================================================================================

                       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, 2001
                                       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-K 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-K or any amendment to this
Form 10-K. |_|

As of March 26, 2002, 27,297,923 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 26, 2002 (based upon the
closing price on the OTC Bulletin Board of the National Association of
Securities Dealers of $0.129 on that date) was approximately $2,300,000.

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-K Annual Report
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
PART I ....................................................................    3
   BUSINESS ...............................................................    3
   PROPERTIES .............................................................   10
   LEGAL PROCEEDINGS ......................................................   10
   SUBMISSION  OF MATTERS TO A VOTE OF SECURITY HOLDERS ...................   10
PART II ...................................................................   11
   PRICE RANGE OF COMMON STOCK ............................................   11
   SELECTED CONSOLIDATED FINANCIAL DATA ...................................   11
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
    RESULTS OF OPERATIONS .................................................   12
   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ............................   16
   DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ...................   16
PART III ..................................................................   17
   DIRECTORS AND EXECUTIVE OFFICERS .......................................   17
   EXECUTIVE COMPENSATION .................................................   18
   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT .........   19
   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS .........................   19
   COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT ......................   20
PART IV ...................................................................   21
   EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K .................   21

                      FORWARD LOOKING STATEMENT INFORMATION

      Certain statements made in this Annual Report on Form 10-K 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," "Certain Factors That May Affect
Future Growth" 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, 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 (LTL), truckload, air, rail and ocean common
carriers to service our customers' needs.

      We have full service offices in Florida, New Jersey, Missouri (opened in
February 2001) and North Carolina (opened May 2001) and independent sales agents
in New York, Georgia, New Jersey, Ohio, Illinois, Washington, Oklahoma,
Wisconsin, Kansas, Michigan, South Carolina, and Florida to service our
customers' transportation needs. As of March 1, 2002 we had 35 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.

                               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. Our main
business focus became the challenge to seek out business opportunities in
furtherance of our plan to rebuild the company and create shareholder value.
These efforts were inhibited by our negative net worth and subordinated debt of
$9.3 million. Therefore, we commenced discussions with our noteholders regarding
the restructuring of this debt to enhance the possibility of consummating a
transaction to return the company to operating status and create shareholder
value.

      As a result, 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 providing for the issuance of one share of our common stock and
a cash payment of $0.03 for each dollar of approximately $9.5 million of
outstanding unsecured debt.

      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, 10 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. The consummation of the transaction was
contingent upon, among other things, (a) the approval of the Merger Agreement
and our Disclosure Statement by the United States Bankruptcy Court, (b) the
approval of the Disclosure Statement by our unsecured creditor class, (c) the
entry of an order confirming the Reorganization Plan and (d) securing additional
financing.

      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 (LTL), 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 (the "Reorganization Plan") were approved by the Bankruptcy
Court.


                                       3
<PAGE>

      On August 1, 2000, we announced that the Reorganization Plan had been
confirmed by the Honorable Adlai S. Hardin, Jr., United States Bankruptcy Judge
to become effective, without further action by the Court, upon the closing of
the Sunteck merger, which occurred in December 2000.

                                  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 (LTL) 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.

      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 1,100 freight orders per month. Our
sales agents in Florida, New Jersey, Missouri and North Carolina as well as our
independent sales agent / representatives in New York, New Jersey, Georgia,
Ohio, Illinois, Washington, Michigan, South Carolina, and Florida receive
customers freight


                                       4
<PAGE>

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
the 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 2001, 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.

      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' / shippers internal
traffic / transportation departments as well as carriers internal sales and
marketing departments directly seeking shippers' freight.


                                       5
<PAGE>

      We generally compete only 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
logistic 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 I. 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.

                  CERTAIN FACTORS THAT MAY AFFECT FUTURE GROWTH

      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 the current and prior years.

      Our operations to date have not been profitable. For the year ended
December 31, 2001, we increased gross revenues from $3.4 million to $8.0 million
and reduced our loss from continuing operations to $15,000 from $81,000 in the
prior year. These losses are primarily attributable to costs associated with
scaling up Sunteck's business as well as our general and administrative
expenses.

Other factors that could adversely affect our operating results include:

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


                                       6
<PAGE>

      o     changes in general economic conditions.

      We cannot assure you that our revenues will increase sufficiently to
offset our operating costs or that, even if they do, that our operations will
continue to be profitable.

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 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


                                       7
<PAGE>

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.

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 1.6 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. In that event we would probably find it more
difficult to obtain additional financing.

Concentration of ownership

      As of December 31, 2001, 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.


                                       8
<PAGE>

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.

Absence of dividends to shareholders.

      We have never declared a dividend on our common stock. We do not
anticipate paying dividends on the common stock in the foreseeable future. We
anticipate that earnings, if any, will be reinvested in the expansion of our
business.

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.

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

      The Securities and Exchange Commission 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 Commission 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 44 full-time employees and independent sales agents.
None of our employees are represented by a labor union.


                                       9
<PAGE>

      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 120 White
Horse Pike, Haddon Heights, New Jersey. This lease runs through October 2002 and
provides for an annual rental of $15,000. We lease 1,100 square feet for our
operating office at 239 Chesterfield Industrial Blvd., Chesterfield, Missouri.
The lease runs through February 2002 and provides for an annual rental of
$13,000. We lease 1,100 square feet for our operating office 315 Main Street,
Pineville, North Carolina. The lease runs through February 2005 and provides for
an annual rental of $12,000.

