AUTOINFO INC, 10-K405, 2000-04-13

AUTOINFO INC
10-K405, 2000-04-13
INSURANCE AGENTS, BROKERS & SERVICE

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

(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, 1999

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

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

Commission File Number 0-14786

AUTOINFO, INC.
(Exact name of registrant as specified in its charter)

DELAWARE 13-2867481
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

PO Box 4383
Stamford, CT 06907-0383
(Address of principal executive offices)

Registrant's telephone number, including area code: (203) 595-0005

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 $.01

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

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

As of March 13, 2000, 7,756,953 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 April 7, 2000 (based upon the
closing price on the OTC Bulletin Board of the National Association of
Securities Dealers of $0 .25 on that date) was approximately $1,800,000.

DOCUMENTS INCORPORATED BY REFERENCE

NONE

<PAGE>

AUTOINFO, INC.

Form 10-K Annual Report

TABLE OF CONTENTS

Page
----
PART I .................................................................. 3
Item 1. Business.......................................................... 3
Item 2. Properties........................................................ 5
Item 3. Legal Proceedings................................................. 5
Item 4. Submission of Matters to a Vote of Security Holders............... 5

PART II .................................................................. 6
Item 5. Price Range of Common Stock and Related Stockholder Matters....... 7
Item 6. Selected Consolidated Financial Data.............................. 7
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 8
Item 8. Financial Statements and Supplementary Data....................... 17
Item 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosures............................................. 17

PART III .................................................................. 18
Item 10. Directors and Executive Officers................................. 18
Item 11. Executive Compensation........................................... 19
Item 12. Security Ownership of Certain Beneficial Owners and Management... 19
Item 13. Certain Relationships and Related Transactions................... 19

PART IV .................................................................. 21
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K......................................................... 21

FORWARD LOOKING STATEMENT INFORMATION

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

2
<PAGE>

PART I

Item 1: BUSINESS

General

During 1998, we ceased to operate as an automobile finance company. On
January 29, 1999, our wholly-owned subsidiary, CarLoanCo., Inc. ("CLC"), filed a
voluntary petition under Chapter 7 of the United States Bankruptcy Code.

During 1999, we negotiated the termination of our executive lease in
Montvale, New Jersey and relocated to temporary space in Stamford, Connecticut
as part of our continuing effort to reduce operating expenses and preserve
corporate capital. Our main business focus became the challenge to seek out
business opportunities in furtherance of our plan to rebuild the company and
create shareholder value. These efforts were inhibited by our negative net worth
and remaining subordinated debt of $9.3 million. Therefore, we commenced
discussions with our noteholders regarding the restructuring of this debt to
enhance the possibility of consummating a transaction to return the company to
operating status and create shareholder value.

Accordingly, 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. The Plan provides 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 unsecured debt. At the time of filing, the
requisite number and dollar amount of the unsecured creditor group had voted to
support the Plan. Preliminary hearings were held to consider compliance with the
disclosure requirements. Certain objections and issues have been raised by the
court and other interested parties. These issues will be addressed in an amended
disclosure statement that we will file. A hearing to consider our amended
disclosure statement and compliance with the disclosure requirements has been
scheduled for May 11, 2000. No assurances can be given that our reorganization
plan will be confirmed by the court. All documents on file in our bankruptcy
proceeding, case no. 00-10368, can be viewed on the Bankruptcy Court's Internet
site at: http://ecf.nysb.uscourts.gov/index.html

Assuming confirmation of the Plan, we anticipate having cash and
short-term investments of approximately $500,000 and no debt. In contemplation
of confirmation, we are continuing our efforts to identify new business
opportunities in furtherance of our plan to rebuild the Company and create
shareholder value.

The accompanying financial statements have been prepared assuming the we
will continue as a going concern. The foregoing factors raise substantial doubt
about our ability to continue as a going concern. The accompanying consolidated
financial statements do not include any adjustments that might be necessary
should we be unable to continue as a going concern. Accordingly, the carrying
amounts of our assets and liabilities do not purport to represent realizable or
settlement amounts.

3
<PAGE>

CERTAIN FACTORS THAT MAY AFFECT FUTURE GROWTH

The following factors may affect our future growth and should be
considered by any prospective purchaser of our securities:

Negative net worth; Losses; Independent auditors' comments regarding
company's ability to continue as a going concern. At December 31, 1999, we had a
negative net worth of $9,658,262. We also experienced approximately $1 million,
$10 million and $11 million of losses, respectively, during the years ended
December 31,1999, 1998 and 1997. Further, the reports of our independent
auditors in connection with our financial statements at December 31, 1999 and
1998 contain an additional paragraph regarding our ability to continue as a
going concern. Among the factors cited by the independent auditors as to our
ability to continue as a going concern are that we have suffered recurring
losses, ceased operating as an automobile finance company, filed for bankruptcy
protection for one of our subsidiaries under Chapter 7 of the United States
Bankruptcy Code and filed a disclosure statement and reorganization plan
pursuant to Chapter 11 of the United States Bankruptcy Code. We have reduced
operating expenses and are exploring acquisition, investment and merger
opportunities. However, no assurance can be given that we will not continue to
incur operating losses or that we will be able to continue operations as a going
concern.

Disclosure statement and reorganization plan pursuant to Chapter 11 of the
United States Bankruptcy Code. On February 2, 2000, we filed a disclosure
statement and reorganization plan pursuant to Chapter 11 of the United States
Bankruptcy Code. The Plan provides 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 unsecured debt. At the time of filing, the requisite number and dollar amount
of the unsecured creditor group had voted to support the Plan. Preliminary
hearings were held to consider compliance with the disclosure requirements.
Certain objections and issues have been raised by the court and other interested
parties. These issues will be addressed in an amended disclosure statement that
we will file. A hearing to consider our amended disclosure statement and
compliance with the disclosure requirements has been scheduled for May 11, 2000.
No assurances can be given that our reorganization plan will be confirmed by the
court and that we will emerge from Chapter 11.

Limited resources; No present source of revenues. At December 31, 1999 and
March 1, 2000, we had cash and cash equivalents of approximately $1.0 million
and $800,000, respectively. We have no current source of revenue and will not
achieve any revenues (other than investment income) until the consummation of a
business transaction, if ever. Moreover, there can be no assurance that any
transaction, if achieved, will result in material revenues from operations or
result in our operating on a profitable basis.

Additional financing requirements. Our continued operations will depend
upon revenues, if any, from operations to be acquired and the availability of
equity or debt financing. We have no commitments for any acquisitions or
additional financing. Further, there can be no assurance that we will be able to
generate levels of revenues and cash flows sufficient from any acquisition to
fund operations or that we will be able to obtain additional financing on
satisfactory terms, if at all, to achieve profitable operations.

Net operating loss carryforward. At December 31, 1999, the Company had
approximately $27 million in available Federal net operating losses for Federal
tax reporting purposes which may be carried forward to offset future years
taxable income subject to certain limitations. The utilization of net operating
loss carryforwards may be limited by shareholder changes including our possible
issuance of additional shares in one or more financings or other transactions.

4
<PAGE>

"Blind pool"; Broad discretion of management. Prospective investors who
invest in our common stock will do so without an opportunity to evaluate the
specific merits or risks of any proposed transactions. As a result, investors
will be entirely dependent on the broad discretion and judgment of management in
connection with the application of our working capital and the selection of an
acquisition or investment target. There can be no assurance that any
determinations ultimately made will result in our achieving profitable
operations.

Acquisition risks. As part of our business strategy, we will evaluate
merger and acquisition opportunities. Such transactions involve numerous risks,
including difficulties in the assimilation of the operations and products or
services of the participant companies, the expenses incurred in connection with
the acquisition and subsequent assimilation of operations and products or
services and the potential loss of key employees. There can be no assurance
that we will successfully identify, complete or integrate any future
transaction, or that a transaction, if completed, will contribute favorably to
our operations and future financial condition.

Dependence upon executive officer and board of directors. Our ability to
successfully effect a transaction will be largely dependent upon the efforts of
our management and board of directors. No assurance can be given that we will be
successful in consummating a transaction and achieving profitability.

Limited trading market. During 1998, our common stock was delisted from
the Nasdaq SmallCap market for failure to comply with the minimum listing
maintenance requirements. As a result thereof, our common stock is traded on the
OTC Bulletin Board of the National Association of Security Dealers, Inc. and
there is a limited trading market. No assurances can be given that our common
stock will continue to trade on the OTC Bulletin Board or that an orderly
trading market will be maintained for our common stock.

Patents, Trademarks and Copyrights

"AUTOINFO" is a registered trademark and service mark of the Company.

Employees

We currently have one full-time employee who is not represented by a labor
union.

Item 2: PROPERTIES

We occupy temporary space in Stamford, CT. on a month to month basis.

Item 3. LEGAL PROCEEDINGS

We are not a party to any material legal proceedings.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

5
<PAGE>

Part II

Item 5. PRICE RANGE OF COMMON STOCK

During 1998, our common stock was delisted from the Nasdaq National Market
System due to our failure to meet Nasdaq's continued listing maintenance
requirements. Our common stock is currently traded on the OTC Bulletin Board of
the National Association of Securities Dealers, Inc. under the symbol AUTO. The
following table sets forth, for the periods indicated, the high and low closing
bid quotations per share for our common stock. Quotations represent interdealer
prices without an adjustment for retail markups, markdowns or commissions and
may not represent actual transactions:

Year Ended December 31, 1999 High Low
- ----------------------------------------------- -------- --------

First quarter $ 0.07 $ 0.04
Second quarter 0.125 0.04
Third quarter 0.07 0.04
Fourth quarter 0.18 0.03

Year Ended December 31, 1998 High Low
- ----------------------------------------------- -------- --------

First quarter $ 0.625 $ 0.125
Second quarter 0.4375 0.1875
Third quarter 0.15 0.02
Fourth quarter 0.0625 0.02

As of April 7, 2000, the closing bid price per share for our common stock,
as reported by NASDAQ was $ 0.25. As of April 7, 2000, we had approximately
1,750 stockholders of record.

Dividend Policy

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

6
<PAGE>

Item 6. SELECTED CONSOLIDATED FINANCIAL DATA

The following is a summary of our selected consolidated financial data. Due to
the deteriorating environment for non-prime automobile finance companies,
beginning in 1997 we, among other actions, restructured operations, sold assets,
and reduced costs and, subsequently eventually withdrew from the non-prime
automobile finance business. In January 1999, our wholly-owned subsidiary filed
a voluntary petition under Chapter 7 of the United States Bankruptcy Code and in
February 2000, we filed a disclosure statement and reorganization plan pursuant
to Chapter 11 of the United States Bankruptcy Code. Currently, we are in the
process of exploring new business opportunities. Accordingly, the following
financial data arises from operations all of which have been discontinued and
should be read as representing our discontinued operations.

<TABLE>
<CAPTION>
000's omitted, except for per share data Seven months
Year ended ended
December 31, December 31,
-------------------------------------------- --------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- ----------
Statement of Discontinued
Operations Data:
- ------------------------------------------

<S> <C> <C> <C> <C> <C>
Revenues $ 96 $ 7,004 $ 19,846 $ 13,185 $ 2,765

Operating expenses (1,885) (13,714) (19,089) (12,092) (1,973)
Provision for credit losses -- (3,942) (12,456) (5,251) --
Write-off of goodwill and
other intangibles -- -- (2,542) -- --
Restructuring charges (204) (2,972) (867) -- --
Investment in and advances to subsidiary 742 -- -- -- --
Unusual item -- impairment of long-lived
assets and additional credit losses on
acquired automobile receivables -- -- -- (19,293) --
-------- -------- -------- -------- ---------

(Loss) income from operations before tax
benefit (1,251) (13,624) (15,108) (23,451) 792
Benefit from income taxes (142) -- (3,986) (4,352) (37)
-------- -------- -------- -------- ---------

(Loss) income from operations before
extraordinary item (1,109) (13,624) (11,122) (19,099) 829

Extraordinary item -- gain on debt
extinguishments -- 3,689 -- -- --
-------- -------- -------- -------- ---------

Net (loss) income $ (1,109) $ (9,935) $(11,122) $(19,099) $ 829
-------- -------- -------- -------- ---------

Basic (loss) income per share (a)
From operations $ (.14) $ (1.71) $ (1.39) $ (2.41) $ .11
From extraordinary item -- .46 -- -- --
-------- -------- -------- -------- ---------
Net (loss) income per share $ (.14) $ (1.25) $ (1.39) $ (2.41) $ .11
-------- -------- -------- -------- ---------

Diluted (loss) income per share (a)
From operations $ (.14) $ (1.71) $ (1.39) $ (2.41) (.11)
From extraordinary item -- .46 -- -- --
-------- -------- -------- -------- ---------
Net (loss) income per share $ (.14) $ (1.25) $ (1.39) $ (2.41) $ .11
-------- -------- -------- -------- ---------
</TABLE>

7
<PAGE>

<TABLE>
<CAPTION>
000's omitted, except for per As at December 31,
share data
---------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------ -------- -------- --------- -------- ---------
Balance Sheet Data:
- ------------------------------------------

<S> <C> <C> <C> <C> <C>
Net automobile receivables after $ -- $ -- $ 78,481 $ 45,814 $ 25,074
allowance for credit losses
Cash and short term investments 984 2,399 4,749 8,698 24,871
Total assets 1,000 2,752 96,614 74,451 65,795
Total debt 9,394 10,038 93,190 60,405 32,746
Retained earnings (deficit) (27,236) (26,127) (16,192) (5,071) 14,029
Stockholders' equity (9,658) (8,564) 1,311 12,327 31,018
</TABLE>

a) The common stock equivalents for the years ended December 31, 1999, 1998,
1997 and 1996 were 744,905, 20,899, 61,864 and 16,875. The common stock
equivalents for these shares were not included in the calculation of diluted
(loss) per common share because the effect would be antidilutive.

Item 7. 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 "Certain Factors That May Affect Future Growth" beginning at page 4
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

In December 1995, we acquired the operating assets of Falk Finance Company
("FFC"), a Norfolk, Virginia based specialty financial services company for
$5,125,000 in cash and the assumption of liabilities and debt approximating
$34,000,000. As a result, we became a specialized consumer finance company that
acquired and serviced automobile receivables from automobile dealers selling new
and used vehicles to non-prime customers. In July 1996, we commenced operations
of our northeast regional center in Norwalk, Connecticut to provide a complete
range of services to dealers in the Northeast.

8
<PAGE>

During 1997 and 1998, several non-prime automobile finance companies,
including the Company, experienced poor loan performance, higher delinquency
rates and increased credit losses on their portfolio assets. In addition, during
this period, a number of non-prime automobile finance companies made strategic
decisions to exit the market-place. This trend was the direct result of several
factors including: (a) the impact of increased levels of competition on loan
acquisition discounts; (b) the heightened demand created by the increased supply
of capital and used automobile inventories; (c) the need to attract consumers
with lower credit qualifications to meet this additional demand; (d) economic
uncertainties and financial difficulties within the non-prime automobile
industry as well as management upheavals at certain industry leaders; and (e)
the increased levels of outstanding consumer debt and personal bankruptcies.
These factors contributed to a significant reduction in available warehouse
lines of credit and a material decline in financial markets investments into the
non-prime automobile industry through the sale of equity securities,
subordinated debt instruments and securitized notes.

