-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TZn5aQ/H7wgEGAWt9dDpR8pHUR5CVJ8plMzTUj4m5cGImZxZ2B6xiMsy/Sy59Rgr rxSbmFYyn6fs2rzWUYG6ig== 0001005477-00-003868.txt : 20000515 0001005477-00-003868.hdr.sgml : 20000515 ACCESSION NUMBER: 0001005477-00-003868 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AUTOINFO INC CENTRAL INDEX KEY: 0000351017 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 132867481 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-11497 FILM NUMBER: 627281 BUSINESS ADDRESS: STREET 1: PO BOX 4383 CITY: STAMFORD STATE: CT ZIP: 06907-0383 BUSINESS PHONE: 2019301800 MAIL ADDRESS: STREET 1: PO BOX 4383 CITY: STAMFORD STATE: CT ZIP: 06907-0383 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended: MARCH 31, 2000 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 Identification number) incorporation or organization) P.O. Box 4383, Stamford, CT 06907-0383 - -------------------------------------------------------------------------------- (Address of principal executive office) (203) 595-0005 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) 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 |_| Number of shares outstanding of the registrant's common stock as of May 10, 2000: 7,756,953 shares of common stock, $.01 par value. AUTOINFO, INC. AND SUBSIDIARIES INDEX Part I. Financial Information: Item 1. Financial Statements: Page Balance Sheets - March 31, 2000 (unaudited) and December 31, 1999.................. 3 Statements of Discontinued Operations (unaudited)- Three months ended March 31, 2000 and 1999........................ 4 Statements of Cash Flows from Discontinued Operations (unaudited)- Three months ended March 31, 2000 and 1999........... 5 Notes to Unaudited Financial Statements........................... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............................10 Part II. Other Information....................................................14 Signatures....................................................................15 2 AUTOINFO, INC. AND SUBSIDIARIES BALANCE SHEETS March 31, December 31, 2000 1999 ------------ ------------ Unaudited Audited ASSETS Cash $ 415,271 $ 584,949 Short-term investments 399,000 399,000 Other assets 14,364 16,520 ------------ ------------ $ 828,635 $ 1,000,469 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities subject to compromise (see note 3): Subordinated notes and other debt $ 9,393,572 $ 9,393,572 Accounts payable and accrued liabilities 1,498,859 1,265,159 ------------ ------------ Total liabilities 10,892,431 10,658,731 ------------ ------------ Stockholders' equity Common stock - authorized 20,000,000 shares $.01 par value; issued and outstanding - 7,756,953 shares as of March 31, 2000 and December 31, 1999 77,570 77,570 Additional paid-in capital 17,772,431 17,772,431 Deferred compensation under stock bonus plan (268,086) (271,889) Retained deficit (27,645,711) (27,236,374) ------------ ------------ Total stockholders' equity (10,063,796) (9,658,262) ------------ ------------ $ 828,635 $ 1,000,469 ============ ============ See notes to condensed unaudited financial statements 3 AUTOINFO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF DISCONTINUED OPERATIONS (Unaudited) Three Months Ended March 31, 2000 1999 ------------ ------------ Investment income $ 18,337 $ 35,502 ------------ ------------ Costs and expenses: Interest expense 233,700 246,488 Operating expenses 123,047 249,366 Reorganization expenses 70,927 -- Depreciation & amortization -- 19,266 ------------ ------------ Total operating expenses 427,674 515,120 ------------ ------------ Net loss $ (409,337) $ (479,618) ============ ============ Basic and diluted net loss per share: ($ .05) ($ .06) ============ ============ Weighted average number of common and common equivalent shares 7,756,953 7,756,953 ------------ ------------ See notes to condensed unaudited financial statements 4 AUTOINFO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FROM DISCONTINUED OPERATIONS (Unaudited) Three Months Ended March 31, 2000 1999 --------- --------- Cash flows from operating activities: Net (loss) income $(409,337) $(479,618) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization -- 19,266 Amortization of deferred compensation 3,803 3,802 Changes in assets and liabilities: Other assets 2,156 69,929 Accounts payable and accrued liabilities 233,700 48,720 --------- --------- Net cash (used in) provided by operating activities (169,678) (337,901) --------- --------- Cash flows from investing activities: Proceeds from sale of short-term investments -- 973,285 --------- --------- Net cash provided by (used in) investing activities -- 973,285 --------- --------- Cash flows from financing activities: Decrease in borrowings, net -- (634,528) --------- --------- Net cash used in financing activities -- (634,528) --------- --------- Net (decrease) increase in cash (169,678) 856 Cash at beginning of period 584,949 116,570 --------- --------- Cash at end of period $ 415,271 $ 117,426 ========= ========= See notes to condensed unaudited financial statements 5 AUTOINFO, INC. AND SUBSIDIARIES NOTES TO UNAUDITED FINANCIAL STATEMENTS Forward Looking Statements Certain statements made in this Quarterly Report on Form 10-Q 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 forward-looking statements include, but are not limited to, the factors set forth in "Certain Factors That May Affect Future Growth," under Part I, Item 1, of the Company's Annual Report on Form 10-K for the year ended December 31, 1999 as filed with the Securities and Exchange Commission. Note 1. - Business and Summary of Significant Accounting Policies Business During 1998, AutoInfo, Inc. (the "Company") ceased to operate as an automobile finance company. 