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                       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, 2004

                                       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 001-11497

                                 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.)

                        6413 Congress Avenue - Suite 260
                              Boca Raton, FL 33487
                    (Address of principal executive offices)

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

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes |X|  No |_|

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

The Registrant's revenues for the year ended December 31, 2004 were $46,492,000.

As of March 7, 2005, 31,367,000 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 7, 2005 (based upon the
closing price on the OTC Bulletin Board of the National Association of
Securities Dealers of $0.66 on that date) was approximately $7,909,000.

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

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      NONE

<PAGE>

                                 AUTOINFO, INC.

                            Form 10-KSB Annual Report
                                TABLE OF CONTENTS
                                                                            Page
                                                                            ----
PART I.........................................................................3
   Item 1.   Business..........................................................3
             Risk Factors......................................................7
   Item 2.   Properties.......................................................12
   Item 3.   Legal Proceedings................................................12
   Item 4.   Submission of Matters to a Vote of Security Holders..............12
PART II.......................................................................13
   Item 5.   Market for our Common Equity and Related Stockholder Matters.....13
             Selected Consolidated Financial Data.............................14
   Item 6.   Management's Discussion and Analysis of Financial Condition
             and Results of Operations........................................15
   Item 7.   Financial Statements and Supplementary Data......................20
   Item 8.   Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosures........................................20
   Item 8A.  Controls and Procedures..........................................20
   Item 8B.  Other Information................................................20

PART III......................................................................21
   Item 9.   Directors and Executive Officers.................................21
   Item 10.  Executive Compensation...........................................23
   Item 11.  Security Ownership of Certain Beneficial Owners and Management...24
   Item 12.  Certain Relationships and Related Transactions...................25
   Item 13.  Exhibits.........................................................25
   Item 14.  Principal Accounting Fees and Services...........................27

                      FORWARD LOOKING STATEMENT INFORMATION

      Certain  statements  made  in  this  Annual  Report  on  Form  10-KSB  are
"forward-looking  statements"(within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995) regarding the plans and objectives of management
for  future  operations.  Such  statements  involve  known  and  unknown  risks,
uncertainties  and other factors that may cause our actual results,  performance
or  achievements  of the  Company  to be  materially  different  from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking  statements.  The forward-looking statements included herein are
based on current expectations that involve numerous risks and uncertainties. Our
plans and objectives are based, in part, on assumptions involving judgments with
respect  to,  among  other  things,  future  economic,  competitive  and  market
conditions  and  future  business  decisions,  all of  which  are  difficult  or
impossible  to predict  accurately  and many of which are  beyond  our  control.
Although  we  believe  that  our  assumptions   underlying  the  forward-looking
statements are reasonable,  any of the assumptions  could prove  inaccurate and,
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
included in this report will prove to be accurate.  In light of the  significant
uncertainties  inherent  in  the  forward-looking   statements  included  herein
particularly  in view of the current state of our  operations,  the inclusion of
such information should not be regarded as a statement by us or any other person
that our objectives and plans will be achieved.  Factors that could cause actual
results  to  differ   materially   from  those  expressed  or  implied  by  such
forward-looking  statements  include,  but are not  limited  to, the factors set
forth herein under the headings  "Business,"  "Risk  Factors" and  "Management's
Discussion and Analysis of Financial Condition and Results of Operations."


                                       2
<PAGE>

                                     PART I

                                    BUSINESS

Overview

      Through  our  wholly-owned   subsidiary,   Sunteck   Transport  Co.,  Inc.
(Sunteck), we are a non-asset based transportation  services company,  providing
transportation   capacity  and  related  transportation   services  to  shippers
throughout the United  States,  and to a lesser  extent,  Canada.  Our non-asset
based services include ground  transportation  coast to coast, local pick up and
delivery,  air freight and ocean freight.  We have strategic alliances with less
than  truckload,  truckload,  air, rail and ocean common carriers to service our
customers'   needs.  Our  business  services   emphasize   safety,   information
coordination  and  customer  service  and are  delivered  through a  network  of
independent  commissioned  sales  agents  and  third  party  capacity  providers
coordinated by us. The  independent  commissioned  sales agents  typically enter
into  contractual  arrangements  with Sunteck and are  responsible  for locating
freight and  coordinating the  transportation  of the freight with customers and
capacity  providers.  The third party capacity  providers consist of independent
contractors  who provide truck  capacity to us,  including  owner-operators  who
operate under our contract  carrier  license,  air cargo carriers and railroads.
Through  this  network  of agents and  capacity  providers,  Sunteck  operates a
transportation  services  business with revenue of  approximately  $46.5 million
during our most recently completed fiscal year.

      Our brokerage  services are provided though a network of independent sales
agents. As of February 22, 2005, we had 12 regional  operating centers providing
brokerage  services and  representatives  in 21 states and Canada.  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.

      Our contract carrier services,  which commenced in 2003, are also provided
through  a  network  of  independent  sales  agents.  We do no own any  trucking
equipment and have a network of independent  owner-operators  who lease onto our
operating authority and transport freight under the Sunteck name. As of February
22, 2005, we had seven regional  operating  centers  providing  contract carrier
services, representatives in nine states and 83 independent owner-operators.

Strategy

      Our  strategy  is  to  continue  to  expand  through   affiliations   with
independent sales agents and through internal expansion. We intend to seek, on a
selective  basis,  acquisition of businesses that have product lines or services
which complement and expand our existing services and product lines, and provide
us with  strategic  distribution  locations or attractive  customer  bases.  Our
ability to  implement  our growth  strategy  will be dependent on our ability to
identify and affiliate with these agents on desirable economic terms.

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.


                                       3
<PAGE>

      The present  market for freight  moved by truck is estimated by management
to exceed $200 billion per year. This is a highly fragmented  industry comprised
of common carriers - contract carriers - freight forwarders and freight brokers.

      The actual movement of goods is  accomplished  by trucking  (consisting of
local, over the road, truckload, and less than truckload shipments); air freight
(time  sensitive  in nature);  rail  freight  (non time  sensitive in nature and
usually  less   expensive   than  truck);   and  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 and 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 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.

      Third party logistics companies provide numerous services to clients on an
outsourced  basis,  by  contract  and on demand.  The  continued  growth of this
industry has created secondary market opportunities to provide low-cost delivery
to the endpoint, in addition to supply chain services of warehousing,  inventory
management  and electronic  interface with customers and suppliers.  Third party
logistics  companies  provide  customized  domestic  and  international  freight
transportation of customers' goods and packages,  via truck, rail,  airplane and
ship, and provide warehousing and storage of those goods. Many companies utilize
information  systems and  expertise to reduce  inventories,  cut  transportation
costs,  speed delivery and improve customer service.  The third-party  logistics
services business has been bolstered in recent years by the  competitiveness  of
the global economy,  which causes shippers to focus on reducing  handling costs,
operating with lower inventories and shortening inventory transit times. Using a
network  of   transportation,   handling  and  storage   providers  in  multiple
transportation  modes,  third-party logistics services companies seek to improve
their  customers'  operating  efficiency by reducing their inventory  levels and
related  handling  costs.  Many  third-party  logistics  service  providers  are
non-asset-based, primarily utilizing physical assets owned by others in multiple
transport modes.

      The  third-party  logistics  services  business  increasingly  relies upon
advanced information technology to link the shipper with its inventory and as an
analytical  tool to optimize  transportation  solutions.  This trend  favors the
larger, more professionally managed companies that have the resources to support
a  sophisticated  information  technology  infrastructure.  By  outsourcing  all
non-core  business  services to third  party  providers,  companies  can help to
control costs, eliminate staff and focus on internal business.


                                       4
<PAGE>

Operations and systems

      In our brokerage services,  we process  approximately 3,300 freight orders
per  month.  Our  sales  agents  in  our  12  regional   operating  centers  and
representatives in 21 states and Canada receive customers' freight  requirements
daily.  All agents make  appropriate  carrier  arrangements  for the pick-up and
timely delivery of customers' freight.

      In our contract carrier services,  we process  approximately 1,000 freight
orders per month. Our sales agents in our seven regional  operating  centers and
representatives  in nine states receive  customers'  freight  requirements daily
and,  utilizing  their  respective  owner-operators,  make  appropriate  carrier
arrangements  for the pick-up  and timely  delivery of  customers'  freight.  In
addition,  utilizing various sources  including  numerous internet based freight
posting boards, our agents locate additional freight to maximize  utilization of
available  capacity  and minimize  deadhead  miles,  or miles driven  generating
little or no revenue. A typical  owner-operator will generate $2,500 per week in
revenues.

      We rely exclusively on independent third parties for our hauling capacity.
These third party capacity providers consist of our independent owner-operators,
unrelated  trucking  companies,  air cargo  carriers and  railroads.  Our use of
capacity  provided  by our  independent  owner-operators,  and other third party
capacity  providers  allows us to maintain a lower level of capital  investment,
resulting in lower fixed costs.

      We utilize a  state-of-the-art  proprietary  internet  based  order  entry
system.  All agents access our web-based  platform and orders are entered into a
customized traffic management system,  which enables us to monitor the status of
all orders, generate customer billing and provide detailed transactional reports
in our Florida corporate headquarters.  We use these reports to monitor customer
logistics and transportation  usage, track customer and carrier historical data,
generate  detailed  financial and accounting data and provide our customers with
details of their supply chain  activity.  We maintain dual off-site  storage and
back up faculties to insure data integrity and safety.

Suppliers

      We use the  services  of various  third  party  transportation  companies.
During 2004, no significant  third party  provider  handled more than 10% of our
shipping volume (measured by revenue).

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 2004, no
customer  accounted  for more than 10% of our  revenues.  We  typically  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 independent
sales agents, the opening of new operations  offices,  an increase in the number
of customers serviced,  and the expansion of logistics and supply chain services
we provide.