We experienced material operating losses during 1996, 1997 and 1998. As a
result of these losses, the adverse changes in the non-prime automobile finance
industry and the deterioration in the our financial condition, we determined to
discontinue the operation of our non-prime automotive finance business.

As a result of these factors, we were unable to maintain adequate levels
of net worth to satisfy the loan covenant requirement under our warehouse
facility agreement and similar covenants pursuant to securitized notes issued in
October 1996. As of December 31, 1997, our warehouse lender was no longer
funding the acquisition of non-prime automobile receivables we generated.
Accordingly among other actions, we restructured operations and significantly
reduced overhead and successfully completed the sale of approximately $58
million of automobile receivables and repaid $47 million under our warehouse
line. Additionally, in conjunction with a July 1998 sale of approximately $8
million of automobile receivables which collateralized our securitized notes,
the remaining balance outstanding on these notes of approximately $7 million was
paid in full.

During the fourth quarter of 1997, we closed our northeast regional center
in Norwalk, Connecticut.

During the fourth quarter of 1998, we sold all remaining repossessed
vehicles, closed our Norfolk, Virginia operating facility, further reduced
overhead and completed the restructuring of outstanding debt under our warehouse
facility and with our subordinated note holders. After the sale of all of our
automobile receivables, we owed the warehouse lender approximately $4.5 million
which agreed to a reduction of $2.25 million and we paid the remaining balance
of approximately $2.3 million in cash. We also granted the warehouse lender a
five year warrant to purchase 1,357,467 common shares at $ .03 per share.
Further, the holders of our $8.2 million of 12% subordinated notes, due in 1999
and 2000, exchanged such notes for new notes totaling approximately $9.35
million due in 2007 and 2008 (the "New Notes"). The New Notes include the
capitalization of interest of approximately $1.15 million through December 31,
1998 to principal. Interest on these new notes is due quarterly at our option at
the rate of 10% if paid in cash and 12% if paid in our common shares. In
addition, representatives of these note holders have designated three members of
our board of directors, one of whom subsequently resigned.

On January 29, 1999, our wholly-owned subsidiary, CarLoanCo., Inc.
("CLC"), filed a voluntary petition under Chapter 7 of the United States
Bankruptcy Code. CLC's carrying amount in the December 31, 1998 consolidated
financial statements has been written off in 1999 as a result of the bankruptcy
filing.

9
<PAGE>

During 1999, we continued to reduce operating overhead by negotiating the
termination of its lease in Montvale, New Jersey and vacating the premises.

On February 2, 2000, we filed a disclosure statement and reorganization
plan (the "Plan") pursuant to Chapter 11 of the United States Bankruptcy Code.
The Plan provides for the issuance of one share of common stock and a cash
payment of $ 0.03 for each dollar of approximately $9.5 million of unsecured
debt. At the time of filing, the requisite number and dollar amount of the
unsecured creditor group had voted to support the Plan. Preliminary hearings
were held to consider compliance with the disclosure requirements. Certain
objections and issues have been raised by the court and other interested
parties. These issues will be addressed in an amended disclosure statement that
we will file. A hearing to consider our amended disclosure statement and
compliance with the disclosure requirements has been scheduled for May 11, 2000.
No assurances can be given that our reorganization plan will be confirmed by the
court.

We are in the process of identifying new business opportunities in
furtherance of our rebuilding plan in our continuing effort to create
shareholder value. The foregoing factors raise substantial doubt about our
ability to continue as a going concern. The accompanying consolidated financial
statements do not include any adjustments that might be necessary should we be
unable to continue as a going concern. Accordingly, the carrying amounts of our
assets and liabilities do not purport to represent realizable or settlement
amounts.

Results of Operations

For the Year Ended December 31, 1999

Revenues

Investment income consisting of interest and dividends on short-term
investments totaled $96,000 for the year ended December 31, 1999 as compared
with $132,000 in the prior year period. The decrease of $36,000 is directly
related to the decrease in cash and short-term investments. Interest and other
finance revenue of $6,809,000 and long distance telephone services revenue of
$63,000 for the year ended December 31, 1998 related to businesses discontinued.

Costs and Expenses

Interest expense totaled $954,000 for the year ended December 31, 1999 as
compared with $4,685,000 in the prior year period. The decrease of $3,371,000
relates directly to the discontinuance of our non-prime auto finance business.

Operating expenses totaled $785,000 for the year ended December 31, 1999
as compared with $5,050,000 in the prior year period. The decrease of $4,265,000
relates directly to the discontinuance of our non-prime auto finance business as
well as other reductions in corporate overhead.

Depreciation and amortization expense totaled $19,000 for the year ended
December 31, 1999 as compared with $438,000 in the prior year period. The
decrease of $419,000 relates directly to the discontinuance of our non-prime
auto finance business as well as other reductions in corporate overhead. During
the quarter ended June 30, 1999, we terminated our lease in Montvale, New Jersey
and vacated the premises. Accordingly, the remaining net fixed assets were
written-off.

10
<PAGE>

Restructuring charges totaling $204,000 relate primarily to the
termination of the lease in Montvale, New Jersey and vacating the premises.
Accordingly, the remaining net fixed assets were written-off. Restructuring
charges of $2,972,000 for the year ended December 31, 1998 related directly to
the discontinuance of our non-prime auto finance business.

Investment in and advances to subsidiary of $742,000 represent the
write-off of the net liabilities of our non-prime automobile subsidiary as of
December 31, 1999. On January 29, 1999, our wholly-owned subsidiary, CarLoanCo.,
Inc. ("CLC"), filed a voluntary petition under Chapter 7 of the United States
Bankruptcy Code.. The carrying amount of CLC's net liabilities as of December
31, 1998 amounted to $742,000 and was classified as Investment in and advances
to subsidiary. At the time of filing, CLC had no assets. As of March 2000,
counsel for the Trustee has indicated that no distribution to creditors is
contemplated and that the proceedings should be concluded within sixty to ninety
days with all liabilities compromised. Accordingly, the investment in and
advances to subsidiary has been written off to operations as of December 31,
1999.

Loss on disposition of securities of $46,000 for the year ended December
31, 1999 represents the loss on disposition of securities recognized on the
specific identification method in the period in which they occur.

Unrealized holding loss of $80,000 for the year ended December 31, 1999
represents losses on trading securities based upon the fair market value as of
the balance sheet date.

Income tax benefit

Income tax benefit for the year ended December 31, 1999 totaling $142,000
is the result of an audit by the Internal Revenue Service of our tax returns for
the years ended May 31, 1993 through 1998.

Extraordinary Item - Gain on Debt Extinguishments

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 its 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 facility. The two off-balance sheet
assets consisted a preferred stock investment in ComputerLogic, Inc.
("ComputerLogic") and an equity interest in a start-up corporation pursuing a
roll-up transaction of new car dealerships. Our preferred stock investment in
ComputerLogic was written off in May 1995 due to the poor financial condition of
ComputerLogic and its failure to make timely dividend payments.

Net Loss from Discontinued Operations

Net loss from discontinued operations totaled ($1,109,000) for the year
ended December 31, 1999 as compared with ($9,935,000) in the prior year period.
The decrease is related directly to the discontinuance of our non-prime auto
finance business offset by the gain on debt extinguishments of $3,689,000 for
the year ended December 31, 1998.

11
<PAGE>

For the Year Ended December 31, 1998

Revenues

Revenues for the year ended December 31, 1998 totaled $7,004,000 as
compared with $19,846,000 in the prior year. Revenues from the non-prime
automobile finance business decreased to $6,809,000 from $19,099,000 in the
prior year. This decrease of $12,842,000 is directly related to the sale of
portfolio assets and the ceasing to operate as a non-prime automobile finance
company. Investment income decreased to $132,000 from $433,000 in the prior
year. This decrease is the direct result of the reduction in short-term
investments utilized to repay senior indebtedness and fund operations. Revenues
from our long distance services business decreased to $63,000 from $315,000 in
the prior year. This decrease of $252,000 is the result of the sale of this
business in settlement of outstanding indebtedness in April 1998.

Costs and Expenses

Interest expense for the year ended December 31, 1998 was $4,685,000 as
compared to $8,146,000 in the prior year. Interest expenses was primarily
related to the non-prime automobile financing business and the debt outstanding
under our senior credit facilities, securitized notes and subordinated and other
debt. The senior credit facility and the securitized notes were repaid during
1998, primarily as a result of the collection of customer accounts in the
ordinary course of business and the sale of automobile receivables. The decrease
in interest expense of $3,461,000 is directly related to the sale of portfolio
assets and the ceasing to operate as a non-prime automobile finance company.

Operating expenses for the year ended December 31, 1998 were $5,050,000 as
compared to $10,235,000 in the prior year. The decrease in operating expenses of
$5,185,000 is directly related to the sale of portfolio assets and the ceasing
to operate as an non-prime automobile finance company.

Depreciation and amortization expense for the year ended December 31, 1998
was $438,000 as compared to $708,000 in the prior year. The decrease in
depreciation and amortization expense of $270,000 is related to the closing of
our northeast operating center (November 1997) and Mid-Atlantic operating center
(December 1998) and the related sale and write off of property and equipment.

We sold approximately $66 million of automobile receivables resulting in a
loss of $3,542,000.

The provision for credit losses for the year ended December 31, 1998 was
$3,942,000 as compared to $12,456,000 in the prior year, a decrease of
$8,514,000. This provision is the result of our recording additional credit
losses based upon an increase in delinquency rates, the higher than anticipated
level of repossessions and the poor performance of loans originated by specific
independent automobile dealers.

Restructuring charges for the year ended December 31, 1998 consists
primarily of costs related to the ceasing to operate as a non-prime automobile
finance company. The restructuring charge for the year ended December 31, 1997
of $867,000, which includes severance and other operating costs as well as the
write-off of certain assets in its Connecticut operating center, is the result
of our decision to consolidate operations in its Norfolk, Virginia operating
center during the fourth quarter.

Extraordinary Item - Gain on Debt Extinguishments

The gain on debt settlement consists of $1,703,000 from the extinguishment
of the Company's $2 million of 7.55% subordinated notes, in exchange for two
off-balance sheet assets and its long

12
<PAGE>

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 facility. The two off-balance sheet assets consisted of a
preferred stock investment in ComputerLogic, Inc. ("ComputerLogic") and an
equity interest in a start-up corporation pursuing a roll-up transaction of new
car dealerships. Our preferred stock investment in ComputerLogic was written off
in May 1995 due to the poor financial condition of ComputerLogic and its failure
to make timely dividend payments.

For the Year Ended December 31, 1997

Revenues

Revenues for the year ended December 31, 1997 totaled $19,846,000 as
compared with $13,185,000 in the prior year. Revenues from the non-prime
automobile finance business increased to $19,099,000 from $11,789,000 in the
prior year. This increase of $7,310,000 is directly related to the growth of the
automobile receivables portfolio acquired and serviced by us which increased
from $62,000,000 as of December 31, 1996 to $97,000,000 as of December 31, 1997.
Investment income decreased to $433,000 from $884,000 in the prior year. This
decrease is the direct result of the reduction in short-term investments
utilized to fund the growth of our automobile receivables portfolio and
operations. Revenues from our long distance services business decreased to
$315,000 from $512,000 in the prior year. This decrease of $197,000 is the
result of the loss of customers to competing long distance carriers.

Net Interest Income on Automobile Receivables

Our principal revenue source was the net interest income, or net spread,
earned on its automobile receivables. This net spread is the differential
between interest income received on loans receivable and the interest expense on
related loans payable. The following table summarizes the pertinent data on our
automobile receivables portfolio as of and for the year ended December 31, 1997:

1997
-----------

Average loans receivable $88,128,000
-----------
Average debt 81,200,000
-----------

Interest revenue $17,269,000
Interest expense 7,988,000
-----------
Net interest income $ 9,281,000
-----------

Yield on loans 19.6%
Cost of funds 9.8%
-----------
Net interest spread 9.8%
-----------

Net interest margin (1) 10.5%
-----------

(1) Net interest margin is net interest income divided by average loans
outstanding.

The increase in average loans receivable and average debt and the
corresponding increase in interest revenue and interest expense was directly
related to the growth in our non-prime automobile business. The decline in yield
on loans is the result of the growth of our portfolio in states with lower

13
<PAGE>

interest rate caps as well as the allocation of a portion of unearned future
interest to reserves at the date of loan acquisition.

Costs and Expenses

Interest expense for the year ended December 31, 1997 was $8,146,000 as
compared to $3,990,000 in the prior year. Interest expenses was primarily
related to the non-prime automobile financing business and the debt outstanding
under our senior credit facilities ($67.9 million as of December 31, 1997),
securitized notes ($14.1 million as of December 31, 1997) and subordinated and
other debt ($11.2 million as of December 31, 1997). The increase in interest
expense of $4,156,000 is directly related to the growth of the automobile
receivables portfolio acquired and serviced by us.

Operating expenses for the year ended December 31, 1997 were $10,235,000
as compared to $6,913,000 in the prior year. The increase in operating expenses
of $3,322,000 is directly related to the growth of the automobile receivables
portfolio acquired and serviced by us.

Depreciation and amortization expense for the year ended December 31, 1997
was $708,000 as compared to $1,189,000 in the prior year and was primarily
attributable to the amortization of goodwill and other intangible assets
associated with the acquisition of FFC in December 1995. The decrease in
depreciation and amortization expense of $481,000 is related to the reduction in
amortization ($784,000) due to the write off of $11,193,000 of this goodwill as
of December 31, 1996 offset by an increase in depreciation ($303,000) related to
the expansion of our northeast regional office and relocation of corporate
headquarters.

The provision for credit losses for the year ended December 31, 1997 was
$12,456,000 as compared to $5,251,000 in the prior year, an increase of
$7,205,000. This provision is the result of our recording additional credit
losses based upon an increase in delinquency rates, the higher than anticipated
level of repossessions and the poor performance of loans originated by specific
independent automobile dealers.

The restructuring charge for the year ended December 31, 1997 of $867,000,
which includes severance and other operating costs as well as the write-off of
certain assets in its Connecticut operating center, is the result of our
decision to consolidate operations in its Norfolk, Virginia operating center
during the fourth quarter.

Loss from Operations and Income Tax Benefit

The loss from operations before income tax benefit was $15,108,000 as
compared to a loss of $23,452,000 in the prior year. This loss is primarily
attributable to the provision for credit losses ($12.5 million). The decrease in
the loss from operations of $8,344,000 is directly related to the write-off of
goodwill and other intangible assets ($11.2 million) and the additional
provision for credit losses on the acquired portfolio ($8.1 million) for the
year ended December 31, 1996.

