SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
                        --------------------------------

                                   (Mark One)
            |X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2002
                                       OR
          |_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

    For the transition period from . . . . . . . . . . to . . . . . . . . . .

                         Commission File Number 0-14786

                                 AUTOINFO, INC.
                  (Exact name of registrant as specified in its
                                    charter)
             DELAWARE                                         13-2867481
 (State or other jurisdiction of                           (I.R.S. Employer
  incorporation or organization)                          Identification No.)

                        6401 Congress Avenue - Suite 230
                              Boca Raton, FL 33487
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (561) 988-9456

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                                  Common Stock,
                                 Par value $.001

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 |X|  No |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. |X|

As of March 21, 2003, 27,347,923 shares of the Registrant's common stock were
outstanding. The aggregate market value of the common stock of the Registrant
held by non-affiliates of the Registrant as of March 10, 2003 (based upon the
closing price on the OTC Bulletin Board of the National Association of
Securities Dealers of $0.17 on that date) was approximately $1,997,000.

Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes |X| No |_|

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

<PAGE>

                                 AUTOINFO, INC.

                            Form 10-KSB Annual Report

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                Page
                                                                                ----

<S>                                                                               <C>
PART I ........................................................................    3
   Item 1.      Business ......................................................    3
                Risk Factors ..................................................    6
   Item 2.      Properties ....................................................    9
   Item 3.      Legal Proceedings .............................................    9
   Item 4.      Submission of Matters to a Vote of Security Holders ...........    9
PART II .......................................................................   10
   Item 5.      Market for our Common Equity and Related Stockholder Matters ..   10
                Selected Consolidated Financial Data ..........................   11
   Item 6.      Management's Discussion and Analysis of Financial Condition and
                Results of Operations .........................................   12
   Item 7.      Financial Statements and Supplementary Data ...................   16
   Item 8.      Changes in and Disagreements with Accountants on Accounting and
                Financial Disclosures .........................................   16
PART III ......................................................................   17
   Item 9.      Directors and Executive Officers ..............................   17
   Item 10.     Executive Compensation ........................................   18
   Item 11.     Security Ownership of Certain Beneficial Owners and Management    20
   Item 12.     Certain Relationships and Related Transactions ................   20
   Item 13.     Exhibits and Reports On Form 8-K ..............................   21
   Item 14.     Controls and Procedures .......................................   22
</TABLE>

                      FORWARD LOOKING STATEMENT INFORMATION

      Certain statements made in this Annual Report on Form 10-KSB are
"forward-looking statements"(within the meaning of the Private Securities
Litigation Reform Act of 1995) 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 such
forward-looking statements include, but are not limited to, the factors set
forth herein under the headings "Business," "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."


                                       2
<PAGE>

                                     PART I

                                    BUSINESS

Overview

      We are a full service third party transportation logistics provider
through our wholly-owned subsidiary Sunteck Transport Co., Inc. (Sunteck). Our
services include ground transportation coast to coast, local pick up and
delivery, warehousing, 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.

      We have five regional operating centers and representatives in 12 states
and Canada. As of March 5, 2003 we had 42 sales agents. Our services include
arranging for the transport of customers' freight from the shippers location to
the designated destination. We do not own any trucking equipment and rely on
independent carriers for the movement of customers' freight. We seek to
establish long-term relationships with our customers and provide a variety of
logistics services and solutions to eliminate inefficiencies in our customers'
supply chain management.

The industry

      Prior to the mid 1980's, the trucking industry was regulated by the
Interstate Commerce Commission. Deregulation brought new breath and life to the
industry. This also brought with it the problem of how to navigate the
transportation highway. Shippers found it difficult to locate carriers and
carriers found that it was expensive to find freight. Enter the third party
transportation providers-intermediaries (freight brokers, freight forwarders and
logistics providers). The third party intermediary connects the shipper and the
carrier and helps manage the flow of goods.

      The present market for freight moved by truck is estimated by management
to exceed $350 billion per year. This is a highly fragmented industry comprised
of common carriers - contract carriers - freight forwarders and freight brokers.

      The actual movement of goods is accomplished by trucking (consisting of
local, over the road, truckload, and less than truckload shipments) - air
freight (time sensitive in nature) - rail freight (non time sensitive in nature
and usually less expensive than truck) - ocean freight (generally in
containerized ships). Other services provided include warehousing and
distribution.

      There are several trends which are relevant to the continued dependency
upon and growth of the trucking industry:

      o     Just in time service       With new technology and a premium on cost
                                       savings, businesses are able to maintain
                                       smaller inventories, thereby reducing
                                       carrying costs and warehouse space
                                       requirements. The impact on the freight
                                       industry is more shipments of smaller
                                       quantities that are more time sensitive
                                       and, therefore, more costly.

      o     Outsourcing Companies      have found it to be more cost effective
                                       and efficient to eliminate company owned
                                       truck fleets and rely upon others to
                                       handle their trucking / shipping needs.

      o     Logistics Small            to medium size businesses, with less
                                       frequent shipping requirements, utilize
                                       logistics providers (freight brokers,
                                       etc.) to manage all aspects of the
                                       transportation, warehousing and delivery
                                       needs.


                                       3
<PAGE>

            The market for third party logistics providers, estimated by
management to exceed $100 billion per year, is highly fragmented. It is
comprised primarily of full service logistics providers, freight brokers,
independent sales agents and sales representatives. Sales agents often work out
of home based offices or small regional sales offices and affiliate themselves
with full service brokers to provide back office services including load
dispatching, bonding and licensing, billing, collection and other administrative
services. Sales representatives vary from experienced people with years of
freight industry experience and established client relationships to
telemarketing personnel cold calling shippers and dispatchers.

Operations and systems

            We presently process in excess of 2,000 freight orders per month.
Our sales agents in our five regional operating centers and representatives in
twelve states and Canada receive customers freight requirements daily. All
agents make appropriate carrier arrangements for the pick-up and timely delivery
of customers' freight.

            We utilize a state-of-the-art order entry system. All agents are
integrated live via Internet access to our database and client server-based
system in our Florida corporate headquarters. Orders are entered into a
customized freight order and tracking system, which enables us to monitor the
status of all orders, generate customer billing and provide detailed
transactional reports. We use these reports to monitor customer logistics and
transportation usage, track customer and carrier historical data, generate
detailed financial and accounting data and provide our customers with details of
their supply chain activity.

Customers

            We strive to establish long-term customer relationships and, by
providing a full range of logistics and supply chain services, we seek to
increase our level of business with each customer. We service customers ranging
from Fortune 100 companies to small businesses in a variety of industries.
During 2002, no customer accounted for more than 10% of our revenues. We receive
credit applications from all customers, review credit references and perform
credit checks to ensure credit worthiness.

            Sunteck has achieved revenue growth through the addition of sales
agents and independent sales agent / representatives, the opening of new
operations offices in New Jersey, Missouri and North Carolina, an increase in
the number of customers serviced and the expansion of logistics and supply chain
services provided.

            Each operations office markets our full range of supply chain
services to existing customers and pursues new customers within their local
markets. We build new customer relationships by exploiting our range of
logistics and supply chain services, the traffic lanes we commonly service,
carrier relationships and capabilities, our industry specific expertise and our
sales agents individual knowledge and experience.

            Agents and representatives move their client affiliation to other
service providers as a result of financial considerations, location and
benefits. We will provide significant advantages and opportunities over
traditional small regional third party logistics providers and build a network
of operating offices and sales agents.

            Our growth model is focused on adding sales agents in strategic
markets. As this agent network is further established and expanded, we believe
that significant other opportunities will emerge. Larger sales agents offices
often have their own equipment (truck space), which presents the opportunity to
maximize available freight and load capacity thereby increasing gross margins
above historical levels. In addition, sales representatives will be added to
regional operating office sales agent locations to increase market penetration.
Since representatives work on a commission basis, this expansion essentially
comes at no additional overhead outlay.


                                       4
<PAGE>

      Significant opportunities for expansion and growth also includes strategic
alliances with other service freight broker groups. This strategy will enable us
to achieve strong regional penetration into new geographical markets and
increase back office capabilities to service the agent network.

Competition

      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 generally compete on the basis of price and the range of logistics and
supply chain services offered.

Government regulation

      Our industry has long been subject to government legislation and
regulation. Over the years, many changes in these laws and regulations have
affected the industry and caused changes in the operating practices and the cost
of providing transportation services. We cannot predict what effect, if any,
legislative and regulatory changes may have on the industry in the future.

