We lease approximately 1,400 square feet of space for our executive offices and the headquarters of Sunteck at 6401 Congress Avenue, Boca Raton, Florida. This lease runs through February 2004 and provides for an annual rental of $21,000. We lease 1,100 square feet for our operating office at 120 White Horse Pike, Haddon Heights, New Jersey. This lease runs through October 2002 and provides for an annual rental of $15,000. We lease 1,100 square feet for our operating office at 239 Chesterfield Industrial Blvd., Chesterfield, Missouri. The lease runs through February 2002 and provides for an annual rental of $13,000.
The following is a summary of our selected consolidated financial data for the years ended December 31, 1996, 1997, 1998, 1999 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 and in the consolidated financial statements included elsewhere in this report have been restated to include the accounts and operations of Sunteck under continuing operations.
The 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.
During 1998, we ceased to operate as an automobile finance company. On January 29, 1999, our wholly-owned subsidiary, CarLoanCo., Inc., filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code. At the time of the filing, it had no assets.
As a result, on February 2, 2000, we filed a disclosure statement and reorganization plan (the "Plan") pursuant to Chapter 11 of Title 11 of the United States Bankruptcy Code providing for the issuance of one share of our common stock and a cash payment of $0.03 for each dollar of approximately $9.5 million of outstanding unsecured debt.
On June 22, 2000, we entered into a Merger Agreement with Sunteck Transport, Inc. ("Sunteck"), a full service third party transportation logistics provider, and it's wholly owned subsidiary, Ubidfreight.com, in exchange, upon closing, for 10 million shares of our Common Stock, which will constitute approximately 37% of the proposed outstanding Common Stock of reorganized AutoInfo under its Chapter 11 reorganization plan. The consummation of the transaction was contingent upon, among other things, the approval of the Merger Agreement and AutoInfo's Disclosure Statement by the United States Bankruptcy Court, approval of the Disclosure Statement by our unsecured creditor class, the entry of an order confirming the Reorganization Plan and the securing of additional financing.
of freight industry experience. Harry Wachtel, Sunteck's President and sole shareholder, became Chairman of the Board, CEO and President of AutoInfo.
Revenues consisting of freight fees and other related services revenue totaled $3,389,000 for the year ended December 31, 2000, as compared with $3,457,000 in the prior year.
Commissions totaled $315,000 for the year ended December 31, 2000, as compared with $263,000 in the prior year.
Income tax (benefit) of $10,000 for the year ended December 31, 2000 and income taxes of $16,000 for the year ended December 31, 1999 relate to the operating results of Sunteck prior to the date of acquisition.
The gain on debt extinguishment for the year ended December 31, 2000 totaling $10,490,000 consists of the gain from the extinguishments of debt pursuant to the our Reorganization Plan.
Net income totaled $9,390,000 for the year ended December 31, 2000, as compared with a loss of ($1,033,000) in the prior year. The increase is related directly to the gain from the extinguishments of debt pursuant to our Reorganization Plan.
Commissions totaled $263,000 for the year ended December 31, 1999, as compared with $366,000 in the prior year. The decrease is the result of commissions paid to certain individuals as independent contractors for the year ended December 31, 1998, who became our employees in 1999. Accordingly, their compensation for the year ended December 31, 1999 is included in operating expenses.
The gain on investments for the year ended December 31, 1999 primarily consisted of the gain on the sale of marketable securities.
Direct freight consisting primarily of delivery costs totaled $1,691,000 for the year ended December 31, 1998 as compared with $264,000 in the prior year. The increase is the result of the business expansion of Sunteck which was formed during the fourth quarter on 1997.
Operating expenses totaled $334,000 for the year ended December 31, 1998 as compared with $39,000 in the prior year. The increase is the result of the business expansion of Sunteck which was formed during the fourth quarter on 1997.
The gain on debt extinguishment for the year ended December 31, 1998 totaling $3,689,000 consists of $1,703,000 from the extinguishment of our $2 million of 7.55% subordinated notes, in exchange for two off-balance sheet assets and our long distance telephone service business and $1,986,000 as the result of a discount granted by our warehouse lender in final settlement of amounts outstanding under our warehouse
Net loss was $9,937,000 for the year ended December 31, 1998 as compared with a loss of $11,133,000 in the prior year. The decrease in the loss is related directly to the gain on debt extinguishment for the year ended December 31, 1998.
We cannot assure you that our revenues will increase sufficiently to offset our operating costs or that, even if they do, that our operations will ever be profitable.
Depending on our ability to generate revenues, we may require additional funds to expand Sunteck's business operations and for working capital and general corporate purposes. At this time, we do not believe that revenues will reach the level required to sustain our operations and growth plans in the near term. Therefore, we are actively pursuing additional financing alternatives. However, we do not have any commitments for additional financing and we cannot assure you that any additional financing will be available or, if available, will be offered on acceptable terms. Any additional equity financing may be dilutive to stockholders, and debt financings, if available, may involve restrictive covenants that further limit our ability to make decisions that we believe will be in our best interests. In the event we cannot obtain additional
The total amount of debt outstanding as of December 31, 2000 and 1999 was $676,000 and $9.4 million, respectively. This following table presents our debt instruments and their weighted average interest rates as of December 31, 2000 and 1999, respectively:
December 31, ---------------------------------------------------- 2000 1999 ------------------------ ------------------------- Weighted Weighted Balance Average Rate Balance Average Rate --------- ------------ ---------- ------------
Subordinated Debt $575,000 12.0% $9,350,000 12.0% Other Debt $101,000 25.6 $ 50,000 7.75