For the fiscal years ended May 31, 1995, 1994 and 1993, we incurred and
paid federal tax liabilities of $7,005,000, $873,000 and $783,000, respectively.
As a result of tax losses incurred, we recorded an income tax benefit of
$3,986,000 for the year ended December 31, 1997 and $4,352,000 for the year
ended December 31, 1996. The current year benefit consists of a carryback claim
of $575,000 filed and received for the tax year ended May 31, 1997 and an
anticipated carryback claim of $3,411,000. The income tax benefit of $4,352,000
for the year ended December 31, 1996 was received in 1997.

14
<PAGE>

Automobile Receivables

The following table provides information regarding our allowance for
credit losses as of December 31, 1997:

1997
------------
Allowance for credit losses $ 19,000,000
Percentage of outstanding automobile receivables 19.5%

The following table summarizes our delinquent accounts that were more than
60 days delinquent as of December 31, 1997:

1997
------------------
Amount %
----------- ----
60 to 89 days delinquent $ 3,199,000 2.5%
90 days or more delinquent 6,992,000 5.6%
----------- ---

Total delinquent loans $10,191,000 8.1%
----------- ---

Trends and Uncertainties

We have no remaining automobile receivables and has ceased to operate as
an automobile finance company. We are in the process of identifying new business
opportunities in furtherance of our plan to rebuild the company and create
shareholder value. No assurances can be given, however, that we will
successfully consummate any transaction, or if consummated, that such
transaction will enhance shareholder value. As a result, there is substantial
doubt about our ability to continue as a going concern.

During 1999, we negotiated the termination of our lease in Montvale, New
Jersey and relocated to temporary space in Stamford, Connecticut as part of our
continuing effort to reduce operating expenses and preserve corporate capital.
Our main business focus became the challenge to seek out business opportunities
in furtherance of our plan to rebuild the company and create shareholder value.
These efforts were inhibited by the negative net worth and remaining
subordinated debt of $9.3 million. Therefore, we commenced discussions with our
noteholders regarding the restructuring of this debt to enhance the possibility
of consummating a transaction to return us to an operating status and create
value.

15
<PAGE>

proceeding, case no. 00-10368, can be viewed on the Bankruptcy Court's Internet
site at: http://ecf.nysb.uscourts.gov/index.html

The foregoing factors raise substantial doubt about our ability to
continue as a going concern.

Liquidity and Capital Resources

Since our entry into the non-prime automobile industry in December 1995
and until we ceased the operations of our non-prime automobile business during
1998, we funded our operations with payments received from automobile
receivables, borrowings under senior credit facilities and the issuance of asset
backed secured notes.

At December 31, 1999, we had outstanding $9.3 million of subordinated debt
outstanding comprised of $8.2 million of 12% notes, included with the
liabilities assumed with the acquisition of FALK Finance Company, Inc. in
December 1995, plus accrued interest of $1.1 million through December 31,1998.

At December 31, 1999, we had liquid assets amounted to $1.0 million.

The total amount of debt outstanding as of December 31, 1999 and 1998 was
$9.4 million and $10.0 million, respectively. This following table presents our
debt instruments and weighted average interest rates on such instruments as of
December 31, 1999 and 1998, respectively:

1999 1998
---- ----
Weighted Weighted
Average Average
Balance Rate Balance Rate
----------------------------------------------
Subordinated debt $9.35 12.0% $9.35 12.0%
Other debt $0.05 7.75 $0.65 7.75

The accompanying financial statements have been prepared assuming we will
continue as a going concern. We have no remaining automobile receivables and
have ceased to operate as an automobile finance company. 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. The Plan provides
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 unsecured debt. At the time of
filing, the requisite number and dollar amount of the unsecured creditor group
had voted to support the Plan. Preliminary hearings were held to consider
compliance with the disclosure requirements. Certain objections and issues have
been raised by the court and other interested parties. These issues will be
addressed in an amended disclosure statement that we will file. A hearing to
consider our amended disclosure statement and compliance with the disclosure
requirements has been scheduled for May 11, 2000. No assurances can be given
that our reorganization plan will be confirmed by the court. All documents on
file in our bankruptcy proceeding, case no. 00-10368, can be viewed on the
Bankruptcy Court's Internet site at: http://ecf.nysb.uscourts.gov/index.html

Inflation and changing prices had no material impact on revenues or the
results of operations for the year ended December 31, 1999.

16
<PAGE>

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

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

Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

17
<PAGE>

Part III

Item 10: DIRECTORS AND EXECUTIVE OFFICERS

Set forth below is information with respect to our Directors and Executive
Officers:

JASON BACHER, age 61, has been a director since our inception in 1976.
From our inception in 1976 through March 29, 1995, Mr. Bacher was our chairman
of the board and the chief executive officer. Mr. Bacher has been associated
with the automobile salvage industry since 1961 as a principal of Bacher Tire
Company, Inc., an automobile recycler located in the New York metropolitan area.
In connection with the sale of a principal portion of our business to ADP Claims
Solutions on April 1, 1995, Mr. Bacher joined ADP Claims Solutions and was an
employee of ADP through March 1998, when he retired.

PETER C. EINSELEN, age 60, has been a director since January 1999. Mr.
Einselen served as senior vice president and a member of the board of Andersen &
Strudwick, a brokerage firm from 1990 to 1998. From 1983 to 1990, Mr. Einselen
was employed by Scott and Stringfellow, Incorporated, a brokerage firm.

HOWARD NUSBAUM, age 52, has been a director since our inception in 1976.
Mr. Nusbaum, who earned a B.A. degree from Brooklyn College, has been a
consultant to the automobile recycling industry since 1976. Mr. Nusbaum is
presently President of SWZ Engineering, Inc.

THOMAS C. ROBERTSON, age 55, has been a director since January 1999. Mr.
Robertson has been president, chief financial officer and a Director of Andersen
& Strudwick, a brokerage firm since 1988. Mr. Robertson has been president of
Gardner & Robertson, a money management firm, since 1997.

WILLIAM WUNDERLICH, age 52, joined us in October 1992 as our vice
president - finance, became chief financial officer in January 1993 and
president in January 1999. 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.

SCOTT ZECHER, age 41, joined us in January 1984 and has been a director
since 1989. He was our president from January 1993 through December 1998 and its
chief executive officer from October 1996 through December 1998. Prior to
becoming president and chief executive officer, he held the position of
executive vice president and chief financial officer. From 1980 to 1984, he was
with the accounting firm of KPMG Peat Marwick. Mr. Zecher has been chief
operating officer of the Kuschner Companies since January 1999. Mr. Zecher is a
Certified Public Accountant with a B.A. degree in Accounting and Economics from
the City University of New York at Queens College.

Option Grants during the year ended December 31, 1999

In November 1999, our Compensation Committee granted performance based
options to William Wunderlich, our president and chief financial officer under
the 1997 Plan. Pursuant to the grant, Mr. Wunderlich received options to
purchase 500,000 shares of common stock at an exercise price of $0.10. On the
date of grant, the fair market value of the Common Stock was $ 0.03. The vesting
of these shares is based upon the completion of a transaction resulting in the
company having an operating business.

18
<PAGE>

Aggregate Year-End Option Values

Shown below is information with respect to unexercised options granted
under the Option Plans to the Named Executives and held by them at December 31,
1999. No options were exercised by the Named Executives during 1999.

<TABLE>
<CAPTION>
Number of Unexercised Options Values of Unexercised In-the-Money
at Options at
12/31/99 12/31/99 (1)
-------- ------------
Name Exercisable/Unexercisable Exercisable/Unexercisable
---- ------------------------- -------------------------

<S> <C> <C> <C> <C>
William Wunderlich 305,000 / 590,000 $0 / $0
</TABLE>

(1) Based on the closing price as quoted on the OTC Bulletin Board on December
31, 1999.

Director Compensation

During 1998, we paid a director's fee of $750 for each meeting attended by
a non-employee director. Commencing in January 1999, we ceased paying director's
fees.

Item 11: EXECUTIVE COMPENSATION

The following table sets forth for the years ended December 31, 1999, 1998
and 1997, information concerning compensation paid for services awarded to,
earned or paid to our chief executive officer. No other executive officer
received compensation in excess of $100,000 during 1999.

<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation All Other
Name and Principal Position Year Salary Bonus Options Compensation (1)
- --------------------------- ---- ------ ----- ------- ----------------

<S> <C> <C> <C> <C> <C>
William Wunderlich 1999 $150,000 -- -- $4,575
President and 1998 $150,000 -- -- $4,575
Chief Financial Officer 1997 $142,500 $ 7,500 -- $4,575
</TABLE>

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

Employment Agreements

Mr. Wunderlich is employed by us pursuant to an employment agreement which
expires in September 2001. This agreement provides for minimum annual
compensation of $150,000 and provides for an annual review by the board of
directors.

19
<PAGE>

Item 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table, together with the accompanying footnotes, sets forth
information, as of March 13, 2000, regarding stock ownership of all persons
known by us to own beneficially 5% or more of our outstanding common stock, all
directors, and all directors and executive officers as a group.

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

(i) Directors
Jason Bacher 288,272 (2) 3.7% (3)
Howard Nusbaum 146,154 1.9%
Scott Zecher 75,872 1.0%

Thomas C. Robertson 10,000 *
Peter C. Einselen -- --

All executive officers and
directors as a group (6 persons) 845,298 (4) 10.4% (4)

(ii) 5% Stockholders

None

- ----------
* 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.
(2) Includes 100,000 shares subject to currently exercisable options.
(3) Assumes that all currently exercisable options or warrants owned by this
individual have been exercised.
(4) Assumes that all currently exercisable options or warrants owned by
members of this group have been exercised.

20
<PAGE>

Part IV

Item 14: EXHIBITS, FINANCIAL STATEMENTS AND REPORTS ON FORM 8-K

Financial Statements

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

Exhibits

No. 3A Certificate of Incorporation of the Company. (1)

No. 3B Amended and Restated By-Laws of the Company. (6)

No. 4A Specimen Stock Certificate. (2)

No. 4B Rights Agreement, dated as of March 30, 1995 between AutoInfo,
Inc. and American Stock Transfer & Trust Company, as Rights
Agent. (3)

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

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

No. 10D 1992 Stock Option Plan. (5)

No. 10E 1997 Stock Option Plan. (8)

No. 10F 1997 Non-Employee Stock Option Plan. (8)

No. 10G 1999 Stock Option Plan. *

No. 10G Employment Agreement between AutoInfo, Inc. and William
Wunderlich dated as of April 10, 1997. (8)

No. 10H Amendment to Employment Agreement between AutoInfo, Inc. and
William Wunderlich dated November 4, 1998. (9)

No. 10I Amendment to Employment Agreement between AutoInfo, Inc. and
William Wunderlich dated October 1, 1999. *

No. 10I Common Stock Purchase Warrant Agreement and Registration
Rights Agreement, each dated as of December 10, 1996, between
AutoInfo, Inc. and CS First Boston Mortgage Capital Corp. (7)

No. 10J Form of Amended Junior Subordinated Promissory Note. (9)

No. 10K Form of Amended Senior Subordinated Promissory Note. (9)

21
<PAGE>

No. 10L Form of Exchange Agreement between the Corporation and holders
of its Senior Subordinated Notes and Junior Subordinated
Notes, dated December 7, 1998. (9)

No. 10M Amendment and Forbearance Agreement between Credit Suisse
First Boston Mortgage Capital, LLC and AutoInfo, Inc., dated
December 10, 1998. (9)

No. 10N Common Stock Purchase Warrant Agreement dated December 10,
1998 between AutoInfo, Inc. and Credit Suisse First Boston
Mortgage Capital, LLC. (9)

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

No. 23B Consent of Arthur Andersen LLP, independent public
accountants. *

No. 27 Financial Data Schedule. *

- -------

*Filed as an Exhibit hereto.

(1) This Exhibits were filed as Exhibits to our definitive proxy statement
dated October 20, 1986 and incorporated herein by reference.

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

(3) This Exhibit was filed as an Exhibit to our Registration Statement on Form
8-A filed April 13, 1995, and is incorporated herein by reference.

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

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

(6) 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.

(7) This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for
the year ended December 31, 1996 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, 1997 and is incorporated herein by reference.

(9) This Exhibit was filed as an Exhibit to our Annual Report on Form 10-K for
the year ended December 31, 1998 and is incorporated herein by reference.

22
<PAGE>

AUTOINFO, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Public Accountants F-2 & F-3

Consolidated Balance Sheets as of December 31, 1999 and 1998 F-4

Consolidated Statements of Discontinued Operations for the Years
Ended December 31, 1999, 1998 and 1997 F-5

Consolidated Statements of Stockholders' Equity for the Years Ended
December 31, 1999, 1998 and 1997 F-6

Consolidated Statements of Cash Flows from Discontinued Operations
for the Years Ended December 31, 1999, 1998 and 1997 F-7

Notes to Consolidated Financial Statements F-8

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

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders
AutoInfo, Inc.
Stamford, Connecticut

We have audited the accompanying consolidated balance sheet of AutoInfo, Inc.
and subsidiaries as of December 31, 1999, and the related consolidated
statements of discontinued operations and cash flows from discontinued
operations for the year 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 audit.

We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides 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, 1999 and the results of their discontinued operations and
their cash flows from discontinued operations for the year then ended in
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1, in
1998, due to recurring losses, the Company ceased to operate as an automobile
finance company and on January 29, 1999, the Company's wholly-owned auto finance
subsidiary filed a voluntary bankruptcy petition under Chapter 7 of the United
States Bankruptcy Code. Further, as discussed in Note 11, on February 2, 2000,
the Company filed a disclosure statement and reorganization plan under Chapter
11 of the United States Bankruptcy Code. The Company has no current source of
operating revenues and will not achieve any material revenues until consummation
of a business transaction, if any. The Company's continued operations will
depend upon revenues, if any, from operations to be acquired and the
availability of equity or debt financing. These factors raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
with respect to these matters also are discussed in Business, Note 1. The
accompanying consolidated financial statements do not include any adjustments
that might result should the Company be unable to continue as a going concern.

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

March 7, 2000, except for Note 11, as to which the date is April 6, 2000.
Bridgeport, Connecticut

F-2
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

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

We have audited the accompanying consolidated balance sheet of AutoInfo, Inc. (a
Delaware corporation) and subsidiaries (the "Company") as of December 31, 1998
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the two years in the period ended December 31, 1998.
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 generally accepted auditing
standards. 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, 1998, and the results of their operations and their cash
flows for each of the two years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 1,
losses incurred by the Company have had a significant adverse impact on the
Company's financial position and results of operations and, as a result, the
Company has ceased to operate as an automobile finance company. Additionally, as
discussed in Note 1, on January 29, 1999, the Company's wholly-owned subsidiary
and operator of the Company's automobile finance business filed a voluntary
bankruptcy petition under Chapter 7 of the United States Bankruptcy Code. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. Management's plans with respect to these matters are also
described in Note 1. The accompanying consolidated financial statements do not
include any adjustments that might result should the Company be unable to
continue as a going concern.