      LEGAL PROCEEDINGS

      We are not a party to any material legal proceedings.

      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None


                                       10
<PAGE>

                                     PART II

      PRICE RANGE OF COMMON STOCK

      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, 2001                             High            Low
---------------------------------------------         -----------     ----------

First quarter                                           $0.06            $0.031
Second quarter                                           0.045            0.031
Third quarter                                            0.0625           0.022
Fourth quarter                                           0.12             0.035

Year Ended December 31, 2000                             High            Low
---------------------------------------------         -----------     ----------

First quarter                                           $0.688           $0.08
Second quarter                                           0.30             0.125
Third quarter                                            0.21             0.10
Fourth quarter                                           0.125            0.02

      As of March 8, 2002, the closing bid price per share for our common stock,
as reported by NASDAQ was $0.10. As of March 8, 2002, we had approximately 1,750
stockholders of record.

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.

      SELECTED CONSOLIDATED FINANCIAL DATA

      The following is a summary of our selected consolidated financial data for
the years ended December 31, 2001, 2000, 1999, 1998 and 1997. 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 and in the consolidated financial statements
included elsewhere in this report 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.


                                       11
<PAGE>

<TABLE>
<CAPTION>
000's omitted, except for per share data                           Year ended December 31,
                                              ------------------------------------------------------------------
                                                 2001          2000          1999          1998          1997
                                              ----------    ----------    ----------    ----------    ----------
<S>                                           <C>           <C>           <C>           <C>           <C>
Statement of Operations Data:
-----------------------------
Gross revenues                                $    8,029    $    3,389    $    3,457    $    2,388    $      384

Net revenues (1)                                   1,567           835           841           698           120

Income (loss) from continuing operations             (15)          (81)           76            (2)          (11)

Income (loss) from discontinued
    operations                                        --         9,471        (1,109)       (9,935)      (11,122)

Net  income (loss)                            $      (15)   $    9,390    $   (1,033)   $   (9,937)   $  (11,133)

Basic net income (loss) per share (2) (3)
     From continuing operations               $     (.00)   $      .00    $      .00    $      .00    $      .00
     From discontinued operations                     --           .51          (.06)         (.56)         (.63)
                                              ----------    ----------    ----------    ----------    ----------
Net (loss) income per share, basic            $     (.00)   $      .51    $     (.06)   $     (.56)   $     (.63)
                                              ----------    ----------    ----------    ----------    ----------

Diluted net income (loss) per share (2) (3)
     From continuing operations               $     (.00)   $      .00    $      .00    $      .00    $      .00
     From discontinued operations                     --           .48          (.06)         (.56)         (.63)
                                              ----------    ----------    ----------    ----------    ----------
Net (loss) income per share, diluted          $     (.00)   $      .48    $     (.06)   $     (.56)   $     (.63)
                                              ----------    ----------    ----------    ----------    ----------
</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, 2000 were
1,304,000.
(3) The common stock equivalents for the years ended December 31,1999, 1998, and
1997 were 745,000, 214,000 and 62,000. The common stock equivalents for these
shares were not included in the calculation of diluted income (loss) per common
share because the effect would be antidilutive.

<TABLE>
<CAPTION>
000's omitted                                               As at December 31,
                                         --------------------------------------------------------
                                            2001       2000        1999        1998        1997
                                         --------    --------    --------    --------    --------
<S>                                      <C>         <C>         <C>         <C>         <C>
Balance Sheet Data:
-------------------
Cash and short term investments          $    898    $    941    $  1,072    $  2,441    $  8,887
Accounts receivable                         1,358         720         428         376      78,640
Total assets                                2,458       1,740       1,530       3,180      96,832
Total liabilities of continuing
    operations                              2,215       1,481         500      11,756      96,530
Liabilities of discontinued operations
    subject to compromise                      --          --      10,624          --          --
Retained earnings (deficit)               (17,798)    (17,784)    (27,173)    (26,141)    (16,203)
Stockholders' equity (deficiency)             243         258      (9,594)     (8,576)      1,301
</TABLE>

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

      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.


                                       12
<PAGE>

      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 "Certain Factors That May Affect Future Growth" 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, 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 (LTL), truckload, air, rail and ocean common
carriers to service our customers' needs.

      We have full service offices in Florida, New Jersey, Missouri (opened in
February 2001) and North Carolina (opened in May 2001) and independent sales
agents in New York, Georgia, New Jersey, Ohio, Illinois, Washington, Oklahoma,
Wisconsin, Kansas, Michigan, South Carolina, and Florida to service our
customers' transportation needs. As of March 1, 2002 we had 35 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, 2001

      During the year ended December 31, 2001, we began 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. As a result of this, our number of
sales agents has increased to 35 as of February 1, 2002 as compared with six at
the end of 2000. 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 the Company's historical business resulting in reduced net revenues as a
percentage of gross revenues.

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

                                                     2001                2000
                                                 ------------        -----------

       Net revenues                                 100.0%              100.0%

          Commissions                                46.1%               37.7%
          Operating expenses                         50.9%               70.9%
          Other charges                               4.0                2.2%

       Loss from continuing operations              (1.0%)              (9.7%)


                                       13
<PAGE>

Revenues

      Gross revenues consisting of freight fees and other related services
revenue totaled $8,029,000 for the year ended December 31, 2001, as compared
with $3,389,000 in the prior year. Net revenues were $1,567,000 for the year
ended December 31, 2001, as compared with $835,000 in the prior year.