      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.

      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


                                       5
<PAGE>

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.
In our brokerage services,  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.  In our contract  carrier
services,  our competitors are other contract  carriers and common carriers.  We
also compete with customers' and shippers'  internal traffic and  transportation
departments  as  well as  carriers  internal  sales  and  marketing  departments
directly seeking shippers' freight.

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

Government regulation

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

      We are licensed by the United States Department of Transportation (DOT) as
a broker arranging the movement of materials by motor carrier. In this capacity,
we are required to meet certain qualifications to enable us to conduct business,
which includes the compliance with certain surety bond requirements. We are also
licensed by the DOT as a contract carrier 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 maintenance of $1,000,000
of general liability insurance and $100,000 of cargo insurance.

      If we fail to comply with, or lose,  any required  licenses,  governmental
regulators  could assess penalties or issue a cease and desist order against our
operations that are not in compliance.

Risk and liability

      In our brokerage  services,  we do not assume liability for loss or damage
to freight;  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. In addition, we maintain
$100,000 of contingent cargo liability insurance.

      In our  contract  carrier  services  business,  we are  liable for loss or
damage to our customers' freight. We maintain cargo liability insurance coverage
with a policy limit of $100,000 per occurrence.


                                       6
<PAGE>

Company background

      AutoInfo,  Inc. was  organized  under the laws of the State of New York in
1976 and reincorporated under the laws of Delaware in 1987. 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.

      On June 22,  2000,  we entered  into a Merger  Agreement  with  Sunteck in
exchange  for,  upon  closing,  ten million  shares of our common  stock,  which
constituted approximately 37% of our proposed outstanding common stock under our
Chapter 11 reorganization plan.

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

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

                                  RISK FACTORS

      In addition to the other information  provided in our reports,  you should
carefully consider the following factors in evaluating our business,  operations
and financial condition.  Additional risks and uncertainties not presently known
to us, that we currently  deem  immaterial or that are similar to those faced by
other  companies  in our  industry or business in general,  such as  competitive
conditions,  may also impair our business  operations.  The occurrence of any of
the  following  risks  could have a  material  adverse  effect on our  business,
financial condition and results of operations.

Continued expansion of our business operations is uncertain.

      For the year ended  December 31, 2004,  we increased  gross  revenues from
$27.2  million to $46.5  million  and had income  before  taxes of  $986,000  as
compared  $546,000 in the prior year. There is no assurance that we will be able
to continue the expansion of our operations.

      Factors that could adversely affect our future operating results include:

            o     the  success of Sunteck in  continuing  the  expansion  of its
                  business operations; and

            o     changes in general economic conditions.

Control of customer accounts; Dependence on independent commission sales agents.

      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 some of these  representatives.  These  contracts are typically
terminable  upon 10 to 30 days notice by either party and do not always restrict
the ability of a former agent to compete with Sunteck following termination.  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.

Dependence on third party capacity providers.

      We do not own trucks or other  transportation  equipment and rely on third
party capacity  providers,  including  independent  owner  operators,  unrelated
trucking  companies,  railroads and air cargo carriers to transport  freight for
our  customers.  We compete with motor  carriers and other third parties for the
services  of  independent   owner  operators  and  other  third  party  capacity
providers.  A significant  decrease in available


                                       7
<PAGE>

capacity provided by either our independent owner operators or other third party
capacity  providers could have a material  adverse effect on Sunteck,  including
our results of operations and revenue.

Decreased demand for transportation services.

      The  transportation   industry   historically  has  experienced   cyclical
financial  results as a result of slowdowns in economic  activity,  the business
cycles of  customers,  price  increases  by capacity  providers,  interest  rate
fluctuations,  and other economic factors beyond Sunteck's  control.  Certain of
our third party  capacity  providers  can be expected to charge higher prices to
cover increased operating  expenses,  and our operating income may decline if we
are unable to pass  through to our  customers  the full  amount of these  higher
transportation  costs.  If a slowdown in economic  activity or a downturn in our
customers'  business  cycles causes a reduction in the volume of freight shipped
by  those  customers,  our  operating  results  could  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 part, on the  continuing  efforts of our
president,   Harry  Wachtel,  who  conceived  our  strategic  plan  and  who  is
responsible  for executing that plan.  The loss of Mr.  Wachtel would  adversely
affect our business. At this time we do not have any term "key man" insurance on
Mr. Wachtel.  If we lose the services of Mr. Wachtel,  our business,  operations
and financial condition would be materially adversely affected.

We may have difficulties in managing our growth.

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

We must attract and retain qualified personnel.

      As we implement our business growth strategy,  significant demands will be
placed on our managerial,  financial and other resources. One of the keys to our
future success will be our ability to attract and retain


                                       8
<PAGE>

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.

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 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.

Our principal stockholders have substantial control over our affairs.

      As of  March  7,  2005,  our  president,  Harry  Wachtel  was our  largest
stockholder,  owning  approximately 24% of the issued and outstanding  shares of
our common stock. Further,  James T. Martin owns approximately 20% 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.  In addition,  this  concentration of ownership could have the effect of
delaying,  deferring  or  preventing a change in control or impeding a merger or
consolidation,   takeover  or  other  business   combination  which  you,  as  a
stockholder, may otherwise view favorably.

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

      The market price of our common stock has historically  experienced and may
continue to  experience  significant  volatility.  For the 52-week  period ended
March 7, 2005, our closing stock price has ranged from $0.30 to $0.76.  On March
7, 2005, our closing stock price was $0.66.

      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  exercise  of  outstanding
options.

      We have granted options covering  approximately  5.6 million shares of our
common stock.  As a result of the actual or potential  sale of these shares into
the market, our common stock price may decrease.


                                       9
<PAGE>

Future sales of our common stock may adversely affect our common stock price.

      If our stockholders sell a large number of shares of common stock or if we
issue a large  number  of shares  in  connection  with  future  acquisitions  or
financings, the market price of our common stock could decline significantly. In
addition, the perception in the public market that our stockholders might sell a
large number of shares of common stock could cause a decline in the market price
of our common stock.

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 and
preferred  stock.  The existence of authorized but unissued common and preferred
stock enables us to discourage or to make it more difficult to obtain control of
us by means of a merger, tender offer, proxy contest or otherwise.

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

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

Liquidity on the otc bulletin  board is limited,  and we may be unable to obtain
listing of our common stock on a more liquid market.

      Our  common  stock is quoted on the OTC  Bulletin  Board,  which  provides
significantly less liquidity than a securities exchange (such as the American or
New York Stock  Exchange) or an automated  quotation  system (such as the Nasdaq
National or SmallCap Market). There is uncertainty that we will ever be accepted
for a listing on an automated quotation system or securities exchange.

Our common  stock has been  thinly  traded,  and the public  market may  provide
little or no liquidity for holders of our common stock.

      Purchasers  of shares of our common  stock may find it difficult to resell
their  shares at prices  quoted in the market or at all.  There is  currently  a
limited  volume of trading in our common stock,  and on many days there has been
no trading  activity at all. Due to the  historically  low trading  price of our
common stock,  many brokerage  firms may be unwilling to effect  transactions in
our common stock,  particularly because low-priced  securities are subject to an
SEC rule that imposes  additional sales practice  requirements on broker-dealers
who sell  low-priced  securities  (generally  those below  $5.00 per share).  We
cannot predict when or whether investor  interest in our common stock might lead
to an increase in its market price or the  development  of a more active trading
market or how liquid that market might become.

The  application  of the "penny stock" rules could  adversely  effect the market
price of our common stock.

      As long as the trading price of our common stock is below $5.00 per share,
the open-market trading of our common stock will be subject to the "penny stock"
rules. The "penny stock" rules impose additional sales practice  requirements on
broker-dealers  who sell securities to persons other than established  customers
and accredited investors (generally those with assets in excess of $1,000,000 or
annual income exceeding  $200,000 or $300,000  together with their spouse).  For
transactions  covered  by these  rules,  the  broker-dealer  must make a special
suitability  determination  for the purchase of securities and have received the
purchaser's   written   consent  to  the   transaction   before  the   purchase.
Additionally,  for any transaction  involving a penny stock,  unless exempt, the
broker-dealer  must  deliver,  before the  transaction,  a  disclosure  schedule
prescribed by the Securities and Exchange Commission relating to the penny stock
market. The broker-dealer also must disclose the


                                       10
<PAGE>

commissions payable to both the broker-dealer and the registered  representative
and current quotations for the securities.  Finally,  monthly statements must be
sent disclosing  recent price information on the limited market in penny stocks.
These additional  burdens imposed on broker-dealers  may restrict the ability of
broker-dealers  to sell the common stock and may affect a stockholder's  ability
to resell the common stock.

      Stockholders  should be aware that,  according to Securities  and Exchange
Commission  Release No.  34-29093,  the market for penny  stocks has suffered in
recent years from patterns of fraud and abuse. Such patterns include (i) control
of the market for the  security  by one or a few  broker-dealers  that are often
related  to  the  promoter  or  issuer;  (ii)  manipulation  of  prices  through
prearranged  matching  of  purchases  and sales and false and  misleading  press
releases;  (iii) boiler room practices involving high-pressure sales tactics and
unrealistic price projections by inexperienced sales persons; (iv) excessive and
undisclosed bid-ask differential and markups by selling broker-dealers;  and (v)
the wholesale  dumping of the same  securities  by promoters and  broker-dealers
after prices have been manipulated to a desired level,  along with the resulting
inevitable  collapse of those prices and with consequent  investor  losses.  Our
management is aware of the abuses that have occurred  historically  in the penny
stock  market.  Although  we do not  expect to be in a position  to dictate  the
behavior  of the market or of  broker-dealers  who  participate  in the  market,
management  will strive within the confines of practical  limitations to prevent
the described patterns from being established with respect to our securities.