ARTHUR ANDERSEN LLP

New York, New York
March 26, 1999

F-3
<PAGE>

AUTOINFO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
ASSETS
1999 1998
------------ ------------

<S> <C> <C>
Cash $ 584,949 $ 116,570
Short-term investments (Note 3) 399,000 2,282,515
Fixed assets, net of accumulated depreciation of $258,397 as of
December 31, 1998 -- 250,887
Other assets 16,520 101,929
------------ ------------

$ 1,000,469 $ 2,751,901
============ ============

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities subject to compromise (See Note 11)
Subordinated notes and other debt (Note 5) $ 9,393,572 $ 10,038,028
Accounts payable and accrued liabilities 1,265,159 1,278,260
------------ ------------

Total Liabilities 10,658,731 11,316,288
------------ ------------

Commitments and contingencies (Note 7)

Stockholders' equity (deficit)
Common Stock - authorized 20,000,000 shares $.01
par value; issued and outstanding 7,756,953 at
December 31, 1999 and 1998 77,570 77,570
Additional paid-in capital 17,772,431 17,772,431
Deferred compensation under stock
bonus plan (Note 8) (271,889) (287,097)
Retained Earnings (deficit) (27,236,374) (26,127,291)
------------ ------------

Total stockholders' equity (deficit) (9,658,262) (8,564,387)
------------ ------------

$ 1,000,469 $ 2,751,901
============ ============
</TABLE>

See Accompanying Notes to Consolidated Financial Statements

F-4
<PAGE>

AUTOINFO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF DISCONTINUED OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997

<TABLE>
<CAPTION>
Years Ended
December 31,

REVENUES 1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Interest and other finance revenue $ -- $ 6,809,440 $ 19,098,602
Investment income 95,734 131,959 432,986
Long distance telephone services -- 63,099 314,643
------------ ------------ ------------

Total revenues 95,734 7 ,004,498 19,846,231
------------ ------------ ------------

COSTS AND EXPENSES

Interest expense 954,101 4,684,934 8,145,959
Operating expenses 784,770 5,049,621 10,234,902
Depreciation and amortization 19,266 438,282 708,248
Restructuring charges (Note 2) 204,459 2,972,170 867,141
Investment in and advances to subsidiary (Note 4) (741,679) -- --
Loss on disposition of securities (Note 3) 45,632 -- --
Unrealized holding losses (Note 3) 79,800 -- --
Loss on sale of automobile receivables -- 3,541,586 --
Write off of goodwill and other intangibles -- -- 2,541,438
Provision for credit losses -- 3,941,528 12,456,124
------------ ------------ ------------
1,346,349 20,628,121 34,953,812
------------ ------------ ------------

(Loss) from discontinued operations (1,250,615) (13,623,623) (15,107,581)
Income tax benefit (Note 6) (141,532) -- (3,985,977)
------------ ------------ ------------

(Loss) from discontinued operations before extraordinary item (1,109,083) (13,623,623) (11,121,604)

Extraordinary item - gain on debt extinguishments (Note 5) -- 3,688,650 --
------------ ------------ ------------

Net (loss) from discontinued operations $ (1,109,083) $ (9,934,973) $(11,121,604)
============ ============ ============

Basic and diluted per share data
(Loss) from discontinued operations ($ .14) ($ 1.71) ($ 1.39)
Extraordinary item -- .46 --
------------ ------------ ------------

Net (loss) per share from discontinued operations ($ .14) ($ 1.25) ($ 1.39)
============ ============ ============

Weighted average number of common and
Common equivalent shares 7,756,953 7,959,860 8,009,097
------------ ------------ ------------
</TABLE>

See Accompanying Notes to Consolidated Financial Statements

F-5
<PAGE>

AUTOINFO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
Shares of Deferred
Common Additional Officer Compensation Retained
Stock Common Paid - In Note Under Stock Earnings
Outstanding Stock Capital Receivable Bonus Plan (Deficit)
----------- ----- ------- ---------- ---------- ---------

<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1997 7,954,752 $ 79,548 $ 18,171,282 $(466,797) $(385,930) $ (5,070,714)

Common shares issued 64,000 640 89,360 -- -- --
Forfeiture of deferred shares (22,000) (220) (27,280) 27,500
Amortization of deferred
compensation -- -- -- -- 15,557 --
Net (loss) -- -- -- -- -- (11,121,604)
---------- -------- ------------ --------- --------- ------------

Balance, December 31, 1997 7,996,752 79,968 18,233,362 (466,797) (342,873) (16,192,318)

Forfeiture of deferred shares (23,000) (230) (40,301) -- 40,531 --
Cancellation of officer note
receivable (216,799) (2,168) (464,630) 466,797 -- --
Warrants issued -- -- 44,000 -- -- --
Amortization of deferred
compensation -- -- -- -- 15,245 --
Net (loss) -- -- -- -- -- (9,934,973)
---------- -------- ------------ --------- --------- ------------

Balance, December 31, 1998 7,756,953 77,570 17,772,431 -- (287,097) (26,127,291)

Amortization of deferred
compensation -- -- -- -- 15,208 --
Net (loss) -- -- -- -- -- (1,109,083)
---------- -------- ------------ --------- --------- ------------

Balance, December 31, 1999 7,756,953 $ 77,570 $ 17,772,431 $ -- $(271,889) $(27,236,374)
========== ======== ============ ========= ========= ============
</TABLE>

See Accompanying Notes to Consolidated Financial Statements

F-6
<PAGE>

AUTOINFO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS FROM DISCONTINUED OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>
December 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:

Net (loss) $ (1,109,083) $ (9,934,973) $(11,121,604)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization expenses 19,266 438,282 708,248
Amortization of deferred compensation 15,208 15,245 15,557
Restructuring charge 204,459 2,684,035 436,086
Investment in and advances to subsidiary (741,679) -- --
Net unrealized holding loss 79,800 -- --
Provision for credit losses -- 3,941,528 12,456,124
Loss on sale of automobile receivables -- 3,541,586 --
Write-off of goodwill and other intangibles -- -- 2,541,438
Extraordinary item - gain on debt extinguishments -- (3,688,650) --

Changes in assets and liabilities:
Automobile receivables, net -- 17,260,290 (45,023,631)
Other assets 85,409 2,950,867 188,147
Refundable income taxes -- 3,411,211 940,789
Accounts payable and accrued liabilities 728,579 (1,552,893) 393,729
------------ ------------ ------------

Net cash provided by (used in) continuing operations (718,041) 19,066,528 (38,465,117)
------------ ------------ ------------

Cash flows from investing activities:

Capital expenditures -- (2,864) (1,152,537)
Proceeds from the sale of property and equipment -- 179,867 --
Proceeds from the sale of automobile receivables -- 53,737,647 --
Redemption of short-term investments 1,803,715 -- 12,899,102
Purchases of short-term investments -- (40,446) (10,248,972)
------------ ------------ ------------

Net cash provided by investing activities 1,803,715 53,874,204 1,497,593
------------ ------------ ------------

Cash Flows from financing activities:

Issuance of notes -- -- 51,410,902
Reduction of borrowings (617,295) (79,419,147) (18,625,868)
Decrease (increase) in restricted cash -- 4,088,483 2,793,363
Issuance of common stock -- -- 90,000
------------ ------------ ------------

Net cash provided by (used in) financing activities (617,295) (75,330,664) 35,668,397
------------ ------------ ------------

Net (decrease) increase in cash 468,379 (2,389,932) (1,299,127)
Cash at beginning of year 116,570 2,506,502 3,805,629
------------ ------------ ------------

Cash at end of year $ 584,949 $ 116,570 $ 2,506,502
============ ============ ============
</TABLE>

See Accompanying Notes to Consolidated Financial Statements

F-7
<PAGE>

AUTOINFO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

Note 1 - Business and Summary of Significant Accounting Policies

Business

In December 1995, AutoInfo, Inc., (the "Company"), a Delaware corporation,
acquired the operating assets of Falk Finance Company ("FFC"), a Norfolk,
Virginia based specialty financial services company for $5,125,000 in cash and
the assumption of liabilities and debt approximating $34,000,000. As a result,
the Company became a specialized consumer finance company that acquired and
serviced automobile receivables from automobile dealers selling new and used
vehicles to non-prime customers. In July 1996, the Company commenced operations
of its Northeast Regional center in Norwalk, Connecticut to provide its complete
range of services to dealers in the Northeast.

The Company experienced material operating losses during 1996, 1997 and
1998. As a result of these losses, the adverse changes in the non-prime
automobile finance industry and the deterioration in the Company's financial
condition, during 1998, the Company discontinued the operation of its non-prime
automotive finance business.

As a result of these factors, the Company was unable to maintain adequate levels
of net worth to satisfy the loan covenant requirement under its warehouse
facility agreement with CS First Boston Mortgage Capital Corp. ("CSFB") and
similar covenants pursuant to securitized notes issued in October 1996 (Note 5).
As of December 31, 1997, CSFB no longer funded the acquisition of non-prime
automobile receivables generated by the Company. The Company, among other
actions, restructured operations and significantly reduced overhead and
successfully completed the sale of approximately $58 million of automobile
receivables and repaid $47 million under its warehouse line with CSFB.
Additionally, in conjunction with a July 1998 sale of approximately $8 million
of automobile receivables which collateralized the Company's securitized notes,
the remaining balance outstanding on these notes of approximately $7 million was
paid in full.

During the fourth quarter of 1997, the Company closed its Northeast
Regional center in Norwalk, Connecticut.

F-8
<PAGE>

During the fourth quarter of 1998, the Company sold all remaining
repossessed vehicles, closed its Norfolk, Virginia operating facility, further
reduced overhead and completed the restructuring of outstanding debt under its
warehouse facility with CSFB and subordinated note holders. As of December 31,
1998, the Company ceased to operate as an automobile finance company. After the
sale of all of its automobile receivables, the Company owed CSFB approximately
$4.5 million under the warehouse facility. CSFB agreed to a reduction of $2.25
million, which resulted in a gain on extinguishment of approximately $2.0
million net of applicable expenses, and the Company paid the remaining balance
of approximately $2.3 million in cash. The Company also granted CSFB a five year
warrant to purchase 1,357,467 common shares at $ .03 per share. Further, the
holders of the Company's $8.2 million of 12% subordinated notes (Note 5), due in
1999 and 2000, exchanged such notes for new notes totaling approximately $9.35
million due in 2007 and 2008 (the "New Notes"). The New Notes include accrued
interest of approximately $1.15 million through December 31, 1998 to principal.
Interest on these new notes is due quarterly at the option of the Company at the
rate of 10% if paid in cash and 12% if paid in common shares of the Company. In
addition, representatives of these note holders designated three members of the
Company's Board of Directors one of whom resigned in 1999.

On January 29, 1999, the Company's wholly-owned subsidiary, CarLoanCo., Inc.
("CLC"), filed a voluntary petition under Chapter 7 of the United States
Bankruptcy Code. The carrying amount of CLC's net liabilities as of December 31,
1998 amounted to $741,679 and was classified as Investment in and advances to
subsidiary. At the time of filing, CLC had no assets. As of March 2000, the
counsel for the Trustee has indicated that no distribution to creditors is
contemplated and that the proceedings should be concluded within sixty to ninety
days with all liabilities compromised. Accordingly, the Investment in and
advances to subsidiary has been written off to operations as of December 31,
1999.

During 1999, the Company continued to reduce operating overhead by negotiating
the termination of its lease in Montvale, New Jersey and vacating the premises.

On February 2, 2000, the Company filed a disclosure statement and reorganization
plan (the "Plan") pursuant to Chapter 11 of the United States Bankruptcy Code.
The Plan provides for the issuance of one share of Common Stock and a cash
payment of $ 0.03 for each dollar of approximately $9.5 million of unsecured
debt. At the time of filing, the requisite number and dollar amount of the
unsecured creditor group had voted to support the Plan. Preliminary hearings
were held to consider compliance with the disclosure requirements. Certain
objections and issues have been raised by the court and other interested
parties. These issues will be addressed in an amended disclosure statement. A
hearing to consider the amended disclosure statement and compliance with the
disclosure requirements has been scheduled for May 11, 2000. No assurances can
be given that the Plan will be confirmed by the court.

The Company is in the process of identifying new business opportunities in
furtherance of its plan to rebuild the Company and create shareholder value. The
foregoing factors raise substantial doubt about the Company's ability to
continue as a going concern. The accompanying consolidated financial statements
do not include any adjustments that might be necessary should the Company be
unable to continue as a going concern. Accordingly, the carrying amounts of the
Company's assets and liabilities do not purport to represent realizable or
settlement amounts.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company has discontinued its operations.
Therefore, the accompanying financial statements present the results of
operations of the Company as the Statement of Discontinued Operations. The
ongoing expenses of the Company consists of the salary and related expenses of
its sole remaining employee, Mr. Wunderlich, President (See Note 7 - Other
Agreements) and administrative expenses.

F-9
<PAGE>

Summary of Significant Accounting Policies

Basis of Presentation

The financial statements of the Company have been prepared using the
accrual basis of accounting under generally accepted accounting principles
("GAAP"). The accounting policies of the Company conform with GAAP and with
general practices within the financial services industry.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly-owned. All significant
intercompany balances and transactions have been eliminated in consolidation.

Short-term Investments

Short-term investments as of December 31, 1998 included bond funds, money
market instruments and commercial paper. Short-term investments as of December
31, 1999 consisted of marketable securities. Investments were carried at cost at
December 31, 1998, which approximated market value, and at market value as of
December 31, 1999. (See Note 3).

Fixed Assets

Fixed assets as of December 31, 1998 consisting predominantly of
furniture, fixtures and equipment at the Company's Montvale, New Jersey
headquarters facility, were carried at cost less accumulated depreciation.
During the quarter ended June 30, 1999, the Company terminated its lease and
vacated the premises. Accordingly, the remaining fixed assets were written-off.
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. Depreciation expense totaled $19,266, $438,282 and $529,185 for the years
ended December 31, 1999, 1998, and 1997.

Revenue Recognition

The Company recognized interest income from automobile receivables on the
interest method. The accrual of interest income was suspended when a loan became
ninety days contractually delinquent. All discounts on the purchase of
installment contracts from dealers were held in reserve and were considered to
cover future anticipated credit losses. Fees received for the purchase of
automobile receivables were deferred and amortized to interest income over the
contractual lives of the contracts using the interest method.

Provision for Credit Losses

The Company established an allowance for credit losses based upon an
evaluation of a number of factors including prior loss experience, contractual
delinquencies, the value of underlying collateral and other factors. The
allowance was periodically evaluated for adequacy based upon a review of credit
loss experience, delinquency trends, static pool loss analysis and an estimate
of future losses inherent in the existing finance receivable portfolio.
Subsequent to the purchase of loans, a provision for losses, if any, was charged
to income in order to maintain the allowance at an adequate level. The Company
charged the allowance for loss account at the time a customer receivable was
deemed uncollectable. Any reduction in the required allowance was amortized to
income prospectively as an adjustment in the yield on the related loans. The
Company estimated and recorded losses, as they became apparent, estimable and
probable.

