,000 for the nine months ended
September 30, 2009, as compared with $134,540,000 in the same prior year period,
a decrease of approximately 5%.  Gross profits were $24,825,000 for
the nine months ended September 30, 2009, as compared with $22,735,000 in the
same prior year period, an increase of approximately 9%.  At the same
time, the number of transactions increased by 38%, from 93,000 to 128,500 as
compared to the same prior year period.  This is the result of several
factors including, the decrease in average revenue dollars per transaction due
to the reduction of fuel prices resulting in lower fuel surcharges, the increase
in less than truckload versus truckload freight, a trend by customers toward
regional and local distribution points reducing mileage and the reduction in per
mile costs based upon the availability of carrier capacity.  These
factors resulted in a lower cost of transportation and had a corresponding
positive impact on our gross profits and per load margins.





Gross
revenues from agent support services, consisting primarily of interest on loans,
totaled $362,000 and $1,003,000 for the three and nine months ended September
30, 2009.





Costs and
expenses





Commissions





Commissions
totaled $6,806,000 for the three months ended September 30, 2009, as compared
with $5,548,000 in the same prior year period, an increase of
23%.  This increase is the result of the increase in gross profits as
well as the increased commission rates with a significant agent which was in a
start up period in 2008.  As a percentage of gross profits from
transportation services, commissions were 76% and 66% for the three months ended
September 30, 2009 and 2008, respectively. This increase is the result of agent
and revenue mix as well as the increased commission rates with a significant
agent as compared to the same prior year period. Our agreement with this agent
includes revenues generated from interest on loans, profit participation and
realization on the option to acquire equity each of which will be recorded as
revenues from our agent support services segment.  The benchmarks
which would have resulted in profit participation were not met during the three
months ended September 30, 2009.


12
 Index


Commissions
totaled $18,414,000 for the nine months ended September 30, 2009, as compared
with $14,660,000 in the same prior year period, an increase of
26%.  This increase is the result of the increase in gross profits as
well as the increased commission rates with a significant agent which was in a
start up period in 2008.  As a percentage of gross profits from
transportation services, commissions were 74% and 65% for the nine months ended
September 30, 2009 and 2008, respectively. This increase is the result of agent
and revenue mix as well as the increased commission rates with a significant
agent as compared to the same prior year period. Our agreement with this agent
includes revenues generated from interest on loans, profit participation and
realization on the option to acquire equity each of which will be recorded as
revenues from our agent support services segment.  The benchmarks
which would have resulted in profit participation were not met during the nine
months ended September 30, 2009.








Operating
expenses





Operating
expenses totaled $1,796,000 for the three months ended September 30, 2009, as
compared with $1,829,000 in the same prior year period, a decrease of
2%.  As a percentage of gross profit, operating expenses were 19% for
the three months ended September 30, 2009, as compared with 22% in the same
prior year period. The decrease is the direct result of cost cutting measures
implemented during the period. We presently have adequate facilities and
management to handle the present and future anticipated transaction volume
without a significant increase in overhead.





Operating
expenses totaled $5,453,000 for the nine months ended September 30, 2009, as
compared with $4,971,000 in the same prior year period, an increase of
10%.  As a percentage of gross profit, operating expenses were 21% for
the three months ended September 30, 2009, as compared with 22% in the same
prior year period. The decrease is the direct result of cost cutting measures
implemented during the period. We presently have adequate facilities and
management to handle the present and future anticipated transaction volume
without a significant increase in overhead.








Interest
expense





Interest
expense was $131,000 for the three months ended September 30, 2009, as compared
with $142,000 in the same prior year period.  This decrease is
primarily due to lower interest rates under our line of credit.





Interest
expense was $330,000 for the nine months ended September 30, 2009, as compared
with $353,000 in the same prior year period.  This decrease is
primarily due to lower interest rates under our line of credit.