                                       11
<PAGE>

Patents, trademarks and copyrights

      "AUTOINFO" is our registered trademark and service mark.

Employees

      As of February 22, 2005, we had 196 full-time employees, independent sales
agents and  owner-operators.  None of our employees are  represented  by a labor
union and we  believe  that our  relationship  with our  employees,  agents  and
owner-operators is good.

Available Information

      Our website address is www.suntecktransport.com.  We are not including the
information  contained  on our  website  as  part  of,  or  incorporating  it by
reference  into,  this annual report on Form 10-KSB.  We make  available free of
charge through our website our annual report on Form 10-KSB,  quarterly  reports
on  Form  10-QSB,  current  reports  on  Form  8-K,  Forms  3, 4 and 5,  and all
amendments  to  those  reports  as soon as  reasonably  practicable  after  such
material  is  electronically  filed  with or  furnished  to the  Securities  and
Exchange Commission.

      The  public  may read and copy any  materials  we file with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, N.W.,  Washington,  D.C. 20549.
The public may obtain  information on the operation of the Public Reference Room
by calling the SEC at  1-800-SEC-0330.  The SEC  maintains an Internet site that
contains  reports,  proxy and  information  statements,  and  other  information
regarding issuers such as us that file  electronically with the SEC. The website
address is www.sec.gov.

                                   PROPERTIES

      We  lease  approximately  5,300  square  feet of space  for our  executive
offices and the  headquarters  of Sunteck at 6413 Congress  Avenue,  Boca Raton,
Florida.  This lease runs through  April 2010 and provides  for  aggregate  rent
payments of $57,000 for the thirteen  months ending  February 2006,  $61,000 for
the thirteen  months ending March 2007,  $65,000 for the thirteen  months ending
April 2008,  $68,000 for the twelve  months ended April 2009 and $71,000 for the
twelve  months ended April 2010.  We lease 1,100  square feet for our  operating
office at 315 Main Street,  Pineville,  North  Carolina.  The lease runs through
February 2008 and provides for an annual rental of $13,000.

                                LEGAL PROCEEDINGS

      We are not a party to any material legal proceedings.

               SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

      None.


                                       12
<PAGE>

                                     PART II

          MARKET FOR OUR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      Our common stock is not listed on any stock exchange.  Our common stock is
traded over-the-counter on the Over-the-Counter  Electronic Bulletin Board under
the  symbol  "Auto."  The  following  table  sets  forth  the  high  and low bid
information  for the common  stock for each  quarter  within the last two fiscal
years, as reported by the  Over-the-Counter  Electronic  Bulletin Board. The bid
information reflects inter-dealer prices,  without retail mark-up,  mark-down or
commission, and may not represent actual transactions.

          Year Ended December 31, 2004              High          Low
          --------------------------------       ---------     ----------

          First quarter                            $0.70          $0.28
          Second quarter                            0.67           0.41
          Third quarter                             0.51           0.32
          Fourth quarter                            0.61           0.32

          Year Ended December 31, 2003              High          Low
          --------------------------------       ---------     ----------

          First quarter                            $0.22          $0.14
          Second quarter                            0.23           0.11
          Third quarter                             0.37           0.17
          Fourth quarter                            0.39           0.23

      As of March 7, 2005, the closing bid price per share for our common stock,
as reported on the OTC Bulletin Board of the National  Association of Securities
Dealers,  Inc.  was  $0.66.  As of March 7,  2005,  we had  approximately  1,000
beneficial stockholders.

Dividend policy

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


                                       13
<PAGE>

                      SELECTED CONSOLIDATED FINANCIAL DATA

      The following is a summary of our selected consolidated financial data for
the years ended December 31, 2004, 2003, 2002, 2001 and 2000. The financial data
has  been  derived  from  our  audited  consolidated  financial  statements  and
accompanying  notes.  This financial data reflects our acquisition of Sunteck in
December  2000,  which was accounted for as a pooling of interest.  Accordingly,
all periods  presented  below have been  restated to include  the  accounts  and
operations of Sunteck under continuing operations.

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

<TABLE>
<CAPTION>
000's omitted, except for per share data                                   Year ended December 31,
                                                 ---------------------------------------------------------------------------
                                                    2004            2003            2002            2001             2000
                                                 ----------      ----------      ----------      ----------       ----------
<S>                                              <C>             <C>             <C>             <C>              <C>
Statement of Operations Data:

Gross revenues                                   $   46,492      $   27,171      $   18,863      $    8,029       $    3,389

Net revenues (1)                                      8,734           5,076           3,368           1,567              835

Income (loss) from continuing operations              1,466           1,300             340             (15)             (81)

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

Net  income (loss)                               $    1,466      $    1,300      $      340      $      (15)      $    9,390

Basic net income (loss) per share (2) (3)
     From continuing operations                  $      .05      $      .05      $      .01      $     (.00)      $      .00
     From discontinued operations                        --              --              --              --              .51
                                                 ----------      ----------      ----------      ----------       ----------
Net income (loss) per share, basic               $      .05      $      .05      $      .01      $     (.00)      $      .51
                                                 ----------      ----------      ----------      ----------       ----------

Diluted net income (loss) per share (2) (3)
     From continuing operations                  $      .04      $      .05      $      .01      $     (.00)      $      .00
     From discontinued operations                        --              --              --              --              .48
                                                 ----------      ----------      ----------      ----------       ----------
Net income (loss) per share, diluted             $      .04      $      .05      $      .01      $     (.00)      $      .48
                                                 ----------      ----------      ----------      ----------       ----------
</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, 2004,  2003
      and 2002 were  2,523,000,  1,434,000  and  635,000  and for the year ended
      December 31, 2000 were 1,304,000.

(3)   The common  stock  equivalents  for the years ended  December 31, 2001 was
      30,000. The common stock equivalents for these shares were not included in
      the  calculation  of diluted  income  (loss) per common share  because the
      effect would have been antidilutive.

<TABLE>
<CAPTION>
000's omitted                                                            As at December 31,
                                                 ---------------------------------------------------------------------
                                                    2004           2003           2002           2001           2000
                                                 ----------     ----------     ----------     ----------     ----------
<S>                                              <C>            <C>            <C>            <C>            <C>
Balance Sheet Data:

Cash and short term investments                  $       38     $      133     $      684     $      898     $      941
Accounts receivable                                   9,658          4,881          2,996          1,358            720
Total assets                                         11,795          6,286          3,944          2,458          1,740
Total liabilities                                     7,383          4,394          3,356          2,215          1,481
Deficit                                             (14,692)       (16,158)       (17,458)       (17,798)       (17,784)
Stockholders' equity                                  4,412          1,892            588            243            258
</TABLE>


                                       14
<PAGE>

   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
                                   OPERATIONS

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

      Pursuant  to  the  "safe  harbor"  provisions  of the  Private  Securities
Litigation  Reform Act of 1995,  readers of this  report are  advised  that this
document  contains  both  statements  of  historical  facts and forward  looking
statements.  Forward  looking  statements  are  subject  to  certain  risks  and
uncertainties,  which could cause actual results to differ materially from those
indicated  by the  forward  looking  statements.  Examples  of  forward  looking
statements include,  but are not limited to (i) projections of revenues,  income
or loss, earnings per share, capital expenditures,  dividends, capital structure
and other  financial  items,  (ii)  statements of our plans and objectives  with
respect to business  transactions  and enhancement of shareholder  value,  (iii)
statements of future  economic  performance,  and (iv) statements of assumptions
underlying other statements and statements about our business prospects.

      This report also identifies  important  factors,  which could cause actual
results  to differ  materially  from  those  indicated  by the  forward  looking
statements.  These risks and  uncertainties  include the factors discussed under
the heading "Risk Factors" beginning at page 7 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

      Through  our  wholly-owned   subsidiary,   Sunteck   Transport  Co.,  Inc.
(Sunteck), we are a non-asset based transportation  services company,  providing
transportation   capacity  and  related  transportation   services  to  shippers
throughout the United  States,  and to a lesser  extent,  Canada.  Our non-asset
based services include ground  transportation  coast to coast, local pick up and
delivery,  air freight and ocean freight.  We have strategic alliances with less
than  truckload,  truckload,  air, rail and ocean common carriers to service our
customers'   needs.  Our  business  services   emphasize   safety,   information
coordination  and  customer  service  and are  delivered  through a  network  of
independent  commissioned  sales  agents  and  third  party  capacity  providers
coordinated by us. The  independent  commissioned  sales agents  typically enter
into  contractual  arrangements  with Sunteck and are  responsible  for locating
freight and  coordinating the  transportation  of the freight with customers and
capacity  providers.  The third party capacity  providers consist of independent
contractors  who provide truck  capacity to us,  including  owner-operators  who
operate under our contract  carrier  license,  air cargo carriers and railroads.
Through  this  network  of agents and  capacity  providers,  Sunteck  operates a
transportation  services  business with revenue of  approximately  $46.5 million
during our most recently completed fiscal year.

      Our brokerage services are provided through a network of independent sales
agents. As of February 22, 2005, we had 12 regional  operating centers providing
brokerage  services and  representatives  in 21 states and Canada.  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.

      Our contract carrier services,  which commenced in 2003, are also provided
through  a  network  of  independent  sales  agents.  We do no own any  trucking
equipment and have a network of independent  owner-operators  who lease onto our
operating authority and transport freight under the Sunteck name. As of February
22, 2005, we had seven regional  operating  centers  providing  contract carrier
services, representatives in nine states and 83 independent owner-operators.