Costs and expenses

      Commissions totaled $722,000 for the year ended December 31, 2001, as
compared with $315,000 in the prior year. As a percentage of net revenues,
commissions were 46.1% for the year ended December 31, 2001 as compared with
37.7% in the prior year. This increase is the direct result of higher commission
rates related to the Company's business expansion.

      Operating expenses totaled $798,000 for the year ended December 31, 2001,
as compared with $592,000 in the prior year. As a percentage of net revenues,
operating expenses were 50.9% for the year ended December 31, 2001 as compared
with 70.97% in the prior year. This decrease is the direct result of the waiver
of $100,000 of salary by our president and management's ability to leverage
selling, general and administrative expenses in connection with business
expansion.

      Investment (income) loss, primarily consisting of the gain or loss on the
sale of marketable securities and dividend and interest income, yielded a gain
of $45,000 for the year ended December 31, 2001 as compared with a loss of
$11,000 in the prior year.

Income tax (benefit)

      Income tax (benefit) of ($9,000) for the year ended December 31, 2000
related to the operating results of Sunteck prior to the date of acquisition.

Net income (loss)

      Net loss totaled $15,000 for the year ended December 31, 2001, as compared
with a loss of $81,000 in the prior year.

For the year ended December 31, 2000

Revenues

      Gross revenues consisting of freight fees and other related services
revenue totaled $3,389,000 for the year ended December 31, 2000, as compared
with $3,457,000 in the prior year. Net revenues were $835,000 for the year ended
December 31, 2000, as compared with $841,000 in the prior year.

Costs and expenses

      Commissions totaled $315,000 for the year ended December 31, 2000, as
compared with $263,000 in the prior year.

      Operating expenses totaled $592,000 for the year ended December 31, 2000,
as compared with $537,000 in the prior year.


                                       14
<PAGE>

      Loss (gain) on investments, primarily consisting of the gain or loss on
the sale of marketable securities, totaled a loss of $11,000 for the year ended
December 31, 2000 as compared with a gain of $50,000 in the prior year.

Income tax (benefit)

      Income tax (benefit) of ($9,000) for the year ended December 31, 2000 and
income taxes of $16,000 for the year ended December 31, 1999 related to the
operating results of Sunteck prior to the date of acquisition.

Discontinued operations

      Extraordinary item - gain on debt extinguishment

      The gain on debt extinguishment for the year ended December 31, 2000
totaling $10,490,000 consisted of the gain from the extinguishments of debt
pursuant to the Reorganization Plan.

      Loss from discontinued operations

      The loss from discontinued operations totaling $1,019,000 for the year
ended December 31, 2000, as compared with $1,109,000 in the prior year, included
our operating results prior to the merger with Sunteck. These costs consisted
primarily of interest expense of $701,000 and $935,000 for the years ended
December 31, 2000 and 1999, respectively. In addition, the loss from
discontinued operations for the year ended December 31, 1999 included the write
off of the net liabilities of our non-prime automobile subsidiary of $742,000
and an income tax benefit totaling $142,000 as a result of an audit by the
Internal Revenue Service of our tax returns for the years ended May 31, 1993
through 1998.

Net income (loss)

      Net income totaled $9,390,000 for the year ended December 31, 2000, as
compared with a loss of ($1,033,000) in the prior year. The increase is related
directly to the gain from the extinguishments of debt pursuant to our
Reorganization Plan.

Trends and uncertainties

      In December 2000, as a result of our acquisition of Sunteck, we became 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 (LTL), truckload, air, rail and ocean common carriers to service our
customers' needs. 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' /
shippers internal traffic / 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.

      Our operations to date have not been profitable. As of December 31, 2001,
we had an accumulated deficit of $17.8 million. Other factors that could
adversely affect our operating results include:

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


                                       15
<PAGE>

      o     changes in general economic conditions.

      We cannot assure you that our revenues will increase sufficiently to
offset our operating costs or that, even if they do, that our operations will
ever be profitable.

      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, 2001, we had outstanding $575,000 of subordinated
convertible 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, 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
2002. 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, which matures in August 2002, on terms acceptable to us.

      At December 31, 2001, we had liquid assets of approximately $898,000.

      The total amount of debt outstanding as of December 31, 2001 and 2000 was
$1,075,000 and $676,000, respectively. This following table presents our debt
instruments and their weighted average interest rates as of December 31, 2001
and 2000, respectively:

<TABLE>
<CAPTION>
                                                                        December 31,
                                        -----------------------------------------------------------------------------
                                                       2001                                     2000
                                        -----------------------------------    --------------------------------------
                                                                Weighted                                  Weighted
                                          Balance             Average Rate       Balance                 Average Rate
                                        ------------          ------------     -----------               ------------
<S>                                      <C>                      <C>           <C>                         <C>
Subordinated Debt                        $ 575,000                12.0%         $ 575,000                   12.0%
Line of Credit and Other
   Debt                                  $ 500,000                17.0          $ 101,000                   25.6
</TABLE>

      Inflation and changing prices had no material impact on our revenues or
the results of operations for the year ended December 31, 2001.