      We are licensed by the United States Department of Transportation (DOT) as
a broker arranging the movement of materials by motor carrier. In this capacity,
we are required to meet certain qualifications to enable us to conduct business,
which includes the compliance with certain surety bond requirements and the
maintenance of a $100,000 contingent cargo insurance policy.

Risk and liability

      We do not assume liability for loss or damage to freight. As a third party
logistics provider, we act as the shipper's agent and arrange for a carrier to
handle the freight. Therefore, we do not take possession of the shipper's
freight and, accordingly, we are not liable for the carrier's negligence or
failure to perform. We do assist our customers in the processing and collection
of any claim. The Federal Highway Administration requires us to maintain a
surety bond of $10,000, which is intended to show our financial responsibility
and provide surety for the arrangements with shippers and carriers.

Executive officers

      We currently have two executive officers. Harry M. Wachtel serves as
president and chief executive officer and has served in these capacities since
December 7, 2000. William Wunderlich serves as executive vice president and
chief financial officer and has served as executive vice president since
December 2000 and as chief financial officer since October 1992. In addition,
Mr. Wunderlich served as our president from January 1999 through December 7,
2000. For information regarding Mr. Wachtel and Mr. Wunderlich's prior business
experience, see Item 10 of this report.

Company background

      AutoInfo was organized under the laws of the State of Delaware in 1987.
During 1998, we ceased to operate as an automobile finance company.

      On February 2, 2000, we filed a disclosure statement and reorganization
plan pursuant to Chapter 11 of Title 11 of the United States Bankruptcy Code.


                                       5
<PAGE>

      On June 22, 2000, we entered into a Merger Agreement with Sunteck, a full
service third party transportation logistics provider, in exchange for, upon
closing, ten million shares of our common stock, which constituted approximately
37% of the proposed outstanding common stock of reorganized AutoInfo under our
Chapter 11 reorganization plan.

      Sunteck, which was formed in 1997, is a full service third party
transportation logistics provider. Its supply chain services include ground
transportation coast-to-coast, local pick up and delivery, warehousing, air
freight and ocean freight. Sunteck has developed strategic alliances with less
than truckload, truckload, air, rail and ocean common carriers to service its
customers' needs.

      On June 27, 2000, our Amended Disclosure Statement and Amended Plan of
Reorganization were approved by the Bankruptcy Court.

      On August 1, 2000, we announced that the Reorganization Plan had been
confirmed and would become effective, without further action by the Court, upon
the closing of the Sunteck merger, which occurred in December 2000.

                                  RISK FACTORS

      A purchase of our common stock is speculative and involves a high degree
of risk. You should carefully consider the risks described below together with
all of the other information included or incorporated by reference in this
report before making an investment decision. The risks and uncertainties
described below are not the only ones we face. If any of the following risks
actually occur, our business, financial condition or operating results could be
harmed. In such case, the trading price of our common stock could decline and
you could lose all or part of your investment.

We have experienced operating losses in prior years.

         For the year ended December 31, 2002, we increased gross revenues from
$8.0 million to $18.9 million and had net income of $340,000 as compared with a
net loss of $15,000 in the prior year. However, in prior years we experienced
operating losses.

Factors that could adversely affect our operating results include:

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

o        changes in general economic conditions.

There is no assurance that we will operate profitably in future periods.

Control of customer accounts.

      A substantial portion of our business is originated by our network of
independent sales representatives. Most of these sales representatives work with
us on a non-exclusive basis. We do not have non-compete or non-solicitation
agreements with these representatives. As a result, if sales representatives
terminate their affiliation with us or direct their freight business to other
logistics providers, our revenue and results of operations could be adversely
affected.

We may require additional financing in the future, which may not be available on
acceptable terms.

      Depending on our ability to generate revenues, we may require additional
funds to expand Sunteck's business operations and for working capital and
general corporate purposes. Any additional equity financing


                                       6
<PAGE>

may be dilutive to stockholders, and debt financings, if available, may involve
restrictive covenants that further limit our ability to make decisions that we
believe will be in our best interests. In the event we cannot obtain additional
financing on terms acceptable to us when required, our ability to expand
Sunteck's operations may be materially adversely affected.

We have limited marketing and sales capabilities and must make sales in
fragmented markets.

      Our future success depends, to a great extent, on our ability to
successfully market our services. We currently have limited sales and marketing
capabilities. Our ability to successfully market our services is further
complicated by the fact that our primary markets are highly fragmented.
Consequently, we will need to identify and successfully target particular market
segments in which we believe we will have the most success. These efforts will
require a substantial, but unknown, amount of effort and resources. We cannot
assure you that any marketing and sales efforts undertaken by us will be
successful or will result in any significant sales.

Our industry is intensely competitive, which may adversely affect our operations
and financial results.

      All our markets are intensely competitive and numerous companies offer
services that compete with our services. 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.

We depend on the continued services of our president.

      Our future success depends, in large part, on the continuing efforts of
our president, Harry Wachtel, who conceived our strategic plan and who is
responsible for executing that plan. The loss of Mr. Wachtel would adversely
affect our business. At this time we do not have any term "key man" insurance on
Mr. Wachtel. If we lose the services of Mr. Wachtel, our business, operations
and financial condition would be materially adversely affected.

We may have difficulties in managing our growth.

      Our future growth depends, in part, on our ability to implement and expand
our financial control systems and to expand, train and manage our employee base
and provide support to an expanded customer base. If we cannot manage growth
effectively, it could have a material adverse effect on our results of
operations, business and financial condition. Acquisitions and expansion involve
substantial infrastructure and working capital costs. We cannot assure you that
we will be able to integrate our acquisitions and expansions efficiently.
Similarly, we cannot assure you that we will continue to expand or that any
expansion will enhance our profitability. If we do not achieve sufficient
revenue growth to offset increased expenses associated with our expansion, our
results will be adversely affected.

We must attract and retain qualified personnel.

      As we implement our business growth strategy, significant demands will be
placed on our managerial, financial and other resources. One of the keys to our
future success will be our ability to attract and retain highly qualified
marketing, sales and administrative personnel. Competition for qualified
personnel in these areas is intense and we will be competing for their services
with companies that have substantially greater resources than we do. We cannot
assure you that we will be able to identify, attract and retain personnel with
skills and experience necessary and relevant to the future operations of our
business. Our inability to retain or attract qualified personnel in these areas
could have a material adverse effect on our business and results of operations.


                                       7
<PAGE>

Our stock price is volatile and could be further affected by events not within
our control.

      The trading price of our common stock has been volatile and will continue
to be subject to:

      o     volatility in the trading markets generally;

      o     significant fluctuations in our quarterly operating results; and

      o     announcements regarding our business or the business of our
            competitors.

      Statements or changes in opinions, ratings or earnings estimates made by
brokerage firms or industry analysts relating to the markets in which we operate
or expect to operate could also have an adverse effect on the market price of
our common stock. In addition, the stock market as a whole has from time to time
experienced extreme price and volume fluctuations which have particularly
affected the market price for the securities of many small cap companies and
which often have been unrelated to the operating performance of these companies.

The price of our common stock may be adversely affected by the possible issuance
of shares of our common stock as a result of the conversion of outstanding
debentures or the exercise of outstanding options.

      We have granted options covering approximately 2.6 million shares of our
common stock. In addition, we have $575,000 of outstanding debentures
convertible at the option of the holders into 2.3 million shares of our common
stock. We have agreed to register the shares underlying the debentures. As a
result of the actual or potential sale of these shares into the market, our
common stock price may decrease.

Concentration of ownership

      As of March 18, 2003, our president, Harry Wachtel was our largest
stockholder, owning approximately 35% of the issued and outstanding shares of
our common stock. Further, James T. Martin owns approximately 24% of the issued
and outstanding shares of our common stock. As a result, either Mr. Wachtel or
Mr. Martin could assert control over our affairs, including the election of
directors and any proposals regarding a sale of the Company or its assets or a
merger.

Some provisions in our charter documents and bylaws may have anti-takeover
effects.

      Our certificate of incorporation and bylaws contain provisions that may
make it more difficult for a third party to acquire us, with the result that it
may deter potential suitors. For example, our board of directors is authorized,
without action of the stockholders, to issue authorized but unissued common
stock. The existence of authorized but unissued common stock enables us to
discourage or to make it more difficult to obtain control of us by means of a
merger, tender offer, proxy contest or otherwise.

We have agreed to limitations on the potential liability of our directors.