Income
taxes





Income
tax expense for the three months ended September 30, 2009 of $255,000 consisted
of the utilization of the deferred tax benefit of $219,000 and state income
taxes of $36,000 compared to $374,000 for the three months ended September 30,
2008 which consisted of the utilization of the deferred tax benefit of $320,000
and state income taxes of $54,000.  The decrease in income taxes is
directly related to lower pre-tax income.





Income
tax expense for the nine months ended September 30, 2009 of $665,000 consisted
of the utilization of the deferred tax benefit of $568,000 and state income
taxes of $97,000 compared to $1,105,000 for the three months ended September 30,
2008 which consisted of the utilization of the deferred tax benefit of $944,000
and state income taxes of $161,000.  The decrease in income taxes is
directly related to lower pre-tax income.


13
 Index


Trends and
uncertainties





The
transportation industry is highly competitive and highly
fragmented.  Our primary competitors are other non-asset based as well
as asset based third party logistics companies, freight brokers, carriers
offering logistics services and freight forwarders.  We also compete
with customers’ and shippers’ internal traffic and transportation departments as
well as carriers internal sales and marketing departments directly seeking
shippers’ freight. We anticipate that competition for our services will continue
to increase.  Many of our competitors have substantially greater
capital resources, sales and marketing resources and experience.  We
cannot assure you that we will be able to effectively compete with our
competitors in effecting our business expansion plans.  The most
significant trend contributing to our growth during the past four years has been
the expansion of our brokerage services agent network and expansion of our
contract carrier agent and owner operator network.  Sales agents are
independent contractors and, as such, there are no assurances that we can either
maintain our existing agent network or continue to expand this
network.





For the
nine months ended September 30, 2009, our gross revenues decreased to $127.7
million from $134.5 million in the same prior year period.  As of
September 30, 2009, we had an accumulated deficit of $2.7
million.  Factors that could adversely affect our operating results
include:





·
            the
      success of Sunteck in expanding its business operations;
    and




·
            general
      economic conditions.





During
the latter part of the fourth quarter of 2008, the general economic conditions
in the United States and globally experienced a significant downturn impacting
the business environment in general and market segments in which we
participate.  This condition, referred to by many economic experts as
a world-wide recession, has continued into 2009.  While we do see some
signs of improvement, there are no assurances that our future financial results
will not continue to be impacted by the current economic climate.





During
the three months ended June 30, 2009, we instituted a cost reduction program
that included salary reductions of 10% to all supervisory and management
personnel, reductions in employees benefit program costs as well as reductions
in other operating expenses.





Liquidity and capital
resources





During
the past two years, our sources for cash have been the cash flow generated from
operations and available borrowings under our line of credit.





At
September 30, 2009, we had an outstanding balance of $16,124,000 under our line
of credit. In March 2009, we entered into a new credit facility with Regions
Bank which increased our line of credit from $20 million to $30 million and
extended the maturity date from June 2009 to June 2012.  The line of
credit facility is at an interest rate of LIBOR plus 1.5% with a floor of 3.0%,
is subject to the maintenance of certain financial covenants, and is secured by
accounts receivable and other operating assets. We believe that we have
sufficient working capital to meet our short-term operating needs.





At
September 30, 2009, we had liquid assets of approximately
$409,000.  Available cash is used to reduce borrowings on our line of
credit.





The total
amount of debt outstanding as of September 30, 2009 and 2008 was $16,124,000 and
$16,643,000, respectively.  The following table presents our debt
instruments and their weighted average interest rates as of September 30, 2009
and 2008, respectively:





Balance
            
            
            Weighted
      Average Rate
            
            
            Balance
            
            
            Weighted
      Average Rate2009
            
            
            2008Line
      of Credit
            
            
            16,124,000
            
            
            
            3.00
            %
            
            
            16,643,000
            
            
            
            5.18
            %


14
 Index


Inflation
had no material impact on our revenues or the results of operations for the
period ended September 30, 2009.