      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

      DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

      None.


                                       16
<PAGE>

                                    PART III

      DIRECTORS AND EXECUTIVE OFFICERS

      Set forth below is information with respect to our directors and executive
officers:

      PETER C. EINSELEN, age 61, 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, age 56, 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, age 43, joined us in conjunction with the acquisition of
Sunteck and has been a director, and our president and chief executive officer
since December 7, 2000. 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, age 42, joined us in conjunction with the acquisition of
Sunteck and has been a director since December 7, 2000. 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, age 54, 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 2000. 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 for our officers and the review of our compensation
plans and policies. Each committee is comprised of Mssrs. Einselen and
Robertson, our non-employee independent outside directors.

Option grants during the year ended December 31, 2001

      Our compensation committee did not grant any options to the named
executives during the year ended December 31, 2001. During 2001, non-employee
directors were granted options to purchase a total of 30,000 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.


                                       17
<PAGE>

Aggregate year-end option values

      Shown below is information with respect to unexercised options granted
under our Option Plans to the Named Executives and held by them at December 31,
2001. No options were exercised by the Named Executives during 2001.

<TABLE>
<CAPTION>
                              Number of Unexercised Options at       Values of Unexercised In-the-Money Options at
                                          12/31/01                                   12/31/01 (1)
                                          --------                                   ------------
           Name                 Exercisable / Unexercisable                   Exercisable / Unexercisable
           ----                 ----------------------------                  ---------------------------
<S>                                     <C>                                          <C>
William Wunderlich                      895,000 / 0                                  $18,000 / $0
</TABLE>

----------
(1)   Based on the closing price as quoted on the OTC Bulletin Board on December
      31, 2001.

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 option to purchase a total of 15,000 shares of
the Company's 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

      The following table sets forth for the years ended December 31, 2001, 2000
and 1999, information concerning compensation paid for services in all
capacities awarded to, earned by or paid to our chief executive officer and all
other executives receiving compensation in excess of $100,000.

<TABLE>
<CAPTION>
                                                                                           All other
Name and principal position                           Year            Salary           compensation (1)
------------------------------------------        ------------     ------------      --------------------
<S>                                                   <C>           <C>                     <C>
Harry Wachtel, president and chief                    2001 (2)      $   75,000                 --
    executive officer                                 2000          $  231,325                 --

William Wunderlich, executive vice
    president and chief financial officer (3)         2001          $   75,000                 --
                                                      2000          $  144,960              $4,575
</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)   In 1999 and through November 2000, 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 $150,000 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


                                       18
<PAGE>

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.

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table, together with the accompanying footnotes, sets forth
information, as of March 26, 2002, 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.

<TABLE>
<CAPTION>
                Name of                          Shares of Common Stock            Percentage
          Beneficial Owner (1)                     Beneficially Owned             Of Ownership
          --------------------                     ------------------             ------------
<S>                                                 <C>                               <C>
(i) Directors and Executive Officers
Harry Wachtel                                        9,770,000 (2)                    34.8%
Thomas C. Robertson                                    115,000 (3)                       *
Peter C. Einselen                                      205,000 (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)                                 11,105,000 (8)                    37.9%

(ii) 5% Stockholders
James T. Martin                                      6,622,000 (5)                    24.3%
</TABLE>

--------------
*  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 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 895,000 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.

      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 2002. Interest on the outstanding borrowings is 17% per
annum payable quarterly in arrears. As of December 31, 2001, the outstanding
borrowings pursuant to this line of credit totaled $500,000 and interest of
$32,000 was paid through December 31, 2001.

      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.


                                       19
<PAGE>

      COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

      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, except: Harry
Wachtel - one Form 3 and one Form 4 filing; Mark Weiss - one Form 3 and one Form
4 filing; and William Wunderlich - one Form 4 filing.


                                       20
<PAGE>

                                     PART IV

             EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

Financial Statements

      The financial statements listed in the accompanying index to financial
statements on Page F-1 are filed as part of this report.

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. *

----------
*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.


                                       21
<PAGE>

(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.


                                       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 27, 2002 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.

<TABLE>
<S>                                         <C>                                           <C>
/s/ Harry M. Wachtel
-------------------------------------
Harry M. Wachtel                            President and Chairman of the Board           March 27, 2002

/s/ William I. Wunderlich
-------------------------------------
William I. Wunderlich                       Chief Financial Officer                       March 27, 2002

/s/ Mark Weiss
-------------------------------------
Mark Weiss                                  Director                                      March 27, 2002

/s/ Peter C. Einselen
-------------------------------------
Peter C. Einselen                           Director                                      March 27, 2002

/s/ Thomas C. Robertson
-------------------------------------
Thomas C. Robertson                         Director                                      March 27, 2002
</TABLE>


                                       23
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Public Accountants                                    F-2

Consolidated Balance Sheets as of December 31, 2001 and 2000                F-3

Consolidated Statements of Operations for the Years Ended
         December 31, 2001 and 2000                                         F-4

Consolidated Statements of Stockholders' Equity for the Years Ended
         December 31, 2001 and 2000                                         F-5

Consolidated Statements of Cash Flows
         for the Years Ended December 31, 2001 and 2000                     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 Shareholders
AutoInfo, Inc.
Boca Raton, Florida

We have audited the accompanying consolidated balance sheets of AutoInfo, Inc.
and Subsidiaries as of December 31, 2001 and 2000, 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, 2001 and 2000 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.