F-10
<PAGE>

Goodwill and Other Intangibles

The excess of cost over the fair value of net assets acquired was
allocated to goodwill and other intangibles and was being amortized using the
straight-line method over periods of up to twenty years. In March 1995, the
Financial Accounting Standards Board ("FASB") issued Statement of Financial
Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The
pronouncement is effective for fiscal years beginning after December 15, 1995.
This statement requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. The Company used methods that were consistent with SFAS
No. 121 to evaluate the carrying amount of goodwill and other intangibles
including comparing estimated future cash flows identified with each long-lived
asset group. For purposes of such comparison, portions of unallocated excess of
cost over net assets acquired were attributed to related long-lived assets and
identifiable intangible assets based upon the relative fair values of such
assets at acquisition.

In the fourth quarter of 1997, the Company determined that goodwill and
other intangible assets were impaired resulting in a charge of $2,541,438 to
operations for the year ended December 31, 1997.

Amortization expense related to goodwill and other intangibles totaled
$179,064 for the year ended December 31, 1997.

Loss Per Share

In 1997, the Company adopted SFAS No. 128, "Earnings Per Share," which
replaced the calculation of primary and fully diluted earnings per share with
basic and diluted earnings per share. Unlike primary earnings per share, basic
earnings per share excludes any dilutive effects of options, warrants and
convertible securities. Diluted earnings per share is similar to the previously
reported fully diluted earnings per share.

Basic loss per share is based on net loss divided by the weighted average
number of common shares outstanding. Common stock equivalents outstanding were
antidilutive for the years ended December 31, 1999, 1998, and 1997.

Use of Estimates

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

Income Taxes

The Company utilizes the asset and liability method for accounting for income
taxes. Under the asset and liability method, deferred tax assets and liabilities
are recognized for the future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and liabilities
are measured using enacted tax rates expected to apply to taxable income in the
years in which those temporary differences are expected to be recovered or
settled.

F-11
<PAGE>

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 accounts for stock-based compensation issued to employees in
accordance with Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees". The Company did not adopt the financial reporting
requirements of Statement of Financial Accounting Standards No. 123 ("SFAS
123"), "Accounting for Stock-Based Compensation," for stock based compensation
granted to employees in accordance with the provisions of SFAS 123 and
accordingly, the Company has disclosed in the notes to the financial statements
the pro forma net loss for the periods presented as if the fair value based
method was used. (Note 8).

Note 2 - Restructuring Charge

During the fourth quarter of 1997, the Company made the decision to
consolidate credit, funding and collections operations into its Norfolk,
Virginia operating center and close its Northeast regional operating center in
Norwalk, Connecticut. This decision was based upon several factors including
management's opinion that the efficiencies and operating controls inherent in a
centralized operating center approach provide significant benefits and that the
presence and dealer relationships in local markets can be maintained through the
use of field representatives. The Company recorded a charge to earnings related
to this restructuring of $867,141, of which $436,086 represented non-cash
charges. Such amount includes severance costs and the write-off of certain
assets.

During 1998, the Company, based upon several factors including its
deteriorating financial condition, ceased the operation of its non-prime
automobile finance business. Accordingly, the Company recorded a charge to
earnings related to this restructuring of $2,972,170, of which $2,684,035
represented non-cash charges. Such amount includes severance costs and the
write-off of certain assets.

During 1999, the Company closed its facility in Montvale, New Jersey
resulting in a charge to earnings of $204,459.

Note 3- Short-Term Investments

At December 31, 1998, short-term investments were classified as securities
available for sale and were reported at cost which approximated fair value. At
December 31, 1999, short-term investments are trading securities and are
reported at fair market value.

December 31,
1999 1998
---------- ----------
Common stock $ 399,000 $ --
Common stock and bond funds -- 1,000,009
Money market instruments -- 386,177
Commercial paper -- 896,329
---------- ----------
$ 399,000 $2,282,515
---------- ----------

Gains and losses on disposition of securities are recognized on the specific
identification method in the period in which they occur. Unrealized holding
gains and losses on trading securities based upon the fair market value

F-12
<PAGE>

as of the balance sheet date, if material, would be included in earnings in the
period in which they occur. Losses on dispositions of securities amounted to
$45,632 for the year ended December 31, 1999. Unrealized holding losses as of
December 31, 1999 amounted to $79,800.

During the years ended December 31, 1998 and 1997, gains and losses arising from
the disposition of marketable securities as well as unrealized gains and losses
were not material.

Note 4 - Investment in and Advances to Subsidiary

On January 29, 1999, the Company's wholly-owned subsidiary, CarLoanCo.,
Inc. ("CLC"), filed a voluntary petition under Chapter 7 of the United States
Bankruptcy Code. The carrying amount of CLC's net liabilities as of December 31,
1998 amounted to $741,679 and was subsequently classified as Investment in and
advances to subsidiary. At the time of filing, CLC had no assets. As of March
2000, the counsel for the Trustee has indicated that no distribution to
creditors is contemplated and that the proceedings should be concluded within
sixty to ninety days with all liabilities compromised. Accordingly, the
Investment in and advances to subsidiary has been written off to operations as
of December 31, 1999.

Note 5 - Debt

Revolving Lines of Credit

In December 1996, the Company entered into a revolving credit agreement
with CSFB, which provided for borrowings of up to $100 million collateralized by
installment automobile loan contracts. Among other provisions, this facility
required the Company to maintain tangible net worth, as defined, of $10 million
and was cancelable in the event of a material adverse change in the Company's
business.

In October 1997, the Company and CSFB entered into an amended and restated
agreement which provided CSFB with additional collateral including a residual
interest in the anticipated cash flows upon the satisfaction of the Class A and
Class B automobile receivables backed notes issued in October 1996 and any
income tax refund for the tax year ended May 31, 1998.

At December 31, 1997 the Company had tangible net worth, as defined, of
approximately $2.1 million and, accordingly, did not meet the tangible net worth
standard. As of December 31, 1997, CSFB no longer funded the acquisition of
non-prime automobile receivables generated by the Company. Advances outstanding
as of December 31, 1997 were $67,935,706 collateralized by net automobile
receivables of $80,085,384.

The Company experienced material operating losses during 1997 and 1998. As
a result of these losses, the adverse changes in the non-prime automobile
finance industry and the deterioration in the Company's financial condition,
during 1998 the Company discontinued the operation of its non-prime automotive
finance business. In furtherance thereof, the Company successfully completed the
sale of approximately $58 million of automobile receivables. The proceeds of
these sales as well as the proceeds of the collection of automobile receivables
in the ordinary course of business, the residual cash balances from the
redemption of the Class A and Class B automobile receivables backed notes in
July 1998 and the federal income tax refund for the tax year ended May 31, 1998
received in August 1998 were remitted to CSFB in reduction of the principal
amount of the loan. In November 1998, the Company entered into an agreement with
CSFB whereby the outstanding balance of approximately $4.5 million was reduced
by $2.25 million and resulted in a gain of approximately $2.0 million net of
applicable expenses. The Company repaid the $2.3 million remaining balance and
issued 1,357,467 warrants to CSFB to purchase common shares of the Company
exercisable over a five year period.

F-13
<PAGE>

Automobile Receivables Backed Notes

In October 1996, AutoInfo Receivables Company, a wholly-owned special
purpose subsidiary of the Company, sold, in a private placement, $34,281,119 of
6.53% Class A Auto Loan Backed Notes and $2,016,536 of 11.31% Class B Auto Loan
Backed Notes with a stated maturity date of January 2002. These notes were being
repaid from the collection of payments of principal and interest and were
collateralized by approximately $40,330,000 of automobile receivables and a
Reserve Account in the amount of approximately $5,600,000.

In conjunction with the July 1998 sale of approximately $8 million of
automobile receivables which collateralized the Company's securitized notes, the
remaining balance outstanding on the Class A and Class B notes of approximately
$7 million was paid in full.

Subordinated Notes and Other Debt

Subordinated notes and other debt consist of the following:

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Subordinated notes (1) $9,348,000 $9,348,000
Subordinated notes due January 2000 payable in equal
Annual installments in January 1998, 1999 and 2000 with
Interest at 7.55% paid semi-annually (2) -- --
Other notes payable (3) 45,572 690,028
---------- ----------

Total other notes $9,393,572 $10,038,028
---------- ----------
</TABLE>

(1) On December 6, 1995 as part of the acquisition of Falk Finance Company
("FFC"), the Company assumed unsecured subordinated notes in the amount of
$9,800,000. In 1996, the Company redeemed $1,600,000 of these notes. In December
1998, the remaining subordinated notes, due in 1999 and 2000, were exchanged for
New Notes, including unpaid interest, totaling approximately $9.35 million due
in 2007 and 2008. These New Notes include accrued interest of approximately
$1.15 million through December 31, 1998. Interest on these new notes is due
quarterly at the option of the Company commencing March 31, 1999 at the rate of
10% if paid in cash and 12% if paid in common shares of the Company. In
addition, three representatives of these note holders have been designated as
members of the Company's board of directors. (See Note 11 - Subsequent Event)

(2) In April 1998, the holders of the Company's $2 million 7.55% subordinated
notes, originally due in equal principal installments in January 1998, 1999 and
2000, released the Company from such obligation in exchange for two off-balance
sheet assets and the Company's long distance telephone service business. The two
off-balance sheet assets consisted of the Company's preferred stock investment
in ComputerLogic, Inc. ("ComputerLogic") and an equity interest in a start-up
corporation pursuing a roll-up transaction of new car dealerships. This
transaction resulted in a net gain of $1.7 million to the Company. The Company's
preferred stock investment in ComputerLogic was written off in May 1995 due to
the poor financial condition of ComputerLogic and its failure to make timely
dividend payments. In conjunction with the extinguishment of these notes, the
Company entered into a consulting arrangement with the noteholder which required
monthly payments of $10,000 for twenty four months in exchange for financial
advisory services. At December 31, 1998, the Company had charged $160,000 to
operations representing its full obligation over the remaining term of the
agreement as no further value is anticipated from the consulting agreement.

F-14
<PAGE>

(3) In January 1999, a note with an outstanding principal balance of $605,000
due in monthly installments of approximately $26,000 was declared in default
based upon the Company's financial condition and the Company's discontinuance of
its non-prime automobile finance business. This debt was paid in full in March
1999 for a cash payment together with unpaid interest of approximately $585,000.

The Company paid interest of approximately $5,143,000 and $7,122,000 for the
years ended December 31, 1998, and 1997 , respectively. No interest has been
paid for the year ended December 31, 1999. (See Note 11 - Subsequent Event)

Note 6 - Income Taxes

For the years ended December 31, 1999, 1998 and 1997, the provision
(benefit) for income taxes consisted of the following:

Years Ended
December 31,
-----------------------------------
1999 1998 1997
--------- ------- -----------
Federal ($141,532) $ -- $(3,985,977)
State -- -- --
--------- ------- -----------
Income tax benefit ($141,532) $ -- $(3,985,977)
========= ======= ===========

The following table reconciles the Company's effective income tax rate
on loss from continuing operations to the Federal Statutory Rate for the years
ended December 31, 1999, 1998 and 1997:

Years Ended
December 31,
------------------------------
1999 1998 1997
------ ------ ------
Federal Statutory Rate (34.0)% (34.0)% (34.0)%
Effect of:
Benefit from tax exempt income XX XX (.7)
Valuation allowance against deferred
Tax assets 34.0 34.0 8.3
---- ---- ----
0% 0% (26.4)%
==== ==== ====

The income tax benefit for the year ended December 31, 1999 results from
the audit by the Internal Revenue Service of the Company's tax returns for the
years ended May 31, 1993 through May 31, 1998. Refundable income taxes on the
accompanying consolidated balance sheet as of December 31, 1997 represented the
Company's refundable income tax based upon the utilization of available tax
credit carrybacks in its federal income tax return. Such amount was received
during 1998 and used to repay a portion of the CSFB debt. (Note 5).

The Company paid no income taxes for the years ended December 31, 1999,
1998 and 1997.

F-15
<PAGE>

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

December 31, December 31,
1999 1998
------------ ------------
Deferred tax assets:
Net operating loss carryforward $ 9,179,266 $ 9,337,258
------------ ------------

Gross deferred tax assets 9,179,266 9,337,257
Less: valuation allowance (9,179,266) (9,337,257)
------------ ------------

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

The deferred tax asset is fully reserved for as the Company's management
does not expect such amounts to be realized. As of December 31, 1999, the
Company has a net operating loss carryforward of approximately $27 million for
federal income tax purposes which expires in 2014. The Company believes that it
has acted properly in application of the tax laws that have resulted in its net
operating loss carryforward. The requirements of the Internal Revenue Code and
related regulations, rulings, judicial authority and practice are subject to
different interpretations. The amount of the net operating loss carryforward
could be affected by these interpretations and will be reduced by any discharge
of indebtedness income resulting from the Chapter 11 filing (See Note 11). The
utilization of the net operating loss carryforward may be limited by, among
other things, shareholder changes including the possible issuance by the Company
of additional shares in one or more financings, acquisitions or payment of
interest on outstanding subordinated notes with shares of Common Stock.

Note 7 - Commitments and Contingencies

Leases

The Company is not presently obligated under any noncancellable operating
leases. Rent expense for the years ended December 31, 1999, 1998 and 1997 was
approximately $72,000, $511,000 and $399,000, respectively.

401(k) Plan

The Company is obligated under its 401(k) Plan to match fifty percent of
employee contributions up to a maximum of three percent of eligible
compensation. 401(k) Plan expense for the years ended December 31, 1999, 1998
and 1997 was approximately $5,000, $49,000 and $95,000, respectively.

Other Agreements

The Company has an employment agreement with Mr. Wunderlich, the President
of the Company, who is also a stockholder. The agreement expires in 2001 and
provides for annual compensation of $150,000.

Litigation

The Company is not presently involved in any litigation.

F-16
<PAGE>

Note 8 - Stockholders' Equity

Stock Bonus Plan

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

These shares will vest ratably every two years over a period of 30 years.
The unvested portion is subject, upon the occurrence of certain events, to
either forfeiture or accelerated vesting. Such shares were recorded at their
estimated fair market value at the date of the grant as determined by the Board
of Directors and are charged as compensation expense ratably over the vesting
period. During 1998 and 1997, 23,000 and 22,000 shares, respectively, were
forfeited. As of December 31, 1999 161,000 of such shares had vested and 219,000
remained subject to forfeiture.

Warrants

In connection with the $4,000,000 7.55% subordinated long-term notes
issued in January 1994, the Company issued to the noteholders six year warrants
to purchase 533,333 shares of Common Stock at a per share price of $4.00. In
September 1995, the Company prepaid $2,000,000 of the notes. In conjunction with
the prepayment, 196,296 of these warrants were canceled. In April 1998, the
Company was released from its remaining obligation (See Note 5) and the
remaining warrants to purchase 337,037 shares of Common Stock were canceled.