                                       15
<PAGE>

      The most  significant  factor in our growth  during the past two years has
been the expansion of our  brokerage  services  agent network and, in 2003,  the
introduction   and  expansion  of  our  contract   carrier  services  agent  and
owner-operator  network.  This  growth  is  readily  measured  by the  number of
transactions we have processed, which increased from 30,800 in 2003 to 43,300 is
2004,  an increase of 41%.  The  average  revenue  dollar per load in our broker
division  also  increased  in 2004 as  compared  to 2003.  This is the result of
several  factors  including an increase in truckload  business  versus less than
truckload at higher per load  revenues,  the  addition of sales  agents  hauling
heavy  equipment at higher per load revenues and, to a lesser degree,  a general
increase in prices.

Results of operations

For the year ended December 31, 2004

      During the year ended  December  31, 2004,  we continued to implement  our
strategic  growth business plan consisting  primarily of the expansion of client
services,  the  opening  of  regional  operations  centers  in key  geographical
markets,  the addition of  independent  sales  agents  providing  brokerage  and
contract  carrier  services.  Our net  revenues  (gross  revenues  less  cost of
transportation)  are the primary  indicator of our ability to source,  add value
and resell  services 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 following table represents certain statement of operation data as a
percentage of net revenues:

                                                 2004             2003
                                             -------------    -------------

           Net revenues                          100.0%           100.0%

              Commissions                         59.3%            58.2%
              Operating expenses                  28.0%            28.6%
              Other charges                        1.4%             2.5%
              Income taxes (benefit)              (5.5)%          (14.9)%

           Net income                             16.8%            25.6%

Revenues

      Gross  revenues,  consisting  of freight fees and other  related  services
revenue,  totaled  $46,492,000 for the year ended December 31, 2004, as compared
with  $27,171,000  in the prior  year,  an increase of 71%.  Net  revenues  were
$8,734,000 for the year ended December 31, 2004, as compared with  $5,076,000 in
the prior year,  an increase of 72%.  Gross  revenues  from  brokerage  services
increased  to  $36,931,000  from  $25,106,000  and  net  revenues  increased  to
$7,032,000 from $4,685,000 in the prior year. This increase is the direct result
of the  continued  expansion  of our agent  network  and  customer  base.  Gross
revenues  from  contract  carrier  services,  which we began  offering  in 2003,
increased to $9,561,000 from $2,065,000 and net revenues increased to $1,702,000
from $391,000 in the prior year.

Costs and expenses

      Commissions  totaled  $5,179,000  for the year ended December 31, 2004, as
compared with $2,955,000 in the prior year, an increase of 75%. This increase is
the direct result of the  continued  expansion of our agent network and customer
base. As a percentage of net revenues,  commissions  were 59% for the year ended
December 31, 2004 as compared with 58% in the prior year.


                                       16
<PAGE>

      Operating  expenses  totaled  $2,449,000  for the year ended  December 31,
2004,  as compared  with  $1,450,000  in the prior year.  As a percentage of net
revenues,  operating  expenses were 28% for the year ended  December 31, 2004 as
compared  with 29% in the prior  year.  This  decrease  is the direct  result of
management's ability to leverage selling, general and administrative expenses in
connection  with business  expansion.  We have  increased  administrative  staff
commensurate with the increase in transaction volume. In February 2005, we moved
our  headquarters  increasing  our space to 5,300 square feet. We presently have
adequate  facilities  and  management  to handle  the  present  and  anticipated
transaction volume in 2005 without a significant increase in overhead.

      Interest  expense was  $120,000  for the year ended  December  31, 2004 as
compared with $131,000 in the prior year.  This decrease is primarily the result
of borrowings pursuant to our line of credit,  secured in May 2004 at a interest
rate of prime + 1/2% and the corresponding repayment in May 2003 of the $500,000
loan at an interest rate of 17%, originated in August 2001.

Income tax

      The income tax benefit of $480,000  for the year ended  December  31, 2004
consisted  of a  benefit  of  $873,000  resulting  from the  anticipated  future
utilization of an available federal tax loss  carryforward,  net of income taxes
of $393,000.  The income tax benefit of $754,000 for the year ended December 31,
2003 consisted of $784,000  resulting from the anticipated future utilization of
an  available  federal  tax  loss  carryforward,  net of state  income  taxes of
$30,000.  Based upon available  objective  evidence,  including our  post-merger
history  of  profitability,  we  believe  that it is more  likely  than not that
forecasted  taxable  income will be  sufficient  to utilize a portion of the net
operating loss carryforward before its expiration in 2014. Accordingly,  in 2004
the valuation allowance was reduced by $873,000.

Net income

      Net income  totaled  $1,466,000  for the year ended  December 31, 2004, as
compared with  $1,300,000 in the prior year.  This increase is the direct result
of the  increase in revenues  due the  continuing  expansion  of our  operations
resulting in an increase in income before income taxes of $440,000 offset by the
net  decrease in the  recognition  on the deferred tax asset of $247,000 and the
increase in state income taxes of $27,000.

Trends and uncertainties

      The  transportation  industry is highly competitive and highly fragmented.
In our brokerage services,  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.  In our contract  carrier
services,  our competitors are other contract  carriers and common carriers.  We
also compete with customers' and shippers'  internal traffic and  transportation
departments  as  well as  carriers  internal  sales  and  marketing  departments
directly  seeking  shippers'  freight.  We anticipate  that  competition for our
services will continue to increase.  Many of our competitors have  substantially
greater capital  resources,  sales and marketing  resources and  experience.  We
cannot  assure  you  that  we  will be able  to  effectively  compete  with  our
competitors  in effecting our business  expansion  plans.  The most  significant
trend  contributing  to our  growth  during  the  past  two  years  has been the
expansion of our brokerage services agent network and, in 2003, the introduction
and expansion of our contract  carrier agent and owner operator  network.  Sales
agents are independent contractors and, as such, there are no assurances that we
can either  maintain  our  existing  agent  network or  continue  to expand this
network.

      For the year ended  December 31, 2004,  we increased  gross  revenues from
$27.2 million to $46.5 million and had net income of $1,466,000 as compared with
$1,300,000  in the prior year.  As of December 31,


                                       17
<PAGE>

2004,  we had an  accumulated  deficit  of $14.7  million.  Factors  that  could
adversely affect our operating results include:

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

            o     changes in general economic conditions.

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

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

      At  December  31,  2004,  we had  outstanding  $1,998,000  pursuant to our
$2,500,000 line of credit. The line of credit, obtained from a bank in May 2003,
is subject to the  maintenance  of certain  financial  covenants,  is secured by
accounts  receivable and other  operating  assets,  and matures in June 2005. We
believe that we have sufficient working capital to meet our short-term operating
needs and that we will be able to increase, extend or replace the line of credit
on terms acceptable to us.

      At December  31,  2004,  we had liquid  assets of  approximately  $38,000.
Available cash is used to reduce borrowings on our line of credit.

      The total amount of debt  outstanding as of December 31, 2004 and 2003 was
$1,998,000 and $1,621,000,  respectively.  The following table presents our debt
instruments  and their weighted  average  interest rates as of December 31, 2004
and 2003, respectively:

                                            Weighted                  Weighted
                               Balance    Average Rate    Balance   Average Rate
                             ---------------------------------------------------
                                        2004                      2003
                             ---------------------------------------------------
      Subordinated Debt              --         --      $  575,000     12.0%
      Line of Credit         $1,998,000        5.2%     $1,046,000      4.5%

      Inflation  and changing  prices had no material  impact on our revenues or
the results of operations for the year ended December 31, 2004.

      In January  2004,  we sold  1,333,333  shares of our common stock for cash
proceeds  of  $417,000.  Simultaneously,  in  a  related  transaction,  our  12%
convertible debentures were converted into 2,300,000 shares of common stock. The
result of these transactions was an increase in cash of $417,000,  a decrease in
debt of $575,000 and an increase in equity of  $1,017,000.  The cash proceeds of
$417,000 were used to reduce the outstanding balance under our line of credit.

Critical Accounting Policies

      Preparation  of our  financial  statements  requires  management  to  make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities and disclosure of contingent assets and liabilities at the date


                                       18
<PAGE>

of the financial  statements  and the reported  amounts of revenues and expenses
during  the  reporting  period.  Note 1 of the  Notes  to  Financial  Statements
includes a summary of the  significant  accounting  policies and methods used in
the  preparation  of  our  financial  statements.  The  most  significant  areas
involving  management  estimates and  assumptions  are described  below.  Actual
results could differ  materially  from  management's  estimates  under different
assumptions or conditions.

Revenue Recognition

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

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

Income Taxes

      The deferred tax asset  represents  expected future tax savings  resulting
from our net operating loss carryforward.  As of December 31, 2004, we had a net
operating loss  carryforward of  approximately  $16.5 million for federal income
tax purposes which expire through 2014. Utilization of this benefit is primarily
subject to the extent of our future earnings, and may be limited by, among other
things,   shareholder  changes,  including  the  possible  issuance  by  the  of
additional shares in one or more financing or acquisition transactions.  We have
established  a valuation  allowance  for the portion of possible tax savings not
likely to be realized by the end of the carryforward period.

Provision For Doubtful Accounts

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

Recently Issued Accounting Pronouncements

      In December 2004, the Financial  Accounting  Standards Board (FASB) issued
Statement of Financial  Accounting  Standards  No. 123R,  "Share-Based  Payment"
(SFAS 123R),  replacing SFAS 123 and  superseding  Accounting  Principles  Board
Opinion No. 25,  "Accounting  for Stock Issued to Employees" (APB 25). SFAS 123R
requires  public  companies  to recognize  compensation  expense for the cost of
awards of equity  compensation  effective July 1, 2005. This  compensation  cost
will  be  measured  as  the  fair  value  of  the  award   estimated   using  an
option-pricing  model on the grant date. The Company is currently evaluating the
various transition provisions under SFAS 123R and will adopt SFAS 123R effective
July 1, 2005, which is expected to result in increased  compensation  expense in
future periods.