                                    Dworken, Hillman, LaMorte & Sterczala, P.C.
February 7, 2002
                                    Shelton, Connecticut


                                      F-2
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        AS OF DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                  ASSETS
                                                                     2001            2000
                                                                 ------------    ------------
<S>                                                              <C>             <C>
Current assets:
   Cash                                                          $    885,000    $    725,000
   Short-term investments (Note 4)                                     13,000         216,000
   Accounts receivable, net of allowance for doubtful accounts
      (2001, $20,000; 2000, $10,000) (Note 5)                       1,358,000         720,000
   Other current assets                                                65,000          67,000
                                                                 ------------    ------------

Total current assets                                                2,321,000       1,728,000

Fixed assets, net of depreciation                                      37,000          12,000

Loan receivable (Note 6)                                              100,000
                                                                 ------------    ------------

                                                                 $  2,458,000    $  1,740,000
                                                                 ============    ============

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Loan payable (Note 5)                                         $    500,000    $    101,000
   Accounts payable and accrued liabilities                         1,140,000         806,000
                                                                 ------------    ------------

Total current liabilities                                           1,640,000         907,000
                                                                 ------------    ------------

Convertible subordinated debentures (Note 5)                          575,000         575,000
                                                                 ------------    ------------

Commitments and contingencies (Note 8)

Stockholders' equity : (Note 9)
  Common Stock - authorized 100,000,000 shares, $.001 par
    value; issue and outstanding 27,297,923 (Note 2)                   27,000          27,000
  Additional paid-in capital                                       18,014,000      18,014,000
  Retained earnings (deficit)                                     (17,798,000)    (17,783,000)
                                                                 ------------    ------------

  Total stockholders' equity                                          243,000         258,000
                                                                 ------------    ------------

                                                                 $  2,458,000    $  1,740,000
                                                                 ============    ============
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


                                      F-3
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                           2001             2000
                                                       ------------    ------------
<S>                                                    <C>             <C>
Gross revenues                                         $  8,029,000    $  3,389,000
Cost of transportation                                    6,462,000       2,554,000
                                                       ------------    ------------

Net revenues                                              1,567,000         835,000
                                                       ------------    ------------

Commissions                                                 722,000         315,000
Operating expenses                                          798,000         592,000
                                                       ------------    ------------
                                                          1,520,000         907,000
                                                       ------------    ------------

Income (loss) from operations                                47,000         (72,000)
                                                       ------------    ------------

Other charges (credits):
   Investment (income) loss (Note 4)                        (45,000)         11,000
   Interest expense                                         107,000           7,000
                                                       ------------    ------------
                                                             62,000          18,000
                                                       ------------    ------------

Loss from continuing operations before income taxes         (15,000)        (90,000)
Income tax (benefit) (Note 7)                                    --          (9,000)
                                                       ------------    ------------

Loss from continuing operations                             (15,000)        (81,000)
                                                       ------------    ------------

Discontinued operations: (Note 3)
   Extraordinary item - gain on debt extinguishments             --      10,490,000
   Loss from discontinued operations                             --      (1,019,000)
                                                       ------------    ------------

Income from discontinued operations                              --       9,471,000
                                                       ------------    ------------

Net income (loss)                                      $    (15,000)   $  9,390,000
                                                       ============    ============

Basic per share data
  Income  (loss) from continuing operations            $       (.00)   $        .00
  Income (loss) from discontinued operations                     --             .51
                                                       ------------    ------------

  Net income (loss) per share                          $       (.00)   $        .51
                                                       ============    ============

Diluted per share data
   Income  (loss) from continuing operations           $       (.00)   $        .00
   Income (loss) from discontinued operations                    --             .48
                                                       ------------    ------------

  Net income (loss) per share                          $       (.00)   $        .48
                                                       ============    ============

Weighted average number of common and
   common equivalent shares                              27,328,000      18,491,000
                                                       ------------    ------------
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


                                      F-4
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                    Shares of                              Deferred
                                      Common                 Additional  Compensation    Retained
                                      Stock        Common    Paid - In   Under Stock     Earnings
                                   Outstanding     Stock      Capital     Bonus Plan     (Deficit)
                                   -----------    -------   -----------   ----------   ------------
<S>                                 <C>           <C>       <C>           <C>          <C>
Balance, January 1, 2000            17,757,000    $87,000   $17,763,000   $ (272,000)  $(27,173,000)

Amortization  of  deferred
  Compensation                              --         --            --       15,000             --
Shares issued pursuant to
  Chapter 11 reorganization          9,541,000     10,000       181,000
Adjustment of par value (Note 9)                  (70,000)       70,000
Vesting of deferred
   Compensation                                                              257,000
Net income                                  --         --            --           --      9,390,000
                                   -----------    -------   -----------   ----------   ------------

Balance, December 31, 2000          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)
                                   ===========    =======   ===========   ==========   ============
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


                                      F-5
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000

<TABLE>
<CAPTION>
                                                            2001           2000
                                                          ---------    ------------
<S>                                                       <C>          <C>
Cash flows from operating activities:
  Net income  (loss)                                      $ (15,000)   $  9,390,000
  Adjustments to reconcile net income (loss) to net
    cash used in  operating activities:
      Depreciation and amortization expenses                 11,000
      Amortization of deferred compensation                      --          15,000
      Gains on sales of securities                          (15,000)        (26,000)
      Net unrealized holding loss (gain)                      1,000         (14,000)
      Extraordinary item - gain on debt extinguishments          --     (10,177,000)