      Our certificate of incorporation provides that, in general, directors will
not be personally liable for monetary damages to the company or our stockholders
for a breach of fiduciary duty. Although this limitation of liability does not
affect the availability of equitable remedies such as injunctive relief or
rescission, the presence of these provisions in the certificate of incorporation
could prevent us from recovering monetary damages.


                                       8
<PAGE>

The liquidity of our stock is severely reduced because we are classified as a
"penny stock".

      The Securities and Exchange Commission (SEC) has adopted regulations which
generally define a "penny stock" to be any non-Nasdaq equity security that has a
market price (as therein defined) of less than $5.00 per share or with an
exercise price of less than $5.00 per share. Our securities are subject to the
existing rules on penny stocks and, accordingly, the market liquidity for our
securities could be severely adversely affected. For any transaction involving a
penny stock, unless exempt, the rules require substantial additional disclosure
obligations and sales practice obligations on broker-dealers where the sale is
to persons other than established customers and accredited investors (generally,
those persons 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 the common stock 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 SEC relating to the penny stock market. The broker-dealer also must disclose
the commissions 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
common stock and accordingly the market for our common stock.

Patents, trademarks and copyrights

      "AUTOINFO" is our registered trademark and service mark.

Employees

      We currently have 56 full-time employees and independent sales agents.
None of our employees are represented by a labor union and we believe that our
relationship with our employees is good.

                                   PROPERTIES

      We lease approximately 1,400 square feet of space for our executive
offices and the headquarters of Sunteck at 6401 Congress Avenue, Boca Raton,
Florida. This lease runs through February 2004 and provides for an annual rental
of $21,000. We lease 1,100 square feet for our operating office at 315 Main
Street, Pineville, North Carolina. The lease runs through February 2005 and
provides for an annual rental of $12,000. We lease 700 square feet for our
operating office at 1040 North Halsted Street, Chicago, Illinois. The lease runs
through September 2004 and provides for an annual rental of $9,600.

                                LEGAL PROCEEDINGS

      We are not a party to any material legal proceedings.

               SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None


                                       9
<PAGE>

                                     PART II

          MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Our common stock is traded on the OTC Bulletin Board of the National
Association of Securities Dealers, Inc. under the symbol AUTO. The following
table sets forth, for the periods indicated, the high and low closing bid
quotations per share for our common stock. Quotations represent interdealer
prices without an adjustment for retail markups, markdowns or commissions and
may not represent actual transactions:

Year Ended December 31, 2002                              High              Low
--------------------------------------------             -----             -----

First quarter                                            $0.19             $0.06
Second quarter                                            0.17              0.12
Third quarter                                             0.22              0.10
Fourth quarter                                            0.22              0.12

Year Ended December 31, 2001                              High              Low
--------------------------------------------             -----             -----

First quarter                                            $0.06             $0.03
Second quarter                                            0.05              0.03
Third quarter                                             0.06              0.02
Fourth quarter                                            0.12              0.04

      As of March 18, 2003, the closing bid price per share for our common
stock, as reported on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. was $0.16. As of March 18, 2003, we had approximately
1,750 beneficial stockholders.

Dividend policy

      We have never declared or paid a cash dividend on our common stock. It has
been the policy of our board of directors to retain all available funds to
finance the development and growth of our business. The payment of cash
dividends in the future will be dependent upon our earnings and financial
requirements and other factors deemed relevant by our board of directors.


                                       10
<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA

      The following is a summary of our selected consolidated financial data for
the years ended December 31, 2002, 2001, 2000, 1999 and 1998. The financial data
has been derived from our audited consolidated financial statements and
accompanying notes. This financial data reflects our acquisition of Sunteck in
December 2000, which was accounted for as a pooling of interest. Accordingly,
all periods presented below have been restated to include the accounts and
operations of Sunteck under continuing operations.

      The selected financial data set forth below should be read together with,
and are qualified by reference to, the "Management's Discussion and Analysis of
Financial condition and Results of Operations" section of this report and our
audited consolidated financial statements and accompanying notes included
elsewhere in this report.

<TABLE>
<CAPTION>
000's omitted, except for per share data                          Year ended December 31,
                                              --------------------------------------------------------------
                                                 2002         2001         2000         1999         1998
                                              ----------    ---------    ---------    ---------    ---------
Statement of Operations Data:
------------------------------------------

<S>                                           <C>           <C>          <C>          <C>          <C>
Gross revenues                                $   18,863    $   8,029    $   3,389    $   3,457    $   2,388

Net revenues (1)                                   3,368        1,567          835          841          698

Income (loss) from continuing operations             340          (15)         (81)          76           (2)

Income (loss) from discontinued
    operations                                        --           --        9,471       (1,109)      (9,935)

Net  income (loss)                            $      340    $     (15)   $   9,390    $  (1,033)   $  (9,937)

Basic net income (loss) per share (2) (3)
     From continuing operations               $      .01    $    (.00)   $     .00    $     .00    $     .00
     From discontinued operations                     --           --          .51         (.06)        (.56)
                                              ----------    ---------    ---------    ---------    ---------
Net (loss) income per share, basic            $      .01    $    (.00)   $     .51    $    (.06)   $    (.56)
                                              ----------    ---------    ---------    ---------    ---------

Diluted net income (loss) per share (2) (3)
     From continuing operations               $      .01    $    (.00)   $     .00          .00    $     .00
     From discontinued operations                     --           --          .48         (.06)        (.56)
                                              ----------    ---------    ---------    ---------    ---------
Net (loss) income per share, diluted
                                              $      .01    $    (.00)   $     .48    $    (.06)   $    (.56)
                                              ----------    ---------    ---------    ---------    ---------
</TABLE>

(1)   Net revenues are determined by deducting cost of transportation from gross
      revenues. See Management's Discussion and Analysis of Financial Condition
      and Results of Operations.

(2)   The common stock equivalents for the year ended December 31, 2002 were
      635,000 and for the year ended December 31, 2000 were 1,304,000.

(3)   The common stock equivalents for the years ended December 31, 1999, and
      1998, were 745,000 and 214,000. The common stock equivalents for these
      shares were not included in the calculation of diluted income (loss) per
      common share because the effect would have been antidilutive.

<TABLE>
<CAPTION>
000's omitted                                                   As at December 31,
                                              -------------------------------------------------------
                                               2002        2001        1999        1998        1997
                                             --------    --------    --------    --------    --------
Balance Sheet Data:
------------------------------------------

<S>                                          <C>         <C>         <C>         <C>         <C>
Cash and short term investments              $    684    $    898    $    941    $  1,072    $  2,441
Accounts receivable                             2,996       1,358         720         428         376
Total assets                                    3,944       2,458       1,740       1,530       3,180
Total liabilities of continuing
    operations                                  3,356       2,215       1,481         500      11,756
Liabilities of discontinued operations
    subject to compromise                          --          --          --      10,624          --
Deficit                                       (17,458)    (17,798)    (17,784)    (27,173)    (26,141)
Stockholders' equity (deficiency)                 588         243         258      (9,594)     (8,576)
</TABLE>

----------

                                       11
<PAGE>

   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.

      Pursuant to the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, 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. 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.

      This report also identifies important factors, which could cause actual
results to differ materially from those indicated by the forward looking
statements. These risks and uncertainties include the factors discussed under
the heading "Risk Factors" beginning at page 6 of this report.

      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

      As a result of our acquisition of Sunteck Transport Co., Inc. (Sunteck) in
December 2000, we are a full service third party transportation logistics
provider. Our services include ground transportation coast to coast, local pick
up and delivery, warehousing, 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.

      We have five regional operating centers and representatives in 12 states
and Canada. As of March 5, 2003 we had 42 sales agents. Our services include
arranging for the transport of customers' freight from the shippers location to
the designated destination. We do not own any trucking equipment and rely on
independent carriers for the movement of customers' freight. We seek to
establish long-term relationships with our customers and provide a variety of
logistics services and solutions to eliminate inefficiencies in our customers'
supply chain management.

Results of operations

For the year ended December 31, 2002

      During the year ended December 31, 2002, 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. Our net revenues (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 below focuses on the changes in our net revenues. The
increases in net revenues and all related cost and expense categories are the
direct result of our business expansion. The cost of transportation related to a
significant portion of the growth generated by this business expansion has been
at a higher rate than our historical business resulting in reduced net revenues
as a percentage of gross revenues.