      In December 2004, the FASB issued SFAS No. 153,  "Exchanges of Nonmonetary
Assets - an Amendment of APB No. 29" (SFAS 153). The amendments made by SFAS 153
are based on the  principle  that  exchanges  of  nonmonetary  assets  should be
measured  based  on  the  fair  value  of the  assets  exchanged.  Further,  the
amendments  eliminate the narrow exception for nonmonetary  exchanges of similar
productive  assets and  replace it with a broader  exception  for  exchanges  of
nonmonetary assets that do not have "commercial


                                       19
<PAGE>

substance." This standard is effective for nonmonetary asset exchanges occurring
after July 1, 2005.  The adoption of this standard is not expected to impact the
Company's consolidated financial statements.

Off-balance sheet arrangements

      We do not have any off-balance sheet arrangements.

                              FINANCIAL STATEMENTS

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

                        CHANGES IN AND DISAGREEMENTS WITH
               ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

      None.

                             CONTROLS AND PROCEDURES

      Our management,  with the participation of our chief executive officer and
chief  financial  officer,  has evaluated the  effectiveness  of our  disclosure
controls  and  procedures  (as  such  term is  defined  in Rules  13a-15(e)  and
15d-15(e)  under the Securities  Exchange Act of 1934, as amended (the "Exchange
Act"))  as of the end of the  period  covered  by  this  report.  Based  on that
evaluation,  our chief  executive  officer  and  chief  financial  officer  have
concluded  that,  as of the end of such  period,  our  disclosure  controls  and
procedures are effective.

      There have not been any changes in our  internal  control  over  financial
reporting (as such term is defined in Rules  13a-15(f)  and 15d-15(f)  under the
Exchange Act) our fiscal fourth quarter that have  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.

                                OTHER INFORMATION

      None.


                                       20
<PAGE>

                                    PART III

                        DIRECTORS AND EXECUTIVE OFFICERS

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

<TABLE>
<CAPTION>
Name                        Age            Position
----                        ---            --------
<S>                         <C>            <C>
Peter C. Einselen           65             Director
Thomas C. Robertson         59             Director
Harry Wachtel               46             President, chief executive officer and director
Mark Weiss                  45             National account executive and director
William Wunderlich          57             Chief financial officer
</TABLE>

      PETER C. EINSELEN has been a director since January 1999. Mr. Einselen has
been an account  executive  since 1990 and served as senior vice  president from
1990 to 2001 of Anderson & Strudwick,  a brokerage firm,. From 1983 to 1990, Mr.
Einselen was employed by Scott and Stringfellow, Incorporated, a brokerage firm.

      THOMAS C. ROBERTSON has been a director since January 1999. Mr.  Robertson
has been senior vice  president  since 2004 and was president,  chief  financial
officer and a director  from 1988 to 2004 of Anderson &  Strudwick,  a brokerage
firm.  Mr.  Robertson  has  been  president  of  Gardner  &  Robertson,  a money
management firm, since 1997.

      HARRY WACHTEL joined us in conjunction with the acquisition of Sunteck and
has been a  director,  and our  president  and  chief  executive  officer  since
December 7, 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 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.

      WILLIAM  WUNDERLICH  joined us in  October  1992 as our vice  president  -
finance,  became chief financial  officer in January 1993,  president in January
1999 and, in conjunction with the acquisition of Sunteck,  became executive vice
president in December  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.

Director Compensation

      We do not pay any directors' fees.  Directors are reimbursed for the costs
relating to  attending  board and  committee  meetings.  During  2004,  Peter C.
Einselen and Thomas C. Robertson, our non-employee directors,


                                       21
<PAGE>

each were  granted  options to  purchase  62,500  shares of our common  stock at
prices ranging from $0.29 to $0.60 per share,  the fair market value on the date
of grant.

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  Messrs.  Einselen  and
Robertson, our non-employee independent outside directors.

Audit Committee Matters

      Under its charter, the audit committee must pre-approve all engagements of
our independent  auditor unless an exception to such  pre-approval  exists under
the Securities  Exchange Act of 1934 or the rules of the Securities and Exchange
Commission  (SEC). Each year, the independent  auditor's  retention to audit our
financial statements, including the associated fee, is approved by the committee
before the filing of the preceding  year's annual report on Form 10-KSB.  At the
beginning of the fiscal year,  the audit  committee  will  evaluate  other known
potential  engagements of the  independent  auditor,  including the scope of the
work proposed to be performed and the proposed  fees, and approve or reject each
service,  taking  into  account  whether  the  services  are  permissible  under
applicable  law  and  the  possible  impact  of each  non-audit  service  on the
independent auditor's independence from management. At each subsequent committee
meeting, the committee will receive updates on the services actually provided by
the  independent  auditor,  and management may present  additional  services for
approval.  Typically,  these  would be  services  such as due  diligence  for an
acquisition, that would not have been known at the beginning of the year

      Since the May 6, 2003  effective  date of the SEC  rules  stating  that an
auditor is not independent of an audit client if the services it provides to the
client are not appropriately approved, each new engagement of Dworken,  Hillman,
LaMorte & Sterczala,  P.C. was approved in advance by the Audit  Committee,  and
none of those  engagements made use of the de minimus  exception to pre-approval
contained in the SEC's rules.

      Our board has  determined  that the chairman of the audit  committee,  Mr.
Robertson,  is an "audit committee financial expert," as that term is defined in
Item  401(e) of  Regulation  B, and  "independent"  for  purposes of current and
recently-adopted   Nasdaq  listing   standards  and  Section  10A(m)(3)  of  the
Securities Exchange Act of 1934.

Code of Ethics

      We have adopted a code of ethics that applies to our  principal  executive
officer,  principal  financial  officer  and other  persons  performing  similar
functions.    This   code   of   ethics   is   posted   on   our    website   at
www.suntecktransport.com.

Section 16(a) beneficial ownership reporting compliance

      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 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.


                                       22
<PAGE>

                             EXECUTIVE COMPENSATION

      Summary  compensation.  The following table sets forth certain information
concerning  compensation paid for services in all capacities  awarded to, earned
by or paid to our chief executive officer and the other most highly  compensated
executive  officers  during  2004,  2003 and 2002 whose  aggregate  compensation
exceeded $100,000 (Named Executive Officers).

<TABLE>
<CAPTION>
                                                                                    All other
Name and principal position                             Salary          Bonus     compensation
------------------------------------------------      ----------     ---------   --------------
<S>                                                     <C>           <C>              <C>
Harry Wachtel
President and chief executive officer
    2004 .......................................        $205,000      $125,000         --
    2003 .......................................        $175,000      $ 51,531         --
    2002 .......................................        $175,000      $ 13,035         --

William Wunderlich
Executive vice president and chief financial
    officer
    2004 .......................................        $100,000      $125,000         --
    2003 .......................................        $ 93,750      $ 55,281         --
    2002 .......................................        $ 75,000      $ 28,035         --

Mark Weiss
National account executive
    2004 .......................................        $107,503            --         --
    2003 .......................................        $118,592            --         --
    2002 .......................................        $127,836            --         --
</TABLE>

Option grants during the year ended December 31, 2004

      Our  compensation  committee  did  not  grant  any  options  to the  named
executives during the year ended December 31, 2004.

      Option exercises and year-end option values.  The following table provides
information  with respect to options  exercised by the Named Executive  Officers
during 2004 and the number and value of  unexercised  options  held by the Named
Executive Officers as of December 31, 2004.

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

<TABLE>
<CAPTION>
                                                                  Number of Shares Underlying    Value of Unexercised In-the-
                                                                 Unexercised Options at Fiscal      Money Options At Fiscal
                                                                           Year-End                       Year-End (2)
                                                                 -----------------------------   ----------------------------
                         Shares Acquired
Name                      on Exercise (#)    Value Realized (1)   Exercisable    Unexercisable   Exercisable    Unexercisable
----                      ---------------    ------------------   -----------    -------------   -----------    -------------
<S>                              <C>                 <C>            <C>                <C>         <C>               <C>
Harry Wachtel                    --                  --                  --            --                --          --
Mark Weiss                       --                  --                  --            --                --          --
William Wunderlich               --                  --             810,000            --          $413,000          --
</TABLE>

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

(2)   For the purposes of this  calculation,  value is based upon the difference
      between the exercise price of the  exercisable and  unexercisable  options
      and the stock price at December 31, 2004 of $0.61 per share.


                                       23
<PAGE>

                      Equity Compensation Plan Information
                          Year Ended December 31, 2004

<TABLE>
<CAPTION>
                                                                                              Number of securities
                                                                                             remaining available for
                                          Number of securities       Weighted-average         future issuance under
                                           to be issued upon         exercise price of         equity compensation
                                              exercise of               outstanding             plans (excluding
                                          outstanding options,       options, warrants       securities reflected in
           Plan Category                  warrants and rights           and rights                 column (a))
----------------------------------        --------------------       -----------------       -----------------------
                                                   (a)                      (b)                           (c)
<S>                                            <C>                         <C>                       <C>
Equity compensation plans
   approved by security holders
   (1985, 1986, 1989, 1992,
   1997, 1999 and 2003 Stock
   Option Plans).................              5,594,000                   $0.28                     450,000
Equity compensation plans not
   approved by security
   holders(1)....................                     --                      --                          --
                                               =========                   =====                     =======

Total............................              5,594,000                   $0.28                     450,000
                                               =========                   =====                     =======
</TABLE>

(1)   We do not have any equity  compensation plans which have not been approved
      by security holders.