Changes in assets and liabilities:
    Accounts receivable, net                               (638,000)       (292,000)
    Other current assets                                      2,000         (37,000)
    Accounts payable and accrued liabilities                334,000         305,000
                                                          ---------    ------------

Net cash used in operating activities                      (320,000)       (836,000)
                                                          ---------    ------------

Cash flows from investing activities:
  Increase in loan receivable                              (100,000)
  Capital expenditures                                      (35,000)        (12,000)
  Redemption of short-term investments                      216,000         306,000
  Purchases of short-term investments                            --         (46,000)
                                                          ---------    ------------

Net cash provided by investing activities                    81,000         248,000
                                                          ---------    ------------

Cash flows from financing activities:
  Issuance of notes                                              --         575,000
  Increase in  borrowings, net                              399,000         101,000
                                                          ---------    ------------

Net cash  provided by  financing activities                 399,000         676,000
                                                          ---------    ------------

Net increase in cash                                        160,000          88,000
Cash at beginning of year                                   725,000         637,000
                                                          ---------    ------------

Cash at end of year                                       $ 885,000    $    725,000
                                                          =========    ============
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements


                                      F-6
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2001 and 2000

Note 1 - Business and Summary of Significant Accounting Policies

Business

      As a result of our acquisition of Sunteck Transport, 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 (LTL), truckload, air, rail and ocean common
carriers to service our customers' needs.

      We have full service offices in Florida, New Jersey, Missouri (opened in
February 2001) and North Carolina (opened in May 2001) and independent sales
agents in New York, Georgia, New Jersey, Ohio, Illinois, Washington, Oklahoma,
Wisconsin, Kansas, Michigan, South Carolina, and Florida to service our
customers' transportation needs. As of March 1, 2002 we had 35 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.

      During 1998, we ceased to operate as an automobile finance company. Our
main business focus became the challenge to seek out business opportunities in
furtherance of our plan to rebuild the company and create shareholder value.
These efforts were inhibited by our negative net worth and subordinated debt of
$9.3 million. Therefore, we commenced discussions with our noteholders regarding
the restructuring of this debt to enhance the possibility of consummating a
transaction to return the company to operating status and create shareholder
value.

      As a result, 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 providing for the issuance of one share of our common stock and
a cash payment of $0.03 for each dollar of approximately $9.5 million of
outstanding unsecured debt.

      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, 10 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. The consummation of the transaction was
contingent upon, among other things, (a) the approval of the Merger Agreement
and our Disclosure Statement by the United States Bankruptcy Court, (b) the
approval of the Disclosure Statement by our unsecured creditor class, (c) the
entry of an order confirming the Reorganization Plan and (d) securing additional
financing.

      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 (LTL), truckload, air, rail and ocean common carriers to service
its customers' needs. Harry


                                      F-7
<PAGE>

Wachtel, Sunteck's President and sole shareholder, became Chairman of the Board,
CEO and President of AutoInfo.

      On June 27, 2000, our Amended Disclosure Statement and Amended Plan of
Reorganization (the "Reorganization Plan") was approved by the Bankruptcy Court.

      On August 1, 2000, we announced that the Reorganization Plan had been
confirmed by the Honorable Adlai S. Hardin, Jr., United States Bankruptcy Judge
to become effective, without further action by the Court, upon the closing of
the Sunteck merger which occurred in December 2000.

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 subsidiaries, all of which are wholly-owned. All significant
intercompany balances and transactions have been eliminated in consolidation.

Revenue Recognition

      Gross revenues consist of the total dollar value of services purchased by
customers. We act primarily as the service provider for these transactions and
recognize revenue as these services are rendered.

Provision for Doubtful Accounts

      The Company has established an allowance for doubtful accounts based upon
historical trends.

Short-term Investments

      Short-term investments as of December 31, 2001 and 2000 consisted of
marketable securities. Investments were carried at market value as of December
31, 2001 and 2000.

Fixed Assets

      Fixed assets as of December 31, 2001 and 2000, 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.


                                      F-8
<PAGE>

Income (Loss) Per Share

      Basic loss per share is based on net loss divided by the weighted average
number of common shares outstanding. Common stock equivalents outstanding were
antidilutive for the year ended December 31, 2001 and were 1,304,000 for the
year ended December 31, 2000.

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. 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.

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.

Recently Issued Accounting Pronouncements

      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
generally accepted accounting principles to revenue recognition in financial
statements. The adoption of SAB 101 did not have a material effect on the
financial statements.

Note 2 - Business Acquisition

      On December 7, 2000, the Company, through a newly formed wholly owned
subsidiary, consummated the acquisition of Sunteck Transport Co., Inc.
("Sunteck"), in exchange for 10 million shares of AutoInfo Common Stock. The
acquisition has been accounted for under the pooling of interest


                                      F-9
<PAGE>

method of accounting and, accordingly, the accompanying financial statements are
presented on a combined basis as if the acquisition occurred on January 1, 2000.
(See Note 3)

Note 3 - Discontinued Operations

      During 1998, the Company ceased to operate as a specialty consumer finance
company and discontinued its operations. On December 7, 2000, based upon the
acquisition of Sunteck, the Company commenced operations as a full service third
party transportation logistics provider. Accordingly, the results of operations
related to its operations as a specialty consumer finance company for the period
January 1, 2000 through December 7, 2000 are presented as discontinued
operations.