                                       12
<PAGE>

The following table represents certain statement of operation data as a
percentage of net revenues:

                                                     2002           2001
                                                    -----          -----

      Net revenues                                  100.0%         100.0%

         Commissions                                 54.2%          46.1%
         Operating expenses                          31.4%          50.9%
         Other charges                                3.8%           4.0%

      Net income (loss)                              10.1%          (1.0%)

Revenues

      Gross revenues, consisting of freight fees and other related services
revenue, totaled $18,863,000 for the year ended December 31, 2002, as compared
with $8,029,000 in the prior year. Net revenues were $3,368,000 for the year
ended December 31, 2002, as compared with $1,567,000 in the prior year.

Costs and expenses

      Commissions totaled $1,827,000 for the year ended December 31, 2002, as
compared with $722,000 in the prior year. As a percentage of net revenues,
commissions were 54.2% for the year ended December 31, 2002 as compared with
46.1% in the prior year. This increase is the direct result of higher commission
rates related to our business expansion.

      Operating expenses totaled $1,057,000 for the year ended December 31,
2002, as compared with $798,000 in the prior year. As a percentage of net
revenues, operating expenses were 31.9% for the year ended December 31, 2002 as
compared with 50.9% in the prior year. This decrease is the direct result of
management's ability to leverage selling, general and administrative expenses in
connection with business expansion.

      Investment income, primarily consisting of the gain on the sale of
marketable securities and dividend and interest income, yielded a gain of
$26,000 for the year ended December 31, 2002, as compared to $45,000 in the
prior year. This decrease is the direct result of the sale of substantially all
marketable securities during the year ended December 31, 2001.

      Interest expense was $154,000 for the year ended December 31, 2002 as
compared with $107,000 in the prior year. This increase is primarily the result
of an increase in borrowings consisting of the loan payable of $500,000,
originated in August 2001, outstanding for a full year offset by the repayment
of a note payable, originated in September 2000, which was repaid in April 2001.

Income tax

      Income taxes of $16,000 for the year ended December 31, 2002 related to
the operating results net of the benefit of the utilization of net operating
loss carryforwards.

Net income (loss)

      Net income totaled $340,000 for the year ended December 31, 2002, as
compared with a loss of $15,000 in the prior year.


                                       13
<PAGE>

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.

      For the year ended December 31, 2002, we increased gross revenues from
$8.0 million to $18.9 million and had net income of $340,000 as compared with a
net loss of $15,000 in the prior year. As of December 31, 2002, we had an
accumulated deficit of $17.5 million. Other factors that could adversely affect
our operating results include:

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

      o     changes in general economic conditions.

      Depending on our ability to generate revenues, we may require additional
funds to expand Sunteck's business operations and for working capital and
general corporate purposes. Any additional equity financing may be dilutive to
stockholders, and debt financings, if available, may involve restrictive
covenants that further limit our ability to make decisions that we believe will
be in our best interests. In the event we cannot obtain additional financing on
terms acceptable to us when required, our ability to expand Sunteck's operations
may be materially adversely affected.

Liquidity and capital resources

      At December 31, 2002, we had outstanding $575,000 of convertible
subordinated debentures and $500,000 pursuant to a line of credit. The
debentures are convertible into common stock at the option of the debenture
holder at a conversion price of $0.25 per share and are redeemable, at the
option of the holder, on or after December 31, 2003. The line of credit,
obtained from a related party in August 2001, is secured by accounts receivable
and matures in August 2003. We believe that we have sufficient working capital
to meet our short-term operating needs and that we will be able to extend or
replace the line of credit on terms acceptable to us.

      At December 31, 2002, we had liquid assets of approximately $684,000.

      The total amount of debt outstanding as of December 31, 2002 and 2001 was
$1,075,000. The following table presents our debt instruments and their weighted
average interest rates as of December 31, 2002 and 2001, respectively:

                                                          Weighted
                                                          Average
                                           Balance         Rate
                                          --------         ----

      Subordinated Debt                   $575,000           12.0%
      Line of Credit                      $500,000           17.0


                                       14
<PAGE>

      Inflation and changing prices had no material impact on our revenues or
the results of operations for the year ended December 31, 2002.

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 of the Notes to Financial Statements
includes a summary of the significant accounting policies and methods used in
the preparation of the Company's 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

As a third party transportation logistics provider, we act as the shippers'
agent and arrange for a carrier to handle the freight. Gross revenues consist of
the total dollar value of services purchased by shippers. Revenue is recognized
upon the delivery of freight, at which time the related transportation cost,
including commission, is also recognized. At that time, our obligations are
completed and collection of receivables is reasonably assured.

In December 1999, the Securities and Exchange Commission (SEC) issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" (SAB
101). SAB 101, as amended, summarizes some of the SEC's views in applying
accounting principles generally accepted in the United States of America (GAAP)
to revenue recognition in the financial statements. We believe our revenue
recognition policy is appropriate and in accordance with GAAP and SAB 101.

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.

Recently Issued Accounting Pronouncements

      In April 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB No. 13, and Technical
Corrections" (SFAS 145), which rescinds the indicated statements and amends
other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions.

      In June 2002, the FASB issued SFAS 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which requires that a liability for a cost
associated with an exit or disposal activity be recognized and measured at fair
value when the liability is incurred.

      In October 2002, the FASB issued SFAS 147, "Acquisitions of Certain
Financial Institutions," which requires that transactions involving the
acquisition of financial institutions, except for transactions between two or
more mutual enterprises, be accounted for in accordance with SFAS 141, "Business
Combinations," and SFAS 142, "Goodwill and Other Intangible Assets."

      In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," which amends SFAS 123, "Accounting
for Stock-Based Compensation," by


                                       15
<PAGE>

providing alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation. SFAS 148
also amends the disclosure requirements of SFAS 123 by requiring prominent
disclosures in both annual and interim financial statements about the method of
accounting for stock-based employee compensation and the effect of the method
used on reported results.

      Adoption of these statements did not have a material impact on our
financial position or results of operations.

                              FINANCIAL STATEMENTS

      The response to this item is submitted as a separate section of this
report beginning on page F-1.

                        CHANGES IN AND DISAGREEMENTS WITH
               ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

      None.


                                       16
<PAGE>

                                    PART III

                        DIRECTORS AND EXECUTIVE OFFICERS

      The following table sets forth the names, ages and positions of our
directors, executive officers and key employees:

Name                       Age   Position
----                       ---   --------

Peter C. Einselen          63    Director
Thomas C. Robertson        57    Director
Harry Wachtel              44    President, chief executive officer and director
Mark Weiss                 43    National account executive and director
William Wunderlich         55    Chief financial officer

      PETER C. EINSELEN has been a director since January 1999. Mr. Einselen has
served as senior vice president of Andersen & Strudwick, a brokerage firm, since
1990. From 1983 to 1990, Mr. Einselen was employed by Scott and Stringfellow,
Incorporated, a brokerage firm.

      THOMAS C. ROBERTSON has been a director since January 1999. Mr. Robertson
has been president, chief financial officer and a director of Andersen &
Strudwick, a brokerage firm since 1988. Mr. Robertson has been president of
Gardner & Robertson, a money management firm, since 1997.

      HARRY WACHTEL joined us in conjunction with the acquisition of Sunteck and
has been a director, and our president and chief executive officer since
December 7, 2001. Since 1997, he has been president of Sunteck. From 1992 to
1997, he served as vice president of sales and marketing for Pioneer Services,
Inc., a third party, non-asset based transportation logistics provider. From
1990 to 1991 he served as president of Guaranteed Federal Financial, a mortgage
origination company.

      MARK WEISS joined us in conjunction with the acquisition of Sunteck and
has been a director since December 7, 2001. Since 1997, he has been employed by
Sunteck as a national account executive. From 1994 to 1997 he served as a
national account executive for Pioneer Services, Inc., a third party, non-asset
based transportation logistics provider. From 1982 to 1994 he was president of
The Picture Place Ltd. Inc., a retailer and wholesaler of photographic, video
and art equipment and supplies. Mr. Weiss is the brother-in-law of Mr.
Wunderlich, our executive vice president and chief financial officer of the
Company.

      WILLIAM WUNDERLICH joined us in October 1992 as our vice president -
finance, became chief financial officer in January 1993, president in January
1999 and, in conjunction with the acquisition of Sunteck, became executive vice
president in December 2001. From 1990 to 1992, he served as vice president of
Goldstein Affiliates, Inc., a public adjusting company. From 1981 to 1990, he
served as executive vice president, chief financial officer and a director of
Novo Corporation, a manufacturer of consumer products. Mr. Wunderlich is a
Certified Public Accountant with a B.A. degree in Accounting and Economics from
the City University of New York at Queens College. Mr. Wunderlich is the
brother-in-law of Mr. Weiss, one of our directors.