Employment Agreements

      In  December  2000,  we entered  into  employment  agreements  (which were
subsequently amended and modified during 2003 and 2004) with Messrs. Wachtel and
Wunderlich  providing for their  employment,  as our chief executive officer and
chief  financial  officer,  respectively,  for terms expiring on March 31, 2006,
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
agreements   provide  for  annual  base   salaries  of  $205,000  and  $100,000,
respectively,  and for participation in all executive benefit plans. Each of Mr.
Wachtel's  and Mr.  Wunderlich's  agreements  provide  that  they  will  each be
entitled to a bonus equal to 10% of our consolidated pre-tax profit (as defined)
up to $1,250,000. Further, Mr. Wachtel's agreement provides, among other things,
that, if employment is terminated without cause (as defined) or if he terminates
his  employment for good reason (as defined) or within six months after a change
of  control  (as  defined),  we will pay him an amount  equal to his  respective
current base salary plus the average  incentive  compensation  due to him during
the remaining term of the agreement.

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The following table, together with the accompanying footnotes,  sets forth
information,  as of March 10,  2005,  regarding  stock  ownership of all persons
known by us to own beneficially 5% or more of our outstanding  common stock, all
directors,  Named Executive Officers and all directors and executive officers as
a group.

      We determined beneficial ownership in accordance with rules promulgated by
the  SEC,  and the  information  is not  necessarily  indicative  of  beneficial
ownership for any other purpose.  Except as otherwise indicated, we believe that
the  persons or  entities  named in the  following  table  have sole  voting and
investment  power with  respect to all  shares of common  stock as  beneficially
owned by them, subject to community property laws where applicable.


                                       24
<PAGE>

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

(i) Directors and Executive Officers
Harry Wachtel                                  7,560,000 (2)            24.1%
Thomas C. Robertson                              240,000 (3)             *
Peter C. Einselen                                410,000 (3)             1.3%
Mark Weiss                                       950,000 (5)             3.0%
William I. Wunderlich                          1,525,000 (4)(6)          4.7%
All executive officers and directors
as a group (5 persons)                         9,125,000 (7)            28.0%

(ii) 5% Stockholders
James T. Martin                                6,270,000                20.0%
Kinderhook Partners                            5,159,000                16.4%

----------
*     Less than 1%

(1)   Unless otherwise  indicated below,  each director,  executive  officer and
      each 5% stockholder  has sole voting and investment  power with respect to
      all  shares  beneficially  owned.  The  address  for Mr.  Wachtel  and Mr.
      Wunderlich is c/o AutoInfo,  Inc., 6413 Congress  Avenue,  Suite 260, Boca
      Raton, FL 33487.  The address for Mr. Martin is c/o Bermuda Trust Company,
      Compass Point Road, 9 Bermudian Road, Hamilton HM11, Bermuda.  The address
      for Kinderhook  Partners is One Executive  Drive,  Suite 160, Fort Lee, NJ
      07024.

(2)   Includes  1,560,000  shares  with  respect to which Mr.  Wachtel  has been
      granted voting rights pursuant to voting proxy agreements.

(3)   Includes 180,000 shares issuable upon the exercise of stock options.

(4)   Includes 810,000 shares issuable upon the exercise of stock options.

(5)   Includes 950,000 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.

(6)   Includes  610,000 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.

(7)   Assumes  that all  currently  exercisable  options  or  warrants  owned by
      members of this group have been exercised.

                 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.
Interest on the outstanding  borrowings was 17% per annum,  payable quarterly in
arrears. This line of credit was repaid in full in May 2003. Interest of $35,000
was charged to operations in 2003.

      In December 2001, we lent $100,000 to the  father-in-law of Harry Wachtel,
our  president.  This loan bore interest at 4% per annum and was due in December
2006. This loan was repaid in March 2004.

      In December  2000, we obtained  financing  totaling  $575,000 from certain
related parties in the form of ten year 12% subordinated convertible debentures.
Interest of $4,000 and $69,000  was  charged to  operations  in each of 2004 and
2003,  respectively.  In January 2004,  these  debentures  were  converted  into
2,300,000 shares of common stock.

                                    EXHIBITS

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)


                                       25
<PAGE>

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. 10K           Amendment to Employment  Agreement between AutoInfo,  Inc. and
                  Harry M. Wachtel dated as of May 7, 2004.*

No. 10L           Amendment to Employment  Agreement between AutoInfo,  Inc. and
                  William Wunderlich dated May 7, 2004.*

No. 10M           Stock Purchase Agreement between AutoInfo,  Inc and Kinderhook
                  Partners, LP dated January 21, 2004.(10)

No. 10N           Registration  Rights  Agreement  between  AutoInfo,  Inc.  and
                  Kinderhook Partners, LP, et al, dated October 4, 2004.*

No. 10O           First  Amendment  to Revolving  Credit and Security  Agreement
                  between Wachovia Bank and AutoInfo, Inc., et al *

No. 14A           Code of Ethics.(10)

No. 21A           Subsidiaries of the Registrant. *

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

31A               Certification  of Chief Executive  Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.*

31B               Certification  of Chief Financial  Officer Pursuant to Section
                  302 of the Sarbanes-Oxley Act of 2002.*


                                       26
<PAGE>

32A               Certification of Chief Executive Officer Pursuant to 18 U.S.C.
                  Section  1350,  as  adopted  Pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002.*

32B               Certification of Chief Financial Officer Pursuant to 18 U.S.C.
                  Section  1350,  as  adopted  Pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002.*

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

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

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

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

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

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

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

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

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

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

(10)  This  Exhibit was filed as an Exhibit to our Annual  Report on Form 10-KSB
      for the year  ended  December  31,  2003  and is  incorporated  herein  by
      reference.

                     PRINCIPAL ACCOUNTING FEES AND SERVICES

                                               2004              2003
                                             -------           -------
Audit fees                                   $48,480           $46,570
Audit related fees                                --                --
Tax fees                                          --                --
All other fees                                    --                --
       Total fees                            $48,480           $46,570
                                             -------           -------

Audit Committee Pre-Approval Policies and Procedures

      Our  audit  committee  charter  provides  that the  audit  committee  will
pre-approve  audit  services  and  non-audit  services  to be  provided  by  our
independent  auditors before the accountant is engaged to render these services.
The audit committee may consult with management in the decision-making  process,
but may not delegate  this  authority to  management.  The audit  committee  may
delegate its authority to pre-approve services to one or more committee members,
provided that the designees  present the  pre-approvals to the full committee at
the next committee meeting.


                                       27
<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 15, 2005 on its behalf by the undersigned, thereunto duly authorized.

                                             AutoInfo, Inc.


                                             By: /s/ Harry M. Wachtel
                                                 -------------------------------
                                                 Harry M. Wachtel, President and
                                                 Chief Executive Officer

      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, Chief Executive Officer and        March 15, 2005
                                      Chairman of the Board
                                      (Principal Executive Officer)

/s/ William I. Wunderlich
-----------------------------
William I. Wunderlich             Chief Financial Officer                       March 15, 2005
                                      (Principal Accounting Officer)

/s/ Mark Weiss
-----------------------------
Mark Weiss                        Director                                      March 15, 2005

/s/ Peter C. Einselen
-----------------------------
Peter C. Einselen                 Director                                      March 15, 2005

/s/ Thomas C. Robertson
-----------------------------
Thomas C. Robertson               Director                                      March 15, 2005
</TABLE>


                                       28
<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm                      F-2

Consolidated Balance Sheets as of December 31, 2004 and 2003                 F-3

Consolidated Statements of Income for the Years Ended
         December 31, 2004 and 2003                                          F-4

Consolidated Statements of Stockholders' Equity for the Years Ended
         December 31, 2004 and 2003                                          F-5

Consolidated Statements of Cash Flows
         for the Years Ended December 31, 2004 and 2003                      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.

<PAGE>

             Report of Independent Registered Public Accounting Firm

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

We have audited the accompanying  consolidated balance sheets of AutoInfo,  Inc.
and subsidiaries as of December 31, 2004 and 2003, and the related  consolidated
statements of income,  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 the standards of the Public  Company
Accounting Oversight Board (United States). 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, 2004 and 2003 and the results of their  operations  and their
cash flows for the years then ended in  conformity  with  accounting  principles
generally accepted in the United States of America.

February 11, 2005
Shelton, Connecticut


                                 /s/ Dworken, Hillman, LaMorte & Sterczala, P.C.
                                 -----------------------------------------------
                                 Dworken, Hillman, LaMorte & Sterczala, P.C.