Extraordinary item - gain on debt extinguishments

      The extraordinary item for the year ended December 31, 2000 of $10.5
million consists of liabilities discharged, net of applicable expenses, in
connection with the confirmation of the Company's Reorganization Plan in
December 2000.

Income from discontinued operations

Summarized results of operations and financial position data of the discontinued
operations are as follows:

                                                             Period from
                                                         January 1, through
                                                             December 7
                                                                2000
                                                            ------------
Results of Operations:
        Revenues                                            $     46,000
                                                            ------------
        Loss before tax benefit                               (1,019,000)
        Extraordinary item - gain on debt
        extinguishments                                       10,490,000
                                                            ------------
        Income tax benefit                                            --
                                                            ------------
        Income (loss) from
             discontinued operations                        $  9,471,000
                                                            ============

Note 4- Short-Term Investments

      At December 31, 2001 and 2000, short-term investments, consisting
primarily of marketable securities, are classified as trading securities and are
reported at fair market value. Gains and losses on disposition of securities are
recognized on the specific identification method 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.

      Investment return is summarized as follows:


                                      F-10
<PAGE>

<TABLE>
<CAPTION>
                                                              Years Ended
                                                             December 31,
                                                     2001                  2000
                                              ------------------    ------------------
<S>                                                  <C>                    <C>
     Unrealized (gain) loss                          $   1,000              $   8,000
     (Gain) loss on sale of securities                 (15,000)                10,000
     Dividends and interest                            (31,000)                (7,000)
                                              ------------------    ------------------
Investment (income) loss                             $ (45,000)             $  11,000
                                              ==================    ==================

Discontinued operations:
     Unrealized gain (loss)                                                 $  22,000
     Gain (loss) on sale of securities                                         36,000
     Dividends                                                                 34,000
                                                                    ------------------
                                                                            $  92,000
                                                                    ==================
</TABLE>

Note 5 - Debt

Line of Credit

      In August 2001, the Company obtained a $500,000 Line of Credit from James
T. Martin, a 24% stockholder of the Company, secured by the Company's accounts
receivable, which expires in August 2002. Interest on the outstanding borrowings
is 17% per annum payable quarterly in arrears. As of December 31, 2001, the
outstanding borrowings pursuant to this Line of Credit total $500,000 and
interest of $32,000 has been paid through December 31, 2001.

Subordinated Notes and Other Debt

      In December 2000, the Company obtained new financing totaling $575,000 in
the form of ten year 12% Convertible Debentures (the "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, after December 31, 2003.

Loan Payable

      In September 2000, Sunteck entered into an agreement with an asset based
lender. The agreement provided for a line of credit of $500,000. Advances are
based on 90% of acceptable accounts receivable (as defined) and bear interest at
..078% per day on outstanding balances. As of December 31, 2000, the net
outstanding advances amounted to $101,000, which was secured by accounts
receivable of $116,000. This loan was repaid in full in April 2001.

      Interest expense was $107,000 and $7,000 for the years ended December 31,
2001 and 2000, respectively. The Company paid interest of approximately $95,000
and $4,000 for the years ended December 31, 2001 and 2000.

Note 6 - 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.


                                      F-11
<PAGE>

Note 7- Income Taxes

      For the years ended December 31, 2001 and 2000, the provision (benefit)
for income taxes consisted of the following:

                                                         2001           2000
                                                        ------      -----------

From continuing operations
   Federal                                                  --      $    (9,000)
   State                                                    --               --
                                                        ------      -----------
   Income tax (benefit)                                     --      $    (9,000)
                                                        ======      ===========

                                                         2001           2000
                                                        ------      -----------

From discontinued operations
   Federal                                                  --      $ 2,840,000
   Benefit due to the utilization of net
       operating loss carryovers                            --       (2,840,000)
                                                        ------      -----------
   Income tax (benefit)                                 $   --      $        --
                                                        ======      ===========

      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, 2001 and 2000.


                                      F-12
<PAGE>

                                                          2001         2000
                                                        ------    -----------
Federal Statutory Rate                                   (34.0)%        (34.0)%
Effect of:
   Tax rates                                                --           15.6
   Depreciation carryforward
   Other                                                    --            4.0
   Valuation allowance against deferred
     tax assets                                           34.0            3.3
                                                        ------    -----------
                                                            (0)%        (11.1)%
                                                        ======    ===========

      The Company paid no income taxes for the years ended December 31, 2001 and
2000.

      Deferred taxes are recorded based upon differences between the financial
statement and tax bases of assets and liabilities and available tax credit
carrybacks. Temporary differences and carryforwards which give rise to a
significant portion of deferred tax assets and liabilities were as follows:

                                                 December 31,      December 31,
                                                    2001              2000
                                                 -----------      -----------
Deferred tax assets:
     Net operating loss carryforward             $ 6,216,000      $ 6,339,000
                                                 -----------      -----------

Gross  deferred tax assets                         6,216,000        6,339,000
Less: valuation allowance                         (6,216,000)      (6,339,000)
                                                 -----------      -----------

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, 2001, the
Company has a net operating loss carryforward of approximately $18.3 million for
federal income tax purposes which expires in 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 8 - 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 $46,000, $33,000, $14,000 and $2,000 for the years ended December
31, 2002, 2003, 2004 and 2005, respectively. Rent expense for the years ended
December 31, 2001 and 2000 for continuing operations was $61,000 and $18,000,
respectively. Rent expense for the year ended December 31, 2000 from
discontinued operations was $9,000.