Committees of the Board of Directors

      Our board of directors has an audit committee and a compensation
committee. The audit committee reviews the scope and results of the audit and
other services provided by our independent accountants and our internal
controls. The compensation committee is responsible for the approval of
compensation arrangements


                                       17
<PAGE>

for our officers and the review of our compensation plans and policies. Each
committee is comprised of Messrs. Einselen and Robertson, our non-employee
independent outside directors.

Option grants during the year ended December 31, 2002

      Our compensation committee did not grant any options to the named
executives during the year ended December 31, 2002. During 2001, non-employee
directors were granted options to purchase a total of 30,000 shares of our
common stock at $0.05 per share, the fair market value on the date of grant.
These shares vest ratably over a three-year period.

      Option exercises and year-end option values. The following table provides
information with respect to options exercised by the Named Executive Officers
during 2002 and the number and value of unexercised options held by the Named
Executive Officers as of December 31, 2002.

    Aggregated Option Exercise in Last Fiscal Year and Year-End Option Values

<TABLE>
<CAPTION>
                                                                  Number of Shares Underlying       Value of Unexercised In-the-
                                                                  Unexercised Options at Fiscal       Money Options At Fiscal
                                                                          Year-End                           Year-End (2)
                                                                  ------------------------------    ----------------------------
                           Shares Acquired
Name                       on Exercise (#)   Value Realized (1)   Exercisable       Unexercisable   Exercisable    Unexercisable
----                       ---------------   ------------------  -------------      -------------   -----------    -------------
<S>                           <C>               <C>                 <C>                        <C>     <C>                  <C>
Harry Wachtel                     --                --                   --                    --            --               --
Mark Weiss                        --                --                   --                    --            --               --
William Wunderlich            50,000            $3,500              845,000                    0       $42,250              $0
</TABLE>

---------------
(1)   For the purposes of this calculation, value is based upon the difference
      between the exercise price of the options and the stock price at date of
      exercise.

(2)   For the purposes of this calculation, value is based upon the difference
      between the exercise price of the exercisable and unexercisable options
      and the stock price at December 31, 2002 of $0.15 per share.

Director Compensation

      We do not pay any directors' fees. Directors are reimbursed for the costs
relating to attending board and committee meetings. During 2001, each
non-employee Director was granted options to purchase a total of 15,000 shares
of our common stock at $.05 per share, the fair market value on the date of
grant. These shares vest ratably over a three-year period.

                             EXECUTIVE COMPENSATION

      Summary compensation. The following table sets forth certain information
concerning compensation paid for services in all capacities awarded to, earned
by or paid to our chief executive officer and the other most highly compensated
executive officers during 2002, 2001 and 2000 whose aggregate compensation
exceeded $100,000.


                                       18
<PAGE>

<TABLE>
<CAPTION>
                                                                            All other
Name and principal position                     Salary         Bonus     compensation (1)
---------------------------                     ------         -----     ----------------
<S>                                            <C>            <C>          <C>
Harry Wachtel
President and chief executive officer
    2002 ...................................   $175,000       $13,035          --
    2001 ...................................   $ 75,000(2)         --          --
    2000 ...................................   $231,325            --          --

William Wunderlich
Executive vice president and chief financial
    officer (3)
    2002 ...................................   $ 75,000       $28,035          --
    2001 ...................................   $ 75,000            --          --
    2000 ...................................   $144,960            --      $4,575

Mark Weiss
National account executive
    2002 ...................................   $127,836            --          --
    2001 ...................................   $131,663            --          --
    2000 ...................................   $137,771            --          --
</TABLE>

--------------------

(1)   Represents amount contributed to the Company's 401(k) deferred
      compensation plan.

(2)   For the year ended December 31, 2001, Mr. Wachtel waived $100,000 of his
      minimum salary.

(3)   From January 1, 2000 to November 2001, Mr. Wunderlich was our president.

Employment Agreements

      In December 2000, we entered into employment agreements with Messrs.
Wachtel and Wunderlich providing for their employment, as our chief executive
officer and chief financial officer, respectively, for terms expiring on
December 31,2003 subject to automatic one-year renewals unless either party
gives written notice ninety days prior to the end of the then current term of
the agreement. The agreement provides for annual base salaries of $175,000 and
$75,000, respectively, and for participation in all executive benefit plans. Mr.
Wachtel's agreement provides that he will be entitled to a bonus equal to 10% of
our consolidated pre-tax profit from $250,000 to $1,250,000. Mr. Wunderlich's
agreement provides that he will be entitled to a bonus equal to 10% of our
consolidated pre-tax profit from $100,000 to $1,250,000. Further, the Mr.
Wachtel's agreement provides, among other things, that, if employment is
terminated without cause (as defined) or if he terminates his employment for
good reason (as defined) or within six months after a change of control (as
defined), we will pay him an amount equal to his respective current base salary
plus the average incentive compensation due to him during the remaining term of
the agreement.


                                       19
<PAGE>

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table, together with the accompanying footnotes, sets forth
information, as of March 21, 2003, regarding stock ownership of all persons
known by us to own beneficially 5% or more of our outstanding common stock, all
directors, and all directors and executive officers as a group.

                Name of                    Shares of Common Stock    Percentage
          Beneficial Owner (1)               Beneficially Owned     Of Ownership
          --------------------               ------------------     ------------

(i) Directors and Executive Officers
Harry Wachtel .........................          9,770,000(2)            34.7%
Thomas C. Robertson ...................            175,000(3)               *
Peter C. Einselen .....................            345,000(3)             1.3%
Mark Weiss ............................          1,000,000(6)             3.7%
William I. Wunderlich .................          1,765,000(4)(7)          6.2%
All executive officers and directors as
a group (5 persons) ...................         11,305,000(8)            38.6%

(ii) 5% Stockholders
James T. Martin .......................          6,622,000(5)            24.3%

--------------

*     Less than 1%

(1)   Unless otherwise indicated below, each director, executive officer and
      each 5% stockholder has sole voting and investment power with respect to
      all shares beneficially owned. The address for Mr. Wachtel and Mr.
      Wunderlich is c/o AutoInfo, Inc., 6401 Congress Avenue, Suite 230, Boca
      Raton, FL 33487. The address for Mr. Martin is c/o Bermuda Trust Company,
      Compass Point Road, 9 Bermudian Road, Hamilton HM11, Bermuda.

(2)   Includes 800,000 shares issuable upon the conversion of a convertible
      subordinated debenture; and 1,750,000 shares with respect to which Mr.
      Wachtel has been granted voting rights pursuant to voting proxy
      agreements.

(3)   Includes 15,000 shares issuable upon the exercise of stock options and
      100,000 shares issuable upon the conversion of a convertible subordinated
      debenture.

(4)   Includes 845,000 shares issuable upon the exercise of stock options and
      100,000 shares issuable upon conversion of a convertible subordinated
      debenture.

(5)   Includes 352,000 shares issuable upon the conversion of a convertible
      subordinated debenture.

(6)   Includes 1,000,000 with respect to which Mr. Weiss has granted voting
      rights to Mr. Wachtel pursuant to a voting proxy agreement. Mr. Weiss
      retains full control over the disposition of these shares.

(7)   Includes 750,000 with respect to which Mr. Wunderlich has granted voting
      rights to Mr. Wachtel pursuant to a voting proxy agreement. Mr. Wunderlich
      retains full control over the disposition of these shares.

(8)   Assumes that all currently exercisable options or warrants owned by
      members of this group have been exercised and all convertible subordinated
      debentures owned by this group have been converted.

      Section 16(a) of the Securities Exchange Act of 1934 requires our officers
and directors, and persons who own more than ten percent of a registered class
of our equity securities, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission (SEC). Officers, directors and
greater than ten-percent stockholders are required by SEC regulation to furnish
us with copies of all Section 16(a) forms they file. Based solely on review of
the copies of such forms furnished to us, or written representations that no
Forms 5 were required, we believe that all Section 16(a) filing requirements
applicable to our officers and directors were complied with.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      In August 2001, we entered into a $500,000 line of credit agreement with
James T. Martin, a significant stockholder, secured by our accounts receivable,
which expires in August 2003. Interest on the outstanding borrowings is 17% per
annum, payable quarterly in arrears. As of December 31, 2002, outstanding
borrowings under this line of credit totaled $500,000 and interest of $85,000
and $32,000 was charged to operations in 2002 and 2001, respectively.


                                       20
<PAGE>

      During the year ended December 31, 2001, Harry Wachtel, our president,
waived $100,000 of compensation due pursuant to his employment agreement dated
December 6, 2000.