<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

      ASSETS (Note 2)

<TABLE>
<CAPTION>
                                                                                        December 31
                                                                              -------------------------------
                                                                                  2004                2003
                                                                              ------------       ------------
<S>                                                                           <C>                <C>
Current assets:
   Cash and cash equivalents                                                  $     38,000       $    133,000
   Accounts receivable, net of allowance for doubtful accounts
      of $60,000                                                                 9,658,000          4,881,000
   Loan receivable (Note 3)                                                             --            100,000
   Deferred income taxes  (Note 4)                                                 369,000            248,000
   Other current assets                                                            679,000            292,000
                                                                              ------------       ------------

Total current assets                                                            10,744,000          5,654,000

Fixed assets, net of depreciation                                                   69,000             71,000

Deferred income taxes (Note 4)                                                     952,000            536,000

Other assets                                                                        30,000             25,000
                                                                              ------------       ------------

                                                                              $ 11,795,000       $  6,286,000
                                                                              ============       ============

         LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Loan payable (Note 2)                                                      $  1,998,000       $  1,046,000
   Convertible subordinated debentures (Note 2)                                         --            575,000
   Accounts payable and accrued liabilities                                      5,385,000          2,773,000
                                                                              ------------       ------------

Total current liabilities                                                        7,383,000          4,394,000
                                                                              ------------       ------------

Commitments and contingencies (Note 5)

Stockholders' equity : (Note 6)
  Common stock - authorized 100,000,000 shares, $.001 par
     value; issue and outstanding 31,218,000 and 27,383,000 as
     of December 31, 2004 and 2003, respectively                                    31,000             27,000
  Other capital                                                                    324,000                 --
  Deferred compensation                                                           (277,000)                --
  Additional paid-in capital                                                    19,026,000         18,023,000
  Deficit                                                                      (14,692,000)       (16,158,000)
                                                                              ------------       ------------

  Total stockholders' equity                                                     4,412,000          1,892,000
                                                                              ------------       ------------

                                                                              $ 11,795,000       $  6,286,000
                                                                              ============       ============
</TABLE>

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

<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                               For The Years Ended December 31,
                                                              ----------------------------------
                                                                  2004                  2003
                                                              ------------          ------------
<S>                                                           <C>                   <C>
Gross revenues                                                $ 46,492,000          $ 27,171,000
Cost of transportation                                          37,758,000            22,095,000
                                                              ------------          ------------

Net revenues                                                     8,734,000             5,076,000
                                                              ------------          ------------

Commissions                                                      5,179,000             2,955,000
Operating expenses                                               2,449,000             1,450,000
                                                              ------------          ------------
                                                                 7,628,000             4,405,000
                                                              ------------          ------------

Income from operations                                           1,106,000               671,000
                                                              ------------          ------------

Other charges (credits):
   Investment income                                                    --                (6,000)
   Interest expense                                                120,000               131,000
                                                              ------------          ------------
                                                                   120,000               125,000
                                                              ------------          ------------

Income before income taxes (benefit)                               986,000               546,000
Income taxes (benefit)  (Note 4)                                  (480,000)             (754,000)
                                                              ------------          ------------

Net income                                                       1,466,000             1,300,000
                                                              ============          ============

Net income per share (basic)                                  $        .05          $        .05
Net income per share (diluted)                                $        .04          $        .05

Weighted average number of common shares (basic)                30,915,000            27,355,000
Weighted average number of common shares (diluted)              33,438,000            28,789,000
</TABLE>

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

<PAGE>

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

<TABLE>
<CAPTION>
                                      Shares of
                                       Common                                                        Additional
                                        Stock           Common          Other       Deferred         Paid - In
                                     Outstanding         Stock         Capital    Compensation        Capital           Deficit
                                     -----------         -----         -------    ------------        -------           -------
<S>                                  <C>             <C>              <C>           <C>             <C>              <C>
Balance, January 1, 2003             27,348,000      $    27,000      $     --      $      --       $18,019,000      $(17,458,000)

Exercise of stock options                35,000               --                                          4,000

Net income                                                                                                              1,300,000
                                    -----------      -----------      --------      ---------       -----------      ------------

Balance, December 31, 2003           27,383,000           27,000            --             --        18,023,000       (16,158,000)

Sale of common shares                 1,333,000            2,000                                        415,000

Conversion of subordinated
    debentures  (Note 2)              2,300,000            2,000                                        573,000

Exercise of stock options               202,000               --                                         15,000

Shares granted under stock
 option plans to non-employees                                         324,000       (324,000)

Compensation expense                                                                   47,000

Net income                                                                                                              1,466,000
                                    -----------      -----------      --------      ---------       -----------      ------------

Balance, December 31, 2004           31,218,000      $    31,000      $324,000      $(277,000)      $19,026,000      $(14,692,000)
                                    ===========      ===========      ========      =========       ===========      ============
</TABLE>

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

<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                 For The Years Ended December 31,
                                                 --------------------------------
                                                      2004              2003
                                                  -----------       -----------
<S>                                               <C>               <C>
Cash flows from operating activities:
  Net income                                      $ 1,466,000       $ 1,300,000
  Adjustments to reconcile net income to net
    cash used in  operating activities:
      Depreciation and amortization expenses           40,000            38,000
      Deferred compensation expense                    47,000
      Deferred income taxes                          (537,000)         (784,000)

Changes in assets and liabilities:
    Accounts receivable, net                       (4,777,000)       (1,885,000)
    Other current assets                             (398,000)         (218,000)
    Other assets                                      105,000            (2,000)
    Accounts payable and accrued liabilities        2,612,000           492,000
                                                  -----------       -----------

Net cash used in operating activities              (1,442,000)       (1,059,000)
                                                  -----------       -----------

Cash flows from investing activities:
    Capital expenditures                              (37,000)          (42,000)
                                                  -----------       -----------

Net cash used in investing activities                 (37,000)          (42,000)
                                                  -----------       -----------

Cash flows from financing activities:
    Sale of common shares                             417,000
   Conversion of subordinated debentures              575,000
    Exercise of stock options                          15,000             4,000
    Increase in  borrowings, net                      377,000           546,000
                                                  -----------       -----------

Net cash  provided by  financing activities         1,384,000           550,000
                                                  -----------       -----------

Net change in cash and cash equivalents               (95,000)         (551,000)
Cash and cash equivalents, beginning of year          133,000           684,000
                                                  -----------       -----------

Cash and cash equivalents, end of year            $    38,000       $   133,000
                                                  ===========       ===========
</TABLE>

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

<PAGE>

                         AUTOINFO, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 and 2003

Note 1 - Business and Summary of Significant Accounting Policies

Business

      Through  our  wholly-owned   subsidiary,   Sunteck   Transport  Co.,  Inc.
(Sunteck), we are a non-asset based transportation  services company,  providing
transportation   capacity  and  related  transportation   services  to  shippers
throughout the United  States,  and to a lesser  extent,  Canada.  Our non-asset
based services include ground  transportation  coast to coast, local pick up and
delivery,  air freight and ocean freight.  We have strategic alliances with less
than  truckload,  truckload,  air, rail and ocean common carriers to service our
customers'   needs.  Our  business  services   emphasize   safety,   information
coordination  and  customer  service  and are  delivered  through a  network  of
independent  commissioned  sales  agents  and  third  party  capacity  providers
coordinated by us. The  independent  commissioned  sales agents  typically enter
into  contractual  arrangements  with Sunteck and are  responsible  for locating
freight and  coordinating the  transportation  of the freight with customers and
capacity  providers.  The third party capacity  providers consist of independent
contractors  who provide truck  capacity to us,  including  owner-operators  who
operate under our contract  carrier  license,  air cargo carriers and railroads.
Through  this  network  of agents and  capacity  providers,  Sunteck  operates a
transportation  services  business  with  revenue of  approximately  $47 million
during our most recently completed fiscal year.

      Our brokerage  services are provided though a network of independent sales
agents. As of February 22, 2005, we had 12 regional  operating centers providing
brokerage  services and  representatives  in 21 states and Canada.  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.

      Our contract carrier services,  which commenced in 2003, are also provided
through  a  network  of  independent  sales  agents.  We do no own any  trucking
equipment and have a network of independent  owner-operators  who lease onto our
operating authority and transport freight under the Sunteck name. As of February
22, 2005, we had seven regional  operating  centers  providing  contract carrier
services, representatives in nine states and 83 independent owner-operators.

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
AutoInfo, Inc. (the Company), its wholly-owned subsidiary Sunteck Transport Co.,
Inc. and its wholly-owned subsidiary Sunteck

<PAGE>

Transport  &  Logistics,   Inc.,   collectively   (Sunteck).   All   significant
intercompany balances and transactions have been eliminated in consolidation.

Revenue Recognition

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

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

Provision For Doubtful Accounts

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

Cash and Cash Equivalents

      Cash and cash equivalents consist of cash in banks.

Fixed Assets

      Fixed assets as of December 31, 2004 and 2003, consisting predominantly of
furniture,  fixtures  and  equipment,  were  carried at cost net of  accumulated
depreciation.  Depreciation  of fixed assets was  provided on the  straight-line
method over the  estimated  useful lives of the related  assets which range from
three to five years.

Income Per Share

      Basic  income  per share is based on net income  divided  by the  weighted
average  number  of  common  shares   outstanding.   Common  stock   equivalents
outstanding  were  2,523,000 and 1,434,000 for the year ended  December 31, 2004
and 2003, respectively.

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.

<PAGE>

Income Taxes

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

Stock-Based Compensation

      The Company applies 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 issued to employees in
the financial statements.

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

      The Company accounts for stock options issued to  non-employees  using the
fair  value  method  in  accordance  with  SFAS  123.   Deferred   compensation,
representing  the  fair  market  value  of  the  options  issued  utilizing  the
Black-Scholes  option-pricing  model,  is charged to  earnings  over the vesting
period.

New Accounting Pronouncements

      In December 2004, the Financial  Accounting  Standards Board (FASB) issued
Statement of Financial  Accounting  Standards  No. 123R,  "Share-Based  Payment"
(SFAS 123R),  replacing SFAS 123 and  superseding  Accounting  Principles  Board
Opinion No. 25,  "Accounting  for Stock Issued to Employees" (APB 25). SFAS 123R
requires  public  companies  to recognize  compensation  expense for the cost of
awards of equity  compensation  effective July 1, 2005. This  compensation  cost
will  be  measured  as  the  fair  value  of  the  award   estimated   using  an
option-pricing  model on the grant date. The Company is currently evaluating the
various transition provisions under SFAS 123R and will adopt SFAS 123R effective
July 1, 2005, which is expected to result in increased  compensation  expense in
future periods.

      In December 2004, the FASB issued SFAS No. 153,  "Exchanges of Nonmonetary
Assets - an Amendment of APB No. 29" (SFAS 153). The amendments made by SFAS 153
are based on the  principle  that  exchanges  of  nonmonetary  assets  should be
measured  based  on  the  fair  value  of the  assets  exchanged.  Further,  the
amendments  eliminate the narrow exception for nonmonetary  exchanges of similar
productive  assets and  replace it with a broader  exception  for  exchanges  of
nonmonetary  assets that do not have  "commercial  substance."  This standard is
effective for  nonmonetary  asset  exchanges  occurring  after July 1, 2005. The
adoption of this standard is not expected to impact the  Company's  consolidated
financial statements.