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. During 1999, the Company negotiated the termination of its lease in Montvale, New Jersey and relocated to temporary space in Stamford, Connecticut as part of its continuing effort to reduce operating expenses and preserve corporate capital. The Company's main business focus became the challenge to seek out business opportunities in furtherance of its plan to rebuild and create shareholder value. These efforts were inhibited by a negative net worth and remaining subordinated debt of $9.3 million. Therefore, the Company commenced discussions with its noteholders regarding the restructuring of this debt to enhance the possibility of consummating a transaction to return to an operating status and create shareholder value. Accordingly, on February 2, 2000, the Company 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 its 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 the Company intends to file. A hearing to consider its amended disclosure statement and compliance with the disclosure requirements has been scheduled for May 31, 2000. No assurances can be given that the Plan will be 6 confirmed by the Bankruptcy 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, the Company anticipates having cash and short-term investments of approximately $500,000 and no debt. In contemplation of confirmation, efforts are continuing to identify new business opportunities in furtherance of the plan to rebuild the Company and create shareholder value. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. 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 our assets and liabilities do not purport to represent realizable or settlement amounts. 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 and administrative expenses. 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. Principles of Consolidation The 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, consisting of marketable securities as of March 31, 2000 and December 31, 1999, are carried at market value. Gains and losses on disposition of securities are recognized on the specific identification method in the period in which they occur. Unrealized holding gains and losses on trading securities based upon the fair market value as of the balance sheet date, if material, would be included in earnings in the period in which they occur. There were no losses on dispositions of securities or unrealized holding losses for the three month periods ended March 31, 2000 and 1999. Fixed Assets Fixed assets are carried at cost less accumulated depreciation. Depreciation of fixed assets is provided on the straight-line method over the estimated useful lives of the related assets which range from three to five years. As of December 31, 1998, fixed assets consisted predominantly of furniture, fixtures and equipment at the Company's Montvale, New Jersey headquarters facility. During the quarter ended June 30, 1999, the Company terminated its lease and vacated the premises. Accordingly, the remaining fixed assets were written-off. Loss Per Share 7 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. All earnings per share amounts for prior periods have been restated to conform to the new requirements. 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 three month periods ended March 31, 2000 and 1999. 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. 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. As of March 31, 2000, the Company has a net operating loss carryforward of approximately $27 million for federal income tax purposes which expires in 2014. Any benefit from the utilization of these net operating loss carryforwards has been fully reserved for in the accompanying financial statements. Note 2 - General The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments consisting of normal recurring accruals considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2000 and 1999 are not necessarily indicative of the results that may be expected for a full fiscal year. For further information, refer to the financial statement and footnotes thereto included in the Company's report on Form 10-K for the year ended December 31, 1999. Note 3 - Liquidity and capital resources and filing pursuant to Chapter 11 of the United States Bankruptcy Code The Company has outstanding $9.3 million of notes due in 2007 and 2008, comprised of $8.2 million of 12% notes, included with the liabilities assumed with the acquisition of FALK Finance Company, Inc. ("FFC") in December 1995, plus accrued interest of $1.1 million through December 31, 1998. Interest on these 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. Interest on the notes from January 1, 1999 through March 31, 2000 has been accrued but not paid. Representatives of these note holders designated three members of the Company's Board of Directors, one of whom subsequently resigned. 8 The Company's liquid assets amounted to approximately $ 800,000 as of March 31, 2000. 