401(k) Plan

      Through December 2000, the Company was obligated under its 401(k) Plan to
match fifty percent of employee contributions up to a maximum of three percent
of eligible compensation. 401(k) Plan expense for the year ended December 31,
2000 was approximately $5,000. The Plan was terminated effective December 31,
2000.

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

Litigation

      The Company is not presently involved in any material litigation.


                                      F-13
<PAGE>

Note 9 - Stockholders' Equity

Common Stock

      The Company's Reorganization Plan, which was confirmed in December 2000,
increased the number of authorized shares from 20 million to 100 million and
changed the par value from $ 0.01 to $ 0.001 per share.

Stock Bonus Plan

      The Company, in 1987 and 1995, issued 410,000 and 15,000 shares,
respectively, of common stock pursuant to a restricted stock bonus plan to key
executives, directors and consultants.

      These shares were scheduled to vest ratably every two years over a period
of 30 years. The unvested portion was subject, upon the occurrence of certain
events, to either forfeiture or accelerated vesting. Such shares were recorded
at their estimated fair market value at the date of the grant as determined by
the Board of Directors and are charged as compensation expense ratably over the
vesting period. As of December 31, 1999, 161,000 of such shares had vested and
219,000 remained subject to forfeiture. In December 2000 in conjunction with the
acquisition of Sunteck and pursuant to the provisions regarding acceleration,
the remaining 219,000 vested.

Warrants

      In connection with prior financings related to the discontinued
operations, the Company issued warrants to purchase 1,641,562 shares of Common
Stock at a per share price ranging from $ .03 to $2.70. These warrants were
cancelled in December 2000 pursuant to the Company's Reorganization Plan.

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 grant will be issued
under the 1985, 1986 or the 1989 Plans. At December 31, 2001, options to
purchase 1,461,000 shares of Common Stock were exercisable pursuant to the
Plans.

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


                                      F-14
<PAGE>

      Option activity for the years ended December 31, 2001 and 2000 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, 2000           995,000       $   .10
Granted during the year                       --            --
                                      ----------       -------

Outstanding at December 31, 2000         995,000           .10       995,000      $   .10
                                      ----------       -------       -------      -------
Forfeited during the year               (100,000)          .10
Granted during the year                  566,000          .061
                                      ----------       -------       -------      -------

Outstanding December 31, 2001          1,461,000       $  .085       895,000      $   .10
                                      ----------       -------       -------      -------
</TABLE>

Weighted average fair value of options granted:
                              2001                                 $  .061

Note 10- 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.

      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 11 - Quarterly Results of Operations (Unaudited)

<TABLE>
<CAPTION>
                                                       Year Ended December 31, 2001
                                                             Quarter Ended (1)
                                       --------------------------------------------------------------
                                          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>

(1) The net (loss) income for the quarters ended March 31, June 30 and September
30 have been adjusted due to a change in estimate related to officers
compensation. This reallocation of operating expenses amongst the quarters did
not result in a change in the aggregate net (loss) income for the nine months
ended September 30 or the year ended December 31.


                                      F-15
<PAGE>

<TABLE>
<CAPTION>
                                                           Year Ended December 31, 2000
                                                                  Quarter Ended
                                       --------------------------------------------------------------------
                                            Mar 31           June 30            Sep 30           Dec 31
                                       --------------    --------------    --------------    --------------
<S>                                    <C>               <C>               <C>               <C>
Gross revenues                         $      693,000    $      824,000    $      688,000    $    1,184,000
                                       --------------    --------------    --------------    --------------

(Loss) income from continuing
      operations                       $      (26,000)   $      (20,000)   $       15,000    $      (50,000)
Extraordinary item - gain on debt
      extinguishments                         (71,000)          (20,000)           (2,000)       10,583,000
Loss from discontinued
      operations                             (338,000)         (302,000)         (266,000)         (113,000)
                                       --------------    --------------    --------------    --------------
Net (loss) income                      $     (435,000)   $     (342,000)   $     (253,000)   $   10,420,000
                                       ==============    ==============    ==============    ==============

Basic per share data:
---------------------
(Loss) income from continuing
      operations                       $          .00    $          .00    $          .00    $          .00
(Loss) income from discontinued
      operations                                 (.02)             (.02)             (.01)              .51
                                       --------------    --------------    --------------    --------------
Net (loss) income                      $         (.02)   $         (.02)   $         (.01)   $          .51
                                       ==============    ==============    ==============    ==============

Diluted per share data:
-----------------------
(Loss) income from continuing
      operations                       $          .00    $          .00    $          .00    $          .00
(Loss) income from discontinued
      operations                                 (.02)             (.02)             (.01)              .50
                                       --------------    --------------    --------------    --------------
Net (loss) income                      $         (.02)   $         (.02)   $         (.01)   $          .50
                                       ==============    ==============    ==============    ==============
</TABLE>


                                      F-16