      In December 2001, we lent $100,000 to the father-in-law of Harry Wachtel,
our president. This loan bears interest at 4% per annum and is due in December
2003.

      In December 2000, the Company obtained financing totaling $575,000 from
certain related parties in the form of ten year 12% subordinated convertible
debentures. The debentures are convertible into common stock at the option of
the debenture holder at a conversion price of $0.25 per share and are
redeemable, at the option of the holder, on or after December 31, 2003. Interest
of $69,000 was charged to operations in each of 2002 and 2001.

                        EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
--------

No. 3A      Certificate of Incorporation of the Company, as amended.(9)

No. 3B      Amended and Restated By-Laws of the Company. (5)

No. 4A      Specimen Stock Certificate. (2)

No. 10A     1986 Stock Option Plan. (1)

No. 10B     1989 Stock Option Plan.  (3)

No. 10C     1992 Stock Option Plan.  (4)

No. 10D     1997 Stock Option Plan.  (6)

No. 10E     1997 Non-Employee Stock Option Plan.  (6)

No. 10F     1999 Stock Option Plan. (8)

No. 10G     Form of Agreement and Plan of Reorganization among AutoInfo, Inc. on
            the one hand, and Sunteck Transport Co., Inc., et al., on the other
            hand, dated June 22, 2000. (7)

No. 10H     Form of Debenture dated December 6, 2000.  (7)

No. 10I     Employment Agreement between AutoInfo, Inc. and Harry M. Wachtel
            dated as of December 7, 2000. (9)

No. 10J     Employment Agreement between AutoInfo, Inc. and William Wunderlich
            dated December 7, 2000. (9)

No. 21A     Subsidiaries of the Registrant. (9)

No. 23A     Consent of Dworken, Hillman, LaMorte & Sterczala, P.C., independent
            public accountants.*

No. 99.1    Certification of Chief Executive Officer.*


                                       21
<PAGE>

No. 99.2    Certification of Chief Financial Officer.*

-----------------------
*Filed as an exhibit hereto.

(1)   This Exhibit was filed as an Exhibit to our definitive proxy statement
      dated October 20, 1986 and is incorporated herein by reference.

(2)   This Exhibit was filed as Exhibit to our Registration Statement on Form
      S-1 (File No. 33-15465) and is incorporated herein by reference.

(3)   This Exhibit was filed as an Exhibit to our definitive proxy statement
      dated September 25, 1989 and is incorporated herein by reference.

(4)   This Exhibit was filed as an Exhibit our definitive proxy statement dated
      October 2, 1992 and is incorporated herein by reference.

(5)   This Exhibit was filed as an Exhibit to our Current Report on Form 8-K
      dated March 30, 1995 and is incorporated herein by reference.

(6)   This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 1997 and is incorporated herein by reference.

(7)   This Exhibit was filed as an Exhibit to our Current Report on Form 8-K
      dated December 6, 2000 and is incorporated herein by reference.

(8)   This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 1999 and is incorporated herein by reference.

(9)   This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for
      the year ended December 31, 2000 and is incorporated herein by reference.

Reports on Form 8-K

None.

                             CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

      Within the past 90 days, our management, including our chief executive
officer and chief financial officer, has conducted an evaluation of the
effectiveness of disclosure controls and procedures pursuant to Rule 13a-14 and
15d-14 under the Securities Exchange Act of 1934, as amended. Based on that
evaluation, our chief executive officer and chief financial officer concluded
that our disclosure controls and procedures are effective in ensuring that all
material information required to be filed in this annual report has been made
known to them in a timely fashion.

Changes in Internal Controls

      There have been no significant changes in internal controls, or in factors
that could significantly affect internal controls, subsequent to the date our
chief executive officer and chief financial officer completed their evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.


                                       22
<PAGE>

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d), the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
March 24, 2003 on its behalf by the undersigned, thereunto duly authorized.

                                             AutoInfo, Inc.

                                             By:  /s/ Harry M. Wachtel
                                                  ------------------------------
                                                   Harry M. Wachtel, President

      Pursuant to the requirements of the Securities Act of 1934, this Report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated.


/s/ Harry M. Wachtel
-------------------------
Harry M. Wachtel            President and Chairman of the Board  March 24, 2003



/s/ William I. Wunderlich
-------------------------
William I. Wunderlich       Chief Financial Officer              March 24, 2003


/s/ Mark Weiss
-------------------------
Mark Weiss                  Director                             March 24, 2003


/s/ Peter C. Einselen
-------------------------
Peter C. Einselen           Director                             March 24, 2003


/s/ Thomas C. Robertson
-------------------------
Thomas C. Robertson         Director                             March 24, 2003



                                       23
<PAGE>

                                 AUTOINFO, INC.

                     CERTIFICATIONS PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

      CERTIFICATION

      I, Harry Wachtel, certify that:

      1. I have reviewed this annual report on Form 10-KSB of AutoInfo, Inc.;

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

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

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

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

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

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

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

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

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

      6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                                      /s/ Harry Wachtel
                                                      --------------------------
                                                      Harry Wachtel
                                                      Chief Executive Officer

Date:    March 24, 2003


                                       24
<PAGE>

                                 AUTOINFO, INC.

                     CERTIFICATIONS PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002

      CERTIFICATION

      I, William Wunderlich, certify that:

      1. I have reviewed this annual report on Form 10-KSB of AutoInfo, Inc.;

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

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

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

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

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

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

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

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

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

      6. The registrant's other certifying officers and I have indicated in this
annual report whether or not there were significant changes in internal controls
or in other factors that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

                                                    /s/ William Wunderlich
                                                    ----------------------------
                                                    William Wunderlich
                                                    Chief Financial  Officer

Date:    March 24, 2003


                                       25
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Public Accountants                                   F-2

Consolidated Balance Sheets as of December 31, 2002 and 2001               F-3

Consolidated Statements of Operations for the Years Ended
         December 31, 2002 and 2001                                        F-4

Consolidated Statements of Stockholders' Equity for the Years Ended
         December 31, 2002 and 2001                                        F-5

Consolidated Statements of Cash Flows
         for the Years Ended December 31, 2002 and 2001                    F-6

Notes to Consolidated Financial Statements                                 F-7

Information required by schedules called for under Regulation S-X is either not
applicable or is included in the Consolidated Financial Statements or Notes
thereto.


                                       F-1
<PAGE>

                          Independent Auditors' Report

To the Board of Directors and Stockholders of
AutoInfo, Inc.

We have audited the accompanying consolidated balance sheets of AutoInfo, Inc.
and Subsidiaries as of December 31, 2002 and 2001, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of AutoInfo, Inc. and Subsidiaries
as of December 31, 2002 and 2001 and the results of their operations and their
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.

February 13, 2003
Shelton, Connecticut

                                     Dworken, Hillman, LaMorte & Sterczala, P.C.


                                      F-2
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                  ASSETS
                                                                                     December 31
                                                                             ----------------------------
                                                                                 2002            2001
                                                                             ------------    ------------

<S>                                                                          <C>             <C>
Current assets:
   Cash and cash equivalents                                                 $    684,000    $    885,000
   Short-term investments (Note 2)                                                     --          13,000
   Accounts receivable, net of allowance for doubtful accounts
      (2002 - $60,000; 2001 - $20,000) (Note 3)                                 2,996,000       1,358,000
   Loan receivable (Note 4)                                                       100,000              --
   Other current assets                                                            97,000          65,000
                                                                             ------------    ------------

Total current assets                                                            3,877,000       2,321,000

Fixed assets, net of depreciation                                                  67,000          37,000

Loan receivable (Note 4)                                                               --         100,000
                                                                             ------------    ------------

                                                                             $  3,944,000    $  2,458,000
                                                                             ============    ============

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Loan payable (Note 3)                                                     $    500,000    $    500,000
   Convertible subordinated debentures (Note 3)                                   575,000              --
   Accounts payable and accrued liabilities                                     2,281,000       1,140,000
                                                                             ------------    ------------

Total current liabilities                                                       3,356,000       1,640,000
                                                                             ------------    ------------

Convertible subordinated debentures (Note 3)                                           --         575,000
                                                                             ------------    ------------

Stockholders' equity : (Note 7)
  Common Stock - authorized 100,000,000 shares, $.001 par value; issue and
     outstanding 27,347,923 and 27,297,923 as
    of December 31, 2002 and 2001, respectively                                    27,000          27,000
  Additional paid-in capital                                                   18,019,000      18,014,000
  Deficit                                                                     (17,458,000)    (17,798,000)
                                                                             ------------    ------------