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. The Company intends to address these issues in an amended disclosure statement. A hearing to consider the amended disclosure statement and compliance with the disclosure requirements has been scheduled for May 31, 2000. No assurances can be given that the Plan will be confirmed by the Bankruptcy 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 Company will have 17.3 million shares of its Common Stock outstanding. Assuming confirmation of the Plan, substantially all of the liabilities of the Company as of March 31, 2000 are subject to compromise. The following pro-forma Balance Sheet as of March 31, 2000 gives effect to the adjustments resulting from the assumed confirmation of the Plan: Pro Forma As Stated Adjustments As Adjusted ------------ ------------ ------------ Total assets $ 829,000 $ (285,000) $ 544,000 ------------ ------------ ------------ Liabilities $ 10,892,000 $(10,710,000) $ 182,000 Equity (10,063,000) 10,425,000 362,000 ------------ ------------ ------------ Total liabilities and equity $ 829,000 $ (285,000) $ 544,000 ------------ ------------ ------------ The Company is in the process of identifying new business opportunities in furtherance of its plan to rebuild the Company and create shareholder value. If the Plan is not confirmed and the Company is unsuccessful in identifying and consummating such a transaction, the Company does not have sufficient liquid assets and available lines of credit to meet its short and long-term capital requirements. Note 4 - Debt Settlement On March 23, 1999, the Company paid $585,000 representing full payment, net of a $25,000 discount, of principal and accrued interest on a note which had been previously declared in default by the lender. 9 AUTOINFO, INC. AND SUBSIDIARIES Management's Discussion and Analysis of Financial Condition And Results of Operations General 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. 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 10 "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. 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. The Company intends to address these issues in an amended disclosure statement. A hearing to consider the amended disclosure statement and compliance with the disclosure requirements has been scheduled for May 31, 2000. No assurances can be given that the Plan will be confirmed by the Bankruptcy 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 Three Months Ended March 31, 2000 and 1999 Revenues Revenues for the three month periods ended March 31, 1999 and 1998 of $18,000 and $36,000, respectively, consisted of interest and dividends on short-term investments. The decline is directly related to the decrease in short-term investments. Costs and Expenses Interest expense for the three month periods ended March 31, 2000 and 1999 ($234,000 and $246,000, respectively) was related to subordinated debt and other bank debt. The decrease is directly related to the repayment of debt during the three month period ended March 31, 1999. Operating expenses for the three months ended March 31, 2000 and 1999 ($123,000 and $249,000, respectively) consisted primarily of corporate overhead. The decrease is directly related to reduction in corporate staff and the cost reduction plan implemented by the Company. 11 Reorganization expenses for the three month period ended March 31, 2000 of $71,000 consists of legal and other costs related to the February 2, 2000 filing pursuant to Chapter 11 of the United States Bankruptcy Code. Depreciation and amortization expense for the three months ended March 31, 1999 of $19,000 consisted of the depreciation of fixed assets. Loss from Operations Loss from operations for the three month period ended March 31, 2000 was ($409,000) compared with ($480,000) in the prior year period. The decrease is the result of the reduction in operating expenses. There is no income tax benefit for the three month periods ended March 31, 2000 and 1999 as the Company has recorded the utilization of its available income tax carrybacks as of December 31, 1997. Liquidity and Capital Resources Trends and Uncertainties 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 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. 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. The Company intends to address these issues in an amended disclosure statement. A hearing to consider the amended disclosure statement and compliance with the disclosure requirements has been scheduled for May 31, 2000. No assurances can be given that the Plan will be confirmed by the Bankruptcy 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 The foregoing factors raise substantial doubt about our ability to continue as a going concern. Liquidity and Capital Resources At March 31, 2000, 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. The Company's cash and short-term investments amounted to approximately $800,000 as of March 31, 2000. 12 The total amount of debt outstanding as of March 31, 2000 and December 31, 1990 was $9.4 million. This following table presents the Company's debt instruments and weighted average interest rates on such instruments as of March 31, 2000 and December 31, 1998: Weighted Average Balance Rate ------------------ Subordinated debt $9.3 12.0% Other debt $.1 8.5% Inflation and changing prices had no material impact on revenues or the results of operations for the period ended March 31, 2000. 13 AUTOINFO, INC. AND SUBSIDIARIES Part II - OTHER INFORMATION Item 1 - 3: Inapplicable Item 4: Submission of Matters to a Vote of Security Holders: None Item 5: Inapplicable Item 6 (a): None Item 6 (b): During the quarter ending March 31, 2000, the Company filed a report on Form 8-K pursuant to Item 4 thereof reporting the retention of independent auditors. 14 SIGNATURES Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto authorized. AUTOINFO, INC. (Registrant) ----------------------------------- /s/ William I. Wunderlich ----------------------------------- William I. Wunderlich President and Principal Financial Officer Date: May 11, 2000 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 415,271 399,000 14,364 0 0 828,635 0 0 828,635 1,498,859 9,393,572 77,570 0 0 (10,141,366) 828,635 0 18,337 0 123,047 70,927 0 233,700 (409,337) 0 (409,337) 0 0 0 (409,337) (0.050) (0.050)
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