In connection with a May 1986 public offering of Common Stock, the Company
issued warrants to the underwriter for the purchase of 96,000 shares of its
Common Stock at a per share price of $4.80. Such warrants expired during 1998.

In connection with the $2,016,536 Class B Notes issued in October 1996,
the Company issued three year warrants to purchase 159,095 shares of Common
Stock at a per share price of $2.70. The Company has reserved 159,095 shares of
Common Stock for issuance upon exercise of these warrants. (See Note 11 -
Subsequent Event).

In connection with the $100 million credit facility provided by CSFB in
December 1996, the Company issued 3 year warrants to purchase 125,000 shares of
Common Stock at a per share price of $3.70. In connection with the final
settlement with CSFB in November 1998, these warrants were canceled and replaced
with new warrants to purchase 1,482,467 shares of the Common Stock at a per
share price of $ .03. The Company has reserved 1,482,467 shares of Common Stock
for issuance upon exercise of these warrants. (See Note 11 - Subsequent Event).

No warrants have been exercised to date. (See Note 11 - Subsequent Event)

F-17
<PAGE>

Stock Option Plans

The Company has five stock option plans, its 1985 Plan, 1986 Plan, 1989
Plan, 1992 Plan and 1997 Plan (collectively the "Plans"). The Company accounts
for these Plans under APB Opinion No. 25, under which no compensation cost has
been recognized. Had compensation cost for these Plans been determined
consistent with SFAS No. 123, the Company's net loss and loss per share would
have been reduced to the following pro forma amounts:

1999 1998 1997
------------ ------------- -------------
Net (loss) income:
As reported $(1,109,083) $(9,934,973) $(11,121,604)
Pro forma $(1,112,010) $(10,064,124) $(11,316,689)

(Loss) earnings per share:
As reported $(0.14) $(1.25) $(1.39)
Pro forma $(0.14) $(1.26) $(1.41)

The effects of applying SFAS No. 123 in this pro forma disclosure are not
indicative of future amounts. Pursuant to the Plans, a total of 2,842,500 shares
of Common Stock were made available for grant of stock options. Under the Plans,
options have been granted to key personnel for terms of up to ten years at not
less than fair value of the shares at the dates of grant and are exercisable in
whole or in part at stated times commencing one year after the date of grant. No
further grant will be issued under the 1986 Plan. At December 31, 1999, options
to purchase 405,000 shares of Common Stock were exercisable pursuant to the
Plans. (See Note 11 - Subsequent Event)

Weighted average fair value of options granted:
1999 $ .03
1997 $ .61

The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted
assumptions used for grants in 1999 and 1997, respectively: risk-free interest
rates of 6.00 and 6.52 percent; expected lives of 4 years for all options
granted; expected volatility of 161.8 and 33.0 percent. There were no grants in
1998.

Option activity for the years ended December 31, 1999, 1998 and 1997 was
as follows:

Number of Weighted Average
Shares Exercise Price
----------- ----------------
Outstanding at January 1, 1997 654,333 $3.43
Granted during the year 815,000 1.75
Forfeited during the year (224,500) 3.28
--------- -----

Outstanding at December 31, 1997 1,244,833 2.36
Forfeited during the year (749,833) 2.24
--------- -----

Outstanding at December 31, 1998 (1) 495,000 .10
Granted during the year 500,000 .10
--------- -----

Outstanding at December 31, 1999 (2) 995,000 $ .10
--------- -----

(1) In November 1998, all outstanding options were amended to reflect an
exercise price of $.10 per share.
(2) See Note 11 - Subsequent Event.

F-18
<PAGE>

Note 9 - 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 and cash equivalents and accounts payable and accrued liabilities are
carried at amounts which reasonably approximate fair value.

Due to the insufficient collateral supporting the Company's subordinated
notes and other debt with an aggregate carrying amount of $9,393,572 and
$10,038,028 at December 31, 1999 and 1998, a determination of fair value could
not be made.

Although management is not aware of any factors that would significantly
affect the estimated fair value amounts, such amounts have not been
comprehensively revalued for the purposes of these consolidated financial
statements since that date and current estimates of fair value may differ
significantly from the amounts presented herein.

Note 10 - Quarterly Results of Discontinued Operations (Unaudited)

<TABLE>
<CAPTION>
Year Ended December 31, 1998
Quarter Ended
---------------------------------------------------------
Mar 31 June 30 Sep 30 Dec 31
----------- ----------- ----------- --------

<S> <C> <C> <C> <C>
Revenues $ 32,502 $ 14,690 $ 26,208 $ 22,334

Net (loss) income ($ 479,618) ($ 541,046) ($ 304,782) (1)$216,363

Basic and diluted per share data:

Net (loss) income ($ .06) ($ .07) ($ .04) $ .03
</TABLE>

(1) Net income for the quarter ended December 31, 1999 is primarily the result
of the write-off of the Investment in and advances to subsidiary. (See Note 4)

<TABLE>
<CAPTION>
Year Ended December 31, 1998
Quarter Ended
------------------------------------------------------
Mar 31 June 30 Sep 30 Dec 31
----------- ----------- ----------- --------

<S> <C> <C> <C> <C>
Revenues $ 3,920,994 $ 2,337,025 $ 715,322 $ 31,157
=========== =========== =========== ========

Net (loss) income ($ 568,911) ($4,267,910) ($5,450,840) $352,688
----------- ----------- ----------- --------

Basic and diluted per share data:
----------- ----------- ----------- --------
Net (loss) income ($ .07) ($ .53) ($ .68) $ .03
=========== =========== =========== ========
</TABLE>

F-19
<PAGE>

Note 11 - Subsequent Event

On February 2, 2000, the Company filed a disclosure statement and
reorganization plan (the "Plan") pursuant to Chapter 11 of the United States
Bankruptcy Code. The Plan provides for the issuance of one share of Common Stock
and a cash payment of $ 0.03 for each dollar of approximately $9.5 million of
unsecured debt. At the time of filing, the requisite number and dollar amount of
the unsecured creditor group had voted to support the Plan. Preliminary hearings
were held to consider compliance with the disclosure requirements. Certain
objections and issues have been raised by the court and other interested
parties. These issues will be addressed in an amended disclosure statement. A
hearing to consider the amended disclosure statement and compliance with the
disclosure requirements has been scheduled for May 11, 2000. No assurances can
be given that the Plan will be confirmed by the court.

Pursuant to the Plan, the 7,756,953 shares of the Company's Common Stock
outstanding at the time of filing will be deemed New Common Shares and
approximately 9.5 million additional New Common Shares will be issued. Upon
confirmation as currently contemplated, the total issued and outstanding shares
of the Company's Common Stock will be approximately 17.3 million.

The Plan provides for the cancellation of all outstanding warrants and
options granted pursuant to the Company's Employee Stock Option Plans. The Plan
additionally provides for the adoption of the 1999 Employee Stock Option Plan
pursuant to which options to purchase an aggregate of two million shares of New
Common Stock may be granted to Officers, Key Employees, Consultants and
Non-Employee Directors of the Company and the granting of options to purchase
895,000 shares at $ .10 per share. Of this total, the vesting of 500,000 of such
options shall be subject to the Company consummating a transaction resulting in
it having an operating business.

Assuming confirmation of the Plan, substantially all of the liabilities of
the Company as of December 31, 1999 are subject to compromise. The following
pro-forma Balance Sheet as of December 31, 1999 gives effect to the adjustments
resulting from the assumed confirmation of the Plan:

Pro Forma
As Stated Adjustments As Adjusted
----------- ------------- -------------

Total assets $ 1,000,000 $ (285,000) $ 715,000
----------- ------------ ----------

Liabilities $10,658,000 $(10,476,000) $ 182,000
Equity (9,658,000) 10,191,000 533,000
----------- ------------ ----------

Total liabilities and equity $ 1,000,000 $ (285,000) $ 715,000
----------- ------------ ----------

F-20
<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
April 13, 2000 on its behalf by the undersigned, thereunto duly authorized.

AutoInfo, Inc.

By: /s/ William I. Wunderlich
-----------------------------------------
William I. Wunderlich, President and
Chief Financial 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.

/s/ William I. Wunderlich
- ----------------------------
William I. Wunderlich President and Chief April 13, 2000
Financial Officer

/s/ Jason Bacher
- ----------------------------
Jason Bacher Director April 13, 2000

/s/ Peter C. Einselen
- ----------------------------
Peter C. Einselen Director April 13, 2000

/s/ Howard Nusbaum
- ----------------------------
Howard Nusbaum Director April 13, 2000

/s/ Thomas C. Robertson
- ----------------------------
Thomas C. Robertson Director April 13, 2000

/s/ Scott Zecher
- ----------------------------
Scott Zecher Director April 13, 2000

EXHIBIT 10G

AUTOINFO, INC.
1999 STOCK OPTION PLAN

1. Purpose; Types of Awards; Construction.

The purpose of the AutoInfo, Inc. 1999 Stock Option Plan (the
"Plan") is to align the interests of officers, other key employees, consultants
and non-employee directors of AutoInfo, Inc. (the "Company") and its
subsidiaries with those of the stockholders of the Company, to afford an
incentive to such officers, employees, consultants and directors to continue as
such, to increase their efforts on behalf of the Company and to promote the
success of the Company's business. To further such purposes, the Committee may
grant options to purchase shares of the Company's common stock. The provisions
of the Plan are intended to satisfy the requirements of Section 16(b) of the
Securities Exchange Act of 1934 and of Section 162(m) of the Internal Revenue
Code of 1986, as amended, and shall be interpreted in a manner consistent with
the requirements thereof, as now or hereafter construed, interpreted and applied
by regulations, rulings and cases.

2. Definitions.

As used in this Plan, the following words and phrases shall have the
meanings indicated below:

(a) "Agreement" shall mean a written agreement entered into
between the Company and an Optionee in connection with an award under the Plan.

(b) "Board" shall mean the Board of Directors of the Company.

(c) "Cause" when used in connection with the termination of an
Optionee's employment by the Company or the cessation of an Optionee's service
as a consultant or a member of the Board, shall mean (i) the conviction of the
Optionee for the commission of a felony, (ii) the willful and continued failure
by the Optionee substantially to perform his duties and obligations to the
Company or a Subsidiary (other than any such failure resulting from his
incapacity due to physical or mental illness), or (iii) the willful engaging by
the Optionee in misconduct that is demonstrably injurious to the Company or a
Subsidiary. For purposes of this Section 2(c), no act, or failure to act, on an
Optionee's part shall be considered "willful" unless done, or omitted to be
done, by the Optionee in bad faith and without reasonable belief that his action
or omission was in the best interest of the Company. The Committee shall
determine whether a termination of employment is for Cause for purposes of the
Plan.

1
<PAGE>

(d) "Change in Control" shall mean the occurrence of the event
set forth in any of the following paragraphs:

(i) any Person (as defined below) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its subsidiaries)
representing 50% or more of the combined voting power of the
Company's then outstanding securities; or

(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and
any new director (other than a director whose initial
assumption of office is in connection with an actual or
threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of
the Company) whose appointment or election by the Board or
nomination for election by the Company's stockholders was
approved or recommended by a vote of at least two-thirds (2/3)
of the directors then still in office who either were
directors on the date hereof or whose appointment, election or
nomination for election was previously so approved or
recommended; or

(iii) there is consummated a merger or consolidation of
the Company or a direct or indirect subsidiary thereof with
any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of
the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of
the surviving entity or any parent thereof), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, at
least 50% of the combined voting power of the securities of
the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or
(B) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no Person is or becomes the beneficial owner, directly
or indirectly, of securities of the Company (not including in
the securities beneficially owned by such Person any
securities acquired directly from the Company or its
subsidiaries) representing 50% or more of the combined voting
power of the Company's then outstanding securities; or

(iv) the stockholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at
least 50% of the combined voting power of the voting
securities of which are owned by Persons in substantially the
same proportions as their ownership of the Company immediately
prior to such sale.

2
<PAGE>

For purposes of this Section 2(d), "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections
13(d) and 14(d) thereof, except that such term shall not include (i) the Company
or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any of its subsidiaries, (iii)
an underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.

(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.

(f) "Committee" shall mean a committee established by the
Board to administer the Plan.

(g) "Common Stock" shall mean shares of common stock, par
value $0.01 per share, of the Company.

(h) "Company" shall mean AutoInfo, Inc., a corporation
organized under the laws of the State of Delaware, or any successor corporation.

(i) "Disability" shall mean an Optionee's inability to perform
his duties with the Company or on the Board by reason of any medically
determinable physical or mental impairment, as determined by a physician
selected by the Optionee and acceptable to the Company.

(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time, and as now or hereafter construed,
interpreted and applied by regulations, rulings and cases.

(k) "Fair Market Value" per share as of a particular date
shall mean (i) if the shares of Common Stock are then listed on a national
securities exchange, the closing sales price per share of Common Stock on the
national securities exchange on which the Common Stock is principally traded for
the last preceding date on which there was a sale of such Common Stock on such
exchange, or (ii) if the shares of Common Stock are then traded in an
over-the-counter market, the closing bid price for the shares of Common Stock in
such over-the-counter market for the last preceding date on which there was a
sale of such Common Stock in such market, or (iii) if the shares of Common Stock
are not then listed on a national securities exchange or traded in an
over-the-counter market, such value as the Committee, in its sole discretion,
shall determine.

(l) "Incentive Stock Option" shall mean any option intended to be
and designated as an incentive stock option within the meaning of Section 422 of
the Code.

3
<PAGE>

(m) "Non-employee Director" shall mean a member of the Board
who is not an employee of the Company.

(n) "Nonqualified Option" shall mean an Option that is not an
Incentive Stock Option.

(o) "Option" shall mean the right, granted hereunder, to
purchase shares of Common Stock. Options granted by the Committee pursuant to
the Plan may constitute either Incentive Stock Options or Nonqualified Stock
Options.

(p) "Optionee" shall mean a person who receives a grant of an
Option.

(q) "Option Price" shall mean the exercise price of the shares
of Common Stock covered by an Option.

(r) "Parent" shall mean any company (other than the Company)
in an unbroken chain of companies ending with the Company if, at the time of
granting an Option, each of the companies other than the Company owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other companies in such chain.

(s) "Plan" shall mean this AutoInfo, Inc. 1999 Stock Option
Plan.

(t) "Retirement" shall mean the retirement of an Optionee in
accordance with the terms of any tax-qualified retirement plan maintained by the
Company or a Subsidiary in which the Optionee participates. If the Optionee is
not a participant in such a plan, such term shall mean the termination of the
Optionee's employment or cessation of the Optionee's service as a member of the
Board, other than by reason of death, Disability or Cause on or after attainment
of the age of 65.

(u) "Rule 16b-3" shall mean Rule 16b-3, as from time to time
in effect, promulgated by the Securities and Exchange Commission under Section
16 of the Exchange Act, including any successor to such Rule.