  Total stockholders' equity                                                      588,000         243,000
                                                                             ------------    ------------

                                                                             $  3,944,000    $  2,458,000
                                                                             ============    ============
</TABLE>

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


                                      F-3
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                For The Years Ended December 31,
                                                --------------------------------
                                                      2002             2001
                                                 ------------      ------------

Gross revenues                                   $ 18,863,000      $  8,029,000
Cost of transportation                             15,495,000         6,462,000
                                                 ------------      ------------

Net revenues                                        3,368,000         1,567,000
                                                 ------------      ------------

Commissions                                         1,827,000           722,000
Operating expenses                                  1,057,000           798,000
                                                 ------------      ------------
                                                    2,884,000         1,520,000
                                                 ------------      ------------

Income from operations                                484,000            47,000
                                                 ------------      ------------

Other charges (credits):
   Investment income (Note 2)                         (26,000)          (45,000)
   Interest expense                                   154,000           107,000
                                                 ------------      ------------
                                                      128,000            62,000
                                                 ------------      ------------

Income (loss) before income taxes                     356,000           (15,000)
Income taxes (Note 5)                                  16,000                --
                                                 ------------      ------------

Net income (loss)                                     340,000           (15,000)
                                                 ============      ============

Basic and diluted net income per share           $        .01                --
                                                 ============      ============

Weighted average number of common and
   common equivalent shares                        27,940,000        27,328,000
                                                 ============      ============

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


                                      F-4
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                              Shares of
                               Common                 Additional
                                Stock      Common     Paid - In
                             Outstanding    Stock      Capital       Deficit
                             -----------    -----      -------       -------

Balance, January 1, 2001      27,298,000   $27,000   $18,014,000   $(17,783,000)

Net loss                              --        --            --        (15,000)
                              ----------   -------   -----------   ------------

Balance, December 31, 2001    27,298,000    27,000    18,014,000    (17,798,000)

Exercise of stock options         50,000        --         5,000

Net income                                                              340,000
                              ----------   -------   -----------   ------------

Balance, December 31, 2002    27,348,000   $27,000   $18,019,000   $(17,458,000)
                              ==========   =======   ===========   ============

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


                                      F-5
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         For The Years Ended
                                                             December 31,
                                                       -------------------------
                                                           2002          2001
                                                       -----------    ---------
Cash flows from operating activities:
  Net income  (loss)                                   $   340,000    $ (15,000)
  Adjustments to reconcile net income (loss) to net
    cash used in  operating activities:
      Depreciation and amortization expenses                18,000       11,000
      Gains on sales of securities                              --      (15,000)
      Net unrealized holding loss                               --        1,000

Changes in assets and liabilities:
    Accounts receivable, net                            (1,638,000)    (638,000)
    Other current assets                                   (32,000)       2,000
    Accounts payable and accrued liabilities             1,141,000      334,000
                                                       -----------    ---------

Net cash used in operating activities                     (171,000)    (320,000)
                                                       -----------    ---------

Cash flows from investing activities:
  Increase in loan receivable                                   --     (100,000)
  Capital expenditures                                     (48,000)     (35,000)
  Redemption of short-term investments                      13,000      216,000
                                                       -----------    ---------

Net cash provided by (used in) investing activities        (35,000)      81,000
                                                       -----------    ---------

Cash flows from financing activities:
  Exercise of stock options                                  5,000           --
  Increase in  borrowings, net                                  --      399,000
                                                       -----------    ---------

Net cash  provided by  financing activities                  5,000      399,000
                                                       -----------    ---------


Net change in cash and cash equivalents                   (201,000)     160,000
Cash and cash equivalents, beginning of year               885,000      725,000
                                                       -----------    ---------

Cash and cash equivalents, end of year                 $   684,000    $ 885,000
                                                       ===========    =========

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


                                      F-6
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 and 2001

Note 1 - Business and Summary of Significant Accounting Policies

Business

      As a result of the Company's acquisition of Sunteck Transport Co., Inc.
(Sunteck) in December 2000, the Company is a full service third party
transportation logistics provider. The Company services include ground
transportation coast to coast, local pick up and delivery, warehousing, 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.

      The Company has five regional operating centers and representatives in 12
states and Canada. As of March 5, 2003 we had 42 sales agents. The Company's
services include arranging for the transport of customers' freight from the
shippers location to the designated destination. The Company does not own any
trucking equipment and rely on independent carriers for the movement of
customers' freight. It seeks to establish long-term relationships with its
customers and provide a variety of logistics services and solutions to eliminate
inefficiencies in customers' supply chain management.

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).

Principles of Consolidation

      The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary Sunteck Transport Co., Inc. All significant
intercompany balances and transactions have been eliminated in consolidation.

Revenue Recognition

      As a third party transportation logistics provider, the Company acts as
the shippers' agent and arranges for a carrier to handle the freight. Gross
revenues consist of the total dollar value of services purchased by shippers.
Revenue is recognized upon the 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.

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.


                                      F-7
<PAGE>

Cash and Cash Equivalents

      Cash and cash equivalents consist of cash in banks and investments in
short-term, highly liquid securities having original maturities of three months
or less. From time to time, the Company has on deposit at financial institutions
cash balances which exceed federal deposit insurance limitations. The Company
has not experienced any losses in such accounts and believes it is not exposed
to any significant credit risk on cash and cash equivalents.

Short-Term Investments

      Short-term investments are classified as trading securities and are
reported at fair market value. Gains and losses on disposition of trading
securities are recognized based on specific identification in the period in
which they occur. Unrealized holding gains and losses on trading securities,
based upon the fair market value as of the balance sheet date, are included in
earnings in the period in which they occur.

Fixed Assets

      Fixed assets as of December 31, 2002 and 2001, consisting predominantly of
furniture, fixtures and equipment, 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 (Loss) Per Share

      Basic income (loss) per share is based on net income (loss) divided by the
weighted average number of common shares outstanding. Common stock equivalents
outstanding were 633,000 for the year ended December 31, 2002 and were
antidilutive for the year ended December 31, 2001.

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.

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.


                                      F-8
<PAGE>

Stock-Based Compensation

      The Company has adopted Statement of Financial Accounting Standards No.
123, "Accounting for Stock Based Compensation" (SFAS 123). As permitted by SFAS
123, the Company has chosen to continue to apply Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and,
accordingly, no compensation cost has been recognized for stock options in the
financial statements.

New Accounting Pronouncements

      In April 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 145, "Rescission of FASB
Statements No. 4, 44, and 64, Amendment of FASB No. 13, and Technical
Corrections" (SFAS 145), which rescinds the indicated statements and amends
other existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under changed
conditions.

      In June 2002, the FASB issued SFAS 146, "Accounting for Costs Associated
with Exit or Disposal Activities," which requires that a liability for a cost
associated with an exit or disposal activity be recognized and measured at fair
value when the liability is incurred.

      In October 2002, the FASB issued SFAS 147, "Acquisitions of Certain
Financial Institutions," which requires that transactions involving the
acquisition of financial institutions, except for transactions between two or
more mutual enterprises, be accounted for in accordance with SFAS 141, "Business
Combinations," and SFAS 142, "Goodwill and Other Intangible Assets."

      In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," which amends SFAS 123, "Accounting
for Stock-Based Compensation," by providing alternative methods of transition
for a voluntary change to the fair value based method of accounting for
stock-based employee compensation. SFAS 148 also amends the disclosure
requirements of SFAS 123 by requiring prominent disclosures in both annual and
interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results.

      Adoption of these statements did not have a material impact on the
Company's financial position or results of operations.

Note 2- Short-Term Investments

      Short-term investments at December 31, 2001 consisted of marketable
securities. Investment return is summarized as follows:

                                                       Years Ended December 31,
                                                       ------------------------
                                                         2002             2001
                                                       -------         --------

    Unrealized loss                                    $    --         $ (1,000)
    Gain on sale of securities                           1,000           15,000
    Dividends and interest                              25,000           31,000
                                                       -------         --------
Investment income                                      $26,000         $ 45,000
                                                       =======         ========


                                      F-9
<PAGE>

Note 3 - Debt

Loan Payable

      In August 2001, the Company entered into a $500,000 Line of Credit
Agreement with James T. Martin, a 24% stockholder of the Company, secured by the
Company's accounts receivable, which expires in August 2003. Interest on the
outstanding borrowings is 17% per annum, payable quarterly in arrears. As of
December 31, 2002, outstanding borrowings under this Line of Credit totaled
$500,000 and interest of $85,000 and $32,000 was charged to operations in 2002
and 2001, respectively.