Segment Information

<PAGE>

      The  Company  provides   transportation  capacity  and  related  logistics
services  through its integrated  network of independent  agents and third party
capacity  providers.   For  the  purpose  of  applying  Statement  of  Financial
Accounting  Standards No. 131,  "Disclosures About Segments of an Enterprise and
Related  Information",  management has  determined  that it operates in a single
business segment.

Note 2 - Debt

Loan Payable

      In May 2003,  the  Company  entered  into a $1.5  million  Line of Credit,
expiring  in May  2004,  with  a  commercial  lending  institution,  secured  by
substantially  all  assets of the  Company.  In 2004,  this  Line of Credit  was
increased to $2.5 million, expiring in June 2005. The line provides for interest
at the prime rate plus 1/2% and the maintenance of certain financial  covenants.
Interest of $59,000 and  $27,000  was  charged to  operations  in 2004 and 2003,
respectively.

      In  August  2001,  the  Company  entered  into a  $500,000  Line of Credit
Agreement  with James T.  Martin,  a  significant  stockholder  of the  Company,
secured  by the  Company's  accounts  receivable.  Interest  on the  outstanding
borrowings was 17% per annum, payable quarterly in arrears. This credit facility
was repaid in full in May 2003. Interest of $35,000 was charged to operations in
2003.

Convertible Subordinated Debentures

      In December 2000, the Company obtained  financing  totaling  $575,000 from
certain  related  parties in the form of ten year 12%  Subordinated  Convertible
Debentures  (Debentures).  In January 2004, these Debentures were converted into
2,300,000 shares of common stock.  Interest of $4,000 and $69,000 was charged to
operations in each of 2004 and 2003, respectively.

Note 3 - 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 bore interest at 4%
per annum and was repaid in full in March 2004.

Note 4- Income Taxes

      For the years ended  December 31, 2004 and 2003,  the provision for income
taxes consisted of the following:

<PAGE>

<TABLE>
<CAPTION>
                                                        2004                            2003
                                              -------------------------       -------------------------
                                               Current        Deferred         Current        Deferred
                                              ---------       ---------       ---------       ---------
<S>                                           <C>             <C>             <C>             <C>
Income tax expense before application of
   operating loss carryforwards               $ 393,000       $      --       $ 205,000       $      --
Income tax expense (benefit) of
   operating loss carryforwards                (336,000)        336,000        (175,000)             --
   Change in valuation allowance                     --        (873,000)             --        (784,000)
                                              -------------------------       -------------------------

   Income tax expense (benefit)               $  57,000       $(537,000)      $  30,000       $(784,000)
                                              =========================       =========================
</TABLE>

      The following table reconciles the Company's  effective income tax rate on
income  from  operations  to the  Federal  Statutory  Rate for the  years  ended
December 31, 2004 and 2003.

<TABLE>
<CAPTION>
                                                           2004            2003
                                                         --------        --------
<S>                                                         <C>            <C>
      Federal Statutory Rate                                 34.0%           34.0%

      State income taxes, net of federal benefit              5.7             3.6

      Effect of:
         Utilization of operating loss carryforward         (34.0)          (34.0)
         Change in valuation allowance                      (88.4)         (141.6)
                                                         --------        --------
                                                            (48.7)%        (138.0)%
                                                         ========        ========
</TABLE>

      Deferred  taxes are  comprised  of the  following at December 31, 2004 and
2003:

<TABLE>
<CAPTION>
                                                        December 31,      December 31,
                                                            2004              2003
                                                        ------------      ------------
<S>                                                     <C>               <C>
      Deferred tax asset:
           Net operating loss carryforward              $ 5,590,000       $ 5,926,000
                                                        -----------       -----------

      Gross  deferred tax asset                           5,590,000         5,926,000
      Less: valuation allowance                          (4,269,000)       (5,142,000)
                                                        -----------       -----------

      Deferred tax asset                                $ 1,321,000       $   784,000
                                                        ===========       ===========
</TABLE>

      The deferred tax asset  represents  expected future tax savings  resulting
from the Company's net operating loss carryforward. As of December 31, 2004, the
Company has a net operating loss carryforward of approximately $16.5 million for
federal  income tax purposes  which expire  through  2014.  Utilization  of this
benefit is primarily subject to the extent of future earning of the Company, and
may be limited by,  among  other  things,  shareholder  changes,  including  the
possible  issuance by the Company of additional  shares in one or more financing
or acquisition  transactions.  The Company has established a valuation allowance
for the portion of the possible tax savings not likely to be realized by the end
of the carryforward period.

<PAGE>

      Based  upon  available   objective   evidence,   including  the  Company's
post-merger history of profitability, management believes it is more likely than
not that  forecasted  taxable  income will be sufficient to utilize a portion of
the net operating loss carryforward before its expiration in 2014.  Accordingly,
in 2004 and 2003 the  valuation  allowance was reduced by $873,000 and $784,000,
respectively.  However, there can be no assurance that the Company will meet its
expectations of future income.

Note 5 - Commitments and Contingencies

Leases

      The  Company  is  obligated  under  non-cancelable  operating  leases  for
premises  expiring at various  dates through  April 2010.  Future  minimum lease
payments are $62,000,  $68,000, $73,000, $67,000 and $70,000 for the years ended
December 31, 2005, 2006, 2007, 2008 and 2009, respectively. Rent expense for the
years ended December 31, 2004 and 2003 was $77,000 and $53,000, respectively.

Other Agreements

      The Company has employment agreements with Messrs. Wachtel, the president,
and Wunderlich,  the executive vice president and chief financial officer of the
Company,  who are also  stockholders.  The  agreements  expire in March 2006 and
provide for minimum annual  compensation  of $205,000 and $100,000,  and bonuses
equal to 10% of the  Company's  consolidated  pre-tax  profit (as defined) up to
$1,250,000,  respectively.  Bonus  payments  to  each  of  Messrs.  Wachtel  and
Wunderlich  were  $125,000 for the year ended  December 31, 2004 and $51,531 and
$55,281 for the year ended December 31, 2003, respectively.

Litigation

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

Note 6 - Stockholders' Equity

Stock Option Plans

      The Company has seven stock option  plans,  its 1985,  1986,  1989,  1992,
1997,  1999 and 2003 Plan  (collectively,  the Plans).  Pursuant to the Plans, a
total of 7,842,500 shares of Common Stock were made available for grant of stock
options.  Under the Plans,  options have been granted to key personnel for terms
of up to ten  years at not less than  fair  value of the  shares at the dates of
grant and are  exercisable  in whole or in part at stated times  commencing  one
year  after the date of grant.  No further  grants  will be made under the 1985,
1986,  1989 or 1992 Plans. At December 31, 2004,  options to purchase  5,594,000
shares of common stock were outstanding under the Plans.

<PAGE>

      Option  activity  for the years  ended  December  31, 2004 and 2003 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, 2003                 2,583,000               .11
Forfeited during the year                       (222,000)              .10
Exercised during the year                        (35,000)              .10
Granted during the year                        1,769,000               .20
                                               ---------              ----

Outstanding at December 31, 2003               4,095,000              $.15              1,802,000             $.10
                                                                                        ---------             ----
Forfeited during the year                       (736,000)              .16
Exercised during the year                       (202,000)              .07
Granted during the year                        2,437,000               .44
                                               ---------              ----

Outstanding December 31, 2004                  5,594,000              $.28              2,332,000             $.14
                                               ---------              ----              ---------             ----
</TABLE>

Weighted average fair value of options granted:

                              2004                  $  .42
                              2003                  $  .20

Note 7 - 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 8 - Quarterly Results of Operations (Unaudited)

<TABLE>
<CAPTION>
                                                      Year Ended December 31, 2004
                                                              Quarter Ended
                                  ------------------------------------------------------------------
                                     Mar 31            June 30            Sep 30           Dec 31
                                  ------------      ------------      ------------      ------------
<S>                               <C>               <C>               <C>               <C>
Gross revenues                    $  8,159,000      $ 10,960,000      $ 12,938,000      $ 14,435,000
                                  ------------      ------------      ------------      ------------

                                  ------------      ------------      ------------      ------------
Net  income                       $    176,000      $    271,000      $    278,000      $    741,000
                                  ============      ============      ============      ============

Basic net income per share        $       .006      $       .009      $       .009      $       .023
                                  ------------      ------------      ------------      ------------
Diluted net income per share      $       .005      $       .008      $       .008      $       .022
                                  ============      ============      ============      ============
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
                                                        Year Ended December 31, 2003
                                                                Quarter Ended
                                      --------------------------------------------------------------
                                         Mar 31          June 30          Sep 30            Dec 31
                                      -----------      -----------      -----------      -----------
<S>                                   <C>              <C>              <C>              <C>
Gross revenues                        $ 5,141,000      $ 6,102,000      $ 7,552,000      $ 8,376,000
                                      -----------      -----------      -----------      -----------

                                      -----------      -----------      -----------      -----------
Net income                            $    79,000      $   108,000      $   172,000      $   941,000
                                      ===========      ===========      ===========      ===========

Basic and diluted net income per
   share                              $      .003      $      .004      $      .006      $      .032
                                      ===========      ===========      ===========      ===========
</TABLE>

Note 9 - Supplemental Disclosure of Cash Flow Information

Cash paid for interest in 2004 and 2003 was $59,000 and $131,000, respectively.

The Company paid no income taxes in 2004 and 2003.