(v) "Subsidiary" shall mean any company (other than the
Company) in an unbroken chain of companies beginning with the Company if, at the
time of granting an Option, each of the companies other than the last company in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
companies in such chain.

(w) "Ten Percent Stockholder" shall mean an Optionee who, at
the time an Incentive Stock Option is granted, owns (or is deemed to own
pursuant to the attribution rules of Section 424(d) of the Code) stock
possessing more than ten percent (10%) of

4
<PAGE>

the total combined voting power of all classes of stock of the Company or any
Parent or Subsidiary.

3. Administration.

The Plan shall be administered by the Committee, the members of
which shall, except as may otherwise be determined by the Board, be
"non-employee directors" under Rule 16b-3 and "outside directors" under Section
162(m) of the Code.

The Committee shall have the authority in its discretion, subject to
and not inconsistent with the express provisions of the Plan, to administer the
Plan and to exercise all the powers and authorities either specifically granted
to it under the Plan or necessary or advisable in the administration of the
Plan, including, without limitation, the authority to grant Options; to
determine which Options shall constitute Incentive Stock Options and which
Options shall constitute Nonqualified Stock Options; to determine the purchase
price of the shares of Common Stock covered by each Option; to determine the
persons to whom, and the time or times at which awards shall be granted; to
determine the number of shares to be covered by each award; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the Agreements (which need not be
identical) and to cancel or suspend awards, as necessary; and to make all other
determinations deemed necessary or advisable for the administration of the Plan.

The Committee may delegate to one or more of its members or to one
or more agents such administrative duties as it may deem advisable, including
delegating to one or more of the Company's management employees the authority to
grant Options to employees who are not "insiders" for purposes of Section 16 of
the Exchange Act and who are not "covered employees" for purposes of Section
162(m) of the Code, and the Committee or any person to whom it has delegated
duties as aforesaid may employ one or more persons to render advice with respect
to any responsibility the Committee or such person may have under the Plan. The
Board shall have sole authority, unless expressly delegated to the Committee, to
grant Options to Non-employee Directors. All decisions, determination and
interpretations of the Committee shall be final and binding on all Optionees of
any awards under this Plan.

The Board shall have the authority to fill all vacancies, however
caused, in the Committee. The Board may from time to time appoint additional
members to the Committee, and may at any time remove one or more Committee
members. One member of the Committee shall be selected by the Board as chairman.
The Committee shall hold its meetings at such times and places as it shall deem
advisable. All determinations of the Committee shall be made by a majority of
its members either present in person or participating by conference telephone at
a meeting or by written consent. The Committee may appoint a secretary and make
such rules and regulations for the conduct of its business as it shall deem
advisable, and shall keep minutes of its meetings.

No member of the Board or Committee shall be liable for any action
taken or determination made in good faith with respect to the Plan or any award
granted hereunder.

5
<PAGE>

4. Eligibility.

Awards may be granted to officers and other key employees of and
consultants to the Company, and its Subsidiaries, including officers and
directors who are employees, and to Non-employee Directors. In determining the
persons to whom awards shall be granted and the number of shares to be covered
by each award, the Committee shall take into account the duties of the
respective persons, their present and potential contributions to the success of
the Company and such other factors as the Committee shall deem relevant in
connection with accomplishing the purpose of the Plan.

5. Stock.

The maximum number of shares of Common Stock reserved for the grant
of awards under the Plan shall be 2,000,000, subject to adjustment as provided
in Section 9 hereof. Such shares may, in whole or in part, be authorized but
unissued shares or shares that shall have been or may be required by the
Company.

If any outstanding award under the Plan should for any reason
expire, be canceled or be forfeited without having been exercised in full, the
shares of Common Stock allocable to the unexercised, canceled or terminated
portion of such award shall (unless the Plan shall have been terminated) become
available for subsequent grants of awards under the Plan.

6. Terms and Conditions of Options.

Each Option granted pursuant to the Plan shall be evidenced by an
Agreement, in such form and containing such terms and conditions as the
Committee shall from time to time approve, which Agreement shall comply with and
be subject to the following terms and conditions, unless otherwise specifically
provided in such Option Agreement:

(a) Number of Shares. Each Option Agreement shall state the
number of shares of Common Stock to which the Option relates.

(b) Type of Option. Each Option Agreement shall specifically
state that the Option constitutes an Incentive Stock Option or a Nonqualified
Stock Option.

(c) Option Price. Each Option Agreement shall state the Option
Price, which shall not be less than one hundred percent (100%) of the Fair
Market Value of the shares of Common Stock covered by the Option on the date of
grant unless, with respect to Nonqualified Stock Options, otherwise determined
by the Committee. The Option Price shall be subject to adjustment as provided in
Section 9 hereof. The date as of which the Committee

6
<PAGE>

adopts a resolution expressly granting an Option shall be considered the day on
which such Option is granted, unless such resolution specifies a different date.

(d) Medium and Time of Payment. The Option Price shall be paid
in full, at the time of exercise, in cash or in shares of Common Stock then
owned by the Optionee having a Fair Market Value equal to such Option Price or
in a combination of cash and Common Stock or, unless the Committee shall
determine otherwise, by a cashless exercise procedure through a broker-dealer.

(e) Exercise Schedule and Period of Options. Each Option
Agreement shall provide the exercise schedule for the Option as determined by
the Committee; provided, however, that, the Committee shall have the authority
to accelerate the exercisability of any outstanding Option at such time and
under such circumstances as it, in its sole discretion, deems appropriate. The
exercise period shall be ten (10) years from the date of the grant of the Option
unless otherwise determined by the Committee; provided, however, that, in the
case of an Incentive Stock Option, such exercise period shall not exceed ten
(10) years from the date of grant of such Option. The exercise period shall be
subject to earlier termination as provided in Sections 6(f) and 6(g) hereof. An
Option may be exercised, as to any or all full shares of Common Stock as to
which the Option has become exercisable, by written notice delivered in person
or by mail to the Secretary of the Company, specifying the number of shares of
Common Stock with respect to which the Option is being exercised.

(f) Termination. Except as provided in this Section 6(f) and
in Section 6(g) hereof, an Option may not be exercised unless (i) with respect
to an Optionee who is an employee of the Company, the Optionee is then in the
employ of the Company or a Subsidiary (or a company or a Parent or Subsidiary
company of such company issuing or assuming the Option in a transaction to which
Section 424(a) of the Code applies), and unless the Optionee has remained
continuously so employed since the date of grant of the Option and (ii) with
respect to an Optionee who is a Non-employee Director, the Optionee is then
serving as a member of the Board or as a member of a board of directors of a
company or a Parent or Subsidiary company of such company issuing or assuming
the Option. In the event that the employment of an Optionee shall terminate or
the service of an Optionee as a member of the Board shall cease (other than by
reason of death, Disability, Retirement or Cause), all Options of such Optionee
that are exercisable at the time of such termination may, unless earlier
terminated in accordance with their terms, be exercised within ninety (90) days
after the date of such termination or service (or such different period as the
Committee shall prescribe).

(g) Death, Disability or Retirement of Optionee. If an
Optionee shall die while employed by the Company or a Subsidiary or serving as a
member of the Board, or within ninety (90) days after the date of termination of
such Optionee's employment or cessation of such Optionee's service (or within
such different period as the Committee may have provided pursuant to Section
6(f) hereof), or if the Optionee's employment shall terminate or service shall
cease by reason of Disability or Retirement, all Options theretofore granted to
such Optionee (to the extent otherwise exercisable) may, unless earlier
terminated in accordance with their terms, be exercised by the Optionee or by
his beneficiary, at any time

7
<PAGE>

within one year after the death, Disability or Retirement of the Optionee (or
such different period as the Committee shall prescribe). In the event that an
Option granted hereunder shall be exercised by the legal representatives of a
deceased or former Optionee, written notice of such exercise shall be
accompanied by a certified copy of letters testamentary or equivalent proof of
the right of such legal representative to exercise such Option. Unless otherwise
determined by the Committee, Options not otherwise exercisable on the date of
termination of employment shall be forfeited as of such date.

(h) Other Provisions. The Option Agreements evidencing awards
under the Plan shall contain such other terms and conditions not inconsistent
with the Plan as the Committee may determine, including penalties for the
commission of competitive acts and a provision providing that no option may be
exercised prior to the consummation of an underwritten initial public offering
of the Company's securities pursuant to a registration statement filed pursuant
to the Securities Act of 1933, as amended.

7. Nonqualified Stock Options.

Options granted pursuant to this Section 7 are intended to
constitute Nonqualified Stock Options and shall be subject only to the general
terms and conditions specified in Section 6 hereof.

8. Incentive Stock Options.

Options granted pursuant to this Section 8 are intended to
constitute Incentive Stock Options and shall be subject to the following special
terms and conditions, in addition to the general terms and conditions specified
in Section 6 hereof. An Incentive Stock Option may not be granted to a
Non-employee Director or a consultant to the Company.

(a) Value of Shares. The aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the shares
of Common Stock with respect to which Incentive Stock Options granted under this
Plan and all other option plans of any subsidiary become exercisable for the
first time by each Optionee during any calendar year shall not exceed $100,000.

(b) Ten Percent Stockholder. In the case of an Incentive Stock
Option granted to a Ten Percent Stockholder, (i) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the shares
of Common Stock on the date of grant of such Incentive Stock Option, and (ii)
the exercise period shall not exceed five (5) years from the date of grant of
such Incentive Stock Option.

8
<PAGE>

9. Effect of Certain Changes.

(a) In the event of any extraordinary dividend, stock
dividend, recapitalization, merger, consolidation, stock split, warrant or
rights issuance, or combination or exchange of such shares, or other similar
transactions, each of the number of shares of Common Stock available for awards,
the number of such shares covered by outstanding awards, and the price per share
of Options, as appropriate, shall be equitably adjusted by the Committee to
reflect such event and preserve the value of such awards; provided, however,
that any fractional shares resulting from such adjustment shall be eliminated.

(b) Upon the occurrence of a Change in Control, each Option
granted under the Plan and then outstanding but not yet exercisable shall
thereupon become fully exercisable.

10. Surrender and Exchange of Awards.

The Committee may permit the voluntary surrender of all or a portion
of any Option granted under the Plan or any option granted under any other plan,
program or arrangement of the Company or any Subsidiary ("Surrendered Option"),
to be conditioned upon the granting to the Optionee of a new Option for the same
number of shares of Common Stock as the Surrendered Option, or may require such
voluntary surrender as a condition precedent to a grant of a new Option to such
Optionee. Subject to the provisions of the Plan, such new Option may be an
Incentive Stock Option or a Nonqualified Stock Option, and shall be exercisable
at the price, during such period and on such other terms and conditions as are
specified by the Committee at the time the new Option is granted.

11. Period During Which Awards May Be Granted.

Awards may be granted pursuant to the Plan from time to time within
a period of ten (10) years from the date the Plan is adopted by the Board, or
the date the Plan is approved by the shareholders of the Company, whichever is
earlier, unless the Board shall terminate the Plan at an earlier date.

12. Nontransferability of Awards.

Except as otherwise determined by the Committee, awards granted
under the Plan shall not be transferable otherwise than by will or by the laws
of descent and distribution, and awards may be exercised or otherwise realized,
during the lifetime of the Optionee, only by the Optionee or by his guardian or
legal representative.

13. Approval of Shareholders.

The Plan shall take effect upon its adoption by the Board and shall
terminate on the tenth anniversary of such date, but the Plan (and any grants of
awards made prior to the

9
<PAGE>

shareholder approval mentioned herein) shall be subject to the approval of
Company's shareholders, which approval must occur within twelve months of the
date the Plan is adopted by the Board.

14. Agreement by Optionee Regarding Withholding Taxes.

If the Committee shall so require, as a condition of exercise of a
Nonqualified Stock Option (a "Tax Event"), each Optionee who is not a
Non-employee Director shall agree that no later than the date of the Tax Event,
such Optionee will pay to the Company or make arrangements satisfactory to the
Committee regarding payment of any federal, state or local taxes of any kind
required by law to be withheld upon the Tax Event. Alternatively, the Committee
may provide that such an Optionee may elect, to the extent permitted or required
by law, to have the Company deduct federal, state and local taxes of any kind
required by law to be withheld upon the Tax Event from any payment of any kind
due the Optionee. The withholding obligation may be satisfied by the withholding
or delivery of Common Stock. Any decision made by the Committee under this
Section 15 shall be made in its sole discretion.

15. Amendment and Termination of the Plan.

The Board at any time and from time to time may suspend, terminate,
modify or amend the Plan; provided, however, that, unless otherwise determined
by the Board, an amendment that requires stockholder approval in order for the
Plan to continue to comply with Rule 16b-3, Section 162(m) of the Code or any
other law, regulation or stock exchange requirement shall not be effective
unless approved by the requisite vote of stockholders. Except as provided in
Section 10 (a) hereof, no suspension, termination, modification or amendment of
the Plan may adversely affect any award previously granted, unless the written
consent of the Optionee is obtained.

16. Rights as a Shareholder.

An Optionee or a transferee of an award shall have no rights as a
shareholder with respect to any shares covered by the award until the date of
the issuance of a stock certificate to him for such shares. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distribution of other rights for which the record date is
prior to the date such stock certificate is issued, except as provided in
Section 10(a) hereof.

17. No Rights to Employment or Service as a Director.

Nothing in the Plan or in any award granted or Agreement entered
into pursuant hereto shall confer upon any Optionee the right to continue in the
employ of the Company or any Subsidiary or as a member of the Board or to be
entitled to any remuneration or benefits not set forth in the Plan or such
Agreement or to interfere with or limit in any way the right of the Company or
any such Subsidiary to terminate such Optionee's employment or service.

10
<PAGE>

Awards granted under the Plan shall not be affected by any change in duties or
position of an employee Optionee as long as such Optionee continues to be
employed by the Company or any Subsidiary.

18. Beneficiary.

An Optionee may file with the Committee a written designation of a
beneficiary on such form as may be prescribed by the Committee and may, from
time to time, amend or revoke such designation. If no designated beneficiary
survives the Optionee, the executor or administrator of the Optionee's estate
shall be deemed to be the Optionee's beneficiary.

19. Governing Law.

The Plan and all determinations made and actions taken pursuant
hereto shall be governed by the laws of the State of Delaware.

EXHIBIT 10-I

AMENDED AND RESTATED
EMPLOYMENT AGREEMENT

AGREEMENT amended and restated as of October 1, 1999 by and between
AutoInfo, Inc., a Delaware corporation ("Auto") and William Wunderlich residing
at 14 Frost Pond Road, Stanford, Connecticut 06903 ("Wunderlich").

WHEREAS, Wunderlich is currently the President and Chief Financial Officer
of Auto; and

WHEREAS, the Company desires to assure itself of the benefit of
Wunderlich's services and experience for a period of time; and

WHEREAS, Wunderlich is willing to enter into an agreement to that end with
the Company upon the terms and conditions herein set forth.