Convertible Subordinated Debentures

      In December 2000, the Company obtained financing totaling $575,000 from
certain related parties in the form of ten year 12% Subordinated Convertible
Debentures (Debentures). The Debentures are convertible into the common stock of
the Company at the option of the debenture holder at a conversion price of $0.25
per share and are redeemable, at the option of the holder, on or after December
31, 2003. Interest of $69,000 was charged to operations in each of 2002 and
2001.

Note 4 - Loan Receivable

      In December 2001, the Company made a loan of $100,000 to the father-in-law
of Harry Wachtel, the president of the Company. This loan bears interest at 4%
per annum and is due in December 2003.

Note 5- Income Taxes

      For the years ended December 31, 2002 and 2001, the provision for income
taxes consisted of the following:

                                                   2002              2001
                                                 -------           -------

      Federal                                    $    --           $    --
      State                                       16,000                --
                                                 -------           -------
      Income tax                                 $16,000           $    --
                                                 =======           =======

      The following table reconciles the Company's effective income tax rate on
(loss) income from continuing operations to the Federal Statutory Rate for the
years ended December 31, 2002 and 2001.

                                                  2002       2001
                                                --------   --------
      Federal Statutory Rate                     (34.0)%   (34.0)%
      Effect of:
         Valuation allowance against deferred
           tax assets                             34.0       34.0
                                                --------   --------
                                                   0 %        0 %
                                                ========   ========

      Deferred taxes are recorded based upon differences between the financial
statement and tax bases of assets and liabilities and future benefits to be
recognized upon the utilization of certain operating


                                      F-10
<PAGE>

loss carryforwards. Temporary differences and carryforwards which give rise to a
significant portion of deferred tax assets and liabilities were as follows:

                                               December 31,   December 31,
                                                   2002          2001
                                               -----------    -----------
      Deferred tax assets:
           Net operating loss carryforward     $ 6,101,000    $ 6,216,000
                                               -----------    -----------

      Gross  deferred tax assets                 6,101,000      6,216,000
      Less: valuation allowance                 (6,101,000)    (6,216,000)
                                               -----------    -----------

      Deferred tax asset                       $        --    $        --
                                               ===========    ===========

      The deferred tax asset is fully reserved for as the Company's management
does not expect such amounts to be realized. As of December 31, 2002, the
Company has a net operating loss carryforward of approximately $18.1 million for
federal income tax purposes which expire through 2014. The requirements of the
Internal Revenue Code and related regulations, rulings, judicial authority and
practice are subject to different interpretations. The utilization of the net
operating loss carryforward may be limited by, among other things, shareholder
changes including the possible issuance by the Company of additional shares in
one or more financing or acquisition transactions.

Note 6 - Commitments and Contingencies

Leases

      The Company is obligated under non-cancelable operating leases for
premises expiring at various dates through January 2005. Future minimum lease
payments are $43,000, $22,000 and $2,000 for the years ended December 31, 2003,
2004 and 2005, respectively. Rent expense for the years ended December 31, 2002
and 2001 for continuing operations was $77,000 and $61,000, respectively.

Other Agreements

      The Company has employment agreements with Messrs. Wachtel, the president,
and Wunderlich, the executive vice president and chief financial officer of the
Company, who are also stockholders. The agreements expire in 2003 and provide
for minimum annual compensation of $175,000 and $75,000, respectively. Mr.
Wachtel's agreement provides that he will be entitled to a bonus equal to 10% of
the Company's consolidated pre-tax profit from $250,000 to $1,250,000. Mr.
Wunderlich's agreement provides that he will be entitled to a bonus equal to 10%
of the Company's consolidated pre-tax profit from $100,000 to $1,250,000. Bonus
payments to Messrs. Wachtel and Wunderlich for the year ended December 31, 2003
were $13,035 and $28,035, respectively. For the year ended December 31, 2001,
Mr. Wachtel waived $100,000 of his minimum salary.

Litigation

      The Company is involved in certain litigation arising in the ordinary
course of its business. In the opinion of management, these matters will not
have a material adverse effect on the Company's financial position or liquidity.


                                      F-11
<PAGE>

Note 7 - Stockholders' Equity

Stock Option Plans

      The Company has six stock option plans, its 1985 Plan, 1986 Plan, 1989
Plan, 1992 Plan, 1997 Plan and 1999 Plan (collectively, the Plans). Pursuant to
the Plans, a total of 2,842,500 shares of Common Stock were made available for
grant of stock options. Under the Plans, options have been granted to key
personnel for terms of up to ten years at not less than fair value of the shares
at the dates of grant and are exercisable in whole or in part at stated times
commencing one year after the date of grant. No further grants will be made
under the 1985, 1986, 1989 or 2002 Plans. At December 31, 2002, options to
purchase 2,583,000 shares of common stock were outstanding under the Plans.

      The pro-forma effect of these options on net income and earnings per
share, utilizing the Black-Scholes option-pricing model, consistent with the
method stipulated by SFAS 123, was not material to the Company's results of
operations.

      Option activity for the years ended December 31, 2002 and 2001 was as
follows:

<TABLE>
<CAPTION>
                                                     Granted                      Exercisable
                                         ------------------------------   --------------------------
                                                           Weighted                      Weighted
                                          Number of         Average       Number of      Average
                                           Shares        Exercise Price    Shares     Exercise Price
                                           ------        --------------    ------     --------------

<S>                                       <C>                <C>          <C>               <C>
Outstanding at January 1, 2001              995,000          $.10
Forfeited during the year                  (100,000)          .10
Granted during the year                     566,000           .06
                                          ---------          ----

Outstanding at December 31, 2001          1,461,000           .10           895,000         $.10
                                                                          ---------         ----
Forfeited during the year                   (86,000)          .08
Exercised during the year                   (50,000)          .10
Granted during the year                   1,258,000           .13
                                          ---------          ----

Outstanding December 31, 2002             2,583,000          $.11         1,005,000         $.09
                                          ---------          ----         ---------         ----

</TABLE>

Weighted average fair value of options granted:
                              2002                 $  .13
                              2001                 $  .06

Note 8 - Fair Value of Financial Instruments

      The following disclosures of fair value were determined by management
using available market information and appropriate valuation methodologies.
Considerable judgment is necessary to interpret market data and develop
estimated fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts the Company could realize on disposition
of the financial instruments. The use of different market assumptions and/or
estimation methodologies may have a material effect on the estimated fair value
amounts.


                                      F-12
<PAGE>

      Cash, accounts receivable, loans receivable, accounts payable and accrued
liabilities, loans payable and convertible subordinated debentures are carried
at amounts which reasonably approximate fair value.

Note 9 - Quarterly Results of Operations (Unaudited)

<TABLE>
<CAPTION>
                                               Year Ended December 31, 2002
                                                    Quarter Ended (1)
                                    -----------------------------------------------------
                                       Mar 31        June 30      Sep 30         Dec 31
                                    -----------    ----------   -----------    ----------

<S>                                 <C>            <C>          <C>            <C>
Gross revenues                      $ 3,560,000    $4,743,000   $ 5,412,000    $5,148,000
                                    -----------    ----------   -----------    ----------

                                    -----------    ----------   -----------    ----------
Net  income                         $    65,000    $   83,000   $   107,000    $   85,000
                                    ===========    ==========   ===========    ==========

Basic and diluted per share data:
                                    -----------    ----------   -----------    ----------
Net income                          $      .002    $     .003   $      .004    $     .003
                                    ===========    ==========   ===========    ==========

<CAPTION>
                                               Year Ended December 31, 2001
                                                       Quarter Ended
                                    -----------------------------------------------------
                                       Mar 31        June 30      Sep 30         Dec 31
                                    -----------    ----------   -----------    ----------

<S>                                 <C>            <C>          <C>            <C>
Gross revenues                      $ 1,487,000    $1,789,000   $ 2,041,000    $2,712,000
                                    -----------    ----------   -----------    ----------

                                    -----------    ----------   -----------    ----------
Net (loss) income                   $   (63,000)   $   19,000   $    (4,000)   $   33,000
                                    ===========    ==========   ===========    ==========

Basic and diluted per share data:
Net (loss) income                   $      (.00)   $      .00   $      (.00)   $      .00
                                    ===========    ==========   ===========    ==========
</TABLE>

Note 10 - Supplemental Disclosure of Cash Flow Information

Cash paid for interest in 2002 and 2001 was $147,000 and $96,000, respectively.

The Company paid no income taxes in 2002 and 2001.


                                      F-13