Critical accounting
policies





Preparation
of our financial statements 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 revenues and expenses during the
reporting period.  Note 1 to the notes to the financial statements
included in this report includes a summary of the significant accounting
policies and methods used in the preparation of our financial
statements.  The most significant areas involving management estimates
and assumptions are described below.  Actual results could differ
materially from management’s estimates under different assumptions or
conditions.





Revenue
Recognition





Gross
revenues from transportation services consist of the total dollar value of
services purchased by shippers.  Gross profits are gross revenues less
the direct costs of transportation. Revenue is recognized upon delivery of
freight, at which time the related transportation cost, including commission, is
also recognized.  At that time, the Company’s obligations are
completed and collection of receivables is reasonably assured. Gross revenues
from agent support services consist primarily of interest on interest bearing
loans.





Emerging
Issues Task Force No. 99-19, “Reporting Revenues Gross as a Principal Versus Net
as an Agent” (EITF 99-19), establishes criteria for recognizing revenues on a
gross or net basis.  We are the primary obligor in our transactions,
have all credit risk, maintain substantially all risk and rewards, have
discretion in selecting the supplier, and have latitude in pricing
decisions.  Accordingly, we record all transactions at the gross
amount, consistent with the provisions of EITF 99-19.





Income
Taxes





The
deferred tax asset represents expected future tax savings resulting from our net
operating loss carryforwards.  As of December 31, 2008, we had net
operating loss carryforwards of approximately $5.2 million for federal income
tax purposes which expire through 2014.  Utilization of this benefit
is primarily subject to the extent of our future earnings, and may be limited
by, among other things, stockholder changes, including the possible issuance of
additional shares in one or more financing or acquisition
transactions.  As of December 2006, we eliminated any valuation
allowance for the future tax savings as management believes it is more likely
than not that they will be realized by the end of the carryforward
period.





Provision
For Doubtful Accounts





We
continuously monitor the creditworthiness of our customers and have established
an allowance for amounts that may become uncollectible in the future based on
current economic trends, our historical payment and bad debt write-off
experience, and any specific customer related collection issues.




Off-balance sheet
arrangements




We do not
have any off-balance sheet arrangements.




15
 Index




Item 3.
            QUANTITATIVE AND
      QUALITATIVE DISCLOSURES ABOUT MARKET
RISK




As a
smaller reporting company we are not required to provide the information
required by this Item.




Item 4T.
            CONTROLS AND
      PROCEDURES





(a)
            Evaluation
      of Disclosure Controls and
Procedures





Our
management, with the participation of our president and chief financial officer,
carried out an evaluation of the effectiveness of our “disclosure controls and
procedures” (as defined in the Securities Exchange Act of 1934 (the “Exchange
Act”) Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by
this report (the “Evaluation Date”).  Based upon that evaluation, the
president and chief financial officer concluded that as of the Evaluation Date,
our disclosure controls and procedures are effectiveto ensure that
information required to be disclosed by us in the reports that we file or submit
under the Exchange Act (i) is recorded, processed, summarized and reported,
within the time periods specified in the SEC’s rules and forms and (ii) is
accumulated and communicated to our management, including ourpresidentand
chief financial officer, as appropriate to allow timely decisions regarding
required disclosure.





(b)
            Changes
      in Internal Control over Financial
Reporting





There
were no changes in our internal controls over financial reporting that occurred
during the period
covered by this reportthat has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.





Part
II - OTHER INFORMATION





Item 6.
            EXHIBITS





Exhibit No.
            Description31A
            Certification
      of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.*31B
            Certification
      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.*32A
            Certification
      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.*32B
            Certification
      of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted
      Pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002.*


_______________________


*Filed as
an exhibit hereto.


16
 Index


SIGNATURES








Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.








AUTOINFO,
      INC./s/ Harry WachtelHarry
      WachtelPresident
      and Chief Executive Officer(Principal
      Executive Officer)/s/ William WunderlichWilliam
      WunderlichChief
      Financial Officer(Principal
      Financial Officer)





Date:           November 13,
2009






17