NOW THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:

1. Employment. Auto hereby employs Wunderlich as its President and Chief
Financial Officer and Wunderlich hereby accepts such employment and agrees to
perform his duties and responsibilities hereunder in accordance with the terms
and conditions hereinafter set forth.

2. Duties and Responsibilities. Wunderlich shall be the President and
Chief Financial Officer of Auto during the Employment Term (as defined below).
Wunderlich shall report to and be subject to the direction of the Board of
Directors (the "Board") of Auto and Wunderlich shall perform such duties as may
be assigned to him from time to time by the Board; provided, that such duties
shall be of a nature consistent with the dignity and authority of the positions
of President and Chief Financial Officer. During the Employment Term Wunderlich
shall, subject to the Company's vacation policy, devote substantially all of his
normal business time and attention to the businesses of Auto and its
subsidiaries and affiliates and shall perform such duties in a diligent,
trustworthy, loyal, businesslike and efficient manner, all for the purpose of
advancing the business of Auto and its subsidiaries and affiliates. Nothing
contained in this Agreement shall be deemed to prohibit Wunderlich from devoting
a nominal amount of his time to his (and his family's) personal investments,
provided, however, that, in case of conflict, the performance of Wunderlich's
duties under this Agreement shall take precedence over his activities with
respect to such investments.

3. Term. The Term of this Agreement shall commence on the date hereof and
shall continue until September 30, 2001, unless terminated prior thereto in
accordance with the terms and provisions hereof (the "Employment Term").

<PAGE>

4. Compensation. Auto shall pay to Wunderlich a salary at the rate of
$150,000 per year, payable in such manner as Auto shall determine, but in no
event any less often than monthly, less withholding required by law and other
deductions agreed to by Wunderlich. Wunderlich's annual salary may be increased
during the Employment Term in the sole discretion of the Board.

5. Bonus. In addition to the compensation provided for in Paragraph 4 of
this Agreement, Wunderlich shall during the Employment Term participate in the
Company's then existing and effective profit sharing and bonus plans.
Furthermore Wunderlich shall receive such other bonuses as determined in the
sole discretion of the Board.

6. Principal Office. Without Wunderlich's consent, Auto shall not require
Wunderlich to maintain his principal office in any location other than the New
York, New Jersey, Connecticut tri-state area.

7. Expenses and Benefits.

(a) Auto shall, consistent with Auto's policy of reporting and
reimbursement of business expenses, reimburse Wunderlich for such other ordinary
and necessary entertainment and business related expenses as shall be incurred
by Wunderlich in the course of the performance of his duties under this
Agreement.

(b) Auto recognizes that Wunderlich will be required to incur
significant travel in rendering services to Auto hereunder and in connection
therewith Auto shall during the Employment Term provide Wunderlich with a
automobile allowance of $750 per month which the parties agree shall be used to
pay all of the expenses associated with the operation of an automobile
including, without limitation, maintenance, repair and insurance costs.

(c) Wunderlich shall be entitled to participate, to the extent he
qualifies, in such life insurance, hospitalization, disability and other medical
insurance plans or programs as are generally made available to executive
officers of Auto which shall be consistent with the programs and benefits
currently offered to Wunderlich.

8. Termination and Termination Benefits.

(a) Termination by the Company.

(i) For Cause. Notwithstanding any provision contained herein,
the Company may terminate this Agreement at any time during the Employment Term
for "cause". For purposes of this subsection 8(a)(i), "cause" shall mean (1) the
continuing failure by the Executive to substantially perform his duties
hereunder for any reason other than total or partial incapacity due to physical
or mental illness, (2) gross negligence or gross malfeasance on the part of the
Executive in the performance of his duties hereunder that

2
<PAGE>

demonstrably cause harm to the Company, and (3) the conviction of the Executive,
by a court of competent jurisdiction, of a felony or other crime involving moral
turpitude. Termination pursuant to this subsection 8(a)(i) shall be effective
immediately upon giving the Executive written notice thereof stating the reason
or reasons therefor with respect to clauses (2) and (3) above, and 15 days after
written notice thereof from the Company to the Executive specifying the acts or
omissions constituting the failure and requesting that they be remedied with
respect to clause (1) above, but only if the Executive has not cured such
failure within such 15 day period. In the event of a termination pursuant to
this subsection 8(a)(i), the Executive shall be entitled to payment of his Base
Compensation and the benefits pursuant to Section 7 hereof up to the effective
date of such termination.

(ii) Notwithstanding any provision contained herein, the
Company may terminate this Agreement at any time during the Employment Term
without "cause" upon 120 days' notice to the Executive. In the event of a
termination pursuant to this subsection 8(a)(ii), the Executive shall be
entitled to payment of his Base Compensation and the benefits pursuant to
Section 7 hereof up to the effective date of such termination plus a severance
payment equal to $75,000. In order to effect a termination of this Agreement
pursuant to this provision, simultaneously with the delivery of the termination
notice provided for herein, the Company shall have deposited in escrow with
Morse, Zelnick, Rose & Lander, LLP the amount of $75,000 representing the
severance payment provided for herein, which shall be released to Wunderlich on
the 120th day following the date of the termination notice, provided Wunderlich
shall not be in material breach of this Agreement.

(iii) Disability. If due to illness, physical or mental
disability, or other incapacity, the Executive shall fail, for a total 90 days
during any 120 day period ("Disability"), to substantially perform the principal
duties required by this Agreement, the Company may terminate this Agreement upon
30 days' written notice to the Executive; provided, however that if the
Executive commences to perform the duties required by this Agreement within such
30-day period and performs such services for 25 out of 30 of the ensuing work
days, then such notice shall be void. In the event of a termination pursuant to
this subsection 8(a)(iii), the Executive shall be (1) paid his Base Compensation
until the Termination Date and his Pro Rata Share of any Incentive Compensation
to which he would have been entitled for the year in which such termination
occurs, and (2) provided with employee benefits pursuant to Section 4, to the
extent available, for the remainder of the Employment Term; provided, however,
that any compensation to be paid to the Executive pursuant to this subsection
8(a)(iii) shall be offset against any payments received by the Executive
pursuant to any policy of disability insurance the premiums of which are paid
for by the Company. Nothing herein shall be construed to violate any Federal or
State law including the Family and Medical Leave Act of 1993, 27 U.S.C.S.
ss.2601 et seq., and the Americans With Disabilities Act, 42 U.S.C.S. ss.12101
et seq.

3
<PAGE>

(b) Termination by the Executive

(i) For Good Reason. The Executive may terminate this
Agreement at any time during the Employment Term for "good reason" upon 30 days'
written notice to the Company (during which period the Executive shall, if
requested in writing by the Company, continue to perform his duties as specified
under this Agreement). "Good reason" shall mean: (1) the Company's failure to
make any of the payments or provide any of the benefits to the Executive under
this Agreement; or (2) the Company's material breach of any provision of this
Agreement; provided, however, that the Company has not cured, or made
substantial efforts to cure, such failure or breach within the aforementioned 30
day period. In the event of a termination of this Agreement by the Executive for
"good reason" pursuant to this subsection, the Executive shall be paid a
termination payment in the amount of $75,000. The termination payment be paid to
the Executive no later than 5 days following the effective date of the
Executive's termination. For purposes of this subsection 8(b), the date of
termination of the Executive's employment shall be date on which the Executive
ceases to perform services for the Company.

(ii) Without Good Reason. The Executive may terminate this
Agreement at any time during the Employment Term for any reason upon 60 days'
written notice to the Company (during which period the Executive shall continue
to perform his duties as specified under this Agreement). In the event of a
termination pursuant to this subsection 8(b)(ii), the Executive shall be
entitled to payment of his Base Compensation and the benefits pursuant to
Section 4 hereof up to the effective date of such termination.

(c) Stock Options and Other Benefits. In the event that the
Executive is terminated for reasons other than for "cause" or in the event the
Executive terminates this Agreement for "good reason", any stock options then
held by the Executive and/or any other benefits subject to specified vesting
criteria, shall immediately vest in the Executive; provided, however, all stock
options then held by the Executive and/or any other benefits subject to
specified vesting criteria shall expire and/or terminate 90 days after the date
this Agreement is terminated. The Company agrees to take such steps and to
execute such documents as shall be necessary to effectuate the foregoing.

(d) Death Benefit. Notwithstanding any other provision of this
Agreement, this Agreement shall terminate on the date of the Executive's death.
In such event the Company shall pay Executive's Base Salary to his wife, if she
survives him, or, if she does not survive him, in equal shares to his children
who survive him, through the end of the month in which such death occurs. In
addition, the Company shall pay to Executive's wife, if she survives him, or, if
she does not survive him, in equal shares to his children who survive him, the
Pro Rata Share of any Incentive Compensation to which Executive would have been
entitled for the year in which such death occurs.

(e) No Mitigation. The Executive shall not be required to mitigate
the amount of any payments provided for by this Agreement by seeking employment
or otherwise,

4
<PAGE>

nor shall the amount of any payment or benefit provided in this Agreement be
reduced by any compensation or benefit earned by the Executive after termination
of his employment.

9. Non-Competition. Wunderlich covenants and agrees that during his
employment hereunder and for a period of two years after his employment
hereunder is terminated, he will not, without the prior written consent of Auto,
(a) compete with the business of Auto or any of its subsidiaries or affiliates
and, in particular, he will not without such consent, directly or indirectly,
own, manage, operate, finance, join, control or participate in the ownership,
management, operation, financing or control of, or be connected as a director,
officer, employee, partner, consultant or agent with, any business in
competition with or similar to the business of Auto or any of its subsidiaries
or affiliates; provided, however, that Wunderlich may own up to two percent of
the capital stock of any publicly traded corporation in competition with the
business of Auto or any of its subsidiaries or affiliates if the fair market
value of such corporation's outstanding capital stock exceeds $100 million, and
(b) divert, take away, interfere with or attempt to take away any present or
former employee or customer of Auto or any of its subsidiaries or affiliates.
The provisions of this Section 9 shall no longer be applicable if Wunderlich's
employment is terminated by Auto (other than for cause) or by Wunderlich
pursuant to the provisions of Section 8(b)(i) hereof during the Employment Term.
In the event that the provisions of this Section 9 should ever be deemed to
exceed the time or geographic limitations or any other limitations permitted by
applicable law, then such provisions shall be deemed reformed to the maximum
permitted by applicable law. Wunderlich acknowledges and agrees that the
foregoing covenant is an essential element of this Agreement and that, but for
the agreement of Wunderlich to comply with the covenant, the Company would not
have entered into this Agreement, and that the remedy at law for any breach of
the covenant will be inadequate and the Company, in addition to any other relief
available to it, shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damage.

10. Confidential Information. Wunderlich recognizes and acknowledges that
the customer lists, patents, inventions, copyrights, methods of doing business,
trade secrets and proprietary information of Auto including, without limitation,
as the same may exist from time to time, are valuable, special and unique assets
of the business of Auto. Except in the ordinary course of business or as
required by law, Wunderlich shall not, during or after the Employment Term,
disclose any such list of customers or any part thereof, any such patents,
inventions, copyrights, methods of doing business, trade secrets or proprietary
information which are not otherwise in the public domain to any person, firm,
corporation or other entity for any reason whatsoever. In addition, Wunderlich
specifically acknowledges and agrees that the remedy at law for any breach of
the foregoing shall be inadequate and that AutoInfo and the Company, in addition
to any other relief available to them, shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual damage.

11. COBRA. In the event of Wunderlich's death during the term of this
Agreement, Auto shall make all COBRA medical premium payments for Wunderlich's
family for the three year period following his death.

5
<PAGE>

12. Opportunities. During his employment with Auto, Wunderlich shall not
take any action which might divert from Auto or any of its subsidiaries or
affiliates any opportunity which would be within the scope of any of the present
or future businesses of Auto or any of its subsidiaries or affiliates.

13. Contents of Agreement, Parties in Interest, Assignment, etc. This
Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Wunderlich hereunder which are of
a personal nature shall neither be assigned nor transferred in whole or in party
by Wunderlich. This Agreement shall not be amended except by a written
instrument duly executed by Auto and Wunderlich.

14. Severability. If any term or provision of this Agreement shall be held
to be invalid or unenforceable for any reason, such term or provision shall be
ineffective to the extend of such invalidity or unenforceability without
invalidating the remaining terms and provisions hereof, and this Agreement shall
be construed as if such invalid or unenforceable term or provision had not been
contained herein.

15. Notices. Any notice, request, instruction or other document to be
given hereunder by any party to the other party shall be in writing and shall be
deemed to have been duly given when delivered personally or five (5) days after
dispatch by registered or certified mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:

If to Auto
addressed to: AutoInfo, Inc.
c/o Morse, Zelnick, Rose & Lander, LLP
450 Park Avenue
New York, New York 10178
Attn: Kenneth S. Rose, Esq.

If to Wunderlich
addressed to: William Wunderlich
14 Frost Pond Road
Stanford, Connecticut 06903

or at such other address as the one party shall specify to the other party in
writing.

16. Counterparts and Headings. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all which
together shall

6
<PAGE>

constitute one and the same instrument. All headings are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this Agreement.

17. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York.

18. Arbitration. Any disputes arising hereunder shall be submitted to
arbitration before a single arbitrator in New York City under the rules and
regulations of the American Arbitration Association. Any award in such
arbitration proceeding may be enforced in any court of competent jurisdiction.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.

AUTOINFO, INC.

By:
-----------------------------------
Howard Nusbaum, Director

-----------------------------------
William Wunderlich

EXHIBIT 23A

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We consent to the incorporation in the Annual Report on Form 10-K under the
Securities Exchange Act of 1934 of AutoInfo, Inc. for the year ended December
31, 1999, of our report dated March 7, 2000, except for Note 11, as to which the
date is April 6, 2000 on the financial statements of AutoInfo, Inc. for the year
ended December 31, 1999 by reference to the Registration Statement under the
Securities Act of 1933 (File No. 33-34442) of AutoInfo, Inc.

Dworken, Hillman, LaMorte & Sterczala PC

New York, New York
April 13, 2000

EXHIBIT 23B

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 10-K, into AutoInfo, Inc.'s previously filed
Registration Statement, File No. 33-34442.

Arthur Andersen LLP

New York, New York
April 13, 2000

<ARTICLE> 5

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 584,949
<SECURITIES> 399,000
<RECEIVABLES> 16,520
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,000,469
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,000,469
<CURRENT-LIABILITIES> 1,265,159
<BONDS> 9,393,572
0
0
<COMMON> 77,570
<OTHER-SE> (9,735,832)
<TOTAL-LIABILITY-AND-EQUITY> 1,000,469
<SALES> 0
<TOTAL-REVENUES> 95,734
<CGS> 0
<TOTAL-COSTS> 804,036
<OTHER-EXPENSES> (411,788)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 954,101
<INCOME-PRETAX> (1,250,615)
<INCOME-TAX> (141,532)
<INCOME-CONTINUING> (1,109,083)
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